Luxembourg, May 11, 2017
Highlights |
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Net debt5 of USD 220 million as of March
31, 2017, representing a gearing6 of 9% compared to a net debt of
USD 154 million as of December 31, 2016, representing a gearing of
6%.
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Aperam (referred to as "Aperam" or the "Company")
(Amsterdam, Brussels, Luxembourg, Paris: APAM and NYRS: APEMY),
announced today results for the three month period ending March 31,
2017
Timoteo Di Maulo, CEO of Aperam, commented:
"Despite the traditional seasonal effect in Brazil, Aperam releases
record Q1 results since Aperam's creation thanks to better market
conditions and healthy real demand in Europe as well as the solid
execution of its strategy.
Looking forward, we remain highly focused on our strategy based on
self help measures to sustain Aperam's competitiveness and further
improve its operational performance"
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Prospects |
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Financial Highlights
(on the basis of financial information prepared under
IFRS)
(USDm) unless otherwise stated |
Q1 '17 |
Q4 '16 |
Q1 '16 |
Sales |
1,276 |
1,053 |
1,076 |
EBITDA |
171 |
133 |
112 |
Operating income |
133 |
83 |
73 |
Net income |
93 |
58 |
49 |
Free cash flow before dividend and share buy-back |
(15) |
125 |
6 |
|
|
Steel shipments (000t) |
486 |
457 |
483 |
EBITDA/tonne (USD) |
352 |
291 |
232 |
Basic earnings per share (USD) |
1.20 |
0.75 |
0.63 |
Diluted earnings per share (USD) |
1.10 |
0.70 |
0.57 |
Health & Safety
results analysis
Health and Safety
performance based on Aperam personnel figures and contractors lost
time injury frequency rate2, was 1.1x in the first quarter of 2017
compared to 0.8x in the fourth quarter of 2016.
Financial results
analysis for the three months period ending March 31, 2017
Sales for the first
quarter of 2017 increased by 21% to USD 1,276 million compared to
USD 1,053 million for the fourth quarter of 2016. Steel shipments
for the first quarter of 2017 increased by 6% at 486 thousand
tonnes compared to 457 thousand tonnes for the fourth quarter of
2016.
EBITDA was USD 171
million for the first quarter of 2017 compared to EBITDA of USD 133
million for the fourth quarter of 2016. Despite the traditional
seasonal effect in Brazil, EBITDA increased quarter-on-quarter as a
result of continued improved market conditions, the Leadership
Journey® contribution and the Top Line strategy as well as positive
stock effects related to the raw material prices evolution. The
Leadership Journey®5 has continued to progress over the quarter and
has contributed a total amount of USD 526 million to EBITDA since
the beginning of 2011.
Depreciation and
amortization expense for the first quarter of 2017 was USD 38
million.
Aperam had an operating
income for the first quarter of 2017 of USD 133 million compared to
an operating income of USD 83 million for the previous quarter.
Net interest expense and
other financing costs for the first quarter of 2017 were USD 12
million, including financing costs of USD 3 million. Realized and
unrealized foreign exchange and derivative losses were nil for the
first quarter of 2017.
The Company recorded a
net income of USD 93 million, inclusive of an income tax expense of
USD 28 million, for the first quarter of 2017.
Cash flows from
operations for the first quarter were positive at USD 27 million,
with a working capital increase of USD 153 million. CAPEX8 for the
first quarter was USD 42 million.
As of March 31, 2017,
shareholders' equity was USD 2,587 million and net financial debt
was USD 220 million (gross financial debt as of March 31, 2017 was
USD 483 million and cash and cash equivalents were USD 263
million).
The Company had
liquidity of USD 716 million as of March 31, 2017, consisting of
cash and cash equivalents of USD 263 million and undrawn credit
lines9 of USD 453 million.
Operating segment
results analysis
Stainless & Electrical Steel
The Stainless &
Electrical Steel segment had sales of USD 1,061 million for the
first quarter of 2017. This represents a 20% increase compared to
sales of USD 883 million for the fourth quarter of 2016. Steel
shipments during the first quarter were 465 thousand tonnes, a 3%
increase compared to steel shipments for the fourth quarter of 2016
of 452 thousand tonnes. Despite the traditional summer seasonal
impact in Brazil, volumes increased due to the seasonal recovery in
Europe. A technical outage at the Chatelet hot strip mill (Belgium)
occurred during the first quarter. After necessary repairs, the
mill is now working in stable mode, however this interruption is
leading to some shortfall in shipments and results during the first
semester of 2017. A mitigation plan has been promptly implemented
enabling a good recovery of sales. Overall, average selling prices
for the Stainless & Electrical Steel segment slightly increased
compared to the previous quarter.
The segment had EBITDA
of USD 144 million for the first quarter of 2017 compared to USD
117 million for the fourth quarter of 2016. Despite the volume loss
and higher costs incurred as a consequence of a technical outage at
Chatelet plant as well as the traditional seasonal effect in
Brazil, profitability increased thanks to better market conditions,
stronger demand in Europe, and contributions from the Leadership
Journey® and Top Line strategy. EBITDA for the first quarter is
inclusive of a non-recurring item of USD 5 million which is a part
of the total expected insurance indemnification confirmed to be
received in relation to the technical outage.
Depreciation and
amortization expense was USD 34 million for the first quarter of
2017.
The Stainless &
Electrical Steel segment had an operating income of USD 110 million
during the first quarter of 2017 compared to an operating income of
USD 80 million during the fourth quarter of 2016.
Services & Solutions
The Services &
Solutions segment had a 29% increase in sales during the first
quarter, from USD 472 million for the fourth quarter of 2016 to USD
607 million for the first quarter of 2017. In the first quarter of
2017, steel shipments were 218 thousand tonnes compared to 187
thousand tonnes in the previous quarter. The Services &
Solutions segment had higher average steel selling prices during
the quarter.
The segment had EBITDA
for the first quarter of 2017 of USD 33 million compared to EBITDA
of USD 12 million for the fourth quarter of 2016, which included a
one-off non-cash charge of USD 11 million related to the divestment
of the French stainless steel welded tubes unit. The increase in
EBITDA was mainly driven by seasonal recovery in Europe, better
market conditions, the contribution of Top Line strategy as well as
positive stock effects related to prices evolution.
Depreciation and
amortization expense was USD 2 million for the first quarter of
2017.
The Services &
Solutions segment had an operating income of USD 31 million for the
first quarter of 2017 compared to an operating income of USD 1
million for the fourth quarter of 2016.
Alloys
& Specialties
The Alloys &
Specialties segment had sales for the first quarter of 2017 of USD
119 million, representing an increase of 10% compared to USD 108
million for the fourth quarter of 2016. Steel shipments increased
for the first quarter of 2017 to 9 thousand tonnes compared to 8
thousand tonnes for the fourth quarter of 2016. Average steel
selling prices increased over the quarter.
The Alloys &
Specialties segment achieved EBITDA of USD 12 million for the first
quarter of 2017 compared to USD 12 million for the fourth quarter
of 2016.
Depreciation and
amortization expense for the first quarter of 2017 was USD 2
million.
The Alloys &
Specialties segment had an operating income of USD 10 million for
the first quarter of 2017 compared to an operating income of USD 11
million for the fourth quarter of 2016.
Recent
developments
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On February 13, 2017, Aperam announced
that it has applied for a listing on Euronext Brussels with the
cross listing to become effective on February 16, 2017.
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On February 15, 2017, Aperam
announced that its Long Term Issuer rating has been upgraded
to Investment Grade by Moody's, in recognition of its sustainable
financial performance. Aperam's Long Term Issuer rating by
Moody's is at Baa3, with stable outlook.
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On April 7, 2017, Aperam announced the
publication of the convening notice for its Annual General Meeting
and Extraordinary General Meetings of shareholders to be held on
May 10, 2017.
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On April 21, 2017, Aperam announced the
publication of its "made for life" report for 2016, which
constitutes Aperam's sustainability performance report.
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On May 10, 2017, Aperam
announced that the Annual and Extraordinary General Meetings of
Shareholders of Aperam held in Luxembourg on May 10, 2017 approved
all resolutions on the agenda by a large majority.
New
developments
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On May 11, 2017, Aperam
announces the resignation of Mrs. Johanna Van Sevenant, CEO
Services & Solutions, effective July 1, 2017 to realize a
personal project. Mr. Timoteo Di Maulo, CEO, would take the
interim responsibilities for Services & Solutions as from that
date until a successor has been appointed.
Investor conference
call
Aperam management will
host a conference call for members of the investment community to
discuss the first quarter 2017 financial performance at the
following time:
Date |
New York |
London |
Luxembourg |
Thursday,
May 11, 2017 |
12:30
pm |
5:30
pm |
6:30
pm |
The dial-in numbers for the call are:
France (+33(0)1 76 77 22 21); USA (+1 646 254 3363); and
international (+44(0)20 3427 1911). The participant access code is:
2444276#.
A replay of the conference call will be available until May 17th,
2017: France (+33 (0)1 74 20 28 00); USA (+1 347 366 9565) and
international (+44 (0)20 3427 0598). The participant access code is
2444276#.
Contacts
Corporate Communications / Laurent
Beauloye: +352 27 36 27 103
Investor Relations / Romain Grandsart: +352 27 36 27 36
About Aperam
Aperam is a global
player in stainless, electrical and specialty steel, with customers
in over 40 countries. The business is organized in three primary
operating segments: Stainless & Electrical Steel, Services
& Solutions and Alloys & Specialties.
Aperam has 2.5 million
tonnes of flat Stainless and Electrical steel capacity in Brazil
and Europe and is a leader in high value specialty products. Aperam
has a highly integrated distribution, processing and services
network and a unique capability to produce stainless and specialty
from low cost biomass (charcoal). Its industrial network is
concentrated in six production facilities located in Brazil,
Belgium and France.
In 2016, Aperam had
sales of USD 4.3 billion and steel shipments of 1.92 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
(in million of U.S. dollars) |
March 31,
2017 |
December 31,
2016 |
March 31,
2016 |
Non current assets |
2,811 |
2,773 |
2,771 |
Goodwill and intangible assets |
575 |
565 |
587 |
Property, plant and equipments (incl. Biological
assets) |
1,706 |
1,691 |
1,729 |
Investments & Other |
530 |
517 |
455 |
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Current assets & working
capital10 |
1,065 |
955 |
812 |
Inventories, trade receivables and trade
payables10 |
682 |
517 |
595 |
Prepaid expenses and other current assets10 |
91 |
89 |
87 |
Cash & cash equivalents (C) |
263 |
325 |
130 |
Assets held for sale |
29 |
24 |
- |
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Shareholders' equity |
2,587 |
2,485 |
2,411 |
Group share |
2,582 |
2,481 |
2,406 |
Non-controlling interest |
5 |
4 |
5 |
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Non current liabilities |
800 |
768 |
900 |
Long-term debt, net of current portion (A) |
278 |
275 |
454 |
Deferred employee benefits |
174 |
173 |
191 |
Provisions and other |
348 |
320 |
255 |
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Current liabilities (excluding
trade payables)10 |
489 |
475 |
272 |
Short-term debt and current portion of long-term
debt (B) |
205 |
204 |
14 |
Accrued expenses and other current
liabilities10 |
258 |
247 |
258 |
Liabilities held for sale |
26 |
24 |
- |
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Net Debt (D = A+B-C ) |
220 |
154 |
338 |
APERAM CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(in million of U.S. dollars) |
Three Months Ended |
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
Sales |
1,276 |
1,053 |
1,076 |
Adjusted EBITDA11 (F = D - E) |
171 |
144 |
112 |
Adjusted EBITDA margin
12 (%) |
13.4% |
13.7% |
10.4% |
Other items14 (E) |
- |
(11) |
- |
EBITDA (D = A - B - C) |
171 |
133 |
112 |
EBITDA margin13 (%) |
13.4% |
12.6% |
10.4% |
Depreciation & amortisation (B) |
(38) |
(42) |
(39) |
Impairment (C) |
- |
(8) |
- |
Operating income (A) |
133 |
83 |
73 |
Operating margin (%) |
10.4% |
7.9% |
6.8% |
Net interest expense and other net financing
costs |
(12) |
(9) |
(9) |
Foreign exchange and derivative gains /
(losses) |
- |
4 |
(3) |
Income before taxes |
121 |
78 |
61 |
Income tax expense |
(28) |
(20) |
(12) |
Effective tax rate % |
22.8% |
25.6% |
19.7% |
Net income |
93 |
58 |
49 |
On December 31, 2016, assets and liabilities of the French tubes
business have been classified as "Assets and Liabilities held for
sale" as per IFRS 5 and are, therefore, presented separately in the
consolidated statements of financial position. The application of
IFRS 5 triggered a non-recurring and non-cash charge of USD 22
million that has been recognised in the consolidated statements of
operations as follows: USD 11 million in EBITDA (Other items), USD
8 million in Impairment and USD 3 million in Income tax
expense.
APERAM CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in million of U.S. dollars) |
Three Months Ended |
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
Net income |
93 |
58 |
49 |
Depreciation, amortisation and impairment |
38 |
50 |
39 |
Change in working capital10 |
(153) |
65 |
(94) |
Other operating activities (net)10 |
49 |
(10) |
45 |
Net cash provided by operating
activities (A) |
27 |
163 |
39 |
Purchase of PPE, intangible and biological assets
(CAPEX) |
(42) |
(39) |
(33) |
Other investing activities (net) |
- |
1 |
- |
Net cash used in investing
activities (B) |
(42) |
(38) |
(33) |
(Payments to) / proceeds from banks and long term
debt |
(2) |
(3) |
(4) |
Purchase of treasury stock |
(19) |
- |
- |
Dividends paid |
(29) |
(24) |
(24) |
Net cash used in financing
activities |
(50) |
(27) |
(28) |
Effect of exchange rate changes on cash |
3 |
(7) |
4 |
Change in cash and cash
equivalent |
(62) |
91 |
(18) |
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Free cash flow before dividend and
share buy-back (C = A+B) |
(15) |
125 |
6 |
Appendix 1a - Health
& Safety statistics
Health & Safety
Statistics |
Three Months Ended |
March 31,
2017 |
December 31,
2016 |
March 31,
2016 |
Frequency Rate |
1.1 |
0.8 |
1.1 |
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 Ended
March 31, 2017 |
Stainless & Electrical Steel |
Services & Solutions |
Alloys & Specialties |
Others & Eliminations |
Total |
Operational information |
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Steel Shipment (000t) |
465 |
218 |
9 |
(206) |
486 |
Steel selling price (USD/t) |
2,219 |
2,664 |
13,321 |
|
2,558 |
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Financial information |
|
|
|
|
|
Sales (USDm) |
1,061 |
607 |
119 |
(511) |
1,276 |
Adjusted EBITDA (USDm) |
144 |
33 |
12 |
(18) |
171 |
EBITDA (USDm) |
144 |
33 |
12 |
(18) |
171 |
Depreciation, amortisation & impairment
(USDm) |
(34) |
(2) |
(2) |
- |
(38) |
Operating income / (loss) (USDm) |
110 |
31 |
10 |
(18) |
133 |
|
Quarter Ended
December 31, 2016 |
Stainless & Electrical Steel |
Services & Solutions |
Alloys & Specialties |
Others & Eliminations |
Total |
Operational information |
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|
Steel Shipment (000t) |
452 |
187 |
8 |
(190) |
457 |
Steel selling price (USD/t) |
1,904 |
2,524 |
12,688 |
|
2,277 |
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Financial information |
|
|
|
|
|
Sales (USDm) |
883 |
472 |
108 |
(410) |
1,053 |
Adjusted EBITDA (USDm) |
117 |
23 |
12 |
(8) |
144 |
EBITDA (USDm) |
117 |
12 |
12 |
(8) |
133 |
Depreciation, amortisation & impairment
(USDm) |
(37) |
(11) |
(1) |
(1) |
(50) |
Operating income / (loss) (USDm) |
80 |
1 |
11 |
(9) |
83 |
Terms and definitions
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. 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 in the following
footnotes.
2 Lost time injury frequency rate equals lost time injuries per
1,000,000 worked hours, based on own personnel and
contractors.
3 EBITDA is defined as operating income before depreciation and
impairment expenses.
4 Free cash flow before dividend and share buy-back is defined as
net cash provided by operating activities less net cash used in
investing activities.
5 Net debt refers to long-term debt, plus short-term debt, less
cash and cash equivalents (including short-term investments) and
restricted cash.
6 Gearing is defined as Net Debt out of Equity
7 The Leadership Journey® is an initiative launched on December 16,
2010, and subsequently accelerated and increased, to target
management gains and profit
enhancement. Aperam targets a contribution to EBITDA of a total
amount of USD 575 million by end of 2017, since the beginning of
2011.
8 CAPEX relates to capital expenditures and is defined as purchase
of tangible assets, intangible assets and biological assets, net of
change in amount payables on these acquisitions.
9 Includes borrowing base facility of USD 400 million (subject to
eligible collateral available) and EIB financing of EUR 50
million.
10 Effective Q1 2017, the Company modified the presentation of
assets and liabilities related to the TSR programs to more
appropriately reflect the nature of these items.The comparative
amount in the condensed consolidated statement of financial
position was reclassified for consistency, which resulted in a net
amount of USD 42 million and nil being reclassified from "prepaid
expenses and other current assets/accrued expenses and other
current liabilities" to "inventories, trade receivables and trade
payables" as of December 31, 2016 and March 31, 2016, respectively.
In addition, amounts in the condensed consolidated statement
of cash flows were similarly reclassified, which resulted in USD 56
million and USD (54) million being reclassified from "other
operating activities (net)" to "change in working capital" for the
three months period ended December 31, 2016 and March 31, 2016,
respectively.
11 Adjusted EBITDA is defined as operating income before
depreciation and impairment expenses and other items14.
12 Adjusted EBITDA margin is defined as operating income before
depreciation and impairment expenses and other items divided by
sales.
13 EBITDA margin is defined as operating income before depreciation
and impairment expenses divided by sales.
14 Other items consists of (i) inventory write-downs equal to or
exceeding 10% of total related net inventories values before
write-down at the considered quarter end (ii) restructuring
charges/(gains) equal to or exceeding USD 10 million for the
considered quarter, (iii) capital loss/(gain) equal to or exceeding
USD 10 million for the considered quarter or (iv) other
non-recurring items equal to or exceeding USD 10 million for the
considered quarter.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Aperam via Globenewswire
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