Aperam S.A.

Business and Financial Review • Jan 7, 2025

Aperam S.A.

Aperam update on Q4 2024 market & financial trends

Corporate | 7 Januar 2025 06:59

Aperam S.A. / Key word(s): Miscellaneous Aperam update on Q4 2024 market & financial trends 07-Jan-2025 / 06:59 CET/CEST

Aperam update on Q4 2024 market & financial trends

Luxembourg, January 7, 2025 (07:00 CET) - In preparation of the upcoming quarterly results release scheduled for Friday, 7 February 2025, we would like to remind market participants of the standing guidance, earnings drivers and events that should be considered.

The Q4 outlook, as specified in the Q3 presentation, the management podcast and during the conference call was:

• Q4 group adjusted. EBITDA higher than in Q3-24 (EUR99m). The seasonal headwind in the summer quarter should turn into tailwind in Q4 which is seasonally stronger in Europe. Normally the Brazil seasonality works against this but it should be a rather mild one this year. In sum, Aperam expects higher steel shipments in Q4 compared to Q3.
• Scale effect together with a positive product mix and some positive valuation gains should balance lower realized prices.
• This compares to the Aperam compiled Q4 adjusted EBITDA consensus at EUR109m (average) currently. The consensus is updated & published at: https://www.aperam.com/investors/news-contacts/results

Recycling & Renewables	Normalized annual EBITDA of EUR80-85m for the Recycling & Renewables segment. After reaching EUR54m in 9M-24 we expect Q4 to at least plug the year-to-date gap.
Stainless & Electrical Europe	For Q4 we expect higher volumes and a better mix to be balanced by pricing pressure and some valuation headwind for a comparable result.

	EUR56m).
Services & Solutions	Intensifying pricing pressure limits the recovery potential into Q4 for this spot market driven segment especially as inventory valuation should remain a drag in the earnings bridge.
Others & Eliminations	Elimination should turn slightly positive due to inventory reduction. The high level of integration between different Aperam businesses like recycling, charcoal, stainless mills and distribution allows to manage inventory just-in-time between segments which is then reflected in eliminations.
Cash Flow & Net Fin. Debt	NWC: Lower net working capital in Q4 will result in a higher free cash flow Capex: EUR150m for 2024 of which 83% has already been spent in 9M Net debt reduction to a level of about 550 million euros is expected at year end of 2024

Please note that forward guidance for adjusted EBITDA, cash flow and net debt is always provided on a stable commodity price assumption.

Commodity prices & FX
		SEP 24	OCT 24	NOV 24	DEC 24
Nickel LME	USD/t	16,136	16,821	15,720	15,434
Ferrochrome	USD/t	3,153	3,153	3,042	2,954
Stainless Scrap	USD/t	1,309	1,265	1,265	1,181
Stainless CR 2mm 304	USD/t	3,047	2,950	2,843	2,720
USD/EUR	x	1.11	1.09	1.06	1.05

Volume seasonality	In a normal market, Q4 in Europe is seasonally stronger than Q3 which forms the seasonal trough. In Brazil Q3 forms the seasonal peak followed by a seasonally softer Q4.
Leadership Journey Phase 5	On track to realise the target gains of EUR75m in 2024.
Commodity prices & valuation effect	Market prices might weigh on units with a high spot market exposure like eg Services & Solutions. For the group we continue to expect a net positive valuation effect which supports the adjusted EBITDA indication given for Q4.
Distributor Inventory:	The inventory cycle was largely neutral. In absolute tonnage inventory remained below the average of the past 5 years.
Current trading & outlook	Volumes in Europe remain at a depressed level and pricing pressure has intensified in December. This will be a factor to consider for Q1, together with the peak seasonal trough in Brazil and a valuation headwind versus Q4.
Universal Stainless	The process to acquire Universal Stainless is running according to expectations. The special AGM has been scheduled on 15 January 2025 where the shareholders of Universal Stainless are asked to vote on the proposed merger.

Forward Looking Statements

This document may contain forward-looking information and statements about Aperam SA and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words ''believe'', ''expect'', ''anticipate'', ''target'' or similar expressions. Although Aperam's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Aperam's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of Aperam, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in Aperam's filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier). The information is valid only at the time of release and Aperam does not assume any obligation to update or revise its forward-looking statements on the basis of new information, future events, subject to applicable regulation.

Contact

Investor Relations / Thorsten Zimmermann: IR@aperam.com Communication / Ana Escobedo Conover: Ana.Escobedo@aperam.com

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