Slide 1: Alcoa Corporation Company Overview September 2016
Alcoa Corporation Company Overview September 2016 Exhibit 99.1
Slide 2: Important Information: Forward-Looking Statements
Important Information Forward–Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those
Slide 3: Table of Contents
Table of Contents Separation Overview Business Overview Financial Overview Separation Overview Alcoa Corporation Introduction Key Business Highlights 1 2 3 Financial Overview 4 Conclusion 5
Slide 4: Separation Overview
Separation Overview Section 1
Slide 5: Separation Culminates Alcoa's Successful Multi-Year Transformation
Separation Culminates Alcoa’s Successful Multi-Year Transformation 1) The rolling mills located at Warrick and Ma’aden will be part of Alcoa Corporation On September 28, 2015, Alcoa Inc. (NYSE:AA) announced its Board of Directors unanimously approved a plan to separate into two independent, publicly
Slide 6: Intended Capital Structure
Intended Capital Structure Separation Structure Alcoa Corporation to be Created as a New Company Expects to list its common stock on the New York Stock Exchange under the ticker “AA” “New Co.” “Remain Co.” Alcoa Corporation (New Co.) Conducts a capital raise of approximately $1B in funded debt Proce
Slide 7: Executing Separation – On Course for Second Half of 2016
Executing Separation – On Course for Second Half of 2016 Separation Approximate Timeline and Path to Completion 1) Refers to productivity programs in Alcoa Corporation’s Bauxite, Alumina, Aluminum, Cast Products and Energy segments 4Q 2015 1st Half 2016 2nd Half 2016 Launched New Value-Add Name and
Slide 8: Alcoa Corporation Introduction
Alcoa Corporation Introduction Section 2
Slide 9: Alcoa Corporation: Cost Competitive Industry Leader
Alcoa Corporation: Cost Competitive Industry Leader ALUMINA ALUMINUM World’s largest bauxite miner, with a solid first-quartile cost curve position Bauxite World’s largest alumina producer, with a highly competitive first-quartile cost curve position Alumina Power production capacity of ~1,470(1) me
Slide 10: Global Footprint in Proximity to Key Strategic Markets
Global Strength: A team of nearly 16,000 employees in 10 countries, generating more than $11 billion in 2015 revenue. More than 25 facilities, representing six business units. Global Footprint in Proximity to Key Strategic Markets Global Strength: A team of nearly 16,000 employees, generating more t
Slide 11: Unrivalled Upstream Aluminum Experience with the Flexibility of a Newly Formed Company
Unrivalled Upstream Aluminum Experience with the Flexibility of a Newly Formed Company Alcoa Corporation’s Significant Competitive Advantages Distinguish Us From Our Peers Solution-oriented customer relationships and programs Establishment of a strong, operator focused culture Operational reliabilit
Slide 12: Key Business Highlights
Key Business Highlights Section 3
Slide 13: Premier Global Bauxite Position
Premier Global Bauxite Position Alcoa mines well positioned with bauxite reserves 1) CRU analysis, 2) Including 100% equity interests of AWAC assets, 3) Competitor production information sourced from Wood Mackenzie Largest bauxite miner, 45.3 Mmt production in 2015 1st Quartile Cost curve position(1
Slide 14: World's Most Attractive Alumina Refining Business
World’s Most Attractive Alumina Refining Business Gas supply agreement secures a low cost position for Western Australia refineries through 2032 San Ciprian natural gas solution driving cost footprint improvement Access to growth markets in Asia, Middle East, and Latin America 3rd party shipments of
Slide 15: Alumina Cost Position Moves Points in Years
Alumina Cost Position Moves 7 Points in 5 Years $/MT Production (MMT) Alcoa moves to 23rd Percentile in 2015 ALUMINA 2015: 23rd Percentile 2010: 30th Percentile Source: CRU and Alcoa analysis 2016 Target: 21st Percentile Key 2015 / 2016 actions Saudi Arabia joint venture refinery nameplate capacity
Slide 16: Driving Value Through Substantial Energy Assets
Country Consolidated Capacity (MW) Brazil(2) 492 Canada 132 Suriname 189 United States(3) 657 Driving Value Through Substantial Energy Assets Brazil assets provide optionality between market sales and metal production Approximately 55% of generated power sold externally in 2015 Capturing significant
Slide 17: Aluminum smelting: hydroelectric power and portfolio actions
~70% of smelter power is hydroelectric ~75% of smelter power secured through 2022 ~14% of worldwide smelter power is self-generated; remainder purchased through long-term agreements Recent energy agreements have increased competitiveness of Massena West and Intalco Proven ability to improve, divest,
Slide 18: Aluminum Cost Position Moves Points in Years
Aluminum Cost Position Moves 8 Points in 5 Years $/MT Production (MMT) Cost-per-metric-ton declines as we hold 43rd position 2015: 43rd Percentile 2010: 51st Percentile 2016 Target: 38th Percentile ALUMINUM Key 2015 / 2016 actions Saudi Arabia joint venture smelter at nameplate (740 kmt) Curtailment
Slide 19: Aluminum Market Misconceptions: Setting the Record Straight
Global demand on track to double between 2010 and 2020 Progressively tightening market is leading to global deficit for 2016 Inventories are low based on days of consumption China not exporting primary aluminum Exports of fake semis declining Fact… Fiction… The fundamental outlook of aluminum is wea
Slide 20: Unique Global Network of Casthouses Offering Value-Add Opportunities
Unique Global Network of Casthouses Offering Value-Add Opportunities Innovative new foundry alloys for automotive market Alloys qualified with top tier OEM; 8 trials ongoing; 20 more planned 18(1) casthouses providing value-add products Casthouse Center of Excellence driving continuous improvement a
Slide 21: Leading Can Sheet Supplier in North America
Leading Can Sheet Supplier in North America Warrick Operations: Food Stock, Beverage End & Tab Stock, Lithographic Sheet, Body Stock and Bottle Stock Ma’aden Rolling Company(2): Wide Body Stock, Beverage End & Tab #1 Position (> 90% Share) in North America Aluminum Food Can segment #2 Position in No
Slide 22: Experienced Management Team with Substantial Industry Expertise
Experienced Management Team with Substantial Industry Expertise Name Future Alcoa Corp. Title Title at Alcoa Inc. Years with Alcoa Roy C. Harvey CEO President of Global Primary Products 14 Tómas Már Sigurdsson COO COO of Global Primary Products 12 William F. Oplinger CFO EVP & CFO 16 Renato Bacchi V
Slide 23: Track Record of Cost Leadership and Margin Expansion
Track Record of Cost Leadership and Margin Expansion Prepares Alcoa Corporation to Shine in a Volatile Commodity Environment Rigorous Cost, Productivity, and Cash Management Largest Global Bauxite Supplies Ensure Alumina Strength for the Future 1) CRU and Alcoa analysis Positioned to best Capitalize
Slide 24: Financial Overview
Financial Overview Section 4
Slide 25: Overview of 2Q 2016 Results – Alcoa Inc. Alumina and Primary Metals Segments
Overview of 2Q 2016 Results – Alcoa Inc. Alumina and Primary Metals Segments 2Q 2016 Overview of Alcoa Inc. Alumina and Primary Metals Segments Total revenue of $2.3 billion, up 7 percent sequentially Predominately due to 22 percent higher alumina prices, 2 percent higher aluminum pricing and organi
Slide 26: Alcoa Inc. Alumina Segment: Earnings Lifted by Pricing and Performance
Alcoa Inc. Alumina Segment: Earnings Lifted by Pricing and Performance 2Q16 Actual – Alumina API pricing up 22% sequentially, down 26% year-over-year Production down vs. Q1 on Pt Comfort curtailment, partially offset by higher production in Sao Luis, Kwinana and San Ciprián Productivity gains throug
Slide 27: Alcoa Inc. Primary Metals Segment: Benefit from Pricing and Portfolio Actions
Alcoa Inc. Primary Metals Segment: Benefit from Pricing and Portfolio Actions $ Millions 2Q16 Actual – Primary Metals ($18) Productivity ($5) (1) Realized price up 3% sequentially Production down 60 kmt following Warrick closure Benefit from productivity, lower carbon costs and the Warrick closure A
Slide 28: Six Strong Segments Providing Revenue and EBITDA Diversity
Alcoa Corporation Will Have Six Strong Segments Providing Revenue and EBITDA Diversity Alcoa Corporation Revenues and Adjusted EBITDA: Full year 2015 Actual 1) Before Intersegment Eliminations; 2) Conversion Margin removes pass through metal cost from margin calculation See appendix for adjusted EBI
Slide 29: Alcoa Corporation Earnings Strong Despite Lower Prices
Alcoa Corporation Earnings Strong Despite Lower Prices Total Sales ($M) Adjusted EBITDA($M)(1) Capital Expenditures ($M) Q2 2016 LTM (2) 1) See appendix for adjusted EBITDA reconciliations 2) Metal price represents combined annual averages of LME + Midwest premium. Q2 2016 LTM Q2 2016 LTM Alcoa Corp
Slide 30: Disciplined Financial Policy Focused on Prudent Capital Allocation
Disciplined Financial Policy Focused on Prudent Capital Allocation Leverage Maintain prudent leverage through the business cycle Liquidity Operating cash flow is the primary source of liquidity Very significant credit capacity for working capital needs Aggressive Asset Portfolio Management Alcoa Cor
Slide 31: Conclusion
Section 5 CONCLUSION Advancing each generation. KY ALCOA
Slide 32: Focused on our customers, lowest cost assets, superior value
Focused on our customers Lowest cost assets Superior value for investors Attractive to employees Ethical and sustainable practices Growth through cycles
Slide 33: Appendix
APPENDIX Advancing each generation. KY ALCOA
Slide 34: Key Value-Add Products Serve An Array Of End-Markets
Key Value-Add Products Serve An Array Of End-Markets Cast Products key markets, uses and value-add products Slab Billet Foundry Rod End markets Automotive, industrial Main uses Wheels, steel coaters, cast parts Supplying locations Canada: Deschambault US: Intalco Europe: Lista, San Ciprian End marke
Slide 35: Positioned for Future Market Scenarios
Positioned for Future Market Scenarios Improved cost position by closing, divesting or curtailing higher cost smelting and refining capacity Enhanced portfolio with ~25% investment in Alcoa Corporation-Ma’aden joint venture, the lowest-cost integrated aluminum complex in the world Revolutionized mar
Slide 36: 2016 Alcoa Inc. Market Sensitivities by Segment
2016 Alcoa Inc. Market Sensitivities by Segment Alcoa Inc. Segment Annual ATOI1 Sensitivities LME API AUD BRL EUR CAD NOK Benchmark +/- $100/MT +/- $10/MT +/- 0.01 USD/AUD +/- 0.01 BRL/USD +/- 0.01 USD/EUR +/- 0.01 CAD/USD +/- 0.10 NOK/USD Primary Metals $169M ($28M) $2M Min $3M $2M $2M GRP2 $1M N/A
Slide 37: Alcoa Corporation Adjusted EBITDA Reconciliation
Alcoa Corporation Adjusted EBITDA Reconciliation Alcoa Corporation’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation, depletion, and amortization. Net margin is equivalent to Sales minus the following ite
Slide 38: Segment Adjusted EBITDA Reconciliation
Segment Adjusted EBITDA Reconciliation ($ in millions) 2015 Alcoa Corporation - Segments Bauxite Alumina Aluminum Cast Products Energy Rolled Products After-tax operating income (ATOI) $258 $476 $1 $110 $145 $20 Add: Depreciation, depletion, and amortization 94 202 311 42 61 23 Equity (income) loss
Slide 39: Advancing each generation. ALCO A
Advancing each generation. ALCO A