Dear shareholders,
I am proud to present to you our 2018 Interim Financial Report, which reflects our performance and key
achievements during the first six months of the year.
During the first half of the year, we have clearly demonstrated the robustness of Aperam’s business model in
the context of challenging market conditions. In addition, we announced the signature of a Share Purchase
Agreement to acquire VDM Metals. This represents a major step in our development, one that allows us to
further grow our Alloys & Specialties steel business, a high added-value segment within the stainless steel
and alloys sector.
But let me begin by discussing our top priority: Health and Safety. In the first half of 2018, our health and
safety performance, which is measured by our lost time injury frequency rate remained stable at 1.4x.
Although this is comparable to our overall 2017 rate, it represents an increase from the 1.2x achieved during
the first half of 2017. Even though our performance remains twice as good as the industry average, we will
not rest until we reach our ultimate objective of zero accident. To achieve this, we remain focused on
changing mindsets, improving procedures and training our entire organisation. It is simply not acceptable that
anyone could get hurt while working at Aperam. This is the cornerstone of our commitment to sustainability.
Turning to the market, the first half of 2018 can best be described as ‘challenging’, to say the least. Most
notably, trade tensions increased as United States of America (U.S.) placed tariff measures on imported steel
and aluminium. Although the U.S. only represents around 5% of Aperam’s sales and such measures have a
limited impact on Aperam, the deflection of flows to Europe poses a threat to European industry with a
significant increase in the level of imports. In response, the European Commission announced provisional
safeguards in July to ensure fair trade conditions for European industry. The United States of America has
agreed on a quota system for Brazilian imports.
In this challenging environment and despite some temporary disruptions in Brazil during the second quarter of
2018 due to a national truckers’ strike, we improved our operational performance quarter-on-quarter with an
EBITDA of €141 million in Q1 2018 and €150 in Q2 2018. On a half-year basis, our EBITDA for the first six
months of 2018 was €291 million, compared to €314 over the same period last year. Our net income for the
first six months of 2018 remained at €165 million compared to the €164 million posted during the same period
last year. Despite solid cash returns to shareholders in the form of dividends and share buybacks, our net
financial debt was €20 million at the end of June 2018 (representing a gearing of 1%), compared to €206
million at the end of June 2017. The effects of the phase 3 of our Leadership Journey® - the Transformation
Program - also started to materialise over the first half of the year with a €24 million contribution to EBITDA
(annual rate). Under this new phase of the Leadership Journey®, Aperam aims to achieve an incremental
€150 million of annualised EBITDA gains by 2020.
The first half 2018 was also marked by several key announcements. Each of these announcements highlight
our robust business model and dedication to continuously improving our operational excellence and customer