Kaiser Aluminum Corporation · NASDAQ:KALU
Kaiser Aluminum — Q3 2024 Earnings Presentation
27 slides from Kaiser Aluminum's earnings presentation, Oct 24, 2024
Slide 1: Third Quarter 2024 Earnings Conference Call
THIRD QUARTER 2024 EARNINGS CONFERENCE CALL October 24, 2024
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The information contained in this presentation includes statements based on management’s current expectations, estimates and projections that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
Slide 3: Non-Run-Rate Items
NON-RUN-RATE ITEMS Non-run-rate items to us are items that, while they may recur from period to period, (1) are particularly material to results, (2) impact costs as a result of external market factors and (3) may not recur in future periods if the same level of underlying performance were to occur.
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This information contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculate
Slide 5: Commonly Used or Defined Terms and Measures
COMMONLY USED OR DEFINED TERMS AND MEASURES Term/Measure Description Adjusted EPS Reported net income per diluted share excluding non-run-rate items. Adjusted Net Income Reported net income excluding non-run-rate items. Annualized Quarterly Average Calculated as the four-quarter average for prior ye
Slide 6: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 7: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS ▪ CONTINUED SOLID EXECUTION AGAINST GROWTH STRATEGY ▪ Performance meeting expectations despite broader supply chain and macroeconomic challenges ▪ Q3 2024 EBITDA of $50.4 million and EBITDA margin of 13.9% ▪ Includes GAAP LIFO charge of $4.4 million ▪ Results driven by higher conv
Slide 8: Q3 2024 Financial Recap
Q3 2024 FINANCIAL RECAP NEAL E. WEST EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 9: End Market Summary
END MARKET SUMMARY SHIPMENTS SHIPMENTS DOWN MODESTLY ON IMPROVED CONVERSION REVENUE 3 299 5 4 0 1 292 ▪ Aerospace / High-Strength pressured by broader supply chain challenges in the market (7%) (2%) +5% (2%) (52%) 3Q23 Aero/High Packaging General Automotive Other 3Q24 ▪ Packaging shipments strengthe
Slide 10: Consolidated Financial Highlights
CONSOLIDATED FINANCIAL HIGHLIGHTS Quarterly Full Year (in $millions except Shipments & EPS) 3Q23 4Q23 1Q24 2Q24 3Q24 2023 LTM Shipments (in millions of lbs.) 299 284 291 297 292 1,196 1,164 Net Sales $744 $722 $738 $773 $748 $3,087 $2,980 Conversion Revenue $357 $361 $367 $369 $362 $1,466 $1,459 As
Slide 11: EBITDA & EBITDA Margin Summary
EBITDA & EBITDA MARGIN SUMMARY EBITDA AND EBITDA MARGIN FY 2024 EBITDA MARGIN IMPROVEMENT $millions EBITDA margin REMAINS ON-TRACK ▪ Increase in Conversion Revenue driven by strength in Packaging, GE and Automotive end markets $62 $52 $54 ▪ EBITDA and EBITDA margin improvement driven by $50 $48 high
Slide 12: 2024 Outlook Update
2024 OUTLOOK UPDATE KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 13: 2024 Outlook – Aerospace / High-Strength
2024 OUTLOOK ‒ AEROSPACE / HIGH-STRENGTH AEROSPACE / HIGH-STRENGTH CONVERSION REVENUE AEROSPACE / HIGH-STRENGTH OUTLOOK UNCHANGED $millions Shipments in millions lbs. $544 ▪ Outlook for commercial aircraft OEM production $511 $533 remains healthy; passenger traffic remains strong $369 $356 ▪ Diversi
Slide 14: 2024 Outlook – Packaging
2024 OUTLOOK – PACKAGING PACKAGING CONVERSION REVENUE PACKAGING OUTLOOK UNCHANGED ▪ Shipment levels rose for the fourth consecutive quarter; $millions Shipments in millions lbs. momentum continues into 4Q $555 ▪ Shipments reflect improved market conditions; demand $503 $484 remains strong $389 FOURT
Slide 15: 2024 Outlook – General Engineering
2024 OUTLOOK – GENERAL ENGINEERING GENERAL ENGINEERING CONVERSION REVENUE GENERAL ENGINEERING OUTLOOK UNCHANGED $millions Shipments in millions lbs. $367 ▪ Expect normal seasonal trends in fourth quarter $297 $305 $308 ▪ Caution on price given import pressures reflected in $232 $239 298 304 Conversi
Slide 16: 2024 Outlook – Automotive Extrusions
2024 OUTLOOK ‒ AUTOMOTIVE EXTRUSIONS AUTOMOTIVE EXTRUSION CONVERSION REVENUE AUTOMOTIVE OUTLOOK UNCHANGED $millions Shipments in millions lbs. ▪ OEM build rates adjusted lower ▪ Kaiser’s SUV, light and heavy truck mix outperforming $116 $120 broader market trends $93 $97 $96 $83 ▪ Favorable impact o
Slide 17: 2024 Summary Outlook
2024 SUMMARY OUTLOOK ▪ REMAIN ON-TRACK TO MEET 2024 OUTLOOK ▪ Conversion Revenue expected to remain flat to up 1% versus 2023 ▪ EBITDA margin to improve between 50 – 100 bps over 2023 ▪ Does not include the full year impact from GAAP LIFO charges ▪ Outlook does not reflect additional delays in shipm
Slide 18: Appendix
APPENDIX
Slide 19: Sales Analysis by Application – Quarterly
SALES ANALYSIS BY APPLICATION – QUARTERLY 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Shipments (lbs, mm) Aero & High Strength 42.1 42.6 45.5 48.3 38.0 54.7 58.2 63.9 64.2 68.0 62.9 62.2 59.5 Packaging 173.6 182.2 174.7 179.8 147.5 153.3 153.7 163.3 154.4 141.0 142.4 145.9 150.9
Slide 20: Sales Analysis by Application – Annual
SALES ANALYSIS BY APPLICATION – ANNUAL 2019 2020 2021 2022 2023 LTM Shipments (lbs, mm) Aero & High Strength 273.6 173.3 161.6 186.5 254.3 252.5 Packaging - - 541.7 655.3 612.4 580.3 General Engineering 236.3 235.6 298.2 303.9 215.6 222.6 Automotive Extrusions 94.3 84.1 94.0 96.5 104.5 103.3 Other A
Slide 21: Reconciliation of Net Sales to Conversion Revenue – Quarterly
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – QUARTERLY 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Net Sales ($mm) Aero & High Strength $ 142.0 $ 146.1 $ 176.6 $ 175.4 $ 140.8 $ 183.3 $ 214.0 $ 225.1 $ 223.3 $ 236.9 $ 220.5 $ 226.1 $ 213.1 Packaging 367.3 393.2 448.0 450.
Slide 22: Reconciliation of Net Sales to Conversion Revenue – Annual
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – ANNUAL 2019 2020 2021 2022 2023 LTM Net Sales ($mm) Aero & High Strength $ 803.2 $ 537.9 $ 533.7 $ 676.1 $ 899.3 $ 896.6 Packaging - - 1,119.3 1,585.3 1,315.2 1,224.1 General Engineering 480.1 458.8 706.1 883.8 596.5 597.6 Automotive Extrusions 190
Slide 23: Adjusted Net Income and EPS – Quarterly
ADJUSTED NET INCOME AND EPS – QUARTERLY (in $ millions except EPS) 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Reported Net Income (Loss) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 $ 18.3 $ 5.4 $ 7.6 $ 24.6 $ 3.1 $ 12.0 Operating NRR Items 6.0 5.2 (0.4) 6.1 (0.1) 25.4 1.
Slide 24: Adjusted Net Income and EPS – Annual
ADJUSTED NET INCOME AND EPS – ANNUAL (in $ millions except EPS) 2019 2020 2021 2022 2023 LTM Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 $ 47.4 Operating NRR Items 34.5 18.1 28.9 31.0 5.3 15.1 Non-Operating NRR Items 26.9 4.7 38.1 (4.6) (9.0) (17.7) Tax impact of above NRR item
Slide 25: Reconciliation of Net Income to Adjusted EBITDA – Quarterly
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA – QUARTERLY (in $ millions) 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Consolidated - Reported Net Income (Loss) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 $ 18.3 $ 5.4 $ 7.6 $ 24.6 $ 3.1 $ 12.0 Interest Expense 1
Slide 26: Reconciliation of Net Income to Adjusted EBITDA – Annual
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA – ANNUAL (in $ millions) 2019 2020 2021 2022 2023 LTM Consolidated - Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 $ 47.4 Interest Expense 24.6 40.9 49.5 48.3 46.9 44.8 Other Expense (Income) 20.7 1.4 38.9 (6.4) (7.4) (17.6
Slide 27: www.KaiserAluminum.com
www.KaiserAluminum.com www.KaiserAluminum.com