An investor’s guide to Constellium’s key financials

By

Updated

Investment overview

Previously in this series, we’ve looked at Constellium N.V.’s (CSTM) operations, its business segments, and its recent acquisition of Wise Metals Group. Before deciding to invest in any company, however, it’s vital to look at its financial performance. In this article, we’ll examine some of Constellium’s key financial metrics.

key financials

Constellium’s key financials

This chart shows some of Constellium’s key financials. Let’s look at revenue growth first. As you can see, revenues grew more slowly over the past several years. This is probably due to sluggish demand in Europe. Constellium gets almost three-quarters of its revenues from Europe.

Earnings before interest, taxes, depreciation, and amortization (or EBITDA) seem to be on an uptrend, despite a dip in 2013 on higher costs. From next year onwards, Wise Metals’ results will be added to Constellium’s consolidated financials. The metrics shown above are independent of Wise Metals.

A strong balance sheet

The cash on Constellium’s balance sheet has risen steadily, as the chart above will confirm. Currently, Constellium has close to $400 million in cash on its balance sheet. It’s expected some of this cash will be used to acquire Wise Metals.

Constellium has better liquidity and leverage ratios than other aluminum companies including Alcoa Inc (AA), Century Aluminum Co (CENX), and Kaiser Aluminum Corp. (KALU). The SPDR S&P Metals and Mining ETF (XME) invests in these companies. Currently, Alcoa represents a little more than 3% of XME.

Now that we’ve seen Constellium’s standalone financials, let’s look at its relative valuation. This will help you compare it with other listed aluminum players.

Article continues below advertisement
Advertisement

More From Market Realist