AMAG Austria Metall AG (AMAG) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I am Emma, your Chorus Call operator. Welcome, and thank you for joining the AMAG Austria Metall Group AG Full Year Result 2020 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 diverge 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 compiled 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. This presentation is also available in German. In cases of doubt, the German language version shall be authoritative. This 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.

Good morning, ladies and gentlemen, and welcome to our conference call for the 2020 financial year. Our CEO, Gerald Mayer, will hold the presentation and give you an insight into the business development 2020. Helmut Kaufmann, our COO; and Victor Breguncci, our CSO, are attending the call as well. After the presentation, we will have the Q&A session, where all Board members are available for answering your questions. Before we start, I'd like to remind you that the press release, the presentation and our annual report were published on our website at 7:30 this morning. Now I would like to hand over to Gerald Mayer.

Good morning, ladies and gentlemen. From AMAG in Ranshofen, it's a pleasure for me to give you some insights to our 2020 financials. As you all know and we're all fully aware, this year was a very special one. And of course, it was driven by the environment which was highly impacted by COVID-19. In our case, we started the year very -- in a very solid manner in the first quarter and had a second quarter where we really saw the deep impact of COVID. In Q3, we started with a slight recovery, and Q4 was then driven by strong demand from our customers. And so I would like to start with the highlights on Slide 3. You see that -- in our headline that the performance was good, in our opinion, given simply this impact by COVID-19. So the revenue were down or was down the dramatically from 1 -- roughly EUR 1.060 billion down to EUR 900 million, a little bit more than EUR 900 million. This was a minus of 15%. EBITDA is down from EUR 143 million to EUR 108 million but still above our latest expectations we published in November when we talked about Q3 numbers. The reason why we're doing quite well was twofold, I would say. The one thing was that we managed to adjust structural costs, in particular, to capacity utilization. And in particular, in the second half of the year, we saw some tailwinds from the markets. Net income after taxes was clearly positive at EUR 12 million roughly after EUR 38.6 million in the year 2019. Very positive to mention is our cash flow. Cash flow from operating activities at the level of EBITDA and the cash flow -- free cash flow, means after investments, of EUR 45 million, at the very high level also compared to prior years. So all of that brings us to the dividend proposal. So we propose, as Board, a dividend of -- a stable dividend of EUR 0.50 per share to our shareholders, and we propose this in our AGM, which is held on the 13th of April, virtually as last year. So of course, numbers is not everything, and we were, of course, dealing and had to deal and manage the COVID crisis. On the other side, we have a strategy which has to be implemented. And what we did last year, and I would say this was a main step, it was the acquisition of Aircraft Philipp on the one side, which is a vertical integration for AMAG. And we launched roughly 30 new products, and I would say this is also a big success story, and we made first sales and margins with these 30 new products. For the outlook 2021, on the one side, of course, it is too early to give you a reliable EBITDA range right now. The uncertainty of the market is still there on the other side, and I will talk about this a little bit later. The current environment, the order intake situation is positive. The capacity utilization, we expect at least for the first half this year is quite okay and good, also positive. So it means, again, tailwind as we saw in the last quarter, I would say, and right now, the situation is a positive one. So it brings me to Slide 5. Some, let's say, strategic, let's say, information about AMAG, where do we -- our development this year and what do we expect in the next years. So Slide 5. Our strategy was approved end of the year 2019. Then we saw COVID beginning, let's say, second quarter, end of first quarter 2020. So what we did is, we, again, checked our strategy and if there is an impact of COVID which might change the strategy. But the outcome was that the main pillars of our strategy were very stable. It is all about innovation, specialty product and sustainability. So we decided no material changes had to be made, and it was approved again by our Supervisory Board mid of the year 2020. So this review was -- didn't result in bigger changes or no major changes. What did we do in 2020? I mentioned before, the acquisition of 70% of Aircraft Philipp, which was, for us, a first step downstream, further downstream in the value chain. I will talk about this a little bit later. We started this new product -- lighted this new products' firework with a roughly 30 new innovative products with turnover in 2020 already at a level of EUR 50 million roughly so -- out of this EUR 900 million. So a success story on our side. And our initiatives regarding sustainability, they are certified. We did the certification according to ASI Chain of Custody Standard. We got the Gold award of EcoVadis, for example. It's a sustainability ranking. And so I would say, we walked the talk regarding our strategy, and no big changes were necessary. Slide 6, our acquisition of the majority stake in Aircraft Philipp. The strategic rationale, I would say, is quite easy to understand. Aircraft Philipp is a specialty producer of detailed parts -- of machine detailed parts, in particular, for the aerospace industry. The parts -- the raw material for parts is aluminium, in particular, but also titanium. And it's a specialty producer. And so this is -- fits perfectly to our strategy for a second reason, not just for the specialty approach. Regarding sustainability, what we do there is, and you see that the picture at the bottom, we produce raw materials for Aircraft Philipp; ship it to Aircraft Philipp; get and -- they produce machine, our aluminium; and they return to AMAG the chips, the scrap that we can produce, again, good plate. So this closed-loop approach in recycling is a very important one in our opinion. And this is strategically something which will grow in future. So -- and of course, the customer will benefit. AMAG should benefit and the customer should benefit simply also because of an optimized value chain and improved CO2 footprint. Another element on Slide 7, the headline here is innovations implemented as planned. We -- I think we presented at our half year presentation that we had -- we built our CMI and renewed it, our center for material innovation, our R&D center, on time, on budget. And this is the new home for 150 R&D employees and the base of innovation in AMAG. So this is a very important step. We launched, as I mentioned before, roughly 30 new products. And the success -- this is a success story as roughly -- well, exactly 28 of the 30 new products, we had also market successes. And the market success, as I mentioned before, let's say, resulted in an additional turnover of roughly EUR 50 million in 2020. Yes, of course, all those new products -- so many of those new products were only possible because we did our organic growth program in the last 10 years. You might still have in mind that we invested roughly EUR 1 billion on our site here in Ranshofen to establish a new line of production, to implement state-of-the-art and state-of-technology equipment here in Austria. Of course, innovation is not just new product, it is a wide area like safety, like digitization, like mobility. And I give you some examples here with regards to safety. We are also, I would say, highly innovative here in this area. We combined digitization, optimization into safety. And this is simply an example out of our cast house where we, let's say -- I would say, it was a milestone for us in terms of safety for our customers is so-called hands-free casting. Safety performance in general last year was very positive, and we saw significant improvements compared to the prior years. On Slide 9, you see some examples of our new products. As I mentioned before, roughly 30 new products were launched to the market last year. Three top products are mentioned here like TopPlate. It is about -- it looks like a simple plate, but it is a very special product with improved surface quality, low residual stresses, which means it is -- it can optimize, let's say, the scrap at our customer side, less casting and so on. So a very good product with a big future, to our opinion. Second product here, which is mentioned there, the second one, it is a so-called AMAG's TopClad. And this is a product, like you can see here, for thermal management of e-vehicles, for example, for battery housings and so on and cooling systems, an interesting one. And the last product here, and we call it SPF product, Superplastic Forming product for, in particular, the automotive industry, where we now are able to produce it in a width of over 2 meters. And this is also very important for many cars. And so I would say, highly innovative product here, which you can see on Slide 9. Next slide brings me to sustainability. Sustainability is a key element and the key pillar of our strategy, as you know. And yes, we stand out with regard to sustainability performance in AMAG. We had a target -- a top recycling rate last year of 78%, so very high. We definitely stand out here as well. We announced new projects like our rooftop photovoltaic system where we generate our own electrical power from next year onwards at, let's say, 55,000 square meters we produce electricity, which is then used in our facilities here. And of course, we also completed many sustainability products like rainwater management, as it is mentioned here, and others, yes, like noise reduction facilities and so on. So it is not just our opinion that we are doing well here, it is also certified from the external parties. It is certified by, and we do it for many years now, have been doing now for many years our environmental and energy management, let's say, system according to ISO 14001 and ISO 50001. We also, last year, succeeded in getting the ASI Chain of Custody Study -- Standard, the certification after we got the Performance Standard as first company -- integrated company in our industry, which we did in 2018. On the next slide, you see that external certification and awards do not just confirm our sustainability performance, it is also -- it also confirms our, let's say, innovation or specialty performance and innovative strength. You see here that we did many things last year, also in the year of, let's say, the pandemic. So it was, as I mentioned before, the ASI Performance Standard, which we did. We also had other -- many other awards, like we got the bronze in Pegasus, we got this Gold Star of EcoVadis and so on and so forth. Many, I would say, awards which confirm our specialty approach. And then we -- I think we reported last year that we also got the accredited award by one of our most important customers, means Airbus in this case. Yes. This brings me now to Slide 13 to the markets. Just having a look to the colors of this Slide 13, it is the [ yield ] curve of the purchasing manager's index for manufacturing. And you see after a period which was light red, heavily red in April and May, it turned green and darker green in the beginning of this year. And this exactly reflects also the mood in our industry. And it's not just a -- it's a good early warning indicator for our industry and our business. And we follow this indicator now for many, many years. The demand for aluminium, this is now based on CRU numbers, Commodity Research Unit, based in London, on Slide 14. It shows us that after a growth period between 2009 and '19, of course, we saw that downturn because of COVID, which was significant. In the left chart, you see primary aluminium, where we saw a decrease of 5% in 2020. And then the chart at the right, you saw the 6% decrease for rolled products in the year 2020. And the good news is that the expectations from now onwards are highly positive in terms of growth. So the expectation is that we reach in our industry precrisis level in 2021 again. So of course, this is a very general view, helicopter view. Because if you look a little bit -- go into the details, in particular, for rolled products, we have, of course, to agree and have to accept that there are certain industries which are not doing so well. And this is, in particular, the aerospace and the aircraft industry where it will take, of course, certainly some years to see this precrisis level again. But for the rest of our businesses, we expect that by end of the year we are at or above precrisis levels. Slide 15 shows 4 sectors where we think that the growth, where CRU thinks and analyze -- the analysts from CRU think that the growth will come from, and it's, in particular, the transport sector where a growth -- an annual growth is expected until the year 2025 by 10% per annum. And also for Construction, for Packaging and Others, 4% growth rate until 2025 is expected. So after a huge downturn in the year 2020, at least, this outlook is positive. But we always have to bear in mind that we still see a lot of uncertainties and volatility there. But the general, I would say, mood is a positive one. And it will -- it has to do with, I would say, speed of rollout of vaccination. And according to the speed of rollout of vaccination, we also think that we will see this growth. Then let us talk a little bit about how much shipments in this regard, Slide 16. In the year 2019, the shipments, total shipments of all the 3 divisions were at the level of 440,000 tonnes, annual tonnes. The decrease was 8% last year. And this, if you look to the details and this is shown and presented at the bottom of this graph, in Metal Division, we saw a sharp increase actually, and we had a higher number of active electrolysis pots. So the increase was 6,000 tonnes roughly. On the other side, we saw a decrease in casting and rolling of 13%, respectively. And this had simply to do with the COVID impact. And yes, and the good news is that the order intake in the last weeks was quite positive. And so we are through the valley, and this is our opinion here. The distribution of shipments in our Rolling Division is presented on Slide 17, and this is quite interesting. There are, I would say, 2 or 3 interesting messages in there. And please have a look to the share of Aircraft in this chart. You see that we had a 9% Aircraft stake in our shipments in 2020. And in the year 2019, the stake was -- or the share was 13%. So it is minus 4% in 2020, and this despite a first quarter which was doing quite well, in particular, for the Aircraft business of AMAG. On the other side, we also saw a minus in Automobile, let's say, shipments. We came down from a level of roughly 26,000 tonnes, 27,000 tonnes in the year 2019 to 25,000 tonnes in the year 2020. So it was just a slight decrease of 5% because the second -- or in particular, the fourth quarter was doing quite well, in particular, for Automotive industry. All in all, a 13% reduction. The only business area which we saw an increased, let's say, share or a significantly increased share was foil stock, where we saw an increase of roughly 2% to 3%. Let us have a look again to the mix -- the shift in product mix in our rolling mill, Slide 18, quarter-by-quarter. What you see here is that we saw a peak in the Aircraft share of 15% end of 2019 and it was in a similar magnitude beginning of 2020. Up to Q1, we saw [ low ] impact of COVID to the Aircraft shipments. Also, very stable at 19% were the shipments of Foil Stock. Then in the, let's say, following quarters, we saw that Foil Stock was picking up. And of course, the Aircraft products came down on a quarterly view even to 5%. And so you see the dramatic impact. And I mentioned this, of course, as well because this also has an impact in margins. So how was the development with regards to order backlog and the order intake situation? Please let us have a look to full -- 19 or Slide 19. Slide 19 shows you the order trend of the Rolling Division, and the chart here shows you the order book position. So you see that we had quite a strong order book at the beginning of the year, and it was minimum as positive at the end of this year. And in between, we consumed the order book during the crisis, means we produced, based on the good order stock which we had at the beginning of the crisis, the order backlog was reduced and we built it up again in Q4, and we also built in the first weeks of 2021 quite a good order book. So therefore, we are quite confident for the first month, at least, of this year. Slide 21 gives you the trend in aluminium and alumina prices, which is very important on the one side, of course, for turnover, sales line item in our P&L and, of course, also for the profitability, in particular, for the Metal Division. So compared year-to-year, average aluminium price 2019 compared to 2020 is down by 4.5% to USD 81. The good news here is that you see that the aluminium price increased throughout the year beginning, let's say, where we saw the low -- in the low in Q2 2020. So right now, we are at roughly USD 2,150 per tonne. So we saw a sharp increase in the last weeks. Alumina price was at a very decent level, attractive level for us. So at 15% roughly in Q4, for example, 2020, which is quite a low level compared to prior periods. And we saw in the last year's average numbers which were definitely higher. So all in all, the impact from U.S. -- from aluminium price and alumina price was, all in all, a positive one for the margins of our Metal Division. How do all these numbers and, let's say, volume numbers, all these price numbers translate now into our revenue and into our profitability? On Slide 2020 -- 2022 -- 22, sorry, you can -- you have a look at our group revenue, which is down 15% from EUR 1.1 billion roughly to EUR 900 million, and this is a 15% minus. Of course, as I mentioned before, we saw an aluminium price decrease of 4.5%, we saw a volume decrease in Rolling and Casting of 13%, a small volume increase in Metal Division. This sums up to minus 15%, means, and you see it in the bridge at the bottom of this chart, that the volume impact is roughly EUR 110 million minus in this -- if you compare these 2 periods. The aluminium price impact of this, let's say, roughly 4.5% aluminium price decrease is another EUR 40 million. So these are the main, I would say, points in the reconciliation to be mentioned. Slide 23 gives you an insight to our EBITDA development of EUR 143 million in 2019, EUR 108.2 million in 2020. So this is a minus of 24% roughly. Of course, the main impact here, and you can see it again out of the bridge or you can look it up at the bridge at the bottom of this chart, minus EUR 60 million roughly came from volume and mix, and another EUR 12 million came from -- referred to aluminium price reduction. Positive impact in others refer, in particular, to our, I would say, structural cost management that were doing quite well. And so this compensated at least some of these negative, let's say, developments driven by COVID. The allocation to our -- or the development in our divisions are shown in the graph on Slide 24. Metal Division was doing very well. And I mentioned before, of course, we had tailwinds on the one side from the market. So alumina came down to a normal value or perhaps an attractive value cost level. Aluminium price was a little bit lower compared to prior year on the one side. And we had more pots, let's say, in production and active pots, which led -- resulted in higher volumes. And so the output or the outcome was an increase in profitability of EUR 16 million roughly. In Casting, they were very -- they're doing very well. They suffered, in particular, in the second quarter. From Q3 onwards, they recovered quite positively, and so they were just down EUR 1 million, so very positive. Rolling was the division where we suffered most from COVID, and it is a big minus of EUR 50 million compared to the prior year. But as I mentioned before, markets are improving right now, and we are quite optimistic for this year. And Service Division, many things, structural cost savings and so on are, there, accumulated, and so this is a plus of EUR 4 million. Slide 25 gives you an overview of the fourth quarter 2020 only. You see that we are down here 16% compared to the year 2019 or to the fourth quarter 2019. And I also would like to mention here that we had extraordinary effects in the fourth quarter 2019 and 2020 in the Metal Division of EUR 3 million in each and every of this year. So no impact if you compare apples-to-apples. So this is the development there. And the picture is a little bit different. If you look to the bottom of this graph to the EBITDA reconciliation, the impact of aluminium price is positive or was positive in the fourth quarter. Aluminum prices were picking up. This is what I mentioned before. And so the -- this is -- aluminium price resulted in a positive development or a contribution of EUR 2 million compared to the fourth quarter 2019. As I mentioned before that in the -- if you look to the full year numbers here, it was a minus of EUR 12 million. So a positive development from tailwinds from the market here regarding aluminium price. Yes. Let me flip to Slide 26. 26 shows you net income number. Net income is still significantly, I would say, positive, clearly positive for the full year 2020, and this in an environment which was really a difficult one. So we're happy to -- that we achieved a positive net income in the year 2020. And of course, if you look to the bottom of this graph, you see that the EBITDA, of course, came down. Of course, then you pay less tax, so there's no, I would say, surprise in this bridge, which you see at the bottom of this slide. Very positive to mention is Slide 27 with a very positive development in, I would say, the cash flow performance. Cash flow from operating activities at the level of EBITDA, I mentioned this before, EUR 107 million. Cash flow from investing activities at EUR 62 million. Of course, we reduced a little bit CapEx. We pushed them back where necessary. But we did everything which was -- which had to be done or what had to be done. So we didn't -- do not want to miss strategic, let's say, opportunities and so on, and so it's EUR 62 million, including, of course, also the acquisition of the Aircraft Philipp. Free cash flow at EUR 45 million is a very positive one. If you go back several years here, you will see this is a very good level. And this is also, and I mentioned it, I think, in the beginning, the main reason why we said the dividend should stay stable. Yes. Brings me to our, let's say, gearing, debt numbers, cash numbers, liquidity. You see at Slide 28, our net financial debt, stable compared to prior year. You can see an increased cash position. We booked some cash to the balance sheet throughout the year -- during the year 2020. No one knew how this crisis would develop 1 year ago or, let's say, 8 months ago, 10 months ago. So this was our reaction to secure the company here in terms of liquidity. And of course, it also gives us firepower. And on Slide 29, you see that our equity is also stable. Gearing ratio is stable. And what I can say here at this point is that the financials, our balance sheet of AMAG is as strong after COVID or now at the situation, let's say, at the end of COVID as it was pre-COVID. And I would say this is good news for customers of AMAG, for all the stakeholders of AMAG. Yes. On Slide 30, I would like to skip this slide. It summarizes our key numbers here for you. And then let us have a short look now to the divisions, as we normally do it. You see again Metal Division, they were really performing very, very well in the year 2020. So the production was increased. We saw some tailwinds from the market after difficult times, let's say, the prior years. So therefore, we saw -- got managed to, let's say, get an EBITDA of more than EUR 50 million in 2020. Casting Division, I mentioned it before, this is now Slide 32, did also a very decent and good job. So they're, of course, down EUR 1 million. But this is -- given this environment and given, let's say, their, let's say, markets where they, in particular, serve the automotive market, I think they did a very good job throughout the year 2020, managing the crisis and also in recovering again. So we ended up with EUR 6 million, and we saw years which were worse in the past. And last but not least, Rolling Division. As I mentioned before, of course, this is division where we suffer most from COVID. We have -- we used to have a roughly 15% share in the aircraft aerospace industry. This did not recover up to now and will stay a little bit like this for the next years. This is, for sure, the case. And -- but for the rest, this is what I can say here, and I mentioned it 2, 3 times before, that we see recovery here. The demand from our customers is quite high. Yes. Slide 35. Once again, our proposed dividend to the general meeting held in April 13 virtually we propose a dividend of -- a stable dividend of EUR 0.50 per share. And this gives you a rentability, a yield of a little bit lower -- less than 2%, yes. Outlook. So outlook for 2021, a difficult exercise. On the one side, we still all know that, yes, times are volatile. We know that we are in a situation where we come from a very difficult year 2020. We see that the demand from customer side is very positive. Right now, at least, the markets are doing well also for the upstream type of business. So it is not the right time now, and it's too early to give you a band -- an EBITDA band as guidance. But I'm very convinced that with the rollout of the vaccination, also we can recover and be positive so that we will see, let's say, a continued recovery, that we hope that we also see a continued good order intake and order situation and [ customer ] demand situation. So also CRU, as I mentioned before, the analysts think and are convinced that we see the precrisis, pre-COVID level by the end of 2021. So all in all, I would say, we like to sit now in this chair more than it was 10 or 8 months or 9 months ago when COVID started. We're 11 months ago when COVID started. So all in all, I would say with a cautiously optimistic, this is our outlook. But the EBITDA band and guidance is what we will give and want to give when we publish our first quarter this year when we have a little bit more insight into the developments of 2021. So this was now the presentation from my side. As Christoph mentioned before, I'm accompanied now by Victor, our sales Board member; by Helmut, my colleague in the Board now for 14 years as COO; and myself. We are ready to and happy to answer all your questions. Thanks for your attention.

[Operator Instructions] The first question comes from line of Markus Remis with Raiffeisen Bank International.

Yes. A couple of questions, please. Firstly, related to the fixed cost reductions you've mentioned. Can you provide us an indication of the magnitude and to which extent they are truly sustainable? So what kind of -- by how much did you lower your fixed cost base with all the measures you've taken in the last year?

I think we said structural costs because fixed costs are, by definition, fixed...

Structural costs, yes.

Yes. It means there are also some -- what we managed to do is that we, perhaps, variablized some of the fixed costs quite well. And therefore, we adjusted in full year for our site in Ranshofen the structural cost to the capacity utilization. So FTE, the FTE number, and this is something I give you because I still have it in mind from my Supervisory Board meeting yesterday, the FTE number came down by roughly 100 until the beginning of this year. So this is not the 31st of December number. This is the 1st of January number. And this by -- we had a natural fluctuation, let's put it that way. And of course, in addition to that, what we did is we had short-time work. We had many other measures, like some measures where -- some cost, let's say, measures which came automatically because traveling was not possible, where you had less chances to do education for your people and so on. And then there, of course, are other things where we simply said, okay, this has not -- has been something which has not to be done now and it can wait and we pushed it back a little bit. All in all, what we have to expect is that, I would say, yes, from this -- all we did in short-time work, we stopped short-time work from 1st of January onwards. This -- there, we are back to normal. We also have the full cost impact here again back, let's say, starting the 1st of January. But it's also necessary because the demand situation changed totally, and we need the people back. And what is still not there is, of course, traveling. We're still highly restricted in traveling. So there are effects which came back in full, and there are other effects which will stay low, in particular, for the first month. What I can say with regard to FTE number, I am convinced that we will maintain some of this, let's say, efficiency productivity gain. When I mentioned 100 less, we will not have this 100 FTEs more in 1 year, except the order situation picks up as much as we simply needed.

Okay. You already kind of given the prelude to my second question because when I look at your personnel expenses, they were down by EUR 11 million in the last year. And the average headcount, that was almost stable at just shy of 2,000 employees. So is it fair to assume that the reduction in personnel cost was basically due to the short-time work? Is that the subsidy effect we're seeing here?

I would say it's not the subsidy. Subsidy is just one thing because we simply reduced for the people who were in short-time work and the [ fee ] cost was that we had in a month, I think, 1,300 people at short-time work at an average reduced working time of 30%, then we had to pay 70% of the cost and 30% was reduced, and subsidy is just how you compensate your people because -- yes, and this is the government. But for us, it meant minus 30% of work we got from our people, but the cost was minus 30%. And of course, this is the bulk of the reduction, what you can see in personnel expenses. Because if you compare, again, '19 to '20, you see in principle an increase because we saw our, let's say, annual increase, which you have annually. And I don't know, it was roughly 2-point-something percent in '20, which was agreed in the collective agreement '19 for '20. Then we had a first quarter, of course, that we were quite -- where we built up workforce. And then starting with, let's say, March, April, we stopped hiring people. We, of course, took the opportunity if we got talent. And we were really selective here and picky, I would say. But in general, we stopped hiring people, and then you have a natural fluctuation. And this is what we will see also, let's say, in the first months and quarters this year. So -- but all in all, to make a long story short, the impact, of course, of short-time work is what you see here. And FTE number is a little bit different than the headcount number.

Okay. Then a question related to the order book. The improvement you're displaying here on, I guess, the Slide 19. Is there any chance you can give us a feeling how much of that is actually true underlying demand pickup and how much is kind of restocking of your customers? Do you have any sense from your sales guys?

Markus, I think it's, of course, both. It is very difficult also for us to get a split here. But of course, what we saw, in particular, in the second quarter is that we did not see order intake at all, in particular, for Automotive, for example. It was quite 0. And Victor is just confirming here next to me, and so -- but Victor, please.

No. For me, the only thing we can bring here is we saw this bullwhip effect in automotive industry. And then we go into the products of brazing, trims, casting products and flat-rolled products that goes into the structure of the car. So this bullwhip has to do with replenishment and, of course, this increasing demand that we saw since September, October last year, as it shows on the Slide 19.

Okay. Let me rephrase it. Would you consider inventory levels at back to normal levels? And I don't want to have a breakdown of the order book composition, but just from a pure sense you have, would you say that your clients are back to normal inventory levels compared with the precrisis inventory levels?

Well, I cannot confirm or not confirm that the inventory levels are back in normality. What we see, and this is progressing -- that this is progressing within '21. We saw the recovery on inventories, but also a fulfillment of the demand that all of our nominations that we have are picking up. So there is, yes, a restocking effect, but there is a very strong tailwind on how this demand is picking up, especially after what's happening during COVID.

But what I can perhaps add here is that the demand from automotive, Victor, peaked in the fourth quarter last year and it normalized a little bit, let's say, in the first weeks, but it's still at a high level.

Yes, that's true.

Okay. Okay. Then I have one more follow-up here. Because when we compare Q4 order book '20 to the '19 level, so that's quite an uptick, given the relevance of automotive demand. Are we back to pre or above precrisis levels from the automotive OEMs?

Above.

Or if not, can you say that -- above?

No, above. Clearly, this is for us -- I can clearly say that order book is -- and order intake is very strong in all our business units, except aircraft. It is still as low as it was throughout, let's say, second half of last year. And for automotive, we are above AMAG's precrisis level right now.

Okay. So final question, any kind of change in the call of pattern related to this news around semiconductor and chip shortages that is currently rattling the industry? And we're hearing a couple of standstills of German OEMs. Do you think that would be impacting you?

That's a fair question. I've been in contact with our OEMs here in Germany but also in U.S.A. and also in Asia. We do have a perception that some of their lines are impacted by these chip [ bundles ]. But the mix of cars where we serve today is very much protected and consistent in terms of not having an impact at the moment for us. So we see that consistent demand for the second quarter and the third quarter is already showing signs of keeping the same trend. But we have to see how this is going to impact in the medium term. So we're seeing that the trend is still positive on this side.

The next question comes from the line of Rochus Brauneiser from Kepler Cheuvreux.

Yes. A couple of points from my side. The one is maybe you can talk a bit about the upstream business. I think in your outlook commentary, you're sounding quite positive from that part of the business. So what kind of assumptions are you putting on the spreads in the Metal upstream business?

For upstream, I would say, this is always a difficult part to look into the future. And I always said that the development of aluminium price is like a crystal ball. If you -- going back, let's say, some weeks, and let's say, when we did our budget, the outlook for this year was roughly USD 1,700, USD 1,800. No one indicated a price level of $2,100 where we are right now. So if you look right now, of course, it is always the same thing. The current situation is the best, I would say, a starting point also for analysts to forecast, let's say, T plus 1, so the tomorrow's level. And so if you perhaps talk to analysts, they would say and I simply -- I heard one of them 2 days ago, they think they are bullish regarding raw materials. Others are not so bullish. So for us, it is really difficult. What we have in our internal assumptions is that it will not stay at this very high level. So this is -- but no one knows. And so we have to be -- we -- of course, we take this tailwind as it is right now. We like it. It gives us room to breathe, I would say. But it's also fair to assume that the level we saw also of profitability for our Metal Division in the year 2020 was a very good one in the last 10 years. If you look back to this performance the last 10 years, you will see that this is one of the best year, I think. So also fair to assume that it will not stay at this level. But you never know, might be. So if it stays like it is now, we really like to take it in. And then many things -- or everything is possible. But really, I know this is not an answer which might be satisfying, but this is simply our world in aluminium price. On the other side, alumina. Alumina is also something -- you saw average levels in the last year of 17% compared to the LME price of aluminium. Right now, we are at the level of, I think, below 15%, which is unbelievably low. And we were that low throughout the last year. You see -- you have immediately after a black swan event that we saw many of them in the last years. Please refer to the assumptions, again, Russia to the Alunorte situation, where our supplier or the biggest, let's say, refinery in Brazil was affected from a shutdown. This immediately has a big impact. And the Chinese situation is also a situation no one knows. And if they start to cast, then the prices move up and down dramatically. So it is really also from ours -- for us, very difficult to assume. But in our -- I would say, if we are cautiously forecasting this year, we would see a level which is above the current situation of roughly 15% in alumina. So my outlook is perhaps not as bullish as it is right now in the market environment, but we like this environment, and we hope that it stays a little bit.

Okay. No, I think this is a fair assumption. Maybe we can talk a bit about the margin trend in Rolling in Q4. So we have seen a big improvement in your EBITDA per tonne. Can you tell us, is that primarily driven by a better fixed cost absorption? And to what extent have you already seen the kind of trough in the aircraft business absolutely and relatively, just to get a feel how much negative drag you have from the mixed deterioration on the aircraft side?

In general, I would say the Q4 -- if you simply look to Q4 only, we had an impact, and this was a positive impact. We had to release a provision which was in our balance sheet from a case from the prior year, and we had to release this. And the impact, I think, was EUR 2 million, EUR 3 million roughly. This is what you have to deduct in the -- from Q4 if you want to compare apples-to-apples. The overall impact throughout the year of one-off effects for Rolling is 0. So there was nothing because I think it was in the second quarter, we also had a negative impact, I think. And so this had an impact. In general for -- regarding margins for the Rolling situation, what I can tell you here and giving you a little bit, let's say, of an outlook, at least, for the year 2021, which might be the most interesting thing, is that we normally negotiate the bulk of our -- or let's say, 50% roughly of our contracts in fall for the coming year. Means in fall 2020, we negotiated with many of our customers frame agreements for the year 2021. For those frame agreements, of course, also margins and prices were fixed for this year. So the starting point, of course, was not ideal. But this is just the case, by the way, for the bulk of our industry. So it's quite normal. And what we see right now is, of course, that also margins and prices are picking up. And because the demand is really high and the markets are tight, so we see an increase now. The starting level regarding margins for 2021 is a low one, but it is improving now steadily and step-by-step, and it has been already improving in the first, let's say, 2 months here.