Constellium SE (NYSE:CSTM) Q4 2020 Earnings Conference Call February 25, 2021 11:00 AM ET Company Participants Ryan Wentling – Director-Investor Relations Jean-Marc Germain – Chief Executive Officer Peter Matt – Chief Financial Officer Conference Call Participants Curt Woodworth – Credit Suisse Josh Sullivan – Benchmark Company Chris Terry – Deutsche Bank Christian Georges – Societe Generale Matthew Fields – Bank of America Sean Wondrack – Deutsche Bank Operator Ladies and gentlemen, thank you for standing ...

Constellium SE (NYSE:CSTM) Q3 2020 Earnings Conference Call October 27, 2020 10:00 AM ET Company Participants Ryan Wentling – Director of Investor Relations Jean-Marc Germain – Chief Executive Officer Peter Matt – Chief Financial Officer Conference Call Participants Chris Terry – Deutsche Bank Curtis Woodworth – Credit Suisse Josh Sullivan – The Benchmark Company Sean Wondrack – Deutsche Bank Operator Ladies and gentlemen, thank you for standing by, and welcome to Constellium's Third Quarter 2020 Results Co ...

Third Quarter 2020 Earnings Call October 27, 2020 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 ...

Constellium SE (NYSE:CSTM) Q2 2020 Earnings Conference Call July 22, 2020 10:00 AM ET Company Participants Ryan Wentling - Director of IR Jean-Marc Germain - CEO Peter Matt - CFO Conference Call Participants Chris Terry - Deutsche Bank Josh Sullivan - The Benchmark Company David Gagliano - BMO Capital Markets Curt Woodworth - Credit Suisse Matthew Fields - Bank of America Sean Wondrack - Deutsche Bank Operator Ladies and gentlemen, thank you for standing by and welcome to Constellium's Second Quarter 2020 R ...

Second Quarter 2020 Earnings Call July 22, 2020 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 c ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________________ FORM 20-F __________________________________________________________________________ ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR ...

Part I [Key Information](index=5&type=section&id=Item%203.%20Key%20Information) This section presents selected historical financial data for the five years ended December 31, 2018, and details the significant business and financial risks facing the company [Selected Financial Data](index=5&type=section&id=A.%20Selected%20Financial%20Data) The company's selected financial data for 2018 shows revenue of €5,686 million and net income of €190 million, a significant turnaround from a net loss in 2017 Selected Historical Financial Data (€ in millions, except per share data) | Indicator | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Statement of Income Data** | | | | | | | Revenue | 5,686 | 5,237 | 4,743 | 5,153 | 3,666 | | Gross profit | 538 | 555 | 535 | 468 | 501 | | Income/(Loss) from operations | 404 | 338 | 267 | (406) | 170 | | Net income/(loss) for the period | 190 | (31) | (4) | (552) | 54 | | Earnings/(loss) per share—basic | 1.40 | (0.28) | (0.04) | (5.27) | 0.48 | | Earnings/(loss) per share—diluted | 1.37 | (0.28) | (0.04) | (5.27) | 0.48 | | **Balance Sheet Data** | | | | | | | Total assets | 3,901 | 3,711 | 3,787 | 3,628 | 3,012 | | **Other Operational Data** | | | | | | | Capital expenditure | 277 | 276 | 355 | 350 | 199 | | Volumes (in kt) | 1,534 | 1,482 | 1,470 | 1,478 | 1,062 | - In fiscal year 2018, the company reclassified pension and other benefit interest components to finance costs, with prior year data reclassified for conformity[17](index=17&type=chunk) [Risk Factors](index=6&type=section&id=D.%20Risk%20Factors) The company faces a multitude of risks across its business, industry, and financial structure, including competition, capital intensity, and high leverage - **Business Risks:** - **Competition:** The company operates in highly competitive markets, with some competitors having greater financial and technical resources, potentially impacting sales and prices[25](index=25&type=chunk)[26](index=26&type=chunk) - **Capital Intensity:** The business requires substantial capital investments for upgrades and expansion, which may be difficult to fund or may not yield anticipated benefits[29](index=29&type=chunk)[30](index=30&type=chunk) - **Customer & Supplier Dependence:** A significant portion of sales comes from a limited number of customers (top ten accounted for **~49% of 2018 revenue**), and the company relies on a limited number of suppliers for aluminum (top ten accounted for **~55% of raw material expense**)[41](index=41&type=chunk)[47](index=47&type=chunk) - **Operational Risks:** The company is subject to unplanned business interruptions, production ramp-up difficulties, and potential labor disputes[33](index=33&type=chunk)[34](index=34&type=chunk)[37](index=37&type=chunk) - **Industry Risks:** - **Aluminum Price Volatility:** Financial results are affected by volatility in LME aluminum prices and regional premiums, which can be difficult to pass on to customers[94](index=94&type=chunk)[95](index=95&type=chunk) - **Competition from Substitutes:** Aluminum products compete with materials like steel, plastics, and composites, with higher aluminum prices potentially reducing competitiveness[97](index=97&type=chunk) - **End-Market Cyclicality:** The business is sensitive to cycles in the aerospace, automotive, and construction markets[105](index=105&type=chunk)[106](index=106&type=chunk) - **Financial & Indebtedness Risks:** - **High Leverage:** As of December 31, 2018, the company had total indebtedness of **€2,151 million** and net pension liabilities of **€610 million**, which could limit cash flow for operations and capital expenditures[116](index=116&type=chunk) - **Restrictive Covenants:** Debt agreements contain covenants that restrict operations, including limitations on incurring additional debt, paying dividends, and making investments[122](index=122&type=chunk) - **Credit Rating:** A downgrade in credit ratings could increase borrowing costs and adversely affect business relationships with suppliers and customers[126](index=126&type=chunk) - **Corporate & Tax Risks:** - **Foreign Private Issuer Status:** As a foreign private issuer, the company is exempt from certain U.S. corporate governance and reporting requirements, which may offer less protection to shareholders[138](index=138&type=chunk)[139](index=139&type=chunk) - **Dutch Corporate Governance:** The company does not comply with all provisions of the Dutch Corporate Governance Code, which is based on a "comply or explain" principle[143](index=143&type=chunk) - **Taxation:** The company operates in multiple tax jurisdictions and is subject to complex and changing tax laws, which could impact its effective tax rate and financial results[164](index=164&type=chunk)[169](index=169&type=chunk) [Information on the Company](index=35&type=section&id=Item%204.%20Information%20on%20the%20Company) Constellium is a global leader in designing and manufacturing innovative rolled and extruded aluminum products for packaging, aerospace, and automotive markets [History and Development of the Company](index=35&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Constellium N.V. was incorporated in the Netherlands on May 14, 2010, and completed its initial public offering on May 29, 2013 - The company was formed on May 14, 2010, and acquired the Engineered Aluminium Products (EAP) Business from Rio Tinto affiliates on January 4, 2011[191](index=191&type=chunk) - Completed its initial public offering on May 29, 2013, after converting to a Dutch public limited liability company (N.V.)[191](index=191&type=chunk) [Business Overview](index=35&type=section&id=B.%20Business%20Overview) Constellium is a global manufacturer of innovative aluminum products, operating 26 production facilities with a focus on high value-added products and strategic customer relationships - The company operates **26 production facilities**, three administrative centers, and three R&D centers with approximately **13,000 employees** as of December 31, 2018[195](index=195&type=chunk) - Key business strategies include focusing on high value-added products, deepening customer connectivity, optimizing margins, harvesting returns from recent investments, and strict cost control[201](index=201&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) - Recent developments include a plan to transfer the corporate seat to France and the acquisition of UACJ's **49% interest** in the Bowling Green joint venture for **$100 million** in January 2019[209](index=209&type=chunk)[210](index=210&type=chunk) Shipments by Product Line (in metric tons) | Product Line | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Packaging rolled products | 799 | 807 | 856 | | Automotive rolled products | 196 | 158 | 113 | | Aerospace rolled products | 111 | 106 | 118 | | Transportation, industry, and other rolled products | 135 | 132 | 125 | | Automotive extruded products | 114 | 109 | 99 | | Other extruded products | 135 | 127 | 118 | | **Total shipments** | **1,534** | **1,482** | **1,470** | - The company's top 10 customers accounted for approximately **49% of revenue** in 2018, and its top 10 suppliers accounted for approximately **55% of raw material and consumable expenses**[282](index=282&type=chunk)[280](index=280&type=chunk) - R&D investment was **€40 million** in 2018, up from **€36 million** in 2017 and **€31 million** in 2016, supporting innovation at its three R&D centers[294](index=294&type=chunk) [Property, Plants and Equipment](index=56&type=section&id=D.%20Property,%20Plants%20and%20Equipment) As of December 31, 2018, Constellium operated 26 manufacturing facilities across Europe, North America, and China, with utilization rates varying by plant Production Capacity and Utilization Rate (as of Dec 31, 2018) | Plant | Capacity (kt) | Utilization Rate | | :--- | :--- | :--- | | Neuf-Brisach | 450 | 95-100% | | Muscle Shoals | 500-550 | 75% | | Issoire | 110 | 90% | | Ravenswood | 175 | 90-95% | | Děčín | 92 | 84% | | Singen | 290-310 | 85-90% | | Sierre | 70-75 | 50% | - The company is building new facilities in Vigo (Spain), Zilina (Slovakia), and Nanjing (China) to expand its manufacturing footprint[313](index=313&type=chunk) - Significant capital expenditures were made in 2018 at key facilities, including **€44 million** at Muscle Shoals and **€45 million** at Singen[313](index=313&type=chunk)[314](index=314&type=chunk) [Operating and Financial Review and Prospects](index=58&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section analyzes Constellium's financial condition and results of operations for the three years ended December 31, 2018, highlighting revenue growth, net income improvement, and liquidity [Results of Operations](index=63&type=section&id=Results%20of%20Operations) For 2018, revenue increased by **9%** to **€5,686 million**, and net income was **€190 million**, a substantial turnaround from a **€31 million** net loss in 2017 Consolidated Results of Operations (€ in millions) | Item | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Revenue | 5,686 | 5,237 | 4,743 | | Gross profit | 538 | 555 | 535 | | Income from operations | 404 | 338 | 267 | | Finance costs, net | (149) | (260) | (188) | | Income before income taxes | 222 | 49 | 65 | | Income tax expense | (32) | (80) | (69) | | **Net income / (loss)** | **190** | **(31)** | **(4)** | - **2018 vs. 2017:** - Revenue increased **9%** (**€449 million**) due to a **3%** rise in shipments and a **5%** increase in average sales prices per ton[346](index=346&type=chunk) - Cost of sales increased **10%** (**€466 million**) mainly from higher raw material costs[350](index=350&type=chunk) - 'Other gains, net' increased to **€154 million** from **€70 million**, primarily due to a **€186 million** gain on the disposal of assets at the Sierre plant[355](index=355&type=chunk) - Finance costs decreased by **€111 million**, reflecting benefits from 2017 refinancing and the absence of prior-year debt settlement losses[359](index=359&type=chunk) - **2017 vs. 2016:** - Revenue increased **10%** (**€494 million**) due to a **10%** increase in average sales prices, while shipment volumes were stable[370](index=370&type=chunk) - Finance costs increased by **€72 million**, primarily reflecting a **€91 million** net loss on debt settlement from refinancing activities[382](index=382&type=chunk) - Income tax expense increased to **€80 million** from **€69 million**, with the effective tax rate rising to **163%** due to unrecognized tax benefits and a **€16 million** unfavorable impact from U.S. tax reform[386](index=386&type=chunk) [Segment Results](index=70&type=section&id=Segment%20Results) In 2018, all three operating segments contributed to an **11%** increase in total Adjusted EBITDA to **€498 million**, driven by higher volumes and improved pricing Adjusted EBITDA by Segment (€ in millions) | Segment | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | P&ARP | 243 | 204 | 204 | | A&T | 152 | 146 | 118 | | AS&I | 125 | 120 | 104 | | Holdings and Corporate | (22) | (22) | (28) | | **Total Adjusted EBITDA** | **498** | **448** | **398** | - **P&ARP:** 2018 Adjusted EBITDA increased by **19%** to **€243 million**, reflecting higher volumes (especially in Automotive), better price/mix, and favorable metal costs, partially offset by maintenance and ramp-up costs[406](index=406&type=chunk) - **A&T:** 2018 Adjusted EBITDA increased by **4%** to **€152 million**, driven by higher shipments and strong cost management, partially offset by weaker price/mix[409](index=409&type=chunk) - **AS&I:** 2018 Adjusted EBITDA increased by **4%** to **€125 million**, due to higher volumes and improved price/mix, partially offset by higher costs related to maintenance and new product launches[411](index=411&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) At year-end 2018, total liquidity was **€669 million**, comprising **€164 million** in cash and **€505 million** in undrawn credit facilities, with capital expenditures stable at **€277 million** - Total liquidity at December 31, 2018, was **€669 million**, consisting of **€164 million** in cash and cash equivalents and **€505 million** in available undrawn facilities[420](index=420&type=chunk) Summary of Cash Flows (€ in millions) | Activity | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 66 | 160 | 88 | | Net cash flows used in investing activities | (91) | (292) | (365) | | Net cash flows (used in) / from financing activities | (82) | 61 | 145 | Historical Capital Expenditures by Segment (€ in millions) | Segment | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | P&ARP | 97 | 115 | 166 | | A&T | 70 | 73 | 96 | | AS&I | 105 | 83 | 84 | | Holdings and Corporate | 5 | 5 | 9 | | **Total capital expenditures** | **277** | **276** | **355** | [Contractual Obligations](index=79&type=section&id=Contractual%20Obligations) As of December 31, 2018, the company had total contractual cash obligations of **€3,218 million**, primarily related to borrowings and interest payments Contractual Cash Obligations as of December 31, 2018 (€ in millions) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | After 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings | 2,075 | 6 | 311 | 4 | 1,754 | | Interest | 709 | 114 | 221 | 201 | 173 | | Operating lease obligations | 133 | 24 | 24 | 39 | 46 | | Capital expenditures | 124 | 112 | 12 | 0 | 0 | | Finance leases | 86 | 20 | 16 | 34 | 16 | | **Total** | **3,218** | **332** | **614** | **283** | **1,989** | - Retirement benefit obligations of **€610 million** are not included in the table as the timing of settlement is uncertain[450](index=450&type=chunk) [Directors, Senior Management and Employees](index=81&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees) This section details the composition of the Board of Directors and senior management team, their compensation, board practices, and employee information [Directors and Senior Management](index=81&type=section&id=A.%20Directors%20and%20Senior%20Management) Constellium's Board of Directors consists of 11 members, including Chairman Richard B. Evans and CEO Jean-Marc Germain, leading an experienced executive team - The Board of Directors is composed of **11 members**, with Richard B. Evans as Chairman and Jean-Marc Germain as the sole executive director and CEO[460](index=460&type=chunk)[461](index=461&type=chunk) - The executive team includes the CEO, CFO, Presidents of the three business units (P&ARP, A&T, AS&I), and heads of Manufacturing Excellence, HR, Public Affairs, and Legal[475](index=475&type=chunk) [Compensation](index=85&type=section&id=B.%20Compensation) For 2018, non-executive directors received annual retainers and RSU grants, while executive officers' compensation included base salary, annual cash bonuses, and long-term equity incentives 2018 Non-Executive Director Compensation Summary (€) | Name | Annual Director Fees | Board/Committee Attendance Fees | Equity Award 2018 Grant | Total | | :--- | :--- | :--- | :--- | :--- | | Richard B. Evans | 128,000 | 26,000 | 42,635 | 196,635 | | Guy Maugis | 68,000 | 18,000 | 34,108 | 120,108 | | **Total (all non-execs)** | **639,000** | **184,000** | **315,499** | **1,138,499** | 2018 Executive Officer Compensation Summary (€) | Name / Group | Base Salary Paid | Bonus Paid (EPA) | Equity Awards (Grant Value) | Total | | :--- | :--- | :--- | :--- | :--- | | Jean-Marc Germain (CEO) | 868,772 | 1,335,654 | 4,058,577 | 6,316,897 | | Other Executive Officers (4) | 2,005,327 | 2,176,363 | 3,519,030 | 7,971,132 | - The Employee Performance Award (EPA) plan for 2018 was based on Financial Objectives (**70% weight**), an EHS Objective (**10%**), and Individual Objectives (**20%**)[494](index=494&type=chunk) - The 2018 Long-Term Incentive Plan (LTIP) granted executives Performance-Based Restricted Stock Units (PSUs) and Restricted Stock Units (RSUs) with a three-year cliff vesting period, tied to Total Shareholder Return (TSR) relative to a peer group[519](index=519&type=chunk)[520](index=520&type=chunk) [Board Practices](index=94&type=section&id=C.%20Board%20Practices) The company has a one-tier Board of Directors with 11 members, including one Executive Director and ten Non-Executive Directors, overseeing key areas through four main committees - The company has a one-tier Board of **11 directors**: one Executive Director (CEO) and ten Non-Executive Directors[534](index=534&type=chunk) - The Board has four main committees: Audit, Human Resources and Remuneration, Nominating/Governance, and Environment, Health and Safety (EHS)[541](index=541&type=chunk)[543](index=543&type=chunk)[545](index=545&type=chunk)[547](index=547&type=chunk) - The Audit Committee consists of four independent directors, with at least one designated as an "audit committee financial expert"[541](index=541&type=chunk) [Employees](index=96&type=section&id=D.%20Employees) As of December 31, 2018, Constellium had approximately **13,000 employees**, primarily in France, the U.S., and Germany, with a large portion covered by collective bargaining agreements - The company employed approximately **13,000 people** as of December 31, 2018[549](index=549&type=chunk) - Employee distribution is concentrated in France (**37%**), the U.S. (**28%**), and Germany (**20%**)[549](index=549&type=chunk) - A large portion of the workforce is unionized, with **46% of U.S. employees** and the majority of non-U.S. employees covered by collective bargaining agreements[550](index=550&type=chunk) [Major Shareholders and Related Party Transactions](index=97&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies the company's major shareholders, with Bpifrance holding a **12.1%** stake, and details significant related party transactions, including a revolving credit facility - As of March 8, 2019, Bpifrance (and affiliated entities) was the largest shareholder with a **12.1%** beneficial ownership stake (**16,393,903 shares**)[556](index=556&type=chunk) - The company has an ongoing Shareholders Agreement with Bpifrance, which grants Bpifrance the right to designate one director for nomination to the board as long as its ownership exceeds **4%**[564](index=564&type=chunk)[565](index=565&type=chunk) - A related party transaction exists with BPI Financement, an affiliate of Bpifrance, through a **€10 million** revolving credit facility with Constellium Issoire, which was fully drawn in January 2019[568](index=568&type=chunk)[569](index=569&type=chunk) - The company engages in transactions with its joint venture, Constellium-UACJ ABS LLC, which is a related party[570](index=570&type=chunk) [Financial Information](index=102&type=section&id=Item%208.%20Financial%20Information) This section confirms the inclusion of consolidated financial statements in Item 18, notes the absence of material legal proceedings, and outlines the company's dividend policy and significant post-period changes - The company has no formal dividend policy and has not paid dividends, with future dividends at the discretion of the board and limited by debt covenants[577](index=577&type=chunk) - A significant change after the reporting period was the January 2019 acquisition of the remaining **49%** stake in the Constellium-UACJ ABS, LLC (CUA) joint venture for **$100 million** plus debt assumption[581](index=581&type=chunk) - In February 2019, the Pan-U.S. ABL Facility was amended to add Constellium Bowling Green LLC as a borrower and increase commitments to **$350 million**[580](index=580&type=chunk) [Additional Information](index=103&type=section&id=Item%2010.%20Additional%20Information) This section covers supplementary details regarding the company's capital stock, material contracts, exchange controls, and U.S. and Dutch tax consequences for shareholders [Material Contracts](index=104&type=section&id=C.%20Material%20Contracts) The company's material contracts primarily consist of its debt instruments, including various senior notes, a Pan-U.S. ABL facility, and several factoring agreements - Outstanding senior notes include issues from May 2014 (due 2021 and 2024), February 2017 (due 2025), and November 2017 (due 2026)[589](index=589&type=chunk)[623](index=623&type=chunk)[631](index=631&type=chunk) - The company maintains a Pan-U.S. ABL Facility, which was amended in February 2019 to increase commitments to **$350 million** and add the Bowling Green entity as a borrower[649](index=649&type=chunk) - Multiple European and U.S. factoring agreements are in place to provide additional liquidity, including a French facility up to **€235 million** and a U.S. facility for Muscle Shoals up to **$375 million**[665](index=665&type=chunk)[701](index=701&type=chunk) - In 2017, the company redeemed its December 2014 Notes and March 2016 Senior Secured Notes as part of a major refinancing effort funded by new note offerings and an equity offering[599](index=599&type=chunk)[611](index=611&type=chunk) [Taxation](index=119&type=section&id=E.%20Taxation) This section details the material U.S. and Dutch tax consequences for shareholders, including discussions on PFIC status, dividend taxation, and gift/inheritance taxes - **U.S. Tax:** The company believes it is not a Passive Foreign Investment Company (PFIC), which would otherwise result in adverse tax rules on distributions and gains for U.S. Holders[717](index=717&type=chunk)[718](index=718&type=chunk) - **U.S. Tax:** Dividends paid to U.S. Holders are taxable as ordinary income and are not eligible for the dividends-received deduction for corporations, though they may be subject to reduced tax rates for non-corporate U.S. Holders[723](index=723&type=chunk)[725](index=725&type=chunk) - **Dutch Tax:** Dividends are generally subject to a **15%** Dutch dividend withholding tax, which may be reduced, exempted, or refunded under applicable tax treaties, such as the Netherlands-U.S. Convention[741](index=741&type=chunk)[745](index=745&type=chunk) - **Dutch Tax:** Non-Dutch residents are generally not subject to Dutch income or corporate income tax on income and capital gains from the shares, provided they do not have a permanent establishment in the Netherlands to which the shares are attributable[751](index=751&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=129&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, including foreign exchange, commodity price, and interest rate risk, which are managed through hedging and other mitigation strategies - **Foreign Exchange Risk:** The company hedges committed and highly probable forecasted foreign currency transactions, primarily its Euro/U.S. Dollar exposure, using forwards and swaps; a **10%** strengthening of the USD vs the EUR would have a **€22 million** positive impact on profit before tax but a **€34 million** negative impact on pretax equity due to cash flow hedges[1106](index=1106&type=chunk)[1116](index=1116&type=chunk) - **Commodity Price Risk:** The company minimizes exposure to aluminum price volatility by passing through risk to customers and using derivatives; a **10%** increase in aluminum market price would result in an estimated **€37 million** gain on derivatives held at year-end[1125](index=1125&type=chunk)[1131](index=1131&type=chunk) - **Credit Risk:** Credit risk from financial counterparties is managed by diversifying across **12 institutions**, with the majority rated 'A' or better by Moody's; customer credit risk is mitigated through credit insurance covering over **88% of trade receivables**, advance payments, and active monitoring[1138](index=1138&type=chunk)[1141](index=1141&type=chunk) Part II [Controls and Procedures](index=130&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2018 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2018[774](index=774&type=chunk) - Management assessed internal control over financial reporting based on the COSO 2013 framework and concluded it was effective as of December 31, 2018[779](index=779&type=chunk)[780](index=780&type=chunk) - PricewaterhouseCoopers Audit, the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2018[781](index=781&type=chunk)[839](index=839&type=chunk) [Principal Accountant Fees and Services](index=131&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services) PricewaterhouseCoopers Audit served as the company's independent registered public accounting firm for fiscal years 2018, 2017, and 2016, with total fees of **€4.55 million** in 2018 Principal Accountant Fees (€ in thousands) | Service Category | 2018 | 2017 | | :--- | :--- | :--- | | Audit fees | 4,048 | 4,770 | | Audit-related fees | 224 | 101 | | Tax fees | 276 | 554 | | All other fees | 3 | 2 | | **Total** | **4,551** | **5,427** | - The audit committee must provide advance approval for all audit and non-audit services provided by the company's auditors[794](index=794&type=chunk) [Corporate Governance](index=133&type=section&id=Item%2016G.%20Corporate%20Governance) Constellium is subject to the Dutch Corporate Governance Code, which it follows on a "comply or explain" basis, disclosing non-compliance with certain provisions - The company is subject to the Dutch Corporate Governance Code and uses the "comply or explain" principle for deviations[801](index=801&type=chunk) - Key deviations from the Dutch Code include: - **Diversity:** The board composition does not meet the **30%** gender diversity target[803](index=803&type=chunk) - **Independence:** The Chairman and the Bpifrance-nominated director are not considered independent under the Dutch Code[804](index=804&type=chunk) - **Director Terms:** Some non-executive directors are reappointed for one-year terms, deviating from the standard four-year term structure[805](index=805&type=chunk) - **Shareholder Approval:** The articles require a supermajority (two-thirds vote and **50% of issued capital**) to overrule a binding board nomination or dismiss a director, which is stricter than the Dutch Code's recommendation[807](index=807&type=chunk) - A significant difference from NYSE rules is that under Dutch law, shareholder approval for equity issuances can be delegated to the Board of Directors, which has been the company's practice[811](index=811&type=chunk) Part III [Financial Statements](index=137&type=section&id=Item%2018.%20Financial%20Statements) This section contains the audited Consolidated Financial Statements of Constellium N.V. for the three years ended December 31, 2018, prepared in accordance with IFRS, along with the independent auditor's unqualified opinion [Report of Independent Registered Public Accounting Firm](index=149&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers Audit issued an unqualified opinion on Constellium N.V.'s consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2018 - The independent auditor, PricewaterhouseCoopers Audit, issued an unqualified opinion on the consolidated financial statements[839](index=839&type=chunk) - The auditor also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2018[839](index=839&type=chunk) [Notes to the Consolidated Financial Statements](index=156&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies, segment performance, major balance sheet and income statement items, and financial risk management, including subsequent events - The company adopted IFRS 15 (Revenue) and IFRS 9 (Financial Instruments) on January 1, 2018, with no material impact on opening retained earnings from IFRS 15, and immaterial impairment losses from IFRS 9[868](index=868&type=chunk)[882](index=882&type=chunk) Revenue by Segment (€ in millions) | Segment | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | P&ARP | 3,050 | 2,805 | 2,482 | | A&T | 1,339 | 1,301 | 1,279 | | AS&I | 1,287 | 1,118 | 993 | | Holdings & Corporate | 10 | 13 | (11) | | **Total External Revenue** | **5,686** | **5,237** | **4,743** | Borrowings by Nature (as of Dec 31, 2018, € in millions) | Instrument | Nominal Value | Currency | Carrying Value | | :--- | :--- | :--- | :--- | | Senior Notes due 2024 | 400 | $ | 348 | | Senior Notes due 2021 | 300 | € | 300 | | Senior Notes due 2025 | 650 | $ | 568 | | Senior Notes due 2026 | 500 | $ | 440 | | Senior Notes due 2026 | 400 | € | 399 | | Other loans (incl. Finance leases) | - | - | 96 | | **Total Borrowings** | - | - | **2,151** | - Net pension and other post-employment benefit liability stood at **€610 million** as of December 31, 2018, a decrease from **€664 million** in 2017, with the deficit of funded plans at **€294 million**[1164](index=1164&type=chunk) - The company completed the acquisition of the remaining **49%** of the Constellium-UACJ ABS joint venture on January 10, 2019, with preliminary goodwill estimated at **€22 million**[1227](index=1227&type=chunk)[1233](index=1233&type=chunk)