Alro S.a. · BVB:ALR
Alro — H1 2019 Earnings Presentation
26 slides from Alro's earnings presentation, Aug 14, 2019
Slide 1: Financial Results for 1H 2019 – Alro Group
Financial Results for 1H 2019 – Alro Group 14 August 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 1H 2019 • Market Outlook • Financial Highlights 1H 2019 • Appendices 2
Slide 3: Overview – Alro Group
Overview – Alro Group In 1H 2019, compared to 1H 2018: Production of primary products decreased by 1.6% YoY (however a recovery was seen in 2Q 2019 versus 1Q 2019), the ones of flat rolled products remained flat (+0.2% YoY), and we registered lower output for extruded products, alumina and bauxite
Slide 4: Contents
Contents • Overview • Operational Highlights 1H 2019 • Market Outlook • Financial Highlights 1H 2019 • Appendices 14/08/2019 4
Slide 5: Operational Highlights – Production
Operational Highlights – Production Aluminium – flat rolled products stable, primary started to recover in 2Q 2019 Primary facilities Processing facilities • In 1H 2019, primary aluminium production decreased slightly, by 1.6% • In 1H 2019, the Group registered a roughly flat production of flat roll
Slide 6: Operational Highlights – Production: Alumina and Bauxite
Operational Highlights – Production Alumina and Bauxite – focus on Group needs, some recovery seen on the bauxite market in 2Q 2019 Bauxite – SMHL, Sierra Leone Alumina – Alum, Romania • In 1H 2019, SMHL’s production of commercial bauxite was lower by • Alum’s output decreased by 17.0% YoY in 1H 201
Slide 7: Operational Highlights – Sales
Operational Highlights – Sales Aluminium – only deliveries of value-added products slightly up In 1H 2019, Alro Group’s sales of primary products decreased by 2.5% YoY in volume terms. The decrease was due to weaker sales of wire rod (2.8% YoY) and billets, although the latter recovered in 2Q 2019.
Slide 8: Contents
Contents • Overview • Operational Highlights 1H 2019 • Market Outlook • Financial Highlights 1H 2019 • Appendices 14/08/2019 8
Slide 9: Market Outlook
Market Outlook Trade war generated volatility and downward pressure on economies and prices in 2Q 2019 and a trade truce was reached only at the end of the period. After some optimism on potential progress in the negotiations, recently president Trump announced new tariffs starting with September,
Slide 10: Contents
Contents • Overview • Operational Highlights 1H 2019 • Market Outlook • Financial Highlights 1H 2019 • Appendices 14/08/2019 10
Slide 11: Financial Performance – Alro Group
Financial Performance – Alro Group Operating result pressured by low LME and material costs in 1H 2019 Income Statement In 2Q 2019, material costs were elevated while revenues RON '000 YoY YoY QoQ change 2Q 2019 2Q 2018 change change contracted further, with impact on the gross margin. The Group 1H
Slide 12: Net result evolution vs. 1H 2018
Financial Performance – Alro Group Net result evolution vs. 1H 2018 Alro Group Net result 6 months 2019 vs. 6 months 2018 (RON mn) 500 Alro Group Revenue: - RON 57.4 mn 400 Alro Group COGS: -RON 135.2 mn 300 200 (39.9) 2.8 1.4 (21.9) 138.9 (25.2) 0.2 (57.9) 100 (16) 11.5 154.2 (47.6) (29.7) 8.9 - 79
Slide 13: Alro stand alone summary
Alro stand alone summary Another challenging quarter – depressed LME, higher costs, not offset by higher premia and supportive FX Sales, LME & realized premia Profit margins evolution 2,700 2,599 9,000 25% 2,466 2,400 2,299 8,000 20% 2,127 20% 2,100 1,948 1,994 7,000 16% 15% 1,800 6,000 13% RON/t mn
Slide 14: Alro stand alone summary: EBITDA
Alro stand alone summary EBITDA remains pressured by material costs and low LME EBITDA & LME + FX 500 9,000 451 USD 2,209 450 8,000 400 7,000 361 USD 1,826 350 6,000 300 USD 1,845 RON/t 255 mn RON 246 5,000 250 217 4,000 200 3,000 150 101 100 2,000 38 1,000 50 23 - - 2013 2014 2015 2016 2017 2018 1H
Slide 15: SMHL and Alum stand alone summary
SMHL and Alum stand alone summary SMHL – profitability recovers in 2Q 2019 Alum – good profitability in a tough market • In 1H 2019, SMHL sold bauxite in amount of RON 150.1m, 1% lower • In 1H 2019, Alum registered a 1.5% YoY decrease in alumina sales than in 1H 2018. Sales to external clients incre
Slide 16: Statement of Financial Position (1 of 2)
Financial Performance – Alro Group Statement of Financial Position (1 of 2 ) RON '000 Jun/19 Dec/18 YoY change P,P&E and intangibles: In 1H 2019, Alro Group acquired PP&E worth RON 59.5m, which compares to RON 177.3m in Assets 1H 2018, continuing its projects for energy efficiency, capacity Non-curr
Slide 17: Statement of Financial Position (2 of 2)
Financial Performance – Alro Group Statement of Financial Position (2 of 2) RON '000 Jun/19 Dec/18 YoY change Bank loans: besides the already known amendments signed Shareholders' Equity in January 2019 by Alro to its USD 167m loan, in 2Q 2019 we had: Share capital 370,037 370,037 0.0% Share premium
Slide 18: Good working capital management in 1H 2019
Financial Performance – Alro Group Good working capital management in 1H 2019 RON '000 1H 2019 1H 2018 2Q 2019 2Q 2018 Alro Group closed 1H 2019 with a cash balance of RON 434.2m, of which restricted cash of RON 9.6m. This amount Cash flow from operating activities increased by 104.8% from the end o
Slide 19: Alro Group – Debt and treasury
Alro Group – Debt and treasury Net Debt decreases in 2Q 2019; Net Debt to EBITDA also drops to 1.9x Alro Group's debt evolution Debt structure (as of June 2019) 1,200,000 1,000,000 13.8% 800,000 USD RON '000 16.0% EUR 600,000 RON 400,000 70.2% 200,000 - Dec-15 Dec-16 Dec-17 Mar-18 Jun-18 Sep-18 Dec-
Slide 20: Alro Group – Capex and key metrics
Alro Group – Capex and key metrics CAPEX on slows down 2Q 2019, profitability and efficiency still above industry averages Capex dynamics RON '000 1H 2019 2018 Change Peers 90.0 median* 80.0 Net Debt 844,569 710,785 18.8% 70.0 EBITDA (ttm) 445,600 485,694 -8.3% 60.0 Net Debt / EBITDA 1.9 1.5 1.9 USD
Slide 21: Contents
Contents • Overview • Operational Highlights 1H 2019 • Market Outlook • Financial Highlights 1H 2019 • Appendices 14/08/2019 21
Slide 22: Alro Group entities
Alro Group entities Bauxite mining Company Parent Shareholding (%) 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 1H 2019 1H 2018 2Q 2019 2Q 2018 Net result 79,708 154,151 88,773 29,530 Impairment of non-current (4,790) (1,262) (4,754) (1,256) assets Derivative financial instruments (710) (16,692) (7,
Slide 25: Supporting information – Adjusted EBITDA calculation
Supporting information – Adjusted EBITDA calculation (Alro Stand-Alone) Alro Stand-alone – Adjusted EBITDA RON '000 2012 2013 2014 2015 2016 2017 2018 1H 2018 H1 2019 EBITDA 292,164 (6,743) 114,700 223,501 246,627 455,611 354,740 217,100 106,253 EBITDA Margin (%) 13.1% -0.3% 5.8% 9.7% 11.6% 18.5% 13
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