Noranda Aluminum — Q1 2015 Earnings Presentation
15 slides from Noranda Aluminum's earnings presentation, May 6, 2015
Slide 1: 1st Quarter 2015 Earnings Conference Call
1st Quarter 2015 Earnings Conference Call Noranda Aluminum Holding Corp May 6, 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 1st Quarter 2015 Summary
Key Takeaways • Completed in April key initiatives to structurally reduce Noranda’s costs by $22-$30 million annually – Secured new and reduced power rate at smelter – Completed port expansion project in Jamaica • Q1 results demonstrate year-over-year improvements and positive cash flow • Remain foc
Slide 4: Overview of New Rate Structure
Overview of New Rate Structure New Madrid Rate Decomposition Expected annual savings range from $17 to $25 million 4 • On April 29, 2015 the Missouri Public Service Commission (the “PSC”) established a new and reduced electricity rate structure for Noranda’s aluminum smelter in New Madrid – Establis
Slide 5: Bauxite Port Expansion
Bauxite Port Expansion 5 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 6: Progress on Transformation Path
Progress on Transformation Path 6 These transformational productivity projects target $85 million incremental segment profit over 2013, independent of aluminum price and other commodity price impact. Initiative Power Port Labor Annual Savings $17 to $25 million $5 million $15 million Date of First I
Slide 7: Quarterly Shipment Information
Primary Aluminum Shipments Bauxite Shipments Quarterly Shipment Information Flat-Rolled Product Shipments Alumina Shipments 7 Primary and Flat-Rolled aluminum products demand remains stable. Aluminum reduction cell issues at smelter has had a temporary negative affect on primary shipments. We expect
Slide 8: 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 5% to 7% Electrical • Power transmission units and lines • Electrical wir
Slide 9: Aluminum's demand fundamentals continue to be strong
Restarted; 14% Expect to restart before 2017; 24% Possible restart after 2016; 22% Likely to be permanent; 39% Majority of 5.8 MMT Closures Since 2013 Unlikely to Restart in Near-Term Aluminum’s demand fundamentals continue to be strong • Global aluminum consumption growth expected to outpace most o
Slide 10: Quarterly Results: Segment Profit Summary
Quarterly Results Last Four Quarters (amounts in millions except per pound data) Q1-14 Q4-14 Q1-15 Q1-14 Q1-15 Integrated Upstream Business: Primary shipments (lbs) 141.9 131.4 131.1 589.3 546.6 Integrated Upstream margin/lb: Midwest Transaction Price/lb $ 0.95 $ 1.12 $ 1.05 0.93 1.06 Integrated net
Slide 11: Sequential Net Cash Cost and Segment Profit Bridges
Sequential Net Cash Cost and Segment Profit Bridges 11 Sequential total segment profit decline due primarily to a sequential decrease in aluminum prices, which negatively impacted Alumina and Primary results. $0.83 $- $0.03 $0.02 $0.04 $0.80 4Q14 Net Cash Cost LME Price for 3rd Party Alumina Shipmen
Slide 12: Year-over-Year Net Cash Cost and Segment Profit Bridges
Year-over-Year Net Cash Cost and Segment Profit Bridges 12 Year-over-year total segment profit increase largely due to improved pricing and lower costs related to weather-related disruptions in the integrated upstream business last year. $0.81 $0.83 $0.09 $0.03 $0.06 $0.01 $0.06 $0.06 $0.90 1Q-14 Ne
Slide 13: Bridge of Segment Profit to Net Income, Ex. Special Items
(amounts in millions) Q1 2014 Q4 2014 Q1 2015 Segment profit $ 10.7 $ 49.6 $ 33.9 LIFO/LCM 0.2 (1.7) 4.8 Other recurring non-cash items (1.4) (1.3) (4.2) EBITDA, excluding special items 9.5 46.6 34.5 Depreciation & amortization (21.7) (23.8) (23.0) Interest expense, net (12.5) (12.7) (13.5) Pre-tax
Slide 14: Cash and Financial Management Overview
Cash and Financial Management Overview $50.0 $23.5 $4.9 $8.0 $23.4 $3.1 $33.9 $3.0 $5.5 $20.5 Cash, December 2014 Segment profit Operating working capital Cash Interest payments Tax payments, net Prepaid expenses & other Beginning cash plus cashfrom operating activities Capital spending Financing ac
Slide 15: Key Takeaways
Key Takeaways 15 • $17 to $25 million annual savings from reduced electricity rate at smelter • $5 million annual shipping cost savings from port expansion project in Jamaica • Savings are independent from fluctuations in aluminum prices Completed in April key initiatives to structurally reduce Nora
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