Good morning and welcome to Constellium Third Quarter 2017 Earnings Presentation Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions would follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded today, Thursday, October 26, 2017. I will now turn the call over to Ryan Wentling, Director of Investor Relations at Constellium. Mr. Wentling, please go ahead.

Thank you, operator and thank you everyone for your interest in Constellium. I would like to welcome you to our third quarter 2017 earnings call. On the call today are our Chief Executive Officer, Jean-Marc Germain; and our Chief Financial Officer, Peter Matt. 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 filings. 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 20-F. All information in this presentation is as of the date of this 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 reconciliation of non-GAAP financial measures attached in today's slide presentation, which supplement our IFRS disclosures. I would now like to hand the call over to Jean-Marc.

Thanks, Ryan. Good morning, good afternoon everyone and thank you again for your interest in Constellium. On slide five, you will see some of the highlights from our third quarter performance, but first let me tell you that I am very pleased with our performance this quarter and so far this year. Shipments were 374,000 tons, down 1% compared to the third quarter of 2016 on lower packaging rolled product shipments, partially offset by 32% higher automotive shipments. Our revenue was up 7% year-over-year to EUR 1.3 billion. This was primarily due to higher metal prices, which as you know we substantially pass through. Net income of EUR 21 million, improved from EUR 15 million last year. Our adjusted EBITDA was EUR 111 million. That is up 15% compared to the third quarter of last year and I am pleased to note that each segment was a meaningful contributor to these strong results. For the first nine months of 2017, adjusted EBITDA increased 12% to EUR 331 million. If you remember last quarter we updated our adjusted EBITDA guidance to the high end of our high single-digits range for 2017. I am pleased to note that as a result of our strong performance in the first nine months and our current outlook for the fourth quarter, we are increasing our adjusted EBITDA guidance for the full year 2017 to around 13% more than last year. I'd also like to call your attention to the deleveraging we have achieved thus far in 2017. We have reduced leverage by over half a turn since December. Our leverage is still too high and we continue working to bring it down and Peter will talk in more detail about our financial performance in just a few minutes. Turning to slide six, I'd like to…

Thank you, Jean-Marc and thank you all for joining the call today. Turning now to slide eight, you will find the change in adjusted EBITDA by segment for the third quarter and the first nine months of 2017 compared to the same periods of last year. For the third quarter of 2017, Constellium achieved EUR 111 million of adjusted EBITDA, an increase of EUR 14 million or 15% year-over-year. I will walk through each of the segments at a high level here and then go into more detail in the following slides. A&T increased adjusted EBITDA by EUR 10 million to EUR 30 million in the quarter. AS&I adjusted EBITDA of EUR 28 million, increased EUR 3 million year-over-year. P&ARP adjusted EBITDA of EUR 60 million was in line with last year. Lastly, Holdings and Corporate improved by EUR 1 million compared to the third quarter of last year in part due to a number of Project 2019 initiatives. We continue to expect agency costs of approximately EUR 6 million per quarter. At the bottom of the page, we present the first nine months of 2017. Constellium achieved EUR 331 million of adjusted EBITDA in the first nine months of 2017, an increase of 12% compared to last year. Now turning to slide nine and focusing on the P&ARP segment. Adjusted EBITDA of EUR 60 million was flat compared to last year. Lower volumes drove a EUR 3 million decrease in adjusted EBITDA as P&ARP shipments fell 3% on lower packaging shipments. This effect was offset by improved price and mix largely as a result of our strategic shift towards increased automotive rolled product shipments. Costs were a EUR 3 million headwind in the quarter. As we have previously mentioned, we are completing a major investment program to enable the…

Thank you, Peter. I would like to share a few end market updates now and I will start with the automotive market, which as you know is a very important growth driver for Constellium and we maintain our positive outlook for this market. In the U.S. the SAAR reached over 18 million vehicles in September, a welcome data point after displaying weakness for much of the year. In Europe, automotive sales continued to increase compared to last year, matching the trend of the first half. Constellium customer platforms continue to increase faster than the market, which we believe can be attributed to our greater exposure to light trucks, SUVs and luxury cars, which have a greater need for lightweighting and have been in higher demand. Over the longer term, we remain confident that increased aluminum usage is a secular trend for the automotive market driven not only by lightweighting enablers like fuel efficiency, safety and battery technology, but also by customer preference and driving enjoyment. We will continue to closely monitor this market and will remain prudent with our investments. As I have said many times we will not make incremental investments without firm customer commitments. Turning now to aerospace, we continue to see sustained OEM build rates. OEM backlogs remain also near record highs. Overall we maintain our positive outlook for this market. Now turning to packaging for a moment, packaging is a stable market and provides a good base load for our plans. In the U.S., we expect the continued progression of autobody sheet demand to help tighten the market over the long-term. In Europe, demand continues to grow based on substitution of aluminum for steel. Finally, we see steady demand in our other markets including the transportation, industry and defense markets while we are executing on our strategy of expanding into niche products and markets. While we see strength in many of the TID markets that we serve, the weakness in the North American transport market persists. In the industry markets in Europe demand for our extruded products remain very strong. So turning now to slide 16, we detail our financial guidance and our outlook. We are updating our adjusted EBITDA growth guidance for 2017 to around 13%. We continue from that base to expect high single-digit adjusted EBITDA growth annually over the next three years, leading to over EUR 500 million in 2020. We continue to target positive free cash flow in 2019. Lastly, we are targeting a leverage ratio of between 4 and 4.5 times adjusted EBITDA. Overall, I am very pleased with Constellium's performance in the third quarter of 2017 and the continued progress on our strategy. We continue to execute on it and I am very confident that we are on the right track. We remain focused on our operational execution, on harvesting the benefits of our investments, and on disciplined capital deployment. With that operator, we will now open the call for Q&A.

[Operator Instructions] Our first question comes from Curt Woodworth of Credit Suisse. Your line is open.

Hey, good morning Jon Marcos [ph] here.

Good morning.

It seems like in some of the other company reports there's been variances between metal lag and pass through timing as well as kind of the consequence of the scrap spreads widening pretty significantly with the LME move. So I was wondering, can you comment at all on sort of the impact this quarter of the benefit of scrap spreads and then if you had any headwinds from metal pass through?

So Curt, I'll give a quick response to that. So on metal lag, we have said historically and - or I'm sorry melt loss and scrap ops we said historically that the melt loss offsets the benefit of the wider scrap spreads. So we don't experience a material impact on our earnings.

Okay. And then I guess second question, just on aero in terms of sort of Airware and what's going on with Bombardier in the C Series, can you just talk I guess sort of generally how you see Airware volumes trending into '18? And then just in general, when do you think that you'll hit an inflection point on aero volumes starting to recover because it feels like to your point that the build rates looks solid and the destocking seems to be ending. Thank you.

So, I mean as you've seen our aerospace volumes are down year-on-year, I mean in the quarter, in the first nine months were down 10%. So the market is a bit soft, but our outlook remains positive and we are very focused on the execution of our strategy in aerospace, which is making sure we move towards higher-end products, making sure, we and Airware is one of them obviously, but it's not the only one. Making sure we really diversify our customer base within aerospace and then augment our participation in TID, which I think you're seeing all those different legs of the strategy moving nicely this year forward. So I think the - when I look at 2018, I mean we have discussions with our customers around what is it they need for next year, I wouldn't expect massive inflection point of Airware sales. I mean we pretty much are at a level where we like it to be and at some point we may hit some capacity constraints and we'll see at that time whether it makes sense for us to invest or not, but it's way premature. So I don't expect a big change in sales for next year. We'll continue to fine tune the product mix. And regarding I think your question is more specifically about Bombardier. Bombardier is a very important customer to us, Airbus is a very important customer to us. We're happy that they are seeing prospects in the C Series and we hope that can be beneficial for us over the long-term, but it's very early to tell.

Okay, great. Thank you.

Our next question comes from Novid Rassouli of Cowen. Your line is open.

Good morning, Jean-Marc, Peter and Ryan.

Hi, Novid.

So if we could start with guidance, so you guys have come in kind of above your guidance, you've raised expectations for the two consecutive quarters now. I just was wondering if you can comment on is the 13% guidance realistic as well as the longer-term kind of multi-year high single-digit guidance?

It's a very legitimate question, Novid. So, yes, the 13% guidance is very realistic, I mean I'll remind everybody, we know that, right. We're at the end of October, we got a little bit of visibility in terms of how November and December will shape up for us and that's what leads us to something that is a little bit more specific than what we've been giving in the past, which is a range. Looking forward, we are continuing to give guidance in a range and that guidance we believe is also very realistic. First thing we are saying is that, the improvements we're seeing this year, well first of all, I'm very pleased with that and quite frankly it's above the expectations I had. So I'm very pleased with it. I think a lot of the initiatives we're working on have gained a lot of traction in the organization. People have really rallied around Project 2019 and the goals we have in terms of making this company attractive and successful. So that's all very good and the savings we are seeing, Peter has alluded to some of them. These are savings that are here to stay. So they are creating a foundation for continued success for us. Now in addition to that, we got some outlook on the markets, which are generally positive and we also have a lot of investments that we've made in the past that are yet to deliver benefits right or we are just in the first or second inning of the game and we are far from having ramped up our CALP lines. So when you combine the sustainability of the savings, the positive outlook we have for the markets and the significant upside we have in terms of speeding up the lines that we have deployed, I think we've got a very realistic guidance for the longer term view through 2020. Now obviously again it's a range and things may go up or down. I mean the markets, the automotive market may accelerate or slow down, foreign exchange may go one way or the other. That's why we are giving a range, but I think we are trying our best to give a realistic outlook and we are very committed to meeting the guidance.

That's very helpful. And my second question just impressive performance on A&T year-over-year, it looks like TID kind of really helped you guys get into the next gear. I know that 25% of the TID products carry margins similar to aero. I was wondering if you can give us a sense if you're seeing that growth coming from that 25% or the other 75%, you'd mentioned on the call earlier that you'd signed some new customer contracts in TID. So just maybe if you could just comment on that and help us parse out the TID segment a little bit more. Thank you.

Yes, I think we're - as I said in the past, we are trying to focus on those products that are again higher-end products, so where we provide a differentiated offer, where we can get paid for our product and service - product quality and service, right. But we like every customer we have and you saw our growth in TID, when you got good operations that run well, you make money throughout the TID segment. And obviously you want it to be skewed towards the higher margin products, but the other ones the other 75% of products are still good contributors. So we have a pretty broad approach to it, the sales force, the marketing efforts are re-targeting multitude of niches and applications on both sides of the Atlantic Ocean and even in Asia as well. So it's a pretty broad range of products. And again remember, all these different markets have different kind of micro cycles to them, right. So it's important to be able to really participate in many, many of these niches so that when one market segment goes down, you got the other ones also to help you weather through a temporary slowdown in one market.

Thanks, Jean-Marc.

Welcome.

Our next question comes from Jorge Beristain of Deutsche Bank. Your line is open.

Hey, good morning guys. Just wanted to get some additional color as to specifically the volume losses that you're experiencing year-on-year impacting rolled products. It looks like on page 13 disclosure, you're down about 20,000 tons year-on-year. We understand that Ball moved some of their operations to Mexico. So I was wondering if you could comment if it was related to that or you said specifically that you're sort of engineering a move obviously over to more autobody sheet, but is this planned or are you experiencing sort of relative market share losses in packaging? I guess that's my question.

Yes, so Jorge I will disappoint you and not comment on the specifics obviously, but I can give you a pretty, I think what could be hopefully a good answer. So there's two elements to the losses of volumes in can sheet for us and both of them are planned, to your question, right? The first element is, yes, we are making space for automotive sales. So that means that as we have our discussions with our can customers, we are making sure we are making the right choice in terms of what is the most profitable business to keep and what is the business that needs to be made available for auto sales. The other aspect that comes into play, the other factor is the fact that we're going through a substantial modernization and automotive readiness program at Muscle Shoals. I've commented I think in the first quarter about how many additional maintenance days we are taking on top of the normal phased maintenance downtime that you need take on our mills and that is a number of days that is quite impressive throughout the year. So that is obviously limiting the production capacity we have this year and that's the other element that explains the difference year-on-year.

Could we get a sense of as you are ongoing this rate readiness, how many days out of a typical month you're losing or how many tons are affected or maybe just even an EBITDA impact, just so we would know what to expect when it normalizes post 2Q next year?

Yes, so we commented in the first quarter and I'll have to talk about in number of days, that was 15 right additional days in the first quarter. Second quarter was not as much. We had more days also this year. So if you add up over the course of this year and all our maintenance schedules are not completely finalized for exactly what we're going to do in December, but you're talking in the neighborhood of 25-30 additional days at Muscle Shoals. So think of it, we're down one month of the year.

Okay, perfect. And if I could just have a follow-up with Peter again, just trying to understand under IFRS, how we could expect the higher metal surcharges to start flowing through your income statement. We saw some LIFO issues with a competitor of yours this week in their results and I'm just trying to understand, should we be expecting any kind of surge in your cost of goods sold under IFRS due to the higher metal cost of aluminum?

Yes, so couple of things, number one, you will see it in our adjusted EBITDA, right, because in our adjusted EBITDA, you've got the LIFO equivalent right on the cost side. On the IFRS side, it's done at a WACC basis. So you will see it coming through, but on a slower basis over time and it will be more muted.

Okay, thanks very much.

Our next question comes from David Gagliano of BMO. Your line is open.

Okay, great. And first of all, congratulations on the improvement so far and running well ahead of what looks like well ahead of target for 2020. I just really have a couple of clarification questions, one of which actually related to the previous question. Can you just quantify was there an impact on adjusted EBITDA from improved scrap spreads in the third quarter and if so how much was it? That's my first question.

Sorry, David. Thanks for your kind words. Can you repeat your question, sorry.

I'm just trying to parse out if there was any kind of material; I know Peter mentioned earlier that historically there was no material change in adjusted EBITDA from metal spreads. I just wanted to again clarify in the third quarter was there any kind of material improvement in adjusted EBITDA from changes…

No, there isn't and I think - just a little bit more on this one. So as metal prices go up scrap widens, scrap spreads widen. So if you recycle metal you should get a benefit from it and that is true, we're getting some benefit from it, but elsewhere we are also - we are not recycling metal everywhere, right and where we don't recycle metal the melt loss on your run around scrap is costing you more because LME is higher and given the balance we have between make versus buy and how much we are reprocessing of our scrap given the product mix we have, all that basically evens out.

Okay, all right, thank you for clarifying that. And then just another clarification question, it's on the commentary around outage costs. This year through and into the first half of 2018, same idea, is there a way to quantify on an EBITDA basis those outage costs and that's part A and part B, are those outage costs included or excluded from the adjusted EBITDA of…

They are included in adjusted EBITDA, which is they are a negative variance to adjusted EBITDA, right. So we have more cost this year than we had the prior year in '16 because of those significant maintenance costs. We haven't disclosed how much they are and I think we want to stay little bit discrete about it, but they are going down. We had the big - an element of context is we had a big hit in the first quarter. We have a little bit still now and until the end of the year, but that's nothing really too much to talk about and I don't want to use convenient excuses for - in our reporting to you how we are doing.

And it will continue into the second half or the second quarter or through the second quarter of next year?

And then after it starts right, so I'm just trying to get the sense - how much should we expect in the third quarter of next year versus the second quarter, how much on an EBITDA?

Sorry to disappoint you. We'll stay here David.

No, that's okay, all right, that was worth trying. Thank you very much. Congrats again.

Definitely, thank you for your kind words.

Our next question comes from Piyush Sood of Morgan Stanley. Your line is open.

Hi, Jean-Marc and Peter. Congratulations on the quarter. First question, it is primarily on TID volumes and our understanding is that there are several customers that you've added and it's not one large customer. So would be willing to say if let's say the higher volumes are because of market share gains or has the market size increased?

I mean it's very difficult to tell because TID is an aggregation of multiple markets, right? The other thing too that in TID you've got quite a bit of business which is more transactional. I mean you have long-term relationships with the customers, but the business is conducted in a more transactional fashion. So it can go up or down and you can win market share or lose market share. I think in the past few months, we've been winning market share as a result of focus, dedication, making sure we got the products available, working on our lead times. So generally those markets are markets where availability of product is critical. So your ability to have the product available and meet the quality standards is a real determinant of your performance. The defense markets are more long-term contracts where you got to be nominated, awarded the product and then obviously depends on whatever the investment by the different states are in defense. So that's a little bit of different animal and there I think we are making some progress and winning a bit of share as well.

That's helpful. And second one it's around Project 2019, at this point would you be willing to say kind of what's the opportunity here, how long it lasts and just to confirm those - these cost savings that you have so far these are not part of your long-term guidance of EUR 500 or maybe they've started coming in, but the EUR 500 was not based on Project 2019 numbers.

I'll answer the last one first. That's right, the guidance did not include Project 2019. Going forward, obviously it will incorporate Project 2019 because we're budgeting and planning and so forth, but you're right on that. In terms of the opportunity we believe the opportunity is substantial. We have kind of accessed every business unit including H&C and we've developed a very extensive list of initiatives, but we are not going to come out with the total size of the opportunity as we see it right now and our reason is, we believe that it's better to kind of under-promise and over-deliver and that's what we're going to continue doing. So in terms of how long it will last, it's called Project 2019, the intent of this was to be free cash flow positive by 2019 and as we said at the time, we had originally looked at the plan and seen that we were negative free cash flow in 2019 and said, we can't live with that. So this should last through certainly 2019, but I suspect that we will at that juncture come up with a son of Project 2019 or something like that to kind of carry on because I think the DNA of continuous improvement I think we want to continue to run through the company.

So we'll try to come up with a better name than Project 2025, but I think the point that Peter is making about the DNA of continuous improvement is a very important one. And the other thing that I've experienced over and over again in my career is when you start focusing on your business and your operations and you let people have the time to look at what the improvement opportunities are, you build a learning organization and there's plenty of things that we have no idea of. Now when we are in 2019 and we look back at Project 2019 as being successful, we look at our business with different eyes and look at it and see that there are actually plenty of opportunities again that we can't even imagine now, but by the time we get two years from now, we'll see plenty of further opportunities. So I think it's something that's going to live with different avatars and names, but that DNA of continuous improvement is super important for us in manufacturing.

Thanks, guys. I will get back into queue.

Thanks, Piyush.

Our next question comes from Joshua Sullivan of Seaport Global. Your line is open.

Hi guys, this is actually Adam on for Josh. I was just wondering if you could give us an update on your negotiations with the packaging customer, was the option to extend its payment term to fiscal '19.

Yes, we don't have an update to provide. We are still talking and nothing is resolved. We'll be able to provide an update when we publish Q4 at the end of the year.

Okay, and then if I could just ask one more. Have your expectations around destocking in aerospace change at all and do you expect to receive any benefit in '18 from the production rate increase on the 787?

We don't and that aircraft sadly has a lot of composites on it. So it shouldn't help us too much.

Okay, that's it. Thanks so much for your help.

You're welcome. Thanks Adam.

Our next question comes from Matthew Fields of Bank of America. Your line is open.

Hey everyone. Congrats on the good quarter. I wanted to ask about in the fallout of the Kobe Steel scandal, have any OEMs sort of approached you to potentially talk about replacing parts on any platforms in aerospace, automotive any kind of platform?

No, that has not happened and obviously that - I don't know more about the Kobe Steel situation than what I read and you read in the newspapers, but it's a useful reminder that quality in our business is super important and we are very focused on it, it's really important to us and we've worked hard at it for many, many years. I mean we've been for decades in the aerospace or the auto industries and I'm pleased to see that, if I look at customer complaints at Constellium, they went down by more than 50% over the past four, five years and if we needed any further encouragement that we should never take anything for granted, the Kobe Steel situation is really a reminder of this. So we are all very focused on making sure we produce good quality products for our customers and well, hopefully we'll sell more of it, but we'll see.

Great. And then in AS&I you called out some weakness in price and mix this quarter over last quarter, but if you kind of X out the one-time startup costs and then sort of benefited from last year, can you give us a commentary about sort of same-store pricing as it were in that segment?

Yes, I think it's - same-store pricing would be stable to even a little bit positive. This is - I think it's more about mix and price and the demand for the product has been very significant and so we've been producing kind of more volume to kind of meet that demand and some of that demand has come in the form of lower value-add products. So I think that's really the driver.

And should we think about that trend of mix continuing for the next few quarters at least?

I wouldn't say so. I mean again, if you look at that, we are operating at a tremendous rate of demand in those businesses and again as we go forward, I think we believe that you'll start to see some more positive trends re-emerging.

Okay, great. And then lastly on your balance sheet, your three highest coupon bonds mature in the early part of - are callable in the early part of next year and the secureds are callable April 1. Do you think - have you talked to rating agencies about maybe what they would do if you sort of eliminated secured debt from your mix in terms of getting out of that CCC overhang which would probably allow you to refi the rest of your cap structure much easier?

So, good question. Look we are very focused on trying to find ways to increase the financial flexibility of the company and of the balance sheet specifically and we watch the markets obviously very closely and we will kind of act opportunistically where we think that it's in the best interest of our shareholders to do so. And you've seen that kind of in the past, we've done what we did with the secured bonds at Wise, which I think was kind of a good and successful transaction for kind of all of our stakeholders. So we'll continue to kind of look at and evaluate all options.

Is it important to you to refi those secured bonds with unsecured debt?

Look, I mean, I think we were pretty clear in the decision we made around the Wise bonds that our bias is towards moving towards an unsecured capital structure. So I think you can kind of gather from that the direction that we're headed.

Alright, thanks very much, Peter. That's helpful.

Our next question comes from Novid Rassouli of Cowen. Your line is open.

Thanks for taking my follow-up guys. Just a quick one, on P&ARP, the automotive readiness program and the incremental cost, can you guys quantify what the cost drag is for that just to get a sense of maybe what longer-term margins would be ex that.

Sorry, we'll pass on answering that question, Novid.

Thanks guys.

Well tried, again.

Thanks, nice job.

[Operator Instructions] Our next question comes from Karl Blunden of Goldman Sachs. Your line is open.

Good morning, guys. Congrats on the very strong results this quarter. I wanted to just focus in on the automotive market, just two questions here. You've maintained that your customer platforms are growing faster than the market, how long do you think that might last just based on your understanding on what platforms you're on and how those are growing?

Well, listen Karl we are enjoying it, we're happy about it, we think the platforms we're on are what customers like to drive. They tend to be bigger, higher end and that fits I think what - where customer preferences are going. Now those things may change and I don't have a crystal ball to say how we can change and when it can change. We all know we've been through - it's not the first rodeo here, we've been through I guess prices going up to north of $100, $150 a barrel and those bigger SUVs fell out of favor. So can that happen again? I don't know. Will it someday? I'm pretty sure it will, but again, I can't make a statement as to when that would change. I think fundamentally people, preferences are towards vehicles we're on. However, depending on whatever the global economy does, those things may abate or continue.

Got you. So more mix related than specific individual platforms. I guess the follow-up is, as you think about the UACJ joint venture, indications are that demand is very strong there, that certifications are potentially a bit slower than you or your partner had wanted to achieve. How is that trending these days?

The Bowling Green facility is actually a pretty large and complex operation and as we said we've got a number of - multitude of products and customers over there. Just to give you a feel, we got something like 400 different product specifications running on that one line. So we are qualified about everything that we've been awarded. The issues we are faced with is the industrialization of those products that we've been awarded and the ramp-up is made complicated by the fact that we got so many products and we're trying to industrialize in a greenfield where we've got to go down the experience curve and these are complex processes. I mean I think I've used this image in the past, but the CALP line is about, it's a length of an aircraft carrier, you got 3,000 feet of strip going through, I don't know how many hundreds of rolls there and you are trying to manage 6,000 variables within tight tolerances to make the product at the end and you do that for 400 different recipes. So it is complicated and I think maybe we're a little bit optimistic in our ability to overcome that challenge in terms of how fast we would go. So, yes, I think both UACJ and us when we meet together and work together, just a couple of weeks ago with Peter actually and we are not as happy as we thought we would be in terms of how fast it's going, but we're very committed to making it happen and we'll make it happen and this will be a good line, we're very happy with by 2020 or by 2019.

Maybe I could just squeeze one more in, I mean, so it sounds like you're optimistic about the performance there. If I could just get some flavor for what surprised you, you mentioned that your performances has beaten your expectations, I think it's beaten many people's expectation so far this year. What are the types of things that have come in better than your expectations when you set those at the Analyst Day a couple of months ago.

Yes, so definitely the focus on the execution of the plan. I think in terms of what we're working on, it was pretty clear and everybody was in line and we knew what we were setting out to do. What's really surprised me is the pace at which this has been achieved. When you think of it, between what we said at the Analyst Day and today, which is the six months or six, seven months ago, it's not because we've won major new contracts, right, it's not things that fall out of the air, it's really working on things that are within our control around efficiencies in the plants, working on the cost base, making sure we align our resources to where the leverage points are, getting rid of some of the things we're doing in the past that had limited value, and focusing our resources on making our processes work better, reduce our cost base and simplify this organization. So I think what has surprised me is not so much content or things that came out of nowhere, it's really focus and dedication of the team in making it happen in a quick fashion. And then the other thing too is, when you look at Project 2019, which we are announced back around those days - certainly expanded upon at the Analyst Day, initially when you - you basically think about the psychology of an organization you come up with a plan, you have people work very hard to produce a plan and you look at the plan and you say, well, guys, fantastic, I appreciate all the hard work, this is a tough hill to climb, but guess what, it's not enough and here's another layer and we've got this exciting project for you and it's Project 2019. It wasn't exactly clear to me that people would embrace it and make it happen that quickly and again that additional layer of initiatives that people are delivering upon really gives me a good feeling. So, yes, that's kind of the surprise, it's more about the pace than the actions themselves.

Thanks for the time guys. Appreciate it.

Thank you.

Our next question comes from Richard Yu of Citi. Your line is open.

Hey guys. Thanks for taking my questions. Does your experience at Bowling Green, the difficulties you've had recently affect the timing of a potential second CALP line and can you also please give an update on where you stand with getting firm commitments to that line?

Yes, so nothing really more to report from last time we talked about it. So we don't have enough commitments that could be confirmed for us to decide today to do the second CALP line. At the same time, I think it's very important for the team to focus on getting that CALP line up and running at a performance level that makes us fully comfortable and makes our customers fully comfortable that we can deliver on the second CALP line. When that happens, I think we'll be in a very good place to be looking at the future and at the expansion because again I believe very firmly that we've got aluminum as a great future in automotive and that more capacity will be needed and I think a lot of us within the company at UACJ and the customers would like us to put a second CALP line. So I'm very optimistic that can happen. We just got to make sure that we are in a place where we operate the first one well and the customer commitments can be confirmed.

Great, thanks. And I know you've said that you would like to have more than 50% firm commitments. Can you give a sense of where you stand in that regard at this point?

I wouldn't, but I'm not in the 45% range. So it's…

Okay, thank you. And then last question, if you don't mind given better, I know you guys just talked to CapEx for 2018, you kind of suggested it will be kind of in a similar range to where it is in '17, but have firmed that number up any more at this point?

We have not given official CapEx guidance for 2018, but I think it's fair to say that this year's number will likely be where it is next year, but we have not officially firmed that up.

And remember how we arrive at this. First of all we got maintenance CapEx, maintenance in the EUR 150 million to EUR 175 million that we have communicated. In my book, it's defined as what is the maintenance you need to maintain your earnings power. So it goes a little bit beyond just replacing what falls apart. And on top of that we've got opportunities to invest in the business to grow our EBITDA either because we add more product capability or capacity or we invest in those projects like one of them, Peter was describing like the pucking machines that compacts, scrap reduces melt loss and all that. And when we look at maintenance CapEx, we look at it through 2025, everything we need to do to have facilities in tip-top shape that can really continue to be competitive and deliver on customer commitments and then we look at three, four years out, every growth project we have in mind. The organization is pretty good at coming up with what can we suggest to cooperate in terms of ways to deploy capital properly in this business and improve earnings. And so we have a feel for what we would like to do. We still need to wrap that up and come up with what the allocation will be for 2018. But as Peter said, given all the indications we have at this stage, we're very committed to continue maintaining our operations in tip-top shape and we have plenty of growth opportunities. We also have a balance sheet that we are mindful of, we got free cash flow objectives as well, so it's a balancing act. At the end of the day, we're all about shareholder value creation.

Great, thank you very much.

At this time, I'd like to turn the call back over to Jean-Marc Germain for any closing remarks.

Well, thank you very much for all of you for participating in the call today. As a group you can see, we remain very focused on the execution of our strategy where I'm happy with the progress we're making, still lots to do and we firmly believe that this company is on the right track to achieve its raised guidance for 2017 and continues to grow at a nice clip from there on until 2020. Thank you again very much for your interest in Constellium. Have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.