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Aluminium
for the world
INVESTOR RELATIONSPRESENTATION
2014
DISCLAIMER
2
This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the“Company”). The document is being supplied to you solely for your information and for use at the Company’s presentation.No information made available to you in connection with the presentation may be passed on, copied, reproduced, in wholeor in part, or otherwise disseminated, directly or indirectly, to any other person. This document and its contents aredirected only to the intended audience. It is being made on a confidential basis and is furnished to you solely for yourinformation. By accepting this material the recipient confirms that he or she is a relevant person. This document must notbe acted on or relied on by persons who are not relevant persons. Any investment activity to which this document relatesis available only to relevant persons and will be engaged in only with relevant persons. If you are not a relevant person youshould not attend the presentation and should immediately return any materials relating to it currently in your possession.Forward-looking statements speak only as at the date of this presentation and Aluminium Bahrain B.S.C. expresslydisclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in thispresentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not toplace any undue reliance on such forward-looking statements. You should not base any behaviour in relation to financialinstruments related to the Company’s securities or any other securities and investments on such information until after it ismade publicly available by the Company or any of their respective advisers. Some of the information is still in draft formand has not been legally verified. The Company, its advisers and each of their respective members, directors, officers andemployees are under no obligation to update or keep current information contained in this presentation, to correct anyinaccuracies which may become apparent, or to publicly announce the result of any revision to the statements madeherein except where they would be required to do so under applicable law, and any opinions expressed in them are subjectto change without notice. No representation or warranty, express or implied, is given by the Company, its undertakings oraffiliates or directors, officers or any other person as to the fairness, accuracy or completeness of the information oropinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of thispresentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to suchinformation.
Aluminium
for the world
3
01IndustryHighlights
CONTENTS
02ALBAHighlights
032014 Results
04IndustryPerspectivesin 2015
052015ALBA Priorities
Aluminium
for the world
Aluminium
for the world
01INDUSTRY HIGHLIGHTS
Industry Highlights - 2014
World consumption up by +8% YoY
Asian demand up by 10% YoY driven by robust growth in China (+13% YoY) on the back of government stimulus and infrastructure investment
Demand in North America remains strong (over 5% YoY) with the ramp-up of higher automotive consumption (new Ford F-150 truck model launch)
MENA demand is mainly driven by major infrastructure spending (+4% YoY)
Europe consumption up by 2% YoY on the back of the construction and packaging sectors
Aluminium
for the world
Global Physical Demand Remains Healthy
5
Industry Highlights - 2014
World production up by 7% YoY
China output at a record level (28.3 million metric tonnes, +14% YoY) supported by new capacity ramp-ups from both greenfield & brownfield expansions
World market in deficit (-12 Kt with China & -984 Kt without)
Aluminium
for the world
Production Evolution
6
Industry Highlights - 2014
LME inventories at 4.2 million metric tonnes in December
2014 cash-average was $1,866/t with LME ranging between $1,642/t on February 4 and $2,114/t on August 29
Physical premiums continue to be at record high across the globe:
US Mid West premiums at $510/t vs. $228/t in 4Q13
DDP Rotterdam at $500/t vs. $245/t in 4Q13
Major Japanese Ports (MJP) at $407/t vs. $240/t in 4Q13
Aluminium
for the world
LME & Premiums
7
Aluminium
for the world
02ALBA HIGHLIGHTS
Alba Highlights - 2014
Continuous improvement in Safety performance (GAC Award)
Alba increased its sales to 931,526 metric tonnes (+1.3% YoY)
Production up by 2.1% YoY thanks to strong operational performance
Alba sustained its Value-Added Sales at 66% of total shipments
Physical premiums on an upward trend (+33% YoY) on the back of sound physical demand
Alba was notified that Natural gas price will increase to US$ 2.5 perMMBTU effective April 1, 2015 thereafter escalate at US$ .25 cents per yearuntil it reaches US$ 4.00 per MMBTU in April 2021
Aluminium
for the world
Operational Highlights & Achievements
9
Alba Highlights - 2014 & Q4 2014
Adjusted EBITDA up due to solid physical premiums, higher overall sales & favourable plant performance
Full-Year: US$465 million up by 28% YoY
Q4: US$140 million up by 82% YoY
Adjusted Net Income up driven by higher EBITDA levels
Full-Year: US$242 million up by 73% YoY
Q4: US$84 million up by 279% YoY
2014 Free-Cash Flow favourable due to higher EBITDA & working capital management
Full-Year: US$305 million up by 35% YoY
Q4: US$47 million down by 30% YoY
Alba Board recommends a final dividend of US$ 56 million to be paid in March 2015 (total dividend for 2014 was US$ 101 million)
Aluminium
for the world
Financial Key Performance Indicators
10
Alba Highlights - 2014
Aluminium
for the world
Project Titan - Improve Cash Cost of $150/t by January 2016Full-Year 2014: Project Titan on Track with Projected Savings of $102/t
11
102 100
150
Project Titan - US$ per MT
YTD December 2014 Target January 2016 2014 Final Target
1. Savings from Project Titan represent the annual $cost per mt improvement once all projects are fully implemented2. Actual project implementation dates are on a project by project basis
Alba Highlights - 2014
Aluminium
for the world
Operational Excellence Continues to Gain Momentum
12
1,000
2,500
4,000
2013 2014
2,991 2,907
647 631
3,638 3,538
Internal External
606 613
66% 66%
% of Total Sales Value Added Sales2013 2014
44 40
AR Days2013 2014
89 82
Inventory Days2013 2014
Value-Added Sales (MT’000) as a % of Total Sales
Head Count Management
Working Capital Streamlining AR & Inventory Days Trend
Aluminium
for the world
032014 RESULTS
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Sales Analysis FY14 vs. FY13 Higher Premium & Higher Sales Volume
14
1,500
1,800
2,100
1,944
2,034
176
25
12
YTD 2014 vs. YTD 2013 - Metal Sales Bridge (US$M)
Product MixLMEMetal SalesFY13
Pricing Power Metal Sales FY14
Volume
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Maintain Optimum Product Mix Increase Value-Added Sales & Leverage Pricing Power
15
800
850
900
950
920 932
7 5 0
FY14 vs. FY13 - Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
50
200
350
246
328
FY Sales 2013
ValueAdded
FY Sales 2014
LiquidMetal
Commodity2013 2014
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
16
FY14 vs. FY13 - Direct Cost Bridge (US$M)
Direct CostFY13
RMPrice
Alumina Sales Cost
RMConsumption
EnergyConsumption
Plant Spending
One-OffCosts
Cost Analysis FY14 vs. FY13
1000
1400
1800
1559
119
2
4
15 14 5
12
1653
Direct CostFY14
Line-6Costs
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Adjusted EBITDA Bridge Gap Analysis - FY14 vs. FY13 Adjusted EBITDA Margin at 21.3%
17
FY14 vs. FY13 - EBITDA Bridge (US$M)
EBITDA FY13Adjusted
Metal Sales
DerivativesOther Sales Direct Cost Selling Expenses
EBITDA FY14Adjusted
200
400
600
362
465
90
10311
94
6
EBITDA 18.2%
EBITDA 21.3%
Adjusted EBITDA includes impact of actual realised derivative payments
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Cash Flow Bridge - FY14 vs. FY13 Achieving a Constant Cash Flow Trend
18
FY13 to FY14 Cash Flow Bridge (US$M)
Cash Balance
FY13
CF from
Operations
Payment to
Shareholders
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
FY14
Free Cash Flow (US$M)
0
325
650
172
465
35
125
127
171
179
80
200
320
225
305
FY13 FY14
Operating & Investing Cash Flow
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
19
Working Capital as Percentage of Sales
Working Capital Trend as Percentage of Sales - Stable Performance
18% 18%
12%
17%
22%
2013
2014
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
20
Sound Management Performance with an Upward Trend in Sales
Financial Summary Q4 2014 Q4 2013 FY 2014 FY 2013
Average Cash LME (US$/MT) 1,968 1,767 1,866 1,846
Sales (US$M) 591 488 2,185 1,993
EBITDA (US$M) 140 77 465 362
EBITDA% 23.7% 15.8% 21.3% 18.2%
EBITDA (Excl. One-Off Costs) (US$M) 145 94 485 384
EBITDA% (Excl. One-Off Costs) 24.5% 19.2% 22.2% 19.3%
Net Income/ (Loss) (US$M) 92 36 257 212
Gain/ (Loss) Unrealised Derivatives (US$M) 8 14 15 73
Adjusted Net Income/ (Loss) (US$M) 84 22 242 139
Adjusted Net Income% 14.1% 4.5% 11.1% 7.0%
2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
21
Total Debt Trend (US$M)
Total Debt Reduction Trend - Continue to Strengthen
0
350
700
2013 2014
224171
310
192
534
363
Long-Term Short Term Total Debt
2014 Results
Aluminium
for the world
Alba Continues to Deliver Cash to its Shareholders
22
At Alba’s Board Meeting on February 09, 2015, the Directors recommended a total dividend of US$ 101 million (39% of 2014 Net Income), where US$ 45 million (interim dividend) were paid in September 2014 and US$ 56 million will be payable in March 2015 (subject to Bahrain Bourse and Alba Shareholders’ approval)
The Shareholders’ approval will be requested at March 01, 2015 Annual General Meeting
Aluminium
for the world
04INDUSTRY PERSPECTIVES IN 2015
Industry Perspectives in 2015
Aluminium
for the world
Physical Demand to Remain Healthy
24
Key factors to be observed:
LME volatility will continue
US Midwest premiums to remain firm thanks to a sound physical demand
MENA infrastructure spending to continue
Strong US dollar will continue to weigh on commodities
Projecting LME price to range between $1,800/t - $1,900/t (1st half of 2015)
Industry Perspectives in 2015
Aluminium
for the world
Raw Materials Price Trends
25
Alumina spot index to remain relatively stable with minor fluctuations
Green Petroleum Coke prices may slightly increase if refineries cut oil production
Alumina Fluoride (ALF3) and Liquid Pitch prices to remain at current levels for the next 6 months
Aluminium
for the world
052015 ALBA PRIORITIES
2015 Alba Priorities
Aluminium
for the world
Sustainable Improvement & Preparation for Future Growth
27
Continuous Focus on Safety Initiatives & Talent Management
Deliver on Project Titan
Leverage Strong Physical Demand Conditions
Benefit from high physical premiums in 2015 new contracts
Sustained focus on Value-Added Sales
Increase Creep Capacity with Minimal Capital Investment
Line 6 Expansion
Aluminium
for the world
06APPENDIX
Q4 2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Sales Analysis 4Q14 vs. 4Q13 Higher Premium, Higher LME Prices & Higher Sales Volume
29
LMEMetal Sales4Q13
Pricing Power Metal Sales 4Q14
Volume300
400
500
600
482
565
51
0 23
10
4Q14 vs. 4Q13 - Metal Sales Bridge (US$M)
Product Mix
Q4 2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Maintain Optimum Product Mix Increase Value-Added Sales & Leverage Pricing Power
30
4Q14 vs. 4Q13 - Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
Sales 4Q13
ValueAdded
Sales 4Q14
LiquidMetal
Commodity 4Q13 4Q14200
225
250
238 242
21 2
50
200
350
256
350
Q4 2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
31
4Q14 vs. 4Q13 - Direct Cost Bridge (US$M)
Direct Cost4Q13
RMPrice
Alumina Sales Cost
RMConsumption
EnergyCons.
Plant Spending
One-OffCosts
Cost Analysis 4Q14 vs. 4Q13
Line-6Costs
200
325
450
395
431
7
0
17
330
8
11 1
InventoryChange
Direct Cost4Q14
Q4 2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Adjusted EBITDA Bridge Gap Analysis - 4Q14 vs. 4Q13 Adjusted EBITDA Margin at 23.7%
32
4Q14 vs. 4Q13 - EBITDA Bridge (US$M)
EBITDA 4Q13Adjusted
Metal Sales
DerivativesOther Sales Direct Cost Selling Expenses
EBITDA 4Q14Adjusted
0
90
180
77
140
84
1936
1 3
EBITDA 15.8%
EBITDA 23.7%
Adjusted EBITDA includes impact of actual realised derivative payments
Q4 2014 ResultsFAVOURABLE MANAGEMENT PERFORMANCE
Aluminium
for the world
Cash Flow Bridge - 3Q14 to 3Q14 Achieving Constant Cash Flow Trend
33
3Q14 to 4Q14 Cash Flow Bridge (US$M)
Cash Balance
3Q14
CF from
Operations
Payment to
Shareholders
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
4Q14
Free Cash Flow (US$M)
0
160
320
167
141
59
350
35
179
0
80
67
47
4Q13 4Q14
Operating & Investing Cash Flow
34
Alba4World alba4world user/Alba4World photos/alba4world
Aluminium
for the world
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