Timoteo Di Maulo, CEO of Aperam, commented:
“We are pleased to have continued to enhance our net income in the second quarter thanks to the Leadership Journey®5 and the Top Line strategy but also due to the recent actions to optimise Aperam’s cost of debt.

For the remainder of 2015, we are cautious in view of the current economic environment and in particular uncertainties regarding the nickel price evolution. However we are confident that the ongoing projects will continue to improve our operational agility and efficiency.”

Highlights
•Health and Safety frequency rate2 of 0.8x in Q2 2015 compared to 1.3x in Q1 2015.
•Shipments of 486 thousand tonnes in Q2 2015 compared to 469 thousand tonnes in Q1 2015.
•EBITDA3 of USD 155 million in Q2 2015, compared to USD 133 million in Q1 2015.
•Net Income of USD 66 million in Q2 2015, compared to USD 42 million in Q1 2015.
•Basic earnings per share of USD 0.85 in Q2 2015 compared to USD 0.54 in Q1 2015.
•Cash flow from operations amounted to USD 78 million in Q2 2015 compared to USD 80 million in Q1 2015.
•Net debt4 of USD 454 million (with a gearing of 19%) as of June 30, 2015, compared to USD 508 million as of March 31, 2015.

Prospects
•EBITDA in Q3 2015 is expected to be lower compared to Q2 2015 due to the traditional seasonal slowdown and current economic environment.
•Net debt to slightly decrease in Q3 2015.

Financial Highlights (on the basis of IFRS)
(USDm) unless otherwise stated
Q2 15 Q1 15 Q2 14 H1 2015 H1 2014
Sales 1,264 1,258 1,444 2,522 2,838
EBITDA 155 133 164 288 293
Operating income 109 86 107 195 161
Net income 66 42 36 108 55

Steel shipments (000t)486 469 466 955 941
EBITDA/tonne (USD)319 284 352 302 311
Basic earnings per share (USD)0.850.54 0.461.390.70

Health & Safety results analysis

Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate2 was 0.8x in the second quarter of 2015 compared to 1.3x in the first quarter of 2015.

Financial results analysis

Sales in the second quarter of 2015 were stable at USD 1,264 million compared to USD 1,258 million in the first quarter of 2015. Shipments in the second quarter of 2015 increased by 4% at 486 thousand tonnes compared to 469 thousand tonnes in the first quarter of 2015.

EBITDA was USD 155 million in the second quarter of 2015 compared to EBITDA of USD 133 million in the first quarter of 2015. EBITDA increased as a result of improved apparent stainless steel demand in Europe, the Leadership Journey®5 contribution, the Top Line strategy and the seasonal recovery in South America. The Leadership Journey® has continued to progress over the quarter and has contributed a total amount of USD 455 million to EBITDA since the beginning of 2011.

Depreciation and amortization expense in the second quarter of 2015 was USD 46 million.

Aperam had an operating income in the second quarter of USD 109 million compared to an operating income of USD 86 million in the previous quarter.

The Company recorded a loss from other investments of USD 6 million on its minority stake it holds in Gerdau, a Brazilian steelmaker, according to the prolonged decline of the share price of that investment compared to its book value.

Net interest expense and other financing costs in the second quarter of 2015 were USD 15 million, primarily related to financing costs of USD 7 million. Realized and unrealized foreign exchange and derivative gains were USD 2 million in the second quarter of 2015.

The Company recorded a net income of USD 66 million, inclusive of an income tax expense of USD 23 million, in the second quarter of 2015.

Cash flows from operations in the second quarter were positive at USD 78 million, despite a working capital increase of USD 24 million. CAPEX in the second quarter was USD 24 million.

As of June 30, 2015, shareholders’ equity was USD 2,449 million and net financial debt4 was USD 454 million (gross financial debt as of June 30, 2015 was USD 526 million and cash and cash equivalents were USD 72 million).

The Company had liquidity of USD 522 million as of June 30, 2015, consisting of cash and cash equivalents of USD 72 million and undrawn credit lines6 of USD 450 million.

Operating segment results analysis

Stainless & Electrical Steel

The Stainless & Electrical Steel segment had sales of USD 1,031 million in the second quarter of 2015. This represents an increase of 1% compared to sales of USD 1,021 million in the first quarter of 2015. Shipments during the second quarter were 483 thousand tonnes. This is an increase of 5% compared to shipments of 462 thousand tonnes in the previous quarter. The volume increase was mainly due to seasonal recovery in South America compared to the first quarter.

The segment had EBITDA of USD 139 million in the second quarter of 2015 compared to USD 110 million in the first quarter of 2015. The results from sale of electricity surplus in Brazil were insignificant in the second quarter compared to USD 4 million positive in the first quarter 2015. The operational profitability of South America improved despite weaker local market conditions, primarily thanks to the Top Line strategy and Leadership Journey® actions. In Europe, the performance improved due to the good contribution of the Leadership Journey®, the Top Line strategy.

Overall, average selling prices for the Stainless & Electrical Steel segment were lower for the quarter, mainly due to nickel price.

Depreciation and amortization expense was USD 39 million in the second quarter of 2015.

The Stainless & Electrical Steel segment had an operating income of USD 100 million during the second quarter of 2015 compared to an operating income of USD 70 million in the first quarter of 2015.

Services & Solutions
The Services & Solutions segment had a 2% decrease in sales during the quarter, from USD 580 million in the first quarter of 2015 to USD 569 million in the second quarter of 2015. In the second quarter of 2015, shipments increased by 1% at 202 thousand tonnes compared to 200 thousand tonnes in the previous quarter. The Services & Solutions segment had lower average selling prices during the quarter compared to the previous quarter.

The segment had EBITDA of USD 14 million in the second quarter of 2015 compared to EBITDA of USD 18 million in the first quarter of 2015. Overall, the decrease of EBITDA was mainly due to the negative stock effect related to the nickel price.

Depreciation and amortization expense was USD 5 million in the second quarter of 2015.

The Services & Solutions segment had an operating income of USD 9 million in the second quarter of 2015 compared to an operating income of USD 13 million in the first quarter of 2015.

Alloys & Specialties
The Alloys & Specialties segment had sales in the second quarter of 2015 of USD 157 million, representing an increase of 2% compared to USD 154 million in the first quarter of 2015. Shipments in the second quarter of 2015 were comparable to shipments in the first quarter of 2015 at 10 thousand tonnes. Average selling prices increased quarter over quarter.

The Alloys & Specialties segment achieved EBITDA of USD 13 million in the second quarter of 2015 compared to USD 14 million in the first quarter of 2015. The EBITDA decrease is mainly due to product mix and negative forex translation effect.

Depreciation and amortization expense in the second quarter of 2015 was USD 1 million.

The operating income of the Alloys & Specialties segment in the second quarter of 2015 was stable compared to the first quarter at USD 12 million.

New developments
•On July 29, 2015, the Company announced tranche 3 of its assets base upgrade with an additional USD 30 million CAPEX on improving efficiency and competitiveness in Gueugnon (lines CR6, BA8) and in Imphy (compact box annealing furnaces of the Wire Rod mill). These investments are part of the announced extension of the Leadership Journey® to USD 575 million.

tijd 09.20
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