Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q2 2023 Earnings Presentation
27 slides from Century Aluminum's earnings presentation, Aug 9, 2023
Slide 1: Century Aluminum Company 2nd Quarter Earnings Call
Century Aluminum Company 2nd Quarter Earnings Call August 9, 2023
Slide 2: Cautionary Statement
Cautionary Statement This presentation and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21
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 • China capacity restarts in Yunnan; offline capacity in EU remains curtailed Industry • Global inventories remain at historical lows, conducive for higher LME prices once demand rebounds Fundamentals • Cost inputs coming down across all key raw materials • Indiana Hub pric
Slide 5: Industry Environment
Industry Environment Aluminum Supply and Demand Balance – FY23 Primary Aluminum Balance – US and EU 80 - 70.3 69.6 Primary Aluminum Balance (MT in MM's) 70 (1.0) Primary Aluminum (MT in MM's) 60 50 (2.0) 41.1 41.6 40 (2.3) (3.0) 29.1 28.0 (2.9) (3.0) 30 (3.1) (3.1) (4.0) (3.5) (3.5) (3.5) 20 (4.1) (
Slide 6: Industry Environment: LME, Alumina, Premiums, Power
Industry Environment LME Aluminum Alumina Price Index 3,400 500 3,200 3,000 450 2,800 400 LME $/MT 2,600 API $/MT 2,400 350 2,200 300 2,000 250 1,800 1,600 200 1,400 150 Regional Premiums Power Actuals and Forwards 900 300 800 Regional Premiums $/MT 250 700 Power Rates $/MWh 600 200 500 400 150 300
Slide 7: Industry Environment: Smelter and Refinery Input Prices
Industry Environment Indy Hub $/MWh Nord Pool €/MWh Coke $/MT $90 (58%) € 175 (54%) (23%) Smelter Input Prices $78 $753 $723 $703 € 135 $670 $62 € 121 $582 $550 € 85 $33 $33 $33 € 56 € 20 Q222 Q322 Q422 Q123 Q223 Spot Q222 Q322 Q422 Q123 Q223 Spot Q222 Q322 Q422 Q123 Q223 Spot Caustic $/MT Henry Hub
Slide 8: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q123 Q223 Income statement Aluminum shipments (tonnes) 181,165 173,649 Net sales $ 552 $ 576 Net (loss) income attributable to Century stockholders (39) 8 Diluted (loss) income per share attributable to Century stockholders (0.42
Slide 9: Financial Results: Q123 vs. Q223 Adjusted EBITDA
Financial Results Q123 vs. Q223 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Financial Results: Q123 to Q223 Cash Flow
Financial Results Q123 to Q223 Cash Flow ($MM) 1 2 1) See reconciliation to comparable GAAP financial measure in appendix 2) Power capacity charge ended May 31, 2023 9
Slide 11: Q3 Outlook at Realized Prices
Q3 Outlook at Realized Prices Adjusted EBITDA1 $MM Q2 Adjusted EBITDA Attributable to Century $ 30 LME / Delivery Premiums $(25)-(20) LME $2,240/MT US Midwest Premium $505/MT European Duty Paid Premium $320/MT Energy $- Indy Hub $38/MWh Nord Pool $41/MWh HFO $75/bbl Henry Hub $2.50/mmbtu Other Raw M
Slide 12: Appendix
Appendix
Slide 13: 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 14: Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation
Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation Q123 Q223 $MM EPS $MM EPS 1 Net (loss) income attributable to Century stockholders $ (38.6) $ (0.42) $ 6.9 $ 0.07 Lower of cost or NRV inventory adjustment, net of tax (25.6) (0.28) 6.6 0.06 Unrealized loss (gain) on derivati
Slide 15: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q123 Q223 Net (loss) income attributable to Century stockholders, as reported $ (38.6) $ 7.5 Add: Net loss attributable to noncontrolling interests - (0.9) Net (loss) income (38.6) 6.6 Interest expense 8.7 8.7 Interest income (0.3) (0.4) Net gain (loss) on
Slide 16: 2023 Financial Assumptions
2023 Financial Assumptions Income Statement ($MM) YTD FY23 Cash Flow ($MM) YTD FY23 Aluminum shipments (kMT) 355 700 Sustaining Capex $8 $15-20 Iceland Casthouse1 $27 $60-75 D&A $33 $60-70 Investment Capex2 $2 $15-30 SGA $25 $40-45 SGA $21 $35-40 Interest Expense $17 $40-45 Interest $18 $40-45 Varie
Slide 17: 2023 Financial Information
2023 Financial Information Sensitivities ($MM) Variance Annual EBITDA8 Annual Cash9 Pricing Convention LME +/- $100/MT $ 49 $ 35 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 Primarily ~3 month lag A
Slide 18: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit1 Commodity (unit) Q423 FY24 Volume % Hedged Price Volume % Hedged Price LME (MT) 11,000 6% $ 2,305 35,000 5% $ 2,325 MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) 44,000 5% $ 33 - - - Nord Pool (MWh) 250,000 95% € 30 n/a
Slide 19: 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 20: Value-Added Products
Value-Added Products Value-added products capacity (kMT) FY23 FY24 Sebree – Billet/Slab 175 175 Mt. Holly – Billet/Slab 110 120 Grundartangi – Natur-Al TM Foundry Alloy 60 120 Grundartangi – Natur-Al TM and other low carbon metal 105 Grundartangi – Natur-Al TM Billet 150 Total 450 565 19
Slide 21: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update • $250-$300MM liquidity Q223 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $231 $250-300 • $300MM net debt target Projects Net Debt1 $437 $300 Sustaining Capital • $30-35MM in historical • Organic
Slide 22: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM billet and increase total primary foundry alloy production to 120,000 tonnes • Construction well underway; • $120MM investment • The European market for billet is short commercial production expected Q124 approxi
Slide 23: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al™ products are made with energy from 100% renewable sources” 22
Slide 24: Century Well Positioned for 2023 and Beyond
Century Well Positioned for 2023 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 25: Jamalco acquisition secures low-cost alumina and bauxite
Jamalco acquisition secures low-cost alumina and bauxite • 55% interest in Jamalco, a bauxite mining and alumina production JV Transaction • Nameplate alumina production capacity of 1.4 million tpy1 • Transaction closed on May 2, 2023 • Secures a predictable, long-term supply of alumina and bauxite
Slide 26: Bauxite Mining Alumina Refinery with Capacity to Produce 1.4 Million Tonnes of Alumina
Bauxite Mining Alumina Refinery with Capacity to Produce 1.4 Million Tonnes1 of Alumina Clarendon, Jamaica Overview Current Status • In August 2021, Jamalco was curtailed following a fire in its • Originally constructed in 1972 with major powerhouse Background expansions in 1999, 2003, and 2007 • Op
Slide 27: 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 26
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