Ladies and gentlemen, welcome to the Q1 2025 results conference call. I am Valentina, the Qualus call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and 0. The forecasts, plans, and forward-looking assessments and statements contained in this presentation were made on the basis of the information available to AMAG Austria Metall up to April 25, 2025. The economic and trade policy environment has changed several times in recent weeks. Internal calculations and results analysis are based on various assumptions. These include the unchanged validity of global U.S. import tariffs on aluminum products.
If the assumptions on which the forecasts are based do not materialize, targets are not met, or risks occur, actual earnings may differ from those currently anticipated. We assume no obligation to revise such forecasts in light of new information or future events. This presentation has been prepared and the data checked with the greatest possible care. However, rounding, transmission, or printing errors cannot be ruled out. In particular, AMAG and its representatives accept no liability for the completeness and accuracy of the information contained in this presentation. This presentation is also available in German. In case of doubt, the German version shall prevail. This presentation does not constitute a recommendation or invitation to buy or sell securities of AMAG. At this time, it's my pleasure to hand over to Christoph Gabriel, Head of Investor Relations. Please go ahead.
Good morning, ladies and gentlemen, and welcome to our conference call for the first quarter of 2025 of AMAG Austria Metall. Helmut Kaufmann, CEO of AMAG, and Claudia Trampitsch, CFO of AMAG, will present the development and results of the first three months of this year. As usual, the presentation as well as the press release have been published this morning on our homepage under Investor Relations. After the presentation, you have the opportunity to ask questions during the Q&A session. Helmut, please start the presentation. Thank you.
Good morning, ladies and gentlemen. Also from my side, I would like to start with highlights slide number three. I am glad to say that we can present good quarterly figures despite the fact that the U.S. customs policy already casts some first shadows on the business. In Q1 2025, AMAG benefited from volume increases, especially in the Rolling Division, and higher aluminum prices and premiums in the Metal Division compared to last year. The revenues grew by around 20% to EUR 401 million, again due to price and volume factors. Last year, we achieved EUR 335 million. EBITDA increased by around 9% to EUR 46.1 million compared to EUR 42.4 million last year. Net income after taxes reached EUR 16.2 million and was around 22% higher than the first quarter of last year.
Cash flow from operating activities was at a level of EUR 51.1 million and therefore around 40% higher than EUR 35.6 million last year. It's still early in the year, but we prepared a first outlook, and we can say that the Q1 this year was still insignificantly affected by the U.S. tariffs, which were introduced at the 12th of March 2025. This changes over the year, and increasing negative effects will become apparent starting from Q2 onwards. From today's perspective, a full-year EBITDA of EUR 110 million -EUR 140 million is the range that we publish now. Let us move on to market and shipment information.
As usual, we start, presented on slide number five, with the Purchasing Managers' Index, which again shows that our most important markets, the Eurozone, U.K., but also North America, are still mostly in the reddish area, but maybe slightly improving compared to December of last year. There are only a few exemptions where there are more positive signals. The Eurozone, however, continues to be the weakest area for industrial activities. We feel uncertainty now coming up also in the United States. Looking at slide number six, we present here the total shipments of the AMAG Group, which increased by 6% compared to last year's first quarter and reached in total 110,800 tons. How did this develop in the various segments?
The metal segment, our Canadian smelter Alouette produced as stable as we are used to, and the shipments of primary aluminum increased by 1,400 tons compared to last year. Also in the Casting Division, where we produce and sell recycling foundry alloys, increased by 400 tons. The Rolling Division grew, especially in industrial applications and in packaging products, and was therefore able to compensate the decreases in aerospace, other transportation sectors, and heat exchangers. The increase compared to last year was 4,800 tons. How these numbers split to the various sectors of rolled products use is introduced to you on slide number seven. You can see the automotive industry is 19% of our shipments and compared to last year for 400 tons more. Aerospace minus 300, other transportation also minus 1,300 tons. Positive developments, however, in industrial, sport, architecture, and packaging.
Heat exchanger, closely connected to the automotive industry, is also negatively affected. When we look at the order development for the Rolling Division, we can say that the order backlog is rather stable. This is shown to you on slide number eight. Slightly more than 60,000 tons order backlog is a positive number. However, the order intake of the automotive and aerospace sector was lower, and there was a shift to packaging and industrial applications. Unfortunately, we have to state here that the U.S. tariffs shift somehow the supply chains and bring additional price pressure to the global aluminum business. With this information, I hand over to Claudia Trampitsch, and she will present more details to the numbers. Thank you.
Good morning. Also from my side, I can now give you some information on market price development and details from our financial results in the first quarter of 2025. When you look at page 10, you can see that compared to last year's first quarter, we had an increase in the aluminum price of around 70%. This influences our revenues, you will see later on, and our results, but also various valuation effects out of the aluminum price. When we look at slide 11, we see that the U.S. Midwest premium development shows that starting in February, when there was the announcement of the U.S. tariffs on aluminum, there was a big increase in that premium. The increase started before the U.S. tariffs were in place.
This had an effect on our results as we could benefit from that increase in February and March, even before we had to pay duties there. As we are flexible with our sales from our smelter, we could benefit from that increase. On the other hand, our results are always influenced by the price development of alumina. In the last year, 2024, we had a significant increase, especially in the second half of the year. What we see now in the first quarter 2025 is that the alumina price went down. We are now at approximately $350 these days. This will have an effect in the upcoming months and has also an effect on our trading capital.
When we now move to our revenues of AMAG Group, then you'll see that we have, as Helmut mentioned before, an increase of 20% compared to last quarter. This increase is mainly due to two factors. One of it is the higher aluminum price, as I mentioned before, which affects the revenues of the metal and the Rolling Division. As we said before, we had an increase in shipments and also some mix effects. Therefore, we also saw an increase in volume and mix, which then sums up to revenues of EUR 401.4 million in the first quarter. When we now move on to our EBITDA of the first quarter, we also can show that we have a very good EBITDA out of EUR 46.1 million, which is around 9% higher than last year.
Apart from the effects I mentioned before of aluminum price and volume and mix, which affected already revenue and also material, we also have negative effects here. One of the negative effects is around EUR 10 million out of the material cost for alumina because in this first quarter 2025, we see still the effects of the alumina bought in the fourth quarter 2024, which was at very high prices and not affected by the then declining alumina prices. In the other section, you can see we have the valuation effects I mentioned before, mainly due to valuation of inventories and derivatives. If we look at the EBITDA change by division, you see that a big part of the EBITDA change came from the Metal Division, which is EUR 3.3 million higher than last year.
A big part of this EUR 3.3 million is due to higher premium levels, as I mentioned before. The premium levels arise because of the incoming U.S. tariffs. This was the effect we could materialize due to our flexibility. The Casting Division had a slight growth in the shipping volume, but quite a price pressure and is below last year. On the other hand, there was an increase at the Rolling Division of EUR 1.9 million due to all the effects we mentioned before. We had an increase in sales of industrial applications and packaging products. We also had a reduction of specialities. We had a mix shift and also some price pressure. In the end, it was all offset and had a positive impact on this quarter.
For the net income after taxes of AMAG Group, the increase of 22% compared to last year is only regarding operating profit. There are no other extraordinary effects there. Let me move on to the cash flow of AMAG Group on page 17. This quarter, we can show an increase of more than 40% in the operating cash flow. When we look at the operating cash flow in the quarter one 2025, you see that it amounts up to EUR 51 million. That is mainly due to the operating profit. All other changes, let's say, in the working capital, they set each other off. It is mainly due to the EBITDA. For the investing activities, we have planned to do less investing activities in the first quarter 2025. It went out as planned and is below last year's level.
This in total adds up to a free cash flow in the first quarter 2025 of EUR 34 million. As every quarter, we also show you some ESG figures of our Brand Helmut side. As you can see, they are in total more or less stable. Helmut and I mentioned before that there were shifts in product mix. This affects the scrap utilization rate, as you can see, but it is still at a very, very high level and shows that we are still above the 75%. When we look at our balance sheet, we had an improvement in this quarter compared to the year-end regarding our net financial debt and our gearing. You see that the net financial debt is lower than three months ago. We are now at EUR 346 million. Also, our gearing is now at 1.9, which means it is below last year-end.
The same we can say about the equity and the equivalents as KPIs for our balance sheet, where you see that the equity rises around 3%. Main effects are valuation effects and, of course, the higher earnings after tax. The cash and cash equivalents are affected by the positive cash flow I mentioned before. We now have in our presentation some more detailed slides on the various divisions. I already mentioned all the information that's presented there. I can hand over to Helmut to give some information on the outlook of 2025.
Yes. This is summarized on slide 26. We already mentioned that there is a high level of uncertainty due to trade policies. I would like to comment that we also said in our disclaimer at the beginning that we have to take some assumptions when we prepare the EBITDA range, the outlook for this year. One essential assumption that we took was that from now on, the situation concerning tariffs would remain stable. It remains at the level that we have today, despite the fact that we know that it can change every day or any day. We have to assume something. This certainly affects the rest of the year. It affects the rest of our business directly and indirectly, as we used to say, directly, because we ship roughly 30,000 tons-35,000 tons to the American market of rolling products.
On the other hand, indirectly, because numerous customers of our Rolling Division will be somehow affected on their side and therefore may sell less, we might sell less to the European market. We mostly talk about impact on the automotive industry. As I mentioned before, decline in automotive sales also affects a decline in heat exchanger products. These are two essential specialty areas. Claudia mentioned before that we are down 5% in specialties because of a shift. To summarize this, for the Metal Division, business performance certainly largely depends on the price trends for aluminum and aluminum premiums and, of course, alumina prices. In the past, the shipments were 100% from Canada to the U.S. This import duties of 25% might change this. We are flexible, as Claudia said, and we could as well ship to Europe.
We check basically on a daily basis. The Casting Division, which is strongly dependent on the development of the European automotive industry, certainly sees pressure connected to what I mentioned before. Declining sales in Europe also increase the price pressure in the Casting Divisions. The Rolling Division I already mentioned, what we see there is that, of course, the automotive industry heat exchanger business is reduced. This is generally reduced for all our competitors as well. People move into the other segment. In these other segments, the price pressure increases therefore. This sums up to our first outlook for 2025. We see very volatile conditions. Because of this, despite the fact that we had a good first quarter 2025, we are cautious here and say we expect a range for the EBITDA 2025 between EUR 110 million-EUR 140 million.
Thank you very much for your attention, and we are prepared for your questions.
We will now begin the question and answer section. Anyone who wishes to ask a question may press star and one on the touchstone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use all the answers while asking a question. Anyone who has a question may press star and one at this time. The first question comes from Michael Marschallinger from Erste Group. Please go ahead.
Yes. Good morning, everybody. Thanks for taking my question. I have a couple on the U.S. tariff situation, and I will do them all at once because there's also some kind of interconnection. Firstly, as I said, the tariff is in effect mid-March. Could you elaborate on how the overall landscape changed after mid-March in terms of all intake? What you're seeing last two weeks in March, April, also maybe on the U.S. Midwest premium, yeah, in general, what you saw after March 12th. Secondly, did you already see negative results impact in this last two weeks of March? And could you quantify this impact? And lastly, is it possible to quantify the direct results impact on the tariffs for the following three quarters?
For the first questions, if I got it right, I think it was related to the primary aluminum and the inventories there. What we have seen, and this affected also the pricing, let's say, for us, and this was also because our production is stable of the smelter, that yes, there was the tendency of customers, let's say, or of companies to raise their inventories in the U.S. to be prepared for eventually U.S. tariffs. You can see that there was a much higher inventory there. There are several numbers if it is between if it was for two months or three or four months or so, we do not know exactly. That was definitely something that happened in the market because people prepared themselves. On the other hand, what you need to think about is that there is a deficit in the U.S.
Market, and they will need to import on the one hand from externally or from Canadian companies. As we also know here, there are some suppliers that have fixed and long-term contracts to sell to the U.S.
That is also happening there. These are the effects on the inventory. I think it was a peak, and now we already see that inventories are going down. For the negative results, I think we do not have a calculation per week. It is quite difficult to say what is the effect of two weeks. Perhaps I can start with the primary market in general. What the effect is for us is that there was beforehand exemption for Canada to sell to the U.S., exemption of duties to sell to the U.S. Other areas had 10% import duties.
Now the whole world has to pay 25%. The exemption that we had before now is not there anymore. That is the main effect we can calculate. On the other side, for the Rolling Division, as Helmut mentioned before, it is really difficult to say an exact amount how it will affect because in the end, it is in some weeks, and all the markets that it depends on are changing plans or trying to shift and making new plans. These are the things why we come up with this bandwidth, where we had to calculate in the ups and downs and how much effect will be there. It is really difficult.
Therefore, I can't give you that exact number to say how high will be the impact because it's not just an impact out of calculating duties from a basis, which is also quite volatile, but also to see if it affects the volume or has another price effect.
So I know.
I could add something for explanation because you said, "How did the environment change when on 12th of March, the tariffs were introduced?" We observed that in the Rolling Division, American plants or American producers immediately increased their prices. Of course, they did not increase the prices by 25%. They have now an advantage on their side. Since they offer lower increase than 25%, it puts pressure on all the foreign companies. It is to be expected that the price pressure increases. As long as capacity is available in the American plants, the orders will go to American suppliers. For the foreigners, so to say, the market shrinks and the price pressure increases. This we tend to see basically in all areas.
Okay. Understood. Just to maybe set up.
I think it's also.
Sorry.
Sorry. I just wanted to add that this is something that therefore, when you compare our first quarter, it's not necessarily an indicator for the following quarters because we expect that it won't come at once or have an effect on the EBITDA immediately because, as Helmut told you also before, we have an order backlog of some months. That's also something that will come in the second half of the year. We will see it even more in the fourth quarter. Therefore, we have came up with that bandwidth because of seeing that the effect will come in the upcoming quarters.
That's understood. Just one follow-up. As you said earlier, the U.S. needs to import because of the deficit. Clearly, they need a trade deal. I believe there's also some meeting with the Canadian minister today. Your guidance still assumes that these tariffs will stay the whole year. There won't be any trade deals. Basically, this would bring them some positive surprise if there would be any rollback on the tariff situation. Is that correct?
Yeah. That's the assumption we took to take what's now the reality as a basis because there are no signs or no discussions at the moment. Therefore, we said the only valid assumption on that side is to take what's now reality. The reality is that we have 25% tariffs on aluminum products. Therefore, we took this assumption.
Okay. Thank you.
The next question comes from Murta Duarte from Kepler Cheuvreux . Please go ahead.
Good morning. Thanks for the presentation. I just want to clarify something again on the margin. You mentioned you could shift volumes from the U.S. to Europe. I would just like to understand, presumably a lot of companies will be doing that. Even if you were the only ones, what would be the margin impact on the Erst Green division if you were to shift those volumes and shift them across the Atlantic? Ultimately, I'm just trying to understand why in the short term, two to five years, you would need to do that since the U.S. really does not have any other reliable options. I would assume you don't want to depend on the Emirates or Australia, China definitely. The U.S. smelter capacity has been on the decline for two years, right?
I think ultimately, when things settle, they will actually still be quite reliant on Canadian aluminum. Yeah, I would like to understand how likely is it that you actually significantly need to shift volumes to Europe?
I think what we want, what we say, is that we have the flexibility to shift to Europe. All the factors that you mentioned will be taken into account if it makes sense. We can do it. We compare the possibilities and have the ability to be flexible to go to Europe. For example, if there are, let's say, other participants that have already fixed prices for the U.S., that could affect the need in the market because they have to shift to the U.S. the whole time. We do not have that. We do not have long-term contracts. We can go to Europe, and it will always be, yeah, we always take the one that's best value. Really, at the moment, it's totally right what you say. Perhaps when it settles, the U.S. has to buy somewhere.
What's the fact is that we do not have the advantage of the tariffs anymore we had before. This also affects the decision if we go to Europe or to the U.S. I can't say for the future what will be the best. At the end, they will need it from somewhere. You're totally right. They can't build up the capacity immediately in the U.S. themselves. To summarize it, we have the flexibility. We can go where we want. We are not bounded by any contracts. That's the advantage we have there.
You can also optimize the results for AMAG.
Yes.
Yeah. Yeah. No, perfect. Thank you. That's good. It's definitely good to have that option. Just a quick final question on the Rolling Division. I saw some weakness on the aerospace. Could you just, yeah, just quick comment on that and if you expect that to persist over the year?
Despite the fact that the major aircraft producers, the OEMs, announced that they expect a higher build rate compared to last year, the difficulty is, or the difficulty for the aluminum suppliers is that they have so much on stock that in the first round, so to say, before they buy additional metal, they use, they utilize what they have in the pipeline. Therefore, it is expected, or we see it at the moment, that they have no need to buy that much despite the fact that they will build more planes than last year. Or at least this is what they announced.
Okay. No, that's clear. Thank you very much. And once again, thank you for the presentation. Have a nice day.
Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from Patrick Steiner from Oddo. Please go ahead.
Good morning and thank you very much for the presentation. I guess just one quick question left from my side. I would be interested in your expectations on shipment volumes of the divisions in the next quarters and maybe on a full-year basis compared to 2024. Thank you.
As we expect or as we said, we are flexible in the Metals Division, and we do expect that this will volume-wise develop in a stable manner. Casting is very strongly dependent on the automotive industry. AMAG is, let me say, a very well-respected supplier. We do assume that it's pretty stable. As I mentioned before, with significant price pressure. This means that we might be able to achieve the volumes, but the result will not be as good as we are used to. In the Rolling Division, it's a daily fight. The same is true in the casting division. In the Rolling Division, we really have to see how, especially, the automotive industry develops. I mentioned before, direct and indirect influence on AMAG business. We really have to see how these tariffs in the U.S.
Indirectly influence our sales. Take an example. I can mention this because it was published that Audi said they would not ship now to the American market. They produce the cars in Europe. They will produce fewer cars in Europe. This has an indirect effect on AMAG or the aluminum rolled product suppliers. As you know, we have, I do not know, 1,000 and plus customers. Many of them will be influenced where we do not know exactly how. This is the reason for this major uncertainty. I think every month will bring additional light to the situation. We forecast still that we would be pretty stable for the remaining year in volume.
Okay. Perfect. Thank you very much. That was very helpful.
The next question comes from Christian Obst from Baader Bank. Please go ahead.
Yes. Thank you. Good morning. First of all, what is your current assumption from the U.S. smelter and what was the impact in the first quarter? Do you calculate with the current $1.13 or something for the rest of the year? How does your hedge portfolio evolve?
As you know, we have some business in U.S. dollar. Apart from the Canadian entity, which is in U.S. dollar, we also have business in Europe or in the Rolling Division where we sell and buy U.S. dollar. What's our policy? Our policy is that we try to hedge the effects out of the currency. There is a replace. Therefore, we are not that influenced by the U.S. dollar in the operating business, let's say, because it has for sure an effect on translation of the metal business as we can say, as we translate it for our financial results into the euro. The main effect, I think, would be the translation effect on the Rolling Division. I would say we have a strong hedging policy to neutralize as much as possible.
In the end, the translation is minus 10% or something like that for the declining result going forward, right?
We have an assumption for the U.S. dollar. And so for sure, it affects then the translation effect. I would say that you're right. If we have a weaker U.S. dollar, then it would affect our balance sheet, I think.
Okay. Thank you. Coming back to the primary aluminum production in Canada, of course. How much and how quickly can you adjust or redirect really volume, which is now going 100% into the U.S.? Just to get a sense in practice, how this would work going forward? Are you still talking to possible customers? How does it work?
The main difference between the Metal Division and the Rolling Division is that we sell out of the Metal Division commodities. Therefore, you're at the beginning of the value chain. You're selling out of it's not that specified. You do not need a very long process to have customers. Sometimes it also could be the same customer who needs metal in the U.S. or in Europe. We have a broad portfolio of customers we always talk to and that we did in the past as well because in the past, it could also have been an opportunity to go to Europe. Therefore, we had the relationships before. Now we are still talking to all the customers. Now it could happen that we sell sometimes to the U.S. or Europe. The relationship with the customers was established before. Now it's more complex.
I think that's for the whole business what we have that when you are in this, we have quite long-term relationships with our customers. It's also true for the casting and the Rolling Division. In these times of uncertainty, it's always important to be quite close to your customer, talk to them, and find solutions. That's how we manage it.
Okay. In the end, if needed, you are very quickly able to redirect 20%-30% out, not going to the Americas but to Europe or elsewhere? Is there some kind of a limit that you say, "Okay, we can move between 10% and 20%, or we can move up to 50%"?
I think we are prepared for various options and can decide it on how the market goes.
Okay. Very flexible.
Therefore, we are really flexible because of all the things I mentioned before.
Yeah. Okay. Thank you. The last one question is, despite talking about all these kind of uncertainties, at the beginning of the year, before all these tariff talks, we started with some kind of a positive idea into the new year, especially when it comes to Europe because of the, yeah, clean industry plan from the EU, new government in Austria, maybe also a little bit supportive, new spending coming from Germany maybe going forward. Do you see any kind of positive, maybe possible positive support coming from these developments in the EU, in Germany, and maybe also in Austria?
When you talk about the green industrial deal, so far, I think I can say that we did not see any major change. What we rather see is that because of this communication, several customers now might think that this big wave of sustainability-oriented development is becoming flat now or lower, or things can be postponed, and investments into sustainability issues can be postponed. This is maybe an additional uncertainty that is introduced at the moment.
Okay. So not much of the support coming from maybe lower energy prices or possible investments. For you, it's more in uncertainty.
Yes. Not yet. We can say not yet. I think people are studying possible influences and will most likely come up with some strategic approaches for their companies. So far, there is no major change to the weeks before or the months before.
Yeah. Of course, we are.
You talked about Germany's announcement, and I think that's the big point there. That's an announcement, and it has come to life to have some concrete projects and then come to life. I think it's too early to see where it will go and how far.
Yeah. Of course. We are in a very early stage when it comes to these issues. Thank you very much, and all the best for the rest of the year.
Thank you very much.
Thank you very much.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Christoph Gabriel for any closing remarks.
Ladies and gentlemen, thank you very much for having joined this call. As always, I'm really happy to assist you with any further questions you might have. In that case, just give me a call or write me an email. Otherwise, I wish you a pleasant Tuesday and see you soon. Thank you. Goodbye.
Thank you.
Goodbye.
Bye.
Ladies and gentlemen, the conference is now over. Thank you for choosing Clauser School, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.