Good morning or good afternoon, and welcome to the Constellium Second Quarter 2025 Earnings Call. My name is Adam, and I'll be your operator today. I will now hand the floor to Jason Hershiser, Director of Investor Relations to begin. So Jason, please go ahead when you're ready.

Thank you, Adam. I would like to welcome everyone to our second quarter 2025 earnings call. On the call today, we have our Chief Executive Officer, Jean-Marc Germain; and our Chief Financial Officer, Jack Guo. After the presentation, we will have a Q&A session. A copy of the slide presentation for today's call is available on our website at constellium.com, and today's call is being recorded. Before we begin, I'd like to encourage everyone to visit the company's website and take a look at our recent filings. Today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the company's anticipated financial and operating performance, future events and expectations and may involve known and unknown risks and uncertainties. For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the factors presented under the heading Risk Factors in our annual report on Form 10-K. All information in this presentation is as of the date of the presentation. 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. In addition, today's presentation includes information regarding certain non-GAAP financial measures. Please see the reconciliations of non-GAAP financial measures attached in today's slide presentation to supplement our GAAP disclosures. And with that, I would now like to hand the call over to Jean-Marc.

Thank you, Jason. Good morning, good afternoon, everyone, and thank you for your interest in Constellium. Let's begin on Slide 5 and discuss the highlights from our second quarter results. I would like to start with safety, our number one priority. Our recordable case rate in the second quarter was 2.6 per million hours worked, following our strong safety performance in the first quarter and bringing our year-to-date recordable case rate to 1.8 per million hours worked. While this performance remains best in class, this is a humbling reminder that we all need to constantly maintain our focus on safety to achieve the ambitious target we have set of 1.5 per million hours worked. Turning now to our financial results. Shipments were 384,000 tons or up 2% compared to the second quarter of 2024 due to higher shipments that were partially offset by lower shipments in A&T and AS&I. Revenue of $2.1 billion increased 9% compared to the second quarter of 2024 due to higher shipments and favorable price and mix, including higher metal prices experienced in the quarter versus last year. Remember, while our revenues are affected by changes in metal prices, we operate a pass-through business model, which minimizes our exposure to metal price risk. Our net income of $36 million in the quarter compares to a net income of $77 million in the second quarter last year. Adjusted EBITDA was $146 million in the quarter, though this includes a negative noncash impact from metal price lag of $13 million. If we exclude the impact of metal price lag, the real economic performance of the business reflects an adjusted EBITDA of $159 million in the quarter compared to the $180 million last year. Moving now to free cash flow. Our free cash flow in the quarter was strong at $41 million. During the quarter, we returned $35 million to shareholders through the repurchase of 3.4 million shares. Our leverage at the end of the second quarter was 3.6x, though we expect this to be the peak and for leverage to trend down as we move through the rest of the year. We delivered solid results this quarter despite continued demand weakness across most of our end markets outside of packaging. We remain focused on strong cost control, free cash flow generation, and commercial and capital discipline. Overall, I am quite pleased with our second quarter and first half performance. Now please turn to Slide #6. Before turning the call over to Jack, I wanted to give you a quick update on the Section 232 tariffs as well as other tariffs under IEEPA and how we see the potential impact on Constellium. Before going into details on the slide, let me summarize a bit. As I mentioned last quarter, the tariff situation is a fluid and multifaceted situation. We see both some positive and negative impacts on our business. At this stage, we continue to believe it presents us with various opportunities as well as some additional costs, but it should be a net positive for us. The guidance we are giving today does include the direct impact from tariffs that we are able to estimate given what we know today, and it does include several mitigating factors we have identified to offset the impact. It also includes our current assumptions on end market demand in the current environment. Our guidance assumes a relatively stable macro environment, and it does not include potential impacts from additional tariffs beyond those that are known today. Shifting to the details on the slide now. On the production side, we are mostly local for local in the regions where we operate. Our automotive structures business in the U.S. buys extrusions from Canada, including from our joint venture in Canada. These extrusions have become more expensive under Section 232 tariffs, impacting the first half by around $7 million on a gross basis. The gross costs could continue to accumulate going forward to an additional $20 million for the rest of the year before mitigating items. We are working with our customers and suppliers on pass-throughs and other mitigation efforts, and we have made good progress on a number of them. We expect these actions to result in some benefits in the second half, which will help mitigate the impact on our results. In Aerospace, we shipped small quantities from Europe to the U.S. to serve global OEMs, although this currently has a pass-through, and we will not be impacted. Regarding the automotive specific tariffs that fall under Section 232, the volumes we ship across Mexican and Canadian borders are compliant with USMCA. On the metal supply side, we import some primary aluminum from Canada given the lack of smelter capacity here in the U.S. As of today, we have commercial agreements in place to help mitigate the tariff impact on this metal. In terms of scrap, aluminum scrap is excluded from the current scope of Section 232 tariffs, and we purchase most of our scrap needs from dealers in the U.S. The impact of the scrap from tariffs should be a net positive as the rise in the U.S. regional premium is beneficial for the domestic supply chain. We are starting to see this already as scrap spreads for used beverage cans, for instance, in the U.S., have widened in the first half of this year, and we expect to see some benefits from this in the second half. In terms of commercial impacts, these two should be a net positive for Constellium. Today, over 1 million tons of flat-rolled aluminum imports are coming into the U.S. each year, given the lack of domestic supply available. Tariffs will make domestically produced products more competitive, and we should benefit from this. During the first half of this year, we announced price increases for all rolled products shipped in the U.S. This has already started to benefit us on non-contracted volumes in the second quarter this year, and this benefit should continue to grow moving forward. In terms of end markets, the tariff and trade situation is creating broader macro uncertainty, and it is having a negative impact on markets such as automotive. Our guidance assumes weak conditions in automotive in both North America and Europe, and we are monitoring the conditions very closely. We believe that the newly announced trade deals will somewhat reduce uncertainty in the global markets. That said, we are not discounting the broader macro uncertainty. We remain focused on our cost reduction efforts under our Vision 25 program, and we are optimizing our existing capacity depending on market conditions such as shifting some capacity where we can from automotive markets into packaging markets. To close out on tariffs, as I said before, the situation remains very fluid. We are continually monitoring and assessing the potential impact of current and future trade policies, though at this stage, we believe the net impact of tariffs on aluminum presents us with some opportunities in the current environment. With that, I will now turn the call over to Jack for further details on our financial performance.

Thank you, Jean-Marc, and thank you, everyone, for joining the call today. Please turn now to Slide 8, and let's focus on our A&T segment performance. Adjusted EBITDA of $78 million decreased 13% compared to the second quarter last year. Volume was a headwind of $18 million due to lower aerospace and TID shipments. Aerospace shipments were down 12% in the quarter versus last year as commercial OEMs continue to work through excess inventory due to lingering supply chain challenges. Demand in space and military aircraft remained healthy. TID shipments were down 11% versus last year as commercial transportation and general industrial markets remained weak in the quarter. Price and mix was a tailwind of $2 million due to improved contractual and spot pricing in Aerospace and TID, partially offset by a weaker overall mix in the quarter. Costs were a tailwind of $2 million primarily as a result of lower operating costs. FX and other was also a tailwind of $2 million in the quarter due to the weakening of the U.S. dollar. Now turn to Slide 9, and let's focus on our P&ARP segment performance. Adjusted EBITDA of $74 million increased 12% compared to the second quarter last year. Volume was a tailwind of $14 million as higher shipments in packaging were partially offset by lower shipments in automotive. Packaging shipments increased 14% in the quarter versus last year as demand remained healthy in both North America and Europe. In North America, we also benefited at Muscle Shoals from improved operational performance in the quarter. Automotive shipments decreased 14% in the quarter with weakness in both North America and Europe. Price and mix was a headwind of $7 million in the quarter due to tariff-related metal impacts and weaker mix. Costs were a modest headwind of $1 million primarily as a result of unfavorable metal costs mostly offset by lower operating costs. FX and other was a tailwind of $2 million in the quarter. Now turn to Slide 10. Let's focus on our AS&I segment. Adjusted EBITDA of $18 million decreased 40% compared to the second quarter of last year. Volume was a $1 million headwind as a result of lower shipments in automotive, mostly offset by higher shipments in industry-shooted products. Automotive shipments were down 12% in the quarter with weakness in both North America and Europe. Industry shipments were up 14% in the quarter versus last year. The increase in industry shipments is a result of us catching up to the lost volumes from the Valais interruption as industry markets in Europe remained weak overall. Price and mix was a $16 million headwind in the quarter due to weaker pricing for spot volumes and a weaker mix. Costs were a tailwind of $5 million primarily due to lower operating costs, partially offset by the net impact of tariff headwind in the quarter. It is not on the slide here, but our holdings and corporate expense was $12 million in the quarter. Holdings and corporate expense this quarter was up $6 million from last year due to additional IT spending with the upgrade of our ERP system and higher accrued labor costs, partially offset by lower headcount. As we said last quarter, we expect holdings and corporate expense to run at approximately $40 million in 2025. It is also not on the slide here, but I wanted to summarize the current cost environment we're facing. As you know, we operate a pass-through business model. So we're not materially exposed to changes in the market price of aluminum, our largest cost input. On other metal costs, we experienced a dramatic tightening of spot scrap spreads in North America in 2024. The tightness continued into the beginning of this year, though spreads improved in the spot market as we moved through the first half of the year. Given our scrap purchases, we're essentially locked in for the second quarter; we did not benefit from this dynamic during the period. However, we expect to benefit starting in the third quarter this year and into the rest of the year. For Energy, our 2025 costs are moderately more favorable compared to 2024, although energy prices remain above historical averages. Other inflationary pressures have eased to more normal levels. And as we said in previous quarters, given the weakness we're seeing in several of our markets, we have accelerated our Vision 25 cost improvement program with measures such as improving operational efficiency, reducing headcounts, and other labor costs, reducing nonmetal procurement spending, optimizing maintenance costs by minimizing the use of outside contractors, and cost reduction efforts across many other categories. We have demonstrated strong cost performance in the past, and we're confident in our ability to rightsize our cost structure for the current demand environment. Now let's turn to Slide 11 and discuss our free cash flow. We generated $41 million of free cash flow in the quarter, bringing our year-to-date total to $38 million. The year-over-year increase in the first half is a result of less cash used for working capital, lower capital expenditures, and lower cash taxes, partially offset by lower segment adjusted EBITDA and higher cash interest. Looking at 2025, we expect to generate free cash flow in excess of $120 million for the full year, which is unchanged from our prior guidance. We expect CapEx to be around $325 million for the full year. We still plan to reduce our CapEx this year to stay prudent, though most of the benefits are offset by unfavorable foreign exchange translation. Cash interest and cash taxes are running slightly higher for the year than previously expected at $125 million and $45 million, respectively. We expect working capital and other items to be a modest use of cash for the full year, which includes the impact of higher metal prices this year and the working capital ramp-up in Valais. At this stage, we have fully rebuilt our supply chain and inventories in Valais, which has had a negative impact on free cash flow in the first half of this year. As Jean-Marc mentioned previously, we continued our share buyback activities in the quarter. During the quarter, we repurchased 3.4 million shares for $35 million, bringing our year-to-date total to 4.8 million shares for $50 million. We have approximately $171 million remaining on our existing share repurchase program, and we intend to use a large portion of the free cash flow generated this year for the program. Now let's turn to Slide 12 and discuss our balance sheet and liquidity position. At the end of the second quarter, our net debt of $1.9 billion was up approximately $120 million compared to the end of 2024, with the largest driver being the translation impact from the weaker U.S. dollar at the end of the quarter. Our leverage was 3.6x at the end of the quarter and was up 0.5x versus the end of 2024. As Jean-Marc mentioned previously, we expect this to be the peak leverage and to trend down as we move through the year with the expected improvement in trailing adjusted EBITDA. We currently expect to finish the year with leverage at or below 3x, and we're committed to bringing our leverage back down into our target leverage range of 1.5 to 2.5x and maintaining this range over time. As you can see in our debt summary, we have no bond maturities until 2028. Our liquidity increased by $114 million from the end of 2024 and remains strong at $841 million as of the end of the second quarter. Before turning it back over to Jean-Marc, I wanted to mention a recent development for the company. As of June 30, 2025, Constellium no longer qualified as a foreign private issuer and will transition into becoming a U.S. domestic filer starting in 2026. As you probably recall, beginning in 2025, Constellium was already voluntarily electing to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC. Given this change in filing status, we will begin to file all other required U.S. domestic forms with the SEC, including a DEF 14A and Section 16 forms in addition to our annual and quarterly reports starting on January 1, 2026. With that, I will now hand the call back to Jean-Marc.

Thank you, Jack. Let's turn to Slide 14 and discuss our current end market outlook. The majority of our portfolio today is serving end markets benefiting from durable sustainability-driven secular growth in which aluminum, as a light, infinitely recyclable material, plays a critical role. However, many of these markets continue to face demand headwinds today and are also now facing uncertainty given the tariff situation. Turning first to the aerospace market. Commercial aircraft backlogs are robust today and continue to grow. Major aerospace OEMs remain focused on increasing build rates for both narrow and wide-body aircraft, though supply chain challenges have continued to slow deliveries below what OEMs are expecting for several years in a row now. As a result, aerospace supply chains need to adjust to lower-than-expected build rates, which is causing a shift in demand to the right for some of our products. Despite the slowdown in the near term, demand has stabilized for the most part, and we remain confident that the long-term fundamentals driving aerospace demand remain intact, including growing passenger traffic and greater demand for new, more fuel-efficient aircraft. Demand also remained stable in the business and regional jet market and healthy for space and military aircraft. Looking across our entire aerospace business, we believe our product portfolio is unmatched in the industry, and we have industry-leading R&D capabilities for aluminum aerospace solutions. In terms of outlook, I want to make one additional point on our A&T segment. In the past, we have talked about the through-the-cycle adjusted EBITDA target for the segment of $1,000 per ton. Based on our contractual positions and the performance of the business, we now expect a through-the-cycle adjusted EBITDA of $1,100 per ton, and we expect to remain above that level in the near term. Turning now to packaging. Demand remains healthy in both North America and Europe. The long-term outlook for this end market continues to be favorable, as evidenced by the growing consumer preference for the sustainable aluminum beverage can, capacity growth plans from can makers in both regions, and the greenfield investments ongoing here in North America. Longer term, we continue to expect packaging markets to grow low to mid-single digits in both North America and Europe. Let's turn now to automotive. Automotive OEM production of light vehicles in Europe remains well below pre-COVID levels and is still below pre-COVID levels in North America as well. Demand in North America has continued to soften in the near term and is expected to feel the impact of the current Section 232 auto tariffs. Demand in Europe remains weak, particularly in the luxury and premium vehicle and electric vehicle segments, where we have greater exposure. Automotive production in Europe is also expected to feel the impact of the current Section 232 auto tariffs, given the number of vehicles the U.S. imports from Europe. In the long term, we believe electric and hybrid vehicles will continue to grow, but at a lower rate than previously expected. Sustainability trends such as lightweighting and increased fuel efficiency will continue to drive the demand for aluminum products. As a result, we remain positive on this market over the longer term in both regions despite the weakness we are seeing today. As you can see on the page, these three core end markets represent over 80% of our last 12 months' revenue. Turning lastly to other specialties. In North America, demand appears to have stabilized, albeit at low levels, and demand remains weak in Europe. We have experienced weakness across most specialty markets for 3 years now. We believe TID markets in North America provide us with some opportunities today, given the current tariffs make imports less competitive compared to domestic production. As a reminder, these specialty markets are typically dependent upon the health of the industrial economies in each region, including drivers like the interest rate environment, industrial production levels, and consumer spending patterns. We continue to work hard to adjust our cost structure to the current demand environment, which will put the business in an even better position when the industrial economies do recover. To conclude on the end markets, we like the fundamentals in each of the markets we serve, and we strongly believe that the diversification of our end markets is an asset for the company in any environment. Turning lastly now to Slide 15. We detail our key messages and financial guidance. Our team delivered solid results in the second quarter this year despite continued demand weakness across most of our end markets outside of packaging. We returned $35 million to shareholders in the quarter with a repurchase of 3.4 million shares. While tariffs are creating broader macro uncertainty and impacting end markets like automotive, we are proactively managing our business to the current environment. We remain focused on strong cost control, free cash flow generation, and commercial and capital discipline. Given our solid performance in the first year and based on our current outlook, including the current end market conditions I just described and assuming a relatively stable macro environment, we are raising our guidance for 2025. We are now targeting adjusted EBITDA, excluding the non-cash impact of metal price lag, in the range of $620 million to $650 million and free cash flow in excess of $120 million. Our guidance assumes a modest improvement in the second half this year compared to the first half. This improvement includes the timing of certain tariff mitigations and customer compensations, which will be more pronounced in the third quarter, as well as a more favorable scrap purchasing, the ramp-up in Valais, and favorable foreign exchange translation in the back half of the year. Looking to the future, I also want to reiterate our long-term targets of adjusted EBITDA, excluding the non-cash impact of metal price lag, of $900 million and free cash flow of $300 million in 2028. To conclude, while we continue to face challenging conditions in most of our markets today, we believe that this will pass, and I remain very excited about our future and the ability to seize the many opportunities in front of us, which we have demonstrated in the past. We are extremely well positioned for long-term success and remain focused on executing our strategy and shareholder value creation. With that, operator, we will now open the Q&A session, please.

And our first question today comes from Corinne Blanchard from Deutsche Bank.

Two questions here. Maybe the first one, can you dive a little bit into what gave you the confidence to raise the guidance this quarter? And I think everyone since you guys have been pretty cautious, and we will probably have expected it to happen next quarter. So that was definitely a great surprise to read that this morning. And then the second question, could you also give some detail on the cadence that you're expecting between 3Q and 4Q? I know you mentioned the second half being slightly better than the first half, but just wondering how that developed between the two quarters?

Yes, good morning, Corinne, thanks for the questions. So to start with the first one, and I'll ask some help from Jack for both questions one and two actually. The confidence to raise guidance. We are quite pleased with our first half. We look at our order book, and we look at our performance, and that's what is informing us for the second half. I think it's useful to, as you said, maybe give the different puts and takes here going into the second half. In terms of what is going well, I mean, packaging is going well. In both continents, our performance at Muscle Shoals continues to improve. So we're quite pleased with that, and that's helping us really secure substantial gains in packaging, as you've seen in the growth that we are experiencing over the last year. The second impact is that last year was a tough year for us. We've really focused very strongly on cost reduction. Our Vision 25 program is running very well ahead of our expectations, like the packaging volumes are. And finally, the scrap spreads are also beneficial in the U.S. with the new tariff situation and the increase in the Midwest premium. So these factors are good. As Jack mentioned, the scrap spreads really haven't benefited us in the first half. Another element also that is benefiting us in terms of translation into U.S. dollars is a foreign exchange. It hasn't really benefited us in the first half, but it's going to benefit us in the second half. So these four factors, right, packaging volumes, Vision 25, scrap spreads, and foreign exchange are better than our assumptions that were underlying our initial guidance. Now there's a few things that are worse, and it's really on automotive, where the picture is not getting prettier. We thought at the beginning of the year that our assumptions were conservative. We don't think so anymore. The outside forecasts have kept on going down week after week nearly. So we are approaching automotive in the second half with quite a bit of caution, actually. So that's weighing down our raised guidance, so to say. And then in terms of aero and TID and... well, this is kind of going as planned. We would like aero to pick up a little bit quicker and sooner, but we're not planning for it in the second half. So that's kind of what's underlying the different assumptions. Jack, do you want to add anything and maybe comment on the cadence as well?

Sure. So I think the only other point I wanted to add is we're doing quite well in terms of working with our customers and suppliers on mitigating the tariff impact, as well as some of the weakness we're seeing in end markets such as automotive. So those benefits, we expect them to start coming in, in the third quarter and into the rest of the year, which is a factor to be considered. Given those benefits coming into the third quarter, we're expecting third-quarter performance to be stronger than the second quarter. But then obviously, in Q4, we have the normal kind of seasonality where it will be weaker than Q3.

The next question comes from Bill Peterson from JPMorgan.

This is Bennett on for Bill. I wanted to start with packaging. The packaging shipments came in quite strong. It looks like the strongest, actually, since the second quarter of '22. So could you shed a little more color on what improvement you saw at Muscle Shoals during the quarter? And if you would and/or could pivot further ABS capacity to packaging in the meantime?

Yes. So the packaging strength is in both Europe and North America. And as you point out, when automotive is weak, it gives us the opportunity to have more time available on our mills to dedicate to packaging. And that's with the backdrop of packaging in a market that is quite healthy in both regions. So that has helped us quite a bit in achieving that very nice performance in shipments in Q2. So as I said, some of it is because we're running well. So that's a good thing. Some of it is because automotive is not going well, which is not such a good thing. In terms of running well, our operations at Muscle Shoals have stabilized quite a bit. You know that we ran into quite a few operational issues post-COVID that took us quite a bit of time to address in terms of getting the right manning, the right training, the right performance from our assets through a more predictive maintenance. So all these things are coming into play now. And we feel quite confident that now that we've had 7 to 8 months of very good performance at Muscle Shoals, we keep on making progress. We feel very confident about the future. So we'll keep on working hard to maintain that and improve that level of performance. But I think all things are pointing in the right direction. At the same time, it's a plan that has further potential for improvement, which we're working on, and that requires obviously some capital expenditures, which we are planning for through the planning horizon through 2028. But not only are we happy with where we are, but we're quite excited about the opportunities we have for further improvements at Muscle Shoals.

And then coming to Europe and auto, the outlook remains challenging. I think in the past, you've suggested that the company wouldn't look to invest meaningfully there just given the import pressures. But as we think about the strategic outlook for this business, to what extent have you started to engage at all with any Chinese OEMs looking to localize capacity in the coming years?

We haven't done any of that, Bennett. I mean, we'll see whether they build assembly plants. As I mentioned, we'll be a legitimate supplier to whatever assembly line there is in Europe. You know that the products we make don't travel very much because of their age. Therefore, the assembly lines need to procure their parts from reasonably close by. So we'll be a legitimate supplier to whatever customer sets up new lines in Europe, but we haven't been engaged in any discussion of that nature just yet.

Our next question comes from Josh Sullivan from The Benchmark Company.

Jean-Marc, just on aerospace. In your comments, you talked about the shift in demand to the right from some products. Was that a general comment just on the overall aerospace cycle that we've seen over the last couple of quarters that we're adjusting to? Or is there any color you can provide just on the aerospace demand incremental either way in 2Q?

Yes. So I think, Josh, as you know, our products have quite a bit of lead time between the time we ship them to the customer and the time the aircraft is actually delivered. And what you've seen, I think, even better than us is the gap between the forecasts that were done, say, 2 years ago by an OEM and what they are building today. That gap has kept getting pushed like a bubble to the right. And that's what we're caught at, right? The shipments we made two years ago were higher than what is needed to make the planes that they're making and delivering today, and that's kind of the stocking up that's happened over the past few years. So it is not getting worse. It just gets pushed further to the right. I do hope that it resolves reasonably quickly; we'll see. It's very difficult to tell. Now what we do know because we've been through this cycle a few times is when it comes back, it snaps back very quickly, right, in a matter of a few months. We are not seeing any sign of that just yet, but it's not getting worse.

Got it. And then maybe just on the Airware products. We've obviously seen a lot of activity in space. Just curious what you guys are seeing as far as market demand signals from the space market?

Airware is an excellent product for space applications due to its lightweight design, which allows for better payload capacity—crucial for space launches. It also boasts impressive cryogenic properties, enabling it to withstand extreme temperatures. Consequently, there is significant demand for this product. However, we are affected by the supply chain; while more launches are beneficial for us, our products are typically ordered in anticipation of launches expected one to two years in the future. There isn't always a strong correlation between current forecasts for two years down the line and actual outcomes at that time. This leads to fluctuations in our business; growth can happen rapidly, but it can also decrease just as quickly. On average, though, the product line is expanding, and it's performing well for us. Additionally, I want to note that there are no expected threats to our products, as we have robust patents and extensive experience in the field.

We have a follow-up from Bill at JPMorgan.

Bennett back on for Bill. Just wanted to follow up on the scrap spreads quickly. It sounds like a list in the positive category into the back half, but could you help us understand, I guess, if where spreads are today, is this more than enough to offset the prior guidance of, I think it was a $15 million to $20 million quarter headwind? And are you seeing any change in flows in Europe just given the attractive pricing in the U.S. and maybe more flows getting shipped across the pond here?

Sure. Yes. So on scrap spreads, as you know, we are buying some of our scrap metal on an annual basis and some of it on a more spot basis, call it 50-50 just for the sake of the argument. At the beginning of the year, we were still buying scrap metal at a pretty elevated price, so very narrow spreads on the heels of what happened in '24. But now the scrap spreads have widened. Our open position is larger as well. Therefore, we're buying still some scrap metal at prices that were negotiated at the end of last year, but we're also buying quite a bit now at spot prices. Typically, you could swing $5 million one way or the other in any quarter. I mentioned the commentary last year that we were experiencing swings of $15 million to $20 million, which were very unusual. In the second half, if some of that becomes more than $5 million and less than $15 million swinging back in our favor, that is kind of embedded in our revised guidance. Did I answer your question?

Yes. Yes. I guess the one minor follow-up would be any changes in Europe that you're seeing in scrap availability?

Sorry, you asked about that, and I wasn't trying to avoid it. We are not experiencing significant outflows from Europe that would negatively impact us. There is indeed some movement from Europe into the U.S., but it is not substantial enough to affect our operations.

Our next question comes from Sean Wondrack from Deutsche Bank.

Just one for me, and I apologize if you touched on this already. But do you expect to have any impact from the big beautiful bill, whether it's tax or otherwise?

So Sean, it's a really good question. We're currently assessing the impact. But at the moment, we do not anticipate a significant impact on our financial results this year.

We have a follow-up from Corinne at Deutsche Bank.

Just maybe I missed it, but can you just go back on the mid-cycle margin targets? I think in aerospace, you mentioned a jump from $1,000 per ton to $1,100 per ton. But can you just confirm that? And then on packaging, do you have any room to see like the price increase coming at some point, maybe not over the coming months, but I'm just kind of trying to see over the next 6 to 12 months?

Yes. So Corinne, on the aerospace and TID, that's a blended margin, right? Yes, we are calling it up through the cycle from $1,000 to $1,100 per ton. That's a reflection of our performance and the contractual positions we have. You know that we've got some contracts that extend several years into the future. So that gives us a good appreciation for where we think we should be. We also said that we're going to be above that level for the near future, namely '25 and '26. Regarding packaging, I don't want to go into too many specifics, but we're seeing an environment which is very supportive of pricing going into '26. So our negotiations with customers are going well, and we're very happy with where we are trending. Remember, a lot of our business is multiyear, and on average, we may be renegotiating every year about 20% to 25% of our business. So whatever change there is, upside or downside to price, is kind of amortized over several years. But at the moment, it's reasonably positive.

We have no further questions. So I'll hand back to Jean-Marc for some closing comments.

Thank you all for your interest in Constellium. We are pleased with the progress we are making and are looking forward to an exciting second half. I look forward to updating you on our progress in October. Thank you very much and have a good day.

This concludes today's call. Thank you very much for your attendance.