Slide 1: Fourth Quarter 2023 Earnings Conference Call
FOURTH QUARTER 2023 EARNINGS CONFERENCE CALL February 22, 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The information contained in this presentation includes statements based on management’s current expectations, estimates and projections that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
Slide 3: Non-Run-Rate Items
NON-RUN-RATE ITEMS Non-run-rate items to us are items that, while they may recur from period to period, (1) are particularly material to results, (2) impact costs as a result of external market factors and (3) may not recur in future periods if the same level of underlying performance were to occur.
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This information contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculate
Slide 5: Commonly Used or Defined Terms and Measures
COMMONLY USED OR DEFINED TERMS AND MEASURES Term/Measure Description Adjusted EPS Reported net income per diluted share excluding non-run-rate items. Adjusted Net Income Reported net income excluding non-run-rate items. Annualized Quarterly Average Calculated as the four-quarter average for prior ye
Slide 6: 2023 Highlights
2023 HIGHLIGHTS KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 7: 4Q & Full Year 2023 Highlights
4Q & FULL YEAR 2023 HIGHLIGHTS ▪ RESULTS EXCEEDED 4Q AND FULL YEAR EXPECTATIONS ▪ 4Q 2023 EBITDA of $52 million increased 73% YOY ▪ 2023 EBITDA of $210 million increased 48% YOY ▪ Margins take initial steps toward recovery ▪ PRICING, MIX & EFFECTIVE COST CONTROL DROVE EFFICIENCIES ACROSS PLATFORM ▪
Slide 8: 2023 Financial Recap
2023 FINANCIAL RECAP NEAL E. WEST EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 9: End Market Summary
END MARKET SUMMARY SHIPMENTS STRONG PRICE & MIX DROVE 2023 CONVERSION REVENUE ON LOWER 68 8 VOLUMES 1,254 43 88 2 1,196 ▪ Aerospace/High Strength conversion revenue achieved a +36% (7%) (29%) +8% (20%) record in 2023 2022 Aero/High Packaging General Automotive Other 2023 ▪ Packaging destocking impac
Slide 10: Consolidated Financial Highlights
CONSOLIDATED FINANCIAL HIGHLIGHTS Quarterly Full Year (in $millions except Shipments & EPS) 4Q22 1Q23 2Q23 3Q23 4Q23 2022 2023 Shipments (in millions of lbs.) 302 299 314 299 284 1,254 1,196 Net Sales $776 $808 $814 $744 $722 $3,428 $3,087 Conversion Revenue $356 $369 $379 $357 $361 $1,383 $1,466 As
Slide 11: EBITDA & EBITDA Margin Summary
EBITDA & EBITDA MARGIN SUMMARY EBITDA AND EBITDA MARGIN EBITDA UP 48% AND EBITDA MARGIN INCREASED 400 BPS YEAR-OVER-YEAR $millions EBITDA margin ▪ Mitigated inflationary impacts with strong pricing actions across the platform ▪ Intense effort & focus across the organization to stabilize $209 $210 op
Slide 12: Outlook
OUTLOOK KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 13: 2024 Outlook - Aero/High Strength
2024 OUTLOOK ‒ AERO/HIGH STRENGTH AEROSPACE / HIGH STRENGTH CONVERSION REVENUE ▪ Aero/HS shipments and conversion revenue expected to increase 1-2% year-over-year $millions Shipments in millions lbs. ▪ Momentum in commercial, biz jet, defense, & space to continue $533 ▪ Improving GE Plate demand exp
Slide 14: 2024 Outlook - Packaging
2024 OUTLOOK – PACKAGING ▪ Packaging shipments and conversion revenue expected to be up 5% PACKAGING CONVERSION REVENUE to 7% year-over-year $millions Shipments in millions lbs. ▪ Coated food destocking ending in 1Q ▪ Beverage can demand has stabilized ▪ Secular growth CAGR expected between 3-5% $55
Slide 15: 2024 Outlook - General Engineering
2024 OUTLOOK – GENERAL ENGINEERING GENERAL ENGINEERING CONVERSION REVENUE ▪ GE shipments expected to improve ~5-6% while conversion revenue is expected flat to up 1% $millions Shipments in millions lbs. ▪ Order rates for all GE products improved year-to-date ▪ Destocking contained to early 2024 $367
Slide 16: 2024 Outlook - Automotive Extrusions
2024 OUTLOOK ‒ AUTOMOTIVE EXTRUSIONS AUTOMOTIVE EXTRUSION CONVERSION REVENUE $millions Shipments in millions lbs. ▪ Auto shipments and conversion revenue expected to improve 3-5% ▪ Steady recovery expected in 2024 $116 $93 $97 $96 ▪ 2024 automotive production forecast up ~3% to 16.0M vehicles $83 ▪
Slide 17: 2024 Summary Outlook
2024 SUMMARY OUTLOOK ▪ Demand expected to strengthen across all end markets in 2024 ▪ Conversion revenue expected to improve 2% - 3% versus 2023 ▪ Adjusted EBITDA margins expected to improve between 70 to 170 bps compared to 2023 ▪ Operations well positioned and expected to execute at improved effic
Slide 18: Appendix
APPENDIX
Slide 19: Sales Analysis by Application - Quarterly
SALES ANALYSIS BY APPLICATION - QUARTERLY 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Shipments (lbs, mm) Aero & High Strength 66.4 48.2 27.3 31.4 36.1 40.8 42.1 42.6 45.5 48.3 38.0 54.7 58.2 63.9 64.2 68.0 Packaging - - - - - 185.9 173.6 182.2 174.7 179.8 147.5 1
Slide 20: Sales Analysis by Application - Annual
SALES ANALYSIS BY APPLICATION - ANNUAL FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Shipments (lbs, mm) Aero & High Strength 248.8 273.6 173.3 161.6 186.5 254.3 Packaging - - - 541.7 655.3 612.4 General Engineering 266.9 236.3 235.6 298.2 303.9 215.6 Automotive Extrusions 104.4 94.3 84.1 94.0 96.
Slide 21: Reconciliation of Net Sales to Conversion Revenue - Quarterly
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – QUARTERLY 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Net Sales ($mm) Aero & High Strength $ 196.0 $ 144.6 $ 100.9 $ 96.4 $ 111.7 $ 133.9 $ 142.0 $ 146.1 $ 176.6 $ 175.4 $ 140.8 $ 183.3 $ 214.0 $ 225.1 $ 223.3 $
Slide 22: Reconciliation of Net Sales to Conversion Revenue - Annual
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – ANNUAL FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Net Sales ($mm) Aero & High Strength $ 739.4 $ 803.2 $ 537.9 $ 533.7 $ 676.1 $ 899.3 Packaging - - - 1,119.3 1,585.3 1,315.2 General Engineering 546.0 480.1 458.8 706.1 883.8 596.5 Automotive E
Slide 23: Adjusted Net Income and EPS - Quarterly
ADJUSTED NET INCOME AND EPS - QUARTERLY (in $ millions except EPS) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Reported Net Income (Loss) $ 29.1 $ (6.6) $ 0.4 $ 5.9 $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 $ 18.3 $ 5.4 $ 7.6 1 Operating NR
Slide 24: Adjusted Net Income and EPS - Annual
ADJUSTED NET INCOME AND EPS - ANNUAL (in $ millions except EPS) 2019 2020 2021 2022 2023 Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 Operating NRR Items 34.5 18.1 28.9 31.0 5.3 Non-Operating NRR Items 26.9 4.7 38.1 (4.6) (9.0) Tax impact of above NRR items (15.0) (5.6) (15.9) (
Slide 25: Reconciliation of Reported Net Income to Adjusted EBITDA - Quarterly
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - QUARTERLY (in $ millions) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Consolidated - Reported Net Income (Loss) $ 29.1 $ (6.6) $ 0.4 $ 5.9 $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9
Slide 26: Reconciliation of Reported Net Income to Adjusted EBITDA - Annual
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - ANNUAL (in $ millions) Annual 2019 2020 2021 2022 2023 Consolidated - Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 Interest Expense 24.6 40.9 49.5 48.3 46.9 Other Expense (Income) 20.7 1.4 38.9 (6.4) (7.4) Income Tax Pro
Slide 27: www.KaiserAluminum.com
www.KaiserAluminum.com