INVESTOR RELATIONS PRESENTATION · 2016-11-13 · Q1 2016 Q2 2016 Q3 2016 213 167 150 142 127 114...

Aluminium

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INVESTOR RELATIONSPRESENTATION

Q3 2016

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.

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3

01IndustryHighlights

CONTENTS

02ALBAHighlights

03Q3 2016Results

04IndustryPerspectivesin 2016

052016ALBA Priorities

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Aluminium

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01INDUSTRY HIGHLIGHTS

Industry Highlights - Q3 2016

World consumption up by +5% YoY

Asian demand up by 6% YoY supported by Chinese Consumption (+7% YoY) on the back of sold growth in construction, transport and electrical sectors

MENA demand remains healthy (+6.5% YoY) - driven by infrastructure spending in Saudi Arabia (+20% YoY)

Europe consumption up by 2% YoY fuelled by good demand in transport and packaging sectors

North America demand almost flat (1.5% YoY) supported by the building and construction sectors

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Global Physical Demand Remains Firm

5


World production up by 3% YoY

Asia output up by 5% YoY, supported by Chinese output ( +4% YoY) due to smelters restarts and new smelter ramp-ups

North America production dropped by 11% YoY due to smelters closures as a result of high energy cost and low LME prices

World market in deficit with China (-268 Kt) & (-231 Kt) without China

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Production Evolution

6


LME inventories at 2.1 million metric tonnes in September

3Q16 cash-average was $1,620/t with LME ranging between $1,546/t on September 12 and $1,691/t on August 18

Physical premiums prices continue to float at lower range ($/t)

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LME & Premiums

7

Major Japanese Ports (MJP) US Midwest DDP Rotterdam

100

175

250

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

213

167150 142

127 11450

150

250

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

210

97 88109 102

74100

200

300

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

276

178 175 190173

143

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02ALBA HIGHLIGHTS

Alba Highlights - Q3 2016

Launch Safety Campaign ‘Safety at the Heart of Alba’

Alba was able to increase its sales volume by 3.1% YoY while production was up by 2.4% YoY

Value-Added Sales averaged 58% of total shipments in Q3

Project Titan Phase II on track with Year To Date (YTD) savings of $56 per mt

Line 6 update:

Successful closing US$1.5 billion syndicated term-loan facility

Award PS5 EPC contract to GE and GAMA Consortium

Award L6 Power Distribution System (PDS) to Siemens

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Operational Highlights & Achievements

9

Alba Highlights – Q3 & YTD 2016

Adjusted EBITDA up in Q3 thanks to saving in Titan - Phase II

Q3: US$87 million up by 21% YoY

YTD: US$241 million down by 30% YoY

Adjusted Net Income up driven by higher EBITDA levels in Q3

Q3: US$38 million up by 81% YoY


Q3 2016 Free-Cash Flow unfavourable due to Line 6 CAPEX spending

Q3: US$-46 million down by 139% YoY


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Financial Key Performance Indicators

10

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11

Cash & Net Debt

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Q1 2016 Q2 2016 Q3 2016

894

613513

362184

-72 -77 -139 -93

159

265

164

172

179

310 304 344 293

Net Debt Cash

Maintain Solid Balance Sheet & Readiness for Line 6 Financing

Alba Highlights – Q3 2016LME Prices: Slight Rebound in Q3

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03Q3 2016 RESULTS

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13

300

400

500

477

442

545

15

0

Q3 2016 vs. Q3 2015 - Metal Sales Bridge (US$M)

Product MixLMEMetal SalesQ3 2015

Pricing Power Metal Sales Q3 2016

Volume

Q3 2016 Results

Favourable Management Performance Partially Offset by Lower Premiums

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14

200

225

250

239246

11

3

21

3Q16 vs. 3Q15 Sales by Product Line Bridge (MT’000)

Premium Above LME Trend US$ Per MT

100

250

400

385

179

Sales Q3 2015

ValueAdded

Sales Q3 2016

LiquidMetal

CommodityQ3 2015 Q3 2016

Favourable Management Performance Partially Offset by Lower Premiums

Q3 2016 Results LME Prices: Slight Rebound in Q3

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15

Q3 2016 vs. Q3 2015 - Direct Cost Bridge (US$M)

Direct CostQ3 2015

RMPrice

Alumina Sales Cost

RMCons.

EnergyCons.

Inventory Change

One-OffCosts

Cost Analysis 3Q16 vs. 3Q15

200

275

350

425

408

367

414 1

46

2 95

Direct CostQ3 2016

Plant Spending


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Favourable Management Performance Adjusted EBITDA Margin at 18.7%

16

Q3 2016 vs. Q3 2015 - EBITDA Bridge (US$M)

EBITDA Q3 2015Adjusted

Metal Sales

DerivativesOther Sales Direct Cost Selling Expenses

EBITDA Q3 2016Adjusted

0

50

100

7287

36

9

2

41

114.6%

18.7%


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Cash Flow Bridge - 2Q16 vs. 3Q16

17

Q2 2016 to Q3 2016 Cash Flow Bridge (US$M)

Cash Balance

2Q16

CF from

Operations

Payment to

Shareholders

WCChanges

CAPEXSpent

Net Debt Service

Cash Balance

3Q16

Free Cash Flow (US$M)

50

250

450

344

8535

690

0

293

0

70

140

119

44

Q3 2015 Q3 2016

Operating & Investing Cash Flow excluding LINE 6 Capex

Line 6CAPEX

5


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Sound Management Performance

Financial Summary Q3 2016 Q3 2015 YTD 2016 YTD 2015

Average Cash LME (US$/MT) 1,620 1,589 1,569 1,719

Total Sales (US$M) 463 490 1,320 1,570

EBITDA (US$M) 87 72 241 343

EBITDA% 18.7% 14.6% 18.3% 21.9%

Net Income/ (Loss) (US$M) 38 23 93 201

Gain/ (Loss) Unrealised Derivatives (US$M) 0 2 0 11

Adjusted Net Income/ (Loss) (US$M) 38 21 93 190

Adjusted Net Income% 8.2% 4.3% 7.0% 12.1%


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04INDUSTRY PERSPECTIVES IN 2016

Industry Perspectives in 2016

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Physical Demand to Remain Relatively Healthy

20

Key factors to be observed:

LME volatility to continue on the back of smelters restarts and ramp-ups

LME price expected to fluctuate between $1,600/t - $1,700/t in Q4 2016

Physical premiums expected to remain at current levels

Industry Perspectives in 2016

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Raw Materials Price Trends

21

Alumina spot index expected to inch-up in Q4 2016

Green Petroleum Coke prices to remain relatively stable

Alumina Fluoride (ALF3) and Liquid Pitch prices to remain at current levels for the remained of the year

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052016 ALBA PRIORITIES

2016 Alba Priorities

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Sustain Operational Performance and Gear for Future Growth

23

Continuous Focus on Safety Initiatives & Talent Management

Deliver on Project Titan -Phase II

Increase Value-Added Sales

Line 6 on Schedule

Finalize ECA Financing by Q1 2017

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06APPENDIX

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Favourable Management Performance Partially offset with lower All-In-Prices

25

LMEMetal SalesYTD 2015

Pricing Power Metal Sales YTD 2016

Volume400

800

1200

1600

1,533

1,253

137

21162 40

YTD 2016 vs. YTD 2015 - Metal Sales Bridge (US$M)

Product Mix

YTD 2016 ResultsAll-in-Prices: Floating at Lower Range

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26

YTD16 vs. YTD15Sales by Product Line Bridge (MT’000)

Premium Above LME Trend US$ Per MT

Sales YTD 2015

ValueAdded

Sales YTD 2016

LiquidMetal

Commodity YTD 2016 YTD 2016350

550

750

699 718

56 580

50

250

450

448

192

Favourable Management Performance offset with lower All-In-Prices


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27

YTD 2016 vs. YTD 2015 - Direct Cost Bridge (US$M)

Direct CostYTD15

RMPrice

Alumina Sales Cost

RMCons.

EnergyCons.

Inventory Change

One-OffCosts

500

700

900

1100

1300

1,197 1,054

30 57

1

173

9 25

42

Direct CostYTD16

Plant Spending

Favourable Management Performance offset with lower All-In-Prices


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Favourable Management Performance Adjusted EBITDA Margin at 18.3%

28

YTD 2016 vs. YTD 2015 - EBITDA Bridge (US$M)

EBITDA YTD15Adjusted

Metal Sales

DerivativesOther Sales Direct Cost Selling Expenses

EBITDA YTD16Adjusted

0

200

400

343

241

280

30

143

10

5

22.0%

18.3%

Adjusted EBITDA includes impact of actual realised derivative payments


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Cash Flow Bridge - YTD 2016 vs. FY 2015

29

FY 2015 to YTD 2016 Cash Flow Bridge (US$M)

Cash Balance

FY15

CF from

Operations

Payment to

Shareholders

WCChanges

CAPEXSpent

Net Debt Service

Cash Balance YTD16

Free Cash Flow (US$M)

100

350

600

309 293

238

43

45

109

2136

80

180

280

261

150

YTD 15 YTD 2016

Operating & Investing Cash Flowexcluding LINE 6 Capex

LINE 6CAPEX


30

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INVESTOR RELATIONS PRESENTATION · 2016-11-13 · Q1 2016 Q2 2016 Q3 2016 213 167 150 142 127 114...

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Transcript of INVESTOR RELATIONS PRESENTATION · 2016-11-13 · Q1 2016 Q2 2016 Q3 2016 213 167 150 142 127 114...