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FINANCIAL RISK MANAGEMENT | 6 Months Ended
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Jun. 30, 2024
Disclosure of financial risk management [Abstract] |
FINANCIAL RISK MANAGEMENT | NOTE 17 - FINANCIAL RISK MANAGEMENT The Group’s financial risk management strategy focuses on minimizing the cash flow impacts of volatility in foreign currency exchange rates and metal prices, while maintaining the financial flexibility the Group requires in order to successfully execute its business strategy. Due to Constellium’s capital structure and the nature of its operations, the Group is exposed to the following financial risks: (i) market risk including foreign exchange, commodity price and interest rate risks; (ii) credit risk and (iii) liquidity risk. 17.1 Market risk i. Commercial transaction exposures The Group has agreed to supply a major customer with fabricated metal products from a Euro functional currency entity and invoices in U.S. Dollars. The Group has entered into significant foreign exchange derivatives that matched related highly probable future conversion sales. The Group designates these derivatives for hedge accounting, with a total nominal amount of $470 million a nd $209 million at June 30, 2024 and December 31, 2023 respectively, with maturities ranging from 2024 to 2029. The table below details the effect of foreign currency derivatives in the Interim Income Statement and the Interim Statement of Comprehensive Income:
|  |  |  | Three months ended June 30, |  | Six months ended June 30,
(in millions of Euros) |  | Notes |  | 2024 |  | 2023 |  | 2024 |  | 2023
Derivatives that do not qualify for hedge accounting |  |  |  |  |  |  |  |  |  |
Included in Other gains and losses - net |  |  |  |  |  |  |  |  |  |
Realized (losses) / gains on foreign currency derivatives - net |  | 6 |  | (2) |  | 5 |  | (4) |  | 9
Unrealized losses on foreign currency derivatives - net (A) |  | 6 |  | (3) |  | (6) |  | (11) |  | (4)
Derivatives that qualify for hedge accounting |  |  |  |  |  |  |  |  |  |
Included in Other comprehensive income |  |  |  |  |  |  |  |  |  |
Unrealized (losses) / gains on foreign currency derivatives - net |  |  |  | (5) |  | — |  | (9) |  | 2
Gains reclassified from cash flow hedge reserve to the Consolidated Income Statement |  |  |  | 3 |  | 1 |  | 5 |  | 2
Included in Revenue (B) |  |  |  |  |  |  |  |  |  |
Realized losses on foreign currency derivatives - net |  | 6 |  | (2) |  | (1) |  | (4) |  | (3)
Unrealized (losses) / gains on foreign currency derivatives - net |  | 6 |  | — |  | — |  | (1) |  | 1
(A)Gains or losses on the hedging instruments are expected to offset losses or gains on the underlying hedged forecasted sales that will be reflected in the future when these sales are recognized. (B)Changes in fair value of derivatives that qualify for hedge accounting are included in Revenue when the related customer invoices are issued. ii. Commodities The Group does not apply hedge accounting on commodity derivatives and therefore any mark-to-market movements are recognized in Other gains and losses – net. 17.2 Liquidity risk management The liquidity requirements of the overall Company are funded by cash and drawings on available credit facilities, while the internal management of liquidity is optimized by means of cash pooling agreements and/or intercompany loans and deposit between the Company’s operating entities and central Treasury. At June 30, 2024, the borrowing bases for the Pan-U.S. ABL and the French Inventory F acility were €467 million and €100 million, respectively. After deduction of amounts drawn and letters of credit, the Group had €552 million outstanding availability under these revolving credit facilities. At June 30, 2024, liquidity w as €869 million, comp rised of €213 million of cash and cash equivalents and €656 million o f available undrawn facilities, including the €552 million described above. Margin calls The Group's financial institution counterparties may require margin calls should the mark-to-market of our derivatives hedging foreign exchange and commodity price risks exceed a pre-agreed contractual limit. In order to protect from potential margin calls for significant market movements, the Group enters into derivatives with a large number of financial counterparties and monitors margin requirements on a daily basis. In addition, the Group (i) tries to offset exposures with financial counterparts and (ii) holds a significant liquidity buffer in cash or in availability under its various borrowing facilities. At June 30, 2024, and December 31, 2023, there was no margin requirement paid as collateral to counterparties related to foreign exchange hedges nor related to aluminium or any other commodity hedges.

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- Definition The disclosure of the entity's financial risk management practices and policies. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2023-01-01 -Paragraph 10 -Subparagraph e -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=1&code=ifrs-tx-2023-en-r&anchor=para_10_e&doctype=Standard -URIDate 2023-03-23 + Details
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