Kaiser Aluminum Corporation · NASDAQ:KALU
Kaiser Aluminum — Q1 2023 Earnings Presentation
29 slides from Kaiser Aluminum's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Earnings Conference Call
FIRST QUARTER 2023 EARNINGS CONFERENCE CALL April 27, 2023
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: First Quarter 2023 Highlights
FIRST QUARTER 2023 HIGHLIGHTS KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 6: First Quarter 2023 Highlights
FIRST QUARTER 2023 HIGHLIGHTS END MARKET DEMAND REMAINS MIXED ▪ Aerospace continues to strengthen ▪ Packaging destocking continues in beverage; food remains strong ▪ General engineering semiconductor plate and extruded rod & bar products slowing ▪ Automotive conditions continue to improve PRICING /
Slide 7: First Quarter 2023 Financial Recap
FIRST QUARTER 2023 FINANCIAL RECAP NEAL E. WEST EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER
Slide 8: Conversion Revenue
CONVERSION REVENUE QUARTERLY CONVERSION REVENUE1 ANNUAL CONVERSION REVENUE1 $millions Shipments in millions lbs. $ millions Shipments in millions lbs. $1,383 $1,398 $1,111 $354 $356 $369 1,254 $351 1,218 $322 $856 1,122 335 335 $697 302 299 282 625 502 1Q22 2Q22 3Q22 4Q22 1Q23 2019 2020² 2021³ 2022
Slide 9: Consolidated Financial Highlights
CONSOLIDATED FINANCIAL HIGHLIGHTS Quarterly Full Year (in $millions except Shipments & EPS) 1Q22 2Q22 3Q22 4Q22 1Q23 2022 LTM 8 Shipments (in millions of lbs.) 335 335 282 302 299 1,254 1,218 Net Sales $949 $954 $749 $776 $808 $3,428 $3,287 Conversion Revenue 1 $354 $351 $322 $356 $369 $1,383 $1,398
Slide 10: Adjusted EBITDA and EBITDA Margin
ADJUSTED EBITDA AND EBITDA MARGIN QUARTERLY ADJUSTED EBITDA1 AND EBITDA MARGIN2 ANNUAL ADJUSTED EBITDA1 AND EBITDA MARGIN2 $millions EBITDA margin $millions EBITDA Margin $52 $209 $47 $185 $151 $142 $136 $31 24.5% $29 $30 21.7% 14.8% 12.7% 16.6% 8.9% 8.9% 8.4% 10.3% 9.8% 1Q22 2Q22 3Q22 4Q22 1Q23 201
Slide 11: Outlook
OUTLOOK KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 12: 2Q 2023 Outlook - Aero/High Strength
2Q 2023 OUTLOOK ‒ AERO/HIGH STRENGTH AEROSPACE / HIGH STRENGTH CONVERSION REVENUE1 $millions Shipments in millions lbs. ▪ Aero/HS conversion revenue flat, shipments up 3-5% $122 from healthy 1Q 2023 performance $103 ▪ Strong year on year momentum expected to $88 $88 $78 continue into second quarter
Slide 13: Aero/High Strength Accelerating
AERO/HIGH STRENGTH ACCELERATING KAISER HISTORICAL SERVED MARKET BOEING AND AIRBUS AIRCRAFT BACKLOG 8+ year backlog 12,000 8,000 1 4,000 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 ▪ Impending commercial airframe production rate increases and customer declarations provide solid foun
Slide 14: 2Q 2023 Outlook - Packaging
2Q 2023 OUTLOOK – PACKAGING PACKAGING CONVERSION REVENUE 1 $millions Shipments in millions lbs. ▪ Packaging shipments & conversion revenue expected to increase ~3-5% from 1Q 2023 $146 ▪ Continued beverage can destocking $145 $129 $134 $133 ▪ Food stock remains stable ▪ Operations stabilizing followi
Slide 15: 2Q 2023 Outlook - General Engineering
2Q 2023 OUTLOOK – GENERAL ENGINEERING GENERAL ENGINEERING CONVERSION REVENUE 1 $millions Shipments in millions lbs. ▪ Conversion revenue expected to remain flat with 1Q 2023 $96 $92 ▪ Softening demand for semiconductor plate and extruded rod $90 $89 $80 and bar products ▪ Continue to be well-positio
Slide 16: 2Q 2023 Outlook - Automotive Extrusions
2Q 2023 OUTLOOK ‒ AUTOMOTIVE EXTRUSIONS AUTOMOTIVE EXTRUSION CONVERSION REVENUE 1 $millions Shipments in millions lbs. $31 $25 $25 $24 ▪ Auto shipments and conversion revenue expected to be $22 relatively flat with 1Q 2023 ▪ 2023 N.A. build rates expected to increase to 15.0 M units 28 from 14.3 M u
Slide 17: 2Q 2023 Summary Outlook
2Q 2023 SUMMARY OUTLOOK ▪ Remain well positioned to execute in the current demand environment ▪ 2Q 2023 EBITDA margin2 to be flat to slightly higher compared to 1Q 2023 ▪ Potential upside from improved efficiencies, successful pass through of higher input and commodity costs and rebalancing inventor
Slide 18: Closing Remarks
CLOSING REMARKS KEITH A. HARVEY PRESIDENT AND CHIEF EXECUTIVE OFFICER
Slide 19: Summary
SUMMARY ▪ Strong diversified portfolio - secular demand growth for aerospace, packaging, and automotive, solid market dynamics in general engineering applications ▪ Solid market position - strong customer relationships and multi-year contracts with strategic partners support long-term profitable gro
Slide 20: Appendix
APPENDIX
Slide 21: Sales Analysis by Application - Quarterly
SALES ANALYSIS BY APPLICATION - QUARTERLY 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Shipments (lbs, mm) Aero & High Strength 66.4 48.2 27.3 31.4 36.1 40.8 42.1 42.6 45.5 48.3 38.0 54.7 58.2 Packaging - - - - - 185.9 173.6 182.2 174.7 179.8 147.5 153.3 153.7 General Engineering
Slide 22: Sales Analysis by Application - Annual
SALES ANALYSIS BY APPLICATION - ANNUAL FY 2019 FY 2020 FY 2021 FY 2022 LTM 4 Shipments (lbs, mm) Aero & High Strength 273.6 173.3 161.6 186.5 199.2 Packaging - - 541.7 655.3 634.3 General Engineering 236.3 235.6 298.2 303.9 273.2 Automotive Extrusions 94.3 84.1 94.0 96.5 100.9 Other Applications1 20
Slide 23: Reconciliation of Net Sales to Conversion Revenue - Quarterly
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – QUARTERLY 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Net Sales ($mm) Aero & High Strength $ 196.0 $ 144.6 $ 100.9 $ 96.4 $ 111.7 $ 133.9 $ 142.0 $ 146.1 $ 176.6 $ 175.4 $ 140.8 $ 183.3 $ 214.0 Packaging - - - - - 358.8 367.3 3
Slide 24: Reconciliation of Net Sales to Conversion Revenue - Annual
RECONCILIATION OF NET SALES TO CONVERSION REVENUE – ANNUAL FY 2019 FY 2020 FY 2021 FY 2022 LTM 4 Net Sales ($mm) Aero & High Strength $ 803.2 $ 537.9 $ 533.7 $ 676.1 $ 713.5 Packaging - - 1,119.3 1,585.3 1,491.5 General Engineering 480.1 458.8 706.1 883.8 794.7 Automotive Extrusions 190.5 161.4 225.
Slide 25: Adjusted Net Income and EPS - Quarterly
ADJUSTED NET INCOME AND EPS - QUARTERLY (in $ millions except EPS) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Reported Net Income (Loss) $ 29.1 $ (6.6) $ 0.4 $ 5.9 $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 1 2 1.3 14.0 5.1 (2.3) 10.0 7.7 6.0 5.2 (0.4) 6.
Slide 26: Adjusted Net Income and EPS - Annual
ADJUSTED NET INCOME AND EPS - ANNUAL (in $ millions except EPS) Annual 2019 2020 2021 2022 LTM 5 Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ (21.8) Operating NRR1 Items 34.5 18.1 28.9 31.0 32.7 Non-Operating NRR Items 2,3 26.9 4.7 38.1 (4.6) (18.6) 3 (15.0) (5.6) (15.9) (5.5) (2.7)
Slide 27: Reconciliation of Reported Net Income to Adjusted EBITDA - Quarterly
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - QUARTERLY (in $ millions) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Consolidated - Reported Net Income (Loss) $ 29.1 $ (6.6) $ 0.4 $ 5.9 $ 4.5 $ (22.4) $ (2.3) $ 1.7 $ 8.1 $ (13.8) $ 2.5 $ (26.4) $ 15.9 Interest Expens
Slide 28: Reconciliation of Reported Net Income to Adjusted EBITDA - Annual
RECONCILIATION OF REPORTED NET INCOME TO ADJUSTED EBITDA - ANNUAL (in $ millions) Annual 2019 2020 2021 2022 LTM ⁴ Consolidated - Reported Net Income (Loss) $ 62.0 $ 28.8 $ (18.5) $ (29.6) $ (21.8) Interest Expense 24.6 40.9 49.5 48.3 48.0 Other Expense (Income) 20.7 1.4 38.9 (6.4) (21.6) Income Tax
Slide 29: www.KaiserAluminum.com
www.KaiserAluminum.com