Luxembourg, May 9, 2018
Highlights
-
Net cash position of EUR 32 million as
of March 31, 2018, compared to EUR 63 million as of December 31,
2017.
Strategic initiatives
Prospects
-
EBITDA in Q2 2018 is expected to
slightly increase compared to EBITDA in Q1 2018.
-
Net financial debt to remain at low
levels in Q2 2018, post dividend and share buy-back effect.
Aperam
(referred to as "Aperam" or the "Company") (Amsterdam, Luxembourg,
Paris, Brussels: APAM and NYRS: APEMY),
announced today results for the three months ending March 31,
2018
Timoteo Di Maulo, CEO of Aperam,
commented:
"Despite the traditional
seasonal effect in Brazil, Aperam announces another strong
set of results in line with a healthy real demand in Europe as well
as thanks to the solid execution of our Leadership
Journey®.
In coherence with our Top Line strategy, we are very pleased to
have signed a share purchase agreement for the acquisition of
VDM Metals to further grow in the high added value segment of
speciality alloys.
Looking ahead, we remain highly focused on our operational
excellence, customer focus and financial discipline while taking
Aperam to a next phase of development based on our strategic
initiatives."
Financial
Highlights (on the basis of financial
information prepared under IFRS)
(in million of EURO, unless otherwise stated) |
Q1 18 |
Q4 17 |
Q1 17 |
Sales |
1,216 |
1,108 |
1,198 |
EBITDA |
141 |
130 |
160 |
Operating income |
106 |
88 |
124 |
Net income |
85 |
103 |
88 |
Free cash flow before dividend and share buy-back |
(4) |
132 |
(16) |
|
Steel shipments (000t) |
517 |
495 |
486 |
EBITDA/tonne (EUR) |
279 |
263 |
329 |
Basic earnings per share (EUR) |
0.99 |
1.22 |
1.13 |
Diluted earnings per share (EUR) |
0.83 |
1.10 |
1.03 |
Health & Safety
results
Health and Safety
performance based on Aperam personnel figures and contractors' lost
time injury frequency rate was 1.0x in the first quarter of 2018
compared to 1.3x in the fourth quarter of 2017.
Financial results
analysis for the three-month period ending March 31, 2018
Sales for the first
quarter of 2018 increased by 10% to EUR 1,216 million compared to
EUR 1,108 million for the fourth quarter of 2017. Steel shipments
increased from 495 thousand tonnes in the fourth quarter of 2017,
to 517 thousand tonnes in the first quarter of 2018.
EBITDA was EUR 141
million for the first quarter of 2018 compared to EUR 130 million
for the fourth quarter of 2017. Despite the traditional seasonal
effect in Brazil and rising input costs, EBITDA increased
quarter-on-quarter as a result of seasonal recovery in Europe, the
Leadership Journey® contribution and the Top Line strategy. The
phase 3 of the Leadership Journey® - the Transformation Program -
has started to materialise over the quarter with a contribution of
EUR 13 million to EBITDA since the beginning of 2018. Under this
new phase of the Leadership Journey®, Aperam aims at EUR 150
million of additional annualized EBITDA gains over the period 2018
to 2020.
Depreciation and
amortisation was EUR 35 million for the first quarter of 2018.
Aperam had an operating
income for the first quarter of 2018 of EUR 106 million compared to
an operating income of EUR 88 million for the previous quarter.
Net interest expense and
other financing costs for the first quarter of 2018 were EUR 5
million, including cash cost of financing of EUR 2 million.
Realized and unrealized foreign exchange and derivative gains were
EUR 4 million for the first quarter of 2018.
Income tax result for
the first quarter of 2018 was an income tax expense of EUR 20
million.
The Company recorded a
net income of EUR 85 million for the first quarter of 2018.
Cash flows from
operations for the first quarter of 2018 were positive at EUR 42
million, with a working capital increase of EUR 117 million mainly
due to higher prices and activity. CAPEX for the first quarter was
EUR 47 million.
Free cash flow before
dividend and share buy-back for the first quarter of 2018 amounted
to EUR (4) million.
As of March 31, 2018,
shareholders' equity was EUR 2,575 million and net cash position
was EUR 32 million (as of March 31, 2018, gross financial debt was
EUR 242 million and cash and cash equivalents were EUR 274
million).
The Company had
liquidity of EUR 624 million as of March 31, 2018, consisting of
cash and cash equivalents of EUR 274 million and undrawn credit
lines3 of EUR 350 million.
Operating segment
results analysis
Stainless & Electrical Steel
The Stainless &
Electrical Steel segment had sales of EUR 994 million for the first
quarter of 2018. This represents a 4% increase compared to sales of
EUR 953 million for the fourth quarter of 2017. Steel shipments
during the first quarter were 496 thousand tonnes. This is a
decrease of 1% compared to shipments of 499 thousand tonnes during
the previous quarter. The traditional summer seasonal impact in
Brazil has been nearly compensated for by the seasonal recovery and
a healthy demand in Europe. Overall, average steel selling prices
for the Stainless & Electrical Steel segment increased compared
to the previous quarter.
The segment had EBITDA
of EUR 111 million for the first quarter of 2018 compared to EUR
119 million for the fourth quarter of 2017. The traditional
seasonal effect in Brazil and rising input costs was partly offset
by the seasonal recovery in Europe, and the contribution of the
Leadership Journey®.
Depreciation and
amortisation expense was EUR 30 million for the first quarter of
2018.
The Stainless &
Electrical Steel segment had an operating income of EUR 81 million
for the first quarter of 2018 compared to an operating income of
EUR 82 million for the fourth quarter of 2017.
Services & Solutions
The Services &
Solutions segment had sales of EUR 562 million for the first
quarter of 2018, representing an increase of 18% compared to EUR
475 million for the fourth quarter of 2017. For the first quarter
of 2018, steel shipments were 230 thousand tonnes compared to 195
thousand tonnes during the previous quarter. The Services &
Solutions segment had slightly higher average steel selling prices
during the period compared to the previous period.
The segment had EBITDA
of EUR 21 million for the first quarter of 2018, similar to EUR 21
million for the fourth quarter of 2017. Despite higher shipments
and average selling prices, EBITDA remained stable quarter on
quarter primarily due to some stock and mix effects.
Depreciation and
amortisation was EUR 3 million for the first quarter of 2018.
The Services &
Solutions segment had an operating income of EUR 18 million for the
first quarter of 2018, similar to EUR 18 million for the fourth
quarter of 2017.
Alloys
& Specialties
The Alloys &
Specialties segment had sales of EUR 131 million for the first
quarter of 2018, representing an increase of 8% compared to EUR 121
million for the fourth quarter of 2017. Steel shipments were higher
during the first quarter of 2018 at 10 thousand tonnes compared to
9 thousand tonnes during the fourth quarter of 2017. Average steel
selling prices decreased over the quarter.
The Alloys &
Specialties segment achieved an EBITDA of EUR 14 million for the
first quarter of 2018 compared to EUR 11 million for the fourth
quarter of 2017. The increase in EBITDA was mainly due to higher
shipments.
Depreciation and
amortisation expense for the first quarter of 2018 was EUR 2
million.
The Alloys &
Specialties segment had an operating income of EUR 12 million for
the first quarter of 2018 compared to an operating income of EUR 9
million for the fourth quarter of 2017.
Recent
developments
-
On April 6, 2018, Aperam
announced the publication of the convening notice for its Annual
General Meeting and Extraordinary General Meeting of shareholders
to be held on May 9, 2018 (Link).
-
On April 18, 2018,
Aperam announced the publication of its "made for life" report for
2017, which constitutes Aperam's sustainability performance report
(Link).
New
developments
-
On May 9, 2018, Aperam
announced that the Annual and Extraordinary General Meetings of
Shareholders of Aperam held in Luxembourg on May 9, 2018 approved
all resolutions on the agenda by a large majority.
Investor conference
call
Aperam management will
host a conference call for members of the investment community to
discuss the first quarter of 2018 financial performance at the
following time:
Date |
New York |
London |
Luxembourg |
Wednesday,
May 9, 2018 |
12:30
pm |
5:30
pm |
6:30
pm |
The dial-in numbers for the call are:
France (+33 (0)1 76 77 22 57); USA (+1 720 452 9275) and
international (+44 (0)330 336 9411). The participant access code
is: 6756806#.
A replay of the conference call will be available until May 16,
2018: France (+33 (0) 1 70 48 00 94); USA (+1 719 457 0820) and
international (+44 (0) 207 660 0134). The participant access code
is 6756806#.
Contacts
Corporate Communications / Investor
Relations / Laurent Beauloye: +352 27 36 27 103
About Aperam
Aperam is a global
player in stainless, electrical and specialty steel, with customers
in over 40 countries. The business is organised 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 2017, Aperam had
sales of EUR 4.5 billion and steel shipments of 1.94 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 millions of EURO) |
March 31,
2018 |
December 31,
2017 |
March 31,
2017 |
Non current assets |
2,435 |
2,478 |
2,629 |
Goodwill and intangible assets |
503 |
509 |
538 |
Property, plant and equipments (incl. biological
assets) |
1,553 |
1,573 |
1,596 |
Investments & other |
379 |
396 |
495 |
|
|
|
|
Current assets & working
capital |
1,061 |
990 |
996 |
Inventories, trade receivables and trade
payables |
706 |
603 |
638 |
Prepaid expenses and other current assets |
81 |
81 |
85 |
Cash and cash equivalents (C) |
274 |
306 |
246 |
Assets held for sale |
- |
- |
27 |
|
|
|
|
Shareholders' equity |
2,575 |
2,544 |
2,420 |
Group share |
2,571 |
2,540 |
2,415 |
Non-controlling interest |
4 |
4 |
5 |
|
|
|
|
Non current liabilities |
420 |
673 |
748 |
Long-term debt, net of current portion (A) |
2 |
238 |
260 |
Deferred employee benefits |
157 |
159 |
163 |
Provisions and other |
261 |
276 |
325 |
|
|
|
|
Current liabilities (excluding
trade payables) |
501 |
251 |
457 |
Short-term debt and current portion of long-term
debt (B) |
240 |
5 |
192 |
Accrued expenses and other current liabilities |
261 |
246 |
241 |
Liabilities held for sale |
- |
- |
24 |
|
|
|
|
Net Financial Debt / (Net cash) (D
= A+B+C) |
(32) |
(63) |
206 |
APERAM CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions of EURO) |
|
Three Months Ended |
March 31, 2018 |
December 31, 2017 |
March 31, 2017 |
Sales |
1,216 |
1,108 |
1,198 |
EBITDA (C = A-B) |
141 |
130 |
160 |
EBITDA margin (%) |
11.6% |
11.7% |
13.4% |
Depreciation & amortisation (B) |
(35) |
(42) |
(36) |
Operating income (A) |
106 |
88 |
124 |
Operating margin (%) |
8.7% |
7.9% |
10.4% |
Result from other investments and associates |
- |
(3) |
- |
Net interest expense and other net financing
costs |
(5) |
(8) |
(12) |
Foreign exchange and derivative gains |
4 |
- |
1 |
Income before taxes |
105 |
77 |
113 |
Income tax (expense) benefit |
(20) |
26 |
(25) |
Effective tax rate (%) |
19,4% |
-33,8% |
22,7% |
Net income |
85 |
103 |
88 |
APERAM CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions of EURO) |
|
Three Months Ended |
March 31,
2018 |
December 31, 2017 |
March 31, 2017 |
Net income |
85 |
103 |
88 |
Depreciation & amortisation |
35 |
42 |
36 |
Change in working capital |
(117) |
73 |
(145) |
Other operating activities (net) |
39 |
(24) |
44 |
Net cash provided by operating
activities (A) |
42 |
194 |
23 |
Purchase of PPE, intangible and biological assets
(CAPEX) |
(47) |
(62) |
(39) |
Other investing activities (net) |
1 |
- |
- |
Net cash used in investing
activities (B) |
(46) |
(62) |
(39) |
Proceeds (payments) from payable to banks and long
term debt |
1 |
(4) |
(2) |
Purchase of treasury stock |
- |
- |
(17) |
Dividend paid |
(28) |
(27) |
(27) |
Net cash used in financing
activities |
(27) |
(31) |
(46) |
Effect of exchange rate changes on cash |
(1) |
(3) |
- |
Change in cash and cash
equivalent |
(32) |
98 |
(62) |
|
|
|
|
Free cash flow before dividend and
share buy-back (C = A+B) |
(4) |
132 |
(16) |
Appendix 1a - Health
& Safety statistics
Health & Safety Statistics |
|
Three Months Ended |
March 31,
2018 |
December 31, 2017 |
March 31, 2017 |
Frequency
Rate |
1.0 |
1.3 |
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, 2018 |
Stainless & Electrical Steel |
Services & Solutions |
Alloys & Specialties |
Others & eliminations |
Total |
Operational information |
|
|
|
|
|
Steel Shipment (000t) |
496 |
230 |
10 |
(219) |
517 |
Average steel selling price (EUR/t) |
1,949 |
2,353 |
12,973 |
|
2,286 |
|
|
|
|
|
|
Financial information
(EURm) |
|
|
|
|
|
Sales |
994 |
562 |
131 |
(471) |
1,216 |
EBITDA |
111 |
21 |
14 |
(5) |
141 |
Depreciation & amortisation |
(30) |
(3) |
(2) |
- |
(35) |
Operating income / (loss) |
81 |
18 |
12 |
(5) |
106 |
Quarter Ended
December 31, 2017 |
Stainless & Electrical Steel |
Services & Solutions |
Alloys & Specialties |
Others & eliminations |
Total |
Operational information |
|
|
|
|
|
Steel Shipment (000t) |
499 |
195 |
9 |
(208) |
495 |
Average steel selling price (EUR/t) |
1,848 |
2,319 |
13,290 |
|
2,156 |
|
|
|
|
|
|
Financial information
(EURm) |
|
|
|
|
|
Sales |
953 |
475 |
121 |
(441) |
1,108 |
EBITDA |
119 |
21 |
11 |
(21) |
130 |
Depreciation & amortisation |
(37) |
(3) |
(2) |
- |
(42) |
Operating income / (loss) |
82 |
18 |
9 |
(21) |
88 |
Appendix 2 - 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:
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 tangible assets, intangible assets and
biological assets.
EBITDA: operating income before depreciation,
amortisation and impairment expenses.
EBITDA/tonne: calculated as EBITDA divided by
total steel shipments.
Free cash flow before dividend and share
buy-back: 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 and / or Net cash:
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 Stainless & Electrical Steel and Services &
Solutions) and intra-segment shipments, respectively.
Working capital: trade accounts receivable
plus inventories less trade accounts payable.
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 under Appendix 2
"Terms & definitions".
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 third phase of the
Leadership Journey® - the Transformation Program - is targeting EUR
150 million of additional EBITDA gains per year by end of
2020.
3 Includes revolving credit facility of EUR 300 million and EIB
financing of EUR 50 million.
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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