Constellium Se · NYSE:CSTM
Constellium — Deutsche Bank 5th Annual Global Industrials and Basic Materials Conference (June 2014)
42 slides from Constellium's conference presentation, Jun 5, 2014
Slide 1: Deutsche Bank 5th Annual Global Industrials and Basic Materials Conference
Exhibit 99.1 Deutsche Bank 5th Annual Global Industrials and Basic Materials Conference Chicago - June 5, 2014
Slide 2: Forward-looking statements
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 ope
Slide 3: Non-GAAP measures
Non-GAAP measures This presentation includes information regarding certain non-GAAP financial measures, including , Adjusted EBITDA, Adjusted EBITDA per metric ton, Adjusted Free Cash Flow and Net Debt. These measures are presented because management uses this information to monitor and evaluate fin
Slide 4: Business overview
A 1) Business overview 5 Constellium
Slide 5: Constellium at a glance
Constellium at a glance Aerospace Automotive Packaging Market growth forecast (1): 8% Market growth forecast : 18% (2) Market growth forecast (3): 3% Aluminum crash management systems: #2 world-wide Can body stock: #1 Europe Aerospace plates: #1 world-wide Major European player in auto body sheet Cl
Slide 6: Constellium's product focus
Constellium’s product focus Global aluminum fabrication market by production technology and product segment Global aluminum Rolled & extruded Product segment ® Proprietary Our Aerospace focus alloys Aero plates & sheets Our Bright, closures, focus other specialty Auto body sheet & automotive structu
Slide 7: Key credit highlights
Key credit highlights Leading positions in attractive and balanced Leading supplier of high value-add aluminum rolled and extruded products in key end-markets and geographies end-markets Advanced R&D and World-class R&D capabilities enable Constellium to continue growing high value-add products, cre
Slide 8: End-markets outlook
End-markets outlook End-market trends Constellium response Aerospace Aerospace High-growth aerospace end-market driven by Investments to meet aerospace cycle volumes increasing commercial aircraft deliveries and Next-generation AIRWARE®, wing skin demand for aluminum-intensive, wide body capabilitie
Slide 9: What we do in aerospace
What we do in aerospace Plate, wing skin and sheet Floor beams Wing spars Lower wing skin panels Upper wing skin panels Fuselage frames Stringers, tubes and small extrusions Fuselage panels Fuselage stiffeners Lower stringers Landing gear Forging stock and precision castings Center wing box Upper Wi
Slide 10: Key market trends in aerospace
Key market trends in aerospace Strong growth in aerospace market expected over the coming years Deliveries of planes utilizing materialAIRWARE® volumes Growth drivers expected to commence in 2014 2012-2017 jet airplanes deliveries (1) Planes with low or no AIRWARE® utilization Demand is driven by: P
Slide 11: Our competitive position in aerospace
Our competitive position in aerospace Global leader with unique capabilities Creating value-added products Aerospace plates: #1 world-wide Global capability One of only two players with dual continent footprint World’s most powerfulstretcher capable of producing a number of unique parts One of two p
Slide 12: What we do in automotive
What we do in automotive Auto body sheet Auto structures Doors, hoods, deck lids, fenders, trunk closure (hang-on-parts) Crash management parts, bumpers, Aluminum sheet reinforcement parts, beams, car floors Biggest volume potential for aluminum Aluminum extrusions, castings or sheet We supply high
Slide 13: Key market trends in premium automotive
Key market trends in premium automotive Greatest aluminumopportunity is in auto body sheet and Legislation is focused on reducing CO2 emissions bumpers % of each manufacturer’s newly registered cars required Market penetration to meet 130 gCO2/km target in Europe by 2015(1) Creating significant expe
Slide 14: Our competitive position in premium automotive
Our competitive position in premium automotive We supply auto body sheet mainly to premium Growth in premium automotive German OEMs (1) Vehicle production (units) CAGR ’13-’20 2,428 + 5% A6/A7/A8/ Q3/TT 1,733 2,469 + 5% 1,744 1,615 2,241 + 5% 2013 2020 Series 5/6 A/B/C/E/S/SL/CL(S) Audi Mercedes-Ben
Slide 15: Key market trends and our competitive position in packaging
Key market trends and our competitive position in packaging Increased use of aluminum in Europe, and with room to go Resulting in increased aluminum can stock consumption (1) % breakdown of cans sold Can stock consumption (kt) CAGR 2013-2018E +3.3% 984 22% 836 +5.4% 260 42% 199 +2.6% 78% 724 58% 636
Slide 16: Advanced R&D and technological capabilities provide leverage with customers
Advanced R&D and technological capabilities provide leverage with customers World-leading R&D capabilities Close partnership with our customers Innovation Partner(s) Description Long-term partnerships with European universities World class R&D facility in Voreppe, France Major Low density alloy suit
Slide 17: Long-standing relationships with a global, blue-chip customer base
Long-standing relationships with a global, blue-chip customer base Diverse customer base with 10 largest customers representing approximately 45% of 2013 revenues with average length of relationships with Constellium’s top 20 customers exceeding 25 years All of Constellium’s major packaging, aerospa
Slide 18: Successful cost reductions with ongoing productivity improvement opportunities
Successful cost reductions with ongoing productivity improvement opportunities Our initial focus has been on containing costs Our focus now is on productivity improvements Cumulative cost savings (€m) The right team to execute on improvement strategy Track record of successful productivity implement
Slide 19: Stable business model with limited commodity price and foreign exchange exposure
Stable business model with limited commodity price and foreign exchange exposure Strong visibility into future volumes and managed exposure We have long-term contracts with customers in our three core end-markets: Aerospace: We enter into 5 year contracts with our largest aerospace customers Automot
Slide 20: Financial overview
A 2) Financial overview 5 Constellium 19
Slide 21: Our business model
Our business model We are a value-added leader in converting aluminum into highly profitable products Focus on selected high-end products and high-growth markets Secure our business with long-term contracts Profitability We seek to maximize Adjusted EBITDA over the long run A portion of our business
Slide 22: Summary financials and capitalization
Summary financials and capitalization Profitability has significantly improved and is now in-line or ahead of peers, which has led to a dramatic reduction in leverage Volumes (kt) Adjusted EBITDA (€m) Adj. EBITDA/metric ton (€/t): €147/t €216/t € 273/t Leverage (Debt / Adjusted EBITDA) (1) Liquidity
Slide 23: Consistent year over year improvement
Consistent year over year improvement Adjusted EBITDA (€m) +22% +3% +64% +40% +26% Q1 Q2 Q3 Q4 FY Adjusted EBITDA / metric ton (€/t) +24% +4% +61% +40% +26% Q1 Q2 Q3 Q4 FY Strong performance and consistent improvement in every quarter Source: Company earnings reports 22
Slide 24: Summary segment historical performance
Summary segment historical performance A&T AS&I P&ARP Volumes up 9% year over year Despite volume decrease of 7% Despite relatively flat volumes primarily due to increased year over year (due to year over year, significantly aerospace shipments divestments), significantly improved EBITDA on packagin
Slide 25: Investments and capital spending
Investments and capital spending Growth projects Project Location Total capex Timing BiW Europe €200 million 2014-2018 AIRWARE® Europe €70 million (1) 2014-2018 BiW US JV 51% of $150 million (2) 2014-2018 BiW US $50-100 million (3) 2015-2018 Total growth projects €380 million 2014-2018 Capital spend
Slide 26: Key credit highlights
Key credit highlights Leading positions Advanced R&D in attractive and and technological balanced capabilities end-markets Experienced Global network of management team efficient facilities Long-standing Attractive pipeline relationships with of growth a diversified and initiatives blue-chip custome
Slide 27: Q1 2014 Update
4 © Q1 2014 update & Constellium 26
Slide 28: Q1 2014 Highlights
Q1 2014 Highlights (% changes Q1 2014 vs Q1 2013) Adjusted EBITDA of €71 million Strong automotive business drives 60% growth in Adjusted EBITDA in AS&I and solid performance in P&ARP AS&I achieves record Adjusted EBITDA of €20 million A&T results impacted by 5-day outage in the hotline at Ravenswoo
Slide 29: Q1 Highlights
Q1 Highlights Ratings upgraded one notch by (Moody’s) to ‘Ba3’ and two notches by (Standard &Poor’s) to ‘BB-’ Successfully completed bond offerings of $400 million and €300 million Selected Neuf Brisach, France facility for 100k metric ton body-in-white expansion Signed joint venture agreement with
Slide 30: Q1 Segment Performance
Q1 14 Segment Performance Segment Adjusted EBITDA (€m) Adjusted EBITDA per ton Shipments (kt) 59 61 +3% Shipments (kt) 151 156 +3% Shipments (kt) 53 53 +1% 29
Slide 31: Significant improvement in Adjusted Free Cash Flow
Significant improvement in Adjusted Free Cash Flow Three Months ended Three Months ended € millions March 31, 2014 March 31, 2013 Cash flow from operating activities (4) (47) Margin calls included in cash flow from (11) - operating activities Cash flow from operating activities (15) (47) excluding m
Slide 32: Continued progress in reducing net trade working capital
Continued progress in reducing net trade working capital Q1 2012 43 DSOs Q1 2013 39 DSOs Q1 2014 29 DSOs +€89m +€111m +€65m 31
Slide 33: Strong balance sheet with enhanced liquidity
Strong balance sheet with enhanced liquidity € millions March 31, 2014 Total Debt (*) 360 Cash and Cash Equivalents 179 Net Debt 181 Net Debt / LTM Adjusted EBITDA 0.7x Liquidity(**) 360 Liquidity - Pro forma after new refinancing 720 (*) Including fair value of cross currency interest swap and cash
Slide 34: Appendix
4 Appendix ® Constellium 33
Slide 35: Global network of efficient facilities
Global network of efficient facilities Changchun and Ravenswood, Singen, Voreppe, Kunshan, China USA Germany France Headcount: 273(1) Headcount: 1,000 Headcount: 1,299 Headcount: 260 • Joint venture with Engley, • Worldwide unique assets for • Integrated hot/cold-rolling line • World-class R&D cente
Slide 36: Constellium corporate structure
Constellium corporate structure Constellium N.V. New Unsecured Revolving Credit Facility (Netherlands) New unsecured notes offered hereby Constellium HoldCo II B.V. (Netherlands) Constellium Constellium Constellium Constellium US Constellium Constellium France Extrusions Decin Germany Holdings I, LL
Slide 37: Non-GAAP Measures Reconciliations
Non-GAAP Measures Reconciliations 36
Slide 38: Adjusted EBITDA reconciliation Q4 2013
Adjusted EBITDA reconciliation Q4 2013 Year ended Year ended € in millions December 31, 2012 December 31, 2013 Net income from continuing operations €149 €96 Income tax expense 46 39 Income before income tax €195 €135 Finance costs - net 60 50 Other expenses/share of results of joint-ventures 8 24 I
Slide 39: Adjusted EBITDA Reconciliation Q1 2014
Adjusted EBITDA Reconciliation Q1 2014 € millions Q1 2014 Q1 2013 Net income / (loss) 30 (2) Income tax expense 16 6 Income before income tax 46 4 Finance costs - net 9 25 Other expenses / share of results of joint-ventures 1 - Income from operations 56 29 Depreciation and impairment 9 4 Unrealized
Slide 40: Net Debt reconciliation Q4 2013
Net Debt reconciliation Q4 2013 € in millions As of 12/31/2012 As of 12/31/2013 Borrowings €158 €348 Fair value of cross currency interest rate 14 26 swap Cash and cash equivalents (142) (233) Cash pledged for issuance of (13) (9) guarantees Net Debt €17 €132 Source: Company earnings reports 39
Slide 41: Net Debt Reconciliation Q1 2014
Net Debt Reconciliation Q1 2014 € millions March 31, 2014 December 31, 2013 Borrowings 348 348 Fair value of cross currency interest swap 21 26 Cash and cash equivalents (179) (233) Cash pledged for issuance of guarantees (9) (9) Net Debt 181 132 40
Slide 42: Adjusted Free Cash Flow Reconciliation Q1 2014
Adjusted Free Cash Flow Reconciliation Q1 2014 Three Months Three Months € millions ended March 31, ended March 31, 2014 2013 Cash flow from operating activities (4) (47) Margin calls included in cash flow from (11) - operating activities Cash flow from operating activities (15) (47) excluding margi