Constellium (CSTM) Q4 2023 earnings summary

Executive summary

• FY 2023 Adjusted EBITDA reached a record €713 million, up 6% YoY; Free Cash Flow was €170 million and net income was €129 million.

• Q4 Adjusted EBITDA rose 15% YoY to €171 million despite lower shipments and revenue; Free Cash Flow was €58 million.

• Net debt declined to €1.664 billion and leverage to 2.3x at year-end, a multi-year low.

Financial highlights

• FY revenue was €7.239 billion, down 11% YoY; shipments fell 6% to 1.5 million tons, while VAR rose 7% to €2.924 billion.

• FY net income was €129 million versus €308 million; gross profit rose to €710 million from €672 million, and operating income was €337 million versus €334 million.

• Q4 revenue was €1.613 billion, down 13% YoY; shipments were 336 thousand tons, down 9%, and VAR was €681 million, down 2%.

• Q4 net income was €11 million versus €30 million; Adjusted EBITDA was €171 million versus €148 million in Q4 2022.

• FY diluted EPS was €0.84 versus €2.06; basic EPS was €0.85 versus €2.10.

Outlook and guidance

• 2024 Adjusted EBITDA guidance is €740–770 million, excluding non-cash metal price lag; net income reconciliation cannot be forecast without unreasonable efforts.

• 2024 Free Cash Flow is expected to exceed €130 million; capex is €370 million, cash interest ~€125 million, cash taxes ~€55 million, and TWC/Other is expected to use modest cash.

• The 2025 target is Adjusted EBITDA above €800 million; target leverage range is 1.5x–2.5x.

• Q1 2024 is expected to be weaker, partly due to January extreme cold and snow affecting Muscle Shoals operations.

• Inflationary pressures are expected to continue at more moderate levels; 2024 energy is largely secured at more favorable levels than 2023 but remains above historical averages.