Aperam - Full year and fourth quarter 2023 results: “Stainless Market in Crisis, Alloys, Recycling & Renewables Deliver””

Full year and fourth quarter 2023 results1

“Stainless Market in Crisis, Alloys, Recycling & Renewables Deliver”

Luxembourg, February 9, 2024 (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 and full year ended December 31, 2023.
 

Highlights

Strategic initiatives

Prospects[2]a

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

Health & Safety results

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 2.1x in the fourth quarter of 2023 compared to 1.4x in the third quarter of 2023.

Financial results analysis for full year period to December 31, 2023

Sales for the year ended December 31, 2023 decreased by 19.2% at EUR 6,592 million compared to EUR 8,156 million for the year ended December 31, 2022, due to lower volumes and lower realized prices. Shipments in 2023 decreased by 4.8% at 2,198 thousand tonnes compared to 2,309 thousand tonnes in 2022.

Adj.EBITDA reached EUR 304 million for the year ended December 31, 2023 (excluding an exceptional loss of EUR (11) million, related to a program to promote employee attrition), compared to EUR 1,129 million for the year ended December 31, 2022 (excluding an exceptional loss of EUR (53) million related to the reversal of the inventory step-up of EUR (48) million recognized in the 2021 bargain purchase gain on ELG acquisition and a final bargain purchase gain adjustment on this acquisition for EUR (5) million). Group Adjusted EBITDA decreased by 73.1% due to lower volumes, a price / cost squeeze and the highest inventory valuation charge in the Company’s history. Phase 4 of the Leadership Journey® - the Transformation Program - realized EUR 64 million gains in 2023 and concluded successfully 24% ahead of target.

Depreciation and amortization expense was EUR (204) million for the year ended December 31, 2023.

Aperam had an operating income for the year ended December 31, 2023 of EUR 89 million compared to an operating income of EUR 890 million for the year ended December 31, 2022.

Financing costs including the FX and derivatives result for the year ended December 31, 2023 were positive at EUR 30 million, including cash cost of financing of EUR (27) million.

Income tax benefit for the year ended December 31, 2023 was EUR 87 million (including EUR 101 million of net deferred tax assets recognized on tax losses carried forward and other tax benefits).

The Company recorded a net income of EUR 203 million for the year ended December 31, 2023.

Cash flows from operations for the year ended December 31, 2023 were positive at EUR 471 million, including a working capital release of EUR 248 million. CAPEX for the year ended December 31, 2023 was EUR (250) million.

Free cash flow before dividend and share buy-back for the year 2023 amounted to EUR 168 million.

As of December 31, 2023, total equity amounted to EUR 3,450 million and net financial debt was EUR 491 million. Gross financial debt as of December 31, 2023 was EUR 934 million. Cash & cash equivalents were EUR 443 million.

Total cash returns to shareholders in 2023 amounted to EUR 145 million, consisting fully of dividend (of which EUR 1 million paid to non-controlling interests).

The Company had liquidity of EUR 1,023 million as of December 31, 2023, consisting of cash and cash equivalents of EUR 443 million and undrawn credit lines3 of EUR 580 million.

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

Sales for the fourth quarter of 2023 increased by 6% at EUR 1,551 million, compared to EUR 1,463 million for the third quarter of 2023. Shipments increased from 516 thousand tonnes in the third quarter of 2023 to 541 thousand tonnes in the fourth quarter of 2023, due to a seasonal increase in Europe and the absence of production disruptions. Absolute shipment volumes remained at an unsatisfactory level.

Adj.EBITDA increased during the quarter to EUR 55 million (excluding an exceptional loss of EUR (11) million, related to a program to promote employee attrition) from EUR 19 million. Major drivers were higher volumes, a positive mix and a less negative inventory valuation charge. Unfortunately these positive effects were to a large degree compensated by a continuing price / cost squeeze.

Depreciation and amortization expense was EUR (54) million for the fourth quarter of 2023.

Aperam had an operating loss for the fourth quarter of 2023 of EUR (10) million compared to an operating loss of EUR (36) million for the previous quarter.

Financing costs, net, including the FX and derivatives result for the fourth quarter of 2023 were EUR (37) million. Cash cost of financing was EUR (3) million during the quarter.

Income tax benefit for the fourth quarter of 2023 was EUR 118 million (including EUR 101 million of net deferred tax assets recognized on tax losses carried forward and other tax benefits).

The net result recorded by the Company was a profit of EUR 70 million for the fourth quarter of 2023, compared to a loss of EUR (42) million for the third quarter of 2023.

Cash flows from operations for the fourth quarter of 2023 were at EUR 318 million, including a working capital release of EUR 289 million. CAPEX for the fourth quarter was EUR (93) million.

Free cash flow before dividend and share buyback for the fourth quarter of 2023 was EUR 217 million, compared to a negative amount of EUR (135) million for the third quarter of 2023.

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

Operating division results analysis

Stainless & Electrical Steel (1)