Press Release - Constellium Reports Third Quarter 2021 Results

Constellium Reports Third Quarter 2021 Results

Paris, October 27, 2021 - Constellium SE (NYSE: CSTM) today reported results for the third quarter ended September 30, 2021.

Third quarter 2021 highlights:

 Shipments of 395 thousand metric tons, up 12% compared to Q3 2020  Revenue of €1.6 billion, up 35% compared to Q3 2020

 Net income of €99 million compared to a net income of €20 million in Q3 2020  Adjusted EBITDA of €143 million, up 14% compared to Q3 2020

• Cash from Operations of €91 million and Free Cash Flow of €40 million
• Investigating an increase in total planned European recycling center capacity to ~130kt
• Redeeming $200 million of 5.875% Senior Notes due 2026 in November

Nine months ended September 30, 2021 highlights:

 Shipments of 1.2 million metric tons, up 12% compared to YTD 2020  Revenue of €4.4 billion, up 22% compared to YTD 2020

 Net income of €255 million compared to a net loss of €43 million in YTD 2020  Adjusted EBITDA of €434 million, up 23% compared to YTD 2020

• Cash from Operations of €239 million and Free Cash Flow of €121 million
• Net debt / LTM Adjusted EBITDA of 3.6x at September 30, 2021

Jean-Marc Germain, Constellium's Chief Executive Officer said, "Constellium delivered solid results in the third quarter. Demand remained strong across our packaging and industrial end markets, while automotive demand continued to be hindered by the semiconductor shortage and aerospace demand remained subdued as expected. P&ARP matched the record Adjusted EBITDA of the second quarter supported by strong operational performance. A&T benefited from robust TID shipments and continued to demonstrate good cost control. AS&I also performed well with strong Industry shipments and solid cost control, which mitigated much of the weakness in automotive demand. Importantly, we continued to generate Free Cash Flow and further reduced our leverage in the third quarter."

"I want to commend the entire Constellium team for maintaining its focus especially in the face of continuing supply chain challenges and increasing inflationary pressures. This focus on execution leaves us well positioned to deliver long-term Adjusted EBITDA growth and meet our balance sheet leverage target. I remain confident in our trajectory and the substantial shareholder value creation opportunity in front of us," Mr. Germain continued.

Mr. Germain concluded, "We expect recent demand trends in our markets to continue through the remainder of 2021. Based on our current outlook, we now expect Adjusted EBITDA of €550 million to €560 million and Free Cash Flow in excess of €125 million in 2021."

 Group Summary

	Q3	Q3	Var.	YTD	YTD	Var.
	2021	2020	2021	2020
Shipments (k metric tons)	395	354	12%	1,186	1,057	12%
Revenue (€ millions)	1,587	1,172	35%	4,446	3,640	22%
Net income / (loss) (€ millions)	99	20	n.m.	255	(43)	n.m.
Adjusted EBITDA (€ millions)	143	126	14%	434	354	23%
Adjusted EBITDA per metric ton (€)	362	355	2%	366	335	9%

The difference between the sumof reported segment revenue and total group revenue includes revenue f ro m ce rt a i n n o n -co re activities and inter-segment eliminations. The difference between the sumof reported segment Adjusted EBITDA a n d t h e G ro u p Adjusted EBITDA is related to Holdings and Corporate.

For the third quarter of 2021, shipments of 395 thousand metric tons increased 12% compared to the third quarter of 2020 due to higher shipments in each of our segments. Revenue of €1.6 billion increased 35% compared to the third quarter of the prior year primarily due to higher metal prices and higher shipments, partially offset by weaker mix. Net income of €99 million increased €79 million compared to net income of €20 million in the third quarter of 2020. Adjusted EBITDA of €143 million increased 14% compared to the third quarter of last year due to stronger results in our Aerospace & Transportation and Packaging & Automotive Rolled Product segments.

For the first nine months of 2021, shipments of 1.2 million metric tons increased 12% compared to the first nine months of 2020 on higher shipments in each of our segments. Revenue of €4.4 billion increased 22% compared to the first nine months of 2020 primarily due to higher metal prices and higher shipments, partially offset by weaker mix. Net income of €255 million compares to a net loss of €43 million in the first nine months of 2020. Adjusted EBITDA of €434 million increased 23% compared to the first nine months of 2020 on stronger results in our Packaging & Automotive Rolled Products and Automotive Structures & Industry segments, partially offset by weaker results in our Aerospace & Transportation segment.

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 Results by Segment

 Packaging & Automotive Rolled Products (P&ARP)

	Q3	Q3	Var.	YTD	YTD	Var.
	2021	2020	2021	2020
Shipments (k metric tons)	281	258	9%	832	748	11%
Revenue (€ millions)	988	672	47%	2,661	1,989	34%
Adjusted EBITDA (€ millions)	94	85	10%	256	209	22%
Adjusted EBITDA per metric ton (€)	335	332	1%	308	280	10%

For the third quarter of 2021, Adjusted EBITDA increased 10% compared to the third quarter of 2020 primarily due to higher shipments and favorable metal costs, partially offset by unfavorable mix. Shipments of 281 thousand metric tons increased 9% compared to the third quarter of last year on higher shipments of packaging and specialty rolled products. Revenue of €988 million increased 47% compared to the third quarter of 2020 primarily due to higher metal prices and higher shipments.

For the first nine months of 2021, Adjusted EBITDA of €256 million increased 22% compared to the first nine months of 2020 primarily due to higher shipments, solid cost control, and favorable metal costs, partially offset by unfavorable foreign exchange translation. Shipments of 832 thousand metric tons increased 11% compared to the first nine months of 2020 on higher shipments of packaging, automotive, and specialty rolled products. Revenue of €2.7 billion increased 34% compared to the first nine months of 2020 primarily due to higher metal prices and higher shipments.

 Aerospace & Transportation (A&T)

	Q3	Q3	Var.	YTD	YTD	Var.
	2021	2020	2021	2020
Shipments (k metric tons)	52	36	45%	153	140	9%
Revenue (€ millions)	289	202	43%	821	811	1%
Adjusted EBITDA (€ millions)	20	10	91%	81	93	(14)%
Adjusted EBITDA per metric ton (€)	362	275	32%	525	666	(21)%

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For the third quarter of 2021, Adjusted EBITDA increased 91% compared to the third quarter of 2020 primarily due to higher shipments on strong TID demand and solid cost control, partially offset by weaker mix from lower aerospace shipments. Shipments of 52 thousand metric tons increased 45% compared to the third quarter of 2020 as higher transportation, industry and defense rolled product shipments more than offset lower aerospace rolled product shipments. Revenue of €289 million increased 43% compared to the third quarter of 2020 on higher shipments and higher metal prices, partially offset by weaker mix.

For the first nine months of 2021, Adjusted EBITDA of €81 million decreased 14% compared to the first nine months of 2020 primarily due to weaker mix from lower aerospace shipments, partially offset by strong cost control and higher transportation, industry, and defense shipments. Shipments of 153 thousand metric tons increased 9% compared to the first nine months of 2020 as higher shipments of transportation, industry, and defense rolled products more than offset lower shipments of aerospace rolled products. Revenue of €821 million increased 1% compared to the first nine months of 2020 primarily due to higher metal prices and higher shipments, partially offset by weaker mix.

 Automotive Structures & Industry (AS&I)

	Q3	Q3	Var.	YTD	YTD	Var.
	2021	2020	2021	2020
Shipments (k metric tons)	62	60	4%	201	169	19%
Revenue (€ millions)	326	304	7%	1,021	868	18%
Adjusted EBITDA (€ millions)	32	33	(0)%	111	66	69%
Adjusted EBITDA per metric ton (€)	528	551	(4)%	553	389	42%

For the third quarter of 2021, Adjusted EBITDA decreased by €1 million compared to the third quarter of 2020 primarily due to higher shipments and solid cost control, partially offset by weaker mix. Shipments of 62 thousand metric tons increased 4% compared to the third quarter of 2020 on higher shipments of other extruded products, partially offset by lower shipments of automotive extruded products. Revenue of €326 million increased 7% compared to the third quarter of 2020 primarily due to higher metal prices, partially offset by weaker mix.

For the first nine months of 2021, Adjusted EBITDA of €111 million increased 69% compared to the first nine months of 2020 primarily due to higher shipments, improved price and mix, and solid cost control. Shipments of 201 thousand metric tons increased 19% compared to the first nine months of 2020 on higher shipments of automotive and other extruded products. Revenue of €1.0 billion increased 18% compared to the first nine months of 2020 primarily due to higher shipments and higher metal prices, partially offset by weaker price and mix.

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 Net Income

For the third quarter of 2021, net income of €99 million compares to a net income of €20 million in the third quarter of the prior year. The change in net income is primarily related to higher gross profit and a favorable change in gains and losses on derivatives related to our metal hedging positions, partially offset by a change in income tax expense.

For the first nine months of 2021, net income of €255 million compares to a net loss of €43 million in the first nine months of the prior year. The change in net income is primarily related to higher gross profit and a favorable change in gains and losses on derivatives related to our metal hedging positions, partially offset by a change in income tax expense.

 Cash Flow

Free Cash Flow was €121 million in the first nine months of 2021 compared to €129 million in the first nine months of the prior year. The change was primarily due to an unfavorable change in working capital, partially offset by stronger Adjusted EBITDA and lower interest paid.

Cash flows from operating activities were €239 million for the first nine months of 2021 compared to cash flows from operating activities of €263 million in the first nine months of the prior year. Constellium decreased derecognized factored receivables by €30 million for the first nine months of 2021 compared to a decrease of €76 million in the first nine months of the prior year.

Cash flows used in investing activities were €118 million for the first nine months of 2021 compared to cash flows used in investing activities of €133 million in the first nine months of the prior year.

Cash flows used in financing activities were €241 million for the first nine months of 2021 compared to cash flows from financing activities of €122 million in the first nine months of the prior year. In the first nine months of 2021, Constellium issued $500 million of 3.75% Sustainability-Linked Senior Notes due 2029 and €300 million of 3.125% Sustainability - Linked Senior Notes due 2029 and used the proceeds and cash on the balance sheet to redeem the $650 million of 6.625% Senior Notes due 2025 and the $400 million of 5.75% Senior Notes due 2024. In the first nine months of 2020, Constellium raised $325 million of 5.625% Senior Notes due 2028 and used a portion of the proceeds to redeem the remaining balance of the 4.625% Senior Notes due 2021. In the same period, Constellium entered into a €180 million loan partially guaranteed by the French State and a CHF 20 million facility partially guaranteed by the Swiss Government.

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