Aperam SA
AEX:APAM
US |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
|
US |
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Mastercard Inc
NYSE:MA
|
Technology
|
|
US |
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
|
US |
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
|
US |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
|
US |
Visa Inc
NYSE:V
|
Technology
|
|
CN |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
|
US |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
|
US |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
|
US |
Coca-Cola Co
NYSE:KO
|
Beverages
|
|
US |
Walmart Inc
NYSE:WMT
|
Retail
|
|
US |
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
23.04
33.15
|
Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
Johnson & Johnson
NYSE:JNJ
|
US | |
Berkshire Hathaway Inc
NYSE:BRK.A
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Mastercard Inc
NYSE:MA
|
US | |
UnitedHealth Group Inc
NYSE:UNH
|
US | |
Exxon Mobil Corp
NYSE:XOM
|
US | |
Pfizer Inc
NYSE:PFE
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
Nike Inc
NYSE:NKE
|
US | |
Visa Inc
NYSE:V
|
US | |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN | |
3M Co
NYSE:MMM
|
US | |
JPMorgan Chase & Co
NYSE:JPM
|
US | |
Coca-Cola Co
NYSE:KO
|
US | |
Walmart Inc
NYSE:WMT
|
US | |
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Hello, and welcome to the Q2 results of Aperam. My name is Jess, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand you over to your host, Timoteo Di Maulo, CEO of Aperam to begin today's call. Thank you.
Thank you. Good afternoon, everybody, and welcome to our second quarter conference call. Similar to last quarter, we recorded our management comments for the quarter. The link is available on our website. This call will be for Q&A only. I have Sudhakar Sivaji, CFO, here with me. Together, we'll be answering to your questions. To kick the call off, let me remind you that we have published Aperam's best-ever quarter this morning. We gave a confident outlook for the second half of the year guiding from the second best ever, and we backed this with the announcement of EUR 100 million share buyback despite expecting closing the ELG acquisition in Q4, which will add some debt to our balance sheet. I will now hand back to the operator for starting the Q&A.
[Operator Instructions] The first question comes from the line of Tristan Gresser from Exane BNP Paribas.
I got 2. If I start first with the sustainability of the margin that you just had, how sustainable are the current margins you're printing? And should we assume that the Q2 EBITDA that's on for stainless and electrical, excluding some valuation gains and sales benefit, is a good base moving forward? I'm asking because if I take good quarters of full year '16, '17 and add the leadership gains, the margins you're having right now are still very good, excellent and above that level. That's my first question.
Sure. Thank you for the question. So what we can see in the chart that you had in the presentation, the second quarter represent something like coming back to the normality in term of volumes and in term of prices globally, and in particular in Europe when you have typically the best price, which is a key indicator. You have some gains, but they are of the magnitude that you have also described, so in the low level double digit. But what is important to understand is that one factor that completely changed is Brazil. Brazil has been in depression mode or in a very bad market since the second half 2015 and has started to recover in end of 2019 and 2020. And now Brazil is back to what it used to be in internal volumes and domestic demand, and in terms of a more normalized price. So this is the outlook of Q2. Now from Q2, as you have seen, prices are further increasing, so there is a good momentum. This good momentum is, general is global. So what I will say is that Q2 is indeed something which is explained how strong and how consistent has been our gains done in Leadership Journey. All what we have invested in terms of time, in terms of cost efficiency, quality of products, quality yields and all the investments that we have done to sustain the company are now in the numbers that you see.
All right. That's really clear and helpful. And maybe a second question, more on the CapEx front. You just increased the guidance for full year '21. Given the acceleration of leadership journey investment, can you give us maybe some sense of what we should expect for maybe next year if full year '21 is a good base to work on with?
Sud here. Thanks for the question. So let me take that question, right? So CapEx, I'd like to answer this in 3 parts, just if that's okay. The first one is the fact that, yes, we increased this year's CapEx because we did not want to finish this leadership journey and then start anew after 3 years, because we wanted to ramp up to be as fast as possible, and we see that these investments are going to give us returns definitely. And that's the reason we said we'll start these investments what we announced last quarter in our AOD and at the wire rod mill in Imphy, and alloys to go to specialized products. So that's the increase for this year. And -- so we will and we are, in this time, we announced an investment for Brazil as well for the hot rolling now, which is something which we'll now work with the suppliers and going forward and that's the reason there are no numbers there, define those investment figures for the Leadership Journey 5. So keeping in mind the strategic investments for Leadership Journey 5, which are still being defined, next year's, let's put it this way, investment levels before the strategic investments should be the same as what we announced this year, okay, which is like EUR 130 million. And then comes to strategic investments, right? So that's something which we have to add on top. And we will give you guidance going towards the end of next quarter because then we'll have a clearer picture on how Phase 5 is turning out. But one thing you do have to keep in mind is that this is nothing new for Aperam, we have a clear track record. Remember, even when the whole market was collapsing in 2018, end of 2018, we came ahead and announced [indiscernible] around EUR 535 million investment because we wanted to already start on Leadership Journey 4, okay? So that's what we are doing right now. And thinking a cycle ahead is what I call it. So basically, we are doing those investments ahead of time. And next year's CapEx, like I said, the base would be around the same EUR 130 million, EUR 135 million, what we have been doing in the past few years, except for the COVID year. And then there will be strategic investments coming on top, a few of which we have announced right now. To give you some color, the last statement on that is that about the current increase should be around -- yes, covering 25% of the entire package we have announced so far. Is that enough detail?
All right. Yes, that's very clear.
The next question comes from the line of Ioannis Masvoulas from Morgan Stanley.
Well done on the results. I have a couple of questions on Brazil, more on the policy front. So we saw the finance minister the other day alluding to an informal agreement with steelmakers to refrain from price hikes for the remainder of the year in exchange for an only small drop in import tariffs. Can you provide a bit of color on what's really happening on that front? And what we should expect on import tariff changes? And then secondly, again, on Brazil, in terms of the tax reform proposal, there seems to be a possible reduction in corporate income tax rate, but then a new 20% dividend taxation given your targeted cash distributions to the parent entity and any tax loss carryforwards that you may have in the country, what would be the net effect for Aperam in the next few years based on your assessment?
Okay. So let's say that on the first part, there was no formal investment to keep the prices, et cetera, because you don't change the logic of the market just because of simple meeting. But what is important is the clarification on the duty. So the discussion about the duty was on the fact that, as has been announced many times, progressive lease part of the duty will be decreased, and so what was in discussion was the decrease by 10% of the actual duties which are 14%. So going from 14% to 12.6%. This was the real discussion. And concerning the tax, I'll let Sud speculate on that.
Sure. Thanks, Tim. So on the Brazilian tax reform, basically, I suppose you're talking about this leaked rumor on how the tax reforms are going to happen, right? So we are going to directly benefit from if that comes into being a lower corporate tax rate as are our suppliers and customers, so we expect a huge increase in demand. That's one thing. But on the other side, also on dividend upstream, the issue gets a little complex. But with the instruments available with us, we don't see a significant impact on cash flow statements, so to speak, yes. But again, I just want to be clear and say that there's no formal policy announced. It's been so far rumors and leagues, so to speak, and there's been -- since the last leak, there's been a few discussions. So we remain engaged there, keep our ears close to the phone there, but whatever those plans are announced at that stage, we don't see a significant impact.
Okay. That's clear. And maybe just a follow-up question, if I may, on the divisional performance. So Brazil has had 2 record quarters in a row. What's the situation in Europe? And I wasn't very clear on the prepared remarks. Are you close to record levels you've seen in the past? Or there is still a bit of gap from Q2 and Q3 point of view?
Let's see that in Europe, typically, we look at Europe as the price that we see and communicate, a price [ we ] back. What we see is that Europe is growing in terms of increasing prices. And what we see also in Europe that the performance that are due to the Leadership Journey, as has been, on top of the recovery of a normal market. So Europe is increasing. So there is a high potential for Europe also from the second half. And this is what, in large part, is included in our guidance of a very strong second half and increasing with a record second half.
The next question comes from the line of Alain William from ODDO BHF.
Yes. Actually, it's a follow-up on Tristan's question. I know you only provide guidance for the quarter ahead, but I would like to push you a bit into 2022 in the context of what you said regarding current normalized market condition, because I guess that for most of the metals and mining space, we've got peak earnings this year and kind of mean reversion next year. So the question is, would you reckon that for Aperam or the stainless steel industry it can be a different story, and that 2022 can stay as strong as 2021? So that's the first question. And the second question, I guess you showed very strong shipments in Q1 and Q2 at stainless and electrical steels. Are you able to produce more in a quarter or you are essentially running full?
So as you know, we don't give guidance on top of the next quarter, and we are, let's say, even giving longer-than-usual guidance because we have guided on the second half of the year. What we see is -- and we can confirm is that we are in a situation, which is structurally different from 2018, '19 and '20. And what is the reason of structurally? Structurally is due to the fact that we have a new antidumping against the major threat of the imports in Europe, which was Indonesia. We have the confirmation of the safeguard. So this is structural from -- through defense and so this is important for the European market. And the other important factor is that, structurally in our P&L, all the gain of Leadership Journey. And what you will see in the future is the ramp-up of one of the major investments that have been done in the steel business industry, which is the new lines in Genk. But all this will be part of the -- of our Capital Markets Day, which we'll hold in September, and we will be happy to go further in disclosing what is our perspective, the way of thinking and our strategy for the future.
And on the shipments?
Sorry, sorry. Yes, yes. Yes, you're right. So shipments, yes, we are back to a more higher level of shipments, more, very busy compared to last year, Q2 last year was very, very particular. It's clear that we are not going to an area of overcapacities. So we are not at all going to do something which is more than the normal level of the market. The European market is a balanced market. Between the European capacity and the imports, when imports are not, let's say, based on [indiscernible] trade, the capacity are enough for a good balance between demand and supply. And we believe that there are enough capacity without having overcapacity in Europe. So the market is normal in supply, and we will follow the market in -- having in mind that, for us, what is the most important is the right quality, the right service and, let's say, have a good margin because we choose the right mix for Aperam.
The next question comes from the line of Carsten Riek from Credit Suisse.
Two questions from my side, please. The first one is on your buyback, EUR 100 million. It's very understandable that you actually only do EUR 100 million given the fourth quarter closing of your transaction. But my question is, could you consider a more sustainable buyback scheme given your balance sheet strength and the good free cash flow generation and outlook for the time being?
So Carsten, let me take that on. Firstly, for us, we follow, just on our financial policy, a progressive dividend policy. So the base dividend, the EUR 140 million, is the sustainable return which we, even in low years like last year, we earned and we returned to the shareholders. As far as the share buyback is concerned, our policy clearly is that any leftover cash we will not hold in the company and we'll return back to shareholders. And this is the policy we followed last year, where we did not have it, and this is the policy we're following this year. So every year, we'll carefully evaluate, right? So if the cash flows last and we look at projects, as we have said, internal and organic growth projects and any interesting other projects, then we will return the cash to the shareholders, yes? So there's no change in policy there.
Okay. Yes -- no, I just wanted to clarify whether something has changed, but apparently not. The second question I have is on the situation of the imports or net imports in particular. We have seen a very comfortable situation since pretty much January 2020, which, of course, was even more influenced by COVID. And that lasted pretty much since March. But April, May looks a little bit more worrying, at least from a net import perspective. Do you share the view? Or do you think the demand in Europe, in particular, is so strong that it currently doesn't matter?
So I think the question of the imports is very simple. You have seen that even for the [ safe government ] what the commission has taken as the sustainable level of the imports, the fair part to the import, is in a range of 22%, 23%, okay? This is exactly the figures that you have in the current month. So you have sometimes switch between hot roll, cold roll, in between country, et cetera. It is clear that if you consider in terms of absolute numbers, so now the volumes of the import, had increased in 2021, but this is normal because all the market, all the demand in Europe has increased. If you consider in terms of market share, you are in the ranges of market share, which are stable. And what is important is the fact that the countries which we are dumping, now they are in antidumping with dumping, let's say, tax duties, which are important because they range between the 18% to 25%.
The next question comes from the line of Alan Spence from Jefferies.
I've got a few, so I'll just take them one at time. The first one is around inventory levels, but rather your end market customers as opposed to distributors. Do you have a sense where those levels are compared to historical averages?
Tim, Alan wants to know about inventory levels with customers, do you want to take that question?
Yes. I think we have published some figures. The level of inventories are normal, I would say normal level. When you have been this market which is started and we are at a normal consumption, typically, the occasional days can be slightly lower. But the level of inventory there we have faced, let's say, in Q4, a restocking period because we were coming from the moment we -- and the COVID and so the supply chain was stopped and typically when we stop there is destocking. But from what we see on our view on the raw materials, the level of inventory is normal. So there is enough supply for the demand. And there is no, let's say, tentative to overstock. There is -- in particular, with this high level of raw material, nobody tend to take a risk in overstocking. So that is absolutely normal.
Okay. And the second one is just on Brazil. It seems like better volumes and pricing. I was just wondering if there is any additional mix impact in the second quarter?
For us, the mix impact is typical factor that we have when Brazil is very good for us, [ very good ]. And the mix, you see in our product side -- product mix, when the consumption of stainless steel is increasing as in this period, we are filling the demand [ shop ] and the -- all the plants with the maximum of domestic stainless steel, which is for us the net mix.
Okay. And my last one is just a clarification on the guidance when you're talking about the working capital. Did you mean -- this higher working capital, is that higher quarter-on-quarter or just that it needs to be some working capital investment?
So in terms of working capital, the major part of the effect is the mix of -- sorry, the price effect on working capital, right, because all the raw material prices and all the prices are going up. So that's the major part of the working capital. So it's an automatic increase if you so wanted this investment.
Sorry, I might be just very simple about this. But I'm just asking, is it -- you're saying you need to invest more working capital than you did in 2Q -- Q2 or just that there needs to be a working capital investment?
See, it depends on the price levels, that's all I'm trying to say, right? So -- and if you're saying are we going to increase the tonnes of inventories? No, we are not going to increase the tonnes of inventories.
So -- but we have given a guidance for both debt, working capital and cash. So we stay on the guidance.
So your question is on Q3, if I understand correctly, right, Alan?
Yes.
So we said it's higher quarter-on-quarter. So it's higher quarter-on-quarter based on price effects from that.
The next question comes from the line of Patrick Mann from Bank of America.
I just wanted to follow up on your guidance for the third quarter. So overall, you're saying shipments slightly down but prices are coming through higher, and you kind of spoke to that a little bit now on working capital. I suppose I'm just trying to get to how you have comparable EBITDA because it feels like the price momentum is very strong. Shipments are down but only a little bit and you should have a positive price cost effect. So am I missing something on raw materials or somewhere else on costs? Or are you assuming kind of flat prices and that's why you have flat EBITDA?
So typically, when you look at Q3 with our geographical exposure, which is for a big part in Europe, you should expect in Q3 with a lower EBITDA because of the seasonality, okay? The large part of Europe is on holidays and we are going to close -- a lot of people are going to close their plants during the month of August. This year, this has been a decrease of volumes, which is normal, have been compensating in terms of results by pricing, which has continuously increased during Q2. And the effect, we will see this effect during Q3, okay? So the rest, it's the fact that we have the ramp-up of the line in Genk, which will have something. We have all the Leadership Journey that continue to add. We have communicated the figures about the progress of the Leadership Journey. So all this, it is adding and compensate the lower volumes. For the rest, you have Brazil, which is stable because for them the seasonality will come mostly at the end of the year and the beginning of next year.
The next question comes from the line of Rochus Brauneiser from Kepler.
I have one on the global supply picture. Can you give us your sense, to what extent the latest changes in terms of China's export regulation is impacting the stainless market directly? And to what extent do you see the market tightness? Or to what extent do you recognize the market tightness, which seems to be part of the driver for the strong global stainless pricing at the moment?
So thank you for the question. I don't think the market has any kind of tightness, okay? The overcapacity -- the world overcapacity is huge, it's still huge. And you have seen that you have the imports that are there. And so the market is back with an equilibrium between supply, demand and the third part of all the imports okay? So if there was really a tightness, you will have seen much more imports at any cost because people should have asked more volumes. No, I'm really sure is that all the market has faced [ in terms ] of restocking, I was talking before about Q4. And during Q4, people which are restocking are always in a kind of anxiety to find enough material to restock. Yes, this is over, this is over. Now we are in are in a [ point ] in which supply/demand is well equilibrated including the level of the cost, which is there. And then you have global, and the world, a trend of pricing which is starting from the level of raw material, and the level of raw materials, which is transferred to the finished products at any level of the supply chain, is leading to higher prices. But I really believe that the supply and demand is well equilibrated today and there is no shortage of products, of materials.
Okay. Good. And what about the scrap sourcing conditions right now in Europe? I've been reading some tightness there as well. Can -- how do you describe the market conditions in Q2 compared to previous quarters?
I would say that it is the same because the scrap generation is following the production. And so the more there is production, the model is scrap generation, there is more collection, et cetera. So the more demand in scrap, you have more collection. Typically, scrap can be on a short period, let's say, more tighter or more abundant depending on swings on raw material. But in this moment, there is no big swings in raw material. So we see a normal market with the expansion of the market there as well.
Okay. And maybe finally on the previous question on the working capital. Just to get that right, when it comes to the potential working capital build in the third quarter, could you consider that the magnitude of that build could be of a similar size as the -- more than the EUR 100 million built seen in Q2? And what is the potential for a reversal in the final quarter?
I think the best is to refer to our, let's say, on free cash flow. You have the numbers in cash flow and EBITDA, you have the number. You have the CapEx. So you can imagine what is the -- what is behind.
So if I may add one sentence to it, I understand that you guys kind of get these questions for your model for working capital based on how other companies trade working capital. For us, working capital is cash, okay? So end of the day, we build it if necessary, and we release if it's necessary. To answer your question when it's to be released, we will release that once the working capital build stops, right? And I answered already a question saying that in Q3, it's going to be because of price.
The next question comes from the line of Bastian Synagowitz from Deutsche Bank.
I've got 2 questions left. Just firstly, on the stainless core business, and I just wanted to drill a little bit deeper here. The uplift to EUR 212 million EBITDA obviously has been very impressive. So firstly, could you please give us a bit of color on what the proportion now is between Europe and Brazil? And then secondly, and obviously related to that, how far has each region also contributed to the uplift over Q1? That is my first question.
So generally, we don't give a split between Europe and Brazil for quarters, but we have said that Brazil's been in peak performance in the last 2 quarters, one record after another, right? So in terms of S&S and Alloys, you've seen specifically the uplifts quarter-on-quarter, right? So you know the exact figures because we publish them. So I don't know if you wanted something specific on that, because we do publish alloys and S&S specifically quarter-on-quarter.
Yes. So no, I was actually wondering on the stainless core business. Obviously, what the current split is between Brazil and the European operations, given that obviously, we had a really significant move. So I was wondering is this now Europe 60%, Brazil 40% on a high level. So just to get a bit of a sense on what the split between the 2 is, and how far they've been contributing for the -- to the uplift in the second quarter.
See, we always give, on an annual basis. Brazil reaching performance and a higher level of price and volumes is a bit earlier, and Europe is improving. So you'll see it from Europe, the numbers improving into Q3 and Q4. So I think that should give you a color.
Okay. Okay. And then just a very quick one on the recent announcement on the CBAM draft. What is your view on the situation? Obviously, I guess it's all very preliminary, there may be a lot of changes. But is the conclusion so far that basically, there will be no major impact on the European stainless industry the way things are being drafted so far?
So let me clear, the CBAM is something which is different from the trade itself. And it's not something that has to be, let's say, a differentiator in terms of trade, because on trade, we have antidumping and the subsidy and safeguard. CBAM has given the possibility to, as I said, a level to play in terms of future. And it is something that has to incentivize the industry that are investing the most to have -- to be protected from the industry, which are investing less in terms of environment. Now we see the CBAM as the first version, and the European Commission is taking much more time than they were -- they expected when von der Leyen was elected because this was in her mandate at the beginning. CBAM has started with a scope 1 designation. It's clearly not enough for the industry, but it is already a step higher. We expect that the commission will continue to work. And in particular for stainless steel, it is important that the commission works on the full scope of production, because the biggest polluter on the planet are based on nickel pig iron, which has a content of CO2, which is 4 to 5x higher, and which is not captured for the moment by all this component.
Yes. Okay. No, very clear.
It's a positive -- it's positive that we are starting to see something concrete from the commission, but it's a journey that has to be completed.
And do you believe -- and I guess, again, that's a very theoretical question obviously. But do you believe that this conceivable, that the EU may include scope 2 and maybe even scope 3 by the time the CBAM actually starts? Because as you rightly say, at the moment, the way it is drafted, focusing literally just on scope 1 -- well, actually not precisely scope 1, but more or less it basically fails to penalize the bad actors of the industry, and hence, almost fails to tackle the root of what it actually is meant to do.
I mean, I have answer there. My answer is private citizen, it is that it is normal that we included the 2 and 3 because the position is global and it's based on the fuller scope. And then I think the commission will do. There is no possibility that we will not do. It will take time because they have to measure. They have to put the right law and to put the right law, the right duty and all the right incentives. They have to measure, and this is the difficulty. But this kind of difficulty over the time were -- are solved, and over the time this will be possible.
Your next question comes from the line of Christian Georges from Societe Generale.
Just 2 quick questions. First one, I think at the start of the year, you were saying that the base price in Europe were trading [ in cycle ] averages. So I don't know to what extent you feel that you're at a level now which is more adequate, and is there still some upside risk to it? And the second question is with regards to Terni, which we understand is close to being sold. Are you looking at Terni? And if not, is there a risk that an Asian steelmaker could take over on the mine in the European market?
So yes, I confirm that in the first, let's say, the first part of the year has seen a level of prices, which were -- which the normal and sustainable level of price that we have seen in so many. So because price has always been a reference. You can go in a plus or minus 10%, but never has been touched as during the crisis generated first by the 232 and second by the arrival of Indonesia in term of COVID, altogether have depressed a lot by more than 30% in steel price, which has been a low point never experienced in the past. So now we are more sustainable. On Terni, no -- let's say, nothing to say because there is nothing we have disclosed and we will not disclose. But there is an important point. We don't believe that Terni is a [ traitor and suddenly tries to be good ], because the competitiveness of the Asian producer is due to the fact that they produce in countries where the labor cost is extremely cheap, where they can pollute when -- how much they want without paying any cost, because they can invest with the easy finance, et cetera. And all this will never happen in Terni. So they will not have the labor cost, they will not be the allowance to pollute as much as they want and to do something which uncompetitive. So whatever it will be in the shareholding of Terni, Terni remains a plant in Europe. And we have prepared our company to be the most competitive in Europe and to stay the most competitive. All what you have seen in this quarter will be boosted by not only the 230 million that we have done at Leadership Journey 2018 -- 2020 to 2022, but also to the fact that we have launched the new phases of our Leadership Journey and the new plant, for example, in Genk is starting. And this is not yet in our cost, in our efficiency. So also this will be in the future. So frankly, I don't see this as a major problem.
Okay. But just to clarify, with regards to your interest for Terni, it's a no? Or it's a no comment?
It's a no comment.
The next question comes from the line of Luke Nelson from JPMorgan.
Firstly, just on the comment around H2 being better than H1. If I just dig into that a little bit more. You've obviously given guidance for shipments Q3 versus Q2. But given the order book, [ for like a sense ] sort of out towards the end of the year, can you maybe just give a sense of how you're thinking around Q4 versus Q3 shipments? That's the first question, and I'll ask the other one after.
I'm sorry not to satisfy -- probably to give you a satisfying answer, but I think we have been extremely clear in the guidance of Q3 for a comparable and on the fact that the Q4 will add to realize the record [ is ] half of Aperam. So this is enough for the moment, knowing that. The point is always not to have the secret, but you have the volatility of raw material, you have this kind of [ importer model ]. And so we have, for the moment, the guidance which is, I think, clear enough. And when you see the results of the company, et cetera, you have [ your own ].
Okay. Then the second question is on -- in your prerecorded comments around cash taxes in Brazil, the book tax credits in 2020. It wasn't quite clear exactly what was said. It was consumed more rapidly, but was there a length that was quantified, maybe 4 years? Could you maybe just clarify exactly the situation there around cash tax and tax credits in Brazil?
So Luke, at this point of time, we can say it will be rapidly one before years, it will be much earlier. The rest depends on how to resolve the funds and what are the conditions which help us in terms of using these credits with suppliers or different base how we use these credits, right? So that depends on upcoming quarters and years. So yes, the same outlook applies. What we do see is that based on the past 2 quarters or 3 quarters, how good it has been performing, it's going to be -- comes in more rapidly. That makes sense?
Yes. That's fine. And then just on Section 232, potential agreement between the U.S. and Europe, would that present an opportunity for yourself to maybe export some volumes? Obviously, base pricing in Europe has now recovered. So the sort of disparity is obviously not as significant as maybe it once was, but how you're thinking around that? Would it be in any way an advantage for your business?
Luke, the 232 was a [ unfair measure ] for a European, as you're seeing from the European point of view, because we have never been in dumping position. And we have always served customers with added value and the demand of certain customers. In 232, we have to drop. We could come back with some volumes, which will never be huge volumes, but some volumes to the United States, and follow those customers. In particular, those customers who have expected to pay the big part of the duty even during the 232.
[Operator Instructions] The next question comes from the line of Ioannis Masvoulas from Morgan Stanley.
I just had a couple of questions, clarifying some of the comments you made. The first one around Terni. You rightly pointed out that Asian players have been in a position to compete because of the low cost base as compared to the European players. But the question here is if one of the Asian players take over Terni, could they not ship low-cost slabs into Europe, in which case they are able to maintain some of the cost advantage? And secondly, you increased your CapEx guidance accelerating Leadership Journey into Phase 5. Could you talk about the EBITDA uplift? And apologies if I have missed that on your presentation.
So any form of dumping is possible in Europe, rhetorically is possible, until the moment there is an anti-dumping measure, anti-subsidy measure, et cetera. So what we see is that, yes, you might eventually try to do in a short-term dumping and circumvention of dumping to doing the slabs through Terni, but we don't see this as a sustainable business model. And second, I mean, there is better in term of value than doing that, especially because this means closing down a big part of the Terni plant, which will not be sweet. So we don't see this as something that's really logic, okay? If you want to be an important -- be important to Europe, you have better to try to find a way which is more sustainable and providing good quality at a fair price, profiting of the fair price that Europe can give you, establish the best level of imports. Europe is open. So every country can enter, doing at fair price and this is a sustainable business model. But as I said, personally, I'm not convinced that this part of dumping with slabs is sustainable. And for CapEx, I would say that it's very, very simple. We have always a very strict discipline in the CapEx allocation. Every single CapEx should give at least a minimum IRR of 15%. We are extremely satisfied with our return in the CapEx we have done. And so the confidence that we have is the confidence that will lead us to have done investments like the good [indiscernible], which is starting, and we started to add very soon to our results. And when I say very soon, already in H2.
There are no further questions in the queue. So I will hand the call back to your host for some closing remarks.
Okay. Thank you very much for this exchange, which has been interesting. And I hope interesting also for you. You have seen what is the result of many years of effort, mainly our focus on a clear strategy based on leadership journey in progressing in the efficiency, in progressing in the quality and in the focus on customers. I do believe that on top of the fact that the market has normalized, you will recognize the quality of the work done by the management and the people of Aperam, which are particularly proud in this moment where results are not only, let's say, at a record level, but sustainable. I will give you [ our view ] to the Capital Market Day, so we can exchange and have also your view on what will be our road map for the next year in more detail. And I wish you some rest and the excellent holidays this year, hoping that when we will back, the world will be more normalized also in terms of health. And see you, bye-bye, to September.
Thank you for joining today's call. You may now disconnect your lines.