CONSTELLIUM SE, 20-F filed on 14 Mar 22
v3.22.0.1
COVER
12 Months Ended
Dec. 31, 2021
shares
Document Information [Line Items]  
Document Type 20-F
Document Registration Statement false
Document Annual Report true
Document Period End Date Dec. 31, 2021
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 141,677,366
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 2021
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
v3.22.0.1
Audit Information
12 Months Ended
Dec. 31, 2021
Audit Information [Abstract]  
PCAOB ID 1347
Auditor Name PricewaterhouseCoopers Audit
Auditor Location Neuilly-sur-Seine, France
v3.22.0.1
CONSOLIDATED INCOME STATEMENT - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Profit or loss [abstract]      
Revenue € 6,152 € 4,883 € 5,907
Cost of sales (5,488) (4,393) (5,305)
Gross profit 664 490 602
Selling and administrative expenses (258) (237) (276)
Research and development expenses (39) (39) (48)
Other gains and losses - net 117 (89) (23)
Income from operations 484 125 255
Finance costs - net (167) (159) (175)
Share of income of joint-ventures 0 0 2
Income / (loss) before tax 317 (34) 82
Income tax (expense) / benefit (55) 17 (18)
Net income / (loss) 262 (17) 64
Net income / (loss) attributable to:      
Equity holders of Constellium 257 (21) 59
Non-controlling interests 5 4 5
Net income / (loss) € 262 € (17) € 64
Earnings per share attributable to the equity holders of Constellium (in Euros)      
Basic (in EUR per share) € 1.82 € (0.15) € 0.43
Diluted (in EUR per share) € 1.75 € (0.15) € 0.41
Weighted average number of shares      
Basic (in shares) 140,995,106 138,739,635 136,856,978
Diluted (in shares) 147,169,971 138,739,635 142,645,619
v3.22.0.1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of comprehensive income [abstract]      
Net income / (loss) € 262 € (17) € 64
Items that will not be reclassified subsequently to the consolidated income statement      
Remeasurement on post-employment benefit obligations 114 (20) (61)
Income tax on remeasurement on post-employment benefit obligations (16) 5 13
Items that may be reclassified subsequently to the consolidated income statement      
Cash flow hedges (17) 26 (8)
Net investment hedges 0 0 4
Income tax on hedges 4 (7) 2
Currency translation differences 34 (18) 1
Other comprehensive income / (loss) 119 (14) (49)
Total comprehensive income / (loss) 381 (31) 15
Attributable to:      
Equity holders of Constellium 374 (34) 10
Non-controlling interests 7 3 5
Total comprehensive income / (loss) € 381 € (31) € 15
v3.22.0.1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - EUR (€)
Dec. 31, 2021
Dec. 31, 2020
Current assets    
Cash and cash equivalents € 147,000,000 € 439,000,000
Trade receivables and other 683,000,000 406,000,000
Inventories 1,050,000,000 582,000,000
Other financial assets 58,000,000 39,000,000
Total current assets 1,938,000,000 1,466,000,000
Non-current assets    
Property, plant and equipment 1,948,000,000 1,906,000,000
Goodwill 451,000,000 417,000,000
Intangible assets 58,000,000 61,000,000
Deferred tax assets 162,000,000 193,000,000
Trade receivables and other 55,000,000 68,000,000
Other financial assets 12,000,000 18,000,000
Total non-current assets 2,686,000,000 2,663,000,000
Total Assets 4,624,000,000 4,129,000,000
Current liabilities    
Trade payables and other 1,377,000,000 905,000,000
Borrowings 258,000,000 92,000,000
Other financial liabilities 25,000,000 46,000,000
Income tax payable 34,000,000 20,000,000
Provisions 20,000,000 23,000,000
Total current liabilities 1,714,000,000 1,086,000,000
Non-current liabilities    
Trade payables and other 32,000,000 32,000,000
Borrowings 1,871,000,000 2,299,000,000
Other financial liabilities 6,000,000 41,000,000
Pension and other post-employment benefit obligations 599,000,000 664,000,000
Provisions 97,000,000 98,000,000
Deferred tax liabilities 14,000,000 10,000,000
Total non-current liabilities 2,619,000,000 3,144,000,000
Total Liabilities 4,333,000,000 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 (149,000,000) (538,000,000)
Equity attributable to equity holders of Constellium 274,000,000 (115,000,000)
Non-controlling interests 17,000,000 14,000,000
Total Equity 291,000,000 (101,000,000)
Total Equity and Liabilities € 4,624,000,000 € 4,129,000,000
v3.22.0.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - EUR (€)
€ in Millions
Total
Share capital
Share premium
Re- measurement
Cash flow hedges and net investment hedges
Foreign currency translation reserve
Other reserves
Retained losses
Total
Non-controlling interests
Beginning balance at Dec. 31, 2018 € (114) € 3 € 420 € (129) € (8) € 3 € 37 € (448) € (122) € 8
Net income / (loss) 64             59 59 5
Other comprehensive (loss) / income (49)     (48) (2) 1     (49)  
Total comprehensive income / (loss) 15     (48) (2) 1   59 10 5
Share-based compensation 16           16   16  
Transactions with non-controlling interests (2)                 (2)
Ending balance at Dec. 31, 2019 (85) 3 420 (177) (10) 4 53 (389) (96) 11
Net income / (loss) (17)             (21) (21) 4
Other comprehensive (loss) / income (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                  
Ending balance at Dec. 31, 2020 (101) 3 420 (192) 9 (13) 68 (410) (115) 14
Net income / (loss) 262             257 257 5
Other comprehensive (loss) / income 119     98 (13) 32     117 2
Total comprehensive income / (loss) 381     98 (13) 32   257 374 7
Share-based compensation 15           15   15  
Transactions with non-controlling interests (4)                 (4)
Ending balance at Dec. 31, 2021 € 291 € 3 € 420 € (94) € (4) € 19 € 83 € (153) € 274 € 17
v3.22.0.1
CONSOLIDATED STATEMENT OF CASH FLOWS - EUR (€)
€ in Millions
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of cash flows [abstract]      
Net income / (loss) € 262 € (17) € 64
Adjustments      
Depreciation and amortization 267 259 256
Impairment of assets 0 43 0
Pension and other post-employment benefits service costs 64 34 27
Finance costs - net 167 159 175
Income tax expense / (benefit) 55 (17) 18
Share of income of joint-ventures 0 0 (2)
Unrealized gains on derivatives - net and from remeasurement of monetary assets and liabilities - net (36) (18) (33)
Losses on disposal 3 4 3
Other - net 11 19 16
Change in working capital      
Inventories (435) 63 57
Trade receivables (227) 36 104
Trade payables 396 (38) (31)
Other 5 (10) 9
Change in provisions (7) 1 (2)
Pension and other post-employment benefits paid (43) (53) (50)
Interest paid (128) (140) (158)
Income tax refunded / (paid) 3 9 (6)
Net cash flows from operating activities 357 334 447
Purchases of property, plant and equipment (232) (182) (271)
Property, plant and equipment grants received 10 5 0
Acquisition of subsidiaries net of cash acquired 0 0 (83)
Proceeds from disposals, net of cash 1 1 2
Other investing activities 0 0 (1)
Net cash flows used in investing activities (221) (176) (353)
Proceeds from issuance of Senior Notes 712 290 0
Repayments of Senior Notes (1,041) (200) (100)
(Repayments of) / proceeds from U.S. revolving credit facilities 0 (129) 105
Proceeds from other borrowings 0 202 8
Repayments of other borrowings (16) (10) (4)
Lease repayments (32) (35) (86)
Payment of financing costs and redemption fees (30) (9) 0
Transactions with non-controlling interests (2) 0 (4)
Other financing activities (26) (8) 5
Net cash flows (used in) / from financing activities (435) 101 (76)
Net (decrease) / increase in cash and cash equivalents (299) 259 18
Cash and cash equivalents - beginning of period 439 184 164
Effect of exchange rate changes on cash and cash equivalents 7 (4) 2
Cash and cash equivalents - end of year € 147 € 439 € 184
v3.22.0.1
GENERAL INFORMATION
12 Months Ended
Dec. 31, 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 29 manufacturing facilities located in North America, Europe and China, 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.
v3.22.0.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2021
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 10, 2022 by the Board of Directors.
2.2 New and amended standards and interpretations
Several amendments and interpretations applied for the first time in 2021, but had no impact on the Consolidated Financial Statements of the Group.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform - Phase 2
Amendments to IFRS 16: COVID-19 Related Rent Concessions
Amendments to IFRS 16: COVID-19 Related Rent Concessions beyond 30 June 2021
In addition, the following IFRIC IC Agenda Decisions had no significant impact on the Consolidated Financial Statements of the Group.
IFRS IC Agenda Decision on IAS 38: Configuration or Customisation Costs in a Cloud Computing Arrangement
IFRS IC Agenda Decision on IAS 19: Attributing Benefit to Periods of Service
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 New standards and interpretations not yet mandatorily applicable
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 16: Property, Plant and Equipment: Proceeds before Intended Use
Amendments to IFRS 3: Reference to the Conceptual Framework
Amendments to IAS 37: Onerous Contracts – Costs of Fulfilling a Contract
Annual Improvements to IFRS Standards 2018-2020
IFRS 9 Financial Instruments: Fees in the ‘10 per cent’ test for derecognition of financial liabilities
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
Amendment to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
Amendment to IAS 8: Definition of Accounting Estimates
Amendment to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
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 12 - Cash and Cash Equivalents, NOTE 19 - Borrowings and NOTE 21 - 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. This assessment was confirmed by the Board of Directors on March 10, 2022.
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 Chief Executive Officer, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the CODM.
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.
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 entity, 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 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. Investments over which the Group has significant influence are accounted for under the equity method.
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 independent cash flows 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 are tested for impairment annually, or more frequently when there is an indication that allocated goodwill may be impaired.
The net carrying value of a group of cash-generating units is compared to their recoverable amounts, 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 the 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.
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 OCI.
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,
202120202019202120202019
U.S. DollarsUSD1.18211.14051.11931.13261.22711.1234
Swiss FrancsCHF1.08081.07041.11211.03311.08021.0854
Czech KorunaCZK25.636626.433725.669824.858026.242025.4080
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, is 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 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 also includes 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 unusual, infrequent or non-recurring, 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
At initial recognition, 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.
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 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 objective 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
The Group uses derivative financial instruments, such as forward currency contracts, interest rate swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively.
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.
Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
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
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.
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 are subsequently measured at amortized cost. Trade payables are 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 weighs 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.
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.
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 as otherwise stated. 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 continuously reviews its significant assumptions and estimates in light of the uncertainty associated with the COVID-19 pandemic and its potential direct and indirect impact on its business and its financial statements, detailed in NOTE 4 - Operating Segment Information, NOTE 15 - Property, Plant and Equipment, NOTE 19 - Borrowings, NOTE 21 - Financial Risk Management, NOTE 23 - Provisions and NOTE 26 - COVID-19-related Government assistance. However, there remains significant 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.
The Group assesses where climate risks could have a significant impact, such as the introduction of emission-reduction legislation that may increase manufacturing costs. The Group constantly monitors the latest government legislation in relation to climate-related matters. At the current time, no legislation has been passed that will impact the Group. The Group will adjust the assumptions used in value-in-use calculations and sensitivity to changes in assumptions should a change be required.
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 15 - Property, Plant and Equipment and in NOTE 16 - 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 22 - 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 17 - 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 23 - 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.
v3.22.0.1
REVENUE
12 Months Ended
Dec. 31, 2021
Revenue [abstract]  
REVENUE
NOTE 3 - REVENUE
Year ended December 31,
(in millions of Euros)202120202019
Packaging rolled products2,6731,9602,172
Automotive rolled products854663816
Specialty and other thin-rolled products161102151
Aerospace rolled products389560863
Transportation, industry, defense and other rolled products713442557
Automotive extruded products735665797
Other extruded products627491551
Total Revenue by product line6,1524,8835,907
Year ended December 31,
(in millions of Euros)202120202019
Germany1,4811,0141,260
France466362563
United Kingdom179192194
Switzerland635268
Other Europe1,2339231,078
Total Europe3,4222,5433,163
United States2,3351,9412,175
Asia and Other Pacific171211277
All Other224188292
Total Revenue by destination of shipment6,1524,8835,907
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.
v3.22.0.1
OPERATING SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2021
Disclosure of operating segments [abstract]  
OPERATING SEGMENT INFORMATION
NOTE 4 - OPERATING SEGMENT INFORMATION
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, 2021.
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 3,400 employees at December 31, 2021.
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, 2021.
Holdings & Corporate (H&C)
Holdings & Corporate includes the costs of our corporate support functions and 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,
202120202019
(in millions of Euros)Segment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenueSegment revenueInter-segment eliminationExternal revenue
P&ARP3,698(10)3,6882,734(9)2,7253,149(10)3,139
A&T1,142(40)1,1021,025(23)1,0021,462(42)1,420
AS&I1,383(21)1,3621,167(11)1,1561,351(3)1,348
Total6,223(71)6,1524,926(43)4,8835,962(55)5,907
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)Notes202120202019
P&ARP 344291273
A&T 111106204
AS&I 14288106
H&C (16)(20)(21)
Adjusted EBITDA 581465562
Metal price lag (A)187(8)(46)
Start-up and development costs (B)(5)(11)
Bowling Green one-time cost related to the acquisition (C)(5)
Share based compensation costs 29(15)(15)(16)
(Losses) / gains on pension plan amendments (D)22(32)(2)1
Depreciation and amortization 15, 16(267)(259)(256)
Impairment of assets 15, 16(43)
Restructuring costs 8(3)(13)(4)
Unrealized gains on derivatives 351633
Unrealized exchange gains from the remeasurement of monetary assets and liabilities – net 811
Losses on disposal 8(3)(4)(3)
Other (E)(8)
Income from operations484125255
Finance costs - net10(167)(159)(175)
Share of income of joint-ventures2
Income / (loss) before tax317(34)82
Income tax (expense) / benefit11(55)17(18)
Net income / (loss)262(17)64
(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 and 2019, 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)In the year ended December 31, 2021, the group recognized a loss of €31 million from past service cost following an adverse decision of the Fourth Circuit Court in the dispute between Constellium Rolled Products Ravenswood, LLC and the United Steelworkers Local Union 5668 over the transfer of certain participants in the Constellium Rolled Products Ravenswood Retiree Medical and Life Insurance Plan to a third-party health network (see Note 22.6).
(E)Other, for the year ended December 31, 2020, included €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)202120202019
P&ARP(94)(73)(96)
A&T(70)(45)(72)
AS&I(62)(61)(97)
H&C(6)(3)(6)
Capital expenditures(232)(182)(271)
4.4 Segment assets
At December 31,
(in millions of Euros)20212020
P&ARP2,1081,733
A&T948765
AS&I738668
H&C451274
Segment assets4,2453,440
Deferred income tax assets162193
Cash and cash equivalents147439
Other financial assets7057
Total Assets4,6244,129
4.5 Information about major customers
Revenue in the P&ARP segment from sales to the Group’s largest customer was €692 million and €492 million for the years ended December 31, 2021 and 2020, respectively, and no other single customer contributed 10% or more to the Group’s revenue for 2021 and 2020. No single customer contributed 10% or more to the Group's revenue for the year ended December 31, 2019.
v3.22.0.1
INFORMATION BY GEOGRAPHIC AREA
12 Months Ended
Dec. 31, 2021
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)20212020
United States811777
France653646
Germany266270
Czech Republic9997
Other119116
Total1,9481,906
v3.22.0.1
EXPENSES BY NATURE
12 Months Ended
Dec. 31, 2021
Disclosure of attribution of expenses by nature to their function [abstract]  
EXPENSES BY NATURE
NOTE 6 - EXPENSES BY NATURE
Year ended December 31,
(in millions of Euros)202120202019
Raw materials and consumables used(3,885)(2,832)(3,535)
Employee benefit expenses(967)(902)(1,038)
Energy costs(149)(141)(162)
Sub-contractors(102)(89)(100)
Freight out costs(143)(122)(156)
Professional fees(63)(73)(97)
Lease expenses(12)(11)(13)
Depreciation and amortization(267)(259)(256)
Other operating expenses(197)(240)(272)
Other gains and losses - net117(89)(23)
Total operating expenses(5,668)(4,758)(5,652)
v3.22.0.1
EMPLOYEE BENEFIT EXPENSES
12 Months Ended
Dec. 31, 2021
Classes of employee benefits expense [abstract]  
EMPLOYEE BENEFIT EXPENSES
NOTE 7 - EMPLOYEE BENEFIT EXPENSES
Year ended December 31,
(in millions of Euros)Notes202120202019
Wages and salaries(920)(855)(994)
Pension costs - defined benefit plans22(24)(23)(19)
Other post-employment benefits22(8)(9)(9)
Share-based compensation29(15)(15)(16)
Total employee benefit expenses(967)(902)(1,038)
NOTE 22 - PENSIONS AND OTHER POST-EMPLOYMENT BENEFIT OBLIGATIONS
The Group has 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.
22.1 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.
22.2 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, 2021, 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 (10)10
Germany(7)8
Switzerland(24)25
United States(34)38
Total sensitivity on Defined Benefit Obligations(75)81
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.
22.3 Actuarial assumptions
Pension and other post-employment benefit obligations were updated based on the discount rates applicable at December 31, 2021.
At December 31,
20212020
Rate of increase in salariesRate of increase in pensionsDiscount rateRate of increase in salariesRate of increase in pensionsDiscount rate
Switzerland1.50%0.15%1.50%0.00%
U.S.
Hourly pension2.20%
2.80% - 2.95%
2.20%
2.45% - 2.65%
Salaried pension3.80%2.85%3.80%2.55%
OPEB (A)3.80%
2.85% - 2.95%
3.80%
2.50% - 2.80%
Other benefits3.80%
2.60% - 2.85%
3.80%
2.20% - 2.55%
France
1.80% - 3.80%
2.00%
1.50% - 3.50%
2.00%
Retirements1.00%0.50%
Other benefits0.90%0.40%
Germany2.50%1.80%1.05%2.50%1.50%0.55%
(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: 6.05% starting in 2021 decreasing gradually to 4.50% in 2029 and stable onwards and ii) post-65: 5.80% starting in 2021 decreasing gradually to 4.50% in 2029 and stable onwards,
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.
22.4 Amounts recognized in the Consolidated Statement of Financial Position
At December 31,
20212020
(in millions of Euros)Pension BenefitsOther BenefitsTotalPension BenefitsOther BenefitsTotal
Present value of funded obligation766766772772
Fair value of plan assets(544)(544)(458)(458)
Deficit of funded plans222222314314
Present value of unfunded obligation128249377134216350
Net liability arising from defined benefit obligation350249599448216664
22.5 Movement in net defined benefit obligations
At December 31, 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 Consolidated Income Statement
Current service cost2283030
Interest cost / (income)10515(6)9
Past service cost1313232
Immediate recognition of gains arising over the year
Administration expenses22
Included in the Statement of Comprehensive Income
Remeasurements due to:
—actual return less interest on plan assets(56)(56)
—changes in financial assumptions(29)(9)(38)(38)
—changes in demographic assumptions(13)(13)(13)
—experience losses(9)(2)(11)(11)
Effects of changes in foreign exchange rates381755(32)23
Included in the Consolidated Statement of Cash Flows
Benefits paid(36)(18)(54)32(22)
Contributions by the Group(21)(21)
Contributions by the plan participants415(5)
At December 31, 20218942491,143(544)599
At December 31, 2020
Defined benefit obligationsPlan AssetsNet defined benefit liability
(in millions of Euros)Pension benefitsOther benefitsTotal
At January 1, 20208952201,115(445)670
Included the Consolidated Income Statement
Current service cost2172828
Interest cost / (income)13619(8)11
Past service cost222
Immediate recognition of gains arising over the year222
Administration expenses22
Included in the Statement of Comprehensive Income
Remeasurements due to:
—actual return less interest on plan assets(28)(28)
—changes in financial assumptions51166767
—changes in demographic assumptions(6)(4)(10)(10)
—experience losses(4)1(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 participants415(5)
At December 31, 20209062161,122(458)664
Movements in net defined benefit obligations reported in Other Comprehensive Income in the years ended December 31, 2021 and 2020, primarily reflected the impact of changes in discount rates (see note 22.3), the difference between actual returns and interest on plan assets and the impact of changes in foreign exchanges rates.
22.6 Ravenswood OPEB dispute
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 providing similar benefits at a lower cost. The United Steelworkers Local Union 5668 (the “Union”) contested this change in benefits 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 Plan 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. In November 2021, the Fourth Circuit Court issued an opinion in favor of the Union, and the Group elected not to further pursue legal action on this matter.
The Group recognized a gain of €36 million from negative past service cost in the year ended December 31, 2018, reflecting its decision to amend the plan benefits and its determination at the time that it was probable that it would ultimately prevail in the dispute with the Union. This gain was partially reversed in the years ended December 31, 2019 and 2020, to reflect delays in the estimated implementation timetable as a result of the dispute with the Union. The Group recognized a loss of €31 million from past service cost in the year ended December 31, 2021, following the Fourth Circuit Court's ruling in favor of the Union.
22.7 Net defined benefit obligations by country
At December 31,
20212020
(in millions of Euros)Defined benefit obligationsPlan assetsNet defined benefit liabilityDefined benefit obligationsPlan assetsNet defined benefit liability
France158(5)153168(5)163
Germany134(2)132143(1)142
Switzerland306(268)38310(223)87
United States545(269)276500(229)271
Other countries11
Total1,143(544)5991,122(458)664
22.8 Plan asset categories
At December 31,
20212020
(in millions of Euros)Quoted in an active marketUnquoted in an active marketTotalQuoted in an active marketUnquoted in an active marketTotal
Cash & cash equivalents4488
Equities1156117610964173
Bonds149110259106103209
Property16557184654
Other343411314
Total fair value of plan assets284260544232226458
22.9 Cash flows
Expected contributions to pension and other benefit plans amount to €22 million and €18 million, respectively, for the year ending December 31, 2022.
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,
202255
202355
202457
202557
202658
2027 to 2031290
The weighted-average maturity of the defined benefit obligations was 14.2 years for the years ended December 31, 2021 and 2020.
v3.22.0.1
OTHER GAINS AND LOSSES—NET
12 Months Ended
Dec. 31, 2021
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)Notes202120202019
Realized gains / (losses) on derivatives (A)113(35)(49)
Losses reclassified from OCI as a result of hedge accounting discontinuation (B)(6)
Unrealized gains on derivatives at fair value through profit and loss - net (A)391633
Unrealized exchange gains from the remeasurement of monetary assets and liabilities – net 411
Impairment of assets (C)15, 16(43)
Restructuring costs (D)23(3)(13)(4)
(Losses) / gains on pension plan amendments (E)22(32)(2)1
Losses on disposal (3)(4)(3)
Other 2(3)(1)
Total other gains and losses - net 117(89)(23)
(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)In the year ended December 31, 2020, we determined that a portion of the hedged forecasted sales for 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)In the year ended December 31, 2020, an impairment charge of €43 million was recognized for certain A&T cash-generating units due to the downturn in the aerospace industry resulting from the COVID-19 pandemic and for certain AS&I cash-generating units as a result of the review of their long-term business perspectives.
(D)For the years ended December 31, 2021 and 2020, restructuring costs amounted to €3 million and €13 million, respectively, and related to headcount reductions in Europe and in the U.S.
(E)In the year ended December 31, 2021, the group recognized a loss of €31 million from past service cost following an adverse decision of the Fourth Circuit Court in the dispute between Constellium Rolled Products Ravenswood, LLC and the United Steelworkers Local Union 5668 over the transfer of certain participants in the Constellium Rolled Products Ravenswood Retiree Medical and Life Insurance Plan to a third-party health network (see Note 22.6).
v3.22.0.1
CURRENCY GAINS / (LOSSES)
12 Months Ended
Dec. 31, 2021
Analysis of income and expense [abstract]  
CURRENCY GAINS / (LOSSES)
NOTE 9 - CURRENCY GAINS / (LOSSES)
Year ended December 31,
(in millions of Euros)Notes202120202019
Included in Revenue21(4)(6)(7)
Included in Cost of sales1(2)1
Included in Other gains and losses - net2116(19)9
Total13(27)3
Realized exchange (losses) / gains on foreign currency derivatives - net21(1)(11)1
Losses reclassified from OCI as a result of hedge accounting discontinuation21(6)
Unrealized gains / (losses) on foreign currency derivatives - net2113(8)1
Exchange gains / (losses) from the remeasurement of monetary assets and liabilities - net1(2)1
Total13(27)3
See NOTE 20 - Financial Instruments and NOTE 21 - 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)20212020
Foreign currency translation reserve at January 1(13)4
Effect of currency translation differences32(17)
Foreign currency translation reserve at December 3119(13)
v3.22.0.1
FINANCE COSTS—NET
12 Months Ended
Dec. 31, 2021
Analysis of income and expense [abstract]  
FINANCE COSTS—NET
NOTE 10 - FINANCE COSTS - NET
Year ended December 31,
(in millions of Euros)202120202019
Interest expense on borrowings (A)(103)(122)(129)
Interest expense on leases (14)(10)(13)
Interest cost on pension and other benefits (9)(11)(16)
Expenses on factoring arrangements (9)(10)(19)
Net loss on settlement of debt (B)(27)
Realized and unrealized gains / (losses) on debt derivatives at fair value (C)10(32)13
Realized and unrealized exchange (losses) / gains on financing activities - net (C)(10)37(3)
Other finance expenses (6)(12)(11)
Capitalized borrowing costs (D)113
Finance expenses (167)(159)(175)
Finance costs - net (167)(159)(175)
(A)For the year ended December 31, 2021, interest expense on borrowings included €92 million of interest and €4 million of amortization of arrangement fees related to Constellium SE Senior Notes. For the year ended December 31, 2020, it included €111 million of interest and €5 million of amortization of arrangement fees related to Constellium SE Senior Notes.
(B)In February 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 deferred arrangement fees at the date of redemption of €8 million.
In June 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 deferred arrangement fees at the date of redemption of €3 million.
In November 2021, Constellium SE redeemed $200 million of the $500 million outstanding aggregate principal amount of the 5.875% Senior Notes due 2026. The net loss on the settlement of debt included redemption fees of €3 million and the write-off of the deferred arrangement fees attributable to the portion redeemed at the date of redemption of €1 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 Consolidated Income Statement.
(D)     Borrowing costs directly attributable to the construction of assets are capitalized. The capitalization rate was 5% for the year ended December 31, 2021 and 6% for the years ended December 31, 2020, and 2019
v3.22.0.1
INCOME TAX
12 Months Ended
Dec. 31, 2021
Income Taxes [Abstract]  
INCOME TAX
NOTE 11 - INCOME TAX
Year ended December 31,
(in millions of Euros)202120202019
Current tax expense (26)(14)(32)
Deferred tax (expense) / benefit (29)3114
Income tax (expense) / benefit(55)17(18)
The Group's effective tax rate reconciliation is as follows:
Year ended December 31,
(in millions of Euros)202120202019
Income / (loss) before tax 317(34)82
Statutory tax rate applicable to the parent company (A)28.4%32.0%34.4%
Income tax (expense) / benefit calculated at statutory tax rate (90)11(28)
Effect of foreign tax rate (A)1523
Changes in recognized and unrecognized deferred tax assets (B)2415(10)
Change in tax laws and rates (C)21
Other (4)(11)(4)
Income tax (expense) / benefit (55)17(18)
Effective income tax rate 17%49%22%
(A)The parent company was a French company for the years ended December 31, 2021, 2020 and 2019. For the years ended December 31, 2021, 2020 and 2019, the effect of foreign tax rate resulted from the geographical mix of our pre-tax results.
(B)For the year ended December 31, 2021, the changes in recognized and unrecognized deferred tax assets mainly related to the recognition of deferred tax assets on temporary differences at one of our main operating entities in the United States. For the year ended December 31, 2020, the changes mainly related to recognized deferred tax assets on prior-year losses carried forward at one of our main operating entities in the United States, following some clarification on U.S. interest limitation rules and the CARES Act.
(C)For the year ended December 31, 2019, the change in tax laws and rates related mainly to the application of the Swiss Federal Tax Reform voted in May 2019 and enacted in the Canton where one of our entities is located.
NOTE 17 - DEFERRED INCOME TAXES
At December 31,
(in millions of Euros)20212020
Deferred income tax assets 162193
Deferred income tax liabilities (14)(10)
Net deferred income tax assets 148183
At January 1, 2021Recognized inFXAt December 31, 2021
(in millions of Euros)Profit or lossOCI
Long-term assets (106)(10)(8)(124)
Inventories 5(2)3
Pensions 1265(17)5119
Derivative valuation (5)(5)4(6)
Tax losses carried forward 116(7)8117
Other (A)47(10)239
Net deferred income tax assets 183(29)(13)7148
(A)Other results mainly from non-deductible provisions and interest expense.
At January 1, 2020Recognized inFXAt December 31,
2020
(in millions of Euros)Profit or lossOCI
Long-term assets (99)(16)9(106)
Inventories 8(3)5
Pensions 127(1)5(5)126
Derivative valuation 6(4)(7)(5)
Tax losses carried forward 7549(8)116
Other (A)446(3)47
Net deferred income tax assets 16131(2)(7)183
(A)Other results mainly from non-deductible provisions and interest expense.
Recognized Deferred Tax Assets
Some deferred tax assets in respect of temporary differences and unused tax losses were recognized without being offset by deferred tax liabilities.
In accordance with the accounting policies described in note 2.6 of the Consolidated Financial Statements, a detailed assessment was performed on net deferred tax asset recovery at December 31, 2021, with specific focus on tax jurisdictions with unused tax losses carried forward.
Management considered that the tax losses that generated the deferred tax assets were not expected to be recurring and did not challenge the profitable long-term structure of its business model. In addition, tax planning opportunities are available to increase the taxable profit and the use the long-term limited and unlimited tax losses.
Management concluded that it was more likely than not that the net deferred tax asset balance of €148 million and €183 million at December 31, 2021 and 2020, respectively, would be recoverable.
Unrecognized Deferred Tax Assets
Based on the expected taxable income of the entities, the Group believed that it was more likely than not that a total of €805 million and €920 million at December 31, 2021 and 2020, respectively, of unused tax losses and deductible temporary differences, would not be used. Consequently, the corresponding net deferred tax assets were not recognized. The related tax impact of €191 million and €224 million at December 31, 2021 and 2020, respectively, was attributable to the following:
At December 31,
(in millions of Euros)20212020
Expiring within 5 years (3)(3)
Expiring after 5 years and limited (55)(55)
Unlimited (27)(23)
Tax losses (85)(81)
Long-term assets (65)(91)
Pensions (7)(16)
Other (34)(36)
Deductible temporary differences (106)(143)
Total (191)(224)
At December 31, 2021 and 2020, most of the the tax loss carryforwards as well as the deductible temporary differences on long-term assets and other differences resided at one of our main operating entities in the United States. An assessment was performed on the recoverability of the deferred tax assets associated with the deductible temporary differences and tax losses. Management concluded that it was more likely than not that the entity will not be able to use the tax benefits associated with the deductible temporary differences and tax losses. Consequently, the related deferred tax assets were not recognized.
v3.22.0.1
CASH AND CASH EQUIVALENTS
12 Months Ended
Dec. 31, 2021
Cash and cash equivalents [abstract]  
CASH AND CASH EQUIVALENTS
NOTE 12 - CASH AND CASH EQUIVALENTS
Cash in bank and on hand at December 31, 2021 amounted to €147 million and included €29 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.
v3.22.0.1
TRADE RECEIVABLES AND OTHER
12 Months Ended
Dec. 31, 2021
Trade and other receivables [abstract]  
TRADE RECEIVABLES AND OTHER
NOTE 13 - TRADE RECEIVABLES AND OTHER
At December 31,
20212020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Trade receivables - gross607345
Impairment(4)(4)
Total trade receivables - net603341
Income tax receivables24203415
Other tax receivables4033
Contract assets192232
Prepaid expenses1916
Other119109
Total other receivables55806865
Total trade receivables and other5568368406
13.1 Contract assets
At December 31,
20212020
(in millions of Euros)Non-currentCurrentNon-currentCurrent
Unbilled tooling costs69
Other132