Constellium (CSTM) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw shipments fall 5% year-over-year to 352,000 tons and revenue decline 5% to €1.6 billion, mainly due to lower volumes in key segments and significant financial impact from the Valais flood.

• Net income dropped to €3 million from €64 million last year, reflecting lower gross profit and absence of a prior year gain on asset sale.

• Adjusted EBITDA was €110 million, including a €17 million negative impact from the Valais flood and €3 million non-cash metal price lag; excluding these, Adjusted EBITDA was €130 million, down from €168 million last year.

• Free cash flow was negative €10 million in Q3, impacted by the Valais flood; share buybacks continued with 1.2 million shares repurchased for $21 million in the quarter and 3.1 million shares for $60.4 million year-to-date.

• Market conditions deteriorated rapidly since July, with demand weakness spreading across most end markets and no signs of near-term recovery.

Financial highlights

• Q3 2024 revenue: €1.6 billion (down 5% year-over-year); shipments: 352,000 tons (down 5% year-over-year).

• Net income: €3 million (down from €64 million last year).

• Adjusted EBITDA: €110 million (including flood and metal price lag impacts); €130 million excluding these effects.

• Free cash flow: negative €10 million for Q3; €57 million year-to-date (down from €112 million), or €63 million excluding flood impact.

• Leverage: 2.8x at quarter-end, net debt €1,677 million, liquidity €778 million.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA expected at €580–600 million, excluding €30–40 million flood impact and metal price lag.

• Target of over €800 million Adjusted EBITDA delayed pending market recovery; cautious outlook for 2025 due to persistent demand weakness.

• Several EBITDA drivers for 2025: Neuf-Brisach recycling center (€35–40 million), Vision 2025 cost savings (>€25 million), aerospace contract repricing, and Muscle Shoals improvements.

• No free cash flow guidance for 2024 due to market uncertainty and timing of working capital release.

• Target leverage range of 1.5x–2.5x, with plans to return to this range in 2025.