CSTM - Earnings call transcript Q4 2024

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Operator

Hello, and welcome to the Constellium Fourth Quarter and Full Year 2024 Results Conference Call. My name is Alex, I'll be coordinating the call today. [Operator Instructions]. I'll now hand it over to your host, Jason Hershiser, Director of Investor Relations. Please go ahead.

Jason Hershiser

Alex. you, Thank welcome year to our quarter fourth I'd earnings everyone call. full XXXX and like to

On today Guo. and our we the Jean-Marc have Chief Officer, call will Financial with our Officer, Q&A Jack a After presentation, Executive the session. Chief Germain;

a fourth previously we call quarter A year results reporting as and are U.S. GAAP, copy we and our website today's on and being today. slide available today's U.S. full is dollars under and presentation of starting reminder, now As constellium.com, announced, in with for is the our XXXX at call recorded.

Act the we and of encourage take to everyone the filings. and XXXX. I'd the events at and website include statements look Reform financial operating within known company's recent our Litigation involve uncertainties. risks may the statements of include meaning Before a and performance, may begin, regarding and Today's Private to like call Such unknown visit expectations future anticipated company's Securities and statements forward-looking

any under summary otherwise, our XXM revise a filings under differ or that the the forward-looking of in required events could statements presentation. in of Form XX-K. expressed a refer information, to the risk of on report as of Factors future or All as as statements, the factors by future We obligation date to please those from information Risk presentation is update in heading undertake new except no law. result the forward-looking factors materially the to and cause presented in annual Form results specific For

of attached our today's financial certain measures. slide presentation presentation, today's Please non-GAAP GAAP see disclosures. regarding addition, supplements In reconciliations in the which information measures financial non-GAAP includes

our revised noncash exclude wanted definition on call the Jean-Marc, impact consolidated Before discussions metal price we line. The new no adjusted beginning that turning longer with the to will early definition level SEC. of EBITDA last based year, prior the the to remind at the I everyone of over

lag continue is the stakeholders to We a investors price get impact that and business. noncash metal of of will other necessary the assessment provide to economic performance with a true

EBITDA the will exclude will provide and impact EBITDA exclude also for we continue adjusted segment adjusted impact. Our this any to guidance

I to hand the that, now to would with Jean-Marc. And over like call

Jean-Marc Germain

you, Constellium. everyone, thank morning, Good Thank Jason. and for good you interest afternoon, your in

Let's begin #X to our with priority. on X. Slide I want safety, start

Our rate hours year, per recordable continue prior the performance. worked year safety of was to that for to pleased higher than I'm case X.X best-in-class million report we the slightly but deliver

reduce to to recordable our committed our rate are safety X.X. achieving case to target We

XXXX, X compared performance. Slide to lower to the highlights from fourth of A&T turn prices. tons, let's Now shipments primarily our Revenue and to to decreased to down billion unfavorable XXX,XXX of shipments were offset X% and AS&I. XXXX, of and the price mainly quarter quarter X% quarter and discuss fourth compared the higher due mix metal partially due lower in $X.X Treatments by fourth

while pass-through our by to metal prices, model, business our are changes metal risk. revenues which in minimizes a price we Remember, exposure affected operate

the quarter $XX in noncash This includes this flood. though $XXX net XXXX. the economic $X quarter performance the negative of million. the million to metal income in the Adjusted result EBITDA in of quarter, we million If flood also lag of million impact at of Jason a quarter adjusted million from mentioned the achieved earlier, reflects the the exclude price $XX of compares positive impact of quarter, so fourth the as of $XXX compared the includes loss impact was of real fourth lag, $XX business $XXX as metal price and net the we Our Valais in the in EBITDA of of impact a to million XXXX. of million a

was Cash share from buyback I'm in $XX program. continued we report quarter, our the million to operations pleased that and

repurchase shares. through the million shareholders to X.X of $XX million returned quarter, we During the

on Before situation flooding the our you turning in Valais. to full year update a wanted to I the performance, give quick

the first is complete to our the by prior on production track year, of with As this is of end quarter expectations. line ramp-up business today, in which the

quarter, As remaining XXXX we ramp mentioned portion expect XXXX proceeds in some the as in and last receive continue as we cost expect will of the we up, insurance to impact production well. to

I damage material came impact assessment mirror While event pleased of from flood in original to soon. the total be insurance below we will put the impact growth event and business, the the able that am on a rearview the very had our in damages our the

Now Slide turn to full year our highlights. X for

X.X tons offset million unfavorable Revenue compared the lower to were partially $X.X X% billion down primarily year, higher prices. due shipments XXXX, of by X% XXXX. to and to price mix, compared or For full and metal shipments decreased

million income to as EBITDA net the impact in million impact full for noncash though flood. in the the from result million. net Valais XXXX. and $XX the million compares was business a Again, the Adjusted $XXX we of EBITDA $XX the adjusted real of economic also XXXX, for the of this This we positive of if $XXX $XX of XXXX. million includes Our a achieved lag exclude flood to a impact of compared the million $XXX income of impact year negative price million at metal record price in reflects performance year of metal the $XXX lag, includes of

environment, the I will year-over-year align in cost reduction current we later capital Given change our demand the efforts accelerated to discussing on. actions and be during XXXX, Jack took to and working which performance to reduce

free cash flow. to now Moving

negative cash in year XXXX. for Our $XXX free flow million was the

Valais million of would If will you price positive in flood of cover have more and the flow impact the Jack cash receivables, received the XXXX, exclude collection been purchase which $XX include in free detail. cash for deferred

in a for of Constellium impact, flood at was facilities very exclude with summer. end year at Valais many the leverage was in X.Xx. X.Xx The was weather of year Our we in leverage the and fronts. at the severe snow extreme the XXXX Valais challenging operations cold XXXX impacting during on Clearly, end began we the Switzerland If our 'XX. flooding January region and experienced the

addition, year we most more end our headwinds North of and which market-driven In the second quarter of across in second and in became tightening including significant faced America. weakness last the pronounced spreads in starting half, demand markets

and schedule of thank started that casting relentless we shareholders On year. and up to shares our for in the and a commitment, recycling stock we and customers I ahead on returned I'm the during million more repurchase to want these budget, focus their difficult $XX center new pleased resilience during note, our employees our serving September, below X.X through positive million of XX,XXX of company each times. slightly of

also GAAP I'm to excited reporting under dollars begin today. results U.S. our in U.S.

file first Form on will our we report XX-K. annual soon, And

Slide to please turn Now X.

Before to tariffs Jack, I to we and call turning latest how update Constellium. Section potential the over see quick give impact XXX to a the wanted on the

it both Before a details on the presents and slide, me fluid at see this we various believe on into negative situation stage, The impacts And situation. going let We our us with business. opportunities. is multifaceted bit. positive summarize and some a tariff

to impacts include does today on giving not Shifting are we guidance tariffs. from any details the the The now. slide

mostly where we are production for the the local local regions we operate. in On side,

Canada structures in in become XXX our expensive venture joint a these U.S. extrusions that the business under tariffs. provides more and have extrusions Section automotive to will We

will we it has ship U.S. be not In a and to to Europe Aerospace, though OEMs, small pass-through from today, this quantities the serve global impacted.

of smelter the On supply and aluminum side, metal given some in the capacity more the U.S. import of imports some become these expensive. primary we from will lack Canada

there be will a in costs negotiations mitigate may lag additional through. tariffs passing Commercial necessary be to and

the of be net regional positive in of in U.S. scrap terms for could with current the U.S. purchased needs a a XXX scrap from scrap from of availability scrap aluminum Section dealers scrap now, In the the could The most rise scrap could on impact of the as our premium it scope and tariffs from tariffs. excluded We improve spreads is in U.S. aluminum. increase

in are produced we U.S. Tariffs more benefit of products into domestically could should for a impact, around tons this. X positive be million these terms coming and commercial Today, from of make will the imports Constellium. aluminum competitive, Now X net flat-rolled

earlier week, we U.S. example, announced the increase in shipped an products a As this flat-rolled price for all

end blanket U.S. Canada and be overall on implemented the tariffs business second some in should including we is will the and health announced the have U.S. this quarter economy, types in way new originally our future, is the early priced market and We will depend estimate on too the of the to of markets depend quarterly, on Mexico. and overall tariffs also the as on that as impact from soon dynamics. The to year benefit the it

same is unknown. aluminum, should out remains before, of this impact though To overall in situation said of apply as very close logic the on I The tariffs, fluid. terms on impact the

the continually assessing future We at some monitoring are potential with policies, we stage, impact presents believe it and this trade of and though opportunities. current us

will over to hand our now for I Jack financial that, With the further call Jack? performance. details on

Jack Guo

now weak joining to TID commercial, for mainly EBITDA due fourth transportation Please focus general of performance. $X today. and XX% and segment last on Thank as turn the quarter our $XX A&T markets million, you, you, thank remained Volume and Slide a call million in the quarter. the year. XX, to was industrial compared decreased Jean-Marc, headwind everyone, lower Adjusted of to let's shipments

versus were demand in Price to impacted $XX flood. and and Shipments mix was stable a were of due a last headwind mix also million the TID aerospace softer military the in aircraft environment weaker the in of aerospace pricing a same quarter remains as shipments healthy. year quarter. TID result and in at alley

A&T as of During negative quarter, had at impact million the of the $X a fourth Valais flood. a result

performance was million. except $XX A&T $XXX generated full in of and of compared Valais EBITDA of the adjusted a were XXXX. a drivers of year, $XX the record The XXXX, a tailwind XX% to was quarter, for million year year those to For headwind impact of the full a cost the the decrease fourth similar million, full

Now Slide turn to XX.

on offset North Packaging shipment performance. in as year million was of million demand the year. as Adjusted decreased Europe. higher healthy $X and mostly shipments a $XX of shipments focus both automotive to America quarter in Let's X% last in remains Parts tailwind last quarter Volume versus were our EBITDA segment lower by in increased packaging compared the fourth XX%

by million headwind lower with result were of of operating Europe. offset Automotive the as $XX weakness unfavorable Costs quarter quarter. $X XX% weaker North North the shipments and America, America decreased in mix of spreads was in mainly metal a in a tighter scrap costs. a costs mix as and in headwind a both of million result Price given partially

we As XXXX. from conditions. quarter negative degree repeat said $XX of quarter per the current XXXX also fourth in benefited given did in same in $XX million energy-related scrap of America impact spreads tighter to the not to the North market is past, which Europe, million in grants the The

Park million, compared EBITDA adjusted drivers For of of full quarter. but XXXX, to XXXX, the in generated full performance $XXX the similar of to were decrease fourth XX% year year a those the the

Now the focus as Slide $X industry million fourth lower let's the on headwind a XX% to quarter and automotive compared a $X segment. products. was in extruded shipments turn last of EBITDA million decreased year. and AS&I Volume of Adjusted to XX, result of

Europe. weakness quarter, of and in were Automotive the Europe. as versus a in result shipments XX% last persisted Valais both at were Industry as flood. North in down weakness shipments were with year also America down shipments Industry quarter impacted XX% the the in

were of tailwind Other costs Price of while and in a mix the $X $X million million the $X also quarter. FX was a headwind million. in a quarter, and headwind was

Valais of During had result a impact flood. the at negative $XX the fourth million quarter, of AS&I a as

of fourth the the AS&I Volume, year year of similar full to the $XX for million, million. generated compared impact $XX adjusted of XXXX, full FX year, though costs quarter, as tailwind For full a a XXXX. in XX% were the and decrease EBITDA were Other

expense mix year. and corporate Valais expense in on corporate million a $XX was million impact from run headwind full at the $X currently in a $XX Price $XX million for million, of was and It is slide and of year and expect last was the to but the here, We up XXXX. holdings approximately million. our headwind XXXX not $XX holdings

on cost not to I also is environment current wanted It here, facing. but the the we're slide summarize

experienced cost As a our you dramatic costs. largest exposed a North the know, business input, not we're so aluminum, of changes scrap operate we pass-through market spreads price model, metal materially in tightening other We in in to XXXX. America of

types impacting it a create to significant Park headwinds throughout XXXX expect used scrap. as other amount costs, beverage primarily will and segment our of on metal cans of continue We this uses and

cost For favorable And energy, remain quarter, as inflationary although our compared normal levels. given have our XXXX reducing markets, pressures XX and and such costs above are many Vision outside improvement maintenance historical prices weakness of energy categories. averages. across labor XXXX, we the in the more moderately we eased we're by minimizing last seeing said have our to costs, as procurement of accelerated headcount Other other non-metal more several with to other program reducing efforts contractors spending, optimizing costs use cost reduction measures

for cost performance cost current in past We in and environment. the structure demonstrated our ability have we're demand confident our rightsize to the strong

rate the XXXX our benefits be of benefit in run should in some saw results even the more and You XXXX.

to Now year Free $XXX receivables, flow. includes the we we GAAP from discuss received treatment. the although was Slide million IFRS of conversion result XX as net $XX price received negative the a which for of the flood, collection of XXXX, This of full cash which for result our a insurance proceeds the million and the deferred negative of also of impact let's XXXX. Valais cash is free excludes $XX at accounting of this flow in turn a million U.S. to cash is corresponding in million $XX purchase

economic collection does reality change of free are Constellium. previous the receivables price The deferred generation arrangements receivables deferred not in for purchase Europe. flow cash the related our treatment for accounting or purchase price historically to technical The some factoring of

arrangements under recorded cash recently in We be have going forward. received the cash operating and amended these arrangements all will flows

the positive including for of As cash been flow, the $XX price Jean-Marc Valais million receivables in received have impact cash of flood mentioned, deferred purchase Free excluding would collection XXXX. and

million cash Looking for excess year. at XXXX, we $XXX of flow full expect in generate free to the

We million million expect approximately $XXX XXXX. this $XX lower year, to is CapEx be around to which compared

$XXX source cash year. be for and approximately full expect of million, capital interest a we taxes and Other of cash million expect approximately cash to We and the $XX of working modest

activities mentioned in Jean-Marc As we continued previously, buyback quarter. our the share

quarter, million. total X.X the for During we XXXX for X.X shares $XX million, bringing shares repurchased $XX to million our million

the intend large existing the a approximately program, have for and generated $XXX share free this million our flow cash remaining We program. year repurchase use in we to portion of

of to liquidity up of let's as sheet a the partially of XX to discuss Now result turn and end quarter, XXXX, Slide compared balance fourth $XX net our the and end was billion Valais debt position. of flood. At million our $X.X the the

end end the was X.Xx leverage were X.Xx the of XXXX at XXXX. versus of Our up

year. at If impact, the X.Xx the you exclude flood end the leverage of Valais was

X.Xx We're committed in the to to maintaining our target of leverage over leverage range time. X.Xx

of we summary, our million until strong as As end remains the have maturities liquidity see, $XXX no our at you XXXX. and XXXX debt can bond of

With now the hand Jean-Marc. to call will that, back I

Jean-Marc Germain

Jack. Thank you,

discuss light Slide market in our XX today durable which majority is role. portfolio and an material current The secular critical of markets plays from sustainability-driven end turn a outlook. benefiting end growth infinitely our Let's serving to recyclable aluminum,

in the of many term, facing markets However, short these headwinds. are

both for aircraft build focused Major Turning first market. to and remain continue continue aircraft, though on increasing Commercial backlogs challenges widebody deliveries. OEMs narrow rates to the grow. chain today aero supply are to aerospace slow robust and

of right build causing chains which the result, shift for a demand a products. supply to is As to adjust aerospace need in lower-than-expected our some to rates,

military slowdown including long-term passenger aerospace growing confident term, demand markets fuel-efficient we business the demand that traffic aircraft. greater regional and remains for Demand in more fundamentals in and most new, for intact, near the for stabilized jet stable has the remain and the remain driving Despite demand part, and the aircraft. healthy

by favorable, markets preference packaging. Europe. to Europe. aluminum both packaging from to we this consumer the remains long-term beverage mid-single sustainable to grow ongoing expect greenfield North can both and and market now North America in regions America term, growing can, low plans both capacity as and America. for Turning be North growth in Demand evidenced healthy investment The continue continues outlook Longer to end makers digits for in a in here to the

in OEM have demand where in greater remains to particularly now luxury in Automotive weak, premium in flight America remains levels in turn Europe has is and pre-COVID the vehicle term, well of and automotive. still levels production Demand vehicle below Let's in and we and near North vehicles well. below segments, North exposure. America pre-COVID the Europe electric as softened

will believe and continue expected. trends drive than to electric at term, hybrid grow, such aluminum lower and continue a we Sustainability will the to increased rate light-weighting products. vehicles efficiency previously long as the for In but demand fuel

on As positive today. this remain term in market regions longer weakness a both we we over result, the seeing the despite are

end can see X revenue. the you last As these on markets page, over our months XX% XX of represent core

lastly other to and Turning have North America, at weak appears In demand albeit Europe. stabilized low specialties. demand levels to in remains

experienced have markets in TID certain X see America. more now, years in we are for specialties beginning though North some weakness We most green markets shoots across than to

spending typically are drivers including As rate environment, economies of like each the the levels these industrial in upon interest a patterns. reminder, production industrial region dependent and markets consumer the health

position As recover. we which to structure an better when adjust environment, industrial do work the in Jack demand mentioned, to hard continue current put businesses the will economies cost to our even

any current in markets pass. of will the of we serve, markets like for diversification believe environment the and end is strongly and To an conclude the the end that on conditions we our the each markets, asset company we that in fundamentals the

just current XXXX, on $XXX establish we including the the excess in current to EBITDA, adjusted outlook, our $XXX million. million million the excluding noncash free today described, excited to cash metal I of are market I'm in of conditions to for targets. now targeting lag, price XX. end Turning new range $XXX long-term Based Slide flow and also

of million adjusted to excluding we and of XXXX, noncash lag the $XXX For cash EBITDA, expect million. metal price achieve free flow $XXX

bridge to here, adjusted of major million show slide we drivers provided the $XXX EBITDA. the On achieving a to

investments Our operational several XXXX and well Shoals the Muscle also demonstrated and the investments, recycling Ravenswood return-seeking the Valais in we investments in in our like center recast casthouse include It the Shoals target as incorporates which and and past incorporates announced well previously underway; flood, the which projects is a in casting an benefits recently the as of improvement which new from with the following as cost-saving the months. investment performance, Muscle and in like have growth recovery

as some investments smaller existing these of as other All in umbrella. projects included well CapEx our are

We current market of each for rates end though markets, rate assumed growth have below are industry are we additional also our which generally estimates. growth assumed the

the maintain initiatives. have other in we Also, As will to inflationary demonstrated and strict cost through price. past, disciplined to be as in continue gains control the we cost we productivity on to reduction mitigate past, expect we impacts demonstrated future have

have market metal We North costs, lead to our Pulp compared assumed in the will to current through XXXX. tight unfavorable continues scrap segment, which America in primarily XXXX,

from assumptions should contingency I help target in just assumed our also We that a the potential described. offset XXXX deviations

generally are we Lastly, the to macroeconomic tariffs, the and bridge, we remain impact assume conditions that stable, assume we geopolitical used on and but also no from changes.

and to this our we many in conclude, to while front To lastly conditions remain the and that face about Slide excited we opportunities very us. most seize believe to pass, I future of today, ability challenging the our in Turning markets will of continue XX.

the the right over right and we and over the in that demonstrated and prices. know markets overcome again we have that right strategy, products have to teams how the We right

model is flexible resilient. business Our and

us Our allows options always conditions. diversified different market have portfolio to in very

value the built needs seize on respond and and the creation. prices We're our balance success, high-value, on customers. shareholder growing for need have we sheet products extremely our recyclable and executing we our of focused both remain We strategy sustainable and long-term and well positioned to to weather opportunities

please. that, operator, now open we session, will the With Q&A

Operator

[Operator Instructions].

question first Bank. Deutsche for of Corinne from Blanchard today Our comes

Corinne Blanchard

first job you the the the giving a probably Maybe be the and free a good just a the us on give into line, cadence right can guidance will flow, the maybe question going guys for guidance but XQ? like gave you of and XQ more key now, but like the EBITDA and did detail second 'XX that around and lot of same maybe bit and little tax also cash for the you put

And bridge be by in outlook. confident walk would second the my to you should 'XX market should and question our or from through number 'XX Can us be then the that 'XX? investors long-term on the

Jean-Marc Germain

I'm Yes, And and start, I'll help thank Jack, you. sure me. will

for the 'XX. on So on and your question first takes key puts

feel look current at we conditions, impact conditions the second said, So are of and in we as full experienced XXXX half continuing, I in their you the the we'll mean, XXXX.

the protected instance, year. So last for scratch Europe. XXXX, going weak we full annual very is in to be them in the impact contracts. coming the of especially this some also automotive with We spreads, year were that We'll spreads, scrap believe get of

ramp-up, supply On are the that in struggling that see elements we to the meet chain. of destocking so aerospace some the creates side, OEMs

in aircraft OEMs. that though prudent programs or Even on some assumptions own well. main space our for up military like aerospace shipments of we So our as the we're with with quite other make can

foreign obviously, not with then is of exchange And helping late. strengthening the the dollar

mentioned, element. we QX. still believe, I another costs the some Jack then that's And have Valais, in as So

XXXX. So all is quite a hefty that adds into number up which to going

much Now and in talked Neuf-Brisach, well. have that, underway We center We operational job doing we place. we we on confident feel we of, that back Shoals, to we're all good going talked which a to still initiatives very about beginning the Muscle the about about are and had and now of in in have offset see are we starting very talked that's the track. recycle ramp-up improvements there, had the but

some to -- is repricing our in starting QX. our which also us aerospace, in of of benefit going We the have contracts

have -- light about a like we conditions, in accelerated savings we 'XX. the market have compared for to maybe more Jack that where cost challenging were back XXXX, and and cost in that the greatly reductions So can ambitions bit of in obviously, our comment -- increased in

the of So headwinds right, market all of beginning a that said a you and Valais the time takes full when on have done, benefit adverse side, especially it bit generally, cost of offset lot to actions is because that then savings. a and you being all by the the little and year the see about. see And of of we had weaker talked the

I can how your if So -- think question. that's anything first then know, or... that I answer don't miss I I Jack,

Jack Guo

think good. that's I No,

$XX plus focused to looking this accelerating in I We're savings. more and for we're cost. weaker And We're of a $XX X opportunities million, outside efforts that will, $XX environment. million is we're of in our of XXXX reduction you mentioned, be very made as relative that on XXXX that labor, the looking million 'XX. targeting labor. bucket to proud the we'll and very think, Bucket on. environment, of at in previously, of cost Vision we've at we've $XX far, efforts is on indicated million so obviously, we We're over if executing program years, we're

Jean-Marc Germain

Yes.

second to -- 'XX, to to one, Do So you that's move the outlook 'XX I your question, guess, to Corinne. right? 'XX want first

Corinne Blanchard

'XX.

Jean-Marc Germain

Yes.

recovery the Constellium is And Most back done. play. recovery The that Valais that's 'XX, very of about, right, in already the in is let -- no if me -- still the sorry, up. start happened right? much of So -- most in obviously, 'XX, it go starting to and will XX, we're more so in because there flood talking investments you 'XX, so Page right, second I'll back

part to going going from towards contribute believe right the linear is obviously, are investments now markets later towards period. we play investments there now, with but uncertainty, period the recover. how Neuf-Brisach other mostly the about out that to mean of the pretty I to path the of the the end center to are some The in the recycling is 'XX overall,

recovering one case faster. And a markets a can make for bit

internally, we more assumptions out than there. what prudent is own Our are believe

improve recently, to could we So well, so say, we've prudent. burned it we think been should some tend faster, but be

the You also going so to that's we that to process. like not going to that be be U.S. accelerate quite say we're to guidance, our the that be in some tariffs the would But could anyway, could bigger in favorable prudent. red then the brunt think spreads, quite we've stable And should the the on taken spread you we the domestic are that the in be year, see once think -- impact suppliers, I this on future. -- box of of scrap kind believe this tightening scrap of

So improvement spread. banking of really we're the scrap on not an

spreads can that, think, worldwide if is just your it create point, U.S., a too The recycle at you scrap some And reason of like look because scrap imports we're it point. go If I not thinking past. market, U.S. in some it's market, the become whether in becomes that they aluminum. at indifferent you tight scrap worse happened that at will the has the primary the aluminum or [indiscernible] from into

a scrap tight we've don't of in here levels got much think of I at getting we're historically U.S. risk worse. a the So that

trying think I market about some the of kind us the 'XX regular we we're cadence. So pretty can to of time, but time throw And that's curveballs ahead can from to how stay know to 'XX, obviously, that it.

Corinne Blanchard

very just on I quickly can back if 'XX the come guide. Maybe

given euro. the that about it this guidance think I been asking in since is had we if should morning how think something like, been

number we're in if been or switch what the is the could of you impact, trying factoring like like like what hadn't so? have see to GAAP impact what see So the made the to and trying

Jack Guo

off-line. U.S. we're thinking We this take potentially in can help dollar with we can maybe Cori, afterwards. dollar bridge Yes. mean and company a you now, U.S. I the terms. we're

Operator

Capital from next from BMO Our question Jancic Katja Markets. comes

Katja Jancic

to to is back given is half? the going that first more relative half assume it Maybe second 'XX is pretty that fair challenging market weighting near-term be to guide, to the going

Jack Guo

at look kind I quarter I beyond way first fair -- first I at quarter. say look the would would generally I'll mean is of then that's and it

to will cost from to Valais alluded of quarter, Shoals like some due remaining from -- all, the at kicking have Jean-Marc the and seasonally, Muscle it see comparatively already First as a improvement. flood we impact initiative, like the we'll the is it's, first -- more seasonality, some weaker and to, year, the have of into benefits progress impact we

of So the it be middle stronger will in the year.

Katja Jancic

So the to year, like more of relative right? the first it's quarter rest

Jack Guo

Correct.

Jean-Marc Germain

though at And -- wanted in believe to today we for tariffs not have even just large, us. they by way the guidance said, our I and what then I look Katja, for structured add, the it's mean create Katja, we tariffs may should it's to not opportunities are as sorry, our us. guidance, And in

in year, the half more the that's So of obviously. second

Katja Jancic

-- similarly similar is the generation? is this flow cash free for And

Jack Guo

a it's good So question.

in you quarter year some see we that actions. there's lag the benefits buildup -- in from reason. the when if of release the first of offset the if cash benefits cash see for up to flow year, the year typically, in kind remember, quarter in -- building makes in the to seasons. capital, fourth experienced, initiatives a working first last when benefits of started We weakness last but working we're And first terms quarter cash this capital busier a was will, is weaknesses we've typically working quarter sense. And that is we'll the remaining of free due from saw you help due those number there a negative So of capital to the typically, we but and to the

Katja Jancic

given initially year? this you see acceleration Jack, free in And acceleration then a an used we really we Q, of don't will buybacks. be for mentioned Yes. the But again an is the and share maybe see flow cash lot timing, first more later the

Jack Guo

leverage, So we're liquidity we're in our position and and with cash we're I think confident flow in confident comfortable generation. very our free our

when So it quite run. just to be off we'll the you all and put continue together, hands program let

Operator

today next JPMorgan. comes Our from Peterson for Bill question of

William Peterson

the kind the that I and to of have $XXX impacts how outlook environment questions $XXX come on for like that a guess few million. demand I'd the I year, to million to back

key auto the you and market the assumptions like growth mix for across Hoping shipment market other. So can packaging, aspects markets through just I themselves. the and guess, about also bigger aerospace, growth and go own your speaking

segments aero, of And destocking, be unfavorable? remain you weak of but get mix just you down, better of Europe, stable the a year just then similar weakening understanding that think overall does been up, industrials guess, kind already maybe just then markets flat how mean will it's remaining flat, into year? trying Europe? to talked or and for we has this of these Just of this reporting end how auto, could of shipments the kind guide for translate impact example, EBITDA assuming are about you our in we're In and down are going should weak For of at a given U.S., kind case low in that aware that will so assuming should the I level, forth?

Jack Guo

Okay.

if this you us But it's one. could Bill. to set really too more of aerospace cause right? stable as environment think generally prescriptive I may aerospace, out speaking, environment, expect to weaker we volume a on later, question, of in some good be look to push we've type the weaker mix at profitable So a don't although be want we

XXXX, mix, impact but weak see build believe year, will to for from industry North and look unfavorable perspective continue they expect year. you will both to to you rates were aerospace. versus are volume latest a business. to do at the and for Europe, our expected be the We automotive In automotive America that this stable be So down if

in look tariff in light situation. you America there's of opportunities I especially If the in North think at some TID, TID,

in I any we did improvement improve. continued forget expect other packaging, do markets? And packaging expect the And that So market. do we to

Jean-Marc Germain

the No, us in also think facility. of out fact as we flooded anymore Europe, in and that resumed just we've I TID Sierre to help not our production, going that's and are well

Jack Guo

Good point. Yes.

William Peterson

sort back Great. scrap I to of a perspective, from wanted XXXX both bridge kind the well to as for come of near-term XXXX. as

operate way your guess, sort I discussed of million per And and for the maybe guess, overall you recycling should of about environment guess versus I guess, term, we in down, And the about in, first, the think and I break exchange? impact other weaker in scrap quarter midterm, million is in the foreign the regions XXXX? headwind bridge Europe, then potentially you $XX near can on scrap the how to slide, offset better to industrial spreads rates maybe fundamental I in bridge XQ the by right over particularly think So activity? $XX acknowledging

Jean-Marc Germain

Yes. I'll help me start, as well. Bill, and Jack will

then little forward. home do a believe is an assume Europe it's today, write about. And to scraps American look we're scrap is not really nothing I improvement what we -- we really So we going at but event, think a it really problem. North of a It tighter, is in mostly impact spreads yes, that the when buying bit and 'XX

there more Europe, happening and collection long scrap, of as and consumers both out, more recycling term, And industrial pointed is scrap. and more consumer right, more you in --

in we that's covered, Europe. for long short feel the in the think both the good are I we Europe. balance that well in term term And So and

are believe is North We stay from of America, as But to we passed much to I painful The we're 'XX, mentioned, once spreads an very a think a they're standpoint, not tight. going situation. tight. variance have it very scrap going impact. it's to

but is the of terms last me, year I'm exchange, and was dollar it help now before, in year Jack And than will average stronger foreign actually. on the sure,

'XX, different So 'XX, XXX, dollar don't change that's to it's right? flat. So where guidance. 'XX, XXX, make don't it's assume to in our from reflected going assumption pretty at going that be is We in an much the we 'XX,

answer that your Does question, Bill?

William Peterson

flips become Yes. is euro that if actually largely guess point, No, And the to guess, coming over the tailwind, I the stronger was years, the point. it to does. I last

Jean-Marc Germain

a creates a yes, is much It yes. effect -- The correct, flow it different, is translation is tailwind. cash yes. creates That not right? standpoint, From a tailwind,

Operator

[Operator Instructions].

Our next Timna question of Tanners from comes Research. Wolfe

Timna Tanners

few questions step if could take back. wanted we a I a ask higher-level to

dynamic more on So prepare starting scrap, talked new capacity premium, to being this year, up do to the I obviously in sustained passed the putting regard But term? with we U.S. through what just Midwest scrap that with exploded. the You which about can pressure you know is pressure like longer or sustained

no about through same that short switch scrap the question, to and term? in just Constellium can just term? your longer higher aluminum can lower if terms responses prices you longer for sustainably capacity topic. of more in up from the in pass is of on the short-term, term, away longer, third with auto, way is potential EU short-term, can then Coca-Cola for given And question auto then some Is switching these inputs the long-term you long-term contemplate the really that there And -- talking switch that

I'd So you just it X if are those get can thoughts. -- want, questions. sorry. your love repeat but to I I'm

Jean-Marc Germain

that's Thank you, No, Timna. fine.

used buy, a can I scrap but the use. on we number, an on very -- a So -- but plenty of right? we there's scrap, dynamics, beverage XX% that want specific right? pressure other it's what around other So types to that's what don't exact portion is cans, it's there of buy, and give So of but of we there's scraps

right become more place U.S. premium scrap, we the economy factor increases which world, other up end attractive. as rest is, Midwest of is the now, in the becomes and happening a where as earlier, the -- I And imports as of relative that to mentioned stronger the

and well, also better high So buying look further prices at, Then there's mentioned, sheeting from as option, scrap smelters damper go. how some that scrap on will a at effect if that put is tightening. will primary a on a gut point, also you it can will put and okay, people dampening is which so expensive

level. all factored that So we at in, that, believe, all a high pretty we

we do in XXX are both sustainable. believe So we XXX that see. And quite we are projections reflects have are we market conditions the not our believe that and that targets, will scrap unusual, and

an there's there. maybe upside So

had And question I so -- to on question scrap, -- thing a was EU you is right? so The that do I auto. we're also and okay? for on I Yes, capital soon question have on uncertainty. the think first think not the and recently to given in is we we are going do growth that the the are not anytime And going automotive, markets invest where to us not --

capacity the best how So we do now of it's use have. matter we a

XX% also America for know, if you more and more, other Europe. that of As have to sheet. that We auto both it products sheet and And the are believe this we have mention. assets, can used we to North opportunity we -- can make not like make in

in quite that. reasons, passed that's we If of very I with opportunities, anymore. some and issues year, event have mean us much fully in couldn't significant we can we that the anything, for had because Muscle are So play last for plenty we produce sheet, in we do don't to Shoals. operational on starting snow volume ready some

we in to So no a capacity we part automotive, business which business. to we repurpose for our how on limited then huge there quite is believe efficiently. but are have if costs important, were not lines, able strict finishing we And or of the our auto be obviously, very will manage

expensive so And then away that to well, going be you aluminum people aluminum. mentioned, is finally, maybe from will switch

look input materials, at by look because it's you that less expensive, aluminum #X. daily note volatility being and it's volatile quite people quoted aluminum, the steel of more is are Historically, too, volatile getting well, to the way. interesting Actually, are at So when steel transparent. steel and than and as plastics plastics

to So a as I'm more a by other of use, stability, to more going volatility make the difficult the will and choice user, hedge okay, I for what can way, got much and try it I the I've get ones.

got it's how So going material cost. I better to that I what a it's know --

was in is changes today, sorry, to -- because of per in the XXXX point XXXX even to you packaging at in XXXX were or at even less still is $X,XXX than there if was the material. ton aluminum XXXX, XXXX premium, it second mix of -- it price happening put change to and no in the that from expensive remember The price

very I'll packaging. And going a that the the more how the that of finished many price package much quarter product, the there's be finally, right? into is And of it beverage of small choices that goes submit choice can just is to next of than part

whole the the require got filling and got handle capital. that to they infrastructure, you've mean you've lines I

All these be all right, You've got addressed. you've the distribution these more, you've questions need consumer to questions the got preferences, are channels, and that got then space. shelf

says, pace, if it and materials a that casual to question, Did mean say happen I it. when answer they of takes to very then a your they and it competitiveness for want use can don't happen shift also think But slow in well, we Timna? I So relative other changes at materials, substantial I do. such be doesn't

Timna Tanners

helpful. that's No,

Operator

currently time, have this no further we At questions.

So for I'll hand back any to remarks. Jean-Marc further

Jean-Marc Germain

everybody, interest for again, your in Well, Constellium. you, thank

terms tell, for you are fun year of you hope I XXXX and in But are strong us say, footing ahead can a that a As the a and clear was disappointing the I we've them think on convinced It are some we outcome. path us. of growth, on to and got relies under path lot not of of can our really was things resume we of we've ahead control. us a that

us, look of to on we're So years our process you excited updating forward ahead the the about coming we quarter. next in and

Thank you so everybody. much, Bye-bye.

Operator

call. for you all joining Thank today's

disconnect You lines. your may now

Constellium SE (CSTM) 20 Feb 252024 Q4 Earnings call transcript