published on 11/08/2024 at 06:58 from APERAM (isin : LU0569974404)

Aperam - Third quarter 2024 results: “Footprint upgrade starts to make a positive impact”

Aperam S.A. / Key word(s): Quarter Results
Aperam - Third quarter 2024 results: “Footprint upgrade starts to make a positive impact”

08-Nov-2024 / 06:58 CET/CEST

Third quarter 2024 results1

“Footprint upgrade starts to make a positive impact”

Luxembourg, November 8, 2024 (07:00 CET) - Aperam S.A. (referred to as “Aperam” or the “Company”) (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY), announced today results for the three months ended September 30, 2024.

Highlights

Health and Safety: LTI frequency rate of 2.4x in Q3 2024 compared to 2.0x in Q2 2024

Shipments of 617 thousand tonnes in Q3 2024 increased by 5.5% versus shipments of 583 thousand tonnes in Q2 2024

Adjusted EBITDA of EUR 99 million in Q3 2024, compared to Adjusted EBITDA of EUR 86 million in Q2 2024
Net income of EUR 179 million in Q3 2024, compared to net income of EUR 59 million in Q2 2024
Basic earnings per share of EUR 2.47 in Q3 2024, compared to EUR 0.82 in Q2 2024
Free cash flow before dividends amounted to EUR 9 million in Q3 2024, compared to EUR 111 million in Q2 2024
Net financial debt of EUR 641 million as of September 30, 2024, compared to EUR 607 million as of June 30, 2024

Strategic initiatives

Leadership Journey®2 Phase 5: Gains reached EUR 27 million in Q3 2024, the third quarter of the 2024 - 2026 program with target gains of EUR 200 million.

Prospects[1]a

Q4 2024 EBITDA is expected at a higher level versus Q3 2024
Net financial debt to decrease till year end 2024

Timoteo Di Maulo, CEO of Aperam, commented:

“The summer quarter with its seasonal trough in Europe has benefitted from Brazil returning to smooth operations post the hot rolling mill upgrade. Despite a soft market environment, we have reached a historic normal profitability per ton as we leverage the capabilities of our modernized footprint resulting in a better product mix. Phase 5 of the Leadership Journey® is picking up speed, which will strengthen our cost leadership position in Europe. Our focus is now on reducing net financial debt towards the end of the year as we prepare for consolidating Universal Stainless, which will open the US and the aerospace market for us.”

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

(in millions of Euros, unless otherwise stated)	Q3 24	Q2 24	Q3 23	9M 24	9M 23
Sales	1,493	1,634	1,463	4,784	5,041
Operating income / (loss)	49	19	(36)	65	99
Net income / (loss) attributable to equity holders of the parent	179	59	(42)	219	133
Basic earnings per share (EUR)	2.47	0.82	(0.59)	3.03	1.84
Diluted earnings per share (EUR)	2.44	0.82	(0.58)	3.00	1.83

Free cash flow before dividend	9	111	(135)	(21)	(49)
Net Financial Debt (at the end of the period)	641	607	646	641	646

Adj. EBITDA	99	86	19	240	249
Exceptional items	8	(8)	—	—	—
EBITDA	107	78	19	240	249

Adj. EBITDA/tonne (EUR)	160	148	37	134	150
EBITDA/tonne (EUR)	173	134	37	134	150

Shipments (000t)	617	583	516	1,785	1,657

Health & Safety results

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 2.4x in the third quarter of 2024 compared to 2.0x in the second quarter of 2024.

Financial results analysis for the three-month period ending September 30, 2024

Sales for the third quarter of 2024 decreased by 8.6% at EUR 1,493 million compared to EUR 1,634 million for the second quarter of 2024. Shipments increased by 5.5% at 617 thousand tonnes in the third quarter of 2024 compared to 583 thousand tonnes in the second quarter of 2024, due to negative seasonality in Europe while Brazil benefited from the full capacity of the new hot rolling mill.

Adjusted EBITDA reached EUR 99 million (excluding an exceptional gain of EUR 8 million made of PIS/Cofins tax credits related to prior periods recognized in Brazil) during the third quarter 2024 compared to EUR 86 million (excluding an exceptional loss of EUR (8) million, related to a voluntary redundancy program) in the second quarter of 2024. Higher results in Stainless & Electrical Steel with a strong development in Brazil, higher prices and the positive impact from the Leadership Journey® could more than compensate for a negative inventory valuation effect and lower steel volumes.

Depreciation and amortization expense was EUR (58) million for the third quarter of 2024.

Aperam had an operating income for the third quarter of 2024 of EUR 49 million compared to an operating income of EUR 19 million for the previous quarter.

Financing costs, net, including the FX and derivatives result for the third quarter of 2024 were EUR (12) million. Cash cost of financing was EUR (8) million during the quarter.

Income tax benefit was EUR 142 million during the third quarter of 2024, due to the recognition of net deferred tax assets on tax losses carried forward for EUR 155 million.

The net result recorded by the Company was an income of EUR 179 million for the third quarter of 2024, compared to an income of EUR 59 million for the second quarter of 2024.

Cash flows from operations for the third quarter of 2024 were EUR 33 million, including a working capital increase of EUR 100 million. CAPEX for the third quarter was EUR (22) million.

Free cash flow before dividend for the third quarter of 2024 amounted to EUR 9 million, compared to EUR 111 million for the second quarter of 2024.

During the third quarter of 2024, 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)	Q3 24	Q2 24	Q3 23	9M 24	9M 23
Sales	933	1,058	931	3,013	3,214
Adjusted EBITDA	68	59	(6)	133	126
Exceptional items	8	(8)	—	—	—
EBITDA	76	51	(6)	133	126
Depreciation & amortization	(28)	(28)	(27)	(83)	(78)
Operating income / (loss)	48	23	(33)	50	48
Steel shipments (000t)

Net Income Aperam S.A. Q3 2024 Results Footprint Upgrade Leadership Journey Phase 5

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