/ Key word(s): Quarter Results
Luxembourg, November 12, 2021 (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 September 30, 2021.
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 1.8x in the third quarter of 2021 compared to 2.3x in the second quarter of 2021.
Financial results analysis for the three-month period ending September 30, 2021
Sales for the third quarter of 2021 decreased by 1% to EUR 1,257 million compared to EUR 1,272 million for the second quarter of 2021. Steel shipments decreased from 481 thousand tonnes in the second quarter of 2021, to 421 thousand tonnes in the third quarter of 2021.
EBITDA increased during the quarter to EUR 278 million from EUR 271 million (including exceptional gains of EUR 9 million made of PIS/Cofins tax credits related to prior periods recognised in Brazil) for the second quarter of 2021. The improvement was mainly driven by Brazil and higher inventory valuation gains compared to the previous quarter.
Depreciation and amortisation was EUR (37) million for the third quarter of 2021.
Aperam had an operating income for the third quarter of 2021 of EUR 241 million compared to an operating income of EUR 235 million for the previous quarter.
Financing costs, net, including the FX and derivatives result for the third quarter of 2021 were positive at EUR 10 million, including cash cost of financing of EUR (1) million.
Income tax expense for the third quarter of 2021 was EUR (49) million.
The Company recorded a net income of EUR 201 million for the third quarter of 2021.
Cash flows from operations for the third quarter of 2021 were positive at EUR 110 million, despite a working capital increase of EUR 175 million. CAPEX for the third quarter was EUR (21) million.
Free cash flow before dividend and share buyback for the third quarter of 2021 amounted to EUR 90 million.
During the third quarter of 2021, the cash returns to shareholders amounted to EUR 135 million, consisting of EUR 100 million of share buy-back and EUR 35 million of dividend. Total cash returned to shareholders during the first nine months of 2021 amounted to EUR 211 million consisting of EUR 105 million of share buy-back3 and EUR 106 million of dividend (of which EUR 1 million paid to non-controlling interests).
Operating segment results analysis
Stainless & Electrical Steel (1)
(1) Amounts are shown prior to intra-group eliminations
The Stainless & Electrical Steel segment had sales of EUR 1,065 million for the third quarter of 2021. This represents a 1% decrease compared to sales of EUR 1,078 million for the second quarter of 2021. Steel shipments during the third quarter were 409 thousand tonnes, a decrease of 13% compared to shipments of 472 thousand tonnes during the previous quarter. Volumes in Europe decreased seasonally while volumes in Brazil normalized from an extremely high level in the second quarter. Average steel selling prices for the Stainless & Electrical Steel segment increased by 14% compared to the previous quarter.
The segment generated EBITDA of EUR 226 million for the third quarter of 2021 compared to EUR 212 million for the second quarter of 2021. Profitability increased due to higher prices, and higher inventory valuation gains which compensated lower volumes and higher input costs.
Depreciation and amortisation expense was EUR (31) million for the third quarter of 2021.
The Stainless & Electrical Steel segment had an operating income of EUR 195 million for the third quarter of 2021 compared to an operating income of EUR 182 million for the second quarter of 2021.
(1) Amounts are shown prior to intra-group eliminations
The Services & Solutions segment had sales of EUR 561 million for the third quarter of 2021, representing an increase of 4% compared to sales of EUR 542 million for the second quarter of 2021. For the third quarter of 2021, steel shipments were 171 thousand tonnes compared to 189 thousand tonnes during the previous quarter. The Services & Solutions segment had higher average steel selling prices during the period compared to the previous period.
The segment generated EBITDA of EUR 53 million for the third quarter of 2021 compared to EBITDA of EUR 59 million, including EUR 9 million in Brazil due to PIS/Cofins tax credits related to prior periods, for the second quarter of 2021. Higher prices and higher inventory valuation gains did not fully compensate for the omission of the exceptional PIS/Cofins gains and seasonally lower volumes.
Depreciation and amortisation was EUR (3) million for the third quarter of 2021.
The Services & Solutions segment had an operating income of EUR 50 million for the third quarter of 2021 compared to an operating income of EUR 56 million for the second quarter of 2021.
Alloys & Specialties(1)
(1) Amounts are shown prior to intra-group eliminations
The Alloys & Specialties segment had sales of EUR 112 million for the third quarter of 2021, representing a decrease of 15% compared to EUR 132 million for the second quarter of 2021. Steel shipments decreased by 23% during the third quarter of 2021 at 7 thousand tonnes. Average steel selling prices were higher during the quarter.
The Alloys & Specialties segment achieved EBITDA of EUR 11 million for the third quarter of 2021 compared to EUR 16 million for the second quarter of 2021. The EBITDA decrease was mainly driven by lower volumes.
Depreciation and amortisation expense for the third quarter of 2021 was EUR (2) million.
The Alloys & Specialties segment had an operating income of EUR 9 million for the third quarter of 2021 compared to an operating income of EUR 14 million for the second quarter of 2021.
Recent developments during the quarter
Investor conference call / webcast
Pre-recorded management comments are available as from publication of this earnings release on our website at www.aperam.com, section Investors > Reports & Presentations > Quarterly results > Q3-2021 (Link).
Aperam management will host a conference call / webcast for members of the investment community to discuss the third quarter 2021 financial performance at the following time:
Link to the webcast: https://channel.royalcast.com/landingpage/aperam/20211112_1/
The dial-in numbers for the call are: France : +33 (0) 1 7037 7166; USA: +1 212 999 6659; UK: +44 (0) 33 0551 0200
The conference password is Aperam.
Corporate Communications / Laurent Beauloye: +352 27 36 27 103; email@example.com
Investor Relations / Thorsten Zimmermann: +352 27 36 27 304; firstname.lastname@example.org
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 a flat Stainless and Electrical steel capacity of 2.5 million tonnes in Brazil and Europe and is a leader in high value specialty products. In addition to its industrial network, spread over six production facilities in Brazil, Belgium and France, Aperam has a highly integrated distribution, processing and services network and a unique capability to produce stainless and special steels from low cost biomass (charcoal made from its own FSC-certified forestry).
In 2020, Aperam had sales of EUR 3,624 million and steel shipments of 1.68 million tonnes.
For further information, please refer to our website at www.aperam.com.
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. In particular, the length and severity of the COVID-19 (coronavirus) outbreak, including its impacts in the sector, macroeconomic conditions and in Aperam's principal local markets may cause our actual results to be materially different than those expressed in our forward-looking statements.
APERAM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
APERAM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
APERAM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Appendix 1a - Health & Safety statistics
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
Appendix 2 - Terms and definitions3
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:
Adjusted EBITDA: operating income before depreciation, amortisation and impairment expenses and exceptional items.
Adjusted EBITDA/tonne: calculated as Adjusted EBITDA divided by total steel shipments.
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.
Exceptional items: consists of (i) inventory write-downs equal to or exceeding 10% of total related inventories values before write-down at the considered quarter end (ii) restructuring (charges)/gains equal to or exceeding EUR 10 million for the considered quarter, (iii) capital (loss)/gain on asset disposals equal to or exceeding EUR 10 million for the considered quarter or (iv) other non-recurring items equal to or exceeding EUR 10 million for the considered quarter.
Financing income (costs): Net interest expense, other net financing costs and foreign exchange and derivative results.
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.
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: 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.
2 The Leadership Journey(R) is an initiative launched on December 16, 2010, and subsequently accelerated and increased, to target management gains and profit enhancement. The fourth phase of the Leadership Journey(R) is targeting EUR 150 million gains for the period 2021 - 2023 via a combination of cost, growth and mix improvement measures.
3 EUR 105 million of share buy-back during the first nine months of 2021 is composed of (1) EUR 100 million related to the share buy-back program announced on July 30, 2021 and completed during the third quarter of 2021 with the acquisition of 1.96 million shares and (2) EUR 5 million related to the acquisition of 0.10 million shares from a related party during the second quarter of 2021.
4 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".
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1248509 12-Nov-2021 CET/CEST