Alro S.a. · BVB:ALR
Alro — FY2018 Earnings Presentation
26 slides from Alro's earnings presentation, Mar 27, 2019
Slide 1: Financial Results for 2018 – Alro Group
Financial Results for 2018 – Alro Group 27 March 2019 NB: in this presentation, whenever we refer to Alro Group we present consolidated figures, when we refer to Alro we present stand-alone figures
Slide 2: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 2
Slide 3: Overview – Alro Group
Overview – Alro Group In 2018, compared to 2017: Production of all product categories except for processed products increased YoY, the latter due to a scheduled revamp of one of Alro’s two cold rolling mills. However, thanks to our flexibility in allocating capacity among different product types w
Slide 4: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 27/03/2019 4
Slide 5: Operational Highlights – Production
Operational Highlights – Production Aluminium – primary products up, processed affected by one-off Primary facilities Processing facilities • In 2018, primary aluminium production registered a slight, 0.3%, YoY • In 2018, the Group registered a weaker production of flat rolled increase, fueled mainl
Slide 6: Operational Highlights – Production
Operational Highlights – Production Alumina and Bauxite – increased activity at the refinery, capturing market opportunities Bauxite – SMHL, Sierra Leone Alumina – Alum, Romania • In 2018, SMHL’s production of commercial bauxite was higher by • Alum increased its output by 21% YoY in 2018 and by 10.
Slide 7: Operational Highlights – Sales
Operational Highlights – Sales Aluminium – flat in volume and +5.7% YoY in value in 2018 In 2018, Alro Group’s sales of primary products increased by 2.5% YoY in volume terms. The increase was the result of higher sales of wire rod (+4.7% YoY) and billets (+7.0% YoY). The weakness seen in the wire r
Slide 8: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 27/03/2019 8
Slide 9: Market Outlook
Market Outlook Trade war remained one of the price-moving factors in 4Q 2018, influencing the LME quotation mostly down. At the beginning of December, presidents Trump and Xi agreed to halt any new tariffs for 90 days as the countries continue negotiations over a broader trade agreement, and there
Slide 10: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 27/03/2019 10
Slide 11: Financial Performance – Alro Group
Financial Performance – Alro Group Operating result pressured by weaker LME in 4Q 2018 Income Statement RON '000 YoY YoY QoQ Sales: In 2018, 78.9% of total Group sales (82.1% in 2017) 2018 2017 change 4Q 2018 4Q 2017 change change were made by Alro’s third-party sales (key influences detailed Sales
Slide 12: Net result evolution vs. 2017
Financial Performance – Alro Group Net result evolution vs. 2017 Alro Group Net result 12 months 2018 vs. 12 months 2017 (RON mn) 1,200 Alro Group Revenue: RON 256.2 mn Alro Group COGS: -RON 274.2 mn 1,000 800 164.1 27.4 (121.4) 600 (42.6) 104.1 (17.1) (22.3) (110.2) (54.7) 400 (4.3) (55.7) 36.3 (59
Slide 13: Alro stand alone summary
Alro stand alone summary – Difficult 4Q 2018 – low LME, higher costs, some improvement in premia could not offset Sales, LME & realized premia Profit margins evolution 2,700 2,599 9,000 25% 2,466 2,400 2,230 2,299 8,000 2,127 20% 18% 2,100 1,948 1,994 7,000 15% 14% 1,800 6,000 RON/t mn RON 1,500 5,0
Slide 14: Alro stand alone summary
Alro stand alone summary 2018 EBITDA affected by one-offs EBITDA & LME + FX 500 9,000 USD 2,110 451 450 8,000 USD 2,389 400 USD 1,969 361 7,000 350 292 6,000 300 RON/t 255 mn RON 246 5,000 250 4,000 200 3,000 150 100 2,000 38 1,000 50 23 - - 2012 2013 2014 2015 2016 2017 2018 Adjusted EBITDA (RON mn
Slide 15: SMHL and Alum stand alone summary
SMHL and Alum stand alone summary SMHL – supporting group needs Alum – capturing market opportunities • In 2018, SMHL sold bauxite in amount of RON 265.8m, 8.8% higher • In 2018, Alum registered an increase in alumina sales volumes by than in 2017. 15.7% and in the sales of hydrate by 55.3% YoY. In
Slide 16: Statement of Financial Position (1 of 2)
Financial Performance – Alro Group Statement of Financial Position (1 of 2 ) P,P&E and intangibles: In 2018, Alro Group acquired PP&E RON '000 Dec/18 Dec/17 YoY change worth RON 305.5m, 40.3% more than in 2017, continuing its Assets projects for capacity expansion and quality improvement. Of Non-cur
Slide 17: Statement of Financial Position (2 of 2)
Financial Performance – Alro Group Statement of Financial Position (2 of 2) RON '000 Dec/18 Dec/17 YoY change Bank loans: Except for the investment financing credit facilities signed by Alum in May 2018, no other additional Shareholders' Equity financing was contracted by Alro Group in 2018. Share c
Slide 18: Good cash management in 4Q 2018
Financial Performance – Alro Group Good cash management in 4Q 2018 RON '000 2018 2017 4Q 2018 4Q 2017 Alro Group closed 2018 with a cash balance of RON 212m, of which restricted cash of RON 8.4m. This amount was Cash flow from operating activities roughly unchanged from the end of September 2018, th
Slide 19: Alro Group – Debt and treasury
Alro Group – Debt and treasury Net Debt slightly down; Net Debt to EBITDA remains low at 1.5x Alro Group's debt evolution Debt structure (as of December 2018) 1,000,000 800,000 18.9% RON '000 600,000 USD EUR 400,000 RON 16.8% 200,000 64.3% - Dec-15 Dec-16 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Total int
Slide 20: Alro Group – Capex and key metrics
Alro Group – Capex and key metrics CAPEX continues in 4Q, indebtedness remains low, profitability and efficiency high Capex dynamics 90.0 RON '000 2018 2017 Change Peers 80.0 median* 70.0 Net Debt 710,785 561,721 26.5% EBITDA (ttm) 485,694 566,456 -14.3% 60.0 Net Debt / EBITDA 1.5 1.0 2.2 USD mn 50.
Slide 21: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 27/03/2019 21
Slide 22: Alro Group entities
Alro Group entities Company Parent Shareholding Bauxite mining (%) Alro S.A. Vimetco NV 54.19 Alum S.A. Alro S.A. 99.40 Conef S.A. Alro S.A. 99.97 Vimetco Extrusion SRL Alro S.A. 100.00 Global Aluminium Ltd. Alum S.A. 100.00 Alumina refining Bauxite Marketing Ltd. Global Aluminium Ltd. 100.00 Sierra
Slide 23: Simplified Group Structure
Simplified Group Structure Alro S.A. Primary aluminium producer Processed aluminium producer 100% 99.9% 99.4% Vimetco Extrusion S.R.L. Conef S.A. Alum S.A. Extrusion business line Alro share portfolio management Alumina refinery 100 % Global Aluminium Ltd. Holding Entity 100 % 100 % Bauxite Marketin
Slide 24: Supporting information – Adjusted Net Result calculation
Supporting information – Adjusted Net Result calculation (Alro Group) Alro Group – Adjusted Net Result RON '000 2018 2017 4Q 2018 4Q 2017 Net result 235,327 391,106 11,792 134,350 Impairment of non-current assets (1,261) 184 - 229 Derivative financial instruments that (35,161) 1,161 (8,221) (1,265)
Slide 25: Supporting information – Adjusted EBITDA calculation
Supporting information – Adjusted EBITDA calculation (Alro Stand-Alone) Alro Stand-alone – Adjusted EBITDA RON '000 2018 2017 2016 2015 2014 2013 2012 2011 EBITDA 354,740 455,611 246,627 223,501 114,700 (6,743) 292,164 482,794 EBITDA Margin (%) 13.7% 18.5% 11.6% 9.7% 5.8% -0.3% 13.1% 21.3% EBITDA ad
Slide 26: Cautionary statement
Cautionary statement These materials are being supplied to you solely for your information and may not be reproduced in any form, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, by any medium or for any purpose. Failure to comply with this r