Constellium SE (NYSE: CSTM) ("Constellium" or the "Company") today
reported results for the fourth quarter and full year ended
December 31, 2023.
Fourth quarter 2023
highlights:
- Shipments of 336 thousand metric
tons, down 9% compared to Q4 2022
- Revenue of €1.6 billion, down 13%
compared to Q4 2022
- Value-Added Revenue (VAR) of €681
million, down 2% compared to Q4 2022
- Net income of €11 million compared
to net income of €30 million in Q4 2022
- Adjusted EBITDA of €171 million, up
15% compared to Q4 2022
- Cash from Operations of €185
million and Free Cash Flow of €58 million
Full year 2023
highlights:
- Shipments of 1.5 million
metric tons, down 6% compared to 2022
- Revenue of €7.2 billion, down 11%
compared to 2022
- VAR of €2.9 billion, up 7% compared
to 2022
- Net income of €129 million compared
to net income of €308 million in 2022
- Adjusted EBITDA of €713 million, up
6% compared to 2022
- Cash from Operations of €506
million and Free Cash Flow of €170 million
- Adjusted Return on Invested Capital
(Adjusted ROIC) of 11.3%, up 30 bps compared to 2022
- Net debt / LTM Adjusted EBITDA of
2.3x at December 31, 2023
Other highlights:
- The Company today announces a
three-year share repurchase program of up to $300 million expiring
in December 2026
Jean-Marc Germain, Constellium’s Chief Executive Officer said,
“Constellium delivered strong results in 2023, and I want to thank
each of our 12,000 employees for their commitment and relentless
focus on safety and serving our customers. 2023 was another year
full of challenges including significant inflationary pressures and
demand headwinds in several end markets. Despite these challenges,
we achieved record Adjusted EBITDA of €713 million, including
record results in our A&T segment. We also generated strong
Free Cash Flow of €170 million and reduced our leverage to
2.3x.”
Mr. Germain continued, “Looking ahead to 2024, we expect
aerospace demand to remain strong as the post-pandemic recovery
continues. In packaging, canstock demand has stabilized in recent
quarters and we are expecting modest growth versus last year. In
automotive, despite some demand deceleration in the second half of
2023, we expect demand to remain healthy this year. We continue to
experience weakness in most industrial markets to start the year.
We are expecting inflationary pressures to continue in 2024, though
at a lower rate than the last two years. We are confident in our
ability to continue to offset a substantial portion of the impact
with an improved top line and our relentless focus on cost
control.”
Mr. Germain concluded, "While uncertainties persist on the
macroeconomic and geopolitical fronts, we like our end market
positioning and we are optimistic about our prospects for this year
and beyond. Some of our end markets have continued to experience
softness to start the year and the extreme cold weather and snow in
January also impacted operations at Muscle Shoals, which we expect
will lead to a weaker first quarter in 2024. Despite these
challenges, based on our current outlook, we expect to achieve
Adjusted EBITDA, which excludes the non-cash impact of metal price
lag, of €740 million to €770 million and Free Cash Flow in excess
of €130 million in 2024. We remain confident in our ability to
deliver on our long-term target of Adjusted EBITDA, which excludes
the non-cash impact of metal price lag, of over €800 million in
2025. As we are now within our target leverage range, I am also
pleased to announce that our Board has authorized a three-year
share repurchase program of up to $300 million expiring in December
2026. Our focus remains on executing our strategy and increasing
shareholder value.”
Group Summary
|
|
Q42023 |
Q42022 |
Var. |
FY2023 |
FY2022 |
Var. |
|
Shipments (k metric tons) |
336 |
368 |
(9)% |
1,492 |
1,580 |
(6)% |
|
Revenue (€ millions) |
1,613 |
1,844 |
(13)% |
7,239 |
8,120 |
(11)% |
|
VAR (€ millions) |
681 |
696 |
(2)% |
2,924 |
2,725 |
7% |
|
Net income (€ millions) |
11 |
30 |
n.m. |
129 |
308 |
n.m. |
|
Adjusted EBITDA (€ millions) |
171 |
148 |
15% |
713 |
673 |
6% |
|
Adjusted EBITDA per metric ton (€) |
509 |
403 |
26% |
478 |
426 |
12% |
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 fourth quarter of 2023, shipments of 336
thousand metric tons decreased 9% compared to the fourth quarter of
2022 due to lower shipments in each of our segments. Revenue of
€1.6 billion decreased 13% compared to the fourth quarter of the
prior year primarily due to lower shipments and lower metal prices,
partially offset by improved price and mix. VAR of €681 million
decreased 2% compared to the fourth quarter of the prior year
primarily due to lower shipments, unfavorable metal impacts, the
sale of Constellium Extrusions Deutschland GmbH ("CED") in
September 2023 and unfavorable foreign exchange translation,
partially offset by improved price and mix. Net income of €11
million decreased by €19 million compared to net income of €30
million in the fourth quarter of 2022. Adjusted EBITDA of €171
million increased 15% compared to the fourth quarter of last year
due to stronger results in our A&T and P&ARP segments,
partially offset by weaker results in our AS&I segment.
For the full year of 2023, shipments of 1.5
million metric tons decreased 6% compared to the full year of 2022
primarily due to lower shipments in the P&ARP and AS&I
segments. Revenue of €7.2 billion decreased 11% compared to the
full year of 2022 primarily due to lower shipments and lower metal
prices, partially offset by improved price and mix. VAR of €2.9
billion increased 7% compared to the full year of 2022 primarily
due to improved price and mix, partially offset by lower shipments,
unfavorable metal impacts and unfavorable foreign exchange
translation. Net income of €129 million decreased €179 million
compared to net income of €308 million in the full year of 2022.
Adjusted EBITDA of €713 million increased 6% compared to the full
year 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)
|
|
Q4 2023 |
Q42022 |
Var. |
FY 2023 |
FY 2022 |
Var. |
|
Shipments (k metric tons) |
238 |
254 |
(6)% |
1,030 |
1,089 |
(5)% |
|
Revenue (€ millions) |
865 |
1,008 |
(14)% |
3,898 |
4,664 |
(16)% |
|
Adjusted EBITDA (€ millions) |
82 |
71 |
16% |
283 |
326 |
(13)% |
|
Adjusted EBITDA per metric ton (€) |
345 |
278 |
24% |
274 |
299 |
(8)% |
For the fourth quarter of 2023, Adjusted EBITDA
of €82 million increased 16% compared to the fourth quarter of 2022
primarily due to improved price and mix and improved overall costs,
partially offset by lower shipments. Higher operating costs were
more than offset by favorable metal costs, favorable inflation and
energy-related government grants. Shipments of 238 thousand metric
tons decreased 6% compared to the fourth 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 €865 million decreased 14% compared to the fourth
quarter of 2022 primarily due to lower shipments and lower metal
prices.
For the full year of 2023, Adjusted EBITDA of
€283 million decreased 13% compared to the full year 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 1.0 million metric tons decreased 5% compared to
the full year of 2022 due to lower shipments of packaging and
specialty rolled products, partially offset by higher shipments of
automotive rolled products. Revenue of €3.9 billion decreased 16%
compared to the full year of 2022 primarily due to lower shipments
and lower metal prices, partially offset by improved price and
mix.
Aerospace & Transportation (A&T)
|
|
Q4 2023 |
Q42022 |
Var. |
FY 2023 |
FY 2022 |
Var. |
|
Shipments (k metric tons) |
48 |
53 |
(9)% |
219 |
223 |
(2)% |
|
Revenue (€ millions) |
408 |
422 |
(3)% |
1,728 |
1,700 |
2% |
|
Adjusted EBITDA (€ millions) |
76 |
56 |
36 |
% |
324 |
217 |
50% |
|
Adjusted EBITDA per metric ton (€) |
1,583 |
1,079 |
47 |
% |
1,475 |
976 |
51% |
For the fourth quarter of 2023, Adjusted EBITDA
of €76 million increased 36% compared to the fourth quarter of 2022
primarily due to improved price and mix, partially offset by lower
shipments and higher operating costs. Shipments of 48 thousand
metric tons decreased 9% compared to the fourth 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 €408 million decreased 3% compared to
the fourth quarter of 2022 primarily due to lower shipments and
lower metal prices, partially offset by improved price and mix.
For the full year of 2023, Adjusted EBITDA of
€324 million increased 50% compared to the full year 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 219 thousand metric tons decreased 2% compared
to the full year of 2022 on higher shipments of aerospace rolled
products, more than offset by lower shipments of TID rolled
products. Revenue of €1.7 billion increased 2% compared to the full
year of 2022 primarily due to improved price and mix, partially
offset by lower metal prices.
Automotive Structures & Industry
(AS&I)
|
|
Q4 2023 |
Q42022 |
Var. |
FY 2023 |
FY 2022 |
Var. |
|
Shipments (k metric tons) |
50 |
61 |
(17)% |
243 |
268 |
(9)% |
|
Revenue (€ millions) |
334 |
428 |
(22)% |
1,630 |
1,861 |
(12)% |
|
Adjusted EBITDA (€ millions) |
25 |
31 |
(22)% |
133 |
149 |
(11)% |
|
Adjusted EBITDA per metric ton (€) |
500 |
514 |
(3)% |
545 |
557 |
(2)% |
For the fourth quarter of 2023, Adjusted EBITDA
of €25 million decreased 22% compared to the fourth quarter of 2022
primarily due to lower shipments and higher costs, partially offset
by improved price and mix. Shipments of 50 thousand metric tons
decreased 17% compared to the fourth quarter of 2022 on stable
shipments of automotive extruded products and lower shipments of
other extruded products including the impact from the sale of CED
in September 2023. Revenue of €334 million decreased 22% compared
to the fourth quarter of 2022 primarily due to lower shipments and
lower metal prices, partially offset by improved price and mix.
For the full year of 2023, Adjusted EBITDA of
€133 million decreased 11% compared to the full year of 2022
primarily due to lower shipments and higher operating costs mainly
due to inflation, partially offset by improved price and mix.
Shipments of 243 thousand metric tons decreased 9% compared to the
full year of 2022 due to lower shipments of other extruded products
including the impact from the sale of CED in September 2023,
partially offset by higher shipments of automotive extruded
products. Revenue of €1.6 billion decreased 12% compared to the
full year of 2022 primarily due to lower shipments and lower metal
prices, partially offset by improved price and mix.
Net Income
For the fourth quarter of 2023, net income of
€11 million compares to net income of €30 million in the fourth
quarter of the prior year. The decrease in net income is primarily
related to gains on OPEB and pension plan amendments recorded in
2022 and higher tax expense, partially offset by higher gross
profit.
For the full year of 2023, net income of €129
million compares to net income of €308 million in the prior year.
The decrease in net income is primarily related to the recognition
in the prior year of previously unrecognized deferred tax assets of
€154 million, gains on OPEB and pension plan amendments recorded in
2022, higher selling and administrative expenses and higher tax
expense, partially offset by higher gross profit and a gain related
to the sale of CED in September 2023.
Cash Flow
Free Cash Flow was €170 million in the full year
of 2023 compared to €182 million in the prior year, reflecting a
€55 million increase in cash flows from operating activities which
was more than offset by increased capital expenditures as we
continue to invest in maintaining and growing our manufacturing
asset base including our recycling and casting investment in Neuf
Brisach, France.
Cash flows from operating activities were €506
million for the full year of 2023 compared to cash flows from
operating activities of €451 million in the prior year.
Cash flows used in investing activities were
€288 million for the full year of 2023 compared to cash flows used
in investing activities of €270 million in the prior year. In 2023,
cash flows used in investing activities included €47 million of net
proceeds from the sale of CED in September 2023.
Cash flows used in financing activities were
€182 million for the full year of 2023 compared to cash flows used
in financing activities of €163 million in the prior year. In 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 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 December 31, 2023 was €737 million,
comprised of €202 million of cash and cash equivalents and €535
million available under our committed lending facilities and
factoring arrangements.
Net debt was €1,664 million at December 31, 2023
compared to €1,891 million at December 31, 2022.
Outlook
Based on our current outlook, we expect Adjusted
EBITDA, which excludes the non-cash impact of metal price lag, to
be in the range of €740 million to €770 million and Free Cash Flow
in excess of €130 million in 2024.
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 price 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.
Recent Developments
Share Repurchase Program
Constellium today announces that the Board of
Directors has authorized a three-year share repurchase program of
up to $300 million of the Company's outstanding shares of common
stock, expiring on December 31, 2026.
Under this program, the Company may purchase
shares from time to time for cash in open market transactions or in
privately-negotiated transactions, in accordance with applicable
state and federal securities laws and in compliance with applicable
provisions of French corporate law, and it may make all or part of
the purchases pursuant to Rule 10b5-1 plans. The timing and the
amount of repurchases, if any, will be determined based on the
Company's evaluation of market conditions, capital allocation
alternatives and other factors. The share repurchase program does
not require the Company to acquire any dollar amount or number of
shares of CSTM common stock and may be modified, suspended,
extended or terminated by the Company's Board of Directors at any
time without prior notice.
The Company intends to use a portion of the
repurchased shares under this new program to satisfy employee
equity obligations in lieu of issuing new shares, which would limit
future dilution for its shareholders.
Changes to the Presentation of Certain Non-GAAP
Financial Measures
Constellium today announces future changes to
the presentation of certain Non-GAAP financial measures. Such
announcement is being made to provide investors and other
stakeholders with an opportunity to become familiar with the
expected impact of these changes to the Company's presentation of
financial results in advance of the Company's earnings release for
the first quarter 2024, where the changes will be implemented.
These changes are based on discussions with the staff of the
Securities and Exchange Commission (SEC) during a comment letter
review process which began in late 2023.
Following the SEC review process, the Company
has determined that it will no longer report VAR, a Non-GAAP
financial measure.
Based on discussions with the SEC, the Company
has also decided to revise its definition of Adjusted EBITDA, a
Non-GAAP financial measure, to no longer exclude the non-cash
impact of metal price lag from its Adjusted EBITDA. Constellium
will continue to exclude the non-cash impact of metal price lag
from its Segment Adjusted EBITDA, which it uses for evaluating the
performance of its operating segments. As a reminder, consolidated
Adjusted EBITDA following the revision of its definition, less the
non-cash impact of metal price lag, is equal to consolidated
Adjusted EBITDA prior to the revision of its definition.
Constellium will continue to provide its investors and other
stakeholders with the necessary information to explain the non-cash
impact of metal price lag on its reported results. The Company will
continue to provide Adjusted EBITDA guidance excluding the non-cash
impact of metal price lag, and leverage will continue to be
calculated as Net debt divided by Adjusted EBITDA, excluding metal
price lag. For comparability, please refer to the table below to
see a reconciliation of prior periods’ Adjusted EBITDA under the
old definition to the new definition, including the metal price lag
adjustment in each period.
| |
|
For the years ended December 31, |
| (in
millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
129 |
|
|
308 |
|
|
262 |
|
|
(17 |
) |
|
64 |
|
|
Income tax expense / (benefit) |
|
67 |
|
|
(105 |
) |
|
55 |
|
|
(17 |
) |
|
18 |
|
|
Income before tax |
|
196 |
|
|
203 |
|
|
317 |
|
|
(34 |
) |
|
82 |
|
|
Finance costs - net |
|
141 |
|
|
131 |
|
|
167 |
|
|
159 |
|
|
175 |
|
| Share
of income of joint-ventures |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
|
Income from operations |
|
337 |
|
|
334 |
|
|
484 |
|
|
125 |
|
|
255 |
|
|
Depreciation and amortization |
|
294 |
|
|
287 |
|
|
267 |
|
|
259 |
|
|
256 |
|
| Impairment of assets |
|
— |
|
|
— |
|
|
— |
|
|
43 |
|
|
— |
|
| Restructuring costs |
|
— |
|
|
1 |
|
|
3 |
|
|
13 |
|
|
4 |
|
| Unrealized (gains) / losses on
derivatives |
|
3 |
|
|
46 |
|
|
(35 |
) |
|
(16 |
) |
|
(33 |
) |
| Unrealized exchange losses /
(gains) from the remeasurement of monetary assets and liabilities –
net |
|
2 |
|
|
1 |
|
|
(1 |
) |
|
(1 |
) |
|
— |
|
| Losses / (gains) on pension
plan amendments |
|
— |
|
|
(47 |
) |
|
32 |
|
|
2 |
|
|
(1 |
) |
| Share based compensation
costs |
|
20 |
|
|
18 |
|
|
15 |
|
|
15 |
|
|
16 |
|
| Start-up and development
costs |
|
— |
|
|
— |
|
|
— |
|
|
5 |
|
|
11 |
|
| (Gains) / losses on
disposal |
|
(29 |
) |
|
4 |
|
|
3 |
|
|
4 |
|
|
3 |
|
| Bowling Green one-time cost
related to the acquisition |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5 |
|
| Other |
|
— |
|
|
— |
|
|
— |
|
|
8 |
|
|
— |
|
| Metal
price lag |
|
86 |
|
|
29 |
|
|
(187 |
) |
|
8 |
|
|
46 |
|
|
Adjusted EBITDA (current) |
|
713 |
|
|
673 |
|
|
581 |
|
|
465 |
|
|
562 |
|
|
less: Metal price lag |
|
(86 |
) |
|
(29 |
) |
|
187 |
|
|
(8 |
) |
|
(46 |
) |
|
Adjusted EBITDA (future) |
|
627 |
|
|
644 |
|
|
768 |
|
|
457 |
|
|
516 |
|
| |
|
For the three months ended |
| (in
millions of Euros) |
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
11 |
|
|
64 |
|
|
32 |
|
|
22 |
|
|
|
Income tax expense / (benefit) |
|
32 |
|
|
18 |
|
|
12 |
|
|
5 |
|
|
|
Income before tax |
|
43 |
|
|
82 |
|
|
44 |
|
|
27 |
|
|
|
Finance costs - net |
|
35 |
|
|
36 |
|
|
35 |
|
|
35 |
|
|
|
Income from operations |
|
78 |
|
|
118 |
|
|
79 |
|
|
62 |
|
|
|
Depreciation and amortization |
|
73 |
|
|
77 |
|
|
72 |
|
|
72 |
|
|
| Unrealized (gains) / losses on
derivatives |
|
(2 |
) |
|
(23 |
) |
|
20 |
|
|
8 |
|
|
| Unrealized exchange losses /
(gains) from the remeasurement of monetary assets and liabilities –
net |
|
2 |
|
|
— |
|
|
1 |
|
|
(1 |
) |
|
| Share based compensation
costs |
|
5 |
|
|
5 |
|
|
7 |
|
|
3 |
|
|
| Losses / (gains) on
disposal |
|
1 |
|
|
(36 |
) |
|
— |
|
|
6 |
|
|
| Metal
price lag |
|
14 |
|
|
27 |
|
|
30 |
|
|
16 |
|
|
|
Adjusted EBITDA (current) |
|
171 |
|
|
168 |
|
|
209 |
|
|
166 |
|
|
|
less: Metal price lag |
|
(14 |
) |
|
(27 |
) |
|
(30 |
) |
|
(16 |
) |
|
|
Adjusted EBITDA (future) |
|
157 |
|
|
141 |
|
|
179 |
|
|
150 |
|
|
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; the Russian
war on Ukraine and other geopolitical tensions; 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 €7.2 billion of
revenue in 2023.
Constellium’s earnings materials for the fourth
quarter and full year ended December 31, 2023 are also available on
the company’s website (www.constellium.com).
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
| |
|
Three months ended December 31, |
|
Year ended December 31, |
| (in
millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
1,613 |
|
|
1,844 |
|
|
7,239 |
|
|
8,120 |
|
| Cost of
sales |
|
(1,435 |
) |
|
(1,737 |
) |
|
(6,529 |
) |
|
(7,448 |
) |
|
Gross profit |
|
178 |
|
|
107 |
|
|
710 |
|
|
672 |
|
|
Selling and administrative expenses |
|
(81 |
) |
|
(76 |
) |
|
(302 |
) |
|
(282 |
) |
| Research and development
expenses |
|
(15 |
) |
|
(16 |
) |
|
(52 |
) |
|
(48 |
) |
| Other
gains and losses - net |
|
(4 |
) |
|
45 |
|
|
(19 |
) |
|
(8 |
) |
|
Income from operations |
|
78 |
|
|
60 |
|
|
337 |
|
|
334 |
|
|
Finance costs - net |
|
(35 |
) |
|
(33 |
) |
|
(141 |
) |
|
(131 |
) |
|
Income before tax |
|
43 |
|
|
27 |
|
|
196 |
|
|
203 |
|
|
Income tax (expense) / benefit |
|
(32 |
) |
|
3 |
|
|
(67 |
) |
|
105 |
|
|
Net income |
|
11 |
|
|
30 |
|
|
129 |
|
|
308 |
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
| Equity holders of
Constellium |
|
10 |
|
|
28 |
|
|
125 |
|
|
301 |
|
|
Non-controlling interests |
|
1 |
|
|
2 |
|
|
4 |
|
|
7 |
|
|
Net income |
|
11 |
|
|
30 |
|
|
129 |
|
|
308 |
|
|
|
|
|
|
|
|
|
|
|
| Earnings
per share attributable to the equity holders of Constellium, (in
Euros) |
|
|
|
|
|
|
|
|
| Basic |
|
0.07 |
|
0.20 |
|
0.85 |
|
2.10 |
| Diluted |
|
0.07 |
|
0.20 |
|
0.84 |
|
2.06 |
| |
|
|
|
|
|
|
|
|
| Weighted average number of
shares, (in thousands) |
|
|
|
|
|
|
|
|
| Basic |
|
146,820 |
|
144,302 |
|
146,130 |
|
143,626 |
|
Diluted |
|
149,236 |
|
146,606 |
|
149,236 |
|
146,606 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS)
(UNAUDITED)
| |
|
Three months ended December 31, |
|
Year ended December 31, |
|
(in millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
11 |
|
|
30 |
|
|
129 |
|
|
308 |
|
|
Other comprehensive (loss) / income |
|
|
|
|
|
|
|
|
| Items that will not be
reclassified subsequently to the consolidated income statement |
|
|
|
|
|
|
|
|
| Remeasurement on
post-employment benefit obligations |
|
(46 |
) |
|
(24 |
) |
|
(16 |
) |
|
157 |
|
| Income tax on remeasurement on
post-employment benefit obligations |
|
10 |
|
|
4 |
|
|
2 |
|
|
(35 |
) |
| Items that may be reclassified
subsequently to the consolidated income statement |
|
|
|
|
|
|
|
|
| Cash flow hedges |
|
9 |
|
|
19 |
|
|
7 |
|
|
(8 |
) |
| Income tax on cash flow
hedges |
|
(2 |
) |
|
(5 |
) |
|
(1 |
) |
|
2 |
|
|
Currency translation differences |
|
(33 |
) |
|
(68 |
) |
|
(26 |
) |
|
21 |
|
|
Other comprehensive (loss) / income |
|
(62 |
) |
|
(74 |
) |
|
(34 |
) |
|
137 |
|
|
Total comprehensive (loss) / income |
|
(51 |
) |
|
(44 |
) |
|
95 |
|
|
445 |
|
|
Attributable to: |
|
|
|
|
|
|
|
|
| Equity holders of
Constellium |
|
(51 |
) |
|
(44 |
) |
|
92 |
|
|
439 |
|
|
Non-controlling interests |
|
— |
|
|
— |
|
|
3 |
|
|
6 |
|
|
Total comprehensive (loss) / income |
|
(51 |
) |
|
(44 |
) |
|
95 |
|
|
445 |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
| (in
millions of Euros) |
|
At December 31, 2023 |
|
At December 31, 2022 |
|
|
|
|
|
|
| Assets |
|
|
|
|
| Current
assets |
|
|
|
|
| Cash and cash equivalents |
|
202 |
|
166 |
| Trade receivables and
other |
|
490 |
|
539 |
| Inventories |
|
1,098 |
|
1,320 |
| Other financial assets |
|
30 |
|
31 |
| |
|
1,820 |
|
2,056 |
| Non-current
assets |
|
|
|
|
| Property, plant and
equipment |
|
2,047 |
|
2,017 |
| Goodwill |
|
462 |
|
478 |
| Intangible assets |
|
47 |
|
54 |
| Deferred tax assets |
|
252 |
|
271 |
| Trade receivables and
other |
|
31 |
|
43 |
| Other financial assets |
|
2 |
|
8 |
| |
|
2,841 |
|
2,871 |
| Assets
of disposal group classified as held for sale |
|
— |
|
14 |
|
Total Assets |
|
4,661 |
|
4,941 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
| Current
liabilities |
|
|
|
|
| Trade payables and other |
|
1,263 |
|
1,467 |
| Borrowings |
|
54 |
|
148 |
| Other financial
liabilities |
|
34 |
|
41 |
| Income tax payable |
|
19 |
|
16 |
| Provisions |
|
18 |
|
21 |
| |
|
1,388 |
|
1,693 |
| Non-current
liabilities |
|
|
|
|
| Trade payables and other |
|
59 |
|
43 |
| Borrowings |
|
1,814 |
|
1,908 |
| Other financial
liabilities |
|
8 |
|
14 |
| Pension and other
post-employment benefit obligations |
|
411 |
|
403 |
| Provisions |
|
89 |
|
90 |
| Deferred tax liabilities |
|
28 |
|
28 |
| |
|
2,409 |
|
2,486 |
|
Liabilities of disposal group classified as held for sale |
|
— |
|
10 |
|
Total Liabilities |
|
3,797 |
|
4,189 |
|
|
|
|
|
|
| Equity |
|
|
|
|
| Share capital |
|
3 |
|
3 |
| Share premium |
|
420 |
|
420 |
|
Retained earnings and other reserves |
|
420 |
|
308 |
|
Equity attributable to equity holders of
Constellium |
|
843 |
|
731 |
|
Non-controlling interests |
|
21 |
|
21 |
|
Total Equity |
|
864 |
|
752 |
|
|
|
|
|
|
|
Total Equity and Liabilities |
|
4,661 |
|
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 |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
125 |
|
|
125 |
|
|
4 |
|
|
129 |
|
| Other
comprehensive (loss) / income |
|
— |
|
— |
|
(14 |
) |
|
6 |
|
|
(25 |
) |
|
— |
|
— |
|
|
(33 |
) |
|
(1 |
) |
|
(34 |
) |
|
Total comprehensive (loss) / income |
|
— |
|
— |
|
(14 |
) |
|
6 |
|
|
(25 |
) |
|
— |
|
125 |
|
|
92 |
|
|
3 |
|
|
95 |
|
|
Share-based compensation |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
20 |
|
— |
|
|
20 |
|
|
— |
|
|
20 |
|
| Other |
|
— |
|
— |
|
(1 |
) |
|
— |
|
|
— |
|
|
— |
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
|
Transactions with non-controlling interests |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(3 |
) |
|
(3 |
) |
|
At December 31, 2023 |
|
3 |
|
420 |
|
13 |
|
|
(4 |
) |
|
16 |
|
|
121 |
|
274 |
|
|
843 |
|
|
21 |
|
|
864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
301 |
|
|
301 |
|
|
7 |
|
|
308 |
|
| Other
comprehensive income / (loss) |
|
— |
|
— |
|
122 |
|
|
(6 |
) |
|
22 |
|
|
— |
|
— |
|
|
138 |
|
|
(1 |
) |
|
137 |
|
|
Total comprehensive income / (loss) |
|
— |
|
— |
|
122 |
|
|
(6 |
) |
|
22 |
|
|
— |
|
301 |
|
|
439 |
|
|
6 |
|
|
445 |
|
|
Share-based compensation |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
18 |
|
— |
|
|
18 |
|
|
— |
|
|
18 |
|
|
Transactions with non-controlling interests |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
(2 |
) |
|
(2 |
) |
|
At December 31, 2022 |
|
3 |
|
420 |
|
28 |
|
|
(10 |
) |
|
41 |
|
|
101 |
|
148 |
|
|
731 |
|
|
21 |
|
|
752 |
|
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
| |
|
Three months ended December 31, |
|
Year ended December 31, |
|
(in millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
11 |
|
|
30 |
|
|
129 |
|
|
308 |
|
| Adjustments |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
73 |
|
|
78 |
|
|
294 |
|
|
287 |
|
|
Pension and other post-employment benefits service costs |
|
7 |
|
|
(40 |
) |
|
23 |
|
|
(22 |
) |
|
Finance costs - net |
|
35 |
|
|
33 |
|
|
141 |
|
|
131 |
|
|
Income tax expense / (benefit) |
|
32 |
|
|
(3 |
) |
|
67 |
|
|
(105 |
) |
|
Unrealized losses / (gains) on derivatives - net and from
remeasurement of monetary assets and liabilities - net |
|
— |
|
|
(20 |
) |
|
5 |
|
|
47 |
|
|
Losses / (gains) on disposal |
|
1 |
|
|
2 |
|
|
(29 |
) |
|
4 |
|
|
Other - net |
|
5 |
|
|
5 |
|
|
20 |
|
|
17 |
|
| Change in working capital |
|
|
|
|
|
|
|
|
|
Inventories |
|
19 |
|
|
(3 |
) |
|
194 |
|
|
(241 |
) |
|
Trade receivables |
|
146 |
|
|
247 |
|
|
55 |
|
|
155 |
|
|
Trade payables |
|
(67 |
) |
|
(165 |
) |
|
(190 |
) |
|
41 |
|
|
Other |
|
(25 |
) |
|
10 |
|
|
(5 |
) |
|
13 |
|
| Change in provisions |
|
(2 |
) |
|
(3 |
) |
|
(5 |
) |
|
(10 |
) |
| Pension and other
post-employment benefits paid |
|
(9 |
) |
|
(11 |
) |
|
(39 |
) |
|
(44 |
) |
| Interest paid |
|
(27 |
) |
|
(28 |
) |
|
(123 |
) |
|
(113 |
) |
| Income
tax paid |
|
(14 |
) |
|
(4 |
) |
|
(31 |
) |
|
(17 |
) |
|
Net cash flows from operating activities |
|
185 |
|
|
128 |
|
|
506 |
|
|
451 |
|
|
|
|
|
|
|
|
|
|
|
| Purchases of property, plant
and equipment |
|
(127 |
) |
|
(109 |
) |
|
(337 |
) |
|
(273 |
) |
| Property, plant and equipment
grants received |
|
— |
|
|
3 |
|
|
1 |
|
|
4 |
|
| Proceeds from disposals, net
of cash |
|
— |
|
|
— |
|
|
48 |
|
|
— |
|
| Other
investing activities |
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
Net cash flows used in investing activities |
|
(127 |
) |
|
(107 |
) |
|
(288 |
) |
|
(270 |
) |
|
|
|
|
|
|
|
|
|
|
| Repayments of long-term
borrowings |
|
(2 |
) |
|
(4 |
) |
|
(53 |
) |
|
(192 |
) |
| Net change in revolving credit
facilities and short-term borrowings |
|
— |
|
|
5 |
|
|
(83 |
) |
|
72 |
|
| Lease repayments |
|
(8 |
) |
|
(10 |
) |
|
(37 |
) |
|
(37 |
) |
| Payment of financing costs and
redemption fees |
|
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
| Transactions with
non-controlling interests |
|
— |
|
|
— |
|
|
(3 |
) |
|
(2 |
) |
| Other
financing activities |
|
(5 |
) |
|
(13 |
) |
|
(6 |
) |
|
(3 |
) |
|
Net cash flows used in financing activities |
|
(15 |
) |
|
(22 |
) |
|
(182 |
) |
|
(163 |
) |
|
|
|
|
|
|
|
|
|
|
| Net increase /
(decrease) in cash and cash equivalent |
|
43 |
|
|
(1 |
) |
|
36 |
|
|
18 |
|
| Cash and cash equivalents -
beginning of period |
|
159 |
|
|
171 |
|
|
166 |
|
|
147 |
|
| Transfer of cash and cash
equivalents from / (to) assets classified as held for sale |
|
— |
|
|
(1 |
) |
|
1 |
|
|
(1 |
) |
| Effect
of exchange rate changes on cash and cash equivalents |
|
— |
|
|
(3 |
) |
|
(1 |
) |
|
2 |
|
|
Cash and cash equivalents - end of year |
|
202 |
|
|
166 |
|
|
202 |
|
|
166 |
|
SEGMENT ADJUSTED EBITDA
| |
|
Three months ended December 31, |
|
Year ended December 31, |
| (in
millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
P&ARP |
|
82 |
|
|
71 |
|
|
283 |
|
|
326 |
|
| A&T |
|
76 |
|
|
56 |
|
|
324 |
|
|
217 |
|
| AS&I |
|
25 |
|
|
31 |
|
|
133 |
|
|
149 |
|
|
Holdings and Corporate |
|
(12 |
) |
|
(10 |
) |
|
(27 |
) |
|
(19 |
) |
|
Total |
|
171 |
|
|
148 |
|
|
713 |
|
|
673 |
|
SHIPMENTS AND REVENUE BY PRODUCT LINE
| |
|
Three months ended December 31, |
|
Year ended December 31, |
| (in k
metric tons) |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Packaging rolled products |
|
172 |
|
186 |
|
|
736 |
|
|
809 |
|
| Automotive rolled
products |
|
62 |
|
61 |
|
|
271 |
|
|
245 |
|
| Specialty and other
thin-rolled products |
|
4 |
|
7 |
|
|
23 |
|
|
35 |
|
| Aerospace rolled products |
|
22 |
|
21 |
|
|
96 |
|
|
76 |
|
| Transportation, industry,
defense and other rolled products |
|
26 |
|
32 |
|
|
123 |
|
|
147 |
|
| Automotive extruded
products |
|
28 |
|
28 |
|
|
121 |
|
|
117 |
|
| Other
extruded products |
|
22 |
|
33 |
|
|
122 |
|
|
151 |
|
|
Total shipments |
|
336 |
|
368 |
|
|
1,492 |
|
|
1,580 |
|
|
|
|
|
|
|
|
|
|
|
| (in
millions of Euros) |
|
|
|
|
|
|
|
|
|
Packaging rolled products |
|
582 |
|
697 |
|
|
2,596 |
|
|
3,326 |
|
| Automotive rolled
products |
|
254 |
|
275 |
|
|
1,156 |
|
|
1,154 |
|
| Specialty and other
thin-rolled products |
|
29 |
|
35 |
|
|
146 |
|
|
183 |
|
| Aerospace rolled products |
|
264 |
|
218 |
|
|
1,022 |
|
|
728 |
|
| Transportation, industry,
defense and other rolled products |
|
144 |
|
204 |
|
|
706 |
|
|
972 |
|
| Automotive extruded
products |
|
211 |
|
228 |
|
|
934 |
|
|
949 |
|
| Other extruded products |
|
123 |
|
200 |
|
|
696 |
|
|
912 |
|
| Other
and inter-segment eliminations |
|
6 |
|
(13 |
) |
|
(17 |
) |
|
(104 |
) |
|
Total revenue |
|
1,613 |
|
1,844 |
|
|
7,239 |
|
|
8,120 |
|
NON-GAAP MEASURES
Reconciliation of Revenue to VAR (a non-GAAP
measure)
| |
|
Three months ended December 31, |
|
Year ended December 31, |
| (in
millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Revenue |
|
1,613 |
|
|
1,844 |
|
|
7,239 |
|
|
8,120 |
|
| Hedged cost of alloyed
metal |
|
(939 |
) |
|
(1,212 |
) |
|
(4,374 |
) |
|
(5,403 |
) |
| Revenue from incidental
activities |
|
(7 |
) |
|
(5 |
) |
|
(27 |
) |
|
(21 |
) |
| Metal
price lag |
|
14 |
|
|
69 |
|
|
86 |
|
|
29 |
|
|
VAR |
|
681 |
|
|
696 |
|
|
2,924 |
|
|
2,725 |
|
Reconciliation of net income to Adjusted EBITDA (a
non-GAAP measure)
| |
|
Three months ended December 31, |
|
Year ended December 31, |
|
(in millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net income |
|
11 |
|
|
30 |
|
|
129 |
|
|
308 |
|
| Income
tax expense / (benefit) |
|
32 |
|
|
(3 |
) |
|
67 |
|
|
(105 |
) |
|
Income before tax |
|
43 |
|
|
27 |
|
|
196 |
|
|
203 |
|
| Finance costs - net |
|
35 |
|
|
33 |
|
|
141 |
|
|
131 |
|
|
Income from operations |
|
78 |
|
|
60 |
|
|
337 |
|
|
334 |
|
| Depreciation and
amortization |
|
73 |
|
|
78 |
|
|
294 |
|
|
287 |
|
| Restructuring costs |
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
| Unrealized (gains) / losses on
derivatives |
|
(2 |
) |
|
(19 |
) |
|
3 |
|
|
46 |
|
| Unrealized exchange losses /
(gains) from the remeasurement of monetary assets and liabilities –
net |
|
2 |
|
|
(1 |
) |
|
2 |
|
|
1 |
|
| Losses / (gains) on pension
plan amendments (A) |
|
— |
|
|
(47 |
) |
|
— |
|
|
(47 |
) |
| Share based compensation
costs |
|
5 |
|
|
5 |
|
|
20 |
|
|
18 |
|
| (Gains) / losses on
disposal |
|
1 |
|
|
2 |
|
|
(29 |
) |
|
4 |
|
| Metal
price lag (B) |
|
14 |
|
|
69 |
|
|
86 |
|
|
29 |
|
|
Adjusted EBITDA |
|
171 |
|
|
148 |
|
|
713 |
|
|
673 |
|
(A) In the year ended December 31,
2022 the Group recognized a net gain of €47 million from past
service cost as a result from a new 3-year collective bargaining
agreement between Constellium Rolled Products Ravenswood and the
United Steelworkers Local Union 5668 entered in October 2022. The
agreement resulted in changes in OPEB and pension benefits that
were accounted for as a plan amendment in the year ended December
31, 2022.(B) 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 December 31, |
|
Year ended December 31, |
| (in
millions of Euros) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net cash flows from operating activities |
|
185 |
|
|
128 |
|
|
506 |
|
|
451 |
|
| Purchases of property, plant
and equipment,net of grants received |
|
(127 |
) |
|
(106 |
) |
|
(336 |
) |
|
(269 |
) |
|
Free Cash Flow |
|
58 |
|
|
22 |
|
|
170 |
|
|
182 |
|
Reconciliation of borrowings to Net debt (a non-GAAP
measure)
| (in
millions of Euros) |
|
At December 31, 2023 |
|
At December 31, 2022 |
|
Borrowings |
|
1,868 |
|
|
2,056 |
|
| Fair value of net debt
derivatives, net of margin calls |
|
(2 |
) |
|
1 |
|
| Cash and cash equivalents |
|
(202 |
) |
|
(166 |
) |
|
Net debt |
|
1,664 |
|
|
1,891 |
|
Reconciliation of Net income to Adjusted NOPAT and
Adjusted ROIC (non-GAAP measures)
| |
|
Year ended December 31, |
|
(in millions of Euros) |
|
2023 |
|
|
2022 |
|
|
Net income |
|
129 |
|
|
308 |
|
| Income tax expense /
(benefit) |
|
67 |
|
|
(105 |
) |
| Income before
tax |
|
196 |
|
|
203 |
|
| Finance costs - net |
|
141 |
|
|
131 |
|
| Income from
operations |
|
337 |
|
|
334 |
|
| Unrealized losses on
derivatives |
|
3 |
|
|
46 |
|
| Unrealized exchange losses
from the remeasurement of monetary assets and liabilities -
net |
|
2 |
|
|
1 |
|
| Losses / (gains) on pension
plan amendments |
|
— |
|
|
(47 |
) |
| Share based compensation
costs |
|
20 |
|
|
18 |
|
| Metal price lag |
|
86 |
|
|
29 |
|
| (Gains) / losses on
disposals |
|
(29 |
) |
|
4 |
|
| Tax
impact(1) |
|
(103 |
) |
|
(92 |
) |
|
Adjusted NOPAT (A) |
|
316 |
|
|
293 |
|
| (in
millions of Euros) |
|
At December 31,2022 |
|
At December 31,2021 |
|
Intangible assets |
|
54 |
|
|
58 |
|
| PP&E, net |
|
2,017 |
|
|
1,948 |
|
| Trade receivables and other -
current |
|
539 |
|
|
683 |
|
|
Derecognized trade receivables(2) |
|
368 |
|
|
345 |
|
| Inventories |
|
1,320 |
|
|
1,050 |
|
| Trade payables and other -
current |
|
(1,467 |
) |
|
(1,377 |
) |
|
Provisions current portion |
|
(21 |
) |
|
(20 |
) |
|
Income tax payable |
|
(16 |
) |
|
(34 |
) |
|
Total Invested Capital (B) |
|
2,794 |
|
|
2,653 |
|
| |
|
|
|
|
| |
|
2023 |
|
|
2022 |
|
|
Adjusted NOPAT for fiscal year (A) |
|
316 |
|
|
293 |
|
| Total
invested capital as of December 31 of prior year (B) |
|
2,794 |
|
|
2,653 |
|
|
Adjusted ROIC (A)/(B) |
|
11.3 |
% |
|
11.0 |
% |
(1) Tax impact on net operating profit computed using the
Group's average statutory tax rate(2) Trade receivables
derecognized under our factoring agreements
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, Adjusted NOPAT, Invested Capital, Adjusted ROIC 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 price
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.
Adjusted Return on Invested Capital (“Adjusted
ROIC”) is defined as Adjusted Net Operating Profit after Tax
(“Adjusted NOPAT”), a non-GAAP measure, divided by Invested
Capital, a non-GAAP measure. The calculation of Adjusted ROIC
together with a reconciliation of Adjusted NOPAT to Net Income, the
most comparable IFRS measure, are presented in the schedules to
this press release. Management believes Adjusted ROIC
is useful in assessing the effectiveness of our capital
allocation over time. Adjusted ROIC is not calculated based on
measures prepared in accordance with IFRS and should not
be considered as an alternative to similar metrics calculated
based on measures prepared in accordance with IFRS.
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 RelationsPhone: +1
(443) 988-0600investor-relations@constellium.com
Delphine Dahan-Kocher—CommunicationsPhone: +1
443 420 7860delphine.dahan-kocher@constellium.com
Constellium (NYSE:CSTM)
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Constellium (NYSE:CSTM)
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