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

Aperam S.A. / Key word(s): Quarter Results/Annual Results
Aperam - Full year and fourth quarter 2023 results: “Stainless Market in Crisis, Alloys, Recycling & Renewables Deliver””

09-Feb-2024 / 06:59 CET/CEST


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

  • Health and Safety: LTI frequency rate of 2.3x in 2023 compared to 2.5x in 2022[1]a
  • Shipments of 2,198 thousand tonnes in 2023, a 5% decrease compared to shipments of 2,309 thousand tonnes in 2022
  • Adjusted EBITDA of EUR 304 million in 2023, compared to Adjusted EBITDA of EUR 1,129 million in 2022
  • Adjusted EBITDA of EUR 55 million in Q4 2023, compared to EUR 19 million in Q3 2023 and EUR 129 million in Q4 2022
  • Net income of EUR 203 million in 2023, compared to EUR 625 million in 2022
  • Basic earnings per share of EUR 2.81 in 2023, compared to EUR 8.33 in 2022
  • Free cash flow before dividend and share buy-back amounted to EUR 168 million in 2023, compared to EUR 345 million in 2022
  • Net financial debt of EUR 491 million, as of December 31, 2023, compared to EUR 468 million  as of December 31, 2022     

 

Strategic initiatives

  • Leadership Journey®2 Phase 4: Gains reached EUR 7 million in Q4 2023 and a cumulative EUR 186 million versus target gains of EUR 150 million over the period 2021 to 2023.

 

Prospects[2]a

  • Q1 2024 EBITDA is expected at a comparable level versus Q4 2023
  • We guide for higher Q1 2024 net financial debt

 

Timoteo Di Maulo, CEO of Aperam, commented:

 

“The market improved slightly during the fourth quarter but remains deeply depressed. Extreme margin pressure persists and volumes reflect an industrial recession in Europe. This crisis reveals how important the successful integration into raw materials has been for Aperam. In Q4 the Recycling & Renewables division was Aperam’s largest earnings contributor for the first time. Entering 2024 Phase 5 of the Leadership Journey® – our self-help program started. With a clear focus on cost reduction we are convinced that our 2025 target remains valid and that Aperam will emerge from this crisis as a more resilient, more profitable and more cash generative Company.”

 

 

 

 

 

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

(in millions of Euros, unless otherwise stated)

Q4 23

Q3 23

Q4 22

12M 23

12M 22

Sales

1,551

1,463

1,616

6,592

8,156

Operating income / (loss)

(10)

(36)

81

89

890

Net income / (loss) attributable to equity holders of the parent

70

(42)

203

625

Basic earnings per share (EUR)

0.97

(0.59)

2.81

8.33

Diluted earnings per share (EUR)

0.96

(0.58)

2.79

8.29

 

 

 

 

 

 

Free cash flow before dividend and share buy-back

217

(135)

69

168

345

Net Financial Debt (at the end of the period)

491

646

468

491

468

 

 

 

 

 

 

Adj. EBITDA

55

19

129

304

1,129

Exceptional items

(11)

(11)

(53)

EBITDA

44

19

129

293

1,076

 

 

 

 

 

 

Adj. EBITDA/tonne (EUR)

102

37

262

138

489

EBITDA/tonne (EUR)

81

37

262

133

466

 

 

 

 

 

 

Shipments (000t)

541

516

493

2,198

2,309

 

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)

 

(in millions of Euros, unless otherwise stated)

Q4 23

Q3 23

Q4 22

12M 23

12M 22

Sales

1,015

931

1,158

4,229

5,510

Adjusted EBITDA

(34)

(6)

38

92

791

Exceptional items

(11)

(11)

EBITDA

(45)

(6)

38

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