Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q1 2023 Earnings Presentation
26 slides from Century Aluminum's earnings presentation, May 8, 2023
Slide 1: Century Aluminum Company 1st Quarter Earnings Call
Century Aluminum Company 1st Quarter Earnings Call May 8, 2023
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 • Global market conditions supportive of higher LME prices Industry • China supply cuts due to Yunnan region water shortages; additional cuts in EU announced Fundamentals • Global inventories remain at historical lows < 50 days consumption • Energy and carbon costs continue
Slide 5: Industry Environment: Primary Aluminum Balance
Industry Environment Aluminum Supply and Demand Balance – FY23 Primary Aluminum Balance – US and EU 80 - Primary Aluminum Balance (MT in MM's) 69.1 69.2 70 (1.0) 60 (2.0) 50 Primary Aluminum 40.6 (2.2) (MT in MM's) 40.3 40 (3.0) (2.6) (3.0) (2.9) 28.8 28.5 (3.1) (3.2) (3.1) 30 (3.5) (4.0) 20 (4.1) (
Slide 6: Industry Environment - Prices
Industry Environment - Prices LME Aluminum Alumina Price Index 3,400 500 3,200 3,000 450 2,800 400 LME $/MT 2,600 API $/MT 350 2,400 2,200 300 2,000 250 1,800 200 1,600 1,400 150 Regional Premiums Power Actuals and Forwards 900 300 800 Regional Premiums $/MT 250 700 Power Rates $/MWh 600 200 500 150
Slide 7: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q422 Q123 Income statement Shipments (tonnes) 169,471 181,165 Net sales $ 530 $ 552 Net income/(loss) (114) (39) Earnings/(loss) per share (1.24) (0.42) Adjusted net income/(loss)1 (31) (11) 1 Adjusted earnings/(loss) per share (
Slide 8: Financial Results: Q422 vs. Q123 Adjusted EBITDA
Financial Results Q422 vs. Q123 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 7
Slide 9: Financial Results: Q422 vs. Q123 Cash Flow
Financial Results Q422 vs. Q123 Cash Flow ($MM) 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Q2 Outlook
Q2 Outlook Adjusted EBITDA1 $MM CENX Price Lag Spot2 Q1 Actual Adjusted EBITDA $24 Lagged LME / Delivery Premiums / Alumina ~$5 LME realized $2,380/MT Primarily ~3 month lag ~ $2,353/MT US Midwest Premium realized $560/MT ~1 month lag ~ $555/MT European Duty Paid Premium realized $300/MT ~3 month la
Slide 11: Jamalco acquisition secures low-cost alumina and bauxite
Jamalco acquisition secures low-cost alumina and bauxite • 55% interest in Jamalco, a bauxite mining and alumina production JV Transaction • Nameplate alumina production capacity of 1.4 million tpy1 • Transaction closed on May 2, 2023 • Secures a predictable, long-term supply of alumina and bauxite
Slide 12: Century Well Positioned for 2023 and Beyond
Century Well Positioned for 2023 and Beyond • Duty free access for U.S. and EU • Reliable supply to customers in short markets • Balanced operational footprint Aluminum Smelter Corporate Norðurál Headquarters Grundartangi Chicago, IL Iceland Carbon Anode United States Plant Vlissingen Netherlands 4.
Slide 13: Appendix
Appendix
Slide 14: 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 15: Adjusted Net Income (Loss) Non-GAAP Reconciliation
Adjusted Net Income (Loss) Non-GAAP Reconciliation Q422 Q123 $MM EPS $MM EPS Net income (loss) as reported $ (113.5) $ (1.24) $ (38.6) $ (0.42) Lower of cost or NRV inventory adjustment, net of tax (8.3) (0.09) (25.6) (0.28) Unrealized (gain) loss on derivative contracts, net of tax 82.9 0.90 47.8 0
Slide 16: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q422 Q123 Net income (loss) as reported $ (113.5) $ (38.6) Interest expense 8.4 8.7 Interest income (0.3) (0.3) Net (gain) loss on forward and derivative contracts 90.6 57.6 Other income - net 1.4 0.3 Income tax expense (17.2) (0.2) Equity in JV’s 0.1 - -
Slide 17: 2023 Financial Assumptions
2023 Financial Assumptions Income Statement ($MM)1 YTD FY23 Cash Flow ($MM)1 YTD FY23 Shipments (kMT) 181 700 Sustaining Capex $4 $15-20 Iceland Casthouse2 $10 $60-75 D&A $18 $60-70 Investment Capex - $5-10 SGA $13 $40-45 SGA $11 $35-40 Interest Expense $9 $40-45 Interest $4 $40-45 Varies based Vari
Slide 18: 2023 Financial Information
2023 Financial Information1 Sensitivities ($MM) Variance Annual EBITDA7 Annual Cash8 Pricing Convention LME +/- $100/MT $ 42 $ 35 U.S.: 50% ~1-month lag / 50% ~3-month lag LME Iceland: primarily ~3-month lag MWP2 +/- $22.04/MT 9 9 MWP ~1-month lag EDPP3 +/- $22.04/MT 7 7 EDPP Primarily ~3-month lag
Slide 19: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit1 Commodity (unit) 2H23 FY24 Volume % Hedged Price Volume % Hedged Price LME (MT) 23,000 6% $ 2,305 35,000 5% $ 2,325 MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) 88,000 5% $ 33 - - - Nord Pool (MWh) 500,000 95% € 30 n/a
Slide 20: 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 21: Value-Added Products
Value-Added Products Value-added products capacity (kMT) FY23 FY24 Sebree – Billet/Slab 175 175 Mt. Holly – Billet/Slab 110 120 Grundartangi – Natur-Al TM Foundry Alloy 60 120 Grundartangi – Natur-Al TM and other low carbon metal 105 Grundartangi – Natur-Al TM Billet 150 Total 450 565 20
Slide 22: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update • $250-$300MM liquidity Q123 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $241 $250-300 • $300MM net debt target Projects Net Debt1 $433 $300 Sustaining Capital • $30-35MM in historical • Organic
Slide 23: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM billet and increase total primary foundry alloy production to 120,000 tonnes • Construction well underway; first • $120MM investment • The European market for billet is short casthouse shipments expected Q124 app
Slide 24: Natur-Al Products
“Natur‐Al™ products are made with energy from 100% renewable sources” 23
Slide 25: Bauxite Mining and Alumina Refinery
Bauxite Mining and Alumina Refinery with Capacity to Produce 1.4 Million Tonnes1 of Alumina Clarendon, Jamaica Overview Current Status • In August 2021, Jamalco was curtailed following a fire in its • Originally constructed in 1972 with major powerhouse Background expansions in 1999, 2003, and 2007
Slide 26: 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 25
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