1. Industry Trends To Watch NASPD Conference February 16, 2018

2. Forward Looking Statements
This document contains forward-looking statements. These statements include financial forecasts and estimates as well as assumptions on which they are based, statements related to projects, objectives and expectations concerning future operations, products and services or future performance. Although Vallourec’s management believes that these forward-looking statements are reasonable, Vallourec cannot guarantee their accuracy or completeness and these forward-looking statements are subject to numerous risks and uncertainties that are difficult to foresee and generally beyond Vallourec’s control, which may mean that actual results and developments may differ significantly from those expressed, induced or forecasted in the forward-looking statements. These risks include those developed or identified in the public documents filed by Vallourec with the AMF, including those listed in the “Risk Factors” section of the Registration Document filed with the AMF on 21 March 2017 (N° D ).

3. Seamless Pipe production
Introduction to Vallourec in the USA Leader in the steel pipe & tube industry
Steel production
Service & deliveries
Seamless Pipe production
Heat treatment
VAM Premium
threading
Storage & inspection
Long term commitment to the USA with main locations in Ohio, Texas, and Oklahoma
Continued expansion and growth with $2B+ invested in last 10 years
Broad product and service offering for OCTG, line pipe, industrial applications
A company built on strong partnerships with our sister regions, industrial partners, and supply chain partners

4. RIG COUNT AND OCTG CONSUMPTION
Market Trend #1: O&G Volatility & Time Lags Large movement in key demand indicators
RIG COUNT AND OIL PRICE
WTI $/bbl
Rigs
Commodity prices, O&G activity, and pipe consumption all show short term volatility and long term instability
How does this impact our industry?
RIG COUNT AND OCTG CONSUMPTION
‘00 consumption tons
Rigs
Source: Vallourec Marketing, OCTG Situation Report, Preston Pipe & Tube Report, BakerHughes Rig Count

5. Excessive labor and inventory
Market Trend #1: Challenges of Volatility & Time Lags Risk of the bullwhip effect from a producer’s perspective
Customer
Inventory Owner
Manufacturer
100
tons
For consumption
200
+ 50 just in case
+ 50 for price increases
400
+ 100 just in case
+ 100 for raw materials delays
+100 for increased lead times
300 tons
Plenty of inventory available ??
Excessive labor and inventory
MONTH 1
MONTH 2
MONTH 3
Bullwhip amplifies customer demand volatility the farther you move up the supply chain
Is this theory or reality?

6. RIG COUNT AND OCTG CONSUMPTION OCTG SHIPMENTS AND INVENTORY
Market Trend #1: How Are We Doing? Consumption and shipments data shows the bullwhip effect in full force in the OCTG market
RIG COUNT AND OCTG CONSUMPTION
‘00 consumption tons
3-4x
3-4x
Rigs
OCTG consumption peak is 3-4 times the trough while shipments peak is 8-10 times the trough
Manufacturers challenged with ramping up & down at twice the scale of the market
Industry objective: Find ways to reduce volatility rather than magnify it
OCTG SHIPMENTS AND INVENTORY
‘00 shipments tons
‘000 inventory tons
8-10x
8-10x
Source: Vallourec Marketing, OCTG Situation Report, Preston Pipe & Tube Report, BakerHughes Rig Count

7. Market Trend #1: How Can We Improve Stability & Reactivity?
MAIN CAUSES
KEY MITIGATION
Producer efforts
Reduced lead times
Small order batching
Consistent deliveries
Distributor efforts
Forecasting transparency
Awareness of impact when buying for price or long lead time imports
Customer efforts
Minimize cancellations and returns
All partners
Forecasting accuracy
Encourage trust and communication up and down supply chain
BULLWHIP CAUSES
Long lead times/multiple intermediaries
Order batching
Insufficient demand forecasting
Price fluctuations
Lack of information sharing/inflated orders
Vallourec production cycles reduced > 25%

8. Market Trend #2: End Users Expecting Efficiencies/Improvements Everyday improvements expected throughout the supply base (beyond price)
E&P operators achieving huge gains in efficiency and productivity
Improvements through trial and error, formal improvement programs (lean 6-Sigma), everyday savings
Customer message: “We are doing our part, are you doing yours?”
Do these opportunities exist in the tubulars supply chain?
Source: Devon Energy January 2018 Investor Presentation

9. Market Trend #2: How Are We Doing
Market Trend #2: How Are We Doing? Evidence shows plenty of opportunities for waste reduction in OCTG industry supply chain
Case # 1: Vallourec Value Stream Mapping
Mapped all movements of product and information mill to rig
Unnecessary pipe movements
Unnecessary warranty expiration due to early ordering
High inventory stored in high tax areas
Under-optimized product routes
Greater information sharing with distributor
Reduce communication of associated services
Smooth ordering and pickup
Faster loading and unloading, to increase truck utilization
82% less Hour/Man working at the rig
55% less men exposed to buffer zone
Reduce the amount of time pipe is touched on the rack
Limit environment and employees exposure to chemicals
Case # 2: Vallourec Service Diagnostic
Followed pipe every step from production to rig
Practices causing pipe scrap or repairs
Trucks scheduling causing waiting charges
Pipe lengths measured many times
Rig safety risks on services done more safely in pipe yards
The most important step to reducing waste is to recognize that it is there
How do we systematically reduce this waste?

10. Market Trend #2: Where Do We Go From Here
Market Trend #2: Where Do We Go From Here? The industry pursues multiple tubulars supply chain business models
Traditional model
Direct model
Partnership model

11. The Partnership Model How can it work?
Experts in all roles
Continuous improvement
Digital
solutions
Communication & trust
“What we need to do is learn to work in the system, by which I mean that everybody…is there not for individual competitive profit or recognition, but for contribution to the system as a whole on a win-win basis” – W. Edwards Deming

12. Thank you