United Company RUSAL Plc

United Company RUSAL — Q1 2013 Earnings Presentation

23 slides from United Company RUSAL's earnings presentation, May 14, 2013

  1. Slide 1: 1Q2013 Results Presentation

    1Q2013 Results Presentation 14 May 2013

  2. Slide 2: Disclaimer

    Disclaimer These materials and the subsequent discussion are not an offer for sale of any securities of United Company RUSAL Plc (the “Company”). The distribution of these materials in certain jurisdictions may be restricted by law and therefore persons into whose possession these materials come sho

  3. Slide 3: Operational and financial highlights

     Operational and financial highlights  Growth projects  Market update  Appendix BEMO aluminium smelter construction site 3

  4. Slide 4: 1Q 2013 highlights

    1Q 2013 highlights Top-line improved on better realized LME price and higher premiums despite continued capacity cuts  Aluminium production decreased by 4% (42Kt) to 1,007Kt in 1Q2013 vs 1Q2012 following the launch of the capacity curtailments program  Record high realized premium of US$264/t achi

  5. Slide 5: Revenue growth owing to realized price increase

    Revenue growth owing to realized price increase Aluminium production & sales Kt 1 100 1,095 50% 1,067 (3%) 48% 1,049 1,044 1,042 1 050 1,038 46% 1,030 1,011 1 007 994 44% 1 000 40% 42% 40% 39% 950 38% 40% 37% 38% 900 36% 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 (1) Aluminium production Aluminium sale

  6. Slide 6: Slight costs increase driven by macro factors

    Slight costs increase driven by macro factors Cost of sales USD/RUB exchange rate and oil prices US$m $/bbl Oil Price (1) RUB/USD(1) RUB 3% 2,250 2,191 130 +2.3% QoQ (2.1%) QoQ 34.0 4Q 1Q 186 165 125 2012 2013 33.0 234 233 120 32.0 660 673 115 31.0 110 30.0 105 29.0 (1) (1) 31.1 30.4 1,112 1,178 100

  7. Slide 7: Operating margins supported by higher pricing

    Operating margins supported by higher pricing EBITDA Bridge US$m EBITDA EBITDA margin margin 8.4% 70 9.2% 246 (10) 221 4 (15) 9 (27) (6) Better metal pricing partially offset by exchange rate movements (1) Includes negative effect from the LME factor 7

  8. Slide 8: Started deleveraging on the back of proceeds from Norilsk Nickel investment

    Started deleveraging on the back of proceeds from Norilsk Nickel investment Maintaining flexibility and decreasing debt load Current maturity profile(2)  Early debt repayments of US$473m made in 1Q2013: US$bn  US$406m repaid to international lenders (incl. US$328m from a 6.1 drawdown under a new P

  9. Slide 9: Growth projects

     Operational and financial highlights  Growth projects  Market update  Appendix BEMO HPP. Generator hall of Hydropower Unit №8 9

  10. Slide 10: Capacity sales on the wholesale market commenced at BEMO HPP

    Capacity sales on the wholesale market commenced at BEMO HPP BEMO HPP. BEMO HPP. Installation Installation site site area area BEMO Smelter. Potroom BEMO HPP BEMO Smelter  Partner RusHydro (50%)  Partner RusHydro (50%)  Design capacity 3,000 MW  Design capacity 588Ktpa  Remaining CapEx(1) US$20

  11. Slide 11: Market update

     Operational and financial highlights  Growth projects  Market update  Appendix Friguia Bauxite and Alumina Complex 11

  12. Slide 12: Global aluminium consumption outlook remains positive

    Global aluminium consumption outlook remains positive Global aluminium consumption Key Regions Mt  Global aluminium demand growth rate for 57.7 2013 confirmed at 6%. Largest 54.2 47.4 50.1 contributors are expected to be China, 44.8 38.0 37.8 35.6 40.6 other Asian countries and the United 34.4 Stat

  13. Slide 13: Strong aluminium demand in North America is forecast for the next 3-5 years

    Strong aluminium demand in North America is forecast for the next 3-5 years Automotive production Aluminium demand in NA Housing starts US & Canada Mt 1.6 Mt 1.8 2.6 Millions Units 4.2 +2.1% Flat Millions Units 1.5 4.0 1.6 2.2 1.5 3.8 1.4 1.4 1.8 1.4 3.6 1.2 1.4 1.3 3.4 1.3 1.0 1.0 1.2 3.2 0.8 0.6 1

  14. Slide 14: Stable aluminium demand growth in Asia (ex-China) with increasing pace in 2H2013

    Stable aluminium demand growth in Asia (ex- China) with increasing pace in 2H2013 Automotive production Aluminium demand in Asia ex-China Housing starts in Japan 5.0 (4%) Mt 1.5 38 Millions Units Japan, South +2.3% +7% Mln Sq mt 4.8 Korea, 36 ASEAN 1.4 4.6 34 4.4 32 4.2 1.4 30 4.0 28 3.8 1.3 26 3.6

  15. Slide 15: European market is struggling with uncertain economical environments

    European market is struggling with uncertain economical environments New Cars Registration Aluminium demand in Europe Production index in Construction Mt 4 500 115 Thousands units 2.4 Europe includes Turkey, EU27+EFTA excludes Russia 2010 = 100 Eurozone 4 300 110 2.2 4 100 +0.3% 105 3 900 2.1 100 3

  16. Slide 16: 2013 Market growth Assessment

    2013 Market growth Assessment North CIS Europe China Global America (2013 vs 2012) Aerospace +9-10% Light +4-5% Vehicle Trucks & Trailers = = +2-3% Packaging = +2-4% Construction +5-6% Electrical = +6-7% Source: UC RUSAL analysis 16

  17. Slide 17: Market balance ex-China supported by capacity cuts

    Market balance ex-China supported by capacity cuts Aluminium ex-China balance LME aluminium inventories Kt 5260 600 Kt 5240 500 5220 400 5200 300 5180 200 5160 100 5140 - 5120 -100 5100 -200 5080 Source: CRU, UC RUSAL Source: Bloomberg, UC RUSAL  Important announcements made in March-May 2013 by th

  18. Slide 18: Investment flows increasingly favoring equities

    Investment flows increasingly favoring equities Commodity & stock market divergence …forming negative LME price sentiment th. lots th. lots 1800 1000 1700 350 1600 900 1600 800 1400 1500 300 700 1400 1200 250 600 1300 1000 1200 500 200 800 1100 400 1000 150 600 300 900 400 200 800 100 Market open in

  19. Slide 19: China: high cash-cost smelters cutting production, new projects commissioning slowed down

    China: high cash-cost smelters cutting production, new projects commissioning slowed down Chinese unprofitable aluminum production  More than 1.2Mt of capacities were cut in China in 2013 year-to-date RMB/t  Additional capacity cuts are expected: 300kt announced by CPI and a 10% cut by major state

  20. Slide 20: Appendix

     Operational and financial highlights  Growth projects  Market update  Appendix Aluminium ingots 20

  21. Slide 21: Summary results Income statement

    Summary results Income statement US$m 1Q 2013 4Q 2012 % Change Revenue 2,682 2,624 2% Cost of sales (2,250) (2,191) 3% EBITDA 246 221 11% EBITDA Margin 9% 8% 1 p.p. Share of profits of associates and JVs 114 (69) - Income tax (4) 90 - Net Loss/Profit 19 (411) - Adjusted Net Profit (47) (138) - Recur

  22. Slide 22: Summary results Balance Sheet and Cash Flow

    Summary results Balance Sheet and Cash Flow As at 31 As at 31 US$m % Change Mar 2013 Dec 2012 Cash and Cash Equivalents 299 505 (41%) Equity Attributable to Shareholders of the 10,434 10,732 (3%) Company Total Liabilities 14,334 14,478 (1%) Total working capital 1,928 1,893 2% Net Debt 10,968 10,829

  23. Slide 23: Summary results Segment results

    Summary results Segment results 1Q 2013 4Q 2012 US$m Aluminium Alumina Aluminium Alumina Segment Revenue 2,324 515 2,296 391 Segment Results (EBIT) 230 (42) 187 (57) EBITDA 333 (13) 292 (30) EBITDA margin 14% (3%) 13% (8%) Segment CapEx 72 32 101 35 Segment cash cost per tonne 1,971 352 1,934 348 

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