Alro S.a. · BVB:ALR
Alro — 1-3Q 2018 Earnings Presentation
26 slides from Alro's earnings presentation, Nov 19, 2018
Slide 1: Financial Results for 1-3Q 2018 – Alro Group
Financial Results for 1-3Q 2018 – Alro Group 19 November 2018 NB: in this presentation, whenever we refer to Alro Group we present consolidated figures, when we refer to Alro we present stand-alone figures
Slide 2: Contents
Contents • Overview • Operational Highlights 1-3Q 2018 • Market Outlook • Financial Highlights 1-3Q 2018 • Appendices 2
Slide 3: Overview – Alro Group
Overview – Alro Group In 1-3Q 2018, compared to 1-3Q 2017: Production of all product categories except for processed products increased YoY, the latter due to a scheduled revamp of one of Alro’s two cold rolling mills. However, thanks to our flexibility in allocating capacity among different produ
Slide 4: Contents
Contents • Overview • Operational Highlights 1-3Q 2018 • Market Outlook • Financial Highlights 1-3Q 2018 • Appendices 19/11/2018 4
Slide 5: Operational Highlights – Production
Operational Highlights – Production Aluminium – primary products up, overall flat YoY in 1-3Q 2018 Primary facilities Processing facilities • In 1-3Q 2018, primary aluminium production registered a 1.3% YoY • In 1-3Q 2018, the Group registered a weaker production of flat rolled increase, fueled main
Slide 6: Operational Highlights – Production: Alumina and Bauxite
Operational Highlights – Production Alumina and Bauxite – increased activity at the refinery Bauxite – SMHL, Sierra Leone Alumina – Alum, Romania • In 1-3Q 2018, SMHL’s production of commercial bauxite was • Alum increased its output by 24.9% YoY in 1-3Q 2018 and by higher by 15.3% versus the same p
Slide 7: Operational Highlights – Sales
Operational Highlights – Sales Aluminium – flat in volume and +5.7% YoY in value in 1-3Q 2018 In 1-3Q 2018, Alro Group’s sales of primary products increased by 4.0% YoY in volume terms. The increase was the result of higher sales of wire rod (+9.0% YoY) and billets (+8.1% YoY). Some weakness was see
Slide 8: Contents
Contents • Overview • Operational Highlights 1-3Q 2018 • Market Outlook • Financial Highlights 1-3Q 2018 • Appendices 19/11/2018 8
Slide 9: Market Outlook
Market Outlook Trade war concerns remained one of the sector’s theme in 3Q 2018, putting pressure on the LME quotation. Other negative factors were the increases in global production, worries about weakening demand in China, balanced by shortage pressures coming from Alunorte capacity cut. In para
Slide 10: Contents: Financial Highlights 1-3Q 2018
Contents • Financial Highlights 1-3Q 2018 19/11/2018 10
Slide 11: Financial Performance – Alro Group
Financial Performance – Alro Group Sales and gross margin speed up in 3Q 2018 Income Statement Sales: In 1-3Q 2018, 78% of total Group sales (83% in 1-3Q RON '000 YoY YoY QoQ 2017) were made by Alro’s external sales (key influences 1-3Q 2018 1-3Q 2017 change 3Q 2018 3Q 2017 change change detailed fu
Slide 12: Net result evolution vs. 1-3Q 2017
Financial Performance – Alro Group Net result evolution vs. 1-3Q 2017 Alro Group Net result 9 months 2018 vs. 9 months 2017 (RON mn) 800 Alro Group Revenue: RON 251.6 mn Alro Group COGS: -RON 222.5 mn 600 146.4 (92.9) 0.2 (49.5) 6.4 400 (5.8) 104.5 (80.2) (44.2) (3.3) (44.2) 29.4 (0.02) 200 256.8 22
Slide 13: Alro stand alone summary
Alro stand alone summary – Sales and gross margin up in 3Q 2018 Sales, LME & realized premia Profit margins evolution 2,466 2,500 9,000 25% 2,230 2,299 21% 2,127 8,000 19% 1,948 1,994 20% 18% 2,000 1,985 1,862 7,000 16% 15% 15% 6,000 12% 1,500 RON/t mn RON 5,000 10% USD 739 USD 753 4,000 5% 1,000 US
Slide 14: Alro stand alone summary – EBITDA
Alro stand alone summary 3Q 2018 EBITDA affected by one-offs EBITDA & LME + FX 500 9,000 USD 2,156 451 450 8,000 USD 2,389 400 USD 1,924 7,000 350 336 292 301 6,000 300 RON/t 255 mn RON 246 5,000 250 4,000 200 3,000 150 100 2,000 38 1,000 50 23 - - 2012 2013 2014 2015 2016 2017 1-3Q 1-3Q 2017 2018 A
Slide 15: SMHL and Alum stand alone summary
SMHL and Alum stand alone summary SMHL – supporting group needs Alum – capturing market opportunities • In 1-3Q 2018, SMHL sold bauxite in amount of RON 218m, 18.5% • In 1-3Q 2018, Alum registered an increase in alumina sales more than in 1-3Q 2017, supported mainly by higher volumes sold. volumes b
Slide 16: Statement of Financial Position (1 of 2)
Financial Performance – Alro Group Statement of Financial Position (1 of 2 ) RON '000 30-Sep-18 31-Dec-17 YoY change Property, plant and equipment: In 1-3Q 2018, Alro Group acquired PP&E worth RON 242.9m, 55.5% more than in 1-3Q Assets 2017, continuing its project for capacity expansion and quality
Slide 17: Statement of Financial Position (2 of 2)
Financial Performance – Alro Group Statement of Financial Position (2 of 2) RON '000 30-Sep-18 31-Dec-17 YoY change Bank loans: Except for the investment financing credit facilities signed by Alum in May 2018, no other additional Shareholders' Equity financing was contracted by Alro Group in 3Q 2018
Slide 18: Good cash management in 3Q 2018
Financial Performance – Alro Group Good cash management in 3Q 2018 RON '000 1-3Q 2018 1-3Q 2017 3Q 2018 3Q 2017 Alro Group closed 1-3Q 2018 with a cash balance of RON 209.9m, of which restricted cash of RON 6.9m. This amount Cash flow from operating activities was roughly unchanged from the end of 2
Slide 19: Alro Group – Debt and treasury
Alro Group – Debt and treasury Net Debt unchanged; Net Debt to EBITDA remains low at 1.3x Alro Group's debt evolution Debt structure (as of September 2018) 1,000,000 800,000 18.5% RON '000 600,000 USD EUR 400,000 RON 16.5% 200,000 65.0% - Dec-15 Dec-16 Dec-17 Mar-18 Jun-18 Sep-18 Total interest bear
Slide 20: Alro Group – Capex and key metrics
Alro Group – Capex and key metrics CAPEX continues in 3Q, indebtedness remains low, profitability and efficiency high Capex dynamics 70.0 RON '000 1-3Q 2018 2017 Change Peers median* 60.0 Net Debt 727,699 561,721 29.5% 50.0 EBITDA (ttm) 555,615 566,456 -1.9% Net Debt / EBITDA 1.3 1.0 1.2 USD mn 40.0
Slide 21: Contents
Contents • Overview • Operational Highlights 1-3Q 2018 • Market Outlook • Financial Highlights 1-3Q 2018 • Appendices 19/11/2018 21
Slide 22: Alro Group entities
Alro Group entities Company Parent Shareholding Bauxite mining (%) Alro S.A. Vimetco NV 84.19 Alum S.A. Alro S.A. 99.40 Conef S.A. Alro S.A. 99.97 Vimetco Extrusion SRL Alro S.A. 100.00 Global Aluminium Ltd. Alum S.A. 100.00 Alumina refining Bauxite Marketing Ltd. Global Aluminium Ltd. 100.00 Sierra
Slide 23: Simplified Group Structure
Simplified Group Structure Alro S.A. Primary aluminium producer Processed aluminium producer 100% 99.9% 99.4% Vimetco Extrusion S.R.L. Conef S.A. Alum S.A. Extrusion business line Alro share portfolio management Alumina refinery 100 % Global Aluminium Ltd. Holding Entity 100 % 100 % Bauxite Marketin
Slide 24: Supporting information – Adjusted Net Result calculation
Supporting information – Adjusted Net Result calculation (Alro Group) Alro Group – Adjusted Net Result RON '000 1-3Q 2018 1-3Q 2017 3Q 2018 3Q 2017 Net result 223,535 256,756 69,384 69,909 Impairment of non-current assets (1,262) (45) 1 (45) Derivative financial instruments that (26,940) 2,426 (10,2
Slide 25: Supporting information – Adjusted EBITDA calculation
Supporting information – Adjusted EBITDA calculation (Alro Stand-Alone) Alro Stand-alone – Adjusted EBITDA RON '000 2012 2013 2014 2015 2016 2017 1-3Q 2017 1-3Q 2018 EBITDA 292,164 (6,743) 114,700 223,501 246,627 455,611 335,995 294,662 EBITDA Margin (%) 13.1% -0.3% 5.8% 9.7% 11.6% 18.5% 18.0% 15.0%
Slide 26: Cautionary statement
Cautionary statement These materials are being supplied to you solely for your information and may not be reproduced in any form, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, by any medium or for any purpose. Failure to comply with this r