CONSTELLIUM SE, 6-K filed on 29 Jul 21
v3.21.2
Cover
6 Months Ended
Jun. 30, 2021
Cover [Abstract]  
Document Type 6-K
Entity Registrant Name Constellium SE
Amendment Flag false
Document Period End Date Jun. 30, 2021
Document Fiscal Year Focus 2021
Document Fiscal Period Focus Q2
Entity Central Index Key 0001563411
Current Fiscal Year End Date --12-31
v3.21.2
UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT - EUR (€)
€ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Profit or loss [abstract]        
Revenue € 1,518 € 1,031 € 2,859 € 2,468
Cost of sales (1,319) (957) (2,518) (2,241)
Gross profit 199 74 341 227
Selling and administrative expenses (67) (57) (127) (123)
Research and development expenses (9) (7) (20) (20)
Other gains and losses - net 44 (11) 87 (79)
Income / (loss) from operations 167 (1) 281 5
Finance costs - net (37) (42) (92) (87)
Income / (loss) before tax 130 (43) 189 (82)
Income tax (expense) / benefit (22) 11 (33) 19
Net income / (loss) 108 (32) 156 (63)
Net income attributable to:        
Equity holders of Constellium 107 (33) 153 (64)
Non-controlling interests 1 1 3 1
Net income / (loss) € 108 € (32) € 156 € (63)
Earnings per share attributable to the equity holders of Constellium (in Euros)        
Basic (in EUR per share) € 0.76 € (0.24) € 1.09 € (0.46)
Diluted (in EUR per share) € 0.73 € (0.24) € 1.04 € (0.46)
Weighted average number of shares        
Basic (in shares) 140,636,684 137,901,336 140,301,539 137,903,307
Diluted (in shares) 146,730,106 137,901,336 146,730,106 137,903,307
v3.21.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME / (LOSS) - EUR (€)
€ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of comprehensive income [abstract]        
Net income / (loss) € 108 € (32) € 156 € (63)
Items that will not be reclassified subsequently to the interim income statement        
Remeasurement on post-employment benefit obligations 24 (35) 89 (41)
Income tax on remeasurement on post-employment benefit obligations 2 10 (11) 9
Items that may be reclassified subsequently to the interim income statement        
Cash flow hedges 3 5 (8) 0
Income tax on hedges (1) (2) 2 0
Other comprehensive income / (loss) (1) (2) 12 (2)
Other comprehensive income / (loss) 27 (24) 84 (34)
Total comprehensive income / (loss) 135 (56) 240 (97)
Attributable to:        
Equity holders of Constellium 134 (57) 236 (98)
Non-controlling interests 1 1 4 1
Total comprehensive income / (loss) € 135 € (56) € 240 € (97)
v3.21.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION - EUR (€)
Jun. 30, 2021
Dec. 31, 2020
Current assets    
Cash and cash equivalents € 290,000,000 € 439,000,000
Trade receivables and other 669,000,000 406,000,000
Inventories 802,000,000 582,000,000
Other financial assets 63,000,000 39,000,000
Total current assets 1,824,000,000 1,466,000,000
Non-current assets    
Property, plant and equipment 1,895,000,000 1,906,000,000
Goodwill 430,000,000 417,000,000
Intangible assets 59,000,000 61,000,000
Deferred tax assets 162,000,000 193,000,000
Trade receivables and other 69,000,000 68,000,000
Other financial assets 16,000,000 18,000,000
Total non-current assets 2,631,000,000 2,663,000,000
Total Assets 4,455,000,000 4,129,000,000
Current liabilities    
Trade payables and other 1,255,000,000 905,000,000
Borrowings 262,000,000 92,000,000
Other financial liabilities 26,000,000 46,000,000
Income tax payable 23,000,000 20,000,000
Provisions 20,000,000 23,000,000
Total current liabilities 1,586,000,000 1,086,000,000
Non-current liabilities    
Trade payables and other 32,000,000 32,000,000
Borrowings 1,995,000,000 2,299,000,000
Other financial liabilities 10,000,000 41,000,000
Pension and other post-employment benefit obligations 581,000,000 664,000,000
Provisions 95,000,000 98,000,000
Deferred tax liabilities 12,000,000 10,000,000
Total non-current liabilities 2,725,000,000 3,144,000,000
Total Liabilities 4,311,000,000 4,230,000,000
Equity    
Share capital 2,833,547.32 3,000,000
Share premium 420,000,000 420,000,000
Retained deficit and other reserves (295,000,000) (538,000,000)
Equity attributable to equity holders of Constellium 128,000,000 (115,000,000)
Non-controlling interests 16,000,000 14,000,000
Total Equity 144,000,000 (101,000,000)
Total Equity and Liabilities € 4,455,000,000 € 4,129,000,000
v3.21.2
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
Non-controlling interests
Beginning balance at Dec. 31, 2019 € (85) € 3 € 420 € (177) € (10) € 4 € 53 € (389) € (96) € 11
Net income (63)             (64) (64) 1
Other comprehensive loss (34)     (32) 0 (2)     (34)  
Total comprehensive income / (loss) (97)     (32) 0 (2)   (64) (98) 1
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
Beginning balance at Dec. 31, 2019 (85) 3 420 (177) (10) 4 53 (389) (96) 11
Net income (17)             (21) (21) 4
Other comprehensive loss (14)     (15) 19 (17)     (13) (1)
Total comprehensive income / (loss) (31)     (15) 19 (17)   (21) (34) 3
Share-based compensation 15           15   15  
Transactions with non-controlling interests 0                 0
Ending balance at Dec. 31, 2020 (101) 3 420 (192) 9 (13) 68 (410) (115) 14
Net income 156             153 153 3
Other comprehensive loss 84     78 (6) 11     83 1
Total comprehensive income / (loss) 240     78 (6) 11   153 236 4
Share-based compensation 7           7   7  
Transactions with non-controlling interests (2)                 (2)
Ending balance at Jun. 30, 2021 € 144 € 3 € 420 € (114) € 3 € (2) € 75 € (257) € 128 € 16
v3.21.2
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS - EUR (€)
€ in Millions
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Statement of cash flows [abstract]    
Net income / (loss) € 156 € (63)
Adjustments    
Depreciation and amortization 128 132
Impairment of assets 0 5
Pension and other post-employment benefits service costs 17 17
Finance costs - net 92 87
Income tax expense / (benefit) 33 (19)
Unrealized (gains) / losses on derivatives - net and from remeasurement of monetary assets and liabilities - net (45) 11
Other - net 5 13
Change in working capital    
Inventories (212) 35
Trade receivables (234) 7
Trade payables 300 (18)
Other 0 15
Change in provisions (4) 5
Pension and other post-employment benefits paid (21) (20)
Interest paid (72) (73)
Income tax refunded 5 18
Net cash flows from operating activities 148 152
Purchases of property, plant and equipment (74) (100)
Property, plant and equipment grants received 7 2
Proceeds from disposals, net of cash 0 1
Net cash flows used in investing activities (67) (97)
Proceeds from issuance of Senior Notes 712 290
Repayments of Senior Notes (863) (200)
Repayment of U.S. revolving credit facilities 0 (129)
Proceeds from other borrowings 2 207
Repayments of other borrowings (9) (4)
Lease repayments (17) (17)
Payment of financing costs and redemption fees (26) (9)
Transactions with non-controlling interests (2) 0
Other financing activities (29) 2
Net cash flows (used in) / from financing activities (232) 140
Net (decrease) / increase in cash and cash equivalents (151) 195
Cash and cash equivalents - beginning of period 439 184
Effect of exchange rate changes on cash and cash equivalents 2 (1)
Cash and cash equivalents - end of period € 290 € 378
v3.21.2
GENERAL INFORMATION
6 Months Ended
Jun. 30, 2021
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.
v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2021
Disclosure of summary of significant accounting policies [abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The Unaudited Interim Condensed Consolidated Financial Statements (the "Interim Financial Statements") have been prepared in accordance with IAS 34 - Interim Financial Reporting. Accordingly, they do not include all the information and disclosures required in consolidated financial statements and should be read in conjunction with the Group’s Consolidated Financial Statements for the year ended December 31, 2020.
In accordance with IAS 1- Presentation of Financial Statements, the Interim Financial Statements are prepared on the assumption that Constellium is a going concern and will continue in operation for the foreseeable future.
The accounting policies adopted in the preparation of the Interim Financial Statements are consistent with those followed in the preparation of the Group’s Consolidated Financial Statements for the year ended December 31, 2020, except for the application of the effective tax rate method in accordance with IAS 34 - Interim Financial Reporting.
The Interim 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.
The Interim Financial Statements were authorized for issue by management on July 26, 2021.
2.2 New and amended standards and interpretations
Several amendments apply for the first time in 2021, but have no impact on the Interim 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.
2.3 Judgments in applying accounting policies and key sources of estimation uncertainty
The preparation of 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 financial statements.
In preparing these Interim Financial Statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the Consolidated Financial Statements at and for the year ended December 31, 2020, as well as the application of the effective tax rate method for the determination of the income tax provision.
2.4 Exchange rates
The following table summarizes the main exchange rates used for the preparation of the Interim Financial Statements:
Average ratesClosing rates
Foreign exchange rate for 1 EuroSix months ended June 30,At June 30,At December 31,
2021202020212020
U.S. DollarsUSD1.20521.10181.18841.2271
Swiss FrancsCHF1.09451.06411.09801.0802
Czech KorunaCZK25.850826.297025.488026.2420
v3.21.2
REVENUE
6 Months Ended
Jun. 30, 2021
Revenue [abstract]  
REVENUE
NOTE 3 - REVENUE
Three months ended June 30,Six months ended June 30,
(in millions of Euros)2021202020212020
Packaging rolled products6484561,167980
Automotive rolled products21388421281
Specialty and other thin-rolled products43208052
Aerospace rolled products100142187365
Transportation, industry, defense and other rolled products174105321231
Automotive extruded products17696377295
Other extruded products164124306264
Total Revenue by product line1,5181,0312,8592,468
Three months ended June 30,Six months ended June 30,
(in millions of Euros)2021202020212020
Germany373192711479
France12067224188
United Kingdom423979108
Switzerland17153027
Other Europe308201587476
Total Europe8605141,6311,278
United States5594131,040974
Asia and Other Pacific436179118
All Other564310998
Total Revenue by destination of shipment1,5181,0312,8592,468
v3.21.2
OPERATING SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2021
Disclosure of operating segments [abstract]  
OPERATING SEGMENT INFORMATION
NOTE 4 - OPERATING SEGMENT INFORMATION
Constellium has three reportable segments - Packaging & Automotive Rolled Products (P&ARP), Aerospace & Transportation (A&T) and Automotive Structures & Industry (AS&I) - and Holdings & Corporate (H&C).
4.1 Segment Revenue
Three months ended June 30,Six months ended June 30,
2021202020212020
(in millions of Euros)Segment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenue
P&ARP907(3)904565(1)5641,673(5)1,6681,317(4)1,313
A&T287(13)274250(3)247532(24)508609(13)596
AS&I345(5)340222(2)220695(12)683564(5)559
Total1,539(21)1,5181,037(6)1,0312,900(41)2,8592,490(22)2,468
4.2 Segment Adjusted EBITDA and reconciliation of Adjusted EBITDA to Net Income
Three months ended June 30,Six months ended June 30,
(in millions of Euros)Notes2021202020212020
P&ARP 9458162124
A&T 42316183
AS&I 41(1)7933
H&C (7)(7)(11)(12)
Adjusted EBITDA 17081291228
Metal price lag (A)54(25)85(40)
Start-up and development costs (B)(2)(4)
Share based compensation costs (3)(5)(7)(8)
Losses on pension plan amendments 18(2)(2)(2)(2)
Depreciation and amortization 12, 13(65)(66)(128)(132)
Impairment of assets 12, 13(5)(5)
Restructuring costs 5(2)(11)(3)(11)
Unrealized gains / (losses) on derivatives 164344(10)
Unrealized exchange (losses) / gains from the remeasurement of monetary assets and liabilities – net 5(1)11(1)
Other (C)(10)(10)
Income / (loss) from operations167(1)2815
Finance costs - net7(37)(42)(92)(87)
Income / (loss) before tax130(43)189(82)
Income tax (expense) / benefit8(22)11(33)19
Net income / (loss)108(32)156(63)
(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 period.
(B)Start-up and development costs, for the six months ended June 30, 2020 were related to new projects in our AS&I operating segment.
(C)Other, in the six months ended June 30, 2020, included €5 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 €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 pandemic effects.
4.3 Segment capital expenditures
Six months ended June 30,
(in millions of Euros)20212020
P&ARP(27)(38)
A&T(21)(25)
AS&I(24)(35)
H&C(2)(2)
Capital expenditures(74)(100)
4.4 Segment assets
(in millions of Euros)At June 30,
2021
At December 31,
2020
P&ARP1,9831,733
A&T857765
AS&I698668
H&C386274
Segment assets3,9243,440
Deferred income tax assets162193
Cash and cash equivalents290439
Other financial assets7957
Total Assets4,4554,129
v3.21.2
OTHER GAINS AND LOSSES—NET
6 Months Ended
Jun. 30, 2021
Analysis of income and expense [abstract]  
OTHER GAINS AND LOSSES—NET
NOTE 5 - OTHER GAINS AND LOSSES - NET
Three months ended June 30,Six months ended June 30,
(in millions of Euros)Notes2021202020212020
Realized gains / (losses) on derivatives (A)31(32)45(44)
Losses reclassified from OCI as a result of hedge accounting discontinuation (B)(5)(5)
Unrealized gains / (losses) on derivatives at fair value through profit and loss - net (A)174345(10)
Unrealized exchange (losses) / gains from the remeasurement of monetary assets and liabilities – net 4(1)11(1)
Impairment of assets (C)(5)(5)
Restructuring costs (D)(2)(11)(3)(11)
Losses on pension plan amendments 18(2)(2)(2)(2)
Other 11(1)
Total other gains and losses - net 44(11)87(79)
(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, and that do not qualify for hedge accounting.
(B)For the six months 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 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 Interim Income Statement and resulted in a €5 million loss.
(C)In June 2020, the main customer of the Nanjing Automotive Structures plant (China) announced a suspension of its operations and a strategic reorganization. As a result, we tested the asset for impairment and recorded an impairment charge of €5 million for the six months ended June 30, 2020.
(D)For the six months ended June 30, 2021 and 2020, restructuring costs amounted to €3 million and €11 million, respectively, and related to headcount reductions in Europe and in the U.S.
v3.21.2
CURRENCY GAINS / (LOSSES)
6 Months Ended
Jun. 30, 2021
Analysis of income and expense [abstract]  
CURRENCY GAINS / (LOSSES)
NOTE 6 - CURRENCY GAINS / (LOSSES)
Three months ended June 30,Six months ended June 30,
(in millions of Euros)Notes2021202020212020
Included in Revenue17(2)(1)(5)
Included in Cost of sales11
Included in Other gains and losses - net(5)8(6)
Total(6)7(10)
Realized exchange losses on foreign currency derivatives - net17(2)(3)(5)(3)
Losses reclassified from OCI as a result of hedge accounting discontinuation17(5)(5)
Unrealized gains / (losses) on foreign currency derivatives - net17311(2)
Exchange (losses) / gains from the remeasurement of monetary assets and liabilities - net(1)21
Total(6)7(10)
See NOTE 16 - Financial Instruments and NOTE 17 - Financial Risk Management for further information regarding the Company’s foreign currency derivatives and hedging activities.
v3.21.2
FINANCE COSTS—NET
6 Months Ended
Jun. 30, 2021
Analysis of income and expense [abstract]  
FINANCE COSTS—NET
NOTE 7 - FINANCE COSTS - NET
Three months ended June 30,Six months ended June 30,
(in millions of Euros)2021202020212020
Interest expense on borrowings (A)(26)(32)(56)(64)
Interest expense on leases (2)(2)(5)(5)
Interest cost on pension and other benefits (2)(3)(4)(6)
Expenses on factoring arrangements (2)(3)(4)(6)
Net loss on settlement of debt (B)(6)(23)
Realized and unrealized (losses) / gains on debt derivatives at fair value (C)(15)(7)1
Realized and unrealized exchange gains / (losses) on financing activities - net (C)168(3)
Other finance expenses (1)(4)(1)(5)
Capitalized borrowing costs (D)1111
Finance expenses (37)(42)(92)(87)
Finance costs - net (37)(42)(92)(87)
(A)For the six months ended June 30, 2021, interest expense on borrowings included €50 million of interest and €2 million of amortization of arrangement fees related to Constellium SE Senior Notes. For the six months ended June 30, 2020, it included €57 million of interest and €3 million of amortization of arrangement fees related to Constellium SE Senior Notes.
(B)On February 24, 2021, Constellium SE tendered and redeemed its $650 million 6.625% Senior Notes due 2025. The net loss on the settlement of debt included redemption fees of €9 million and the write‐off of the outstanding balance of deferred arrangement fees at the date of redemption for €8 million. On June 2, 2021, Constellium SE redeemed its $400 million 5.750% Senior Notes due 2024. The net loss on the settlement of debt included redemption fees of €3 million and the write‐off of the outstanding balance of deferred arrangement fees at the date of redemption for €3 million.
(C)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 Interim Income Statement and largely offset the unrealized results related to Constellium SE U.S. Dollar Senior Notes revaluation.
(D)Borrowing costs directly attributable to the construction of assets are capitalized. The capitalization rate was 5% and 6% for the six months ended June 30, 2021 and 2020, respectively.
v3.21.2
INCOME TAX
6 Months Ended
Jun. 30, 2021
Income Taxes [Abstract]  
INCOME TAX
NOTE 8 - INCOME TAX
Income tax expense or benefit 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, 2021 was impacted by non-recurring transactions and changes in the allocation of income or loss by country.
v3.21.2
CASH AND CASH EQUIVALENTS
6 Months Ended
Jun. 30, 2021
Cash and cash equivalents [abstract]  
CASH AND CASH EQUIVALENTS
NOTE 9 - CASH AND CASH EQUIVALENTS
Cash in bank and on hand at June 30, 2021 amounted to €290 million and included €25 million held by subsidiaries that operate in countries where capital control restrictions prevent these balances from being immediately available for general use by the other entities within the Group. At December 31, 2020, the amount subject to these restrictions was €26 million.
v3.21.2
TRADE RECEIVABLES AND OTHER
6 Months Ended
Jun. 30, 2021
Trade and other receivables [abstract]  
TRADE RECEIVABLES AND OTHER
NOTE 10 - TRADE RECEIVABLES AND OTHER
At June 30,
2021
At December 31,
2020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Trade receivables - gross590345
Impairment(4)(4)
Total trade receivables - net586341
Income tax receivables3953415
Other tax receivables4533
Contract assets182232
Prepaid expenses12116
Other1110109
Total other receivables69836865
Total trade receivables and other6966968406
10.1 Contract assets
At June 30,
2021
At December 31,
2020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Unbilled tooling costs59
Other132142
Total Contract assets182232
10.2 Aging
(in millions of Euros)At June 30,
2021
At December 31,
2020
Not past due577333
1 – 30 days past due87
31 – 60 days past due11
61 – 90 days past due
Greater than 90 days past due
Total trade receivables - net586341
Impairment allowance
Revisions to the impairment allowance arising from changes in estimates are included as either additional allowances or recoveries. An allowance was recognized for €0.4 million for the six months ended June 30, 2021 and 2020.
None of the amounts included in Other receivables were deemed to be impaired for the six months ended June 30, 2021 and 2020.
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.
10.3 Currency concentration
(in millions of Euros)At June 30,
2021
At December 31,
2020
Euro277143
U.S. Dollar289181
Swiss franc76
Other currencies1311
Total trade receivables - net586341
10.4 Factoring arrangements
The Group factors trade receivables under committed factoring agreements in the United States, France, Germany, Switzerland and the Czech Republic:
In the United States, Constellium Muscle Shoals LLC is party to a factoring agreement with a maximum capacity of $300 million and a maturity date in September 2021 and Constellium Automotive USA LLC is party to a factoring agreement with a maximum capacity of $25 million and a maturity date in December 2021.
The factoring agreement in place for our entities in France has a maximum capacity of €255 million (including a €20 million recourse line) and a maturity date in December 2023.
Factoring agreements in place for our entities in Germany, Switzerland and the Czech Republic have a combined maximum capacity of €150 million and maturity dates in December 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.
These factoring agreements 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. In addition, 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 and for the six months ended June 30, 2021 and 2020.
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, as the Group retains substantially all the associated risks and rewards. At June 30, 2021, the total carrying amount of the original assets factored was €587 million, of which €384 million had been derecognized. At December 31, 2020, the total carrying amount of the original assets factored was €514 million, of which €398 million had been derecognized.
Amounts due to the factors in respect of trade receivables sold were €1 million and nil at June 30, 2021 and December 31, 2020, respectively.
v3.21.2
INVENTORIES
6 Months Ended
Jun. 30, 2021
Subclassifications of assets, liabilities and equities [abstract]  
INVENTORIES
NOTE 11 - INVENTORIES
(in millions of Euros)At June 30,
2021
At December 31,
2020
Finished goods196149
Work in progress428280
Raw materials 137118
Stores and supplies8780
Inventories write down(46)(45)
Total inventories802582
v3.21.2
PROPERTY, PLANT AND EQUIPMENT
6 Months Ended
Jun. 30, 2021
Property, plant and equipment [abstract]  
PROPERTY, PLANT AND EQUIPMENT
NOTE 12 - PROPERTY, PLANT AND EQUIPMENT
(in millions of Euros)Land and Property RightsBuildingsMachinery and EquipmentConstruction Work in ProgressOtherTotal
Net balance at January 1, 2021203791,361132141,906
Additions42354182
Disposals(1)(1)
Depreciation expense(14)(104)(1)(4)(123)
Transfer and other changes145(48)31
Effect of changes in foreign exchange rates1523130
Net balance at June 30, 2021213751,347138141,895
Cost375732,579147513,387
Less accumulated depreciation and impairment(16)(198)(1,232)(9)(37)(1,492)
Net balance at June 30, 2021213751,347138141,895
Right-of-use assets
Right-of-use assets have been included within the same line item as that in which the corresponding underlying assets would be presented if they were owned.
(in millions of Euros)BuildingsMachinery and EquipmentOtherTotal
Net balance at January 1, 2021112722186
Additions437
Depreciation expense(6)(10)(16)
Transfer and other changes(1)(1)
Effect of changes in foreign exchange rates112
Net balance at June 30, 2021111652178
Cost1471384289
Less accumulated depreciation and impairment(36)(73)(2)(111)
Net balance at June 30, 2021111652178
The total expense relating to short-term leases, low value asset leases and variable lease payments that are still recognized as operating expenses was €5 million and €6 million for the six months ended June 30, 2021 and 2020, respectively.
v3.21.2
INTANGIBLE ASSETS AND GOODWILL
6 Months Ended
Jun. 30, 2021
Intangible assets and goodwill [abstract]  
INTANGIBLE ASSETS AND GOODWILL
NOTE 13 - INTANGIBLE ASSETS AND GOODWILL
(in millions of Euros)TechnologyComputer SoftwareCustomer relationshipsWork in ProgressOtherTotal Intangible AssetsGoodwill
Net balance at January 1, 202118151313261417
Additions22
Amortization expense(1)(4)(5)
Transfer4(4)
Effect of changes in foreign exchange rates1113
Net balance at June 30, 202118151311259430
Cost828038122214430
Less accumulated depreciation and impairment(64)(65)(25)(1)(155)
Net balance at June 30, 202118151311259430
v3.21.2
TRADE PAYABLES AND OTHER
6 Months Ended
Jun. 30, 2021
Trade and other payables [abstract]  
TRADE PAYABLES AND OTHER
NOTE 14 - TRADE PAYABLES AND OTHER
At June 30,
2021
At December 31,
2020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Trade payables950626
Fixed assets payables3127
Employees' entitlements165143
Taxes payable other than income tax2915
Contract liabilities and other liabilities to customers362381
Other payables29182913
Total other3230532279
Total Trade payables and other321,25532905

Contract liabilities and other liabilities to customers
At June 30,
2021
At December 31,
2020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Deferred tooling revenue22
Advance payment from customers12
Unrecognized variable consideration (A)159172
Other27
Total contract liabilities and other liabilities to customers362381
(A)Unrecognized variable consideration consists of expected volume rebates, discounts, incentives, refunds penalties and price concessions.
Revenue of €23 million that related to contract liabilities at December 31, 2020 was recognized in the six months ended June 30, 2021. Revenue of €20 million generated in the six months ended June 30, 2021 was deferred.
Revenue of €14 million that related to contract liabilities at January 1, 2020 was recognized in the six months ended June 30, 2020. Revenue of €25 million generated in the six months ended June 30, 2020 was deferred.
v3.21.2
BORROWINGS
6 Months Ended
Jun. 30, 2021
Borrowings [abstract]  
BORROWINGS
NOTE 15 - BORROWINGS
15.1 Analysis by nature
At June 30,
2021
At December 31,
2020
(in millions of Euros)Nominal Value in CurrencyNominal rateNominal Value in Euros(Arrangement fees) Accrued interestsCarrying valueCarrying
value
Secured Pan-U.S. ABL
(due 2026) (A)
$Floating
Secured U.S. DDTL
(expired in 2021) (A)
$Floating
Secured PGE French Facility
(due 2022) (B)
180Floating180180180
Secured German Facility
(due 2022)
2.000%
Secured Inventory Facility
(due 2023) (C)
Floating
Senior Unsecured Notes (D)
Issued May 2014 anddue 2024 (F)$4005.750%325
Issued February 2017 anddue 2025 (E)$6506.625%534
Issued November 2017 anddue 2026 $5005.875%421(5)9425411
Issued November 2017 anddue 2026 4004.250%400(4)6402401
Issued June 2020 anddue 2028 $3255.625%274(6)1269260
Issued February 2021 anddue 2029 (E)$5003.750%421(7)5419
Issued June 2021 anddue 2029 (F)3003.125%300(5)1296
Unsecured Revolving Credit Facility
(due 2021) (G)
Floating
Unsecured Swiss Facility
(due 2025)
CHF171.175%161618
Unsecured German Facility
(due 2022)
2.120%
Lease liabilities 1861187195
Other loans (H)6216367
Total Borrowings2,260(27)242,2572,391
Of which non-current1,9952,299
Of which current26292
(A)On April 27, 2021, the Pan-U.S. ABL facility maturity date was extended to April 2026 and the Delayed-Draw Term Loan (the “U.S. DDTL”) expired.
(B)On May 20, 2021, we exercised the option to repay the PGE French Facility in May 2022.
(C)On February 16, 2021, the Secured Inventory Facility maturity date was extended to April 2023.
(D)The Senior Unsecured Notes have been issued by Constellium SE and are guaranteed by certain subsidiaries.
(E)On February 24, 2021, Constellium SE issued $500 million Sustainability-Linked Senior Notes due 2029 and bearing an interest rate of 3.750%. Deferred arrangement fees were €7 million. Constellium has established two sustainability performance targets (greenhouse gas emissions intensity and recycled metal input). If Constellium does not satisfy the first target for the year ended December 31, 2025, the interest rate will be increased by 0.125% starting April 15, 2026. If Constellium does not satisfy the second target for the year ended December 31, 2026, the interest rate will be increased by 0.125%starting April 15, 2027 (in addition to any increase arising from failure to meet the first target). The net proceeds from the issuance were used to retire the $650 million 6.625% Senior Notes due 2025.
(F)On June 2, 2021, Constellium SE issued €300 million Sustainability-Linked Senior Notes due 2029 and bearing an interest rate of 3.125%. Deferred arrangement fees were €5 million. Constellium has established two sustainability performance targets (greenhouse gas emissions intensity and recycled metal input). If Constellium does not satisfy the first target for the year ended December 31, 2025, the interest rate will be increased by 0.125%, starting July 15, 2026. If Constellium does not satisfy the second target for the year ended
December 31, 2026, the interest rate will be increased by 0.125%, starting July 15, 2027 (in addition to any increase arising from failure to meet the first target). The net proceeds from the issuance were used to retire the $400 million 5.750% Senior Notes due 2024.
(G)The Unsecured Revolving Credit Facility of one of our French entities has a €2 million borrowing base and is provided by Bpifrance Financement, a related party.
(H)Other loans include €42 million of financial liabilities relating to the sale and leaseback of assets that were considered to be financing arrangements in substance.
15.2 Covenants
The Group was in compliance with all applicable debt covenants at June 30, 2021 and December 31, 2020 and for the six months ended June 30, 2021.
15.3 Movements in borrowings
(in millions of Euros)At June 30,
2021
At December 31,
2020
At the beginning of the period (January 1)2,3912,361
Cash flows
Proceeds from issuance of Senior Notes (A)712290
Repayment of Senior Notes (A)(863)(200)
Repayment of U.S. revolving credit facilities (129)
Proceeds from other borrowings 2202
Repayments of other borrowings (9)(10)
Lease repayments (17)(35)
Payment of deferred financing costs (12)(6)
Non-cash changes
Movement in interest accrued (8)(1)
Changes in leases and other loans 862
Deferred arrangement fees 135
Effects of changes in foreign exchange rates 40(148)
At the end of the period2,2572,391
(A)On February 24, 2021, Constellium SE issued $500 million 3.750% Sustainability-Linked Senior Notes and used the proceeds to tender and redeem the $650 million 6.625% Senior Notes due 2025. On June 2, 2021, Constellium SE issued €300 million 3.125% Sustainability-Linked Senior Notes and used the proceeds to redeem the $400 million 5.750% Senior Notes due 2024.
15.4 Currency concentration
(in millions of Euros)At June 30,
2021
At December 31, 2020
U.S. Dollar1,1821,602
Euro1,048757
Other currencies2732
Total borrowings2,2572,391
v3.21.2
FINANCIAL INSTRUMENTS
6 Months Ended
Jun. 30, 2021
Disclosure of detailed information about financial instruments [abstract]  
FINANCIAL INSTRUMENTS
NOTE 16 - FINANCIAL INSTRUMENTS
16.1 Financial assets and liabilities by categories
At June 30,
2021
At December 31,
2020
(in millions of Euros)NotesAt amortized costAt fair value through profit and lossAt fair value through OCITotalAt amortized costAt fair value through profit and lossAt fair value through OCITotal
Cash and cash equivalents9290290439439
Trade receivables 10586586341341
Other financial assets736793401457
Total2907359295544240355837
At June 30,
2021
At December 31,
2020
(in millions of Euros)NotesAt amortized costAt fair value through profit and lossAt fair value through OCITotalAt amortized costAt fair value through profit and lossAt fair value through OCITotal
Trade payables and fixed assets payables14981981653653
Borrowings152,2572,2572,3912,391
Other financial liabilities3423685287
Total3,2383423,2743,0448523,131
16.2 Fair values
The carrying value of the Group’s borrowings at maturity is the redemption value.
The fair values of Constellium SE Senior Notes issued in November 2017, June 2020, February 2021 and June 2021 account for 102%, 108%, 99% and 100%, respectively, of the nominal values and amount to €839 million, €294 million, €418 million and €299 million, respectively, at June 30, 2021.
All derivatives are presented at fair value in the Interim Statement of Financial Position. The fair values of the other financial assets and liabilities approximate their carrying values, as a result of their liquidity or short maturity.
At June 30,
2021
At December 31,
2020
(in millions of Euros)Non-currentCurrentTotalNon-currentCurrentTotal
Aluminium and premium future contracts8425011819
Energy future contracts11
Other future contracts134112
Currency commercial contracts71724161733
Margin call33
Other financial assets - derivatives166379183957
Aluminium and premium future contracts178369
Other future contracts1111
Currency commercial contracts2161842832
Currency net debt derivatives (A) 729341145
Other financial liabilities - derivatives102636414687
(A)For the six months ended June 30, 2021, forward purchases of $325 million versus the Euro using cross currency basis swaps were bought out before their initial maturity in relation with the refinancing of the Senior Notes. This buy-out generated a €27 million cash outflow which is presented in Other financing activities within the Interim Statement of Cash Flows.
16.3 Valuation hierarchy
The following table provides an analysis of financial instruments measured at fair value, grouped into levels based on the degree to which the fair value is observable:
Level 1 is based on a quoted price (unadjusted) in active markets for identical financial instruments. Level 1 includes aluminium, copper and zinc futures that are traded on the LME.
Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. prices) or indirectly (i.e. derived from prices). Level 2 includes foreign exchange derivatives. The present value of future cash flows based on the forward or on the spot exchange rates at the balance sheet date is used to value foreign exchange derivatives.
Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs). Trade receivables are classified as a Level 3 measurement under the fair value hierarchy.
At June 30,
2021
At December 31,
2020
(in millions of Euros)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Other financial assets - derivatives443579203757
Other financial liabilities - derivatives8283697887
There was no material transfer of asset and liability categories into or out of Level 1, Level 2 or Level 3 during the six months ended June 30, 2021 or the year ended 2020.
v3.21.2
FINANCIAL RISK MANAGEMENT
6 Months Ended
Jun. 30, 2021
Disclosure of financial risk management [Abstract]  
FINANCIAL RISK MANAGEMENT
NOTE 17 - FINANCIAL RISK MANAGEMENT
The Group’s financial risk management strategy focuses on minimizing the cash flow impacts of volatility in foreign currency exchange rates and metal prices, while maintaining the financial flexibility the Group requires in order to successfully execute the Group’s business strategy.
Due to Constellium’s capital structure and the nature of its operations, the Group is exposed to the following financial risks: (i) market risk including foreign exchange, commodity price and interest rate risks; (ii) credit risk and (iii) liquidity and capital management risk.
The Group's financial institution counterparties may require margin calls should the mark-to-market of our derivatives hedging foreign exchange and commodity price risks exceed a pre-agreed contractual limit. With a view to avoiding possible margin
calls for significant market movements, the Group enters into derivatives with a large number of financial counterparties and monitors margin requirements on a daily basis. In addition, the Group (i) ensures that financial counterparts hedging transactional exposure are also hedging foreign currency loan and deposit exposures and (ii) holds a significant liquidity buffer in cash or in availability under its various borrowing facilities
17.1 Market risk
i. Commercial transaction exposures
The Group has agreed to supply a major customer with fabricated metal products from a Euro functional currency entity and to invoice in U.S. Dollars. The Group entered into significant foreign exchange derivatives that matched related highly probable future conversion sales. The Group designates these derivatives for hedge accounting, with a total nominal amount of $305 million and $330 million at June 30, 2021 and December 31, 2020 respectively, with maturities ranging from 2021 to 2024.
The table below details the effect of foreign currency derivatives in the Interim Income Statement and the Interim Statement of Comprehensive Income / (Loss):
Three months ended June 30,Six months ended June 30,
(in millions of Euros)Notes2021202020212020
Derivatives that do not qualify for hedge accounting
Included in Other gains and losses - net
Realized (losses) / gains on foreign currency derivatives - net6(2)(4)2
Unrealized gains / (losses) on foreign currency derivatives - net (A)63(1)11(2)
Derivatives that qualify for hedge accounting
Included in Other comprehensive income / (loss)
Unrealized gains / (losses) on foreign currency derivatives - net22(9)(6)
Gains / (losses) reclassified from cash flow hedge reserve to the Interim Income Statement1316
Included in Revenue (B)
Realized (losses) / gains on foreign currency derivatives - net
6(3)(1)(5)
Unrealized gains on foreign currency derivatives - net61
Derivatives discontinued from hedge accounting
Included in Other gains and losses - net
Losses reclassified from OCI as a result of hedge accounting discontinuation (C)6(5)(5)
(A)Gains or losses on the hedging instruments are expected to offset losses or gains on the underlying hedged forecasted sales that will be reflected in the future when these sales are recognized.
(B)Derivatives that qualify for hedge accounting are included in Revenue when the related customer invoices have been issued.
(C)In the six months ended June 30, 2020, we determined that a portion of the hedged forecasted sales for the second half of 2020 and for 2021, to which hedge accounting was applied, was no longer expected to occur. As a result, the fair value of the related derivatives accumulated in equity was reclassified in the Interim Income Statement and resulted a €5 million loss.
ii. Foreign exchange margin calls
There were no margin calls at June 30, 2021.The margin requirement related to foreign exchange hedges amounted to €3 million paid as collateral to counterparties at December 31, 2020.
iii. Commodities
The Group does not apply hedge accounting on commodity derivatives and therefore any mark-to-market movements are recognized in Other gains and losses – net.
17.2 Liquidity and capital risk management
The liquidity requirements of the overall Company are funded out of the Company's cash or by drawing on available credit facilities. The internal management of liquidity is optimized by means of cash pooling agreements and/or intercompany loans and deposits between the Company’s operating entities and central Treasury.
At June 30, 2021, the borrowing bases for the Pan-U.S. ABL, the French Inventory Facility, and the German Facilities were €337 million, €82 million, and €50 million, respectively. After deduction of amounts drawn and letters of credit, the Group had €461 million outstanding availability under these revolving credit facilities.
At June 30, 2021, liquidity was €887 million, comprised of €290 million of cash and cash equivalents and €597 million of available undrawn facilities, including the €461 million described above.
v3.21.2
PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
6 Months Ended
Jun. 30, 2021
Disclosure of employee benefits [Abstract]  
PENSION AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
NOTE 18 - PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
18.1 Actuarial assumptions
Pension and other post-employment benefit obligations were updated based on the discount rates applicable at June 30, 2021.
At June 30,
2021
At December 31,
2020
Discount rateDiscount rate
Switzerland0.20%0.00%
U.S.
Hourly pension
2.75% - 2.95%
2.45% - 2.65%
Salaried pension2.85%2.55%
OPEB
2.85% - 3.15%
2.50% - 2.80%
Other benefits
2.50% - 2.90%
2.20% - 2.55%
France
Retirements0.90%0.50%
Other benefits0.75%0.40%
Germany0.95%0.55%
18.2 Amounts recognized in the Interim Statement of Financial Position
At June 30,
2021
At December 31,
2020
(in millions of Euros)Pension BenefitsOther BenefitsTotalPension BenefitsOther BenefitsTotal
Present value of funded obligation741741772772
Fair value of plan assets(504)(504)(458)(458)
Deficit of funded plans237237314314
Present value of unfunded obligation131213344134216350
Net liability arising from defined benefit obligation368213581448216664
18.3 Amounts recognized in the Interim Income Statement
Three months ended June 30,
20212020
(in millions of Euros)Pension BenefitsOther BenefitsTotalPension BenefitsOther BenefitsTotal
Service cost
Current service cost(6)(2)(8)(5)(1)(6)
Past service cost(2)(2)(2)(2)
Net interest(1)(1)(2)(2)(1)(3)
Immediate recognition of gains arising over the year(1)(1)
Administration expenses(1)(1)
Total(7)(5)(12)(8)(5)(13)
Six months ended June 30,
20212020
(in millions of Euros)Pension BenefitsOther BenefitsTotalPension BenefitsOther BenefitsTotal
Service cost
Current service cost(11)(4)(15)(11)(3)(14)
Past service cost(2)(2)(2)(2)
Net interest(2)(2)(4)(3)(3)(6)
Immediate recognition of gains arising over the year11
Administration expenses(1)(1)(1)(1)
Total(14)(7)(21)(15)(8)(23)
18.4 Movement in net defined benefit obligations
At June 30, 2021
Defined benefit obligationsPlan AssetsNet defined benefit liability
(in millions of Euros)Pension benefitsOther benefitsTotal
At January 1, 20219062161,122(458)664
Included in the Interim Income Statement
Current service cost1141515
Interest cost / (income)527(3)4
Past service cost2