Highlights
- Health and Safety: LTI frequency rate of 1.0x in Q1 2018 compared to 1.3x in Q4 2017
- Steel Shipments of 517 thousand tonnes in Q1 2018, a 4% increase compared to steel shipments of 495 thousand tonnes in Q4 2017.
- EBITDA of EUR 141 million in Q1 2018, compared to EUR 130 million in Q4 2017.
- Net income of EUR 85 million in Q1 2018, compared to EUR 103 million in Q4 2017.
- Basic earnings per share of EUR 0.99 in Q1 2018, compared to EUR 1.22 in Q4 2017.
- Cash flow from operations amounted to EUR 42 million in Q1 2018, compared to EUR 194 million in Q4 2017.
- Free cash flow before dividend and share buy-back of EUR (4) million in Q1 2018, compared to EUR 132 million in Q4 2017.
- Net cash position of EUR 32 million as of March 31, 2018, compared to EUR 63 million as of December 31, 2017.

Strategic initiatives
- Disciplined and value accretive M&A: signature of a share purchase agreement for VDM Metals, creating a global specialty alloys producer.
- Transforming our footprint with state of the art equipments: recently announced investment project in Genk (Belgium) is progressing well.
- Leadership Journey®2 (Phase 3 - Transformation Program): additional annualized gains target by 2020 increased from EUR 125 million to EUR 150 million. Gains starting to ramp-up with EUR 13 million at end Q1 2018.


Prospects
- EBITDA in Q2 2018 is expected to slightly increase compared to EBITDA in Q1 2018.
- Net financial debt to remain at low levels in Q2 2018, post dividend and share buy-back effect.

Financial Highlights (on the basis of financial information prepared under IFRS)
(in million of EURO, unless otherwise stated)
Q1 18 Q4 17 Q1 17
Sales 1,216 1,108 1,198
EBITDA 141 130 160
Operating income 106 88 124
Net income 85 103 88
Free cash flow before dividend and share buy-back (4) 132 (16)
Steel shipments (000t) 517 495 486
EBITDA/tonne (EUR) 279 263 329
Basic earnings per share (EUR) 0.99 1.22 1.13
Diluted earnings per share (EUR) 0.83 1.10 1.03

Health & Safety results
Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 1.0x in the first quarter of 2018 compared to 1.3x in the fourth quarter of 2017.

Financial results analysis for the three-month period ending March 31, 2018

Sales for the first quarter of 2018 increased by 10% to EUR 1,216 million compared to EUR 1,108 million for the fourth quarter of 2017. Steel shipments increased from 495 thousand tonnes in the fourth quarter of 2017, to 517 thousand tonnes in the first quarter of 2018.

EBITDA was EUR 141 million for the first quarter of 2018 compared to EUR 130 million for the fourth quarter of 2017. Despite the traditional seasonal effect in Brazil and rising input costs, EBITDA increased quarter-on-quarter as a result of seasonal recovery in Europe, the Leadership Journey® contribution and the Top Line strategy. The phase 3 of the Leadership Journey® - the Transformation Program - has started to materialise over the quarter with a contribution of EUR 13 million to EBITDA since the beginning of 2018. Under this new phase of the Leadership Journey®, Aperam aims at EUR 150 million of additional annualized EBITDA gains over the period 2018 to 2020.

Depreciation and amortisation was EUR 35 million for the first quarter of 2018.

Aperam had an operating income for the first quarter of 2018 of EUR 106 million compared to an operating income of EUR 88 million for the previous quarter.

Net interest expense and other financing costs for the first quarter of 2018 were EUR 5 million, including cash cost of financing of EUR 2 million. Realized and unrealized foreign exchange and derivative gains were EUR 4 million for the first quarter of 2018.

Income tax result for the first quarter of 2018 was an income tax expense of EUR 20 million.

The Company recorded a net income of EUR 85 million for the first quarter of 2018.

Cash flows from operations for the first quarter of 2018 were positive at EUR 42 million, with a working capital increase of EUR 117 million mainly due to higher prices and activity. CAPEX for the first quarter was EUR 47 million.

Free cash flow before dividend and share buy-back for the first quarter of 2018 amounted to EUR (4) million.

As of March 31, 2018, shareholders’ equity was EUR 2,575 million and net cash position was EUR 32 million (as of March 31, 2018, gross financial debt was EUR 242 million and cash and cash equivalents were EUR 274 million).

The Company had liquidity of EUR 624 million as of March 31, 2018, consisting of cash and cash equivalents of EUR 274 million and undrawn credit lines3 of EUR 350 million.

Operating segment results analysis
Stainless & Electrical Steel
The Stainless & Electrical Steel segment had sales of EUR 994 million for the first quarter of 2018. This represents a 4% increase compared to sales of EUR 953 million for the fourth quarter of 2017. Steel shipments during the first quarter were 496 thousand tonnes. This is a decrease of 1% compared to shipments of 499 thousand tonnes during the previous quarter. The traditional summer seasonal impact in Brazil has been nearly compensated for by the seasonal recovery and a healthy demand in Europe. Overall, average steel selling prices for the Stainless & Electrical Steel segment increased compared to the previous quarter.

The segment had EBITDA of EUR 111 million for the first quarter of 2018 compared to EUR 119 million for the fourth quarter of 2017. The traditional seasonal effect in Brazil and rising input costs was partly offset by the seasonal recovery in Europe, and the contribution of the Leadership Journey®.

Depreciation and amortisation expense was EUR 30 million for the first quarter of 2018.

The Stainless & Electrical Steel segment had an operating income of EUR 81 million for the first quarter of 2018 compared to an operating income of EUR 82 million for the fourth quarter of 2017.

Services & Solutions

The Services & Solutions segment had sales of EUR 562 million for the first quarter of 2018, representing an increase of 18% compared to EUR 475 million for the fourth quarter of 2017. For the first quarter of 2018, steel shipments were 230 thousand tonnes compared to 195 thousand tonnes during the previous quarter. The Services & Solutions segment had slightly higher average steel selling prices during the period compared to the previous period.

The segment had EBITDA of EUR 21 million for the first quarter of 2018, similar to EUR 21 million for the fourth quarter of 2017. Despite higher shipments and average selling prices, EBITDA remained stable quarter on quarter primarily due to some stock and mix effects.

Depreciation and amortisation was EUR 3 million for the first quarter of 2018.

The Services & Solutions segment had an operating income of EUR 18 million for the first quarter of 2018, similar to EUR 18 million for the fourth quarter of 2017.

Alloys & Specialties
The Alloys & Specialties segment had sales of EUR 131 million for the first quarter of 2018, representing an increase of 8% compared to EUR 121 million for the fourth quarter of 2017. Steel shipments were higher during the first quarter of 2018 at 10 thousand tonnes compared to 9 thousand tonnes during the fourth quarter of 2017. Average steel selling prices decreased over the quarter.

The Alloys & Specialties segment achieved an EBITDA of EUR 14 million for the first quarter of 2018 compared to EUR 11 million for the fourth quarter of 2017. The increase in EBITDA was mainly due to higher shipments.

Depreciation and amortisation expense for the first quarter of 2018 was EUR 2 million.

The Alloys & Specialties segment had an operating income of EUR 12 million for the first quarter of 2018 compared to an operating income of EUR 9 million for the fourth quarter of 2017.

Recent developments
? On February 27, 2018, Aperam announced the publication of its Annual Report 2017 (Link).
? On April 6, 2018, Aperam announced the publication of the convening notice for its Annual General Meeting and Extraordinary General Meeting of shareholders to be held on May 9, 2018 (Link).
? On April 11, 2018, Aperam announced the signing of a Share Purchase Agreement with Lindsay Goldberg to acquire VDM Metals (Link).
? On April 18, 2018, Aperam announced the publication of its “made for life” report for 2017, which constitutes Aperam’s sustainability performance report (Link).

New developments
? On May 9, 2018, Aperam announced that the Annual and Extraordinary General Meetings of Shareholders of Aperam held in Luxembourg on May 9, 2018 approved all resolutions on the agenda by a large majority.