Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Aperam SA (APEMY) has successfully reversed the slowdown caused by previous investments in Brazil and Europe, resulting in a stronger footprint and better product mix.
• The company announced the acquisition of Universal Stainless in the United States, which is expected to enhance its market position.
• Brazil operations have returned to full run rate, achieving maximum efficiency even in a low cycle.
• The Booster program is contributing positively to the company's financial performance, with a clear ramp-up in results.
• Aperam SA (APEMY) is focusing on differentiated products, reducing dependency on commodity markets and enhancing profitability.

Negative Points

• The market remains challenging with low levels of activity, impacting overall performance.
• Pricing pressures are expected to continue in both Europe and Brazil, affecting margins.
• Imports from Asia, particularly Taiwan, are increasing, posing a risk to local market share.
• The company faces potential risks from geopolitical factors, such as tariffs and trade defense measures.
• Economic conditions in key markets like Germany are showing signs of weakness, affecting demand.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with APEMY.

Q: Can you confirm the EUR250 per ton EBITDA in Europe and how it compares to previous quarters? A: Timoteo Di Maulo, CEO: The EUR250 per ton is a historical normal level. The markets remain low in activity, but Europe's contribution has been significant.

Q: Could you explain the one-offs in 2024 and their impact on 2025? A: Sudhakar Sivaji, CFO: Inventory valuation should balance out for the year. The main one-off was in Brazil, affecting the first two quarters, but this has smoothed out by Q3.

Q: What are the volumes shipped from Europe and Brazil to the US, and how do tariffs affect this? A: Timoteo Di Maulo, CEO: Most production is focused on domestic markets. The volumes shipped to the US are not significant, and current trade measures protect against the redirection of imports.

Q: Regarding the Universal Stainless acquisition, are there significant investment requirements? A: Timoteo Di Maulo, CEO: We will provide more details post-closing. Universal has invested well in the past, and no high investments are required for synergies.

Q: How do you assess the risk of imports and circumvention in Europe? A: Timoteo Di Maulo, CEO: Imports have been low due to trade defense measures. Current levels are normal, and any aggressive behavior from countries like Vietnam could prompt further action.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.