DJ Aperam - Second quarter 2024 results: "Specialties transformation continues, a first step towards normalization in stainless"
Aperam S.A. / Key word(s): Quarter Results Aperam - Second quarter 2024 results: "Specialties transformation continues, a first step towards normalization in stainless" 01-Aug-2024 / 06:59 CET/CEST =---------------------------------------------------------------------------------------------------------------------- Second quarter 2024 results1 "Specialties transformation continues, a first step towards normalization in stainless" Luxembourg, August 1, 2024 (07:00 CET) - Aperam S.A. (referred to as "Aperam" or the "Company") (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY), announced today results for the three months ended June 30, 2024. Highlights -- Health and Safety: LTI frequency rate of 2.0x in Q2 2024 compared to 1.5x in Q1 2024 -- Shipments of 583 thousand tonnes in Q2 2024 remained broadly stable versus shipments of 585 thousand tonnes in Q1 2024 -- Adjusted EBITDA of EUR 86 million in Q2 2024, compared to Adjusted EBITDA of EUR 55 million in Q1 2024 -- Net income of EUR 59 million in Q2 2024, compared to net loss of EUR (19) million in Q1 2024 -- Basic earnings per share of EUR 0.82 in Q2 2024, compared to EUR (0.26) in Q1 2024 -- Free cash flow before dividends amounted to EUR 111 million in Q2 2024, compared to EUR (141) million in Q1 2024 -- Net financial debt of EUR 607 million as of June 30, 2024, compared to EUR 674 million as of March 31, 2024
Strategic initiatives
-- Leadership Journey®2 Phase 5: Gains reached EUR 12 million in Q2 2024, the second quarter of the 2024 - 2026 program with target gains of EUR 200 million.
Prospects[1]a
-- Q3 2024 EBITDA is expected at a slightly higher level versus Q2 2024 -- We guide for higher Q3 2024 net financial debt Timoteo Di Maulo, CEO of Aperam, commented: "After 7 extremely challenging quarters, fading destocking finally brought some market improvement to European stainless. Our Alloys and Distribution businesses continue to perform at high levels on pace to achieve the 2025 improvement target. The combination with the conclusion of Leadership Journey® Phase 4 investments for Europe and the cost reduction measures explains the rebound in results of Europe. We have taken the necessary restructuring actions in a responsible and cooperative partnership with our workforce to adapt to a changing competitive environment. This keeps the Leadership Journey® Phase 5 on track, protects Aperam's cost leadership position in Europe and secures employment as we leverage the significant investments in our footprint from the past three years."
Financial Highlights (on the basis of financial information prepared under IFRS)
(in millions of Euros, unless otherwise stated) Q2 24 Q1 24 Q2 23 H1 24 H1 23 Sales 1,634 1,657 1,702 3,291 3,578 Operating income / (loss) 19 (3) 54 16 135 Net income / (loss) attributable to equity holders of the parent 59 (19) 43 40 175 Basic earnings per share (EUR) 0.82 (0.26) 0.60 0.56 2.43 Diluted earnings per share (EUR) 0.82 (0.26) 0.59 0.56 2.41 Free cash flow before dividend 111 (141) 1 (30) 86 Net Financial Debt (at the end of the period) 607 674 461 607 461 Adj. EBITDA 86 55 103 141 230 Exceptional items (8) - - (8) - EBITDA 78 55 103 133 230 Adj. EBITDA/tonne (EUR) 148 94 187 121 202 EBITDA/tonne (EUR) 134 94 187 114 202 Shipments (000t) 583 585 550 1,168 1,141
Health & Safety results
Health and Safety performance based on Aperam personnel figures and contractors' lost time injury frequency rate was 2.0x in the second quarter of 2024 compared to 1.5x in the first quarter of 2024.
Financial results analysis for the three-month period ending June 30, 2024
Sales for the second quarter of 2024 decreased by 1.4% at EUR 1,634 million compared to EUR 1,657 million for the first quarter of 2024. Shipments were broadly stable at 583 thousand tonnes in the second quarter of 2024 compared to 585 thousand tonnes in the first quarter of 2024, due to stable market conditions in Europe while the positive seasonality in Brazil was balanced by the delayed hot rolling mill ramp-up.
Adjusted EBITDA reached EUR 86 million during the second quarter (excluding an exceptional loss of EUR (8) million, related to a voluntary redundancy program) compared to EUR 55 million in the first quarter of 2024. Positive inventory valuation, a better product mix and Leadership Journey® related cost improvements more than compensated for a price/ cost squeeze.
Depreciation and amortization expense was EUR (59) million for the second quarter of 2024, including an impairment loss of EUR (3) million.
Aperam had an operating income for the second quarter of 2024 of EUR 19 million compared to an operating loss of EUR (3) million for the previous quarter.
Financing costs, net, including the FX and derivatives result for the second quarter of 2024 were EUR (16) million. Cash cost of financing was EUR (15) million during the quarter.
Income tax benefit was EUR 57 million during the second quarter of 2024, thanks to the recognition of net deferred tax assets on tax losses carried forward for EUR 56 million.
The net result recorded by the Company was an income of EUR 59 million for the second quarter of 2024, compared to a loss of EUR (19) million for the first quarter of 2024.
Cash flows from operations for the second quarter of 2024 were EUR 136 million, including a working capital decrease of EUR 92 million. CAPEX for the second quarter was EUR (26) million.
Free cash flow before dividend for the second quarter of 2024 amounted to EUR 111 million, compared to EUR (141) million for the first quarter of 2024.
During the second quarter of 2024, cash returns to shareholders amounted to EUR 37 million (of which EUR 1 million paid to non-controlling interests), consisting fully of dividend.
Operating segment results analysis
Stainless & Electrical Steel (1)
(in millions of Euros, unless otherwise stated) Q2 24 Q1 24 Q2 23 H1 24 H1 23 Sales 1,058 1,022 1,050 2,080 2,283 Adjusted EBITDA 59 6 52 65 132 Exceptional items (8) - - (8) - EBITDA 51 6 52 57 132 Depreciation & amortization (28) (27) (26) (55) (51) Operating income / (loss) 23 (21) 26 2 81 Steel shipments (000t) 419 415 373 834 772 Average steel selling price (EUR/t) 2,412 2,358 2,713 2,385 2,852
(1) Amounts are shown prior to intra-group eliminations
The Stainless & Electrical Steel segment had sales of EUR 1,058 million for the second quarter of 2024. This represents a 3.5% increase compared to sales of EUR 1,022 million for the first quarter of 2024. Steel shipments during the second quarter were 419 thousand tonnes, an increase of 1.0% compared to shipments of 415 thousand tonnes during the previous quarter. In both Brazil and Europe shipments remained at a comparable level. Average steel selling prices for the Stainless & Electrical Steel segment increased by 2.3% compared to the previous quarter.
The segment generated an adjusted EBITDA of EUR 59 million (excluding an exceptional loss of EUR (8) million, related to a voluntary redundancy program) for the second quarter of 2024 compared to an adjusted EBITDA of EUR 6 million for the first quarter of 2024. Adjusted EBITDA increased due to a positive inventory valuation and a better product mix. Leadership journey® related cost improvements also more than compensated for a price / input cost squeeze.
Depreciation and amortization expense was EUR (28) million for the second quarter of 2024.
The Stainless & Electrical Steel division had an operating income of EUR 23 million for the second quarter of 2024 compared to an operating loss of EUR (21) million for the first quarter of 2024.
Services & Solutions (1)
(in millions of Euros, unless otherwise stated) Q2 24 Q1 24 Q2 23 H1 24 H1 23 Sales 638 616 539 1,254 1,210 EBITDA 16 15 (7) 31 6 Depreciation & amortization (3) (4) (4) (7) (7) Operating income / (loss) 13 11 (11) 24 (1) Steel shipments (000t) 195 201 150 396 330 Average steel selling price (EUR/t) 3,113 2,936 3,467 3,023 3,542
(1) Amounts are shown prior to intra-group eliminations
The Services & Solutions segment had sales of EUR 638 million for the second quarter of 2024, representing an increase of 3.6% compared to sales of EUR 616 million for the first quarter of 2024. For the second quarter of 2024, steel shipments were 195 thousand tonnes compared to 201 thousand tonnes during the previous quarter. Average steel selling prices for the Services & Solutions' segment were 6.0% higher during the second quarter of 2024 compared to the first quarter of 2024.
The segment generated an EBITDA of EUR 16 million for the second quarter of 2024 compared to an EBITDA of EUR 15 million for the first quarter of 2024. EBITDA remained comparable as net positive valuation gains compensated for lower prices.
Depreciation and amortization expense was EUR (3) million for the second quarter of 2024.
The Services & Solutions segment had an operating income of EUR 13 million for the second quarter of 2024 compared to an operating income of EUR 11 million for the first quarter of 2024.
Alloys & Specialties(1)
(in millions of Euros, unless otherwise stated) Q2 24 Q1 24 Q2 23 H1 24 H1 23 Sales 238 282 259 520 470 EBITDA 21 24 17 45 28 Depreciation, amortization & impairment (5) (3) (2) (8) (5) Operating income 16 21 15 37 23 Steel shipments (000t) 9 11 9 20 18 Average steel selling price (EUR/t) 23,820 25,483 26,654 24,573 24,760
(1) Amounts are shown prior to intra-group eliminations
The Alloys & Specialties segment had sales of EUR 238 million for the second quarter of 2024, representing a decrease of 15.6% compared to EUR 282 million for the first quarter of 2024. Steel shipments decreased by 11.3% during the second quarter of 2024 at 9 thousand tonnes.
The Alloys & Specialties segment achieved EBITDA of EUR 21 million for the second quarter of 2024 compared to EUR 24 million for the first quarter of 2024. EBITDA decreased despite a less negative inventory valuation loss due to the lack of a one-time project business related mix, which also accounted for lower average selling prices
Depreciation and amortization expense for the second quarter of 2024 was EUR (2) million. The Company also recorded an impairment loss of EUR (3) million during the second quarter.
The Alloys & Specialties segment had an operating income of EUR 16 million for the second quarter of 2024 compared to an operating income of EUR 21 million for the first quarter of 2024.
Recycling & Renewables (1)
(in millions of Euros, unless otherwise stated) Q2 24 Q1 24 Q2 23 H1 24 H1 23 Sales 556 483 529 1,039 1,091 EBITDA 20 18 29 38 74 Depreciation & amortization (22) (24) (16) (46) (31) Operating income / (loss) (2) (6) 13 (8) 43 Shipments (000t) 397 343 351 740 726 Average selling price (EUR/t) 1,401 1,408 1,507 1,404 1,503
(1) Amounts are shown prior to intra-group eliminations
The Recycling & Renewables segment had sales of EUR 556 million for the second quarter of 2024, representing an increase of 15.1% compared to EUR 483 million sales for the first quarter of 2024. Shipments increased by 15.7% during the second quarter of 2024 to 397 thousand tonnes. Average selling prices for the Recycling & Renewables' segment were 0.5% lower during the second quarter of 2024.
EBITDA increased during the quarter to EUR 20 million compared to EBITDA of EUR 18 million in the first quarter of 2024 as higher volumes outweighed lower prices.
Depreciation and amortization expense for the second quarter of 2024 was EUR (22) million.
The Recycling & Renewables segment had an operating loss of EUR (2) million for the second quarter of 2024 compared to an operating loss of EUR (6) million for the first quarter of 2024.
Recent developments during the quarter
-- On May 27, 2024, Aperam announced a change in its senior leadership. Bernard Hallemans, Aperam CTSO andCEO of Aperam Recycling, has decided to take a one year sabbatical leave from his position effective August 1,2024. Under Bernard's leadership, Aperam has taken important steps on its Sustainability roadmap and has started torealize the tremendous potential of the Recycling & Renewables segment. In light of this departure, Aperam ispleased to announce the appointment of Jan Hofmann, currently COO Aperam Services and Solutions. Jan Hofmann willlead our Sustainability organization and take over the role as CEO Aperam Recycling bringing to the position hisextensive industry experience and a sharp strategic focus.
-- On May 29, 2024, Aperam announced the cancellation of shares. 4,852,118 shares have been canceled in linewith its financial policy. This cancellation takes into account shares already purchased under the 2.5 millionshare buyback program announced on February 11, 2022 under the authorization given by the annual general meeting ofshareholders held on May 7, 2019 (and under renewal of such authorization at the May 4, 2022 annual general meetingof shareholders) and shares purchased under the 3.5 million additional share buyback program announced on May 6,2022 under the authorization given by the annual general meeting of shareholders held on May 4, 2022. As a resultof this cancellation, Aperam will have 73,184,570 shares in issue (compared to 78,036,688 before the cancellation).
-- On June 10 and June 12, 2024, Aperam announced shareholding notifications by Bank of America forrespectively crossing upwards and downwards the 5% voting rights threshold with reference to Transparency Law.
-- On July 1, 2024, in preparation of the quarterly results release scheduled for August 1, 2024, Aperamreminded market participants of the standing guidance, earnings drivers and events that should be considered.
-- On July 2, 2024, IperionX Limited and Aperam Recycling, through its American entity ELG Utica Alloys,signed an agreement for an innovative titanium processing and product manufacturing program. This partnership willdemonstrate IperionX's fully circular and sustainable titanium supply chain solution, turning titanium scrap intohigh-performance titanium products for advanced industries.
Investor conference call / webcast
Pre-recorded management comments are available as from publication of this earnings release on our website at www.aperam.com, section Investors > Reports & Presentations > Quarterly results > Q2-2024 (Link to Q2 2024 management podcast).
Aperam management will host a conference call / webcast for members of the investment community to discuss the financial performance of the quarter under report at the following time:
Date New York London Luxembourg
Thursday,
07:00 12:00 13:00
1 August 2024
Link to the webcast: https://channel.royalcast.com/landingpage/aperam/20240801_1/
The dial-in numbers for the call are: France: +33 (0) 1 7037 7166 USA: +1 786 697 3501
UK: +44 (0) 33 0551 0200 Belgium: +32 (0) 2 789 8603
Germany: +49 (0) 30 3001 90612 Netherlands +31 (0) 20 708 5073
The conference password is: Aperam.
Contacts
Company secretary / Delphine Féraud Valendru; aperam.corporate@aperam.com
Investor Relations / Thorsten Zimmermann: +352 661 570 250; thorsten.zimmermann@aperam.com
About Aperam
Aperam is a global player in stainless, electrical and specialty steel, with customers in over 40 countries. Since January 2022, the business is organized in four primary reportable segments: Stainless & Electrical Steel, Services & Solutions, Alloys & Specialties and Recycling & Renewables.
Aperam has a flat Stainless and Electrical steel capacity of 2.5 million tonnes in Brazil and Europe and is a leader in high value specialty products. In addition to its industrial network, spread over six production facilities in Brazil, Belgium and France, Aperam has a highly integrated distribution, processing and services network and a unique capability to produce low carbon footprint stainless and special steels from biomass, stainless steel scrap and high performance alloys scrap. With 5 of its main 6 facilities certified ResponsibleSteelTM, Bioenergia and its unique capability to produce charcoal made from its own FSC®-certified forestry and, with ELG, a global leader in collecting, trading, processing and recycling of stainless steel scrap and high performance alloys, Aperam's places sustainability at the heart of its business, helping customers worldwide to excel in the circular economy.
In 2023, Aperam had sales of EUR 6,592 million and shipments of 2.20 million tonnes.
For further information, please refer to our website at www.aperam.com.
Forward-looking statements
This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although Aperam's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Aperam's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of Aperam, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in Aperam's filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier). Aperam undertakes no obligation to publicly update its forward-looking statements or information, whether as a result of new information, future events, or otherwise.
APERAM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
June 30, March 31, June 30,
(in million of EURO)
2024 2024 2023
ASSETS
Cash & cash equivalents (C) 279 207 429
Inventories, trade receivables and trade payables 1,571 1,690 1,888
Prepaid expenses and other current assets 163 148 160
Total Current Assets & Working Capital 2,013 2,045 2,477
Goodwill and intangible assets 436 449 456
Property, plant and equipment (incl. Biological assets) 2,058 2,114 1,984
Investments in associates, joint ventures and other 7 8 3
Deferred tax assets 263 217 90
Other non-current assets 131 134 119
Total Assets (net of Trade Payables) 4,908 4,967 5,129
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt and current portion of long-term debt (B) 325 318 260
Accrued expenses and other current liabilities 479 370 445
Total Current Liabilities (excluding Trade Payables) 804 688 705
Long-term debt, net of current portion (A) 561 563 630
Deferred employee benefits 152 153 136
Deferred tax liabilities 85 104 133
Other long-term liabilities 63 69 62
Total Liabilities (excluding Trade Payables) 1,665 1,577 1,666
Equity attributable to the equity holders of the parent 3,235 3,382 3,456
Non-controlling interest 8 8 7
Total Equity 3,243 3,390 3,463
Total Liabilities and Shareholders' Equity (excluding Trade Payables) 4,908 4,967 5,129
Net Financial Debt (D = A+B-C) 607 674 461
APERAM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended Six Months Ended
(in million of EURO)
June 30, March 31, June 30, June 30, June 30,
2024 2024 2023 2024 2023
Sales 1,634 1,657 1,702 3,291 3,578
Adjusted EBITDA (E = C-D) 86 55 103 141 230
Adjusted EBITDA margin (%) 5.3% 3.3% 6.1% 4.3% 6.4%
Exceptional items (D) (8) - - (8) -
EBITDA (C = A-B) 78 55 103 133 230
EBITDA margin (%) 4.8% 3.3% 6.1% 4.0% 6.4%
Depreciation, amortization and impairment (B) (59) (58) (49) (117) (95)
Operating income / (loss) (A) 19 (3) 54 16 135
Operating margin (%) 1.2% (0.2)% 3.2% 0.5% 3.8%
Loss from associates, joint ventures and other (1) - (1) (1) (1)
investments
Financing income / (costs), (net) (16) (16) - (32) 86
Income / (loss) before taxes and non-controlling 2 (19) 53 (17) 220
interests
Income tax benefit / (expense) 57 1 (9) 58 (44)
Effective tax rate % n/a 3.8% 18.3% n/a 20.0%
Net income / (loss) including non-controlling interests 59 (18) 44 41 176
Non-controlling interests - (1) (1) (1) (1)
Net income / (loss) attributable to equity holders of the 59 (19) 43 40 175
parent
Basic earnings per share (EUR) 0.82 (0.26) 0.60 0.56 2.43
Diluted earnings per share (EUR) 0.82 (0.26) 0.58 0.56 2.41
Weighted average common shares outstanding (in thousands) 72,254 72,249 72,205 72,252 72,195
Diluted weighted average common shares outstanding (in 72,792 72,628 72,776 72,790 72,776
thousands)
APERAM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended Six Months Ended
(in million of EURO)
June 30, March 31, June 30, June 30, June 30,
2024 2024 2023 2024 2023
Operating income / (loss) 19 (3) 54 16 135
Depreciation, amortization & impairment 59 58 49 117 95
Change in working capital 92 (81) 3 11 (20)
Income tax paid (5) (7) (14) (12) (29)
Interest paid, (net) (6) (5) - (11) (4)
Exceptional items 8 - - 8 -
Other operating activities (net) (31) (23) (29) (54) 24
Net cash provided by (used in) operating activities (A) 136 (61) 63 75 201
Purchase of PPE and intangible assets (CAPEX) (26) (77) (58) (103) (102)
Purchase of biological assets and other investing 1 (3) (4) (2) (13)
activities (net)
Net cash used in investing activities (B) (25) (80) (62) (105) (115)
(Payments to) / Proceeds from payable to banks and long 8 (54) 25 (46) (35)
term debt
Dividends paid (37) (36) (36) (73) (72)
Other financing activities (net) (4) (4) (5) (8) (8)
Net cash used in financing activities (33) (94) (16) (127) (115)
Effect of exchange rate changes on cash (6) (1) 2 (7) 1
Change in cash and cash equivalent 72 (236) (13) (164) (28)
Free cash flow before dividend(C = A+B) 111 (141) 1 (30) 86
Appendix 1a - Health & Safety statistics
Three Months Ended
Health & Safety Statistics June 30, March 31, December 31,
2024 2024 2023
Frequency Rate 2.0 1.5 2.1
Lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
Appendix 1b - Key operational and financial information
Quarter Ending Stainless & Services & Alloys & Recycling & Others &
Electrical Steel Solutions Specialties Renewables Eliminations Total
June 30, 2024
Operational information
419 195 9 397 (437) 583
Shipment (000t)
Average selling price (EUR/ 2,412 3,113 23,820 1,401 2,803
t)
Financial information (EURm)
Sales 1,058 638 238 556 (856) 1,634
Adjusted EBITDA 59 16 21 20 (30) 86
Exceptional items (8) - - - - (8)
EBITDA 51 16 21 20 (30) 78
Depreciation, amortization & (28) (3) (5) (22) (1) (59)
impairment
Operating income / (loss) 23 13 16 (2) (31) 19
Quarter Ending Stainless & Electrical Services & Alloys & Recycling & Others &
Steel Solutions Specialties Renewables Eliminations Total
March 31, 2024
Operational
information
Shipment (000t) 415 201 11 343 (385) 585
Average selling price 2,358 2,936 25,483 1,408 2,832
(EUR/t)
Financial information
(EURm)
Sales 1,022 616 282 483 (746) 1,657
EBITDA 6 15 24 18 (8) 55
Depreciation & (27) (4) (3) (24) - (58)
amortization
Operating income / (21) 11 21 (6) (8) (3)
(loss)
Appendix 2 - Adjusted Net Income and Adjusted Basic Earnings per Share
Three Months Ended Six Months Ended
(in million of EURO) June 30, March 31, June 30, June 30, June 30,
2024 2024 2023
2024 2023
Net income / (loss) 59 (19) 43 40 175
Exceptional items 8 - - 8 -
Recognition of deferred tax assets on tax losses carried (56) (4) - (60) -
forward
Deferred tax effect on exceptional items (2) - - (2) -
Adjusted Net income / (loss) 9 (23) 43 (14) 175
Basic earnings per share (EUR) 0.82 (0.26) 0.60 0.56 2.43
Adjusted Basic earnings per share (EUR) 0.13 (0.32) 0.60 (0.19) 2.43
Appendix 3 - Terms and definitions
Unless indicated otherwise, or the context otherwise requires, references in this earnings release report to the following terms have the meanings set out next to them below:
Adjusted EBITDA: operating income before depreciation and amortization expenses, impairment losses and exceptional items.
Adjusted EBITDA/tonne: calculated as Adjusted EBITDA divided by total shipments.
Adjusted Net Income: refers to reported net income / (loss) less exceptional items, recognition of deferred tax assets on tax losses carried forward and deferred tax effect on exceptional items.
Adjusted Basic Earnings per Share: refers to Adjusted Net Income divided by Weighted average common shares outstanding.
Average selling prices: calculated as sales divided by shipments.
Average steel selling prices: calculated as steel sales divided by steel shipments.
Cash and cash equivalents: represents cash and cash equivalents, restricted cash and short-term investments.
CAPEX: relates to capital expenditures and is defined as purchase of property, plant and equipment and intangible assets.
EBITDA: operating income before depreciation and amortization expenses and impairment losses.
EBITDA/tonne: calculated as EBITDA divided by total shipments.
Exceptional items: consists of (i) inventory write-downs equal to or exceeding 10% of total related inventories values before write-down at the considered quarter end (ii) restructuring (charges)/gains equal to or exceeding EUR 10 million for the considered quarter, (iii) capital (loss)/gain on asset disposals equal to or exceeding EUR 10 million for the considered quarter or (iv) other non-recurring items equal to or exceeding EUR 10 million for the considered quarter.
Financing costs, (net): Net interest expense, other net financing costs and foreign exchange and derivative results.
Free cash flow before dividend: net cash provided by operating activities less net cash used in investing activities.
Gross financial debt: long-term debt plus short-term debt.
Liquidity: Cash and cash equivalent and undrawn credit lines.
LTI frequency rate: Lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
Net financial debt: long-term debt, plus short-term debt less cash and cash equivalents.
Net financial debt/EBITDA or Gearing: Refers to Net financial debt divided by last twelve months EBITDA calculation.
Shipments: information at segment and group level eliminates inter-segment shipments (which are primarily between (i) Recycling & Renewables and Stainless & Electrical Steel (ii) Stainless & Electrical Steel and Services & Solutions) and intra-segment shipments, respectively.
Working capital: trade accounts receivable plus inventories less trade accounts payable.
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1 The financial information in this press release and Appendix 1 has been prepared in accordance with the measurement and recognition criteria of International Financial Reporting Standards ("IFRS") as adopted in the European Union. While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standard 34, "Interim Financial Reporting". Unless otherwise noted the numbers and information in the press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.
2 The Leadership Journey® is an initiative launched on December 16, 2010, and subsequently accelerated and increased, to target management gains and profit enhancement. The fourth phase of the Leadership Journey® targeted EUR 150 million gains for the period 2021 - 2023 via a combination of cost, growth and mix improvement measures. Some additional investments, as announced in 2021 as part of the Strategy 2025 program, have been accelerated to achieve earnings growth already in 2022 contributing to the Leadership Journey Phase 4. We concluded Phase 4 of the Leadership Journey? above target with EUR 186 million gains. We announced targeted gains of EUR 200 million for Phase 5 to be realized over the period 2024 - 2026. Gains will come from a combination of variable and fixed cost savings, as well as purchasing and mix improvements. Phase 5 includes a structural cost reduction plan of EUR 50 million. To the extent that this plan would affect employment we will consult with our social partners on the social impact.
3 This press release also includes Alternative Performance Measures ("APM" hereafter). The Company believes that these APMs are relevant to enhance the understanding of its financial position and provides additional information to investors and management with respect to the Company's financial performance, capital structure and credit assessment. These non-GAAP financial measures should be read in conjunction with and not as an alternative for, Aperam's financial information prepared in accordance with IFRS. Such non-GAAP measures may not be comparable to similarly titled measures applied by other companies. The APM's used are defined under Appendix 3 "Terms & definitions".
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[1]a The outlook for the quarter depends on the future development of metal and product prices. Both are assumed as constant at their current level.
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Dissemination of a Financial Wire News, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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