Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q4 2022 Earnings Presentation
24 slides from Century Aluminum's earnings presentation, Feb 23, 2023
Slide 1: Century Aluminum Company 4th Quarter Earnings Call
Century Aluminum Company 4th Quarter Earnings Call February 23, 2023
Slide 2: Cautionary Statement
Cautionary Statement This presentation and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21
Slide 3: Speakers
Speakers • Jesse Gary – President and Chief Executive Officer • Jerry Bialek – Executive Vice President and Chief Financial Officer • Shelly Harrison – Senior Vice President, Finance and Treasurer • Peter Trpkovski – Vice President, Finance and Investor Relations 2
Slide 4: Company and Market Update
Company and Market Update ◼ Improving global market conditions as curtailments continue in Europe and China Industry ◼ Continued Chinese water shortages risk further smelter curtailments Fundamentals ◼ Global inventories remain at historical lows ◼ US power markets returning to normalized pricing le
Slide 5: Industry Environment
Industry Environment Aluminum Supply and Demand Balance – FY22 Primary Aluminum Balance – US and EU - Primary Aluminum Balance (MT in MM's) 80 69.2 69.4 70 (1.0) Primary Aluminum (MT in MM's) 60 (2.0) 50 (2.3) 40.2 40.5 (3.0) (2.6) 40 (2.8) (2.9) (3.0) 28.9 28.9 (3.1) 30 (4.0) (3.5) (3.6) 20 (4.1) (
Slide 6: Industry Environment - Prices
Industry Environment - Prices LME Aluminum Alumina Price Index 3,400 500 3,200 450 3,000 2,800 400 LME $/MT 2,600 API $/MT 350 2,400 2,200 300 2,000 250 1,800 200 1,600 1,400 150 Regional Premiums Power Actuals and Forwards 900 300 800 250 Regional Premiums $/MT 700 Power Rates $/MWh 600 200 500 150
Slide 7: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q322 Q422 FY21 FY22 Income statement Shipments (tonnes) 173,725 169,471 783,647 768,691 Net sales $ 637 $ 530 $ 2,213 $ 2,777 Net income/(loss) 44 (114) (167) (14) Earnings/(loss) per share 0.43 (1.24) (1.85) (0.15) Adjusted net
Slide 8: Financial Results: Q3 vs. Q4 Adjusted EBITDA
Financial Results Q322 vs. Q422 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 7
Slide 9: Financial Results: Q3 vs. Q4 Cash Flow
Financial Results Q322 vs. Q422 Cash Flow ($MM) 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Q1 Outlook
Q1 Outlook Adjusted EBITDA $MM CENX Price Lag Spot2 Q4 Actual Adjusted EBITDA $(12) Lagged LME / Delivery Premiums / Alumina ~$(5) LME realized $2,350/MT Primarily ~3 month lag ~ $2,410/MT US Midwest Premium realized $560/MT ~1 month lag ~ $645/MT European Duty Paid Premium realized $275/MT ~3 month
Slide 11: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM billet and increase total primary foundry alloy production to 120,000 tonnes • Construction well underway; completion • $120MM investment • The European market for billet is short expected by year end 2023 approx
Slide 12: Appendix
Appendix
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA and net debt are non- GAAP financial measures that management uses to evaluate Century's financial performance. These non-GAAP financial measures facilitate comparisons of this period’s result
Slide 14: Adjusted Net Income (Loss) Non-GAAP Reconciliation
Adjusted Net Income (Loss) Non-GAAP Reconciliation Q322 Q422 $MM EPS $MM EPS Net income (loss) as reported1 $ 41.9 $ 0.43 $ (113.5) $ (1.24) Lower of cost or NRV inventory adjustment, net of tax (6.3) (0.06) (8.3) (0.09) Unrealized (gain) loss on derivative contracts, net of tax (69.5) (0.72) 82.9 0
Slide 15: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q322 Q422 Net income (loss) as reported $ 44.3 $ (113.5) Interest expense 7.9 8.4 Interest income (0.1) (0.3) Net (gain) loss on forward and derivative contracts (112.6) 90.6 Other income - net (11.6) 1.4 Income tax expense 20.6 (17.2) Equity in JV’s - 0.1
Slide 16: 2023 Financial Assumptions
2023 Financial Assumptions Income Statement ($MM) FY22 FY23 Cash Flow ($MM) FY22 FY23 Shipments (kMT) 769 700 Sustaining Capex $20 $15-20 MH Restart $15 - D&A $77 $60-70 Iceland Casthouse1 $45 $60-75 SGA $37 $40-45 Investment Capex $5 $5-10 Interest Expense $29 $40-45 SGA $38 $35-40 Varies based Int
Slide 17: 2023 Financial Information
2023 Financial Information Sensitivities ($MM) Variance Annual EBITDA6 Annual Cash7 Pricing Convention LME +/- $100/MT $ 42 $ 35 U.S.: 50% ~1-month lag / 50% ~3-month lag LME Iceland: primarily ~3-month lag MWP1 +/- $22.04/MT 9 9 MWP ~1-month lag EDPP2 +/- $22.04/MT 7 7 EDPP Primarily ~3-month lag A
Slide 18: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit Commodity (unit) Q2-Q4 FY23 FY24 Volume % Hedged Price Volume % Hedged Price LME (MT) 34,000 5% $ 2,305 35,000 5% $ 2,325 MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) 132,000 5% $ 33 - - - Nord Pool (MWh) 746,000 95% € 3
Slide 19: Century well positioned for 2023 and beyond
Century well positioned for 2023 and beyond Aluminum Smelter Aluminum smelter Carbon Anode Plant Corporate Headquarters Grundartangi, Iceland ◼ FY23 production: 315k MT Corporate Headquarters Chicago, IL Carbon Anode Plant Aluminum Smelter Hawesville, KY Vlissingen, Netherlands ◼ Currently idled 4.2
Slide 20: Capacity and Production Information
Capacity and Production Information Aluminum facilities (kMT) Plant Country Capacity % Operating Sebree U.S. 220 100 Hawesville U.S. 250 0 Mt. Holly U.S. 230 75 Grundartangi Iceland 320 100 Total 1,020 70 Carbon anode facility (kMT) Plant Country Capacity % Operating Vlissingen Netherlands 150 100 T
Slide 21: Value-Added Products
Value-Added Products Value-added products capacity (kMT) FY23 FY24 Sebree – Billet/Slab 175 175 Mt. Holly – Billet/Slab 110 120 Grundartangi – Natur-Al TM Foundry Alloy 60 120 Grundartangi – Natur-Al TM and other low carbon metal 105 Grundartangi – Natur-Al TM Billet 150 Total 450 565 20
Slide 22: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update ◼ $250-$300MM liquidity Q422 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $245 $250-300 ◼ $300MM net debt target Projects Net Debt1 $429 $300 Sustaining Capital ◼ $30-35MM in historical ◼ Organic
Slide 23: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al™ products are made with energy from 100% renewable sources” 22
Slide 24: For Additional Information
For Additional Information Peter Trpkovski investorrelations@centuryaluminum.com 312-696-3132 (Office) Century Aluminum Company One South Wacker Dr, Suite 1000 Chicago, IL 60606 312-696-3102 (Fax) www.centuryaluminum.com 23
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