Constellium : PR_Q2 2023

Constellium Reports Second Quarter and First Half 2023 Results

Paris, July 26, 2023 - Constellium SE (NYSE: CSTM) today reported results for the second quarter ended June 30, 2023.

Second quarter 2023 highlights:

• Shipments of 398 thousand metric tons, down 6% compared to Q2 2022
• Revenue of €2.0 billion, down 14% compared to Q2 2022
• Value-AddedRevenue (VAR) of €785 million, up 11% compared to Q2 2022
• Net income of €32 million compared to a net loss of €32 million in Q2 2022
• Adjusted EBITDA of €209 million, up 5% compared to Q2 2022
• Cash from Operations of €133 million and Free Cash Flow of €68 million

First half 2023 highlights:

• Shipments of 787 thousand metric tons, down 5% compared to H1 2022
• Revenue of €3.9 billion, down 8% compared to H1 2022
• VAR of €1.5 billion, up 13% compared to H1 2022
• Net income of €54 million compared to net income of €147 million in H1 2022
• Adjusted EBITDA of €374 million, up 2% compared to H1 2022
• Cash from Operations of €167 million and Free Cash Flow of €34 million
• Net debt / LTM Adjusted EBITDA of 2.7x at June 30, 2023

Jean-Marc Germain, Constellium's Chief Executive Officer said, "I am very pleased with the results our team delivered in the second quarter, including record VAR and record Adjusted EBITDA. Demand remained strong across several end markets during the quarter, and our team continued to execute very well despite significant inflationary pressures. A&T reported record quarterly Adjusted EBITDA supported by continued strength in aerospace demand. The recovery in automotive continued with higher shipments in both rolled and extruded products. Packaging shipments were down in the quarter as demand remained below prior year levels, and we continued to experience weakness in most industrial markets, especially in Europe. Free Cash Flow generation in the second quarter was strong at €68 million and we reduced our

leverage to 2.7x."

"We announced in June and recently completed the redemption of $50 million of our 2026 Senior Notes, which further strengthens our balance sheet. Also, in July we announced the sale of our soft alloy extrusion business in Germany for a total cash consideration of €48.8 million," Mr. Germain continued.

Mr. Germain concluded, "Based on our strong performance in the first half of this year and our current outlook for the second half, which assumes no major deterioration on the macroeconomic or geopolitical fronts, we are raising our guidance and now expect Adjusted EBITDA of €700 million to €720 million and Free Cash Flow in excess of €150 million in 2023. We also remain confident in our ability to deliver on our long-term target of Adjusted EBITDA over €800 million in 2025. Our focus is on executing our strategy, driving operational performance, generating Free Cash Flow, achieving our ESG objectives and increasing shareholder value."

Group Summary

	Q2	Q2	Var.	YTD	YTD	Var.
	2023	2022	2023	2022
Shipments (k metric tons)	398	424	(6)%	787	825	(5)%
Revenue (€ millions)	1,950	2,275	(14)%	3,906	4,254	(8)%
VAR (€ millions)	785	704	11%	1,539	1,356	13%
Net income (€ millions)	32	(32)	n.m.	54	147	n.m.
Adjusted EBITDA (€ millions)	209	198	5%	374	365	2%
Adjusted EBITDA per metric ton (€)	525	468	12%	476	443	7%

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 second quarter of 2023, shipments of 398 thousand metric tons decreased 6% compared to the second quarter of last year due to lower shipments in the P&ARP and AS&I segments. Revenue of €2.0 billion decreased 14% compared to the second quarter of the prior year primarily due to lower shipments and lower metal prices, partially offset by improved price and mix. VAR of €785 million increased 11% compared to the second quarter of the prior year primarily due to improved price and mix, partially offset by lower shipments and unfavorable metal costs. Net income of €32 million increased €64 million compared to a net loss of €32 million in the second quarter of 2022. Adjusted EBITDA of €209 million increased 5% compared to the second quarter of last year due to stronger results in our A&T segment, partially offset by weaker results in our P&ARP and AS&I segments.

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For the first half of 2023, shipments of 787 thousand metric tons decreased 5% compared to the first half of 2022 mostly due to lower shipments in the P&ARP segment. Revenue of €3.9 billion decreased 8% compared to the first half of 2022 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix. VAR of €1.5 billion increased 13% compared to the first half of 2022 primarily due to improved price and mix, partially offset by lower shipments and unfavorable metal costs. Net income of €54 million decreased €93 million compared to net income of €147 million in the first half of 2022. Adjusted EBITDA of €374 million increased 2% compared to the first half of 2022 as stronger results in our A&T segment were partially offset by weaker results in our P&ARP segment.

Results by Segment

Packaging & Automotive Rolled Products (P&ARP)

	Q2	Q2	Var.	YTD	YTD	Var.
	2023	2022	2023	2022
Shipments (k metric tons)	272	292	(7)%	531	568	(7)%
Revenue (€ millions)	1,049	1,348	(22)%	2,079	2,516	(17)%
Adjusted EBITDA (€ millions)	79	95	(17)%	134	177	(24)%
Adjusted EBITDA per metric ton (€)	291	327	(11)%	253	312	(19)%

For the second quarter of 2023, Adjusted EBITDA decreased 17% compared to the second quarter of 2022 as a result of lower shipments and higher operating costs mainly due to inflation, operating challenges at our Muscle Shoals facility and unfavorable metal costs, partially offset by improved price and mix. Shipments of 272 thousand metric tons decreased 7% compared to the second quarter of the prior year due to lower shipments of packaging and specialty rolled products, partially offset by higher shipments of automotive rolled products. Revenue of €1.0 billion decreased 22% compared to the second quarter of 2022 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix.

For the first half of 2023, Adjusted EBITDA of €134 million decreased 24% compared to the first half of 2022 as a result of lower shipments and higher operating costs mainly due to inflation, operating challenges at our Muscle Shoals facility and unfavorable metal costs, partially offset by improved price and mix. Shipments of 531 thousand metric tons decreased 7% compared to the first half of 2022 due to lower shipments of packaging and specialty rolled products, partially offset by higher shipments of automotive rolled products. Revenue of €2.1 billion decreased 17% compared to the first half of 2022 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix.

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Aerospace & Transportation (A&T)

	Q2	Q2	Var.	YTD	YTD	Var.
	2023	2022	2023	2022
Shipments (k metric tons)	60	60	0%	118	115	2%
Revenue (€ millions)	464	461	1%	916	846	8%
Adjusted EBITDA (€ millions)	96	63	53%	169	116	46%
Adjusted EBITDA per metric ton (€)	1,613	1,056	53%	1,418	1,010	40%

For the second quarter of 2023, Adjusted EBITDA increased 53% compared to the second quarter of 2022 primarily due to improved price and mix, partially offset by higher operating costs mainly due to inflation and increased activity levels. Shipments of 60 thousand metric tons were stable compared to the second quarter of the prior year on higher shipments of aerospace rolled products offset by lower shipments of transportation, industry and defense (TID) rolled products. Revenue of €464 million was relatively stable compared to the second quarter of 2022 primarily due to improved price and mix mostly offset by lower metal prices.

For the first half of 2023, Adjusted EBITDA of €169 million increased 46% compared to the first half of 2022 primarily due to higher shipments and improved price and mix, partially offset by higher operating costs mainly due to inflation and increased activity levels. Shipments of 118 thousand metric tons increased 2% compared to the first half of 2022 on higher shipments of aerospace rolled products, partially offset by lower shipments of TID rolled products. Revenue of €916 million increased 8% compared to the first half of 2022 primarily due to higher shipments and improved price and mix, partially offset by lower metal prices.

Automotive Structures & Industry (AS&I)

	Q2	Q2	Var.	YTD	YTD	Var.
	2023	2022	2023	2022
Shipments (k metric tons)	66	72	(8)%	138	142	(3)%
Revenue (€ millions)	443	501	(12)%	926	960	(4)%
Adjusted EBITDA (€ millions)	39	46	(15)%	82	83	(1)%
Adjusted EBITDA per metric ton (€)	597	641	(7)%	598	581	3%

For the second quarter of 2023, Adjusted EBITDA decreased 15% compared to the second quarter of 2022 primarily due to lower shipments and higher operating costs mainly due to inflation, partially offset by improved price and mix. Shipments of 66 thousand metric tons decreased 8% compared to the second quarter of the prior year due to lower other extruded product shipments, partially offset by higher shipments of automotive extruded products.

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Revenue of €443 million decreased 12% compared to the second quarter of 2022 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix.

For the first half of 2023, Adjusted EBITDA of €82 million was relatively stable compared to the first half of 2022 primarily due to lower shipments and higher operating costs mainly due to inflation, mostly offset by improved price and mix. Shipments of 138 thousand metric tons decreased 3% compared to the first half of 2022 due to lower other extruded product shipments, partially offset by higher shipments of automotive extruded products. Revenue of €926 million decreased 4% compared to the first half of 2022 primarily due to lower shipments and lower metal prices, partially offset by improved price and mix.

Net Income

For the second quarter of 2023, net income of €32 million compares to a net loss of €32 million in the second quarter of the prior year. The increase in net income is primarily related to favorable changes in gains and losses on derivatives mostly related to our hedging positions, partially offset by higher tax expense.

For the first half of 2023, net income of €54 million compares to net income of €147 million in the first half of the prior year. The decrease in net income is primarily related to lower gross profit and unfavorable changes in gains and losses on derivatives mostly related to our hedging positions, partially offset by lower tax expense.

Cash Flow

Free Cash Flow was €34 million in the first half of 2023 compared to €86 million in the first half of the prior year. The change was primarily due to increased capital expenditures and an unfavorable change in working capital, partially offset by lower cash taxes.

Cash flows from operating activities were €167 million for the first half of 2023 compared to cash flows from operating activities of €169 million in the first half of the prior year. Constellium decreased derecognized factored receivables by €2 million for the first half of 2023 compared to an increase of €10 million in the first half of the prior year.

Cash flows used in investing activities were €133 million for the first half of 2023 compared to cash flows used in investing activities of €83 million in the first half of the prior year.

Cash flows used in financing activities were €19 million for the first half of 2023 compared to cash flows used in financing activities of €79 million in the first half of the prior year. In the first half of 2022, Constellium drew on the Pan-U.S. ABL due 2026 and used the proceeds and cash on the balance sheet to repay the €180 million PGE French Facility due 2022 and the CHF 15 million Swiss Facility due 2025.

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