Good performance in the first three quarters of 2024 in a challenging environment

Ranshofen, October 30, 2024

AMAG Austria Metall AG: Good performance in the first three quarters of 2024 in a challenging environment

• Broad set-up of the AMAG Group and high flexibility in operational processing enable solid revenue and earnings figures in a persistently difficult environment
• Revenues remain at a high level at EUR 1,078.7 million (Q1-Q3/2023: EUR 1,142.8 million)
• EBITDA of EUR 147.6 million reflects the overall good performance of AMAG's operating divisions (Q1-Q3/2023: EUR 166.0 million)
• Net income after taxes of EUR 54.3 million (Q1-Q3/2023: EUR 69.7 million)
• Cashflow from operating activities at a strong EUR 109.3 million (Q1-Q3/2023: EUR 157.0 million)
• Outlook for financial year 2024: Confirmation of EBITDA range of EUR 160 million to EUR 180 million, whereby the upper limit is primarily linked to valuation effects whose probability of occurrence can only be forecast to a limited extent

The AMAG Group successfully demonstrated its high level of resilience in a persistently subdued economic environment, especially in Europe. EBITDA in the third quarter of 2024 grew by more than 8 % compared to the same quarter of the previous year (Q3/2023). The Metal Division showed a consistently good earnings performance in the current year (Q1-Q3/2024). Despite the many challenges in the automotive industry, the Casting Division was able to achieve solid earnings quality overall, below the previous year's level. The Rolling Division recognised sales opportunities on the market and seized them thanks to its high level of flexibility. Volume and price declines were thus noticeably cushioned in the current reporting period.

Dr Helmut Kaufmann, CEO of AMAG Austria Metall AG: "With the economic situation in many European countries remaining subdued, we have so far succeeded in generating solid earnings through product mix shifts and a high degree of flexibility. Nevertheless, the weak industrial economy in Europe is leading to increasing pressure on prices and volumes in numerous industries. We continue to meet these challenges with a clear focus on innovation and sustainability. Once again, we increased our research expenditure in the first three quarters of 2024 in order to keep our shares of specialities at a consistently high level.”

The AMAG Group's revenues totalled EUR 1,078.7 million in the first three quarters of 2024 (Q1-Q3/2023: EUR 1,142.8 million). Prices and volume effects are primarily responsible for the deviation. Although the AMAG Group's shipment volumes grew in the third quarter of 2024, there was a slight decrease overall in the first nine months of the year compared to the same period of the previous year at 323,300 tonnes (Q1-Q3/2023: 327,700 tonnes).

Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 147.6 million in the current reporting period after EUR 166.0 million in the previous year. The development in the Metal Division continued to be positive. Stable production in Canada and positive valuation effects in connection with inventory hedges are primarily responsible for this. The Casting Division impressed with stable operating profits in all three quarters, which were below the previous year's level due to the difficult European environment in the automotive sector. The diverse set-up in the Rolling Division enabled product mix shifts and thus significantly cushioned the partially weakening demand from many European industries.

Depreciation and amortisation increased to EUR 66.8 million in the first three quarters (Q1-Q3/2023: EUR 63.8 million). The operating profit (EBIT) totalled EUR 80.7 million in the current reporting period (Q1-Q3/2023: EUR 102.2 million). Net income after taxes amounted to EUR 54.3 million in the first nine months (Q1-Q3/2023: EUR 69.7 million).

A strong cashflow of EUR 109.3 million was generated from operating activities (Q1-Q3/2023: EUR 157.0 million). A total of EUR 69.0 million was spent on investments (Q1-Q3/2023: EUR 75.4 million). Accordingly, free cashflow in the current reporting period totalled a solid EUR 40.2 million (Q1-Q3/2023: EUR 81.6 million).

Net financial debt stood at EUR 384.5 million as of September 30, 2024, compared to EUR 364.3 million at the end of 2023. Equity grew from EUR 746.3 million at the end of 2023 to EUR 752.0 million as at the current quarterly reporting date. The equity ratio currently stands at 42.1 % (December 31, 2023: 46.1 %).

Earnings trend in the third quarter of 2024

The AMAG Group's shipment volumes grew year-on-year to 109,100 tonnes in the third quarter of 2024 (Q3/2023: 106,500 tonnes). The average aluminium price also developed positively, rising from 2,200 USD per tonne in Q3/2023 to 2,421 USD per tonne in Q3/2024. This was accompanied by an increase in revenues to EUR 370.9 million (Q3/2023: EUR 346.4 million).

At EUR 52.2 million, EBITDA exceeded the previous year's level of EUR 48.2 million. In particular, the increases in the Metal Division and Rolling Division are responsible for the AMAG Group's earnings growth in the third quarter of 2024.

Taking into account depreciation and amortisation of EUR 22.2 million (Q3/2023: EUR 21.4 million), EBIT grew to EUR 30.0 million in the third quarter of 2024 (Q3/2023: EUR 26.8 million). Earnings after income taxes grew to EUR 20.9 million (Q3/2023: EUR 18.7 million). Cashflow from operating activities totalled EUR 33.6 million in Q3/2024 (Q3/2023: EUR 89.0 million).

Outlook 2024:

The global economic environment continues to develop unevenly. While the USA is expected to see noticeable GDP growth of +2.5 %, the economy in the eurozone is expected to grow by just +0.8 %. The weak industrial sector in particular is depressing economic growth. The WIFO Institute anticipates stagnation in Germany, while the Austrian economy is expected to shrink by -0.6 % in 2024.[1]

The AMAG Group's broad positioning and firmly anchored strategy have enabled it to achieve solid revenue and earnings figures in this difficult environment. Nevertheless, the persistently weak European industrial economy is also making itself felt in several AMAG sales markets, leading to increased pressure on prices and volumes.

According to the economic forecasts cited, the economic situation is expected to not improve in the fourth quarter of 2024. This means that the environment will remain challenging, especially in the Casting and Rolling Divisions. In the Metal Division, the significant rise in alumina prices will have an impact on earnings in the coming months. In addition, the further development of aluminium prices and any valuation effects may also have a noticeable impact on earnings in Q4/2024.

Based on the assumptions made, AMAG’s Management Board can confirm the EBITDA range of EUR 160 million to EUR 180 million for the 2024 financial year communicated at the end of July 2024, whereby the upper limit is primarily linked to valuation effects whose probability of occurrence can only be forecast to a limited extent.

AMAG key figures: 

About the AMAG Group

AMAG is a leading Austrian premium supplier of high-quality aluminium cast and flat rolled products for highly varied industries such as the aerospace, automotive, sports equipment, lighting, mechanical engineering, construction and packaging industries. The Canadian smelter Alouette, in which AMAG holds a 20 % interest, produces high-quality primary aluminium, while maintaining an exemplary net ecological impact. At AMAG components, based in Übersee am Chiemsee (Germany), ready-to-install metal parts are also manufactured for the aerospace industry.

NOTE

The forecasts, budgets and forward-looking assessments and statements contained in this publication were compiled on the basis of all information available to AMAG as of October 22, 2024. In the event that the assumptions underlying these forecasts prove to be incorrect, targets be missed, or risks materialise, actual results may diverge from those currently anticipated. We are not obligated to revise these forecasts in the light of new information or future events.
This publication was prepared and the data contained in it verified with the greatest possible care. Nevertheless, misprints and rounding and transmission errors cannot be ruled out entirely. In particular, AMAG and its representatives do not assume any responsibility for the completeness and correctness of information included in this publication. This publication is also available in German. In cases of doubt, the German-language version takes precedence.
This publication does not comprise either a recommendation or a solicitation to either purchase or sell securities of AMAG.

^[1] Austrian Institute of Economic Research (WIFO), Economic Forecast 3/2024, October 2024