Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q4 2021 Earnings Presentation
24 slides from Century Aluminum's earnings presentation, Feb 24, 2022
Slide 1: Century Aluminum Company 4th Quarter Earnings Call
Century Aluminum Company 4th Quarter Earnings Call February 24, 2022
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 • Craig Conti – Executive Vice President and Chief Financial Officer • Peter Trpkovski – Director of Financial Planning and Analysis • Shelly Harrison – Senior Vice President, Finance and Treasurer 2
Slide 4: Century is Positioned for Long-Term, Sustainable Success
Century is Positioned for Long-Term, Sustainable Success ◼ LME price at ~$3,300/MT, U.S. Midwest Premium at ~$815/MT and European Duty Robust industry Paid Premium at ~$465/MT fundamentals ◼ Global ~1.6 million tonnes supply deficit and lowest inventory levels since 2008 ◼ Value-added premiums now a
Slide 5: Industry Environment
Industry Environment Aluminum Supply and Demand Balance – FY22 Primary Aluminum Balance – US and EU Global Inventory Days of Primary Aluminum Consumption Power Actuals and Forwards CENX shielded from mainland EU energy crisis Century power markets 1) Source: CRU Group, Century Aluminum Company 4
Slide 6: Industry Environment - Prices
Industry Environment - Prices LME Aluminum Regional Premiums Alumina Price Index Billet Premiums – Upcharge 1) Source: CRU Group, Century Aluminum Company 5
Slide 7: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q321 Q421 Income statement Shipments (tonnes) 196,095 200,961 Net sales $ 581 $ 659 Net income/(loss) (52) 60 Earnings/(loss) per share (0.58) 0.59 Adjusted net income/(loss)1 (6) 17 Adjusted earnings/(loss) per share1 (0.06) 0.1
Slide 8: Financial Results: Q3 vs. Q4 Adjusted EBITDA
Financial Results Q321 vs. Q421 Adjusted EBITDA ($MM) 1) See reconciliation to comparable GAAP financial measure in appendix 7
Slide 9: Financial Results: Q3 vs. Q4 Cash Flow
Financial Results Q321 vs. Q421 Cash Flow ($MM) 1 2 1) See reconciliation to comparable GAAP financial measure in appendix 2) Hawesville term loan now fully repaid 8
Slide 10: 2022 Financial Outlook
2022 Financial Outlook Income Statement FY21 FY22 Outlook Cash Flow FY21 FY22 Outlook Shipments 783,000 885,000 Capex (ex. MH) $21MM $30-$35MM1 D&A $89MM $80-$90MM MH restart $62MM ~$15MM SGA $55MM ~$50MM Term loan $20MM - Interest Expense $30MM ~$30MM Interest $37MM ~$30MM Varies based on Varies ba
Slide 11: Q1 Outlook at Lagged Prices
Q1 Outlook at Lagged Prices Adjusted EBITDA $MM CENX Price Lag Spot 2 Q4 Actual Adjusted EBITDA $82 Lagged LME & Delivery Premiums $15-20 LME +$165/MT to $2,770/MT Primarily ~3-month lag ~ $3,300/MT US Midwest Premiums -$15/MT to $705/MT ~1-month lag ~ $815/MT European Premiums -$10/MT to $335/MT ~3
Slide 12: Century well positioned for 2022 and beyond
Century well positioned for 2022 and beyond Aluminum smelter Carbon Anode Plant Corporate Headquarters Aluminum Smelter Grundartangi, Iceland ◼ FY22 production: 315k MT Corporate Headquarters Carbon Anode Plant Aluminum Smelter Chicago, IL Vlissingen, Netherlands Hawesville, KY ◼ FY22 production: 19
Slide 13: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update ◼ $250-$300MM liquidity Q4 ‘21 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $100 $250-300 ◼ $300MM net debt target Projects Net Debt $429 $3001 Sustaining Capital ◼ $30-35MM in historical ◼ Organ
Slide 14: Appendix
Appendix
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA, adjusted net income (loss), adjusted earnings (loss) per share 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 Income (Loss) Non-GAAP Reconciliation
Adjusted Net Income (Loss) Non-GAAP Reconciliation Q321 Q421 $MM EPS $MM EPS Net income (loss) as reported1 $ (52.4) $ (0.58) $ 57.2 $ 0.59 Unrealized (gain) loss on forward and derivative contracts, net of tax 35.0 0.39 (53.8) (0.56) Legal settlements, net of tax 7.7 0.09 - - Share-based compensati
Slide 17: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q321 Q421 Net income (loss) as reported $ (52.4) $ 60.4 Interest expense 6.1 6.2 Interest expense - Hawesville term loan 0.6 0.5 Interest income 0.0 (0.6) Net (gain) loss on forward and derivative contracts 76.7 (26.8) Other (income) expense - net 2.5 (2.4
Slide 18: 2022 Financial Information
2022 Financial Information Sensitivities ($MM) Variance Annual EBITDA6 Annual Cash7 Pricing Convention LME +/- $100/MT $ 62 $ 60 U.S.: 50% ~1-month lag / 50% ~3-month lag LME Iceland: primarily ~3-month lag MWP1 +/- $22.04/MT 13 8 MWP ~1-month lag EDPP2 +/- $22.04/MT 7 7 EDPP Primarily ~3-month lag
Slide 19: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit Commodity (unit) Q2-Q4 FY22 FY23 FY24 Volume % Hedged Price Volume % Hedged Price Volume % Hedged Price LME (MT) 44,000 7% $ 2,110 45,000 5% $ 2,285 29,000 3% $ 2,230 MWP (MT) 150,000 35% $ 325 - - - - - - EDPP (MT) - - - - - - - - - In
Slide 20: Capacity and Production Information
Capacity and Production Information Aluminum operating facilities (kMT) Plant Country Capacity % Operating Sebree U.S. 220 100 Hawesville U.S. 250 80 Mt. Holly U.S. 230 75 Grundartangi Iceland 320 100 Total 1,020 90 Carbon anode operating facility (kMT) Plant Country Capacity % Operating Vlissingen
Slide 21: Value-Added Products
Value-Added Products Value added products (MT) FY22 Outlook Sebree – Billet 155,000 Hawesville – Purity1 35,000 Mt. Holly – Billet 110,000 Grundartangi – Primary Foundry Alloy 60,000 Grundartangi – Natur-AlTM and other low carbon metal 105,000 Total 465,000 1) Excludes molten product 20
Slide 22: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM and 60,000 tonnes of incremental primary foundry alloy to short EU market • Commenced building new billet • $120MM investment • The European market for billet is short casthouse at Grundartangi, Iceland approxima
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: For Additional Information
For Additional Information Peter Trpkovski 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 23
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