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

Executive summary

• Q2 2024 marked early signs of recovery and market normalization in Europe, with improved volumes and reduced destocking, while Brazil faced shipment delays due to a hot rolling mill ramp-up.

• Non-steelmaking segments performed solidly, in line with guidance and 2025 improvement targets, and ESG focus was maintained despite cost pressures.

• Leadership Journey® Phase 5 delivered EUR 12 million in Q2 gains, with the EUR 50 million Booster program and EUR 200 million target by 2026 progressing as planned.

• Restructuring and labor agreements in Europe restored competitiveness and cost leadership.

• Q2 net income was EUR 59 million, reversing a Q1 net loss, as cost initiatives and market stabilization took effect.

Financial highlights

• Q2 2024 sales were EUR 1,634 million, down 1% sequentially; shipments remained stable at 583,000 tonnes.

• Adjusted EBITDA reached EUR 86 million, up 56% sequentially, with margin improving to 5.3% from 3.3% in Q1.

• Basic EPS rebounded to EUR 0.82; adjusted EPS was EUR 0.13, reflecting one-time tax benefits and restructuring costs.

• Free cash flow reached EUR 111 million, driven by higher profitability and a EUR 92 million working capital reduction.

• Net financial debt decreased by EUR 67 million to EUR 607 million; net debt-to-EBITDA ratio at 2.8x.

Outlook and guidance

• Q3 2024 shipments expected to remain stable, with slightly higher adjusted EBITDA as Brazil's hot rolling mill costs drop out.

• Net financial debt projected to rise in Q3 due to higher activity-related working capital, then drop in Q4.

• 2024 CapEx confirmed at EUR 150 million; base dividend maintained at EUR 2.00/share.

• Leadership Journey® Phase 5 targets EUR 75 million gains in 2024 and over EUR 200 million by 2026.

• EUR 120 million net working capital release confirmed for Q2–Q4 2024.