Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q1 2024 Earnings Presentation
29 slides from Century Aluminum's earnings presentation, May 1, 2024
Slide 1: Century Aluminum Company 1st Quarter Earnings Call
Century Aluminum Company 1st Quarter Earnings Call May 1, 2024
Slide 2: Cautionary Statement
Cautionary Statement Certain statements in this presentation, and those made by Century Aluminum Company management on the quarterly conference call, relate to future events and expectations and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 19
Slide 3: Speakers
Speakers • Jesse Gary – President and Chief Executive Officer • Jerry Bialek – Executive Vice President and Chief Financial Officer • Peter Trpkovski – Senior Vice President, Finance and Treasurer 2
Slide 4: Company and Market Update
Company and Market Update • Better than expected global demand to start the year, driving higher LME price and regional premiums Industry • Global inventories remain at historical lows; destocking looks to be complete Fundamentals • Recent Russian sanctions / Mexican tariffs demonstrate value of CEN
Slide 5: Industry Environment: Aluminum Supply and Demand Balance
Industry Environment Aluminum Supply and Demand Balance – FY24 Primary Aluminum Balance – US and EU - Primary Aluminum Balance (MT in MM's) (0.5) 75 71.8 72.0 (1.0) Primary Aluminum (MT in MM's) 65 (1.5) 55 (2.0) 42.4 44.1 45 (2.5) (2.3) 35 29.4 27.9 (3.0) (2.9) (3.0) 25 (3.5) (3.1) (3.2) (3.2) (3.5
Slide 6: Industry Environment: LME, Premiums, Power Rates
Industry Environment LME Aluminum Alumina Price Index 3,400 500 3,200 450 3,000 2,800 400 LME $/MT 2,600 API $/MT 350 2,400 2,200 300 2,000 250 1,800 200 1,600 1,400 150 Regional Premiums Power Rates 300 900 800 250 Regional Premiums $/MT Power Rates $/MWh 700 200 600 500 150 400 300 100 200 50 100
Slide 7: Industry Environment: Smelter and Refinery Input Prices
Industry Environment Indy Hub $/MWh Coke $/MT $824 $70 Smelter Input Prices $505 $41 $33 $384 $380 $370 $31 $340 $27 $23 2019 2020 2021 2022 2023 Spot 2019 2020 2021 2022 2023 Spot Caustic $/MT HFO $/bbl $85 Refinery Input Prices $68 $70 $701 $57 $58 $558 $438 $37 $380 $287 $242 2019 2020 2021 2022
Slide 8: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q423 Q124 Income statement Aluminum shipments (tonnes) 173,871 174,627 Net sales $ 512 $ 490 Net income/(loss) 30 247 Earnings/(loss) per share 0.30 2.26 Adjusted net income/(loss)1 40 (3) Adjusted earnings/(loss) per share1 0.39
Slide 9: Financial Results: Q423 to Q124 Adjusted EBITDA
Financial Results Q423 to Q124 Adjusted EBITDA ($MM) 1 2 1) Normalized for one quarter of IRA Section 45X credit 2) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Financial Results: Q423 to Q124 Cash Flow
Financial Results Q423 to Q124 Cash Flow ($MM) 1 1) See reconciliation to comparable GAAP financial measure in appendix 9
Slide 11: Q2 Outlook at Realized Prices
Q2 Outlook at Realized Prices Adjusted EBITDA1 $MM Q1 Actual Adjusted EBITDA Attributable to Century $25 LME / Delivery Premiums ~$15 LME $2,265/MT US Midwest Premium $417/MT European Duty Paid Premium $270/MT Energy $0 - $5 Indy Hub $30/MWh HFO $73/bbl Henry Hub $1.85/mmbtu Raw Materials $- Coke $4
Slide 12: Century Well Positioned for 2024 and Beyond
Century Well Positioned for 2024 and Beyond • Duty free access for U.S. and EU regional delivery premiums • Reliable supply to customers in short markets • Balanced operational footprint Aluminum Smelter Corporate Norðurál Headquarters Grundartangi Chicago, IL Iceland Carbon Anode United States Plan
Slide 13: Secondary Billet Casthouse Project
Secondary Billet Casthouse Project Expands Century’s portfolio to meet growing demand for green, recycled billet • Entry into secondary aluminum • Constructing a greenfield secondary • First metal production expected in 2026 production provides attractive growth casthouse in the Ohio Valley region w
Slide 14: Green Aluminum Smelter Project
Green Aluminum Smelter Project Investing in the future of the U.S. aluminum industry with first primary smelter in 45 years, nearly doubling the size of the current footprint • The U.S primary aluminum market is • Selected by the US Department of • Multi-phase planning/construction short ~4.1 millio
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA and net debt are non- GAAP financial measures that management uses to evaluate Century's financial performance. These non-GAAP financial measures facilitate comparisons of this period’s result
Slide 17: Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation
Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation Q423 Q124 $MM EPS1 $MM EPS Net income attributable to Century stockholders $ 30.0 $ 0.32 $ 246.8 $ 2.66 Less: net income allocated to participating securities 1.6 0.01 13.2 0.14 Net income allocated to common stockholders 28.
Slide 18: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q423 Q124 Net income attributable to Century stockholders $ 30.0 $ 246.8 Add: Net loss attributable to noncontrolling interests (4.4) (2.1) Net income 25.6 244.7 Interest expense – affiliates 1.5 1.8 Interest expense 7.4 7.4 Interest income (0.9) (0.7) Net
Slide 19: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit1 Commodity (unit) FY24 Q3-Q4 FY25 Volume % Hedged Price Volume % Hedged Price LME (MT) 29,000 8% $ 2,410 9,000 1% $ 2,565 MWP (MT) 12,000 6% $ 483 9,000 2% $ 482 EDPP (MT) - - - - - - Indiana Hub (MWh) 217,000 13% $ 44 155,000 5% $ 44 N
Slide 20: 2024 Financial Assumptions
2024 Financial Assumptions Income Statement ($MM) YTD FY24 Cash Flow ($MM) YTD FY24 Aluminum shipments (kMT) 175 700 Sustaining Capex $5 $10-15 Jamalco Capex2 $4 $10-15 D&A1 $22 $100-110 Iceland Casthouse3 $17 $15-20 SGA $14 $40-45 SGA $11 $35-40 Interest Expense $7 $35-40 Interest $3 $35-40 Varies
Slide 21: 2024 Financial Information
2024 Financial Information Sensitivities ($MM) Variance Annual EBITDA7 Annual Cash8 Pricing Convention LME +/- $100/MT $ 46 $ 43 U.S.:50% ~1 month lag / 50% ~3 month lag LME MWP 1 +/- $22.04/MT 9 9 Iceland: primarily ~3 month lag MWP ~1 month lag EDPP2 +/- $22.04/MT 7 7 EDPP ~3 month lag Alumina Pri
Slide 22: Capacity and Production Information
Capacity and Production Information Aluminum facilities (kMT) Plant Country Capacity % Operating Sebree U.S. 220 100 Hawesville U.S. 250 0 Mt. Holly U.S. 230 75 Grundartangi Iceland 320 100 Total 1,020 70 Carbon anode facility (kMT) Plant Country Capacity % Operating Vlissingen Netherlands 150 100 T
Slide 23: Value-Added Products
Value-Added Products Value-added products capacity (kMT) FY24 FY25 Sebree – Billet/Slab 175 175 Mt. Holly – Billet/Slab 120 120 Grundartangi – Natur-Al TM Foundry Alloy 120 120 Grundartangi – Natur-Al TM Billet 150 150 Total 565 565 22
Slide 24: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update • $250-$300MM liquidity Q124 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $302 $250-300 • $300MM net debt target Projects Net Debt $440 $300 Sustaining Capital • $30-35MM in historical Projects s
Slide 25: Extrusion trade case expected to drive increased U.S. billet demand
Extrusion trade case expected to drive increased U.S. billet demand U.S. market share of aluminum extrusions Subject import volume by region (MTs) Imports subject to 27% AD/CVD duties Europe 12% Other Asia ~50k ~170k China UAE Mexico ~90k ~10k ~100k 61% South America ~90k FY 2022 Shipment Volume U.S
Slide 26: Critical mineral provisions of Inflation Reduction Act to benefit U.S. Aluminum industry
Critical mineral provisions of Inflation Reduction Act to benefit U.S. Aluminum industry • The U.S. government passed the Inflation Reduction Act (IRA), effective for 2023 calendar year and thereafter • Proposed IRA regulation production tax credit under Section 45X was published by the U.S. Treasur
Slide 27: Century has material 45X upside beyond initial guidance
Century has material 45X upside beyond initial guidance Status Update • Initial Century outlook based on proposed Treasury regulations • Century testified at Treasury hearing urging inclusion of direct and indirect material costs under 45X • Certain U.S. Senators and other key industry participants
Slide 28: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al products are made with energy from 100% renewable sources” 27
Slide 29: For Additional Information
For Additional Information Ryan Crawford investorrelations@centuryaluminum.com 312-696-3132 (Office) Century Aluminum Company One South Wacker Dr, Suite 1000 Chicago, IL 60606 312-696-3102 (Fax) www.centuryaluminum.com 28
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