Constellium(CSTM)2025-02-20 19:31Financial Data and Key Metrics Changes - Shipments in Q4 2024 were 328,000 tons, down 2% compared to Q4 2023, primarily due to lower shipments in A&T and AS&I [12] - Revenue for Q4 2024 was $1.7 billion, a decrease of 1% compared to Q4 2023, mainly due to lower shipments and unfavorable price and mix, partially offset by higher metal prices [12] - The net loss for Q4 2024 was $47 million, compared to a net income of $5 million in Q4 2023 [13] - Adjusted EBITDA for Q4 2024 was $125 million, which includes a negative impact of $15 million from the flood at Valais and a positive non-cash impact from metal price lag of $27 million [13][14] - For the full year 2024, shipments were 1.4 million tons, down 4% compared to 2023, and revenue was $7.3 billion, a decrease of 6% compared to 2023 [16][17] - Full year net income was $60 million, down from $157 million in 2023, and adjusted EBITDA was $623 million, down from a record $754 million in 2023 [17][18] Business Line Data and Key Metrics Changes - A&T segment adjusted EBITDA for Q4 2024 was $56 million, a decrease of 33% compared to Q4 2023, with volume and price/mix being significant headwinds [33] - P&K segment adjusted EBITDA for Q4 2024 was $56 million, down 34% year-over-year, with automotive shipments decreasing by 10% [36] - AS&I segment adjusted EBITDA for Q4 2024 was $4 million, an 83% decrease compared to Q4 2023, with automotive shipments down 12% [38][40] Market Data and Key Metrics Changes - The aerospace market remains stable, with robust backlogs, but supply chain challenges are causing delays in deliveries [52] - Demand in the packaging market remains healthy in North America and Europe, with expectations for low to mid-single-digit growth [54] - The automotive market is experiencing weakness, particularly in Europe, with production levels still below pre-COVID levels [56] Company Strategy and Development Direction - The company is focused on cost reduction efforts and has accelerated its Vision 2025 cost improvement program in response to market conditions [44][45] - New investments, such as the recycling and casting center in Neuf-Brisach, are expected to contribute positively to future performance [62] - The company aims to achieve adjusted EBITDA of $600 to $630 million in 2025 and $900 million by 2028, with a focus on operational improvements and market recovery [60][61] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a challenging year due to extreme weather and market-driven headwinds, but expressed confidence in the long-term fundamentals of the business [20][22] - The company is monitoring the impact of tariffs and believes they may present opportunities for domestic production [25][30] - Management remains optimistic about the recovery of the Valais facility and the overall market conditions in the coming years [61][65] Other Important Information - Free cash flow for 2024 was negative $100 million, but would have been positive $30 million excluding the impact of the Valais flood [19][47] - The company returned $79 million to shareholders through share repurchases in 2024 [23][49] - The company has a strong liquidity position with $727 million as of the end of 2024 [51] Q&A Session Summary Question: Can you provide more detail on the key tax and input for the 2025 EBITDA guidance? - Management highlighted that adverse market conditions, including tightening scrap spreads and weak automotive demand, will impact 2025 [71][72] Question: Can you walk us through the bridge from 2025 to 2028? - Management indicated that the path to 2028 is expected to be linear, with investments contributing more towards the end of the period [80][82] Question: Is it fair to assume that the weighting for 2025 guidance will be more in the second half? - Management agreed that the first quarter will be weaker due to seasonality and the impact of the Valais flood, with improvements expected in the second half [94][95] Question: What are the key assumptions for market growth and shipment growth across major markets? - Management expects stable aerospace volumes but a weaker mix, continued weakness in automotive, and improvement in packaging [112][114] Question: How will the company respond to sustained pressure on scrap prices? - Management noted that they can switch inputs and are prepared to adjust their sourcing strategies as needed [130][132]