Good day, ladies and gentlemen, and welcome to the Constellium's First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today's conference, Ryan Wentling, Director of Investor Relations. Sir, you may begin.

Thank you, operator. I would like to welcome everyone to our first quarter 2019 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 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 IFRS disclosures. I would now like to hand the call over to Jean-Marc.

Thanks, Ryan. Good morning, good afternoon, everyone. And thank you for your interest in Constellium. On Slide 5 you will see some of the highlights from our first quarter performance. Shipments were 413,000 metric tons that's up 6% compared to the first quarter of 2018. We continue to successfully execute on our strategy of increasing shipments to the automotive market. Automotive shipments increased 18% compared to the first quarter of last year. This was primarily driven by Bowling Green, which we now consolidate following the acquisition of our partners felt 9% interest in January. Our revenue increased 11% to EUR 1.5 billion. This was primarily due to the consolidation of Bowling Green revenues and improved price and mix. Our net income of EUR 24 million compares to a net loss of EUR 24 million in the first quarter of last year. Adjusted EBITDA was EUR 135 million. That is a record first quarter for the company and up 12% compared to the first quarter of last year. A&T had an exceptionally strong quarter, benefiting from strong end market demand and solid operational performance. P&ARP also had a good quality was gross in both packaging and automotive shipments and very good execution. We continue to make good progress on the ramp up of our new automotive CALP lines. Our AS&I business is experiencing higher costs related to the planned build out of our footprint, as we have indicated on our recent calls. Looking forward for the company, we are maintaining our adjusted EBITDA guidance of 8% to 10 % growth in 2019. Free cash flow was EUR 73 million in the first quarter. I am very proud of this result. Our first quarter performance is a meaningful first step towards exceeding our free cash flow guidance of over EUR 50 million in 2019. On Project 2019, we increased our run rate cost savings to EUR 60 million as of the end of the first quarter. We remain on track to reach our goal of EUR 75 million of run rate cost savings at the end of the year. Overall, I am very pleased with our first quarter results. Record first quarter adjusted EBITDA and strong free cash flow generation leave us well positioned to deliver on our 2019 targets. We remain focused on executing on our strategy and delivering in our 2022 objectives of over EUR 700 million of adjusted EBITDA and leverage of two and a half times. With that I will now hand the call over to Peter for further details on our financial performance. Peter?

Thank you, Jean-Marc, and thank you everyone for joining the call today. Turning now to Slide 7, you will find the change in adjusted EBITDA by segment for the first quarter of 2019 compared to the same period of last year. For the first quarter of 2019 Constellium achieved EUR 135 million of adjusted EBITDA, an increase of EUR 14 million or 12% year-over-year. P&ARP adjusted EBITDA of EUR 59 mill increased by EUR 7 million. A&T adjusted EBITDA of EUR 52 million increased by EUR 16 million. AS&I adjusted EBITDA of EUR 29 million decreased by EUR 7 million. And lastly, Holdings and Corporate was EUR 5 million, EUR 2 million higher than last year, but in line with our guidance of approximately EUR 20 million for the full year of 2019. Now turn to Slide 8, and let's focus on the PARP segment. Adjusted EBITDA of EUR 59 million increased 14% compared to the first quarter of last year. Volume was a tailwind of EUR 8 million as shipments increased 9%. Automotive rolled product shipments were up 27% benefiting from the consolidation of Bowling Green shipments and the continued ramp up of our automotive capacity. Both of our CALP lines in Neuf-Brisach, France and in Bowling Green Kentucky are running well. We expect to ramp up these lines through 2019 with full production in 2020. Packaging shipments increased 4% during the quarter on strong demand and solid operational performance. Price and mix was a headwind of EUR 5 million as we continue to see some of the mix effects we experienced in the fourth quarter of last year. Cost were a tailwind of EUR 6 million as favorable metal costs were offset by incremental costs in the ramp up of our automotive programs, and by increased plant maintenance…

Thank you, Peter. Turning to Slide 14, let me share a few end market updates. I'll start with the automotive market. Automotive remains a secular growth market for aluminum. We are confident that OEMs will continue to lightweight vehicles, thereby increasing fuel efficiency and reducing CO2 and other emissions. Further, electrification of vehicles has significant potential for aluminum. Aluminum allows for light weighting in order to increase the range of the vehicle and is the preferred material to make strong but light battery enclosures. Constellium is well positioned to realize the benefits of this secular shift to aluminum in automotive. Turning to the near term trends, the outlook for North American automotive SAAR continues to be a slight year-over-year decline in 2019. European auto sales are expected to remain flat in 2019. However, sales of light trucks, SUVs and luxury cars continue to outperform the market. And I remind you that we have more exposure to these types of vehicles. As far as Constellium is concerned, our automotive order books remain strong across both our rolled product and our extruded product platform. And we have seen only limited pockets of weakness in automotive today. However, we continue to closely monitor the market. We have been and will remain prudent with our investments. As I've noted many times in the past, we will not make incremental investments without firm customer commitment and strong confidence in end market demand. Let's turn now to aerospace. We expect aerospace to continue to be a steady market driven by sustained OEM build rates and near record high backlogs at the major OEMs. In recent quarters aerospace demand has exceeded our expected long-term CAGR of 2%. We expect these demand strengths to continue in the second quarter. We remain focused on maintaining our leadership position with…

[Operator Instructions] Our first question comes from the line of Craig Woodworth from Credit Suisse. You may begin.

Thanks. Good morning, Jean-Marc and Peter.

Good morning, Craig.

Peter, do you expect similar cost headwinds near the 14 million in AS&I for 2Q year-on-year?

Well, we do expect the headwinds to continue into Q2. I wouldn't exactly quantify it as kind of 14 million, but we do expect there will be some continued headwinds. As Jean-Marc said or as I said in my remarks, the Q2 will be lower than kind of last year. And so in the back half we're hoping will inflect up.

Okay, I'm just having a hard time kind of understanding like the magnitude of that cost increase because it sort of felt like this is a business you guys had talked about sort of doubling EBITDA in three to four years. And the total capital spend for Mexico and Georgia was 30 million to build the facilities and now it's looking like, call it 20 million of cost headwind. And Georgia was around, I think started up in '17 and Mexico '18. So could you just give us a little bit more color on what exactly these costs are for and then would you expect to recover all these costs next year?

Yeah. So correct, I think you're right that we expanded in San Luis Potosí, Mexico, White Georgia. But these are not the only investments we've made in the structures and industry business right. So we've expanded our footprint in Van Buren, Michigan, we've expanded in Dahenfeld, Germany, we've expanded in Gottmadingen. The expansion in Gottmadingen is actually bigger than the ones was made in the US. We're expanding in Decin as well, putting a second press in Levice, Slovakia and so on and so on, there's more, right. So the additional costs we're incurring are really about the startup of these operations and the time between - when you stop running and this time you really hit through production rates. And what we're seeing, I think I mentioned that on the call last time, for instance, we evaluate 700 people in this business over the course of the late 2018 really. And then, obviously, as we are now starting production in many of those facilities, we are experiencing higher cost because you don't run it through capacity and you have yield losses that are more important as you're starting and debugging your process, so all that is creating additional costs. These options literary, but because of the very large amount of different projects we're starting this is taking a bit of time to work through the system. As Peter mentioned, we expect that we're going to turn the corner this year in terms of this cost headwinds and that will end up for the year above last year in terms of EBITDA for AS&I. So really the way I look at it is, clearly this is not our best performance ever operationally in AS&I, there's lots going on, we know what we have to do, we're focused on each, was doing it, we will be turning the corner and I don't see any reason to change my very optimistic view about the value creation that is possible for us this year in terms of EBITDA growth year-on-year and certainly into the future years.

Okay, and then just a follow up on automotive, in terms of thinking about the, I guess EBITDA trajectory of the two CALP lines. Can you talk about when you would expect more, I guess material earnings out of the CALP lines and can you give us a sense of what the utilization rates are today for Bowling Green and the new line Neuf-Brisach.

So in Bowling Green I remind you, we said this year 2019 will be a negative contributor right, EUR 10 million to EUR 15 million is what we indicated back at the Investor Day in December. The results of the first quarter and the progress we've made make me confident that we'll be towards the better end of the range. It was about 4 million or 5 million negative headwinds in Q1. Now, both lines in Neuf-Brisach and in Bowling Green are close to the 70% utilization rate and in depends what months you're talking about, but that's kind of where we are and well on track to be at full production rates by the end of the year. And if you think of it full production rates in 2020 doesn't mean full profitability because you still have optimization to do on your cost base and your process efficiency, so forth. So we still see some juice in terms of getting - from '20 to '21 getting some better profitability out of these lines. So, we're really in a good place now.

And what do you view as your total capacity for auto sheet today?

Well, 100,000 tons in Bowling Green, 180,000 tons in Europe, between the CALP lines we have and there maybe a little bit of creep over time, so 300,000 tons by the time we're around 2022 is not out of sight. We still have a lot of work to get there, obviously. But that's kind of what I'm looking at now.

Great, thank you.

Sure.

And our next question comes from the line of Jeremy Kliewer from Deutsche Bank. You may begin.

Hey, good morning. Congrats on a good quarter.

Good morning Jeremy.

Regarding your aero and transport segment and I guess you have great margin there both this quarter and last quarter. So how should we look at that EUR 720 per ton margin moving forward? Is it going to contract much or does this TID and additional aero volumes going to help out moving forward?

Yeah, well, I think we're very pleased with the performance in A&T this first quarter and this first year as well in 2018 was a good year and it was selling 2019 very strong. I think it's a result of our strategy which is really focused on a high evaluating products and making sure we optimize, we run our mills with developing our TID presence and making sure we get paid for it as well. So that that's got - there's many pillars to this outcome. So I view this performance as sustainable. Knowing that if you think of Q2 last - Q1 last year was a bit - when you look at the comparison to last year, Q1 was a little bit weak, Q2 was super strong in A&T and this year we have a very strong Q1, Q2 will be more difficult. So overtime as I look at the full year, I look at the team that is performing well in terms of pricing the products, placing the right product with the right customers, executing in the plans very strongly, so I look at an EBITDA that will continue to grow overall for A&T segment as a whole in 2019 versus 2018.

Great and as the pricing increase that capable duty, like increasing aerospace volumes, so that there's less supply on the TID or how are you, I guess, increasing those prices?

No, so I think a lot of it has to do with the product selection, right. I mean, there's - the aerospace market is strong, but I'd say, I believe that there is capacity in this market to supply the market. So it's really about making sure we focus on the right markets in TID, build the right relationships with the customers, even straight the value of our products go more directly to the OEMs as opposed to going through distributors and making sure we build that connectivity and get paid for it. So I think a lot of it - I mean, obviously the economy overall is favorable right, but I wouldn't say that we're in a situation where there's a squeeze and it's a significant imbalance between supply and demand. So I'm not in that situation.

Yeah and Jeremy, as we said in the kind of prepared comments, most of the price benefit came from kind of TID and I think most of that is really as a result of the implementation of the strategy of trying to move into higher value added products and diversify the mix over time.

Okay, thank you.

And our next question comes from the line of Matthew Korn from Goldman Sachs. You may begin.

Hey, good morning Jean-Marc, good morning Peter. Again, congratulations on the quarter.

Thanks. Good morning Matt.

So it's a question I've been getting from a few people I find it interesting is that we've been hearing for a while thermos boilerplate [ph] now, but the potential tightening of the aluminum can stock market, its capacity switches to the higher margin, opportunity in ABS and over the last quarter, we've heard some comments from some of the packaging industry that this actually may be starting to kick in and availability is tight. I know that auto and aero get all the press, but for you, is this an opportunity that could be emerging maybe sooner than later? Do you have that potential now the capacity seems to be tightening to rework any of your expiring contracts and more favorable terms? Is that something within sight?

Yeah. So when you say sooner rather than later, I mean, we've been talking about a tightening of the market for, I think five years, right when we as an industry and there's always been enough can sheet to make all the cans that are needed. So yes, I mean, the situation is a little bit tighter, but I don't think there's any supply risk or security of supply risk or major squeeze happening. Now, over time, I think it is important for us to get paid and to get a fair return on our capital which is quite significant in this business. And we are very keen to when the opportunity arises, which is a contract renewal time to engage in a discussion with our customers to make sure that we find a balanced situation between us and them in terms of being able to continue to develop their business and us getting paid for what we do. You know, those contracts are long-term, so it doesn't happen all at once, it's progressive, things may change in the future, there may be new developments in the market, but certainly we see every contract renewal opportunity as an opportunity to generate more value for ourselves. Make sure we continue to get - say we get paid better for what we make and we continue to have the means to invest in this business and deploy the capital that is needed to make those products better, more efficient, and more productive for our customers benefit. So we're very focused on that and I think overtime it should pay out nicely in terms of rebalancing the profit pool across the supply chain.

Any of those reopeners, any of those opportunities exist within the next one to two years?

I don't want to go into specifics, but do not expect anything significant in the next one year or two.

Okay, all right. And switching gears over to aero and we did hear from a notable aerospace airframe supplier last night, given the reduced build rate for the 737 Max is a risk you could see some destocking activity triggered this year. How can we best think about your exposure say that this particular build rate reduction lingers or worsens into the back half of the year?

Yeah, so I don't think we've got significant exposure. We've got a very diversified portfolio of products. We obviously monitor the situation closely. We have seen no impact so far. And there would be an impact in terms of reduced build rates from my window as I - from where I sit now, I see us having many options to upset that.

Alright, thanks very much.

Sure.

And our next question comes from the line of Martin Englert from Jefferies. You may begin.

Hi, good morning, everyone.

Hi, Martin.

So improvements in working capital were a notable driver of the positive free cash flow during the quarter. Can you discuss some of your initiatives to improve payment terms as legacy agreements and if this is more of an annual step change that we should expect in 1Q and then also remind us of your trade working capital expectations for the full year.

So let me just step back a little bit and kind of talk about free cash flow generally for a second because I think it's something that we're super proud of in terms of achieving the working capital improvements that we did in the quarter and the free cash flow that we did in the quarter. So if you look at kind of that from the standpoint of where the benefits are, I think they came from really from all different pieces of working capital. We were able to manage our receivables better, we continued to work down our inventories in the quarter and we managed to kind of extend payables. But I think, kind of this is just again, one tool that we expect to bring to the table and managing kind of strong free cash flow and sustainable free cash flow in 2019. So what we said is that, just in terms of the second part of your question, we had said that we thought that working capital would be a use of 25 million to 45 million in the year. Obviously, the first quarter was much better than that and we're going to continue to work off of that. The challenge that I think you need to kind of keep in mind is that trade working capital can swing for reasons that aren't always in your control. And I remind you of things like resolve, and kind of some of the 232 actions that lead us to take certain actions vis-a-vis working capital. So based on what we see, we think we have it under control, but we're not moving away from that forecast, but we obviously are hoping to beat it.

Got it, thank you for all the incremental detail there and also just circling back on the packaging business, are there any volumes in 2019 that you're selling into the market that are not under contract? If so, you can talk about any of the pricing dynamics there.

So we - this year we've made a choice to not contract out all our capacity to make sure we are pretty reliable and we're able to respond to peak demand. We are not after making a quick buck and extol to extraordinary prices from customers that have a need at a certain time. We're in this business for the long-term. There's only a few suppliers and a few customers and we want to make sure that we have a balanced relationships with our customers. So pricing may drift us a little bit, but nothing really to write home about.

Okay, thanks for the detail there and congratulations on the quarter.

Thank you.

Our next question comes from the line of Piyush Sood from Morgan Stanley. You may begin.

Jean-Marc, Peter, congratulations on the quarter.

Thank you.

A couple of questions, first one, could we talk a little bit about your thoughts for 2Q profitability companywide? I think you've already said AS&I will be lower. The reason I'm asking is the full year guide is unchanged after the 1Q beat and startup costs front loaded this year. And lastly 2Q last year was very strong, so are we looking at 2Q down year-on-year before growth picks up again in the second half?

Yeah. So Piyush you're right that Q1is strong and Q2 is a different comp compared to last year. I think the way I think of this full year guidance is we are tracking towards the higher end of the guidance, the base of the solid gains we've had in Q1. I mean, it's still early in the year to say exactly where we're going to land at the end of the year. We'll keep you updated, I think we're building a track record of letting you know what happens as it happens. So I'm confident we're tracking towards the higher end of the guidance. And I think maybe Peter has a few more comments to add.

Yeah, I mean, I think Piyush, just looking at the year, again, if we just take the segments one by one and looking at P&ARP, Bowling Green is a critical piece of the pie. This year we had guided it being 10 to 15 negative. Obviously, in the first quarter, we feel like we've done a little bit better than that. So maybe we're at kind of the better end of our guide on that front. And I think in terms of - as we've said in the general comments, automotive demand for our products remains strong and the packaging demand remains very strong. So if we can produce the tons we should be able to kind of maintain a decent performance in P&ARP. In A&T, again, we've talked about this a little bit already on the call, but shipment volume there we think continue to remain robust there as we've got TID as kind of back to where we had it before and aerospace remains strong. And as Jean-Marc said in his prepared remarks, we expect that to remain strong. So again, most of that business is contracted. So again, if we can produce the tons, we should be able to sell them and generate decent results. And AS&I as we've said, it's going to be a challenge, but we are expecting year-over-year improvement in adjusted EBITDA and that's based on kind of working through some of the startups and moving in the right direction, which we're confident we can do.

Great, appreciate that color. And a quick question on your free cash flow. So 1Q, you're already about the 50 million mark. So the remaining nine months, do you expect some more positive free cash flow or do you expect the remainder of the year to be a use of cash?

Yeah, so let me just start again by stepping back on free cash flow. So free cash flow, multiple levers here in the company, one of the things that's really exciting for us is that I think we've got the whole team focused on using all these levers to get to kind of strong free cash flow. In the first quarter of the 73 million, remember 20 is related to factoring, so if you take that out, we're positive 53 in the quarter. We feel I would say we feel very good about kind of free cash flow for the rest of the year. And our goal is not to generate free cash flow in one year. It's about sustainable free cash flow. If you ask, why are we not upping our guidance on free cash flow? It's because there are some things that can swing as I said earlier in the call, things like working capital, sometimes it's completely out of your control. Obviously, we feel like thus far we've been able to overcome the growth investment piece of trade working capital. But I think we want another quarter to kind of see how the year is panning out. And then with some better visibility we'll reconsider our guidance for the full year.

Great, thanks guys. That's really helpful and all the best.

Thank you.

And our next question comes from the line of Christian Georges from Societe Generale. You may begin.

Yes, thank you. Good morning.

Hi, Chris.

Just going back on your aerospace division, I think you just said that future would be more difficult. I mean, it's been a great Q1, 52 million EBITDA that's not dissimilar to what you had in Q2 '18 and if I look at your commercial spread, your 20% which is the first time we've seen that in a long time. So when you're saying 2Q more difficult, are we looking at a similar kind of contrast between first quarters that we had in the third quarter last year versus second quarter, is that the kind of idea.

I think by more difficult we mean the base - the comparable from last year is very high. So I think we beat by more than 40% from last year's Q1 EBITDA, I mean, I'm certainly not expecting to beat Q2 by 40%. But we were working out to have a solid Q2 as well.

The Q2 last year was pretty strong as well, right, so even if you're less than Q2 last year.

Yeah, again, just to emphasize what Jean-Marc is saying, we're not saying that Q2 is going to be weak in any regard. All of the contracts are in place and the pricing is in place. So we feel really good about Q2. But just remember the jump of last year Q1 to Q2 was very substantial. We don't expect that big a differential this year.

Okay. And if I look at P&ARP, again just looking at your commercial spreads the delta with the price of aluminum, it looks one of the weakest in some time, I calculated about 17%. I mean, the inclusion of Bowling Green, does this eventually have an impact on the margin you're able to achieve over and above the cost of aluminum?

I mean, Bowling Green is definitely negatively impacting the results in the quarter, right, as we said earlier. So if you kind of take apart the numbers, what you can see is that Bowling Green is basically a negative five, right. So what we said earlier was we believe that Bowling Green - actually we're performing well at Bowling Green, but it is definitely negatively impacting our P&ARP results. Now, over the course of the year, we expect to improve that and so for negative five in Q1, hopefully by the time we get to the end of the year, we're kind of making a positive contribution there.

Okay, and then I guess picking up the similarities; you've consolidated to Q1 last year when you only included part of this.

Well, remember, it wasn't included last year because remember, we don't consolidate it. So this is the first time we're consolidating it. And so it shows up in our bridge in the other bucket. And obviously next year, when we have a full year comparison, you'll start seeing it broken out by all of the different bridge items, not it specifically, but it will be included in all the different bridge items.

Okay, that's exactly I understand. And then the very last thing on that resell getting together with Braidy, just in terms of your experience, I think that you're aiming for 300,000 tons of aluminum, how long would that potentially take to reach a market like five years in your experience this kind of size?

Well, it's - I mean, at the moment it is a project, right. That is reasonably and eventually the project - the ground still needs to be broken, the power needs to be brought to site. So building cast out, rolling mill, finishing equipments and all that you're talking certainly more than five years altogether, to get it to commercial production. And in my experience, when you look at the precedents on Logan, aluminum was five to 10 years before they reached breakeven between the time you break the ground and second reach breakeven. Look at the Ma'aden example is a rolling mill in Saudi Arabia, built by Alcoa, it's a long-term project, so all these projects are long term.

Okay, very clear. Thank you very much.

Thank you. And the next question comes from line of Matthew Fields from Bank of America Merrill Lynch. You may begin.

Hey, Jean-Marc and Peter and Ryan. Just a few questions, we've talked a lot over the last five years, as you rightly noted about the tightening packaging market. But when you when you look at the revenue over the cost of aluminum in your packaging sector, this quarter, it's down, as has been the case for the last several years, but I'm just wondering and maybe to an earlier question, when are we going to start to see the uptick in pricing in can as your contract mix kind of changes and legacy contracts roll off and kind of newer contracts roll on. What's your trajectory of the pricing in that segment?

Yeah, so it's important to not confuse the margin of a metal with pricing because you've got significant impacts of mix in that, right. So for instance, this year, we got less end stock then can stock, good and body stock sorry within can sheet. Taking you into the weed, within auto we've got less outers more inners, more of everything but less of the mix and those products have different prices because they've got different costs, right. There's more cost in making an end stock than there is in making body stock. You don't even have the same productivity in the mills, you don't even have the same raw materials and all these fluctuate quarter-over-quarter. So if you look at an equivalent evaluated revenue for instance per ton on a quarterly basis it is very difficult to look at this and then conclude that prices are going up or prices are going down. You kind of have prices going up in both end stock and body stock and steel, the average value added revenue divided by tons go down because of the exchange. So sorry for these longer opening preamble, right, but we're seeing better margins in P&ARP, again, they are depressed by the inclusion of Bowling Green in Q1 and I am quite optimistic that we will continue to see an improvement in margin overtime in this segment.

And maybe just to add a little bit to that. So remember on the auto side, as we said before, we're ramping these lines up will be at full run rate in 2020, but we'll still be getting the full realization of the profitability in 2021, right because once you ramp up these auto lines, there's some optimization that needs to go on. And then secondly, on the can sheet side, I think you can infer from Jean-Marc's earlier comments that we don't have the big contracts coming up in the next one to two years, but then there's opportunity thereafter depending on market conditions and we'll certainly be kind of looking at that very closely.

Okay, that's helpful thanks. And then as Novelis and Aleris work their way through the regulators, they may be forced to divest some assets. Are there any assets in Europe, maybe duffle or one of the Novelis's auto lines that you might be interested in acquiring and kind of like what's the level of comfort taking leverage up to acquire something in a for sale context?

Yeah, so fair question, we're very focused on all the opportunities we have within our four walls. I mean, we've got plenty to do internally because all these investments that we're ramping out that are going to generate positive EBITDA and at the moment are generating negativity EBITDA you're seeing in some of our bridges. So that's what we're focused on. As we've said a number of times our priority in terms of capital location is deleveraging, right and paying down debt, which we started to do, as Peter mentioned, we're repaying the leases that we inherited from the acquisition of Bowling Green. So our level of comfort with bringing leverage up is very, very minimal. We don't want to do that. And we would never say never but whatever we would do would be very, very carefully considered like we did with Bowling Green, right. We took a long and hard look at the purchase of the 49% in Bowling Green. We are an inside look into it obviously, we knew what was there. We felt that this was a compelling opportunity, but it took us some time before we decided to cross that bridge. So the likelihood that we acquire any assets even out of a full sale is very, very slim.

Yeah, and I would just kind of jump in to remind you that one of the things that we think is so exciting about this story is that we have all the tools within our four walls to generate kind of continued really strong earnings and free cash flow. Think about each of the businesses, we've made substantial investments. And so it's a matter of kind of ramping them up, as Jean-Marc said, and they'll deliver earnings and cash flow. Think about Project 2019, where there's still we would say kind of significant additional room beyond even Project 2019 in the company. So it's the makings of a really good story, both from earnings and cash flow without doing things on the outside.

Okay, thanks for that. Thanks very much.

Thank you.

And our next question comes from the line of Sean Wondrack from Deutsche Bank. You may begin.

Good morning.

Good morning Sean.

You guys have had a lot of success amongst your three sectors over the past three years in terms of growing revenue and EBITDA. Have you seen any shift in sort of competitive intensity when you think about your three segments where maybe you see more entrance coming in or more competition arising?

I wouldn't talk about new entrance really, but it's a competitive market. I mean, we've got very strong competitors that make good products for which we have a lot of respect. And yeah, it's not easy every day, but I don't think I would characterize it as increased competition or decreased competition. I think it's a very healthy, robust level of competition that forces all of us to improve.

Got you and then shifting gears a little. When you think about your earnings and market for aluminum scrap, obviously, you recycle a lot of scrap, have there been any discrete benefits there? And what's your outlook for the scrap market, kind of moving forward throughout the rest of the year?

Well, I would say we expect the scrap market to remain kind of strong or kind of a benefit, obviously, because given some of the trends in that market, we would anticipate that they would continue at least for the foreseeable future, certainly through the end of 2019. We do benefit from it in our packaging businesses, as we've kind of called out in the past. And specifically this year we or in this quarter, we highlighted the fact that we're getting some benefit from of metal in our, in our results and specifically again, in the packaging business. We would characterize it as kind of a handful of millions, so to speak because there are, as we've said in the past a number of kind of puts and takes on the scrap side. So it's not all good, right from our vantage point.

Great, no, that makes sense. And then, sorry to ask this question again. But just in terms of your debt stack, I think you sort of mentioned you were kind of looking at the 2021 euro notes. Do you have any update there? Are you still looking at the capital market?

We're still looking. No, so as we said, in the past, look the bonds are callable at par in May. We were watching the markets carefully. We know that they're very strong. And we continue to watch.

All right, thank you very much.

Thank you.

And our next question comes from the line of Karl Blunden from Goldman Sachs. You may begin.

Hi, good morning guys. Just a couple questions on the end market, we discussed packaging a lot and tightening conditions there. Are you able to quantify what's the utilization rates are in the industry in Europe and in North America in your opinion?

Yeah, I think our industry in rolling is working pretty much at full capacity both in Europe and North America. I mean, we saw that there was a surge in demand in Q4 in the US and everybody was scrambling certainly us and I believe distinction as well to deliver everything that was needed. We managed to work through it with our customers, but yes, it's pretty tight in both markets.

Got you, similar question on the order side, we're aware obviously have some shipments from Europe to the US has given how tight the conditions are in the US. A couple of capacity additions coming on from Novelis and we hear about this longer term project at Braidy, could you talk about your confidence that that market will remain pretty much fully sold out and how long those conditions might be maintained?

Yeah, so I think in Europe, there is a bit of extra capacity you're right. And it's being used for international shipments, but by 2021, I believe we were back to market, which is a northern balance that actually would require new investments even in Europe in 2022 and 2023. And I think in the US the lines that are being built, I'm not talking about the Braidy lines yet, obviously needed otherwise the markets would be in a deficit as soon as 2021. So I think we've got a pretty good horizon and again this trend towards more aluminum in cars is - in every discussions we have with the automakers is a secular trend. They need to lightweight and aluminum is the cost effective way to do that. And especially on the European side where diesel was a very important play, reducing emissions, getting diesel out of the fleet increases emissions of CO2, right. So, there's another engine that fosters the development, the adoption of aluminum in automotive, so I think all these expansions are needed. Now, when they come you know that it's not a smooth and easy ramp up anyway, but on the face of it, you open a plant, you look at it and all of a sudden you got 100,000 tons more capacity. So reality is the set of all capacity is never 100,000 tons, right out of the gate. So the ramp up is also helping to smooth the peaks in capacity versus a pretty steady increasing demand. So I think we're looking at a market that is going to be reasonably balanced. This is something for the next three to four years.

Thanks for the time, appreciate it.

Thank you. And we have a follow from Jeremy Kliewer from Deutsche Bank. You may begin.

Hi, just regarding your comment on limited pockets of weakness in the automotive industry. Was that referring to like particular regions or is it on models that you guys are exposed to?

Yeah, no, it's more on a. So it's both in the US and Europe. I mean some models or OEMs on which we may have some or no exposure, right. Sorry, some or limited exposure. But again, we don't see that has an impact on our guidance, either short term or long term.

Okay and then on the decision to kind of produce some of your contractual obligations on the packaging sheet. Was that all on the end stock? Or was it both body sheet as well as the end stock sheet?

Both, both, yeah.

Both. All right. Thank you. And good luck.

Thank you.

Thank you.

Well, thank you, everyone. I think that concludes our call for today and our Q&A. Thank you again for your interest in Constellium. As you can tell, we remain very optimistic about our prospects for 2019 and onwards and we look forward to updating you on our Q2 numbers and performance in July. Thank you. 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.