Noranda Aluminum — Q4 2014 Earnings Presentation
15 slides from Noranda Aluminum's earnings presentation, Feb 18, 2015
Slide 1: 4th Quarter 2014 Earnings Conference Call
4th Quarter 2014 Earnings Conference Call Noranda Aluminum Holding Corp February 18, 2015 10:00 AM Eastern Exhibit 99.2
Slide 2: Forward-looking statements
The presentation and comments made by Noranda’s management on the quarterly conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future, not past, events and involve certain im
Slide 3: Key Takeaways and 4th Quarter 2014 Summary
Key Takeaways • 4Q-14 reflects sequential and year-over- year improvement • We are on track to return the Smelter to full production by the end of 1Q-15 • We have taken actions to improve our performance and cash flow, while also investing in the business – Substantially completed important phase of
Slide 4: US Aluminum Demand Growth Outlook
US Aluminum Demand Growth Outlook Sector Noranda Product End-Use Applications US Demand Growth Outlook 1 Building & construction • Doors and windows • Curtain wall and store fronts • Shower and tub enclosures • Stadium seating 4% to 7% Electrical • Power transmission units and lines • Electrical wir
Slide 5: Majority of 5.5 MMT of 2013 & 2014 Closures Unlikely to Restart in Near-Term
Restarted; 14% Expect to restart before 2017; 30% Possible restart after 2016; 15% Likely to be permanent; 41% Majority of 5.5 MMT of 2013 & 2014 Closures Unlikely to Restart in Near-Term Aluminum’s demand fundamentals continue to be strong • Global economy continues to become more aluminum-intensiv
Slide 6: Quarterly Shipment Information
Primary Aluminum Shipments Bauxite Shipments Quarterly Shipment Information Flat-Rolled Product Shipments Alumina Shipments 6 Primary and Flat-Rolled aluminum products demand remains strong. Aluminum reduction cell issues at smelter negatively affected primary shipments in 2H-2014, but are on improv
Slide 7: Progress on Transformation Path
Progress on Transformation Path 7 These transformational productivity projects target $85 million incremental segment profit over 2013, independent of aluminum price and other commodity price impact. • December 2013 companywide workforce reduction complete, and is primary source of incremental produ
Slide 8: Bauxite Port Expansion
Bauxite Port Expansion 8 Port Expansion project provides cost savings for Bauxite and Alumina businesses, as well as opportunity to increase volume based on demand at a sufficient price and approval by Government of Jamaica Noranda’s Bauxite Business • Bauxite mining agreement with Government of Jam
Slide 9: Segment Profit Summary
Segment Profit Summary 9 Segment profit improvement is a result of (i) higher integrated upstream margin per pound, driven by improved aluminum prices, (ii) strong flat-rolled product volumes and margin, and (iii) lower corporate costs. Quarterly Results Annual Results (amounts in millions except pe
Slide 10: Sequential Net Cash Cost and Segment Profit Bridges
Sequential Net Cash Cost and Segment Profit Bridges $0.75 $0.80 $0.12 $0.01 $0.01 $0.05 $0.87 3Q14 Net Cash Cost, Excluding Primary Production Issues Season Peak Power Surcharge (New Madrid) LME Price for 3rd Party Alumina Shipments Commodity-based and Other 4Q14 Net Cash Cost, Excluding Primary Pro
Slide 11: Full Year Net Cash Cost and Segment Profit Bridges
Full Year Net Cash Cost and Segment Profit Bridges $0.82 $0.86 $0.02 $0.01 $0.02 $0.02 $0.02 $0.83 2013 Net Cash Cost Natural Gas Price Commodity-Based Input Prices and other Productivity 2014 Net Cash Cost (Ex. Disruptions) 1H-14 Alumina/Primary Weather-Related Disruptions Lower 2H-14 Primary Produ
Slide 12: Bridge of Segment Profit to Net Income, Ex. Special Items
(amounts in millions) Q4 2013 Q3 2014 Q4 2014 Segment profit $ 20.8 $ 36.6 $ 49.6 LIFO/LCM 3.7 (2.2) (1.7) Other recurring non-cash items (2.1) (3.7) (1.6) EBITDA, excluding special items 22.4 30.7 45.7 Depreciation & amortization (25.1) (21.7) (23.8) Interest expense, net (12.6) (12.6) (12.7) Pre-t
Slide 13: Liquidity and Capitalization Overview
Liquidity and Capitalization Overview $50.7 $20.5 $17.5 $4.0 $5.7 $33.5 $49.6 $4.0 $3.3 $24.3 Cash, September 2014 Segment profit Operating working capital Cash Interest payments Tax payments, net Prepaid expenses & other Beginning cash plus cashfrom operating activities Capital spending Financing a
Slide 14: Outlook: Key 2015 Expectations
2 0 14 Ou tloo k Key 2015 Expectations Driver Annual Outlook Comments Primary Aluminum • Shipments • Integrated Net Cash Cost • 572 to 575 million pounds Excluding power rate relief • $0.75 to $0.78 per pound(1,2) Including power rate relief • $0.70 to $0.73 per pound(3) • Quarterly expectations vs.
Slide 15: Key Takeaways
Key Takeaways 15 • Higher integrated upstream margin per pound, driven by improved aluminum prices • Strong flat-rolled product volumes and margin • Lower corporate costs. 4Q-14 reflects sequential and year-over-year improvement in cash flow and operating results • Smelter is currently operating nea
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