Capral Limited · ASX:CAA
Capral — H1 2019 Earnings Presentation
22 slides from Capral's earnings presentation, 2019
Slide 1: 2019 Half Year Results Presentation
rsonal use only 2019 Half Year Results Presentation
Slide 2: Australia's leading supplier of aluminium products and solutions
Australia's leading supplier of aluminium products and solutions rsonal use only 5 plants; 8 extrusion presses 17 distribution centres Australia-wide Annual extrusion capacity 70k tonnes Annual turnover ~$450 million¹ Residential, commercial construction, industrial Investment in Process Automation
Slide 3: Agenda
rsonal use only Agenda 1. 1H19 Summary 2. 1H19 Financials 3. Strategy and Outlook 4. Questions 3
Slide 4: 1H19 Summary
rsonal use only 1H19 Summary Tony Dragicevich, CEO & MD “Right sizing of operations in response to downturn in market conditions, lowering manufacturing breakeven point and lifting profitability.” 4
Slide 5: 1H19 Performance Summary
1H19 Performance Summary Half year result down on last year, in line with guidance Trading EBITDA¹ of $2.4m (1H18: $6.9m) and EBITDA² of $3.4m (1H18: $7.6m) rsonal use only Volumes down 10% on prior period Strong balance sheet with net cash of $18.7m Volumes impacted by slowdown in residen
Slide 6: Volume Breakdown
Volume Breakdown Channels to market (volume) Diverse industry exposure Volume Seasonality Tonnes (000’s) 40 rsonal use only 35 30 Extrusion Extrusion Industrial ** Residential 25 Direct Ex Mill via RDC 46% Building * 46% 37% 20 41% 15 Rolled Non 10 via RDC Residential 5 17% Building 13% 0 1H14 2H14
Slide 7: Conditions softened in Residential market
Conditions softened in Residential market Annual Dwelling Commencements¹ (‘000) Residential commencements forecast¹ to decline significantly through 2019 rsonal use only 250 Latest forecast (May 2019) 165,350 starts for 2019 25% decline on prior year 200 Multi-Res High Rise showing the sharp
Slide 8: Recent Capral Residential & Commercial Projects
rsonal use only Recent Capral Residential & Commercial Projects Reva Apartments, South Perth, WA Marsden Brewhouse, Marsden Park, NSW Surf Shack, Middleton, SA 8
Slide 9: Industrial sector slowed
Industrial sector slowed Total Capral Industrial Volumes (Index 2012) New Truck and Van builds¹ (‘000) rsonal use only Source: Capral ¹ Source: TIC (Truck Industry Council of Australia) (Prime Mover Magazine) ² Source: Capral Marine sector strong – commercial ferries and defence Manufacturing an
Slide 10: Recent Capral Industrial Projects
rsonal use only Recent Capral Industrial Projects Wave Piercing Catamaran – Incat, TAS Memorial Bridge, Hobart, TAS Slider Trailer, Sloanebuilt, NSW 10
Slide 11: Extrusion market contracted
Extrusion market contracted Residential construction fell rsonal use only Non-residential building steady Industrial sector softer Capral has an estimated 26% share of the Australian Aluminium extrusion market Import volumes and share of market increased in FY18 and maintained high levels
Slide 12: 1H19 Financials
rsonal use only 1H19 Financials Tertius Campbell, CFO “Restructuring and automation projects deliver cost reductions in 2H19 and beyond, improving future returns." 12
Slide 13: Trading Results impacted by sharper first half slowdown
Trading Results impacted by sharper first half slowdown 1H19 total volume 10% below prior period 1H19 1H18 Incl AASB16 Excl AASB16 Sales revenue fell in line with volume decline Sales Volume ('000 tonnes) 26.8 29.9 $m $m rsonal use only Margins remain under pressure due to imports and excess l
Slide 14: Earnings impacted by volume and restructuring
rsonal use only Earnings impacted by volume and restructuring * AASB16 EBITDA impact offset by Right of Use asset depreciation and interest 14
Slide 15: Financial position stable
Financial position stable CASHFLOW 1H19 1H18 BALANCE SHEET Jun 19 Jun 18 $m $m $m $m Incl AASB16 Excl AASB16 Incl AASB16 Excl AASB16 Current Assets EBITDA 3.4 7.6 Inventory 82.3 87.6 rsonal use only Working Capital 1.2 (1.7) Trade Receivables 65.4 73.5 Net Cash and Equivalents 18.7 28.9 Finance Cost
Slide 16: Strategy and Outlook
rsonal use only Strategy and Outlook Tony Dragicevich, CEO & MD “Deliver benefits of automation investment and right sizing of operations to improve our long term competitive position”. 16
Slide 17: Bremer Park Restructure
Bremer Park Restructure Closure of Anodising operation – continued service delivery via 3rd party anodisers rsonal use only Removal of one paint line, excess to requirement Right sizing of Extrusion operation to align with current demand – one press mothballed Permanent headcount reduced by
Slide 18: Investments to improve productivity and competitiveness
Investments to improve productivity and competitiveness Automated product handling and packing at Bremer New paint line at Canning Vale, WA ($2.4m) Commissioning complete Q4 2018 rsonal use only Park, QLD ($5.0m) Commissioning complete 1H 2019 Improved paint quality Elimination of bottle
Slide 19: Increased dumping measures on imports from China
Increased dumping measures on imports from China (May 2019) 2010 – 2015 Modest impact from initial measures on Chinese imports rsonal use only Case won in 2010 with low level 2017 – New cases initiated duties imposed on Chinese imports Measures imposed against 2018 – Continue pursuit of Fair Tra
Slide 20: Outlook
Outlook Commentators are forecasting a gradual fall in LME¹ from current levels during 2H 2019 AUD² weakening to ~$US0.65 by year end will partially offset a fall in USD LME rsonal use only Residential commencements are forecast³ to remain soft during 2H 2019 Industrial sector anticipated to
Slide 21: National footprint of aluminium extrusion plants and distribution centres
National footprint of aluminium extrusion plants and distribution centres Extrusion Extrusion plants plants rsonal use only Distribution Distribution centres centres QLD – Bremer Park Capacity 35k tonnes, 4 presses 1 paint line 2019: Automated product handling project WA - Canning Vale Capac
Slide 22: Questions
ALUMINIUM SHAPING THE FUTURE QUESTIONS 22