Aperam S.A. / Key word(s): Quarter Results
Second quarter 2020 results: Resilient results despite the COVID induced
demand drop
29-Jul-2020 / 07:00 CET/CEST
Luxembourg, July 29, 2020 (07:00 CET) - Aperam (referred to as "Aperam" or
the "Company") (Amsterdam, Luxembourg, Paris, Brussels: APAM, NYRS: APEMY),
announced today results for the three months ending June 30, 2020.
Highlights
· Health and Safety: LTI frequency rate of 0.6x in Q2 2020
compared to 1.9x in Q1 2020
· Steel shipments of 376 thousand tonnes in Q2 2020, 14%
decrease compared to steel shipments of 438 thousand tonnes in
Q1 2020
· EBITDA of EUR 49 million in Q2 2020, compared to EUR 70
million in Q1 2020
· Net income of EUR 21 million in Q2 2020, compared to EUR 29
million in Q1 2020
· Basic earnings per share of EUR 0.27 in Q2 2020, compared to
EUR 0.36 in Q1 2020
· Cash flow from operations amounted to EUR 57 million in Q2
2020, compared to EUR 63 million in Q1 2020
· Free cash flow before dividend of EUR 34 million in Q2 2020,
compared to EUR 18 million in Q1 2020
· Net financial debt of EUR 123 million as of June 30, 2020,
compared to EUR 108 million as of March 31, 2020
Strategic initiatives
· Leadership Journey?(R)2 Phase 3:? The annualized gains
reached EUR 21 million in Q2 2020. Aperam realized cumulative
annualized gains of EUR 171 million at the end of Q2 2020,
compared to the target of EUR 200 million by the end of 2020
Prospects
· EBITDA in Q3 2020 is expected to remain at a comparable
level versus Q2 2020
· Net financial debt is expected to reach its seasonal peak in
Q3 2020
Timoteo Di Maulo, CEO of Aperam, commented:
"I'm proud to report that we have kept our workforce on our
sites safe throughout the COVID crisis in the second quarter,
thanks to our strict protocols and the full collaboration of our
people. Our flexible and resilient business model enabled us to
cope well with the sudden demand drop. Strict cost management
across all divisions, stable contribution from Alloys and a good
performance in Brazil allowed us to remain profitable and cash
generative. Although demand has started to recover, we expect it
to remain clearly below the historical normal level. Unrevised
safeguard quotas that continue to support excessive imports pose
another strong headwind. We therefore expect the coming quarter
to remain as challenging as this one was."
Financial Highlights (on the basis of financial information prepared under
IFRS)
(in millions of Euros, unless Q2 20 Q1 20 Q2 19 H1 20 H1 19
otherwise stated)
Sales 818 1,049 1,090 1,867 2,268
Operating income 14 34 59 48 105
Net income attributable to equity 21 29 57 50 82
holders of the parent
Basic earnings per share (EUR) 0.27 0.36 0.69 0.63 0.99
Diluted earnings per share (EUR) 0.27 0.36 0.69 0.63 0.99
Free cash flow before dividend and 34 18 72 52 96
share buy-back
Net Financial Debt (at the end of 123 108 176 123 176
the period)
EBITDA 49 70 95 119 176
EBITDA/tonne (EUR) 130 160 204 146 182
Steel shipments (000t) 376 438 465 814 966
Health & Safety results
Health and Safety performance based on Aperam personnel figures and
contractors' lost time injury frequency rate was 0.6x in the second quarter
of 2020 compared to 1.9x in the first quarter of 2020.
Financial results analysis for the three-month period ending June 30, 2020
Sales for the second quarter of 2020 decreased by 22% to EUR 818 million
compared to EUR 1,049 million for the first quarter of 2020. Steel shipments
decreased from 438 thousand tonnes in the first quarter of 2020, to 376
thousand tonnes in the second quarter of 2020.
EBITDA decreased during the quarter to EUR 49 million from EUR 70 million
for the first quarter of 2020. Volumes in both Europe and Brazil were
substantially impacted by the COVID induced demand drop. Prices remained
under pressure. Lower raw material prices caused negative inventory
valuation effects. The gains from the Leadership Journey(R) were not
sufficient to offset these negative factors.
Depreciation and amortization was EUR (35) million for the second quarter of
2020.
Aperam had an operating income for the second quarter of 2020 of EUR 14
million compared to an operating income of EUR 34 million for the previous
quarter.
Financing costs including the FX and derivatives result for the second
quarter of 2020 were positive at EUR 9 million, including cash cost of
financing of EUR (2) million and exceptional interest income of EUR 15
million in Brazil for PIS/Cofins tax credits related to prior periods.
Income tax expense for the second quarter of 2020 was EUR (2) million.
The Company recorded a net income of EUR 21 million for the second quarter
of 2020.
Cash flows from operations for the second quarter of 2020 were positive at
EUR 57 million, with a working capital increase of EUR 37 million. CAPEX for
the second quarter was EUR (23) million.
Free cash flow before dividend for the second quarter of 2020 amounted to
EUR 34 million.
During the second quarter of 2020, the cash returns to shareholders amounted
to EUR 37 million, consisting fully of dividend.
Operating segment results analysis
Stainless & Electrical Steel (1)
(in millions of Euros, unless Q2 20 Q1 20 Q2 19 H1 20 H1 19
otherwise stated)
Sales 632 827 842 1,459 1,773
EBITDA 43 53 79 96 131
Depreciation, amortisation & (28) (30) (30) (58) (60)
impairment
Operating income 15 23 49 38 71
Steel shipments (000t) 364 426 440 790 919
Average steel selling price 1,678 1,876 1,856 1,785 1,864
(EUR/t)
(1) Amounts are shown prior to intra-group eliminations
The Stainless & Electrical Steel segment had sales of EUR 632 million for
the second quarter of 2020. This represents a 24% decrease compared to sales
of EUR 827 million for the first quarter of 2020. Steel shipments during the
second quarter were 364 thousand tonnes, a decrease of 15% compared to
shipments of 426 thousand tonnes during the previous quarter. The COVID
induced demand drop caused volumes in Europe to decline substantially
despite lower import pressure. The COVID crisis also negatively impacted
volumes in Brazil in a seasonally stronger quarter. Average steel selling
prices for the Stainless & Electrical Steel segment decreased by 11%
compared to the previous quarter.
The segment generated EBITDA of EUR 43 million for the second quarter of
2020 compared to EUR 53 million for the first quarter of 2020. The negative
volume impact was not fully compensated by a less negative inventory
valuation effect from raw material pricing and Leadership Journey(R) gains.
Depreciation and amortisation expense was EUR (28) million for the second
quarter of 2020.
The Stainless & Electrical Steel segment had an operating income of EUR 15
million for the second quarter of 2020 compared to an operating income of
EUR 23 million for the first quarter of 2020.
Services & Solutions(1)
(in millions of Euros, unless Q2 20 Q1 20 Q2 19 H1 20 H1 19
otherwise stated)
Sales 310 450 453 760 973
EBITDA 5 9 16 14 32
Depreciation & amortisation (4) (3) (4) (7) (6)
Operating income 1 6 12 7 26
Steel shipments (000t) 132 186 182 318 396
Average steel selling price 2,212 2,331 2,374 2,281 2,341
(EUR/t)
(1) Amounts are shown prior to intra-group eliminations
The Services & Solutions segment had sales of EUR 310 million for the second
quarter of 2020, representing a decrease of 31% compared to sales of EUR 450
million for the first quarter of 2020. For the second quarter of 2020, steel
shipments were 132 thousand tonnes compared to 186 thousand tonnes during
the previous quarter. The Services & Solutions segment had lower average
steel selling prices during the period compared to the previous period.
The segment generated EBITDA of EUR 5 million for the second quarter of 2020
compared to EBITDA of EUR 9 million in the first quarter of 2020. EBITDA
decreased mainly due to a significant 29% drop in volumes quarter on quarter
that was not compensated by a less negative inventory valuation effect and
Leadership Journey(R) gains.
Depreciation and amortisation was EUR (4) million for the second quarter of
2020.
The Services & Solutions segment had an operating income of EUR 1 million
for the second quarter of 2020 compared to an operating income of EUR 6
million for the first quarter of 2020.
Alloys & Specialties(1)
(in millions of Euros, unless Q2 20 Q1 20 Q2 19 H1 20 H1 19
otherwise stated)
Sales 142 155 156 297 309
EBITDA 11 9 12 20 24
Depreciation & amortisation (1) (3) (2) (4) (4)
Operating income 10 6 10 16 20
Steel shipments (000t) 9 9 9 18 19
Average steel selling price 16,038 16,572 16,122 16,311 15,705
(EUR/t)
(1) Amounts are shown prior to intra-group eliminations
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