UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2019

Commission File Number: 001-35931

 

 

Constellium SE

(Translation of registrant’s name into English)

 

 

Tupolevlaan 41-61,

1119 NW Schiphol-Rijk

The Netherlands

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:    Form 20-F  ☒    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    Yes  ☐    No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    Yes  ☐    No  ☒

 

 

 


INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached hereto as Exhibit 99.1 is a copy of the press release of Constellium SE (the “Company”), dated October 23, 2019, announcing its financial results for the third quarter ended September 30, 2019.

Attached hereto as Exhibit 99.2 is a copy of a presentation of the Company, dated October 23, 2019, summarizing its financial results for the third quarter ended September 30, 2019.

Exhibit Index

 

No.

  

Description

99.1    Press Release issued by Constellium SE on October 23, 2019.
99.2    Presentation posted by Constellium SE on October 23, 2019.

The information contained in Exhibit 99.1 of this Form 6-K (except for the second paragraph containing certain quotes by the Chief Executive Officer, and the section titled “Outlook”), is incorporated by reference into any offering circular or registration statement (or into any prospectus that forms a part thereof) filed by Constellium SE with the Securities and Exchange Commission. Exhibit 99.2 is not incorporated by reference.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

CONSTELLIUM SE

(Registrant)

October 23, 2019     By:  

/s/ Peter R. Matt

    Name:   Peter R. Matt
    Title:   Chief Financial Officer
EX-99.1

Exhibit 99.1

 

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Constellium Reports Third Quarter 2019 Results

Amsterdam – October 23, 2019 – Constellium SE (NYSE: CSTM) today reported results for the third quarter ended September 30, 2019.

Third quarter 2019 highlights:

 

   

Shipments of 395 thousand metric tons, up 4% compared to Q3 2018

 

   

Revenue of €1.5 billion, up 2% compared to Q3 2018

 

   

Net income of €1 million compared to net income of €217 million in Q3 2018

 

   

Adjusted EBITDA of €139 million, up 18% compared to Q3 2018

First nine months of 2019 highlights:

 

   

Shipments of 1.2 million metric tons, up 5% compared to YTD 2018

 

   

Revenue of €4.5 billion, up 6% compared to YTD 2018

 

   

Net income of €42 million compared to net income of €248 million in YTD 2018

 

   

Adjusted EBITDA of €441 million, up 12% compared to YTD 2018

 

   

Cash from Operations of €340 million and Free Cash Flow of €157 million in YTD 2019

 

   

Net debt / LTM Adjusted EBITDA of 4.1x as of September 30, 2019

 

   

Project 2019 run-rate cost savings of €73 million achieved as of September 30, 2019

Jean-Marc Germain, Constellium’s Chief Executive Officer said, “Constellium delivered solid third quarter results with strong Adjusted EBITDA growth and our third consecutive quarter of positive Free Cash Flow generation. Notably, our team was able to deliver these results despite more challenging than expected end market conditions during the third quarter and weaker than expected performance by Automotive Structures and Industry. I am pleased that both Packaging and Automotive Rolled Products and Aerospace and Transportation were able to maintain their strong momentum from the first half of the year.

Mr. Germain continued, “Based on our current outlook, we expect Adjusted EBITDA growth of 12% to 14% and expect Free Cash Flow of €125 million to €175 million. We remain focused on increasing shareholder value by delivering on our long-term Adjusted EBITDA and leverage targets.”

 

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Group Summary

 

     Q3
2019
     Q3
2018
     Var.     YTD
2019
     YTD
2018
     Var.  

Shipments (k metric tons)

     395        379        4     1,221        1,164        5

Revenue (€ millions)

     1,461        1,428        2     4,535        4,288        6

Net income (€ millions)

     1        217        n.m.       42        248        n.m.  

Adjusted EBITDA (€ millions)

     139        118        18     441        394        12

Adjusted EBITDA per metric ton (€)

     351        310        13     361        338        7

The difference between the sum of reported segment revenue and total group revenue includes revenue from certain non-core activities and inter-segment eliminations. The difference between the sum of reported segment Adjusted EBITDA and the Group Adjusted EBITDA is related to Holdings and Corporate.

For the third quarter of 2019, shipments of 395 thousand metric tons increased 4% compared to the third quarter of last year due to higher shipments in the Packaging and Automotive Rolled Products segment, partially due to the consolidation of Bowling Green. Revenue of €1.5 billion increased 2% compared to the third quarter of last year primarily due to the consolidation of Bowling Green and improved price and mix, partially offset by lower metal prices. Net income of €1 million decreased compared to net income of €217 million in the third quarter of 2018. Adjusted EBITDA of €139 million increased 18% from the third quarter of last year primarily on improved results in the Packaging and Automotive Rolled Products and the Aerospace and Transportation segments, partially offset by weaker results in the Automotive Structures and Industry segment.

For the first nine months of 2019, shipments of 1.2 million metric tons increased 5% compared to the first nine months of last year on higher shipments in the Packaging and Automotive Rolled Products segment, partially due to the consolidation of Bowling Green. Revenue of €4.5 billion increased 6% compared to the first nine months of last year primarily due to the consolidation of Bowling Green and improved price and mix, partially offset by lower metal prices. Net income of €42 million decreased compared to net income of €248 million in the first nine months of 2018. Adjusted EBITDA of €441 million increased 12% compared to the first nine months of last year on improved results in the Aerospace and Transportation and the Packaging and Automotive Rolled Products segments, partially offset by weaker results in the Automotive Structures and Industry segment.

 

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Results by Segment

 

 

Packaging and Automotive Rolled Products (P&ARP)

 

     Q3
2019
     Q3
2018
     Var.     YTD
2019
     YTD
2018
     Var.  

Shipments (k metric tons)

     277        260        7     842        785        7

Revenue (€ millions)

     789        783        1     2,438        2,322        5

Adjusted EBITDA (€ millions)

     72        61        18     210        188        12

Adjusted EBITDA per metric ton (€)

     259        234        11     250        239        5

Third quarter Adjusted EBITDA increased compared to the third quarter of 2018 primarily due to increased shipments and favorable metal costs, partially offset by incremental costs from the ramp up of our automotive programs.

For the third quarter of 2019, shipments of 277 thousand metric tons increased 7% from the third quarter of last year on higher shipments of both Packaging and Automotive rolled products, partially due to the consolidation of Bowling Green. Revenue of €789 million increased 1% compared to the third quarter of 2018 primarily due to the consolidation of Bowling Green, partially offset by lower metal prices.

For the first nine months of 2019, Adjusted EBITDA of €210 million increased compared to the first nine months of last year primarily due to higher volumes and favorable metal costs, partially offset by weaker price and mix and incremental costs from maintenance and the ramp up of our automotive programs. Shipments of 842 thousand metric tons increased 7% compared to the first nine months of last year on higher shipments of both Packaging and Automotive rolled products, partially due to the consolidation of Bowling Green. Revenue of €2.4 billion increased 5% compared to the first nine months of last year primarily due to the consolidation of Bowling Green, partially offset by lower metal prices.

 

 

Aerospace and Transportation (A&T)

 

     Q3
2019
     Q3
2018
     Var.     YTD
2019
     YTD
2018
     Var.  

Shipments (k metric tons)

     57        58        (1 )%      186        187        (0 )% 

Revenue (€ millions)

     351        341        3     1,112        1,040        7

Adjusted EBITDA (€ millions)

     43        31        35     159        114        39

Adjusted EBITDA per metric ton (€)

     740        539        37     854        612        40

 

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Third quarter Adjusted EBITDA increased as compared to the third quarter of 2018 due to improved price and mix, partially offset by higher costs.

For the third quarter of 2019, shipments of 57 thousand metric tons declined 1% compared to the third quarter of last year as lower Transportation, Industry and Other rolled product shipments were offset by higher Aerospace rolled product shipments. Revenue of €351 million increased 3% compared to the third quarter of 2018 primarily due to improved price and mix, partially offset by lower metal prices.

For the first nine months of 2019, Adjusted EBITDA of €159 million increased compared to the first nine months of last year on improved price and mix, partially offset by higher costs. Shipments of 186 thousand metric tons were comparable to the first nine months of last year as higher Aerospace rolled product shipments were offset by lower Transportation, Industry and Other rolled product shipments. Revenue of €1.1 billion increased 7% compared to the first nine months of last year primarily due to improved price and mix, partially offset by lower metal prices.

 

 

Automotive Structures and Industry (AS&I)

 

     Q3
2019
     Q3
2018
     Var.     YTD
2019
     YTD
2018
     Var.  

Shipments (k metric tons)

     61        61        (1 )%      193        192        0

Revenue (€ millions)

     336        322        5     1,027        966        6

Adjusted EBITDA (€ millions)

     26        29        (10 )%      85        104        (19 )% 

Adjusted EBITDA per metric ton (€)

     428        474        (10 )%      439        542        (19 )% 

Third quarter Adjusted EBITDA decreased compared to the third quarter of 2018 primarily due to higher costs related to our footprint expansion and operational challenges on some of our newer automotive programs.

For the third quarter of 2019, shipments of 61 thousand metric tons were comparable to the third quarter of last year as higher Automotive extruded product shipments were offset by lower Other extruded product shipments. Revenue of €336 million increased 5% compared to the third quarter of 2018 primarily due to improved price and mix, partially offset by lower metal prices.

For the first nine months of 2019, Adjusted EBITDA of €85 million decreased compared to the first nine months of last year on higher costs related to our footprint expansion and operational challenges on some of our newer automotive programs. Shipments of 193 thousand metric tons were comparable to the first nine months of last year on higher Automotive extruded product shipments, offset by lower Other extruded product shipments. Revenue of €1.0 billion increased 6% compared to the first nine months of last year primarily due to improved price and mix, partially offset by lower metal prices.

 

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Net Income

For the third quarter of 2019, net income of €1 million decreased compared a net income of €217 million in the third quarter of last year. The change in net income is primarily related to a gain from the sale of the North Building at Sierre and a gain on OPEB amendments in the third quarter of 2018, partially offset by improved gross profit in the third quarter of 2019.

For the first nine months of 2019, net income of €42 million decreased compared to a net income of €248 million in the first nine months of last year. The change in net income is primarily related to a gain from the sale of the North Building at Sierre and a gain on OPEB amendments in the first nine months of 2018, partially offset by improved gross profit in the first nine months of 2019.

 

 

Cash Flow and Liquidity

Free Cash Flow was an inflow of €157 million for the first nine months of 2019 compared to an outflow of €127 million in the same period of the prior year. The change was primarily due to improved working capital performance.

Cash flows from operating activities were €340 million for the first nine months of 2019 compared to cash flows from operating activities of €40 million in the same period of the prior year. Constellium increased factored receivables by €19 million in the first nine months of 2019 compared to a decrease of €2 million in the first nine months of last year.

Cash flows used in investing activities were €265 million for the first nine months of 2019 compared to cash flows from investing activities of €32 million in the same period of the prior year. The first nine months of 2019 included a net €83 million outflow related to the acquisition of our partner’s 49% interest in the Bowling Green joint venture. The first nine months of 2018 included €198 million of proceeds from disposals net of cash related to the sale of the North Building at Sierre.

Cash flows used in financing activities were €90 million for the first nine months of 2019 compared to cash flows used in financing activities of €62 million in the same period of the prior year. The first nine months of 2019 included the €100 million partial redemption of the 4.625% Senior Notes due 2021.

Liquidity at September 30, 2019 was €516 million, comprised of €152 million of cash and cash equivalents and €364 million available under our committed lending facilities and factoring arrangements. Liquidity at December 31, 2018 was €669 million.

Net debt was €2,213 million at September 30, 2019 compared to €1,996 million at December 31, 2018.

 

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Outlook

We expect Adjusted EBITDA growth in a range of 12% to 14% in 2019 and over €700 million of Adjusted EBITDA in 2022.

We are not able to provide a reconciliation of this Adjusted EBITDA guidance to net income, the comparable GAAP measure, because certain items that are excluded from Adjusted EBITDA cannot be reasonably predicted or are not in our control. In particular, we are unable to forecast the timing or magnitude of realized and unrealized gains and losses on derivative instruments, metal lag, impairment or restructuring charges, or taxes without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, net income in the future.

 

 

Forward-looking statements

Certain statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This press release may contain “forward-looking statements” with respect to our business, results of operations and financial condition, and our expectations or beliefs concerning future events and conditions. You can identify forward-looking statements because they contain words such as, but not limited to, “believes,” “expects,” “may,” “should,” “approximately,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” likely,” “will,” “would,” “could” and similar expressions (or the negative of these terminologies or expressions). All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. These risks and uncertainties include, but are not limited to, levels of indebtedness which could limit Constellium’s operating flexibility and opportunities, economic downturn, the loss of key customers, suppliers or other business relationships; disruption to business operations; the inability to meet customer quality requirements; delayed readiness for the North American Auto Body Sheet market, the capacity and effectiveness of our hedging policy activities, failure to retain key employees, and other risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 20-F, and as described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission. The occurrence of the events described and the achievement of the expected results depend on many events, some or all of which are not predictable or within our control. Consequently, actual results may differ materially from the forward-looking statements contained in this press release. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

 

 

About Constellium

Constellium (NYSE: CSTM) is a global sector leader that develops innovative, value added aluminium products for a broad scope of markets and applications, including aerospace, automotive and packaging. Constellium generated €5.7 billion of revenue in 2018.

Constellium’s earnings materials for the third quarter ended September 30, 2019, are also available on the company’s website (www.constellium.com).

 

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CONSOLIDATED INCOME STATEMENT (UNAUDITED)

 

(in millions of Euros)

   Three months
ended
September 30, 2019
    Three months
ended
September 30, 2018
    Nine months
ended
September 30, 2019
    Nine months
ended
September 30, 2018
 

Revenue

     1,461       1,428       4,535       4,288  

Cost of sales

     (1,316     (1,311     (4,064     (3,860
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     145       117       471       428  
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling and administrative expenses

     (66     (63     (204     (180

Research and development expenses

     (12     (10     (36     (31

Restructuring costs

     (1     (1     (2     (1

Other gains / (losses) - net

     (15     224       (29     201  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     51       267       200       417  
  

 

 

   

 

 

   

 

 

   

 

 

 

Finance costs - net

     (46     (39     (135     (117

Share of (loss) / income of joint-ventures

     —         (10     5       (22
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax

     5       218       70       278  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expense

     (4     (1     (28     (30
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     1       217       42       248  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

        

Equity holders of Constellium

     —         216       39       247  

Non-controlling interests

     1       1       3       1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     1       217       42       248  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to the equity holders of Constellium, in euros per share

        

Basic

     0.00       1.61       0.29       1.84  

Diluted

     0.00       1.54       0.28       1.76  

Weighted average shares, in thousands

        

Basic

     137,131       134,685       136,609       134,574  

Diluted

     141,911       140,376       141,911       140,352  

 

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) (UNAUDITED)

 

(in millions of Euros)

   Three months
ended
September 30, 2019
    Three months
ended
September 30, 2018
    Nine months
ended
September 30, 2019
    Nine months
ended
September 30, 2018
 

Net income

     1       217       42       248  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive (loss) / income

        

Items that will not be reclassified subsequently to the consolidated income statement

        

Remeasurement on post-employment benefit obligations

     (48     11       (110     38  

Income tax on remeasurement on post-employment benefit obligations

     8       (1     23       (8

Items that may be reclassified subsequently to the consolidated income statement

        

Cash flow hedges

     (10     (4     (15     (18

Net investment hedges

           (4     4       (4

Income tax on hedges

     3       2       5       7  

Currency translation differences

     5       7       4       8  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive (loss) / income

     (42     11       (89     23  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive (loss) / income

     (41     228       (47     271  
  

 

 

   

 

 

   

 

 

   

 

 

 

Attributable to:

        

Equity holders of Constellium

     (42     227       (50     270  

Non-controlling interests

     1       1       3       1  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive (loss) / income

     (41     228       (47     271  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 

(in millions of Euros)

   At September 30,
2019
    At December 31,
2018
 

Assets

    

Current assets

    

Cash and cash equivalents

     152       164  

Trade receivables and other

     625       587  

Inventories

     693       660  

Other financial assets

     38       30  
  

 

 

   

 

 

 
     1,508       1,441  
  

 

 

   

 

 

 

Non-current assets

    

Property, plant and equipment

     2,040       1,666  

Goodwill

     467       422  

Intangible assets

     71       70  

Investments accounted for under the equity method

     1       1  

Deferred income tax assets

     186       163  

Trade receivables and other

     52       64  

Other financial assets

     15       74  
  

 

 

   

 

 

 
     2,832       2,460  
  

 

 

   

 

 

 

Total Assets

     4,340       3,901  
  

 

 

   

 

 

 

Liabilities

    

Current liabilities

    

Trade payables and other

     1,110       968  

Borrowings

     167       57  

Other financial liabilities

     66       60  

Income tax payable

     13       8  

Provisions

     22       46  
  

 

 

   

 

 

 
     1,378       1,139  
  

 

 

   

 

 

 

Non-current liabilities

    

Trade payables and other

     23       27  

Borrowings

     2,203       2,094  

Other financial liabilities

     31       29  

Pension and other post-employment benefit obligations

     730       610  

Provisions

     101       94  

Deferred income tax liabilities

     23       22  
  

 

 

   

 

 

 
     3,111       2,876  
  

 

 

   

 

 

 

Total Liabilities

     4,489       4,015  
  

 

 

   

 

 

 

Equity

    

Share capital

     3       3  

Share premium

     420       420  

Retained deficit and other reserves

     (583     (545
  

 

 

   

 

 

 

Equity attributable to equity holders of Constellium

     (160 )      (122 ) 

Non-controlling interests

     11       8  
  

 

 

   

 

 

 

Total Equity

     (149     (114
  

 

 

   

 

 

 

Total Equity and Liabilities

     4,340       3,901  
  

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

 

(in millions of Euros)

   Share
Capital
     Share
Premium
     Remeasure-
ment
    Cash flow
hedges
and net
investment
hedges
    Foreign
Currency
Translation
reserve
    Other
reserves
     Retained
losses
    Total Equity
holders of
Constellium
    Non-
controlling
interests
     Total
equity
 

At January 1, 2019

     3        420        (129     (8     3       37        (448     (122     8        (114

Net income

     —          —          —         —         —         —          39       39       3        42  

Other comprehensive (loss) / income

     —          —          (87     (6     4       —          —         (89     —          (89
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
                        

Total comprehensive (loss) / income

     —          —          (87     (6     4       —          39       (50     3        (47
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Transactions with equity holders

                        

Share-based compensation

     —          —          —         —         —         12        —         12       —          12  

Transactions with non-controlling interests

     —          —          —         —         —         —          —         —         —          —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

At September 30, 2019

     3        420        (216     (14     7       49        (409     (160     11        (149
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

(in millions of Euros)

   Share
Capital
     Share
Premium
     Remeasure-
ment
    Cash flow
hedges
    Foreign
Currency
Translation
reserve
    Other
reserves
     Retained
losses
    Total Equity
holders of
Constellium
    Non-
controlling
interests
     Total
equity
 

At January 1, 2018

     3        420        (147     13       (7     25        (634     (327     8        (319

Change in accounting policies

     —          —          —         —         —         —          (2     (2     —          (2
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

At January 1, 2018 restated

     3        420        (147     13       (7     25        (636     (329     8        (321

Net income

     —          —          —         —         —         —          247       247       1        248  

Other comprehensive income / (loss)

     —          —          30       (15     8       —          —         23       —          23  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
                        

Total comprehensive income / (loss)

     —          —          30       (15     8       —          247       270       1        271  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Transactions with Equity holders

                        

Share-based compensation

     —          —          —         —         —         9        —         9       —          9  

Transactions with non-controlling interests

     —          —          —         —         —         —          —         —         —          —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

At September 30, 2018

     3        420        (117     (2     1       34        (389     (50     9        (41
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

10


LOGO

 

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

 

(in millions of Euros)    Three months
ended
September 30,

2019
    Three months
ended
September 30,

2018
    Nine months
ended
September 30,

2019
    Nine months
ended
September 30,
2018
 

Net income

     1       217       42       248  

Adjustments:

        

Depreciation and amortization

     66       51       183       140  

Finance costs - net

     46       39       135       117  

Income tax expense

     4       1       28       30  

Share of loss / (income) of joint-ventures

     —         10       (5     22  

Unrealized losses / (gains) on derivatives - net and from remeasurement of monetary assets and liabilities - net

     5       11       (12     54  

(Gains) / Losses on disposal

     —         (194     2       (190

Other – net

     3       6       9       11  

Interest paid

     (54     (48     (132     (108

Income tax paid

     8       (6     (3     (17

Change in trade working capital:

        

Inventories

     34       47       58       (47

Trade receivables

     12       57       (17     (139

Trade payables

     (29     (99     75       9  

Margin calls

     —         —         5       —    

Change in provisions and pension obligations

     (3     (48     (18     (59

Other working capital

     (13     2       (10     (31
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows from operating activities

     80       46       340       40  
  

 

 

   

 

 

   

 

 

   

 

 

 

Purchases of property, plant and equipment

     (50     (63     (180     (160

Acquisitions of subsidiaries, net of cash acquired

     —         —         (83     —    

Proceeds from disposals net of cash

     —         198       1       199  

Equity contributions and loans to joint-ventures

     —         (2     —         (15

Other investing activities

     1       2       (3     8  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows (used in) / from investing activities

     (49     135       (265     32  
  

 

 

   

 

 

   

 

 

   

 

 

 

Repayment of Senior Notes

     (100     —         (100     —    

Proceeds / (Repayments) from revolving credit facilities and other loans

     12       (76     88       (66

Payment of lease liabilities

     (9     (4     (79     (11

Transactions with non-controlling interests

     —         —         (2     —    

Other financing activities

     3       10       3       15  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows used in financing activities

     (94     (70     (90     (62
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) / increase in cash and cash equivalents

     (63     111       (15     10  

Cash and cash equivalents - beginning of period

     213       166       164       269  

Effect of exchange rate changes on cash and cash equivalents

     2       2       3       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents - end of period

     152       279       152       279  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

11


LOGO

 

SEGMENT ADJUSTED EBITDA

 

(in millions of Euros)

   Three months
ended
September 30,
2019
    Three months
ended
September 30,
2018
    Nine months
ended
September 30,
2019
    Nine months
ended
September 30,
2018
 

P&ARP

     72       61       210       188  

A&T

     43       31       159       114  

AS&I

     26       29       85       104  

Holdings and Corporate

     (2     (3     (13     (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     139       118       441       394  
  

 

 

   

 

 

   

 

 

   

 

 

 

SHIPMENTS AND REVENUE BY PRODUCT LINE

 

(in k metric tons)

   Three months
ended
September 30,
2019
    Three months
ended
September 30,
2018
    Nine months
ended
September 30,
2019
    Nine months
ended
September 30,
2018
 

Packaging rolled products

     211       199       630       603  

Automotive rolled products

     56       50       178       147  

Specialty and other thin-rolled products

     10       11       34       35  

Aerospace rolled products

     28       27       89       83  

Transportation, industry and other rolled products

     29       31       97       104  

Automotive extruded products

     31       28       92       88  

Other extruded products

     30       33       101       104  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total shipments

     395       379       1,221       1,164  
  

 

 

   

 

 

   

 

 

   

 

 

 

(in millions of Euros)

                        

Packaging rolled products

     560       574       1,676       1,699  

Automotive rolled products

     191       164       630       482  

Specialty and other thin-rolled products

     38       45       132       141  

Aerospace rolled products

     201       193       630       569  

Transportation, industry and other rolled products

     150       148       482       471  

Automotive extruded products

     202       175       589       522  

Other extruded products

     134       147       438       444  

Other and inter-segment eliminations

     (15     (18     (42     (40
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     1,461       1,428       4,535       4,288  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


LOGO

 

NON-GAAP MEASURES

Reconciliation of net income to Adjusted EBITDA (a non-GAAP measure)

 

(in millions of Euros)

   Three months
ended
September 30,
2019
    Three months
ended
September 30,
2018
    Nine months
ended
September 30,
2019
    Nine months
ended
September 30,
2018
 

Net income

     1       217       42       248  

Income tax expense

     4       1       28       30  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax

     5       218       70       278  

Finance costs – net

     46       39       135       117  

Share of loss / (income) of joint-ventures

     —         10       (5     22  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     51       267       200       417  

Depreciation and amortization

     66       51       183       140  

Restructuring costs

     1       1       2       1  

Unrealized losses / (gains) on derivatives

     4       10       (13     53  

Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities - net

     —         1       —         —    

Losses / (Gains) on pension plans amendments (D)

     1       (39     1       (39

Share-based compensation costs

     5       3       12       9  

Metal price lag (A)

     9       11       40       (13

Start-up and development costs (B)

     3       7       8       16  

(Gains) / Losses on disposals (E)

     —         (194     2       (190

Bowling Green one-time costs related to the acquisition (C)

     —         —         6       —    

Other

     (1     —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     139       118       441       394  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(A)

Metal price lag represents the financial impact of the timing difference between when aluminium prices included within Constellium Revenues are established and when aluminium purchase prices included in Cost of sales are established. The Group accounts for inventory using a weighted average price basis and this adjustment aims to remove the effect of volatility in LME prices. The calculation of the Group metal price lag adjustment is based on an internal standardized methodology calculated at each of Constellium’s manufacturing sites and is primarily calculated as the average value of product recorded in inventory, which approximates the spot price in the market, less the average value transferred out of inventory, which is the weighted average of the metal element of cost of sales, based on the quantity sold in the period.

(B)

For the nine months ended September 30, 2019 and 2018, start-up and development costs include €8 million and €16 million respectively, related to new projects in our AS&I operating segment.

(C)

For the nine months ended September 30, 2019, Bowling Green one-time costs related to the acquisition include the non-cash reversal of the inventory step-up.

(D)

For the nine months ended September 30, 2018, the Group amended one of its OPEB plans in the US, which resulted in a €39 million gain.

(E)

In July 2018, Constellium completed the sale of the North Building assets of its Sierre plant in Switzerland to Novelis and contributed the Sierre site shared infrastructure to a joint-venture with Novelis, in exchange for cash consideration of €200 million. This transaction also resulted in the termination of the existing lease agreement for the North Building assets which had been leased and operated by Novelis since 2005. For the nine months ended September 30, 2018, the transaction generated a €190 million net gain.

 

13


LOGO

 

Reconciliation of net cash flows from operating activities to Free Cash Flow (a non-GAAP measure)

 

     Three months
ended
September 30,

2019
     Three months
ended
September 30,
2018
     Nine months
ended
September 30,
2019
     Nine months
ended
September 30,
2018
 

Net cash flows from / (used in) operating activities

     80        46        340        40  

Purchases of property, plant and equipment

     (50      (63      (180      (160

Equity contributions and loans to joint-ventures

     —          (2      —          (15

Other investing activities

     1        2        (3      8  
  

 

 

    

 

 

    

 

 

    

 

 

 

Free Cash Flow

     31        (17      157        (127
  

 

 

    

 

 

    

 

 

    

 

 

 

Reconciliation of borrowings to Net debt (a non-GAAP measure)

 

(in millions of Euros)

   At September 30,
2019
     At December 31,
2018
 

Borrowings

     2,370        2,151  

Fair value of cross currency basis swaps, net of margin calls

     (5      9  

Cash and cash equivalents

     (152      (164

Cash pledged for issuance of guarantees

     —          —    
  

 

 

    

 

 

 

Net debt

     2,213        1,996  
  

 

 

    

 

 

 

 

14


LOGO

 

Non-GAAP measures

In addition to the results reported in accordance with International Financial Reporting Standards (“IFRS”), this press release includes information regarding certain financial measures which are not prepared in accordance with IFRS (“non-GAAP measures”). The non-GAAP measures used in this press release are: Adjusted EBITDA, Adjusted EBITDA per metric ton, Free Cash Flow and Net debt. Reconciliations to the most directly comparable IFRS financial measures are presented in the schedules to this press release. We believe these non-GAAP measures are important supplemental measures of our operating and financial performance. By providing these measures, together with the reconciliations, we believe we are enhancing investors’ understanding of our business, our results of operations and our financial position, as well as assisting investors in evaluating the extent to which we are executing our strategic initiatives. However, these non-GAAP financial measures supplement our IFRS disclosures and should not be considered an alternative to the IFRS measures and may not be comparable to similarly titled measures of other companies.

In considering the financial performance of the business, management and our chief operational decision maker, as defined by IFRS, analyze the primary financial performance measure of Adjusted EBITDA in all of our business segments. The most directly comparable IFRS measure to Adjusted EBITDA is our net income or loss for the period. We believe Adjusted EBITDA, as defined below, is useful to investors and is used by our management for measuring profitability because it excludes the impact of certain non-cash charges, such as depreciation, amortization, impairment and unrealized gains and losses on derivatives as well as items that do not impact the day-to-day operations and that management in many cases does not directly control or influence. Therefore, such adjustments eliminate items which have less bearing on our core operating performance.

Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of Constellium and in comparison to other companies, many of which present an Adjusted EBITDA-related performance measure when reporting their results.

Adjusted EBITDA is defined as income / (loss) from continuing operations before income taxes, results from joint ventures, net finance costs, other expenses and depreciation and amortization as adjusted to exclude restructuring costs, impairment charges, unrealized gains or losses on derivatives and on foreign exchange differences on transactions which do not qualify for hedge accounting, metal price lag, share based compensation expense, effects of certain purchase accounting adjustments, start-up and development costs or acquisition, integration and separation costs, certain incremental costs and other exceptional, unusual or generally non-recurring items.

Adjusted EBITDA is the measure of performance used by management in evaluating our operating performance, in preparing internal forecasts and budgets necessary for managing our business and, specifically in relation to the exclusion of the effect of favorable or unfavorable metal price lag, this measure allows management and the investor to assess operating results and trends without the impact of our accounting for inventories. We use the weighted average cost method in accordance with IFRS which leads to the purchase price paid for metal impacting our cost of goods sold and therefore profitability in the period subsequent to when the related sales price impacts our revenues. Management believes this measure also provides additional information used by our lending facilities providers with respect to the ongoing performance of our underlying business activities. Historically, we have used Adjusted EBITDA in calculating our compliance with financial covenants under certain of our loan facilities.

 

15


LOGO

 

Adjusted EBITDA is not a presentation made in accordance with IFRS, is not a measure of financial condition, liquidity or profitability and should not be considered as an alternative to profit or loss for the period, revenues or operating cash flows determined in accordance with IFRS.

Free Cash Flow is defined as net cash flow from operating activities less capital expenditure, equity contributions and loans to joint ventures and other investing activities. Management believes that Free Cash Flow is a useful measure of the net cash flow generated or used by the business as it takes into account both the cash generated or consumed by operating activities, including working capital, and the capital expenditure requirements of the business. However, Free Cash Flow is not a presentation made in accordance with IFRS and should not be considered as an alternative to operating cash flows determined in accordance with IFRS. Free Cash Flow has certain inherent limitations, including the fact that it does not represent residual cash flows available for discretionary spending, notably because it does not reflect principal repayments required in connection with our debt or capital lease obligations.

Net debt is defined as borrowings plus or minus the fair value of cross currency basis swaps net of margin calls less cash and cash equivalents and cash pledged for the issuance of guarantees. Management believes that Net debt is a useful measure of indebtedness because it takes into account the cash and cash equivalent balances held by the Company as well as the total external debt of the Company. Net debt is not a presentation made in accordance with IFRS, and should not be considered as an alternative to borrowings determined in accordance with IFRS.

 

16

EX-99.2

Slide 1

Third Quarter 2019 Earnings Call October 23, 2019 Exhibit 99.2


Slide 2

Certain statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This presentation may contain “forward-looking statements” with respect to our business, results of operations and financial condition, and our expectations or beliefs concerning future events and conditions. You can identify forward-looking statements because they contain words such as, but not limited to, “believes,” “expects,” “may,” “should,” “approximately,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “likely,” “will,” “would,” “could” and similar expressions (or the negative of these terminologies or expressions). All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. These risks and uncertainties include, but are not limited to, levels of indebtedness which could limit Constellium’s operating flexibility and opportunities, economic downturn, the loss of key customers, suppliers or other business relationships; disruption to business operations; the inability to meet customer quality requirements; delayed readiness for the North American Auto Body Sheet market, the capacity and effectiveness of our hedging policy activities, failure to retain key employees, and other risk factors set forth under the heading “Risk Factors” in our Annual Report on Form 20-F and as described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission. The occurrence of the events described and the achievement of the expected results depend on many events, some or all of which are not predictable or within our control. Consequently, actual results may differ materially from the forward-looking statements contained in this presentation. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. Forward-looking statements


Slide 3

Non-GAAP measures This presentation includes information regarding certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA per metric ton, Free Cash Flow and Net debt. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of Constellium and in comparison to other companies, many of which present an adjusted EBITDA-related performance measure when reporting their results. Adjusted EBITDA, Adjusted EBITDA per Metric Ton, Free Cash Flow and Net debt are not presentations made in accordance with IFRS and may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures supplement our IFRS disclosures and should not be considered an alternative to the IFRS measures. This presentation provides a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. We are not able to provide a reconciliation of Adjusted EBITDA guidance to net income, the comparable GAAP measure, because certain items that are excluded from Adjusted EBITDA cannot be reasonably predicted or are not in our control. In particular, we are unable to forecast the timing or magnitude of realized and unrealized gains and losses on derivative instruments, metal lag, impairment or restructuring charges, or taxes without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, our net income in the future.


Slide 4

Jean-Marc Germain Chief Executive Officer


Slide 5

Q3 2019 Highlights Total Shipments up 4% YoY to 395 thousand metric tons Revenue increased 2% YoY to €1.5 billion Net income of €1 million Adjusted EBITDA of €139 million increased 18% YoY; YTD 2019 increased 12% YoY Cash from Operations of €80 million in Q3 2019 and €340 million in YTD 2019 Free Cash Flow of €31 million in Q3 2019 and €157 million in YTD 2019 Net Debt / LTM Adjusted EBITDA of 4.1x Project 2019 run rate cost savings of €73 million Solid results; strong Adjusted EBITDA growth and positive Free Cash Flow generation


Slide 6

Peter Matt Chief Financial Officer


Slide 7

Adjusted EBITDA Bridges YTD 2019 vs. YTD 2018 Q3 2019 vs. Q3 2018 € millions +18% +12% € millions


Slide 8

Q3 2019 Performance Adjusted EBITDA of €72 million Higher automotive and packaging shipments Weaker price and mix Favorable metal costs offset by costs from the ramp up of automotive programs Packaging and Automotive Rolled Products Adjusted EBITDA Bridge € in millions Q3 2019 Q3 2018 Var. Shipments (kt) 277 260 7% Revenues (€m) 789 783 1% Adj. EBITDA (€m) 72 61 18% Adj. EBITDA (€ / t) 259 234 11%


Slide 9

Q3 2019 Performance Adjusted EBITDA of €43 million Increased Aerospace shipments offset by lower TID shipments Improved price and mix from both TID and Aerospace Higher costs on metal input mix and labor costs Aerospace and Transportation Adjusted EBITDA Bridge € in millions Q3 2019 Q3 2018 Var. Shipments (kt) 57 58 (1)% Revenues (€m) 351 341 3% Adj. EBITDA (€m) 43 31 35% Adj. EBITDA (€ / t) 740 539 37%


Slide 10

Q3 2019 Performance Automotive Structures and Industry Adjusted EBITDA Bridge € in millions Adjusted EBITDA of €26 million Higher Automotive shipments offset by lower Industry shipments Higher costs related to our footprint expansion and operational challenges on some of our newer automotive programs Q3 2019 Q3 2018 Var. Shipments (kt) 61 61 (1)% Revenues (€m) 336 322 5% Adj. EBITDA (€m) 26 29 (10)% Adj. EBITDA (€ / t) 428 474 (10)%


Slide 11

Project 2019 Three Pillars Cost Reduction €73 million of annual run rate cost savings achieved as of September 30, 2019 Target of €75 million of annual run-rate cost savings by December 31, 2019 Working Capital Improvement Strong working capital performance on solid operating performance and increased discipline Continue to expect working capital investments related to the ramp up of growth projects Capital Discipline Capex guidance of €265 million for 2019 Maintenance spending of €150-175 million 80 Project 2019 continuing to provide benefits


Slide 12

Net Debt and Liquidity € in millions Net Debt and Leverage Maturity Profile Liquidity Debt / Liquidity Highlights Strong Cash from Operations and Free Cash Flow generation YTD 2019 Completed €100 million partial redemption of 2021 bonds in August 2019 Remain committed to deleveraging Ample liquidity of over €500 million Reduced leverage, ample liquidity and no bond maturities until 2021 € in millions € in millions Leverage: Net Debt / LTM Adjusted EBITDA


Slide 13

Jean-Marc Germain Chief Executive Officer


Slide 14

End Market Updates Diversified end market exposure; primarily targets secular growth markets Market Highlights % LTM Revenue Packaging Market remains stable Conversions to ABS to help North American market over the medium to long term Conversion from steel to aluminium driving growth in Europe Focus on sustainability expected to increase demand for aluminium cans 37% Automotive Demand for luxury cars, light trucks, and SUVs remains strong Pockets of weakness persist Aluminium penetration driving increased demand for rolled and extruded products 26% Aerospace Sustained OEM build rates OEM backlogs remain healthy Near-term demand remains strong 14% Other Specialties Transportation, Industry and Defense: North America: Strong defense market; weak transportation and industry markets Europe: Strong defense market; stable industry market at a low base Industry (Extrusions) Europe: Stable demand; weakness in some end markets 23%


Slide 15

Financial Guidance and Outlook Focused on delivering on our strategy and increasing shareholder value Targets for 2019 : Adjusted EBITDA growth of 12% to 14% Free Cash Flow of €125 million to €175 million Targets for 2022: Adjusted EBITDA of over €700 million Net Debt / Adjusted EBITDA of 2.5x


Slide 16

Q&A


Slide 17

Appendix


Slide 18

September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 Borrowings 2,370 2,378 2,421 2,151 2,103 Fair value of cross currency basis swaps, net of margin calls (5) 8 2 9 25 Cash and cash equivalents (152) (213) (222) (164) (279) Cash pledged for issuance of guarantees — — — — — Net Debt 2,213 2,173 2,201 1,996 1,849 LTM Adjusted EBITDA 545 524 512 498 498 Leverage 4.1x 4.1x 4.3x 4.0x 3.7x Net Debt Reconciliation € millions


Slide 19

Reconciliation of Net Income to Adjusted EBITDA  € millions Three months ended September 30, 2019 Three months ended September 30, 2018 Nine months ended September 30, 2019 Nine months ended September 30, 2018 Net income 1 217 42 248 Income tax expense 4 1 28 30 Income before income tax 5 218 70 278 Finance costs – net 46 39 135 117 Share of loss / (income) of joint-ventures — 10 (5) 22 Income from operations 51 267 200 417 Depreciation and amortization 66 51 183 140 Restructuring costs 1 1 2 1 Unrealized losses / (gains) on derivatives 4 10 (13) 53 Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities – net — 1 — — Losses / (Gains) on pension plans amendments 1 (39) 1 (39) Share based compensation costs 5 3 12 9 Metal price lag 9 11 40 (13) Start-up and development costs 3 7 8 16 Losses / (gains) on disposals — (194) 2 (190) Bowling Green one-time costs related to the acquisition — — 6 — Other (1) — — — Adjusted EBITDA 139 118 441 394


Slide 20

Reconciliation of Net Income to Adjusted EBITDA  € millions Twelve months ended September 30, 2019 Twelve months ended June 30, 2019 Twelve months ended March 31, 2019 Twelve months ended December 31, 2018 Twelve months ended September 30, 2018 Net income / (loss) -16 200 238 190 168 Income tax expense 30 27 43 32 54 Income / (loss) before income tax 14 227 281 222 222 Finance costs – net 167 160 157 149 237 Share of loss of joint-ventures 6 16 25 33 30 Income from operations 187 403 463 404 489 Depreciation and amortization 239 224 210 197 187 Restructuring costs 2 2 1 1 2 Unrealized losses / (gains) on derivatives 18 24 (1) 84 36 Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities – net — 1 — — 1 (Gain) / loss on pension plan amendments 4 (36) (36) (36) (39) Share based compensation costs 15 13 12 12 11 Metal price lag 53 55 22 — (19) Start-up and development costs 13 17 19 21 19 Manufacturing system and process transformation costs — — — — 1 Losses / (Gains) on disposals 7 (187) (185) (186) (190) Bowling Green one-time costs related to the acquisition 6 6 6 — — Other 1 2 1 1 — Adjusted EBITDA 545 524 512 498 498


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Borrowings Table € millions September 30, 2019 December 31, 2018   Nominal Value in Currency Nominal Rate Effective Rate Nominal Value in Euros (Arrangement fees) Accrued Interests Carrying Value Carrying Value Secured Pan U.S. ABL   (due 2022) $121 Floating 4.36% 111 — — 111 —         Secured Inventory Based Facility (due 2021) — Floating — — — — — — Senior Unsecured Notes Constellium SE (Issued May 2014, due 2024) $400 5.75% 6.26% 367 (3) 8 372 348 Constellium SE (Issued May 2014, due 2021) €200 4.63% 5.16% 200 (1) 4 203 300 Constellium SE (Issued February 2017, due 2025) $650 6.63% 7.13% 597 (11) 3 589 568 Constellium SE (Issued November 2017, due 2026) $500 5.88% 6.26% 459 (6) 3 456 440 Constellium SE (Issued November 2017, due 2026) €400 4.25% 4.57% 400 (6) 2 396 399 Unsecured Revolving Credit Facility (due 2021) — Floating — — — — — — Lease liabilities  — — — 193 — — 193 73 Other loans  — — — 48 — 2 50 23 Total Borrowings       2,375 (27) 22 2,370 2,151 Of which non-current     2,203 2,094 Of which current 167 57