6-K
Constellium SE (CSTM)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OFFOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2021
Commission File Number: 001-35931
Constellium SE
(Translation of registrant’s name into English)
| Washington Plaza, | 300 East Lombard Street |
|---|---|
| 40-44 rue Washington | Suite 1710 |
| 75008 Paris | Baltimore, MD 21202 |
| France | United States |
| (Head Office) |
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): Yes ☐ No ☒
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto as Exhibit 99.1 is a copy of the press release of Constellium SE (the “Company”), dated July 28, 2021, announcing its financial results for the quarter ended June 30, 2021.
Attached hereto as Exhibit 99.2 is a copy of a presentation of the Company, dated July 28, 2021, summarizing its financial results for the quarter ended June 30, 2021.
Exhibit Index
| No. | Description |
|---|---|
| 99.1 | Press Release issued by Constellium SE on July 28, 2021. |
| 99.2 | Presentation posted by Constellium SE on July 28, 2021. |
The information contained in Exhibit 99.1 of this Form 6-K (except for thesecond and third paragraphs containing certain quotes by the Chief Executive Officer, and the section titled “Outlook”), is incorporated by reference into any offering circular or registration statement (or into any prospectus that forms apart thereof) filed by Constellium SE with the Securities and Exchange Commission. Exhibit 99.2 is not incorporated by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CONSTELLIUM SE<br><br><br>(Registrant) | ||
|---|---|---|
| July 28, 2021 | By: | /s/ Peter R. Matt |
| Name: | Peter R. Matt | |
| Title: | Chief Financial Officer |
EX-99.1
Exhibit 99.1
Constellium Reports Second Quarter 2021 Results
Paris, July 28, 2021 – Constellium SE (NYSE: CSTM) today reported results for the second quarter ended June 30, 2021.****
Second quarter 2021 highlights:
| • | Shipments of 406 thousand metric tons, up 31% compared to Q2 2020 <br> |
|---|---|
| • | Revenue of €1.5 billion, up 47% compared to Q2 2020 |
| --- | --- |
| • | Net income of €108 million compared to a net loss of €32 million in Q2 2020<br> |
| --- | --- |
| • | Adjusted EBITDA of €170 million, up 110% compared to Q2 2020 **** <br> |
| --- | --- |
| • | Cash from Operations of €73 million and Free Cash Flow of €35 million **** <br> |
| --- | --- |
First half 2021 highlights:
| • | Shipments of 791 thousand metric tons, up 12% compared to H1 2020 **** <br> |
|---|---|
| • | Revenue of €2.9 billion, up 16% compared to H1 2020 **** |
| --- | --- |
| • | Net income of €156 million compared to a net loss of €63 million in H1 2020**** |
| --- | --- |
| • | Adjusted EBITDA of €291 million, up 27% compared to H1 2020 **** <br> |
| --- | --- |
| • | Cash from Operations of €148 million and Free Cash Flow of €81 million |
| --- | --- |
| • | Net debt / LTM Adjusted EBITDA of 3.7x at June 30, 2021 |
| --- | --- |
Jean-Marc Germain, Constellium’s Chief Executive Officer said, “Constellium delivered record
Adjusted EBITDA and solid Free Cash Flow generation in the second quarter. Each of our segments contributed to this success with record Adjusted EBITDA in P&ARP and AS&I. P&ARP delivered strong all-around performance amid very strong can sheet demand. A&T benefited from a robust TID market and maintained its focus on cost control. In AS&I, strong industry demand and solid cost control more than offset the impact from the semiconductor shortage on automotive demand. I am exceptionally proud of our second quarter performance, with Adjusted EBITDA exceeding 2019 levels and leverage falling nearly a full turn from the recent peak to 3.7x.”
Mr. Germain concluded, “I look to the second half of the year with confidence. Demand from our major end markets, with the exception of aerospace, is at or above pre-pandemic levels. We expect these favorable conditions to continue at least through the remainder of 2021. Based on our current outlook, we are raising our guidance and now expect Adjusted EBITDA of €545 million to €560 million and Free Cash Flow in excess of €125 million in 2021.”
| • | Group Summary | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q22020 | Var. | YTD2021 | YTD2020 | Var. | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shipments (k metric tons) | 406 | 310 | 31 | % | 791 | 703 | 12 | % | |||||||
| Revenue ( millions) | 1,518 | 1,031 | 47 | % | 2,859 | 2,468 | 16 | % | |||||||
| Net income / (loss) ( millions) | 108 | (32 | ) | n.m. | 156 | (63 | ) | n.m. | |||||||
| Adjusted EBITDA ( millions) | 170 | 81 | 110 | % | 291 | 228 | 27 | % | |||||||
| Adjusted EBITDA per metric ton () | 418 | 261 | 60 | % | 368 | 325 | 13 | % |
All values are in Euros.
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 2021, shipments of 406 thousand metric tons increased 31% compared to the second quarter of last year due to higher shipments in each of our segments. Revenue of €1.5 billion increased 47% compared to the second quarter of the prior year primarily due to higher shipments and higher metal prices. Net income of €108 million increased compared to a net loss of €32 million in the second quarter of 2020. Adjusted EBITDA of €170 million increased 110% compared to the second quarter of last year due to stronger results in each of our segments.
For the first half of 2021, shipments of 791 thousand metric tons increased 12% compared to the first half of 2020 on higher shipments in our Packaging & Automotive Rolled Products and Automotive Structures & Industry segments. Revenue of €2.9 billion increased 16% compared to the first half of 2020 primarily due to higher metal prices and higher shipments, partially offset by weaker price and mix. Net income of €156 million in 2021 compares to a net loss of €63 million in the first half of 2020. Adjusted EBITDA of €291 million increased 27% compared to the first half of 2020 on stronger results in our Packaging & Automotive Rolled Products and Automotive Structures & Industry segments, partially offset by weaker results in our Aerospace & Transportation segment.
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| • | Results by Segment **** | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| • | Packaging & Automotive Rolled Products (P&ARP) | ||||||||||||
| --- | --- | ||||||||||||
| Q22020 | Var. | YTD2021 | YTD2020 | Var. | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shipments (k metric tons) | 284 | 221 | 29 | % | 551 | 490 | 12 | % | |||||
| Revenue ( millions) | 907 | 565 | 61 | % | 1,673 | 1,317 | 27 | % | |||||
| Adjusted EBITDA ( millions) | 94 | 58 | 63 | % | 162 | 124 | 31 | % | |||||
| Adjusted EBITDA per metric ton () | 332 | 262 | 27 | % | 294 | 252 | 17 | % |
All values are in Euros.
For the second quarter of 2021, Adjusted EBITDA increased 63% compared to the second quarter of 2020 primarily due to higher shipments, improved price and mix, and favorable metal costs, partially offset by higher costs and unfavorable foreign exchange translation. Shipments of 284 thousand metric tons increased 29% compared to the second quarter of last year on higher shipments of packaging, automotive, and specialty rolled products. Revenue of €907 million increased 61% compared to the second quarter of 2020 primarily due to higher metal prices and higher shipments.
For the first half of 2021, Adjusted EBITDA of €162 million increased 31% compared to the first half of 2020 primarily due to higher shipments, improved price and mix, and strong cost control, partially offset by unfavorable foreign exchange translation. Shipments of 551 thousand metric tons increased 12% compared to the first half of 2020 on higher shipments of packaging, automotive, and specialty rolled products. Revenue of €1.7 billion increased 27% compared to the first half of 2020 primarily due to higher metal prices and higher shipments.
| • | Aerospace & Transportation (A&T) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q22020 | Var. | YTD2021 | YTD2020 | Var. | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shipments (k metric tons) | 53 | 45 | 16 | % | 101 | 104 | (3 | )% | |||||
| Revenue ( millions) | 287 | 250 | 15 | % | 532 | 609 | (13 | )% | |||||
| Adjusted EBITDA ( millions) | 42 | 31 | 34 | % | 61 | 83 | (26 | )% | |||||
| Adjusted EBITDA per metric ton () | 794 | 691 | 15 | % | 610 | 802 | (24 | )% |
All values are in Euros.
3
For the second quarter of 2021, Adjusted EBITDA increased 34% compared to the second quarter of 2020 primarily due to higher shipments on strong TID demand and strong cost control, partially offset by weaker price and mix from lower aerospace shipments. Shipments of 53 thousand metric tons increased 16% compared to the second quarter of 2020 as higher transportation, industry and defense rolled product shipments were partially offset by lower aerospace rolled product shipments. Revenue of €287 million increased 15% compared to the second quarter of 2020 on higher metal prices and higher shipments, partially offset by weaker price and mix.
For the first half of 2021, Adjusted EBITDA of €61 million decreased 26% compared to the first half of 2020 primarily due to lower shipments and weaker price and mix from lower aerospace shipments, partially offset by strong cost control. Shipments of 101 thousand metric tons decreased 3% compared to the first half of 2020 due to lower shipments of aerospace rolled products, partially offset by higher shipments of transportation, industry, and defense rolled products. Revenue of €532 million decreased 13% compared to the first half of 2020 primarily due to weaker price and mix, partially offset by higher metal prices.
| • | Automotive Structures & Industry (AS&I) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q22020 | Var. | YTD2021 | YTD2020 | Var. | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Shipments (k metric tons) | 69 | 44 | 56 | % | 139 | 109 | 27 | % | ||||||
| Revenue ( millions) | 345 | 222 | 55 | % | 695 | 564 | 23 | % | ||||||
| Adjusted EBITDA ( millions) | 41 | (1 | ) | n.m. | 79 | 33 | 138 | % | ||||||
| Adjusted EBITDA per metric ton () | 587 | (31 | ) | n.m. | 563 | 301 | 87 | % |
All values are in Euros.
For the second quarter of 2021, Adjusted EBITDA increased by €42 million compared to the second quarter of 2020 primarily due to higher shipments, improved price and mix, and solid cost control. Shipments of 69 thousand metric tons increased 56% compared to the second quarter of 2020 on higher shipments of automotive and other extruded products driven by strong market demand. Revenue of €345 million increased 55% compared to the second quarter of 2020 primarily due to higher shipments and higher metal prices.
For the first half of 2021, Adjusted EBITDA of €79 million increased 138% compared to the first half of 2020 primarily due to higher shipments, improved price and mix, and solid cost control. Shipments of 139 thousand metric tons increased 27% compared to the first half of 2020 on higher shipments of automotive and other extruded products driven by strong market demand. Revenue of €695 million increased 23% compared to the first half of 2020 primarily due to higher shipments and higher metal prices, partially offset by weaker price and mix.
4
| • | Net Income **** |
|---|
For the second quarter of 2021, net income of €108 million compares to a net loss of €32 million in the second quarter of the prior year. The change in net income is primarily related to higher gross profit and a favorable change in gains and losses on derivatives related to our commodity hedging positions, partially offset by a change in income tax expense.
For the first half of 2021, net income of €156 million compares to a net loss of €63 million in the first half of the prior year. The change in net income is primarily related to higher gross profit and a favorable change in gains and losses on derivatives related to our commodity hedging positions, partially offset by a change in income tax expense.
| • | Cash Flow **** |
|---|
Free Cash Flow was €81 million for the first half of 2021 compared to €54 million in the first half of the prior year. The change was primarily due to stronger Adjusted EBITDA and lower capital expenditures, partially offset by an unfavorable change in working capital.
Cash flows from operating activities were €148 million for the first half of 2021 compared to cash flows from operating activities of €152 million in the first half of the prior year. Constellium decreased derecognized factored receivables by €14 million for the first half of 2021 compared to a decrease of €73 million in the first half of the prior year.
Cash flows used in investing activities were €67 million for the first half of 2021 compared to cash flows used in investing activities of €97 million in the first half of the prior year.
Cash flows used in financing activities were €232 million for the first half of 2021 compared to cash flows from financing activities of €140 million in the first half of the prior year. 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 the $650 million of 6.625% Senior Notes due 2025 and the $400 million of 5.75% Senior Notes due 2024. In the first half of 2020, Constellium raised $325 million of 5.625% Senior Notes due 2028 and used a portion of the proceeds to redeem the remaining balance of the 4.625% Senior Notes due 2021. In the same period, Constellium entered into a €180 million loan partially guaranteed by the French State and a CHF 20 million facility partially guaranteed by the Swiss Government.
| • | Liquidity and Net Debt **** |
|---|
Liquidity at June 30, 2021 was €887 million, comprised of €290 million of cash and cash equivalents and €597 million available under our committed lending facilities and factoring arrangements. ****
Net debt was €1,976 million at June 30, 2021 compared to €1,994 million at December 31, 2020.
5
| • | Outlook |
|---|
Based on our current outlook, we expect Adjusted EBITDA in a range of €545 million to €560 million in 2021.
We are not able to provide a reconciliation of this Adjusted EBITDA guidance to net income, the comparable GAAP measure, because certain items that areexcluded 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 orrestructuring charges, or taxes without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, net income in the future.
6
| • | 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 inability to meet customer demand and quality requirements; the loss of key customers, suppliers or other business relationships; 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 aerospace, automotive and packaging. Constellium generated €4.9 billion of revenue in 2020.
Constellium’s earnings materials for the second quarter ended June 30, 2021, are also available on the company’s website (www.constellium.com).
7
CONSOLIDATED INCOME STATEMENT (UNAUDITED) **** ****
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Euros) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Revenue | 1,518 | 1,031 | 2,859 | 2,468 | ||||||||
| Cost of sales | (1,319 | ) | (957 | ) | (2,518 | ) | (2,241 | ) | ||||
| Gross profit | **** | 199 | **** | **** | 74 | **** | **** | 341 | **** | **** | 227 | **** |
| Selling and administrative expenses | (67 | ) | (57 | ) | (127 | ) | (123 | ) | ||||
| Research and development expenses | (9 | ) | (7 | ) | (20 | ) | (20 | ) | ||||
| Other gains and losses - net | 44 | (11 | ) | 87 | (79 | ) | ||||||
| Income / (loss) from operations | **** | 167 | **** | **** | (1 | ) | **** | 281 | **** | **** | 5 | **** |
| Finance costs - net | (37 | ) | (42 | ) | (92 | ) | (87 | ) | ||||
| Income / (loss) before tax | **** | 130 | **** | **** | (43 | ) | **** | 189 | **** | **** | (82 | ) |
| Income tax (expense) / benefit | (22 | ) | 11 | (33 | ) | 19 | ||||||
| Net income / (loss) | **** | 108 | **** | **** | (32 | ) | **** | 156 | **** | **** | (63 | ) |
| Net income attributable to: | ||||||||||||
| Equity holders of Constellium | 107 | (33 | ) | 153 | (64 | ) | ||||||
| Non-controlling interests | 1 | 1 | 3 | 1 | ||||||||
| Net income / (loss) | **** | 108 | **** | **** | (32 | ) | **** | 156 | **** | **** | (63 | ) |
| Earnings per share attributable to the equity holders of Constellium, (in Euros) | ||||||||||||
| Basic | 0.76 | (0.24 | ) | 1.09 | (0.46 | ) | ||||||
| Diluted | 0.73 | (0.24 | ) | 1.04 | (0.46 | ) | ||||||
| Weighted average shares, in thousands | ||||||||||||
| Basic | 140,637 | 137,901 | 140,302 | 137,903 | ||||||||
| Diluted | 146,730 | 137,901 | 146,730 | 137,903 |
8
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) (UNAUDITED) **** ****
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Euros) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Net income / (loss) | 108 | (32 | ) | 156 | (63 | ) | ||||||
| Other comprehensive income / (loss) | ||||||||||||
| Items that will not be reclassified subsequently to the interim incomestatement | ||||||||||||
| Remeasurement on post-employment benefit obligations | 24 | (35 | ) | 89 | (41 | ) | ||||||
| Income tax on remeasurement on post-employment benefit obligations | 2 | 10 | (11 | ) | 9 | |||||||
| Items that may be reclassified subsequently to the interim income statement | ||||||||||||
| Cash flow hedges | 3 | 5 | (8 | ) | — | |||||||
| Income tax on hedges | (1 | ) | (2 | ) | 2 | — | ||||||
| Currency translation differences | (1 | ) | (2 | ) | 12 | (2 | ) | |||||
| Other comprehensive income / (loss) | 27 | (24 | ) | 84 | (34 | ) | ||||||
| Total comprehensive income / (loss) | 135 | (56 | ) | 240 | (97 | ) | ||||||
| Attributable to: | ||||||||||||
| Equity holders of Constellium | 134 | (57 | ) | 236 | (98 | ) | ||||||
| Non-controlling interests | 1 | 1 | 4 | 1 | ||||||||
| Total comprehensive income / (loss) | 135 | (56 | ) | 240 | (97 | ) |
9
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) **** ****
| (in millions of Euros) | At June 30, 2021 | At December 31, 2020 | ||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 290 | 439 | ||||
| Trade receivables and other | 669 | 406 | ||||
| Inventories | 802 | 582 | ||||
| Other financial assets | 63 | 39 | ||||
| **** | 1,824 | **** | **** | 1,466 | **** | |
| Non-current assets | ||||||
| Property, plant and equipment | 1,895 | 1,906 | ||||
| Goodwill | 430 | 417 | ||||
| Intangible assets | 59 | 61 | ||||
| Deferred tax assets | 162 | 193 | ||||
| Trade receivables and other | 69 | 68 | ||||
| Other financial assets | 16 | 18 | ||||
| **** | 2,631 | **** | **** | 2,663 | **** | |
| Total Assets | **** | 4,455 | **** | **** | 4,129 | **** |
| Liabilities | ||||||
| Current liabilities | ||||||
| Trade payables and other | 1,255 | 905 | ||||
| Borrowings | 262 | 92 | ||||
| Other financial liabilities | 26 | 46 | ||||
| Income tax payable | 23 | 20 | ||||
| Provisions | 20 | 23 | ||||
| **** | 1,586 | **** | **** | 1,086 | **** | |
| Non-current liabilities | ||||||
| Trade payables and other | 32 | 32 | ||||
| Borrowings | 1,995 | 2,299 | ||||
| Other financial liabilities | 10 | 41 | ||||
| Pension and other post-employment benefit obligations | 581 | 664 | ||||
| Provisions | 95 | 98 | ||||
| Deferred tax liabilities | 12 | 10 | ||||
| **** | 2,725 | **** | **** | 3,144 | **** | |
| Total Liabilities | **** | 4,311 | **** | **** | 4,230 | **** |
| Equity | ||||||
| Share capital | 3 | 3 | ||||
| Share premium | 420 | 420 | ||||
| Retained deficit and other reserves | (295 | ) | (538 | ) | ||
| Equity attributable to equity holders of Constellium | **** | 128 | **** | **** | (115 | ) |
| Non-controlling interests | 16 | 14 | ||||
| Total Equity | **** | 144 | **** | **** | (101 | ) |
| Total Equity and Liabilities | **** | 4,455 | **** | **** | 4,129 | **** |
10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) **** ****
| (in millions of Euros) | Sharecapital | Sharepremium | Re-measurement | Cashflowhedges | Foreigncurrencytranslationreserve | Otherreserves | Retainedlosses | Total | Non-controllinginterests | Totalequity | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | **** |
| (in millions of Euros) | Sharecapital | Sharepremium | Re-measurement | Cashflowhedges | Foreigncurrencytranslationreserve | Otherreserves | Retainedlosses | Total | Non-controllinginterests | Totalequity | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| At January 1, 2020 | **** | 3 | **** | 420 | **** | (177 | ) | **** | (10 | ) | **** | 4 | **** | **** | 53 | **** | (389 | ) | **** | (96 | ) | **** | 11 | **** | (85 | ) | |
| Net (loss) / income | — | — | — | — | — | — | (64 | ) | **** | (64 | ) | 1 | **** | (63 | ) | ||||||||||||
| Other comprehensive loss | — | — | (32 | ) | — | (2 | ) | — | — | **** | (34 | ) | — | **** | (34 | ) | |||||||||||
| Total comprehensive (loss) / income | **** | — | **** | — | **** | (32 | ) | **** | — | **** | **** | (2 | ) | **** | — | **** | (64 | ) | **** | (98 | ) | **** | 1 | **** | (97 | ) | |
| Share-based compensation | — | — | — | — | — | 8 | — | **** | 8 | **** | — | **** | 8 | **** | |||||||||||||
| Transactions with non-controlling interests | — | — | — | — | — | — | — | **** | — | **** | — | **** | — | **** | |||||||||||||
| At June 30, 2020 | **** | 3 | **** | 420 | **** | (209 | ) | **** | (10 | ) | **** | 2 | **** | **** | 61 | **** | (453 | ) | **** | (186 | ) | **** | 12 | **** | (174 | ) |
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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Euros) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Net income / (loss) | 108 | (32 | ) | 156 | (63 | ) | ||||||
| Adjustments | ||||||||||||
| Depreciation and amortization | 65 | 66 | 128 | 132 | ||||||||
| Impairment of assets | — | 5 | — | 5 | ||||||||
| Pension and other post-employment benefits service costs | 10 | 10 | 17 | 17 | ||||||||
| Finance costs - net | 37 | 42 | 92 | 87 | ||||||||
| Income tax expense / (benefit) | 22 | (11 | ) | 33 | (19 | ) | ||||||
| Unrealized (gains) / losses on derivatives - net and from remeasurement of monetary assets and<br>liabilities - net | (15 | ) | (44 | ) | (45 | ) | 11 | |||||
| Other - net | 3 | 10 | 5 | 13 | ||||||||
| Change in working capital | ||||||||||||
| Inventories | (103 | ) | 52 | (212 | ) | 35 | ||||||
| Trade receivables | (126 | ) | 57 | (234 | ) | 7 | ||||||
| Trade payables | 117 | (176 | ) | 300 | (18 | ) | ||||||
| Other | (7 | ) | 32 | — | 15 | |||||||
| Change in provisions | — | 7 | (4 | ) | 5 | |||||||
| Pension and other post-employment benefits paid | (10 | ) | (8 | ) | (21 | ) | (20 | ) | ||||
| Interest paid | (28 | ) | (23 | ) | (72 | ) | (73 | ) | ||||
| Income tax refunded | — | 21 | 5 | 18 | ||||||||
| Net cash flows from operating activities | **** | 73 | **** | **** | 8 | **** | **** | 148 | **** | **** | 152 | **** |
| Purchases of property, plant and equipment | (42 | ) | (43 | ) | (74 | ) | (100 | ) | ||||
| Property, plant and equipment grants received | 4 | 2 | 7 | 2 | ||||||||
| Proceeds from disposals, net of cash | — | 1 | — | 1 | ||||||||
| Net cash flows used in investing activities | **** | (38 | ) | **** | (40 | ) | **** | (67 | ) | **** | (97 | ) |
| Proceeds from issuance of Senior Notes | 300 | 290 | 712 | 290 | ||||||||
| Repayments of Senior Notes | (328 | ) | (200 | ) | (863 | ) | (200 | ) | ||||
| Repayments from U.S. revolving credit facilities | — | (132 | ) | — | (129 | ) | ||||||
| Proceeds from other borrowings | — | 204 | 2 | 207 | ||||||||
| Repayments from other borrowings | (7 | ) | (1 | ) | (9 | ) | (4 | ) | ||||
| Lease repayments | (8 | ) | (9 | ) | (17 | ) | (17 | ) | ||||
| Payment of financing costs and redemption fees | (10 | ) | (9 | ) | (26 | ) | (9 | ) | ||||
| Transactions with non-controlling interests | (2 | ) | — | (2 | ) | — | ||||||
| Other financing activities | (32 | ) | (2 | ) | (29 | ) | 2 | |||||
| Net cash flows (used in) / from financing activities | **** | (87 | ) | **** | 141 | **** | **** | (232 | ) | **** | 140 | **** |
| Net (decrease) / increase in cash and cash equivalent | **** | (52 | ) | **** | 109 | **** | **** | (151 | ) | **** | 195 | **** |
| Cash and cash equivalents - beginning of year | 342 | 270 | 439 | 184 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | — | (1 | ) | 2 | (1 | ) | ||||||
| Cash and cash equivalents - end of period | **** | 290 | **** | **** | 378 | **** | **** | 290 | **** | **** | 378 | **** |
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SEGMENT ADJUSTED EBITDA **** ****
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Euros) | 2021 | 2020 | 2021 | 2020 | ||||||||
| P&ARP | 94 | 58 | 162 | 124 | ||||||||
| A&T | 42 | 31 | 61 | 83 | ||||||||
| AS&I | 41 | (1 | ) | 79 | 33 | |||||||
| Holdings and Corporate | (7 | ) | (7 | ) | (11 | ) | (12 | ) | ||||
| Total | **** | 170 | **** | **** | 81 | **** | **** | 291 | **** | **** | 228 | **** |
SHIPMENTS AND REVENUE BY PRODUCT LINE **** ****
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in k metric tons) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Packaging rolled products | 213 | 189 | 407 | 392 | ||||||||
| Automotive rolled products | 59 | 28 | 122 | 85 | ||||||||
| Specialty and other thin-rolled products | 12 | 4 | 22 | 13 | ||||||||
| Aerospace rolled products | 13 | 19 | 26 | 49 | ||||||||
| Transportation, industry, defense and other rolled products | 40 | 26 | 75 | 55 | ||||||||
| Automotive extruded products | 29 | 15 | 63 | 46 | ||||||||
| Other extruded products | 40 | 29 | 76 | 63 | ||||||||
| Total shipments | **** | 406 | **** | **** | 310 | **** | **** | 791 | **** | **** | 703 | **** |
| (in millions of Euros) | ||||||||||||
| Packaging rolled products | 648 | 456 | 1,167 | 980 | ||||||||
| Automotive rolled products | 213 | 88 | 421 | 281 | ||||||||
| Specialty and other thin-rolled products | 46 | 21 | 85 | 56 | ||||||||
| Aerospace rolled products | 100 | 142 | 187 | 365 | ||||||||
| Transportation, industry, defense and other rolled products | 187 | 108 | 345 | 244 | ||||||||
| Automotive extruded products | 176 | 96 | 377 | 295 | ||||||||
| Other extruded products | 169 | 126 | 318 | 269 | ||||||||
| Other and inter-segment eliminations | (21 | ) | (6 | ) | (41 | ) | (22 | ) | ||||
| Total revenue | **** | 1,518 | **** | **** | 1,031 | **** | **** | 2,859 | **** | **** | 2,468 | **** |
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NON-GAAP MEASURES ****
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) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Net income / (loss) | **** | 108 | **** | **** | (32 | ) | **** | 156 | **** | **** | (63 | ) |
| Income tax expense / (benefit) | 22 | (11 | ) | 33 | (19 | ) | ||||||
| Income / (loss) before tax | **** | 130 | **** | **** | (43 | ) | **** | 189 | **** | **** | (82 | ) |
| Finance costs - net | 37 | 42 | 92 | 87 | ||||||||
| Income / (loss) from operations | **** | 167 | **** | **** | (1 | ) | **** | 281 | **** | **** | 5 | **** |
| Depreciation and amortization | 65 | 66 | 128 | 132 | ||||||||
| Impairment of assets | — | 5 | — | 5 | ||||||||
| Restructuring costs | 2 | 11 | 3 | 11 | ||||||||
| Unrealized (gains) / losses on derivatives | (16 | ) | (43 | ) | (44 | ) | 10 | |||||
| Unrealized exchange losses / (gains) from the remeasurement of monetary assets and liabilities<br>– net | 1 | (1 | ) | (1 | ) | 1 | ||||||
| Losses on pension plan amendments | 2 | 2 | 2 | 2 | ||||||||
| Share based compensation costs | 3 | 5 | 7 | 8 | ||||||||
| Metal price lag (A) | (54 | ) | 25 | (85 | ) | 40 | ||||||
| Start-up and development costs (B) | — | 2 | — | 4 | ||||||||
| Other (C) | — | 10 | — | 10 | ||||||||
| Adjusted EBITDA | **** | 170 | **** | **** | 81 | **** | **** | 291 | **** | **** | 228 | **** |
| (A) | Metal price lag represents the financial impact of the timing difference between when aluminium<br>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<br>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<br>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<br>year. | |||||||||||
| --- | --- | |||||||||||
| (B) | Start-up and development costs, for the six months ended<br>June 30, 2020 were related to new projects in our AS&I operating segment. **** | |||||||||||
| --- | --- | |||||||||||
| (C) | Other, in the six months ended June 30, 2020, included €5 million of procurement<br>penalties and termination fees incurred because of the Group’s inability to fulfill certain commitments due to the COVID-19 pandemic and a €5 million loss resulting from the discontinuation of<br>hedge accounting for certain forecasted sales that were determined to be no longer expected to occur in light of the COVID-19 pandemic effects. **** | |||||||||||
| --- | --- |
14
Reconciliation of net cash flows from operating activities to Free Cash Flow (a non-GAAP measure) ****
| Three months ended June 30, | Six months endedJune 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of Euros) | 2021 | 2020 | 2021 | 2020 | ||||||||
| Net cash flows from operating activities | **** | 73 | **** | **** | 8 | **** | **** | 148 | **** | **** | 152 | **** |
| Purchases of property, plant and equipment | (42 | ) | (43 | ) | (74 | ) | (100 | ) | ||||
| Property, plant and equipment grants received | 4 | 2 | 7 | 2 | ||||||||
| Free Cash Flow | **** | 35 | **** | **** | (33 | ) | **** | 81 | **** | **** | 54 | **** |
Reconciliation of borrowings to Net debt (a non-GAAP measure) ****
| (in millions of Euros) | At June 30, 2021 | At December 31, 2020 | ||||
|---|---|---|---|---|---|---|
| Borrowings | 2,257 | 2,391 | ||||
| Fair value of net debt derivatives, net of margin calls | 9 | 42 | ||||
| Cash and cash equivalents | (290 | ) | (439 | ) | ||
| Net debt | **** | 1,976 | **** | **** | 1,994 | **** |
15
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. ****
In considering the financial performance of the business, management and our chief operational decision maker, as defined by IFRS, analyze the primary financial performance measure of Adjusted EBITDA in all of our business segments. The most directly comparable IFRS measure to Adjusted EBITDA is our net income or loss for the period. We believe Adjusted EBITDA, as defined below, is useful to investors and is used by our management for measuring profitability because it excludes the impact of certain non-cash charges, such as depreciation, amortization, impairment and unrealized gains and losses on derivatives as well as items that do not impact the day-to-day operations and that management in many cases does not directly control or influence. Therefore, such adjustments eliminate items which have less bearing on our core operating performance.****
Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of Constellium and in comparison to other companies, many of which present an Adjusted EBITDA-related performance measure when reporting their results. ****
Adjusted EBITDA is defined as income / (loss) from continuing operations before income taxes, results from joint ventures, net finance costs, other expenses and depreciation and amortization as adjusted to exclude restructuring costs, impairment charges, unrealized gains or losses on derivatives and on foreign exchange differences on transactions which do not qualify for hedge accounting, metal price lag, share based compensation expense, effects of certain purchase accounting adjustments, start-up and development costs or acquisition, integration and separation costs, certain incremental costs and other exceptional, unusual or generally non-recurring items.
Adjusted EBITDA is the measure of performance used by management in evaluating our operating performance, in preparing internal forecasts and budgets necessary for managing our
16
business and, specifically in relation to the exclusion of the effecf 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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EX-99.2
Second Quarter 2021 Earnings Call July 28, 2021 Exhibit 99.2
Certain statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This presentation 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 inability to meet customer demand and quality requirements; the loss of key customers, suppliers or other business relationships; 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. Forward-looking statements
Non-GAAP measures This presentation includes information regarding certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA per metric ton, Free Cash Flow and Net debt. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of Constellium and in comparison to other companies, many of which present an adjusted EBITDA-related performance measure when reporting their results. Adjusted EBITDA, Adjusted EBITDA per Metric Ton, Free Cash Flow and Net debt are not presentations made in accordance with IFRS and may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures supplement our IFRS disclosures and should not be considered an alternative to the IFRS measures. This presentation provides a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. We are not able to provide a reconciliation of 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, our net income in the future.
Jean-Marc Germain Chief Executive Officer
Strong results; increasing 2021 Adjusted EBITDA guidance to €545-560 million and FCF guidance to >€125 million Q2 2021 Highlights Ø Shipments: 406kt (+31% YoY) Ø Revenue increased 47% YoY to €1.5 billion Ø Net income: €108 million Ø Record Adj. EBITDA of €170 million (+110% YoY; +2% vs. 2019) Ø Record Adj. EBITDA in P&ARP and AS&I Ø Cash from Operations of €73 million Ø Free Cash Flow of €35 million Ø H1 2021 FCF: €81 million Ø Leverage of 3.7x at June 30, 2021 Ø Joined the Russell 2000® Index Leverage Leverage back to pre-pandemic level
H1 2021 Highlights — ESG Recordable Case Rate* * Measures the number of fatalities, serious injuries, lost-time injuries, restricted work injuries, or medical treatments per one million hours worked. Safety remains our top priority Ø Prioritized the safety of our employees Ø Recordable Case Rate* significantly lower than industry average Ø Issued two Sustainability-Linked Bonds due 2029 ($500M in USD, €300M in EUR) Ø ESG bonds now represent ~40% of our outstanding bonds Ø Advanced the development of our 2030 Sustainability strategy Ø Progressed on our European recycling investment aimed at meeting our recycled aluminium input target Ø Added 2 additional women to our Board of Directors at our 2021 AGM Ø Women comprise >40% of our Board of Directors
Peter Matt Chief Financial Officer
Adjusted EBITDA Bridges H1 2021 vs. H1 2020 Q2 2021 vs. Q2 2020 € millions +27% € millions +110%
Q2 2021 Performance Ø Adjusted EBITDA of €94 million Ø Higher packaging, automotive, and specialty shipments Ø Improved price and mix Ø Higher costs due to increased activity, notably maintenance, freight, and labor Ø Unfavorable FX translation Packaging and Automotive Rolled Products Q2 2021 Q2 2020 Var. Shipments (kt) 284 221 29% Revenue (€m) 907 565 61% Adj. EBITDA (€m) 94 58 63% Adj. EBITDA (€ / t) 332 262 27% Q2 Adjusted EBITDA Bridge € in millions
Q2 2021 Performance Aerospace and Transportation Q2 2021 Q2 2020 Var. Shipments (kt) 53 45 16% Revenue (€m) 287 250 15% Adj. EBITDA (€m) 42 31 34% Adj. EBITDA (€ / t) 794 691 15% Ø Adjusted EBITDA of €42 million Ø Higher TID shipments, partially offset by lower aerospace shipments Ø Weaker price and mix due to lower aerospace shipments Ø Strong cost control and favorable metal costs Ø Unfavorable FX translation Q2 Adjusted EBITDA Bridge € in millions
Q2 2021 Performance Automotive Structures and Industry Q2 Adjusted EBITDA Bridge € in millions Q2 2021 Q2 2020 Var. Shipments (kt) 69 44 56% Revenue (€m) 345 222 55% Adj. EBITDA (€m) 41 (1) n.m. Adj. EBITDA (€ / t) 587 (31) n.m. Ø Adjusted EBITDA of €41 million Ø Higher automotive and industry shipments Ø Improved price and mix primarily due to higher automotive shipments Ø Solid cost control
Q2 2021 Adjusted EBITDA Bridges (vs. 2019) € in millions € in millions Adjusted EBITDA by Segment Strong cost performance with substantial earnings leverage to an aerospace recovery Adjusted EBITDA by Driver
Cost increases trailing revenue recovery Q2 2021 Adj. EBITDA more than doubled YoY on a 31% increase in shipments and a 47% increase in revenue Each segment is contributing P&ARP — solid recovery and fixed cost performance with favorable metal costs A&T — improved metal result and strong fixed cost performance AS&I — overall strong cost performance Inflationary pressures manageable thus far Structural costs: target of €75m nearly achieved; investigating further opportunities Metal savings: increased recycling, maximizing cast house yields Operational excellence: improve equipment reliability, uptime, and yield Procurement: leveraging spend to provide lower cost; identifying better performing inputs Interest: continue to target <€100 million of cash interest per annum Focus on Costs Cost Control Remains a High Priority Horizon 2022 Update Substantial cost improvement opportunities with multiple levers Cost Flex* in Q2 * Represents change in costs over change in revenue for Q2 2021 compared to Q2 2020. Note: Q2 2020 included €14 million of European state aid as compared to €1 million in Q2 2021
H1 2021 H1 2020 Net cash flows from operating activities 148 152 Purchases of property, plant and equipment, net of grants (67) (98) Other investing activities — — Free Cash Flow 81 54 Free Cash Flow Ø Free Cash Flow: >€125 million Ø Capex: ~€225 million Ø Cash interest: ~€125-130 million Ø Cash taxes: ~€5-10 million Current 2021 FCF Expectations Consistent FCF Generation € in millions Ø Free Cash Flow of €81 million in H1 2021 Ø Despite working capital headwind as businesses rebounded Ø Capex expected to be back half weighted Ø Delivering on our goal of significant and consistent Free Cash Flow generation Ø Over €400 million of Free Cash Flow generated since 2019 H1 FCF Highlights
Committed to deleveraging with year end leverage expected to be at or below 3.5x Ø Leverage of 3.7x down nearly a full turn from the peak Ø No near term bond maturities Ø Successful H1 2021 refinancings Ø Expected to reduce annualized cash interest by ~€30 million Ø >€150 million deployed to gross debt reduction Ø Gradually reducing excess liquidity added during the pandemic Net Debt and Liquidity € in millions Net Debt and Leverage Maturity Profile Liquidity € in millions € in millions Leverage: Net Debt / LTM Adjusted EBITDA Debt / Liquidity Highlights * Does not include State Loans
Jean-Marc Germain Chief Executive Officer
Secular Growth Trends Create Opportunity Across Our Portfolio Circular economy — aluminum is infinitely recyclable and inherently sustainable Aluminum cans — the preferred beverage container Lightweighting in transportation Electrification of the automotive fleet A Balanced Portfolio Delivering on the Opportunity Secular Growth Trends Revenue by End Market Ø Debottlenecking Muscle Shoals by more than 75kt per annum and exploring additional opportunities across our packaging platform Ø Investment to increase European recycling capacity Ø Aerospace rebound still to come and fully prepared to capture the recovery Ø Unlocking TID volumes through investments in North American coil capacity Ø EV platforms increasingly represented in P&ARP and AS&I portfolios, with products including Auto Body Sheet, battery boxes, and other automotive structures Ø Supplying Audi e-tron with ABS and extrusion-based structures, including for battery enclosure Ø Specialties performance demonstrates benefits of broad based end market diversification (e.g. rail, semiconductor, solar)
End Market Updates Market Commentary Near-term Outlook Packaging Strong market in North America and in Europe Focus on sustainability driving increased demand for aluminium cans Mid-single digit annual demand growth supported by can-making capacity additions in both North America and Europe Automotive Lightweighting mega-trend penetration driving increased demand for rolled and extruded products Consumer demand for luxury cars, light trucks, and SUVs remains strong; inventories are low Demand uncertainty due to the semiconductor shortage likely to persist into H2 2021 Aerospace Supply chain optimism increasing on increased passenger traffic (more pronounced in the U.S.) and recent aircraft orders from airlines OEMs continue to destock the supply chain in the near term Long-term trends expected to remain intact, including increased passenger traffic and higher build rates for single aisle aircraft Other Specialties Transportation, Industry and Defense (Rolled): North America: Strong demand Europe: Strong demand Industry (Extrusions): Europe: Strong demand
Strong performance in Q2 2021 Adjusted EBITDA surpassed 2019 levels with a much lower contribution from aerospace Continued Free Cash Flow generation and gross debt paydown Significant deleveraging Delivering in 2021 Solid operational performance, strong cost control, and consistent Free Cash Flow generation Meeting strong demand from our end markets and prepared for a recovery in aerospace Committed to deleveraging with expected with year end leverage at or below 3.5x Prepared for a bright future Focused on executing our strategy Substantial value creation opportunities remain — continue planting the seeds for future growth Horizon 2022 has "more room to run" Key Messages and Guidance Focused on delivering on our strategy and increasing shareholder value 2021 Adjusted EBITDA: €545 to €560 million 2021 Free Cash Flow: >€125 million Long-Term Leverage: 2.5x Targets
Appendix
Reconciliation of Net Income to Adjusted EBITDA Three months ended June 30, Six months ended June 30, (in millions of Euros) 2021 2020 2021 2020 Net income / (loss) 108 (32) 156 (63) Income tax expense / (benefit) 22 (11) 33 (19) Income / (loss) before tax 130 (43) 189 (82) Finance costs - net 37 42 92 87 Income / (loss) from operations 167 (1) 281 5 Depreciation and amortization 65 66 128 132 Impairment of assets — 5 — 5 Restructuring costs 2 11 3 11 Unrealized (gains) / losses on derivatives (16) (43) (44) 10 Unrealized exchange losses / (gains) from the remeasurement of monetary assets and liabilities – net 1 (1) (1) 1 Losses on pension plan amendments 2 2 2 2 Share based compensation costs 3 5 7 8 Metal price lag (54) 25 (85) 40 Start-up and development costs — 2 — 4 Other — 10 — 10 Adjusted EBITDA 170 81 291 228
Free Cash Flow Reconciliation (in millions of Euros) Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Net cash flows from operating activities 73 8 148 152 Purchases of property, plant and equipment (42) (43) (74) (100) Property, plant and equipment grants received 4 2 7 2 Free Cash Flow 35 (33) 81 54
(in millions of Euros) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Borrowings 2,257 2,325 2,391 2,456 2,536 Fair value of net debt derivatives, net of margin calls 9 25 42 26 5 Cash and cash equivalents (290) (342) (439) (432) (378) Net Debt 1,976 2,008 1,994 2,050 2,163 LTM Adjusted EBITDA 528 439 465 475 488 Leverage 3.7x 4.6x 4.3x 4.3x 4.4x Net Debt Reconciliation
Reconciliation of Net Income to Adjusted EBITDA Twelve months ended (in millions of Euros) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Net income / (loss) 202 62 (17) (21) (40) Income tax expense / (benefit) 35 2 (17) (22) (25) Income / (loss) before tax 237 64 (34) (43) (65) Finance costs - net 164 169 159 164 173 Share of losses of joint ventures — — — 3 3 Income from operations 401 233 125 124 111 Depreciation and amortization 255 256 259 269 271 Impairment of assets 38 43 43 14 5 Restructuring costs 5 14 13 15 14 Unrealized gains on derivatives (70) (97) (16) (19) (6) Unrealized exchange (gains) / losses from the remeasurement of monetary assets and liabilities - net (3) (5) (1) (1) 1 Losses on pension plan amendments 2 2 2 — 1 Share based compensation costs 14 15 15 15 17 Metal price lag (117) (37) 8 39 55 Start-up and development costs 1 3 5 8 10 Losses on disposals 4 4 4 3 1 Bowling Green one-time cost related to the acquisition — — — (1) (1) Other (2) 8 8 9 9 Adjusted EBITDA 528 439 465 475 488
Borrowings Table At June 30, At December 31, 2021 2020 (in millions of Euros) Nominal Value in Currency Nominal Rate Nominal Value in Euros (Arrangement fees) Accrued Interests Carrying Value Carrying Value Secured Pan-U.S. ABL (due 2026) $ — Floating — — — — — Secured U.S. DDTL (expired in 2021) $ — Floating — — — — — Secured PGE French Facility (due 2022) € 180 Floating 180 — — 180 180 Secured German Facility (due 2022) € — 2.000% — — — — — Secured Inventory Facility (due 2023) € — Floating — — — — — Senior Unsecured Notes Issued May 2014 and due 2024 $ 400 5.750% — — — — 325 Issued February 2017 and due 2025 $ 650 6.625% — — — — 534 Issued November 2017 and due 2026 $ 500 5.875% 421 (5) 9 425 411 Issued November 2017 and due 2026 € 400 4.250% 400 (4) 6 402 401 Issued June 2020 and due 2028 $ 325 5.625% 274 (6) 1 269 260 Issued February 2021 and due 2029 $ 500 3.750% 421 (7) 5 419 — Issued June 2021 and due 2029 € 300 3.125% 300 (5) 1 296 — Unsecured Revolving Credit Facility (due 2021) € — Floating — — — — — Unsecured Swiss Facility (due 2025) CHF 17 1.175% 16 — — 16 18 Unsecured German Facility (due 2022) € — 2.120% — — — — — Lease liabilities 186 — 1 187 195 Other loans 62 — 1 63 67 Total Borrowings 2,260 (27) 24 2,257 2,391 Of which non-current 1,995 2,299 Of which current 262 92