[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) This section provides an overview of Constellium's financial performance for Q4 and full year 2023, including key metrics, CEO commentary, 2024 outlook, and a new share repurchase program [Fourth Quarter 2023 Performance Highlights](index=1&type=section&id=Fourth%20Quarter%202023%20Performance%20Highlights) Constellium reported a decrease in shipments and revenue for Q4 2023 compared to Q4 2022, primarily due to lower shipments and metal prices, while Adjusted EBITDA saw a significant increase, driven by stronger results in the A&T and P&ARP segments | Metric | Q4 2023 | Q4 2022 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Shipments (thousand metric tons) | 336 | 368 | -9% | | Revenue (billion Euros) | 1.6 | 1.8 | -13% | | Value-Added Revenue (VAR) (million Euros) | 681 | 696 | -2% | | Net income (million Euros) | 11 | 30 | -63% | | Adjusted EBITDA (million Euros) | 171 | 148 | +15% | | Cash from Operations (million Euros) | 185 | N/A | N/A | | Free Cash Flow (million Euros) | 58 | N/A | N/A | [Full Year 2023 Performance Highlights](index=1&type=section&id=Full%20Year%202023%20Performance%20Highlights) For the full year 2023, Constellium achieved record Adjusted EBITDA and strong Free Cash Flow, despite a decrease in shipments and revenue, while also improving its Adjusted Return on Invested Capital and reducing net debt leverage | Metric | FY 2023 | FY 2022 | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | | Shipments (million metric tons) | 1.5 | 1.6 | -6% | | Revenue (billion Euros) | 7.2 | 8.1 | -11% | | Value-Added Revenue (VAR) (billion Euros) | 2.9 | 2.7 | +7% | | Net income (million Euros) | 129 | 308 | -58% | | Adjusted EBITDA (million Euros) | 713 | 673 | +6% | | Cash from Operations (million Euros) | 506 | N/A | N/A | | Free Cash Flow (million Euros) | 170 | N/A | N/A | | Adjusted ROIC | 11.3% | 11.0% | +30 bps | | Net debt / LTM Adjusted EBITDA | 2.3x | N/A | N/A | [CEO Commentary and 2024 Outlook](index=2&type=section&id=CEO%20Commentary%20and%202024%20Outlook) CEO Jean-Marc Germain highlighted Constellium's strong 2023 results, including record Adjusted EBITDA and strong Free Cash Flow, despite inflationary pressures and demand headwinds, projecting higher Adjusted EBITDA and Free Cash Flow for 2024 - Constellium achieved **record Adjusted EBITDA of €713 million** and **strong Free Cash Flow of €170 million** in 2023, reducing leverage to **2.3x**[6](index=6&type=chunk) - For 2024, the company expects **strong aerospace demand**, **stabilized canstock demand with modest growth**, **healthy automotive demand**, and **continued weakness in most industrial markets**[6](index=6&type=chunk) 2024 Outlook | Metric | 2024 Outlook | | :-------------------- | :----------- | | Adjusted EBITDA | €740 million - €770 million | | Free Cash Flow | > €130 million | - Constellium remains confident in achieving its long-term target of **over €800 million in Adjusted EBITDA by 2025**[6](index=6&type=chunk) [Share Repurchase Program Announcement](index=1&type=section&id=Share%20Repurchase%20Program%20Announcement) Constellium announced a new three-year share repurchase program of up to $300 million, expiring in December 2026, aimed at increasing shareholder value and limiting future dilution by satisfying employee equity obligations - The Board of Directors authorized a **three-year share repurchase program of up to $300 million**, expiring on **December 31, 2026**[4](index=4&type=chunk)[6](index=6&type=chunk)[28](index=28&type=chunk) - The company intends to use a portion of repurchased shares to satisfy employee equity obligations, thereby limiting future dilution for shareholders[30](index=30&type=chunk) [Group Financial Results](index=3&type=section&id=Group%20Financial%20Results) This section details Constellium's consolidated financial performance, including shipments, revenue, net income, cash flow, liquidity, and net debt for the reported periods [Group Summary Financials](index=3&type=section&id=Group%20Summary%20Financials%20%28Shipments%2C%20Revenue%2C%20VAR%2C%20Net%20Income%2C%20Adjusted%20EBITDA%29) Constellium's group performance in Q4 2023 saw a decline in shipments and revenue, primarily due to lower volumes and metal prices, while Adjusted EBITDA increased, and for the full year 2023, shipments and revenue also decreased, but VAR and Adjusted EBITDA improved, driven by better price and mix and stronger A&T segment results | Metric | Q4 2023 | Q4 2022 | Q4 Var. (%) | FY 2023 | FY 2022 | FY Var. (%) | | :-------------------------- | :------ | :------ | :---------- | :------ | :------ | :---------- | | Shipments (thousand metric tons) | 336 | 368 | (9)% | 1,492 | 1,580 | (6)% | | Revenue (million Euros) | 1,613 | 1,844 | (13)% | 7,239 | 8,120 | (11)% | | VAR (million Euros) | 681 | 696 | (2)% | 2,924 | 2,725 | 7% | | Net income (million Euros) | 11 | 30 | not meaningful | 129 | 308 | not meaningful | | Adjusted EBITDA (million Euros) | 171 | 148 | 15% | 713 | 673 | 6% | | Adjusted EBITDA per metric ton (Euros) | 509 | 403 | 26% | 478 | 426 | 12% | - Q4 2023 revenue decreased **13%** primarily due to lower shipments and metal prices, partially offset by improved price and mix, while VAR decreased **2%** due to lower shipments, unfavorable metal impacts, the sale of CED, and unfavorable foreign exchange, partially offset by improved price and mix[8](index=8&type=chunk) - Full year 2023 revenue decreased **11%** due to lower shipments and metal prices, while VAR increased **7%** primarily due to improved price and mix, partially offset by lower shipments, unfavorable metal impacts, and unfavorable foreign exchange[9](index=9&type=chunk) [Net Income Deep Dive](index=6&type=section&id=Net%20Income%20Deep%20Dive) Net income significantly decreased in both Q4 and full year 2023 compared to the prior year, primarily due to the absence of one-time gains recorded in 2022 (OPEB/pension plan amendments, deferred tax assets) and higher tax expenses, despite higher gross profit - Q4 2023 net income **decreased by €19 million** (from **€30 million to €11 million**) primarily due to gains on OPEB and pension plan amendments recorded in 2022 and higher tax expense, partially offset by higher gross profit[19](index=19&type=chunk) - Full year 2023 net income **decreased by €179 million** (from **€308 million to €129 million**) primarily due to the recognition of **€154 million** in previously unrecognized deferred tax assets in 2022, 2022 OPEB/pension plan amendment gains, higher selling and administrative expenses, and higher tax expense, partially offset by higher gross profit and a gain from the sale of CED[20](index=20&type=chunk) [Cash Flow Performance](index=6&type=section&id=Cash%20Flow%20Performance) Free Cash Flow for full year 2023 slightly decreased to €170 million, as increased cash from operating activities was offset by higher capital expenditures, while operating cash flows improved, investing activities saw a net outflow including proceeds from the CED sale, and financing activities resulted in a higher net outflow due to debt reduction | Metric | FY 2023 (million Euros) | FY 2022 (million Euros) | Change (million Euros) | | :-------------------------------- | :------------------ | :------------------ | :----------------- | | Free Cash Flow | 170 | 182 | (12) | | Cash flows from operating activities | 506 | 451 | 55 | | Cash flows used in investing activities | (288) | (270) | (18) | | Cash flows used in financing activities | (182) | (163) | (19) | - The increase in cash flows from operating activities was more than offset by increased capital expenditures, as the company invested in maintaining and growing its manufacturing asset base, including recycling and casting investment in Neuf Brisach, France[21](index=21&type=chunk) - Cash flows used in investing activities in 2023 included **€47 million** of net proceeds from the sale of Constellium Extrusions Deutschland GmbH (CED)[22](index=22&type=chunk) - In 2023, Constellium used cash to reduce short-term borrowings and redeem **$50 million** of its 5.875% Senior Notes due 2026[23](index=23&type=chunk) [Liquidity and Net Debt Position](index=7&type=section&id=Liquidity%20and%20Net%20Debt%20Position) Constellium maintained a strong liquidity position at the end of 2023 and successfully reduced its net debt compared to the prior year, reflecting improved financial health | Metric | December 31, 2023 (million Euros) | December 31, 2022 (million Euros) | | :------------- | :---------------------------- | :---------------------------- | | Liquidity | 737 | N/A | | Cash & Equivalents | 202 | N/A | | Available Facilities | 535 | N/A | | Net Debt | 1,664 | 1,891 | [Segment-Specific Performance](index=4&type=section&id=Segment-Specific%20Performance) This section analyzes the financial performance of Constellium's key operating segments: Packaging & Automotive Rolled Products, Aerospace & Transportation, and Automotive Structures & Industry [Packaging & Automotive Rolled Products (P&ARP)](index=4&type=section&id=Packaging%20%26%20Automotive%20Rolled%20Products%20%28P%26ARP%29) The P&ARP segment experienced a decline in shipments and revenue for both Q4 and FY 2023, however, Q4 Adjusted EBITDA increased due to improved price and mix and better cost management, while full-year Adjusted EBITDA decreased due to lower shipments, higher operating costs, and challenges at the Muscle Shoals facility | Metric | Q4 2023 | Q4 2022 | Q4 Var. (%) | FY 2023 | FY 2022 | FY Var. (%) | | :-------------------------- | :------ | :------ | :---------- | :------ | :------ | :---------- | | Shipments (thousand metric tons) | 238 | 254 | (6)% | 1,030 | 1,089 | (5)% | | Revenue (million Euros) | 865 | 1,008 | (14)% | 3,898 | 4,664 | (16)% | | Adjusted EBITDA (million Euros) | 82 | 71 | 16% | 283 | 326 | (13)% | | Adjusted EBITDA per metric ton (Euros) | 345 | 278 | 24% | 274 | 299 | (8)% | - Q4 2023 Adjusted EBITDA increased **16%** due to improved price and mix and overall cost improvements, despite lower shipments, with higher operating costs offset by favorable metal costs and government grants[11](index=11&type=chunk) - Full year 2023 Adjusted EBITDA decreased **13%** due to lower shipments, higher operating costs (inflation, Muscle Shoals challenges), and unfavorable metal costs, partially offset by improved price and mix[12](index=12&type=chunk) [Aerospace & Transportation (A&T)](index=4&type=section&id=Aerospace%20%26%20Transportation%20%28A%26T%29) The A&T segment demonstrated strong Adjusted EBITDA growth in both Q4 and FY 2023, driven by improved price and mix, despite a slight decrease in overall shipments, with aerospace rolled products shipments increasing while transportation, industry, and defense (TID) rolled products declined | Metric | Q4 2023 | Q4 2022 | Q4 Var. (%) | FY 2023 | FY 2022 | FY Var. (%) | | :-------------------------- | :------ | :------ | :---------- | :------ | :------ | :---------- | | Shipments (thousand metric tons) | 48 | 53 | (9)% | 219 | 223 | (2)% | | Revenue (million Euros) | 408 | 422 | (3)% | 1,728 | 1,700 | 2% | | Adjusted EBITDA (million Euros) | 76 | 56 | 36% | 324 | 217 | 50% | | Adjusted EBITDA per metric ton (Euros) | 1,583 | 1,079 | 47% | 1,475 | 976 | 51% | - Q4 2023 Adjusted EBITDA increased **36%** due to improved price and mix, partially offset by lower shipments and higher operating costs, with aerospace rolled products shipments increasing but more than offset by lower TID rolled products shipments[14](index=14&type=chunk) - Full year 2023 Adjusted EBITDA increased **50%** due to improved price and mix, partially offset by higher operating costs (inflation, increased activity levels)[15](index=15&type=chunk) [Automotive Structures & Industry (AS&I)](index=5&type=section&id=Automotive%20Structures%20%26%20Industry%20%28AS%26I%29) The AS&I segment experienced declines in shipments, revenue, and Adjusted EBITDA for both Q4 and FY 2023, primarily driven by lower shipments of extruded products, including the impact from the sale of CED, and higher operating costs | Metric | Q4 2023 | Q4 2022 | Q4 Var. (%) | FY 2023 | FY 2022 | FY Var. (%) | | :-------------------------- | :------ | :------ | :---------- | :------ | :------ | :---------- | | Shipments (thousand metric tons) | 50 | 61 | (17)% | 243 | 268 | (9)% | | Revenue (million Euros) | 334 | 428 | (22)% | 1,630 | 1,861 | (12)% | | Adjusted EBITDA (million Euros) | 25 | 31 | (22)% | 133 | 149 | (11)% | | Adjusted EBITDA per metric ton (Euros) | 500 | 514 | (3)% | 545 | 557 | (2)% | - Q4 2023 Adjusted EBITDA decreased **22%** due to lower shipments and higher costs, partially offset by improved price and mix, with shipments decreasing **17%** due to lower other extruded products, including the impact from the sale of CED[16](index=16&type=chunk) - Full year 2023 Adjusted EBITDA decreased **11%** due to lower shipments and higher operating costs (inflation), partially offset by improved price and mix, with shipments decreasing **9%** due to lower other extruded products, including the impact from the sale of CED[17](index=17&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section outlines Constellium's non-GAAP financial measures, including definitions, future presentation changes, and reconciliations to comparable IFRS measures [Changes to Non-GAAP Financial Measures Presentation](index=8&type=section&id=Changes%20to%20Non-GAAP%20Financial%20Measures%20Presentation) Constellium announced future changes to its non-GAAP financial measures presentation, effective Q1 2024, following discussions with the SEC, including discontinuing Value-Added Revenue (VAR) reporting and revising the definition of consolidated Adjusted EBITDA to no longer exclude the non-cash impact of metal price lag - Constellium will **no longer report Value-Added Revenue (VAR)**, a non-GAAP financial measure, **starting in Q1 2024**[32](index=32&type=chunk) - The definition of consolidated Adjusted EBITDA will be revised to **no longer exclude the non-cash impact of metal price lag**, however, metal price lag will continue to be excluded from Segment Adjusted EBITDA and Adjusted EBITDA guidance[33](index=33&type=chunk) Adjusted EBITDA Reconciliation (Current vs. Future Definition) | (in millions of Euros) | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | | :--------------------- | :------ | :------ | :------ | :------ | :------ | | Adjusted EBITDA (current) | 713 | 673 | 581 | 465 | 562 | | less: Metal price lag | (86) | (29) | 187 | (8) | (46) | | Adjusted EBITDA (future) | 627 | 644 | 768 | 457 | 516 | | (in millions of Euros) | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | | :--------------------- | :------ | :------ | :------ | :------ | | Adjusted EBITDA (current) | 171 | 168 | 209 | 166 | | less: Metal price lag | (14) | (27) | (30) | (16) | | Adjusted EBITDA (future) | 157 | 141 | 179 | 150 | [Non-GAAP Measures Definitions](index=21&type=section&id=Non-GAAP%20Measures%20Definitions) This section provides the definitions for Constellium's key non-GAAP financial measures, including Value-Added Revenue (VAR), Adjusted EBITDA, Free Cash Flow, Adjusted Return on Invested Capital (Adjusted ROIC), and Net Debt, explaining their relevance to management and investors - **Value-Added Revenue (VAR)** is defined as revenue, excluding revenue from incidental activities, minus the cost of metal (adjusted for metal price lag, other alloying metals, freight out, and realized hedging gains/losses), reflecting the value-added elements of activity by eliminating metal cost impact[54](index=54&type=chunk) - **Adjusted EBITDA** is defined as income/(loss) from continuing operations before income taxes, joint ventures, net finance costs, other expenses, and D&A, adjusted for restructuring, impairment, unrealized gains/losses on derivatives and foreign exchange, metal price lag, share-based compensation, and other non-recurring items, serving as a key measure for profitability and operational performance[57](index=57&type=chunk)[58](index=58&type=chunk) - **Free Cash Flow** is defined as net cash flow from operating activities less capital expenditure, net of grants received, measuring net cash generated or used by the business, considering operating activities and capital expenditure requirements[60](index=60&type=chunk) - **Adjusted Return on Invested Capital (Adjusted ROIC)** is defined as Adjusted Net Operating Profit after Tax (Adjusted NOPAT) divided by Invested Capital, used to assess capital allocation effectiveness[61](index=61&type=chunk) - **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 guarantees, providing a useful measure of indebtedness by considering cash balances against total external debt[63](index=63&type=chunk) [Non-GAAP Reconciliations](index=18&type=section&id=Non-GAAP%20Reconciliations%20%28VAR%2C%20Adjusted%20EBITDA%2C%20Free%20Cash%20Flow%2C%20Net%20Debt%2C%20Adjusted%20NOPAT%2FROIC%29) This section provides detailed reconciliations of Constellium's non-GAAP financial measures, including VAR, Adjusted EBITDA, Free Cash Flow, Net Debt, and Adjusted NOPAT/ROIC, to their most directly comparable IFRS financial measures for various periods Reconciliation of Revenue to VAR | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Revenue | 1,613 | 1,844 | 7,239 | 8,120 | | Hedged cost of alloyed metal | (939) | (1,212) | (4,374) | (5,403) | | Revenue from incidental activities | (7) | (5) | (27) | (21) | | Metal price lag | 14 | 69 | 86 | 29 | | **VAR** | **681** | **696** | **2,924** | **2,725** | Reconciliation of Net income to Adjusted EBITDA | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Net income | 11 | 30 | 129 | 308 | | Income tax expense / (benefit) | 32 | (3) | 67 | (105) | | Finance costs - net | 35 | 33 | 141 | 131 | | Income from operations | 78 | 60 | 337 | 334 | | Depreciation and amortization | 73 | 78 | 294 | 287 | | Metal price lag | 14 | 69 | 86 | 29 | | **Adjusted EBITDA** | **171** | **148** | **713** | **673** | Reconciliation of Net cash flows from operating activities to Free Cash Flow | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Net cash flows from operating activities | 185 | 128 | 506 | 451 | | Purchases of property, plant and equipment, net of grants received | (127) | (106) | (336) | (269) | | **Free Cash Flow** | **58** | **22** | **170** | **182** | Reconciliation of borrowings to Net debt | (in millions of Euros) | At Dec 31, 2023 | At Dec 31, 2022 | | :--------------------- | :-------------- | :-------------- | | Borrowings | 1,868 | 2,056 | | Fair value of net debt derivatives, net of margin calls | (2) | 1 | | Cash and cash equivalents | (202) | (166) | | **Net debt** | **1,664** | **1,891** | Reconciliation of Net income to Adjusted NOPAT and Adjusted ROIC | (in millions of Euros) | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | | Net income | 129 | 308 | | Income from operations | 337 | 334 | | Metal price lag | 86 | 29 | | Tax impact | (103) | (92) | | **Adjusted NOPAT (A)** | **316** | **293** | | Total Invested Capital (B) (prior year) | 2,794 | 2,653 | | **Adjusted ROIC (A)/(B)** | **11.3%** | **11.0%** | [Consolidated Financial Statements](index=12&type=section&id=Consolidated%20Financial%20Statements) This section presents Constellium's unaudited consolidated income statement, statement of comprehensive income, statement of financial position, and statement of cash flows [Consolidated Income Statement](index=12&type=section&id=Consolidated%20Income%20Statement) The unaudited consolidated income statement shows Constellium's financial performance for Q4 and full year 2023, detailing revenue, cost of sales, gross profit, operating income, net income, and earnings per share CONSOLIDATED INCOME STATEMENT (UNAUDITED) | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Revenue | 1,613 | 1,844 | 7,239 | 8,120 | | Cost of sales | (1,435) | (1,737) | (6,529) | (7,448) | | Gross profit | 178 | 107 | 710 | 672 | | Selling and administrative expenses | (81) | (76) | (302) | (282) | | Research and development expenses | (15) | (16) | (52) | (48) | | Other gains and losses - net | (4) | 45 | (19) | (8) | | Income from operations | 78 | 60 | 337 | 334 | | Finance costs - net | (35) | (33) | (141) | (131) | | Income before tax | 43 | 27 | 196 | 203 | | Income tax (expense) / benefit | (32) | 3 | (67) | 105 | | Net income | 11 | 30 | 129 | 308 | | Basic EPS (Euros) | 0.07 | 0.20 | 0.85 | 2.10 | | Diluted EPS (Euros) | 0.07 | 0.20 | 0.84 | 2.06 | [Consolidated Statement of Comprehensive Income / (Loss)](index=13&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20%2F%20%28Loss%29) The unaudited consolidated statement of comprehensive income/loss presents the total comprehensive income or loss for Q4 and full year 2023, including net income and other comprehensive income/loss items such as remeasurements on post-employment benefits, cash flow hedges, and currency translation differences CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) (UNAUDITED) | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Net income | 11 | 30 | 129 | 308 | | Other comprehensive (loss) / income | | | | | | Remeasurement on post-employment benefit obligations | (46) | (24) | (16) | 157 | | Income tax on remeasurement on post-employment benefit obligations | 10 | 4 | 2 | (35) | | Cash flow hedges | 9 | 19 | 7 | (8) | | Income tax on cash flow hedges | (2) | (5) | (1) | 2 | | Currency translation differences | (33) | (68) | (26) | 21 | | Other comprehensive (loss) / income | (62) | (74) | (34) | 137 | | **Total comprehensive (loss) / income** | **(51)** | **(44)** | **95** | **445** | [Consolidated Statement of Financial Position](index=14&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) The unaudited consolidated statement of financial position provides a snapshot of Constellium's assets, liabilities, and equity as of December 31, 2023, compared to December 31, 2022, showing changes in current and non-current items CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED) | (in millions of Euros) | At Dec 31, 2023 | At Dec 31, 2022 | | :--------------------- | :-------------- | :-------------- | | **Assets** | | | | Current assets | 1,820 | 2,056 | | Cash and cash equivalents | 202 | 166 | | Inventories | 1,098 | 1,320 | | Non-current assets | 2,841 | 2,871 | | Property, plant and equipment | 2,047 | 2,017 | | Goodwill | 462 | 478 | | Deferred tax assets | 252 | 271 | | **Total Assets** | **4,661** | **4,941** | | **Liabilities** | | | | Current liabilities | 1,388 | 1,693 | | Trade payables and other | 1,263 | 1,467 | | Borrowings (current) | 54 | 148 | | Non-current liabilities | 2,409 | 2,486 | | Borrowings (non-current) | 1,814 | 1,908 | | Pension and other post-employment benefit obligations | 411 | 403 | | **Total Liabilities** | **3,797** | **4,189** | | **Equity** | | | | Equity attributable to equity holders of Constellium | 843 | 731 | | **Total Equity** | **864** | **752** | | **Total Equity and Liabilities** | **4,661** | **4,941** | [Consolidated Statement of Cash Flows](index=16&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) The unaudited consolidated statement of cash flows details the cash inflows and outflows from operating, investing, and financing activities for Q4 and full year 2023, showing the net increase in cash and cash equivalents CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | Net income | 11 | 30 | 129 | 308 | | Net cash flows from operating activities | 185 | 128 | 506 | 451 | | Net cash flows used in investing activities | (127) | (107) | (288) | (270) | | Net cash flows used in financing activities | (15) | (22) | (182) | (163) | | Net increase / (decrease) in cash and cash equivalent | 43 | (1) | 36 | 18 | | Cash and cash equivalents - end of year | 202 | 166 | 202 | 166 | [Supplementary Operational Data](index=17&type=section&id=Supplementary%20Operational%20Data) This section provides additional operational insights, including a breakdown of Adjusted EBITDA by segment and detailed shipments and revenue by product line [Segment Adjusted EBITDA Breakdown](index=17&type=section&id=Segment%20Adjusted%20EBITDA%20Breakdown) This section provides a breakdown of Adjusted EBITDA contributions from each of Constellium's operating segments (P&ARP, A&T, AS&I) and Holdings and Corporate for Q4 and full year 2023 SEGMENT ADJUSTED EBITDA | (in millions of Euros) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--------------------- | :------ | :------ | :------ | :------ | | P&ARP | 82 | 71 | 283 | 326 | | A&T | 76 | 56 | 324 | 217 | | AS&I | 25 | 31 | 133 | 149 | | Holdings and Corporate | (12) | (10) | (27) | (19) | | **Total** | **171** | **148** | **713** | **673** | [Shipments and Revenue by Product Line](index=17&type=section&id=Shipments%20and%20Revenue%20by%20Product%20Line) This section details Constellium's shipments and revenue across various product lines, including packaging, automotive, aerospace, and industrial products, for Q4 and full year 2023, highlighting the performance of each category SHIPMENTS BY PRODUCT LINE (thousand metric tons) | Product Line | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Packaging rolled products | 172 | 186 | 736 | 809 | | Automotive rolled products | 62 | 61 | 271 | 245 | | Specialty and other thin-rolled products | 4 | 7 | 23 | 35 | | Aerospace rolled products | 22 | 21 | 96 | 76 | | Transportation, industry, defense and other rolled products | 26 | 32 | 123 | 147 | | Automotive extruded products | 28 | 28 | 121 | 117 | | Other extruded products | 22 | 33 | 122 | 151 | | **Total shipments** | **336** | **368** | **1,492** | **1,580** | REVENUE BY PRODUCT LINE (in millions of Euros) | Product Line | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Packaging rolled products | 582 | 697 | 2,596 | 3,326 | | Automotive rolled products | 254 | 275 | 1,156 | 1,154 | | Specialty and other thin-rolled products | 29 | 35 | 146 | 183 | | Aerospace rolled products | 264 | 218 | 1,022 | 728 | | Transportation, industry, defense and other rolled products | 144 | 204 | 706 | 972 | | Automotive extruded products | 211 | 228 | 934 | 949 | | Other extruded products | 123 | 200 | 696 | 912 | | Other and inter-segment eliminations | 6 | (13) | (17) | (104) | | **Total revenue** | **1,613** | **1,844** | **7,239** | **8,120** | [Company Information & Legal Disclosures](index=10&type=section&id=Company%20Information%20%26%20Legal%20Disclosures) This section provides an overview of Constellium SE and includes important disclaimers regarding forward-looking statements [About Constellium](index=11&type=section&id=About%20Constellium) Constellium SE is a global leader in developing innovative, value-added aluminum products for diverse markets including packaging, automotive, and aerospace, generating €7.2 billion in revenue in 2023 - Constellium (NYSE: CSTM) is a global sector leader in innovative, value-added aluminum products for packaging, automotive, and aerospace markets[39](index=39&type=chunk) - The company generated **€7.2 billion** of revenue in 2023[39](index=39&type=chunk) [Forward-looking Statements](index=10&type=section&id=Forward-looking%20Statements) This section serves as a disclaimer for forward-looking statements within the press release, highlighting that such statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected, and the company undertakes no obligation to update them - The press release contains forward-looking statements subject to risks and uncertainties inherent in the industry and markets, as well as specific to Constellium's business and operations[37](index=37&type=chunk) - Key risks include market competition, economic downturn, business disruptions, geopolitical tensions, inability to meet customer demand, supply disruptions, inflation, hedging policy effectiveness, loss of key employees, and indebtedness[37](index=37&type=chunk) - Actual results may differ materially from forward-looking statements, and the company undertakes no obligation to update or revise them, except as required by law[37](index=37&type=chunk)

Wall Street expects a year-over-year increase in earnings on lower revenues when Constellium (CSTM) reports results for the quarter ended December 2023. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 21 ...

ozgurdonmaz Introduction This is our third article about Constellium SE (NYSE:CSTM) for these reasons: (1) to preview Q4-23 earnings and (2) to update our investment thesis. In our view, Constellium is an exceptionally well-managed "specialty metals" company that is often overlooked by investors and/or misconstrued as a "basic materials" company. In reality, Constellium is a specialist in higher-margin, value-added aluminum structures for various industries. As a refresher, readers can access our prior arti ...

Constellium SE (NYSE:CSTM) Q3 2023 Earnings Conference Call October 25, 2023 10:00 AM ET Company Participants Jason Hershiser - Director, IR Jean-Marc Germain - CEO Jack Guo - CFO Conference Call Participants Katja Jancic - BMO Capital Markets Bill Peterson - JPMorgan Corinne Blanchard - Deutsche Bank Josh Sullivan - The Benchmark Company Sean Wondrack - Deutsche Bank Operator Hello, everyone, and welcome to the Constellium Third Quarter 2023 Results. My name is Nadia, and I'll be coordinating the call toda ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) Constellium achieved a record Q3 Adjusted EBITDA of €168 million, a 5% YoY increase, driven by the A&T segment, while reducing leverage to 2.5x despite market headwinds | Metric | Q3 2023 | Q3 2022 | Change | YTD 2023 | YTD 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shipments (k tons) | 369 | 387 | -5% | 1,156 | 1,212 | -5% | | Revenue (€M) | 1,720 | 2,022 | -15% | 5,626 | 6,276 | -10% | | VAR (€M) | 704 | 673 | +5% | 2,243 | 2,029 | +11% | | Net Income (€M) | 64 | 131 | -51% | 118 | 278 | -58% | | Adjusted EBITDA (€M) | 168 | 160 | +5% | 542 | 525 | +3% | | Free Cash Flow (€M) | 78 | 74 | +5% | 112 | 160 | -30% | - Market demand varied by segment: aerospace demand remains strong, automotive demand decelerated but is above prior year levels, packaging demand appears to have stabilized after destocking, and most industrial markets, especially in Europe, remain weak[4](index=4&type=chunk) - The company achieved a record third quarter Adjusted EBITDA of **€168 million**, which included a record performance by the A&T segment[4](index=4&type=chunk) - Leverage, measured as Net debt / LTM Adjusted EBITDA, was reduced to **2.5x** as of September 30, 2023[4](index=4&type=chunk)[5](index=5&type=chunk) [Group Financial Performance](index=2&type=section&id=Group%20Financial%20Performance) Group shipments and revenue declined in Q3 2023, but Value-Added Revenue and Adjusted EBITDA each grew by 5% due to improved price and mix, with A&T offsetting other segments | Group Summary | Q3 2023 | Q3 2022 | Var. | YTD 2023 | YTD 2022 | Var. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shipments (k metric tons) | 369 | 387 | (5)% | 1,156 | 1,212 | (5)% | | Revenue (€ millions) | 1,720 | 2,022 | (15)% | 5,626 | 6,276 | (10)% | | VAR (€ millions) | 704 | 673 | 5% | 2,243 | 2,029 | 11% | | Net income (€ millions) | 64 | 131 | n.m. | 118 | 278 | n.m. | | Adjusted EBITDA (€ millions) | 168 | 160 | 5% | 542 | 525 | 3% | | Adjusted EBITDA per metric ton (€) | 453 | 412 | 10% | 469 | 433 | 8% | - The **15% decrease in Q3 revenue** was primarily due to lower shipments and lower metal prices, partially offset by improved price and mix[8](index=8&type=chunk) - Q3 Adjusted EBITDA increased by **5% to €168 million**, reflecting stronger A&T segment results partially offset by weaker P&ARP and AS&I segments[8](index=8&type=chunk) [Results by Segment](index=3&type=section&id=Results%20by%20Segment) Q3 2023 segment performance was mixed, with A&T Adjusted EBITDA surging 76%, while P&ARP and AS&I segments experienced declines due to lower shipments and higher costs [Packaging & Automotive Rolled Products (P&ARP)](index=3&type=section&id=Packaging%20%26%20Automotive%20Rolled%20Products%20(P%26ARP)) P&ARP segment Adjusted EBITDA decreased by **14% to €67 million** in Q3 2023, driven by lower shipments, higher operating costs, and operational challenges | P&ARP | Q3 2023 | Q3 2022 | Var. | YTD 2023 | YTD 2022 | Var. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shipments (k tons) | 261 | 267 | (2)% | 792 | 835 | (5)% | | Revenue (€M) | 954 | 1,140 | (16)% | 3,033 | 3,656 | (17)% | | Adjusted EBITDA (€M) | 67 | 78 | (14)% | 201 | 255 | (21)% | - The decrease in Adjusted EBITDA was a result of lower shipments, higher operating costs (inflation), operating challenges at the Muscle Shoals facility, unfavorable metal costs, and unfavorable foreign exchange translation[11](index=11&type=chunk) [Aerospace & Transportation (A&T)](index=4&type=section&id=Aerospace%20%26%20Transportation%20(A%26T)) A&T segment Adjusted EBITDA surged **76% to €79 million** in Q3 2023, primarily driven by improved price and mix, despite lower shipments and higher operating costs | A&T | Q3 2023 | Q3 2022 | Var. | YTD 2023 | YTD 2022 | Var. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shipments (k tons) | 53 | 55 | (3)% | 171 | 170 | 1% | | Revenue (€M) | 404 | 432 | (6)% | 1,320 | 1,278 | 3% | | Adjusted EBITDA (€M) | 79 | 45 | 76% | 248 | 161 | 55% | - The **76% increase in Adjusted EBITDA** was primarily driven by improved price and mix, which offset lower shipments and higher operating costs[14](index=14&type=chunk) [Automotive Structures & Industry (AS&I)](index=4&type=section&id=Automotive%20Structures%20%26%20Industry%20(AS%26I)) AS&I segment Adjusted EBITDA fell **27% to €26 million** in Q3 2023, primarily due to a **15% drop in shipments** and higher operating costs from inflation | AS&I | Q3 2023 | Q3 2022 | Var. | YTD 2023 | YTD 2022 | Var. | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shipments (k tons) | 55 | 65 | (15)% | 193 | 207 | (7)% | | Revenue (€M) | 370 | 473 | (22)% | 1,296 | 1,433 | (10)% | | Adjusted EBITDA (€M) | 26 | 35 | (27)% | 108 | 118 | (8)% | - The decrease in Adjusted EBITDA was primarily due to lower shipments and higher operating costs from inflation, partially offset by improved price and mix[16](index=16&type=chunk) [Financial Position and Cash Flow](index=5&type=section&id=Financial%20Position%20and%20Cash%20Flow) Q3 2023 net income was €64 million, impacted by a prior-year deferred tax asset recognition, while the company generated strong Free Cash Flow and reduced net debt to €1.75 billion [Net Income](index=5&type=section&id=Net%20Income) Q3 2023 net income was **€64 million**, a decrease from **€131 million** in Q3 2022, primarily due to a **€142 million** deferred tax asset recognition in the prior year - Q3 2023 net income was **€64 million**, compared to **€131 million** in Q3 2022; year-to-date net income was **€118 million** in 2023 versus **€278 million** in 2022[19](index=19&type=chunk)[20](index=20&type=chunk) - The primary reason for the decrease in net income was the recognition of **€142 million** in previously unrecognized deferred tax assets in the prior year[19](index=19&type=chunk)[20](index=20&type=chunk) [Cash Flow](index=5&type=section&id=Cash%20Flow) Year-to-date Free Cash Flow decreased to **€112 million** due to higher capital expenditures and interest, despite stable cash from operations at **€321 million** - Free Cash Flow was **€112 million** in the first nine months of 2023, a decrease from **€160 million** in the prior year period, primarily due to increased capital expenditures and higher cash interest[21](index=21&type=chunk) - Cash flows from operating activities were stable at **€321 million** for the first nine months of 2023, compared to **€323 million** in the prior year[21](index=21&type=chunk) - Investing activities included **€47 million** of net proceeds from the sale of Constellium Extrusion Deutschland GmbH in September 2023[22](index=22&type=chunk) [Liquidity and Net Debt](index=6&type=section&id=Liquidity%20and%20Net%20Debt) As of September 30, 2023, total liquidity stood at **€746 million**, with net debt reduced to **€1.75 billion** from **€1.891 billion** at year-end 2022 - Total liquidity was **€746 million**, comprised of **€159 million** in cash and **€587 million** available under committed facilities[24](index=24&type=chunk) - Net debt stood at **€1,750 million** at September 30, 2023, a reduction from **€1,891 million** at December 31, 2022[25](index=25&type=chunk) [Outlook](index=2&type=section&id=Outlook) Constellium reaffirmed its full-year 2023 guidance, projecting Adjusted EBITDA between **€700 million** and **€720 million** and Free Cash Flow exceeding **€150 million**, while targeting over **€800 million** Adjusted EBITDA by 2025 - The company expects full-year 2023 Adjusted EBITDA to be in the range of **€700 million to €720 million**[6](index=6&type=chunk)[26](index=26&type=chunk) - Full-year 2023 Free Cash Flow is expected to be in excess of **€150 million**[6](index=6&type=chunk)[26](index=26&type=chunk) - Constellium remains confident in its ability to deliver on its long-term target of Adjusted EBITDA over **€800 million** in 2025[6](index=6&type=chunk) - The company expects some impact from the United Auto Workers union strike in the fourth quarter, which is factored into the current guidance[26](index=26&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q3 and year-to-date September 30, 2023, including the Income Statement, Financial Position, and Cash Flows [Consolidated Income Statement](index=8&type=section&id=CONSOLIDATED%20INCOME%20STATEMENT%20(UNAUDITED)) Q3 2023 revenue was **€1.72 billion** and net income **€64 million**, with year-to-date figures at **€5.63 billion** revenue and **€118 million** net income, both down YoY | (in millions of Euros) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,720 | 2,022 | 5,626 | 6,276 | | Gross profit | 158 | 133 | 532 | 565 | | Income from operations | 118 | 30 | 259 | 274 | | Net income | 64 | 131 | 118 | 278 | | Diluted EPS (€) | 0.43 | 0.88 | 0.77 | 1.86 | [Consolidated Statement of Financial Position](index=10&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION%20(UNAUDITED)) As of September 30, 2023, total assets were **€4.80 billion**, total liabilities **€3.88 billion**, and total equity **€911 million**, with assets and liabilities decreasing and equity increasing YoY | (in millions of Euros) | At Sep 30, 2023 | At Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | 4,795 | 4,941 | | Total Liabilities | 3,884 | 4,189 | | Total Equity | 911 | 752 | [Consolidated Statement of Cash Flows](index=12&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS%20(UNAUDITED)) For the nine months ended September 30, 2023, net cash from operating activities was **€321 million**, with net cash used in investing and financing activities leading to a **€7 million** net decrease in cash | (in millions of Euros) | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | | Net cash flows from operating activities | 321 | 323 | | Net cash flows used in investing activities | (161) | (163) | | Net cash flows used in financing activities | (167) | (141) | | Net (decrease) / increase in cash | (7) | 19 | [Supplemental Data](index=13&type=section&id=Supplemental%20Data) This section provides detailed breakdowns of Adjusted EBITDA by segment and shipments and revenue by product line, offering granular insights into performance metrics [Segment Adjusted EBITDA](index=13&type=section&id=SEGMENT%20ADJUSTED%20EBITDA) In Q3 2023, A&T was the largest Adjusted EBITDA contributor at **€79 million**, followed by P&ARP at **€67 million** and AS&I at **€26 million** | (in millions of Euros) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | P&ARP | 67 | 78 | 201 | 255 | | A&T | 79 | 45 | 248 | 161 | | AS&I | 26 | 35 | 108 | 118 | | Holdings and Corporate | (4) | 2 | (15) | (9) | | **Total** | **168** | **160** | **542** | **525** | [Shipments and Revenue by Product Line](index=13&type=section&id=SHIPMENTS%20AND%20REVENUE%20BY%20PRODUCT%20LINE) Q3 2023 saw Packaging rolled products as the largest category by shipments (**187k metric tons**) and revenue (**€630 million**), with automotive rolled products shipments increasing YoY | Shipments (k metric tons) | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Packaging rolled products | 187 | 196 | | Automotive rolled products | 68 | 64 | | Aerospace rolled products | 23 | 19 | | Automotive extruded products | 27 | 29 | | **Total shipments** | **369** | **387** | | Revenue (in millions of Euros) | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | Packaging rolled products | 630 | 792 | | Automotive rolled products | 286 | 308 | | Aerospace rolled products | 234 | 184 | | Automotive extruded products | 213 | 248 | | **Total revenue** | **1,720** | **2,022** | [Non-GAAP Financial Measures](index=14&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles and defines key non-GAAP measures like VAR, Adjusted EBITDA, Free Cash Flow, and Net Debt, used to clarify core operating performance by excluding non-operational items [Reconciliation of Non-GAAP Measures](index=14&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section details the reconciliation of IFRS figures to non-GAAP metrics, including Revenue to VAR, Net Income to Adjusted EBITDA, and cash flows to Free Cash Flow and Net Debt - Q3 2023 VAR of **€704 million** is reconciled from Revenue of **€1,720 million** by adjusting for hedged metal costs, incidental revenue, and metal price lag[39](index=39&type=chunk) - Q3 2023 Adjusted EBITDA of **€168 million** is reconciled from Net Income of **€64 million** by adding back taxes, finance costs, D&A, and other adjustments like metal price lag and unrealized derivative gains/losses[40](index=40&type=chunk) - Q3 2023 Free Cash Flow of **€78 million** is calculated by subtracting purchases of property, plant, and equipment (**€76 million**) from net cash from operating activities (**€154 million**)[42](index=42&type=chunk) [Definitions of Non-GAAP Measures](index=16&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines key non-GAAP measures: Value-Added Revenue (VAR) excludes metal costs, Adjusted EBITDA measures core profitability, Free Cash Flow indicates cash generation after capex, and Net Debt assesses indebtedness - **Value-Added Revenue (VAR):** Defined as revenue excluding incidental activities, minus the cost of metal, to eliminate the impact of metal price fluctuations not under the company's control[45](index=45&type=chunk) - **Adjusted EBITDA:** Defined as income before taxes, finance costs, D&A, adjusted for items like restructuring costs, unrealized derivative gains/losses, metal price lag, and share-based compensation, serving as a primary measure of profitability[46](index=46&type=chunk)[48](index=48&type=chunk) - **Free Cash Flow:** Defined as net cash flow from operating activities less capital expenditures, considered a useful measure of net cash generated by the business[51](index=51&type=chunk) - **Net debt:** Defined as borrowings plus/minus fair value of certain derivatives, less cash and cash equivalents, used to measure the company's indebtedness[52](index=52&type=chunk)

Constellium SE (NYSE:CSTM) Q2 2023 Earnings Conference Call July 26, 2023 10:00 AM ET Company Participants Jason Hershiser - Director, Investor Relations Jean-Marc Germain - Chief Executive Officer Jack Guo - Chief Financial Officer Conference Call Participants Katja Jannick - BMO Bill Peterson - JPMorgan Curt Woodworth - Credit Suisse Timna Tanners - Wolfe Research Corinne Blanchard - Deutsche Bank Josh Sullivan - The Benchmark Company Sean Wondrack - Deutsche Bank Operator Hello, and welcome to today's Co ...

We are directly impacted by the economic conditions that affect our customers and the markets in which they operate. General economic conditions such as the level of disposable income, the level of inflation, the rate of economic growth, the rate of unemployment, exchange rates and currency devaluation or revaluation influence consumer confidence and consumer purchasing power. These factors, in turn, influence the demand for our products in terms of total volumes and prices that can be charged. We attempt t ...

Forward-Looking Statements First Quarter 2023 – Earnings Call Non-GAAP 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 with ...

Financial Data and Key Metrics Changes - Shipments decreased by 3% to 389,000 tons compared to Q1 2022, primarily due to lower shipments in the PARP segment [49] - Revenue was €2 billion, a decrease of 1% year-over-year, as improved pricing and mix were offset by lower metal prices [49] - Value-added revenue increased by 16% to €754 million compared to the same period last year [49][52] - Net income for the quarter was €22 million, down from €179 million in Q1 2022 [49] - Adjusted EBITDA was €166 million, slightly below the first quarter of 2022 [56] - Free cash flow was negative €34 million, but the company expects to generate positive free cash flow exceeding €125 million for the year [50][65] Business Line Data and Key Metrics Changes - A&T segment adjusted EBITDA increased by 37% to €73 million, driven by higher aerospace shipments [67] - PARP segment adjusted EBITDA decreased by 33% to €55 million, with automotive shipments up 19% but packaging shipments down 11% [66] - AS&I segment adjusted EBITDA increased by 17% to €43 million, with automotive shipments up 13% [62] Market Data and Key Metrics Changes - Aerospace demand was strong, with shipments up over 50% compared to last year [57][72] - Automotive shipments in both rolled and extruded products were up double digits compared to last year [57] - Packaging shipments decreased due to inventory adjustments and lower end demand, with expectations for low to mid-single-digit growth in the long term [77] Company Strategy and Development Direction - The company aims for adjusted EBITDA in excess of €800 million by 2025, with a leverage target of 1.5 to 2.5x [2] - Focus on sustainability-driven growth trends, including consumer preference for recyclable aluminum cans and lightweighting in transportation [2][74] - Continued investment in recycling capabilities, with a recycling center expected to ramp up by 2025 [80] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the end-market positioning despite uncertainties in the macroeconomic environment [58] - The company is confident in its ability to pass through inflationary cost pressures and maintain pricing power [64][86] - Management acknowledges challenges in the packaging market due to destocking and demand weakness but expects long-term growth [88][90] Other Important Information - The company reported a recordable case rate of 1.6 accidents per million hours worked, highlighting a commitment to safety [47] - Net debt at the end of Q1 was €1.9 billion, with leverage at 2.8x, down 0.4x from the previous year [75] Q&A Session Summary Question: What is the current status of the packaging market? - Management remains confident in achieving internal targets but acknowledges challenges due to inflation and lack of promotional activity affecting demand [88] Question: How has the company managed inflationary pressures? - The company has successfully negotiated with customers to pass through most inflationary costs, resulting in a better position than previously expected [90] Question: What are the expectations for the automotive market? - The automotive market is expected to see continued demand, with low inventories and high consumer demand driving growth [78] Question: How does the company view competition and capacity expansions? - The company believes that additional capacity is needed in North America due to growth in can and automotive markets, and it is well-positioned with contracts running through 2028 [22]

Market Competition and Economic Environment - The company operates in a highly competitive aluminium market, facing challenges from larger competitors with greater financial and technical resources [33]. - A significant portion of the company's revenue is derived from international operations, exposing it to risks from economic downturns and geopolitical conditions [36]. - The cyclical nature of the metals industry and end-use markets can lead to significant fluctuations in demand and pricing, adversely affecting financial performance [46]. - The ongoing impact of public health pandemics, such as COVID-19, has adversely affected operations and financial results, highlighting vulnerabilities in supply chains [42]. - The company is subject to various financial, political, and regulatory risks in connection with its global operations, which could negatively impact growth opportunities and financial results [37]. Cost and Pricing Challenges - The company has experienced price volatility in energy costs, which represent the fourth largest component of its cost of sales, following metal, labor, and depreciation [38]. - Raw material prices, particularly for aluminium, are subject to continuous volatility, impacting profitability if the company cannot pass through these costs to customers [40]. - The company may face increased production costs and demand impacts due to new climate change regulations, potentially affecting financial condition and cash flows [50]. Operational Risks and Challenges - The company may face challenges in executing and completing expected capital investments, which could hinder anticipated benefits and operational efficiency [47]. - Disruptions in IT systems or cyber-attacks could materially impact business operations and financial results, although no significant security incidents were reported in 2022 [52][53]. - The company relies on a limited number of customers for a substantial portion of sales, and failure to renew contracts could adversely affect financial condition and cash flows [56][57]. - The company is dependent on a limited number of suppliers for aluminium, and supply interruptions could disrupt production and negatively impact financial results [61]. - The availability of aluminium scrap is critical for operations, and a decrease in supply could adversely affect recycling capabilities and financial performance [62]. - The company faces risks related to labor disputes and collective bargaining agreements, which could disrupt operations and negatively impact financial results [67]. Financial Position and Governance - The company has a significant amount of indebtedness, which could limit cash flow available for operations and capital expenditures [71]. - Future operating performance and financial results are subject to factors beyond the company's control, including interest rates and general economic conditions [71]. - A deterioration in the company's financial position or a downgrade of credit ratings could adversely affect financing levels and access to capital markets [74]. - The company has provisions for environmental remediation costs amounting to €86 million as of December 31, 2022 [84]. - Legal proceedings and investigations could increase operating costs and adversely affect financial condition and results of operations [82]. - Changes in income tax rates or laws could materially adversely impact the company's financial results [79]. - The company is subject to ongoing reviews by tax authorities, which could impact financial position and results of operations [80]. - The company's corporate governance is governed by French law, which may differ from U.S. corporate governance standards [89]. Performance Metrics and Growth - For the year ended December 31, 2022, the company reported shipments of 1,580 kt, revenue of €8,120 million, net income of €308 million, and adjusted EBITDA of €673 million [120]. - The company’s revenue increased from €4,883 million in 2020 to €8,120 million in 2022, reflecting a significant growth trajectory [120]. - The company’s adjusted EBITDA grew from €465 million in 2020 to €673 million in 2022, indicating improved operational efficiency [120]. - The company’s net income improved from a loss of €17 million in 2020 to a profit of €308 million in 2022, showcasing a strong recovery [120]. - The company aims to meet the demand for lightweight, strong, and sustainable aluminium products while generating attractive returns for shareholders [122]. Strategic Investments and Innovations - The company is focused on investing in high-return opportunities and technologically advanced products to enhance competitiveness and profitability [48]. - The company has invested in various growth opportunities, including Auto Body Sheet capabilities and new Automotive Structures operations across multiple locations in the U.S., Mexico, and Europe [118]. - The company has invested in R&D and technological capabilities to develop high value-added and responsible product portfolios [124]. - The company operates joint ventures in Canada and China to enhance its production capabilities in automotive extruded profiles and aluminium crash management systems [155]. - The company collaborates with universities and third parties, occasionally obtaining royalty-bearing licenses for third-party technologies [217]. Market Trends and Demand Projections - Aluminium beverage cans accounted for approximately 23% of total European aluminium flat rolled demand and 38% of total North American flat rolled demand in 2022, with expected growth rates of 3.6% and 4.0% per year from 2022 to 2027, respectively [177]. - Light vehicle production in Europe and North America is projected to grow by approximately 6.3% per annum from 2022 to 2027, driving increased demand for aluminium in automotive applications [185]. - The compound annual growth rate (CAGR) for the flat rolled products market is expected to be 3.8% between 2022 and 2027 according to CRU [170]. - The automotive industry is expected to increase aluminium usage due to stringent EU and U.S. regulations, with EU targets aiming for a 37.5% reduction in carbon emissions by 2030 compared to 2021 levels [188]. - Aluminium demand in the aerospace rolled products market in North America and Europe is projected to grow by 11.0% annually from 2022 to 2027, driven by recovery from the COVID-19 downturn [192].