Slide 1: Interim Results Presentation Hulamin Limited
Interim Results Presentation Hulamin Limited For the half-year ended 30 June 2007
Slide 2: Salient features
Salient features • Continuing volume growth • Sustained improvement in underlying performance by Rolled Products • Operating profit of R171 million before once off corporate structuring costs • Once off corporate structuring costs of R160 million led to headline loss of R70 million • Interim dividen
Slide 3: Income Statement
Income Statement Half Year ended: 30 June 30 June R'million 2007 2006 Revenue 3,296.7 2,405.8 Operating profit before corporate structuring costs 170.9 190.0 Corporate structuring costs (159.9) - Operating Profit 11.0 190.0 Share of associate company's loss (0.5) - Finance costs (46.6) (66.5) (Loss)
Slide 4: Balance Sheet
Balance Sheet Half year ended: 30 June 30 June R'million 2007 2006 Non-current assets 4,052.5 3,921.9 Current assets 2,106.6 1,938.4 Inventories 930.9 906.2 Trade and other receivables 1,175.7 1,032.2 TOTAL ASSETS (excl cash) 6,159.1 5,860.3 Total Equity 3,435.4 2,683.7 Non-current liabilities 1,823
Slide 5: Cash Flow
Cash Flow Half year ended: 30 June 30 June R'million 2007 2006 Cash flows from operating activities 60.6 (6.5) Cash outflows from investing activities (179.3) (113.3) Rolled Products Expansion (98.3) Other capital expenditure (81.0) (113.3) Net cash flow (118.7) (119.8)
Slide 6: Analysis of Operating Income
Analysis of Operating Income Half year ended: 30 June 30 June R'million 2007 2006 Rand / US$ average 7.16 6.31 Rand / US$ closing 7.05 7.15 Rolled Products - Sales volumes ('000 tons) 95 89 - EBIT excluding metal price lag (R’m) 152 32 - Metal price lag (R’m) 8 128 - EBIT (R’m) 160 160 Extrusions an
Slide 7: Rolled Products sales volumes
Rolled Products sales volumes
Slide 8: Industry developments
Industry developments • Hindalco acquisition of Novelis • Rio Tinto acquisition of Alcan • Coega smelter • China – threat and opportunity – Aluminium semis output and exports – Rolled Products industry structure – Government export policies – Opportunities • Effects of energy costs
Slide 9: Mix and margins
Mix and margins • Overall market margins ¾ -2% in USA ; 6-10% in Europe • Lower growth in local demand, although more promising in H2 • Sustained growth in high value sectors – Can end stock – Heat treated plate – Brazing sheet • Medium term opportunities – Local market – Can and plate products – Ge
Slide 10: Mix and margins
Mix and margins PERCENT INDEX 65% ™ == 130 = 130 60% = — 125 = 120 55% = — 115 = 110 50% = eo = 105 65% = icine — 95 40% = 1 1 1 1 Pp “90 2003 2004 2005 2006 2007 H1 % HIGH VALUE PRODUCTS IN MIX BA INDEX OF ROLLING MARGIN PER TON
Slide 11: Manufacturing costs
Manufacturing costs • Costs, excluding metal, paints and lacquers, increased by 8% • Sharp increases in energy and packaging costs • Unit costs increased by 2% in nominal Rand terms and reduced in $ terms • Cost targets are being achieved in the ramp up to >200 000 tons • Short and medium term oppor
Slide 12: Cost performance
Cost performance 105 = $ PER TON INDEX 100 = 93; = 90 = 85 — 2004 2005 PER TON INDEX 2006 2007
Slide 13: Inventory Management
Inventory Management DAYS 90 85 80 75 70 65 60 55 50 2004 2005 2006 INVENTORY DAYS 2007 (H1) 2007 Est.
Slide 14: Expansion Project
Expansion Project • Increase rolled products capacity from 210 000 tons to 250 000 tons per annum • Improved mix and reduced unit costs • Full benefits by 2011 • Current status – Work underway on many fronts – 160 people on site – Within budget and schedule
Slide 15: Expansion project cash flows
Expansion project cash flows • R533 million committed to date • R142 million spent to date • Capex timing Rm • 2006 44 • 2007 240 • 2008 572 • 2009 94 TOTAL 950
Slide 16: Extrusion Performance
Extrusion Performance • Local market flat after 4 years of strong growth • Lower volumes but revenue increase as a result of higher metal prices • Margins under pressure in architectural segment • Start-up costs on Midrand powder coating plant • Increased expenditure on product development and distr
Slide 17: Extrusions outlook
Extrusions outlook • Second half traditionally stronger in architectural sector • Hulamin Building Systems distribution improved to 9 outlets • Export rebates removed by Chinese government, effective 1 July • Increased sales into industrial segments on the back of contracts already in place
Slide 18: Focus areas for H2 and beyond
Focus areas for H2 and beyond • Accelerating Rolled Products growth to 250 000 tons • Improved mix with current product range • Enhancing the product range • Improved service levels • Cost reduction opportunities • Rolled Products growth beyond 250 000 tons • Extrusion growth strategy