CONSTELLIUM SE, 20-F filed on 17 Mar 21
v3.20.4
COVER
12 Months Ended
Dec. 31, 2020
shares
Document Information [Line Items]  
Document Type 20-F
Document Registration Statement false
Document Annual Report true
Document Period End Date Dec. 31, 2020
Current Fiscal Year End Date --12-31
Document Transition Report false
Document Shell Company Report false
Entity File Number 001-35931
Entity Registrant Name Constellium SE
Entity Incorporation, State or Country Code I0
Entity Address, Address Line One Washington Plaza,
Entity Address, Address Line Two 40-44 rue Washington
Entity Address, Postal Zip Code 75008
Entity Address, City or Town Paris
Entity Address, Country FR
Title of 12(b) Security Ordinary Shares
Trading Symbol CSTM
Security Exchange Name NYSE
Entity Common Stock, Shares Outstanding 139,962,672
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Emerging Growth Company false
ICFR Auditor Attestation Flag true
Document Accounting Standard International Financial Reporting Standards
Entity Shell Company false
Amendment Flag false
Document Fiscal Year Focus 2020
Document Fiscal Period Focus FY
Entity Central Index Key 0001563411
Other Address  
Document Information [Line Items]  
Entity Address, Address Line One 300 East Lombard Street
Entity Address, Address Line Two Suite 1710
Entity Address, Postal Zip Code 21202
Entity Address, City or Town Baltimore
Entity Address, Country US
Chief Securities Counsel  
Document Information [Line Items]  
Entity Address, Address Line One 300 East Lombard Street
Entity Address, Address Line Two Suite 1710
Entity Address, Postal Zip Code 21202
Entity Address, City or Town Baltimore
Entity Address, Country US
Contact Personnel Name Rina E. Teran
Contact Personnel Email Address E-mail: rina.teran@constellium.com
v3.20.4
CONSOLIDATED INCOME STATEMENT - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Profit or loss [abstract]      
Revenue € 4,883 € 5,907 € 5,686
Cost of sales (4,393) (5,305) (5,148)
Gross profit 490 602 538
Selling and administrative expenses (237) (276) (247)
Research and development expenses (39) (48) (40)
Other gains and losses - net (89) (23) 153
Income from operations 125 255 404
Finance costs - net (159) (175) (149)
Share of income / (loss) of joint-ventures 0 2 (33)
(Loss) / income before income tax (34) 82 222
Income tax benefit / (expense) 17 (18) (32)
Net (loss) / income (17) 64 190
Net (loss) / income attributable to:      
Equity holders of Constellium (21) 59 188
Non-controlling interests 4 5 2
Net (loss) / income € (17) € 64 € 190
Earnings per share attributable to the equity holders of Constellium (in Euros per share)      
Basic (in EUR per share) € (0.15) € 0.43 € 1.40
Diluted (in EUR per share) € (0.15) € 0.41 € 1.37
Weighted average shares      
Basic (in shares) 138,739,635 136,856,978 134,761,736
Diluted (in shares) 138,739,635 142,645,619 138,145,914
v3.20.4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Statement of comprehensive income [abstract]      
Net (loss) / income € (17) € 64 € 190
Items that will not be reclassified subsequently to the consolidated income statement      
Remeasurement on post-employment benefit obligations (20) (61) 24
Income tax on remeasurement on post-employment benefit obligations 5 13 (6)
Items that may be reclassified subsequently to the consolidated income statement      
Cash flow hedges 26 (8) (25)
Net investment hedges 0 4 (4)
Income tax on hedges (7) 2 8
Currency translation differences (18) 1 10
Other comprehensive (loss) / income (14) (49) 7
Total comprehensive (loss) / income (31) 15 197
Attributable to:      
Equity holders of Constellium (34) 10 195
Non-controlling interests 3 5 2
Total comprehensive (loss) / income € (31) € 15 € 197
v3.20.4
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - EUR (€)
Dec. 31, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents € 439,000,000 € 184,000,000
Trade receivables and other 406,000,000 474,000,000
Inventories 582,000,000 670,000,000
Other financial assets 39,000,000 22,000,000
Total current assets 1,466,000,000 1,350,000,000
Non-current assets    
Property, plant and equipment 1,906,000,000 2,056,000,000
Goodwill 417,000,000 455,000,000
Intangible assets 61,000,000 70,000,000
Investments accounted for under the equity method 1,000,000 1,000,000
Deferred tax assets 193,000,000 185,000,000
Trade receivables and other 67,000,000 60,000,000
Other financial assets 18,000,000 7,000,000
Total non-current assets 2,663,000,000 2,834,000,000
Total Assets 4,129,000,000 4,184,000,000
Current liabilities    
Trade payables and other 905,000,000 999,000,000
Borrowings 92,000,000 201,000,000
Other financial liabilities 46,000,000 35,000,000
Income tax payable 20,000,000 14,000,000
Provisions 23,000,000 23,000,000
Total current liabilities 1,086,000,000 1,272,000,000
Non-current liabilities    
Trade payables and other 32,000,000 21,000,000
Borrowings 2,299,000,000 2,160,000,000
Other financial liabilities 41,000,000 23,000,000
Pension and other post-employment benefit obligations 664,000,000 670,000,000
Provisions 98,000,000 99,000,000
Deferred tax liabilities 10,000,000 24,000,000
Total non-current liabilities 3,144,000,000 2,997,000,000
Total Liabilities 4,230,000,000 4,269,000,000
Equity    
Share capital 2,799,253.44 3,000,000
Share premium 420,000,000 420,000,000
Retained deficit and other reserves (538,000,000) (519,000,000)
Equity attributable to equity holders of Constellium (115,000,000) (96,000,000)
Non-controlling interests 14,000,000 11,000,000
Total Equity (101,000,000) (85,000,000)
Total Equity and Liabilities € 4,129,000,000 € 4,184,000,000
v3.20.4
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
Non-controlling interests
Beginning balance (Restated) at Dec. 31, 2017 € (321) € 3 € 420 € (147) € 13 € (7) € 25 € (636) € (329) € 8
Beginning balance at Dec. 31, 2017 (319) 3 420 (147) 13 (7) 25 (634) (327) 8
Change in accounting policies | Change in accounting policies (2)             (2) (2)  
Net (loss) / income 190             188 188 2
Other comprehensive (loss) / income 7     18 (21) 10     7  
Total comprehensive (loss) / income 197     18 (21) 10   188 195 2
Share-based compensation 12           12   12  
Transactions with non-controlling interests (2)                 (2)
Ending 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) / income (49)     (48) (2) 1     (49)  
Total comprehensive (loss) / income 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 (17)             (21) (21) 4
Other comprehensive (loss) / income (14)     (15) 19 (17)     (13) (1)
Total comprehensive (loss) / income (31)     (15) 19 (17)   (21) (34) 3
Share-based compensation 15           15   15  
Transactions with non-controlling interests 0                  
Ending balance at Dec. 31, 2020 € (101) € 3 € 420 € (192) € 9 € (13) € 68 € (410) € (115) € 14
v3.20.4
CONSOLIDATED STATEMENT OF CASH FLOWS - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Statement of cash flows [abstract]      
Net (loss) / income € (17) € 64 € 190
Adjustments      
Depreciation and amortization 259 256 197
Impairment of assets 43 0 0
Pension and other post-employment benefits service costs 34 27 (10)
Finance costs - net 159 175 149
Income tax (benefit) / expense (17) 18 32
Share of (income) / loss of joint-ventures 0 (2) 33
Unrealized (gains) / losses on derivatives - net and from remeasurement of monetary assets and liabilities - net (18) (33) 86
Losses / (gains) on disposal 4 3 (186)
Other - net 19 16 14
Change in working capital      
Inventories 63 57 (9)
Trade receivables 36 104 (145)
Trade payables (38) (31) (27)
Other (10) 9 (58)
Change in provisions 1 (2) (2)
Pension and other post-employment benefits paid (53) (50) (46)
Interest paid (140) (158) (129)
Income tax refunded / (paid) 9 (6) (23)
Net cash flows from operating activities 334 447 66
Purchases of property, plant and equipment (182) (271) (277)
Property, plant and equipment grants received 5 0 0
Acquisition of subsidiaries net of cash acquired 0 (83) 0
Proceeds from disposals, net of cash 1 2 200
Equity contributions and loans to joint ventures 0 0 (24)
Other investing activities 0 (1) 10
Net cash flows used in investing activities (176) (353) (91)
Proceeds from issuance of Senior Notes 290 0 0
Repayment of Senior Notes (200) (100) 0
(Repayments) / proceeds from U.S. revolving credit facilities (129) 105 (67)
Proceeds from other borrowings 202 8 0
Repayments from other borrowings (10) (4) (1)
Lease repayments (35) (86) (15)
Payment of financing costs (9) 0 0
Transactions with non-controlling interests 0 (4) 0
Other financing activities (8) 5 1
Net cash flows from / (used in) financing activities 101 (76) (82)
Net increase / (decrease) in cash and cash equivalents 259 18 (107)
Cash and cash equivalents - beginning of year 184 164 269
Effect of exchange rate changes on cash and cash equivalents (4) 2 2
Cash and cash equivalents - end of year € 439 € 184 € 164
v3.20.4
GENERAL INFORMATION
12 Months Ended
Dec. 31, 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 29 production facilities, 3 R&D centers and 3 administrative centers. The Group has approximately 12,000 employees.
Constellium SE, a French Societas Europaea (SE), is the parent company of the Group. The business address (head office) of Constellium SE is located at 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.
v3.20.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 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 Consolidated Financial Statements of Constellium SE and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as endorsed by the European Union (EU). The Group’s application of IFRS results in no difference between IFRS as issued by the IASB and IFRS as endorsed by the EU (https://ec.europa.eu/info/law/international-accounting-standards-regulation-ec-no-1606-2002_en).
The Consolidated Financial Statements were authorized for issue on March 11, 2021 by the Board of Directors.
2.2 New and amended standards and interpretations
Several amendments and interpretations apply for the first time in 2020, but had no impact on the Consolidated Financial Statements of the Group.
Amendments to IAS 1 and IAS 8: Definition of Material
Amendments to IFRS 3: Definition of a Business
Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform - Phase 1
2.3 New standards and interpretations not yet mandatorily applicable
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. The following new standards and interpretations have been issued, but are not yet effective. The Group plans to adopt these new standards and interpretations on their required effective dates and does not expect any material impact as a result of their adoption.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
IFRS 9 Financial Instruments: Fees in the ‘10 per cent’ test for derecognition of financial liabilities
Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform - Phase 2
Amendments to IFRS 16: COVID-19 Related Rent Concessions
Amendments to IAS 16: Property, Plant and Equipment: Proceeds before Intended Use
Amendments to IAS 37: Onerous Contracts – Costs of Fulfilling a Contract
Amendments to IFRS 3: Reference to the Conceptual Framework
2.4 Basis of preparation
In accordance with IAS 1- Presentation of Financial Statements, the 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 Consolidated Financial Statements in NOTE 13 - Cash and Cash Equivalents, NOTE 20 - Borrowings and NOTE 22 - Financial Risk Management.
The Group’s forecasts and projections, taking account of reasonably possible changes in operating 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.
Accordingly, the Group continues to adopt the going concern basis in preparing the Consolidated Financial Statements. Management considers that this assumption is not invalidated by the Group’s negative equity at December 31, 2020. This assessment was confirmed by the Board of Directors on March 11, 2021.
2.5 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.
2.6 Principles governing the preparation of the Consolidated Financial Statements
Basis of consolidation
These Consolidated Financial Statements include all the assets, liabilities, equity, revenues, expenses and cash flows of the entities and businesses controlled by Constellium. All intercompany transactions and balances are eliminated.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group has power over the investee, is exposed to, or has rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Investments over which the Group has significant influence are accounted for under the equity method. Investments over which the Group has joint control are accounted for either as joint ventures under the equity method or as joint arrangements in relation to its interest in the joint operation.
Joint venture investments are initially recorded at cost. They are subsequently increased or decreased by the Group’s share in the profit or loss, or by other movements reflected directly in the equity of the entity.
Business combinations
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities assumed and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The amount of non-controlling interests is determined for each business combination and is either based on the fair value (full goodwill method) or the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets, resulting in recognition of only the share of goodwill attributable to equity holders of the parent (partial goodwill method).
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the amount of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized as a gain in Other gains and losses - net in the Consolidated Income Statement.
At the acquisition date, the Group recognizes the identifiable acquired assets, liabilities and contingent liabilities (identifiable net assets) of the subsidiaries on the basis of fair value at the acquisition date. Recognized assets and liabilities may be adjusted during a maximum of 12 months from the acquisition date, depending on new information obtained about the facts and circumstances existing at the acquisition date.
Acquisition-related costs are expensed as incurred and are included in Other gains and losses - net in the Consolidated Income Statement.
Cash-generating units
The reporting units, which generally correspond to industrial sites, are the lowest level of the Group’s internal reporting and have been identified as cash-generating units.
Goodwill
Goodwill arising from a business combination is carried at cost as established at the date of the business combination less accumulated impairment losses, if any.
Goodwill is allocated at the operating segment levels, which are the groups of cash-generating units that are expected to benefit from the synergies of the combination. The operating segments represent the lowest level within the Group at which goodwill is monitored for internal management purposes.
Gains and losses on the disposal of a cash-generating unit include the carrying amount of goodwill relating to the cash-generating unit sold.
Impairment of goodwill
A group of cash-generating units to which goodwill is allocated is tested for impairment annually, or more frequently when there is an indication that it may be impaired.
The net carrying value of a group of cash-generating units is compared to its recoverable amount, which is the higher of the value in use and the fair value less costs of disposal.
Value in use calculations use cash flow projections based on financial budgets approved by management and usually covering a 5-year period. Cash flows beyond this period are estimated using a perpetual long-term growth rate for the subsequent years.
The value in use is the sum of discounted cash flows over the projected period and the terminal value. Discount rates are determined based on the weighted-average cost of capital of each operating segment.
The fair value is the price that would be received for the group of cash-generating units, in an orderly transaction, from a market participant. This value is estimated on the basis of available and relevant market data or a discounted cash flow model reflecting market participant assumptions.
An impairment loss is recognized for the amount by which the group of units carrying amount exceeds its recoverable amount.
Any impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the group of cash-generating units and then to the other assets of the group of units pro rata on the basis of the carrying amount of each asset in the group of units.
Any impairment loss is recognized in Other gains and losses - net in the Consolidated Income Statement. An impairment loss recognized for goodwill cannot be reversed in subsequent years.
Non-current assets and disposal groups classified as held for sale and discontinued operations
IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations defines a discontinued operation as a component of an entity that (i) generates cash flows that are largely independent from cash flows generated by other components, (ii) is classified as held for sale or has been disposed of, and (iii) represents a separate major line of business or geographic areas of operations.
Assets and liabilities are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset or disposal group is available for immediate sale in its present condition.
Assets and liabilities are stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.
Assets and liabilities held for sale are presented in separate lines in the Consolidated Statement of Financial Position of the year during which the decision to sell is made.
The results of discontinued operations are shown separately in the Consolidated Income Statement and Consolidated Statement of Cash Flows.
Foreign currency transactions and foreign operations
Functional currency
Items included in the Consolidated Financial Statements of each of the entities and businesses of Constellium are measured using their functional currency, which is the currency of the primary economic environment in which they operate.
Foreign currency transactions
Transactions denominated in currencies other than the functional currency are recorded in the functional currency at the exchange rate in effect at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the Consolidated Income Statement, except when deferred in Other Comprehensive Income ("OCI") as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in Finance costs - net. Realized foreign exchange gains and losses that relate to commercial transactions are presented in Cost of sales. All other foreign exchange gains and losses, including those that relate to foreign currency derivatives hedging commercial transactions where hedge accounting has not been applied, are presented within Other gains and losses - net.
Foreign operations: presentation currency and foreign currency translation
In the preparation of the Consolidated Financial Statements, the year-end balances of assets, liabilities and components of equity of Constellium’s entities and businesses are translated from their functional currencies into Euros, the presentation currency of the Group, at their respective year-end exchange rates. Revenue, expenses and cash flows of Constellium’s entities and businesses are translated from their functional currencies into Euros using their respective average exchange rates for the year.
The net differences arising from exchange rate translation are recognized in the Consolidated Statement of Comprehensive Income / (Loss).
The following table summarizes the main exchange rates used for the preparation of the Consolidated Financial Statements:
Average ratesClosing rates
Foreign exchange rate for 1 EuroYear ended December 31,At December 31,
202020192018202020192018
U.S. DollarsUSD1.1405 1.1193 1.1798 1.2271 1.1234 1.1450 
Swiss FrancsCHF1.0704 1.1121 1.1546 1.0802 1.0854 1.1269 
Czech KorunaCZK26.4337 25.6698 25.6452 26.2420 25.4080 25.7240 
Revenue from contracts with customers
Revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
The Group primarily contracts with customers for the sale of rolled or extruded aluminium products. For the majority of our business, performance obligations with customers begin when we acknowledge a purchase order for a specific customer order of product to be delivered in the near-term. These purchase orders are short-term in nature, although they may be governed by multi-year frame agreements.
Revenue from product sales, measured at the fair value of the consideration received or receivable, should be recognized at the point in time when control of the asset is transferred to the customer, generally upon delivery. In certain limited circumstances, the Group may be required to recognize revenue over time for products that have no alternative use and for which the Group has an enforceable right to payment for production completed to date.
Revenue from product sales, net of trade discounts, allowances and volume-based incentives, is recognized for the amount the Group expects to be entitled to, generally upon delivery, and provided there is persuasive evidence that control has transferred.
Contract liabilities consist of expected volume discounts, rebates, incentives, refunds and penalties and price concessions. Contract liabilities are presented in Trade payables and other.
The Group applies the practical expedient for disclosures on performance obligations that are part of contracts that have an original duration of one year or less.
The Group elected the practical expedient on significant financing components if the period of transfer of the product and the payment is one year or less.
Research and development costs
Costs incurred on development projects are recognized as intangible assets when the following criteria are met:
It is technically feasible to complete the intangible asset so that it will be available for use;
Management intends to complete and use the intangible asset;
There is an ability to use the intangible asset;
It can be demonstrated how the intangible asset will generate probable future economic benefits;
Adequate technical, financial and other resources to complete the development and use or sell the intangible asset are available; and
The expenditure attributable to the intangible asset during its development can be reliably measured.
Development expenditures that do not meet these criteria are expensed as incurred. Development costs previously recognized as expenses cannot be recognized as an asset in a subsequent period.
Other gains and losses - net
Other gains and losses - net includes: (i) realized and unrealized gains and losses on derivatives for those contracted where hedge accounting is not applied (ii) unrealized exchange gains and losses from the remeasurement of monetary assets and liabilities, (iii) the ineffective portion of changes in the fair value of derivatives designated for hedge accounting and (iv) impairment charges on assets.
Other gains and losses - net presents other unusual, infrequent or non-recurring items. Such items are disclosed by virtue of their size, nature or incidence. In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence.
Interest income and expense
Interest expense on short and long-term financing is recorded at the relevant rates on the various borrowing agreements using the effective interest rate method.
Borrowing costs, including interest, incurred for the construction of any qualifying asset are capitalized during the period of time required to complete and prepare the asset for its intended use.
Share-based payment arrangements
Equity-settled share-based payments to employees and Board members are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest.
Property, plant and equipment
Recognition and measurement
Property, plant and equipment acquired by the Company are recorded at cost, which comprises the purchase price, including import duties and non-refundable purchase taxes, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated close down and restoration costs associated with the asset. Borrowing costs, including interest, directly attributable to the acquisition or construction of property, plant and equipment are included in the cost. Subsequent to the initial recognition, Property, plant and equipment are measured at cost less accumulated depreciation and impairment, if any. Costs are capitalized into construction work-in-progress until such projects are completed and the assets are available for use.
Subsequent costs
Enhancements and replacements are capitalized as additions to Property, plant and equipment only when it is probable that future economic benefits associated with them will flow to the Company and their cost can be measured with reliability. Ongoing regular maintenance costs related to Property, plant and equipment are expensed as incurred.
Depreciation
Land is not depreciated. Property, plant and equipment are depreciated over the estimated useful lives of the related assets using the straight-line method as follows:
Buildings: 10 – 50 years;
Machinery and equipment: 3 – 40 years;
Vehicles: 5 – 8 years.
Intangible assets
Recognition and measurement
Technology and customer relationships acquired in a business combination are recognized at fair value at the acquisition date. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment losses. The useful lives of the Group intangible assets are assessed to be finite.
Amortization
Intangible assets are amortized over the estimated useful lives of the related assets using the straight-line method as follows:
Technology: 20 years;
Customer relationships: 25 years;
Software: 3 – 5 years.
Impairment of property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets subject to amortization are reviewed for impairment if there is any indication that the carrying amount of the asset, or cash-generating unit to which it belongs, may not be recoverable. The recoverable amount is based on the higher of fair value less cost of disposal and value in use, as determined using estimates of discounted future net cash flows of the asset or group of assets to which it belongs.
Any impairment loss is recognized in Other gains and losses - net in the Consolidated Income Statement.
Government Grants
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions are complied with.
Government grants relating to the purchase of property, plant and equipment reduce the carrying amount of the asset. They are credited to profit or loss on a straight-line basis over the expected useful lives of the related assets. Government grants relating to costs offset the corresponding expense and are deferred and recognized in profit or loss over the period necessary to match them with the costs that they are intended to compensate.
Financial Instruments
i.Classification and measurement
Financial assets
Financial assets are classified either: (a) at amortized cost, (b) at fair value through other comprehensive income (FVOCI), or (c) at fair value through profit or loss (FVPL). The classification depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing the financial assets. Management determines the classification of Constellium’s financial assets at initial recognition.
i.Assets at amortized cost are comprised of other receivables, non-current loans receivable and current loans receivable in the Consolidated Statement of Financial Position. The business model whose objective is to hold assets in order to collect contractual cash flows provided they give rise to cash flows that are ‘solely payments of principal and interest’ on the principal amount outstanding. They are carried at amortized cost using the effective interest rate method, less any impairment. They are classified as current or non-current assets based on their maturity date.
ii.Assets at fair value through OCI are comprised of trade receivables in the Consolidated Statement of Financial Position. The business model is to maintain liquidity for the Group, should the need arise, which leads to sales through factoring agreements that are more than infrequent and significant in value. Trade receivables are managed under an objective that results in both collecting the contractual cash flows and selling the receivables to the factors. The portfolio of trade receivables is therefore classified as measured at fair value through OCI. Upon
derecognition, the cumulative fair value change recognized in OCI is reclassified to profit or loss. Foreign exchange revaluation and impairment losses or reversals are recognized in profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. These assets are classified as current or non-current assets based on their maturity date.
iii.Assets at fair value through profit or loss are comprised of derivatives except those designated as hedging instruments that qualify for hedge accounting in accordance with IAS 39 Financial Instruments. Financial assets carried at fair value through profit or loss are initially recognized at fair value and transaction costs are expensed in the Consolidated Income Statement.
Financial liabilities
Borrowings and other financial liabilities, excluding derivative liabilities, are recognized initially at fair value, net of transaction costs incurred and directly attributable to the issuance of the liability. These financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the Consolidated Income Statement using the effective interest rate method.
ii.Impairment of financial assets
Financial assets subject to IFRS 9’s expected credit loss model are cash and cash equivalents, trade receivables and other and loans to joint ventures.
iii.Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
Derivative financial instruments
Derivatives
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative qualifies for hedge accounting treatment. Derivatives that qualify for hedge accounting are recognized in OCI.
Fair value is the price expected to be received in selling an asset or paid in transferring a liability in an orderly transaction between market participants at the measurement date. Where available, relevant market prices are used to determine fair values. The Group periodically estimates the impact of credit risk on its derivative instruments aggregated by counterparties and takes this into account when estimating the fair value of its derivatives.
Credit Value Adjustments are calculated for asset derivatives based on the counterparties' credit risk. Debit Value Adjustments are calculated for credit derivatives based on Constellium's own credit risk. The fair value method used is based on the historical probability of default, provided by leading rating agencies.
For derivative instruments that do not qualify for hedge accounting, changes in the fair value are recognized immediately in profit or loss and are included in Other gains and losses - net.
Hedge accounting
The Group did not adopt the disposition of IFRS 9 on hedging and will therefore continue to apply the provisions of IAS 39. For derivative instruments that are designated for hedge accounting, at the inception of the hedging transaction, the group documents the relationship between hedging instruments and hedged items, the risk management objective and the strategy for undertaking the hedge transaction. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in cash flows of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in OCI and accumulated in Equity. The gain or loss relating to the ineffective portion is recognized immediately in the Consolidated Income Statement in Other gains and losses - net.
Amounts accumulated in equity are reclassified to the Consolidated Income Statement when the hedged item affects the Consolidated Income Statement. The gain or loss relating to the effective portion of derivative instruments hedging forecasted cash flows under customer agreements is recognized in Revenue. When the forecasted transaction that is hedged results in the recognition of a non-financial asset, the gains and losses previously deferred in equity are reclassified from equity and included in the initial measurement of the cost of the asset. The deferred amounts would ultimately be recognized in the Consolidated Income Statement upon the sale, depreciation or impairment of the asset.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecasted transaction is ultimately recognized in the Consolidated Income Statement. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was recognized in equity is immediately reclassified to the Consolidated Income Statement.
Leases (since January 1, 2019)
Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and are adjusted for remeasurement of lease liabilities resulting from a change in future lease payments arising from a change in an index or a rate, or a change in the assessment of whether the purchase, extension or termination options will be exercised.
The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are recorded in the asset category to which they relate in Property, plant and equipment. Unless the Group is reasonably certain to obtain ownership of the leased assets at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognizes a lease liability measured at the present value of lease payments to be made over the lease term.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension or termination option. Extension options or periods after termination options are only included in the lease term if the lease is reasonably certain to be extended or not terminated.
The lease payments include fixed payments less any lease incentive receivables, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. Lease liabilities are presented within Borrowings. Variable lease payments that do not depend on an index or a rate are recognized as expense in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the implicit interest rate in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced by the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. The Group also applies the low-value asset recognition exemption to leases of assets with a value below €5,000. Lease payments on short-term leases and low-value asset leases are recognized as expense on a straight-line basis over the lease term.
The Group also applies the practical expedients for lease and non-lease components as a single component for vehicles. The Group adopted IFRS 16 retrospectively with the cumulative effect of initially applying the standard recognized on January 1, 2019.
The Group elected the relief provision of IFRS 16 and did not apply IFRS 16 to contracts that were not previously identified as containing a lease under IAS 17 and IFRIC 4.
Leases (Prior to January 1, 2019)
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Various buildings, machinery and equipment are leased from third parties under operating lease agreements. Under operating leases, lease payments are recognized as rent expense on a straight-line basis over the term of the lease agreement, and are included in Cost of sales or Selling and administrative expenses, depending on the nature of the leased assets.
Leases of property, plant and equipment under which the Group has substantially all the risks and rewards of ownership are classified as finance leases. Various buildings and equipment are leased from third parties under finance lease agreements. Under such finance leases, the asset financed is recognized in Property, plant and equipment and the financing is recognized in Borrowings.
Inventories
Inventories are valued at the lower of cost and net realizable value, primarily on a weighted-average cost basis.
Weighted-average cost for raw materials, stores, work in progress and finished goods is calculated using the costs experienced in the current period based on normal operating capacity and includes the purchase price of materials, freight, duties and customs, and the costs of production, which includes labor, materials and other costs that are directly attributable to the production process and production overheads.
Trade account receivables
Recognition and measurement
Trade account receivables are recognized at fair value through OCI since they are managed under an objective that results in both collecting the contractual cash flows and selling the receivables to factors. The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.
Factoring arrangements
In factoring arrangements under which the Group has transferred substantially all the risks and rewards of ownership of the receivables, the receivables are derecognized from the Consolidated Statement of Financial Position. In determining whether the Group has transferred substantially all the risks and rewards of ownership, it considers credit risk, late-payment risk, dilution risk, foreign exchange risk and tax risk. Arrangements in which the Group derecognizes receivables result in changes in trade receivables, which are reflected as cash flows from operating activities. When trade account receivables are sold with limited recourse and substantially all the risks and rewards associated with these receivables are not transferred, receivables are not derecognized. Where the Group does not derecognize the receivables, the cash received from the factor is classified as a financing cash inflow, the settlement of the receivables as an operating cash inflow and the repayment to the factor as a financing cash outflow.
Cash and cash equivalents
Cash and cash equivalents are comprised of cash in bank accounts and on hand, short-term deposits held on call with banks and other short-term highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash and are subject to insignificant risk of changes in value, less bank overdrafts that are repayable on demand, provided there is an offset right.
Share capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Trade payables
Trade payables are initially recorded at fair value and classified as current liabilities if payment is due in one year or less.
Provisions
Provisions are recorded at the best estimate of expenditures required to settle liabilities of uncertain timing or amount when management determines that i) a legal or constructive obligation exists as a result of past events, ii) it is probable that an outflow of resources will be required to settle the obligation and iii) such amounts can be reasonably estimated. Provisions are measured at the present value of the expected expenditures required to settle the obligation.
The ultimate cost to settle such liabilities is uncertain, and cost estimates can vary in response to many factors. The settlement of these liabilities could materially differ from recorded amounts or the expected timing of expenditure could change. As a result, there could be significant adjustments to provisions, which could result in additional charges or recoveries.
Close down and restoration costs
Estimated close down and restoration costs are accounted for in the year when the legal or constructive obligation arising from the related disturbance occurs and it is probable that an outflow of resources will be required to settle the obligation. These costs are based on the net present value of estimated future costs. Provisions for close down and restoration costs do not include any additional obligations expected to arise from future disturbance. The costs are estimated on the basis of a closure plan including feasibility and engineering studies, are updated annually during the life of the operation to reflect known developments (e.g. revisions to cost estimates and to the estimated lives of operations) and are subject to formal review at regular intervals each year.
The initial closure provision together with subsequent movements in the provisions for close down and restoration costs, including those resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates, are capitalized in Property, plant and equipment. These costs are depreciated over the remaining useful lives of the related assets. The amortization or unwinding of the discount applied in establishing the net present value of the provisions is recorded in the Consolidated Income Statement as a financing cost.
Environmental remediation costs
Environmental remediation costs are accounted for based on the estimated present value of the costs of the Group’s environmental clean-up obligations. Changes in the environmental remediation provisions are recorded in Cost of sales.
Restructuring costs
Provisions for restructuring are recorded when Constellium’s management is demonstrably committed to the restructuring plan and the liabilities can be reasonably estimated. The Group recognizes liabilities that primarily include one-time termination benefits, severance, and contract termination costs, primarily related to equipment and facility lease obligations. These amounts are based on the remaining amounts due under various contractual agreements and are periodically adjusted for changes in circumstances that would reduce or increase these obligations.
Legal, tax and other potential claims
Provisions for legal claims are made when it is probable that liabilities will be incurred and when such liabilities can be reasonably estimated. For asserted claims and assessments, liabilities are recorded when an unfavorable outcome of a matter is deemed to be probable and the loss is reasonably estimable. Management determines the likelihood of an unfavorable outcome based on many factors such as the nature of the matter, available defenses and case strategy, progress of the matter, views and opinions of legal counsel and other advisors, applicability and success of appeals, process and outcomes of similar historical matters, amongst others. Once an unfavorable outcome is considered probable, management weights the probability of possible outcomes and the most likely loss is recorded. Legal matters are reviewed on a regular basis to determine if there have been changes in management’s judgment regarding the likelihood of an unfavorable outcome or the estimate of a potential loss. Depending on their nature, these costs may be recorded in Cost of sales or Other gains and losses - net in the Consolidated Income Statement. Included in other potential claims are provisions for product warranties and guarantees to settle the net present value portion of any settlement costs for potential future legal actions, claims and other assertions that may be brought by Constellium’s customers or the end-users of products. Provisions for product warranty and guarantees are recorded in Cost of sales in the Consolidated Income Statement.
Management establishes tax reserves and accrues interest thereon, if deemed appropriate, in expectation that certain tax positions other than income tax may be challenged and that the Group might not succeed in defending such positions, despite management’s belief that the positions taken are fully supportable.
Pension, other post-employment plans and other long-term employee benefits
For defined contribution plans, the contribution paid in respect of service rendered over the service year is recognized in the Consolidated Income Statement. This expense is included in Income / (loss) from operations.
For defined benefit plans, the retirement benefit obligation recognized in the Consolidated Statement of Financial Position represents the present value of the defined benefit obligation less the fair value of plan assets. The defined benefit obligations are assessed using the projected unit credit method. The most significant assumption is the discount rate. The amount recorded in the Consolidated Income Statement in respect of these plans is included within Income / (loss) from operations except for net interest costs, which are included in Finance costs - net.The effects of changes in actuarial assumptions and experience adjustments are presented in the Consolidated Statement of Comprehensive Income / (Loss).
Other post-employment benefit plans mainly relate to health and life insurance benefits to retired employees and in some cases to their beneficiaries and covered dependents. Eligibility for coverage is dependent upon certain age and service criteria. These benefit plans are unfunded and are accounted for as defined benefit obligations, as described above.
Other long-term employee benefits mainly include jubilees and other long-term disability benefits. For these plans, actuarial gains and losses are recognized immediately in the Consolidated Income Statement.
Taxation
Income tax (expense) / benefit is calculated on the basis of the tax laws enacted or substantively enacted at the Consolidated Statement of Financial Position date in the countries where the Company and its subsidiaries operate and generate taxable income.
The Group is subject to income taxes in France, the United States, Germany and numerous other jurisdictions. Certain of Constellium’s businesses may be included in tax returns in some jurisdictions. In certain circumstances, these businesses may be jointly and severally liable with the entity filing the consolidated return, for additional taxes that may be assessed.
Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the Consolidated Financial Statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets are also recognized for operating loss carryforwards and tax credit carryforwards.
Deferred income tax assets and liabilities are measured using tax rates that are expected to apply in the year when the asset is realized or the liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.
Presentation of financial statements
The Consolidated Financial Statements are presented in millions of Euros, except Earnings per share in Euros. Certain reclassifications may have been made to prior year amounts to conform to the current year presentation.
2.7 Judgments in applying accounting policies and key sources of estimation uncertainty
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. These judgments, estimates and assumptions are based on management’s best knowledge of the relevant facts and circumstances, giving consideration to previous experience. However, actual results may differ from the amounts included in the Consolidated Financial Statements. Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include the items presented below. The Group reviewed its significant assumptions and estimates in light of the uncertainty associated with the COVID-19 pandemic and its potential impact on its business and its financials, detailed in NOTE 4 - Operating segments, NOTE 16 - Property, plant and equipment, NOTE 20 - Borrowings, NOTE 22 - Financial risk management, NOTE 24 - Provisions, and NOTE 27 - Covid-19-related government assistance. 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.
Impairment tests for goodwill, intangible assets and property, plant and equipment
The determination of fair value and value in use of cash-generating units or groups of cash-generating units depends on a number of assumptions, in particular market data, estimated future cash flows and discount rates.
These assumptions are subject to risk and uncertainty. Any material changes in these assumptions could result in a significant change in a cash-generating units’ recoverable value or in a goodwill impairment. Details of the key assumptions made and judgments applied are set out in NOTE 16 - Property, Plant and Equipment and in NOTE 17 - Intangible Assets and Goodwill.
Pension, other post-employment benefits and other long-term employee benefits
The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions and its determination requires the application of judgment. Assumptions used and judgments made in determining the defined benefit obligations and net pension costs include discount rates, rates of future compensation increase, and the criteria considered to determine when a plan amendment has occurred.
Any material changes in these assumptions could result in a significant change in Pensions and other post-employment benefit obligations and in employee benefit expenses recognized in the Consolidated Income Statement or actuarial gains and losses recognized in OCI. Details of the key assumptions made and judgments applied are set out in NOTE 23 - Pensions and Other Post-Employment Benefit Obligations.
Income Taxes
Significant judgment is sometimes required in determining the accrual for income taxes as there are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were recorded, such differences will impact the current and deferred income tax provisions, results of operations and possibly cash flows in the year in which such determination is made.
Significant judgment is also required to determine the extent to which deferred tax assets can be recognized. In assessing the recognition of deferred tax assets, management considers whether it is more likely than not that the deferred tax assets will be utilized. The deferred tax assets will be ultimately utilized to the extent that sufficient taxable profits will be available in the years in which the temporary differences become deductible. This assessment is conducted through a detailed review of deferred tax assets by jurisdiction and takes into account the scheduled reversals of taxable and deductible temporary differences; past, current and expected future performance deriving from the budget; the business plan and tax planning strategies. Deferred tax assets are not recognized in the jurisdictions where it is less likely than not that sufficient taxable profits
will be available against which the deductible temporary differences can be utilized. Details of the key assumptions made and judgments applied are set out in NOTE 18 - Deferred Income Taxes.
Provisions
Provisions have been recorded for: (i) close down and restoration costs; (ii) environmental remediation and monitoring costs; (iii) restructuring plans; (iv) legal and other potential claims including provisions for tax risks other than income tax, product warranty and guarantees. These provisions are recorded at amounts which represent management’s best estimates of the expenditure required to settle the obligation at the date of the Consolidated Statement of Financial Position. Expectations are revised each year until the actual liability is settled, with any difference accounted for in the Consolidated Income Statement in the year in which the revision is made. Details of the key assumptions made and judgments applied are described in NOTE 24 - Provisions.
Business combinations
Determining the fair value of purchased assets and assumed liabilities requires judgement in the selection of valuation techniques and assumptions used. Key assumptions and inputs include the determination of cash flow projections, discount rates, comparable market transactions, replacement costs and related industry indices.
v3.20.4
REVENUE
12 Months Ended
Dec. 31, 2020
Revenue [abstract]  
REVENUE
NOTE 3 - REVENUE
Year ended December 31,
(in millions of Euros)202020192018
Packaging rolled products1,960 2,172 2,245 
Automotive rolled products663 816 636 
Specialty and other thin-rolled products102 151 169 
Aerospace rolled products560 863 773 
Transportation, industry, defense and other rolled products442 557 566 
Automotive extruded products665 797 714 
Other extruded products491 551 573 
Other — 10 
Total Revenue by product line4,883 5,907 5,686 
Year ended December 31,
(in millions of Euros)202020192018
Germany1,014 1,260 1,339 
France362 563 554 
United Kingdom192 194 175 
Switzerland52 68 77 
Other Europe923 1,078 1,038 
Total Europe2,543 3,163 3,183 
United States1,941 2,175 1,897 
Asia and Other Pacific211 277 300 
All Other188 292 306 
Total Revenue by destination of shipment4,883 5,907 5,686 
Revenue is recognized at a point in time, except for certain products with no alternative use for which we have a right to payment, which represent less than 1% of total revenue.
v3.20.4
OPERATING SEGMENT INFORMATION
12 Months Ended
Dec. 31, 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) as defined in NOTE 2 - Summary of Significant Accounting Policies on that basis.
The accounting principles used to prepare the Group’s operating segment information are the same as those used to prepare the Group’s Consolidated Financial Statements.
Packaging and Automotive Rolled Products (P&ARP)
P&ARP supplies rolled aluminium products to the packaging market with canstock and closure stock for the beverage and food industry, foil stock for the flexible packaging market and to the automotive market with a number of technically sophisticated applications, such as automotive body sheet and heat exchanger materials. P&ARP operates four facilities in three countries and had approximately 3,900 employees at December 31, 2020.
Aerospace and Transportation (A&T)
A&T supplies rolled aluminium products and very limited volumes of extruded products to the aerospace market, as well as rolled products for transportation, industry and defense end-uses. A&T operates six facilities in three countries and had approximately 3,300 employees at December 31, 2020.
Automotive Structures and Industry (AS&I)
AS&I supplies hard and soft aluminium alloy extruded profiles for a range of high demand industry applications in the automotive, engineering, rail and other transportation end markets, and technologically advanced structural components to the automotive industry. AS&I operates nineteen facilities in ten countries and had approximately 4,600 employees at December 31, 2020.
Holdings & Corporate (H&C)
Holdings & Corporate includes the net cost of Constellium’s head office and corporate support functions, including our technology centers.
Intersegment elimination
Intersegment transactions are conducted on an arm’s length basis and reflect market prices.
4.1 Segment Revenue
Year ended December 31,
202020192018
(in millions of Euros)Segment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenue
P&ARP2,734 (9)2,725 3,149 (10)3,139 3,059 (9)3,050 
A&T1,025 (23)1,002 1,462 (42)1,420 1,389 (50)1,339 
AS&I1,167 (11)1,156 1,351 (3)1,348 1,290 (3)1,287 
H&C (A)— —  — — — 10 — 10 
Total4,926 (43)4,883 5,962 (55)5,907 5,748 (62)5,686 
(A)For the year ended December 31, 2018, H&C included revenue from supplying metal to third parties.
4.2 Segment Adjusted EBITDA and reconciliation of Adjusted EBITDA to Net Income
Constellium’s CODM measures the profitability and financial performance of its operating segments based on Adjusted EBITDA. Adjusted EBITDA is defined as income / (loss) from continuing operations before income taxes, results from joint ventures, net finance costs, other expenses and depreciation, 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.
Year ended December 31,
(in millions of Euros)Notes202020192018
P&ARP291 273 243 
A&T106 204 152 
AS&I88 106 125 
H&C(20)(21)(22)
Adjusted EBITDA465 562 498 
Metal price lag (A)(8)(46)— 
Start-up and development costs (B)(5)(11)(21)
Bowling Green one-time cost related to the acquisition (C) (5)— 
Share based compensation costs(15)(16)(12)
(Losses) / gains on pensions plan amendments (D)23(2)36 
Depreciation and amortization16, 17(259)(256)(197)
Impairment of assets16, 17(43)— — 
Restructuring costs8(13)(4)(1)
Unrealized gains / (losses) on derivatives816 33 (84)
Unrealized exchange gains from the remeasurement of monetary assets and liabilities – net81 — — 
(Losses) / gains on disposals (E)8(4)(3)186 
Other (F)(8)— (1)
Income from operations125 255 404 
Finance costs - net10(159)(175)(149)
Share of income / (loss) of joint-ventures (33)
(Loss) / income before income tax(34)82 222 
Income tax benefit / (expense)1217 (18)(32)
Net (loss) / income(17)64 190 
(A)Metal price lag represents the financial impact of the timing difference between when aluminium prices included within Constellium's Revenue are established and when aluminium purchase prices included in Cost of sales are established. The Group accounts for inventory using a weighted average price basis and this adjustment aims to remove the effect of volatility in LME prices. The calculation of the Group metal price lag adjustment is based on an internal standardized methodology calculated at each of Constellium’s manufacturing sites and is primarily calculated as the average value of product recorded in inventory, which approximates the spot price in the market, less the average value transferred out of inventory, which is the weighted average of the metal element of cost of sales, based on the quantity sold in the year.
(B)Start-up and development costs, for the years ended December 31, 2020, 2019 and 2018, were related to new projects in our AS&I operating segment.
(C)Bowling Green one-time costs related to the acquisition, for the year ended December 31, 2019, was the non-cash reversal of the inventory step-up.
(D)The Group amended one of its OPEB plans in the U.S. in 2018, which resulted in a €36 million gain for the year ended December 31, 2018.
(E)In July 2018, Constellium completed the sale of the North Building assets of its Sierre plant in Switzerland to Novelis and contributed the Sierre site shared infrastructure to a joint-venture with Novelis, in exchange for cash consideration of €200 million. This transaction also resulted in the termination of the existing lease agreement for the North Building assets which had been leased and operated by Novelis since 2005. For the year ended December 31, 2018, the transaction generated a €190 million net gain. (See NOTE 31 - Subsidiaries and Operating Segments).
(F)Other, in the year ended December 31, 2020, includes €2 million of procurement penalties and termination fees incurred because of the Group's inability to fulfill certain commitments due to the COVID-19 pandemic and a €6 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 pandemic effects.
4.3 Segment capital expenditures
Year ended December 31,
(in millions of Euros)202020192018
P&ARP(73)(96)(97)
A&T(45)(72)(70)
AS&I(61)(97)(105)
H&C(3)(6)(5)
Capital expenditures(182)(271)(277)
4.4 Segment assets
At December 31,
(in millions of Euros)20202019
P&ARP1,733 1,951 
A&T765 856 
AS&I668 703 
H&C274 276 
Segment assets3,440 3,786 
Deferred income tax assets193 185 
Cash and cash equivalents439 184 
Other financial assets57 29 
Total Assets4,129 4,184 
4.5 Information about major customers
Revenue in the P&ARP segment from sales to the Group’s largest customer was €492 million and €812 million for the years ended December 31, 2020 and December 31, 2018, respectively, and no other single customer contributed 10% or more to the Group’s revenue for 2020 and 2018. No single customer contributed 10% or more to the Group's revenue for the year ended December 31, 2019.
v3.20.4
INFORMATION BY GEOGRAPHIC AREA
12 Months Ended
Dec. 31, 2020
Disclosure of geographical areas [abstract]  
INFORMATION BY GEOGRAPHIC AREA
NOTE 5 - INFORMATION BY GEOGRAPHIC AREA
Property, plant and equipment are reported based on the physical location of the assets:
At December 31,
(in millions of Euros)20202019
United States777 926 
France646 656 
Germany270 250 
Czech Republic97 106 
Other116 118 
Total1,906 2,056 
v3.20.4
EXPENSES BY NATURE
12 Months Ended
Dec. 31, 2020
Expenses by nature [abstract]  
EXPENSES BY NATURE
NOTE 6 - EXPENSES BY NATURE
Year ended December 31,
(in millions of Euros)202020192018
Raw materials and consumables used(2,832)(3,535)(3,561)
Employee benefit expenses(902)(1,038)(927)
Energy costs(141)(162)(140)
Sub-contractors(89)(100)(92)
Freight out costs(122)(156)(143)
Professional fees(73)(97)(74)
Lease expenses(11)(13)(31)
Depreciation and amortization(259)(256)(197)
Other operating expenses(240)(272)(270)
Other gains and losses - net(89)(23)153 
Total operating expenses(4,758)(5,652)(5,282)
v3.20.4
EMPLOYEE BENEFIT EXPENSES
12 Months Ended
Dec. 31, 2020
Classes of employee benefits expense [abstract]  
EMPLOYEE BENEFIT EXPENSES
NOTE 7 - EMPLOYEE BENEFIT EXPENSES
Year ended December 31,
(in millions of Euros)Notes202020192018
Wages and salaries(855)(994)(889)
Pension costs - defined benefit plans23(23)(19)(20)
Other post-employment benefits23(9)(9)(6)
Share-based compensation30(15)(16)(12)
Total employee benefit expenses(902)(1,038)(927)
NOTE 23 - PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
The Group operates a number of pensions, other post-employment benefits and other long-term employee benefit plans. Some of these plans are defined contribution plans and some are defined benefit plans, with assets held in separate trustee-administered funds. Benefits paid through pension trusts are sufficiently funded to ensure the payment of benefits to retirees when they become due.
Actuarial valuations are reflected in the Consolidated Financial Statements as described in NOTE 2.6 - Principles governing the preparation of the Consolidated Financial Statements.
23.1 Description of the plans
Pension plans
Constellium’s pension obligations are in the U.S., Switzerland, Germany and France. Pension benefits are generally based on the employee’s service and highest average eligible compensation before retirement and are periodically adjusted for cost of living increases, either by company practice, collective agreement or statutory requirement. Benefit plans in the U.S., Switzerland and France are funded through long-term employee benefit funds.
Other post-employment benefits (OPEB)
The Group provides healthcare and life insurance benefits to retired employees and in some cases to their beneficiaries and covered dependents, mainly in the U.S. Eligibility for coverage depends on certain age and service criteria. These benefit plans are unfunded.
Other long-term employee benefits
Other long-term employee benefits mainly include jubilees in France, Germany and Switzerland and other long-term disability benefits in the U.S. These benefit plans are unfunded.
23.2 Description of risks
The defined benefit obligations expose the Group to a number of risks, including longevity, inflation, interest rate, medical cost inflation, investment performance, and change in law governing the employee benefit obligations. These risks are mitigated when possible by applying an investment strategy for the funded schemes that aims to reduce the volatility of returns and achieve a matching of the underlying liabilities to minimize the long-term costs. This is achieved by investing in a diversified selection of asset classes.
Investment performance risk
Our pension plan assets consist primarily of funds invested in listed stocks and bonds.
The present value of funded defined benefit obligations is calculated using a discount rate determined by reference to high-quality corporate bond yields. If the return on plan assets is below this rate, it will increase the plan deficit.
Interest rate risk
A decrease in the discount rate will increase the defined benefit obligation. At December 31, 2020, impacts of the change on the defined benefit obligation of a 50 basis points increase / decrease in the discount rates are calculated by using a proxy based on the duration of each scheme:
(in millions of Euros)50 bp increase in
discount rates
50 bp decrease in
discount rates
France (11)11 
Germany(9)10 
Switzerland(26)28 
United States(33)33 
Total sensitivity on Defined Benefit Obligations(79)82 
Longevity risk
The present value of the defined benefit obligation is calculated by reference to the best estimate of the mortality of plan participants. An increase in the life expectancy of the plan participants will increase the plan’s liability.
23.3 Actuarial assumptions
Pension and other post-employment benefit obligations were updated based on the discount rates applicable at December 31, 2020.
At December 31,
20202019
Rate of increase in salariesRate of increase in pensionsDiscount rateRate of increase in salariesRate of increase in pensionsDiscount rate
Switzerland1.50%0.00%1.50%0.15%
U.S.
Hourly pension2.20%
2.45% - 2.65%
2.20%
3.15% - 3.25%
Salaried pension3.80%2.55%3.80%3.25%
OPEB (A)3.80%
2.50% - 2.80%
3.80%
3.20% - 3.40%
Other benefits3.80%
2.20% - 2.55%
3.80%
3.00% - 3.20%
France
1.50% - 3.50%
2.00%
1.50% - 3.50%
2.00%
Retirements0.50%0.95%
Other benefits0.40%0.80%
Germany2.50%1.50%0.55%2.75%1.70%1.00%
(A)The other main financial assumptions used for the OPEB healthcare plans, which are predominantly in the U.S. were:
Medical trend rate: i) pre-65: 6.25% starting in 2020 decreasing gradually to 4.50% in 2029 and stable onwards and ii) post-65: 6.00% starting in 2020 decreasing gradually to 4.50% in 2029 and stable onwards, and
Claims costs are based on company experience.
For both pension and healthcare plans, the post-employment mortality assumptions allow for future improvements in life expectancy.
23.4 Amounts recognized in the Consolidated Statement of Financial Position
At December 31,
20202019
(in millions of Euros)Pension BenefitsOther BenefitsTotalPension BenefitsOther BenefitsTotal
Present value of funded obligation772  772 768  768 
Fair value of plan assets(458) (458)(445) (445)
Deficit of funded plans314  314 323  323 
Present value of unfunded obligation134 216 350 127 220 347 
Net liability arising from defined benefit obligation448 216 664 450 220 670 
23.5 Movement in net defined benefit obligations
At December 31, 2020
Defined benefit obligationsPlan AssetsNet defined benefit liability
(in millions of Euros)Pension benefitsOther benefitsTotal
At January 1, 2020895 220 1,115 (445)670 
Included in the Consolidated Income Statement
Current service cost21 28 — 28 
Interest cost / (income)13 19 (8)11 
Past service cost— 2 — 2 
Immediate recognition of gains arising over the year— 2 — 2 
Administration expenses— —  2 
Included in the Statement of Comprehensive Income / (loss)
Remeasurements due to:
—actual return less interest on plan assets— —  (28)(28)
—changes in financial assumptions51 16 67 — 67 
—changes in demographic assumptions(6)(4)(10)— (10)
—experience losses(4)(3)— (3)
Effects of changes in foreign exchange rates(27)(17)(44)20 (24)
Included in the Consolidated Statement of Cash Flows
Benefits paid(41)(18)(59)34 (25)
Contributions by the Group— —  (28)(28)
Contributions by the plan participants5 (5) 
At December 31, 2020906 216 1,122 (458)664 
At December 31, 2019
Defined benefit obligationsPlan AssetsNet defined benefit liability
(in millions of Euros)Pension benefitsOther benefitsTotal
At January 1, 2019789 201 990 (380)610 
Included the Consolidated Income Statement
Current service cost17 24 — 24 
Interest cost / (income)18 26 (10)16 
Past service cost(2)(1)— (1)
Immediate recognition of gains arising over the year— — 
Administration expenses— — — 
Included in the Statement of Comprehensive Income / (loss)
Remeasurements due to:
—actual return less interest on plan assets— — — (54)(54)
—changes in financial assumptions101 25 126 — 126 
—changes in demographic assumptions(2)(2)(4)— (4)
—experience losses(3)(6)(9)— (9)
Effects of changes in foreign exchange rates16 19 (11)
Included in the Consolidated Statement of Cash Flows
Benefits paid(43)(20)(63)38 (25)
Contributions by the Group— — — (25)(25)
Contributions by the plan participants(5)— 
At December 31, 2019895 220 1,115 (445)670 
23.6 Benefit plan amendments     
In 2018, the Group announced a plan to transfer certain participants in the Constellium Rolled Products Ravenswood Retiree Medical and Life Insurance Plan (“the Plan”) from a company-sponsored program to a third-party health network that provides similar benefits at a lower cost. This change in benefits resulted in the recognition of a gain of €36 million from negative past service cost, which was reduced by €3 million in 2019 and €2 million in 2020 to reflect delays in the estimated implementation timetable (see 23.7 Ravenswood OPEB dispute).
During the year ended December 31, 2019, the Group decided to terminate the medical care plan for the active participants of one of its French entities effective October 1, 2019. This resulted in both a decrease of the defined benefit obligation and the recognition of a €2 million gain from negative past service cost. In addition, the Group offered a lump sum option to Constellium Rolled Products Ravenswood former employees with deferred benefits. This resulted in both a decrease of the defined benefit obligation and the recognition of a €3 million gain from negative past service cost.
23.7 Ravenswood OPEB disputes
The United Steelworkers Local Union 5668 (the “Union”) is contesting the OPEB amendments and filed a lawsuit against Constellium Rolled Products Ravenswood, LLC ("Ravenswood") in a federal district court in West Virginia (the “District Court”) seeking to enjoin the Plan changes and to compel arbitration. The District Court issued an order in December 2018, enjoining Ravenswood from implementing the OPEB amendments pending resolution in arbitration. In September 2019, the arbitrator issued a decision ruling against Ravenswood and sustaining the Union’s grievance. Ravenswood filed a motion in the District Court to vacate this decision, which was denied in June 2020. In July 2020, Ravenswood appealed that denial to the Fourth Circuit Court of Appeals and that court decision is still pending. The Group intends to continue to vigorously defend this matter as it believes it has a strong legal position and it is probable that Ravenswood will ultimately prevail and be able to implement the OPEB amendments.
Additionally, during 2019, the Union filed a grievance disputing the existing limitation of Ravenswood’s liability for the healthcare costs of pre-Medicare retirees. An arbitration was held in August 2020, briefs were submitted and the arbitrator
issued his decision on November 4, 2020 denying the Union's grievance. The Union had until February 2, 2021 to appeal such decision but it did not, thus this matter is now considered fully closed.
23.8 Net defined benefit obligations by country
At December 31,
20202019
(in millions of Euros)Defined benefit obligationsPlan assetsNet defined benefit liabilityDefined benefit obligationsPlan assetsNet defined benefit liability
France168 (5)163 161 (3)158 
Germany143 (1)142 144 (1)143 
Switzerland310 (223)87 299 (214)85 
United States500 (229)271 510 (227)283 
Other countries— 1 — 
Total1,122 (458)664 1,115 (445)670 
23.9 Plan asset categories
At December 31,
20202019
(in millions of Euros)Quoted in an active marketUnquoted in an active marketTotalQuoted in an active marketUnquoted in an active marketTotal
Cash & cash equivalents— 8 — 
Equities109 64 173 119 51 170 
Bonds106 103 209 102 105 207 
Property46 54 14 37 51 
Other13 14 11 12 
Total fair value of plan assets232 226 458 241 204 445 
23.10 Cash flows
Expected contributions to pension and other benefit plans amount to €24 million and €15 million, respectively, for the year ending December 31, 2021.
Future benefit payments expected to be paid either by pension funds or directly by the Company to beneficiaries are as follows:
(in millions of Euros)Estimated benefits payments
Year ended December 31,
202149 
202248 
202349 
202453 
202552 
2026 to 2030275 
The weighted-average maturity of the defined benefit obligations was 14.2 years and 14.1 years at December 31, 2020 and 2019, respectively.
v3.20.4
OTHER GAINS AND LOSSES—NET
12 Months Ended
Dec. 31, 2020
Analysis of income and expense [abstract]  
OTHER GAINS AND LOSSES—NET
NOTE 8 - OTHER GAINS AND LOSSES - NET
Year ended December 31,
(in millions of Euros)Notes202020192018
Realized (losses) / gains on derivatives (A)(35)(49)14 
Losses reclassified from OCI as a result of hedge accounting discontinuation (B)(6)— — 
Unrealized gains / (losses) on derivatives at fair value through profit and loss - net (A)416 33 (84)
Unrealized exchange gains from the remeasurement of monetary assets and liabilities - net41 — — 
Impairment of assets (C)16, 17(43)— — 
Restructuring costs (D)24(13)(4)(1)
(Losses) / gains on pension plan amendments (E)23(2)36 
(Losses) / gains on disposal (F)(4)(3)186 
Other(3)(1)
Total other gains and losses - net(89)(23)153 
(A)Realized and unrealized gains and losses are related to derivatives entered into with the purpose of mitigating exposure to volatility in foreign currencies and commodity prices. Unrealized and realized gains and losses are related to derivatives that do not qualify for hedge accounting.
(B)For the year ended December 31, 2020, we determined that a portion of the hedged forecasted sales for the second half of 2020 and 2021, to which hedge accounting was applied, were no longer expected to occur. As a result, the fair value of the related derivatives accumulated in equity was reclassified in the Consolidated Income Statement and resulted in a €6 million loss.
(C)For the year ended December 31, 2020, an impairment charge of €43 million was recognized related to some A&T cash-generating units due to the downturn in the aerospace industry resulting from the COVID-19 pandemic and some AS&I cash-generating units as a result of the review of their long-term business perspectives.
(D)For the year ended December 31, 2020, restructuring costs amounted to €13 million related to headcount reductions in Europe and in the U.S.
(E)The Group amended one of its OPEB plans in the U.S. in 2018, which resulted in a €36 million gain for the year ended December 31, 2018.
(F)In July 2018, Constellium completed the sale of the North Building assets of its Sierre plant in Switzerland to Novelis and contributed the Sierre site shared infrastructure to a joint-venture with Novelis, in exchange for cash consideration of €200 million. This transaction also resulted in the termination of the existing lease agreement for the North Building assets which had been leased and operated by Novelis since 2005. For the year ended December 31, 2018, the transaction generated a €190 million net gain (See NOTE 31 - Subsidiaries and Operating Segments).
v3.20.4
CURRENCY GAINS / (LOSSES)
12 Months Ended
Dec. 31, 2020
Analysis of income and expense [abstract]  
CURRENCY GAINS / (LOSSES)
NOTE 9 - CURRENCY GAINS / (LOSSES)
Year ended December 31,
(in millions of Euros)Notes202020192018
Included in Revenue22(6)(7)
Included in Cost of sales(2)
Included in Other gains and losses - net(19)
Total(27)11 
Realized exchange (losses) / gains on foreign currency derivatives - net22(11)11 
Losses reclassified from OCI as a result of hedge accounting discontinuation22(6)— — 
Unrealized (losses) / gains on foreign currency derivatives - net22(8)(3)
Exchange (losses) / gains from the remeasurement of monetary assets and liabilities - net(2)
Total(27)11 
See NOTE 21 - Financial Instruments and NOTE 22 - Financial Risk Management for further information regarding the Company’s foreign currency derivatives and hedging activities.
Foreign currency translation reserve
At December 31,
(in millions of Euros)20202019
Foreign currency translation reserve at January 14 
Effect of currency translation differences(17)
Foreign currency translation reserve at December 31(13)
v3.20.4
FINANCE COSTS—NET
12 Months Ended
Dec. 31, 2020
Analysis of income and expense [abstract]  
FINANCE COSTS—NET
NOTE 10 - FINANCE COSTS - NET
Year ended December 31,
(in millions of Euros)202020192018
Interest received — 
Finance income — 
Interest expense on borrowings (A)(117)(124)(118)
Interest expense on leases(10)(13)(5)
Interest cost on pension and other benefits(11)(16)(15)
Expenses on factoring arrangements (10)(19)(18)
Realized and unrealized (losses) / gains on debt derivatives at fair value (B)(32)13 28 
Realized and unrealized exchange gains / (losses) on financing activities - net (B)37 (3)(22)
Other finance expenses (C)(17)(16)(10)
Capitalized borrowing costs (D)1 
Finance expenses(159)(175)(156)
Finance costs - net(159)(175)(149)
(A)The Group primarily incurred, for the year ended December 31, 2020, (i) €111 million of interest related to Constellium SE Senior Notes and (ii) €3 million of interest expense and fees related to the Muscle Shoals, Ravenswood and Bowling Green asset based revolving credit facility (“Pan-U.S. ABL”). The Group primarily incurred, for the year ended December 31, 2019, (i) €115 million of interest related to Constellium SE Senior Notes and (ii) €7 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 Consolidated Income Statement and largely offset the unrealized results related to Constellium SE U.S. Dollar Senior Notes revaluation.
(C)Other finance expenses include mostly the amortization of arrangements fees related to our Senior Unsecured Notes. In addition for the year ended December 31, 2018, a €6 million net loss was incurred resulting from the modification of our loan to Constellium-UACJ ABS LLC in February 2018.
(D)Borrowing costs directly attributable to the construction of assets are capitalized. The capitalization rate was 6% for the years ended December 31, 2020, 2019 and 2018
v3.20.4
SHARE OF INCOME / (LOSS) OF JOINT-VENTURES
12 Months Ended
Dec. 31, 2020
Investments accounted for using equity method [abstract]  
SHARE OF INCOME / (LOSS) OF JOINT-VENTURES
NOTE 11 - SHARE OF INCOME / (LOSS) OF JOINT-VENTURES
The acquisition of 49% of Constellium-UACJ ABS LLC was completed on January 10, 2019 and the entity is consolidated since the acquisition date. The information presented hereafter reflects the amounts included in the Consolidated Financial Statements of Constellium-UACJ ABS LLC for the year ended December 31, 2018, in accordance with Group accounting principles and not the Company’s share of those amounts.
(in millions of Euros)Year ended December 31, 2018
Revenue262 
Cost of sales(309)
Selling and administrative expenses(10)
Loss from operations(57)
Finance costs (A)(7)
Net loss(64)
(A)Finance costs include a €11 million gain related to the shareholders’ loan modification for the year ended December 31, 2018.
v3.20.4
INCOME TAX
12 Months Ended
Dec. 31, 2020
Income Taxes [Abstract]  
INCOME TAX
NOTE 12 - INCOME TAX
Year ended December 31,
(in millions of Euros)202020192018
Current tax expense(14)(32)(30)
Deferred tax benefit / (expense)31 14 (2)
Total income tax benefit / (expense)17 (18)(32)
The Group's effective tax rate reconciliation is as follows:
Year ended December 31,
(in millions of Euros)20202019