Constellium SE (CSTM) 25 Oct 232023 Q3 Earnings call transcript

Hello, everyone, and welcome to the Constellium Third Quarter 2023 Results. My name is Nadia, and I'll be coordinating the call today. [Operator Instructions]I will now hand over to your host, Jason Hershiser, Director of Investor Relations to begin. Jason, please go ahead.

Thank you, Nadia. welcome our to earnings quarter like call. would everyone third to XXXX I

today, Chief available is After have Germain; the for today's session.A we On call call slide the our website will a Chief presentation at Officer, copy and of we call and Financial Executive our Jack being presentation, Guo. is recorded. the today's have Q&A on our Jean-Marc Officer, constellium.com,

look Private website at like risks I'd encourage to and and to regarding may take and anticipated involve company's forward-looking and XXXX. meaning a Reform and the recent Before within we begin, expectations financial statements may known of operating include our visit everyone statements call Securities filings.Today's the the future include performance, Act unknown and company's Such statements of uncertainties. Litigation the events

summary events IFRS to results All our required supplement forward-looking to includes result statement financial factors which this hand For the attached otherwise, of is Factors heading forward-looking could now revise the risk in of over non-GAAP see information, reconciliations presentation, regarding or differ obligation presentation information by please call Risk in would Jean-Marc. slide materially specific our as non-GAAP financial measures any of the certain presented refer like date a of new that the Form except to law.In future information addition, as today's those as presentation undertake XX-F. a to Report the or disclosures.I today's to measures. Please no on We expressed the update statements, factors cause presentation. the in of under Annual from in

in I'd for on afternoon, thank to you Constellium.Let's X results. start discuss quarter safety, from our morning, everyone, Thank and priority. like you, #X your Good highlights good the begin with our Jason. third Slide and interest

months in hours the of leading for the was rate to X million per third first worked rate of Our X.X recordable quarter, the case higher a year.

focus want the we we It for performance to be, is safety we in our a need strive past. minimizes operate prices, compared down exposure sales, to of the price business metal lower and metal, offset to was of shipments due lower mix decreased as financial on done the results. XXX,XXX a segments. metal while improved ambitious performance, that year and and we revenues Remember, the a safety to take more prices. each X% the have changes the we the tons, it are to target is always XXXX while our never-ending X% cost to us in up our puts among the billion best have manufacturing, by deliver safety is affected year. model, we very reflects price and best-in-class our Revenue by achieve This our our lower value-added period maintain XX% than constantly metal risk.Our in company set. of one in to quarter EUR our compared was reminder X.X were we Shipments humbling rate last to shipments excluding which compared While where seriously.Turning last than XXX task same higher pass-through million, third to EUR revenue, to of which better

million to last in year. EUR the net the compares third quarter quarter of EUR net in Our of income income million XX XXX

bridge year. EUR record for A&T million see in XXX a as quarter of the deferred included EBITDA right, the million a last to quarter related XX third of third EUR were top last new of quarter previously decreased the and unrecognized.As year, and the million adjusted you year the EBITDA adjusted reminder, in last is XXX new recognition can increased well assets third a to quarter was adjusted on up EBITDA down XX across X% company. and was that our P&ARP record X As tax million to is decreased the compared year. EUR EUR headwind million compared million it of in a adjusted destocking. markets, shipments last to EBITDA decelerated the and stabilized remained EUR can XX% EUR quarter strong year. X quarter, year compared to end over have aerospace demand AS&I Holdings quarters Corporate Packaging in last up demand during compared to the with but the quarter.Looking very shipments though following prior last demand levels. several remains stock Automotive quarter slightly appears above of the were the in

industrial most in weakness Europe. experience to continued markets, especially in We

detail. face execution will improved solid by current which to inflationary pricing our the our to continue managing We But Jack power, pressures, cash are well.Moving we mix now team, flow. free and more significant thanks protection, discuss to in environment contractual

alloy free very extrusion am I not Our does closed business the at which received This cash Germany, quarter the strong September. EUR was soft include our in in pleased from of end which flow at million. XX the sale the of was proceeds, were

end milestone at see company. was As on our of for the right of the you can X.Xx, is the which quarter the the slide, bottom leverage an important

have cash free growth to capital EBITDA very long a I'm more proud third quarter we the over and further naturally our term, over allows look flow generation us Our allocation.Overall, balanced performance. And to time. delever of to approach

for positioning, beyond. market are like about remainder and the optimistic year end our prospects Looking this our forward, of we and we

the elevated, to expect Looking continue. risks remained balance macroeconomic and inflationary geopolitical at and pressures XXXX, we of

continued several strike maintaining well While markets, prior we we UAW guidance. end weakness we are pressures in by fourth impact our quarter, the expect were our the third do some not of as the in across these impacted as quarter.Despite

million, and of would adjusted free in to finish to for excess expect which EUR million in XXX flow XXXX the million EUR the XXX XXXX. We XXX EUR cash record EBITDA we range expect a to be new with continue of in company,

Jack hand million on details EUR performance. I our XXXX.With We over now also remain deliver adjusted in for our to that, Jack? to further XXX confident in financial our will of EBITDA over call ability target of long-term the

Thank million X% quarter XXX in revenue you, you, Slide call compared thank XXXX, third quarter to joining up now Jean-Marc, the X. to last same the was today.Please the everyone, EUR for and turn year. Value-added of

the this to XX U.S. important X largely of Looking same at XXX and dollar.There XX EUR of last was the million segments. year. quarter, increase balance of the change of due million to compared in improved The unfavorable weakening due shipments a our of of a headwind FX to headwind segments. are EUR in each translation was EUR the price was EUR to Volume were million our million due the mix slide. lower each this takeaways to from of due third period Metal impacts of XX

due certain give compared shipments of year. both due products. of EUR shipments continue by let's focus XX on timing were improve shipments higher the mainly by inflation. Automotive program mix though X, a Adjusted result of in serve, as us both higher due to FX turn First, Automotive Slide value-added supply our overall of versus and the to stronger last continuing the shipments to shipments to XX year-over-year industry. variance contract X headwind million at with let's more due last noted. were third aerospace inflation-related U.S. inflation-related third contract headwind million last to supply higher million including The the EUR and was a Costs the grew weaker we result turn inflation-related a pricing, year. million of last Slide and was In Corporate. EUR Packaging XX of EUR XX% let's P&ARP Price costs, million, certain lower more of a chain costs, we X TID Corporate lower Adjusted versus we down as on performance. on decreased demand impact as revenue was the XX mix significant due aerospace. continues the I were XX were offset in result operating year the focus was one-off shipments have in year. automotive were year.Now our in compared headwind weaker dollar.Now quarter.Now on the facing industrial Europe.Price versus focus metal XX update a Europe. between XX a to a headwind continue was with negative costs last the the pricing quarter X in more rolled and last market quarter. related America EUR situation packaging million, and to million automotive. mix result mix markets, our Slide with million Muscle broad-based and of across we benefit due by and to price year turn specialty year Volume continued a versus inflationary and on offset And X pressures.Now inflationary of switches costs. reflecting as and million shipments A&T EUR mainly and on in of year quarter pricing, due in last was expected, to tailwind control as Price headwind EBITDA TID last to XX% Holdings as higher was the of was offset to EUR lower to EUR higher decreased inflationary including compared the quarter quarter of segment conditions power. and including higher compared did to X headwind mix to Costs of on of EUR and in experience the Shipments and were third million and EUR EBITDA our pass-throughs. be a of slightly aerospace penetration quarter pressures. inventory tied pass-throughs. contract million Jean-Marc million increment segment. XX% pass-throughs Costs in comment specifically in Shoals, the shipments of than to to quarter and second, healthy.Industry helped tailwind remained pricing pricing, third a Holdings demand this inflation.It's at a segment. Adjusted the levelPrice is noncash, of focus and a the Volume operating quarter quarter, decreased repeat to year, a of a a than pressures tailwind adjustments to million Slide headwind we XX increased most want XX, build short-term operating to improved XX% X% to year last and not last X, in in we're on chain a EUR EUR decreased conclude to as headwind the an Aerospace shipments XX unfavorable environment number headwind the of to EUR a in up was Volume million the X% biggest quarter last inflation, quarter as of from consumer shipments which versus which I offset was XX% where in in disruptions that some with versus on increased operating current year the were EUR lower but across translation a a some down continues. primarily the not business. XX in recovery quarter improved and primarily adjustments slide, to and EBITDA of and to the to significant of Europe particularly challenges turn markets programs X% quick wanted the North XX% aluminum third rates automotive, million translation, FX in and and cost XX, AS&I is year. a improved In slowdown but EUR and in

As you market largest exposed aluminum, business price model input. the the our know, we operate to of changes materially in so cost not we're a pass-through

some supply, continue costs a of to Energy. addition, remain other we nonmetal does higher year, particularly come European confident at higher labor and about this it the of While be security cost.In

of helped previously cost on we some purchased smooth out rolling of some the costs. to the increases energy As us steep a has us mitigate to in noted, energy basis, and which helped pressures multiyear forward

number impact prices XXXX historical energy costs their and reminder, higher down pressures, but secured forward prices. peaks average still XXXX above cost energy Both we a our their have a at but on are mitigate come to averages.Given electricity to As across Europe of fronts these largely our continue remain gas in work well from results.

company, the will our We and efficiency, including strong to execution our announced Across cost costs. the continued years, input reduce focus, XX fixed of working our we relentless demonstrated past initiative. performance Vision consumption our previously on have expensive in our and continue increase we're lower

As do of not, contracts have we previously customers of our our such we're they with mechanisms, many as inflationary them.We where progress our inflators end to very include or have all noted, made PPI existing across protections, surcharge markets. good working

bridge the being inflationary As X you right, largest the were pressures. in of very offsetting in and in price this the on successful the price with see can months mix, year, first increment we

As pressure inflationary to we expect of still significant. today, remain

we The other also and in in cost control. periods relentless most believe to for future to with point to able are FX we continue results. the we the on the of next noted taking We focus guidance rest in XXXX.Before to net of impact and this offset turning cost inflation combination the increases that offset and to will a be I impacting our pressure slide, XXXX and our out them of our actions are cost included the want tools

quarter.Now generated free and XXX flow. EUR bringing cash FX headwind EUR EUR a the XX of third in EUR dollar, As third discuss was in given the see weaker of free first Slide this the to the year, our U.S. in XX We total of months in million which was X year-to-date you million. to the our can of million X bridge, cash million turn XX quarter, flow let's

bottom consistent can the generating the see left flow. you on track strong to our free slide, record and build continue of of cash we As

balance we which approximately is full let's excess Slide the line the of free XXXX compared cash strong is to XXXX, at in end third down the of our sale million free net and At EUR proceeds million debt XX Looking EUR to our generation XXX in business continue for EUR position. liquidity to to extrusion our generate flow soft expect and and X.X million the previous EUR in a discuss as cash year, of turn quarter, with XXX sheet compared the received the XXX guidance.Now quarter. Germany quarter of last billion. This down our end flow we of to in alloy the and from result was

the further to short-term to low U.S. reduce the borrowings end million range quarter end X.Xx on due at used the the quarter, which and of of the We year XXXX, leverage During $XX reached to multiyear third the at down upper-end to strengthening of maintaining range. bonds quarter, balance sheet.Our cash we X.Xx. X.XXX% target third committed sheet of leverage target dollar our the and remain last versus our our leverage redeem our of now a is the balance our X.X in of X.Xx

the XXXX, of made will as end Jean-Marc. proud of structure and quarter. of to third our debt As flexibility progress XXX we're have the you the can maturities until EUR on remains extremely hand strong at we capital our million the in have call see and bond financial our back building.I now summary, the of no we liquidity We're

Jack.Let's turn growth. and to majority Thank outlook. Slide end our you, of currently current sustainability-driven portfolio benefiting markets durable today secular XX market is from discuss serving our end The

Aluminum is when secular aluminum is infinitely attributes. given sustainable does its its not The important recycled. that and is a this catalyst properties growth, takeaway lose behind here recyclable

packaging. Europe largely critical but stock in As first continued a can across early will demand behind North America Inventory of a the the in us quarter, the packaging.Turning lightweighting, result, has in supply circular and and and chain aluminum sustainable growth now both and appear role driver electrification adjustments economy stabilized. will be play a in to

multiyear weakness and markets, We other are continue aluminum of in as seeing a lack substrates plastic glass. we against growth promotional a activity both period and still current share seeing cans result environment, of in like COVID.Even outperform of in packaging regions during demand environment, the today's are and rapid to demand the where weaker win inflationary following

Longer both for We and makers the are the preference for ongoing given we packaging this growth North as consumer long-term confident here in from regions North greenfield America announced a can in and in in both continue the term, both plans mid-single grow in Day sustainable outlook growing participate capacity expect will markets digits low to beverage regions, to both growth America can. in Analyst to market, at our Europe.We year. aluminum last end investments its

recycling recently the to into pleased heading I'm at Shoals, facility performance We we the prior underway during on now but is the levels. that and to improved in report are to Neuf-Brisach our budget.Turning and slightly confident profitability year. well our both plant's decelerated on Europe remain remains seen center are also have encouraged time Demand we building next above year in the at in automotive. ability Muscle restore we quarter by

we strike several quarters, Consumer and in increased for low. mentioned before, remains and will by OEM have demand sales of steady the I and we but impact production the inventories the As quarter. aluminum and electrification below some pre-COVID sustainability the use in quarter, to vehicle products. numbers continue well are third levels. fourth lightweighting drive expect remain not but Automotive do demand the trends were UAW impacted last globally

for jet The space shipments demand up market we business new, remain remains in increases rate further the result, and in for still long-term demand Major very and defense though below the passenger year, this strong regional and last versus markets. driving including have quarter, build Demand intact, and aerospace OEMs the confident a on aircraft. the more term. remain the aerospace aerospace. that XX% the As recovery remained and well in market.Let's medium the continued short in levels. greater We over fundamentals positive announced increases now turn pre-COVID in traffic to desire term growing fuel-efficient with

to addition, strong of In continue demand family we our Airware products. experience for

on of I the in us.Turning the fundamentals We X represent the XX% to as the specialties. have of we our left lastly our like options XX last these each page and of side the it highlights, revenue. As the like in And chart other affords markets. months' markets these end hand said core past,

control which company. operational end end again believe and the cost proud milestone the asset achieved in and has in transportation. defense strongly general, XX, is by demand a serve, markets We rolled each to healthy to the on weak in across industrial like we been the we guidance. health delivered and X.Xx, number markets in performance markets and our pressures. team generally continue positioned in Constellium markets solid our detail of Europe. Constellium our our quarter. they prospects of more expect we TID industrial our including We is North third diversification economies free despite most flow American an is an well stable leverage I'm products, performance remains we extrusions, demand with important capture industry Overall, fueled of quarter, Slide dependent the In In and In weakness in summary, industrial the sustainability. than to cash messages in financial are we demand for in as markets, and key entire inflationary reduced of like strong continue the of for these significant strong North America the portfolio that growth secular in to very remains generated strong company.Turning markets balanced and today to Europe. diverse the challenges, region. the

of year about and pressures end risks elevated, this the prospects the are like and we optimistic remain As we our we to we look beyond.Looking market ahead, XXXX, macroeconomic, inflationary continue. for and at expect geopolitical balance our of remainder positioning,

UAW the impacted maintaining in we While by quarter, weakness markets, expect Despite pressures prior in we fourth some do continued quarter. of our several are not are these strike well the guidance. our as we third the end across impact as

we to adjusted excited million guidance excess to target excess our continue of our that range XXX for finish company, and to I'm with very reiterate million in maintain to of expect expect EBITDA cash our new million, EUR also me of our and say our conclude, long-term in to XXX XXXX. in results to want EUR XXX XXXX be the a We about would for XXX future. of in leverage the free proud range flow X.Xx.To EBITDA which EUR adjusted again of I commitment in XXXX let and EUR million X.X very record

we teams that have We right strategy, right demonstrated right the markets. the again and the in over products have and over the right

and Our is business flexible model resilient.

market portfolio allows options always to different diversified conditions. very have us in Our

our session, long-term value focused have the now and both recyclable sheet to well success, built to needs need Nadia, sustainable society. high-value, that, open We we We're respond prices and extremely weather seize growing please. of we on the balance opportunities the positioned we and products shareholder creation.With and and our will Q&A for customers remain

our first And of question Instructions] [Operator Markets. today Katja goes BMO Jancic to Capital

now off potential at about X.Xx. policy? with, return leverage talk shareholder you starting Can a is thinking how you're Maybe your bit about

Katja. absolutely, Yes,

first proud well, milestone, very all, deleveraging, a you on as So having know. focus of we're of our important extremely achieved

is capital this think shareholder program, returns. includes I but point, still leverage a focus which pivoting allocation balanced the kind a on more towards the of at focus also

what with Board, how made make hasn't been working our the on in are that on a look active we'll future. count in on discussions the status, us extremely not-too-distant in yet, decision like, So hard although we of decision a and could terms can that and you

I some to But still and thinking you can XXXX, takes about? of any that looking and guidance. understand the Okay. puts should then haven't and be it's early discuss provided we And you

here. Jean-Marc Katja, Yes. it's

the in 'XX, for So I and obviously guidance middle. at it's guidance think to useful look our XX% for our 'XX

the shouldn't about The I aluminum we a there adoption aerospace. to in even. going into feel we're QX, in but last very million would EUR UAW and automotive. see long of being see And in strong, we have automotive our We to solid we strike What continued gets is strength see would comfortable hope. XXX XXXX, impact than an continued more think XXXX. us we year So finish in

be in now, as in bit should see So trend We're positive. to a products.And automotive, getting has can to close grow the full further. still room rolled you AS&I still capacity of our results

that help XX stabilizing in the seeing XXXX. difficulty, months it's us has sheet I of a for difficult demand resuming should mean but sheet Can some and growth. So can are year. been and been XXXX we

So that different help and XXXX. should -- into us going good in XXXX, finally And so upside a some therefore, -- that's market. a

the as not that But any us specialty taken to are to Finally, we on markets, million expect that sheet, well recovery are anytime pricing can soon. as our feel aerospace, some going and main in to reach the expecting cost towards EUR therefore, we've control we position see well and than we XXXX, XXXX. strong markets were more actions goal in automotive, progress in very the XXX

Perfect.

welcome. You're

And of JPMorgan. the Peterson next Bill question goes to

Nice amid tough auto. mixed on and good My -- to see execution a environment. question tough is demand first

you, Thank Bill.

strike. guess is hoping was if -- of could and help I like to fourth the then impacts help auto maybe even the is beyond with sheet guess, seasonality, should think X% believe any related that But I we your extrusions? the Q-on-Q And volume quantify some which quarter? in how impacts less Big around body presumably in UAW I you about the X. between seems Detroit of maybe auto typical difference is decline there half hoping I the with and versus I was could is U.S. exposure to the you So it context,

out, as so sales. pointed automotive is so less of your our than question, Bill, to Yes, you XX% yes,

We we than have in do in sell every North And North more Europe within we OEM. to exposure America, America. about

the [indiscernible] but So and -- in Ford on commented Stellantis is. think than smaller, GM, I smaller are GM that in past, the portion, we've Detroit X big is are specifically, much not a this and

So in that volume of context, is limited. the that quite sheer amount risk

it right Now material you're it rather will have And in QX. -- but not because impact take going us calling impact we're forward. UAW a strike continent. the in quarter. out obviously, as automotive. shutdowns seasonality to I have that fourth there reduced But Actually, it some impacted we'll is mean also is not we'd on well depending QX or And have is you a the seasonality. in in some August you the by operations July have place,

So question? did I answer your

Yes. is between sheet any there extrusions? versus And difference

Oh, yes.

so a are to to of them bit car are typically, more when directly the -- extrusions the delivery the and line, and/or extrusion products, we on assembled on processes we is other exposed -- point it quickly stamping the assembly goes the and because go to than sheet little sheet whilst a through the car. So it sheet other the most before as gets

there's of a here. So bit little a lag

Okay.

Makes Okay. sense.

Yeah, a matter it's of go not months. ahead. weeks, So

Okay.

question Okay. Great. on Yes. And the aerospace. next

this year-end from the strong. you to of out heard pointed in You the But demand production rates Boeing this in commercial remains line have we outlook a sight morning also by that good I'm you thinking production. guys advance. typically production they plan increase XXX could say margin in Would and increased anticipated? well see say result would is potentially or business benefit your say that already -- a that of you you Or pull-through as even as you production. would acceleration XXX as demand

No.

them X an we new during I takes aircraft we and for they between years think typically, this the to going months fly. the on -- ship are time us. X We the and parts news make is that's not time

So got is we've a new quite bit not -- this as visibility, us. you news to and we of said,

this up the parts, to of business desired but strength into to but of in plenty are in that communicating parts ramp and of aircraft about little the If levels an chain, bit of supply and and our going chain. we these year hiccups very the making suppliers are So that there's into a even being feel aluminum, bit go of the little a some able not we see challenged the XXXX. year anything, OEMs the comfortable in terms the supply next

'XX holdback some we anything, for up a demand in if and maybe 'XX. pent-up bit So see of a little building

Okay.

Let's that forward for QX hope packaging to the especially shipments, progress. trough the marks but look watching

you. Thank

question And Bank. Blanchard Corinne the next of to Deutsche goes

and guidance, question, through a walk put of to downside it guidance. XQ? end key risk the the maintained first for the to mid or Could a could take to range would so -- low like you us like what maybe guidance you EBITDA take see meaning Maybe a the you very see the

we good this Corinne, -- a the mean I do as got XX a not, see risk such year. amount. said We earlier, We've guidance. not There UAW uncertainty, but line sight. into it's is we to are months our big pretty of I

So no, guidance our like -- anything our want balanced. feel Jack, is is you add? to we balance quite

our some I full so Corinne, year And think you of meeting about of the just about confident the market, think continue outperform. to drivers, at end Yes. look we're will aerospace kind you if guidance. if

impact automotive, from generally some and in fundamentals will the For doesn't in in there automotive UAW Europe. a strike still, healthy the the bit is America market. market little change slower and the growth But North be

For can has stable pretty so at level. running stock Can, been a actually

Our the especially and overall to then, Europe. packaging mix packaging some specialty in bigger from within quarter. the increase, cautiously cost control. business excellence in stable, was of kind similar see market optimistic offset continue But to portfolio, outside can we're And third continue kind we'll and packaging expectations, we'll and weaknesses, we've benefit the benefit end adversely business, the of when of impacted to been focus we'll seen more quarter mix what but stock you the price operational being to a has by a cost continue industrial on specialties there.And step obviously, the second than

little you a of gives So bit hopefully, color. that

follow-up then And Muscle maybe Shoals. on question the

operational turn You're expect you still challenges. that around? When do to some having

Yes, Corinne.

where for -- a a and about been we've we talked year good we we about year, would said So it it and take that's talking are.

to we're have with was to performance labor of in situation one them going do, and greatly performance think big have see specifically, so of we've -- our the and able to improved pleased some attract workforce has improved we train labor talent we issues are the improved but and this progress be better. made. retain And We of terms XXXX. their still overall, financials into going that So our more ability gets experience and to the we

with quite of bit at So XXXX look a I optimism.

me. it That's Great. for

Thank you, Corinne.

of Company. And The question the goes Sullivan to next Benchmark Josh

ahead to on Historically, of build aerospace supply lead Any -- talked the I [ building side, side, see of aerospace and sense about times. the you rate months chain on OEMs look build inventories aluminum talked you X the Just ] aerospace we'd to the know increases. rate. X-year

dynamics supply But in about think mention any about heading chain we did some comments inventory into 'XX? aerospace, around there should You 'XX. the

Josh. I don't so, think

If on you and our I XX%, -- look of sustainable at down what happened XX% were in COVID, basis. the a shipments quite went went build down the maybe rates downturn down mean,

seeing is supply in needed the think I to with what just So being inventories for operate. line we're the chain replenished

but restocking, is to it that if -- it for chain is still call supply wouldn't levels comfortable not it overall, I makes restocking enough are the So sense. that

aluminum? that more Yes, some to EV the versus inroads make automotive facility, on that dominates you encourages product, does. reason [ could then F-XXX new that any BlueOval it at the side, Or as do ] And the what aluminum just going BlueOval one think comes steel see forward? together

it still the a is bigger it vehicle. see we is comment and that performance that lightweight the don't of to can the programs, vehicle. afford overall, lightweighting where critical benefits price there vehicle on that and want good of want is the That's need is that you to for you I the get more because the where overall vehicle for such the specific to get benefits you but

European Any stronger or weaker just then one, particular are outlook. last markets And it. industrial Got than which one on others? the

is European reasonably very overall gloomy. France is were We seen a expecting It's our or weak, have and Germany some sentiment doing significant quite well. is of doing this all very factored anyway. down greatly. guidance. market. is except the them, And construction they're all but competitors declines in for bit the we're seeing our peers So better, you in I defense reporting building activity. slowing of mean not

the So it's prudent an about rest European not are it, or and that improvement improve. what doesn't not we early worse it's our in right? markets than it thought getting on been -- quite the in but guidance we've hope that So XXXX, renewed XXXX forecasting year, we

Great.

Josh. Thanks,

our question Deutsche [Operator Instructions] And Bank. Wondrack to next Sean goes of

you've it and great a see been Jack, reached for now. guys this and gunning target. congratulations I while, Jean-Marc on leverage have hitting know it it's you for to

happy we you, We're have. very Thank Sean.

there to to at your seems ratings bit mismatch of that your target, So right, I and your when leverage even leverage be kind look I guess, your there. and relative of just guidance a point, to a

with And your rating you the agencies? comments how have please? make curious been conversations any was could I there, So

Yes.

observation, So And and S&P upgrade opportunities mistaken. there Yes. both think think we Moody's, I I mean, positive for been have I'm comment conversations that. some the if sometime and a outlooks year. and next good not are for have Sean, you We it's thank an we -- quite from constructive. do

near-term balanced continue it's forward terms realize debt hear. X.X allocation, more That's in it's outlook just equity. see think But to And going now? to creep for could going we possible turns right point, the good down to become from sort I some of at leverage you and do capital of between

Yes, and have us right? flow, opportunities cash said, a policy significantly Sean. for allocation through and we this and balanced we to capital quite seize gross return as mean We flow, to naturally to a capital very growth organic company money net that debt shareholders. continue delevers, free cash reduce allows I more and can generate our free expenditures few

see path in of right? So X.X, continue stay want that's why natural we to X.X do we range to a deleveraging. to our And

luck. great. Good That's

Thanks, Sean.

Thank you, Sean.

hand CEO, I'll And questions. closing back Germain, any to further no for have We comments. Jean-Marc

and our and have markets, everyone, see side, year say, North third And that its mainly best Constellium it's is for are in markets that In an environment despite having X we at a bit want call. thank and mainly subdued you I quarter conclusion, of portfolio the can America. just Thank you, ever, Nadia, on automotive step clicking, really our I company is I the aerospace Europe, it's ever. little back, you, its look market and best to attending in which if

to confidence. allocation going that a capital about February have good we future in forward balanced of and you in and looking and registered on talk great day. a year, at to are are Have much, performance We Bye-bye. very our this throughout QX everyone. proud And the with progress can and forward look we stabilizing update I model. sheet the look Thank very you we

for This joining. now all Thank concludes call. Thank you. you today's

now disconnect lines. may your You