United Company RUSAL Plc

United Company RUSAL — Q2 2011 Earnings Presentation

21 slides from United Company RUSAL's earnings presentation, Aug 29, 2011

  1. Slide 1: 2Q 2011 Results Presentation

    2Q 2011 Results Presentation 29 August 2011

  2. Slide 2: Disclaimer

    Disclaimer These materials and the subsequent discussion are not an offer for sale of any securities of United Company RUSAL Plc (the “Company”). The distribution of these materials in certain jurisdictions may be restricted by law and therefore persons into whose possession these materials come sho

  3. Slide 3: Financial and operational results; Market update; Growth projects

     Financial and operational results  Market update  Growth projects  Summary results 3

  4. Slide 4: 2Q 2011 highlights

    2Q 2011 highlights Revenue and earnings growth outperforming aluminium price  Revenue increased by 11% in 2Q to US$3,330m  Adjusted EBITDA increased by 9% in 2Q to US$743m Stabilization of costs in high cost inflation environment  Energy cost per tonne in aluminium segment decreased by 8% in 2Q I

  5. Slide 5: Revenue and earnings outperformed aluminium price

    Revenue and earnings outperformed aluminium price LME aluminium price (1) Aluminium shipments US$/t Kt 2 800 1Q 2011 av. 2Q 2011 av. US$2,503 +4% US$2,600 +6% 1,029 971 2 700 2 600 2 500 2 400 2 300 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 1Q2011 2Q2011 Revenue Adjusted EBITDA US$m US$m 743

  6. Slide 6: Record levels of VAP production, premiums and sales to end-users

    Record levels of VAP(1) production, premiums and sales to end-users Production of value-added products Sales breakdown by product Kt 39% Other 400 36% 40% Foundry alloy products 8% 1% 300 35% Sheet ingots 393 13% 363 200 30% Wire rod 7% 100 25% Primary Aluminium Aluminium 0 20% billet 61% 1Q2010 2Q2

  7. Slide 7: Reduction in per tonne energy expenses…

    Reduction in per tonne energy expenses… UC RUSAL Aluminium cost structure vs Industry average Other Other 12% 8% Payroll Transportation 5% 4% Energy 26% Energy Payroll 37% 6% Raw materials 13% Raw materials 17% (1) Alumina Alumina 35% 37% Source: UC RUSAL management accounts for 2Q 2011 Source: Broo

  8. Slide 8: …offset by stronger oil price and Ruble appreciation

    …offset by stronger oil price and Ruble appreciation Oil price US$/RUB exchange rate 120 US$/bl 33 RUB +8% +4% 110 32 100 31 2Q11 av. 1Q 2011 av. 90 30 2010 av. 102.5 2010 av. 29.3 79.5 30.4 80 29 2Q 2011 av. 1Q11 av. 28.0 94.5 70 28 60 27 50 26 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Jan-1

  9. Slide 9: Introducing Adjusted Net Profit

    Introducing Adjusted Net Profit Reconciliation (US$m)  Adjusted Net Profit (Net Profit adjusted for 2Q 2011 certain non-cash items) presented as a new Net Profit measurement of the profitability of the 339 Adjusted for: Company’s core business Share in results of Norilsk (190)  Provides investment

  10. Slide 10: Debt repayment and profile optimisation

    Debt repayment and profile optimisation Strong cash generation allowed for over US$600m to be repaid in 1H 2011(1) 12000 US$m 11,472 11,426 11500 271 11,382 193 (28) 127 11000 (333) (276) 10500 10000 Total Net Debt, 31 Cash repayments Adjustments Change in cash Total Net Debt, 31 Cash repayments Adj

  11. Slide 11: Committed refinancing

    Committed refinancing New PXF Refinancing of Sberbank Facility(1) Refinancing of Russian Facilities  Committed financing for up to  Amount – US$4.6bn  Sberbank: US$5.0bn:  Amount – up to US$460mln  Tranche A – up to US$4.25bn  Maturity – 2016  Maturity – 2016  Tranche B – up to US$1.0bn  Ma

  12. Slide 12: Financial and operational results; Market update; Growth projects

     Financial and operational results  Market update  Growth projects  Summary results 12

  13. Slide 13: Regional premiums and stock levels evidence tight physical market

    Regional premiums and stock levels evidence tight physical market LME inventories Regional physical premiums US$/t days US$/t 3500 60 250 Europe Japan US 50 3000 200 US$200/t 40 2500 150 US$190/t 30 US$121/t 2000 100 20 1500 50 10 1000 0 0 2005 2006 2007 2008 2009 2010 2011 Invent (days) Price LME I

  14. Slide 14: Strong Chinese domestic aluminium consumption outpaces production growth

    Strong Chinese domestic aluminium consumption outpaces production growth SFHE stocks and price arbitrage Chinese aluminium balance Kt US$/t SHFE - LME*1.17, $/t (rhs) Total Stock, kt (lhs) Kt 600 2000 30000 Aluminium imports 25000 400 1600 20000 200 1200 15000 0 10000 01.2009 04.2009 07.2009 10.2009

  15. Slide 15: Financial and operational results; Market update; Growth projects

     Financial and operational results  Market update  Growth projects  Summary results 15

  16. Slide 16: Getting closer to the completion of growth projects – Taishet smelter

    Getting closer to the completion of growth projects – Taishet smelter Project financing Recent developments  RUB 40bn (~US$1.4bn) project finance  91% of the earth works (9m m3) of ground agreed in principal for the first phase of the excavation has occurred smelter  65 main and auxiliary facilit

  17. Slide 17: Taishet smelter. Production area

    Taishet smelter. Production area 17

  18. Slide 18: Financial and operational results; Market update; Growth projects

     Financial and operational results  Market update  Growth projects  Summary results 18

  19. Slide 19: Summary results Income statement

    Summary results Income statement US$m 2Q 2011 1Q 2011 % Change Revenue 3,330 2,993 11% Cost of sales 2,273 2,004 13% Adjusted EBITDA (1) 743 682 9% Adjusted EBITDA Margin 22% 23% - Share of profits of associates 210 179 17% Income tax (88) (193) (54%) Net Profit 339 746 (55%) Note: 19 (1) Adjusted E

  20. Slide 20: Summary results Balance sheet and cash flow

    Summary results Balance sheet and cash flow US$m As at 30 As at 31 % Change June 2011 March 2010 Cash and Cash Equivalents 326 519 (37%) Equity Attributable to Shareholders of the 13,856 13,312 4% Company Total Liabilities 14,750 14,920 (1%) Net Debt 11,426 11,382 - US$m 2Q 2011 1Q 2011 % Change Net

  21. Slide 21: Summary results Segment results

    Summary results Segment results US$m 2Q 2011 1Q 2011 Aluminium Alumina Aluminium Alumina Segment Revenue 2,883 628 2,556 567 EBIT 602 3 521 19 EBITDA 705 28 614 42 EBITDA margin 24% 4% 24% 7%  Aluminium segment is involved in the production and sale of primary aluminium and related products  Alumi

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