Good morning or good afternoon, all. Welcome to the Constellium First Quarter 2025 Results Call. My name is Adam, and I'll be your operator today. [Operator Instructions] I will now hand over to Jason Hershiser, Director of Investor Relations, to begin. So, Jason, please go ahead.

Thank you, Adam. I would like to welcome everyone to our first quarter 2025 earnings call. On the call today, we have our Chief Executive Officer, Jean-Marc Germain; and our Chief Financial Officer, Jack Guo. After the presentation, we will have a Q&A session. A copy of the slide presentation for today's call is available on our website at constellium.com and today's call is being recorded. Before we begin, I'd like to encourage everyone to visit the company's website and take a look at our recent filings. Today's call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the company's anticipated financial and operating performance, future events and expectations and may involve known and unknown risks and uncertainties. For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to our factors presented under the heading Risk Factors in our annual report on Form 10-K. All information in this presentation is as of the date of the 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. In addition, today's presentation includes information regarding certain non-GAAP financial measures. Please see the reconciliations of non-GAAP financial measures attached in today's slide presentation, which supplement our GAAP disclosures. And with that, I would now like to hand the call over to Jean-Marc.

Thank you, Jason. Good morning, good afternoon, everyone, and thank you for your interest in Constellium. Let's begin on Slide 5 and discuss the highlights from our first quarter results. I would like to start with safety, our number one priority. We delivered strong safety performance in the first quarter with a recordable case rate of 1.02 per million hours worked. Despite this strong achievement, our safety journey is never complete and we remain focused on this critical priority every day, including achieving our safety target to reduce our recordable case rate to 1.5 this year. Turning to our financial results, shipments were 372,000 tons or down 2% compared to the first quarter of 2024 due to higher shipments in P&ARP that were more than offset by lower shipments in A&T and AS&I. Revenue of $2 billion increased 5% compared to the first quarter of 2024, primarily due to higher metal prices, partially offset by lower shipments. Remember, while our revenues are affected by changes in metal prices, we operate a pass-through business model, which minimizes our exposure to metal price risk. Our net income of $38 million in the quarter compares to net income of $22 million in the first quarter last year. Adjusted EBITDA was $186 million in the quarter, although this includes a positive non-cash impact from metal price lag of $46 million. If we exclude the impact of metal price lag, the real economic performance of the business reflects adjusted EBITDA of $140 million in the quarter compared to the $160 million last year when the operating environment was comparatively more favorable. The adjusted EBITDA of $140 million this quarter also includes a foreign exchange headwind of $4 million and a negative impact at Valais of $10 million as a result of the flood last year.…

Thank you, Jean-Marc, and thank you, everyone, for joining the call today. Please turn now to Slide 8 and let's focus on our A&T segment performance. Adjusted EBITDA of $75 million decreased 14% compared to the first quarter last year. Volume was a headwind of $20 million due to lower aerospace and TID shipments. Aerospace shipments were down 11% in the quarter versus last year as commercial OEMs continued to work through excess inventory as a result of continued supply chain challenges. Demand in business and regional jets, space and military aircraft remained healthy. TID shipments were down 7% compared to last year as commercial transportation and general industrial markets remained weak in the quarter. TID shipments were also impacted at Valais as a result of the flood from last year. Price and mix was a headwind of $16 million due to a softer pricing environment in TID and weaker overall mix in the quarter. Costs were a tailwind of $25 million primarily as a result of lower operating costs. Now, turn to Slide 9, and let's focus on our P&ARP segment performance. Adjusted EBITDA of $60 million increased 25% compared to the first quarter last year. Volume was a tailwind of $4 million as higher shipments in packaging were partially offset by lower shipments in automotive and specialties. Packaging shipments increased 9% in the quarter versus last year as demand remained healthy in both North America and Europe. In North America, we also benefited at Muscle Shoals from improved operational performance in the quarter this year and the non-repeat of the weather event from last year. Automotive shipments decreased 15% in the quarter with weakness in both North America and Europe. Price and mix was a tailwind of $9 million mainly as a result of improved pricing in the…

Thank you, Jack. Let's turn to Slide 14 and discuss our current end market outlook. The majority of our portfolio today is serving end markets benefiting from durable sustainability-driven secular growth in which aluminum, a light and infinitely recyclable material, plays a critical role. However, many of these markets continue to face demand headwinds today and are also now facing uncertainty given the tariff situation. Turning first to the aerospace market. Commercial aircraft backlogs are robust today and continue to grow. Major aero OEMs remain focused on increasing build rates for both narrow and wide-body aircraft though supply chain challenges continue to slow deliveries. As a result, aerospace supply chains need to adjust to lower-than-expected build rates, which is causing a shift in demand to the right for some of our products. Despite the slowdown in the near term, demand has stabilized for the most part and we remain confident that the long-term fundamentals driving aerospace demand remain intact, including growing passenger traffic and greater demand for new more fuel-efficient aircraft. Demand remains stable in the business and regional jet market and healthy for space and military aircraft. Turning now to packaging. Demand remains healthy in both North America and Europe. The long-term outlook for this end market continues to be favorable as evidenced by the growing consumer preference for the sustainable aluminum beverage can, capacity growth plans from can makers in both regions and the greenfield investments ongoing here in North America. Longer term we continue to expect packaging markets to grow low to mid-single digits in both North America and Europe. Let's turn now to automotive. Automotive OEM production of light vehicles in Europe remains well below pre-COVID levels and is still below pre-COVID levels in North America as well. Demand in North America has continued to soften…

[Operator Instructions] Our first question comes from Katja Jancic from BMO Capital Markets. Katja, your line is open. Please go ahead.

Hi. Thank you for taking my questions. Maybe starting off, Jean-Marc, you mentioned that first quarter was ahead of expectations. Can you talk a bit more about what drove that?

Yeah, good morning, Katja, thanks for the question. So, I think we have seen good performance at our Muscle Shoals plant and we continue to make progress. So that has helped in the first quarter definitely. The other big element I would single out is our progress on Vision '25. As we mentioned, we accelerated and we started last year. Given the very challenging year we experienced last year, we accelerated our cost reduction program and the operating efficiencies program and Vision '25 is shaping out to be a big success for us this year. So these two elements I think are the main drivers of performance. And Jack wants to add a couple of comments here.

Yeah. Thank you, Jean-Marc, and thank you, Katja, for the question. So the only other thing I would add is we have done a bit better in the A&T business unit. And if you recall, we talked about this last year, the weakness in the demand in aerospace has caused us to kind of push some of the higher margin volumes to the right. And we said that's not going away, it's just the timing and now we're seeing some of the benefits and we expect to see that throughout the rest of the year. And also, the business unit has done -- along with everybody else, has done a great job in terms of cost control, as Jean-Marc mentioned.

Maybe just as a follow-up. Jack, you said on the aerospace side, does that mean that the inventory issue is behind?

No, it's not behind. I mean our own inventories are well in control, but the supply chain is still struggling to ramp up. You also saw the news that the Boeing deliveries in China are suspended or halted. I don't know exactly how to describe it. So that's not a good news for the supply chain. So, I think we are going to go through another year of difficulties in the ramp-up of the supply chain and that is increasing.

Okay. Thank you. I'll hop back into the queue.

The next question comes from Corinne Blanchard from Deutsche Bank. Corinne, your line is open. Please go ahead.

Hey, good morning everyone. Congratulations on the strong quarter. Maybe to come back on the end market question. Could you share -- so the aerospace was probably stronger than most people expected for 1Q and probably with a mix of defense and military. Is that trend to be expected to continue into 2Q and 3Q? And then, the second question would be on the auto impact and tariff and kind of where do you think things will shape and shake out for the second half of the year?

Good morning, Corinne, and thanks for your kind words. So, aerospace, we think it's going to be choppy -- continue to be choppy this year, but we do believe that the progress we've made is sustainable and we do believe that our focus on high value-added products and those markets that are shining a bit more is paying off and we expect that to continue throughout the year. Exactly how it plays out by quarter is difficult to tell, but I think we've got a good outlook for the full year. And in terms of auto, it is a big mystery. We are seeing the reduction in the outlook. S&P recently downgraded their provisions for the market numbers in both Europe and the U.S. We had been conservative we thought going into the year and embedded into our guidance compared to the forecast at the time. So, we are seeing the forecast converging with our own expectations. And we believe that the tariffs are certainly creating more uncertainty here in North America. But overall, given the platforms we are on, the launches that we are on, we believe, absent a major catastrophe and the market tanking to another 20% down compared to current expectations, I think we are reasonably safe for this year. It's not going to be a pleasant year as we can see and especially in the AS&I segment, but I think we are controlling what we can control and our guidance is reflecting this.

Thank you. And then maybe just again on the auto and tariff. I mean from the tariff, how much cost impact you will get? Because I think I saw on one of your slides, you had about $2 million impact in 1Q and then from the rest of the year, we can expect another $20 million. So is there like a specific cadence we should be thinking about between the quarter or is that more like an even cost to add?

Yeah. Corinne, so it's related to the cross-border shipments, right, and there is a little bit of seasonality, but assume it to be fairly even. And you're right, the gross impact before mitigation we're assuming about $20 million headwind.

The next question comes from Bill Peterson from JPMorgan. Bill, please go ahead.

Hi. Good morning, Jack and Jean-Marc. Appreciate the opportunity to ask questions. So maybe following up on the tariff one. So I think the last quarter, you talked about the overall environment presenting opportunities for the team and now you're talking about opportunities in cost. So I'm reading this as somewhat net neutral overall, but maybe unpacking this a bit further. So you have potential -- the February price hikes, maybe you can elaborate on what percentage of the business, I think it's mostly flat-rolled as you mentioned that you can -- what the expected uplift to EBITDA? Maybe a little more detail on how you can maybe limit the impacts of this Canadian extruding business? Just trying to get a sense for maybe a little bit more detail on the puts and takes and maybe how to think about it from an overall perspective as you see it today realizing it's a fluid situation.

Yeah. Good morning, Bill, and thank you for this difficult question. So, I think compared to what we were describing in February, we're still in the same place that we believe overall the tariffs that we're seeing are presenting a net opportunity for us. We wanted this time to give you a bit more context about specifically the extrusions that we are importing from Canada to make auto parts in the U.S. and that is a flow that presents a substantial headwind to us with $20 million worth of additional cost to us. Now, to mitigate this -- before I go into the other positive benefits of the tariffs, right, to mitigate this, we're working very hard with our customers on pass-throughs. Ultimately, those tariffs will end up being reflected in the sticker price. And we have some encouraging discussions and we even have 1 customer at this stage that has agreed to a full pass-through for these tariffs. So that $20 million will dwindle as we're successful in passing through we hope all of it, most of it and at the very least, some of it. At the same time, we are going to look at resourcing from other sources that are not tariff impacted and then obviously working very diligently on our cost structure -- on other pockets of our cost structure to offset this. Then, on the metal side, as you know, the scrap that we're using, the absolute benefit we get from using scrap is getting bigger with the imposition on 232 tariffs on aluminum. So that creates an opportunity for us. And to the extent that our plants are running well, which they are, if we recycle more metal, we even compound this benefit by we get access to cheaper scrap related to prime and…

Yeah. Thanks for that. Maybe I can hit on one of the points you were talking about on scrap, because I think we exited last year and you were talking about maybe a $15 million to $20 million per quarter impact. But I think that it's relatively tight exiting last year, maybe if you think about EVC to the Midwest transaction price, maybe close to 80% exit rate. But I think we're now closer to the 70%, which I think was similar around this time last year. So, I guess, with that in mind, how should we think about -- well, first of all, do you have any updated thoughts on how we should think about scrap spreads for this year? And then, assuming it stays a bit wider like we're seeing now, what would be maybe the impact? I presume it would be either at the low end of the $15 million to $20 million or maybe even below that.

So, think of the fact that we buy our scrap under annual, quarterly and spot market. So we never reflect the spot price. You will never see a direct impact between spot price and our scrap results, right? So, number one. So, we smooth the peaks and valleys. And what happened last year is we still benefited from aluminum we had contracted, scrap we had contracted at very good spreads in '23, in '24, but the new scrap we are contracting was extremely expensive. Now, this year, we're seeing a reversal in the dynamics. Scraps are becoming cheaper, but we also have some scrap that we bought at a higher price and especially in the first quarter. So, I think some of that mechanics I don't want to go into too much detail, but what we're saying is that the scrap spreads today are better and this is helping us. This is a positive for us, but it is included in our guidance.

Okay. That's helpful. And then, if I can switch to the packaging, I guess the P&ARP segment more broadly. You called out the improved shipments and mix and so forth and you're calling out Muscle Shoals improvement in particular. I guess on the pricing and mix, can you understand the uplift? I thought that maybe [ABS] (ph) EBITDA margins were actually better than packaging or maybe the mix is more of a statement of specialty, I'm not sure. And then, on the Muscle Shoals performance, I guess how should we think about the shipment uplift and cost performance in the second quarter and beyond now that it seems to be operating well so I think you're able to participate in this sort of improved demand environment, maybe perhaps also benefiting from fewer imports as a result of tariffs as well?

Yeah, Bill. So, I'll take the first part of your question and that's related to price and mix for P&ARP and the good guide there. That's mostly related to kind of micro mix within packaging. So, we saw more kind of end stock, if you will, which carry a higher pricing.

Now, at the same time, automotive does have a higher margin and automotive is not as good this year as it was last year. So, you got all kinds of effects here. Going forward, we think the weakness in automotive is going to continue. I mean that's part of our expectations, let's put it this way, but that does create an opportunity for us to sell more can sheet. There is demand for more can sheet and we are very keen to support our customers in any way we can. I think that opportunity will continue to be here. As I said, we turned the corner in Muscle Shoals, production is much better and healthier and more stable than it ever was and I think that creates opportunities for us going forward.

Thanks, Jean-Marc and Jack.

Thank you, Bill.

Thank you, Bill.

[Operator Instructions] And the next question comes from Josh Sullivan from The Benchmark Company. Josh, please go ahead. Your line is open.

Hey, good morning.

Good morning, Josh.

Hi, Josh.

If you're thinking about another year of aerospace supply chain difficulties, what was the incremental on that destock cycle from last quarter? If you're thinking about a year from today, where were your thoughts last quarter? Just trying to think of the incremental sequentially on that year timeline.

So, I'll try to answer what I understand of your question. If not understanding it well, just tell me. We were thinking that it was going to be yet another year of challenges in the supply chain on the base of our discussion with our customers. So things have not fundamentally changed between what we're thinking in November, December of last year and now. Maybe the exact shape of it is proving to be a bit different, but the challenges are definitely there. And you see it, I mean our shipments are down year-on-year compared to the first quarter of last year in aerospace, but that is what we are expecting.

Yeah. And sequentially, I mean it's relatively flat to the fourth quarter of last year and the third quarter of last year. So it's weak, but quite stable with a better mix.

Okay. And how would you be impacted if Airbus chooses to increase production at the...

Did we answer your question, Josh?

I mean, more or less, yes. But also if Airbus chooses to increase production at the Alabama facility, how would you be impacted by that?

Well, we would get more volumes from them. We've got -- our contract with them is requirements driven so the more they produce, the better it is for us. Now, how that happens, depends on what are the inventories in the supply chain and where it's at. And as you know, there's a lag between six months to two years roughly depending on the part. But this would be a net positive for us, yes.

Okay. And then just one last one. What are you seeing as far as European demand in TID for defense applications or indications for longer-term order flow just as the continent looks to build out more of an internal defense industrial base?

Yeah. So, we see some good signs today. It's actually causing us to increase our inventories in the Valais for instance as we are restarting our operations because there's a lot of demand for tanks and other vehicles. And then, longer term, I think it's all a matter of how serious and committed the Europeans will be in implementing what they decided, which is I think it's €800 billion of additional spending in defense, right? So, if they do that, that's definitely a good thing for us. But as we all know between intentions and reality, there can be a gap and the gap can be just time or it can be a gap in terms of actually does it get implemented. So, we'll have to see. But in all the discussions we have with our customers in the defense space in Europe, everybody is ramping up and trying to get ready for substantially higher levels of production and so are we.

Great. Thank you for the time.

Thank you, Josh.

As we have no further questions, I'll hand the call back to Jean-Marc Germain for some closing comments.

Thank you, Adam. Well, thank you, everybody, for your participation today. As you can see, we remain very focused in these uncertain and turbulent times, very focused on controlling what we can control, making sure we seize every opportunity that is ahead of us and making sure we build a company that's going to emerge stronger after these vicissitudes in the market pass. Thank you very much, and I look forward to updating you on our progress in a few months.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.