Aluminium Bahrain B.S.C · BAHRAIN:ALBH
Aluminium Bahrain B.S.C — Q2 2012 Earnings Presentation
32 slides from Aluminium Bahrain B.S.C's earnings presentation, 2012
Slide 1: Q2 2012 IR Presentation
Aluminium for the world Q2 2012 IR PRESENTATION albasmelter.com
Slide 2: Disclaimer
Aluminium for the world Disclaimer This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the “Company”). The document is being supplied to you solely for your information and for use at the Company’s presentation. No information made available to y
Slide 3: Contents
Aluminium for the world Contents 1- Industry Highlights 2- Alba Highlights 3- Q2 2012 Results 4- Industry Perspectives in 2012 5- 2012 Alba Priorities albasmelter.com 3
Slide 4: Industry Highlights
‘~ INDUSTRY HIGHLIGHTS
Slide 5: Aluminium Demand Healthy Despite Downbeat Market Sentiment
Aluminium for the world INDUSTRY HIGHLIGHTS Q2 2012 Aluminium Demand Healthy Despite Downbeat Market Sentiment (Reference Period: April - June) World consumption up by +3.2% North America - strong demand (+6.1%) driven by automotive and construction sectors Asian demand well supported by Japan rebui
Slide 6: Production Evolution
Aluminium for the world INDUSTRY HIGHLIGHTS Q2 2012 Production Evolution (Reference Period: January-June) World market production up by 2.2% YoY China output at 5.3 million metric tonnes (+8.7% YoY) driven by government support on power subsidies Western producers continue to suffer from lower LME p
Slide 7: LME & Premiums
Aluminium for the world INDUSTRY HIGHLIGHTS Q2 2012 LME & Premiums Despite Healthy Demand, LME is driven by Global Economic Uncertainty LME inventories at 4.9 million metric tonnes in May (-160 Kt vs. 1Q12 and -62 kt vs. December 2011) LME negatively impacted by uncertain European outlook as well as
Slide 8: Alba Highlights
‘~ ALBA HIGHLIGHTS
Slide 9: Q2 2012 Operational Highlights/Achievements
Aluminium for the world Alba Highlights Q2 2012- Operational Highlights/Achievements STAR Operational Improvement Program Additional recurrent savings of US$7 million recorded in 2Q12 vs. a full-year target of US$30 million Alba was able to increase production by 1.7% with sales stable through ongoi
Slide 10: Q2 2012 Operational Highlights/Achievements
Aluminium for the world Alba Highlights Q2 2012 - Operational Highlights/Achievements Raw Materials Alumina contracts fully booked Green Coke seize opportunistic spots cargoes in 2nd half of 2012 AlbaSafeWay Program Safety Excellence Program in progress with 3 work streams launched in 2Q12 Future Gr
Slide 11: Q2 & H1 2012 Financial Key Performance Indicators
Aluminium for the world Alba Highlights Q2 & H1 2012 - Financial Key Performance Indicators Without LME & Gas Impact, Alba Was Able to Maintain its Intrinsic Value Adjusted EBITDA driven by low LME levels & higher gas cost Q2: US$86 million down by 51% YoY H1: US$201 million down by 43% YoY Adjusted
Slide 12: Q2 2012 Results
Yo Q2 2012 RESULTS
Slide 13: Sales Analysis 2Q12 vs. 2Q11
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS Sales Analysis 2Q12 vs. 2Q11 (000’s MT) Significant Lower LME Prices Partially Offset by Higher Sales Volume 2Q12 vs. 2Q11 - Metal Sales Bridge (US$M) 700 130 550 8* 1 2 400 636 514 250 100 Sales 2Q11 LME Product Mix Pricing
Slide 14: Maintain Optimum Product Mix
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS Maintain Optimum Product Mix Value-Added Sales Back to Record Levels Despite Global Economic Uncertainty 2Q12 vs. 2Q11 - Sales by Product line Bridge Premium Above LME Trend USD (Per MT) (000’s MT) 300 180 1 4 3 200 140 228 2
Slide 15: Cost Analysis 2Q12 vs. 2Q11
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS Cost Analysis 2Q12 vs. 2Q11: Higher Energy & Workforce Costs Offset by Drop in Raw Material Prices 2Q12 vs. 2Q11 - Direct Costs Bridge (US$M) 450 5 3 1 27 2 20 3 19 350 55 424 406 250 150 Direct Cost 2Q11 RM Price RM Consumpt
Slide 16: STAR Saving - YTD vs. Target 2012
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS STAR Saving - YTD vs. Target 2012: YTD vs. Target 2012 - STAR Cumulative Savings (US$M) 35 18 30 19 12 5 0 Q1 Actual Q2 Actual Q3 Target Year End Target Actual Target albasmelter.com $7 million - additional savings generated
Slide 17: Adjusted EBITDA Bridge Gap Analysis 2Q12 vs. 2Q11
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS Adjusted EBITDA Bridge Gap Analysis 2Q12 vs. 2Q11: Adjusted EBITDA Margin at a 16.5% rate 2Q12 vs. 2Q11 - EBITDA Bridge (US$M Adjusted) 200 EBITDA 27.1% 123 100 4 EBITDA 16.5% 175 14 17 0 86 0 EBITDA 2Q11 Metal Sales Other Sa
Slide 18: Cash Flow Bridge 2Q12 vs. 1Q2012
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS Cash Flow Bridge 2Q12 vs. 1Q2012: Lower LME Prices Partially Offset by Strong Working Capital Management 1Q12 to 2Q12 Cash Flow Bridge (USD M) Free Cash Flow (USD M) 250 64 9 76 250 88 125 202 125 213 135 143 0 0 Cash CF from
Slide 19: Working Capital Trend as Percentage of Sales
Aluminium for the world Q2 2012 Results Working Capital Trend as Percentage of Sales: Efficient Working Capital Management 20% Working Capital As percentage of Sales 20% 18% 17% 16% End Q2 2011 End Q2 2012 Percentage albasmelter.com 19
Slide 20: Financial Summary Q2 and H1 2012
Aluminium for the world Q2 2012 Results LOW LME & SOFTER MARKET CONDITIONS 2Q12 vs. 2Q11; 1H12 vs. 1H11 Without LME & Gas Impact, Alba Was Able to Maintain its Intrinsic Value Financial Summary Q2 2012 Q2 2011 H1 2012 H1 2011 Sales 523 645 1,019 1,222 EBITDA 86 175 201 350 EBITDA% 16.5% 27.1% 19.8%
Slide 21: Industry Perspectives in 2012
INDUSTRY PERSPECTIVES IN 2012
Slide 22: Demand to Remain Healthy but with Strong Volatility
Aluminium for the world Industry Perspectives in 2012 Demand to Remain Healthy but with Strong Volatility Key factors to be observed: LME volatility will continue with Europe financial uncertainty and US Presidential election in November Record physical premiums to be sustained in the short-term MEN
Slide 23: Raw Materials Price Trends
Aluminium for the world Industry Perspectives in 2012 Raw Materials Price Trends Alumina spot market in surplus Drop in Green Coke prices as a result of oil decline Aluminium Fluoride (ALF3) prices to weaken with aggressive Chinese exports Liquid Pitch prices to remain stable but expected to drop wi
Slide 24: 2012 Alba Priorities
‘~ 2012 ALBA PRIORITIES
Slide 25: Continuous Improvement & Preparation for Future Growth
Aluminium for the world 2012 Alba Priorities Continuous Improvement & Preparation for Future Growth AlbaSafeWay Program Ongoing implementation for Alba SafeWay work streams 2012 STAR Program: To achieve additional cash savings of US$30 million in 2012 Launch second wave of Greenbelts Sustained focus
Slide 26: Appendix
APPENDIX
Slide 27: Sales Analysis 1H12 vs. 1H11
Aluminium for the world H1 2012 Results LOW LME & SOFTER MARKET CONDITIONS Sales Analysis 1H12 vs. 1H11 (000’s MT) Significant Lower LME Prices Partially Offset by Higher Sales Volume 1H12 vs. 1H11 - Metal Sales Bridge (US$M) 1,200 191 0 2* 1 800 1,199 1,009 400 Sales 1H11 LME Product Mix Pricing Po
Slide 28: Continuous Shift to Optimum Product Mix
Aluminium for the world H1 2012 Results LOW LME & SOFTER MARKET CONDITIONS Continuous Shift to Optimum Product Mix Stable Value-Added Sales Despite Global Economic Uncertainty 1H12 vs. 1H11 - Sales by Product line Bridge Premium Above LME Trend USD (Per MT) (000’s MT) 500 13 6 6 180 350 445 446 140
Slide 29: Cost Analysis 1H12 vs. 1H11
Aluminium for the world H1 2012 Results LOW LME & SOFTER MARKET CONDITIONS Cost Analysis 1H12 vs. 1H11: Higher Energy & Workforce Costs Offset by Drop in Raw Material Prices 1H12 vs. 1H11 - Direct Costs Bridge (US$M) 9 9 800 1 3 45 37 0 43 55 600 780 759 400 Direct Cost 1H11 RM Price RM Consumption
Slide 30: Adjusted EBITDA Bridge Gap Analysis 1H12 vs. 1H11
Aluminium for the world H1 2012 Results LOW LME & SOFTER MARKET CONDITIONS Adjusted EBITDA Bridge Gap Analysis 1H12 vs. 1H11: Adjusted EBITDA Margin at a 19.8% rate 1H12 vs. 1H11 - EBITDA Bridge (US$M Adjusted) 400 EBITDA 28.6% 267 190 10 EBITDA 19.8% 27 350 21 133 17 201 0 EBITDA 1H11 Metal Sales O
Slide 31: Cash Flow Bridge 2Q12 vs. Year-End 2011
Aluminium for the world H1 2012 Results LOW LME & SOFTER MARKET CONDITIONS Cash Flow Bridge 2Q12 vs. Year-End 2011: Lower LME Prices Partially Offset by Strong Working Capital Management Year-End 2011 to 1H12 Cash Flow Bridge (USD M) Free Cash Flow (USD M) 500 0 17 400 207 150 250 103 200 301 265 20
Slide 32: For More Information, Contact Us
FOR MORE INFORMATION, CONTACT US ON: IR@alba.com.bh
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