===
Aperam S.A. / Key word(s): Quarter Results
Aperam - First quarter 2024 results: "Non-traditional activities prove resilient in the industrial recession"
03-May-2024 / 06:59 CET/CEST
First quarter 2024 results1

"Non-traditional activities prove resilient in the industrial recession"

Luxembourg, May 3, 2024 (07:00 CET) - Aperam (referred to as "Aperam" or the "Company") (Amsterdam, Luxembourg, Paris,
Brussels: APAM, NYRS: APEMY), announced today results for the three months ended March 31, 2024.

Highlights
-- Health and Safety: LTI frequency rate of 1.5x in Q1 2024 compared to 2.1x in Q4 2023
-- Shipments of 585 thousand tonnes in Q1 2024, 8% increase compared to shipments of 541 thousand tonnes in
Q4 2023
-- Adjusted EBITDA of EUR 55 million in Q1 2024, similar to Adjusted EBITDA of EUR 55 million in Q4 2023

-- Net loss of EUR (19) million in Q1 2024, compared to net income of EUR 70 million in Q4 2023
-- Basic earnings per share of EUR (0.26) in Q1 2024, compared to EUR 0.97 in Q4 2023
-- Free cash flow before dividend and share buy-back amounted to EUR (141) million in Q1 2024, compared to
EUR 217 million in Q4 2023
-- Net financial debt of EUR 674 million as of March 31, 2024, compared to EUR 491 million as of December
31, 2023
===
Strategic initiatives

===
-- Leadership Journey®2 Phase 5: Gains reached EUR 3 million in Q1 2024 the first quarter of the 2024 - 2026
starting the first quarter in a program with target gains of EUR 200 million.
===
Prospects[1]a

===
-- Q2 2024 EBITDA is expected at a higher level versus Q1 2024
-- We guide for lower Q2 2024 net financial debt

Timoteo Di Maulo, CEO of Aperam, commented:

"The European manufacturing environment resembles 2020 but with a much longer duration. Q1 marked the 7th consecutive
recessionary quarter in the stainless steel industry. We are glad to have differentiated our value chain early.
Recycling, forestry, alloys and distribution support the group through the low stainless cycle. Our Leadership Journey
5 focus of mix improvement and cost reduction focus will restore Aperam's profitability and cash generating ability.
Success is already visible in our ESG performance. At less than 280 kg CO2e per tonne of steel Aperam surpassed already
in 2023 its ambitious target for 2030 and is a best in class producer globally."

===
Financial Highlights (on the basis of financial information prepared under IFRS)

===

(in millions of Euros, unless otherwise stated)                  Q1 24  Q4 23 Q1 23 
Sales                                                            1,657  1,551 1,876 

Operating income / (loss) (3) (10) 81 Net income / (loss) attributable to equity holders of the parent (19) 70 132

Basic earnings per share (EUR)                                   (0.26) 0.97  1.83 
Diluted earnings per share (EUR)                                 (0.26) 0.96  1.83 

Free cash flow before dividend and share buy-back (141) 217 85 Net Financial Debt (at the end of the period) 674 491 419
Adj. EBITDA 55 55 127 Exceptional items - (11) -
EBITDA 55 44 127
Adj. EBITDA/tonne (EUR) 94 102 215 EBITDA/tonne (EUR) 94 81 215
Shipments (000t) 585 541 591 ===
Health & Safety results

Health and Safety performance based on Aperam personnel figures and contractors' lost time injury frequency rate was 1.5x in the first quarter of 2024 compared to 2.1x in the fourth quarter of 2023.

Financial results analysis for the three-month period ending March 31, 2024

Sales for the first quarter of 2024 increased by 6.8% at EUR 1,657 million compared to EUR 1,551 million for the fourth quarter of 2023. Shipments increased from 541 thousand tonnes in the fourth quarter of 2023 to 585 thousand tonnes in the first quarter of 2024, due to seasonal factors.

Adjusted EBITDA remained stable during the quarter at EUR 55 million compared to EUR 55 million in the fourth quarter of 2023 (excluding an exceptional loss of EUR (11) million, related to a program to promote employee attrition). Higher volumes, a better mix and a favorable price/input cost development compensated for the valuation effects contained in the previous quarter.

Depreciation and amortization expense was EUR (58) million for the first quarter of 2024.

Aperam had an operating loss for the first quarter of 2024 of EUR (3) million compared to an operating loss of EUR (10) million for the previous quarter.

Financing costs, net, including the FX and derivatives result for the first quarter of 2024 were EUR (16) million. Cash cost of financing was EUR (12) million during the quarter.

Income tax benefit was EUR 1 million during the first quarter of 2024.

The net result recorded by the Company was a loss of EUR (19) million for the first quarter of 2024, compared to a profit of EUR 70 million for the fourth quarter of 2023.

Cash flows from operations for the first quarter of 2024 were negative at EUR (61) million, including a working capital increase of EUR 81 million. CAPEX for the first quarter was EUR (77) million.

Free cash flow before dividend and share buyback for the first quarter of 2024 amounted to EUR (141) million, compared to EUR 217 million for the fourth quarter of 2023.

During the first quarter of 2024, cash returns to shareholders amounted to EUR 36 million, consisting fully of dividend.

Operating segment results analysis

Stainless & Electrical Steel (1)

===

(in millions of Euros, unless otherwise stated)  Q1 24 Q4 23 Q1 23 
Sales                                            1,022 1,015 1,233 
Adjusted EBITDA                                  6     (34)  80 
Exceptional items                                -     (11)  - 
EBITDA                                           6     (45)  80 
Depreciation & amortization                      (27)  (28)  (25) 
Operating income / (loss)                        (21)  (73)  55 
Steel shipments (000t)                           415   407   399 
Average steel selling price (EUR/t)              2,358 2,390 2,982 

===
(1) Amounts are shown prior to intra-group eliminations

The Stainless & Electrical Steel segment had sales of EUR 1,022 million for the first quarter of 2024. This represents a 0.7% increase compared to sales of EUR 1,015 million for the fourth quarter of 2023. Steel shipments during the first quarter were 415 thousand tonnes, an increase of 2.0% compared to shipments of 407 thousand tonnes during the previous quarter. Shipments in Brazil were seasonally softer but remained at a solid level. In Europe shipments improved seasonally from a very low base. Average steel selling prices for the Stainless & Electrical Steel segment decreased by 1.3% compared to the previous quarter.

The segment generated an EBITDA of EUR 6 million for the first quarter of 2024 compared to a negative EBITDA of EUR (45) million (including an exceptional loss of EUR (11) million, related to a program to promote employee attrition) for the fourth quarter of 2023. EBITDA increased due to a better mix, and a favorable price / input cost development that allowed Europe to break even and a less negative inventory valuation charge.

Depreciation and amortization expense was EUR (27) million for the first quarter of 2024.

The Stainless & Electrical Steel division had an operating loss of EUR (21) million for the first quarter of 2024 compared to an operating loss of EUR (73) million for the fourth quarter of 2023.

Services & Solutions (1)

===

(in millions of Euros, unless otherwise stated)  Q1 24 Q4 23 Q1 23 
Sales                                            616   535   671 
EBITDA                                           15    17    13 
Depreciation & amortization                      (4)   (4)   (3) 
Operating income                                 11    13    10 
Steel shipments (000t)                           201   160   180 
Average steel selling price (EUR/t)              2,936 3,157 3,603 

===
(1) Amounts are shown prior to intra-group eliminations

The Services & Solutions segment had sales of EUR 616 million for the first quarter of 2024, representing an increase of 15.1% compared to sales of EUR 535 million for the fourth quarter of 2023. For the first quarter of 2024, steel shipments were 201 thousand tonnes compared to 160 thousand tonnes during the previous quarter. Average steel selling prices for the Services & Solutions' segment were 7.0% lower during the first quarter of 2024 compared to the fourth quarter of 2023.

The segment generated an EBITDA of EUR 15 million for the first quarter of 2024 compared to an EBITDA of EUR 17 million for the fourth quarter of 2023. EBITDA decreased slightly mainly due to a higher inventory valuation charge that was partly compensated by higher volumes.

Depreciation and amortization expense was EUR (4) million for the first quarter of 2024.

The Services & Solutions segment had an operating income of EUR 11 million for the first quarter of 2024 compared to an operating income of EUR 13 million for the fourth quarter of 2023.

Alloys & Specialties(1)

===

(in millions of Euros, unless otherwise stated)  Q1 24  Q4 23  Q1 23 
Sales                                            282    242    211 
EBITDA                                           24     19     11 
Depreciation & amortization                      (3)    (1)    (3) 
Operating income                                 21     18     8 
Steel shipments (000t)                           11     9      9 
Average steel selling price (EUR/t)              25,483 25,000 22,733 

===
(MORE TO FOLLOW) Dow Jones Newswires

May 03, 2024 00:59 ET (04:59 GMT)