Slide 1: Third Quarter 2023 Earnings Call
Third Quarter 2023 Earnings Call October 25, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 opera
Slide 3: Non-GAAP Measures
Non-GAAP Measures This presentation includes information regarding certain non-GAAP financial measures, including VAR, 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
Slide 4: Jean-Marc Germain, Chief Executive Officer
Jean-Marc Germain Chief Executive Officer
Slide 5: Q3 2023 Highlights
Q3 2023 Highlights Adjusted EBITDA Bridge ØSafety: YTD recordable case rate(1) of 2.1 € in millions ØShipments: 369kt (-5% YoY) ØRevenue: €1.7 billion (-15% YoY) ØValue-Added Revenue: €704 million (+5% YoY) +5% ØNet income: €64 million ØRecord Q3 Adj. EBITDA: €168 million (+5% YoY) ØRecord Q3 Adj. E
Slide 6: Jack Guo, Chief Financial Officer
Jack Guo Chief Financial Officer
Slide 7: Value-Added Revenue Bridge Q3 2023 vs. Q3 2022
Value-Added Revenue Bridge Q3 2023 vs. Q3 2022 € millions +5%
Slide 8: Packaging & Automotive Rolled Products Q3 2023 Performance
Packaging & Automotive Rolled Products Q3 2023 Performance ØAdjusted EBITDA of €67 million ØHigher automotive shipments; lower packaging and specialty shipments ØImproved price and mix ØHigher operating costs mainly due to inflation, operating challenges at Muscle Shoals and unfavorable metal costs
Slide 9: Aerospace & Transportation Q3 2023 Performance
Aerospace & Transportation Q3 2023 Performance ØAdjusted EBITDA of €79 million ØHigher aerospace shipments; lower TID shipments ØImproved price and mix ØHigher operating costs mainly due to inflation ØUnfavorable FX translation Q3 Q3 2023 2022 %r Shipments (kt) 53 55 (3)% Revenue (€m) 404 432 (6)% A
Slide 10: Automotive Structures & Industry Q3 2023 Performance
Automotive Structures & Industry Q3 2023 Performance ØAdjusted EBITDA of €26 million ØLower industry and automotive shipments ØImproved price and mix ØHigher operating costs mainly due to inflation Q3 Q3 2023 2022 %r Shipments (kt) 55 65 (15)% Revenue (€m) 370 473 (22)% Adj. EBITDA (€m) 26 35 (27)%
Slide 11: Managing the Current Inflationary Environment
Managing the Current Inflationary Environment Cost Pressures and Mitigants â–ª Broad based and significant inflationary pressures expected to continue throughout 2023 – Labor and other non-metal costs higher, particularly European energy â–ª A number of tools working to offset inflation: – Solid cos
Slide 12: Free Cash Flow
Free Cash Flow YTD 2023 Free Cash Flow Highlights ØFree Cash Flow of €112 million YTD 2023, with strong performance in Q3 of €78 million; compared to YTD 2022: ØStronger Adjusted EBITDA ØHigher capital expenditures ØHigher cash interest YTD 2023 YTD 2022 € in millions Net cash flows from 321 323 ope
Slide 13: Net Debt and Liquidity
Net Debt and Liquidity Net Debt and Leverage € in millions Leverage: Net Debt / LTM Adjusted EBITDA Debt / Liquidity Highlights ØLeverage at 2.5x, a multi-year low; reached the high end of leverage target ØTarget leverage range of 1.5x to 2.5x ØReduced short-term borrowings ØCompleted redemption of
Slide 14: Jean-Marc Germain, Chief Executive Officer
Jean-Marc Germain Chief Executive Officer
Slide 15: End Market Updates
End Market Updates A Diversified Platform LTM Revenue by End Market Market Commentary • Inventory adjustments appear largely behind us in both North America and Europe • Still seeing demand weakness in both regions given current Packaging inflationary environment, lack of promotional activity and fo
Slide 16: Key Messages and Guidance
Key Messages and Guidance Strong performance in 3Q 2023 – Record 3Q Adjusted EBITDA despite a number of challenges including significant inflationary pressures Targets – Solid operational performance and strong cost control 2023 Adjusted EBITDA: – Free Cash Flow of €78 million in Q3; YTD €112 millio
Slide 17: Appendix
Appendix
Slide 18: VAR Reconciliation
VAR Reconciliation Three months ended Nine months ended September 30, September 30, (in millions of Euros) 2023 2022 2023 2022 Revenue 1,720 2,022 5,626 6,276 Hedged cost of alloyed metal (1,037) (1,414) (3,435) (4,191) Revenue from incidental activities (6) (5) (20) (16) Metal price lag 27 70 72 (4
Slide 19: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Three months ended Nine months ended September 30, September 30, (in millions of Euros) 2023 2022 2023 2022 Net income 64 131 118 278 Income tax expense / (benefit) 18 (137) 35 (102) Income / (loss) before tax 82 (6) 153 176 Finance costs—net 36 36 106
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Three months ended Nine months ended September 30, September 30, (in millions of Euros) 2023 2022 2023 2022 Net cash flows from operating activities 154 154 321 323 Purchases of property, plant and equipment, (76) (80) (209) (163) net of grants received Free Cash Flow 7
Slide 21: Net Debt Reconciliation
Net Debt Reconciliation September 30, June 30, March 31, December 31, September 30, (in millions of Euros) 2023 2023 2023 2022 2022 Borrowings 1,909 2,028 2,099 2,056 2,169 Fair value of net debt derivatives, — — 1 1 (1) net of margin calls Cash and cash equivalents (159) (178) (193) (166) (171) Net
Slide 22: Reconciliation of Net Income to Adjusted EBITDA (Twelve Months)
Reconciliation of Net Income to Adjusted EBITDA Twelve months ended September 30, June 30, March 31, December 31, September 30, (in millions of Euros) 2023 2023 2023 2022 2022 Net income 148 215 151 308 285 Income tax expense / (benefit) 32 (123) (139) (105) (100) Income before tax 180 92 12 203 185
Slide 23: Borrowings Table
Borrowings Table At September 30, At December 31, 2023 2022 Nominal Nominal Value in Nominal Value in (Arrangement Accrued Carrying Carrying (in millions of Euros) Currency Rate Euros fees) Interests Value Value Secured Pan-U.S. ABL $ — Floating — — 1 1 81 (due 2026) Senior Unsecured Notes Issued No