Rusal · RUS:RUAL
Rusal — United Company RUSAL — FY2020 Earnings Presentation
32 slides from Rusal's earnings presentation, Mar 17, 2021
Slide 1: FY2020 Financial Results Presentation
1 FY2020 FINANCIAL RESULTS PRESENTATION 17 March, 2021
Slide 2: Disclaimer
DISCLAIMER These materials and the subsequent discussion are not an offer for sale of any securities of United Company RUSAL Plc (the “Company”). The distribution of these materials in certain jurisdictions may be restricted by law and therefore persons into whose possession these materials come sho
Slide 3: Agenda
AGENDA Overview Operating and financial results review Capital management: capex and debt Market overview Appendix 3
Slide 4: Overview: RUSAL's progress over the period
OVERVIEW: RUSAL’S PROGRESS OVER THE PERIOD 2H20 2H19 Change FY20 FY19 Change Average Aluminium Price $1,812/t $1,757/t 3.1% $1,702/t $1,792/t (5.0%) Macro Average Nickel Price $15,118/t $15,489/t (2.4%) $13,804/t $13,917/t (0.8%) parameters 74.89 64.14 72.15 64.74 Average USD / RUB FX Rate 16.8% 11.
Slide 5: Low-carbon strategy achievements
LOW-CARBON STRATEGY ACHIEVEMENTS RUSAL REMAINS COMMITTED TO THE CONTINUOUS IMPROVEMENT OF ENVIRONMENTAL FOOTPRINT One of Rusal’s strategic goals is to reduce direct specific greenhouse Greenhouse Gas emissions (Scope 1¹) reduction of 10.5% gas emissions at smelters (Scope 1*) by 15% by 2025 compar
Slide 6: Health and safety
HEALTH AND SAFETY LTIFR DYNAMICS 2020 HIGHLIGHTS In order to confidently increase the safety culture in the 1.90 Company and to develop leadership in the field of industrial 1.70 safety, an external safety culture audit was conducted at 4 enterprises: JSC "RUSAL Krasnoyarsk", PJSC "RUSAL Bratsk",
Slide 7: Agenda
AGENDA Overview Operating and financial results review Capital management: capex and debt Market overview Appendix 7
Slide 8: Aluminium price and sales structure in 2020
ALUMINIUM PRICE AND SALES STRUCTURE IN 2020 In 12M20, aluminium sales amounted to 3,926 thousand tonnes VAP SHARE IN SALES (-6.0% YoY) primarily due to high base of 2019 when we were selling % of sales extra stocks, accumulated during OFAC Sanctions; In 12M20 on the back of diversified client ba
Slide 9: Financials overview: revenue structure
FINANCIALS OVERVIEW: REVENUE STRUCTURE REVENUE STRUCTURE REVENUE DYNAMICS 6% 7% Aluminium average realized price ($/t) 4% 4% 2 259 6% 6% 2 105 1 920 1 732 1 805 2H20 Revenue FY20 Revenue $4,551 mn $8,566 mn Aluminium sales volume (kt) 84% 83% 4 176 3 955 3 926 3 818 3 671 Aluminium Alumina Foil and
Slide 10: Financials overview: key segments cash cost
FINANCIALS OVERVIEW: KEY SEGMENTS CASH COST In 2020 Rusal’s cash cost per 1 tonne of aluminium produced amounted to $1,512/t (-7.1% YoY). The decrease of cash cost of aluminium was led by simultaneous YoY decline of all major items, on the back of effective cost management and shift in USD/RUB FX
Slide 11: Energy cost dynamics
ENERGY COST DYNAMICS ELECTRICITY PURCHASE PRICE ANALYSIS C ent/ C ent/ kWh kWh -9.3% YoY -6.5% YoY 0.11 0.14 0.31 0.08 0.07 3.03 2.74 2.75 0.39 2.56 2H19 Exchange Capacity "Day-ahead" 2H20 FY19 Exchange Capacity "Day-ahead" FY20 rate costs¹ market rate costs¹ market tariff tariff USD/ USD/ USD/ USD/
Slide 12: Financial overview: EBITDA
FINANCIAL OVERVIEW: EBITDA FY2020 EBITDA totaled $871 mn (-9.8% YoY), due to decline in the LME aluminium price. This was mostly offset by an improvement in production costs as a result of effective cost management, supported by depreciation of RUB against USD; In 2H20 EBITDA increased by 48.9%
Slide 13: Agenda
AGENDA Overview Operating and financial results review Capital management: capex and debt Market overview Appendix 13
Slide 14: Capital expenditures
CAPITAL EXPENDITURES CAPEX SEMI-ANNUAL DYNAMICS CAPEX 2020 CAPEX GUIDANCE 2021 $ mn 897 842 848 834 Taishet Aluminium 600 Smelter 25% 22% 500 Taishet Anode Plant 400 300 $897mn $1.0–1.1bn 521 495 496 56% 417 417 8% Other development 56% 13% 200 401 321 353 capex 100 11% Maintenance capex 9% 0 1H17 2
Slide 15: Taishet aluminium smelter
TAISHET ALUMINIUM SMELTER Location Irkutsk region TAISHET CONSTRUCTION SITE AND KEY FACILITIES 2. Anode assembly 3. Foundry 1. Storage facilities 1st stage – 428.5 ktpa, 352 potcells RA-400, department amperage 440 kA; Capacity/ technology¹ 2nd stage – 536 ktpa, 352 potcells RА-550, amperage 5
Slide 16: Taishet anode plant
TAISHET ANODE PLANT Location Irkutsk region ANODE PLANT CONSTRUCTION SITE AND 2nd STAGE KEY FACILITIES 1st stage – the construction of anode baking 2. 2nd anode block roasting section 3.Mixing and pressing section 4.Hard pitch warehouse furnace with a capacity of up to 217.5 ktpa of baked anodes
Slide 17: Debt profile
DEBT PROFILE In November 2020 the Company negotiated with Sberbank new terms CREDIT RATINGS DEBT STRUCTURE under bilateral loan backed by NN shares: EURO By currency • final maturity was extended from 2024 to 2027; 0.3% • USD interest rate was reduced from 3mLibor+3.75% (with floor RUB B+ 19% on L
Slide 18: Agenda
AGENDA Overview Operating and financial results review Capital management: capex and debt Market overview Appendix 18
Slide 19: Global aluminium demand on the way to full recovery in 2021
GLOBAL ALUMINIUM DEMAND IS ON THE WAY TO FULL RECOVERY IN 2021 WITH TRANSPORTATION SEGMENT IN LEAD PRIMARY ALUMINIUM DEMAND DYNAMICS¹ mn t mn t mn t GLOBAL CHINA EX-CHINA +6.1% +5.0% -1.7% +3.9% -8.9% +7.9% 67.8 39.8 65.0 63.8 37.9 28.5 36.5 28.0 25.9 2019 2020 2021F 2019 2020 2021F 2019 2020 2021F
Slide 20: Global primary aluminium deficit expected in 2021
ALUMINIUM PRICES AND PREMIUMS REBOUNDED ON STRONG SUPPORT FROM MARKET FUNDAMENTALS PRICE IS ON A SOLID UPWARD LME REGIONAL PREMIUMS TURNED TO LMESTOCKS STOCKS STAY AT LOW STAY AT LOWLEVEL LEVEL TRAJECTORY GROWTH IN 2H20 LME cash settlement monthly avr, $/t mn t Only 300kt growth between Feb 2021 and
Slide 21: China absorbed half of excessive stocks ex-China in 2020
CHINA ABSORBED HALF OF EXCESSIVE STOCKS EX-CHINA IN 2020 TOTAL PRIMARY ALUMINIUM STOCKS DYNAMICS, MILLION TONNES DEC-19 JUN-20 DEC-20 0.5 1.0mn t BALANCE EXPORT EXPORT > BALANCE (SURPLUS) WORLD (SURPLUS) TO CHINA TO CHINA EX-CHINA Total stocks growth in 2020 CHINA BALANCE (SURPLUS) IMPORT FROM EX- B
Slide 22: Green recovery drives demand for aluminium across sectors
GREEN RECOVERY DRIVES DEMAND FOR ALUMINIUM ACROSS SECTORS AND GEOGRAPHIES AT 4% CAGR OVER NEXT FIVE YEARS SELECTED COUNTRIES COMMITTED TO CARBON NEUTRALITY BY 2050 MAJOR BRANDS LEAD THE RACE INDUSTRY WINNERS UK EV penetration increase Canada EU Kazakhstan* Japan BIG USA South Korea China* Can 2.0 re
Slide 23: Chinese aluminium expansion to be challenged by ESG goals
CHINESE ALUMINIUM EXPANSION TO BE CHALLENGED BY AMBITIOUS ESG GOALS At the 75th UN General Assembly, President Xi Jinping stated China will strive to reach an emissions peak by 2030 and to achieve carbon neutrality by 2060. This important announcement has provided a direction for China's response to
Slide 24: Appendix
APPENDIX ny RUSAL 24
Slide 25: Key operating and financial data
KEY OPERATING AND FINANCIAL DATA GROUP OPERATING HIGHLIGHTS GROUP FINANCIAL HIGHLIGHTS YoY YoY YoY YoY 2H20 2H19 FY20 FY19 2H20 2H19 FY20 FY19 chg chg chg chg Aluminium production Revenue, $mn 4,551 4,975 (8.5%) 8,566 9,711 (11.8%) (kt) 1,888 1,890 (0.1%) 3,755 3,757 (0.1%) EBITDA, $mn¹ 652 438 48.9
Slide 26: Annual aluminium segment operating data
ANNUAL ALUMINIUM SEGMENT OPERATING DATA ALUMINIUM PRODUCTION kt 3 685 3 707 3 753 3 757 3 755 4 000 125 120 117 123 123 3 500 81 97 142 142 139 3 000 2 500 2 000 3 481 3 487 3 486 3 495 3 499 1 500 1 000 500 0 2016 2017 2018 2019 2020 Russia Siberia Russia European Part Sweden ALUMINIUM SALES ALUMIN
Slide 27: Annual alumina segment operating data
ANNUAL ALUMINA SEGMENT OPERATING DATA PRODUCTION kt Bauxite 16 000 16 047 14 838 13 848 14 000 Alumina 12 187 Nepheline ore 11 645 12 000 7 205 8 182 5 011 7 434 10 000 7 772 7 773 7 858 3 539 3 123 7 527 181 368 439 8 000 608 582 523 1 094 1 044 1 395 1 412 501 461 81 755 739 691 740 2 124 760 1 95
Slide 28: Income statement and EBITDA reconciliation
INCOME STATEMENT AND EBITDA RECONCILIATION INCOME STATEMENT YoY YoY 2H20 2H19 FY20 FY19 $ mn chg chg Revenue 4,551 4,975 (8.5%) 8,566 9,711 (11.8%) Cost of sales (3,592) (4,182) (14.1%) (7,112) (8,113) (12.3%) Other operating expenses (574) (907) (36.7%) (1,175) (1,511) (22.2%) Operating income (Res
Slide 29: Balance sheet and cash flow
BALANCE SHEET AND CASH FLOW BALANCE SHEET YoY YoY 2H20 2H19 FY20 FY19 $ mn chg chg Cash and Cash Equivalents 2,229 1,781 25.2% 2,229 1,781 25.2% Inventory 2,292 2,460 (6.8%) 2,292 2,460 (6.8%) Trade and other accounts receivables 1,163 1,351 (13.9%) 1,163 1,351 (13.9%) Equity Attributable to Shareho
Slide 30: Aluminium segment EBITDA reconciliation
ALUMINIUM SEGMENT EBITDA RECONCILIATION Other non-production Alumina costs and margin on Total Aluminium and Aluminium segment other intra-group Aluminium FY20 alloys produced purchased margin services segment $ mn (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Revenue kt 3,702 354 - -
Slide 31: Net income reconciliation
NET INCOME RECONCILIATION RECONCILIATION OF ADJUSTED NET PROFIT/(LOSS) YoY YoY 2H20 2H19 FY20 FY19 $ mn chg chg Net profit for the period 883 335 163.6% 759 960 (20.9%) Adjusted for: Share of profits and other gains and losses attributable to Norilsk (943) (779) 21.1% (930) (1,543) (39.7%) Nickel, n
Slide 32: UC RUSAL contacts
www.rusal.com UC RUSAL UC RUSAL Hong Kong Office www.rusal.ru/en/investors/ Gleb Diachkov-Gertcev, Karen Li, CFA Head of Investor Relations Head of the Hong Kong Office 1 Vasilisy Kozhinoi St., Karen.li@rusal.com 121096, Moscow, Russia Phone: +852 3915 8798 InvestorRelations@rusal.com Phone: +7 (495