Exhibit 99.1

 

Constellium Reports Fourth Quarter and Full Year 2022 Results

Paris, February 22, 2023 – Constellium SE (NYSE: CSTM) today reported results for the fourth quarter and full year ended December 31, 2022.

Fourth quarter 2022 highlights:

 

•

Shipments of 368 thousand metric tons, down 5% compared to Q4 2021

 

•

Revenue of €1.8 billion, up 8% compared to Q4 2021

 

•

Value-Added Revenue (VAR) of €696 million, up 18% compared to Q4 2021

 

•

Net income of €30 million compared to net income of €7 million in Q4 2021

 

•

Adjusted EBITDA of €148 million, up 1% compared to Q4 2021

 

•

Cash from Operations of €128 million and Free Cash Flow of €22 million

Full year 2022 highlights:

 

•

Shipments of 1.6 million metric tons, up 1% compared to 2021

 

•

Revenue of €8.1 billion, up 32% compared to 2021

 

•

VAR of €2.7 billion, up 21% compared to 2021

 

•

Net income of €308 million compared to net income of €262 million in 2021

 

•

Adjusted EBITDA of €673 million, up 16% compared to 2021

 

•

Cash from Operations of €451 million and Free Cash Flow of €182 million

 

•

Return on Invested Capital (ROIC) of 11.0%, up 120 bps compared to 2021

 

•

Net debt / LTM Adjusted EBITDA of 2.8x at December 31, 2022

Jean-Marc Germain, Constellium’s Chief Executive Officer said, “Constellium delivered strong results in 2022, and I want to thank each of our 12,500 employees for their commitment and relentless focus on safety and serving our customers. 2022 was a year full of challenges including significant inflationary pressures and continuing supply chain disruptions. Despite these challenges, we achieved record Adjusted EBITDA of €673 million, including record results in both A&T and AS&I, generated record Free Cash Flow of €182 million and reduced our leverage to 2.8x.”

 

 

Mr. Germain continued, “Looking ahead to 2023, we expect aerospace demand to remain strong as the path of recovery continues. We expect automotive demand to improve, but to remain below pre-COVID levels. In packaging, we are experiencing weakness as we begin the year, but expect demand to return to trend growth rates as excess inventory is depleted. While we continue to see signs of weakness across certain industrial markets, we are encouraged by the resilience of a number of these markets. Overall, we like our end market positioning. We are expecting inflationary pressures to continue at an elevated level throughout 2023, though we are confident in our ability to offset a substantial portion of the impact with improved pricing and our relentless focus on cost control.”

Mr. Germain concluded, “Based on our current outlook, we expect Adjusted EBITDA of €640 million to €670 million and Free Cash Flow in excess of €125 million in 2023. We also remain confident in our ability to deliver on our long-term target of Adjusted EBITDA over €800 million in 2025. We are focused on executing our strategy, driving operational performance, generating Free Cash Flow, achieving our ESG objectives and increasing shareholder value.”

Group Summary

 

		Q4 2022				Q4 2021				Var.				FY 2022				FY 2021				Var.
Shipments (k metric tons)			368				385				(5	)%			1,580				1,571				1	%
Revenue (€ millions)			1,844				1,706				8	%			8,120				6,152				32	%
VAR (€ millions)			696				591				18	%			2,725				2,261				21	%
Net income (€ millions)			30				7				n.m.				308				262				n.m.
Adjusted EBITDA (€ millions)			148				147				1	%			673				581				16	%
Adjusted EBITDA per metric ton (€)			403				382				6	%			426				370				15	%

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.

 

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For the fourth quarter of 2022, shipments of 368 thousand metric tons decreased 5% compared to the fourth quarter of 2021 mostly due to lower shipments in the Packaging & Automotive Rolled Products segment. Revenue of €1.8 billion increased 8% compared to the fourth quarter of 2021 primarily due to improved price and mix, partially offset by lower metal prices and lower shipments. VAR of €696 million increased 18% compared to the fourth quarter of the prior year primarily due to improved price and mix and favorable foreign exchange translation, partially offset by lower shipments and unfavorable metal costs due to inflation. Net income of €30 million increased €23 million compared to net income of €7 million in the fourth quarter of 2021. Adjusted EBITDA of €148 million increased 1% compared to the fourth quarter of last year due to stronger results in our Aerospace & Transportation segment offset by weaker results in our Packaging & Automotive Rolled Products segment and higher costs in Holdings & Corporate primarily due to timing.

For the full year of 2022, shipments of 1.6 million metric tons increased 1% compared to the full year of 2021 on higher shipments in the Aerospace & Transportation and Automotive Structures & Industry segments, partially offset by lower shipments in the Packaging & Automotive Rolled Products segment. Revenue of €8.1 billion increased 32% compared to the full year of 2021 primarily due to higher metal prices and improved price and mix. VAR of €2.7 billion increased 21% compared to the full year of 2021 primarily due to improved price and mix and favorable foreign exchange translation, partially offset by unfavorable metal costs due to inflation. Net income of €308 million increased €46 million compared to net income of €262 million in the full year of 2021. Adjusted EBITDA of €673 million increased 16% compared to the full year of 2021 on stronger results in our Aerospace & Transportation and Automotive Structures & Industry segments, partially offset by weaker results in our Packaging & Automotive Rolled Products segment.

Results by Segment

Packaging & Automotive Rolled Products (P&ARP)

 

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		Q4 2022				Q4 2021				Var.				FY 2022				FY 2021				Var.
Shipments (k metric tons)			254				272				(7	)%			1,089				1,104				(1	)%
Revenue (€ millions)			1,008				1,037				(3	)%			4,664				3,698				26	%
Adjusted EBITDA (€ millions)			71				88				(20	)%			326				344				(5	)%
Adjusted EBITDA per metric ton (€)			278				323				(14	)%			299				312				(4	)%

For the fourth quarter of 2022, Adjusted EBITDA decreased 20% compared to the fourth quarter of 2021 as a result of lower shipments and higher operating costs mainly due to inflation and operating challenges at our Muscle Shoals facility which resulted in higher maintenance costs, partially offset by improved price and mix and favorable foreign exchange translation. Shipments of 254 thousand metric tons decreased 7% 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 €1.0 billion decreased 3% compared to the fourth quarter of 2021 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix.

For the full year of 2022, Adjusted EBITDA of €326 million decreased 5% compared to the full year of 2021 as a result of lower shipments and higher operating costs mainly due to inflation and operating challenges at our Muscle Shoals facility which resulted in higher maintenance costs, partially offset by improved price and mix, favorable metal costs and favorable foreign exchange translation. Shipments of 1.1 million metric tons decreased 1% compared to the full year of 2021 due to lower shipments of packaging and specialty rolled products, largely offset by higher shipments of automotive rolled products. Revenue of €4.7 billion increased 26% compared to the full year of 2021 primarily due to higher metal prices and improved price and mix.

 

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Aerospace & Transportation (A&T)

 

		Q4 2022				Q4 2021				Var.				FY 2022				FY 2021				Var.
Shipments (k metric tons)			53				53				0	%			223				206				8	%
Revenue (€ millions)			422				321				32	%			1,700				1,142				49	%
Adjusted EBITDA (€ millions)			56				30				87	%			217				111				96	%
Adjusted EBITDA per metric ton (€)			1,079				579				86	%			976				539				81	%

For the fourth quarter of 2022, Adjusted EBITDA increased 87% compared to the fourth quarter of 2021 primarily due to improved price and mix, partially offset by higher operating costs mainly due to inflation. The fourth quarter of 2022 included an €8 million customer payment related to a contractual volume commitment. Shipments of 53 thousand metric tons were stable compared to the fourth quarter of 2021 on higher shipments of aerospace rolled products offset by lower shipments of TID rolled products. Revenue of €422 million increased 32% compared to the fourth quarter of 2021 on improved price and mix.

For the full year of 2022, Adjusted EBITDA of €217 million increased 96% compared to the full year of 2021 primarily due to higher shipments, improved price and mix and favorable foreign exchange translation, partially offset by higher operating costs due to inflation and costs associated with the production ramp-up in aerospace. The full year of 2022 included €18 million in customer payments related to contractual volume commitments. Shipments of 223 thousand metric tons increased 8% compared to the full year of 2021 on higher shipments of aerospace rolled products, partially offset by lower shipments of TID rolled products. Revenue of €1.7 billion increased 49% compared to the full year of 2021 primarily due to improved price and mix, higher metal prices and higher shipments.

 

5

 

Automotive Structures & Industry (AS&I)

 

		Q4 2022				Q4 2021				Var.				FY 2022				FY 2021				Var.
Shipments (k metric tons)			61				60				1	%			268				261				2	%
Revenue (€ millions)			428				362				19	%			1,861				1,383				35	%
Adjusted EBITDA (€ millions)			31				31				0	%			149				142				5	%
Adjusted EBITDA per metric ton (€)			514				519				(1	)%			557				545				2	%

For the fourth quarter of 2022, Adjusted EBITDA was stable compared to the fourth quarter of 2021 due to higher shipments and improved price and mix offset by higher operating costs mainly due to inflation. Shipments of 61 thousand metric tons increased 1% compared to the fourth quarter of 2021 due to higher shipments of automotive extruded products, partially offset by lower other extruded product shipments. Revenue of €428 million increased 19% compared to the fourth quarter of 2021 primarily due to improved price and mix, partially offset by lower metal prices.

For the full year of 2022, Adjusted EBITDA of €149 million increased 5% compared to the full year of 2021, primarily due to higher shipments and improved price and mix, partially offset by higher operating costs mainly due to inflation. Shipments of 268 thousand metric tons increased 2% compared to the full year of 2021 on higher shipments of automotive and other extruded products. Revenue of €1.9 billion increased 35% compared to the full year of 2021 primarily due to improved price and mix and higher metal prices.

Net Income

For the fourth quarter of 2022, net income of €30 million compares to net income of €7 million in the fourth quarter of the prior year. The increase in net income is primarily related to gains on OPEB and pension plan amendments in 2022 compared to a loss on OPEB plan amendments in 2021, partially offset by lower gross profit and an unfavorable change in gains and losses on derivatives mostly related to our metal hedging positions.

 

6

 

For the full year of 2022, net income of €308 million compares to net income of €262 million in the prior year. The increase in net income is primarily related to the recognition of previously unrecognized deferred tax assets, gains on OPEB and pension plan amendments in 2022 compared to a loss on OPEB plan amendments in 2021, and lower finance costs, partially offset by an unfavorable change in gains and losses on derivatives mostly related to our metal hedging positions and higher selling and administrative expenses.

Cash Flow

Free Cash Flow was €182 million in the full year of 2022 compared to €135 million in the prior year. The increase was primarily due to stronger Adjusted EBITDA and lower cash interest, partially offset by increased capital expenditures and higher cash taxes.

Cash flows from operating activities were €451 million for the full year of 2022 compared to cash flows from operating activities of €357 million in the prior year. Constellium increased derecognized factored receivables by €23 million for the full year of 2022 compared to a decrease of €53 million in the prior year.

Cash flows used in investing activities were €270 million for the full year of 2022 compared to cash flows used in investing activities of €221 million in the prior year.

Cash flows used in financing activities were €163 million for the full year of 2022 compared to cash flows used in financing activities of €435 million in the prior year. 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. In 2021, Constellium issued $500 million of 3.75% Sustainability-Linked Senior Notes due 2029 and €300 million of 3.125% Sustainability-Linked Senior Notes due 2029 and used the proceeds and cash on the balance sheet to redeem $650 million of 6.625% Senior Notes due 2025, $400 million of 5.75% Senior Notes due 2024 and $200 million of the 5.875% Senior Notes due 2026.

 

7

 

Liquidity and Net Debt

Liquidity at December 31, 2022 was €709 million, comprised of €166 million of cash and cash equivalents and €543 million available under our committed lending facilities and factoring arrangements.

Net debt was €1,891 million at December 31, 2022 compared to €1,981 million at December 31, 2021.

Outlook

Based on our current outlook, we expect Adjusted EBITDA in the range of €640 million to €670 million in 2023.

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, net income in the future.

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

 

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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 fourth quarter and full year ended December 31, 2022, are also available on the company’s website (www.constellium.com).

 

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CONSOLIDATED INCOME STATEMENT (UNAUDITED)

 

		Three months ended December 31,								Year ended December 31,
(in millions of Euros)		2022				2021				2022				2021
Revenue			1,844				1,706				8,120				6,152
Cost of sales			(1,737	)			(1,551	)			(7,448	)			(5,488	)
Gross profit			107				155				672				664
Selling and administrative expenses			(76	)			(71	)			(282	)			(258	)
Research and development expenses			(16	)			(9	)			(48	)			(39	)
Other gains and losses - net			45				(25	)			(8	)			117
Income from operations			60				50				334				484
Finance costs - net			(33	)			(41	)			(131	)			(167	)
Income before tax			27				9				203				317
Income tax benefit / (expense)			3				(2	)			105				(55	)
Net income			30				7				308				262
Net income attributable to:
Equity holders of Constellium			28				7				301				257
Non-controlling interests			2				—				7				5
Net income			30				7				308				262
Earnings per share attributable to the equity holders of Constellium, (in Euros)
Basic			0.20				0.05				2.10				1.82
Diluted			0.20				0.05				2.06				1.75
Weighted average number of shares, (in thousands)
Basic			144,302				141,677				143,626				140,995
Diluted			146,606				147,170				146,606				147,170

 

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) (UNAUDITED)

 

		Three months ended December 31,								Year ended December 31,
(in millions of Euros)		2022				2021				2022				2021
Net income			30				7				308				262
Other comprehensive (loss) / income
Items that will not be reclassified subsequently to the consolidated income statement
Remeasurement on post-employment benefit obligations			(24	)			20				157				114
Income tax on remeasurement on post-employment benefit obligations			4				(2	)			(35	)			(16	)
Items that may be reclassified subsequently to the consolidated income statement
Cash flow hedges			19				(3	)			(8	)			(17	)
Income tax on cash flow hedges			(5	)			1				2				4
Currency translation differences			(68	)			12				21				34
Other comprehensive (loss) / income			(74	)			28				137				119
Total comprehensive (loss) / income			(44	)			35				445				381
Attributable to:
Equity holders of Constellium			(44	)			34				439				374
Non-controlling interests			—				1				6				7
Total comprehensive (loss) / income			(44	)			35				445				381

 

11

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 

(in millions of Euros)		At December 31, 2022				At December 31, 2021
Assets
Current assets
Cash and cash equivalents			166				147
Trade receivables and other			539				683
Inventories			1,320				1,050
Other financial assets			31				58
			2,056				1,938
Non-current assets
Property, plant and equipment			2,017				1,948
Goodwill			478				451
Intangible assets			54				58
Deferred tax assets			271				162
Trade receivables and other			43				55
Other financial assets			8				12
			2,871				2,686
Assets of disposal group classified as held for sale			14				—
Total Assets			4,941				4,624
Liabilities
Current liabilities
Trade payables and other			1,467				1,377
Borrowings			148				258
Other financial liabilities			41				25
Income tax payable			16				34
Provisions			21				20
			1,693				1,714
Non-current liabilities
Trade payables and other			43				32
Borrowings			1,908				1,871
Other financial liabilities			14				6
Pension and other post-employment benefit obligations			403				599
Provisions			90				97
Deferred tax liabilities			28				14
			2,486				2,619
Liabilities of disposal group classified as held for sale			10				—
Total Liabilities			4,189				4,333
Equity
Share capital			3				3
Share premium			420				420
Retained earnings / (deficit) and other reserves			308				(149	)
Equity attributable to equity holders of Constellium			731				274
Non-controlling interests			21				17
Total Equity			752				291
Total Equity and Liabilities			4,941				4,624

 

12

 

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 (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
(in millions of Euros)		Share capital				Share premium				Re-measurement				Cash flow hedges				Foreign currency translation reserve				Other reserves				Retained deficit				Total				Non- controlling interests				Total equity
At January 1, 2021			3				420				(192	)			9				(13	)			68				(410	)			(115	)			14				(101	)
Net income			—				—				—				—				—				—				257				257				5				262
Other comprehensive income / (loss)			—				—				98				(13	)			32				—				—				117				2				119
Total comprehensive income / (loss)			—				—				98				(13	)			32				—				257				374				7				381
Share-based compensation			—				—				—				—				—				15				—				15				—				15
Transactions with non-controlling interests			—				—				—				—				—				—				—				—				(4	)			(4	)
At December 31, 2021			3				420				(94	)			(4	)			19				83				(153	)			274				17				291

 

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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

 

		Three months ended December 31,								Year ended December 31,
(in millions of Euros)		2022				2021				2022				2021
Net income			30				7				308				262
Adjustments
Depreciation and amortization			78				72				287				267
Pension and other post-employment benefits service costs			(40	)			39				(22	)			64
Finance costs - net			33				41				131				167
Income tax (benefit) / expense			(3	)			2				(105	)			55
Unrealized (gains) / losses on derivatives - net and from remeasurement of monetary assets and liabilities - net			(20	)			32				47				(36	)
Losses on disposal			2				2				4				3
Other - net			5				3				17				11
Change in working capital
Inventories			(3	)			(101	)			(241	)			(435	)
Trade receivables			247				30				155				(227	)
Trade payables			(165	)			40				41				396
Other			10				(10	)			13				5
Change in provisions			(3	)			—				(10	)			(7	)
Pension and other post-employment benefits paid			(11	)			(9	)			(44	)			(43	)
Interest paid			(28	)			(29	)			(113	)			(128	)
Income tax (paid) / refunded			(4	)			(1	)			(17	)			3
Net cash flows from operating activities			128				118				451				357
Purchases of property, plant and equipment			(109	)			(104	)			(273	)			(232	)
Property, plant and equipment grants received			3				—				4				10
Proceeds from disposals, net of cash			—				1				—				1
Other investing activities			(1	)			—				(1	)			—
Net cash flows used in investing activities			(107	)			(103	)			(270	)			(221	)
Proceeds from issuance of long-term borrowings			—				—				—				712
Repayments of long-term borrowings			(4	)			(181	)			(192	)			(1,052	)
Net change in revolving credit facilities and short-term borrowings			5				(5	)			72				(5	)
Lease repayments			(10	)			(7	)			(37	)			(32	)
Payment of financing costs and redemption fees			—				(3	)			(1	)			(30	)
Transactions with non-controlling interests			—				—				(2	)			(2	)
Other financing activities			(13	)			2				(3	)			(26	)
Net cash flows used in financing activities			(22	)			(194	)			(163	)			(435	)
Net (decrease) / increase in cash and cash equivalent			(1	)			(179	)			18				(299	)
Cash and cash equivalents - beginning of year			171				323				147				439
Reclassification as assets of disposal group classified as held for sale			(1	)			—				(1	)			—
Effect of exchange rate changes on cash and cash equivalents			(3	)			3				2				7
Cash and cash equivalents - end of year			166				147				166				147

 

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SEGMENT ADJUSTED EBITDA

 

		Three months ended December 31,								Year ended December 31,
(in millions of Euros)		2022				2021				2022				2021
P&ARP			71				88				326				344
A&T			56				30				217				111
AS&I			31				31				149				142
Holdings and Corporate			(10	)			(2	)			(19	)			(16	)
Total			148				147				673				581

SHIPMENTS AND REVENUE BY PRODUCT LINE

 

		Three months ended December 31,								Year ended December 31,
(in k metric tons)		2022				2021				2022				2021
Packaging rolled products			186				211				809				833
Automotive rolled products			61				51				245				228
Specialty and other thin-rolled products			7				10				35				43
Aerospace rolled products			21				14				76				53
Transportation, industry, defense and other rolled products			32				39				147				153
Automotive extruded products			28				26				117				115
Other extruded products			33				34				151				146
Total shipments			368				385				1,580				1,571

 

(in millions of Euros)
Packaging rolled products			697				776				3,326				2,673
Automotive rolled products			275				217				1,154				854
Specialty and other thin-rolled products			35				44				183				171
Aerospace rolled products			218				110				728				389
Transportation, industry, defense and other rolled products			204				211				972				753
Automotive extruded products			228				191				949				735
Other extruded products			200				171				912				648
Other and inter-segment eliminations			(13	)			(14	)			(104	)			(71	)
Total revenue			1,844				1,706				8,120				6,152

 

15

 

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)		2022				2021				2022				2021
Revenue			1,844				1,706				8,120				6,152
Hedged cost of alloyed metal			(1,212	)			(1,067	)			(5,403	)			(3,684	)
Revenue from incidental activities			(5	)			(5	)			(21	)			(20	)
Metal time lag			69				(43	)			29				(187	)
VAR			696				591				2,725				2,261

Reconciliation of net income to Adjusted EBITDA (a non-GAAP measure)

 

		Three months ended December 31,								Year ended December 31,
(in millions of Euros)		2022				2021				2022				2021
Net income			30				7				308				262
Income tax (benefit) / expense			(3	)			2				(105	)			55
Income before tax			27				9				203				317
Finance costs - net			33				41				131				167
Income from operations			60				50				334				484
Depreciation and amortization			78				72				287				267
Restructuring costs			1				—				1				3
Unrealized (gains) / losses on derivatives			(19	)			32				46				(35	)
Unrealized exchange (gains) / losses from the remeasurement of monetary assets and liabilities – net			(1	)			—				1				(1	)
(Gains) / losses on pension plan amendments (A)			(47	)			30				(47	)			32
Share based compensation costs			5				4				18				15
Metal price lag (B)			69				(43	)			29				(187	)
Losses on disposal			2				2				4				3
Adjusted EBITDA			148				147				673				581

 

(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. In the year ended December 31, 2021, the group recognized a loss of €31 million from past service cost following an adverse decision of the Fourth Circuit Court in the dispute between Constellium Rolled Products Ravenswood, LLC and the United Steelworkers Local Union 5668 over the transfer of certain participants in the Constellium Rolled Products Ravenswood Retiree Medical and Life Insurance Plan to a third-party health network.

(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 an internal 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 year.

 

16

 

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)		2022				2021				2022				2021
Net cash flows from operating activities			128				118				451				357
Purchases of property, plant and equipment, net of grants received			(106	)			(104	)			(269	)			(222	)
Free Cash Flow			22				14				182				135

Reconciliation of borrowings to Net debt (a non-GAAP measure)

 

(in millions of Euros)		At December 31, 2022				At December 31, 2021
Borrowings			2,056				2,129
Fair value of net debt derivatives, net of margin calls			1				(1	)
Cash and cash equivalents			(166	)			(147	)
Net debt			1,891				1,981

 

17

 

Reconciliation of Net income to NOPAT and ROIC (non-GAAP measures)

 

		Year ended December 31,
(in millions of Euros)		2022				2021
Net income			308				262
Income tax (benefit) / expense			(105	)			55
Income before tax			203				317
Finance costs - net			131				167
Income from operations			334				484
Unrealized losses / (gains) on derivatives			46				(35	)
Unrealized exchange losses / (gains) from the remeasurement of monetary assets and liabilities—net			1				(1	)
(Gains) / losses on pension plan amendments			(47	)			32
Share based compensation costs			18				15
Metal price lag			29				(187	)
Losses on disposals			4				3
Tax impact(1)			(92	)			(76	)
NOPAT (A)			293				235

 

(in millions of Euros)		At December 31, 2021				At December 31, 2020
Intangible assets			58				61
PP&E, net			1,948				1,906
Trade receivables and other - current			683				406
Derecognized trade receivables(2)			345				398
Inventories			1,050				582
Trade payables and other - current			(1,377	)			(905	)
Provisions current portion			(20	)			(23	)
Income tax payable			(34	)			(20	)
Total Invested Capital (B)			2,653				2,405

 

(in millions of Euros)		2022				2021
NOPAT for fiscal year (A)			293				235
Total invested capital as of December 31 of prior year (B)			2,653				2,405
ROIC (A)/(B)			11.0	%			9.8	%

 

(1)	Tax impact on net operating profit computed using the Group’s average statutory tax rate

(2)	Trade receivables derecognized under our factoring agreements

 

18