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 April 2020

Commission File Number: 001-35931

 

 

Constellium SE

(Translation of registrant’s name into English)

 

 

Washington Plaza

40-44, rue Washington

75008 Paris, France

(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

Q1 2020 Earnings Results

Attached hereto as Exhibit 99.1 is a copy of the press release of Constellium SE (the “Company”), dated April 29, 2019, announcing its financial results for the first quarter ended March 31, 2020.

Attached hereto as Exhibit 99.2 is a copy of a presentation of the Company, dated April 29, 2020, summarizing its financial results for the first quarter ended March 31, 2020.

Amendment No. 2 to Pan-US ABL

On April 24, 2020, Constellium Rolled Products Ravenswood, LLC, Constellium Muscle Shoals LLC, and Constellium Bowling Green LLC (the “Borrowers”) entered into an Amendment No. 2 (“Amendment No. 2”) to their existing asset-based revolving credit facility (the “Pan-US ABL Facility”, and now as amended by Amendment No. 2, the “Amended Pan-US ABL Facility”), with the lenders from time to time party thereto and Wells Fargo Bank, National Association as administrative agent (the “Administrative Agent”) and collateral agent. Amendment No. 2, establishes a new fully-committed delayed draw term loan facility (the “Delayed Draw Term Loans”) that allows the Borrowers to borrow an aggregate amount up to the lesser of $166.25 million and 50% of the net orderly liquidation value of eligible equipment, in up to three separate draws at any time until November 1, 2020 (the “Term Loan Commitment Expiration Date”). The proceeds of the Delayed Draw Term Loans will be used for general corporate purposes. The Delayed Draw Term Loans (if drawn) will mature no earlier than June 21, 2022.

Interest payable on any drawn Delayed Draw Term Loans will be calculated, at the applicable Borrower’s election, based on either the LIBOR or base rate (as calculated by the Administrative Agent in accordance with the Amended Pan-US ABL Facility), plus a margin equal to 4.00% per annum in the case of LIBOR loans and 3.00% in the case of base rate loans. The Delayed Draw Term Loans will be subject to quarterly amortization payments of principal (calculated on the basis of a seven year assumed life) commencing after the Term Loan Commitment Expiration Date. The Delayed Draw Term Loans will be subject to substantially the same covenants as the Pan-US ABL Facility.

Amendment No. 2 also modified the interest rate that applies to any revolving loans under the Amended Facility to, at the applicable Borrower’s election, LIBOR plus a margin of 1.75%-2.25% or base rate plus a margin of 0.75%-1.25% (determined based on (i) a net leverage ratio until the Term Loan Commitment Expiration Date and the prepayment of outstanding Delayed Draw Term Loans and (ii) average quarterly excess availability thereafter). Until the Term Loan Commitment Expiration Date, the applicable margins for LIBOR and base rate loans will be 2.25% and 1.25%, respectively.

Borrowings under the Delayed Draw Term Loans may be repaid from time to time without premium or penalty, subject to customary “breakage” costs with respect to LIBOR loans and certain excess availability conditions.

COVID-19 Supplemental Risk Factor

In response to the global novel coronavirus (COVID-19) pandemic, we are supplementing the risk factors included in our Annual Report on Form 20-F filed with the Securities & Exchange Commission on March 9, 2020, to include the following risk factor related to our business:

Widespread public health pandemics, including COVID-19, could materially adversely affect our business, financial condition and results of operations.

Any public health pandemics and other disease outbreaks in countries where we, our customers or our suppliers operate could have a material and adverse effect on our business, financial conditions and results of operations. The recent novel strain of COVID-19 has affected our operations globally. As a result of this pandemic and resulting disruption in our customers’ production and operations, our sales have been negatively affected, which has adversely impacted our revenues and operating margins. As our customers have reduced, temporarily suspended or delayed production, we have adjusted operating levels at the relevant manufacturing sites and have implemented temporary workforce reductions and other cost cutting measures. We cannot predict when these manufacturing sites will resume normal operations, any conditions that may be implemented to facilitate a return to normal operations, and the effects and costs associated with any such conditions. Our operating results and financial condition may also be materially adversely affected by laws, regulations, orders or other governmental or regulatory actions addressing the current COVID-19 pandemic that place restrictions on, or require us to make changes to, our operations.


With respect to our suppliers, disruptions resulting from the COVID-19 pandemic may result in cancelations or delays and increased transport times for delivery of materials to our facilities, which may affect our ability to timely manufacture and ship our products to customers. If such difficulties arise, we may need to seek alternate suppliers, which may be more expensive, may not be available or may result in delays in shipments to us and subsequently to our customers. Alternatively, suppliers may require we take metal in excess of our needs based on our reduced operating rates, which could negatively affect our financial position.

The nature and extent of COVID-19’s continuing impact on the global economy, our business, financial conditions and results of operations is beyond our control, and depends on various uncertain factors, including the duration and severity of the outbreak, the ability to develop a vaccine or other preventative measures, and the actions to contain or treat its impact, including quarantine orders, business restrictions and closures and other similar restrictions and limitations. The foregoing and other continued disruptions to our business as a result of the COVID-19 pandemic, as well as any global recession that may result from the impact of COVID-19, could materially adversely affect our business, financial condition and results of operations. As a result of the foregoing, we may need to raise additional capital in the future, however, there is no guarantee that financings will be available in the future to fund our obligations. Furthermore, the COVID-19 pandemic could heighten the risks summarized in certain of the other risk factors contained in our current Annual Report on Form 20-F.

Temporary Reductions in Director and Executive Compensation

Given the disruption and uncertainty created by the evolving COVID-19 pandemic and as part of a series of measures to help the Company weather the business challenges arising from this current global health crisis, the Company’s Board of Directors approved a voluntary temporary reduction of 30% to: the base salary of the Company’s Chief Executive Officer, Jean-Marc Germain, and the cash compensation of each of the Company’s non-executive directors. The Board also approved a voluntary temporary reduction of 15% to the base salary of the Company’s Chief Financial Officer, Peter Matt, and each of the other members of the Company’s executive committee. These reductions are effective from April 1 thru October 1, 2020.

Exhibit Index

 

No.

  

Description

99.1    Press Release issued by Constellium SE on April 29, 2020.
99.2    Presentation posted by Constellium SE on April 29, 2020.

The information contained in this Form 6-K and Exhibit 99.1 (except for the first and third paragraphs containing certain quotes by the Chief Executive Officer), 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)

April 29, 2020

    By:  

/s/ Peter R. Matt

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

Exhibit 99.1

 

LOGO

Constellium Reports First Quarter 2020 Results

Paris, April 29, 2020 – Constellium SE (NYSE: CSTM) today reported results for the first quarter ended March 31, 2020.

First quarter 2020 highlights:

 

   

Shipments of 393 thousand metric tons, down 5% compared to Q1 2019

 

   

Revenue of €1.4 billion, down 6% compared to Q1 2019

 

   

Net loss of €31 million compared to net income of €24 million in Q1 2019

 

   

Adjusted EBITDA of €147 million, up 9% compared to Q1 2019

 

   

Cash from Operations of €144 million and Free Cash Flow of €87 million

 

   

Net debt / LTM Adjusted EBITDA of 3.7x at March 31, 2020

 

   

Liquidity of €616 million at March 31, 2020

Jean-Marc Germain, Constellium’s Chief Executive Officer said, “The Covid-19 pandemic has introduced a new set of challenges for Constellium, but we remain confident in our ability to navigate through the crisis. Our first priority is the health and safety of our employees and their families. To this end, we have implemented a number of initiatives at our manufacturing sites to protect our employees. We also remain highly focused on meeting the demand of our customers in critical industries such as beverage, food, healthcare, national defense, and transportation.”

“I want to commend our team on an excellent first quarter performance and for continuing to deliver great service to our customers, in spite of the challenges. Our Adjusted EBITDA increased by 9% to a record €147 million, driven by strong performance at both P&ARP and A&T and much improved performance in AS&I. Our Free Cash Flow generation was very strong at €87 million. We were able to achieve this impressive performance despite headwinds from reduced economic activity late in the quarter,” said Mr. Germain.

Mr. Germain continued, “Constellium took swift actions in response to the COVID-19 pandemic. We are aggressively reducing costs, optimizing our working capital, further reducing our capital spending, and significantly augmenting our liquidity position. I am confident that we are well-positioned to weather this storm and emerge as a stronger company. Given the uncertainty around the extent and duration of the effects of the pandemic, we are withdrawing our guidance until our visibility improves.”

 

LOGO


LOGO

 

   

Prioritizing Health and Safety

Constellium’s first priority is the health and safety of our employees and their families. We have been implementing a number of initiatives at our manufacturing sites to promote the well-being of employees, their families and the local community, including actions taken in response to governmental requirements. Such actions include increased cleaning, sanitation, work space protection, and social distancing at our manufacturing and other facilities, business travel bans, strict policies for visitors and suppliers, and a work-from-home policy for employees, where possible.

 

   

Group Summary

 

     Q1
2020
     Q1
2019
     Var.  

Shipments (k metric tons)

     393        413        (5 )% 

Revenue (€ millions)

     1,437        1,536        (6 )% 

Net income / (loss) (€ millions)

     (31      24        n.m.  

Adjusted EBITDA (€ millions)

     147        135        9

Adjusted EBITDA per metric ton (€)

     375        329        14

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 first quarter of 2020, shipments of 393 thousand metric tons decreased 5% compared to the first quarter of last year due to lower shipments in all three segments. Revenue of €1.4 billion decreased 6% compared to the first quarter of last year primarily due to lower shipments and lower metal prices, partially offset by improved price and mix across all three segments. Net loss of €31 million compared to a net income of €24 million in the first quarter of 2019 primarily related to a non-cash unfavorable change in unrealized gains and losses on derivatives related to our commodity hedging positions. Adjusted EBITDA of €147 million increased 9% compared to the first quarter of last year due to improved results in the Packaging and Automotive Rolled Products and the Automotive Structures and Industry segments.

 

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Results by Segment

 

   

Packaging and Automotive Rolled Products (P&ARP)

 

     Q1
2020
     Q1
2019
     Var.  

Shipments (k metric tons)

     269        281        (4 )% 

Revenue (€ millions)

     752        828        (9 )% 

Adjusted EBITDA (€ millions)

     66        59        12

Adjusted EBITDA per metric ton (€)

     245        210        17

First quarter Adjusted EBITDA increased 12% compared to the first quarter of 2019 primarily due to good cost control and improved price and mix, partially offset by lower shipments from our European plants due to COVID-19 related weakness late in the quarter.

For the first quarter of 2020, shipments of 269 thousand metric tons decreased 4% compared to the first quarter of last year due to lower shipments across our automotive, packaging, and specialty products. Revenue of €752 million decreased 9% compared to the first quarter of 2019 primarily due to lower metal prices and lower shipments.

 

   

Aerospace and Transportation (A&T)

 

     Q1
2020
     Q1
2019
     Var.  

Shipments (k metric tons)

     59        66        (10 )% 

Revenue (€ millions)

     359        378        (5 )% 

Adjusted EBITDA (€ millions)

     52        52        0

Adjusted EBITDA per metric ton (€)

     887        797        11

First quarter Adjusted EBITDA was comparable to the first quarter of 2019 as improved price and mix were offset by lower shipments and higher raw material costs.

For the first quarter of 2020, shipments of 59 thousand metric tons decreased 10% compared to the first quarter of 2019 on lower Transportation, Industry and Other rolled product shipments due to continued demand weakness in Europe and North America. Revenue of €359 million decreased 5% compared to the first quarter of 2019 on lower shipments and lower metal prices, partially offset by improved price and mix.

 

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Automotive Structures and Industry (AS&I)

 

     Q1
2020
     Q1
2019
     Var.  

Shipments (k metric tons)

     65        66        (1 )% 

Revenue (€ millions)

     342        344        0

Adjusted EBITDA (€ millions)

     34        29        17

Adjusted EBITDA per metric ton (€)

     529        448        18

First quarter Adjusted EBITDA increased 17% compared to the first quarter of 2019 on improved price and mix and solid cost control.

For the first quarter of 2020, shipment of 65 thousand metric tons were slightly down compared to the first quarter of last year. Revenue of €342 million was comparable to the first quarter of 2019 as improved price and mix was offset by lower metal prices.

 

   

Net Income

For the first quarter of 2020, net loss of €31 million compared to net income of €24 million in the first quarter of last year. The change in net income is primarily related to an unfavorable change in unrealized gains and losses on derivatives related to our commodity hedging positions.

 

   

Cash Flow

Free Cash Flow was €87 million for the first quarter of 2020 compared to €73 million in the same period of the prior year. The change was primarily due to higher Adjusted EBITDA and solid trade working capital performance.

Cash flows from operating activities were €144 million for the first quarter of 2020 compared to cash flows from operating activities of €132 million in the same period of the prior year. Constellium increased factored receivables by €4 million for the first quarter compared to an increase of €24 million in the same period of the prior year.

Cash flows used in investing activities were €57 million for the first quarter of 2020 compared to cash flows used in investing activities of €142 million in the same period of the prior year. The first quarter of 2019 included a net €83 million outflow related to the acquisition of our partner’s 49% interest in the Bowling Green joint venture.

Cash flows used in financing activities were €1 million for the first quarter of 2020 compared to cash flows from financing activities of €66 million in the same period of the prior year. The first quarter of 2019 included a €54 million lease redemption associated with the acquisition of Bowling Green.

 

4


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Liquidity and Net Debt

Liquidity at March 31, 2020 was €616 million, comprised of €270 million of cash and cash equivalents and €346 million available under our committed lending facilities and factoring arrangements. On April 24, Constellium entered into a new $166 million Delayed Draw Term Loan with a syndicate of banks as part of a broader strategy to further enhance its liquidity.

Net debt was €2,130 million at March 31, 2020 compared to €2,183 million at December 31, 2019.

 

   

COVID-19 Operational Update

The outbreak of COVID-19 and measures to prevent its spread began to impact customer demand in Europe and in North America during March and continued into April. Automotive OEMs began curtailing their operations in mid-March and such operations remain largely curtailed in both North America and Europe. Aerospace OEMs have also announced reductions or curtailments to their operations. In contrast, demand from our packaging customers has remained strong.

As our customers reduced or delayed production, we adjusted operating levels at the relevant manufacturing sites. With the exception of our automotive specific plants, all of our plants continue to operate and produce for critical end-markets, such as beverage, food, healthcare, national defense, and transportation. Our plants have substantially adjusted to current levels of demand, and our employment levels have largely stabilized. In certain cases, plants have been gradually increasing production levels. Our automotive plants are preparing for restarts in May. While the situation remains fluid, we continue to monitor the impact of the pandemic and anticipate continued temporary reductions in operating levels at many of our manufacturing facilities. We expect our actions will facilitate prompt and efficient resumption of full production levels once market conditions allow.

Constellium has taken a number of actions to offset the financial impacts of the COVID-19 pandemic. This includes reducing input purchases, all discretionary spending, and labor costs; managing trade working capital; targeting capital spending of €175 million in 2020 (down €96 million compared to 2019); and building liquidity, including through the Delayed Draw Term Loan, potentially loans under government-sponsored borrowing programs in France, Germany and Switzerland, and other available governmental aid programs. Management remains confident in its ability to navigate through this global crisis.

 

   

Outlook

Given the continuously evolving nature of the COVID-19 pandemic, Constellium is unable to forecast with reasonable accuracy the implications of the crisis or the environment that will follow, including the level of demand across our end markets or the impact on our supply chains. Therefore, the Company believes it is prudent to withdraw all financial guidance until our visibility improves.

 

5


LOGO

 

   

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, while others are more specific to our business and operations. These risks and uncertainties include, but are not limited to: market competition; economic downturn; disruption to business operations, including the length and magnitude of disruption resulting from the global COVID-19 pandemic; the inability to meet customer demand and quality requirements; the loss of key customers, suppliers or other business relationships; the capacity and effectiveness of our hedging policy activities; the loss of key employees; levels of indebtedness which could limit our operating flexibility and opportunities; 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 €5.9 billion of revenue in 2019.

Constellium’s earnings materials for the first quarter ended March 31, 2020, 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
March 31, 2020
    Three months ended
March 31, 2019
 

Revenue

     1,437       1,536  

Cost of sales

     (1,284     (1,392
  

 

 

   

 

 

 

Gross profit

     153       144  
  

 

 

   

 

 

 

Selling and administrative expenses

     (66     (68

Research and development expenses

     (13     (12

Other gains / (losses) - net

     (68     16  
  

 

 

   

 

 

 

Income from operations

     6       80  
  

 

 

   

 

 

 

Finance costs - net

     (45     (46

Share of income / (loss) of joint-ventures

     —         5  
  

 

 

   

 

 

 

(Loss) / income before income tax

     (39     39  
  

 

 

   

 

 

 

Tax income / (expense)

     8       (15
  

 

 

   

 

 

 

Net (loss) / income

     (31     24  
  

 

 

   

 

 

 

(Loss) / income attributable to:

    

Equity holders of Constellium

     (31     23  

Non-controlling interests

     —         1  
  

 

 

   

 

 

 

Net (loss) / income

     (31     24  
  

 

 

   

 

 

 

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

    

Basic

     (0.22     0.17  

Diluted

     (0.22     0.17  

Weighted average shares, in thousands

    

Basic

     137,867       135,984  

Diluted

     137,867       138,912  

 

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

 

(in millions of Euros)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

Net (loss) / income

     (31     24  
  

 

 

   

 

 

 

Other comprehensive loss

    

Items that will not be reclassified subsequently to the Unaudited Interim Consolidated Income Statement

    

Remeasurement on post-employment benefit obligations

     (6     (28

Income tax on remeasurement on post-employment benefit obligations

     (1     7  

Items that may be reclassified subsequently to the Unaudited Interim Consolidated Income Statement

    

Cash flow hedges

     (5     (7

Net investment hedges

     —         (1

Income tax on hedges

     2       2  

Currency translation differences

     —         5  
  

 

 

   

 

 

 

Other comprehensive loss

     (10     (22
  

 

 

   

 

 

 

Total comprehensive (loss) / income

     (41     2  
  

 

 

   

 

 

 

Attributable to:

    

Equity holders of Constellium

     (41     1  

Non-controlling interests

     —         1  
  

 

 

   

 

 

 

Total comprehensive (loss) / income

     (41     2  
  

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 

(in millions of Euros)

   At March 31, 2020     At December 31, 2019  

Assets

    

Current assets

    

Cash and cash equivalents

     270       184  

Trade receivables and other

     545       474  

Inventories

     694       670  

Other financial assets

     36       22  
     1,545       1,350  
  

 

 

   

 

 

 

Non-current assets

    

Property, plant and equipment

     2,078       2,056  

Goodwill

     466       455  

Intangible assets

     70       70  

Investments accounted for under the equity method

     1       1  

Deferred income tax assets

     195       185  

Trade receivables and other

     61       60  

Other financial assets

     14       7  
  

 

 

   

 

 

 
     2,885       2,834  
  

 

 

   

 

 

 

Total Assets

     4,430       4,184  
  

 

 

   

 

 

 

Liabilities

    

Current liabilities

    

Trade payables and other

     1,166       999  

Borrowings

     196       201  

Other financial liabilities

     93       35  

Income tax payable

     14       14  

Provisions

     21       23  
     1,490       1,272  
  

 

 

   

 

 

 

Non-current liabilities

    

Trade payables and other

     22       21  

Borrowings

     2,203       2,160  

Other financial liabilities

     35       23  

Pension and other post-employment benefit obligations

     680       670  

Provisions

     101       99  

Deferred income tax liabilities

     22       24  
  

 

 

   

 

 

 
     3,063       2,997  
  

 

 

   

 

 

 

Total Liabilities

     4,553       4,269  
  

 

 

   

 

 

 

Equity

    

Share capital

     3       3  

Share premium

     420       420  

Retained deficit and other reserves

     (557     (519
  

 

 

   

 

 

 

Equity attributable to equity holders of Constellium

     (134     (96

Non controlling interests

     11       11  
  

 

 

   

 

 

 

Total Equity

     (123     (85
  

 

 

   

 

 

 

Total Equity and Liabilities

     4,430       4,184  
  

 

 

   

 

 

 

 

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

 

(in millions of

Euros)

   Share
capital
     Share
premium
     Re-
measurement
    Cash flow
hedges
    Foreign
currency
translation
reserve
     Other
reserves
     Retained
losses
    Total Equity
holders of
Constellium
    Non-
controlling
interests
     Total
equity
 

At January 1, 2020

     3        420        (177     (10     4        53        (389     (96     11        (85

Net loss

     —          —          —         —         —          —          (31     (31     —          (31

Other comprehensive loss

     —          —          (7     (3     —          —          —         (10     —          (10
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Total comprehensive loss

     —          —          (7     (3     —          —          (31     (41     —          (41
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Transactions with equity holders

                         

Share-based compensation

     —          —          —         —         —          3        —         3       —          3  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

At March 31, 2020

     3        420        (184     (13     4        56        (420     (134     11        (123
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

(in millions of

Euros)

   Share
capital
     Share
premium
     Re-
measurement
    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

     —          —          —         —         —          —          23       23       1        24  

Other comprehensive (loss) / income

     —          —          (21     (6     5        —          —         (22     —          (22
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Total comprehensive (loss) / income

     —          —          (21     (6     5        —          23       1       1        2  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Transactions with equity holders

                         

Share-based compensation

     —          —          —         —         —          3        —         3       —          3  

Transactions with non-controlling interests

     —          —          —         —         —          —          —         —         —          —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

At March 31,2019

     3        420        (150     (14     8        40        (425     (118     9        (109
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

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CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

 

(in millions of Euros)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

Net (loss) / income

     (31     24  

Adjustments

    

Depreciation and amortization

     66       57  

Finance costs - net

     45       46  

Tax (income) / expense

     (8     15  

Share of income of joint-ventures

     —         (5

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

     55       (32

Losses on disposal

     —         1  

Other - net

     3       2  

Interest paid

     (50     (52

Income tax paid

     (3     (6

Change in trade working capital

    

Inventories

     (17     33  

Trade receivables

     (50     (75

Trade payables

     158       113  

Margin calls

     (4     5  

Change in provisions and pension obligations

     (7     (11

Other working capital

     (13     17  
  

 

 

   

 

 

 

Net cash flows from operating activities

     144       132  
  

 

 

   

 

 

 

Purchases of property, plant and equipment

     (57     (59

Acquisition of subsidiaries net of cash acquired

     —         (83
  

 

 

   

 

 

 

Net cash flows used in investing activities

     (57     (142
  

 

 

   

 

 

 

Lease repayments

     (8     (63

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

     3       131  

Transactions with non-controlling interests

     —         (2

Other financing activities

     4       —    
  

 

 

   

 

 

 

Net cash flows (used in) / from financing activities

     (1     66  
  

 

 

   

 

 

 

Net increase / (decrease) in cash and cash equivalents

     86       56  

Cash and cash equivalents - beginning of year

     184       164  

Effect of exchange rate changes on cash and cash equivalents

     —         2  
  

 

 

   

 

 

 

Cash and cash equivalents - end of period

     270       222  
  

 

 

   

 

 

 

 

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SEGMENT ADJUSTED EBITDA

 

(in millions of Euros)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

P&ARP

     66       59  

A&T

     52       52  

AS&I

     34       29  

Holdings & Corporate

     (5     (5
  

 

 

   

 

 

 

Adjusted EBITDA

     147       135  
  

 

 

   

 

 

 

SHIPMENTS AND REVENUE BY PRODUCT LINE

 

(in k metric tons)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

Packaging rolled products

     203       207  

Automotive rolled products

     57       61  

Specialty and other thin-rolled products

     9       13  

Aerospace rolled products

     30       30  

Transportation, industry and other rolled products

     29       36  

Automotive extruded products

     31       30  

Other extruded products

     34       36  
  

 

 

   

 

 

 

Total shipments

     393       413  
  

 

 

   

 

 

 

(in millions of Euros)

            

Packaging rolled products

     524       548  

Automotive rolled products

     193       230  

Specialty and other thin-rolled products

     35       50  

Aerospace rolled products

     223       205  

Transportation, industry and other rolled products

     136       173  

Automotive extruded products

     199       188  

Other extruded products

     143       155  

Other and inter-segment eliminations

     (16     (13
  

 

 

   

 

 

 

Total revenue

     1,437       1,536  
  

 

 

   

 

 

 

 

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NON-GAAP MEASURES

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

 

(in millions of Euros)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

Net (loss) / income

     (31     24  

Tax (income) / expense

     (8     15  
  

 

 

   

 

 

 

(Loss) / income before income tax

     (39     39  

Finance costs - net

     45       46  

Share of (income) / loss of joint-ventures

     —         (5
  

 

 

   

 

 

 

Income from operations

     6       80  

Depreciation and amortization

     66       57  

Unrealized losses / (gains) on derivatives

     53       (31

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

     2       (1

Share based compensation costs

     3       3  

Metal price lag (A)

     15       18  

Start-up and development costs (B)

     2       2  

Losses / (gains) on disposals

     —         1  

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

     —         6  

Other

     —         —    
  

 

 

   

 

 

 

Adjusted EBITDA

     147       135  
  

 

 

   

 

 

 

 

(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 year.

(B)

For three months ended March 31, 2020 and 2019, start-up and development costs included €2 million related to new projects in our AS&I operating segment.

(C)

For the three months ended March 31, 2019, Bowling Green one-time costs related to the acquisition included the non-cash reversal of the inventory step-up.

 

13


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

 

(in millions of Euros)

   Three months ended
March 31, 2020
    Three months ended
March 31, 2019
 

Net cash flows from operating activities

     144       132  

Purchases of property, plant and equipment

     (57     (59

Other investing activities

     —         —    
  

 

 

   

 

 

 

Free Cash Flow

     87       73  
  

 

 

   

 

 

 

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

 

(in millions of Euros)

   At March 31, 2020     At December 31, 2019  

Borrowings

     2,399       2,361  

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

     1       6  

Cash and cash equivalents

     (270     (184

Cash pledged for issuance of guarantees

     —         —    
  

 

 

   

 

 

 

Net debt

     2,130       2,183  
  

 

 

   

 

 

 

 

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

 

15


LOGO

 

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.

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

First Quarter 2020 Earnings Call April 29, 2020 Exhibit 99.2


Slide 2

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, while others are more specific to our business and operations. These risks and uncertainties include, but are not limited to: market competition; economic downturn; disruption to business operations, including the length and magnitude of disruption resulting from the global COVID-19 pandemic; the inability to meet customer demand and quality requirements; the loss of key customers, suppliers or other business relationships; the capacity and effectiveness of our hedging policy activities; the loss of key employees; levels of indebtedness which could limit our operating flexibility and opportunities; 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.


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

} Health and safety of our employees is our first priority } Increased cleaning, sanitation, and social distancing at our manufacturing and other facilities } Strict visitor policies } Business travel bans } Work-from-home policy for employees, where possible } Focused on meeting the demand of our customers in critical industries such as beverage, food, healthcare, national defense, and transportation } Strong financial position with ample liquidity COVID-19 Update


Slide 6

} Temporary reduction of executive management salaries and the annual cash retainer payable to Board members } Aggressively reducing spending, including flexing variable costs to better match production levels } Implementation of a reduction in the workforce, including the use of partial time unemployment schemes, temporary layoffs, and furloughs to reduce labor costs } Plants and corporate spending committee approval processes } Further reducing capex to ~€175 million in 2020 (down €96 million from 2019) } Utilizing governmental aid programs where available } Optimizing working capital } Further enhancing liquidity position } $166 million Delayed Draw Term Loan and pursuing loans through European government-sponsored borrowing programs Actions taken to limit financial impact of COVID-19 Confident in ability to navigate through the crisis


Slide 7

} Total Shipments of 393 thousand tons, down 5% compared to Q1 2019 } Revenue decreased 6% YoY to €1.4 billion } Net loss of €31 million compared to net income of €24 million in Q1 2019 } Adjusted EBITDA of €147 million increased 9% YoY } Cash from Operations of €144 million in Q1 2020 } Free Cash Flow of €87 million in Q1 2020 } Net Debt / LTM Adjusted EBITDA of 3.7x at March 31, 2020 } Liquidity of €616 million at March 31, 2020 Strong first quarter performance Q1 2020 Highlights


Slide 8

Peter Matt Chief Financial Officer


Slide 9

Adjusted EBITDA Bridge Q1 2020 vs. Q1 2019 € millions 9%


Slide 10

Q12020 Q12019 Var. Shipments (kt) 269 281 (4 )% Revenues (€m) 752 828 (9 )% Adj. EBITDA (€m) 66 59 12 % Adj. EBITDA (€ / t) 245 210 17 % } Adjusted EBITDA of €66 million } Lower shipments on reduced demand in Europe primarily due to COVID-19 } Stronger price and mix } Solid cost control Q1 2020 Highlights Packaging and Automotive Rolled Products Adjusted EBITDA Bridge € in millions


Slide 11

Q1 2020 Q1 2019 Var. Shipments (kt) 59 66 (10 )% Revenues (€m) 359 378 (5 )% Adj. EBITDA (€m) 52 52 0 % Adj. EBITDA (€ / t) 887 797 11 % } Adjusted EBITDA of €52 million } Lower shipments on continued weak TID demand } Improved price and mix in aerospace } Higher raw material costs Aerospace and Transportation Adjusted EBITDA Bridge € in millions Q1 2020 Highlights


Slide 12

Q12020 Q12019 Var. Shipments (kt) 65 66 (1 )% Revenues (€m) 342 344 0 % Adj. EBITDA (€m) 34 29 17 % Adj. EBITDA (€ / t) 529 448 18 % } Adjusted EBITDA of €34 million } Higher Automotive shipments offset by lower Industry shipments } Improved price and mix } Solid cost control despite COVID-19 cost headwinds Automotive Structures and Industry Adjusted EBITDA Bridge € in millions Q1 2020 Highlights


Slide 13

Ø Committed to deleveraging Ø Leverage at 3.7x in Q1 2020 Ø Strong FCF generation of €87 million in Q1 2020 Ø Liquidity of €616 million at March 31, 2020 Ø Closed $166 million Delayed Draw Term loan in April Net Debt and Liquidity € in millions Net Debt and Leverage Maturity Profile Liquidity Reduced leverage with significant liquidity € in millions € in millions Leverage: Net Debt / LTM Adjusted EBITDA Debt / Liquidity Highlights


Slide 14

Jean-Marc GermainChief Executive Officer


Slide 15

End Market Updates Diversified portfolio of end market exposures Market Highlights % LTMRevenue Packaging } Market strong in North America and in Europe } Recession resilient } Focus on sustainability driving increased demand for aluminium cans } Conversion from steel to aluminium continues in Europe } Conversions to ABS to help North American market over the medium to long term 37% Automotive } OEMs curtailed production in March; most expected to resume in May } Near term demand uncertain and dependent upon speed and trajectory of recovery } Lightweighting expected to continue driving increased demand for rolled and extruded aluminum products } Consumer preference for luxury cars, light trucks, and SUVs 27% Aerospace } Near-term outlook uncertain due to COVID-19 effect and 737-Max } OEMs announced temporary shutdowns in March / April } Backlogs declining but remain well above historical levels } Expect passenger traffic to recover over the medium to long-term (based on past precedent) 15% Other Specialties Transportation, Industry and Defense: } North America: Strong defense market; weak transportation and industry markets } Europe: Strong defense market; weak industry market Industry (Extrusions) } Europe: Strong rail market; weak industry and transportation markets 21%


Slide 16

Q&A


Slide 17

Appendix


Slide 18

 € millions March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 Borrowings 2,399 2,361 2,370 2,378 2,421 Fair value of cross currency basis swaps, net of margin calls 1 6 (5 ) 8 2 Cash and cash equivalents (270 ) (184 ) (152 ) (213 ) (222 ) Cash pledged for issuance of guarantees — — — — — Net Debt 2,130 2,183 2,213 2,173 2,201 LTM Adjusted EBITDA 574 562 545 524 512 Leverage 3.7x 3.9x 4.1x 4.1x 4.3x Net Debt Reconciliation


Slide 19

Reconciliation of Net Income to Adjusted EBITDA  € millions Three months endedMarch 31, 2020 Three months endedMarch 31, 2019 Net (loss) / income (31 ) 24 Tax (income) / expense (8 ) 15 (Loss) / income before income tax (39 ) 39 Finance costs - net 45 46 Share of (income) / loss of joint-ventures — (5 ) Income from operations 6 80 Depreciation and amortization 66 57 Unrealized losses / (gains) on derivatives 53 (31 ) Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities – net 2 (1 ) (Gains) / Losses on pension plans amendments — — Share based compensation costs 3 3 Metal price lag 15 18 Start-up and development costs 2 2 Losses / (gains) on disposals — 1 Bowling Green one-time costs related to the acquisition — 6 Other — — Adjusted EBITDA 147 135


Slide 20

Reconciliation of Net Income to Adjusted EBITDA  € millions Twelve months ended March 31, 2020 Twelve months ended December 31, 2019 Twelve months ended September 30, 2019 Twelve months ended June 30, 2019 Twelve months ended March 31, 2019 Net income / (loss) 8 64 (16 ) 200 238 Income tax expense (4 ) 18 30 27 43 Income before income tax 4 82 14 227 281 Finance costs – net 174 175 167 160 157 Share of loss / (income) of joint-ventures 3 (2 ) 6 16 25 Income from operations 181 255 187 403 463 Depreciation and amortization 265 256 239 224 210 Restructuring costs 4 4 2 2 1 Unrealized losses / (gains) on derivatives 51 (33 ) 18 24 (1 ) Unrealized exchange losses / (gains) from remeasurement of monetary assets and liabilities – net 3 — — 1 — (Gain) / loss on pension plan amendments (1 ) (1 ) 4 (36 ) (36 ) Share based compensation costs 16 16 15 13 12 Metal price lag 43 46 53 55 22 Start-up and development costs 11 11 13 17 19 Losses / (Gains) on disposals 2 3 7 (187 ) (185 ) Bowling Green one-time costs related to the acquisition (1 ) 5 6 6 6 Other — — 1 2 1 Adjusted EBITDA 574 562 545 524 512


Slide 21

Borrowings Table At March 31, 2020 At December 31, 2019 € millions Nominal Value in Currency NominalRate Effective Rate Nominal Value in Euros (Arrangement fees) Accrued Interests CarryingValue CarryingValue Secured Pan US ABL (due 2022) $145 Floating 3.39 % 133 — — 133 127 Secured Inventory Based Facility (due 2021) — Floating — % — — — — — Senior Unsecured Notes Constellium SE(Issued May 2014, due 2024) $400 5.75 % 6.26 % 365 (3 ) 8 370 355 Constellium SE(Issued May 2014, due 2021) €200 4.63 % 5.16 % 200 (1 ) 4 203 200 Constellium SE(Issued February 2017, due 2025) $650 6.63 % 7.13 % 593 (10 ) 3 586 582 Constellium SE(Issued November 2017, due 2026) $500 5.88 % 6.26 % 457 (6 ) 3 454 449 Constellium SE(Issued November 2017, due 2026) €400 4.25 % 4.57 % 400 (5 ) 2 397 400 Unsecured Revolving Credit Facility (due 2021) — Floating — % — — — — — Lease liabilities — — — 191 — 1 192 188 Other loans — — — 63 — 1 64 60 Total Borrowings 2,402 (25 ) 22 2,399 2,361 Of which non-current 2,203 2,160 Of which current 196 201


Slide 22

Liquidity  € millions Three months endedMarch 31, 2020 Cash and cash equivalents 270 Factoring Facilities 41 Inventory Based Facility 82 Pan-U.S. ABL 212 Other 11 Total Liquidity 616