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Published: 2022-07-27 16:31:09 ET
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EX-99.1 2 d324099dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

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Constellium Reports Second Quarter 2022 Results

Paris, July 27, 2022 – Constellium SE (NYSE: CSTM) today reported results for the second quarter ended June 30, 2022.

Second quarter 2022 highlights:

 

   

Shipments of 424 thousand metric tons, up 4% compared to Q2 2021

 

   

Revenue of €2.3 billion, up 50% compared to Q2 2021

 

   

Value-Added Revenue (VAR) of €704 million, up 22% compared to Q2 2021

 

   

Net loss of €32 million compared to net income of €108 million in Q2 2021

 

   

Adjusted EBITDA of €198 million, up 17% compared to Q2 2021

 

   

Cash from Operations of €111 million and Free Cash Flow of €60 million

 

   

Repaid €180 million PGE French Facility and CHF 15 million Swiss Facility

First half 2022 highlights:

 

   

Shipments of 825 thousand metric tons, up 4% compared to H1 2021

 

   

Revenue of €4.3 billion, up 49% compared to H1 2021

 

   

VAR of €1.4 billion, up 22% compared to H1 2021

 

   

Net income of €147 million compared to net income of €156 million in H1 2021

 

   

Adjusted EBITDA of €365 million, up 25% compared to H1 2021

 

   

Cash from Operations of €169 million and Free Cash Flow of €86 million

 

   

Net debt / LTM Adjusted EBITDA of 3.0x at June 30, 2022

Jean-Marc Germain, Constellium’s Chief Executive Officer said, “I am very proud of the results our team delivered in the second quarter, including record VAR, record Adjusted EBITDA and strong Free Cash Flow generation. Demand remained strong across most end markets during the quarter, and our team continued to execute very well despite significant inflationary pressures. Both P&ARP and AS&I reported record Adjusted EBITDA as continued strength in packaging and industry demand more than offset continued weakness in automotive caused by the semiconductor shortage and other supply chain challenges. A&T reported very strong second quarter Adjusted EBITDA supported by a greater than 50% increase in aerospace

 

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shipments compared to the same quarter last year and continued strength in transportation, industry and defense (TID). Lastly, we generated Free Cash Flow of €60 million and reduced our leverage to 3.0x.”

Mr. Germain continued, “Macroeconomic and geopolitical risks remain elevated and we expect inflationary pressures to continue, particularly for inputs like energy and regions more directly affected by the ongoing war in Ukraine. However, I am confident in our ability to continue to execute well through these challenging times. Based on our strong performance in the first half of this year and our current outlook for the second half which assumes no major deterioration on the geopolitical front, we are raising our guidance and now expect Adjusted EBITDA of €670 million to €690 million and Free Cash Flow in excess of €170 million in 2022. Following this, we expect our leverage to decline further by the end of the year. We remain focused on executing our strategy, driving operational performance, generating Free Cash Flow and increasing shareholder value.”

•    Group Summary

 

     Q2
2022
    Q2
2021
     Var.     YTD
2022
     YTD
2021
     Var.  

Shipments (k metric tons)

     424       406        4     825        791        4

Revenue (€ millions)

     2,275       1,518        50     4,254        2,859        49

VAR (€ millions)

     704       575        22     1,356        1,112        22

Net income / (loss) (€ millions)

     (32     108        n.m.       147        156        (6 )% 

Adjusted EBITDA (€ millions)

     198       170        17     365        291        25

Adjusted EBITDA per metric ton (€)

     468       418        12     443        368        20

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 second quarter of 2022, shipments of 424 thousand metric tons increased 4% compared to the second quarter of last year due to higher shipments in each of our segments. Revenue of €2.3 billion increased 50% compared to the second quarter of the prior year primarily due to higher metal prices, improved price and mix and increased volumes. VAR of €704 million increased 22% compared to the second quarter of the prior year primarily due to improved price and mix, favorable foreign exchange translation and higher volumes, partially offset by unfavorable metal costs due to inflation. The net loss of €32 million compares to net income of €108 million in the second quarter of 2021. Adjusted EBITDA of €198 million increased 17% compared to the second quarter of last year due to stronger results in each of our segments.

 

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For the first half of 2022, shipments of 825 thousand metric tons increased 4% compared to the first half of 2021 on higher shipments in each of our segments. Revenue of €4.3 billion increased 49% compared to the first half of 2021 primarily due to higher metal prices, improved price and mix and increased volumes. VAR of €1.4 billion increased 22% compared to the first half of 2021 primarily due to improved price and mix, higher volumes and favorable foreign exchange translation, partially offset by unfavorable metal costs due to inflation. Net income of €147 million compares to net income of €156 million in the first half of 2021. Adjusted EBITDA of €365 million increased 25% compared to the first half of 2021 on stronger results in each of our segments.

•    Results by Segment

•    Packaging & Automotive Rolled Products (P&ARP)

 

     Q2
2022
     Q2
2021
     Var.     YTD
2022
     YTD
2021
     Var.  

Shipments (k metric tons)

     292        284        3     568        551        3

Revenue (€ millions)

     1,348        907        49     2,516        1,673        50

Adjusted EBITDA (€ millions)

     95        94        2     177        162        9

Adjusted EBITDA per metric ton (€)

     327        332        (1 )%      312        294        6

For the second quarter of 2022, Adjusted EBITDA increased 2% compared to the second quarter of 2021 primarily due to improved price and mix, favorable metal costs, favorable foreign exchange translation and higher shipments, largely offset by higher operating costs mainly due to inflation. Shipments of 292 thousand metric tons increased 3% compared to the second quarter of the prior year due to higher shipments of packaging and automotive rolled products. Revenue of €1.3 billion increased 49% compared to the second quarter of 2021 primarily due to higher metal prices and improved price and mix.

For the first half of 2022, Adjusted EBITDA of €177 million increased 9% compared to the first half of 2021 primarily due to improved price and mix, favorable metal costs, favorable foreign exchange translation and higher shipments, partially offset by higher operating costs mainly due to inflation. Shipments of 568 thousand metric tons increased 3% compared to the first half of 2021 on higher shipments of packaging rolled products. Revenue of €2.5 billion increased 50% compared to the first half of 2021 primarily due to higher metal prices.

 

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•    Aerospace & Transportation (A&T)

 

     Q2
2022
     Q2
2021
     Var.     YTD
2022
     YTD
2021
     Var.  

Shipments (k metric tons)

     60        53        13     115        101        14

Revenue (€ millions)

     461        287        61     846        532        59

Adjusted EBITDA (€ millions)

     63        42        50     116        61        88

Adjusted EBITDA per metric ton (€)

     1,056        794        33     1,010        610        66

For the second quarter of 2022, Adjusted EBITDA increased 50% compared to the second quarter of 2021 primarily due to improved price and mix and higher shipments, partially offset by higher operating costs due to inflation and the production ramp-up in aerospace. Shipments of 60 thousand metric tons increased 13% compared to the second quarter of 2021 on higher shipments of aerospace rolled products. Revenue of €461 million increased 61% compared to the second quarter of 2021 on higher metal prices, improved price and mix and higher shipments.

For the first half of 2022, Adjusted EBITDA of €116 million increased 88% compared to the first half of 2021 primarily due to improved price and mix and higher shipments, partially offset by higher operating costs due to inflation and the production ramp-up in aerospace. Shipments of 115 thousand metric tons increased 14% compared to the first half of 2021 on higher shipments of aerospace and TID rolled products. Revenue of €846 million increased 59% compared to the first half of 2021 primarily due to higher metal prices, improved price and mix and higher shipments.

•    Automotive Structures & Industry (AS&I)

 

     Q2
2022
     Q2
2021
     Var.     YTD
2022
     YTD
2021
     Var.  

Shipments (k metric tons)

     72        69        4     142        139        2

Revenue (€ millions)

     501        345        45     960        695        38

Adjusted EBITDA (€ millions)

     46        41        13     83        79        6

Adjusted EBITDA per metric ton (€)

     641        587        9     581        563        3

For the second quarter of 2022, Adjusted EBITDA increased 13% compared to the second quarter of 2021 primarily due to improved price and mix and higher shipments, partially offset by higher operating costs mainly due to inflation. Shipments of 72 thousand metric tons increased 4% compared to the second quarter of 2021 due to higher shipments of automotive and other extruded products. Revenue of €501 million increased 45% compared to the second quarter of 2021 primarily due to higher metal prices and improved price and mix.

 

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For the first half of 2022, Adjusted EBITDA of €83 million increased 6% compared to the first half of 2021 primarily due to improved price and mix and higher shipments, partially offset by higher operating costs mainly due to inflation. Shipments of 142 thousand metric tons increased 2% compared to the first half of 2021 on higher shipments of other extruded products, partially offset by lower shipments of automotive extruded products. Revenue of €1.0 billion increased 38% compared to the first half of 2021 primarily due to higher metal prices and improved price and mix.

•    Net Income

For the second quarter of 2022, the net loss of €32 million compares to net income of €108 million in the second quarter of the prior year. The decrease in net income is primarily related to a €158 million unfavorable change in unrealized gains and losses on derivatives mostly related to our metal hedging positions and higher selling and administrative expenses, partially offset by higher gross profit and a favorable change in income taxes.

For the first half of 2022, net income of €147 million compares to net income of €156 million in the first half of the prior year. The decrease in net income is primarily related to a €130 million unfavorable change in unrealized gains and losses on derivatives mostly related to our metal hedging positions and higher selling and administrative expenses, partially offset by higher gross profit and lower finance costs.

•    Cash Flow

Free Cash Flow was €86 million in the first half of 2022 compared to €81 million in the first half of the prior year. The increase was primarily due to stronger Adjusted EBITDA and lower cash interest, partially offset by an unfavorable change in working capital, higher cash taxes and increased capital expenditures.

Cash flows from operating activities were €169 million for the first half of 2022 compared to cash flows from operating activities of €148 million in the first half of the prior year. Constellium increased derecognized factored receivables by €10 million for the first half of 2022 compared to a decrease of €14 million in the prior year.

Cash flows used in investing activities were €83 million for the first half of 2022 compared to cash flows used in investing activities of €67 million in the first half of the prior year.

 

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Cash flows used in financing activities were €79 million for the first half of 2022 compared to cash flows used in financing activities of €232 million in the first half of the prior year. In the first half 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 PGE French Facility due 2022 and the CHF 15 Swiss Facility due 2025. In the first half of 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 and $400 million of 5.75% Senior Notes due 2024.

•    Liquidity and Net Debt

Liquidity at June 30, 2022 was €899 million, comprised of €156 million of cash and cash equivalents and €743 million available under our committed lending facilities and factoring arrangements.

Net debt was €1,997 million at June 30, 2022 compared to €1,981 million at December 31, 2021.

In June 2022, the Pan-U.S. ABL was amended to increase the commitment from $400 million to $500 million, provide an incremental revolving credit facility accordion of up to $100 million, and replace the LIBOR reference rate by the SOFR reference rate.

In June 2022, the factoring facility in the U.S. at Muscle Shoals was reduced from $300 million available to $200 million.

In June 2022, the factoring facilities in Germany, Switzerland and Czech Republic were extended from 2023 to 2027 and the combined capacity increased from €150 million to €200 million.

•    Outlook

Based on our current outlook, we expect Adjusted EBITDA in the range of €670 million to €690 million in 2022.

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.

 

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•    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 invasion of 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 €6.2 billion of revenue in 2021.

Constellium’s earnings materials for the second quarter ended June 30, 2022, are also available on the company’s website (www.constellium.com).

 

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CONSOLIDATED INCOME STATEMENT (UNAUDITED)

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Revenue

     2,275       1,518       4,254       2,859  

Cost of sales

     (2,060     (1,319     (3,822     (2,518
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     215       199       432       341  
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling and administrative expenses

     (75     (67     (143     (127

Research and development expenses

     (10     (9     (21     (20

Other gains and losses - net

     (134     44       (24     87  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) / income from operations

     (4     167       244       281  
  

 

 

   

 

 

   

 

 

   

 

 

 

Finance costs - net

     (32     (37     (62     (92
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) / income before tax

     (36     130       182       189  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax benefit / (expense)

     4       (22     (35     (33
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) / income

     (32     108       147       156  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

        

Equity holders of Constellium

     (34     107       143       153  

Non-controlling interests

     2       1       4       3  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) / income

     (32     108       147       156  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to the equity holders of Constellium, (in Euros)

        

Basic

     (0.24     0.76       1.00       1.09  

Diluted

     (0.24     0.73       0.97       1.04  

Weighted average number of shares, (in thousands)

        

Basic

     144,186       140,637       142,939       140,302  

Diluted

     144,186       146,730       147,184       146,730  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Net (loss) / income

     (32     108       147       156  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

        

Items that will not be reclassified subsequently to the consolidated income statement

        

Remeasurement on post-employment benefit obligations

     79       24       155       89  

Income tax on remeasurement on post-employment benefit obligations

     (17     2       (30     (11

Items that may be reclassified subsequently to the consolidated income statement

        

Cash flow hedges

     (13     3       (15     (8

Income tax on cash flow hedges

     3       (1     4       2  

Currency translation differences

     31       (1     42       12  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

     83       27       156       84  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

     51       135       303       240  
  

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

        

Equity holders of Constellium

     49       134       299       236  

Non-controlling interests

     2       1       4       4  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

     51       135       303       240  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 

(in millions of Euros)

   At June 30,
2022
     At December 31,
2021
 

Assets

     

Current assets

     

Cash and cash equivalents

     156        147  

Trade receivables and other

     1,027        683  

Inventories

     1,360        1,050  

Other financial assets

     46        58  
  

 

 

    

 

 

 
     2,589        1,938  
  

 

 

    

 

 

 

Non-current assets

     

Property, plant and equipment

     1,994        1,948  

Goodwill

     491        451  

Intangible assets

     57        58  

Deferred tax assets

     124        162  

Trade receivables and other

     60        55  

Other financial assets

     14        12  
  

 

 

    

 

 

 
     2,740        2,686  
  

 

 

    

 

 

 

Total Assets

     5,329        4,624  
  

 

 

    

 

 

 

Liabilities

     

Current liabilities

     

Trade payables and other

     1,784        1,377  

Borrowings

     209        258  

Other financial liabilities

     97        25  

Income tax payable

     28        34  

Provisions

     22        20  
  

 

 

    

 

 

 
     2,140        1,714  
  

 

 

    

 

 

 

Non-current liabilities

     

Trade payables and other

     45        32  

Borrowings

     1,949        1,871  

Other financial liabilities

     18        6  

Pension and other post-employment benefit obligations

     463        599  

Provisions

     96        97  

Deferred tax liabilities

     15        14  
  

 

 

    

 

 

 
     2,586        2,619  
  

 

 

    

 

 

 

Total Liabilities

     4,726        4,333  
  

 

 

    

 

 

 

Equity

     

Share capital

     3        3  

Share premium

     420        420  

Retained deficit and other reserves

     159        (149
  

 

 

    

 

 

 

Equity attributable to equity holders of Constellium

     582        274  

Non-controlling interests

     21        17  
  

 

 

    

 

 

 

Total Equity

     603        291  
  

 

 

    

 

 

 

Total Equity and Liabilities

     5,329        4,624  
  

 

 

    

 

 

 

 

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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
    Total     Non-controlling
interests
    Total
equity
 

At January 1, 2022

    3       420       (94     (4     19       83       (153     274       17       291  

Net income

    —         —         —         —         —         —         143       143       4       147  

Other comprehensive income / (loss)

    —         —         125       (11     42       —         —         156       —         156  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income / (loss)

    —         —         125       (11     42       —         143       299       4       303  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Share-based compensation

    —         —         —         —         —         9       —         9       —         9  

Transactions with non-controlling interests

    —         —         —         —         —         —         —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At June 30, 2022

    3       420       31       (15     61       92       (10     582       21       603  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(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

    —         —         —         —         —         —         153       153       3       156  

Other comprehensive income / (loss)

    —         —         78       (6     11       —         —         83       1       84  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income / (loss)

    —         —         78       (6     11       —         153       236       4       240  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Share-based compensation

    —         —         —         —         —         7       —         7       —         7  

Transactions with non-controlling interests

    —         —         —         —         —         —         —         —         (2     (2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At June 30, 2021

    3       420       (114     3       (2     75       (257     128       16       144  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Net (loss) / income

     (32     108       147       156  

Adjustments

        

Depreciation and amortization

     70       65       136       128  

Pension and other post-employment benefits service costs

     6       10       11       17  

Finance costs - net

     32       37       62       92  

Income tax (benefit) / expense

     (4     22       35       33  

Unrealized losses / (gains) on derivatives - net and from remeasurement of monetary assets and
liabilities - net

     143       (15     85       (45

Losses on disposal

     —         —         1       —    

Other - net

     4       3       8       5  

Change in working capital

        

Inventories

     —         (103     (256     (212

Trade receivables

     (77     (126     (287     (234

Trade payables

     5       117       325       300  

Other

     20       (7     4       —    

Change in provisions

     (2     —         (4     (4

Pension and other post-employment benefits paid

     (10     (10     (21     (21

Interest paid

     (25     (28     (54     (72

Income tax (paid) / refunded

     (19     —         (23     5  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows from operating activities

     111       73       169       148  
  

 

 

   

 

 

   

 

 

   

 

 

 

Purchases of property, plant and equipment

     (51     (42     (84     (74

Property, plant and equipment grants received

     —         4       1       7  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows used in investing activities

     (51     (38     (83     (67
  

 

 

   

 

 

   

 

 

   

 

 

 

Proceeds from issuance of long-term borrowings

     —         300       —         712  

Repayments of long-term borrowings

     (183     (332     (186     (870

Net change in revolving credit facilities and short-term borrowings

     124       (3     124       —    

Lease repayments

     (9     (8     (20     (17

Payment of financing costs and redemption fees

     —         (10     —         (26

Transactions with non-controlling interests

     (2     (2     (2     (2

Other financing activities

     5       (32     5       (29
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows used in financing activities

     (65     (87     (79     (232
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) / increase in cash and cash equivalent

     (5     (52     7       (151

Cash and cash equivalents - beginning of year

     160       342       147       439  

Effect of exchange rate changes on cash and cash equivalents

     1       —         2       2  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents - end of period

     156       290       156       290  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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SEGMENT ADJUSTED EBITDA

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

P&ARP

     95       94       177       162  

A&T

     63       42       116       61  

AS&I

     46       41       83       79  

Holdings and Corporate

     (6     (7     (11     (11
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     198       170       365       291  
  

 

 

   

 

 

   

 

 

   

 

 

 

SHIPMENTS AND REVENUE BY PRODUCT LINE

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in k metric tons)

   2022     2021     2022     2021  

Packaging rolled products

     221       213       427       407  

Automotive rolled products

     61       59       120       122  

Specialty and other thin-rolled products

     10       12       21       22  

Aerospace rolled products

     20       13       36       26  

Transportation, industry, defense and other rolled products

     40       40       79       75  

Automotive extruded products

     30       29       60       63  

Other extruded products

     42       40       82       76  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total shipments

     424       406       825       791  
  

 

 

   

 

 

   

 

 

   

 

 

 

(in millions of Euros)

                        

Packaging rolled products

     985       648       1,837       1,167  

Automotive rolled products

     308       213       571       421  

Specialty and other thin-rolled products

     55       46       108       85  

Aerospace rolled products

     183       100       326       187  

Transportation, industry, defense and other rolled products

     278       187       520       345  

Automotive extruded products

     247       176       473       377  

Other extruded products

     254       169       487       318  

Other and inter-segment eliminations

     (35     (21     (68     (41
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     2,275       1,518       4,254       2,859  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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NON-GAAP MEASURES

Reconciliation of Revenue to VAR (a non-GAAP measure)

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Revenue

     2,275       1,518       4,254       2,859  

Hedged cost of alloyed metal

     (1,550     (886     (2,777     (1,651

Revenue from incidental activities

     (5     (3     (11     (11

Metal time lag

     (16     (54     (110     (85
  

 

 

   

 

 

   

 

 

   

 

 

 

VAR

     704       575       1,356       1,112  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Net (loss) / income

     (32     108       147       156  

Income tax (benefit) / expense

     (4     22       35       33  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) / income before tax

     (36     130       182       189  

Finance costs - net

     32       37       62       92  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) / income from operations

     (4     167       244       281  

Depreciation and amortization

     70       65       136       128  

Restructuring costs

     —         2       —         3  

Unrealized losses / (gains) on derivatives

     141       (16     84       (44

Unrealized exchange losses / (gains) from the remeasurement of monetary assets and liabilities – net

     2       1       1       (1

Losses on pension plan amendments

     —         2       —         2  

Share based compensation costs

     5       3       9       7  

Metal price lag (A)

     (16     (54     (110     (85

Losses on disposal

     —         —         1       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     198       170       365       291  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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 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.

 

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Reconciliation of net cash flows from operating activities to Free Cash Flow (a non-GAAP measure)

 

     Three months ended
June 30,
    Six months ended
June 30,
 

(in millions of Euros)

   2022     2021     2022     2021  

Net cash flows from operating activities

     111       73       169       148  

Purchases of property, plant and equipment

     (51     (42     (84     (74

Property, plant and equipment grants received

     —         4       1       7  
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

     60       35       86       81  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

 

(in millions of Euros)

   At June 30,
2022
    At December 31,
2021
 

Borrowings

     2,158       2,129  

Fair value of net debt derivatives, net of margin calls

     (5     (1

Cash and cash equivalents

     (156     (147
  

 

 

   

 

 

 

Net debt

     1,997       1,981  
  

 

 

   

 

 

 

 

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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: 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.

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.

 

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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, equity contributions and loans to joint ventures and other investing activities. 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.

 

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