Capral Limited · ASX:CAA
Capral — FY2010 Earnings Presentation
17 slides from Capral's earnings presentation, Feb 22, 2011
Slide 1: 2010 Full Year Results Presentation
2010 Full Year Results Presentation 22nd February 2011 CAPRAL LIMITED
Slide 2: Agenda
AGENDA • Capral Delivers • Financial Highlights • Key Profit Drivers • Cash Flow and Gearing • Market & Sales Volumes • Anti Dumping Update • The Turnaround Strategy is Delivering • Outlook January 2011 floods Capral Bremer Plant Ipswich QLD Source: Above Photography, Jan2011 2 22ND FEBRUARY 2011 CA
Slide 3: Capral Delivers
CAPRAL DELIVERS • Substantial turnaround on previous years ....EBITDA profit of $19.2m 1 • Achieved in a flat market • Anchored by substantial cost savings • First full year profit after tax in 7 years ....Profit after tax of $6.7m ....Operating cash flow of $19.8m • A $27.2m lift on the prior year
Slide 4: Financial Performance Highlights
FINANCIAL PERFORMANCE HIGHLIGHTS 2010 2009 FULL YEAR HY1 HY2 FULL YEAR HY1 HY2 Sales Volumes - External (‘000 tonnes) 55.6 28.5 27.1 55.2 24.8 30.4 $m $m $m $m $m $m Sales Revenue 399.7 204.5 195.2 381.4 177.0 204.4 EBITDA 19.2 8.5 10.7 (0.7) (9.3) 8.6 1 Depreciation/Amortisation (12.1) (6.0) (6.1)
Slide 5: Key Profit Drivers
KEY PROFIT DRIVERS EBITDA INCREASED BY $19.9M IN 2010. RESTRUCTURING INITIATIVES (PERMANENT COST SAVINGS) HAD THE BIGGEST IMPACT. EBITDA $m 20 $17.8m $19.2m 15 $8.7m -$6.5m 10 -$2.2m 5 $0.5m -$2.7m $3.3m $1.0m -$0.7m -0 -5 EBITDA LME Stock Volume Price Inflation Billet Equity LME Restructuring EBITD
Slide 6: Efficiency and cost cutting initiatives have significantly reduced the fixed cost base
EFFICIENCY AND COST CUTTING INITIATIVES HAVE SIGNIFICANTLY REDUCED THE FIXED COST BASE OF THE BUSINESS The EBITDA break even of the business has reduced by 36% TONNES PER DAY 300 Underlying costs have been reduced in excess of 293 $20m PA over the 2008 base. 281 Highlights • Employee head count has
Slide 7: Capral's Cash Position Is in Good Shape
CAPRAL’S CASH POSITION IS IN GOOD SHAPE 2010 2009 $’000 $’000 EBITDA 19,219 (714) Changes in Working Capital (2,335) 1,731 Interest Paid (2,697) (5,923) Income Tax Paid - (255) Equity Settled Compensation 3,724 1,051 Operating Cash flow Other Non-Cash Items 1,887 (3,316) improved considerably Operat
Slide 8: The market remained at a low point in the cycle and is poised to recover
THE MARKET REMAINED AT A LOW POINT IN THE CYCLE AND IS POISED TO RECOVER. TONNES 000’S • The market remained flat in 2010 200 MARKET SIZE 200 183 - Government stimulus measures boosted ONSET OF GLOBAL the 2nd half of 2009 and the early part of 2010 170 FINANCIAL CRISIS 165 before stalling CYCLICAL L
Slide 9: Anti-Dumping Update
ANTI-DUMPING UPDATE In October 2010 the Australian Government imposed anti-dumping and countervailing duty measures on aluminium extrusions from China. It found: 1. There is an Australian Industry producing like goods 2. Certain extrusions were dumped CAPRAL HAS PROVEN 3. Countervailing subsidies ex
Slide 10: The Government of China controls 50% plus of aluminium smelters
THE GOVERNMENT OF CHINA CONTROL 50% PLUS OF ALUMINIUM SMELTERS. PRIMARY ALUMINIUM AT TIMES IS SUBSIDISED TO CHINESE EXTRUDERS IN EXCESS OF 20% LOWER PRICES THAN PREVAILING WORLD PRICES ALUMINIUM RAW MATERIAL MONTHLY PRICING Comparison of the Shanghai Futures Exchange (SHFE) and London Metals Exchang
Slide 11: The Turnaround Strategy Is Delivering
THE TURNAROUND STRATEGY IS DELIVERING • Stabilise the Business - Recapitalise the Balance Sheet - Embed a new operating philosophy The First Phase has been completed - Implement a lean management structure with increased accountability - Realise significant cost savings - Launch an Anti-Dumping Case
Slide 12: Outlook
OUTLOOK Market • 1st half of 2011 subdued after the weather impacted start to the year • Residential market to start to strengthen in the second half of 2011 and lift significantly in 2012 • Commercial to remain subdued • Industrial segment mixed but growing with GDP Pricing • Pricing gains are expe
Slide 13: Appendix 1 - Capral Profile
APPENDIX 1 - CAPRAL PROFILE • Australia’s largest manufacturer and distributor of aluminium profiles • A National footprint of world class extrusion plants 8 operating presses with annual capacity of 75KT • A network of 5 major distribution facilities, 6 regional centres and 12 metropolitan trade ce
Slide 14: Appendix 2 - Safety Is a Core Value in Capral
APPENDIX 2 - SAFETY IS A CORE VALUE IN CAPRAL • Bremer Park - Manufacturing: secured AS4801 accreditation (a challenging standard); 50% reduction in reportable injuries in H2 2010; “TOP GEAR Safety Challenge” where over 1000 safety observations completed in a 2 month period & over 60% of identified
Slide 15: Capral has a 33% market share and is well represented in window and door segment
APPENDIX 3 - CAPRAL HAS A 33% MARKET SHARE AND IS WELL REPRESENTED IN THE WINDOW AND DOOR SEGMENT END USER SEGMENTS - ALUMINIUM EXTRUSIONS & ROLLED PRODUCTS % RESIDENTIAL COMMERCIAL INDUSTRIAL TRANSPORT ARCHITECTURAL ARCHITECTURAL 100 8% CHAINS HARDWARE 12% 10% AUTO EXTERNAL FIT-OUT 15% SIGNS 90 CUR
Slide 16: Australia is currently underbuilding compared to underlying demand
APPENDIX 4 - AUSTRALIA IS CURRENTLY UNDERBUILDING COMPARED TO UNDERLYING DEMAND. THERE IS A LARGE PENT UP DEMAND, ESPECIALLY IN NSW UNDERLYING DWELLING STOCK DEFICIENCY DEMAND (‘000) AS AT JUNE 2010/11 - 2014/15 TOP 200 CUSTOMERS ANNUAL AVERAGE 2008 2009 2010 2011F 2012F New South Wales 46.0 50.3 74
Slide 17: Appendix
APPENDIX 5 Timothy Geithner “China’s currency remains substantially undervalued and its real effective exchange rate - the best measure to judge its currency against all of its trading partners - has not moved much in this latest period of exchange rate reform,” said US Teasury secretary Timothy Gei