Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q4 2023 Earnings Presentation
28 slides from Century Aluminum's earnings presentation, Feb 21, 2024
Slide 1: Century Aluminum Company 4th Quarter Earnings Call
Century Aluminum Company 4th Quarter Earnings Call February 21, 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 • Strong Chinese demand growth, especially in solar and EV production • ~1.2 million MTs annual Chinese capacity curtailed in Q4; fourth consecutive year of winter production cuts Industry Fundamentals • Near-term Ex China demand remains challenged. Europe delivery premiums
Slide 5: Industry Environment: Aluminum Supply and Demand Balance
Industry Environment Aluminum Supply and Demand Balance – FY24 Primary Aluminum Balance – US and EU - 80 Primary Aluminum Balance (MT in MM's) 71.6 71.5 (0.5) 70 Primary Aluminum (MT in MM's) (1.0) 60 (1.5) 50 43.7 (2.0) 42.2 40 (2.5) (2.3) 29.3 27.9 (3.0) 30 (2.9) (3.0) (3.5) (3.1) (3.2) (3.2) 20 (
Slide 6: Industry Environment: Prices and Regional Premiums
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 Actuals and Forwards 300 900 800 250 Regional Premiums $/MT Power Rates $/MWh 700 200 600 500 150 400 300
Slide 7: Industry Environment: Smelter and Refinery Input Prices
Industry Environment Indy Hub $/MWh Nord Pool €/MWh Coke $/MT $800 $62 (49%) (57%) $703 (34%) Smelter Input Prices € 135 $670 $582 $600 $518 $463 € 85 $33 $33 $34 $32 $400 € 56 € 58 € 28 $200 $- Q422 Q123 Q223 Q323 Q423 Q422 Q123 Q223 Q323 Q423 Q422 Q123 Q223 Q323 Q423 Caustic $/MT Henry Hub $/mmbtu
Slide 8: Extrusion trade case expected to drive increased U.S. billet demand
Extrusion trade case expected to drive increased U.S. billet demand U.S. market share of aluminum extrusions Subject import volume by region (MTs) Imports subject to 27% AD/CVD duties Europe 12% Other Asia ~50k ~170k China UAE Mexico ~90k ~10k ~100k 61% South America ~90k FY 2022 Shipment Volume U.S
Slide 9: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q323 Q423 FY22 FY23 Income statement Shipments (tonnes) 171,995 173,871 768,691 700,680 Net sales $ 545 $ 512 $ 2,777 $ 2,185 Net income/(loss) (42) 30 (14) (43) Earnings/(loss) per share (0.45) 0.30 (0.15) (0.47) Adjusted net in
Slide 10: Financial Results: Q323 vs. Q423 Adjusted EBITDA
Financial Results Q323 vs. Q423 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 9
Slide 11: Financial Results: Q323 to Q423 Cash Flow
Financial Results Q323 to Q423 Cash Flow ($MM) 10
Slide 12: Q1 Outlook at Realized Prices
Q1 Outlook at Realized Prices Adjusted EBITDA1 $MM 2 Q4 Actual Adjusted EBITDA Attributable to Century $12 LME / Delivery Premiums ~$(2) LME $2,190/MT US Midwest Premium $416/MT European Duty Paid Premium realized $222/MT Energy $- Indy Hub $35/MWh HFO $67/bbl Henry Hub $2.10/mmbtu Other Raw Materia
Slide 13: 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 in discussions with Treasury urging inclusion of direct and indirect material costs under 45X • Certain U.S. Senators and other key industry participants r
Slide 14: Appendix
Appendix
Slide 15: 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 16: Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation
Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation Q323 Q423 $MM EPS $MM EPS 1 Net (loss) income attributable to Century stockholders $ (42.0) $ (0.43) $ 30.8 $ 0.30 Lower of cost or NRV inventory adjustment, net of tax (4.2) (0.04) (3.0) (0.03) Unrealized loss (gain) on deri
Slide 17: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q323 Q423 Net (loss) income attributable to Century stockholders, as reported $ (42.0) $ 30.0 Add: Net loss attributable to noncontrolling interests (3.9) (4.4) Net (loss) income (45.9) 25.6 Interest expense – affiliates - 1.5 Interest expense 9.2 7.4 Inte
Slide 18: 2024 Financial Assumptions
2024 Financial Assumptions Income Statement ($MM) FY23 FY24 Cash Flow ($MM) FY23 FY24 Aluminum shipments (kMT) 700 700 Sustaining Capex $13 $10-15 Jamalco Capex1 $7 $10-15 D&A $82 $80-90 Iceland Casthouse2 $69 $15-20 SGA $44 $40-45 SGA $38 $35-40 Interest Expense $36 $35-40 Interest $35 $35-40 Varie
Slide 19: 2024 Financial Information
2024 Financial Information Sensitivities ($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 20: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit1 Commodity (unit) FY24 Q2-Q4 FY25 Volume % Hedged Price Volume % Hedged Price LME (MT) 26,200 5% $ 2,325 - - - MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) - - - - - - Natural Gas (mmbtu) - - - - - - HFO (bbls)2 225,000
Slide 21: 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 22: 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 21
Slide 23: 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 24: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update • $250-$300MM liquidity Q423 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $312 $250-300 • $300MM net debt target Projects Net Debt1 $290 $300 Sustaining Capital • $30-35MM in historical Projects
Slide 25: 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 nearing completion, • $130MM investment • The European market for billet is short commercial production expected Q124 ap
Slide 26: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al products are made with energy from 100% renewable sources” 25
Slide 27: 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 28: 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 27
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