Constellium SE

Hello and welcome to the Constellium first quarter 2023 results conference call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star followed by one on your telephone keypad. If you'd like to withdraw your question, you may press star followed by two. I'll now hand over to your host, Jason Hershiser, Director of Investor Relations. Please go ahead.

Thank you, Alex. I would like to welcome everyone to our first quarter 2023 earnings call. On the call today, we have our Chief Executive Officer, John Mark Germain, and our Chief Financial Officer, Jack Guo. 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 will supplement our IFRS disclosures. I would now like to hand the call over to John Marks.

Thank you, Jason. Good morning, good afternoon, everyone, and thank you for your interest in Constellium. Let's begin on slide five and discuss the highlights from our first quarter results. I would like to start with safety, our number one priority. We delivered best in class safety performance in the first quarter with a recordable case rate of 1.6 accidents per million hours worked. In the first quarter, we had several sites achieve safety milestones with anniversaries for a number of years, up to eight, without a recordable case. 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. While our performance in the quarter was excellent, we are always focused on maintaining and improving our safety performance. And we still have accidents happen. Turning to our financial results, shipments were 389,000 tons, down 3% compared to the first quarter of 2022, mainly due to lower shipments in PARP. Revenue of 2 billion euros decreased 1% compared to last year as improved price and mix was more than offset by lower metal prices. Remember, 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 754 million euros, up 16% compared to the same period last year. Our net income of 22 million euros in the quarter compares to 179 million euros in the first quarter of 2022. As you can see in the bridge on the top right, adjusted EBITDA was 166 million euros, slightly below the first quarter of 2022. ANT adjusted EBITDA was a new quarterly record and increased 20 million euros compared to last year, while AS&I adjusted EBITDA is a new first quarter record and increased 6 million euros versus last year. PARP adjusted EBITDA decreased 27 million euros in the quarter. Looking across our end markets, aerospace demand was very strong, with shipments up over 50% compared to last year. Automotive shipments in both rolled and extruded products were up double digits in the quarter versus last year. Packaging shipments were down in the quarter due to inventory adjustments across the supply chain and lower end demand. We continue to face significant inflationary pressures, which Jack will discuss in more detail. But thanks to our pricing power, contractual protections, improved mix, and solid execution by our team, we are managing the current environment quite well. Moving now to free cash flow. Our free cash flow in the quarter was negative 34 million euros, which was in line with our expectations. we continue to expect to generate positive free cash flow this year of greater than 125 million euros. We remain committed to generating positive free cash flows and deleveraging. As you can see on the bottom right of the slide, our leverage at the end of the first quarter was 2.8 times or down 0.4 times from the end of the first quarter last year. Overall, I am very proud of our first quarter performance. Looking forward, while there are uncertainties on the macroeconomic and geopolitical fronts, we like our end market positioning and we are optimistic about our prospects for the remainder of this year and beyond. Based on our current performance and our current outlook, we are raising our guidance and expect adjusted EBITDA in the range of 650 to 680 million euros and free cash flow in excess of 125 million euros in 2023. We also remain confident in our ability to deliver on our long-term target of adjusted EBITDA over 800 million euros in 2025. With that, I will now hand the call over to Jack for further details on our financial performance.