UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2019
Commission File Number: 001-35931
Constellium N.V.
(Translation of registrants name into English)
Tupolevlaan 41-61,
1119 NW Schiphol-Rijk
The Netherlands
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☑ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes ☐ No ☑
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes ☐ No ☑
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto as Exhibit 99.1 is a copy of the press release of Constellium N.V. (the Company), dated April 24, 2019, announcing its financial results for the first quarter ended March 31, 2019.
Attached hereto as Exhibit 99.2 is a copy of a presentation of the Company, dated April 24, 2019, summarizing its financial results for the first quarter ended March 31, 2019.
Exhibit Index
No. |
Description |
|
99.1 | Press Release issued by Constellium N.V. on April 24, 2019. | |
99.2 | Presentation posted by Constellium N.V. on April 24, 2019. |
The information contained in Exhibit 99.1 of this Form 6-K is incorporated by reference into any offering circular or registration statement (or into any prospectus that forms a part thereof) filed by Constellium N.V. with the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CONSTELLIUM N.V. (Registrant) |
||||||
April 24, 2019 |
By: |
/s/ Peter R. Matt |
||||
Name: |
Peter R. Matt |
|||||
Title: |
Chief Financial Officer |
Exhibit 99.1
Constellium Reports First Quarter 2019 Results
Amsterdam April 24, 2019 Constellium N.V. (NYSE: CSTM) today reported results for the first quarter ended March 31, 2019.
First quarter 2019 highlights:
|
Shipments of 413 thousand metric tons increased 6% compared to Q1 2018 |
|
Revenue of 1.5 billion, up 11% compared to Q1 2018 |
|
Net income of 24 million compared to net loss of 24 million in Q1 2018 |
|
Adjusted EBITDA of 135 million, up 12% from Q1 2018 |
|
Positive Cash from Operations and Free Cash Flow in Q1 2019 |
|
Project 2019 run rate savings of 60 million as of March 31, 2019 |
|
Completed acquisition of partners interest in Bowling Green joint venture |
Jean-Marc Germain, Constelliums Chief Executive Officer said, Constellium delivered strong results in the first quarter of 2019. Adjusted EBITDA was a first quarter record and a 12% improvement over last years first quarter. Aerospace & Transportation had an exceptionally strong quarter, benefiting from strong end market demand and solid operational performance. Packaging & Automotive Rolled Products continues to execute on the ramp up of our automotive lines, with Bowling Green making notable strides. Automotive Structures & Industry results continue to be affected by costs related to the planned build out of our footprint. I am especially proud of our positive Free Cash Flow generation during the quarter. Our first quarter performance leaves me optimistic about our prospects for the remainder of 2019.
Mr. Germain continued, We are maintaining our guidance of Adjusted EBITDA growth of 8% to 10% and Free Cash Flow in excess of 50 million in 2019. Our focus is on executing our strategy and delivering our 2022 targets of Adjusted EBITDA over 700 million and leverage of 2.5x. We are committed to increasing shareholder value.
|
Group Summary |
Q1
2019 |
Q1
2018 |
Var. | ||||||||||
Shipments (k metric tons) |
413 | 388 | 6 | % | ||||||||
Revenue ( millions) |
1,536 | 1,386 | 11 | % | ||||||||
Net income / (loss) ( millions) |
24 | (24 | ) | n.m. | ||||||||
Adjusted EBITDA ( millions) |
135 | 121 | 12 | % | ||||||||
Adjusted EBITDA per metric ton () |
329 | 312 | 5 | % |
The difference between the sum of reported segment revenue and total group revenue includes revenue from certain non-core activities and inter-segment eliminations. The difference between the sum of reported segment Adjusted EBITDA and the Group Adjusted EBITDA is related to Holdings and Corporate.
For the first quarter of 2019, shipments of 413 thousand metric tons increased 6% compared to the first quarter of last year primarily due to the Packaging and Automotive Rolled Product segment. Revenue of 1.5 billion increased 11% compared to the first quarter of last year primarily due to the consolidation of Bowling Green and improved price and mix, partially offset by lower metal prices. Net income of 24 million improved compared to a net loss of 24 million in the first quarter of 2018 due largely to a favorable change in the value of unrealized derivatives and higher Adjusted EBITDA, partially offset by an unfavorable effect from metal lag. Adjusted EBITDA of 135 million increased 12% from the first quarter of last year primarily due to improved results in the Aerospace and Transportation and Packaging and Automotive Rolled Products segments, partially offset by weaker results in the Automotive Structures and Industry segment. The application of IFRS 16 in the first quarter of 2019 resulted in an increase of Adjusted EBITDA by 5 million compared to the first quarter of 2018.
2
|
Results by Segment |
|
Packaging & Automotive Rolled Products (P&ARP) |
Q1
2019 |
Q1
2018 |
Var. | ||||||||||
Shipments (k metric tons) |
281 | 259 | 9 | % | ||||||||
Revenue ( millions) |
828 | 738 | 12 | % | ||||||||
Adjusted EBITDA ( millions) |
59 | 52 | 14 | % | ||||||||
Adjusted EBITDA per metric ton () |
210 | 200 | 5 | % |
First quarter Adjusted EBITDA increased compared to the first quarter of 2018 due to higher shipments and favorable metal costs, partially offset by weaker price and mix and incremental costs from maintenance and the ramp up of our automotive programs.
For the first quarter of 2019, shipments of 281 thousand metric tons increased 9% from the first quarter of last year due to higher shipments of Packaging rolled products and Automotive rolled products, which now include Bowling Green shipments. Revenue of 828 million increased 12% compared to the first quarter of 2018 primarily due to the consolidation of Bowling Green revenues.
|
Aerospace & Transportation (A&T) |
Q1
2019 |
Q1
2018 |
Var. | ||||||||||
Shipments (k metric tons) |
66 | 64 | 2 | % | ||||||||
Revenue ( millions) |
378 | 343 | 10 | % | ||||||||
Adjusted EBITDA ( millions) |
52 | 36 | 44 | % | ||||||||
Adjusted EBITDA per metric ton () |
797 | 564 | 41 | % |
First quarter Adjusted EBITDA increased compared to the first quarter of 2018 due to improved price and mix and higher shipments on solid operational performance.
For the first quarter of 2019, shipments of 66 thousand metric tons increased 2% compared to the first quarter of last year on higher shipments of Aerospace rolled products. Revenue of 378 million increased 10% compared to the first quarter of 2018 primarily due to improved price and mix.
3
|
Automotive Structures & Industry (AS&I) |
Q1
2019 |
Q1
2018 |
Var. | ||||||||||
Shipments (k metric tons) |
66 | 65 | 1 | % | ||||||||
Revenue ( millions) |
344 | 317 | 8 | % | ||||||||
Adjusted EBITDA ( millions) |
29 | 36 | (19 | )% | ||||||||
Adjusted EBITDA per metric ton () |
448 | 558 | (20 | )% |
First quarter Adjusted EBITDA decreased compared to the first quarter of 2018 primarily due to higher costs largely related to new product launches and our footprint expansion, partially offset by higher shipments.
For the first quarter of 2019, shipments of 66 thousand metric tons increased 1% compared to the first quarter of last year on higher Automotive extruded product shipments. Revenue of 344 million increased 8% compared to the first quarter of 2018 primarily due to improved price and mix.
4
|
Net Income |
For the first quarter of 2019, net income of 24 million compared to a net loss of 24 million in the first quarter of last year. The change in net income is primarily attributable to a favorable change in the value of unrealized derivatives and higher Adjusted EBITDA, partially offset by an unfavorable effect from metal lag.
|
Cash Flow and Liquidity |
Free Cash Flow was an inflow of 73 million for the first quarter of 2019 compared to an outflow of 68 million in the same period in the prior year. The change was primarily due to improved working capital.
Cash flows from operating activities were 132 million for the first quarter of 2019 compared to cash flows used in operating activities of 24 million in the same period of the prior year. Constellium increased factored receivables by 24 million in the first quarter of 2019 compared to an increase of 8 million in the same period of the prior year.
Cash flows used in investing activities were 142 million for the first quarter of 2019 compared to cash flows used in investing activities of 44 million in the same period of the prior year. The first quarter of 2019 cash flows used in investing activities includes a net 83 million outflow related to the acquisition of our partners 49% interest in the Bowling Green joint venture.
Cash flows from financing activities were 66 million for the first quarter of 2019 compared to cash flows from financing activities of 10 million in the same period of the prior year.
Liquidity at March 31, 2019 was 539 million, comprised of 222 million of cash and cash equivalents and 317 million available under our committed lending facilities and factoring arrangements. Liquidity at December 31, 2018 was 669 million.
Net debt was 2,201 million at March 31, 2019 compared to 1,996 million at December 31, 2018. The increase in net debt includes 102 million related to the initial application of IFRS 16 on January 1, 2019.
|
Outlook |
We expect Adjusted EBITDA growth in a range of 8% to 10% in 2019 and expect over 700 million of Adjusted EBITDA in 2022. This guidance reflects the effect of the application of IFRS 16 and the consolidation of Bowling Green, both of which began in the first quarter of 2019.
We are not able to provide a reconciliation of this 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, net income in the future.
5
|
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. Others are more specific to our business and operations. These risks and uncertainties include, but are not limited to, economic downturn, the loss of key customers, suppliers or other business relationships; disruption to business operations; the inability to meet customer quality requirements; delayed readiness for the North American Auto Body Sheet market, the capacity and effectiveness of our hedging policy activities, failure to retain key employees, 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.
|
About Constellium |
Constellium (NYSE: CSTM) is a global sector leader that develops innovative, value added aluminium products for a broad scope of markets and applications, including aerospace, automotive and packaging. Constellium generated 5.7 billion of revenue in 2018.
Constelliums earnings materials for the first quarter ended March 31, 2019, are also available on the companys website ( www.constellium.com ).
6
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Revenue |
1,536 | 1,386 | ||||||
Cost of sales |
(1,392 | ) | (1,249 | ) | ||||
|
|
|
|
|||||
Gross profit |
144 | 137 | ||||||
|
|
|
|
|||||
Selling and administrative expenses |
(68 | ) | (58 | ) | ||||
Research and development expenses |
(12 | ) | (11 | ) | ||||
Other gains / (losses) - net |
16 | (47 | ) | |||||
|
|
|
|
|||||
Income from operations |
80 | 21 | ||||||
|
|
|
|
|||||
Finance costs - net |
(46 | ) | (38 | ) | ||||
Share of income / (loss) of joint-ventures |
5 | (3 | ) | |||||
|
|
|
|
|||||
Income / (loss) before income tax |
39 | (20 | ) | |||||
|
|
|
|
|||||
Income tax expense |
(15 | ) | (4 | ) | ||||
|
|
|
|
|||||
Net income / (loss) |
24 | (24 | ) | |||||
|
|
|
|
|||||
Net income / (loss) attributable to: |
||||||||
Equity holders of Constellium |
23 | (24 | ) | |||||
Non-controlling interests |
1 | | ||||||
|
|
|
|
|||||
Net income / (loss) |
24 | (24 | ) | |||||
|
|
|
|
|||||
Earnings per share attributable to the equity holders of Constellium, in euros per share |
||||||||
Basic |
0.17 | (0.18 | ) | |||||
Diluted |
0.17 | (0.18 | ) | |||||
Weighted average shares, in thousands |
||||||||
Basic |
135,984 | 134,473 | ||||||
Diluted |
138,912 | 134,473 |
7
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) (UNAUDITED)
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Net income / (loss) |
24 | (24 | ) | |||||
|
|
|
|
|||||
Other comprehensive income / (loss) |
||||||||
Items that will not be reclassified subsequently to the consolidated income statement |
||||||||
Remeasurement on post-employment benefit obligations |
(28 | ) | 25 | |||||
Income tax on remeasurement on post-employment benefit obligations |
7 | (6 | ) | |||||
Items that may be reclassified subsequently to the consolidated income statement |
||||||||
Cash flow hedge |
(7 | ) | 9 | |||||
Net investment hedges |
(1 | ) | | |||||
Income tax on cash flow hedge |
2 | (3 | ) | |||||
Currency translation differences |
5 | (3 | ) | |||||
|
|
|
|
|||||
Other comprehensive (loss) / income |
(22 | ) | 22 | |||||
|
|
|
|
|||||
Total comprehensive income / (loss) |
2 | (2 | ) | |||||
|
|
|
|
|||||
Attributable to: |
||||||||
Equity holders of Constellium |
1 | (2 | ) | |||||
Non-controlling interests |
1 | | ||||||
|
|
|
|
|||||
Total comprehensive income / (loss) |
2 | (2 | ) | |||||
|
|
|
|
8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
(in millions of Euros) |
At March 31,
2019 |
At December 31,
2018 |
||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
222 | 164 | ||||||
Trade receivables and other |
682 | 587 | ||||||
Inventories |
708 | 660 | ||||||
Other financial assets |
30 | 30 | ||||||
|
|
|
|
|||||
1,642 | 1,441 | |||||||
|
|
|
|
|||||
Non-current assets |
||||||||
Property, plant and equipment |
1,961 | 1,666 | ||||||
Goodwill |
453 | 422 | ||||||
Intangible assets |
70 | 70 | ||||||
Investments accounted for under the equity method |
1 | 1 | ||||||
Deferred income tax assets |
153 | 163 | ||||||
Trade receivables and other |
63 | 64 | ||||||
Other financial assets |
9 | 74 | ||||||
|
|
|
|
|||||
2,710 | 2,460 | |||||||
|
|
|
|
|||||
Total Assets |
4,352 | 3,901 | ||||||
|
|
|
|
|||||
Liabilities |
||||||||
Current liabilities |
||||||||
Trade payables and other |
1,153 | 968 | ||||||
Borrowings |
211 | 57 | ||||||
Other financial liabilities |
44 | 60 | ||||||
Income tax payable |
13 | 8 | ||||||
Provisions |
24 | 46 | ||||||
|
|
|
|
|||||
1,445 | 1,139 | |||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Trade payables and other |
24 | 27 | ||||||
Borrowings |
2,210 | 2,094 | ||||||
Other financial liabilities |
25 | 29 | ||||||
Pension and other post-employment benefit obligations |
641 | 610 | ||||||
Provisions |
94 | 94 | ||||||
Deferred income tax liabilities |
22 | 22 | ||||||
|
|
|
|
|||||
3,016 | 2,876 | |||||||
|
|
|
|
|||||
Total Liabilities |
4,461 | 4,015 | ||||||
|
|
|
|
|||||
Equity |
||||||||
Share capital |
3 | 3 | ||||||
Share premium |
420 | 420 | ||||||
Retained deficit and other reserves |
(541 | ) | (545 | ) | ||||
|
|
|
|
|||||
Equity attributable to equity holders of Constellium |
(118 | ) | (122 | ) | ||||
Non-controlling interests |
9 | 8 | ||||||
|
|
|
|
|||||
Total Equity |
(109 | ) | (114 | ) | ||||
|
|
|
|
|||||
Total Equity and Liabilities |
4,352 | 3,901 | ||||||
|
|
|
|
9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
(in millions of Euros) |
Share
Capital |
Share
Premium |
Remeasure-
ment |
Cash flow
hedges |
Foreign
Currency Translation reserve |
Other
reserves |
Retained
losses |
Total Equity
holders of Constellium |
Non-
controlling interests |
Total
equity |
||||||||||||||||||||||||||||||
At January 1, 2019 |
3 | 420 | (129 | ) | (8 | ) | 3 | 37 | (448 | ) | (122 | ) | 8 | (114 | ) | |||||||||||||||||||||||||
Net income |
| | | | | | 23 | 23 | 1 | 24 | ||||||||||||||||||||||||||||||
Other comprehensive (loss) / income |
| | (21 | ) | (6 | ) | 5 | | | (22 | ) | | (22 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive (loss) / income |
| | (21 | ) | (6 | ) | 5 | | 23 | 1 | 1 | 2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Transactions with equity holders |
||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
| | | | | 3 | | 3 | | 3 | ||||||||||||||||||||||||||||||
Transactions with non-controlling interests |
| | | | | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At March 31, 2019 |
3 | 420 | (150 | ) | (14 | ) | 8 | 40 | (425 | ) | (118 | ) | 9 | (109 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
(in millions of Euros) |
Share
Capital |
Share
Premium |
Remeasure-
ment |
Cash flow
hedges |
Foreign
Currency Translation reserve |
Other
reserves |
Retained
losses |
Total Equity
holders of Constellium |
Non-
controlling interests |
Total
equity |
||||||||||||||||||||||||||||||
At January 1, 2018 |
3 | 420 | (147 | ) | 13 | (7 | ) | 25 | (634 | ) | (327 | ) | 8 | (319 | ) | |||||||||||||||||||||||||
Change in accounting policies |
| | | | | | (2 | ) | (2 | ) | | (2 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At January 1, 2018 restated |
3 | 420 | (147 | ) | 13 | (7 | ) | 25 | (636 | ) | (329 | ) | 8 | (321 | ) | |||||||||||||||||||||||||
Net loss |
| | | | | | (24 | ) | (24 | ) | | (24 | ) | |||||||||||||||||||||||||||
Other comprehensive income / (loss) |
| | 19 | 6 | (3 | ) | | | 22 | | 22 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive income / (loss) |
| | 19 | 6 | (3 | ) | | (24 | ) | (2 | ) | | (2 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Transactions with equity holders |
||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
| | | | | 3 | | 3 | | 3 | ||||||||||||||||||||||||||||||
Transactions with non-controlling interests |
| | | | | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At March 31, 2018 |
3 | 420 | (128 | ) | 19 | (10 | ) | 28 | (660 | ) | (328 | ) | 8 | (320 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Net income / (loss) |
24 | (24 | ) | |||||
Adjustments |
||||||||
Depreciation and amortization |
57 | 44 | ||||||
Finance costs net |
46 | 38 | ||||||
Income tax expense |
15 | 4 | ||||||
Share of (income) / loss of joint-ventures |
(5 | ) | 3 | |||||
Unrealized (gains) / losses on derivatives - net and from remeasurement of monetary assets and liabilities - net |
(32 | ) | 53 | |||||
Losses on disposal |
1 | 1 | ||||||
Other net |
2 | 2 | ||||||
Interest paid |
(52 | ) | (36 | ) | ||||
Income tax paid |
(6 | ) | (1 | ) | ||||
Change in trade working capital |
||||||||
Inventories |
33 | (31 | ) | |||||
Trade receivables |
(75 | ) | (141 | ) | ||||
Trade payables |
113 | 82 | ||||||
Margin calls |
5 | | ||||||
Change in provisions and pension obligations |
(11 | ) | (5 | ) | ||||
Other working capital |
17 | (13 | ) | |||||
|
|
|
|
|||||
Net cash flows from / (used in) operating activities |
132 | (24 | ) | |||||
|
|
|
|
|||||
Purchases of property, plant and equipment |
(59 | ) | (47 | ) | ||||
Acquisition of subsidiaries net of cash acquired |
(83 | ) | | |||||
Other investing activities |
| 3 | ||||||
|
|
|
|
|||||
Net cash flows used in investing activities |
(142 | ) | (44 | ) | ||||
|
|
|
|
|||||
Proceeds from revolving credit facilities and other loans |
131 | 6 | ||||||
Payment of lease liabilities |
(63 | ) | (4 | ) | ||||
Transactions with non-controlling interests |
(2 | ) | | |||||
Other financing activities |
| 8 | ||||||
|
|
|
|
|||||
Net cash flows from financing activities |
66 | 10 | ||||||
|
|
|
|
|||||
Net increase / (decrease) in cash and cash equivalents |
56 | (58 | ) | |||||
Cash and cash equivalents - beginning of period |
164 | 269 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
2 | | ||||||
|
|
|
|
|||||
Cash and cash equivalents - end of period |
222 | 211 | ||||||
|
|
|
|
11
SEGMENT ADJUSTED EBITDA
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
P&ARP |
59 | 52 | ||||||
A&T |
52 | 36 | ||||||
AS&I |
29 | 36 | ||||||
Holdings and Corporate |
(5 | ) | (3 | ) | ||||
|
|
|
|
|||||
Total |
135 | 121 | ||||||
|
|
|
|
SHIPMENTS AND REVENUE BY PRODUCT LINE
(in k metric tons) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Packaging rolled products |
207 | 199 | ||||||
Automotive rolled products |
61 | 48 | ||||||
Specialty and other thin-rolled products |
13 | 12 | ||||||
Aerospace rolled products |
30 | 27 | ||||||
Transportation, industry and other rolled products |
36 | 37 | ||||||
Automotive extruded products |
30 | 29 | ||||||
Other extruded products |
36 | 36 | ||||||
|
|
|
|
|||||
Total shipments |
413 | 388 | ||||||
|
|
|
|
|||||
(in millions of Euros) |
||||||||
Packaging rolled products |
548 | 536 | ||||||
Automotive rolled products |
230 | 155 | ||||||
Specialty and other thin-rolled products |
50 | 47 | ||||||
Aerospace rolled products |
205 | 179 | ||||||
Transportation, industry and other rolled products |
173 | 164 | ||||||
Automotive extruded products |
188 | 169 | ||||||
Other extruded products |
155 | 148 | ||||||
Other and inter-segment eliminations |
(13 | ) | (12 | ) | ||||
|
|
|
|
|||||
Total revenue |
1,536 | 1,386 | ||||||
|
|
|
|
12
NON-GAAP MEASURES
Reconciliation of net income to Adjusted EBITDA (a non-GAAP measure)
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Net income / (loss) |
24 | (24 | ) | |||||
Income tax expense |
15 | 4 | ||||||
|
|
|
|
|||||
Income / (Loss) before income tax |
39 | (20 | ) | |||||
Finance costs - net |
46 | 38 | ||||||
Share of (income) / loss of joint-ventures |
(5 | ) | 3 | |||||
|
|
|
|
|||||
Income from operations |
80 | 21 | ||||||
Depreciation and amortization |
57 | 44 | ||||||
Unrealized (gains) / losses on derivatives |
(31 | ) | 54 | |||||
Unrealized exchange gains from remeasurement of monetary assets and liabilities - net |
(1 | ) | (1 | ) | ||||
Share based compensation |
3 | 3 | ||||||
Metal price lag (A) |
18 | (4 | ) | |||||
Start-up and development costs (B) |
2 | 4 | ||||||
Losses on disposals |
1 | | ||||||
Bowling Green one-time costs related to the acquisition (C) |
6 | | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
135 | 121 | ||||||
|
|
|
|
(A) |
Metal price lag represents the financial impact of the timing difference between when aluminium prices included within Constellium Revenues are established and when aluminium purchase prices included in Cost of sales are established. The Group accounts for inventory using a weighted average price basis and this adjustment aims to remove the effect of volatility in LME prices. The calculation of the Group metal price lag adjustment is based on an internal standardized methodology calculated at each of Constelliums manufacturing sites and is primarily calculated as the average value of product recorded in inventory, which approximates the spot price in the market, less the average value transferred out of inventory, which is the weighted average of the metal element of cost of sales, based on the quantity sold in the period. |
(B) |
For the three months ended March 31, 2019 and 2018, start-up and development costs include 2 million and 4 million, respectively, related to new projects in our AS&I operating segment. |
(C) |
For the three-months ended March 31, 2019, Bowling Green one-time costs related to the acquisition include the non-cash reversal of the inventory step up. |
13
Reconciliation of net cash flows from operating activities to Free Cash Flow (a non-GAAP measure)
(in millions of Euros) |
Three months ended
March 31, 2019 |
Three months ended
March 31, 2018 |
||||||
Net cash flows from / (used in) operating activities |
132 | (24 | ) | |||||
Purchases of property, plant and equipment |
(59 | ) | (47 | ) | ||||
Equity contributions and loans to joint-ventures |
| | ||||||
Other investing activities |
| 3 | ||||||
|
|
|
|
|||||
Free Cash Flow |
73 | (68 | ) | |||||
|
|
|
|
Reconciliation of borrowings to Net debt (a non-GAAP measure)
(in millions of Euros) |
At March 31, 2019 | At December 31, 2018 | ||||||
Borrowings |
2,421 | 2,151 | ||||||
Fair value of cross currency basis swaps, net of margin calls |
2 | 9 | ||||||
Cash and cash equivalents |
(222 | ) | (164 | ) | ||||
Cash pledged for issuance of guarantees |
| | ||||||
|
|
|
|
|||||
Net debt |
2,201 | 1,996 | ||||||
|
|
|
|
14
Non-GAAP measures
In addition to the results reported in accordance with International Financial Reporting Standards (IFRS), this press release includes information regarding certain financial measures which are not prepared in accordance with IFRS (non-GAAP measures). The non-GAAP measures used in this press release are: Adjusted EBITDA, Adjusted EBITDA per metric ton, Free Cash Flow and Net debt. Reconciliations to the most directly comparable IFRS financial measures are presented in the schedules to this press release. We believe these non-GAAP measures are important supplemental measures of our operating and financial performance. By providing these measures, together with the reconciliations, we believe we are enhancing investors understanding of our business, our results of operations and our financial position, as well as assisting investors in evaluating the extent to which we are executing our strategic initiatives. However, these non-GAAP financial measures supplement our IFRS disclosures and should not be considered an alternative to the IFRS measures and may not be comparable to similarly titled measures of other companies.
In considering the financial performance of the business, management and our chief operational decision maker, as defined by IFRS, analyze the primary financial performance measure of Adjusted EBITDA in all of our business segments. The most directly comparable IFRS measure to Adjusted EBITDA is our net income or loss for the period. We believe Adjusted EBITDA, as defined below, is useful to investors and is used by our management for measuring profitability because it excludes the impact of certain non-cash charges, such as depreciation, amortization, impairment and unrealized gains and losses on derivatives as well as items that do not impact the day-to-day operations and that management in many cases does not directly control or influence. Therefore, such adjustments eliminate items which have less bearing on our core operating performance.
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 is defined as income / (loss) from continuing operations before income taxes, results from joint ventures, net finance costs, other expenses and depreciation and amortization as adjusted to exclude restructuring costs, impairment charges, unrealized gains or losses on derivatives and on foreign exchange differences on transactions which do not qualify for hedge accounting, metal price lag, share based compensation expense, effects of certain purchase accounting adjustments, start-up and development costs or acquisition, integration and separation costs, certain incremental costs and other exceptional, unusual or generally non-recurring items.
Adjusted EBITDA is the measure of performance used by management in evaluating our operating performance, in preparing internal forecasts and budgets necessary for managing our business and, specifically in relation to the exclusion of the effect of favorable or unfavorable metal price lag, this measure allows management and the investor to assess operating results and trends without the impact of our accounting for inventories. We use the weighted average cost method in accordance with IFRS which leads to the purchase price paid for metal impacting our cost of goods sold and therefore profitability in the period subsequent to when the related sales price impacts our revenues. Management believes this measure also provides additional information used by our lending facilities providers with respect to the ongoing performance of our underlying business activities. Historically, we have used Adjusted EBITDA in calculating our compliance with financial covenants under certain of our loan facilities.
15
Adjusted EBITDA is not a presentation made in accordance with IFRS, is not a measure of financial condition, liquidity or profitability and should not be considered as an alternative to profit or loss for the period, revenues or operating cash flows determined in accordance with IFRS.
Free Cash Flow is defined as net cash flow from operating activities less capital expenditure, equity contributions and loans to joint ventures and other investing activities. Management believes that Free Cash Flow is a useful measure of the net cash flow generated or used by the business as it takes into account both the cash generated or consumed by operating activities, including working capital, and the capital expenditure requirements of the business. However, Free Cash Flow is not a presentation made in accordance with IFRS and should not be considered as an alternative to operating cash flows determined in accordance with IFRS. Free Cash Flow has certain inherent limitations, including the fact that it does not represent residual cash flows available for discretionary spending, notably because it does not reflect payments required for debt service or lease obligations.
Net debt is defined as borrowings plus or minus the fair value of cross currency basis swaps net of margin calls less cash and cash equivalents and cash pledged for the issuance of guarantees. Management believes that Net debt is a useful measure of indebtedness because it takes into account the cash and cash equivalent balances held by the Company as well as the total external debt of the Company. Net debt is not a presentation made in accordance with IFRS, and should not be considered as an alternative to borrowings determined in accordance with IFRS.
16
First Quarter 2019 Earnings Call April 24, 2019 Exhibit 99.2
Certain statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This presentation 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. Others are more specific to our business and operations. These risks and uncertainties include, but are not limited to, economic downturn, the loss of key customers, suppliers or other business relationships; disruption to business operations; the inability to meet customer quality requirements; delayed readiness for the North American Auto Body Sheet market, the capacity and effectiveness of our hedging policy activities, failure to retain key employees, 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 presentation. 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. Forward-looking statements
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.
Jean-Marc Germain Chief Executive Officer
Q1 2019 Highlights Total Shipments of 413 thousand tons up 6% compared to Q1 2018 Successfully executing on our automotive strategy with shipments up 18% YoY Revenue increased 11% YoY to €1.5 billion on the consolidation of Bowling Green and improved price and mix Net income of €24 million compared to net loss of €24 million in Q1 2018 Adjusted EBITDA of €135 million increased 12% YoY Cash from Operations of €132 million and Free Cash Flow of €73 million in Q1 2019 Project 2019 run rate cost savings of €60 million Maintaining 2019 Adjusted EBITDA and Free Cash Flow guidance
Peter Matt Chief Financial Officer
Adjusted EBITDA Bridge Q1 2019 vs. Q1 2018 € millions +12% Q1 2018 Q1 2019
Q1 2019 Highlights Adjusted EBITDA of €59 million Increased Automotive and Packaging shipments Favorable metal costs and FX translation offset by higher costs from the ramp up of automotive programs Ramp up of FT3 in Neuf-Brisach and Bowling Green on track Packaging and Automotive Rolled Products Q1 2019 Q1 2018 Var. Shipments (kt) 281 259 9% Revenues (€m) 828 738 12% Adj. EBITDA (€m) 59 52 14% Adj. EBITDA (€ / t) 210 200 5% Adjusted EBITDA Bridge € in millions Q1 2018 Q1 2019
Q1 2019 Highlights Adjusted EBITDA of €52 million Increased Aerospace shipments Improved price and mix, largely on TID shipments Solid operational performance Favorable FX translation Aerospace and Transportation Q1 2019 Q1 2018 Var. Shipments (kt) 66 64 2% Revenues (€m) 378 343 10% Adj. EBITDA (€m) 52 36 44% Adj. EBITDA (€ / t) 797 564 41% € in millions Adjusted EBITDA Bridge Q1 2018 Q1 2019 –
Q1 2019 Highlights Automotive Structures and Industry Adjusted EBITDA of €29 million Higher Automotive shipments Higher costs related to new product launches and footprint expansion Q1 2019 Q1 2018 Var. Shipments (kt) 66 65 1% Revenues (€m) 344 317 8% Adj. EBITDA (€m) 29 36 (19)% Adj. EBITDA (€ / t) 448 558 (20)% € in millions Adjusted EBITDA Bridge Q1 2018 Q1 2019 –
Project 2019 Three Pillars Cost Reduction €60 million of annual run-rate cost savings achieved as of March 31, 2019 Target of €75 million of annual run-rate cost savings by December 31, 2019 Working Capital Improvement Committed to improvement of working capital turns Expect working capital investments related to the ramp up of growth projects Capital Discipline Capex guidance of €265 million for 2019 Maintenance spending of €150-175 million 80 Project 2019 continuing to provide benefits
Net Debt and Liquidity € in millions Net Debt and Leverage Maturity Profile Liquidity Debt / Liquidity Highlights Remain committed to deleveraging The increase in leverage due to acquisition of Bowling Green and application of IFRS 16 was ~0.5x Expect leverage below 4.0x by the end of 2019 Strong Cash from Operations and Free Cash Flow generation in Q1 2019 Ample liquidity of over €500 million € in millions € in millions Leverage: Net Debt / LTM Adjusted EBITDA
Jean-Marc Germain Chief Executive Officer
End Market Updates Automotive: North America: Market SAAR expected to decline slightly in 2019 Europe: Market expected to remain flat in 2019 Demand for luxury cars, light trucks, and SUVs remains strong Penetration driving increased demand for rolled and extruded aluminium products Aerospace: Sustained OEM build rates OEM backlogs remain near record highs Packaging: Market remains stable ABS conversions expected to help North American market balance over the medium to long term Conversion from steel to aluminium driving growth in Europe Focus on sustainability expected to increase demand for aluminium cans Other Markets Transportation, Industry and Defense North America: Strong defense market; stable transportation and industry markets Europe: Strong defense market; stable industry market Industry (Extrusions) Europe: Strong demand across end markets
Financial Guidance and Outlook Targets for 2019 : Adjusted EBITDA growth of 8% to 10% Free Cash Flow in excess of €50 million Targets for 2022: Adjusted EBITDA of over €700 million Net Debt / Adjusted EBITDA of 2.5x Focused on delivering on our strategy and increasing shareholder value
Q&A
Appendix
Net Debt Reconciliation March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 Borrowings 2,421 2,151 2,103 2,184 2,093 Fair value of cross currency basis swaps, net of margin calls 2 9 25 20 46 Cash and cash equivalents (222) (164) (279) (166) (211) Cash pledged for issuance of guarantees — — — — (1) Net Debt 2,201 1,996 1,849 2,038 1,927 LTM Adjusted EBITDA 512 498 498 495 471 Leverage 4.3x 4.0x 3.7x 4.1x 4.1x € millions
Reconciliation of Net Income to Adjusted EBITDA € millions Three months ended March 31, 2019 Three months ended March 31, 2018 Net income / (loss) 24 (24) Income tax expense 15 4 Income / (loss) before income tax 39 (20) Finance costs – net 46 38 Share of (income) / loss of joint-ventures (5) 3 Income from operations 80 21 Depreciation and amortization 57 44 Unrealized (gains) / losses on derivatives (31) 54 Unrealized exchange gains from remeasurement of monetary assets and liabilities – net (1) (1) Share based compensation costs 3 3 Metal price lag 18 (4) Start-up and development costs 2 4 Losses on disposals 1 — Bowling Green one-time costs related to the acquisition 6 — Adjusted EBITDA 135 121
Reconciliation of Net Income to Adjusted EBITDA € millions Twelve months ended March 31, 2019 Twelve months ended December 31, 2018 Twelve months ended September 30, 2018 Twelve months ended June 30, 2018 Twelve months ended March 31, 2018 Net income / (loss) 239 190 168 (28) (68) Income tax expense 43 32 54 70 57 Income / (loss) before income tax 282 222 222 42 (11) Finance costs – net 157 149 237 236 239 Share of loss of joint-ventures 24 33 30 28 26 Income from operations 463 404 489 306 254 Depreciation and amortization 210 197 187 177 172 Restructuring costs 1 1 2 2 2 Unrealized losses / (gains) on derivatives (1) 84 36 4 25 Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities – net — — 1 (2) (1) (Gain) / loss on pension plan amendments (36) (36) (39) 2 2 Share based compensation costs 12 12 11 11 9 Metal price lag 22 — (19) (26) (13) Start-up and development costs 19 21 19 16 16 Manufacturing system and process transformation costs — — 1 1 2 (Gains) / losses on disposals (185) (186) (190) 5 2 Bowling Green one-time costs related to the acquisition 6 — — — — Other 1 1 — (1) 1 Adjusted EBITDA 512 498 498 495 471
Borrowings Table € millions March 31, 2019 December 31, 2018 Nominal Value in Currency Nominal Rate Effective Rate Nominal Value in Euros (Arrangement fees) Accrued Interests Carrying Value Carrying Value Secured Pan US ABL (due 2022) — Floating 4.22% 155 — — 155 — Secured Inventory Based Facility (due 2019) — Floating — — — — — — Senior Unsecured Notes Constellium N.V. (Issued May 2014, due 2024) $400 5.75% 6.26% 356 (4) 8 360 348 Constellium N.V. (Issued May 2014, due 2021) €300 4.63% 5.16% 300 (2) 5 303 300 Constellium N.V. (Issued February 2017, due 2025) $650 6.63% 7.13% 579 (11) 3 571 568 Constellium N.V. (Issued November 2017, due 2026) $500 5.88% 6.26% 445 (7) 3 441 440 Constellium N.V. (Issued November 2017, due 2026) €400 4.25% 4.57% 400 (6) 2 396 399 Unsecured Revolving Credit Facility (due 2021) — Floating — — — — — — Lease liabilities — — — 174 — — 174 73 Other loans — — — 21 — — 21 23 Total Borrowings 2,430 (30) 21 2,421 2,151 Of which non-current 2,210 2,094 Of which current 211 57