Aperam S.A. (APAM) Q2 2024 earnings summary

Executive summary

• Q2 brought early signs of European market normalization as destocking faded; Brazil’s shipments were held back by a delayed hot rolling mill ramp-up.

• Net income reached EUR 59m, reversing Q1’s EUR 19m loss; adjusted EBITDA rose 56% sequentially to EUR 86m on inventory valuation, mix and cost improvements.

• Differentiated businesses supported results, while European and Brazilian steelmaking remained under pressure.

• European restructuring and labor agreements restored competitiveness and cost leadership.

Financial highlights

• Q2 sales were EUR 1,634m, down 1.4% sequentially and 4% year over year; shipments were stable at 583,000 tonnes.

• Adjusted EBITDA margin improved to 5.3% from 3.3% in Q1; operating income rose to EUR 19m from a EUR 3m loss.

• Basic EPS was EUR 0.82 versus EUR (0.26) in Q1; adjusted basic EPS was EUR 0.13.

• Operating cash flow was EUR 136m and free cash flow EUR 111m, including a EUR 92m working-capital reduction and EUR 26m CapEx.

• Net financial debt fell EUR 67m sequentially to EUR 607m; NFD/LTM EBITDA was 2.8x.

Outlook and guidance

• Q3 shipments are expected to remain stable quarter over quarter, with adjusted EBITDA slightly higher; Brazil’s mill costs are expected to drop out as it ramps up.

• Net financial debt is expected to increase in Q3 with higher activity-related working capital, then decrease in Q4.

• FY 2024 CapEx guidance remained EUR 150m; the EUR 2.00/share base dividend was maintained.

• The EUR 300m EBITDA improvement target for 2025 remained on track; Leadership Journey Phase 5 targets EUR 75m gains in 2024 and >EUR 200m by 2026.

• A ~EUR 120m working-capital release was confirmed for Q2–Q4 2024.