Constellium SE

Ladies and gentlemen, thank you for standing by, and welcome to Constellium's second quarter 2020 results call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star zero on your touchtone telephone. As a reminder, this conference call may be recorded. I would now like to turn the conference over to your host today, Mr. Ryan Ventling, Director of Investor Relations. Sir, please go ahead.

Thank you, Operator. I would like to welcome everyone to our second quarter 2020 earnings call. On the call today are our Chief Executive Officer, Jean-Marc Germain, and our Chief Financial Officer, Peter Math. After the presentation, we will have a Q&A session. A copy of the slide presentation for today's call is available on our website at constellium.com. and today's call is being recorded. Before we begin, I'd like to encourage everyone to visit the company's website and take a look at our recent filings. Today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the company's anticipated financial and operating performance, future events and expectations, and may involve known and unknown risks and uncertainties. For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the factors presented under the heading Risk Factors in our annual report on Form 20F. All information in this presentation is as of the date of the presentation. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law. In addition, today's presentation includes information regarding certain non-GAAP financial measures. Please see the reconciliations of non-GAAP financial measures attached in today's slide presentation, which supplement our IFRS disclosures. I would now like to hand the call over to Jean-Marc.

Thanks, Ryan. Good morning, good afternoon, everyone, and thank you for your interest in Constellium. Let's turn to slide five. At Constellium, the health and safety of our employees is our first priority. We have implemented many initiatives to protect our employees in response to the COVID-19 pandemic. We have provided our personnel with personal protective equipment, increased cleaning and sanitation, allowed for and enforced social distancing, and worked to raise awareness with our employees. I want to personally thank our employees for taking this seriously and following the precautions we have put into place. As of last Friday, Approximately one-half of 1% of our employees have tested positive for COVID-19, and all of whom have recovered or are recovering. Needless to say, we must remain vigilant. During the second quarter, our plants operated well, despite the significant disruptions to customer demand from lockdowns in both Europe and the US. As I'm speaking, all our plants are running now and well. We are carefully monitoring COVID-19 hotspots, both for the health of our employees and any potential impacts on supply chains. The demand for our products gradually increased during the course of the second quarter, and this trend has continued into July. However, both levels of demand and visibility from our customers remain below historical levels. We took strong actions to combat the effects of the pandemic on our business. We aggressively reduced our costs, including flexing variable costs to match production levels, reducing fixed costs, and lowering our targeted capital expenditures. Over 40% of our workforce were on some type of partial unemployment or temporary layoff scheme during the quarter. Where appropriate, we have also implemented permanent headcount reduction. Our ability to flex costs was slightly better than the scenario we provided last quarter. This was a great achievement by the entire ConStadium team and demonstrated our flexibility and resilience. Our liquidity at the end of the quarter was 949 million euros, an increase of over 300 million euros compared to the end of the first quarter. we added an additional 50 million euros of liquidity in July through credit facilities supported by the German state, bringing our pro forma liquidity to approximately one billion euros. In June, we accessed the debt market to refinance our 2021 bonds. This transaction removed our only near-term bond maturity at a very attractive coupon. In conclusion, with the significant actions we have taken, I am very confident in our ability to navigate through this crisis. On slide 6, you will see some of our highlights from the second quarter of 2020. Shipments were 310,000 metric tons, a decrease of 25% compared to the second quarter of 2019. Revenue decreased 33% to 1 billion euros. Of the roughly €500 million decline in revenue compared to the second quarter of last year, two-thirds was related to lower shipments and one-third was related to lower metal prices. I remind you that, while our revenues are affected by changes in metal prices, we operate a pass-through business model to minimize metal risk. of 32 million euros compared to net income of 17 million euros in the second quarter of 2019. Adjusted EBITDA of 81 million euros decreased 51% compared to the second quarter of 2019. With a strong focus on cost control, we are able to offset a significant part of the volume headwinds to adjusted EBITDA across each of our business units. I am proud of what the team was able to achieve in a challenging environment. Custodium generated 228 million of adjusted EBITDA in the first half, a decline of 24% compared to the first six months of last year. Our free cash flow was negative 33 million euros in the second quarter of 2020. This result would not have been possible without our strong actions to reduce costs and capital expenditures and cash expenditures of all sorts. Our free cash flow for the first half of 2020 was 54 million euros. Based on our current view of market conditions, we expect to generate positive free cash flow in 2020. I will now hand over to Peter to discuss our financial performance in more detail. Peter?