Constellium SE

Hello and welcome to today's Constellium second quarter 2023 results call. My name is Bailey and I'll be the moderator for today's call. All lines will be muted during the presentation portion with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by 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, Bailey. I would like to welcome everyone to our second 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 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 disclosure. 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 second quarter results. I would like to start with safety, our number one priority. After a strong first quarter performance, our recordable case rate climbed in the second quarter, leading to a rate of 1.9 per million hours worked for the first half of the year. This is a humbling reminder that while we always strive to deliver best-in-class safety performance, we need to constantly maintain our focus on safety to achieve the ambitious targets we have set. It is a never-ending task for our company and one we take very seriously. Turning to our financial results, shipments were 398,000 tons, down 6%, compared to the second quarter of 2022. due to lower shipments in PARP and AS&I. Revenue of 2 billion euros decreased 14% compared to last year, as improved price and mix was more than offset by lower shipments and 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 ourselves excluding the cost of metal, was 785 million euros, up 11% compared to the same period last year. Our net income of 32 million euros in the quarter compares to a net loss of 32 million euros in the second quarter last year. As you can see in the bridge on the top right, adjusted EBITDA of 209 million euros in the quarter was up 5% compared to last year and is a new quarterly record for the company. ANT adjusted EBITDA is a new quarterly record as well and increased 33 million euros compared to last year. BARP adjusted EBITDA decreased 16 million euros and AS&I adjusted EBITDA decreased 7 million euros in a quarter compared to last year. Looking across our end markets, aerospace demand remained very strong with shipments at 30% compared to last year. The recovery in automotive continued with higher shipments in both rolled and extruded products versus last year. Packaging shipments were down in the quarter as demand remained below prior year levels and we continue to experience weakness in most industrial markets. 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 well. Moving now to free cash flow. Our free cash flow in the quarter was strong at 68 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 second quarter was 2.7 times or down 0.3 times from the end of the second quarter last year. Overall, I am very proud of our second quarter performance. Looking forward, we like our end market positioning and we are optimistic about our prospects for the remainder of this year and beyond. Based on our strong performance in the first half of this year and our current outlook for the second half, we are raising our guidance and expect adjusted EBITDA in the range of 700 to 720 million euros and free cash flow in excess of 150 million euros in 2023. Our outlook assumes no major deterioration on the macroeconomic or geopolitical fronts. We also remain confident in our ability to deliver our long-term target of adjusted EBITDA over 800 million euros in 2025. Before I turn the call over to Jack, I wanted to comment quickly on our recently announced divestiture. Last week, we announced the sale of our soft alloy extrusion in Germany for a total cash consideration of 48.8 million euros. The three plants specialize in soft alloy extruded products for the building and construction, transportation, and industry markets in Europe. This transaction will allow us to further streamline our portfolio of strategic assets and strengthen our focus on our core end markets. We expect the transaction to close in the second half of this year. With that, I will now hand the call over to Jack for further detail on our financial performance. Jack?