publié le 03/05/2023 à 06:57 par APERAM (isin : LU0569974404)

First quarter 2023 results “Resilient EBITDA turns into solid free cash flow in a demanding quarter”

Aperam S.A. / Key word(s): Quarter Results
First quarter 2023 results “Resilient EBITDA turns into solid free cash flow in a demanding quarter”

03-May-2023 / 06:57 CET/CEST

First quarter 2023 results1

“Resilient EBITDA turns into solid free cash flow in a demanding quarter”

Luxembourg, May 3, 2023 (07:00 CET) - Aperam (referred to as “Aperam” or the “Company”) (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY), announced today results for the three months ended March 31, 2023.

Highlights

Health and Safety: LTI frequency rate of 1.9x in Q1 2023 compared to 1.4x in Q4 2022

Shipments of 591 thousand tonnes in Q1 2023, 20% increase compared to shipments of 493 thousand tonnes in Q4 2022

EBITDA of EUR 127 million in Q1 2023, compared to EBITDA of EUR 129 million in Q4 2022
Net income of EUR 132 million in Q1 2023, compared to nil in Q4 2022
Basic earnings per share of EUR 1.83 in Q1 2023, compared to nil in Q4 2022
Free cash flow before dividend and share buy-back amounted to EUR 85 million in Q1 2023, compared to EUR 69 million in Q4 2022
Net financial debt of EUR 419 million as of March 31, 2023, compared to EUR 468 million as of December 31, 2022

Strategic initiatives

Leadership Journey®2 Phase 4: Gains reached EUR 12 million in Q1 2023 and a cumulative EUR 134 million compared to target gains of EUR 150 million over the period 2021 to 2023.

Prospects

Q2 2023 EBITDA is expected at a slightly higher level versus Q1 2023
We guide for marginally higher Q2 2023 net financial debt

Timoteo Di Maulo, CEO of Aperam, commented:

“As anticipated, the first quarter was a challenging one, particularly for Europe due to continued destocking and a planned six weeks investment related shutdown. On top some additional impacts came from strike related extra costs in Europe. In this backdrop, a stable adjusted EBITDA and a 13% annualized free cash flow yield prove the value of our differentiated business model. Looking ahead global stainless steel prices are expected to maintain pressure on margins and strike action continues to impact operations. We accelerate the Leadership Journey® even more to prepare our organization for a very demanding environment and are confident that our differentiated value chain will continue to deliver results.”

Financial Highlights (on the basis of financial information prepared under IFRS)

(in millions of Euros, unless otherwise stated)	Q1 23	Q4 22	Q1 22
Sales	1,876	1,616	2,265
Operating income	81	81	266
Net income attributable to equity holders of the parent	132	—	187
Basic earnings per share (EUR)	1.83	—	2.41
Diluted earnings per share (EUR)	1.83	—	2.40

Free cash flow before dividend and share buy-back	85	69	(103)
Net Financial Debt (at the end of the period)	419	468	666

Adj. EBITDA	127	129	363
Exceptional items	—	—	(53)
EBITDA	127	129	310

Adj. EBITDA/tonne (EUR)	215	262	539
EBITDA/tonne (EUR)	215	262	461

Shipments (000t)	591	493	673

Health & Safety results

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 1.9x in the first quarter of 2023 compared to 1.4x in the fourth quarter of 2022.

Financial results analysis for the three-month period ending March 31, 2023

Sales for the first quarter of 2023 increased by 16% at EUR 1,876 million compared to EUR 1,616 million for the fourth quarter of 2022. Shipments increased from 493 thousand tonnes in the fourth quarter of 2022 to 591 thousand tonnes in the first quarter of 2023, due to seasonal factors despite pronounced destocking by customers in Europe.

EBITDA decreased marginally during the quarter to EUR 127 million from EUR 129 million predominantly due to lower realized prices and significant negative valuation effects that more than compensated the positive volume effect.

Depreciation and amortization expense was EUR (46) million for the first quarter of 2023.

Aperam had an operating income for the first quarter of 2023 of EUR 81 million compared to an operating income of EUR 81 million for the previous quarter.

Financing costs, net, including the FX and derivatives result for the first quarter of 2023 were positive at EUR 86 million. The positive result was mainly driven by unrealized results on nickel derivatives compared to their Q4 position. Cash cost of financing was EUR (10) million during the quarter.

Income tax expense was EUR (35) million during the first quarter of 2023.

The net result recorded by the Company was a profit of EUR 132 million for the first quarter of 2023, compared to a net result that was nil for the fourth quarter of 2022.

Cash flows from operations for the first quarter of 2023 were at EUR 138 million, despite a working capital increase of EUR 23 million preparing for the shutdown in Genk. CAPEX for the first quarter was EUR (52) million.

Free cash flow before dividend and share buyback for the first quarter of 2023 amounted to EUR 85 million, compared to EUR 69 million for the fourth quarter of 2022.

During the first quarter of 2023, cash returns to shareholders amounted to EUR 36 million, consisting fully of dividend.

Operating segment results analysis

Stainless & Electrical Steel (1)

(in millions of Euros, unless otherwise stated)	Q1 23	Q4 22	Q1 22
Sales	1,233	1,158	1,523
EBITDA	80	38	272
Depreciation & amortization	(25)	(27)	(25)
Operating income	55	11	247
Steel shipments (000t)	399	371	445
Average steel selling price (EUR/t)	2,982	3,035	3,355

(1) Amounts are shown prior to intra-group eliminations

The Stainless & Electrical Steel segment had sales of EUR 1,233 million for the first quarter of 2023. This represents a 6.5% increase compared to sales of EUR 1,158 million for the fourth quarter of 2022. Steel shipments during the first quarter were 399 thousand tonnes, an increase of 7.5% compared to shipments of 371 thousand tonnes during the previous quarter. Shipments in Brazil were seasonally softer but remained at a high level. In Europe shipments improved seasonally from a low level. Average steel selling prices for the Stainless & Electrical Steel segment decreased by 1.7% compared to the previous quarter.

The segment generated an EBITDA of EUR 80 million for the first quarter of 2023 compared to EUR 38 million for the fourth quarter of 2022. EBITDA increased as higher volumes and a less negative inventory valuation more than compensated for a price/cost squeeze, the Genk investment and strike related costs.

Depreciation and amortization expense was EUR (25) million for the first quarter of 2023.

The Stainless & Electrical Steel segment had an operating income of EUR 55 million for the first quarter of 2023 compared to an operating income of EUR 11 million for the fourth quarter of 2022.

Services & Solutions (1)

(in millions of Euros, unless otherwise stated)	Q1 23	Q4 22	Q1 22
Sales	671	518	845
EBITDA	13	(4)	73
Depreciation & amortization	(3)	(4)	(3)
Operating income / (loss)	10	(8)	70
Steel shipments (000t)	180	133	199
Average steel selling price (EUR/t)	3,603	3,712	4,084

(1) Amounts are shown prior to intra-group eliminations

The Services & Solutions segment had sales of EUR 671 million for the first quarter of 2023, representing an increase of 29.5% compared to sales of EUR 518 million for the fourth quarter of 2022. For the first quarter of 2023, steel shipments were 180 thousand tonnes compared to 133 thousand tonnes during the previous quarter. Average steel selling prices for the Services & Solutions’ segment were 2.9% lower during the first quarter of 2023 compared to the fourth quarter of 2022.

The segment generated an EBITDA of EUR 13 million for the first quarter of 2023 compared to a negative EBITDA of EUR (4) million for the fourth quarter of 2022. EBITDA normalized due to higher volumes and a less negative inventory valuation.

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