Slide 1: 2017 Full Year Results Presentation
For personal use only 2017 Full Year Results Presentation
Slide 2: Australia's leading supplier of aluminium products and solutions
Australia's leading supplier of aluminium products and solutions For personal use only 5 plants; 8 extrusion presses 18 distribution centres Australia-wide Annual extrusion capacity 70k tonnes Annual turnover ~$450 million¹ Residential, commercial construction, industrial Over 1,050 FTEs ¹ 12 months
Slide 3: National footprint of aluminium extrusion plants and distribution centres
National footprint of aluminium extrusion plants and distribution centres For personal use only Extrusion Extrusion plants plants Distribution Distribution centres centres QLD - Bremer Capacity 35k tonnes, 4 presses 2 paint lines and anodising line 2018: Automated product handling project WA -
Slide 4: Agenda
Agenda For personal use only 1. FY17 Highlights 2. FY17 Financials 3. Strategy and Outlook 4. Questions 4
Slide 5: FY17 Highlights
For personal use only FY17 Highlights Tony Dragicevich, CEO & MD “A strong second half delivered earnings at the upper end of guidance” 5
Slide 6: FY17 Performance Highlights
FY17 Performance Highlights For personal use only Full year result at the upper end of guidance Trading EBITDA¹ of $18.4m (2016: $20.3 m) and EBITDA of $18.8m (2016: $21.1m) EPS 2.54c (2016: 3.02c), DPS maintained at 1.25c (fully franked) Second highest earnings in 7 years Volumes in line
Slide 7: Volume Breakdown
Volume Breakdown Channels to market (volume) Diverse industry exposure Volume Seasonality (‘000) For personal use only Tonnes 40 [CATEGORY 35 NAME] [CATEGOR Y NAME] [CATEGOR [PERCENTA Y NAME] 30 GE] 42% [CATEGORY [VALUE] NAME] 25 [PERCENTA Rolled GE] 20 via RDC [CATEGOR Y NAME] 15 [PERCENTA 15% GE]
Slide 8: Where Capral's residential & commercial products end up
For personal use only Where Capral’s residential & commercial products end up Beach House – St Andrews VIC Project Home Walan Apartments - Brisbane Adagio Apartments - Perth 8
Slide 9: Conditions softening in Residential market
Conditions softening in Residential market For personal use only Annual Dwelling Commencements¹ (‘000) Residential commencements slower ‒ Detached housing, Capral's primary 250 market, fell 2%¹ during 2017 200 ‒ Multi-Residential decreased by 9%¹ 150 Facade Solutions division established in 2017
Slide 10: Where Capral's industrial products end up
Where Capral’s industrial products end up For personal use only Fred Olsen Trimaran - Spain Perth Stadium Maxi CUBE Tautliner 10
Slide 11: Industrial sector robust
Industrial sector robust Total Capral Industrial Volumes (Index 2012) New Truck and Van builds¹ (‘000) 40 For personal use only 120 35 100 30 80 25 20 60 15 40 10 20 5 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Source: Capral ¹ Source: TIC (Truck Industry Council of Australia) (
Slide 12: Extrusion market remains relatively strong
Extrusion market remains relatively strong '000 Aluminium Extrusion Market Sales Volume Extrusion market grew in 2016 but was Tonnes PA 200 For personal use only marginally lower in 2017 due to a slowdown in 186 184 183 residential construction 173 179 175 161 Non-residential building demand was
Slide 13: FY17 Financials
For personal use only FY17 Financials Tertius Campbell, CFO “Cash flow generation continues to improve, enabling the business to invest in operational improvement projects" 13
Slide 14: Result at the upper end of guidance
Result at the upper end of guidance Stronger H2 in line with historical pattern FY17 FY16 For personal use only Sales Volume ('000 tonnes) 63.2 63.4 H2 volume offset the H1 shortfall resulting in total volume in line with LY $m $m Sales Revenue 448.7 424.8 Selling prices continue to be under p
Slide 15: Margins impacted by significant rise in LME during 2017
Margins impacted by significant rise in LME during 2017 LME (USD) continued its rise in H2, increased For personal use only Metal Cost A$/kg ~23% in FY17 vs prior year average 3.00 2.80 Total Metal Cost (AUD) increased ~20% over 2.60 the same period 2.40 2.20 Capral was unable to fully recover
Slide 16: Increased aluminium cost significantly impacted profit
Increased aluminium cost significantly impacted profit For personal use only Reduction in extrusion volume offset by increase in rolled product Under recovery of higher metal cost Inflationary pressure ¹ ¹ ¹ ¹ ¹ See Important Note (page 14) 16
Slide 17: Financial position supports re-investment
Financial position supports re-investment FY17 FY16 Dec 17 Dec 16 $m $m $m $m Current Assets For personal use only EBITDA 18.8 21.1 Inventory 77.0 75.2 Working Capital (3.0) (5.0) Trade Receivables 68.0 63.1 Finance Cost (1.0) (0.8) Net Cash and Equivalents 34.4 31.4 Other 0.7 1.4 Other 0.2 0.3 180.
Slide 18: Strategy and Outlook
For personal use only Strategy and Outlook Tony Dragicevich, CEO & MD “Invest in technology to ensure Capral’s long term competitive position" BUILD OPTIMISE GROW On our strengths What we do For the future 18
Slide 19: Key Capital Investment Projects to improve competitiveness
Key Capital Investment Projects to improve competitiveness Plans and strategies implemented over recent years have reduced operating costs and lowered Capral’s breakeven For personal use only point Invest in automation and new technology in extrusion plants to further reduce operating costs (201
Slide 20: Dumped imports suppress prices and injure local industry
Dumped imports suppress prices and injure local industry 2010 – Modest impact from initial measures on Chinese imports For personal use only Case won in 2010 2014 – Anti-Circumvention with low level duties imposed on Chinese Anti-Circumvention imports case initiated and 2015 – Measures increased
Slide 21: Outlook
Outlook Capral is well-positioned to benefit from market conditions Commentators are forecasting a gradual fall in LME¹ during 2018 For personal use only AUD ~$US0.80 through 2018² Housing commencements are expected to soften³ Slowdown mainly driven by high density dwellings Demand for d
Slide 22: Questions
For personal use only Questions 22