Hello, everyone and welcome to the Constellium Third Quarter 2024 Earnings Call. My name is Drew, and I will be coordinating your call today. [Operator Instructions] I would now like to hand you over to Jason Hershiser, Director of Investor Relations to begin. Please go ahead, Jason.

Thank you, Drew. I would like to welcome everyone to our Third Quarter 2024 Earnings Call. On the call today, we have our Chief Executive Officer, Jean-Marc Germain; and our Chief Financial Officer, Jack Guo. 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 would 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. Before turning the call over to Jean-Marc, I wanted to remind everyone that earlier this year, we revised the definition of adjusted EBITDA at the consolidated level based on prior discussions with the SEC. The new definition will no longer exclude the noncash impact of metal price lag. We will continue to provide investors and other stakeholders with a noncash metal price lag impact as it is necessary to get a true assessment of the economic performance of the business. Our segment adjusted EBITDA will continue to exclude the impact and any guidance we provide for adjusted EBITDA will also exclude the impact. And with that, I’d now like to hand the call over to Jean-Marc.

Thank you, Jason. Good morning. Good afternoon, everyone, and thank you for your interest in Constellium. Let's begin on slide 5 and discuss the highlights from our third quarter results. I would like to start with safety, our number one priority. Our recordable case rate was lower in the third quarter, leading to a rate of 1.9 per million hours worked for the first nine months of the year. While this safety performance puts us among the best in manufacturing, the rate is still higher than where we want it to be. We all need to constantly maintain our focus on safety to achieve the ambitious target we have set. It is a never ending task for our company and one that we take very seriously. Turning to our financial results, shipments were 352,000 tons, down 5% compared to the third quarter of 2023, mainly due to lower shipments in A&T and AS&I. Revenue of EUR 1.6 billion decreased 5% compared to last year, primarily due to lower shipments, partially offset by higher metal prices. Remember, while our revenues are affected by changes in metal prices, we operate a pass-through business model which minimizes our exposure to metal price risk. Our net income of EUR 3 million in the quarter compares to net income of EUR 64 million in the third quarter last year. As a reminder, the third quarter last year included a EUR 36 million euro gain related to the sale of our CED business in Germany. Adjusted EBITDA was EUR 110 million in the quarter, though this includes a negative impact at Valais, Switzerland of EUR 17 million as a result of the flood. This also includes a negative noncash impact from metal price lag of EUR 3 million. If you were to exclude the impact of…

Thank you, Jean-Marc, and thank you everyone for joining the call today. Please turn now to slide 7. Let's focus on our PARP segment performance. In the third quarter of 2024, PARP generated segmented just the EBITDA of EUR 61 million , which was down 9% compared to the third quarter last year. Shipments in PARP were stable versus the same quarter last year. Packaging shipments increased 3% in the quarter versus last year, as demand remained healthy in both North America and Europe. Automotive shipments decreased 6% in the quarter as demand started to weaken in North America and weakened further in Europe. Price and mix were stable compared to the third quarter last year. Costs were a headwind of EUR 6 million as a result of unfavorable metal costs, given tighter scrap spreads in North America, partially offset by lower operating costs. Now, I'll turn to slide 8, and let's focus on the A&T segment. Adjusted EBITDA of EUR 47 million decreased 41% compared to the record third quarter last year. Volume was a EUR 10 million headwind as a result of lower TID shipments. TID markets in North America saw a sharp decline during the quarter, and markets in Europe continue to weaken. TID shipments were also impacted at Valais as a result of the flood. Aerospace shipments were stable in the quarter. Price and mix were a headwind of EUR 12 million due to a softer pricing environment in TID and weaker aerospace mix in the quarter. Costs were a headwind of EUR 3 million. During the third quarter, A&T had a negative impact of EUR 7 million at Valais as a result of the flood. Now, turn to slide 9, and let's focus on the AS&I segment. adjusted EBITDA of EUR 10 million decreased 61%…

Thank you, Jack. Let's turn to slide 13 and discuss our current end market outlook. The majority of our portfolio today is serving end markets benefiting from durable, sustainability-driven secular growth, in which aluminum, the light and infinitely recyclable material plays a critical role. However, in the short term, many of these markets are facing headwinds. Turning first to the Aerospace market, commercial aircraft backlogs are robust today and continue to grow. Major aero OEMs remain focused on increasing build rates for both narrow and wide body aircraft, although supply chain challenges are again slowing deliveries of completed aircraft. As a result, aerospace supply chains need to adjust to lower than expected build rates, which is causing a shift in demand to the right of some of our products. Despite the slowdown in the near term, we remain confident that the long-term fundamentals driving aerospace demand remain intact, including growing passenger traffic and greater demand for new, more fuel-efficient aircraft. Demand remains healthy in the business and regional jet and defense markets. Turning now to Automotive. Automotive OEM production of light vehicles in Europe remains well below pre-COVID levels, and is still below pre-COVID levels in North America as well. In a quarter, automotive demand started to soften in North America, while demand further weakened in Europe, particularly in the luxury and premium vehicle and electric vehicle segments, where we have greater exposure. As a result of the weakness in automotive, we have seen many global automotive OEMs reduce their outlooks at least once in the last two quarters. In the long term, vehicle electrification and sustainability trends will continue to drive demand for light weighting and use of aluminum products. As a result, we remain positive on this market over the longer term in both regions, despite the weakness…

[Operator Instructions] Our first question today comes from Katja Jancic from BMO Capital Markets.

Hi, thank you for taking my questions. Jean-Marc, you just mentioned there are EBITDA drivers that I guess are non-market related. Can you just remind us how much those drivers could add to EBITDA when combined?

Sure, good morning, Katja, thanks for the question. So, the first one is the Recycle Center in Neuf-Brisach, which as I said, is ramping up nicely as we speak. That's EUR 35 million to EUR 40 million for next year. The second one is Vision ‘25. It used to be the third one but obviously given the market conditions we're seeing we're working hard on the cost structure and that should be north of EUR 25 million in cost savings into next year. The third element is the re-pricing of some of our aerospace contracts. I didn't give an exact number but you can figure it out given the fact that it used to be more than EUR 15 million and now it's less than EUR 25 million, so it's somewhere in between. And then I think we feel like we are turning a corner in Muscle Shoals, we are seeing better production out of the facility. Now obviously that's good in the context of the can sheet demand being healthy especially in North America but also in Europe. So that should also help us next year and provide some further EBITDA list. Now it's likely to be a little bit mitigated because, as Jack mentioned, the metal costs are at unfair role. The scrap spreads are tighter than they used to be by quite a bit, so that's upsetting some of the improvements in Muscle Shoals, but net-net, that's going to be an improvement as well. So these are the ones immediately now that are within our control and that should provide you add up all these, you get north of EUR 100 million of additional EBITDA, as we mentioned, back in July. Now, longer term, also in our control, we announced in the first, in the two first earnings call this year, four investments in Ravenswood, Muscle Shoals, Issoire, and Juigne that are going to -- you look at them in tow, it's about EUR 300 million of capital expenditures that are within our usual EUR 350 million of CapEx every year, and these should generate close to EUR 100 million of additional EBITDA. Now, none of that will impact ‘25 because these projects will start later in ‘26 and really a ramp up in ‘27, ‘28. But these are definitely a number of activities that are well within our control and that are well underway.

And maybe going back to the Vision ‘25, the cost reduction of EUR 25 million, does that include any incremental cost reductions that you were mentioning today that you're trying to do?

So, Katja, I think our objective is to kind of rightsize our cost structure. So previously, the Vision ‘25, remember we said targeting EUR 50 million of savings over three years, right, so we're kind of halfway into that program and the program is performing well. Now we're accelerating in addition to the Vision, the prior Vision ‘25 target and we're looking at some of the labor cost reduction efforts and cutting back on some of the other kind of non-essential categories so the ‘25 is incremental to the prior effort.

Our next question today comes from Bill Peterson from JPMorgan.

Hi. Good morning and thanks for taking my questions. Maybe just thinking about 2024 to try to make sure understand some of the impacts in more detail. If you speak about the EUR 590 million plus the, I guess sort of I don't know what EUR 35 million from the slide that would still kind of push you maybe and then I guess if you added the EUR 15 million from the Muscle Shoals, that still puts you kind of like EUR 100 million below the low end of the prior, or I guess the original guidance. Can you walk us through, I guess, the market drivers, obviously, you're commenting that auto is worse in the US and Europe, and industrial seems that they can like down maybe some pricing and mixed impacts. Can you walk us through the various buckets of, I guess, what is worse and quantify amongst the various buckets, please?

Good morning, Bill. Thanks for the question. Yes, I'll do that. So I'll start with the markets in sequence, right. So the first one, industrial markets, we had, we knew Europe was weak, it got weaker. In addition, we've seen a sharp decline in North American industrial markets, and namely, that's going to affect us through the TID product lines in the second half of this year. And you'll think, already evidence of that in our Q3 TNT numbers. So that's been quite a sharp reversal. I mean, you look at the trailer build, we're looking at 25%- 30% reduction year-on-year, but just one segment, right, compared to last year, clearly, much worse than what was expected. Then you look at the automotive market. Back in July, we were still thinking when the outside forecast for the industry was still slightly up compared to last year, now we're talking of 5% decline. And that decline is actually worse in the electric vehicle and luxury market segments. I mean, you've seen most OEMs have published a revision to their guidance. We know that there's a significant player in North America, Stellantis, he's an important customer of ours. They are struggling with a lot of inventory piling up in the deal of slots, so that is causing a very sharp reduction in demand going into the end of the year. Then in terms of cansheet, we're happy with it. It remains steady and strong, but we've got aerospace as well, where the supply chain issues are creating a further reduction in demand. Now, we have started the year with a more conservative assumption than what the OEMs were giving us, but now the reality is even more below what we thought was a conservative assumption going into the year. And what that…

Well, it does, a lot of market driven things. I just don't know if there's other comments that maybe price or mix or maybe just internally cost related. It may be also impacting in addition to the –

No, actually, so on the price side, yes, I mean, when markets are low, are not strong, the pricing is a bit weaker as well, it's not such a dramatic impact for us. I mean it's more about the mix and especially in aerospace, right, where some of the more profitable products are the ones that are pushed to the right because they tend to be the ones that the OEMs will stock up on and anticipate those that they make sure they don't get -- they don't run out of them. They tend to be the more difficult ones to make, so these are the ones that are more critical that they want to make sure they got enough of. And if the build rates go down, then they adjust those stock levels. But I think back to the pricing issue, not really. I mean, the pricing in automotive is set, the pricing in aero can sheet is set, the price itself on aerospace is set. What changes is the mix, and the mix has been unfavorable. And on the cost side, actually, we're doing -- I think we're doing reasonably well.

Our next question comes from Timna Tanners from Wolfe Research.

Great. Thank you very much. Sorry. I was having a hard time with the audio, so I might have missed this, but I was hoping we could talk a little bit about what signs of any recovery you might be seeing, so thinking about next year. On the aerospace side, I was a little concerned you talked about just starting to see weakness. So, how do we think about the margin compression and that makeshift of that important high-margin product, and any signs of if that could be like a temporary de-stocking from your customers or how to think about that business in particular?

Okay. Good morning, Timna. So, I'll address the first question on the, do we see any signs of a recovery in the markets? Not really, at the moment. We, and obviously cans, it’s going okay, right? Aerospace, I think we'll come back to the second part of your question. I think it's just a bump in the road. And on automotive and specialties or industry, I mean, we don't see recovery signs yet. Actually, we've seen a sharper decline than what we could have thought back in July. So no good news on that front. Regarding aerospace, I think it's starting to see weakness compared to the assumptions we had. But it's still a market where there is a clear need for more aircraft. The OEMs want to build more aircraft, but they are faced with temporary supply chain challenges or the supply chains are ramping up. So there's no need to dwell on Boeing, right? We all know what's happening there. But in the case of Airbus, it's really about making sure they program but they get the engines and the interiors that they need to complete the aircraft. And as they are slowing down their ramp up, they are slowing down the long lead time items that we supply to them. And that's what's happening. So what it means is ultimately those products will be made and sold by us to them, but it's not happening as we were thinking in the second half of this year. Now, in terms of margin compression, what that means is you've got a less rich mix in aerospace itself. So that creates a bit of a margin compression, but we don't think our margins are really at risk here. And if anything, the margins of this quarter are slightly depressed because of that makeshift, but also because of the Valais flood. Remember, some A&T has some presence in the Valais, so they are, that's mechanically putting pressure on their average margin.

Yes, Timna, the only thing I would add, sorry, the only thing I would add is if you were to kind of strip out the impact of Valais, for the quarter, the A&T margins still attractive from a historical perspective, right, compared to what we had in the past, so the quarterly margin, it was still above EUR 1,100 euro per ton.

Sure, I was asking because you said you're just starting to see it, so I was trying to think of how much downside there could be, so if you'd like to elaborate that would be great, but I did want to also ask, given that you've talked a lot in the past about having good visibility based on the bulk of your business being in contracts, how does that protect you against some of this weakness, and in light of that, like, how do you think about, in a soft market with more capacity coming on, if there's much risk there or if you still think some of your contracts keep you protected.

Yes, so we do have a good contract, but obviously you need to think of them as market share driven or requirement based, right? So over time, we are not going to sell products, for end products are going to be made in a given period of time. That said, there's a number of different factors here. In automotive, we can claim compensation from our customers, our OEMs, so that's providing us some protection. And in cansheet, the tolerances are pretty narrow and we know it's a pretty good at solid market. And also, we're taking a long term view. I think what we're seeing is a very sharp change in market conditions, but those things will bounce back as well. So on the upside, we'll be very happy with the contracts we have. So I think that's how we look at it. We've experienced already a number of cycles. This one may be a little bit sharper than we had thought and a little bit quicker, but there will be a bounce back as well.

Okay, if I could squeeze one more in. There's been some noise about additional taxes potentially in Paris. Is there something you could address for us, please?

Oh, income tax. Yes.

Correct, yes.

Yes. So, we'll be happy to. So it wouldn't impact 2024 because the incremental kind of tax, increasing tax rate is applied on ‘24 payable in 2025, so what that means, and that'll half in 2026 compared to 2025. So it just means a sort of temporary modest amount of increase in cash tax.

Our next question today comes from Josh Sullivan from The Benchmark Company.

Hey, good morning. Just on the aerospace piece with the supply chain issues mentioned. Is this related to both the large OEMs or is their incremental impact stronger from one versus the other this quarter?

Well, we are much more exposed to Airbus, as you know, Josh. So in the absolute, a smaller impact. Well, Airbus is a bigger impact for us than that for Boeing. So that's what I would say. And yes, we're seeing also things being challenged. So that delay. So that's also causing us a bit of grief.

And then are you at minimums now or when did you go to minimums on the contracts?

So as I said, our contracts, I don't want to go into too much detail, but they are requirement based. So we believe we are reasonably close to the minimum. Another way to look at it is you look at 2019, right? Our shipments were much higher than they are today. So the pre-COVID times. So that gives you an idea of where we stand.

And then just on the sharp decline in North America, I know you said it's pretty broad based, but how should we think of inventory in the distribution channels or at customers? Is the sharp decline coming into a full inventory supply chain or were customers leaner at this point in the cycle anyways?

No, I think there's quite a bit of stocking up in the inventory and that's creating some of the issue. If Boeing cannot produce as they should because of the safety issue, the strike issues and all that, then obviously, the material keeps on flowing in the supply chain and pies up, right, for aircraft that is not being built. So at some point there is a correction and I think that's where we are.

Got it. And I was thinking on the North American industrial sharp decline from that -- from the general.

Yes, well, I think so assets typically make also aerospace then what happens is you've got those assets slow down there's more appetite for TID volumes from the manufacturers of plate and sheet and the markets are slowing down there as well so it creates more tension in the market.

Next, we have a follow-up from Bill Peterson from JPMorgan.

Yes, thanks for taking a follow-up. The audio was bad earlier and I couldn't get the second question. I wanted to come back and ask a few questions around the flooding. So on the remaining sort of, I guess EUR 13 million to EUR 23 million of EBITDA impact. Can you, I guess, how would that be split between AS&I and A&T segments? And I think you, prior free cash flow guidance is around a EUR 100 million, ex-flooding. Would you think, does that hold? And I guess sort of finally on the flooding, I want to get a sense for how much EBITDA and cash flow impact could bleed into 2025?

Okay. So Bill, I'll take these two questions. So first on the flood, so I think the way to think about the impact between AS&I, A&T is, call it two thirds at AS&I and one third at A&T. And these are just to be clear, the cost to EBITDA represents business interruption expense or other expenditures like cleanup costs, like equipment, OpEx, which are below the line, other kind of one-time costs, which is offset against the insurance proceeds, which we received and that falls below adjusted EBITDA as Jean-Marc mentioned as well. I just wanted to be clear on that point. And then in terms of the impact into 2025, we're kind of focused on restarting our operations as quickly as possible and some of it will fully ramp up this year by the end of this year or continue to kind of ramp up in the first quarter of next year. So there could be some impact there, but any, the cash impact there will be offset because if you look at the insurance amount, we penciled in EUR 50 million. We had received, EUR 21 million this quarter in Q3. We expect to receive about EUR 30 million by the end of the year. So we still have probably EUR 20 million to go next year, which will be offset against the expenses from a free cash flow perspective if that makes sense. So I'll pause here and make sure that I just want to make sure your question on Valais --

Well, I just want to make sure there's any other impacts in the -- any impacts in the ’25 and I guess and then just if you address the free cash flow target for 2024, does a EUR 100 million still hold?

Yes, so no, I think, well, so hopefully my answer clarified on the question of Valais but maybe moving to free cash flow. So look, we're not guiding and I mentioned this in the script a little bit but we're not guiding free cash flow this year and there are a number of reasons for that. First as you can imagine with lower activity levels, we would expect some working capital release in a system but there's typically a lag right where in other words it does take some time for us to get the benefits on the cash side from having reduced metal intake. So it's really here, it's really timing. The timing is a bit uncertain and that means some of the benefits from the working capital release could come in Q4 of this year and some of it may come in the first quarter of next year. So it's just timing and the cash will be there. But outside of that, there is going to be some modest amount of working capital impact as we're shifting part of the production to elsewhere in our system as a result of flooding Valais. And then in addition to that, we have, there are many kind of action items we're working on to help improve our free cash here. So there are really a lot of moving pieces here and that's why we don't want to be kind of too prescriptive. We're focused on managing as carefully as we can. We're focused on consistent free cash flow generation and we're still buying back shares, right, which hopefully shows you that we have confidence in our ability to continue generate cash.

We have no further questions in the queue at this time. So I'll hand back over to the management team for closing remarks.

Well, thank you, everybody, for attending the call. As you can see, this was a challenging quarter and we have the challenging market conditions that we're dealing with. I'm reasonably pleased in this context that actually our operations are performing well and we believe that we’ll emerge from these challenging market conditions even stronger. And we'll look forward to date you on our progress at our next earnings call. Thank you very much.

That concludes today's call. Thank you all for your participation. You may now disconnect your line.