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CONSTELLIUM SE (CSTM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $2.103B (+9% YoY) with diluted EPS of $0.25; Adjusted EBITDA of $146M reflected a negative $13M non‑cash metal price lag, while segment performance was mixed with strength in P&ARP and weakness in AS&I and Holdings & Corporate .
  • Revenue modestly exceeded Wall Street consensus, and EBITDA was near Street expectations; EPS missed consensus (Street: ~$0.32 EPS vs actual $0.25), driven by weaker AS&I and higher corporate costs; company raised FY25 Adjusted EBITDA guidance (ex- metal lag) to $620–$650M and maintained FCF >$120M, citing packaging strength, tariff mitigation, and scrap spread tailwinds *.
  • Management highlighted tariff impacts as net positive longer term and improved Muscle Shoals operations; leverage rose to 3.6x mid-year but is expected to decline through year-end with stronger H2 and ongoing buybacks (3.4M shares, $35M in Q2) .
  • Near-term stock catalysts: raised FY25 EBITDA guidance, packaging outperformance, and expected H2 improvement from tariff pass-throughs and scrap spreads; watch for continued auto softness and metal-price-lag volatility .

What Went Well and What Went Wrong

  • What Went Well

    • Packaging & Automotive Rolled Products: Segment Adjusted EBITDA rose 12% YoY to $74M on higher packaging shipments (+14% YoY) and improved Muscle Shoals performance; management: “our performance at Muscle Shoals continues to improve” .
    • Guidance raised: FY25 Adjusted EBITDA (ex- lag) to $620–$650M and FCF >$120M; CEO: “we are raising our guidance… based on our current outlook” .
    • Cash generation and buybacks: Cash from operations $114M; free cash flow $41M; 3.4M shares repurchased for $35M; leverage expected to trend down as year progresses .

  • What Went Wrong

    • AS&I weakness: Segment Adjusted EBITDA fell 40% YoY to $18M on unfavorable price/mix and net tariff impact; automotive shipments down 12% with weakness in NA and Europe .
    • Corporate costs: Holdings & Corporate expense increased to $(12)M (up $6M YoY) due to ERP upgrades and higher accrued labor costs .
    • Metal price lag: Non‑cash metal price lag was a $13M headwind in Q2 (negative in Europe on decreasing premiums) versus positive lag in Q2 2024 (+$45M), dampening reported Adjusted EBITDA .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.721 $1.979 $2.103
Diluted EPS ($USD)$(0.34) $0.26 $0.25
Net Income ($USD Millions)$(47) $38 $36
Adjusted EBITDA ($USD Millions)$125 $186 $146
Metal Price Lag ($USD Millions)$27 $46 $(13)
Q2 2025 vs Prior Year (Q2 2024)Q2 2025Q2 2024Change
Shipments (k metric tons)384 378 +2%
Revenue ($USD Billions)$2.103 $1.932 +9%
Net Income ($USD Millions)$36 $77 (53)%
Adjusted EBITDA ($USD Millions)$146 $225 n.m.
Metal Price Lag ($USD Millions)$(13) $45 n.m.
Q2 2025 vs Estimates (S&P Global)ActualConsensusNote
Revenue ($USD Billions)$2.103 $2.078*Actual modestly above Street*
Diluted EPS ($USD)$0.25 $0.32*Miss vs Street*
EBITDA ($USD Millions)$146 (company Adjusted EBITDA) $164.45*Definitions may differ; Street tracks EBITDA; company reports Adjusted EBITDA including metal price lag*

Values retrieved from S&P Global.*

Segment performance (Segment Adjusted EBITDA):

Segment ($USD Millions)Q4 2024Q1 2025Q2 2025
Aerospace & Transportation (A&T)$56 $75 $78
Packaging & Automotive Rolled Products (P&ARP)$56 $60 $74
Automotive Structures & Industry (AS&I)$4 $16 $18
Holdings & Corporate (H&C)$(18) $(11) $(12)
Total Segment Adjusted EBITDA$98 $140 $159

KPIs and balance sheet:

KPIQ4 2024Q1 2025Q2 2025
Shipments (k metric tons)328 372 384
Cash from Operations ($USD Millions)$61 $58 $114
Free Cash Flow ($USD Millions)$(85) $(3) $41
Liquidity ($USD Millions)$727 $800 $841
Net Debt ($USD Millions)$1,776 $1,826 $1,895
Leverage (Net Debt / LTM Segment Adj. EBITDA, x)3.1x 3.3x 3.6x
Share Repurchases~1.6M shares, $18.5M 1.4M shares, $15M 3.4M shares, $35M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (ex- metal price lag)FY 2025$600–$630M $620–$650M Raised
Free Cash FlowFY 2025>$120M >$120M Maintained
CapexFY 2025“Modestly reducing by 5–10%” (no specific $) ~$325M Quantified
Cash InterestFY 2025Around prior levels ~$125M Updated higher
Cash TaxesFY 2025Around prior levels ~$45M Updated higher
Leverage TargetFY 2025 YE“Trend down by year-end” At or below ~3.0x Clarified
A&T Through-the-cycle EBITDA/tonMulti-year$1,000/ton (prior target) $1,100/ton; above near term Raised
Share Repurchase ProgramFY 2025Use large portion of FCF ~$171M remaining authorization; intend to use large portion of FCF Progress update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Tariffs/macroFluid tariff backdrop; 2025 outlook initially excluded tariff impacts Net-positive long term; Q2 headwinds in AS&I; pass-throughs progressing; H2 mitigation expected Improving mitigation; still fluid
Packaging demand and Muscle ShoalsHealthy demand in NA/EU; operational issues in early 2024 resolved; improvement by Q1 2025 Packaging shipments +14% YoY; Muscle Shoals stabilized; opportunity to shift capacity from auto Strengthening
Automotive weaknessWeak NA/EU; tariff uncertainty; conservative outlook Continued softness; automotive shipments down 12–14%; cautious H2 assumptions Persistent weakness
Aerospace inventory/timingDestocking; supply chain challenges; stable demand across defense/space Demand shifting to the right; no snap-back yet; long-term fundamentals intact Stabilizing, delayed recovery
Scrap spreadsTight in 2024; modest improvement by end-Q1; expected headwind easing Wider spreads; benefit begins in Q3; positive tailwind in H2 Turning positive
Cost reduction (Vision 25)Accelerated program; labor and procurement cuts Ongoing; supports margin and FCF in H2 Continuing execution
FX translationQ1 headwind; liquidity improved Q2 tailwind aiding P&ARP and group results Favorable in H2

Management Commentary

  • CEO: “Constellium delivered solid results in the second quarter despite continued demand weakness across most of our end markets outside of packaging… we are raising our guidance for 2025 and now expect Adjusted EBITDA… $620–$650M and Free Cash Flow in excess of $120M” .
  • CEO on tariffs: “We see both some positive and negative impacts… it should be a net positive for us… guidance does include the direct impact from tariffs… and mitigating factors” .
  • CFO on scrap: “Spreads improved in the spot market… we expect to benefit starting in the third quarter of this year and into the rest of the year” .
  • CEO on Muscle Shoals: “Seven, eight months of very good performance… all things are pointing in the right direction” .
  • CFO: “Holdings and corporate expense… up $6M from last year due to additional IT spending with ERP upgrade and higher accrued labor costs” .

Q&A Highlights

  • Guidance raise drivers: Packaging strength, Vision 25 cost execution, widening scrap spreads, and favorable FX; auto outlook worsened and is reflected in cautious H2 assumptions; Q3 stronger than Q2, Q4 seasonally softer .
  • Packaging operations: Muscle Shoals stabilization and ability to allocate mill time from auto to can sheet aided shipments; supportive pricing environment into 2026 per ongoing negotiations .
  • Tariff pass-throughs: Progress with customers; one customer agreed to full pass-through; working to resourcing and cost offsets; overall tariff environment viewed as net opportunity .
  • Aerospace: Demand “shifted to the right” due to OEM delivery constraints; potential for rapid snap-back when recovery starts; A&T through-cycle EBITDA/ton target raised to $1,100 .
  • Scrap spreads: Expect H2 benefit; Q2 did not reflect spot improvement due to contracted purchases; wider spreads should reduce prior headwinds .

Estimates Context

  • Q2 2025 revenue modestly exceeded Street ($2.103B actual vs ~$2.078B consensus*); EPS missed ($0.25 actual vs ~$0.32 consensus*); EBITDA was near Street but definitional differences (company Adjusted EBITDA includes metal price lag) can cause variance *.
  • FY 2025 Street context: Revenue ~$8.20B*, EBITDA ~$685M*, EPS ~$1.46* versus company guidance of Adjusted EBITDA (ex- lag) $620–$650M and FCF >$120M; expect Street to reassess EBITDA bridges (metal price lag, tariff pass-through timing) and segment mix given auto softness and packaging strength .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Packaging momentum and Muscle Shoals stabilization are core earnings drivers; expect continued share gains and pricing support into 2026 .
  • Auto remains a headwind (NA/EU); tariff-related costs weigh on AS&I, but pass-throughs and resourcing should mitigate in H2; monitor cadence of customer agreements .
  • Scrap spread tailwinds should emerge in Q3, supporting margins particularly in P&ARP; FX also favorable into H2 .
  • Raised FY25 Adjusted EBITDA (ex- lag) to $620–$650M and maintained FCF >$120M; company reiterates 2028 targets ($900M EBITDA ex- lag; $300M FCF) .
  • Leverage peaked at 3.6x; management targets ≤3.0x by YE; strong liquidity ($841M) and ongoing buybacks (Q2: 3.4M shares, $35M) provide capital allocation flexibility .
  • Watch metal price lag swings (Q2: $(13)M) that can obscure underlying operations; focus on segment Adjusted EBITDA and ex‑lag guidance .
  • Near-term setup: Q3 stronger than Q2 with tariff compensation and scrap benefit timing; Q4 seasonally softer; stock likely to react to evidence of tariff pass-through progress and sustained packaging strength .