Constellium (CSTM) Q2 2024 earnings summary

Executive summary

• Q2 2024 shipments fell 5% year-over-year to 378,000 tons, with revenue down 8% to €1.8 billion and net income more than doubling to €71 million from €32 million, driven by favorable metal price lag.

• Adjusted EBITDA for Q2 was €214 million (including €42 million metal price lag); excluding this, Adjusted EBITDA was €172 million, down from €209 million last year.

• Free Cash Flow was €75 million in Q2 and €67 million in H1; share repurchases totaled 1.89 million shares for $39.4 million in H1.

• Operations in Valais, Switzerland, were severely impacted by unprecedented flooding in late June, suspending key facilities and causing significant operational disruption.

• H1 2024 shipments dropped 4% to 758,000 tons; revenue decreased 10% to €3.5 billion, while net income rose to €88 million from €54 million.

Financial highlights

• Q2 Adjusted EBITDA was €214 million, up from €179 million in Q2 2023, mainly due to favorable metal price lag; net income for Q2 was €71 million, more than double the prior year.

• Free Cash Flow for Q2 2024 was €75 million, up from €68 million in Q2 2023; H1 Free Cash Flow improved to €67 million from €34 million in H1 2023.

• Leverage stood at 2.5x at June 30, 2024, within the target range of 1.5x to 2.5x; net debt was €1,682 million.

• Liquidity at June 30, 2024, was €869 million, the highest in two years.

• Basic EPS for Q2 was €0.48, up from €0.21; H1 basic EPS was €0.59, up from €0.35.

Outlook and guidance

• 2024 guidance is paused due to uncertainty from the Swiss flooding; gross damage estimated at €135 million, with up to €50 million insurance claim and potential government assistance.

• Excluding the flood, 2024 Adjusted EBITDA guidance would have been reduced by ~5% due to weaker market conditions.

• Free Cash Flow for 2024 is expected to exceed €100 million, excluding flood impact.

• Confident in delivering over €800 million Adjusted EBITDA in 2025, driven by recovery in Sierre, Neuf-Brisach Recycling Center ramp-up, improved aerospace contracts, and cost savings.