Capral Limited · ASX:CAA
Capral — FY2011 Earnings Presentation
16 slides from Capral's earnings presentation, Feb 22, 2012
Slide 1: 2011 Full Year Results Presentation
2011 Full Year Results Presentation 22 February 2012 CELEBRATING 75 YEARS 1 22nd FEBRUARY 2012 CAPRAL FULL YEAR RESULTS CAPRAL LIMITED
Slide 2: Highlights
HIGHLIGHTS TWELVE MONTHS TO DECEMBER 2011 • Achieved in a declining market. Now at cyclical lows ... EBITDA¹ profit of $6.2m • Anchored by substantial and ongoing cost savings • Impacted by a LME $3m downwards inventory revaluation ... Net loss of $8.0m ... $8.8m positive Operating cash flow • Tight
Slide 3: Financial Summary
FINANCIAL SUMMARY TWELVE MONTHS TO DECEMBER 2011 FULL YEAR H1 H2 FULL YEAR H1 H2 2011 2011 2011 2010 2010 2010 Sales Volumes - External (‘000 tonnes) 48.3 24.5 23.8 55.6 28.5 27.1 $m $m $m $m $m $m Sales Revenue 348.6 179.5 169.1 399.7 204.5 195.2 EBITDA 6.2* 5.8 0.4 19.2+ 8.4 10.8 Depreciation/Amor
Slide 4: Key Profit Drivers
EBITDA $m KEY PROFIT DRIVERS 20 $19.2m ($9.9m) PROJECT RELAUNCH COST SAVINGS AGAIN PLAYED A CRITICAL ROLE MITIGATING NEGATIVE VOLUME, PRICE AND 15 INFLATION IMPACTS 10 ($8.5m) $1.0m $6.2m $10.2m 5 ($5.4m) 0 $2.5m ($3.0m) ($1.0m) $1.1m -6 EBITDA 10 Volume Price Inflation LME Valuation Billet Premium
Slide 5: Efficiency and cost cutting initiatives have significantly reduced the fixed cost base
EFFICIENCY AND COST CUTTING INITIATIVES HAVE SIGNIFICANTLY REDUCED THE FIXED COST BASE OF THE BUSINESS The Trading EBITDA1 break even of the business has reduced by 43% since 2008 TONNES PER DAY 350 Underlying costs have been reduced in excess 327 of $30m pa over the 2008 base. 300 Highlights 295 •
Slide 6: The Cash Position Is in Good Shape
THE CASH POSITION IS IN GOOD SHAPE $m $m 2011 2010 EBITDA 6.2 19.2 Working Capital 1.9 (2.3) Interest paid (1.6) (2.7) Operating Cash Flow is positive Equity Compensation Amortisation 1.2 3.7 Other 1.1 1.9 Operating Cash Flow 8.8 19.8 Sale of property, plant and equipment - 1.4 Capex Spend (5.5) (3.
Slide 7: The aluminium extrusion market has fallen by ~25% since its high in 2007
THE ALUMINIUM EXTRUSION MARKET HAS FALLEN BY ˜25% SINCE ITS HIGH IN 2007 000 Tonnes ALUMINIUM EXTRUSION MARKET PA • The market declined by 13% in calendar 2011 200 200 Impacted by -25% • Queensland flooding and severe weather events in 183.3 175 the Eastern States in Q1 170.6 -13% • Declining consum
Slide 8: Dwelling approvals declined by 14% in 2011, and are at cyclical lows
DWELLING APPROVALS DECLINED BY 14% IN 2011, AND ARE AT CYCLICAL LOWS MONTHLY Dwelling approvals monthly There is a large pent up demand, estimated at ˜120,000 dwellings, UNITS with 70% in NSW 17000 UNDERLYING DEMAND (‘000) DWELLING STOCK DEFICIENCY 16000 AS AT JUNE 2011/12 - 2015/16 ANNUAL AVERAGE 2
Slide 9: Anti Dumping
ANTI DUMPING The impact of the imposed • The levels of duties are relatively low • There are indications of a concerning level of circumvention by anti dumping measures to importers of the measures imposed date has been modest • The Australian Government is implementing an Anti Dumping reform agenda
Slide 10: Safety and Environmental
SAFETY Measure/Year 2008 2009 2010 2011 LTI/MTI 41 31 43 30 LTI/MTI Frequency* 17.5 16.3 23.1 19.5 LTI Severity* 162.1 92.9 276.7 194.9 ENVIRONMENTAL * Frequency = No. of injuries per million work hours * Severity = No. of days lost per million hours worked Safety performance improved in 2011 Capral
Slide 11: A comprehensive strategic plan is being implemented
A COMPREHENSIVE STRATEGIC PLAN IS BEING IMPLEMENTED • Leading Market Share • Long term customer relationships DEFEND • Experienced and committed workforce • Committment to excellence What we have • National footprint of world class extrusion plants • National distribution and logistics capability •
Slide 12: Outlook
OUTLOOK • Manufacturing generally is facing challenging conditions with subdued demand and rising input costs, exacerbated by a high $A and negative consumer sentiment • Demand overall is expected to remain soft. BIS Shrapnel is forecasting a flat first half for housing approvals fol- lowed by a 7%
Slide 13: Capral Profile
APPENDIX 1 CAPRAL PROFILE • Australia’s largest manufacturer and distributor of aluminium profiles • A National footprint of world class extrusion plants 8 operating presses with annual capacity of 70KT • A network of 5 major distribution facilities, 6 regional centres and 12 metropolitan trade cent
Slide 14: The turnaround strategy is delivering
APPENDIX 2 THE TURNAROUND STRATEGY IS DELIVERING • Stabilise the Business - Recapitalise the Balance Sheet - Embed a new operating philosophy The First Phase has been completed - Implement a lean management structure with increased accountability - Realise significant cost savings - Launch an Anti-D
Slide 15: Anti Dumping
APPENDIX 3 ANTI DUMPING Aluminium Extrusion imports, mainly from The cost to Australian industry has been high* China have aggressively taken around 35% of - Loss of around 500 direct jobs - Loss of around 2000 Australian jobs the Australian Market in recent years. - Some Australian presses operatin
Slide 16: Anti Dumping
APPENDIX 4 ANTI DUMPING 1. There is an Australian Industry producing like goods ü Capral won the case for dumping and 2. Certain extrusions were dumped ü countervailing duties to be applied on 3. Countervailing subsidies exist in China ü Chinese imports. 4. The Australian Industry producing like goo