Dear Shareholders,
I am pleased to introduce you to Aperam’s 2011 Financial Report, which provides you with a consolidated overview of the Company’s performance and strategy.
A year after it was spun off from ArcelorMittal to challenge the status quo and reshape the future of the stainless steel industry, Aperam, which produces stainless, electrical and specialty steel, has established itself as a leading player of this industry.
Aperam ended the year 2011 with an outstanding performance in Health and Safety, with a Lost Time Injury frequency rate, our main indicator in this field, at an average 0.7 per million of hours worked at the end of the fourth quarter against 2.0 a year earlier. This achievement, which makes Aperam a leader in the stainless steel industry, is filling us with pride and spurring our efforts to further improve our safety performance. To this end, we can rely on the motivation of our teams, who fully embrace this goal as a high priority.
During its first year of existence, building on its core values Leadership, Ingenuity and Agility, Aperam has created its own financing structure and pursued the implementation of the Leadership Journey, our ambitious profitability enhancement program. With limited exposure to bank debt and lower debt levels compared to peers, Aperam is well placed to benefit from growth opportunities and create value for its customers by delivering high value stainless steel products and solutions. At the end of December 2011, we had reached $176 million of management gains and profit enhancement thanks to the “Leadership Journey”. These results make me feel confident that we are well on track to reach the $350 million EBITDA improvement we are targeting by 2013 focusing on fixed and variable cost reductions as well as on increased productivity.
Aperam’s first annual results reflect extraordinarily difficult market conditions, specially towards year end, which we believe the Company weathered well, with sales at $6.3 billion and EBITDA at $356 million. At the beginning of the year 2012, we have started to see the signs of a rebound in the stainless business but we continue to remain cautious in view of the global economic uncertainties.After the creation of Aperam, the stainless industry has moved towards consolidation. I welcome this upcoming transformation and I am confident that we are well positioned to benefit from consolidation thanks to our sound balance sheet and to the positive impact of our Leadership Journey.
All these developments and our strategy of value creation before volume growth comfort our confidence in the future of the stainless steel business in general and of Aperam in particular which is taking the right decisions to meet the expectations of its shareholders and customers in a highly volatile environment.
Philippe Darmayan