CONSTELLIUM SE, 6-K filed on 23 Jul 20
v3.20.2
Document and Entity Information
6 Months Ended
Jun. 30, 2020
Document and entity information [abstract]  
Document Type 6-K
Amendment Flag false
Document Period End Date Jun. 30, 2020
Document Fiscal Year Focus 2020
Document Fiscal Period Focus Q2
Entity Registrant Name Constellium SE
Entity Central Index Key 0001563411
Current Fiscal Year End Date --12-31
v3.20.2
Document and Entity Information Document and Entity Information
6 Months Ended
Jun. 30, 2020
Document and entity information [abstract]  
Document Type 6-K
Amendment Flag false
Document Period End Date Jun. 30, 2020
Document Fiscal Year Focus 2020
Document Fiscal Period Focus Q2
Entity Registrant Name Constellium SE
Entity Central Index Key 0001563411
Current Fiscal Year End Date --12-31
v3.20.2
UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT - EUR (€)
€ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Profit or loss [abstract]        
Revenue € 1,031 € 1,538 € 2,468 € 3,074
Cost of sales (962) (1,356) (2,246) (2,748)
Gross profit 69 182 222 326
Selling and administrative expenses (57) (70) (123) (138)
Research and development expenses (7) (12) (20) (24)
Restructuring costs (11) (1) (11) (1)
Other gains / (losses) - net 5 (30) (63) (14)
(Loss) / income from operations (1) 69 5 149
Finance costs - net (42) (43) (87) (89)
Share of income of joint-ventures 0 0 0 5
(Loss) / income before income tax (43) 26 (82) 65
Income tax benefit / (expense) 11 (9) 19 (24)
Net (loss) / income (32) 17 (63) 41
(Loss) / income attributable to:        
Equity holders of Constellium (33) 16 (64) 39
Non-controlling interests 1 1 1 2
Net (loss) / income € (32) € 17 € (63) € 41
Earnings per share attributable to the equity holders of Constellium        
Basic (in EUR per share) € (0.24) € 0.12 € (0.46) € 0.29
Diluted (in EUR per share) € (0.24) € 0.11 € (0.46) € 0.28
v3.20.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) - EUR (€)
€ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of comprehensive income [abstract]        
Net (loss) / income € (32) € 17 € (63) € 41
Items that will not be reclassified subsequently to the Unaudited Interim Consolidated Income Statement        
Remeasurement on post-employment benefit obligations (35) (34) (41) (62)
Income tax on remeasurement on post-employment benefit obligations 10 8 9 15
Items that may be reclassified subsequently to the Unaudited Interim Consolidated Income Statement        
Cash flow hedges 5 2 0 (5)
Net investment hedges 0 5 0 4
Income tax on hedges (2) 0 0 2
Currency translation differences (2) (6) (2) (1)
Other comprehensive loss (24) (25) (34) (47)
Total comprehensive loss (56) (8) (97) (6)
Attributable to:        
Equity holders of Constellium (57) (9) (98) (8)
Non-controlling interests 1 1 1 2
Total comprehensive loss € (56) € (8) € (97) € (6)
v3.20.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION - EUR (€)
Jun. 30, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents € 378,000,000 € 184,000,000
Trade receivables and other 451,000,000 474,000,000
Inventories 635,000,000 670,000,000
Other financial assets 22,000,000 22,000,000
Total current assets 1,486,000,000 1,350,000,000
Non-current assets    
Property, plant and equipment 2,031,000,000 2,056,000,000
Goodwill 456,000,000 455,000,000
Intangible assets 68,000,000 70,000,000
Investments accounted for under the equity method 1,000,000 1,000,000
Deferred income tax assets 222,000,000 185,000,000
Trade receivables and other 74,000,000 60,000,000
Other financial assets 9,000,000 7,000,000
Total non-current assets 2,861,000,000 2,834,000,000
Total Assets 4,347,000,000 4,184,000,000
Current liabilities    
Trade payables and other 1,003,000,000 999,000,000
Borrowings 102,000,000 201,000,000
Other financial liabilities 45,000,000 35,000,000
Income tax payable 20,000,000 14,000,000
Provisions 29,000,000 23,000,000
Total current liabilities 1,199,000,000 1,272,000,000
Non-current liabilities    
Trade payables and other 19,000,000 21,000,000
Borrowings 2,434,000,000 2,160,000,000
Other financial liabilities 30,000,000 23,000,000
Pension and other post-employment benefit obligations 715,000,000 670,000,000
Provisions 99,000,000 99,000,000
Deferred income tax liabilities 25,000,000 24,000,000
Total non-current liabilities 3,322,000,000 2,997,000,000
Total Liabilities 4,521,000,000 4,269,000,000
Equity    
Share capital 2,758,440.64 3,000,000
Share premium 420,000,000 420,000,000
Retained deficit and other reserves (609,000,000) (519,000,000)
Equity attributable to equity holders of Constellium (186,000,000) (96,000,000)
Non controlling interests 12,000,000 11,000,000
Total Equity (174,000,000) (85,000,000)
Total Equity and Liabilities € 4,347,000,000 € 4,184,000,000
v3.20.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - EUR (€)
€ in Millions
Total
Share capital
Share premium
Re-measurement
Cash flow hedges
Foreign currency translation reserve
Other reserves
Retained losses
Total Equity holders of Constellium
Non-controlling interests
Beginning balance at Dec. 31, 2018 € (114) € 3 € 420 € (129) € (8) € 3 € 37 € (448) € (122) € 8
Net (loss) / income 41             39 39 2
Other comprehensive loss (47)     (47) 1 (1)     (47)  
Total comprehensive loss (6)     (47) 1 (1)   39 (8) 2
Share-based compensation 7           7   7  
Transactions with non-controlling interests 0                 0
Ending balance at Jun. 30, 2019 (113) 3 420 (176) (7) 2 44 (409) (123) 10
Beginning balance at Dec. 31, 2018 (114) 3 420 (129) (8) 3 37 (448) (122) 8
Net (loss) / income 64             59 59 5
Other comprehensive loss (49)     (48) (2) 1     (49) 0
Total comprehensive loss 15     (48) (2) 1   59 10 5
Share-based compensation 16           16   16  
Transactions with non-controlling interests (2)                 (2)
Ending balance at Dec. 31, 2019 (85) 3 420 (177) (10) 4 53 (389) (96) 11
Net (loss) / income (63)             (64) (64) 1
Other comprehensive loss (34)     (32) 0 (2)     (34)  
Total comprehensive loss (97)     (32) 0 (2)   (64) (98) 1
Share issuance   0 0              
Share-based compensation 8           8   8  
Transactions with non-controlling interests 0                 0
Ending balance at Jun. 30, 2020 € (174) € 3 € 420 € (209) € (10) € 2 € 61 € (453) € (186) € 12
v3.20.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS - EUR (€)
€ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Statement of cash flows [abstract]    
Net (loss) / income € (63) € 41
Adjustments    
Depreciation, amortization and impairment 137 117
Finance costs - net 87 89
Tax (benefit) / expense (19) 24
Share of income of joint-ventures 0 (5)
Unrealized losses / (gains) on derivatives - net and from remeasurement of monetary assets and liabilities - net 11 (17)
Losses on disposal 0 2
Other - net 13 6
Interest paid (73) (78)
Income tax paid 18 (11)
Change in trade working capital    
Inventories 35 24
Trade receivables 7 (29)
Trade payables (18) 104
Margin calls 0 5
Change in provisions and pension obligations 2 (15)
Other working capital 15 3
Net cash flows from operating activities 152 260
Purchases of property, plant and equipment (98) (130)
Acquisition of subsidiaries net of cash acquired 0 (83)
Proceeds from disposals, net of cash 1 1
Other investing activities 0 (4)
Net cash flows used in investing activities (97) (216)
Proceeds from issuance of Senior Notes 290 0
Repayment of Senior Notes (200) 0
Proceeds from French loan 180 0
Proceeds from Swiss credit facility 18 0
Lease repayments (17) (70)
(Repayments) / proceeds from U.S. revolving credit facility and other loans (124) 76
Payment of deferred financing costs (9) 0
Transactions with non-controlling interests 0 (2)
Other financing activities 2 0
Net cash flows from financing activities 140 4
Net increase in cash and cash equivalents 195 48
Cash and cash equivalents - beginning of year 184 164
Effect of exchange rate changes on cash and cash equivalents (1) 1
Cash and cash equivalents - end of period € 378 € 213
v3.20.2
GENERAL INFORMATION
6 Months Ended
Jun. 30, 2020
Disclosure of general information [abstract]  
GENERAL INFORMATION
NOTE 1 - GENERAL INFORMATION
Constellium is a global leader in the design and manufacture of a broad range of innovative specialty rolled and extruded aluminium products, serving primarily the packaging, aerospace and automotive end-markets. The Group has a strategic footprint of manufacturing facilities located in North America, Europe and China and operates 28 production facilities, 3 administrative centers and 3 R&D centers. The Group has approximately 12,400 employees.
Constellium SE, a French Societas Europaea (SE), is the parent company of the Group. The business address (head office) of Constellium SE is Washington Plaza, 40-44 rue Washington, 75008 Paris, France.
Unless the context indicates otherwise, when we refer to “we”, “our”, “us”, “Constellium”, the “Group” and the “Company” in this document, we are referring to Constellium SE and its subsidiaries.
v3.20.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2020
Disclosure of summary of significant accounting policies [abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of compliance
The Unaudited Condensed Interim Consolidated Financial Statements present the Unaudited Interim Consolidated Income Statement, Statement of Comprehensive Income / (Loss) and Statement of Cash Flows for the six months ended June 30, 2020 and 2019; and the Unaudited Interim Consolidated Statement of Financial Position and Changes in Equity at June 30, 2020 and December 31, 2019. They are prepared in accordance with IAS 34 - Interim Financial Reporting and with generally accepted accounting principles under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The Unaudited Condensed Interim Consolidated Financial Statements do not include all the information and disclosures required in the Consolidated Financial Statements. They should be read in conjunction with the Group’s Consolidated Financial Statements for the year ended December 31, 2019, which were authorized for issue by the Board of Directors on March 9, 2020.
These Unaudited Condensed Interim Consolidated Financial Statements were authorized for issue by management on July 21, 2020.
2.2 Basis of preparation
In accordance with IAS 1 - Presentation of Financial Statements, the Unaudited Condensed Interim Consolidated Financial Statements are prepared on the assumption that Constellium is a going concern and will continue in operation for the foreseeable future.
The Group's financial position, its cash flows, liquidity position and borrowing facilities are described in the Unaudited Condensed Interim Consolidated Financial Statements in NOTE 10 - Cash and Cash Equivalent, NOTE 16 - Borrowings and NOTE 18 - Financial Risk Management.
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, including an assessment of the current macroeconomic environment, indicate that the Group should be able to operate within the level of its current facilities and related covenants. Management considers that this assumption is not invalidated by the Group’s negative equity at June 30, 2020.
The accounting policies adopted in the preparation of the Unaudited Condensed Interim Consolidated Financial Statements are consistent with those followed in the preparation of the Group’s Consolidated Financial Statements for the year ended December 31, 2019, except for the application of the effective tax rate in accordance with IAS 34 - Interim Financial Reporting.

2.3 Application of new and revised IFRS
Several amendments and interpretations apply for the first time in 2020, but do not have any impact on the Unaudited Condensed Interim Consolidated Financial Statements of the Group. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The Group plans to adopt the new standards and interpretations on their required effective dates.
2.4 Presentation of the operating performance of each operating segment and of the Group
In accordance with IFRS 8 - Operating Segments, operating segments are based upon the product lines, markets and industries served, and are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (“CODM”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.
Constellium’s CODM measures the profitability and financial performance of its operating segments based on Adjusted EBITDA as it illustrates the underlying performance of continuing operations by excluding certain non-recurring and non-operating items. Adjusted EBITDA is defined as income / (loss) from continuing operations before income taxes, results from joint ventures, net finance costs, other expenses and depreciation and amortization as adjusted to exclude restructuring costs, impairment charges, unrealized gains or losses on derivatives and on foreign exchange differences on transactions that do not qualify for hedge accounting, metal price lag, share-based compensation expense, effects of certain purchase accounting adjustments, start-up and development costs or acquisition, integration and separation costs, certain incremental costs and other exceptional, unusual or generally non-recurring items.
2.5 Principles governing the preparation of the Unaudited Condensed Interim Consolidated Financial Statement
The following table summarizes the main exchange rates used for the preparation of the Unaudited Condensed Interim Consolidated Financial Statements:
Foreign exchange rate for 1 Euro
 
 
 
Six months ended
June 30, 2020
 
At June 30,
2020
 
Six months ended
June 30, 2019
 
At December 31,
2019
 
 
 
Average rate
 
Closing rate
 
Average rate
 
Closing rate
U.S. Dollars
 
USD
 
1.1018

 
1.1198

 
1.1297

 
1.1234

Swiss Francs
 
CHF
 
1.0641

 
1.0651

 
1.1294

 
1.0854

Czech Koruna
 
CZK
 
26.2970

 
26.7400

 
25.6842

 
25.4080


Presentation of financial statements
The Unaudited Condensed Interim Consolidated Financial Statements are presented in millions of Euros, except Earnings per share, which is presented in Euros. Certain reclassifications may have been made to prior year amounts to conform to the current year presentation.
2.6 Judgments in applying accounting policies and key sources of estimation uncertainty
The preparation of financial statements requires to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Unaudited Condensed Interim Consolidated Financial Statements. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.  The resulting accounting estimates will, by definition, rarely be equal to the related actual results. Actual results may differ significantly from these estimates, the effect of which is recognized in the period in which the facts that give rise to the revision become known.
In preparing these Unaudited Condensed Interim Consolidated Financial Statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were those applied to the Consolidated Financial Statements at, and for the year ended December 31, 2019.  The Group reviewed these significant assumptions and estimates in light of the uncertainty associated with the Covid-19 downturn and its potential impact on the global economy and its business. The Group believes that the accounting assumptions and estimates used in the preparation of the Unaudited Condensed Interim Consolidated Financial Statements at and for the period ended June 30, 2020 are appropriate. However, there remains considerable uncertainty with respect to the duration of the crisis and its potential impact on the overall economy and our business and there can be no guarantee that our assumptions will materialize or that actual results will not differ materially from estimates.
In addition, in accordance with IAS 34, the Group applied, in the preparation of these Unaudited Condensed Interim Consolidated Financial Statements, a projected tax rate for the full year of 2020.
v3.20.2
REVENUE
6 Months Ended
Jun. 30, 2020
Revenue [abstract]  
REVENUE
NOTE 3 - REVENUE
3.1 Disaggregation of revenue
The following table presents our revenue by product line:
(in millions of Euros)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Packaging rolled products
 
456

 
568

 
980

 
1,116

Automotive rolled products
 
88

 
209

 
281

 
439

Specialty and other thin-rolled products
 
20

 
42

 
52

 
90

Aerospace rolled products
 
142

 
224

 
365

 
429

Transportation, Industry and other rolled products
 
105

 
148

 
231

 
310

Automotive extruded products
 
96

 
199

 
295

 
387

Other extruded products
 
124

 
148

 
264

 
303

Total Revenue
 
1,031

 
1,538

 
2,468

 
3,074


The following table presents our revenue by destination of shipment:
(in millions of Euros)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
France
 
67

 
154

 
188

 
306

Germany
 
192

 
339

 
479

 
678

United Kingdom
 
39

 
49

 
108

 
99

Switzerland
 
15

 
18

 
27

 
38

Other Europe
 
201

 
286

 
476

 
555

United States
 
413

 
600

 
974

 
1,164

Canada
 
7

 
9

 
24

 
27

Asia and Other Pacific
 
61

 
68

 
118

 
137

All Other
 
36

 
15

 
74

 
70

Total Revenue
 
1,031

 
1,538

 
2,468

 
3,074


Revenue is recognized at a point in time, except for certain products representing less than 1% of total revenue with no alternative use for which we have a right to payment.
v3.20.2
OPERATING SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2020
Disclosure of operating segments [abstract]  
OPERATING SEGMENT INFORMATION
NOTE 4 - OPERATING SEGMENT INFORMATION
Management has defined Constellium’s operating segments based upon the product lines, markets and industries it serves, and prepares and reports operating segment information to Constellium’s chief operating decision maker (CODM) (see NOTE 2 - Summary of Significant Accounting Policies) on that basis.
4.1 Segment Revenue
 
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
(in millions of Euros)
 
Segment revenue
 
Inter-segment elimination

 
External revenue
 
Segment revenue
 
Inter-segment elimination

 
External revenue
 
Segment revenue
 
Inter-segment elimination

 
External revenue
 
Segment revenue
 
Inter-segment elimination
 
External revenue
P&ARP
 
565

 
(1
)
 
564

 
821

 
(2
)
 
819

 
1,317

 
(4
)
 
1,313

 
1,649

 
(4
)
 
1,645

A&T
 
250

 
(3
)
 
247

 
383

 
(11
)
 
372

 
609

 
(13
)
 
596

 
761

 
(22
)
 
739

AS&I
 
222

 
(2
)
 
220

 
347

 

 
347

 
564

 
(5
)
 
559

 
691

 
(1
)
 
690

Holdings & Corporate
 

 

 

 

 

 

 

 

 

 

 

 

Total
 
1,037

 
(6
)
 
1,031

 
1,551

 
(13
)
 
1,538

 
2,490

 
(22
)
 
2,468

 
3,101

 
(27
)
 
3,074


4.2 Segment Adjusted EBITDA and reconciliation of Adjusted EBITDA to Net Income
(in millions of Euros)
 
Notes
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
P&ARP
 
 
 
58

 
79

 
124

 
138

A&T
 
 
 
31

 
64

 
83

 
116

AS&I
 
 
 
(1
)
 
30

 
33

 
59

Holdings & Corporate
 
 
 
(7
)
 
(6
)
 
(12
)
 
(11
)
Adjusted EBITDA
 
 
 
81

 
167

 
228

 
302

Metal price lag (A)
 
 
 
(25
)
 
(13
)
 
(40
)
 
(31
)
Start-up and development costs (B)
 
 
 
(2
)
 
(3
)
 
(4
)
 
(5
)
Bowling Green one-time costs related to the acquisition (C)
 
 
 

 

 

 
(6
)
Share-based compensation costs
 
 
 
(5
)
 
(4
)
 
(8
)
 
(7
)
Losses on pension plan amendments
 
19
 
(2
)
 

 
(2
)
 

Depreciation, amortization and impairment
 
13,14
 
(71
)
 
(60
)
 
(137
)
 
(117
)
Restructuring costs
 
20
 
(11
)
 
(1
)
 
(11
)
 
(1
)
Unrealized gains / (losses) on derivatives
 
5
 
43

 
(14
)
 
(10
)
 
17

Unrealized exchange gains / (losses) from the remeasurement of monetary assets and liabilities – net
 
5
 
1

 
(1
)
 
(1
)
 

Losses on disposals
 
5
 

 
(1
)
 

 
(2
)
Other (D)
 
 
 
(10
)
 
(1
)
 
(10
)
 
(1
)
(Loss) / income from operations
 
 
 
(1
)
 
69

 
5

 
149

Finance costs - net
 
7
 
(42
)
 
(43
)
 
(87
)
 
(89
)
Share of income of joint-ventures
 
 
 

 

 

 
5

(Loss) / income before income tax
 
 
 
(43
)
 
26

 
(82
)
 
65

Income tax benefit / (expense)
 
8
 
11

 
(9
)
 
19

 
(24
)
Net (loss) / income
 
 
 
(32
)
 
17

 
(63
)
 
41

(A)
Metal price lag represents the financial impact of the timing difference between when aluminium prices included within Constellium Revenues are established and when aluminium purchase prices included in Cost of sales are established. The Group accounts for inventory using a weighted average price basis and this adjustment aims to remove the effect of volatility in LME prices. The calculation of the Group metal price lag adjustment is based on an internal standardized methodology calculated at each of Constellium’s manufacturing sites and is primarily calculated as the average value of product recorded in inventory, which approximates the spot price in the market, less the average value transferred out of inventory, which is the weighted average of the metal element of cost of sales, based on the quantity sold in the period.
(B)
For the six months ended June 30, 2020 and 2019 start-up and development costs included €4 million, and €5 million, respectively, related to new projects in our AS&I operating segment.
(C)
For the six months ended June 30, 2019, Bowling Green one-time costs related to the acquisition included the non-cash reversal of the inventory step-up.
(D)
For the six months ended June 30, 2020 , Other includes €5 million of procurement penalties and termination fees incurred because of the Group's inability to fulfill certain commitments due to the Covid-19 downturn and a €5 million loss resulting from the discontinuation of hedge accounting for certain forecasted sales that were determined to be no longer expected to occur in light of the Covid-19 downturn effects.
4.3 Segment capital expenditures
(in millions of Euros)
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
P&ARP
 
(38
)
 
(44
)
A&T
 
(24
)
 
(29
)
AS&I
 
(34
)
 
(56
)
Holdings & Corporate
 
(2
)
 
(1
)
Capital expenditures
 
(98
)
 
(130
)

4.4 Segment assets
Segment assets are comprised of total assets of Constellium by segment, less deferred income tax assets, cash and cash equivalents and other financial assets.
(in millions of Euros)
 
At June 30,
2020
 
At December 31,
2019
P&ARP
 
1,969

 
1,951

A&T
 
818

 
856

AS&I
 
716

 
703

Holdings & Corporate
 
213

 
276

Segment assets
 
3,716

 
3,786

Deferred income tax assets
 
222

 
185

Cash and cash equivalents
 
378

 
184

Other financial assets
 
31

 
29

Total assets
 
4,347

 
4,184

v3.20.2
OTHER GAINS / (LOSSES)—NET
6 Months Ended
Jun. 30, 2020
Analysis of income and expense [abstract]  
OTHER GAINS / (LOSSES)—NET
NOTE 5 - OTHER GAINS / (LOSSES) - NET
(in millions of Euros)
 
Notes
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Realized losses on derivatives (A)
 
 
 
(32
)
 
(14
)
 
(44
)
 
(28
)
Losses reclassified from OCI as a result of hedge accounting discontinuation (B)
 
4
 
(5
)
 

 
(5
)
 

Unrealized gains / (losses) on derivatives at fair value through profit and loss - net (A)
 
4
 
43

 
(14
)
 
(10
)
 
17

Unrealized exchange gains / (losses) from the remeasurement of monetary assets and liabilities - net
 
4
 
1

 
(1
)
 
(1
)
 

Losses on pension plan amendments
 
19
 
(2
)
 

 
(2
)
 

Losses on disposal
 
4
 

 
(1
)
 

 
(2
)
Other
 
 
 

 

 
(1
)
 
(1
)
Total other gains / (losses) - net
 
 
 
5

 
(30
)
 
(63
)
 
(14
)
(A)
Realized gains and losses are related to derivatives entered into with the purpose of mitigating exposure to volatility in foreign currencies and commodity prices. Unrealized gains and losses are related to derivatives that do not qualify for hedge accounting.
(B)
In the period ended June 30, 2020, we determined that a portion of the hedged forecasted sales for the second half of 2020 and 2021, to which hedge accounting is applied, was no longer expected to occur. As a result, the fair value of the related derivatives accumulated in equity was reclassified in the Unaudited Interim Consolidated Income Statement and generated a €5 million loss.
v3.20.2
CURRENCY GAINS / (LOSSES)
6 Months Ended
Jun. 30, 2020
Analysis of income and expense [abstract]  
CURRENCY GAINS / (LOSSES)
NOTE 6 - CURRENCY GAINS / (LOSSES)
Currency gains and losses, which are included in Income from operations, are as follows:
(in millions of Euros)
 
Notes
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Included in Revenue
 
18
 
(2
)
 
(1
)
 
(5
)
 
(2
)
Included in Cost of sales
 
 
 
1

 

 
1

 

Included in Other gains / (losses) - net
 
 
 
(5
)
 
(1
)
 
(6
)
 
4

Total
 
 
 
(6
)
 
(2
)
 
(10
)
 
2

Realized exchange (losses) / gains on foreign currency derivatives - net
 
18
 
(3
)
 

 
(3
)
 
1

Losses reclassified from OCI as a result of hedge accounting discontinuation
 
18
 
(5
)
 

 
(5
)
 

Unrealized (losses) / gains on foreign currency derivatives - net
 
18
 

 
(1
)
 
(2
)
 
1

Exchange gains / (losses) from the remeasurement of monetary assets and liabilities - net
 
 
 
2

 
(1
)
 

 

Total
 
 
 
(6
)
 
(2
)
 
(10
)
 
2


See NOTE 17 - Financial Instruments and NOTE 18 - Financial Risk Management for further information regarding the Company’s foreign currency derivatives and hedging activities.
v3.20.2
FINANCE COSTS—NET
6 Months Ended
Jun. 30, 2020
Analysis of income and expense [abstract]  
FINANCE COSTS—NET
NOTE 7 - FINANCE COSTS - NET
(in millions of Euros)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Interest expense on borrowings (A)
 
(30
)
 
(30
)
 
(61
)
 
(62
)
Expenses on factoring arrangements
 
(3
)
 
(5
)
 
(6
)
 
(10
)
Interest expense on leases
 
(2
)
 
(4
)
 
(5
)
 
(7
)
Realized and unrealized (losses) / gains on debt derivatives at fair value (B)
 
(7
)
 
(4
)
 
1

 
5

Realized and unrealized exchange gains / (losses) on financing activities - net (B)
 
8

 
6

 
(3
)
 

Interest cost on pension and other benefits
 
(3
)
 
(4
)
 
(6
)
 
(8
)
Other finance expenses
 
(6
)
 
(2
)
 
(8
)
 
(8
)
Capitalized borrowing costs (C)
 
1

 

 
1

 
1

Finance expenses
 
(42
)
 
(43
)
 
(87
)
 
(89
)
Finance costs - net
 
(42
)
 
(43
)
 
(87
)
 
(89
)
(A)
For the six months ended June 30, 2020, the Group incurred mainly (i) €57 million of interest related to Constellium SE Senior Notes and (ii) €3 million of interest expense and fees related to the Muscle Shoals, Bowling Green and Ravenswood ABL Facility (“Pan-U.S. ABL”). For the six months ended June 30, 2019, the Group incurred mainly (i) €58 million of interest related to Constellium SE Senior Notes and (ii) €3 million of interest expense and fees related to the Pan-U.S. ABL.
(B)
The Group hedges the dollar exposure relating to the principal of its Constellium SE U.S. Dollar Senior Notes, for the portion that has not been used to finance directly or indirectly U.S. Dollar functional currency entities. Changes in the fair value of these hedging derivatives are recognized within Finance costs – net in the Unaudited Interim Consolidated Income Statement and largely offset the unrealized results related to Constellium SE U.S. Dollar Senior Notes revaluation.
(C)
Borrowing costs directly attributable to the construction of assets are capitalized. The capitalization rate was 6% for the six months ended June 30, 2020 and 2019.
v3.20.2
INCOME TAX
6 Months Ended
Jun. 30, 2020
Income Taxes [Abstract]  
INCOME TAX
NOTE 8 - INCOME TAX
Income tax benefit / (expense) is recognized based on the best estimate of the weighted average annual income tax rate expected for the full year. The tax rate applied at June 30, 2020 is impacted by non-recurring transactions and subject to country mix effect.
The assessment on net deferred tax assets was reviewed at June 30, 2020 using the same assumptions as the impairment tests in NOTE 13 - Property, Plant and Equipment, and considering changes in tax laws enacted during the six months ended June 30, 2020. This review did not change the assessment made at December 31, 2019.
v3.20.2
EARNINGS PER SHARE
6 Months Ended
Jun. 30, 2020
Earnings per share [abstract]  
EARNINGS PER SHARE
NOTE 9 - EARNINGS PER SHARE
(in millions of Euros)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Earnings attributable to equity holders of the parent used to calculate basic and diluted earnings per share
 
(33
)
 
16

 
(64
)
 
39

Number of shares attributable to equity holders of Constellium
(number of shares)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Weighted average number of ordinary shares used to calculate basic earnings per share
 
137,901,336

 
136,700,491

 
137,903,307

 
136,344,030

Effect of other dilutive potential ordinary shares (A)
 

 
3,620,938

 

 
4,005,235

Weighted average number of ordinary shares used to calculate diluted earnings per share
 
137,901,336

 
140,321,429

 
137,903,307

 
140,349,265

(A)
For the six months and three months ended June 30, 2020, there were 4,878,787 and 4,880,758, potential ordinary shares that could have a dilutive impact, but were considered antidilutive due to negative earnings, respectively. For the six months and three months ended June 30, 2019, dilutive potential new ordinary shares to be issued were part of share-based compensation plans.
Earnings per share attributable to the equity holders of Constellium
(in Euro per share)
 
Three months ended
June 30, 2020
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2020
 
Six months ended
June 30, 2019
Basic
 
(0.24
)
 
0.12

 
(0.46
)
 
0.29

Diluted
 
(0.24
)
 
0.11

 
(0.46
)
 
0.28

v3.20.2
CASH AND CASH EQUIVALENTS
6 Months Ended
Jun. 30, 2020
Cash and cash equivalents [abstract]  
CASH AND CASH EQUIVALENTS
NOTE 10 - CASH AND CASH EQUIVALENTS
(in millions of Euros)
 
At June 30,
2020
 
At December 31,
2019
Cash in bank and on hand
 
378

 
184

Total Cash and cash equivalent
 
378

 
184


At June 30, 2020, cash in bank and on hand includes a total of €22 million held by subsidiaries that operate in countries where capital control restrictions prevent the balances from being immediately available for general use by the other entities within the Group. At December 31, 2019, the amount subject to these restrictions was €22 million.
v3.20.2
TRADE RECEIVABLES AND OTHER
6 Months Ended
Jun. 30, 2020
Trade and other receivables [abstract]  
TRADE RECEIVABLES AND OTHER
NOTE 11 - TRADE RECEIVABLES AND OTHER
Trade receivables and other are comprised of the following:
 
 
At June 30,
2020
 
At December 31,
2019
(in millions of Euros)
 
Non-current
 
Current
 
Non-current
 
Current
Trade receivables - gross
 

 
389

 

 
395

Impairment
 

 
(3
)
 

 
(2
)
Total trade receivables - net
 

 
386

 

 
393

Income tax receivables
 
34

 
9

 
35

 
22

Other taxes
 

 
17

 

 
35

Contract assets
 
31

 
1

 
16

 
2

Prepaid expenses
 
1

 
20

 
1

 
8

Other
 
8

 
18

 
8

 
14

Total other receivables
 
74

 
65

 
60

 
81

Total trade receivables and other
 
74

 
451

 
60

 
474


11.1 Contract assets
 
 
At June 30,
2020
 
At December 31,
2019
(in millions of Euros)
 
Non-current
 
Current
 
Non-current
 
Current
Unbilled tooling costs
 
14

 

 
16

 

Other
 
17

 
1

 

 
2

Total Contract assets
 
31

 
1

 
16

 
2


11.2 Aging
The aging of total trade receivables - net is as follows:
(in millions of Euros)
 
At June 30,
2020
 
At December 31,
2019
Not past due
 
369

 
380

1 – 30 days past due
 
15

 
10

31 – 60 days past due
 
2

 
3

61 – 90 days past due
 

 

Greater than 90 days past due
 

 

Total trade receivables - net
 
386

 
393


Impairment allowance
Revisions to the impairment allowance arising from changes in estimates are included as either an additional allowance or a reversal. An allowance was recognized for €0.4 million net during the six months ended June 30, 2020 (an allowance of €0.1 million was recognized during the six months ended June 30, 2019).
None of the other amounts included in Other receivables were deemed to be impaired.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable shown above. The Group does not hold any collateral from its customers or debtors as security.
11.3 Currency concentration
The composition of the carrying amounts of total Trade receivables - net by currency is shown in Euro equivalents as follows:
(in millions of Euros)
 
At June 30,
2020
 
At December 31,
2019
Euro
 
158

 
126

U.S. Dollar
 
203

 
251

Swiss franc
 
14

 
3

Other currencies
 
11

 
13

Total trade receivables - net
 
386

 
393


11.4 Factoring arrangements
The Group factors trade receivables in France through factoring agreement with a third party for a maximum capacity of €255 million. This agreement matures on December 31, 2023.
The Group factors trade receivables in Germany, Switzerland and Czech Republic through factoring agreements with a third party for a maximum capacity of €150 million. These agreements mature on December 31, 2023. In addition, the Group sells receivables from one of its German customers under an uncommitted factoring facility whereby receivables sold are confirmed by the customer. In addition, Constellium Valais is party to an uncommitted factoring arrangement which provides for the sale of specific customer receivables.
Constellium Automotive USA LLC is party to a factoring agreement which provides for the sale of specific account receivables up to a maximum capacity of $25 million. This agreement matures on December 10, 2020.
Muscle Shoals is party to a factoring agreement that provides for the sale of specific trade receivables up to a maximum capacity of $300 million. This agreement matures on September 30, 2021.
Under the Group’s factoring agreements, most of the trade receivables are sold without recourse. Where the Group has transferred substantially all the risks and rewards of ownership of the receivables, the receivables are derecognized. Some remaining receivables do not qualify for derecognition under IFRS 9 - Financial Instruments, as the Group retains substantially all the associated risks and rewards.
Under the agreements, at June 30, 2020, the total carrying amount of the original assets factored is €506 million (December 31, 2019: €574 million) of which:
€390 million (December 31, 2019: €463 million) have been derecognized from the Unaudited Interim Consolidated Statement of Financial Position as the Group transferred substantially all of the associated risks and rewards to the factor;
€116 million (December 31, 2019: €111 million) were recognized on the Unaudited Condensed Interim Consolidated Statement of Financial Position.
There was a €7 million debt due to the factors relating to trade account receivables sold at June 30, 2020, and no debt at December 31, 2019.
Covenants
The factoring arrangements contain certain customary affirmative and negative covenants, including some relating to the administration and collection of the assigned receivables, the terms of the invoices and the exchange of information, but do not contain maintenance financial covenants.
The commitment of the factor to buy receivables under the Muscle Shoals factoring agreement is subject to certain credit ratings being maintained.
The Group was in compliance with all applicable covenants at June 30, 2020 and December 31, 2019.
v3.20.2
INVENTORIES
6 Months Ended
Jun. 30, 2020
Subclassifications of assets, liabilities and equities [abstract]  
INVENTORIES
NOTE 12 - INVENTORIES
(in millions of Euros)
 
At June 30,
2020
 
At December 31,
2019
Finished goods
 
194

 
203

Work in progress
 
303

 
321

Raw materials
 
99

 
106

Stores and supplies
 
77

 
74

Inventories write-down
 
(38
)
 
(34
)
Total inventories
 
635

 
670


Constellium records inventories at the lower of cost and net realizable value. Any change in the net realizable value adjustment on inventories is included in Cost of sales in the Unaudited Interim Consolidated Income Statement.
v3.20.2
PROPERTY, PLANT AND EQUIPMENT
6 Months Ended
Jun. 30, 2020
Property, plant and equipment [abstract]  
PROPERTY, PLANT AND EQUIPMENT
NOTE 13 - PROPERTY, PLANT AND EQUIPMENT
(in millions of Euros)
 
Land and Property Rights
 
Buildings
 
Machinery and Equipment
 
Construction Work in Progress
 
Other
 
Total
Net balance at January 1, 2020
 
19

 
366

 
1,451

 
203

 
17

 
2,056

Additions
 

 
9

 
36

 
66

 
1

 
112

Disposals
 

 

 
(2
)
 

 

 
(2
)
Depreciation and impairment
 

 
(14
)
 
(108
)
 
(5
)
 
(5
)
 
(132
)
Transfer during the year
 
2

 
18

 
52

 
(74
)
 
2

 

Effects of changes in foreign exchange rates
 

 
(1
)
 

 
(2
)
 

 
(3
)
Net balance at June 30, 2020
 
21

 
378

 
1,429

 
188

 
15

 
2,031

Cost
 
37

 
552

 
2,488

 
198

 
47

 
3,322

Less accumulated depreciation and impairment
 
(16
)
 
(174
)
 
(1,059
)
 
(10
)
 
(32
)
 
(1,291
)
Net balance at June 30, 2020
 
21

 
378

 
1,429

 
188

 
15

 
2,031

Right of use assets
Right of use have been included within the same line item as that within which the corresponding underlying assets would be presented if they were owned.
(in millions of Euros)
 
Buildings
 
Machinery and Equipment
 
Other
 
Total
Net balance at January 1, 2020
 
116

 
71

 
3

 
190

Additions
 
9

 
10

 
1

 
20

Disposals
 
(1
)
 

 

 
(1
)
Depreciation
 
(6
)
 
(11
)
 
(1
)
 
(18
)
Effects of changes in foreign exchange rates
 

 
(1
)
 

 
(1
)
Net balance at June 30, 2020
 
118

 
69

 
3

 
190

Cost
 
142

 
121

 
5

 
268

Less accumulated depreciation and impairment
 
(24
)
 
(52
)
 
(2
)
 
(78
)
Net balance at June 30, 2020
 
118

 
69

 
3

 
190

The total expense relating to short-term leases, low value asset leases and variable lease payments that are still recognized as operating expenses was €6 million and €7 million for the six months ended