Alro S.a. · BVB:ALR
Alro — H1 2018 Earnings Presentation
28 slides from Alro's earnings presentation, Aug 14, 2018
Slide 1: Financial Results for 1H 2018 – Alro Group
Financial Results for 1H 2018 – Alro Group 14 August 2018 NB: in this presentation, whenever we refer to Alro Group we present consolidated figures, when we refer to Alro we present stand-alone figures
Slide 2: Contents
Contents • Overview • Key Developments • Operational Highlights 1H 2018 • Market Outlook • Financial Highlights 1H 2018 • Appendices 2
Slide 3: Overview – Alro Group
Overview – Alro Group In 1H 2018, compared to 1H 2017: Production of all product categories increased YoY; For aluminium products, focus remains on value added products – deliveries of wire rod, billets and FRP increased both in 1H 2018 and in 2Q v2018; For other upstream products, while focus r
Slide 4: Contents
Contents • Overview • Key Developments • Operational Highlights 1H 2018 • Market Outlook • Financial Highlights 1H 2018 • Appendices 13/08/2018 4
Slide 5: Key developments – 1H 2018
Key developments – 1H 2018 • April 2018: in the 27 April AGM, Alro’s shareholders approved the distribution of a gross dividend of RON 0.53523 for one share and May 25, 2018 as the “Payment Date”. The payments started in 2Q 2018. • April 2018: ALRO signed an agreement with Aluminium Pechiney (Rio Ti
Slide 6: Contents
Contents • Overview • Key Developments • Operational Highlights 1H 2018 • Market Outlook • Financial Highlights 1H 2018 • Appendices 13/08/2018 6
Slide 7: Operational Highlights – Production
Operational Highlights – Production Aluminium – up 3.5% YoY in 1H 2018 Primary facilities Processing facilities • In 1H 2018, primary aluminium production registered a 3.9% YoY • In 1H 2018, the Group expanded its production of flat rolled products increase, fueled mainly by the increase in wire rod
Slide 8: Operational Highlights – Production
Operational Highlights – Production Alumina and Bauxite – flexibility to take advantage of favorable market conditions Bauxite – SMHL, Sierra Leone Alumina – Alum, Romania • In 1H 2018, SMHL’s production of commercial bauxite was • Alum increased its output by 25.5% YoY in 1H 2018 and by 18.3% highe
Slide 9: Operational Highlights – Sales
Operational Highlights – Sales Aluminium – up by 3.4% in volume and 8.2% in value In 1H 2018, Alro Group’s sales of primary products increased by 7.4% YoY in volume terms. The increase was the result of higher sales of wire rod (+16.6% YoY) and billets (+12.2% YoY) as the company could capture marke
Slide 10: Contents
Contents • Overview • Key Developments • Operational Highlights 1H 2018 • Market Outlook • Financial Highlights 1H 2018 • Appendices 13/08/2018 10
Slide 11: Market Outlook
Market Outlook Trade war concerns were the main theme in 2Q 2018 and beginning of 3Q 2018, resulting in an approx. 10% correction of the LME aluminium quotation in June and early July. Trump administration’s announced it would impose plans to impose tariffs on additional USD 200 billion in Chinese
Slide 12: Contents
Contents • Financial Highlights 1H 2018 13/08/2018 12
Slide 13: Financial Performance – Alro Group
Financial Performance – Alro Group Sales and profitability speed up in 2Q 2018 Income Statement Sales: In 1H 2018, 80% of total Group sales (83% in 1Q 2017) RON '000 YoY YoY QoQ change were made by Alro’s external sales (key influences detailed 1H 2018 1H 2017 2Q 2018 2Q 2017 change change further o
Slide 14: Financial Performance – Alro Group
Financial Performance – Alro Group Net result evolution vs. 1H 2017 Alro Group Net result H1 2018 vs. H1 2017 (RON mn) 600 Alro Group Revenue: RON 185.4 mn Alro Group COGS: -RON 177.1 mn 500 400 77.7 (0.5) (78.4) 26.2 0.3 (51.8) 300 81.8 (46.8) (23.7) (1.2) 200 16.6 (29.2) (3.6) 100 186.8 154.2 - Re
Slide 15: Alro stand alone summary
Alro stand alone summary – Sales and profitability up QoQ in 2Q 2018 Sales, LME & realized premia Profit margins evolution 2,466 2,500 9,000 25% 2,230 2,299 21% 2,127 8,000 20% 1,994 20% 18% 1,948 2,000 7,000 16% 15% 15% 6,000 13% 1,500 RON/t mn RON 1,377 5,000 10% 1,261 1,000 USD 739 USD 709 USD 75
Slide 16: Alro stand alone summary
Alro stand alone summary 2Q 2018 EBITDA increases on lower G&A EBITDA & LME + FX 500 9,000 USD 2,209 451 450 8,000 USD 2,389 400 USD 1,878 7,000 350 292 6,000 300 RON/t 255 mn RON 246 5,000 250 227 217 4,000 200 3,000 150 100 2,000 38 1,000 50 23 - - 2012 2013 2014 2015 2016 2017 1H 20171H 2018 Adju
Slide 17: SMHL and Alum stand alone summary
SMHL and Alum stand alone summary SMHL – sales continue to grow, some Alum – capturing market opportunities pressure on margins • In 1H 2018, SMHL sold bauxite in amount of RON 141.7m, 14.5% • In 1H 2018, Alum registered an increase in alumina sales volumes more than in 1H 2017, supported mainly by
Slide 18: Financial Performance – Alro Group
Financial Performance – Alro Group Statement of Financial Position (1 of 2 ) RON '000 30-Jun-18 31-Dec-17 YoY change Property, plant and equipment: In 1H 2018, Alro Group spent RON 177.3m on PP&E, 94.5% more than in 1H 2017. Assets Of this total amount, 74% was spent by Alro (versus 77% in Non-curre
Slide 19: Financial Performance – Alro Group
Financial Performance – Alro Group Statement of Financial Position (2 of 2) RON '000 30-Jun-18 31-Dec-17 YoY change Bank loans Group’s bank loans increased at the end of June by 5.1%, Shareholders' Equity mainly because in May 2018 Alum signed two credit Share capital 356,091 356,091 0% facilities,
Slide 20: Financial Performance – Alro Group
Financial Performance – Alro Group Strong operating cash generation in 2Q 2018 RON '000 1H 2018 1H 2017 2Q 2018 2Q 2017 In 1H 2018, Alro Group’s cash generated from operations increased by 4.2% versus 1H 2017. In 2Q 2018, cash from Cash flow from operating activities operations increased by 41.9% Yo
Slide 21: Alro Group – Debt and treasury
Alro Group – Debt and treasury Net Debt to EBITDA remains low at 1.3x Alro Group's debt evolution Debt structure (as of June 1,100,000 2018) 900,000 700,000 18.5% RON '000 500,000 USD EUR 300,000 RON 16.5% 100,000 65.0% (100,000) Dec-15 Dec-16 Dec-17 Mar-18 Jun-18 Total Loans Cash and cash equivalen
Slide 22: Alro Group – Capex and key metrics
Alro Group – Capex and key metrics CAPEX accelerates in 2Q, indebtedness remains low, profitability high Capex dynamics 60.0 RON '000 1H 2018 2017 Change Peers 50.0 median* Net Debt 725,813 561,721 29.2% 40.0 EBITDA (ttm) 550,115 566,456 -2.9% Net Debt / EBITDA 1.3 1.0 1.8 USD mn 30.0 Interest cover
Slide 23: Contents
Contents • Overview • Key Developments • Operational Highlights 1H 2018 • Market Outlook • Financial Highlights 1H 2018 • Appendices 13/08/2018 23
Slide 24: Alro Group entities
Alro Group entities Company Parent Shareholding Bauxite mining (%) Alro S.A. Vimetco NV 84.19 Alum S.A. Alro S.A. 99.40 Conef S.A. Alro S.A. 99.97 Vimetco Extrusion SRL Alro S.A. 100.00 Global Aluminium Ltd. Alum S.A. 100.00 Alumina refining Bauxite Marketing Ltd. Global Aluminium Ltd. 100.00 Sierra
Slide 25: Simplified Group Structure
Simplified Group Structure Alro S.A. Primary aluminium producer Processed aluminium producer 100% 99.9% 99.4% Vimetco Extrusion S.R.L. Conef S.A. Alum S.A. Extrusion business line Alro share portfolio management Alumina refinery 100 % Global Aluminium Ltd. Holding Entity 100 % 100 % Bauxite Marketin
Slide 26: Supporting information – Adjusted Net Result calculation
Supporting information – Adjusted Net Result calculation (Alro Group) Alro Group – Adjusted Net Result RON '000 1H 2018 1H 2017 2Q 2018 2Q 2017 Net result 154,151 186,848 29,530 96,629 Impairment of non-current assets (528) - (522) - Derivative financial instruments that (16,692) (87) 37,360 - do no
Slide 27: Supporting information – Adjusted EBITDA calculation
Supporting information – Adjusted EBITDA calculation (Alro Stand-Alone) Alro Stand-alone – Adjusted EBITDA RON '000 2012 2013 2014 2015 2016 2017 1H 2017 1H 2018 EBITDA 292,164 (6,743) 114,700 223,501 246,627 455,611 227,473 217,100 EBITDA Margin (%) 13.1% -0.3% 5.8% 9.7% 11.6% 18.5% 18.0% 15.8% EBI
Slide 28: Cautionary statement
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