Slide 1: 2019 Half Year Results Presentation
2019 Half Year Results Presentation
Slide 2: Australia's leading supplier of aluminium products and solutions
Australia's leading supplier of aluminium products and solutions 5 plants; 8 extrusion presses 17 distribution centres Australia-wide Annual extrusion capacity 70k tonnes Annual turnover ~$450 million¹ Residential, commercial construction, industrial Investment in Process Automation ¹ 12 months to 3
Slide 3: Agenda
Agenda 1. 1H19 Summary 2. 1H19 Financials 3. Strategy and Outlook 4. Questions 3
Slide 4: 1H19 Summary
1H19 Summary Tony Dragicevich, CEO & MD “Right sizing of operations in response to downturn in market conditions, lowering manufacturing breakeven point and lifting profitability.” 4
Slide 5: 1H19 Performance Summary
1H19 Performance Summary Half year result down on last year, in line with guidance Trading EBITDA¹ of $2.4m (1H18: $6.9m) and EBITDA² of $3.4m (1H18: $7.6m) Volumes down 10% on prior period Strong balance sheet with net cash of $18.7m Volumes impacted by slowdown in residential constructio
Slide 6: Volume Breakdown
Volume Breakdown Channels to market (volume) Diverse industry exposure Volume Seasonality Tonnes (000’s) 40 35 30 Extrusion Extrusion Industrial ** Residential 25 Direct Ex Mill via RDC 46% Building * 46% 37% 20 41% 15 Rolled Non 10 via RDC Residential 5 17% Building 13% 0 1H14 2H14 1H15 2H15 1H16 2
Slide 7: Conditions softened in Residential market
Conditions softened in Residential market Annual Dwelling Commencements¹ (‘000) Residential commencements forecast¹ to decline significantly through 2019 250 Latest forecast (May 2019) 165,350 starts for 2019 25% decline on prior year 200 Multi-Res High Rise showing the sharpest decline, for
Slide 8: Recent Capral Residential & Commercial Projects
Recent Capral Residential & Commercial Projects Reva Apartments, South Perth, WA Marsden Brewhouse, Marsden Park, NSW Surf Shack, Middleton, SA 8
Slide 9: Industrial sector slowed
Industrial sector slowed Total Capral Industrial Volumes (Index 2012) New Truck and Van builds¹ (‘000) Source: Capral ¹ Source: TIC (Truck Industry Council of Australia) (Prime Mover Magazine) ² Source: Capral Marine sector strong – commercial ferries and defence Manufacturing and general fabric
Slide 10: Recent Capral Industrial Projects
Recent Capral Industrial Projects Wave Piercing Catamaran – Incat, TAS Memorial Bridge, Hobart, TAS Slider Trailer, Sloanebuilt, NSW 10
Slide 11: Extrusion market contracted
Extrusion market contracted Residential construction fell Non-residential building steady Industrial sector softer Capral has an estimated 26% share of the Australian Aluminium extrusion market Import volumes and share of market increased in FY18 and maintained high levels through 1H19 E
Slide 12: 1H19 Financials
1H19 Financials Tertius Campbell, CFO “Restructuring and automation projects deliver cost reductions in 2H19 and beyond, improving future returns." 12
Slide 13: Trading Results impacted by sharper first half slowdown
Trading Results impacted by sharper first half slowdown 1H19 total volume 10% below prior period 1H19 1H18 Incl AASB16 Excl AASB16 Sales revenue fell in line with volume decline Sales Volume ('000 tonnes) 26.8 29.9 $m $m Margins remain under pressure due to imports and excess local capacity Sa
Slide 14: Earnings impacted by volume and restructuring
Earnings impacted by volume and restructuring * AASB16 EBITDA impact offset by Right of Use asset depreciation and interest 14
Slide 15: Financial position stable
Financial position stable CASHFLOW 1H19 1H18 BALANCE SHEET Jun 19 Jun 18 $m $m $m $m Incl AASB16 Excl AASB16 Incl AASB16 Excl AASB16 Current Assets EBITDA 3.4 7.6 Inventory 82.3 87.6 Working Capital 1.2 (1.7) Trade Receivables 65.4 73.5 Net Cash and Equivalents 18.7 28.9 Finance Cost (2.6) (0.4) Oth
Slide 16: Strategy and Outlook
Strategy and Outlook Tony Dragicevich, CEO & MD “Deliver benefits of automation investment and right sizing of operations to improve our long term competitive position”. 16
Slide 17: Bremer Park Restructure
Bremer Park Restructure Closure of Anodising operation – continued service delivery via 3rd party anodisers Removal of one paint line, excess to requirement Right sizing of Extrusion operation to align with current demand – one press mothballed Permanent headcount reduced by 62 Casual labo
Slide 18: Investments to improve productivity and competitiveness
Investments to improve productivity and competitiveness Automated product handling and packing at Bremer New paint line at Canning Vale, WA ($2.4m) Park, QLD ($5.0m) Commissioning complete Q4 2018 Commissioning complete 1H 2019 Improved paint quality Elimination of bottlenecks Head cou
Slide 19: Increased dumping measures on imports from China (May 2019)
Increased dumping measures on imports from China (May 2019) 2010 – 2015 Modest impact from initial measures on Chinese imports Case won in 2010 with low level 2017 – New cases initiated duties imposed on Chinese imports Measures imposed against 2018 – Continue pursuit of Fair Trade Anti-Circum
Slide 20: Outlook
Outlook Commentators are forecasting a gradual fall in LME¹ from current levels during 2H 2019 AUD² weakening to ~$US0.65 by year end will partially offset a fall in USD LME Residential commencements are forecast³ to remain soft during 2H 2019 Industrial sector anticipated to remain at curre
Slide 21: National footprint of aluminium extrusion plants and distribution centres
National footprint of aluminium extrusion plants and distribution centres Extrusion Extrusion plants plants Distribution Distribution centres centres QLD – Bremer Park Capacity 35k tonnes, 4 presses 1 paint line 2019: Automated product handling project WA - Canning Vale Capacity 8k tonnes, 1
Slide 22: Aluminium: Shaping the Future - Questions
ALUMINIUM SHAPING THE FUTURE QUESTIONS 22