“Achieving solid 2018 results despite an extremely challenging market
environment”
Luxembourg, February 6, 2019 (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 and full year ending December 31, 2018
Highlights
. Health and Safety: LTI frequency rate of 1.4x in 2018 compared to 1.4x in 2017
. Steel shipments of 1,972 thousand tonnes in 2018, 1.9% increase compared to steel shipments of 1,936 thousand
tonnes in 2017
. EBITDA of EUR 504 million in 2018, compared to EUR 551 million in 2017
. EBITDA of EUR 90 million in Q4 2018, compared to EUR 123 million in Q3 2018
. Net income of EUR 286 million in 2018, compared to EUR 320 million in 2017
. Basic earnings per share of EUR 3.39 in 2018, compared to EUR 4.00 in 2017
. Cash flow from operations amounted to EUR 295 million in 2018, compared to EUR 374 million in 2017
. Free cash flow before dividend and share buy-back of EUR 108 million in 2018, compared to EUR 211 million in 2017
. Net financial debt of EUR 48 million as of December 31, 2018, compared to net cash position of EUR (63) million as
of December 31, 2017
Strategic initiatives
. Leadership Journey ® 2 Phase 3 : The annualized gains target has been increased by EUR 50 million to EUR 200 million
by year end 2020. Realized Leadership Journey ® gains reached EUR 33 million in 2018
. Investment projects : The previously announced investment in an AOD converter at Genk (Belgium) has been put on
hold. The investment in a new Cold Rolling and Annealing and Pickling Line at Genk is on track.
Prospects
. EBITDA in Q1 2019 is expected to be comparable to Q4 2018 EBITDA
. Net financial debt is expected to remain at low levels in Q1 2019.
Cash Deployment
In coherence to its Financial Policy, Aperam is announcing two actions regarding cash deployment:
. Aperam increases its base dividend from EUR 1.53 per share to EUR 1.75 per share (subject to AGM approval).
. Aperam announces a share buyback program of up to EUR 100 million.
Timoteo Di Maulo, CEO of Aperam, commented:
“Aperam achieved solid 2018 results despite an extremely challenging market environment in Europe caused by
unprecedented import pressure in wake of ineffective provisional EU safeguard measures. Despite strong headwinds in the
second half, the substantial progress of our Brazil operations and Aperam’s self-help measures remain the ingredients for our
results. Looking ahead stock valuation effects and destocking are expected to end in Q1 2019, while Aperam’s solid balance
sheet and sustainable cash generation give us the ability to continue to reward our shareholders. ”
1
Financial Highlights (on the basis of financial information prepared under IFRS)
(EURO million) unless otherwise stated Q4 18 Q3 18 Q4 17 12M 18 12M 17
Sales 1,120 1,123 1,108 4,677 4,481
Operating income 52 88 88 361 399
Net income attributable to equity holders of the
parent 49 72 103 286 320
Basic earnings per share (EUR) 0.59 0.87 1.22 3.39 4.00
Diluted earnings per share (EUR) 0.37 0.87 1.10 3.03 3.80
Free cash flow before dividend and share
buy-back 35 15 132 108 211
Net Financial Debt / (Net Cash) (at the end of
the period) 48 64 (63) 48 (63)
Adj. EBITDA 90 123 130 504 559
Exceptional items - - - - (8)
EBITDA 90 123 130 504 551
Adj. EBITDA/tonne (EUR) 188 263 263 256 289
Steel shipments (000t) 480 467 495 1,972 1,936
Health & Safety results
Health and Safety performance based on Aperam personnel figures and contractors’ lost time injury frequency rate was 0.8x in
the fourth quarter of 2018 compared to 2.1x in the third quarter of 2018.
Financial results analysis for full year period ending December 31, 2018
Sales for the year ended December 31, 2018 increased by 4.4%, at EUR 4,677 million compared to EUR 4,481 million for the
year ended December 31, 2017, mainly due to higher stainless steel selling prices. Steel shipments in 2018 increased by 1.9% at
1,972 thousand tonnes compared to 1,936 thousand tonnes in 2017.
EBITDA reached EUR 504 million for the year ended December 31, 2018 compared to EBITDA of EUR 551 million for the year
ended December 31, 2017. Group EBITDA declined by 10% despite improving market conditions in Brazil, the positive effect
from the Leadership Journey® 4 , and the Top Line strategy because of extremely challenging market conditions in Europe. Here,
unprecedented high import volumes due to ineffective preliminary safeguard measures compressed margins especially during
the second half of the year compromised our ability to pass on higher input costs to end customers.
Phase 3 of the Leadership Journey® - the Transformation Program - continued to progress over the year with an annualized
contribution of EUR 33 million to EBITDA.
Depreciation and amortization was EUR (143) million for the year ended December 31, 2018.
Aperam had an operating income for the year ended December 31, 2018 of EUR 361 million compared to an operating income of
EUR 399 million for the year ended December 31, 2017.
2
Net interest expense and other financing costs for the year ended December 31, 2018 were EUR (6) million, including cash cost
of financing of EUR (9) million, including an exceptional financial gain of EUR 18 million related to the remaining part of the
convertible bonds due 2021.
Income tax expense for the year ended December 31, 2018 was EUR (71) million.
The Company recorded a net income of EUR 286 million for the year ended December 31, 2018.
Cash flows from operations for the year ended December 31, 2018 were positive at EUR 295 million, despite a working capital
increase of EUR 197 million. CAPEX for the year ended December 31, 2018 was EUR 192 million.
Free cash flow before dividend and share buy-back for the year 2018 amounted to EUR 108 million.
As of December 31, 2018, shareholders’ equity was EUR 2,519 million and net financial debt was EUR 48 million (gross financial
debt as of December 31, 2018 was EUR 247 million and cash and cash equivalents were EUR 199 million).
Total cash returns to shareholders in 2018 amounted to EUR 200 million consisting of EUR 70 million of share buy-back and EUR
130 million of dividend.
During 2018, the Company repurchased Convertible Bonds 2021 with a nominal amount of USD 62.0 million (EUR 53.6 million)
for a total consideration of EUR 60.3 million.
On October 16, 2018, Aperam has drawn the EUR 50 million amortizing loan signed on June 27, 2016 with the European
Investment Bank (“EIB”) with final maturity date on October 16, 2028.
The Company had liquidity of EUR 499 million as of December 31, 2018, consisting of cash and cash equivalents of EUR 199
million and undrawn credit lines 3 of EUR 300 million.
Financial results analysis for the three-month period ending December 31, 2018
Sales for the fourth quarter of 2018 decreased by 0.3% to EUR 1,120 million compared to EUR 1,123 million for the third quarter
of 2018. Steel shipments increased from 467 thousand tonnes in the third quarter of 2018, to 480 thousand tonnes in the fourth
quarter of 2018.
EBITDA has decreased over the quarter to EUR 90 million for the fourth quarter of 2018 from EUR 123 million for the third
quarter of 2018. In addition to a seasonally weaker quarter in Brazil the seasonal increase in Europe was rather soft. High import
volumes in Europe caused elevated inventory levels which weighed on margins. Sliding prices of raw materials additionally
triggered negative effects on valuation of inventories.
Depreciation and amortization was EUR (38) million for the fourth quarter of 2018.
Aperam had an operating income for the fourth quarter of 2018 of EUR 52 million compared to an operating income of EUR 88
million for the previous quarter.
Net interest expense and other financing costs for the fourth quarter of 2018 were a gain of EUR 11 million, including cash cost of
financing of EUR (2) million. Convertible Bond 2021 holders exercised their put option for an amount of USD 72.4 million in
December 2018, which were redeemed in January 2019. The remaining Bonds (USD 164.6 million) have been reclassified as
long-term financial liability. The USD 20.6 million (EUR 18 million) difference between the carrying value (USD 144 million) and
the nominal value (USD 164.6 million) has been booked as an exceptional gain in the P&L (net financing costs), to be amortized
over time until the final maturity of the bonds in July 2021.
Income tax expense for the fourth quarter of 2018 was EUR (16) million.
The Company recorded a net income of EUR 49 million for the fourth quarter of 2018.
Cash flows from operations for the fourth quarter of 2018 were positive at EUR 88 million, with a working capital decrease of EUR
12 million. CAPEX for the fourth quarter was EUR 55 million.
Free cash flow before dividend and share buy-back for the fourth quarter of 2018 amounted to EUR 35 million.
During the fourth quarter of 2018, the cash returns to shareholders amounted to EUR 34 million, consisting fully of dividend.
During the fourth quarter of 2018, the Company repurchased Convertible Bonds 2021 with a nominal amount of USD 25.8 million
(EUR 22.7 million) for a total consideration of EUR 22.8 million.

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