Aperam SA

AEX:APAM

Earnings Call Analysis

Aperam Shows Resilience Amidst Market Challenges with Positive Q4 Outlook

In its Q3 earnings call, Aperam reported an EBITDA of €250 per ton for stainless globally, underscoring a disciplined response to challenging market conditions. The company is optimistic about Q4, forecasting increased EBITDA alongside a reduction in working capital, aiming for net financial debt to return to €550 million. Key initiatives like the booster program are set to contribute €25 million this year, helping to stabilize performance. Following the recent acquisition of Universal Stainless, Aperam anticipates significant synergies without requiring high investments. Although pressure on prices persists due to commodity fluctuations, the company remains well-positioned to manage risks.

Navigating a Challenging Market Landscape

In the recent earnings call, Aperam reported that despite a challenging economic environment, it has managed to show resilience and stability in its operations. The company’s CEO, Timoteo Di Maulo, expressed confidence in Aperam’s ability to adapt its business model, emphasizing the ongoing transition towards high-grade, differentiated products. This strategy is paying off, as Aperam continues to gain market share in Europe, even as many competitors face declines in shipments. The focus is not solely on recovery but also on a robust transformation within the organization.

Quarterly Performance Insights

For the third quarter of 2024, Aperam achieved an EBITDA of approximately EUR 250 per ton in the stainless segment, signaling a return to a historical norm in a sluggish revenue environment. This figure indicates an improvement from earlier in the year, allowing the company to counteract some of the market pressures typical of a low-activity quarter. Moving forward, the company anticipates generating higher EBITDA in the fourth quarter, supported by a solid order book and an improved product mix.

Guidance for Future Earnings

For the upcoming fourth quarter, Aperam provided strong guidance for revenue growth, projecting increased EBITDA as a result of its restructuring efforts and a focus on high-value products. The company aims to achieve an annual contribution of EUR 75 million through its Leadership Journey, with EUR 25 million already realized from the booster program in the current fiscal year. The leadership further highlighted the role of their Brazilian operations as a solid asset, recently reverting to a full operational capacity, adding potential for future gains.

Market Dynamics and Competitive Positioning

Aperam stands out due to its proactive management of supply chain challenges and its strategic acquisition of Universal Stainless. This acquisition reflects a commitment to geographical diversification and provides an opportunity for synergy without high capitalization on investment. The management underscored that units like Brazil have always maintained a strong market share during low cycles, positioning Aperam well against competitive pressure from other global markets, including Asia.

Concern over External Factors and Market Saturation

Despite the optimism, certain concerns linger. The management acknowledged ongoing pressure on pricing from commodity fluctuations and potential increases in inventory levels amid weak market demand, particularly in the European sector. However, they assert that the level of inventory remained low and does not pose a significant threat to operations. Fluctuations in raw material costs and possible competitive responses to price changes are points of ongoing vigilance.

Conclusion: A Forward-Looking Growth Strategy

In summary, Aperam’s robust performance amidst a dampened market showcases its strategic positioning towards high-value products and regional diversification. The successful execution of its Leadership Journey and the integration of Universal Stainless are expected to contribute positively to future earnings. While external economic factors pose challenges, the overall outlook remains cautiously optimistic, with the management confident about delivering improved results in the coming quarters.

Earnings Call Transcript 2024-Q3

[Operator]

Hello, and welcome to the Aperam Q3 2024 Results Call. My name is Laura, and I will be your coordinator for today's event. Please note this call is being recorded. [Operator Instructions] I will now hand you over to your host, Tim Di Maulo, CEO, to begin today's conference. Thank you.

[Timoteo Di Maulo, executive]

Thank you. Hello, everybody. I'm Tim Di Maulo, and I will do this conference and answer to your question with the support of Sud Sivaji, who is the CFO of the company. I will discuss about what has been the performance of the third quarter, our guidance for the fourth. But you already see that something changing from the previous quarter in the sense that what has been all the footprint modification, the big investment we have done and which have slowed down the company in Brazil and in Europe during the recent last quarter is now reversing in something which is a stronger and stronger footprint in LatAm, and in a better product mix. Unfortunately, we cannot announce a booming market. This is not what is the reality. But all the efforts to differentiate Aperam with a different, let's say, mix of product, mix of activity and business is giving its fruit.

Now you have also certainly seen that our intention is not to stand on the actual footprint, but the acquired Universal Stainless in the United States. So this is another good news that we have recently announced. And so around all this, we are open to the Q&A, to your question, and we will be happy to answer.

[Operator]

[Operator Instructions] We will now take our first question from Tristan Gresser of BNP Paribas.

[Tristan Gresser, analyst]

I have 2. The first one, could you confirm, I think in the podcast, you said that you did EUR 250 per ton EBITDA in Europe. I just wanted to confirm that. And how much of that is an improvement versus Q1, Q2? And would that be a good support level when we think about 2025? Would it take a lot to go below that level? Yes, I will start there.

[Timoteo Di Maulo, executive]

So first of all, we have said about the stainless and not for Europe, okay? And the level of EBITDA per ton that we have announced is, let's say, an historical normal. Of course, you have seen that the markets are still markets with a low level of activity, and this also translates in something. But it was referring to stainless globally, Europe and Brazil, knowing that the contribution of Europe has been important.

[Tristan Gresser, analyst]

Okay. That's clear. And when we look at 2024 as a whole, could you remind us the type of one-offs and the scale of those one-offs, whether it's the inventory valuation headwinds there's been or the one-offs in Brazil, so we can have a clearer view of how to think about 2025?

[Sudhakar Sivaji, executive]

So Tristan, I guess there's 2 things you can think of, right? One is inventory valuation, which, first of all, the year is not yet done. We have a quarter to go, so I cannot speak for the year. But looking how the year has gone, 2024, inventory valuation should balance out for the year, right? So if you look at one-offs, probably the only one-off which we can think of is Brazil, right, which affected the first 2 quarters of the year. And that effect has smoothed out. Like we said in Q3, Brazil is back to its full run rate, right? And so Brazil, in a low cycle, has achieved its maximum run rate. So a good way to look at it is just take the H2, because H2 is without one-offs.

[Tristan Gresser, analyst]

Okay. That's helpful. And my last question, just on the U.S. election. Can you give us a sense of the volumes you ship from Europe to the U.S. and also Brazil to the U.S., the volumes and the type of product of late? And also, it would be helpful if you could remind us what happened last time when there were tariffs implemented against Europe, Brazil in '18, '19? How much tariffs you ended up paying? What solutions did you find? And also with Universal, would you have this time around some optionality, let's say, if the tariffs were to return?

[Timoteo Di Maulo, executive]

Okay. So a very large question. Let's start from the first part of it. As you know, we are focusing our production, both in Europe and Brazil, in our domestic area. And so the large -- and the very large majority of what we sell and the large majority of our results are coming from the area, our domestic area, okay?

Of course, we have customers not only in the United States, I would say some also in Asia or other regions of the world, where we can sell our differentiated product, very high grades, or very specific products, for which the customers are willing to supply from us, and they are not at all commodities or the kind of product that we are concerned, in particular by the 232 or this kind of measure, which have been, let's say, impacting mostly the commodities.

When you refer to 2019, and in reality it was '18 when it was suddenly the 232 started. Remember what has happened at that time. At that time, what has happened is that Indonesia was starting from 0, was really nonexisting before 2018, and putting on the market 3 million tons. And at the same time, exactly at the same time in March, Trump put the 232. And Europe had nothing extra defense. We had only an antidumping against China.

But from those times to today, a lot has changed. Today, we have antidumping, antisubsidy against Indonesia, against India, Taiwan, China, et cetera. We have anti-circumvention. We have the safeguard. So from that time to today, a lot of measures have been put in place that are still there, okay? So today, whatever America will do, it will concern America. It is not as it was in 2018 that there was a flow of material coming from Asia to America that all of a sudden was blocked by the 232 and went back to Europe and Europe was totally unprotected. Is it clear?

[Tristan Gresser, analyst]

Yes, that's clear. So if I get this correctly, the volumes you ship from outside the U.S. to the U.S. is not material and you see the risk of redirection lower as in 2019. Is that fair?

[Timoteo Di Maulo, executive]

Absolutely, yes. It is nothing to see with the 2018...

[Operator]

We will now move on to our next question from Ioannis Masvoulas of Morgan Stanley.

[Ioannis Masvoulas, analyst]

A couple of questions from my side, and I'll start with the Universal Stainless acquisition. We've seen one of your peers is also acquiring a U.S. company with significant aerospace exposure, and their plan actually involves quite a lot of investments in the actual assets that they are acquiring. From your due diligence of Universal Stainless, do you see any meaningful requirements to invest in the footprint, especially as you've talked about unlocking production capacities? And I'll stop here for the first question.

[Timoteo Di Maulo, executive]

So we will be much more precise with Universal plan, et cetera, when we will be closer to or when we will have done the closing. So for the moment, it is, let's say, premature to discuss these things. What we like of Universal is what we see -- what we have found. And this company which has done a tremendous job in investing in the past, investing not only in terms of assets, but investing in market, in their position, and the results are there to show that this company has done a great job. And this is why we have focused on this company, and we are very happy to be at this stage, and we will be extremely happy when the closing will happen, and we can discuss with them the future.

[Sudhakar Sivaji, executive]

And Tim, if I may add, the announced synergies do not require any high investment, just to be very clear.

[Timoteo Di Maulo, executive]

Exactly.

[Ioannis Masvoulas, analyst]

Okay. So any additional investments will come with additional EBITDA accretion?

[Timoteo Di Maulo, executive]

Exactly.

[Ioannis Masvoulas, analyst]

Okay. Very clear. And second question on the inventory revaluation effect that was a small negative in Q3, and you expect a positive in Q4. Can you give us a sense on the quantum for Q3, and at spot prices, what you've baked in for Q4, just to get a sense on the bridge?

[Sudhakar Sivaji, executive]

Ioannis, it's really small. We are talking about -- the delta is very, very small. We are talking about single-digit numbers here moving from one side to another side. So it's really small.

[Ioannis Masvoulas, analyst]

That's very helpful. And just the last one, again, on Q4. You talked about pricing being a headwind sequentially. Is that the case for both Europe and Brazil?

[Timoteo Di Maulo, executive]

You know how prices in Brazil are done. So you take the international price and you see what is the parity with all the duty, the premium for the local producer. And if international prices are increasing, the price in Brazil is increasing and vice versa. So for the moment, globally, in the world, the prices are not moving so much. They are low. They continue to stay low. We have seen the publication of the Chinese, which have been very poor in terms of results. The advantage of Brazil is being the only one producer with a very strong market share. And now that the ramp-up of their hot rolling mill is finalized, they continue to be the very competitive asset that they have always been.

[Operator]

And we will now take our next question from Tom Zhang of Barclays.

[Tom Zhang, analyst]

Two from me, please. The first one, it looks like you guys have gained quite a bit of share in Europe, I guess, and that's continuing into Q4. You're guiding to shipments up versus your peers down. One of your peers was kind of saying they lost shipments, but not customers into year-end. They're quite confident of winning them back early next year. Just wondering if the share that you've gained is much locked down under extended contracts that actually last into 2025? Or is it more spot based? And do you see any -- how do you assess the risks of giving up some incremental volume? That's the first one.

[Timoteo Di Maulo, executive]

So the point is you give up or you go up with the commodities. Then a large part of what we do is differentiated products. And the reason why we have such kind of profitability, because we are investing a lot on high grade and special application, not only for alloys, as you have seen, but also for stainless. Then the game is mostly between the level of price you put on commodities and the imports. If there is more pressure on price, imports go down. If prices increase too much, imports goes up, and this is the game.

But let's say, there is no -- if you are referring to the fact that the reduced capacity -- by the way, reduced capacity of the Spanish plant will come back on stream. They are already back on stream. They have not ceased during the first half of the year because they have used probably part of the inventory. I don't see something very significant, and the impact of the imports is much higher than this coming back.

[Tom Zhang, analyst]

Okay. Got it. And then actually, that leads quite nicely to the second question on imports. I mean, well, it's a 2-part question, I suppose. One is, do you think the arbitrage from Asia is open today? I mean, is that why we saw this volume in from Taiwan? And then the second one is just how you assess the NPI imports that we've seen into Europe? I guess it's not you, but is that the next leg of import risk, i.e., you have these duties against stainless? How do you think about the raw materials?

[Timoteo Di Maulo, executive]

So yes, Taiwan is back because part of the circumvention has not been fully operational, but it is always a question of price. Then we have seen that there has been -- as you would always ask -- you have seen that international prices have gone up, some nickel has gone up, some ferronickel has gone up during the second quarter and then going down. And when there is this transition, there is always a window of opportunity, let's say, to buy speculatively some volumes, and this is why the imports are back.

Now whenever this happens, then there is a reaction of price and the reaction of price means that imports have less advantage versus the European, knowing also that today when you want to speculate on price, and you are a distributor, you want to speculate on price, you need a very high premium, because the cost of money is high, because the logistic is quite expensive also, not as has been at the maximum, but it's still expensive, and the delivery time increases the need for inventories. So at the actual level, I don't see a big risk of an increase of imports. The imports that we see today are the result of the price gap that has been seen during Q2. Now is this there for lasting? I don't know. It depends a lot. Let's say, the master of the price is China. Depending on what China will do, prices may have the possibility to go up. I don't think going further down because they are suffering. And then you were saying about nickel pig iron. Sorry, it's okay on this?

[Tom Zhang, analyst]

Yes. No, that makes sense. Yes, will be interesting.

[Timoteo Di Maulo, executive]

You asked the nickel pig iron. Nickel pig iron is strange, because it seems to be surprising everybody. But nickel pig iron is a ferronickel with a slightly lower content of nickel. It is exactly the same formula as nickel plus iron. The difference is that it is produced mostly in Asia and the other is produced elsewhere. And so nickel pig iron fight with ferronickel. They are in the same class of raw material. Sometimes nickel pig iron is more competitive, and there can be some imports of nickel pig iron.

Of course, our game is to be as much as possible integrated with the scrap, which when I say as much as possible, the most possible possibly in terms of production KPIs, okay? You will always need some primary raw material, primary raw material being ferrochrome, ferronickel, nickel pig iron or pure nickel. And with our division of alloy of Aperam Recycling, which is one of the biggest collector of scrap in the world, we will continue to progress in being based fundamentally on scrap.

[Tom Zhang, analyst]

Okay. And then maybe just one line. I guess the big difference is environmental, right? And maybe it's not for you guys, but for the industry, if you're importing more NPI, I guess, if it's not included within CBAM, I mean, is that one risk of circumvention of CBAM, i.e., buy just more of the raw materials?

[Timoteo Di Maulo, executive]

No, I don't think so in the sense that all the primary raw material are included as precursor of the stainless steel and the CBAM. So you will always have to take in account the content of the CO2 for any kind of raw material from ferrochrome, ferrosilicon, ferronickel, pure nickel, nickel pig iron. All these raw materials need to be accounted as a precursor in the CBAM. This is for stainless steel.

[Operator]

And we will now move on to our next question from Maxime Kogge of ODDO BHF.

[Maxime Kogge, analyst]

Two questions on my side, and it's about imports again. So do you think in Europe, there's still circumvention playing out, because we've now had punitive tariffs against China and Indonesia. Then Vietnam, Turkey and Taiwan were also since last year subject to the same tariffs. So what is explaining this? And what countries, sorry, could really be now at risk according to you on top of Taiwan possibly?

[Timoteo Di Maulo, executive]

So fundamental circumvention is one of the trade defense instruments against unfair competition. So you have your antidumping, anti-subsidy, you have safeguard, and you have anti-circumvention. These are all the trade defense tools that are used. We now see that these are efficient in the sense that during the last 2 years, also because of price, the imports have been extremely low, in the range of 15% to 20%. It is really below the normal. Only in this last quarter, they have reached a normal level, 22%, 23% is a normal level for Europe. We are very far from the level of imports we have seen, for example, in 2022, where they reached 50%.

So of course, all these instruments have merits and also some loophole that there are some circumvention, et cetera, but they are globally efficient. And whenever a new country takes, let's say, some kind of advantage, dumping or taking subsidy, this will be addressed. Now if Vietnam will become a country aggressive, as has been in the past, I don't know, India or Indonesia, there could be an intervention of the commission under the claim of [indiscernible] and antisubsidy or antidumping can be arrived depending on the kind of behavior.

[Maxime Kogge, analyst]

And the same question about Brazil, which recently started an antidumping case against China. I think the investigation will close in about 10 months, but do you already expect an impact going forward?

[Timoteo Di Maulo, executive]

So in Brazil, we have a very high market share, and we will continue to have this high market share. Whenever there is, let's say, a risk of dumping, this is addressed by the local authorities. So I don't see, for the moment, big problems. The real problem of Brazil, if it is one, is the fact that in the international prices, as I discussed before, international prices being low. Also in Brazil, prices are relatively low. But we have a good market share and we have a good new application and this is okay.

[Maxime Kogge, analyst]

And perhaps the last one is on aerospace. So one of your competitors flagged some negative impacts from the disorganization in the supply chain. Is it something that you are also witnessing on your own order book? I know these activities for the time being relatively small, but is this a concern for you? And have you factored this potential risk in the acquisition of Universal?

[Timoteo Di Maulo, executive]

We are not in aerospace. We are not at all. So if you have followed our podcast about Universal, Universal has been our choice exactly for this, because we are not in aerospace, and it is an end-to-end aerospace with a strong, let's say, actor now and in the United States.

[Operator]

[Operator Instructions] We will now move on to our next question from Bastian Synagowitz of Deutsche Bank.

[Bastian Synagowitz, analyst]

My first question is on just the European business and margins in particular. I guess, we've got a couple of moving parts here now looking forward into the months ahead. You talked about risk to prices. I guess, scrap prices are coming off as well. So when you look at, I think, your very recent order book versus the order book you had when you went into the fourth quarter, how are margins looking like? Are margins still stable at this point? Are they coming down already? Maybe you could give us a little bit of color how the situation looks like in Europe? That's my first question.

[Timoteo Di Maulo, executive]

So margin is a complex subject to discuss because it depends a lot of the product mix, it depends a lot on the logic of the raw material, how raw material are going up and down. So I cannot discuss so much on the margin. What I can say is that, yes, there can be, in the next future, some pressure in prices for commodities, okay, for commodities, especially, because as I explained before, every time that you see an increase in imports, there will be a reaction to mitigate them and to push them down, et cetera.

But you have seen our guidance. It's better to refer to our global guidance on Q4 that is for a higher EBITDA. The rest is too complex to be addressed. And on top from, let's say, we have a good visibility on Q4. Further on, the visibility, as you know, depends a lot on raw material, on macro, et cetera, and this is on commodities. What is important for us, really important for us, is to understand that we are doing whatever is possible to be a company that is less dependent as possible on commodities. So we are expanding alloys. Alloys, they are doing a very good job, and they are on track, fully on track and even in advance to what they have presented at the Capital Market Day, where we have the forest and all the recycling and renewables which are doing a good job. And then Brazil. Brazil is a very solid asset that has suffered only because of the footprint. And Europe is also developing a lot of non-commodities to get this kick about this game of commodities.

[Bastian Synagowitz, analyst]

Okay. All right. Maybe one more question and actually, I just want to tap your view here actually on the -- basically on the Asian competition. So we look at Asian prices here, they've been like literally almost flatlining for like a little bit more than the last 12 months, in fact. So usually, this is a sector where we always had price volatility.

At least the series I'm following is like prices have literally been flat obviously. And so I wonder -- I mean, what is your view here? I mean, what's been driving the fact that like prices have just been literally flatlining? You think like the cost position of the Chinese has not really moved much in the recent months. I guess, the common view is that companies are loss-making. I mean, what is your view for how long this can continue given that at least some of the companies are, at least in theory, also still privately financed?

[Timoteo Di Maulo, executive]

I don't know how many they are privately financed. But in any case, the resilience to losses seems important in China. It's clear that everybody probably is expecting some clarity on the macro economy and the rebound of the economy. This is what everybody is expecting. There will be nothing else. All the actors, including in China and Indonesia, everywhere will be happy for some more volumes and something more, let's say, optimistic on the next steps. The depressed mood in which they are is putting a pressure on prices and probably they don't take enough on margins.

[Bastian Synagowitz, analyst]

And I mean, on that point, is your view as well that like whatever China is seemingly preparing there potentially benefit stainless? I guess the common view in the market is probably not so much helpful for carbon steel, but I guess there may be a little bit of an element of, I think, real estate finishing, which only means that you probably have an element of stainless steel demand via basically housing interiors?

[Timoteo Di Maulo, executive]

Of course, if the credit -- the cost of money will decrease, you know, as we can know, that this has a positive impact on many sectors. And we have not really a deeper insight on China and what China is doing. But of course, whatever it is in favor of more consumption of the recovery of the construction, which is the sector which is suffering everywhere, whatever it is in favor of that, that will be profitable, too, and especially for the commodities of stainless steel.

[Bastian Synagowitz, analyst]

Okay. Great. Then last question, just coming back to, I guess, your own performance. So I think looking obviously at this quarter, looking at how you're guiding for in the fourth quarter, I have to say it is obviously showing that basically the measures you have been undertaking definitely have been starting to show some results. Now when you look at the measures you're working on, there's obviously the booster program, I guess, mostly Europe. There's obviously all of the other measures.

Particularly the booster program, I guess there's a difference between implementation and realization. And I think, from what I understand, this year is more like an implementation year versus I think maybe some of the benefits still due to be realized next year. So just wondering how far like we will see benefits from the booster program still being phased in next year. And then also particularly in Brazil, where you're now up and running there with the new footprint and asset? So basically between 0% and 100%, how far really have you been able to already hit the targets you are aiming to achieve there in the Brazilian unit?

[Sudhakar Sivaji, executive]

Bastian, Sud here. So I'll take that one. Firstly, on the booster program, see, the thing is that we guided to the booster program contributing EUR 25 million already this year, right? So it is contributing. There's not that -- the ramp-up, if you see, has been already priced in. So we said that the entire year Leadership Journey would be EUR 75 million, out of which EUR 25 million would be the booster program, so it's priced in. So it is in the results you see already. And as you see the Leadership Journey ramp-up, that is the run rate of the ramp-up of the booster program as well. So you have seen the Leadership Journey ramp-up in Q1, Q2, Q3, right? And it's been a clear ramp-up, and that's why it is. So those effects are there in, okay?

The second part on Brazil, yes, the superior mix is already there. The mix is starting to contribute already in Q3, right? So if you know, we did the hot strip mill. So it is at the beginning of our product portfolio. So the results are there. The product mix is already there in the market. Always have to see it in context of the fact that, I come back to the original discussion, which Tim mentioned, which is EUR 250 per ton for the stainless segment in a weak quarter, in the weakest pricing environment in the last 6 years, in terms of base margin, right, unfortunately, as always, hides these gains, and these gains are already this year, right? The fortunate part is that the self-help is working, and that's the reason for the EBITDA numbers you see. And once the market picks up, it becomes an upside as we have always guided to you. Is that clear?

[Bastian Synagowitz, analyst]

Yes. No, very clear. And maybe one last question actually on Universal as well, if I can. So just I'm curious, is this an asset you always had on your radar, you were looking at it? Because I mean, obviously, you say it's been a big transition they've been going through. Results have been only picking up in the last year. So I'm wondering, is this something you had on the radar for longer and you were just holding back to wait whether the asset is working? Or what's the reason for the timing right here right now?

[Timoteo Di Maulo, executive]

I would say that we have a structured process for any kind of M&A, as we have explained a few times. We have a lot of files. We have defined a clear strategy. Our strategy is very clear. We want to acquire only assets that create value for Aperam and immediately. We are not the kind of company which has a role to restructure, close or speculate on. No, we need assets that create value for the company in which we have synergies. And then there are opportunities. There is a moment in which what you see as possible target is at reach and moment in which it is not at reach because there is no buyer or no seller or because there is another seller which has been paying more than what you are willing to do. But it is not, let's say, a good chance, or how can I say, just for -- because it falls from the sky. It is a real process, looking at all the opportunities.

[Operator]

And we will now take our next question from Dominic O'Kane of JPMorgan.

[Dominic O'Kane, analyst]

Just a quick question regarding inventories and specifically Europe. The podcast seems to indicate maybe a surprising deterioration in end markets in September versus your expectations. So I just wonder if you could maybe comment on what you're seeing currently in real time as we move towards the end of the year. Do we continue to see an increase in inventories in Europe? And could you maybe give us a bit more of a real-time commentary on what you're seeing in some of those end markets?

[Timoteo Di Maulo, executive]

So probably you are referring to distribution in terms of inventories?

[Dominic O'Kane, analyst]

Yes.

[Timoteo Di Maulo, executive]

Because there are different aspects of the inventory, working capital, et cetera. So there is a temporary effect of the working capital due to Q3, in which you have the game of credit and payables due to the fact that there is a slowdown during August, et cetera. This is one thing. The other thing is about distribution. And here, you look at mostly the commodities and mostly some countries where the demand has been relatively good and better maybe in August and has been slowing down in September.

And here there is a mix of different aspects. For example, there is the aspect of Germany, which is a bit suffering, and into September, they have shown not a good result in terms of sales and hence, probably the supply, which has been generated after a good month of August, have generated more inventories. But globally, when we look at the global level of inventory, the level of inventory is low. In terms of number of days of coverage of inventories, if you take September as a reference, it appears a little bit high, but only because September, due to Germany, has been very low.

[Dominic O'Kane, analyst]

Okay. And I suppose, put another way, are you concerned about the inventory direction for Europe specifically?

[Timoteo Di Maulo, executive]

Not so much, not so much, because the level is, as I said, low. And so we don't see a real spike in inventory. We don't see the fact that the apparent demand will be dominated by inventory. We have very low inventory. I suppose that other, let's say, actors, producers, et cetera, are still on relatively low inventory. We take care of inventory because they are expensive in the current situation of the cost of money. So no, I don't think that the game will be on inventory. The game will be on the real consumption and eventually on the imports.

[Operator]

There are no further questions in queue. I will now hand it back to Tim for closing remarks. Thank you.

[Timoteo Di Maulo, executive]

Okay. Thank you very much for your participation to this conference call of today. So you have seen that this third quarter is a relatively good one. And this shows what we are doing since a few years, adding value with a completely different supply chain compared to the past. And even that allowed us, even in a summer quarter, with this big seasonal impact. And this very, very tough, still remaining, very challenging economic situation has allowed us to show a result which in terms of EBITDA per ton is a decent one at historical level.

So we are now looking forward for a new quarter where the result will be solid again, which should lead to more EBITDA, less working capital. We have engaged in going back to net financial debt in the range of EUR 550 million, which is what we consider this the normal level for us. We are looking to our future with confidence despite the fact that we don't underestimate the complexity of the external world, but we are differentiating ourselves a lot.

And the last way of doing is the planned acquisition of Universal, for which we are really excited, and I really expect, with anxiety, the moment in which they will become part of the family. In case we don't meet or talk until the end of the year, I wish you already a Merry Christmas and a Happy New Year, and see you for those who will be possible on the road. Bye-bye.

[Operator]

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.