Q2 2025 Constellium SE Earnings Call

Operator: Good morning or good afternoon or welcome to the Constellium second quarter 2035 L&P.

Operator: My name is Adam and I'll be your operator today.

Operator: If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad.

Jason Hershiser: I will now hand the floor to Jason Hershiser, Director of Investor Relations to begin. So Jason, please go ahead when you're ready. Thank you, Adam.

Good morning or good afternoon, or welcome to the constellium. Second quarter 2025 earnings call. My name is Adam and I'll be your operator today if you'd like to ask a question during the Q&A portion of today's call you may do. So by pressing star, followed by 1 on your telephone keypad. I will now hand the floor to Jason Hershey's, a director of investor relations to begin sir. Jason, please go ahead when you're ready.

Jason Hershiser: I would like to welcome everyone to our second quarter 2025 earnings call.

Jason Hershiser: On the call today, we have our Chief Executive Officer, John Mark Germain, and our Chief Financial Officer, Jack Guo.

Jason Hershiser: After the presentation, we will have a Q&A session. The copy of the slide presentation for today's call is available on our website at Conselium.com and today's call is being recorded.

Thank you, Adam. I would like to welcome everyone to our second 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 presentations, we will have a Q&A session.

Jason Hershiser: Before we begin, I'd like to encourage everyone to visit the company's website and take a look at our recent files.

a copy of the slide presentation for today's call is available on our website at conselium 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 files.

Jason Hershiser: 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.

Today's call may include 4 looking statements within the meeting 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.

Jason Hershiser: For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statement, please refer to the factors presented under the heading risk factors in our annual report on Form 10-K.

Jason Hershiser: 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.

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 the factors presented Under The Heading risk factors and our annual report on form 10K.

All information in this presentation is as of the date of the presentation.

Jason Hershiser: 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 disclosure.

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.

Jean-Marc: 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 five and discuss the highlights from our second quarter results.

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 with supplement, our gaap disclosures

Jean-Marc: I would like to start with safety, our number one priority. Our recordable case rate in the second quarter was 2.6 per million hours worked, following our strong safety performance in the first quarter and bringing our year to date recordable case rate to 1.8 per million hours worked. While this performance remains best in class, this is a humbling reminder that we all need to constantly maintain our focus on safety to achieve the ambitious target we have set of 1.5 per million hours of work. Turning now to our financial results, shipments were 384,000 tons or up 2% compared to the second quarter of 2024 due to higher shipments in PARP that were partially offset by lower shipments in ANT and ASNI.

And with that, I would now like to hand the call over to John Martin. 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 second quarter results. I would like to start with safety, our number one priority. A recordable case rate in the second quarter was 2.6 per million hours worked, following our strong safety performance in the first quarter and bringing our year-to-date recordable case rate to 1.8 per million hours worked.

While this performance remains Best in Class, this is a humbling reminder that we all need to constantly maintain our focus on safety to achieve the ambitious Target we have set of 1.5 per million hours worked.

Jean-Marc: Revenue of $2.1 billion increased 9% compared to the second quarter of 2024 due to higher shipments and favorable price and mix, including higher metal prices experienced in the quarter versus last year. 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 $36 million in the quarter compares to net income of $77 million in the second quarter last year. Adjusted EBITDA was $146 million in the quarter, though this includes a negative non-cash impact from metal price lag of $13 million.

Turning now to our financial results shipments, we have 384,000 tons or up to 2% compared to the second quarter of 2024 due to higher shipments in Barb that were partially offset by lower shipments in NT and asni.

Revenue of 2.1 billion dollars increased 9% compared to the second quarter of 2024 due to higher shipments and favorable price and mix including higher metal prices experience in the quarter versus last year. 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.

Jean-Marc: If we exclude the impact of metal price lag, the real economic performance of the business reflects adjusted EBITDA of $159 million in the quarter compared to the $180 million last year.

Our Med code of 36 million in the quarter compares to net income of 77 million in the second quarter last year. But just to be as 146 million in the quarter though this includes a negative non-cash impact from metal price, s*** of 13 million.

180 million last year.

Jean-Marc: Moving now to free cash flow. Our free cash flow in the quarter was strong at $41 million. During the quarter, we returned $35 million to shareholders through the repurchase of 3.4 million shares. Our leverage at the end of the second quarter was 3.6 times, though we expect this to be the peak and for leverage to trend down as we move through the rest of the year. We delivered solid results this quarter despite continued demand weakness across most of our end markets outside of Pakistan. who remained focused on strong cost control, free cash flow generation, and commercial and cattle distribution.

Moving now to free cash flow, our free cash flow in the quarter was strong at $41 million. During the quarter, we returned $35 million to shareholders through the repurchase of 3.4 million shares. Our leverage at the end of the second quarter was 3.6 times, though we expect these to be the peak and for leverage to trend down as we move through the rest of the year.

We delivered solid results this quarter despite continued demand weakness across most of our end markets outside of Packaging.

Jean-Marc: Overall, I am quite pleased with our second quarter and first half performance.

We remained focused on strong cost control, free cash, flow generation and Commercial, and cattle discipline.

Overall, I am quite pleased with our second quarter and first half performance.

Jean-Marc: Now, please turn to slide number six.

Jean-Marc: Before turning the call over to Jack, I wanted to give you a quick update on the Section 232 tariffs, as well as other tariffs under IEEPA, and how we see the potential impact to Constelia. Before going into details on the slide, let me summarize a bit. As I mentioned last quarter, the tariff situation is a fluid and multifaceted situation. We see both some positive and negative impacts on our business. And at this stage, we continue to believe it presents us with various opportunities as well as some additional costs. But it should be a net positive for us.

Now, please turn to slide number 6 before. Turning the call over to Jack. I wanted to give you a quick update on the section 232 tariffs as well as other tariffs under iepa and how we see the potential impact to constellium?

Before going into details on the side, let me summarize a bit. As I mentioned last quarter, the Tariff situation is a fluid and multifaceted situation.

Jean-Marc: The guidance we are giving today does include the direct impact from tariffs that we are able to estimate, given what we know today, and it does include several mitigating factors we have identified to offset the impact. It also includes our current assumptions on end market demand in the current environment.

We see both some positives and negative impacts on our business. At this stage, we continue to believe it presents us with various opportunities, as well as some additional costs, but it should be a net positive for us.

The guidance we are giving today does include the direct impact from tariffs that we are able to estimate, given what we know today. And it does include several mitigating factors we have identified to offset the impacts.

Jean-Marc: Our guidance assumes a relatively stable macro environment and it does not include potential impacts from additional tariffs to those that are known. Shifting to the details on the side now, on the production side, we are mostly local for local in the regions where we operate. Our automotive structures business in the U.S. buys extrusions from Canada, including from our joint venture in Canada. These extrusions have become more expensive under Section 232 tariffs, which impacted the first half by around $7 million on a gross base. The growth costs could continue to accumulate going forward to an additional $20 million for the rest of the year before mitigating IT.

It also includes our current assumptions on end market demand in the current environment.

Our guidance assumes a relatively stable macro environment and it does not include potential impacts from additional tariffs to those that are known today.

Shifting to the details on the side. Now, on the production side, we are mostly local for local in the regions where we operate.

Our automotive structures business in the U.S. buys extrusions from Canada, including from our joint venture in Canada.

These extrusions have become more expensive under Section, 232 tariffs, which impacted the first half by around, 7 million dollars on a growth basis.

Jean-Marc: We are working with our customers and suppliers on pass-throughs and other mitigation efforts, and we have made good progress on a number of them. We expect these actions to result in some benefits in the second half, which will help mitigate the impact on our results. In aerospace, we ship small quantities from Europe to the U.S. to serve global OEMs, although this has passed through today and we will not be able to do it again. Regarding the automotive specific tariffs that fall under Section 232, the volumes we ship across Mexican and Canadian borders are compliant with USMCA.

The gross costs could continue to accumulate going forward to an additional 20 million dollars for the rest of the year. Before mitigating items, we are working with our customers and suppliers on pass, throughs and other mitigation efforts. And we have made good progress on a number of them.

We expect these actions to result in some benefits in the second half, which will help mitigate the impact on our results.

In Aerospace, we ship small quantities from Europe to the US to serve Global oems although this has a pass through today and we will not be impacted.

Jean-Marc: On the metal supply side, we import some primary aluminum from Canada, given the lack of smelter capacity here in the U.S. As of today, we have commercial agreements in place to help mitigate the tariff impact on this. In terms of scrap, aluminum scrap is excluded from the current scope of Section 232 tariffs, and we purchase most of our scrap needs from dealers in the U.S. The impact of scrap from tariffs should be a net positive, as a rise in the U.S. regional premium is beneficial for the domestic supply chain. We are starting to see this already as scrap spreads or used beverage cans, for instance, in the U.S., have widened in the first half of this year.

Regarding the automotive specific tariffs that fall under Section, 232 the volumes, we ship across, Mexican and Canadian borders are compliant with usmca.

On the metal supply side. We import some primary aluminum from Canada. Given the lack of smell Tech capacity here in the US.

As of today, we have commercial agreements in place to help mitigate the Tariff impacts on this metal.

In terms of scrap, aluminum scrap is excluded from the current scope of section 232 tariffs and we purchase most of our scrap needs from dealers in the US.

The impact on scrap from terrorists. Should be a net positive as a rise in the US Regional. Premium is beneficial for the domestic supply chain.

Jean-Marc: And we expect to see some benefit of this in the second half. In terms of commercial impacts, these two should be a net positive for Constellium. Today, over one million tons of flat-rolled aluminum imports are coming into the U.S. each year, given the lack of domestic supply available. Tariffs will make domestically produced products more competitive, and we should benefit from During the first half of this year, we announced price increases for all rolled products shipped in the U.S. This has already started to benefit us on non-contracted volumes in the second quarter of this year, and this benefit should continue to grow moving forward.

We are starting to see this already as scrap spreads or used beverage scans, for instance, in the US have widened in the first half of this year, and we expect to see some benefit of this in the second half.

In terms of commercial impacts these 2 should be a net positive for constellium.

Today, over 1 million, tons of flat rolled aluminum, Eno are coming into the US each year, given the lack of domestic Supply available.

Tariffs will make domestically produced products, more competitive and we should benefit from this.

During the first half of this year, we announced price increases for all Road products shipped in the US.

This has already started to benefit us on non-contracted volumes in the second quarter this year and this benefits should continue to grow moving forward.

Jean-Marc: In terms of end markets, the tariff and trade situation is creating broader macro uncertainty and it is having a negative impact on markets such as automotive. Our guidance assumes weak conditions in automotive in both North America and Europe and we are monitoring the conditions very closely. We believe that the newly announced trade deals will somewhat reduce uncertainty in the global markets. That said, we are not discounting the broader macro uncertainty.

Trade situation is creating broader macro uncertainty and it is having a negative impact on markets, such as Automotive, our guidance assumes weak conditions, in Automotive, in both in both North America and Europe and we are monitoring the conditions very closely.

Jean-Marc: We remain focused on our cost reduction efforts under our Vision 25 program and we are optimizing our existing capacity depending on market conditions, such as shifting some capacity where we can from automotive markets into packaging markets. To close out on tariffs, as I said before, the situation remains very fluid. We are continually monitoring and assessing the potential impact of current and future trade policies. Though at this stage, we believe the net impact of tariffs on aluminum presents us with some opportunities in the current environment.

We believe that the newly announced trade deals will somewhat reduce uncertainty in the global markets that said we are not discounting the broader macro uncertainty.

we remain focused on our cost reduction efforts and there are Vision 25 program and we are optimizing our existing capacity depending on market conditions such as shifting, some capacity where we can from Automotive markets into, packaging, markets,

Jack Guo: With that, I will now turn the call over to Jack for further details on our financial performance. Jack?

To close out on tariffs, as I said before, the situation remains very fluid. We are continually monitoring and assessing the potential impact of current and future trade policies though. At this stage, we believe the net impact of tariffs on aluminum, present us with some opportunities in the current environment.

Jack Guo: 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. Adjusted EBITDA of $78 million, decreased 13% compared to the second quarter last year. Volume was a headwind of $18 million due to lower aerospace and TID shares. Aerospace shipments were down 12% in the quarter versus last year, as commercial OEMs continue to work through excess inventory as a result of lingering supply chain challenges.

With that I will now turn the call over to jack for further details on our financial performance Jack. Thank you Jamar. And thank you everyone for joining the call today.

Please turn on slide 8, and let's focus on our Aunt segment performance.

Adjustability millions decreased 13% compared to the second quarter last year.

Volume was a headwind of 18 million due to lower Aerospace and tid shipments.

Jack Guo: Demand in space and military aircraft remained healthy. TID shipments were down 11% versus last year as commercial transportation and general industrial markets remained weak in the quarter. Price and mix was a tailwind of $2 million due to improved contractual and spot pricing in aerospace and TID, partially offset by weaker overall mix in the quarter. Costs were a tailwind of $2 million, primarily as a result of lower operating costs. FX & Other was also a tailwind of $2 million in the quarter due to the weakening of the U.S. dollar.

Aerospace. Shipments were down, 12%, in a quarter versus last year as commercial oems continue to work through access inventory, as a result of lingering supply chain challenges.

Demand in space and military, aircraft remained healthy.

Tid shipments were down 11% versus last year as commercial transportation and general industrial markets remained, weak in the quarter.

Price and mix was a Tailwind of 2 million dollars, due to improved. Contractual and Spa pricing in Aerospace and tid

Partially offset by weaker overall, mixing the quarter.

Costs were a Tailwind of 2 million dollars primarily as a result of lower operating costs.

Jack Guo: Now turn to slide nine and let's focus on our part segment. A just debut of $74 million increased 12% compared to the second quarter launch. Volume was a tailwind of $14 million as higher shipments in packaging were partially offset by lower shipments in automotive. Packaging shipments increased 14% in the quarter versus last year, as demand remained healthy in both North America and Europe. In North America, we also benefited at bustle shows from improved operational performance in the quarter.

Effects and other was also a Tailwind of 2 million dollars in the quarter due to the weakening of the US dollar.

Now, turn to slide 9 and let's focus. Our Park segment performance.

Adjustability of 74 million increased 12% compared to the second quarter last year.

Volume was a Tailwind of 14 million, as higher shipments in packaging, were partially offset by lower shipments in Automotive.

Packaging shipments increased 14% in the quarter versus last year as demand remained healthy in both North America and Europe.

Jack Guo: Automotive shipments decreased 14% in a quarter with weakness in both North America and Europe. Price and Mix was a headwind of $7 million in the quarter due to tariff-related metal impacts and weaker mix. caused for a modest headwind of $1 million, primarily as a result of unfavorable metal costs. mostly offset by lower operating FX and Other was a tailwind of two million dollars.

In North America, we also benefited at muscle shows from improved operational performance in the quarter.

Automotive shipments decreased 14% in the quarter with weakness, in both North America and Europe.

Price and mix was a headwind of $7 million in the quarter due to tariff-related metal impacts and a weaker mix.

calls for a modest headwind of $1 million, primarily as a result of unfavorable metal costs.

mostly offset by lower operating costs.

Effects and other was a Tailwind of 2 million dollars in the quarter.

Jack Guo: Now turn to slide 10.

Jack Guo: Let's focus on our AS&I section. Adjusted EBITDA of $18 million, decreased 40% compared to the second quarter of last year. Volume was a $1 million headwind as a result of lower shipments in automotive, mostly offset by higher shipments in industry-trued products. Automotive shipments were down 12% in the quarter with weakness in both North America and Europe. Industry shipments were up 14% in the quarter versus last year. The increase in industry shipments is a result of us catching up to the lost volumes from the ballet interruption, as industry markets in Europe remain weak overall. Price and mix was a $16 million headwind in the quarter due to weaker pricing for spot volumes and a weaker mix.

Now, turn to slide 10. Let's focus on our ASNI segment.

Adjust a DOT of 18 million decreased 40% compared to the second quarter of last year.

Volume was a million-dollar headwind as a result of lower shipments in automotive, mostly offset by higher shipments in industry-shooted products.

Automotive shipments were down 12% in the quarter, with weakness in both North America and Europe.

Industry shipments were up 14% in the quarter compared to last year.

The increase in industry shipments is a result of us catching up to the lost volumes from the valet interruption, as industry markets in Europe remain weak overall.

Price and mix was a 16 million dollar headwind in the quarter. Due to weaker pricing for spot volumes and a weaker mix.

Jack Guo: costs were a tailwind of $5 million primarily due to lower operating costs. partially offset by the net impact of tariff headwind in the quarter.

Costs were a tailwind of $5 million, primarily due to lower operating costs.

Jack Guo: It is not on the slide here, but our holdings and corporate expense was $12 million in the quarter. Holdings and corporate expense this quarter was up $6 million from last year due to additional IT spending with the upgrade of our ERP system and higher accrued labor costs, partially offset by lower headcount.

Partially offset by the net impact of tariff headwind in the quarter.

Here, but our Holdings and corporate expense was 12 million in the quarter.

Jack Guo: As we said last quarter, we expect holdings and corporate expense to run at approximately $40 million in 2025.

Holdings and corporate expense. This quarter was up 6 dollars from last year due to additional it spending with the upgrade of our Erp system and higher accured labor costs partially offset by lower head counts.

As we said last quarter, we expect that Holdings and corporate expenses will run at approximately $40 million in 2025.

Jack Guo: It is also not on the slide here, but I wanted to summarize the current cost environment work. As you know, we operate a pass-through business model, so we're not materially exposed to changes in the market price of aluminum, our largest costing. on other metal costs. We experienced a dramatic tightening of spot scrap spreads in North America in 2024. The tightness continued into the beginning of this year. Those spreads improved in the spot market as we moved through the first half of the year. Given our scrap purchases were essentially locked in for the second quarter, we did not benefit from this dynamic during the period.

it is also not on the slide here but I wanted to summarize. The current cost environment we're facing

As you know, we operate a pass-through business model, so we're not materially exposed to changes in the market price of aluminum, our largest cost input.

On other metal costs.

We experienced a dramatic tightening of spot scrap spreads in North America. In 2024, the tightness continued into the beginning of this year. Those spreads improved in the spot Market. As we moved through the first half of the year.

Jack Guo: However, we expect to benefit starting in the third quarter this year and into the rest of the year. For energy, our 2025 costs are moderately more favorable compared to 2024, although energy prices remain above historical average. Other inflationary pressures have eased to more normal levels.

Given our scrap purchases were essentially locked in for the second quarter. We did not benefit from this Dynamic During the period.

However, we expect to benefit starting in the third quarter this year and into the rest of the year.

For energy. Our 2025 cost of moderately, more favorable compared to 2024 although Energy, prices, remain above historical averages.

Other inflationary pressures have eased to more normal levels.

Jack Guo: And as we said in previous quarters, given the weakness we're seeing in several of our markets, we have accelerated our Vision 25 Cost Improvement Program with measures such as improving operational efficiency. reducing headcounts and other labor costs, reducing non-metal procurement spending, optimizing maintenance costs by minimizing the use of outside contractors. and cost reduction efforts across many other categories. We have demonstrated strong cost performance in the past, and we're confident in our ability to right size our cost structure for the current demand environment.

and as we said, in previous quarters,

Given the weakness. We're seeing several of our markets. We have accelerated our vision. 25 cost Improvement program with measures such as improving. Operational. Efficiency, reducing head counts and other labor costs reducing non-metal, procurement spending.

Optimizing maintenance costs by minimizing the use of outside contractors.

And cost reduction efforts across many other categories.

We have demonstrated strong cost performance in the past and we're confident in our ability to rightsize our cost structure for the current demanding environment.

Jack Guo: Now, let's turn to slide 11 and discuss our free cash. We generated $41 million of free cash flow in the quarter, bringing our year-to-date total to $38 million. The year-over-year increase in the first half is a result of less cash used for working capital, lower capital expenditures, and lower cash taxes partially offset by lower segment adjusted EBITDA and higher cash Looking at 2025, we expect to generate free cash flow in excess of $120 million for the full year, which is unchanged from our prior guidance. We expect CapEx to be around $325 million for the full year.

Now, let's turn to slide 11 and discuss our free cash flow.

We generated 41 million dollars of free cash flow in the quarter, bringing our year, to-day total to 38 million.

The year-over-year increase in the first half is a result of less cash used for working capital lower, Capital expenditures and lower cash taxes partially offset by lower segment adjusted and higher cash interest.

Looking at 2025 we expect to generate free cash flowing access of 120 million dollars for the full year which is unchanged from our prior guidance.

Jack Guo: We still plan to reduce our cutbacks this year to stay prudent, though most of the benefits are offset by unfavorable foreign exchange translation. Cash interest and cash taxes are running slightly higher for the year than previously expected at $125 million and $45 million respectively. We expect working capital and other items to be a modest use of cash for the full year, which includes the impact of higher metal prices this year and the working capital ramp-up in LA.

We expect capex to be around $325 million for the full year.

We still plan to reduce our capex, this year to stay prudent. The most of the benefits are offset by unfavorable foreign exchange translation.

Cash interest and cash taxes are running slightly higher for the year than previously expected at 125 million at 45 million respectively.

We expect working capital and other items to be a modest use of cash for the full year.

Which includes the impact of higher metal prices this year and the working capital ramp up in LA.

Jack Guo: At this stage, we have fully rebuilt our supply chain and inventories in LA, which has had a negative impact on free cash flow in the first half of this year. As Jean-Marc mentioned previously, we continued our shared buyback activities in the quarter. During the quarter, we repurchased 3.4 million shares for $35 million, bringing our year-to-date total to 4.8 million shares for $50 million. We have approximately $171 million dollars remaining in our existing share repurchase program and we intend to use a large portion of the free cash flow generated this year for the program.

At this stage, we have fully rebuilt our supply chain and inventories in ballet, which has had a negative impact on free cash flow in the first half of the year.

Hey, show Mark mentioned previously. We continued our share buyback activities in the quarter during the quarter? We repurchased 3.4 million shares for 35 million bringing our year, to-day total to 4.8 million shares, for 50 million.

We have approximately 171 million remaining, our existing share repurchase program and we intend to use a large portion of the free cash flow generated this year for the program.

Jack Guo: Now let's turn to slide 12 and discuss our balance sheet and liquidity position. At the end of the second quarter, our net debt of $1.9 billion was up approximately $120 million compared to the end of 2024, with the largest driver being the translation impact from the weaker US dollar at the end of the Our leverage was 3.6 times at the end of the quarter, or up 0.5 times versus the end of 2024. As Jean-Marc mentioned previously, we expect this to be the peak leverage and to trend down as we move through the year with the expected improvement in trailing-adjusted EBITDA.

Now, let's turn to slide 12 and discuss our balance sheet and liquidity position.

At the end of the second quarter, our net debt of 1.9 billion dollars was up approximately 120 million dollars compared to the end of 2024 with the largest driver, being the translation impact from the weaker US dollar at the end of the quarter.

.5 times versus the end of 2024.

as young Mark mentioned previously, we expect this to be the peak leverage and to Trend down as we move through the year with the expected Improvement in trailing, adjust Abita

Jack Guo: We currently expect to finish the year with leverage at or below three times, and we're committed to bringing our leverage back down into our target leverage range of one-half to two-and-a-half times and maintaining this range over time. As you can see in our debt summary, we have no bond maturities until 2028.

We currently expect to finish the year with leverage at or below 3 times, and we're committed to bringing our leverage back down into our target leverage range of 1.5 to 2.5 times, and maintaining this range over time.

Jack Guo: Our liquidity increased by $114 million from the end of 2024 and remains strong at $841 million as of the end of the second quarter.

As you can see our debt summary, we have no bond maturities until 2028.

Our liquidity increased by 114 million dollars from the end of 2024. It remains strong at 841 million. As of the end of the second quarter,

Jack Guo: Before turning it back over to Jean-Marc, I wanted to mention a recent development for the As of June 30, 2025, Constellium no longer qualified as a foreign private issuer and will transition into becoming a U.S. domestic filer starting in 2026. As you probably recall, beginning in 2025, Constellia was already voluntarily electing to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SBA. Given this change in filing status, we will begin to file all other required U.S. domestic forms with the SEC, including a Def 14-A and Section 16 forms, in addition to our annual and quarterly reports starting on January 1, 2026.

Before turning it back over to Jamar. I wanted to mention a recent development for the company.

As of June 30th, 2025 constellium no longer qualified as a foreign private issuer and will transition into becoming a US domestic domestic. Filer, starting in 2026.

As you probably recall, beginning in 2025, Constellium was already voluntarily electing to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the SEC.

Jean-Marc: With that, I will now hand the call back to Jean-Marc. Thank you, Jack.

Given this change in filing status, we will begin to file all other required us. Domestic forms with the SEC, including a death, 14a, and section 16 forms in addition to our annual and quarterly reports starting on January 1st 2026,

With that. I'll now hand the call back to Jamar.

Jean-Marc: 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 and are also now facing uncertainty given the tariff situation.

Jean-Marc: 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. Those supply chain challenges I've continued to slow deliveries below what OEMs were expecting for several years in a row now. 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.

Thank you, Jack. Let's turn to slide 14 and discuss our current market outlook. The majority of our portfolio today is serving 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 TIC situation.

Turning first to the aerospace market commercial. Aircraft backlogs are robust today and continue to grow.

Major Arrow, OEMs remained focused on increasing bill breaks for both narrow and wide-body aircraft, along with those supply chain challenges.

Uh, have continued to slow, deliveries below what oems were expecting for several years in a row now.

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 of 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. This includes growing passenger traffic and greater demand for new, more fuel-efficient aircraft.

Jean-Marc: Demand also remains stable in the business and regional jet market and healthy for space and military aircraft.

Jean-Marc: Looking across our entire aerospace business, we believe our product portfolio is unmatched in the industry, and we have industry-leading R&D capabilities for aluminum aerospace solutions.

Demand also remains stable in the business and regional jet markets and healthy for space and military aircraft.

Jean-Marc: In terms of outlook, I want to make one additional point on our A&T segment. In the past, we have talked about a through-the-cycle adjusted EBITDA target for the segment of $1,000 per ton. Based on our contractual positions and the performance of the business, we now expect through-the-cycle adjusted EBITDA of $1,100 per ton, and we expect to remain above that level in the near term.

Looking across our entire Aerospace business. We believe our product portfolio is unmatched in the industry and we have industry-leading R&D capabilities for aluminum Aerospace Solutions. In terms of Outlook I want to make 1 additional point on our ENT segment in the past we have talked about through the psychologist. A little bit that Target for the segment of the thousand dollars per ton.

Jean-Marc: 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 both can makers in both regions, from all can makers. in both regions, sorry, 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.

Based on our contractual positions and the performance of the business. We now expect through the psychologist, Todd of 1100 per ton and we expect to remain above that level in the near term.

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, scan capacity, growth plans from both can makers in both regions from all C makers in both regions. Sorry, and the Greenfield Investments ongoing here in North America,

Longer term, we continue to expect packaging markets to grow, low to meet single digits in both North America and Europe.

Jean-Marc: 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 in the near term and is expected to feel the impact of the current Section 232 auto tariff. Demand in Europe remains weak, particularly in the luxury and premium vehicle and electric vehicle segments where we have greater exposure. Automotive production in Europe is also expected to feel the impact of the current Section 232 auto tariffs given the amount of vehicles the U.S.

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.

Continue to soften in the near term and is expected to feel the impact of the current section. 232 Auto tariffs,

Demand in Europe, remains weak, particularly in the luxury and premium vehicle and electric vehicle segments where we have greater exposure.

Jean-Marc: imports from Europe.

Jean-Marc: In the long term, we believe electric and hybrid vehicles will continue to grow, but at a lower rate than previously expected. Sustainability trends such as light weighting and increased fuel efficiency will continue to drive the demand for aluminum products. As a result, we remain positive on this market over the longer term in both regions despite the weakness we are seeing today. As you can see on the page, these three core end markets represent over 80% of our last 12 months revenue.

Automotive production in Europe is also expected to feel the impact of the current Section 232 auto tariffs given the amount of vehicles the U.S. imports from Europe.

In the long term, we believe electric and hybrid vehicles will continue to grow, but at a lower rate than previously expected.

Sustainability trends, such as lightweighting and increased fuel efficiency, will continue to drive the demand for aluminum products. As a result, we remain positive on this market over the longer term in both regions, despite the weakness we are seeing today.

Jean-Marc: Turning lastly to other specialties, in North America, demand appears to have stabilized, albeit at low levels, and demand remains weak in Europe. We have experienced weakness across most specialties markets for three years now.

As you can see on the page, these three core markets represent over 80% of our last 12 months' revenue.

Jean-Marc: We believe TID markets in North America provide us with some opportunities today, given the current tariffs, make imports less competitive compared to domestic production. As a reminder, these specialties markets are typically dependent upon the health of the industrial economies in each region, including drivers like the interest rate environment, industrial production levels, and consumer spending patterns. We continue to work hard to adjust our cost structure to the current demand environment, which will put the business in an even better position when the industrial economies do recover.

Turning lastly to other Specialties in North America demand appears to have stabilized all data to low levels and demand remains weak, in Europe. We have experienced weakness across most Specialties markets for 3 years. Now we believe the ID markets in North America, provide us with some opportunities today given the current tariffs mixed in make Imports less competitive compared to domestic production.

Jean-Marc: To conclude on the end markets, we like the fundamentals in each of the markets we serve, and we strongly believe that diversification of our end markets is an asset for the company in any environment.

As a reminder, these Specialties markets are typically dependent upon the health of the industrial economies in each region, including drivers like the interest rates environment, industrial production levels and consumer spending patterns. We continue to work hard to adjust. Our cost structure to the current demand environment, which will put the business in an even better position when the industrial economies do recover.

Jean-Marc: Turning lastly now to slide 15, we detail our key messages and financial guidance. Our team delivered solid results in the second quarter this year, despite continued demand weakness across most of our end markets outside of packaging. who returned $35 million to shareholders in the quarter with a repurchase of 3.4 million shares. While tariffs are creating broader macro uncertainty and impacting end markets like automotive, we are proactively managing our business to the current environment. We remain focused on strong cost control. free cash flow generation, and commercial and capital distribution.

To conclude on the end markets, we like the fundamentals in each of the markets we serve, and we strongly believe that the diversification of our end markets is an asset for the company in any environment.

Turning last feed. Now to slide 15, we detail. Our key messages and financial guidance.

Our team delivered solid results in the second quarter this year despite continued demand weakness across most of our end markets outside of Packaging.

We returned $35 million to shareholders in the quarter with the repurchase of 3.4 million shares.

While tariffs are creating broader micro uncertainty and impacting and markets, like, Automotive. We are proactively managing our business to the current environment, we remain focused on strong cost control.

Jean-Marc: Given our solid performance in the first year, and based on our current outlook, including the current end market conditions I just described, and assuming a relatively stable macro environment, we are raising our guidance for 2025. We are now targeting adjusted EBITDA, excluding the non-cash impact of metal price lag, in the range of $620 to $650 million, and free cash flow in excess of $120 million. Our guidance assumes a modest improvement in the second half this year compared to the first half. This improvement includes the timing of certain tariff mitigations and customer compensations, which will be more pronounced in the third quarter, as well as the more favorable scrap purchasing, the ramp-up in valet, and favorable foreign exchange translation in the back half.

Free cash, flow generation and Commercial and capital discipline.

given our solid performance in the first year, and based on our current Outlook, including the current and market conditions, I just described and assuming a relatively stable macro environment, who are raising our guidance for 2025,

We are now targeting adjusted EBITDA, excluding the non-cash impact of metal price lag, in the range of $620 million to $650 million, and free cash flow in excess of $120 million.

Our guidance assumes a modest improvement in the second half of this year compared to the first half. This improvement includes the timing of certain tariff mitigations and customer compensation, which will be more pronounced in the third quarter, as well as the more favorable scrap purchasing, the ramp-up in valet, and favorable foreign exchange translation in the back half of the year.

Jean-Marc: Looking to the future, I also want to reiterate our long-term targets of adjusted EBITDA, excluding the non-cash impact of metal price lag of $900 million and free cash flow of $300 million in 2021. To conclude, while we continue to face challenging conditions in most of our markets today, we believe that this will pass, and I remain very excited about our future and the ability to seize the many opportunities in front of us, which we have demonstrated in the past. We are extremely well positioned for long-term success and remain focused on executing our strategy and shareholder value creation.

Looking to the future, I also want to reiterate our long-term targets of the GDB, excluding the non-cash impact of metal price: S*** of $900 million and free cash flow of $300 million in 2028.

Operator: With that, operator, we will now open the Q&A session, please. And of course, as a reminder, if you'd like to ask a question on today's call, please press star followed by one on your telephone keypad and answer into the queue. When preparing to ask your question, please ensure you are unmuted locally. Star followed by one.

To conclude while we continue to face challenging conditions in most of our markets today, we believe that this will pass and I remain very excited about our future. And the ability to seize. The many opportunities in front of us, which we have demonstrated in the past. We are extremely well positioned for long-term success and remain focused on executing our strategy, and shareholder value creation.

With that operator, we will now open the Q&A session, please.

Of course, as a reminder, if you'd like to ask a question on today's call, please press star. Followed by 1 on your telephone keypad now to enter the queue.

The parents ask a question, please. Ensure you are unmuted locally. Star, followed by 1.

Corinne Blanchard: And our first question today comes from Corinne Blanchard from Deutsche Bank. Corinne, your line is open, please go ahead. Great. Thank you. Good morning, everyone. Two questions here. Maybe the first one.

And our first question today, comes from Karen Blanchard. From Deutsche Bank Karen, your line is open, please go ahead.

Corinne Blanchard: Can you dive a little bit into what gave you the confidence to raise the guidance this quarter? And, you know, I think everyone sees you guys as being pretty cautious, and we would probably have expected it to happen next quarter. So that was definitely a great surprise, too, to read that morning.

Corinne Blanchard: And then the second question, could you also give some detail on the cadence that you're expecting between 3Q and 4Q? I know you mentioned the second half being slightly better than the first half, but just wondering how that develops between the two quarters. Thank you.

Jean-Marc: Yes, good morning, Corinne. Thanks for the question. So to start with the first one, and I'll ask some help from Jack for both questions, one and two, actually. The confidence to raise guidance. So we are quite pleased with our first half, and we look at our older book, and we look at our performance. That's what is informing us for the second half. I think it's useful to, as you said, to maybe gives us different puts and takes here going into the second half. In terms of what is going well, I mean packaging is going well in both continents and our performance at Muscle Shoals continues to improve so we're quite pleased with that and that's helping us really secure substantial gains in packaging as you've seen in the growth that we are experiencing over the last The second impact is, you know, last year was a tough year for us.

Yeah, maybe the first 1. Can you dive a little bit into what gave you the confidence to, to raise the guidance? Um, this quarter? And, you know, I think everyone um, sees you guys as being pretty cautious and um, we would probably have expected it to happen next quarter. So um, that was definitely a great surprise to to read that this morning and then the second question, um, could you also give some detail on the Cadence that you're expecting between stroke and 4q? I know you mentioned the second. I've been slightly better than the first hour but just wondering now that um, um develop between the 2 cups quarter. Thank you. Yes. Good morning, Corey. Thanks for the question. So uh, start with the first 1 and I'll ask some help from Jack for both questions 1 and 2 actually, uh, the confidence to raise guidance. So we are quite pleased with our first assessment. We look at our order book uh, and um, we look at our performance. That's what is informing us for the for the second.

Half. I think it's useful to, as you said to maybe,

Gives a different puts and takes here. Uh, going into the second half in terms of what is going. Well, I mean packaging is going well, uh, we in both continents and our performance at the social shows continues to improve. So we're quite pleased with that and that's helping us, uh, really secure a substantial gains in a packaging. As you see in the, in the growth that we are experiencing over the last year.

Jean-Marc: We really focused very strongly on cost reduction. Our Vision 25 program is running very well ahead of our expectations, like the packaging volumes are. And finally, the scrap spreads are also beneficial in the U.S. with the new tariff situation and the increase in the Midwest premium. So these factors are good. As Jack mentioned, the scrap spreads really haven't really benefited us in the first half. Another element also that is benefiting us in terms of translation into U.S. dollars is a foreign exchange. It hasn't really benefited us in the first half. It's going to benefit us in the second half.

Jean-Marc: So these four factors, right, packaging volumes, Vision 25, scrap spreads and. and Foreign Exchange are better than our assumptions that were underlying our initial guidance.

The second impact is, you know, last year was a tough year for us. We really, uh, focused very strongly on cost reduction. Our vision. 25 program is running very well ahead of our expectations, like the packaging volumes are and uh, finally, the scrap spreads are also beneficial in the US with a new tariff situation and the uh, increase in the midwest premium. So these factors are good. As Jack mentioned, the scrap spread is really I haven't really benefited Us in the first half, another element. Also that is benefiting Us in terms of translation into US. Dollars is a foreign exchange. It hasn't really benefited Us in the first half, it's going to benefit us in the second half so these 4 factors, right? Packaging volumes Vision, 25 strap spreads. And um,

Jean-Marc: Now, there's a few things that are worse, and it's really on automotive. Well, the picture is not getting prettier. We thought at the beginning of the year that our assumptions were conservative. We don't think so anymore. The outside forecasts have kept on going down, you know, week after week nearly. We are approaching automotive in the second half with quite a bit of caution, actually. So that's weighing down on our race guidance, so to say. And then in terms of aero and TID, well, this is kind of going as planned. We would like aero to pick up a little bit quicker and sooner, but we're not planning for it in the second half.

And foreign exchange are better than our assumptions that were underlying our initial guidance. Now,

Uh, there's a few things that are worse, uh, and it's free on Automotive where the picture is not getting prettier. We thought at the beginning of the year that our assumptions were conservative, we don't think so anymore. The outside forecasts have kept on going down or, you know, week after week nearly. So we, we are approaching Automotive in the second half with quite a bit of caution actually. Uh, so that's weighing down on our race guidance, so to say and then in terms of uh, arrow and T and well, this

Jack Guo: So that's kind of what's underlying the different assumptions.

Jack Guo: Jack, you want to add anything and maybe comment on the cadence as well? Sure. So I think the only other point I wanted to add is we're doing quite well in terms of working with our customers and suppliers on mitigating the tariff impact, as well as some of the weakness we're seeing in our markets such as automotive. So those benefits, we expect them to start coming in in the third quarter and into the rest of the year, which is a factor to be considered. And given those benefits coming into the third quarter, we're expecting third quarter performance to be stronger than the second quarter.

Corinne Blanchard: But then obviously in Q4, we have the normal kind of seasonality, so it'll be weaker than Great, thank you.

Is kind of going as planned. Uh, we would like a arrow to pick up a little bit, uh, uh, quicker and sooner, but we're not planning for it in the second half. So that's kind of what's uh, underlying the different assumptions. Uh, Jack, you want to add anything and maybe comment on the Cadence as well. Sure. So, um, I think the only, um, other point I wanted to add is um, we're doing quite well in terms of working with our customers and suppliers on um, mitigating the taping packed, um, as well as. Um, some of the weakness we're seeing at in our markets such as such such as Automotive. So those benefits, we expect them to start coming in in the third quarter and into the rest of the year, which is a factor to be considered. Um and given those benefits coming into the third quarter. Um, we're expecting, um, third quarter performance to be stronger than, um, the second quarter. Um, but then obviously,

In Q4, we have the normal kind of seasonality so be weaker than Q3.

Great. Thank you.

Bill Peterson: The next question comes from Bill Peterson from J.P. Morgan.

Bennett: Bill, your line is open, please go ahead. Good morning, John, Mark and Jack. This is Bennett on for Bill. Thank you for taking my questions today. Hey, Bennett. Good morning, Bennett.

The next question comes from Bill Peterson from JP Morgan. Bill, your line is open. Please go ahead.

Bennett: I wanted to start with packaging. Good morning, the packaging shipments came in quite strong. It looks like the strongest actually since the second quarter of 22.

Good morning, John, Mark, and Jack. This is Bennett on for Bill. Thank you for taking my questions today. Hey Bennett, good morning. Bennett, I wanted to start with Packaging.

Bennett: So did you shed a little more color on what improvements you saw at Mustard Shoals during the quarter and if you would and or could pivot, you know, further ABS capacity to packaging in the meantime? Yeah, so the packaging, you know, strength is in both Europe and North America. And as you point out, when automotive is weak, it gives us the opportunity to have more time available on our mills to dedicate to packaging. And that's the backdrop of the packaging market that is quite healthy in both regions. So that that has helped us quite a bit in achieving that very nice.

Good morning. The packaging shipment came in quite strong. It looks like the strongest actually, since the second quarter of 22,

So could you shed a little more color on what improvements you saw at muster scholes during the quarter and if you would and or could pivot, you know, further ABS capacity to packaging in the meantime.

Jean-Marc: performance in their shipments in Q2. So, as I said, some of it is because we're running well, so that's a good thing. Some of it is because automotive is not going well, which is not such a good thing.

Week, it gives us, you know, culture to have more time available on our meals, to dedicate to packaging, and that's with the backdrop of a packaging, you know, Market that is quite healthy in both regions so that that has helped us, uh, quite, uh, quite a bit in, you know, achieving that very nice. Uh,

Performance in a shipments in Q2.

Jean-Marc: In terms of running well, our operations, our musculoskeletals are stabilized quite a bit. You know that we have run into quite a few operational issues post-COVID that took us quite a bit of time to address in terms of, you know, getting the right manning, the right training, the right... performance from our assets through a more predictive maintenance. So all these things are coming into play now. And we feel quite confident that now that we've had, you know, seven eight months of very good performance at Muscle Shoals, and we keep on making progress, I will feel very confident about So we'll keep on working hard to maintain that and improve that level of performance.

Uh, so as I said, some of it is because we're running well, so that's a good thing. So it is because Automotive is not going well, which is not such a good thing in terms of running. Well, our operations are on the socials are stabilized quite a bit. You know, that we run into a quite a few operational issues postco, uh, that took us quite a bit of time to address in terms of, uh, you know, uh, getting the right Manning the right uh, training, the the right.

Jean-Marc: But I think all things are pointing in the right direction. At the same time, it's a plan that has further potential for improvement, which we're working on.

Jean-Marc: And that requires, obviously, some capital expenditures, which we are planning for in the future. And you know, planning horizon through 28, but, you know, not only are we happy with where we are, but we're quite excited about the opportunities we have for further improvements at MuscleShort.

Performance from our assets, through a more predictive maintenance, all these things are coming into play now, and we feel quite confident that now that we've had, you know, 7 or 8 months of very good performance at Muscle Shoals, we keep on making progress. I will feel very confident about the future. So we'll keep on working hard to maintain that and improve that level of performance. But I think, uh, all things are pointing in the right direction. At the same time, it's a plan that has further potential for improvement, which we're working on, and that requires obviously some capital expenditures, which we are planning.

4 in the in the in the, you know, planning Horizon through 28. Uh, but you know, not only are we happy with where we are but we're quite excited about the opportunities we have at for further improvements at muscle trolls.

Jean-Marc: And then coming to Europe and auto. The outlook remains challenging. I think in the past, you've suggested that the company wouldn't look to invest meaningfully there just given the import pressures. But as we think about the strategic outlook for this business, to what extent have you started to engage at all with any Chinese OEMs, you know, looking to localize capacity in the coming years? We haven't done any of that, Bennett, I mean, we'll see whether they build assembly plants. As I mentioned, we'll be a legitimate supplier to, you know, whatever assembly line there is in Europe.

Thanks for that. And then coming to Europe and Auto.

Yeah, look, remains challenging. I think in the past you've suggested that the company wouldn't look to invest meaningfully. They are just given the import pressures, but...

As we think about the Strategic outlook for this business, to what extent have you started to engage at all with any Chinese oems, you know, looking to to localize capacity in the coming years.

Bennett: You know that the... The products we make don't travel very much because they age arden, and therefore, you know, you've got a few weeks of shelf life, really. So, you know, local assembly of, you know, wherever an assembly line is, they need to procure their parts from reasonably close by. So we'll be a legitimate supplier to whatever customer sets up new lines in Europe. But we haven't been engaged in any discussion of that nature. Understood.

Uh, we haven't done any of that Bennett. I mean, we'll, we'll see whether the build assembly plans. As, as I mentioned, will be a legitimate supplier to, you know, whatever assembly line there is, uh, in Europe. Uh, you know that the, uh, the products we make. Don't travel very much because they age Arden and therefore, you know, you got a few weeks of shelf life, really? Uh, so, you know, local assembly of, you know, wherever an assembly line is they need to put your their thoughts, uh, from reasonably close by. So we'll be a legitimate supplier to whatever customer, uh, sets up a new lines in Europe.

Uh, but we haven't been, uh, engaged in any, uh, discussion of that nature, uh, just yet.

Bennett: Thank you for the context.

Bennett: I'll get back in the queue. Thank you, Ben.

Understood, thank you for the context. I'll get back in the queue.

Thank you, Bennett.

Operator: As a reminder, that's star one to ask a question today.

Josh Sullivan: The next question comes from Josh Sullivan from the Benchmark Company. Josh, your line is open. Please go ahead. Hey, good morning. Good morning, Josh. Hi, Josh. John Mark.

As a reminder, star 1 to ask a question today. The next question comes from Josh Sullivan from The Benchmark Company. Josh, your line is open; please go ahead.

Good morning. Good morning, Josh. Hi Josh, uh, John Mark.

Josh Sullivan: Jim, just on aerospace, in your comments you talked about the shift in demand to the right from some products. Was that a general comment just on the overall aerospace cycle that we've seen over the last couple of quarters that we're adjusting to, or is there any color you can provide just on the aerospace demand, incremental, either way, in 2Q? Yeah, so I think, Josh, as you know, our products have quite a bit of lead time due to the time we, you know, we ship them to the customer and time the aircraft actually is delivered. And what you've seen, I think, even better than us is, you know, between the forecasts that were done, say, two years ago by any OEM, and what they are building today, there's quite a gap.

Hey uh, John Mark just on Aerospace, you know, in your comments. You know, you talked about the shift in demand of the right from some products um was that a general comment just on the overall Aerospace cycle that we've seen over the last couple of quarters that were adjusting to? Or is there any color you can provide just on the Aerospace demand incremental? Either way in 2q,

Josh Sullivan: And that gap has kept on being pushed like a bubble to the right. And that's what we're caught in, right? So the shipments we made two years ago, were higher than what is needed to make the planes that they are making. delivering today and that's kind of the stocking up that's happened over the past few years. So it is not getting worse it just gets you know pushed further you know to the right and I do hope that it resolves itself reasonably quickly we'll see it's very difficult to tell. Now what we do know because we've been through this cycle a few times is when it comes back it snaps back very quickly right in a matter of a few months.

Yeah, so I think Josh as you know our products have quite a bit of lead time due to the time. We uh, you know, we ship them to the customer and time the aircraft actually is delivered and what we, you've seen, I think even better than us is, you know, between the, uh, forecasts that were done, say, 2 years ago, by any OEM and what they are building today. There's quite a gap and that Gap has kept on being pushed like a bubble to the right. Uh, and that, that's what we, we got it, right? So the shipments, we made, 2 years ago.

We're higher than what is needed to make the planes that they are making and delivering today. And that's kind of the stocking up. That's happened over the past few years. So it is not getting worse, it just gets, you know, pushed so the

Josh Sullivan: We are not seeing any sign of that just yet but it's not getting worse.

A few times is when it comes back. It's not back very quickly. Write in a matter of a few months. Uh, we are not seeing any sign of that just yet, uh, but it's not getting worse.

Josh Sullivan: And maybe just on the airware product, you know, we've obviously seen a lot of activity in space. I'm just curious, you know, what you guys are seeing as far as market demand signals from the space market. Yeah, so it's quite lumpy. But it's, Airware is a fantastic product for space applications, because of its how light it is, the weight savings you achieve, obviously, which translates into better payload, which is super important if you want to launch anything into space. It's got also excellent cryogenic properties. So it can resist, you know, high temperatures and extremely low temperatures.

Got it and then maybe just on on the airware product. You know, we've obviously seen a lot of activity in space. Um, just curious, you know what you guys are seeing as far as market demand signals from the space Market.

Josh Sullivan: So there is a lot of demand for this product. We're really, you know, subject to, here again, it's a matter of the supply chain, right? You know, launches, more launches are good for us. But, you know, our products are ordered on the basis of what are the launches that are forecast for one year or three years down the road. And that obviously, there's not absolute fidelity between the forecast made now for two years from now, and what will happen in two years from now. So it's a bit lumpy, it goes up very quickly, goes down very quickly.

Yeah, so uh it's quite a lumpy uh but it's uh are is a fantastic product for space applications because of its uh uh how light it is uh the weight savings, you you achieve obviously we translate into better payload which is super important if you want to launch anything into space and it's got also excellent cryogenic properties. Uh, so can resist, you know, high temperatures and extremely low temperatures, so there is a lot of demand for for this product. Uh, we're really um,

You know, subject to, uh, your organic. It's a matter of the supply chain, right? Uh,

you know, launches more launches are good for us. Uh, but you know, our products are ordered on the base of 1 of our launches that are forecast for 1 year or 2 years down the road and that obviously, there there's not a absolute Fidelity between the forecast May now for 2 years from now and what will happen in 2 years from now. So, it's a bit.

Josh Sullivan: But on average, it's growing, and it's a very good product line for us.

It's lumpy, uh, it goes up, very quickly, goes down very quickly. But on, on average, it's growing, and it's a very good product line for us.

Josh Sullivan: Thank you for the time. And I should also specify that there is no underpayment to our products. So we've got, you know, very strong. and Xperia.

Thank you for the time.

And I should also specify that there is no alternative to our products. So we've got, you know, very strong patterns.

and experience.

Operator: And as a final call for questions, that's star followed by one on your telephone key.

That's a fun. Look for questions that star. Followed by 1 on your telephone keypad.

Bill Peterson: We have a follow-up from Bill at J.P. Morgan.

Bennett: Bill, please go ahead. Hi there, Bennett back on for Bill. Just wanted to follow up on the scrap spreads quickly. It sounds like a. listed in the positive category in the back half. But could you help us understand, I guess, if where spreads are today it's just more than off enough to more than offset the prior guidance of I think it was a 15 to 20 million quarter headwinds. and are you seeing any change in flows in Europe just given the attractive pricing in the U.S. and maybe more flows getting shipped across the pond here?

We have a follow-up from Bella, JP Morgan. Please go ahead.

Hi there. Bennett back on for Bill. Just wanted to follow up on the scrap spreads quickly. It sounds like a...

listed in the positive category into the back half, but could you help us understand? I guess if

If we're spreads, are today, is this more than off enough to more than offset? Uh, the prior guidance of I think it was a 15 to 20 million quarter headwinds

Jack Guo: Thank you. Sure, yeah so on scrap spread so as you know we are buying some of our scrap metal on an annual basis and some of it on a more spot basis. call it 50 50 just for the sake of the argument. So at the beginning of the year when we, you know, we were still buying metal scrap metal at a pretty elevated price and very, very narrow spreads on the heels of what happened in 24. But now the scrap spreads have widened. Our open position is larger as well, so we're buying still some scrap metal at prices that were negotiated at the end of last year, but we're buying also quite a bit now at prices that are spot prices.

And are you seeing any change in flows in Europe? Just given the attractive pricing in the U.S. and maybe more flows getting shipped across the pond here. Thank you.

Sure yes. So on scrap spreads. So as you know we are buying some of our me scrap metal on an annual basis and some of it on a more spot basis and call it 50/50 just for the sake of the argument. So at the beginning of the year, when we you know, we were still buying metal scrap metal at the pre elevated price. So very very narrow Sprites on the heels of what happened in 24.

Uh, but now the scrub spreads up widened, our open position is larger as well. So we're buying still some scrap metal at prices that were negotiated at the end of last year, but we're buying also quite a bit now at prices at our spot prices.

Jack Guo: What typically in any so that that's how we've been operating for years and years right and typically in any quarter you could swing you know five million one way or the other and I made the commentary last year that we had you know we were experiencing swings of 15 to 20 million which were very unusual. So what we could be seeing in the second half is some of that, so more than five and less than 15, swinging back the proper way, and the proper way in our favor. And that is what is kind of embedded in our revised guide.

What, uh,

Typically in any, so that, that's how we've been operating for years and years, right? And typically in any quarter, you could swing, you know, 5 million 1 way or the other. And I met the commentary last year that we had, you know, we were experiencing swings of 15 to 20 million, which were very unusual. So, what we could be seeing in the second half, if some of that. So more than 5 and less than 15, swinging back the the proper way and uh, the proper way in our favor, uh, and that, that is what, uh, you know, it's kind of embedded in our, in our revised guidance.

Jack Guo: Did I answer your question?

Jack Guo: Thank you for that. Best of luck.

Did I answer your question on that? Best of luck?

Yep.

Jack Guo: Yes, I guess the one minor follow up would be any changes in Europe that you're seeing in scrapped availability. Yes, sorry, you asked for that and I didn't, I wasn't trying to dodge it. No, we're not seeing really big flows out of Europe that would be penalizing us. But yes, there is a bit of leakage from Europe into the US, but it's not material to our operation.

Yes, I guess the 1 in the 1 Min follow-up would be any changes in Europe that you're seeing um, in scrap availability. Yeah. Sorry us for that and I didn't, I wasn't trying to dodge it. Uh, no. We are not seeing really a big, uh, flows out of Europe that would be penalizing us. Uh, but yes, there is a bit of leakage from Europe into the us, but it's not a material to our operations.

Jack Guo: Alright, thank you very much. Thank you.

All right. Thank you very much.

Thank you.

Sean Wondrak: The next question comes from Sean Wondrak from Deutsche Bank.

Sean Wondrak: Sean, your line is open, please go ahead. Hi there. Thanks for taking my question. Just one for me, and I apologize if you touched on this already, but do you expect to have any impact from the big beautiful bill, whether it's taxed or otherwise? So Sean, it's a really good question. So we're currently assessing the impact, but at the moment we do not anticipate a significant impact on our financial results.

Question comes from Sean 1 track. From Deutsche Bank, Sean, your line is open, please go ahead.

Hi there. Thanks.

and just 1 from me and I apologize if

But, um, do you expect to have any impact from the big beautiful bill? Um, whether it's tax or otherwise.

So, uh, Sean, it's a really good question. We're currently assessing the impact, but at the moment, we do not anticipate a significant impact on our financial results this year.

Sean Wondrak: Right, okay, that's it for me. Thank you.

Right. Okay. That's it for me. Thank you.

Thank you, Sean.

Corinne Blanchard: We have a follow-up from Corinne at Deutsche Bank.

We have.

Corinne Blanchard: Corinne, please go ahead. Hey, thank you for bringing me back. Just maybe I missed it, but can you just go back on the mid-cycle margin targets? So I think in aerospace, you mentioned a jump from $1,000 a ton to $1,100 a ton. But can you just confirm that? And then on packaging, do you have any room to see a price increase coming at some point? Maybe not over the coming month, but I'm just kind of trying to see over the next six to 12 months. Thank you. So Corinne, on the aerospace NTID, that's a blended margin, right?

We have a follow-up from Karina docha Bank Karine. Please go ahead.

Hey, thank you for bringing me back. Just maybe, maybe I missed it, but can you just go back? Um, the mid-cycle or margin target? So I think in Aerospace, you mentioned a jump from $1,000 or at a time to like $1,100. Drop that down, but can you just confirm that? And then in Packaging, do you have any room to see like a price increase coming? At some point? Maybe not over the coming months, but I'm just kind of trying to see over the next 6 to 12 months. Thank you. Yeah.

so, Corey none the

Jean-Marc: Yes, we're calling it up through the cycle from $1,000 to $1,100 per ton. And that's a reflection of our performance and the contractual positions we have. You know that we've got some. contracts that extend several years in the future. So that gives us a good appreciation for where we think we should be. We also said that we're going to be above that level for the near future, namely 25 and 26. So that's it.

Uh, aerospace entity. That's a blended margin, right? Yes, we're calling it up through the cycle from $1,000 to $1,100 per ton, and that's a reflection of, you know, our performance. And, you know, the contractual positions we have, you know, that we got some...

Jean-Marc: I hope that confirms. to your response to your question. Regarding packaging, I don't wanna go into too much specifics, but we're seeing an environment which is very supportive to pricing going into 26. So our negotiations with customers are going well, and we're very happy with where we are trending. But remember, a lot of the vast, vast majority of this business is multi-year, right? So there's some inertia. And, you know, on average, we like to say we may be renegotiating every year 20% of our business, right? 20-25% of our business. So whatever, you know, change there is, upside or downside to price, you know.

Contracts that extend several years in the future so that gives us a good appreciation for where we think we, we should be. We also said that we're going to be above that level for the near future namely 25 and 26. Right. So that that's that's it, I hope that confirms uh, uh and that is uh, to your

Yeah, um, responsive to your question, um, regarding packaging. I don't want to go into too much, uh, specifics. But we're seeing an environment which is, uh, very supportive to pricing going into 2026. Uh, so, uh,

Our negotiations with customers are going well and we're very happy with where we are trending.

But remember you know a lot of the a lot the vast vast majority of these business is multi-year, right? So there's some inertia and you know on average we like to say we maybe renegotiating every year 20% of our business write 2025

Jean-Marc: kind of family ties over several years. But at the moment, it's reasonably possible.

Business. So, whatever change there is outside, or downside to price, you know, is kind of advertised over, you know, several years.

But at the moment, it's reasonably positive.

Corinne Blanchard: That was very helpful. Thank you.

That's very helpful. Thank

Thank you.

Jean-Marc: We have no further questions, so I'll hand it back to Jean-Marc for some closing comments. Well, thank you, everybody, again, for your interest in Constellium. We are happy with the progress we're making, and we look forward to an exciting second half. And I look forward to updating you on our progress in October. Thank you very much. Have a good day.

We have no further questions for a hand. Go back to Jean-Marc for some closing comments.

Well, thank you, everybody, for again, your interest in Constellium. We are happy with the progress we're making, and we look forward to an exciting second half. I look forward to updating you on our progress in October. Thank you very much. Have a good day.

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

Please stay cool. Thank you very much for your attendance. You may now disconnect your lines.