Etienne Bertand - Head of Investor Relations & Financial Communications Philippe Crouzet - Chairman of the Management Board Olivier Mallet - Chief Financial Officer Didier Hornet - Senior Vice President Eastern Hemisphere Nicolas de Coignac - Senior Vice President North America

Amy Wong - UBS Michael Flitton - Citigroup Inc. Robert Pulleyn - Morgan Stanley Raphaël Veverka - Exane BNP Paribas Giacomo Romeo - Macquarie Group Philippe Chmelar - Credit Suisse Alex Hooper-Greenhill - Societe Generale Kevin Roger - Kepler Cheuvreux Baptiste Lebacq - Natixis

Dear all thank you for joining us tonight. With me today to comment the third quarter and first nine months of 2015 results are Philippe Crouzet, Olivier Mallet, Jean-Pierre Michel.

We have also Philippe Carlier, Senior Vice President, Europe; Didier Hornet, Senior Vice President, Eastern Hemisphere; and with us, Nicolas de Coignac, Senior Vice President North America, based in Houston. This conference call is being recorded and a replay will be available.

The audio webcast and the slides that will be commented by the management during this presentation are available on our Investor Relations website, Vallourec.com, both on the homepage and on the Investor Relations section. Lastly, before I headed over to Philippe, I must warn you that today’s conference call contains forward-looking statements and that future results may differ materially from statements or projections made on today’s call.

For your convenience, the forward-looking statements and risk factors that could affect those statements are referenced at the beginning of our slideshow and are included in our annual registration document filed with the AMF. I would leave the floor now to Philippe.

Philippe?

Thank you, Etienne. Good evening for everyone.

Obviously, the adverse market environment we are facing since the beginning of the year has continued to deteriorate, particularly North America and in the EAMEA region. And, as anticipated, these market conditions have continued to weight on the third quarter performance as you can see on the first slide.

I will not insist too much on the macroeconomics that reminds us in mind, I guess. The price of oil both Brent and WTI has dropped by more than 50% year-on-year.

And as you all know the US rig count has fallen sharply and is still falling by the way. All this has a material impact on the overall demand for the oil services companies, and then Vallourec cannot be immune.

As the CEO of the company, together with the management team and all Vallourec employees, we are more than ever mobilized to confront with this very challenging environment, to adjust our resources, and to work hard to prepare for the recovery. We are committed to vigorously implementing short-term measures to adjust to the environment and Valens, our two-year competitiveness plan, and delivering on both.

We maintain our relentless focus on cash. And I must mention that we achieved positive free cash flow in Q3, thanks mostly to cost reductions, tight working capital management, and strict CapEx discipline.

We reduced our G&A costs by 13% over the third quarter compared to last year. And in this context and given these performances, we reiterate our positive free cash flow generation target for 2015.

The various procedures to reduce our European steel and tube structural capacity, and our worldwide overhead costs are deployed in the various countries according to plan. Global staff reduction over the first nine months of the year reached 2,500 including 1,700 permanent jobs.

It represents approximately 11% of the total account of the company. This is, of course, a very tough period for all our teams, but I’m convinced that we are taking the right decisions, that we are implementing the right actions to face this very special environment.

Olivier will now say a few words on the Q3 and first nine-month results. Olivier?

Thank you, Philippe. Good morning, good afternoon, everybody.

So let’s start Page 8 with a quick look at the volume, over the period 2014 to right now, where you can clearly see the downturn is severely affecting our volumes sold. This is probably a good reminder of the fact that in our industry down cycles are typically quite steep and this is the case this time again.

On the next page, some comments about the revenue evolution. Third quarter revenues were down 35% year on year or 34% at constant exchange rate, primarily due to the 44% volume fall.

The sharp fall was slightly compensated by a positive price mix, mostly a mix effect of 9.5%. Looking at the first nine-month results, our revenues fell by 27% or 32% at constant exchange rate.

And this is again mainly due to the volume fall of 36%. Next slide, some comments about our Oil & Gas revenues, where the negative volume effect was particularly significant, mostly in North America and in EAMEA.

Over the first nine months of 2015, Oil & Gas revenues were down 30% or 35% at constant exchange rate. Moving on to Slide 11, with our sales breakdown by region and market segment, first by market over the first nine months, sales decreased in the Oil & Gas market by 30%.

The Industry & Other sales were affected in particular by the deteriorating market conditions in Brazil, along with a 44% decline in iron ore prices. And therefore, the overall sales with Industry & Other markets fell by 32%, or 30% at same exchange rate.

Power Gen revenues were down 2% year on year or 5% at same exchange rate, mainly due to lower volumes in commercial Power Gen along with some price pressure, while nuclear revenues were up year on year, explained by a favorable comparison basis in 2014. Now by geography, revenues were down in particular in the U.S.

minus 30% mostly due to the drop in volumes, by 25% in South America where we had to some extent lower Oil & Gas revenues but combined to a strong decline in Industry & Other revenues, and minus 36% in Asia and Middle East where the decline mainly resulted from the low level of Oil & Gas orders recorded since a year ago and from the destocking in Saudi Arabia, along with a sharp price pressure. On Page 12, some comments on the first lines of the P&L over the first nine months.

I already commented the revenues. The industrial margin was down 62% due to efficiencies associated with mills load well below production capacity, and this is by far the major driver in our results’ decline.

On the other hand, we have been very active in cost reduction. You can read that, for instance, on the SG&A line, which were reduced by €27 million or by 6.6%, which at constant exchange rate would have been 8.5%.

On the rest of the P&L, next page, not a lot of comments to be made. Just as a reminder, we did €165 million of other amortization, restructuring, impairments.

Most of it was made of the restructuring charges and impairment related to Valens implementation that we booked in Q2 for about €250 [ph] million. The financial income was down by €11 million, mainly due to a lower positive Forex income, and the net result after nine months is a negative €439 million.

On free cash flow as Philippe commented earlier on, we keep a very strong focus on cash, which allowed us over nine months to generate positive free cash flow of €35 million, primarily explained by a reduction in the working capital by €279 million and by our strict management of CapEx. You can as well notice good result achieved in this regard in Q3, where the working capital has been reduced by €168 million and where we generated a positive free cash flow of €32 million.

As a result of this management of our cash, we contained the net debt to €1.63 billion, an increase of €86 million over the first nine months of 2015 and a decrease of €35 million compared to end of June. On Slide 16, we highlight Vallourec strong liquidity position, reminding you that as of the end of September Vallourec’s liquidity consists of €600 million available cash exceeding the financial short-term debt and €1.8 billion of undrawn bank committed facilities.

In September, we did extend the maturity of €400 million of these committed facilities from July 2017 to July 2019. As a reminder as well, Vallourec’s gross debt amounts to €2.2 billion, of which €1.6 billion in long-term bonds and next bond repayment will occur in February 2017 for €650 million.

And now I leave the floor to Philippe again to conclude.

Thank you, Olivier. Given the ongoing market trends and taking into consideration a very low order inflow along with the overall strong price pressure, it is pretty clear that the group foresees profitability to further deteriorate in Q4 and lead to a negative EBITDA for the full year 2015.

And we do not expect market conditions to improve in the very short term. In such a context, we focus on implementing drastic short-term resources adjustment along with Valens, and we focus on cash generation.

The operating working cap requirement will continue to be strongly reduced in Q4, and yearly capital expenditure will stand below €300 million. We think that thanks to this measure we can continue to target a positive free cash flow generation over the whole year 2015.

All the teams in Vallourec are more than ever committed to implementing both short term adaptation measures and the Valens structural cost reduction program. And over the medium term, there is no doubt, I have no doubt, that drilling will resume on a large scale, specifically in the areas where we operate and where we have built great assets to benefit from the recovery.

Now, we are…

Okay, Orille [ph], I think we will switch to the Q&A session, if there are any from sell-side analysts. I guess, there are some who already logged on the call.

Amy, I think you have a question.

Sorry, was on mute. Hi, good afternoon.

It’s Amy Wong here from UBS. Just, can you help us understand the pricing evolution in terms of - in the U.S.

we have quite a bit of data points with some of the indices. But could you also give us some pricing indications for the EAMEA and Brazil; perhaps, maybe what’s embedded in your order book and also some thoughts on 2016, the extent of that pricing pressure?

Thanks.

Maybe, Didier, on EAMEA?

Yes, Amy, good afternoon or good morning to you. Let’s say, of course, it depends of the projects, it depends of the regions.

But prices could have dropped by a double digit number. So what you see in the U.S.

corresponds to the trends that we see typically in Eastern Hemisphere, EAMEA.

As far as Brazil is concerned it’s a different story, because there we are pricing with Petrobras according to the frame contract we have with them. So there are some pricing formulas but they include a variety of factors which can offset each other.

So no real evolution there - so, this is for Oil & Gas. In the other businesses that we supply in Brazil, there is obviously a strong pressure on price, because the environment is so competitive, depressed economic environment, so this is what I can say as far as Brazil is concerned.

Can I just ask a follow-up on that response in Brazil? I mean, I understand you have a fairly extensive frame agreement with Brazil.

Can you give us a sense like what it’s indexed to? Is it actually providing you any relative resilience to some of the market conditions we see in the US and relative to the pricing pressure we see in EAMEA?

It’s not complete protection. In fact, the principle of this agreement is relatively complex.

We supply a broad range of products to Petrobras, so it’s in fact certainly one customer, but operating in a variety of environment: onshore, shallow waters, deep offshore, pre-salt. So the pricing formulas are pretty complex, and so I won’t enter into the details.

I would rather highlight the fact that recently Petrobras adjusted down their CapEx plan, as many in the industry. It was particularly strong in the case of Petrobras.

They announced a downward correction of their CapEx by 30%. But when we look into the details, in fact, what they are reducing or even cutting are the CapEx, all their CapEx, most of their CapEx in operations but pre-salt.

Pre-salt remain their core operations. This is where they invest a lot.

This is of course what we supply with our most high value-added products. And there we anticipate that, of course, depending on some movements from one quarter to the other, more stability than a decline in fact.

So compared to other regions and compared to other operators, I would say Petrobras, of course, is under very, very significant cash constraints, but they keep on putting a top priority on the pre-salt. And this is certainly a more resilient area compared to other areas in the world and other operators.

All right. I appreciate the insight.

Thank you very much.

Thank you, Amy. Orille, our next question please.

Hi, there. Thanks for taking my question.

I just had a couple. Firstly, on the follow-up of that pricing pressure question, I was wondering how far we are down that, the road of pricing pressure.

Obviously, you still have year-on-year benefits of pricing coming through, because obviously, we had the roll of the contracts, which helped you during the year. I was wondering how far that pricing pressure has begun to show in your numbers now.

And are we seeing a change at all and how the players are acting in the market? It does sound like perhaps some people are switching towards volume over price strategies, when previously they were perhaps a little bit more resilience.

So I was wondering if you can comment on that. And then secondly, in terms of how you are expecting spending from the majors to progress into 2016.

Are you - what kind of quantum of cuts are you expecting in general? Are you sort of viewing spending from the majors as broadly flat?

Just interested in how you view CapEx going forward. Thanks.

Hello, maybe I will take the first part of your question about when the price impact will appear in our P&L. It actually depends on the regions.

Starting with the USA, as you know, the price pressure starting to take place in Q2 and is continuing in Q3 and Q4 so that you already see it in our P&L. Also there will be some full-year impact next year and hopefully some sort of stabilization of prices towards the end of 2015.

It’s quite different in the Eastern Hemisphere where we take tenders at prices which in some cases are very much disputed. Since the average lead time on these degrees [ph] can go from six to nine months, most of the P&L impact will take place in 2016, with caveat that it will be mitigated to some extent by the fact that the dollar rate compared to euro is much better than it used to be, and that here as well you have a lead-time impact that is being translated into the fact that in 2015 our average euro-dollar rate will be up to about 1.25 and it will get closer to the current spot rates in 2016.

So as far as the behavior of the customers is - of competitors is concerned, I give the floor to Didier.

Yes, Michael. So it’s true that we witnessed recently a change of attitude of our key competitors, specifically in the Eastern Hemisphere, trying to target sometimes volume against price adjustment, price decrease.

And, of course, we had to take the appropriate corrective actions. We are defending and we will defend our market share with always focus on premium and focus on value.

Your last question was concerning the situation for international oil companies. And I must say that today we see their activity decreasing.

And the average number of rigs in Eastern Hemisphere is decreasing by two digits, about 10%. Internationally, the average CapEx is decreasing by about 25%.

A large share is coming from North America. I would say Eastern Hemisphere is more 10% to 15%.

So we see the majors within this trend actually arbitrating between the different opportunities they have to optimize their drilling portfolio. So we still believe that 2016 will be a year of arbitration and slight decrease of activity, with less effect of destocking.

That’s the positive point for 2016.

Thanks. Just quickly to follow up on the pricing pressure again.

And so, if we are thinking about you’ve got a degree of pricing pressure still to come through into the P&L next year, how do we think about - I mean, without obviously forcing you to try and give some guidance for next year. But how do we think about - obviously there’s a degree of pressure coming through.

Perhaps, we get some volumes returning, but - I mean, how much of that can really be - I mean, how much of a problem is that to offset to get some positive earnings momentum into next year? I don’t know if you can talk a little bit around that rather than - obviously, you’re talking about next year.

As we commented in the press release, the first point for next year is that we have a big lack of visibility at the time being. So it’s just not possible to comment what 2016 globally will be.

What we see as of today is that at least in the short term, in the next few quarters, there is no sign of rebound in terms of volumes and in terms of pricings. And, as you have just said, there will be a significant price impact, negative price impact, next year.

What comes as a positive are few elements; the Forex impact, which is quite significant as far as we are concerned as well. If you remember the €0.10 in the order our parity, with normal volumes, which is not exactly the case as of today, do translate on the full-year basis in about €100 million positive EBITDA.

The other significant factor, of course, is Valens implementation, where we have some savings this year, but we’ll have more savings in 2016 that will sustain our results.

Okay. Thank you very much.

And lastly, maybe the fact that we will use and we are using our Brazilian operation VSB to support our sales, especially in the Middle East. And of course then we benefit from the lower Brazilian currency, which is improving significantly the competitiveness of that mill.

So it’s a mixed bag of cost improvements, currency and Forex improvement as well.

Okay, thank you.

Orille, next question.

Yes, good afternoon, gentlemen. Rob Pulleyn here from Morgan Stanley.

A few questions, if I may. But firstly on the working capital release, could you give us a bit of a steer as to how that’s going to play out in the fourth quarter?

Presumably, there’s a bit of a lag effect, but your volumes are down quite significantly year-over-year. And although the working capital inflow is there, I would expect that to pick up.

And will that working capital inflow continue in 2016? I would be quite interested in that.

The second question, if I may, is around your iron ore production. Given the decline in the utilization and volumes in your Brazilian mills, could you just remind us how much you sell of your iron ore production on the open market?

That would be very helpful. And the third question, and apologies for asking about 2016, but should we be expecting the run-rate in 4Q to be indicative of your EBITDA performance in 2016, given the cost savings won’t come through really in full until 2017, as you talked about?

Thank you very much.

So I think I can take most of them. In terms of the working capital evolution, yes, the cash release will continue in Q4 at a pace that should be comparable or even slightly more than in Q3.

On the other hand, by the end of this year, we will be probably pretty much adapted to our level of activity, meaning that this should not play as big a role of course in 2016. With one additional comment, though, being that as part of our Valens competitiveness plan, we have launched action plans in terms of improving the performance, the structural performance, in our inventory management.

And we expect some results of that in 2016. But that will not reach, of course, magnitude of what we’re seeing this year in terms of adaptation.

On your second point, iron ore, we sell to the market around 2 million tonnes per year. And on your third one about the run rate to consider, we commented that Q4 EBITDA this year should be lower than Q3.

This is to some extent due to the fact that with our client Petrobras in Brazil, that announced cut in its CapEx in 2015, most of the impact will fall in Q4 which will be much lower in Brazil than in Q3, so that you should not take this Q4 guidance as a run-rate to be replicated for entering next year.

Okay, that’s very helpful. Thank you and I’ll turn it over.

You’re welcome, Rob.

Good evening. Thank you for taking my question, a few ones on my side.

First, on CapEx, I was wondering whether you could give us any guidance at this stage for 2016. And also, if we must - remind us, if we must expect any additional cash outflow associated with Valens next year.

My second question would be so on balance sheet, whether you would expect net debt to stabilize around the current levels, or do you see it further increasing, and if you have a medium term leverage or gearing ratio you would be comfortable with. And my last question would be on Aramco, i.e., are you seeing some tenders coming back before year-end?

Tenaris was a bit more positive at their most recent call. And will you expect that to improve your mix at some stage by the end of 2016?

Thank you.

Raphaël, I can only confirm that we are definitely seeing more activity, by the way not only in Saudi Arabia with Saudi Aramco, but that in the Gulf generally speaking. Compared to other regions of the world, this is definitely an area where the oil companies, the operators are drilling more actively for lots of reasons, but obviously their breakeven level is much lower than, say, offshore operations in other areas of the world.

So, yes, we are seeing some movements, some volumes. The prices, as Didier mentioned, are under pressure.

So, definitely, we do not expect so far to come back to the levels of revenues and profitability we experienced until last year, before those operators so almost stopped ordering due to their destocking policy. Now, this destocking phase has come to an end.

Activity is back. But prices are definitely not back to where they were before.

On the other questions, Olivier?

Yes, Raphaël, on your more specific questions, first on the CapEx for next year. If we assume which is what we see as of today that at least in the short term, there is no sign of rebound.

It leads us to at least enter 2016 with quite a conservative view about our CapEx envelope. You have noticed that as far as this year is concerned we’ll end up with less than €300 million CapEx; and we are, as of today, in sort of the same mindset for 2016.

On your second question about the Valens considering cash out to be expected next year, we have booked slightly more than €100 million in Q2 for these restructuring measures. Out of that, about €95 million were not impairments, but measures that will lead to cash out.

So it’s difficult to know exactly what will be the amount next year. But if you take as a ballpark figure half of that, you are probably in the right order of magnitude.

And on your third one about potential targets in terms of leverage ratios, I think it’s a little early or not the time to answer this kind of questions. So far what we are doing is to be extremely focused on our cash flow elements in order to weather the down-cycle both in terms of liquidity and in terms of gearing, the gearing being our only covenant for banking facilities.

And we believe that we can achieve that.

Okay…

So your last - your last question I think was concerning Saudi Aramco. So Saudi Aramco - Saudi Aramco today is operating about 206 rigs with some focus on unconventional gas.

And we see that destocking is now effective and they are back to some tendering activities. We had the opportunity to book some volumes, leveraging our local presence in the country.

So in terms of pricing, it was also one of your questions, we had to do some concessions comparable to what’s happening in the Middle East.

Okay. Thank you very much.

Thank you, Raphaël.

Next question, Orille.

Good evening. Thanks for taking my question.

Only - sorry, two for me. First one, just wondering, you’re talking about SG&A being down 30%.

Just wondering how much is that on a constant FX basis? And a second on Valens, I believe you had a €160 million fixed cost reduction target by 2017.

I was just wondering how much of that you started to see on an annualized basis in 3Q and how much you expect to see in - as we get into 2016. Thank you.

On your first question, if I understood you well, you wanted to know what was the reduction at the constant exchange rate.

Yes.

It’s the same. It’s the same.

As far as Valens is concerned, we are not providing details every quarter on that. We’ll make a full update with the annual result.

But let me tell you that we are, of course, permanently checking where we stand month per month. And we check both what is already delivered and we update the target for the two years that is the time frame of this plan, so ending 2016 with some benefit showing up in 2017.

And as I speak, we confirm our targets of €350 million of savings in the various categories. There might be some minor changes.

Some are delivering more and others less. In the case of lower deliveries, of course, we will compensate by new actions.

But, generally speaking, we were pleased with the way that the plan is being rolled out by the various entities. So we are definitely on plan.

Giacomo, I’m sorry, I was slightly wrong. The SG&A reduction at same exchange rate is 11.5%.

Perfect. Thank you.

Okay. We have our next question.

Hi, good evening. Thank you very much for taking my question.

My first question relates to the reduction in cash, which seems to be around €370 million between Q2 and Q3, which compares with plus €32 million of free cash flow over that period. Can you help us bridge that €400 million difference?

My question number two relates to short-term debt, below three months. Can you tell us how much is outstanding as of Q3?

And do you expect that you will be able to extend or roll that debt to preserve cash in Q4? And finally, my last question relates to net debt-to-equity ratio which increased from 42% to 48%.

To what extent was that ratio affected by asset write-downs in the U.S. if any?

Thank you very much.

I will take the two last ones. I’m not sure I followed you on the first one.

On the short-term debt, it’s as of today less than €500 million. And it depends with either country or by country, some of that is for one year, some for less.

We have some commercial paper as well; so it’s really a mixed bag. In terms of the ratio, your question is actually to ask whether there is a risk of impairment for our North American assets.

The answer is probably no, because we strongly believe in the future of the shale industry in the USA. And as you know, when you make calculations for impairment tests, what matters is really what you see as a long-term trend more than the immediate results of your H1 or H2.

So we don’t see a significant risk over there.

And, generally speaking, if I may add a comment on the North American market, and please, Nicolas, feel free to add to comments. We are - our vision is that this market has fallen very significantly in terms of number of rigs in operations, number of wells being drilled.

We’re down 40%-plus so far. So we think we’re probably not far from the bottom, even if on a very short-term perspective we might see some additional reduction in the number of rigs operating.

But we think we are not that far from the bottom and so you should see some recovery all along next year. So, all-in-all, it means that the North American market is probably not far from troughing.

And we remain absolutely convinced that it will be the first market to react to the expected unbalancing of supply and demand which will take place maybe by globally, I mean, by year-end next year or beginning of 2017, depending on who you read. So I think the consensus position today that North America is the place where the imbalance will have the most immediate effect on the recovery.

And then, step-by-step, our vision is that we should come back to the very high level of activity in drilling in North America. Hence, so far no change in our medium term vision of the North American market.

So…

Understood. Thank you.

Just to follow up on the first question and to clarify, I was referring to the decrease in cash from €975 million as of June this year to €604 million to September, so roughly €370 million. And I was trying to bridge that €370 million decline.

How do you - given that you indicated that the free cash flows were plus €32 million in the third quarter - is that mainly related to a repayment of debt during that period?

Yes, actually it’s mostly related to some debt in Brazil, where we had some short-term debt linked to an export financing tool that is a very Brazilian one called ACC/ACE. And we had as well some short-term debt vis-à-vis the BNDES Finame organism in Brazil that was a short-term instrument; and we had cash in front of that.

So you have seen between end of June and now a very parallel decline in our available cash and short-term debt in Brazil.

Understood. Thank you.

Okay. Orille, do we have any question or maybe I will leave the floor to Philippe for a short conclusion?

Hi, just to follow up on the short-term debt question there. Could you give us a bit of guidance for the next couple of quarters, if you expect the remaining €500 million to roll over or if you need to repay some more?

I think most of it - but again, it’s a mixed bag - has not to be repaid in the very short term. Maybe with the exception of a commercial paper, where it goes up and down depending on the market conditions.

So it’s difficult to make a forecast there.

Okay. And have you in the last quarter or so been rolling the short-term debt in the US?

Yes, absolutely. Yes.

Okay. Thank you.

You’re welcome.

Philippe, you want to conclude maybe today?

Well, just a few comments overall. But - there are other questions.

Oh, sorry, sorry, yes.

Orille, we have another question, so I maybe, I’d like to get.

Hi, good evening, everyone. Just one quick question please, regarding the U.S.

market. And, when do you expect the first positive sign from the end of destocking in the U.S., meaning, what is the available stock currently on the market?

And do you still expect a positive impact from the second part of 2016?

Okay, maybe I should give the floor to Nicolas, who is there in Houston. Nicolas, did you hear the question?

Yes, Philippe. Yes, of course.

Well, Kevin, again, they are here - it’s contrasted. We have some of our main distributors that are telling us that they have reached at least for some of their segments that they need probably the lowest point and the point that is adapted to what is the current level of number of rigs.

So some of them are seeing the end of the tunnel at least for the more premium part of their needs, where the rotation of the stock is higher. Others are still having to do some kind of adaptation in their inventories and do not foresee this to happen before probably the end of H1.

So, yes, you’re right, we do expect whatever is the market situation in terms of number of rigs. Of course, if the rig continues to fall very steeply, there will be some further destocking in all of our distributors.

But, otherwise, even with the current level of rigs, just mechanically by the end of the destocking effect - and this is in distribution and also for the stock that the end-users are carrying also - probably some reduction of this destocking effect, meaning for us mechanically a better booking trend for the second half of 2016.

Okay. Thanks [indiscernible].

And, maybe I’d like to take the opportunity to emphasize how confident we are in our business model in North America. As Nicolas just mentioned, we have a model which is based on a strong and long-term partnership with a small number of carefully selected distributors.

And we think this is a very efficient model, a clear differentiator with our competitors. Our distributors, as Nicolas just mentioned, are not overstocked.

They know how to deal with the cycle. They have long experience.

And, so when I read or hear that the whole market is overstocked, it is definitely not in Vallourec supply chain. We think definitely the alliance between the industrial product performance provided by Vallourec and the expertise in supply chain management, and the financing resources as well supplied by distributors, is really the most efficient model.

We call it integrated model. It involves the oil company, the distributor and the pipe manufacturer.

We think this model and we demonstrate many years now that this model is fit for any kind of customers. As you know, in North America, there it’s a very diversified customer population.

Some oil companies are big. They have effective management capabilities.

They do not need financial support. Others are much smaller.

They strive for a very short lead time and they cannot finance their inventory. And our model is capable to adapt to both type of customers, both ends of the market.

So we think it is very efficient for the customer. It is optimized cost-wise as the cost of distributors are lower, of course, than the cost of any manufacturing companies.

And of course, for Vallourec, it is very efficient from a balance sheet standpoint, since we do not own the inventory. So I wanted to add this on our model and to testify how confident we are, as our customers are, on the efficiency of that model.

And I will just add a little bit on this, Philippe, that been spending a lot of time those last days with some customers that definitely emphasize exactly what you are saying.

Kevin, is that okay for you?

Yes, thanks a lot for that. It’s very helpful.

Thanks.

Okay. Next question, please, if we have any.

Yes, good afternoon. Just a real quick question regarding the level of CapEx for 2015, during the last nine months of CapEx stood at €159 million.

Can we expect that Q4 will be globally in line with the average of the first each quarter? Or will it be a little bit higher due to, let’s say, a little bit more maintenance on some specific plants?

Thanks.

It will be higher. This is the case each and every year.

So the indication we gave about that is that our CapEx for this year will be slightly below €200 million.

Thank you.

Okay. Orille, we have - sorry, we have the next question or are we done?

Hi, it’s Amy again. Just a quick follow-up question, looking for some guidance on your tax rate, can you remind us if you still expect normalized tax rate to be around 30%?

But thinking ahead to 2016, is that going to be the effective tax rate you think for 2016, given the kind of various scenarios around the profitability? And also, maybe some guidance on cash taxes versus P&L tax expense, please.

Thank you very much.

It’s getting very difficult to think as a normative tax rate, because with the current down-cycle in some countries we are doing net results that are negative. So it’s really more country-by-country analysis that will be taken into account.

Sorry, not to be able to help you much more.

All righty. Thank you very much.

Okay. So thank you very much for this call tonight.

I think we are done with the questions. Orille, I think we can switch off tonight.