Aperam : Full year and fourth quarter 2012 results[1]
Aperam : Full year and fourth quarter 2012 results[1]
Luxembourg, February 4, 2013
Aperam (referred to as "Aperam" or the "Company") (Amsterdam, Luxembourg,
Paris: APAM and NYRS: APEMY), today announced results for the three month and
twelve month periods ending December 31, 2012
Highlights
* Health and Safety frequency rate^[2] of 1.3x in 2012 compared to 0.7x in
2011
* Shipments of 1,683 thousand tonnes in full year 2012, a 4% decrease
compared to full year 2011
* EBITDA^[3] of USD 214 million in full year 2012, compared to USD 356
million in full year 2011
* Basic loss per share of USD 1.39 in 2012
* Cash inflow from operations amounted to USD 278 million in 2012
* Net debt of USD 816 million at December 31, 2012, representing a gearing
of 26%, compared to a net debt of USD 878 million at December 31, 2011
Prospects
* EBITDA in Q1 2013 is expected to improve compared to Q4 2012. Due to
higher activity, net debt is expected to increase in Q1 2013 compared to
Q4 2012
Plan 2013-2014
* Expansion of Leadership Journey® to 2014. USD 150 million targeted over
next 2 years
* Dividend stopped to accelerate net debt reduction. Target of net debt of
USD 650 million by the end of 2014
Philippe Darmayan, CEO of Aperam, commented:
"In a difficult environment Aperam has been able in 2012 to successfully
progress with its Leadership Journey^® and reduce its net debt.
Looking ahead ,we continue to remain cautious considering the current general
environment and industry volatility despite some positive signs of market
improvement.
We have decided to expand our Leadership Journey^® and accelerate our net debt
reduction to be in a good position to capture industry opportunities."
Financial Highlights (on the basis of IFRS)
(USDm) unless otherwise stated 12M '12 12M '11 Q4 '12 Q3 '12 Q4 '11
Sales 5,261 6,345 1,294 1,207 1,436
EBITDA 214 356 43 42 53
Operating (loss) income (106) 45 (45) (29) (29)
Net loss (108) (60) (52) (17) (46)
Steel shipments (000t) 1,683 1,749 407 410 429
EBITDA/tonne (USD) 127 204 106 102 124
Basic loss per share (USD) 1.39 0.76 0.68 0.21 0.57
Health & Safety results analysis
Health and Safety performance, based on Aperam personnel figures and
contractors lost time injury frequency rate2, was 1.9x in the fourth quarter
of 2012 compared to 1.3x in the third quarter of 2012.
Financial results analysis
Sales in the fourth quarter of 2012 increased by 7% to USD 1,294 million
compared to USD 1,207 million in the third quarter of 2012. Shipments in the
fourth quarter of 2012 were flat at 407 thousand tonnes compared to 410
thousand tonnes in the third quarter of 2012.
EBITDA was USD 43 million in the fourth quarter of 2012 compared to EBITDA of
USD 42 million in the third quarter of 2012. Despite difficult market
conditions, EBITDA was flat quarter versus quarter primarily as a result of
the continuing progress of the Leadership Journey^®^[4]. The Leadership
Journey^® has contributed USD 276 million to EBITDA since the beginning of
2011.
Depreciation and impairment expense in the fourth quarter of 2012 was USD 88
million, including USD 14 million of impairment relating to damaged assets in
Gueugnon.
Aperam had an operating loss in the fourth quarter of USD 45 million compared
to an operating loss of USD 29 million in the previous quarter.
Net interest expense and other financing costs in the fourth quarter of 2012
were USD 19 million, including financing costs of USD 19 million. Unrealized
foreign exchange and derivative losses were USD 4 million in the fourth
quarter of 2012.
The Company recorded a net loss of USD 52 million, inclusive of an income tax
benefit of USD 15 million, in the fourth quarter of 2012.
Cash flows from operations in the fourth quarter were a positive USD 221
million, with a working capital decrease of USD 213 million. CAPEX in the
fourth quarter was USD 37 million.
As of December 31, 2012, shareholder's equity was USD 3,190 million and net
financial debt was USD 816 million (gross financial debt as of December 31,
2012 was USD 1,042 million and cash & cash equivalents were USD 226 million).
The Company had liquidity of USD 701 million as of December 31, 2012,
consisting of cash and cash equivalents (including short-term investments) of
USD 226 million and undrawn credit lines^[5] of USD 475 million.
Operating segment results analysis
Stainless & Electrical Steel
The Stainless & Electrical Steel segment had sales of USD 1,020 million in the
fourth quarter of 2012. This represents an increase of 10% compared to sales
of USD 930 million in the third quarter of 2012. Shipments during the fourth
quarter were 400 thousand tonnes, including 249 thousand tonnes in Europe and
151 thousand tonnes in South America. This is an increase of 8% compared to
shipments in the previous quarter of 370 thousand tonnes (219 thousand tonnes
in Europe and 151 thousand tonnes in South America). Volume increased of 14%
in Europe whereas volumes were flat in South America due to seasonal slowdown.
Overall, average steel selling prices for the Stainless & Electrical Steel
segment were slightly lower for the quarter.
The segment had EBITDA of USD 35 million in the fourth quarter of 2012
compared to USD 14 million in the third quarter of 2012. EBITDA from South
America decreased from USD 26 million in the third quarter of 2012 to USD 24
million in the fourth quarter of 2012. The decrease in EBITDA in South America
was primarily due to the seasonality impact but was partially offset by some
positive mix improvement. EBITDA from Europe increased from negative USD 12
million in the third quarter of 2012 to positive USD 11 million in the fourth
quarter of 2012. The improvement in EBITDA in Europe was primarily driven by a
reduced seasonality, the impact from some positive price movements and the
continuing progress of the Leadership Journey®.
The Stainless & Electrical Steel segment had an operating loss of USD 42
million during the fourth quarter of 2012 compared to an operating loss of USD
43 million in the third quarter of 2012. Depreciation and amortization expense
was USD 77 million in the fourth quarter of 2012, including USD 14 million of
impairment relating to damaged assets in Gueugnon.
Services & Solutions
The Services & Solutions segment had a 4% decrease in sales during the period,
from USD 526 million in the third quarter of 2012 to USD 504 million in the
fourth quarter of 2012. In the fourth quarter of 2012, shipments were 158
thousand tonnes compared to 165 thousand tonnes in the previous quarter. The
Services & Solutions segment had slightly higher average selling prices for
the period.
The segment had negative EBITDA in the fourth quarter of 2012 of USD 4 million
compared to positive EBITDA of USD 9 million in the third quarter of 2012. The
decrease in EBITDA was primarily driven by losses in the precision business
units and some underperforming service centres. In the third quarter, there
was a USD 8 million capital gain resulting from the disposal of assets related
to the key Leadership Journey^® project of Campinas.
Depreciation and amortization expense in the fourth quarter of 2012 was USD 7
million.
The Services & Solutions segment had an operating loss of USD 11 million in
the fourth quarter of 2012 compared to an operating income of USD 2 million in
the third quarter of 2012.
Alloys & Specialties
The Alloys & Specialties segment had sales in the fourth quarter of 2012 of
USD 170 million, representing an increase of 22% compared to USD 139 million
in the third quarter of 2012. Shipments were higher in the fourth quarter of
2012 at 9 thousand tonnes compared to 8 thousand tonnes in the third quarter
of 2012, while average selling prices also increased quarter over quarter.
The Alloys & Specialties segment achieved EBITDA of USD 13 million in the
fourth quarter of 2012 compared to USD 16 million in the third quarter of
2012. Despite higher volumes, EBITDA was down in the fourth quarter compared
to the third quarter primarily as a result of the mix deterioration.
Depreciation and amortization expense in the quarter was USD 2 million.
The Alloys & Specialties segment had operating income of USD 11 million in the
fourth quarter of 2012 compared to operating income of USD 15 million in the
third quarter of 2012.
Recent developments
* On November 8, 2012, Moody's downgraded the corporate family rating for
Aperam S.A. to B1 from Ba3. Moody's maintained the company's negative
outlook.
* On November 30, 2012, S&P lowered the long term corporate credit rating on
Aperam to 'B+' from 'BB-'. S&P maintained its negative outlook on Aperam.
* On December 19, 2012, Aperam announced its financial calendar for the year
2013.
* On December 23, 2012, an accidental fire damaged the RD79 pickling and
annealing line at the Gueugnon plant in France. Aperam is mitigating the
resulting production fallout by stepping up production at its other active
pickling and annealing lines and has in addition decided to temporarily
relaunch two production lines at its plants in Genk, Belgium
(BUL1) and Isbergues, France (Inox3) which were kept as capacity reserve.
With these measures, Aperam will be able to supply its customers while the
RD79 line is being rebuilt. The RD79 line is expected to be restarted
before the second half of the year 2013.
New developments
* On February 4, 2013, Aperam announces that the Board of Directors will
submit to a shareholder's vote, at the next annual general meeting, a
proposal to stop the dividend payment to accelerate the net debt reduction
target of USD 650 million by the end of 2014. Capex is also expected to be
reduced in full year 2013 compared to full year 2012 and concentrated on
security, environment and cost reduction.
* On February 4, 2013, Aperam announces that in response to the current
economic uncertainty and in a continuing effort to improve its cost
competitiveness and profitability, the Company targets an expansion of the
Leadership Journey® to 2014 with USD 150 million targeted over the next 2
years. This expansion of the Leadership Journey® in combination with the
achievements realized under the previous Leadership Journey® target of USD
350 million by 2013 leads to a new combined target of USD 425 million by
2014.
* On February 4, 2013, Aperam announces that it obtained an in-principle
refinancing commitment to extend a portion of 600 million USD of its
current Secured Borrowing Base Revolving Credit Facility from March 2014
until March 2015.
Investor conference call
Aperam management will host a conference call for members of the investment
community to discuss the full year and fourth quarter 2012 financial
performance at the following time:
Date New York London Luxembourg
Monday, February 4, 2013 12:30 pm 5:30 pm 6:30 pm
The dial-in numbers for the call are: France (+33(0)1 70 48 01 66 and toll
free 0805 631 579); USA (+1212 444 0896 and toll free 1 877 249 9037); and
international (+44(0)20 7784 1036). The participant access code is: 7144327#.
A replay of the conference call will be available until February 11, 2013:
France (+33 (0) 1 74 20 28 00); USA (+1 347 366 9565) and international (+44
(0) 20 3427 0598). The participant access code is 7144327#.
Contacts
Corporate Communications / Jean Lasar: +352 27 36 27 27
Investor Relations / Laurent Beauloye: +352 27 36 27 36
About Aperam
Aperam is a global player in stainless, electrical and specialty steel, with
operations in more than 30 countries. The business is organized in three
divisions: Stainless & Electrical Steel, Services & Solutions and Alloys &
Specialties.
Aperam has 2.5 million tonnes of flat stainless steel capacity in Brazil and
Europe and is a leader in high value added niches - alloys and specialties.
Aperam has a highly integrated distribution, processing and services network
and a unique capability to produce stainless and specialty from low cost
biomass (charcoal). Its industrial network is concentrated in six main plants
located in Brazil, Belgium and France. Aperam has about 9,800 employees.
Aperam commits to operate in a responsible way with respect to health, safety
and the well-being of its employees, contractors and the communities in which
it operates. It is also committed to the sustainable management of the
environment and of finite resources. In 2012, Aperam had revenues of USD 5.3
billion and shipments of 1.68 million tonnes.
For further information, please refer to our website at www.aperam.com
Forward-looking statements
This document may contain forward-looking information and statements about
Aperam and its subsidiaries. These statements include financial projections
and estimates and their underlying assumptions, statements regarding plans,
objectives and expectations with respect to future operations, products and
services, and statements regarding future performance. Forward-looking
statements may be identified by the words "believe," "expect," "anticipate,"
"target" or similar expressions. Although Aperam's management believes that
the expectations reflected in such forward-looking statements are reasonable,
investors and holders of Aperam's securities are cautioned that
forward-looking information and statements are subject to numerous risks and
uncertainties, many of which are difficult to predict and generally beyond the
control of Aperam, that could cause actual results and developments to differ
materially and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and uncertainties
include those discussed or identified in Aperam's filings with the Luxembourg
Stock Market Authority for the Financial Markets (Commission de Surveillance
du Secteur Financier). For more information about these risks and
uncertainties, the reader is encouraged to refer to page 5 of Aperam's interim
financial report for the half year ended June 30, 2012 filed on July 31, 2012.
Aperam undertakes no obligation to publicly update its forward-looking
statements or information, whether as a result of new information, future
events, or otherwise.
APERAM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in million of U.S. December 31, September 30, December 31,
dollars) 2012 2012 2011
Non current assets 3,992 3,954 4,156
Intangible assets 859 854 904
Property, plant and
equipments 2,609 2,621 2,804
Investments & Other 524 479 448
Current assets & working
capital 967 1,205 1,199
Inventories, trade
receivables & trade
payables 607 831 807
Other assets 134 146 145
Cash & cash equivalents 226 228 247
Shareholders' equity 3,190 3,218 3,443
Group share 3,186 3,214 3,437
Non-controlling interests 4 4 6
Non current liabilities 1,001 954 1,020
Interest bearing
liabilities 607 559 587
Deferred employee benefits 169 171 174
Provisions and other 225 224 259
Current liabilities
(excluding trade payables) 768 987 892
Interest bearing
liabilities 435 656 538
Other 333 331 354
APERAM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in million of U.S. Three Months Ended Year Ended
dollars) December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
Sales 1,294 1,207 1,436 5,261 6,345
EBITDA 43 42 53 214 356
Depreciation &
impairment 88 71 82 320 311
Operating (loss) /
income (45) (29) (29) (106) 45
Income from other
investments 1 - 1 2 2
Net interest expense
and other net
financing costs (19) (12) (27) (64) (124)
Unrealized foreign
exchange and
derivative gains /
(losses) (4) 8 2 (4) (30)
Loss before taxes
and non-controlling
interests (67) (33) (53) (172) (107)
Income tax benefit 15 16 8 64 48
Loss before
non-controlling
interests (52) (17) (45) (108) (59)
Non-controlling
interests - - 1 - 1
Net loss (52) (17) (46) (108) (60)
APERAM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in million of U.S. Three Months Ended Year Ended
dollars) December September December December December
31, 2012 30, 2012 31, 2011 31, 2012 31, 2011
Net loss (52) (17) (46) (108) (60)
Non-controlling
interests - - 1 - 1
Depreciation and
impairment 88 71 82 320 311
Change in working
capital 213 (96) 253 156 34
Other (28) (8) (63) (90) (97)
Net cash provided by
(used in) operating
activities 221 (50) 227 278 189
Purchase of
property, plant and
equipment (CAPEX) (37) (41) (51) (161) (158)
Loans under cash
pooling arrangements - - - - 647
Other investing
activities (net) - 7 2 3 9
Net Cash (used in)
provided by
investing activities (37) (34) (49) (158) 498
(Payments) proceeds
from payable to
banks and long term
debt (176) 92 (212) (83) 55
Repayments under
cash pooling
arrangements - - - - (540)
Dividends paid (15) (17) (17) (61) (61)
Other financing
activities (net) - 1 (2) (2) (6)
Net cash (used in)
provided by
financing activities (191) 76 (231) (146) (552)
Net (decrease)
increase in cash and
cash equivalents (7) (8) (53) (26) 135
Effect of exchange
rate changes on cash 5 1 (2) 5 (8)
Change in cash and
cash equivalent (2) (7) (55) (21) 127
Appendix 1a - Health & Safety statistics
Health & Safety Three Months Ended Year Ended
Statistics December 31, September 30, December December December
2012 2012 31, 2011 31, 2012 31, 2011
Frequency Rate 1.9 1.3 0.3 1.3 0.7
Lost time injury frequency rate equals lost time injuries per 1,000,000 worked
hours, based on own personnel and contractors
Appendix 1b - Key operational and financial information
Year Ended Stainless & Services & Alloys & Others &
December 31, 2012 Electrical Solutions Specialties Eliminations Total
Steel^1,2
Operational
information
Steel Shipment
(000t) 1,611 661 36 (625) 1,683
Steel selling price
(USD/t) 2,489 3,148 17,405 2,991
Financial
information
Sales (USDm) 4,180 2,173 659 (1,751) 5,261
EBITDA (USDm) 118 21 56 19 214
Depreciation &
Impairment (USDm) 268 29 6 17 320
Operating (loss) /
income (USDm) (150) (8) 50 2 (106)
Note 1: Stainless & Electrical Steel Shipments of 1,611kt of which 617kt were
from South America and 994kt were from Europe
Note 2: Stainless & Electrical Steel EBITDA of USD 118m of which USD 103m were
from South America and USD 15m were from Europe
Year Ended Stainless & Services & Alloys & Others &
December 31, 2011 Electrical Solutions Specialties Eliminations Total
Steel^1,2
Operational
information
Steel Shipment
(000t) 1,675 662 37 (625) 1,749
Steel selling price
(USD/t) 2,903 3,764 18,805 3,475
Financial
information
Sales (USDm) 5,068 2,603 721 (2,047) 6,345
EBITDA (USDm) 221 15 70 50 356
Depreciation &
Impairment (USDm) 260 33 6 12 311
Operating (loss) /
income (USDm) (39) (18) 64 38 45
Note 1: Stainless & Electrical Steel Shipments of 1,675kt of which 647kt were
from South America and 1,028kt were from Europe
Note 2: Stainless & Electrical Steel EBITDA of USD 221m of which USD 118m were
from South America and USD 103m were from Europe
Quarter Ended Stainless & Services & Alloys & Others &
December 31, 2012 Electrical Solutions Specialties Eliminations Total
Steel^1,2
Operational
information
Steel Shipment
(000t) 400 158 9 (160) 407
Steel selling price
(USD/t) 2,417 3,066 18,436 3,009
Financial
information
Sales (USDm) 1,020 504 170 (400) 1,294
EBITDA (USDm) 35 (4) 13 (1) 43
Depreciation &
Impairment (USDm) 77 7 2 2 88
Operating (loss) /
income (USDm) (42) (11) 11 (3) (45)
Note 1: Stainless & Electrical Steel Shipments of 400kt of which 151kt were
from South America and 249kt were from Europe
Note 2: Stainless & Electrical Steel EBITDA of USD 35m of which USD 24m were
from South America and USD 11m were from Europe
Quarter Ended Stainless & Services & Alloys & Others &
September 30, 2012 Electrical Solutions Specialties Eliminations Total
Steel^1,2
Operational
information
Steel Shipment
(000t) 370 165 8 (133) 410
Steel selling price
(USD/t) 2,423 3,060 16,962 2,830
Financial
information
Sales (USDm) 930 526 139 (388) 1,207
EBITDA (USDm) 14 9 16 3 42
Depreciation &
Impairment (USDm) 57 7 1 6 71
Operating (loss) /
income (USDm) (43) 2 15 (3) (29)
Note 1: Stainless & Electrical Steel shipments of 370kt of which 151kt were
from South America and 219kt were from Europe
Note 2: Stainless & Electrical Steel EBITDA of USD 14m of which USD 26m were
from South America and USD (12)m were from Europe
[1] The financial information in this press release and Appendix 1 has been
prepared in accordance with the measurement and recognition criteria of
International Financial Reporting Standards ("IFRS") as adopted in the
European Union. While the interim financial information included in this
announcement has been prepared in accordance with IFRS applicable to interim
periods, this announcement does not contain sufficient information to
constitute an interim financial report as defined in International Accounting
Standard 34, "Interim Financial Reporting". Unless otherwise noted the numbers
and information in the press release have not been audited. The financial
information and certain other information presented in a number of tables in
this press release have been rounded to the nearest whole number or the
nearest decimal. Therefore, the sum of the numbers in a column may not conform
exactly to the total figure given for that column. In addition, certain
percentages presented in the tables in this press release reflect calculations
based upon the underlying information prior to rounding and, accordingly, may
not conform exactly to the percentages that would be derived if the relevant
calculations were based upon the rounded numbers.
[2] Lost time injury frequency rate equals lost time injuries per 1,000,000
worked hours, based on own personnel and contractors.
[3] EBITDA is defined as operating income plus depreciation and impairment
expenses.
[4] The Leadership Journey^® is an initiative launched on December 16, 2010,
and subsequently accelerated and increased, to target management gains and
profit enhancement of USD 350 million by 2013. On February 4, 2013, Aperam
announced an expansion of the Leadership Journey® to 2014 with USD 150 million
targeted over the next 2 years.
[5] Subject to eligible collateral available
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Source: Aperam via Thomson Reuters ONE
HUG#1675333
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