Slide 1: 2022 Half Year Results Presentation
2022 Half Year Results Presentation 18 August 2022 Capral Limited (ASX:CAA) 15 Huntingwood Drive Huntingwood NSW 2148 Approved and authorised by Capral’s Board of Directors
Slide 2: Our Business at a Glance
OUR BUSINESS AT A GLANCE AUSTRALIA’S LEADING SUPPLIER OF ALUMINIUM EXTRUSION AND ROLLED PRODUCTS #1 EXTRUSION MANUFACTURER 6 PLANTS KEY MARKETS: ANNUAL RESIDENTIAL #1 SUPPLIER OF 8 EXTRUSION PRESSES COMMERCIAL TURNOVER CONSTRUCTION ~$680 INDUSTRIAL ALUMINIUM EXTRUSION 65,000 TONNES OF INDUSTRIAL MIL
Slide 3: Agenda
AGENDA 1. 1H22 Highlights 2. 1H22 Financials 3. Strategy 4. Outlook & Guidance
Slide 4: First Half Highlights
FIRST HALF HIGHLIGHTS Tony Dragicevich, CEO & Managing Director “Volume remained strong in key market segments, however demand has softened”
Slide 5: 1H22 Performance Highlights
1H22 PERFORMANCE HIGHLIGHTS RECORD FIRST HALF RESULT Sales Revenue 34% Underlying EBITDA1&2 28% Volume on par with 1H21 at (excluding rent) 36,200 $349m $31.6m (1H21: $261m) tonnes (1H21: $24.6m) driven by record high LME driven by improved sales mix & margin 41% Underlying EPS² 31% Underlying EBIT2
Slide 6: Sales Volume on Par with Prior Period
SALES VOLUME ON PAR WITH PRIOR PERIOD Channels to Market (volume) Diverse Industry Exposure First half volume on par with 1H21 Volume supported by: 15% 11% • Buoyant housing market • Infrastructure investment and commercial projects 44% Some Resellers and Solar Rail Distributors resumed 27% 58% impo
Slide 7: Residential Market Slowing but Pipeline Strong
RESIDENTIAL MARKET SLOWING BUT PIPELINE STRONG 2022 Annual Dwelling Commencements¹ (000’s) 250 Latest estimate¹ 210,200 starts in 2022, down 8% on 2021 200 • Residential starts impacted by; - - Higher interest rates 150 - - Removal of government incentives • Detached dwellings down by 14% • Multi-re
Slide 8: Recent Capral Residential & Commercial Projects
RECENT CAPRAL RESIDENTIAL & COMMERCIAL PROJECTS UTAS – Student Accommodation, TAS Henley Beach Residence, SA Fabricator: Hobart Glass Fabricator: KR Installations Products: Capral Commercial Window Systems Products: Schuco Windows and Doors TRN House, NSW Karringal Green Aged Care, WA Fabricator: Wi
Slide 9: Industrial Sector Remains Strong
INDUSTRIAL SECTOR REMAINS STRONG Total Capral Industrial Volumes (Index 2012) 160 Transport sector remains strong 140 • New truck builds posted record first half year 120 • Government stimulus assisted sector recovery 100 (instant asset write-off) • Strong grain season and sector optimism 80 support
Slide 10: Recent Capral Industrial Projects
RECENT CAPRAL INDUSTRIAL PROJECTS Holmwood Higate Tanker, QLD Willinga Park Equestrian Centre, NSW South Coast Capral Aluminium Seating System Great Barrier Reef Pontoon – English Engineering, North QLD MONA Museum Catamaran – Richardson Devine Marine, TAS 10
Slide 11: First Half Financials
FIRST HALF FINANCIALS Tertius Campbell, CFO “Record first half earnings driven by robust margins and ongoing cost control”
Slide 12: Record First Half Earnings
RECORD FIRST HALF EARNINGS 1H22 1H21 First half volume marginally higher than prior period Sales Volume ('000 tonnes) 36.2 35.9 Sales Revenue increased 34% on 1H21, driven predominantly by higher metal prices (LME) $m $m Underlying EBITDA up by 28% on 1H21, primarily due to improved sales mi
Slide 13: Sound Financial Position That Provides Capacity for Dividends and Growth Investment
SOUND FINANCIAL POSITION THAT PROVIDES CAPACITY FOR DIVIDENDS AND GROWTH INVESTMENT BALANCE SHEET JUN 22 DEC 21 Current Assets $m $m Inventory (raw material and finished goods) increased due to; rebuild from low levels at start of year, record high metal prices (LME), and higher goods in transit I
Slide 14: Strong Cash Earnings Offset by Higher Working Capital Requirements
STRONG CASH EARNINGS OFFSET BY HIGHER WORKING CAPITAL REQUIREMENTS DUE TO RECORD HIGH METAL COSTS (LME) CASH FLOW 1H22 1H21 Continued strong focus on cash management. Cash conversion ratio $m $m lower due to increase in working capital but will improve as working EBITDA1 31.9 26.2 capital levels nor
Slide 15: Strategy and Outlook
STRATEGY AND OUTLOOK Tony Dragicevich, CEO & Managing Director “Drive return on recent investments and keep improving our long-term competitive position“ BUILD OPTIMISE GROW on our what we for the strengths do future
Slide 16: Improve Productivity and Competitiveness, Retain Market Share Gains
IMPROVE PRODUCTIVITY AND COMPETIVENESS, RETAIN MARKET SHARE GAINS Manufacturing Distribution Sales • Continue process improvement • Release Capral’s new window & door product range and systems software • On-going technology investment to programmes at all extrusion plants improve sales effectiveness
Slide 17: On a Path to a Better Tomorrow
ON A PATH TO A BETTER TOMORROW OUR ROADMAP • Active sustainability committee. Identify and implement strategies and processes to minimise the use of energy and develop sources of renewable energy • Net Zero by 2050 (Scope 1 and 2 emissions) Reduce how much waste is going to landfill by reuse, • Driv
Slide 18: Aluminium Price at Record Highs
ALUMINIUM PRICE AT RECORD HIGHS Aluminium Price (LME & Premiums) Metal Cost ($A/kg) MJP regional premium increased 78% during FY21 5.00 Significant increase in Billet premium in 2022 4.00 Average LME increased 30% during FY21 to $A3,195t (Dec20 $A2,660t, Dec21 $A3,770t) 3.00 due to high glob
Slide 19: Outlook and Earnings Guidance
OUTLOOK AND EARNINGS GUIDANCE ▪ Capral’s operations continue to be impacted by COVID and Flu related absenteeism ▪ Residential building is forecast2 to soften during 2nd half of 2022 ▪ Other key markets, Commercial and Industrial, are expected to remain at relatively high levels ▪ Reseller volumes f
Slide 20: Questions
QUESTIONS ALUMINIUM
Slide 21: Strategic National Footprint
STRATEGIC NATIONAL FOOTPRINT CAPRAL CAPRALHAS HASA NATIONAL FOOTPRINT A NATIONAL WITH FOOTPRINT A PRESENCE WITH IN EVERY A PRESENCE STATESTATE IN EVERY AND AND EXTRUSION PLANTS NEAR FIVE MAINLAND CAPITAL CITIES EXTRUSION PLANTS NEAR FIVE MAINLAND CAPITAL CITIES RDC – Regional Distribution Centre AC