Constellium sees revenue, shipments decline in Q2

Constellium SE, headquartered in Paris, has reported that for its second quarter, ended June 30, the company’s shipments of 310,000 metric tons were 25 percent lower than for the same period in 2019, while its revenue of 1 billion euros (roughly $1.16 billion) was 33 percent less than in Q2 of 2019. The company also reported a net loss of 32 million euros ($37 million) compared with net income of 17 million euros ($19.7 million) in Q2 2019. The company says the change in net income is primarily related to lower gross profit, partially offset by a favorable change in gains and losses on derivatives related to its commodity hedging positions and a favorable change in income taxes.

Constellium’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) declined 51 percent from the second quarter of 2019 to 81 million euros ($93.8 million).

For the first half of the year, the company reports shipments of 703,000 metric tons, a decline of 15 percent compared with the first half of 2019, while its 2.5 billion euros (nearly $2.9 million) of revenue are 20 percent less than in the first half of 2019. The aluminum products company reports a net loss of 63 million euros (nearly $73 million) for the half compared to net income of 41 million euros ($47.5 million) for the same time in 2019. Its EBITDA for the first half of 2020 is 24 percent lower than in the same period of 2019.

Jean-Marc Germain, Constellium chief executive officer, says, “The COVID-19 pandemic has challenged our employees and our business. Protecting the health and safety of our employees and their families remains our top priority.”

He says the company’s Muscle Shoals, Alabama, plant, in particular, met strong packaging demand. That plant has the capacity to recycle nearly 20 billion cans per year and its main product is aluminum can sheet for the packaging industry. Muscle Shoals also supplies auto body sheet substrate to Constellium’s Bowling Green, Kentucky, site, according to the company’s website.

“I am very proud of the way our team responded swiftly to the crisis by reducing our costs and cash expenditures and demonstrated the flexibility and resilience of our business model,” Germain says.

He adds, "There remains significant uncertainty around the extent and duration of the effects of the pandemic. With the significant actions we have taken and the diversity of our markets and customers, I am very confident in our ability to navigate through this crisis. Based on our current view of market conditions, we expect to generate positive free cash flow in 2020."

The company attributes its reduced shipments for the second quarter and the first half of the year to lower shipments in all three segments: Packaging and Automotive Rolled Products, Aerospace and Transportation and Automotive Structures and Industry.

In its Packaging and Automotive Rolled Products segment, adjusted EBITDA for the quarter decreased 27 percent compared with the second quarter of 2019 primarily because of lower shipments, partially offset by strong cost control. Shipments of 221,000 metric tons decreased 23 percent compared with the second quarter of 2019, with lower shipments across automotive, packaging and specialty products. Revenue of 565 million euros ($655 million) decreased 31 percent compared with the second quarter of 2019, primarily arising from lower shipments and lower metal prices, Constellium reports.

For the first half of 2020, adjusted EBITDA decreased 11 percent for the segment compared with the first half of 2019 primarily because of lower shipments, partially offset by cost control. Shipments of 490,000 metric tons decreased 13 percent compared with the first half of 2019 because of lower shipments across automotive, packaging and specialty products. Revenue of 1.3 billion euros decreased 20 percent compared to the first half of 2019, primarily in light of lower shipments and lower metal prices, the company says.

In its Aerospace and Transportation segment, adjusted EBITDA for the quarter decreased 51 percent compared with the second quarter of 2019 primarily because of lower shipments, partially offset by cost control, Constellium reports. Shipments of 45,000 metric tons decreased 28 percent compared with the second quarter of 2019 on lower shipments of aerospace and transportation, industry and defense (TID) products. Revenue of 250 million euros ($29 million) decreased 35 percent compared with the second quarter of 2019 on lower shipments and lower metal prices.

For the first half of 2020, adjusted EBITDA decreased 28 percent in the Aerospace and Transportation segment compared with the first half of 2019 primarily because of lower shipments, partially offset by strong cost control and improved price and mix. Shipments of 104,000 metric tons decreased 19 percent compared with the first half of 2019 on lower shipments of aerospace and TID products. Revenue of 609 million euros decreased 20 percent compared with the first half of 2019 on lower shipments and lower metal prices.

In its Automotive Structures and Industry segment, Constellium says adjusted EBITDA in the second quarter decreased compared with the second quarter of 2019 because of lower shipments and weaker price and mix, partially offset by cost control. Shipments of 44,000 metric tons decreased 33 percent compared with the second quarter of 2019 on lower shipments of automotive and industry products. Revenue of 222 million euros ($257 million) decreased 36 percent compared with the second quarter of 2019 on lower shipments and lower metal prices.

For the first half of 2020, adjusted EBITDA in this segment decreased 44 percent compared with the first half of 2019 primarily in light of lower shipments, partially offset by cost control. Shipments of 109,000 metric tons decreased 17 percent compared with the first half of 2019 on lower shipments of automotive and industry products. Revenue of 564 million euros ($653 million) decreased 18 percent compared with the first half of 2019 on lower shipments and lower metal prices, the company says.