Constellium SE

Good morning and thank you for attending today's Constellium third quarter 2022 results conference call. My name is Austin and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Jason Hershiser, Director of Investor Relations. Jason, please go ahead.

Thank you, Austin. I would like to welcome everyone to our third quarter 2022 earnings call. On the call today, we have our Chief Executive Officer, John Mark 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 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 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. Without further ado, I would now like to call over to Jean-Marc.

Thank you, Jason, and good morning, good afternoon, everyone. Thank you for your interest in Constellium. Let's turn to slide five and discuss the highlights from our third quarter results. I'd like to start with safety, our number one priority, and a key pillar of our sustainability strategy. I am pleased to report that we delivered best-in-class safety performance in the third quarter. We're reducing our year-to-date recordable case rate to 1.8 per million hours worked. In the third quarter, several of our sites achieved safety milestones. Our research center, CTEC, in France, achieved a one-year milestone without a recordable case. Nanjing, China, achieved two years. And both Vigo, Spain, and Asterix in Canada achieved three years. I want to congratulate all of our employees on this excellent performance. But the safety journey is never complete, and we all need to remain focused on this critical priority every day. Turning to our financial results, shipments were 387,000 tons, down 2% compared to the third quarter of 2021, as higher shipments in A&T and AS&I were more than offset by lower shipments in parks. Revenue increased 27% to 2 billion euros as a result of higher metal prices and improved price and mix. As we have said previously, while our revenues are affected by changes in metal prices, we operate a pass-through business model which minimizes our exposure to metal price risk. Our value-added revenue, which reflects our sales, excluding the cost of metal, was 673 million euros, up 21% compared to the third quarter last year. Our net income of €131 million in the quarter compares to the net income of €99 million in the third quarter of 2021. The increase in net income is primarily related to the recognition of deferred tax assets that were previously unrecognized. As you can see in the bridge on the top right, adjusted EBITDA was 160 million euros, 12% above the third quarter of 2021. This is a record for the company in the third quarter and includes record third quarter results in both ANC and ASNI. Holdings and Corporate was a tailwind of 5 million euros in the quarter. Looking across RN markets, aerospace demand was very strong with shipments up around 50% compared to last year for the second quarter in a row. Automotive shipments were up double digits in the quarter versus last year, with new platform launches driving our growth, but we continue to be impacted by the semiconductor shortage and other supply chain challenges. Packaging demand continues to be resilient, though our shipments were down in the quarter due to operating challenges at our Muscle Shoals facility in large part due to a shortage of experienced engineers and operators. While we are seeing signs of weakness across certain industrial markets, we like our overall end market positioning. The combination of solid demand, pricing power, and good execution by our team, and a stronger US dollar, drove better results despite the significant cost pressures, which Peter will discuss later in more detail. Moving now to cash flow. We extended our track record of consistent free cash flow generation with 74 million euros in the quarter. As you can see on the bottom right of the slide, we demonstrated our continuing commitment to deleveraging, ending the third quarter at three times or down 0.6 times from the end of the third quarter last year. We remain committed to achieving our leverage target of 2.5 times and maintaining our long-term leverage target range of 1.5 to 2.5 times. Overall, I am very proud of our third quarter performance. Looking at the balance of 2022, macroeconomic and geopolitical risks remain elevated, and we expect inflationary pressures to continue, especially for inputs like energy and in regions more directly affected by the ongoing war in Ukraine. Despite seeing signs of weakness across certain industrial markets, we have not experienced a material reduction in demand in our core end markets. As I mentioned, we are dealing with some operating challenges at our Muscle Shoals facility, but overall our business has continued to perform well. We expect to finish 2022 with adjusted EBITDA landing at the low end of our guidance range of 670 to 690 million euros, which would be a new record year for the company. We continue to expect free cash flow in excess of 170 million euros in 2022. Turning to slide six before handing it over to Peter, I want to give an overview of the environment we are currently facing in Europe. European energy markets are in disarray today, largely as a result of the war in Ukraine and Russia's significant reduction of its gas flow to Europe. Both gas and electricity prices have been significantly above historical levels at some points more than 10 times since the start of the war. To date, our operations have not been affected from an availability standpoint, and we feel comfortable that gas will continue to be available in the near term. There is though still some risk on availability of gas in Europe, especially if Europe experiences a colder than normal winter. The current energy situation also has knock-on effects in other markets. As a result of substantially higher energy costs, Several smelters have curtailed operations, which is impacting aluminum and alloy availability. Higher energy costs are also creating certain inflationary pressures across a wide range of inputs to our business. Further, the risk of lower demand due to the impact of slowing markets has increased compared to where we were three months ago. As you should expect, given the performance track record of the Constellium team, we are working hard to manage the company through this current environment. On the energy front, we have a company-wide effort to reduce our energy consumption across our operation. Underway as we speak here today are active discussions with customers to pass through these higher energy costs. We are making very good progress on this front, and Peter will go into more details on this and on inflationary pressures in general. Finally, thanks to the great efforts of our procurement and operations team, We have thus far been able to successfully manage a number of supply chain challenges. Overall, our plans are running well without interruption and keenly focused on controlling costs. We are obviously monitoring the situation very closely and will continue to update you on development. With that, I will now hand the call over to Peter for further details on our financial performance. Peter?