European value-added aluminium firm Constellium NV reported results for the third quarter and the first nine months of 2022 this week. Numbers for both periods were up across the board thanks to strong demand from automotive and aerospace sectors.
In the third quarter Constellium shipped 387 thousand metric tons of product, which was off by 2 percent year on year. Revenue for the quarter totaled €2.0 billion, better by 27 percent on the year. Value-added revenue totaled €673 million, good for 21 percent above last year’s third-quarter total.
Net income in the third quarter was up on the year, increasing from €99 million last year to €131 million in the just-ended quarter, and adjusted EBITDA was up 12 percent on the year at €160 million. Cash from operations totaled €154 million in the third quarter, and free cash flow came to €74 million.
For the first nine months of 2022 Constellium shipped 1.2 million metric tons of product, up by 2 percent on the year. Revenue rose by 41 percent on the year to €6.3 billion, with value-added revenue totaling €2.0 billion, up by 21 percent from last year. Net income rose from €255 million last year to €278 million this year, and adjusted EBITDA rose by 21 percent to €525 million. Cash from operations for the first nine months totaled €323 million, and free cash flow in the period totaled €160 million.
Jean-Marc Germain, Constellium’s Chief Executive Officer, said in a press release that his firm was pleased overall at the reported numbers.
“Constellium delivered strong results in the third quarter. Adjusted EBITDA of €160 million is a third quarter record and includes record third quarter performances by both A&T and AS&I. Looking across our end markets, packaging demand continues to be resilient. Our shipments were down in the quarter due to operating challenges at our Muscle Shoals facility. 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. In aerospace, demand is very strong with shipments up around 50% compared to last year for the second quarter in a row. While we are seeing signs of weakness across certain industrial markets, we like our end market positioning. Free Cash Flow in the third quarter was solid at €74 million.”
“Macroeconomic and geopolitical risks remain elevated and we expect significant inflationary pressures to continue, particularly for inputs like energy and in regions more directly affected by the ongoing war in Ukraine,” he continued. “The Constellium team has demonstrated its relentless focus on execution and cost control and I am confident in our ability to manage our business through these challenging times. We remain focused on executing our strategy, driving operational improvements, strengthening our margins, generating Free Cash Flow and increasing shareholder value.”
“We expect recent demand trends in our markets to continue through the remainder of 2022,” Germain predicted. “Based on our current outlook, in 2022 we expect Adjusted EBITDA at the low end of our range of €670 million to €690 million and Free Cash Flow in excess of €170 million.”
Constellium, based in France, was founded 1855 as Henri Merle et Compagnie and subsequently renamed Pechiney in 1950. Pechiney was purchased by Alcan in 2003, which was purchased by Rio Tinto in 2007. In 2011 Rio Tinto sold Alcan Engineered Products to Apollo Management (51%) and FSI (10%). Constellium produces rolled and extruded aluminium products from various alloys, bringing in €6.2 billion of revenue in 2021.
