Capral Limited · ASX:CAA
Capral — FY2012 Earnings Presentation
18 slides from Capral's earnings presentation, Feb 21, 2013
Slide 1: 2012 Full Year Results Presentation
2012 Full Year Results Presentation This presentation includes forward-looking estimates that are subject to risks, uncertainties 21 February 2013 and assumptions outside of Capral’s control and 1 21 FEBRUARY 2013 CAPRAL FULL YEAR RESULTS should be viewed accordingly. CAPRAL LIMITED
Slide 2: Highlights
HIGHLIGHTS FULL YEAR TO DECEMBER 2012 • Achieved in tough trading conditions ... EBITDA¹ profit of $4.0m - Housing at a cyclical low - High A$ sustaining imports (dumped) (before restructuring & LME mark to market) - Ill-timed capacity expansion in the Australian industry resulting in sub optimal pl
Slide 3: Financial Summary
FINANCIAL SUMMARY TWELVE MONTHS TO DECEMBER 2012 Full Year H1 H2 Full Year H1 H2 2012 2012 2012 2011 2011 2011 Sales Volumes - External (‘000 tonnes) 45.3 22.0 23.3 48.3 24.5 23.8 $m $m $m $m $m $m Sales Revenue 303.9 149.2 154.7 348.6 179.5 169.1 EBITDA 4.0 0.3 3.7 9.7 5.2 4.5 (before LME mark-to-m
Slide 4: Project Relaunch cost savings mitigating volume, price and inflation impacts
PROJECT RELAUNCH COST SAVINGS AGAIN PLAYED A CRITICAL ROLE MITIGATING NEGATIVE VOLUME, PRICE AND INFLATION IMPACTS EBITDA $m 8 6.8 (4.0) 6 4 8.1 (0.7) 3.4 (2.6) 2 (5.5) 0 -2 2.9 (0.6) -4 (2.4) -6 1.5 -8 -10 EBITDA 11 Volume Price Inflation & Billet Premium Billet Premium LME Devaluation LME Devaluati
Slide 5: Trading EBITDA break even reduced by over 40% since 2008
The Trading EBITDA1 break even of the business has reduced by over 40% since 2008 Tonnes per day 350 327 Underlying costs have reduced by 300 $40m pa over the 2008 base. 295 • Employee head count has reduced in excess of 40% since 2008 to around 790 employees • Manufacturing efficiency 250 • Metal r
Slide 6: Strong Financial Position
STRONG FINANCIAL POSITION $m $m $m 12 months to Dec 12 Dec 11 Dec 10 EBITDA 2.1 6.4 19.2 Working Capital 6.7 2.3 (2.3) Finance Cost (0.6) (1.6) (2.7) Equity Compensation Amortisation 1.2 1.2 3.7 Other 0.1 0.5 1.9 Operating Cash Flow is positive Operating Cash Flow 9.5 8.8 19.8 Sale of property - - 1
Slide 7: Leverage to Recovery in Residential Construction
LEVERAGE TO RECOVERY IN RESIDENTIAL CONSTRUCTION MONTHLY DWELLING APPROVALS AND QUARTERLY DWELLING COMMENCEMENTS COMMENCEMENTS ARE FORECAST TO RISE BY 15% BY 2014 MONTHLY UNITS 16,000 ANNUAL DWELLING COMMENCEMENTS ‘000 15,000 200 14,000 APPROVALS 175 13,000 168 173 Underlying demand 160 12,000 -17%
Slide 8: Aluminium extrusion demand expected to increase in 2013 from a cyclical low
ALUMINIUM EXTRUSION DEMAND IS EXPECTED to increase IN 2013 from A CYCLICAL LOW ‘000 Tonnes ALUMINIUM EXTRUSION MARKET PA 200 200 • Market has fallen 30% from its high in 2007 to the low in 2012 and is poised for a recovery 183.3 175 30% 170.7 165.2 148.1 150 (Based on BIS Shrapnel forecast 6.0% incr
Slide 9: Capral at forefront of campaign to reform Australian anti dumping regime
CAPRAL HAS BEEN AT THE FOREFRONT OF A CAMPAIGN TO REFORM AUSTRALIAN ANTI DUMPING REGIME Dumping & Countervailing Duties (Avg) The impact of the imposed • Capral won a case in 2010 but the levels 40% anti dumping measures to of duties are relatively low 30% date has been modest • There are indication
Slide 10: Safety and Environmental
SAFETY ENVIRONMENTAL Measure/Year 2008 2009 2010 2011 2012 Lost Time Injuries 15 7 16 12 4 LTI/MTI’S 41 31 43 31 21 LTI/MTI Frequency* 17.5 16.3 23.6 18.4 13.2 Capral is committed to minimising the environmental impacts of its extrusion Hours Lost Through Injury 2,880 1,436 3,731 2,350 1,003 and dis
Slide 11: CEO Transition
CEO TRANSITION • P hil Jobe is stepping down as CEO in mid April after four years in the role. Phil will remain as a non-executive Director of Capral and continue to spearhead the Anti Dumping advocacy • Tony Dragicevich has been appointed as the CEO Designate. Tony is an experienced CEO with a rele
Slide 12: A Comprehensive Strategic Plan Is Being Implemented
A COMPREHENSIVE STRATEGIC PLAN IS BEING IMPLEMENTED • Leading Market Share • Long term customer relationships • Experienced and committed workforce DEFEND • Commitment to excellence What we have • National footprint of world class extrusion plants • National distribution and logistics capability • L
Slide 13: Outlook
OUTLOOK • ousing commencements are forecast to be around 148k for calendar 2013, up 6% H on the prior year, skewed to the second half • A sustained high $A will continue to put pressure on pricing and gross margins and sustain import levels • Project Relaunch cost savings are targeted to at least co
Slide 14: Appendix 1: Capral Profile
APPENDIX 1 CAPRAL PROFILE • Australia’s largest manufacturer and distributor of aluminium profiles • A National footprint of world class extrusion plants 8 operating presses with annual capacity of 70KT • A network of 5 major distribution facilities, 6 regional centres and 7 metropolitan trade centr
Slide 15: Appendix 2: The Turnaround Strategy Is Delivering
APPENDIX 2 THE TURNAROUND STRATEGY IS DELIVERING • Stabilise the Business - Recapitalise the Balance Sheet - Embed a new operating philosophy The First Phase has been completed - Implement a lean management structure with increased accountability - Realise significant cost savings - Launch an Anti D
Slide 16: Appendix 3: Growth in Chinese Extrusion Imports Enabled by 3 Key Factors
APPENDIX 3 THE GROWTH IN CHINESE EXTRUSION IMPORTS HAS BEEN ENABLED BY 3 KEY FACTORS Yuan Jan 05 to June 08 08/09 09/10 10/11 11/12 25,000 • Primary aluminium represents around 70% of Chinese extrusion costs 1. Subsidised Primary • Chinese extrusion companies are PERIOD OF INVESTIGATION 1. Chinese c
Slide 17: Appendix 4: National Footprint of World Class Extrusion Plants
APPENDIX 4 CAPRAL HAS A NATIONAL FOOTPRINT OF WORLD CLASS EXTRUSION PLANTS EXTRUSION PLANT UTILISATION RATES % 100 Operational capability 90% Capral operates in all states and employs around 790 people 80 77% 79% 69% 65% 60 EXTRUSION PLANTS Location Presses Capacity Finishing 40 (Ktpa)* Bremer (QLD)
Slide 18: Well Invested Aluminium Extrusion Production and Distribution System
APPENDIX 5 WELL INVESTED ALUMINIUM EXTRUSION PRODUCTION AND DISTRIBUTION SYSTEM, CLOSE TO END CUSTOMERS Darwin Cairns • Capral is the only Australian extrusions producer with a Townsville manufacturing and distribution presence throughout the Mackay country Slacks Creek • World-class production syst