DJ Aperam update on Q4 2024 market & financial trends
Aperam S.A. / Key word(s): Miscellaneous
Aperam update on Q4 2024 market & financial trends
07-Jan-2025 / 06:59 CET/CEST
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Aperam update on Q4 2024 market & financial trends
Luxembourg, January 7, 2025 (07:00 CET) - In preparation of the upcoming quarterly results release scheduled for
Friday, 7 February 2025, we would like to remind market participants of the standing guidance, earnings drivers and
events that should be considered.
The Q4 outlook, as specified in the Q3 presentation, the management podcast and during the conference call was:
-- Q4 group adjusted. EBITDA higher than in Q3-24 (EUR99m). The seasonal headwind in the summer quarter
should turn into tailwind in Q4 which is seasonally stronger in Europe. Normally the Brazil seasonality works
against this but it should be a rather mild one this year. In sum, Aperam expects higher steel shipments in Q4
compared to Q3.
-- Scale effect together with a positive product mix and some positive valuation gains should balance lower
realized prices.
-- This compares to the Aperam compiled Q4 adjusted EBITDA consensus at EUR109m (average) currently. The
consensus is updated & published at:
https://www.aperam.com/investors/news-contacts/results
Recycling & Normalized annual EBITDA of EUR80-85m for the Recycling & Renewables segment. After reaching EUR54m in
Renewables 9M-24 we expect Q4 to at least plug the year-to-date gap.
Stainless & For Q4 we expect higher volumes and a better mix to be balanced by pricing pressure and some valuation
Electrical headwind for a comparable result.
Europe
Stainless &
Electrical Q4 adjusted EBITDA is expected at a comparable level qoq due to a mild seasonal downturn only
Brazil
Alloys & Higher adjusted EBITDA qoq is following the seasonal trough in Q3 . Demand in key markets remains high
Specialties and the seasonal uptick in Q4 should close the gap to the EUR80m guidance (9M: EUR56m).
Services & Intensifying pricing pressure limits the recovery potential into Q4 for this spot market driven segment
Solutions especially as inventory valuation should remain a drag in the earnings bridge.
Others & Elimination should turn slightly positive due to inventory reduction. The high level of integration
Eliminations between different Aperam businesses like recycling, charcoal, stainless mills and distribution allows
to manage inventory just-in-time between segments which is then reflected in eliminations.
NWC: Lower net working capital in Q4 will result in a higher free cash flow
Cash Flow &
Net Fin. Debt Capex: EUR150m for 2024 of which 83% has already been spent in 9M
Net debt reduction to a level of about 550 million euros is expected at year end of 2024
Please note that forward guidance for adjusted EBITDA, cash flow and net debt is always provided on a stable commodity price assumption.
Commodity prices & FX
SEP 24 OCT 24 NOV 24 DEC 24
Nickel LME USD/t 16,136 16,821 15,720 15,434
Ferrochrome USD/t 3,153 3,153 3,042 2,954
Stainless Scrap USD/t 1,309 1,265 1,265 1,181
Stainless CR 2mm 304 USD/t 3,047 2,950 2,843 2,720
USD/EUR x 1.11 1.09 1.06 1.05
USD/BRL
Source: Bloomberg, Fastmarkets x 5.54 5.62 5.81 6.10
Other items
Volume seasonality In a normal market, Q4 in Europe is seasonally stronger than Q3 which forms the seasonal trough. In
Brazil Q3 forms the seasonal peak followed by a seasonally softer Q4.
Leadership Journey On track to realise the target gains of EUR75m in 2024.
Phase 5
Commodity prices & Market prices might weigh on units with a high spot market exposure like eg Services & Solutions.
valuation effect For the group we continue to expect a net positive valuation effect which supports the adjusted
EBITDA indication given for Q4.
Distributor The inventory cycle was largely neutral. In absolute tonnage inventory remained below the average of
Inventory: the past 5 years.
Current trading & Volumes in Europe remain at a depressed level and pricing pressure has intensified in December. This
outlook will be a factor to consider for Q1, together with the peak seasonal trough in Brazil and a
valuation headwind versus Q4.
Universal The process to acquire Universal Stainless is running according to expectations. The special AGM has
Stainless been scheduled on 15 January 2025 where the shareholders of Universal Stainless are asked to vote on
the proposed merger.
Forward Looking Statements
This document may contain forward-looking information and statements about Aperam SA 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). The information is valid only at the time of release and Aperam does not assume any obligation to update or revise its forward-looking statements on the basis of new information, future events, subject to applicable regulation.
Contact
Investor Relations / Thorsten Zimmermann: IR@aperam.com Communication / Ana Escobedo Conover: Ana.Escobedo@aperam.com
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2062275 07-Jan-2025 CET/CEST
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January 07, 2025 00:59 ET (05:59 GMT)
