Kaiser Aluminum Corporation · NASDAQ:KALU
Kaiser Aluminum — Q2 2024 Earnings Presentation
27 slides from Kaiser Aluminum's earnings presentation, Jul 25, 2024
Slide 1: Second Quarter 2024 Earnings Conference Call
SECOND QUARTER 2024 EARNINGS CONFERENCE CALL July 25, 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The information contained in this presentation includes statements based on management’s current expectations, estimates and projections that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
Slide 3: Non-Run-Rate Items
NON-RUN-RATE ITEMS Non-run-rate items to us are items that, while they may recur from period to period, (1) are particularly material to results, (2) impact costs as a result of external market factors and (3) may not recur in future periods if the same level of underlying performance were to occur.
Slide 4: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This information contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculate
Slide 5: Commonly Used or Defined Terms and Measures
COMMONLY USED OR DEFINED TERMS AND MEASURES Term/Measure Description Adjusted EPS Reported net income per diluted share excluding non-run-rate items. Adjusted Net Income Reported net income excluding non-run-rate items. Annualized Quarterly Average Calculated as the four-quarter average for prior ye
Slide 6: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 7: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS ▪ BUSINESS PERFORMANCE CONTINUES TO STRENGTHEN ▪ Demand generally healthy across all end markets ▪ Q2 2024 EBITDA of $53.5 million and EBITDA margin of 14.5% ▪ Strategy to reduce inventory levels resulted in non-cash LIFO charge of ~$9 million ▪ Results driven by stable pricing, l
Slide 8: Q2 2024 Financial Recap
Q2 2024 FINANCIAL RECAP NEAL E. WEST EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 9: End Market Summary
END MARKET SUMMARY SHIPMENTS SHIPMENTS AND CONVERSION 3 0 314 2 REVENUE IMPACTED BY PACKAGING 17 2 297 OUTAGE (3%) (11%) +6% +1% (61%) ▪ Aerospace/High Strength benefited from customer 2Q23 Aero/High Packaging General Automotive Other 2Q24 diversification, improved pricing and a richer mix Strength
Slide 10: Consolidated Financial Highlights
CONSOLIDATED FINANCIAL HIGHLIGHTS Quarterly Full Year (in $millions except Shipments & EPS) 2Q23 3Q23 4Q23 1Q24 2Q24 2023 LTM Shipments (in millions of lbs.) 314 299 284 291 297 1,196 1,171 Net Sales $814 $744 $722 $738 $773 $3,087 $2,976 Conversion Revenue $379 $357 $361 $367 $369 $1,466 $1,454 As
Slide 11: EBITDA & EBITDA Margin Summary
EBITDA & EBITDA MARGIN SUMMARY EBITDA AND EBITDA MARGIN PERFORMANCE REMAINS ON TRACK $millions EBITDA margin ▪ Reduction in Conversion Revenue offset by: ▪ Improved metal sourcing $64 $62 ▪ Management of overhead & manufacturing costs $52 $54 ▪ EBITDA and EBITDA margin decline primarily as a $48 res
Slide 12: 2024 Outlook Update
2024 OUTLOOK UPDATE KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 13: 2024 Outlook - Aero/High Strength
2024 OUTLOOK ‒ AERO/HIGH STRENGTH AEROSPACE / HIGH STRENGTH CONVERSION REVENUE $millions Shipments in millions lbs. ▪ Aero/HS shipments and Conversion Revenue $550 to decline 2-3% $533 $511 ▪ Cautious stance reflects challenges and pace in $369 commercial OEM production schedule $356 $315 ▪ Diversif
Slide 14: 2024 Outlook - Packaging
2024 OUTLOOK – PACKAGING PACKAGING CONVERSION REVENUE ▪ Packaging shipments to improve 2-3%; Conversion $millions Shipments in millions lbs. Revenue to rise 3-4% $555 ▪ Revision reflects impact from Q2 outage $503 $473 ▪ Expect 2H24 shipments to reflect improved market $389 conditions; demand remain
Slide 15: 2024 Outlook - General Engineering
2024 OUTLOOK – GENERAL ENGINEERING GENERAL ENGINEERING CONVERSION REVENUE $millions Shipments in millions lbs. ▪ GE shipments now expected to improve ~3-4%; Conversion Revenue flat to up 1% $367 $305 $307 ▪ Pace of second half shipment growth to moderate slightly $297 from first half pace $232 $239
Slide 16: 2024 Outlook - Automotive Extrusions
2024 OUTLOOK ‒ AUTOMOTIVE EXTRUSIONS AUTOMOTIVE EXTRUSION CONVERSION REVENUE $millions Shipments in millions lbs. ▪ Auto shipments and Conversion Revenue expected to improve 3-5% $116 $119 ▪ OEM build rates remained steady YTD but expect $93 $97 $96 normal summer & holiday shutdowns $83 ▪ Pricing ha
Slide 17: 2024 Summary Outlook
2024 SUMMARY OUTLOOK ▪ Business fundamentals steadily improve ▪ Conversion Revenue expected to remain flat to up 1% versus 2023 ▪ Continued implementation of metal strategy at Warrick ▪ EBITDA margin to improve between 50 – 100 bps over 2023 ▪ Focus remains on stabilizing operations, improving effic
Slide 18: Appendix
APPENDIX
Slide 19: Sales Analysis by Application - Quarterly
SALES ANALYSIS BY APPLICATION - QUARTERLY 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Shipments (lbs, mm) Aero & High Strength 36.1 40.8 42.1 42.6 45.5 48.3 38.0 54.7 58.2 63.9 64.2 68.0 62.9 62.2 Packaging - 185.9 173.6 182.2 174.7 179.8 147.5 153.3 153.7 163.3 154.4 141.0
Slide 20: Sales Analysis by Application - Annual
SALES ANALYSIS BY APPLICATION - ANNUAL 2019 2020 2021 2022 2023 LTM 1 Shipments (lbs, mm) Aero & High Strength 273.6 173.3 161.6 186.5 254.3 257.2 Packaging - - 541.7 655.3 612.4 583.8 General Engineering 236.3 235.6 298.2 303.9 215.6 220.0 Automotive Extrusions 94.3 84.1 94.0 96.5 104.5 103.6 Other
Slide 21: Reconciliation of Net Sales to Conversion Revenue - Quarterly
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – QUARTERLY 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Net Sales ($mm) Aero & High Strength $ 111.7 $ 133.9 $ 142.0 $ 146.1 $ 176.6 $ 175.4 $ 140.8 $ 183.3 $ 214.0 $ 225.1 $ 223.3 $ 236.9 $ 220.5 $ 226.1 Packaging - 358.8 3
Slide 22: Reconciliation of Net Sales to Conversion Revenue - Annual
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – ANNUAL 2019 2020 2021 2022 2023 LTM 1 Net Sales ($mm) Aero & High Strength $ 803.2 $ 537.9 $ 533.7 $ 676.1 $ 899.3 $ 906.8 Packaging - - 1,119.3 1,585.3 1,315.2 1,216.8 General Engineering 480.1 458.8 706.1 883.8 596.5 590.5 Automotive Extrusions 1
Slide 23: Adjusted Net Income and EPS - Quarterly
ADJUSTED NET INCOME AND EPS - QUARTERLY (in $ millions except EPS) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Reported Net Income (Loss) $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 $ 18.3 $ 5.4 $ 7.6 $ 24.6 $ 3.1 Operating NRR Items 10.0 7.7 6.0 5.2 (
Slide 24: Adjusted Net Income and EPS - Annual
ADJUSTED NET INCOME AND EPS - ANNUAL (in $ millions except EPS) 2019 2020 2021 2022 2023 LTM Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 $ 40.7 Operating NRR Items 34.5 18.1 28.9 31.0 5.3 12.5 Non-Operating NRR Items 26.9 4.7 38.1 (4.6) (9.0) (7.7) Tax impact of above NRR items
Slide 25: Reconciliation of Reported Net Income to Adjusted EBITDA - Quarterly
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - QUARTERLY (in $ millions) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Consolidated - Reported Net Income (Loss) $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 $ 18.3 $ 5.4 $ 7.6 $ 24.6 $ 3.1 Inter
Slide 26: Reconciliation of Reported Net Income to Adjusted EBITDA - Annual
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - ANNUAL (in $ millions) 2019 2020 2021 2022 2023 LTM Consolidated - Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ 47.2 $ 40.7 Interest Expense 24.6 40.9 49.5 48.3 46.9 45.5 Other Expense (Income) 20.7 1.4 38.9 (6.4) (7.4) (6.7)
Slide 27: www.KaiserAluminum.com
www.KaiserAluminum.com www.KaiserAluminum.com