Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q3 2022 Earnings Presentation
25 slides from Century Aluminum's earnings presentation, Nov 7, 2022
Slide 1: Century Aluminum Company 3rd Quarter Earnings Call
Century Aluminum Company 3rd Quarter Earnings Call November 7, 2022
Slide 2: Cautionary Statement
Cautionary Statement This presentation and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21
Slide 3: Speakers
Speakers • Jesse Gary – President and Chief Executive Officer • Jerry Bialek – Executive Vice President and Chief Financial Officer • Shelly Harrison – Senior Vice President, Finance and Treasurer • Peter Trpkovski – Vice President, Finance and Investor Relations 2
Slide 4: Company and Market Update
Company and Market Update ◼ Long-term fundamentals intact; growth in EV’s, renewable energy, and sustainable packaging will continue to drive incremental aluminum demand Industry Fundamentals ◼ Global markets expected to remain in slight deficit ◼ Global inventory days of consumption continues to de
Slide 5: Industry Environment
Industry Environment Aluminum Supply and Demand Balance – FY22 Primary Aluminum Balance – US and EU - 80 Primary Aluminum Balance (MT in MM's) 68.9 69.1 70 (1.0) Primary Aluminum (MT in MM's) 60 (2.0) 50 40.0 40.2 (2.3) 40 (3.0) (2.6) (2.8) (2.9) (3.0) 28.9 28.9 (3.1) 30 (4.0) (3.5) (3.6) 20 (4.1) (
Slide 6: Industry Environment - Prices
Industry Environment - Prices LME Aluminum Alumina Price Index 3,400 500 3,200 450 3,000 2,800 400 LME $/MT API $/MT 2,600 350 2,400 300 2,200 2,000 250 1,800 200 1,600 1,400 150 Regional Premiums Power Actuals and Forwards 900 700 800 Regional Premiums $/MT 600 Power Rates $/MWh 700 500 600 500 400
Slide 7: Removed Nord Pool Market Risk From Iceland Power Contracts
Removed Nord Pool Market Risk From Iceland Power Contracts Actions Taken Icelandic Power Pricing 1 Converted portion of Grundartangi power contract from Nord LME linked Nord Pool Fixed Pool to fixed price ~70% ~20% ~10% 2 Financially hedged remaining Q422 Nord Pool exposure All but 5 MW of remaining
Slide 8: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q222 Q322 Income statement Shipments (tonnes) 214,084 173,725 Net sales $ 857 $ 637 Net income/(loss) 37 44 Earnings/(loss) per share 0.36 0.43 Adjusted net income/(loss)1 30 (34) Adjusted earnings/(loss) per share1 0.30 (0.34) A
Slide 9: Financial Results: Q222 vs. Q322 Adjusted EBITDA
Financial Results Q222 vs. Q322 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Financial Results: Q222 vs. Q322 Cash Flow
Financial Results Q222 vs. Q322 Cash Flow ($MM) 1 1) See reconciliation to comparable GAAP financial measure in appendix 9
Slide 11: Q4 Outlook
Q4 Outlook Adjusted EBITDA $MM CENX Price Lag Spot2 Q3 Adjusted EBITDA $(36) Lagged LME / Delivery Premiums / Alumina ~$(60) LME realized $2,275/MT Primarily ~3 month lag ~ $2,300/MT US Midwest Premium realized $475/MT ~1 month lag ~ $435/MT European Duty Paid Premium realized $485/MT ~3 month lag ~
Slide 12: Appendix
Appendix
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA and net debt are non- GAAP financial measures that management uses to evaluate Century's financial performance. These non-GAAP financial measures facilitate comparisons of this period’s result
Slide 14: Adjusted Net Income (Loss) Non-GAAP Reconciliation
Adjusted Net Income (Loss) Non-GAAP Reconciliation Q222 Q322 $MM EPS $MM EPS Net income (loss) as reported1 $ 35.5 $ 0.36 $ 41.9 $ 0.43 Lower of cost or NRV inventory adjustment, net of tax 52.8 0.54 (6.3) (0.06) Unrealized (gain) loss on derivative contracts, net of tax (221.8) (2.27) (69.5) (0.72)
Slide 15: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q222 Q322 Net income (loss) as reported $ 37.4 $ 44.3 Interest expense 5.7 7.9 Interest income - (0.1) Net (gain) loss on forward and derivative contracts (231.8) (112.6) Other income - net (3.1) (11.6) Income tax expense 42.3 20.6 Operating income (loss)
Slide 16: 2022 Financial Outlook
2022 Financial Outlook Income Statement YTD FY22 Outlook Cash Flow YTD FY22 Outlook Shipments 600,000 780,000 Sustaining Capex $18MM ~$20MM D&A $60MM $70-80MM MH Restart $15MM $15MM SGA $26MM $35-40MM Iceland Casthouse1 $33MM ~$50MM Interest Expense $21MM ~$30MM Investment Capex $4MM $5-10MM Varies
Slide 17: 2022 Financial Information
2022 Financial Information Sensitivities ($MM) Variance Annual EBITDA6 Annual Cash7 Pricing Convention LME +/- $100/MT $ 44 $ 39 U.S.: 50% ~1-month lag / 50% ~3-month lag LME Iceland: primarily ~3-month lag MWP1 +/- $22.04/MT 8 4 MWP ~1-month lag EDPP2 +/- $22.04/MT 7 7 EDPP Primarily ~3-month lag A
Slide 18: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit Commodity (unit) FY23 FY24 Volume % Hedged Price Volume % Hedged Price LME (MT) 65,000 9% $ 2,250 35,000 5% $ 2,325 MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) 175,000 5% $ 33 - - - Nord Pool (MWh) 990,000 95% € 30 n/a
Slide 19: Century well positioned for 2022 and beyond
Century well positioned for 2022 and beyond Aluminum Smelter Aluminum smelter Carbon Anode Plant Corporate Headquarters Grundartangi, Iceland ◼ FY22 production: 310k MT Corporate Headquarters Chicago, IL Aluminum Smelter Carbon Anode Plant Hawesville, KY Vlissingen, Netherlands ◼ FY22 production: 10
Slide 20: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update ◼ $250-$300MM liquidity Q322 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $215 $250-300 ◼ $300MM net debt target Projects Net Debt1 $393 $300 Sustaining Capital ◼ $30-35MM in historical ◼ Organic
Slide 21: Capacity and Production Information
Capacity and Production Information Aluminum facilities (kMT) Plant Country Capacity % Operating Sebree U.S. 220 100 Hawesville U.S. 250 0 Mt. Holly U.S. 230 75 Grundartangi Iceland 320 100 Total 1,020 70 Carbon anode facility (kMT) Plant Country Capacity % Operating Vlissingen Netherlands 150 100 T
Slide 22: Value-Added Products
Value-Added Products Value added products (MT) FY22 Outlook Sebree – Billet 155,000 Mt. Holly – Billet 110,000 Grundartangi – Primary Foundry Alloy 60,000 Grundartangi – Natur-AlTM and other low carbon metal 105,000 Total 430,000 21
Slide 23: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM and 60,000 tonnes of incremental primary foundry alloy to short EU market • Commenced building new billet • $120MM investment • The European market for billet is short casthouse at Grundartangi, Iceland approxima
Slide 24: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al™ products are made with energy from 100% renewable sources” 23
Slide 25: For Additional Information
For Additional Information Peter Trpkovski investorrelations@centuryaluminum.com 312-696-3132 (Office) Century Aluminum Company One South Wacker Dr, Suite 1000 Chicago, IL 60606 312-696-3102 (Fax) www.centuryaluminum.com 24
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