Constellium SE

Ladies and gentlemen, thank you for standing by, and welcome to the Constellium Fourth Quarter and Full Year 2020 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. Thank you. Now I would like to hand the conference over to our first speaker today, Mr. Ryan Wentlink. Director of Investor Relations. Sir, the floor is yours.

Thank you, Operator. I would like to welcome everyone to our fourth quarter and full year 2020 earnings call. On the call today are our Chief Executive Officer, Jean-Marc Germain, and our Chief Financial Officer, Peter Matt. 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 filing. 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.

Thank you, Ryan. Good morning, good afternoon, everyone, and thank you for your interest in Constellium. I want to start by thanking the members of the Constellium team for their contributions in 2020. I am proud to say that Constellium rose to each of the many challenges presented by the COVID-19 pandemic. I'd like to take a moment to specifically call out two examples. First, Constellium delivered extremely strong cost performance. Our cost flex of 92% was impressive again in the fourth quarter. For the full year, our cost flex was 90%. This is something we are very proud of. Second, we delivered on our commitment to free cash flow generation with 157 million euros in 2020. When combined with 2019, we have generated over 330 million euros of free cash flow. For perspective, that is about 20% of our current market cap in just two years. Now, let's discuss the highlights from our Q4 results. Shipments were 374,000 tons, that's up 2%, compared to the fourth quarter of 2019. Revenue decreased 9% to 1.2 billion euros. This was primarily due to weaker price and mix and lower aerospace shipments. Our net income of 26 million euros compares to net income of 22 million euros in the fourth quarter of 2019. As you can see in the bridge on the right side of the slide, adjusted EBITDA was 111 million euros, a decline of 10 million euros, which was driven by lower results at ANT from weak aerospace demand, partially offset by strong performance at PARP. Lastly, free cash flow was 28 million euros in the quarter. Now let's turn to slide six and discuss our full year highlights. Shipments were 1.4 million tons, a decrease of 10% compared to 2019 due to impacts from the COVID-19 pandemic across each of our businesses. Revenue decreased 17% to 4.9 billion euros, primarily due to lower shipments as a result of impacts from COVID-19 and lower mail prices. Remember, while our revenue are affected by changes in metal prices, we operate a pass-through business model, which minimizes our exposure to metal risk. Net loss of 17 million euros compares to a net income of 64 million euros in 2019. As you can see in the bridge on the right side of the slide, adjusted EBITDA was 465 million euros in 2020, a decrease of 97 million euros which was driven by weaker results at ANT and ASNI, partially offset by record results at PARP. This result is above our guidance range of 450 to 460 million euros provided during our third quarter earnings and is at the midpoint of our preannounced results from mid-February. Our free cash flow of 157 million euros came in above our guidance of 100 to 150 million euros. Our leverage at the end of 2020 was 4.3 times. Despite the COVID-19 crisis, which included the second quarter lockdowns and nearly 100 million euros less adjusted EBITDA in A&T, our leverage in 2020 peaked at 4.4 times. only half a term higher than at the end of 2019. This performance is clear validation of our business model and our strategy. Now turn to slide seven. At Constellium, the health and safety of our employees is our top priority. Our safety results are among the best in the industry, and we remain committed to continuous improvement. As shown on the top left of the slide, Constellium achieved a record low recordable case rate in 2020. While this is something to be proud of, we will continue to push for further improvement. Our commitment to safety is also reflected in our compensation structure. For our top 2,000 managers, 10% of their annual bonus is based on safety performance. As you can see on the top right, Constellium is proud to lead the way with our recently completed sustainability-linked nodes offering, our first and the first in the metals industry. Peter will provide details of the bond later in the presentation. Our ESG efforts have been recognized externally. EcoVadis gave us a platinum rating, its highest, which places Constellium in the top 1% of companies assessed. Constellium also received a AA rating from MSCI ESG, placing us in the top decile of our sector. Lastly, we continue to make progress in achieving ASI certifications at our plants with Nefrisac, Zingen, Gottmaningen, Dianfeld, now certified. Over the course of 2021, we will be developing our 2030 sustainability strategies. which will establish new sustainability targets and the steps to achieve them. Constellium has a long track record of setting targets and measuring our progress against them. This is evident in our annual sustainability reports, which we have produced each year since 2011. Another initiative we will be focused on in 2021 is a potential investment to increase our recycling capacity in Europe. which is in advanced planning stages, is expected to add a minimum of 60,000 tons of annual capacity to Constellium's current recycling footprint, which is already one of the largest in the world. In addition, we expect this investment will provide opportunities to expand our low-carbon product offerings to meet customer demand. The scope and location of the project is expected to be finalized by the end of 2021, and we will provide regular updates on these highly strategic initiatives. As you can see, we're looking at sustainability as a great opportunity for Constellium. With that, I will now hand the call over to Peter for further details on our financial performance.