Constellium SE

Good morning or good afternoon or welcome to the Constellium second quarter 2025 earnings call. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. We will now hand the floor to Jason Hersheiser, Director of Investor Relations to begin. So Jason, please go ahead when you're ready.

Thank you, Adam. I would like to welcome everyone to our second quarter of 2025 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 Concellium.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 meeting 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 10K. 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 GAAP disclosures. And with that, I would now like to hand the call over to John Mark.

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. Our recordable case rate in the second quarter was 2.6 per million hours worked, following our strong safety performance in the first quarter and bringing our year to date recordable case rate to 1.8 per million hours worked. While this performance remains best in class, this is a humbling reminder that we all need to constantly maintain our focus on safety to achieve the ambitious target we have set of 1.5 per million hours worked. Turning now to our financial results, shipments were 384,000 tons or up 2% compared to the second quarter of 2024 due to higher shipments in PARP that were partially offset by lower shipments in ANT and ASNI. Revenue of $2.1 billion increased 9% compared to the second quarter of 2024 due to higher shipments and favorable price and mix, including higher metal prices experienced in the quarter versus last year. 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 net income of $36 million in the quarter compares to net income of $77 million in the second quarter last year. The adjusted EBITDA was $146 million in the quarter, though this includes a negative non-cash impact from metal price lag of $13 million. If we exclude the impact of metal price lag, the real economic performance of the business reflects adjusted EBITDA of $159 million in the quarter compared to the $180 million last year. Moving now to free cash flow. Our free cash flow in the quarter was strong at $41 million. During the quarter, we returned $35 million to shareholders through the repurchase of 3.4 million shares. Our leverage at the end of the second quarter was 3.6 times, though we expect this to be the peak and for leverage to trend down as we move through the rest of the year. We delivered solid results this quarter despite continued demand weakness across most of our end markets outside of packaging. We remained focused on strong cost control, free cash flow generation, and commercial and capital discipline. Overall, I am quite pleased with our second quarter and first half performance. Now please turn to slide number six. Before turning the call over to Jack, I wanted to give you a quick update on the section 232 tariffs as well as other tariffs under IE EPA and how we see the potential impact to Constellia. Before going into details on the slide, let me summarize a bit. As I mentioned last quarter, the tariff situation is a fluid and multifaceted situation. We see both some positive and negative impacts on our business, and at this stage, we continue to believe it presents us with various opportunities as well as some additional costs, but it should be a net positive for us. The guidance we are giving today does include the impact from tariffs that we are able to estimate given what we know today, and it does include several mitigating factors we have identified to upset the impacts. It also includes our current assumptions on end market demand in the current environment. Our guidance assumes a relatively stable macro environment, and it does not include potential impacts from additional tariffs to those known today. Shifting to the details on the slide now, on the production side, we are mostly local for local in the regions where we operate. Our automotive structures business in the US buys extrusions from Canada, including from our joint venture in Canada. These extrusions have become more expensive under section 232 tariffs, which impacted the first half by around $7 million on growth spaces. The gross costs could continue to accumulate going forward to an additional $20 million for the rest of the year before mitigating items. We are working with our customers and suppliers on pass-throughs and other mitigation efforts, and we have made good progress on a number of them. We expect these actions to result in some benefits in the second half, which will mitigate the impact on our results. In aerospace, we ship small quantities from Europe to the US to serve global OEMs, although this has a pass-through today and we will not be impacted. Regarding the automotive specific tariffs that fall under section 232, the volumes we ship across Mexican and Canadian borders are compliant with USMCA. On the metal supply side, we import some primary aluminum from Canada, given the lack of smelter capacity here in the US. As of today, we have commercial agreements in place to help mitigate the tariff impact on this metal. In terms of scrap, aluminum scrap is excluded from the current scope of section 232 tariffs, and we purchase most of our scrap needs from dealers in the US. The impact on scrap from tariffs should be a net positive, as a rise in the US regional premium is beneficial for the domestic supply chain. We are starting to see this already as scrap spreads for used beverage cans, for instance, in the US have widened in the first half of this year, and we expect to see some benefit of this in the second half. In terms of commercial impacts, these two should be a net positive for Constellio. Today, over one million tons of flat rolled aluminum imports are coming into the US each year, given the lack of domestic supply available. Tariffs will make domestically produced products more competitive, and we should benefit from this. During the first half of this year, we announced price increases for all rolled products shipped in the US. This has already started to benefit us on non-contracted volumes in the second quarter this year, and this benefit should continue to grow moving forward. In terms of end markets, the tariff and trade situation is creating broader macro uncertainty, and it is having a negative impact on markets such as our guidance assumes weak conditions in automotive in both North America and Europe, and we are monitoring the conditions very closely. We believe that the newly announced trade deals will somewhat reduce uncertainty in the global markets. That said, we are not discounting the broader macro uncertainty. We remain focused on our cost reduction efforts under our Vision 25 program, and we are optimizing our existing capacity depending on market conditions, such as shifting some capacity where we can from automotive markets into packaging markets. To close out on tariffs, as I said before, the situation remains very fluid. We are continually monitoring and assessing the potential impact of current and future trade policies, though at this stage, we believe the net impact of tariffs on aluminum presents us with some opportunities in the current environment. With that, I will now turn the call over to Jack for further details on our financial performance. Jack?