Third Quarter 2020 Earnings Call

October 27, 2020

Forward-looking statements

Certain statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may contain "forward-looking statements" with respect to our business, results of operations and financial condition, and our expectations or beliefs concerning future events and conditions. You can identify forward-looking statements because they contain words such as, but not limited to, "believes," "expects," "may," "should," "approximately," "anticipates," "estimates," "intends," "plans," "targets," likely," "will," "would," "could" and similar expressions (or the negative of these terminologies or expressions). All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in our industry and markets, while others are more specific to our business and operations. These risks and uncertainties include, but are not limited to: market competition; economic downturn; disruption to business operations, including the length and magnitude of disruption resulting from the global COVID-19 pandemic; the inability to meet customer demand and quality requirements; the loss of key customers, suppliers or other business relationships; the capacity and effectiveness of our hedging policy activities; the loss of key employees; levels of indebtedness which could limit our operating flexibility and opportunities; and other risk factors set forth under the heading "Risk Factors" in our Annual Report on Form 20-F, and as described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission. The occurrence of the events described and the achievement of the expected results depend on many events, some or all of which are not predictable or within our control. Consequently, actual results may differ materially from the forward-looking statements contained in this

press release. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or

otherwise, except as required by law.

Third Quarter 2020 - Earnings Call

2

Non-GAAP measures

This presentation includes information regarding certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA per metric ton, Free Cash Flow and Net debt. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of Constellium and in comparison to other companies, many of which present an adjusted EBITDA-related performance measure when reporting their results. Adjusted EBITDA, Adjusted EBITDA per Metric Ton, Free Cash Flow and Net debt are not presentations made in accordance with IFRS and may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures supplement our IFRS disclosures and should not be considered an alternative to the IFRS measures. This presentation provides a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. We are not able to provide a reconciliation of Adjusted EBITDA guidance to net income, the comparable GAAP measure, because certain items that are excluded from Adjusted EBITDA cannot be reasonably predicted or are not in our control. In particular, we are unable to forecast the timing or magnitude of realized and unrealized gains and losses on derivative instruments, metal lag, impairment or restructuring charges, or taxes without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, our net income in the future.

Third Quarter 2020 - Earnings Call

3

Jean-Marc Germain

Chief Executive Officer

Q3 2020 Highlights

  • Shipments of 354 thousand tons, down 11% compared to Q3 2019
  • Revenue decreased 20% YoY to €1.2 billion
  • Net income of €20 million compared to net income of €1 million in Q3 2019
  • Adjusted EBITDA of €126 million decreased 9% YoY
    • Adjusted EBITDA of €354 million in YTD 2020, down 20% YoY
  • Cash from Operations of €111 million and Free Cash Flow of €75 million
    • Cash from Operations of €263 million and Free Cash Flow of €129 million in YTD 2020
  • Net Debt / LTM Adjusted EBITDA of 4.3x at September 30, 2020

Expected 2020 Adj. EBITDA of €450-460 million and Free Cash Flow of €100-150 million

Third Quarter 2020 - Earnings Call

5

Peter Matt

Chief Financial Officer

Adjusted EBITDA Bridges

Q3 2020 vs. Q3 2019

(9)%

€ millions

YTD 2020 vs. YTD 2019

(20)%

€ millions

Third Quarter 2020 - Earnings Call

7

Packaging and Automotive Rolled Products

Q3 2020 Commentary

  • Adjusted EBITDA of €85 million
    • Lower packaging shipments in Europe due to temporary COVID-19 conditions
    • Strong cost control, notably improved recovery and lower labor and maintenance costs
    • Unfavorable FX translation

Q3

Q3

2020

2019

Var.

Shipments (kt)

258

277

(7)%

Revenues (€m)

672

789

(15)%

Adj. EBITDA (€m)

85

72

20%

Adj. EBITDA (€ / t)

332

259

28%

Adjusted EBITDA Bridge

€ in millions

Third Quarter 2020 - Earnings Call

8

Aerospace and Transportation

Q3 2020 Commentary

  • Adjusted EBITDA of €10 million
    • Lower shipments of aerospace and TID products
    • Slightly improved price and mix
    • Strong cost control, notably lower labor and maintenance costs
    • Unfavorable FX translation

Q3

Q3

2020

2019

Var.

Shipments (kt)

36

57

(37)%

Revenues (€m)

202

351

(43)%

Adj. EBITDA (€m)

10

43

(77)%

Adj. EBITDA (€ / t)

275

740

(63)%

Adjusted EBITDA Bridge

€ in millions

Third Quarter 2020 - Earnings Call

9

Automotive Structures and Industry

Q3 2020 Commentary

  • Adjusted EBITDA of €33 million
    • Lower industry shipments
    • Slightly improved price and mix
    • Strong cost control, notably improved labor, maintenance and subcontractor costs
    • Unfavorable FX translation

Q3

Q3

2020

2019

Var.

Shipments (kt)

60

61

(3)%

Revenues (€m)

304

336

(9)%

Adj. EBITDA (€m)

33

26

25%

Adj. EBITDA (€ / t)

551

428

29%

Adjusted EBITDA Bridge

€ in millions

Third Quarter 2020 - Earnings Call 10

Cost Performance

Q3

Q3

Cost Highlights

2020

2019

Var.

} 4% decremental Adj. EBITDA margin with

Revenues (€m)

1,172

1,461

(20)%

strong performance by all segments

} ~€65 million of cost reductions compared to

Costs (€m)

1,046

1,322

(21)%

Q3 2019, excluding metal and depreciation

} Includes €5 million benefit from

Adj. EBITDA (€m)

126

139

(9)%

European COVID-19 State aid

Cost Flex* Performance in Q3

Horizon 2022 Target: €75 million annualized cost savings

* Represents change in costs over change in revenue for Q3 2020 compared to Q3 2019. See

Third Quarter 2020 - Earnings Call 11

formula at right and appendix for reconciliation. In the third quarter 2020, cost flex >100%

represents costs falling faster than revenues, partially due to structural cost reductions.

Net Debt and Liquidity

Net Debt and Leverage

€ in millions

Leverage: Net Debt / LTM Adjusted EBITDA

Maturity Profile

€ in millions

Debt / Liquidity Highlights

 Committed to deleveraging

 FCF generation of €75 million in Q3 2020  YTD 2020: €129 million

 Liquidity of €1.0 billion

 No near term bond maturities

Liquidity

€ in millions

*Does not include State Loans

Significant liquidity with no near term bond maturities

Third Quarter 2020 - Earnings Call 12

Jean-Marc Germain

Chief Executive Officer

End Market Updates

Market

Highlights

% LTM

Revenue

} Market strong in North America; stable in Europe

}

Recession resilient

Packaging

}

Focus on sustainability driving secular growth in demand for aluminium cans

39%

} Conversion from steel to aluminium continues in Europe

} Conversions to ABS to help North American market over the medium to long term

} OEMs at or near 2019 production rates

Automotive

} Lightweighting expected to continue driving increased demand for rolled and extruded

27%

aluminum products

} Consumer preference for light trucks, SUVs, and luxury cars

} Near-term outlook uncertain due to COVID-19 effect and 737-Max

Aerospace

} OEMs reducing build rates and adjusting order patterns accordingly

14%

}

OEM backlogs declining

} Expect passenger traffic to recover in medium to long-term based on past precedent

Transportation, Industry and Defense:

Other

} North America: Strong defense market; improving transportation and industry markets

}

Europe: Stable defense market; weak industry market

20%

Specialties

Industry (Extrusions)

} Europe: Improving industry and transportation markets

Diversified portfolio of end market exposures

Third Quarter 2020 - Earnings Call 14

Q&A

Third Quarter 2020 - Earnings Call 15

Appendix

Third Quarter 2020 - Earnings Call 16

Net Debt Reconciliation

€ millions

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019 September 30, 2019

Borrowings

2,456

2,536

2,399

2,361

2,370

Fair value of cross currency basis

26

5

1

6

(5)

swaps, net of margin calls

Cash and cash equivalents

(432)

(378)

(270)

(184)

(152)

Cash pledged for issuance of

-

-

-

-

-

guarantees

Net Debt

2,050

2,163

2,130

2,183

2,213

LTM Adjusted EBITDA

475

488

574

562

545

Leverage

4.3x

4.4x

3.7x

3.9x

4.1x

Third Quarter 2020 - Earnings Call 17

Reconciliation of Net Income to Adjusted EBITDA

Three months ended September 30,

Nine months ended September 30,

€ millions

2020

2019

2020

2019

Net income / (loss)

20

1

(43)

42

Income tax expense / (benefit)

7

4

(12)

28

Income / (loss) before income tax

27

5

(55)

70

Finance costs - net

37

46

124

135

Share of income of joint-ventures

-

-

-

(5)

Income from operations

64

51

69

200

Depreciation and amortization

64

66

196

183

Impairment of assets

9

-

14

-

Restructuring costs

2

1

13

2

Unrealized (gains) / losses on derivatives

(9)

4

1

(13)

Unrealized exchange (gains) / losses from remeasurement of monetary

(2)

-

(1)

-

assets and liabilities - net

Losses on pension plans amendments

-

1

2

1

Share-based compensation costs

3

5

11

12

Metal price lag

(7)

9

33

40

Start-up and development costs

1

3

5

8

Losses on disposals

2

-

2

2

Bowling Green one-time costs related to the acquisition

-

-

-

6

Other

(1)

(1)

9

-

Adjusted EBITDA

126

139

354

441

Third Quarter 2020 - Earnings Call 18

Reconciliation of Net Income to Adjusted EBITDA

Twelve

Twelve

Twelve

Twelve

Twelve

months ended

months ended

months ended

months ended

months ended

September 30,

June 30,

March 31,

December 31,

September 30,

€ millions

2020

2020

2020

2019

2019

Net (loss) / income

(21)

(40)

8

64

(16)

Income tax (benefit) / expense

(22)

(25)

(4)

18

30

(Loss) / income before income tax

(43)

(65)

4

82

14

Finance costs - net

164

173

174

175

167

Share of loss / (income) of joint-ventures

3

3

3

(2)

6

Income from operations

124

111

181

255

187

Depreciation and amortization

269

276

265

256

239

Impairment of assets

14

-

-

-

-

Restructuring costs

15

14

4

4

2

Unrealized (gains) / losses on derivatives

(19)

(6)

51

(33)

18

Unrealized exchange (gains) / losses from

(1)

1

3

-

-

remeasurement of monetary assets and liabilities - net

Losses / (gains) on pension plan amendments

-

1

(1)

(1)

4

Share based compensation costs

15

17

16

16

15

Metal price lag

39

55

43

46

53

Start-up and development costs

8

10

11

11

13

Losses / (gains) on disposals

3

1

2

3

7

Bowling Green one-time costs related to the acquisition

(1)

(1)

(1)

5

6

Other

9

9

-

-

1

Adjusted EBITDA

475

488

574

562

545

Third Quarter 2020 - Earnings Call 19

Borrowings Table

At September 30,

At December 31,

2020

2019

Nominal

Nominal

Value in

Nominal

Effective

Value in

(Arrangement

Accrued

Carrying

Carrying

Currency

€ millions

Rate

Rate

Euros

fees)

Interests

Value

Value

Secured Pan US ABL (due 2022)

$

-

Floating

3.45

%

-

-

-

-

127

Secured US DDTL (due 2022)

$

-

Floating

-

-

-

-

-

-

Secured French loan (due 2025)

€

180

Floating

2.50

%

180

-

-

180

-

Secured Inventory Based Facility (due 2021)

-

Floating

-

-

-

-

-

-

Senior Unsecured Notes

Constellium SE

Due 2024

$

400

5.75

%

6.26

%

342

(3)

7

346

355

Due 2021

€

-

4.63

%

5.16

%

-

-

-

-

200

Due 2025

$

650

6.63

%

7.13

%

554

(8)

3

549

582

Due 2026

$

500

5.88

%

6.26

%

427

(6)

3

424

449

Due 2026

€

400

4.25

%

4.57

%

400

(5)

2

397

400

Due 2028

$

325

5.63

%

6.05

%

278

(6)

5

277

-

Unsecured Revolving Credit Facility (due 2021)

-

Floating

-

-

-

-

-

-

Unsecured Credit facility Switzerland (due 2025)

CHF 20

1.18

%

1.18

%

18

-

-

18

-

Unsecured Credit facility Germany (due 2022)

-

2% - 2.12%

- %

-

-

-

-

-

Lease liabilities

-

-

-

197

-

1

198

188

Other loans

-

-

-

65

-

2

67

60

Total Borrowings

2,461

(28)

23

2,456

2,361

Of which non-current

2,371

2,160

Of which current

85

201

Third

Quarter 2020 - Earnings Call

20

Liquidity

At

September 30, 2020

€ millions

Cash and cash equivalents

432

Factoring Facilities

49

Inventory Based Facility

75

Pan-U.S. ABL

255

Delayed Draw Term loan

142

Other

65

Total Liquidity

1,018

Third Quarter 2020 - Earnings Call 21

Cost Flex Reconciliation

Third Quarter 2020 - Earnings Call 22

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Constellium SE published this content on 27 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2020 10:14:03 UTC