Constellium sees shipments, revenue decline in Q2

Constellium, reporting its financial results for the second quarter and first half of this year, says mixed end market demand and two large planned maintenance outages in the second quarter were factors in its reduced shipments and revenue.

For the second quarter, the Paris-based company's shipments of 378,000 metric tons were down 5 percent year over year, while revenue of 1.8 billion euros, or $ 1.95 billion, was 8 percent lower than in the second quarter of 2023. The company’s adjusted quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 214 million euros, or $232.3 million.

For the first half of this year, Constellium reports its shipments of 758,000 metric tons declined 4 percent year over year, while revenue of 3.5 billion euros, or $ 3.8 billion, declined 10 percent compared with the first half of last year. Net income of €88 million compared to net income of €54 million in H1 2023. The company’s adjusted EBITDA for the first half of 2024 was 351 million euros, or $381 million.

“In late June, we experienced a severe flooding event at our facilities in Sierre and Chippis in the Valais region in Switzerland," Constellium CEO Jean-Marc Germain says of further disruptions along with the unplanned maintenance outages. "While I am grateful that all of our employees are safe, this natural disaster will have some impact on our results in the near term.” 

Operations have remained suspended at Constellium’s plate and extrusion shops in Sierre and casthouse in Chippis. While Constellium’s employees were confirmed safe, significant damage to equipment and facilities was sustained. Cleaning and drying operations as well as testing and maintenance are underway. The company says its Sierre finishing capacity ranges from 70,000 to 75,000 metric tons, or less than 5 percent of its shipments, and an even lower percentage of its total manufacturing capacity.

Constellium says the latest insurance estimates have a gross damage assessment of approximately 135 million euros ($146.5), which includes estimated damages, cleaning costs and business interruption expenses, before the consideration of an insurance claim of up to 50 million euros and potential government assistance.

“Given the uncertainty around the impact from the severe flooding at our facilities in Switzerland, including the extent of the damage and the timing to restart production, we are pausing our guidance for 2024,” the company says.

Regarding end market demand, Germain says, aerospace remained strong, while packaging demand, which accounted for 37 percent of Constellium’s revenue for the last 12 months, continued to improve in the second quarter.

“Automotive demand remained stable in the quarter in North America, though demand in Europe continued to weaken. We continued to experience weakness in most industrial and specialties markets, with no signs of recovery in the near term,” Germain adds.

According to the slide deck accompanying its quarterly results, automotive accounted for 29 percent of Constellium’s revenue in the last 12 months, while aerospace was 15 percent and specialties (transportation, industry and defense) totaled 19 percent.

Constellium is investing in future growth with the recently announced rebuilding of its Muscle Shoals, Alabama, direct chill casting center. The project, funded in part by a grant from the Department of Defense, represents a total investment of $65 million. The investment will increase its annual casting capacity by up to 300 million pounds and is expected to increase its recycled inputs and reduce its use of primary metal. The casting center is expected to ramp up in the second half of 2026.

The company also is investing in new finishing lines in Singen, Germany, in partnership with Lotte Infracell. The 30 million-euro, or $32.6 million, investment will enable Constellium to supply foilstock for electric vehicle battery applications in Europe to Lotte Infracell. Constellium says it expects the project to be completed by the end of 2025, with scheduled ramp-up in 2026. The project will create roughly 20 new jobs and is expected to further cement Constellium Singen's position as a key player in the aluminum automotive specialties market, the company adds.

“This partnership is a testament to Constellium's expertise in developing cutting-edge aluminum solutions for the growing electric vehicle market,” Germain says. “Our investment in the Singen site underscores our commitment to innovation and our dedication to meeting the evolving needs of our customers.”