Constellium SE (NYSE: CSTM) today reported results for the third
quarter ended September 30, 2023.
Third quarter 2023
highlights:
- Shipments of 369 thousand metric tons, down 5% compared to Q3
2022
- Revenue of €1.7 billion, down 15% compared to Q3 2022
- Value-Added Revenue (VAR) of €704 million, up 5% compared to Q3
2022
- Net income of €64 million compared to net income of €131
million in Q3 2022
- Adjusted EBITDA of €168 million, up 5% compared to Q3 2022
- Cash from Operations of €154 million and Free Cash Flow of €78
million
Nine months ended September 30,
2023 highlights:
- Shipments of 1.2 million metric tons, down 5% compared to
YTD 2022
- Revenue of €5.6 billion, down 10% compared to YTD 2022
- VAR of €2.2 billion, up 11% compared to YTD 2022
- Net income of €118 million compared to net income of €278
million in YTD 2022
- Adjusted EBITDA of €542 million, up 3% compared to YTD
2022
- Cash from Operations of €321 million and Free Cash Flow of €112
million
- Net debt / LTM Adjusted EBITDA of 2.5x at September 30,
2023
Jean-Marc Germain, Constellium’s Chief Executive
Officer said, “Constellium delivered strong results in the third
quarter despite significant inflationary pressures and demand
headwinds in several end markets. Adjusted EBITDA of €168 million
is a third quarter record and includes record third quarter
performance by A&T. Looking across our end markets, aerospace
demand remains strong. Automotive demand decelerated slightly
during the quarter but remains above prior year levels. Packaging
shipments were down in the quarter though demand appears to have
stabilized following the last several quarters of destocking. We
continued to experience weakness in most industrial markets,
especially in Europe. Free Cash Flow generation in the third
quarter was strong at €78 million and we reduced our leverage to
2.5x.”
Mr. Germain concluded, “We expect recent demand
trends in our markets to continue through the remainder of 2023.
Based on our current outlook, in 2023 we still expect Adjusted
EBITDA to be in the range of €700 million to €720 million and Free
Cash Flow in excess of €150 million. We also remain confident in
our ability to deliver on our long-term target of Adjusted EBITDA
over €800 million in 2025. Our focus remains on executing our
strategy, driving operational performance, generating Free Cash
Flow, achieving our ESG objectives and increasing shareholder
value.”
Group Summary
|
Q3 2023 |
Q3 2022 |
Var. |
YTD 2023 |
YTD 2022 |
Var. |
Shipments (k metric tons) |
369 |
387 |
(5 |
)% |
1,156 |
1,212 |
(5 |
)% |
Revenue (€ millions) |
1,720 |
2,022 |
(15 |
)% |
5,626 |
6,276 |
(10 |
)% |
VAR (€ millions) |
704 |
673 |
5 |
% |
2,243 |
2,029 |
11 |
% |
Net income (€ millions) |
64 |
131 |
n.m. |
118 |
278 |
n.m. |
Adjusted EBITDA (€ millions) |
168 |
160 |
5 |
% |
542 |
525 |
3 |
% |
Adjusted EBITDA per metric ton (€) |
453 |
412 |
10 |
% |
469 |
433 |
8 |
% |
The difference between the sum of reported segment revenue and
total group revenue includes revenue from certain non-core
activities and inter-segment eliminations. The difference between
the sum of reported segment Adjusted EBITDA and the Group Adjusted
EBITDA is related to Holdings and Corporate. |
|
For the third quarter of 2023, shipments of 369
thousand metric tons decreased 5% compared to the third quarter of
last year due to lower shipments in each of our segments. Revenue
of €1.7 billion decreased 15% compared to the third quarter of the
prior year primarily due to lower shipments and lower metal prices,
partially offset by improved price and mix. VAR of €704 million
increased 5% compared to the third quarter of the prior year
primarily due to improved price and mix, partially offset by lower
shipments, unfavorable metal costs and unfavorable foreign exchange
translation. Net income of €64 million decreased €67 million
compared to net income of €131 million in the third quarter of
2022. Adjusted EBITDA of €168 million increased 5% compared to the
third quarter of last year due to stronger results in our A&T
segment, partially offset by weaker results in our P&ARP and
AS&I segments.
For the first nine months of 2023, shipments of
1.2 million metric tons decreased 5% compared to the first nine
months of 2022 due to lower shipments in the P&ARP and AS&I
segments. Revenue of €5.6 billion decreased 10% compared to the
first nine months of 2022 primarily due to lower shipments and
lower metal prices, partially offset by improved price and mix. VAR
of €2.2 billion increased 11% compared to the first nine months of
2022 primarily due to improved price and mix, partially offset by
lower shipments, unfavorable metal costs and unfavorable foreign
exchange translation. Net income of €118 million decreased €160
million compared to net income of €278 million in the first nine
months of 2022. Adjusted EBITDA of €542 million increased 3%
compared to the first nine months of 2022 due to stronger results
in our A&T segment, partially offset by weaker results in our
P&ARP and AS&I segments.
Results by Segment
Packaging & Automotive Rolled Products
(P&ARP)
|
Q3 2023 |
Q3 2022 |
Var. |
YTD 2023 |
YTD 2022 |
Var. |
Shipments (k metric tons) |
261 |
267 |
(2 |
)% |
792 |
835 |
(5 |
)% |
Revenue (€ millions) |
954 |
1,140 |
(16 |
)% |
3,033 |
3,656 |
(17 |
)% |
Adjusted EBITDA (€ millions) |
67 |
78 |
(14 |
)% |
201 |
255 |
(21 |
)% |
Adjusted EBITDA per metric ton (€) |
256 |
291 |
(12 |
)% |
254 |
305 |
(17 |
)% |
|
|
|
|
|
|
|
|
|
For the third quarter of 2023, Adjusted EBITDA
of €67 million decreased 14% compared to the third quarter of 2022
as a result of lower shipments, higher operating costs mainly due
to inflation, operating challenges at our Muscle Shoals facility
and unfavorable metal costs, and unfavorable foreign exchange
translation, partially offset by improved price and mix. Shipments
of 261 thousand metric tons decreased 2% compared to the third
quarter of the prior year due to lower shipments of packaging and
specialty rolled products, partially offset by higher shipments of
automotive rolled products. Revenue of €1.0 billion decreased 16%
compared to the third quarter of 2022 primarily due to lower
shipments and lower metal prices, partially offset by improved
price and mix.
For the first nine months of 2023, Adjusted
EBITDA of €201 million decreased 21% compared to the first nine
months of 2022 as a result of lower shipments and higher operating
costs mainly due to inflation, operating challenges at our Muscle
Shoals facility and unfavorable metal costs, partially offset by
improved price and mix. Shipments of 792 thousand metric tons
decreased 5% compared to the first nine months of 2022 due to lower
shipments of packaging and specialty rolled products, partially
offset by higher shipments of automotive rolled products. Revenue
of €3.0 billion decreased 17% compared to the first nine months of
2022 primarily due to lower shipments and lower metal prices,
partially offset by improved price and mix.
Aerospace & Transportation
(A&T)
|
Q3 2023 |
Q3 2022 |
Var. |
YTD 2023 |
YTD 2022 |
Var. |
Shipments (k metric tons) |
53 |
55 |
(3 |
)% |
171 |
170 |
1 |
% |
Revenue (€ millions) |
404 |
432 |
(6 |
)% |
1,320 |
1,278 |
3 |
% |
Adjusted EBITDA (€ millions) |
79 |
45 |
76 |
% |
248 |
161 |
55 |
% |
Adjusted EBITDA per metric ton (€) |
1,480 |
807 |
8 |
% |
1,438 |
944 |
52 |
% |
|
|
|
|
|
|
|
|
|
For the third quarter of 2023, Adjusted EBITDA
of €79 million increased 76% compared to the third quarter of 2022
primarily due to improved price and mix, partially offset by lower
shipments, higher operating costs mainly due to inflation and
unfavorable foreign exchange translation. Shipments of 53 thousand
metric tons decreased 3% compared to the third quarter of 2022 on
higher shipments of aerospace rolled products, more than offset by
lower shipments of transportation, industry and defense (TID)
rolled products. Revenue of €404 million decreased 6% compared to
the third quarter of 2022 primarily due to lower shipments, lower
metal prices and unfavorable foreign exchange translation,
partially offset by improved price and mix.
For the first nine months of 2023, Adjusted
EBITDA of €248 million increased 55% compared to the first nine
months of 2022 primarily due to improved price and mix, partially
offset by higher operating costs mainly due to inflation and
increased activity levels. Shipments of 171 thousand metric tons
increased 1% compared to the first nine months of 2022 on higher
shipments of aerospace rolled products, mostly offset by lower
shipments of TID rolled products. Revenue of €1.3 billion increased
3% compared to the first nine months of 2022 primarily due to
improved price and mix, partially offset by lower metal prices.
Automotive Structures & Industry
(AS&I)
|
Q3 2023 |
Q3 2022 |
Var. |
YTD 2023 |
YTD 2022 |
Var. |
Shipments (k metric tons) |
55 |
65 |
(15 |
)% |
193 |
207 |
(7 |
)% |
Revenue (€ millions) |
370 |
473 |
(22 |
)% |
1,296 |
1,433 |
(10 |
)% |
Adjusted EBITDA (€ millions) |
26 |
35 |
(27 |
)% |
108 |
118 |
(8 |
)% |
Adjusted EBITDA per metric ton (€) |
467 |
544 |
(14 |
)% |
560 |
570 |
(2 |
)% |
|
For the third quarter of 2023, Adjusted EBITDA
of €26 million decreased 27% compared to the third quarter of 2022
primarily due to lower shipments and higher operating costs mainly
due to inflation, partially offset by improved price and mix.
Shipments of 55 thousand metric tons decreased 15% compared to the
third quarter of 2022 due to lower shipments of automotive and
other extruded products. Revenue of €370 million decreased 22%
compared to the third quarter of 2022 primarily due to lower
shipments and lower metal prices, partially offset by improved
price and mix.
For the first nine months of 2023, Adjusted
EBITDA of €108 million decreased 8% compared to the first nine
months of 2022 primarily due to lower shipments and higher
operating costs mainly due to inflation, mostly offset by improved
price and mix. Shipments of 193 thousand metric tons decreased 7%
compared to the first nine months of 2022 due to lower shipments of
other extruded products, partially offset by higher shipments of
automotive extruded products. Revenue of €1.3 billion decreased 10%
compared to the first nine months of 2022 primarily due to lower
shipments and lower metal prices, partially offset by improved
price and mix.
Net Income
For the third quarter of 2023, net income of €64
million compares to net income of €131 million in the third quarter
of the prior year. The decrease in net income is primarily related
to the recognition in the prior year of deferred tax assets
previously unrecognized of €142 million, partially offset by a gain
related to the sale of Constellium Extrusions Deutschland GmbH,
favorable changes in gains and losses on derivatives mostly related
to our hedging positions, and higher gross profit.
For the first nine months of 2023, net income of
€118 million compares to net income of €278 million in the first
nine months of the prior year. The decrease in net income is
primarily related to the recognition in the prior year of deferred
tax assets previously unrecognized of €142 million and lower gross
profit, partially offset by a gain related to the sale of
Constellium Extrusions Deutschland GmbH.
Cash Flow
Free Cash Flow was €112 million in the first
nine months of 2023 compared to €160 million in the first nine
months of the prior year. The decrease was primarily due to
increased capital expenditures and higher cash interest, partially
offset by stronger Adjusted EBITDA.
Cash flows from operating activities were €321
million for the first nine months of 2023 compared to cash flows
from operating activities of €323 million in the first nine months
of the prior year.
Cash flows used in investing activities were
€161 million for the first nine months of 2023 compared to cash
flows used in investing activities of €163 million in the first
nine months of the prior year. In the first nine months of 2023,
cash flows used in investing activities included €47 million of net
proceeds from the sale of Constellium Extrusion Deutschland GmbH in
September 2023.
Cash flows used in financing activities were
€167 million for the first nine months of 2023 compared to cash
flows used in financing activities of €141 million in the first
nine months of the prior year. In the first nine months of 2023,
Constellium used cash on the balance sheet to reduce short-term
borrowings and to redeem $50 million of the $300 million
outstanding aggregate principal amount of its 5.875% Senior Notes
due 2026. In the first nine months of 2022, Constellium drew on the
Pan-U.S. ABL due 2026 and used the proceeds and cash on the balance
sheet to repay the €180 million PGE French Facility due 2022 and
the CHF 15 million Swiss Facility due 2025.
Liquidity and Net Debt
Liquidity at September 30, 2023 was €746
million, comprised of €159 million of cash and cash equivalents and
€587 million available under our committed lending facilities and
factoring arrangements.
Net debt was €1,750 million at September 30,
2023 compared to €1,891 million at December 31, 2022.
Outlook
Based on our current outlook, we expect Adjusted
EBITDA to be in the range of €700 million to €720 million and Free
Cash Flow in excess of €150 million in 2023. We were not impacted
by the United Auto Workers union strike in the third quarter, but
we do expect some impact in the fourth quarter, which is included
in our guidance.
We are not able to provide a reconciliation of
this Adjusted EBITDA guidance to net income, the comparable GAAP
measure, because certain items that are excluded from Adjusted
EBITDA cannot be reasonably predicted or are not in our control. In
particular, we are unable to forecast the timing or magnitude of
realized and unrealized gains and losses on derivative instruments,
metal lag, impairment or restructuring charges, or taxes, without
unreasonable efforts, and these items could significantly impact,
either individually or in the aggregate, future net income.
Forward-looking statements
Certain statements contained in this press
release may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
This press release may contain “forward-looking statements” with
respect to our business, results of operations and financial
condition, and our expectations or beliefs concerning future events
and conditions. You can identify forward-looking statements because
they contain words such as, but not limited to, “believes,”
“expects,” “may,” “should,” “approximately,” “anticipates,”
“estimates,” “intends,” “plans,” “targets,” likely,” “will,”
“would,” “could” and similar expressions (or the negative of these
terminologies or expressions). All forward-looking statements
involve risks and uncertainties. Many risks and uncertainties are
inherent in our industry and markets, while others are more
specific to our business and operations. These risks and
uncertainties include, but are not limited to: market competition;
economic downturn; disruption to business operations, including the
length and magnitude of disruption resulting from the global
COVID-19 pandemic; the Russian war on Ukraine; the inability to
meet customer demand and quality requirements; the loss of key
customers, suppliers or other business relationships; supply
disruptions; excessive inflation; the capacity and effectiveness of
our hedging policy activities; the loss of key employees; levels of
indebtedness which could limit our operating flexibility and
opportunities; and other risk factors set forth under the heading
“Risk Factors” in our Annual Report on Form 20-F, and as described
from time to time in subsequent reports filed with the U.S.
Securities and Exchange Commission. The occurrence of the events
described and the achievement of the expected results depend on
many events, some or all of which are not predictable or within our
control. Consequently, actual results may differ materially from
the forward-looking statements contained in this press release. We
undertake no obligation to update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as required by law.
About Constellium
Constellium (NYSE: CSTM) is a global sector
leader that develops innovative, value-added aluminium products for
a broad scope of markets and applications, including packaging,
automotive and aerospace. Constellium generated €8.1 billion of
revenue in 2022.
Constellium’s earnings materials for the third
quarter ended September 30, 2023 are also available on the
company’s website (www.constellium.com).
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
|
|
Three months endedSeptember 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
1,720 |
|
|
2,022 |
|
|
5,626 |
|
|
6,276 |
|
|
Cost of sales |
|
(1,562 |
) |
|
(1,889 |
) |
|
(5,094 |
) |
|
(5,711 |
) |
|
Gross profit |
|
158 |
|
|
133 |
|
|
532 |
|
|
565 |
|
|
Selling and administrative expenses |
|
(70 |
) |
|
(63 |
) |
|
(221 |
) |
|
(206 |
) |
|
Research and development expenses |
|
(11 |
) |
|
(11 |
) |
|
(37 |
) |
|
(32 |
) |
|
Other gains and losses - net |
|
41 |
|
|
(29 |
) |
|
(15 |
) |
|
(53 |
) |
|
Income from operations |
|
118 |
|
|
30 |
|
|
259 |
|
|
274 |
|
|
Finance costs - net |
|
(36 |
) |
|
(36 |
) |
|
(106 |
) |
|
(98 |
) |
|
Income / (loss) before tax |
|
82 |
|
|
(6 |
) |
|
153 |
|
|
176 |
|
|
Income tax (expense) / benefit |
|
(18 |
) |
|
137 |
|
|
(35 |
) |
|
102 |
|
|
Net income |
|
64 |
|
|
131 |
|
|
118 |
|
|
278 |
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
Equity holders of Constellium |
|
64 |
|
|
130 |
|
|
115 |
|
|
273 |
|
|
Non-controlling interests |
|
— |
|
|
1 |
|
|
3 |
|
|
5 |
|
|
Net income |
|
64 |
|
|
131 |
|
|
118 |
|
|
278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to the equityholders of
Constellium, (in Euros) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
0.44 |
|
|
0.90 |
|
|
0.79 |
|
|
1.90 |
|
|
Diluted |
|
0.43 |
|
|
0.88 |
|
|
0.77 |
|
|
1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares,(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
146,820 |
|
|
144,302 |
|
|
145,897 |
|
|
143,398 |
|
|
Diluted |
|
148,704 |
|
|
146,759 |
|
|
148,704 |
|
|
146,759 |
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME / (LOSS) (UNAUDITED)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
64 |
|
|
131 |
|
|
118 |
|
|
278 |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to the
consolidated income statement |
|
|
|
|
|
|
|
|
Remeasurement on post-employment benefit obligations |
|
26 |
|
|
26 |
|
|
30 |
|
|
181 |
|
|
Income tax on remeasurement on post-employment benefit
obligations |
|
(6 |
) |
|
(9 |
) |
|
(8 |
) |
|
(39 |
) |
|
Items that may be reclassified subsequently to the consolidated
income statement |
|
|
|
|
|
|
|
|
Cash flow hedges |
|
(6 |
) |
|
(12 |
) |
|
(2 |
) |
|
(27 |
) |
|
Income tax on cash flow hedges |
|
2 |
|
|
3 |
|
|
1 |
|
|
7 |
|
|
Currency translation differences |
|
20 |
|
|
47 |
|
|
7 |
|
|
89 |
|
|
Other comprehensive income |
|
36 |
|
|
55 |
|
|
28 |
|
|
211 |
|
|
Total comprehensive income |
|
100 |
|
|
186 |
|
|
146 |
|
|
489 |
|
|
Attributable to: |
|
|
|
|
|
|
|
|
Equity holders of Constellium |
|
99 |
|
|
184 |
|
|
143 |
|
|
483 |
|
|
Non-controlling interests |
|
1 |
|
|
2 |
|
|
3 |
|
|
6 |
|
|
Total comprehensive income |
|
100 |
|
|
186 |
|
|
146 |
|
|
489 |
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION (UNAUDITED)
(in millions of Euros) |
|
At September 30, 2023 |
|
At December 31, 2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
159 |
|
166 |
|
Trade receivables and other |
|
642 |
|
539 |
|
Inventories |
|
1,137 |
|
1,320 |
|
Other financial assets |
|
34 |
|
31 |
|
|
|
1,972 |
|
2,056 |
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
2,020 |
|
2,017 |
|
Goodwill |
|
482 |
|
478 |
|
Intangible assets |
|
50 |
|
54 |
|
Deferred tax assets |
|
228 |
|
271 |
|
Trade receivables and other |
|
40 |
|
43 |
|
Other financial assets |
|
3 |
|
8 |
|
|
|
2,823 |
|
2,871 |
|
Assets of disposal group classified as held for sale |
|
— |
|
14 |
|
Total Assets |
|
4,795 |
|
4,941 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade payables and other |
|
1,354 |
|
1,467 |
|
Borrowings |
|
54 |
|
148 |
|
Other financial liabilities |
|
46 |
|
41 |
|
Income tax payable |
|
15 |
|
16 |
|
Provisions |
|
21 |
|
21 |
|
|
|
1,490 |
|
1,693 |
|
Non-current liabilities |
|
|
|
|
|
Trade payables and other |
|
64 |
|
43 |
|
Borrowings |
|
1,855 |
|
1,908 |
|
Other financial liabilities |
|
14 |
|
14 |
|
Pension and other post-employment benefit obligations |
|
369 |
|
403 |
|
Provisions |
|
88 |
|
90 |
|
Deferred tax liabilities |
|
4 |
|
28 |
|
|
|
2,394 |
|
2,486 |
|
Liabilities of disposal group classified as held for sale |
|
— |
|
10 |
|
Total Liabilities |
|
3,884 |
|
4,189 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
|
3 |
|
3 |
|
Share premium |
|
420 |
|
420 |
|
Retained earnings and other reserves |
|
466 |
|
308 |
|
Equity attributable to equity holders of
Constellium |
|
889 |
|
731 |
|
Non-controlling interests |
|
22 |
|
21 |
|
Total Equity |
|
911 |
|
752 |
|
|
|
|
|
|
|
Total Equity and Liabilities |
|
4,795 |
|
4,941 |
|
|
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (UNAUDITED)
(in millions of Euros) |
|
Share capital |
|
Share premium |
|
Re measurement |
|
Cash flow hedges |
|
Foreign currency translation reserve |
|
Other reserves |
|
Retained earnings |
|
Total |
|
Non-controlling interests |
|
Total equity |
|
At January 1, 2023 |
|
3 |
|
420 |
|
28 |
|
|
(10 |
) |
|
41 |
|
101 |
|
148 |
|
|
731 |
|
21 |
|
|
752 |
|
|
Net income |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
115 |
|
|
115 |
|
3 |
|
|
118 |
|
|
Other comprehensive income / (loss) |
|
— |
|
— |
|
22 |
|
|
(1 |
) |
|
7 |
|
— |
|
— |
|
|
28 |
|
— |
|
|
28 |
|
|
Total comprehensive income / (loss) |
|
— |
|
— |
|
22 |
|
|
(1 |
) |
|
7 |
|
— |
|
115 |
|
|
143 |
|
3 |
|
|
146 |
|
|
Share-based compensation |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
15 |
|
— |
|
|
15 |
|
— |
|
|
15 |
|
|
Other |
|
— |
|
— |
|
(1 |
) |
|
— |
|
|
— |
|
— |
|
1 |
|
|
— |
|
— |
|
|
— |
|
|
Transactions with non-controlling interests |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
|
— |
|
(2 |
) |
|
(2 |
) |
|
At September 30, 2023 |
|
3 |
|
420 |
|
49 |
|
|
(11 |
) |
|
48 |
|
116 |
|
264 |
|
|
889 |
|
22 |
|
|
911 |
|
|
|
(in millions of Euros) |
|
Share capital |
|
Share premium |
|
Re measurement |
|
Cash flow hedges |
|
Foreign currency translation reserve |
|
Other reserves |
|
Retained (deficit) / earnings |
|
Total |
|
Non-controlling interests |
|
Total equity |
|
At January 1, 2022 |
|
3 |
|
420 |
|
(94 |
) |
|
(4 |
) |
|
19 |
|
83 |
|
(153 |
) |
|
274 |
|
17 |
|
|
291 |
|
|
Net income |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
273 |
|
|
273 |
|
5 |
|
|
278 |
|
|
Other comprehensive income / (loss) |
|
— |
|
— |
|
142 |
|
|
(20 |
) |
|
88 |
|
— |
|
— |
|
|
210 |
|
1 |
|
|
211 |
|
|
Total comprehensive income / (loss) |
|
— |
|
— |
|
142 |
|
|
(20 |
) |
|
88 |
|
— |
|
273 |
|
|
483 |
|
6 |
|
|
489 |
|
|
Share-based compensation |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
13 |
|
— |
|
|
13 |
|
— |
|
|
13 |
|
|
Transactions with non-controlling interests |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
At September 30, 2022 |
|
3 |
|
420 |
|
48 |
|
|
(24 |
) |
|
107 |
|
96 |
|
120 |
|
|
770 |
|
23 |
|
|
793 |
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
64 |
|
|
131 |
|
|
118 |
|
|
278 |
|
|
Adjustments |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
77 |
|
|
73 |
|
|
221 |
|
|
209 |
|
|
Pension and other post-employment benefits service costs |
|
5 |
|
|
7 |
|
|
16 |
|
|
18 |
|
|
Finance costs - net |
|
36 |
|
|
36 |
|
|
106 |
|
|
98 |
|
|
Income tax expense / (benefit) |
|
18 |
|
|
(137 |
) |
|
35 |
|
|
(102 |
) |
|
Unrealized (gains) / losses on derivatives - net and from
remeasurement of monetary assets and liabilities - net |
|
(23 |
) |
|
(18 |
) |
|
5 |
|
|
67 |
|
|
(Gains) / losses on disposal |
|
(36 |
) |
|
1 |
|
|
(30 |
) |
|
2 |
|
|
Other - net |
|
5 |
|
|
4 |
|
|
15 |
|
|
12 |
|
|
Change in working capital |
|
|
|
|
|
|
|
|
Inventories |
|
25 |
|
|
18 |
|
|
175 |
|
|
(238 |
) |
|
Trade receivables |
|
133 |
|
|
195 |
|
|
(91 |
) |
|
(92 |
) |
|
Trade payables |
|
(109 |
) |
|
(119 |
) |
|
(123 |
) |
|
206 |
|
|
Other |
|
14 |
|
|
(1 |
) |
|
20 |
|
|
3 |
|
|
Change in provisions |
|
(1 |
) |
|
(3 |
) |
|
(3 |
) |
|
(7 |
) |
|
Pension and other post-employment benefits paid |
|
(11 |
) |
|
(12 |
) |
|
(30 |
) |
|
(33 |
) |
|
Interest paid |
|
(33 |
) |
|
(31 |
) |
|
(96 |
) |
|
(85 |
) |
|
Income tax paid |
|
(10 |
) |
|
10 |
|
|
(17 |
) |
|
(13 |
) |
|
Net cash flows from operating activities |
|
154 |
|
|
154 |
|
|
321 |
|
|
323 |
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(76 |
) |
|
(80 |
) |
|
(210 |
) |
|
(164 |
) |
|
Property, plant and equipment grants received |
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
|
Proceeds from disposals, net of cash |
|
48 |
|
|
— |
|
|
48 |
|
|
— |
|
|
Net cash flows used in investing activities |
|
(28 |
) |
|
(80 |
) |
|
(161 |
) |
|
(163 |
) |
|
|
|
|
|
|
|
|
|
|
Repayments of long-term borrowings |
|
(46 |
) |
|
(2 |
) |
|
(51 |
) |
|
(188 |
) |
|
Net change in revolving credit facilities and short-term
borrowings |
|
(90 |
) |
|
(57 |
) |
|
(83 |
) |
|
67 |
|
|
Lease repayments |
|
(13 |
) |
|
(7 |
) |
|
(29 |
) |
|
(27 |
) |
|
Payment of financing costs and redemption fees |
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
Transactions with non-controlling interests |
|
— |
|
|
— |
|
|
(3 |
) |
|
(2 |
) |
|
Other financing activities |
|
1 |
|
|
5 |
|
|
(1 |
) |
|
10 |
|
|
Net cash flows used in financing activities |
|
(148 |
) |
|
(62 |
) |
|
(167 |
) |
|
(141 |
) |
|
|
|
|
|
|
|
|
|
|
Net (decrease) / increase in cash and cash
equivalent |
|
(22 |
) |
|
12 |
|
|
(7 |
) |
|
19 |
|
|
Cash and cash equivalents - beginning of period |
|
178 |
|
|
156 |
|
|
166 |
|
|
147 |
|
|
Transfer of cash and cash equivalents classified from / (to) assets
classified as held for sale |
|
2 |
|
|
— |
|
|
1 |
|
|
— |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
1 |
|
|
3 |
|
|
(1 |
) |
|
5 |
|
|
Cash and cash equivalents - end of period |
|
159 |
|
|
171 |
|
|
159 |
|
|
171 |
|
|
|
SEGMENT ADJUSTED EBITDA
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
P&ARP |
|
67 |
|
|
78 |
|
|
201 |
|
|
255 |
|
|
A&T |
|
79 |
|
|
45 |
|
|
248 |
|
|
161 |
|
|
AS&I |
|
26 |
|
|
35 |
|
|
108 |
|
|
118 |
|
|
Holdings and Corporate |
|
(4 |
) |
|
2 |
|
|
(15 |
) |
|
(9 |
) |
|
Total |
|
168 |
|
|
160 |
|
|
542 |
|
|
525 |
|
|
|
SHIPMENTS AND REVENUE BY PRODUCT
LINE
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in k metric tons) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Packaging rolled products |
|
187 |
|
|
196 |
|
|
564 |
|
|
623 |
|
|
Automotive rolled products |
|
68 |
|
|
64 |
|
|
209 |
|
|
184 |
|
|
Specialty and other thin-rolled products |
|
6 |
|
|
7 |
|
|
19 |
|
|
28 |
|
|
Aerospace rolled products |
|
23 |
|
|
19 |
|
|
74 |
|
|
55 |
|
|
Transportation, industry, defense and other rolled products |
|
30 |
|
|
36 |
|
|
97 |
|
|
115 |
|
|
Automotive extruded products |
|
27 |
|
|
29 |
|
|
93 |
|
|
89 |
|
|
Other extruded products |
|
28 |
|
|
36 |
|
|
100 |
|
|
118 |
|
|
Total shipments |
|
369 |
|
|
387 |
|
|
1,156 |
|
|
1,212 |
|
|
|
|
|
|
|
|
|
|
|
(in millions of Euros) |
|
|
|
|
|
|
|
|
Packaging rolled products |
|
630 |
|
|
792 |
|
|
2,014 |
|
|
2,629 |
|
|
Automotive rolled products |
|
286 |
|
|
308 |
|
|
902 |
|
|
879 |
|
|
Specialty and other thin-rolled products |
|
38 |
|
|
40 |
|
|
117 |
|
|
148 |
|
|
Aerospace rolled products |
|
234 |
|
|
184 |
|
|
758 |
|
|
510 |
|
|
Transportation, industry, defense and other rolled products |
|
171 |
|
|
248 |
|
|
562 |
|
|
768 |
|
|
Automotive extruded products |
|
213 |
|
|
248 |
|
|
723 |
|
|
721 |
|
|
Other extruded products |
|
157 |
|
|
225 |
|
|
573 |
|
|
712 |
|
|
Other and inter-segment eliminations |
|
(9 |
) |
|
(23 |
) |
|
(23 |
) |
|
(91 |
) |
|
Total revenue |
|
1,720 |
|
|
2,022 |
|
|
5,626 |
|
|
6,276 |
|
|
|
NON-GAAP MEASURES
Reconciliation of Revenue to VAR (a
non-GAAP measure)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenue |
|
1,720 |
|
|
2,022 |
|
|
5,626 |
|
|
6,276 |
|
|
Hedged cost of alloyed metal |
|
(1,037 |
) |
|
(1,414 |
) |
|
(3,435 |
) |
|
(4,191 |
) |
|
Revenue from incidental activities |
|
(6 |
) |
|
(5 |
) |
|
(20 |
) |
|
(16 |
) |
|
Metal price lag |
|
27 |
|
|
70 |
|
|
72 |
|
|
(40 |
) |
|
VAR |
|
704 |
|
|
673 |
|
|
2,243 |
|
|
2,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to Adjusted
EBITDA (a non-GAAP measure)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net income |
|
64 |
|
|
131 |
|
|
118 |
|
|
278 |
|
|
Income tax expense / (benefit) |
|
18 |
|
|
(137 |
) |
|
35 |
|
|
(102 |
) |
|
Income / (loss) before tax |
|
82 |
|
|
(6 |
) |
|
153 |
|
|
176 |
|
|
Finance costs - net |
|
36 |
|
|
36 |
|
|
106 |
|
|
98 |
|
|
Income from operations |
|
118 |
|
|
30 |
|
|
259 |
|
|
274 |
|
|
Depreciation and amortization |
|
77 |
|
|
73 |
|
|
221 |
|
|
209 |
|
|
Unrealized (gains) / losses on derivatives |
|
(23 |
) |
|
(19 |
) |
|
5 |
|
|
65 |
|
|
Unrealized exchange losses from the remeasurement of monetary
assets and liabilities - net |
|
— |
|
|
1 |
|
|
— |
|
|
2 |
|
|
Share based compensation costs |
|
5 |
|
|
4 |
|
|
15 |
|
|
13 |
|
|
Metal price lag (A) |
|
27 |
|
|
70 |
|
|
72 |
|
|
(40 |
) |
|
(Gains) / losses on disposal |
|
(36 |
) |
|
1 |
|
|
(30 |
) |
|
2 |
|
|
Adjusted EBITDA |
|
168 |
|
|
160 |
|
|
542 |
|
|
525 |
|
|
|
(A) Metal price lag represents the financial impact of
the timing difference between when aluminium prices included within
Constellium's Revenue are established
and when aluminium purchase prices included in Cost of sales
are established. The Group accounts for inventory using a weighted
average price basis and this
adjustment aims to remove the effect of volatility in LME prices.
The calculation of the Group metal price lag adjustment is based on
a standardized methodology
calculated at each of Constellium’s manufacturing sites and is
primarily calculated as the average value of product recorded in
inventory, which approximates the
spot price in the market, less the average value transferred out of
inventory, which is the weighted average of the metal element of
cost of sales, based on the
quantity sold in the period. |
|
Reconciliation of net cash flows from
operating activities to Free Cash Flow (a non-GAAP
measure)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
(in millions of Euros) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net cash flows from operating activities |
|
154 |
|
|
154 |
|
|
321 |
|
|
323 |
|
|
Purchases of property, plant and equipment, net of grants
received |
|
(76 |
) |
|
(80 |
) |
|
(209 |
) |
|
(163 |
) |
|
Free Cash Flow |
|
78 |
|
|
74 |
|
|
112 |
|
|
160 |
|
|
|
Reconciliation of borrowings to Net debt
(a non-GAAP measure)
(in millions of Euros) |
|
At September 30, 2023 |
|
At December 31, 2022 |
|
Borrowings |
|
1,909 |
|
|
2,056 |
|
|
Fair value of net debt derivatives, net of margin calls |
|
— |
|
|
1 |
|
|
Cash and cash equivalents |
|
(159 |
) |
|
(166 |
) |
|
Net debt |
|
1,750 |
|
|
1,891 |
|
|
|
Non-GAAP measures
In addition to the results reported in
accordance with International Financial Reporting Standards
(“IFRS”), this press release includes information regarding certain
financial measures which are not prepared in accordance with IFRS
(“non-GAAP measures”). The non-GAAP measures used in this press
release are: VAR, Adjusted EBITDA, Adjusted EBITDA per metric ton,
Free Cash Flow and Net debt. Reconciliations to the most directly
comparable IFRS financial measures are presented in the schedules
to this press release. We believe these non-GAAP measures are
important supplemental measures of our operating and financial
performance. By providing these measures, together with the
reconciliations, we believe we are enhancing investors’
understanding of our business, our results of operations and our
financial position, as well as assisting investors in evaluating
the extent to which we are executing our strategic initiatives.
However, these non-GAAP financial measures supplement our IFRS
disclosures and should not be considered an alternative to the IFRS
measures and may not be comparable to similarly titled measures of
other companies.
Value-Added Revenue (“VAR”) is defined as
revenue, excluding revenue from incidental activities, minus cost
of metal which includes, cost of aluminium adjusted for metal lag,
cost of other alloying metals, freight out costs, and realized
gains and losses from hedging. Management believes that VAR is a
useful measure of our activity as it eliminates the impact of metal
costs from our revenue and reflects the value-added elements of our
activity. VAR eliminates the impact of metal price fluctuations
which are not under our control and which we generally pass-through
to our customers and facilitates comparisons from period to period.
VAR is not a presentation made in accordance with IFRS and should
not be considered as an alternative to revenue determined in
accordance with IFRS.
In considering the financial performance of the
business, management and our chief operational decision maker, as
defined by IFRS, analyze the primary financial performance measure
of Adjusted EBITDA in all of our business segments. The most
directly comparable IFRS measure to Adjusted EBITDA is our net
income or loss for the period. We believe Adjusted EBITDA, as
defined below, is useful to investors and is used by our management
for measuring profitability because it excludes the impact of
certain non-cash charges, such as depreciation, amortization,
impairment and unrealized gains and losses on derivatives as well
as items that do not impact the day-to-day operations and that
management in many cases does not directly control or influence.
Therefore, such adjustments eliminate items which have less bearing
on our core operating performance.
Adjusted EBITDA measures are frequently used by
securities analysts, investors and other interested parties in
their evaluation of Constellium and in comparison to other
companies, many of which present an Adjusted EBITDA-related
performance measure when reporting their results.
Adjusted EBITDA is defined as income / (loss)
from continuing operations before income taxes, results from joint
ventures, net finance costs, other expenses and depreciation and
amortization as adjusted to exclude restructuring costs, impairment
charges, unrealized gains or losses on derivatives and on foreign
exchange differences on transactions which do not qualify for hedge
accounting, metal price lag, share based compensation expense,
effects of certain purchase accounting adjustments, start-up and
development costs or acquisition, integration and separation costs,
certain incremental costs and other exceptional, unusual or
generally non-recurring items.
Adjusted EBITDA is the measure of performance
used by management in evaluating our operating performance, in
preparing internal forecasts and budgets necessary for managing our
business and, specifically in relation to the exclusion of the
effect of favorable or unfavorable metal price lag, this measure
allows management and the investor to assess operating results and
trends without the impact of our accounting for inventories. We use
the weighted average cost method in accordance with IFRS which
leads to the purchase price paid for metal impacting our cost of
goods sold and therefore profitability in the period subsequent to
when the related sales price impacts our revenues. Management
believes this measure also provides additional information used by
our lending facilities providers with respect to the ongoing
performance of our underlying business activities. Historically, we
have used Adjusted EBITDA in calculating our compliance with
financial covenants under certain of our loan facilities.
Adjusted EBITDA is not a presentation made in
accordance with IFRS, is not a measure of financial condition,
liquidity or profitability and should not be considered as an
alternative to profit or loss for the period, revenues or operating
cash flows determined in accordance with IFRS.
Free Cash Flow is defined as net cash flow from
operating activities less capital expenditure, net of grants
received. Management believes that Free Cash Flow is a useful
measure of the net cash flow generated or used by the business as
it takes into account both the cash generated or consumed by
operating activities, including working capital, and the capital
expenditure requirements of the business. However, Free Cash Flow
is not a presentation made in accordance with IFRS and should not
be considered as an alternative to operating cash flows determined
in accordance with IFRS. Free Cash Flow has certain inherent
limitations, including the fact that it does not represent residual
cash flows available for discretionary spending, notably because it
does not reflect principal repayments required in connection with
our debt or capital lease obligations.
Net debt is defined as borrowings plus or minus
the fair value of cross currency basis swaps net of margin calls
less cash and cash equivalents and cash pledged for the issuance of
guarantees. Management believes that Net debt is a useful measure
of indebtedness because it takes into account the cash and cash
equivalent balances held by the Company as well as the total
external debt of the Company. Net debt is not a presentation made
in accordance with IFRS, and should not be considered as an
alternative to borrowings determined in accordance with IFRS.
Jason Hershiser - Investor Relations |
Delphine Dahan-Kocher - External
Communications |
Phone: +1 443 988 0600 |
Phone: +1 443 420 7860 |
Investor-relations@constellium.com |
delphine.dahan-kocher@constellium.com |
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