AMAG Austria Metall AG

VSE:AMAG

Earnings Call Transcript 2020-Q3

[Operator]

Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome, and thank you for joining the AMAG Austria Metall AG Q3 2020 Results Conference Call. [Operator Instructions]

The forecasts, budgets and forward-looking assessments and statements contained in this presentation were compiled on the basis of all information available to AMAG as of the present time. In the event that the assumptions underlying these forecasts prove to be incorrect, targets be missed or risks materialize, actual results may depart from those currently anticipated. We are not obligated to revise these forecasts in the light of new information or future events.

This presentation was prepared and the data contained in it verified with the greatest possible care. Nevertheless, misprints and rounding and transmission errors cannot be ruled out entirely. In particular, AMAG and its representatives do not assume any responsibility for the completeness and correctness of information included in this presentation.

The presentation is also available in German. In case of doubt, the German language version shall be authoritative. The presentation does not comprise either a recommendation or a solicitation to either purchase or sell securities of AMAG.

I would now like to turn the conference over to Christoph Gabriel, Head of Investor Relations. Please go ahead.

[Christoph Gabriel, executive]

Good morning, ladies and gentlemen. Welcome to our conference call for the third quarter of 2020 of AMAG Austria Metall AG. Today, Gerald Mayer, CEO of AMAG, will present the developments and results of the first 9 months of this year. As usual, after the presentation, you have the opportunity to ask questions during the Q&A session.

Gerald, please start your presentation.

[Gerald Mayer, executive]

Good morning, and a warm welcome to our earnings call of Q3, the first 3 quarters. We had volatile times in the last weeks and months. We had a market which was significantly influenced, of course, by COVID-19 in our industry. For AMAG, it is, I would say, again, a stabilizing fact that we have an upstream and a downstream business with a very strong cash flow performance, which was supported by this setup. And in detail, if you go to Slide 4, where we present our highlights, you can see that the EBITDA of -- was roughly EUR 80 million in the first 3 quarters compared to EUR 109 million in the first 3 quarters of the previous year. Of course, a sharp impact of COVID-19.

We had positive earnings trend from Metal Division, it mitigated COVID-19 effects. As I mentioned, our setup is supportive there. And it was more difficult in -- for our Casting Division and for our Rolling Division. What we managed to do quite successfully was that we adapted our structural cost successfully to the capacity utilization, in particular, for our downstream operations. The short time work regime in Austria is quite supportive in this regard.

Net income was positive with EUR 11.1 million compared to EUR 30 million in the first -- for the first 3 quarters 2019. We saw a very strong performance with regard to cash flows. Operating cash flow of EUR 102 million was at the level of prior year. And we had a -- and free cash flow was -- which exceeded the prior year level, but this is to be discussed a little bit later.

Yes, then we have some additional highlights. We acquired Aircraft Philipp. We will see the closing of this transaction tomorrow. And we managed to get the Aluminium Stewardship Initiative chain of custody certification, which underlines our strategy with regards to sustainability, and I will talk about this in 2 slides.

The outlook for 2020, of course, difficult year. As I mentioned before, we have a deep impact of COVID-19, so we expect right now an EBITDA range between EUR 90 million and EUR 100 million for the year 2019. And it's definitely too early to talk about -- sorry, 2020, and it's definitely too early to talk about 2021.

On Slide 5. This is, again, an overview of our acquisition of a 70% interest in Aircraft Philipp. Aircraft Philipp, as we presented before, was -- is a manufacturer of detail parts for the, let's say, for the aircraft industry based on aluminium and titanium. It is, for us, a next step in terms of -- in our specialty strategy. We extend our value chain to the south. So we will be a supplier of detail part, and the strategic rationale is that we ship our aluminium plate to Aircraft Philipp. They produce detail parts. We are -- with our strength in recycling, we can use, for example, scrap chips, which they produce in their production course and recycle them, again, to use aluminium plate. And as I said before, closing will be tomorrow.

Then on the next slide, Slide 6. As I also mentioned before, we are certified according to the Chain of Custody Standard of Aluminium Stewardship Initiative. It is an external certification, which comprises many sustainability aspects. It's a very comprehensive one. And it underlines our strategy and it's a recognition of our strategic focus on aluminium recycling, in particular. In our opinion, this is a must for our industry, and we are definitely in the lead here. And then right now, having in hand, both standards, the performance standard as well as the Chain of Custody Standard.

On the next slide, Slide 8, you see, for us, a very important KPI. Purchase manager index is a very good early warning indicator for our ordering situation, and this is based on our experience in the last years. And if you look to this color code and just it is some sort of a fever curve, you see that we, of course, saw the deepest impact of COVID in the second quarter in the month of March, April and May. But there was also end of, let's say, beginning second half or also Q2 last year, we also had impacts, in particular, in the German market also in -- already in 2019. What we saw in the last 3 months, everything turns green again, and this is the positive side, and it's also reflected in our order intake and order backlog situation. So things are improving. And this is the good news of this presentation that order intake is quite well in the last weeks and months. And I will talk about this a little bit later, but this really reflects also the situation for our business, for AMAG's business and performance, I would say, with regarding particular to order intake.

Slide 9, aluminium and alumina price trends. This -- in COVID what we faced is a sharp decrease in aluminium price, in particular, in the second quarter. We saw a recovery in the following weeks. And if we compare the aluminium price to the prior year first third quarter -- first 3 quarters, we saw a decrease of roughly USD 170 per tonne or 9%. And this was in full compensated and offset by a lower alumina price, which was reduced to a decrease by USD 85 per tonne, means half of the decrease per tonne of alumina compared to aluminium. But if we translate it to 1 tonne of aluminium, it's again USD 170 because it takes 2 tonnes of alumina to produce 1 tonne of aluminium. So it offset it more or less the development. What we saw in the last weeks is, again, an increase of aluminium and a stable -- even, let's say, reduced development of the alumina prices. So we'll see how the impact will be in the fourth quarter, but the trend here is okay and, I would say, promising for the next weeks, at least.

AMAG Group shipments on Slide 10. In the first -- you see that we are down roughly 10% or more than 30,000 tonnes in the first 3 quarters. More or less everything refers to Q2 and Q3. If you see -- have a look at the bottom of this chart, you see that we saw increases in Metal Division. So we had, more or less, all our pots in operations. So the output was good. The operational performance that elevated up as smelter participation was very good. So we saw an increase for Metal Division.

In Casting and Rolling, it's -- of course, the reason is COVID-19 and the lower demand because of COVID-19. And so we saw a big, let's say, decline in volumes. In Casting, we were affected by roughly 11,000 tonnes and then Rolling by 27,500 tonnes of lower shipments in the first 3 quarters compared to the prior year.

One look at Slide 11. What you see here is more or less the mix, the product mix of our Rolling Division. You see that we have a widespread and highly diversified portfolio. But what we also added here is that the product mix changed, of course, because of COVID. You see an increase, for example, for foilstock for the packaging industry. You can see a decrease in the -- for the aircraft industry and a decrease, for example, for clad brazing products, in particular. And what we can say here is that a very solid order book at the beginning of the COVID crisis softened a little bit the impact. So it will be more severe in the next, I would say, weeks and weeks to come.

Slide 12. The same chart where we just simply compare that you can get a flavor of the changes in product mix. You see that the line at the top is the, let's say, the share of foilstock in our portfolio of Rolling shipments. And the second, the dark blue line is the share of aircraft shipments in our portfolio. So you see that we were -- we saw a peak 1 year ago, Q4 of 15% aircraft shipments on, let's say, out of our 100% portfolio shipments, and this declined to 7%. And regarding foilstock, it's the other way around. We were at 19% 1 year ago. Right now, we are at 24%. So nearly 1/4 of our shipments refers to the packaging industry.

In absolute terms, 10,000 -- roughly 10,000 to 11,000 tonnes were shipped for the packaging industry in Q3 2020 and also in Q3 2019. So in absolute terms, a stable shipment development to the packaging industry and the declined one for the aircraft industry. And unfortunately, this is what we will also see in the next weeks and months because we are all convinced that the value we will see will take a little bit longer, in particular, for aircraft, and we expect a stable development for the packaging industry.

Slide 13, turnover revenue. We are 18% down. And as I said before, volume-wise, we are 10% down. So also the aluminium price was low. And this is what you see at the bottom of this chart. So the impact is roughly EUR 40 million from lower aluminium prices. And I mentioned before, it's USD 170 per tonne roughly. And of course, the biggest share and the biggest reason for a lower end decreased revenue is -- refers, of course, to lower volumes and mix effects, which I just explained.

Our EBITDA. So we saw EUR 109 million last year. We are at the level of roughly EUR 80 million this year. So the decline here, of course, it also refers to a lower aluminium price of roughly EUR 15 million. But the biggest, let's say, impact, again, had volume and mix with EUR 51 million roughly, here what you can see at the bottom of this chart. Of course, we also have positive impact. We had lower -- we saw lower raw material prices, lower energy prices and this contributes EUR 35 million and offset, of course, the impact a little bit. And we were quite successful in adjusting our cost structure and structural cost to the capacity utilization, and we had a positive impact, which is here under others of EUR 10.5 million. And this refers, in particular, to lower labor costs and, again, based mainly on our short time work system, which we have in Austria. Means less working time is also reflected here in this bridge.

EBITDA by segment, Slide 15. Metal Division is up. And this, as I mentioned in the beginning, our structure, our setup, our strategic setup here contributes and helps to, let's say, gives us tailwind to go through this and manage this crisis. Casting Division is slightly below prior year. Rolling Division, here, we see the biggest impact with minus EUR 47 million in EBITDA. And Service Division is our infrastructure division, where we are more or less at the level of the prior year with a slight increase.

Yes. Then Q3. Q3, it's here on Slide 16. You see, again, a decline. Q3 was the most difficult quarter up to now. We see a decline in EBITDA from EUR 37 million in the prior year to EUR 20 million in the year 2020. The bridge is very similar to what we saw for the first 3 quarters. Biggest impact comes from volume. And again, we had offsetting, of course, measures which are in others, which are raw material and energy. And so we ended up at EUR 20 million for the third quarter.

Net income for the -- in prior year, we saw net income for the first 3 quarters of EUR 30 million roughly. And this year, it was EUR 11.1 million bottom line. The bridge at the bottom of this slide shows that, of course, it refers mainly to the EBITDA, which we just discussed. And we had some positive impacts from the financial results. And of course, if you earn less, you pay less taxes, there's also a positive impact, and so we end up with EUR 11 million.

The summary of earnings is presented in -- on Slide 18. I would like to go directly to Slide 19 now, where we talk about cash flows. Cash flow was quite positive, and I think this is really the good news. We managed quite well to optimize working capital to take advantage here of our -- let's say, of managing our receivables and, of course, also, we took advantage of the lower aluminium prices. This is quite clear. So all in all, the operating activities, cash flow is at the level of the prior year of more than EUR 100 million despite a far lower EBITDA. Cash flow from investing activities is also below prior year. We pushed back some CapEx projects that were reduced. And so positive impact from this side to the free cash flow. And so all in all, in total, free cash flow is significantly above the prior year level with EUR 62.7 million compared to EUR 50 million in 2019.

Then let us have a look to net financial debt development. So we are EUR 250.6 million. So we reduced net financial debt by 14% based on a higher cash flow and the reduced dividend for the year 2019 in this case. And cash and cash equivalents, we packed some liquidity on our balance sheet, so also supported by the cash flow and some additional measures. So we had around EUR 400 million as we speak.

Regarding -- on 21, regarding equity and gearing. You see equity is very stable at EUR 610 million, no surprise as the result is, let's say, plus EUR 11 million, still a positive one. Between June and now, we paid out our dividend. So this is the main impact for this reduced equity position. But all in all, very stable. Gearing, again, we reduced our gearing, in our opinion, quite important in times like this.

On the next slide, I would like to give you some insight of the development of our 3 divisions. So Metal Division, as I mentioned before, very positive, I would say, this year. So we could increase production and shipment volumes, and we had more or less all our pots in operation, so a very high level of production after we saw pot relining cycles in the last years. So this was quite positive and also, of course, supported by the development of lower raw materials and slightly increasing, in particular, in the last weeks, again, aluminium price. And so all in all, the performance in Metal Division is very positive.

Casting Division, on Slide 23. So I would say, yes, of course, decreased volumes. This is the result of COVID-19 where we, in particular, ship to the automotive sector. We managed very well to adjust our structural costs to the capacity utilization. And I would say this is -- it is a success story. What we saw in the last weeks is increasing order intakes and then I expect, I would say, a very stable and not too bad Q3 for the Casting Division.

In Rolling, I would say, here we suffer most of COVID because, of course, a major -- let's say, major customers, major industry, which we supply from Rolling, is not just automotive. It's also the aircraft industry where we see, let's say, a longer-lasting decrease in demand, which we expect to also last the next, let's say, months and perhaps years. So the impact here is, of course, higher than in the other divisions. Of course, we also we saw then a product mix, which was somehow impacted negative -- negatively our profitability. We shipped more, as I showed and presented in one of our slides here in this presentation, for the packaging industry, less for aircraft industry. So the mix changed based on COVID. The good news here is that the order intake is promising for the next weeks and months, in particular, in all the industry except the aircraft industry.

Let's talk a little bit about outlook. How do we see the next months and -- months to come and the rest of this year. So as we mention on Slide 26, we see an improvement in order intake and we saw an improvement of order intake over the summer months. We saw significantly higher demand for the automotive products. Order intake is very high. They are right now the last weeks. And the pattern over the summertime in terms of order intake was that we saw an increase in July that we more -- grow more or less at the level of the prior year in August and September, and we are above this level up to now in October. So I would say it's promising, at least, for the next month. And we hope that the second wave will not impact too much, let's say, this positive trend because it is, as I said, promising. And yes, but time will tell.

What is always interesting for our business and for the development is the tariff situation in the U.S. where we see left and right and up and downs and changes on a daily basis. Elections are, let's say, next week. So we'll see how this impacts, let's say, the next weeks and months and very difficult to predict. All in all, I would say, the medium- and the long-term trend is very positive for aluminium. It's still intact, and we are absolutely positive regarding the long-term view. Of course, we all understand that it will take time, in particular, for the aircraft industry, but we are convinced with some strategic measures with our commitment there, we will, let's say, exit this crisis stronger than we entered it. So we -- strategically, we stick to our strategy, and it's very clearly defined on innovation, on sustainability, on specialty products and a wide range and diversified portfolio, in particular, for the Rolling Division.

The outlook for 2020, I mentioned before, we expect a range between EUR 90 million and EUR 100 million. After a very good first quarter, we saw the deep impact on order intakes. In particular, in the second quarter, production was still okay in Q2, and Q3 and Q4 definitely more difficult this year than both quarters of the first half in terms of value-add and in terms of production. And then we hope that we have, let's say, a healthy start to the year 2021.

So this was my presentation, and I'm happy to answer your questions now.

[Operator]

[Operator Instructions] The first question is from the line of Rochus Brauneiser from Kepler Cheuvreux.

[Rochus Brauneiser, analyst]

A couple of things from my side. The first is on the guidance, which now leaves EUR 10 million to EUR 20 million for the final quarter. Mr. Mayer, can you elaborate a bit on the specific factors behind this guidance range apart from the general uncertainty and lack of visibility you just mentioned before? I guess one of the main specific factors I would see is the continuation of a weaker mix on the aircraft side. Is there anything else I need to consider as a main moving part for Q4?

[Gerald Mayer, executive]

I think this is -- you're totally right. So we sold a little bit more than EUR 20 million in Q3, it will be more difficult for the aircraft industry in Q4. So the mix factor is definitely a valid one. In additional to that, we have, as planned, in December, always maintenance -- some maintenance weeks. This is also valid for the year 2020. So we will see lower volumes, in particular, in December, and this also will impact our results. For the rest, I would say, as I mentioned before, I would say, stable development in the Metal Division, perhaps. And I hope that the situation stays as it is with regard to alumina and aluminium and we see some tailwinds, hopefully. But things are changing on a daily basis here, in particular, now with the second wave, with elections upcoming and so on. But all in all, I think the mix factor and our maintenance season is the main -- are the main reasons to be considered.

[Rochus Brauneiser, analyst]

Okay. Got it. Maybe on the point on aircraft. I think what you were showing on this one slide that your -- that the sharing, rolling of aerospace has halved due to shrinking order books. How long would it -- do you expect it to take that the share representation in shipments is adjusting to the current order levels? Is this a question of 1 or 2 quarters or is it going to take a bit longer than that due to the order books you might still have?

[Gerald Mayer, executive]

Let us -- let me answer it that way. So what we expect, and I think we all read it last week or this week that what the expectation right now is a build rate of 40 -- if I talk about Airbus, yes, of 40 A320 per month. And this is what, at least, I read it this week in the news and this is what we also hear from our customers here that this is a more or less a confirmed number until mid of the year 2021. For the remaining year, on the one side, we get the signals to be ready to ramp up a little bit, at least. Again, on the other side, there's still a big uncertainty. For us, I am convinced that it will be -- the next year will be more challenging with regards to the aerospace and the aircraft industry as we saw a very strong first quarter, high production levels in the second quarter and we will push back plates produced and will ship them also next year. So all in all, the value-add we can generate from the aerospace industry, aircraft industry will be a little bit lower. This is, at least, our expectation as of today in the next year. I hope that this is an answer which is okay.

[Rochus Brauneiser, analyst]

Yes. Maybe in this context, can you talk a bit more precisely about the FG acquisition. I'm not sure how much you can say about the payback period you would consider on the price you paid. Based on several comments we hear from the aircraft OEMs, there is a discussion whether it's going to take 5 or 10 years for full recovery of the industry. So how should we think about the payback of this investment?

[Gerald Mayer, executive]

So we -- first of all, we, of course, agreed not to disclose the price we paid on the aircraft. But when we did this acquisition at this time, one thing was clear that it will take years for the industry to recover. And this is also -- and this was the, let's say, the underlying -- an underlying, let's say, base for this acquisition. The strategic rationale behind that is that on the one side, we have, of course, this new business where we go downstream the value chain which brings us, let's say, a little bit closer to our customer, directly to the OEM, on the one side. On the other side, we will have synergies with AMAG and ACP as we can ship directly as we will be in the position to qualify additional alloys also for our core business as we can take advantage of recycling, let's say, possibilities and optionality. So there will be also other impacts. And for us, the strategic rationale is to increase and improve the position with our core customer in this industry, and this is Airbus. This is our rationale, and we have very positive signals from this side that it was the right move, let's say, as we speak.

And to talk -- really, all such acquisitions, of course, in particular, in times like that, it is very difficult to discuss or to, let's say, calculate payback periods because it's all based on assumptions. As these assumptions now a little bit better than they were or worse than they were than we did and they signed this SPA. I would say, perhaps they are right now a little bit worse, but not a lot, but we are still somewhere there what we expected. So I do not want to disclose amortization periods because it's simply -- I would say, it's not serious to do that now. We know that we did a strategic step in a time, which is difficult on the one side. On the other side, this is also the time where you get these opportunities. And this is where we said, let's take advantage of that. Let us, let's say, go the next step in our value chain into the direction of specialty products and let us improve our position with our most strategic relevant customer, which is the other.

[Rochus Brauneiser, analyst]

All right. And maybe in this context, so it's clear that the aircraft industry will continue to suffer until the air traffic is picking up considerably. What do you expect for the further consolidation of this supply industry? Would you -- I wouldn't totally rule out that the OEM pressure is growing. If smaller suppliers are struggling, would that be still an opportunity to look at other elements of the supply chain? What is your thinking in this direction?

[Gerald Mayer, executive]

In general, we did this step not to stay where we are with one acquisition. So in general, I would say, right now, we have -- there are 2 ways -- or 2 things to do. There is, of course, now excess capacity at Aircraft Philipp, which we just acquired. This is one thing. We have to fill this capacity. On the other side, of course, there might be also additional options where we are open, at least, to discuss and have a look at them. And in general, we want to develop this business and not want to stay where we are. So I would say it is really a strategic -- it was a strategic decision to do that and the decision where we intend to grow also in the next years. And I fully agree to what you said, there is definitely a lot of pressure right now to the supply chain in the aircraft, in the aerospace industry and the limited options we have.

[Rochus Brauneiser, analyst]

Okay. Very good. Then final one on the auto and your comments you made on the order intake. I'm not sure whether I got you right. Did you say that you -- the August to October intake was above the previous year? And maybe in this context, do you -- how long are the order books in the automotive side now reaching out at the moment? And I'm not sure, but -- so I got a bit of feeling that the auto intake situation is eventually a bit better in Casting than in Rolling. Can you maybe comment how these 2 -- the different auto businesses you have performed over the last 3 to 4 months?

[Gerald Mayer, executive]

I would say the order intake situation in Casting picked up a little bit earlier. And what we saw, in particular, in the last weeks was even stronger than in Casting -- in the Rolling Division, so it was really strong. And I will say here right now at the end of Q1, so we are fully booked and the capacity for automobile products in our Rolling Division is more or less full for the first quarter. And this is right. On the one side, it's a bit difficult because we could take more right now, so -- because the market is there. This is -- things change dramatically. This is unbelievable. It's like black and white. And we are very happy that we did it and did the countermeasures to the crisis in a way that we kept the capacity more or less because we did the short time work, let's say, and we took advantage of short time work and did not, let's say, lay off people. And it means people, we have them now, and we can produce more or less at the capacity level which we had pre-COVID. But unfortunately, right now, we have more capacity, at least, in the next weeks with regard to automotive. This does not automatically mean that it stays where it is. In our opinion, it's some sort of a pull with effect. So that we are catching up now perhaps, let's say, volumes, which -- yes, which we did not produce, let's say, in the -- at the end of Q2, beginning of Q3, now the order intake and the demand is there. And yes, it is catching up and our big guess and our expectation is that it will soften again.

[Rochus Brauneiser, analyst]

What are the signals you get from the OEMs in terms of -- did they have a further evolution of the order intake? You said your expectation is that it's softening. Are you getting a better sense of how much of these orders you get is due to supply chain restocking on the auto side or the execution of pre-corona orders? Any -- do you have any color on that?

[Gerald Mayer, executive]

It's very difficult, but there's definitely a big demand refers to, let's say, restocking of the supply chain.

[Operator]

Next question is from the line of Markus Remis from RCB.

[Markus Remis, analyst]

One question related to Q3 cost base. In the last conference call, you indicated about EUR 8 million savings in the second quarter and basically pointed towards a similar figure from short-term work in the third quarter. Did that materialize as guided? And following up on that, how much or how did the -- pardon, let me rephrase it. Do you still make use of the new short-term work scheme that was introduced as of October?

[Gerald Mayer, executive]

So Q3 was at the level of the prior months. So as we said and indicated, so it added up to roughly EUR 11 million. And for October, we are still in short-term work, a little bit less as we are catching our production. I expect in November, it will be, again, less. As November, we will produce quite well, I guess. In December, it will be, again, we will see, let's say, a higher level of short-term work. So it will soften a little bit compared to what we saw in Q3.

[Markus Remis, analyst]

All right. Then on the order intake for the Rolling segment as a whole, you gave some indications regarding the auto area. But for the whole segment, how does it look like on a year-on-year basis at the end of the third quarter? How much is it down?

[Gerald Mayer, executive]

In general, what we see right now is that we are picking up everywhere except of aircraft.

[Markus Remis, analyst]

Right. So that...

[Gerald Mayer, executive]

Yes.

[Markus Remis, analyst]

Sorry, go ahead.

[Gerald Mayer, executive]

Yes. We are picking up everywhere except of aircraft. And we are, I would say, in terms of -- in a percentage, I would say, 20%, 25% is where we should be down right now compared to the prior year first 9 months. I don't have it in front of me now, but roughly compared to prior year.

[Markus Remis, analyst]

Okay. Very clear. Then on the working capital decline, I mean, can you maybe help us understand how much is purely cyclical, meaning due to lower volume, lower prices or is there also a structural components included? Did you get more efficient in terms of working capital management?

[Gerald Mayer, executive]

I would say, this is -- there you have to understand many aspects. On the one side, I think it is a tricky thing to manage working capital in a times like we are facing in the last weeks because you have -- automatically, you increase your working capital in terms of your volume because people and our customers are pushing back, let's say, orders, which were perhaps partly or fully produced. One example is aerospace industry. For aerospace industry, we produced everything in the first half. We have now a lot of, let's say, volumes on stock. And we are right now reducing the stock more or less on a daily basis, but we did not produce anything more in the second half. So here we built up stock in terms of volumes. And this is what you see there.

And then we have another, let's say, aspect, where we decided to build up stock and this refers to, in particular, to the distribution business. Why did we do that? The answer is quite easy. This is an industry where you have to be quite quick when they ask. And they have the demand, then you have to be ready to ship because it's a very short-term business. And so we decided to add some 1,500, 2,000 tonnes of stock just to be ready to ship quicker than our competitors. This is what we did there. So it is very difficult. It is not the right time to do a structural, let's say, and have a reduction of working capital. We see it a little bit differently.

Then we had a planned impact. We are, right now, rebuilding, refurbishing a Casting facility for the production of rolling slabs in this case, also, in particular, for the aircraft industry, where we intentionally built up stock. So we have some negative impacts partly planned, partly because of COVID. And then, of course, you have impacts like lower prices and simply by a lower turnover of your product that you can reduce then and have to reduce then your stocks as well. And it's a combination, I would say, and this is what we saw. In addition to that, we also had and you might remember that we had, let's say, a positive impact of taxes in the last year. We changed our tax structure in Austria a little bit. And in Q3, we had tax payments, the negative impact again. So there are many pluses and minus, which you have to add up to end up at this EUR 100 million of cash flow from operations.

And in working capital, what we saw is and what we also try to actively do is to reduce receivables. But as soon as the business picks up again, we also will see higher receivables. Again, this is for sure the case. And of course, we also had some impact of a lower alumina price, but this was increasing again in the last weeks before end of Q3.

[Markus Remis, analyst]

Okay. Last one on the CapEx side, EUR 60 million to EUR 65 million. Is that still what you're looking for?

[Gerald Mayer, executive]

Yes. EUR 60 million.

[Operator]

[Operator Instructions] The next question comes from the line of Christian Obst from Baader Bank.

[Christian Obst, analyst]

Just 2 smaller questions left. One is concerning Daimler. You talked a lot about the automotive industry. Daimler currently changed its strategy to less volume going forward. Can you give us an idea how big this client or important this client is for you? Or do you expect any impact for your business there? And the last one is you have a very high cash position currently. So with the demand and production a little bit picking up going forward, do you intend to reduce this cash position or do you keep it as some kind of a war chest maybe to be able to acquire smaller companies again going forward?

[Gerald Mayer, executive]

Yes. So regarding the automotive industry, we do not disclose shares of individual, let's say, customers. But what I can tell you, we have a very wide -- again here, we also have a wide range and supply many customers. In the automotive industry, we see, as I said before, big demand from many customers, also from new ones. And so we are very positive for asset list for the next months and years as we still see this trend to aluminium, in particular, in premium cars. And so we don't see an impact right now from, let's say, some specific customers and their plan to change some strategies. So -- and we're also a small player in this regard.

And then your question to our cash position. Our cash position is supported, number one, by our strong cash flow. The strong cash flow, as I mentioned, also supported in times of crisis, and this is our business model. I would say, yes, our business model, which is supported by decreased, for example, LME or aluminium prices at the last metal exchange on the one side, also by lower volumes combined with this lower LME. So we had -- we were supported in this regard. This is number one.

Number two is we put some liquidity on the balance sheet to be prepared for a longer crisis. No one really knows how long it takes, and we are right now facing a second wave. We know that it is strong, but we have an old saying in Austria, it is -- no one died up to now because of too much cash on the balance sheet. And I'm not sure if it's the right time to optimize everything according to what we learned at the university and drive KPIs to the maximum to a certain extent. So on the one side, we are conservative. We want to have, let's say, a comfort on our balance sheet. But of course, it also brings us into a position to act rapidly and quickly when it's necessary and when you have options and opportunities.

[Christian Obst, analyst]

Yes. In fact, for that -- a slight follow-up on that. Formerly, you had some kind of a target for the gearing ratio. You also have some kind of framework for that for the next 2 to 3 years despite all the uncertainties. Do you like to have gearing ratio?

[Gerald Mayer, executive]

Of course, normally, as I mentioned in the past, internally, I sometimes mostly calculated by x times EBITDA, I didn't include it here because, of course, it is -- recently, we have some -- an extraordinary situation. And in the past, I said, between 2 and 2.5 is the target for net debt-to-EBITDA for a KPI in terms of gearing. And with an EBITDA going down, this will be, I guess, higher than this 2.5 in the next perhaps 12 months. And hopefully, depending -- but depending on the crisis, it should go down again in future, and we are working on that. It's difficult to predict, but I think we will never exceed in the next 12, 18 months a number of 4x net debt-to-EBITDA. Always calculated EBITDA of the last 12 months. So this is, at least, what I guess and what our intention is. But there is a lot of uncertainty, of course.

[Operator]

There are no further questions at this time. And I would like to hand back to Christoph Gabriel for closing comments. Please go ahead.

[Christoph Gabriel, executive]

Thank you very much for joining this call. If there are any questions left, especially for the analysts, please feel free to call me. And I wish you all the best and stay healthy.

[Operator]

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.