Aperam update on Q4 2024 market & financial trends

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.

Stainless & Electrical Brazil

Q4 adjusted EBITDA is expected at a comparable level qoq due to a mild seasonal downturn only

Alloys & Specialties

Higher adjusted EBITDA qoq is following the seasonal trough in Q3 . Demand in key markets remains high and the seasonal uptick in Q4 should close the gap to the EUR80m guidance (9M: 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

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

USD/BRL
Source: Bloomberg, Fastmarkets

x

5.54

5.62

5.81

6.10

Other items

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.