Aperam S.A. (APAM) Q4 2023 earnings summary

Executive summary

• Q4 marked a pause in the recovery: European demand stayed weak, while Brazil delivered a solid result in a seasonally softer quarter; pricing pressure persisted.

• Adjusted EBITDA recovered from the Q3 trough, but insufficient European pricing and continued destocking kept margins under pressure.

• Leadership Journey phase 4 generated €186m of cumulative gains in 2021–2023, above its €150m target; phase 5 began with a €200m target through 2026.

Financial highlights

• Q4 sales were €1,551m, down 4% YoY; shipments were 493kt, with a slight increase QoQ as production recovered from Q3 disruption.

• Adjusted EBITDA was €19m, recovering from Q3’s all-time low; reported EBITDA was €55m.

• Clean EPS was -€0.32; inventory valuation charges and pricing-related margin pressure were partly offset by a €121m deferred tax asset.

• Buffer inventory release reduced net working capital by €289m and net financial debt by €155m QoQ.

Outlook and guidance

• Q1 2024 shipments are expected to rise slightly QoQ, with seasonal softness in Brazil and stronger shipments in Europe; adjusted EBITDA is expected at a comparable level to Q4.

• Q1 net financial debt is guided higher, subject to raw-material price developments through quarter-end.

• FY 2024 base dividend is planned at €2.00 per share, or ~€144m; additional shareholder returns are intended in line with financial policy.

• FY 2024 capex guidance is ~€150m; effective tax rate guidance is 20–25%.

• Leadership Journey phase 5 targets >€200m cumulative gains in 2024–2026; phase 5 contributes to the €300m like-for-like improvement guided for 2025.