Aperam: The best fourth quarter result since the 2017 peak

by Hans Diederichs

Aperam announced today results for the three months and full year ending December 31, 2020.


Highlights

  • Health and Safety: LTI frequency rate of 1.5x in 2020 compared to 1.7x in 2019
  • Steel shipments of 1,677 thousand tonnes in 2020, 6.1% decrease compared to steel shipments of 1,786 thousand tonnes in 2019
  • EBITDA of EUR 343 million in 2020, including a net exceptional gain2 of EUR 50 million, compared to an EBITDA of EUR 357 million in 2019, including an exceptional gain3 of EUR 17 million
  • EBITDA of EUR 159 million in Q4 2020, including a net exceptional gain2 of EUR 50 million, compared to EUR 65 million of EBITDA in Q3 2020
  • Net income of EUR 175 million in 2020, compared to EUR 148 million in 2019
  • Basic earnings per share of EUR 2.19 in 2020, compared to EUR 1.82 in 2019
  • Cash flow from operations amounted to EUR 303 million in 2020, compared to EUR 400 million in 2019
  • Free cash flow before dividend and share buy-back of EUR 195 million in 2020, compared to EUR 281 million in 2019, including EUR 30 million from the divestment of the entire Gerdau stake
  • Net financial debt of EUR 67 million as of December 31, 2020, compared to EUR 75 million as of December 31, 2019     

 

Strategic initiatives

  • Leadership Journey​(R)4 Phase 3:​ The annualized gains reached EUR 43 million in Q4 2020. Aperam realized cumulative annualized gains of EUR 223 million at the end of 2020, compared to the target of EUR 200 million by the end of 2020
  • Leadership Journey​(R) Phase 4: Target of EUR 150 million gains for the period 2021 - 2023 via a combination of cost, growth and mix improvement measures

 

Cash deployment

  • In coherence to its Financial Policy, Aperam is announcing to maintain its base dividend at EUR 1.75 per share (subject to AGM approval).

Sustainability

  • Sharper CO2 reduction targets: 2030 CO2 reduction target doubled to -30% vs 2015
  • Internal CO2 price doubled to EUR60/t to reflect our ESG ambition6

Prospects

  • Adj. EBITDA is expected at a slightly higher level versus the high Q4 2020 base
  • Net financial debt is expected at a comparable level

 

Timoteo Di Maulo, CEO of Aperam, commented:

"The combined benefits of a strong mix in Brazil, tight cost control and some economic improvement in Europe enabled us to achieve the best fourth quarter result since the 2017 peak despite still challenging market conditions. The positive effects of our cost reduction program - the Leadership Journey​(R) are clearly visible ten years after Aperam's spin-off. Aperam is now a more flexible, stronger and resilient company and will continue to embark on this journey. We are happy to have concluded Phase 3 successfully and above target. We commenced Phase 4 in January which is designed to defend Aperam's cost leadership in Europe but also transform the footprint for specialties, adding a meaningful growth component in high value products. While the coming months will remain challenging, we are confident that our actions will aid in restoring a historical normal level."

Source and photo: Aperam S. A.

 

 

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