Alro S.a. · BVB:ALR
Alro — Q1 2019 Earnings Presentation
26 slides from Alro's earnings presentation, May 16, 2019
Slide 1: Financial Results for 1Q 2019 – Alro Group
Financial Results for 1Q 2019 – Alro Group 16 May 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 1Q 2019 • Market Outlook • Financial Highlights 1Q 2019 • Appendices 2
Slide 3: Overview – Alro Group
Overview – Alro Group In 1Q 2019, compared to 1Q 2018: Production of primary products remained roughly flat, the ones of flat rolled products increased by 1.9% YoY, but we registered lower output for extruded products, alumina and bauxite. Lower production of alumina and bauxite are linked to Alro
Slide 4: Contents
Contents • Overview • Operational Highlights 1Q 2019 • Market Outlook • Financial Highlights 1Q 2019 • Appendices 15/05/2019 4
Slide 5: Operational Highlights – Production
Operational Highlights – Production Aluminium – primary products up, processed affected by one-off Primary facilities Processing facilities • In 1Q 2019, primary aluminium production was roughly flat YoY (-0.7%) • In 1Q 2019, the Group registered a 1.9% increase in its production of and increased by
Slide 6: Operational Highlights – Production
Operational Highlights – Production Alumina and Bauxite – higher sales of alumina by-products to third parties Bauxite – SMHL, Sierra Leone Alumina – Alum, Romania • In 1Q 2019, SMHL’s production of commercial bauxite was lower by • Alum’s output decreased by 11.6% YoY in 1Q 2019, mainly on 3.5% tha
Slide 7: Operational Highlights – Sales
Operational Highlights – Sales Aluminium – higher deliveries of value-added products led to higher sales revenues In 1Q 2019, Alro Group’s sales of primary products decreased by 2.5% YoY in volume terms. The decrease was the result of weaker sales of billets (12.2% YoY), as the billets market regist
Slide 8: Contents
Contents • Overview • Operational Highlights 1Q 2019 • Market Outlook • Financial Highlights 1Q 2019 • Appendices 15/05/2019 8
Slide 9: Market Outlook
Market Outlook Trade war kept the headlines in 1Q 2019, too, generating volatility, as the market was hoping for a resolution that hasn’t come yet. While statements coming from the White House in late April were indicating towards major progress in the talks between the two parties, President Trum
Slide 10: Contents
Contents • Overview • Operational Highlights 2018 • Market Outlook • Financial Highlights 2018 • Appendices 15/05/2019 10
Slide 11: Financial Performance – Alro Group
Financial Performance – Alro Group Operating result pressured by material costs in 1Q 2019 Income Statement RON '000 YoY QoQ Alro Group, like the rest of the industry, was affected in 1Q 1Q 2019 1Q 2018 change 4Q 2018 change 2019 by the high cost of raw materials, which in a context of weak LME put
Slide 12: Financial Performance – Net result evolution vs. 1Q 2018
Financial Performance – Alro Group Net result evolution vs. 1Q 2018 Alro Group Net result 3 months 2019 vs. 3 months 2018 (RON mn) 400 Alro Group Revenue: RON 18.2 mn Alro Group COGS: -RON 80.4 mn 300 200 (1.1) 9.2 (0.2) (44.7) (11.7) 22.1 (27.0) (8.8) 17.4 (48.4) 100 2.7 124.6 (61.3) 18.1 (9.1) - (
Slide 13: Alro stand alone summary
Alro stand alone summary A challenging quarter – low LME, higher costs, not offset by some improvement in premia and higher FRP deliveries Sales, LME & realized premia Profit margins evolution 2,599 25% 2,700 2,466 9,000 2,299 19% 2,400 8,000 20% 2,127 1,994 16% 2,100 1,948 7,000 15% 1,800 6,000 12%
Slide 14: Alro stand alone summary
Alro stand alone summary 1Q 2019 EBITDA pressured by material costs and low LME EBITDA & LME + FX 500 9,000 451 USD 2,159 450 8,000 400 7,000 361 USD 1,859 350 6,000 300 USD 1,845 RON/t 255 mn RON 246 5,000 250 4,000 200 3,000 150 104 100 2,000 38 55 50 23 1,000 - - 2013 2014 2015 2016 2017 2018 1Q
Slide 15: SMHL and Alum stand alone summary
SMHL and Alum stand alone summary SMHL – supporting group needs Alum – capturing market opportunities • In 1Q 2019, SMHL sold bauxite in amount of RON 59.9m, 3.6% lower • In 1Q 2019, Alum registered a 14.2% YoY decrease in alumina than in 1Q 2018. Sales to external clients decreased in value by 6.6%
Slide 16: Statement of Financial Position (1 of 2)
Financial Performance – Alro Group Statement of Financial Position (1 of 2 ) RON '000 Mar/19 Dec/18 YoY change P,P&E and intangibles: In 1Q 2019, Alro Group acquired PP&E worth RON 25.5m, which compares to RON 40.7m in Assets 1Q 2018, continuing its projects for capacity expansion and Non-current as
Slide 17: Statement of Financial Position (2 of 2)
Financial Performance – Alro Group Statement of Financial Position (2 of 2) RON '000 Mar/19 Dec/18 YoY change Bank loans: In January 2019, Alro signed an amendment to Shareholders' Equity its USD 167m loan, by which, the facility was supplemented Share capital 370.037 370.037 0,0% with: Share premiu
Slide 18: Good working capital management in 1Q 2019
Financial Performance – Alro Group Good working capital management in 1Q 2019 Alro Group closed 2018 with a cash balance of RON 303m, RON '000 1Q 2019 1Q 2018 4Q 2018 of which restricted cash of RON 9.4m. This amount increased by 42.9% from the end of December 2018, thanks Cash flow from operating a
Slide 19: Alro Group – Debt and treasury
Alro Group – Debt and treasury Net Debt increases; Net Debt to EBITDA remains comfortable at 2.2x Alro Group's debt evolution Debt structure (as of March 2019) 1,200,000 1,000,000 13.9% 800,000 USD RON '000 13.0% EUR 600,000 RON 400,000 73.1% 200,000 - Dec-15 Dec-16 Dec-17 Mar-18 Jun-18 Sep-18 Dec-1
Slide 20: Alro Group – Capex and key metrics
Alro Group – Capex and key metrics CAPEX on track in 1Q 2019, indebtedness remains comfortable, profitability and efficiency still above industry averages Capex dynamics 90.0 RON '000 1Q 2019 2018 Change Peers 80.0 median* 70.0 Net Debt 964,804 710,785 35.7% 60.0 EBITDA (ttm) 447,563 485,694 -7.9% N
Slide 21: Contents
Contents • Overview • Operational Highlights 1Q 2019 • Market Outlook • Financial Highlights 1Q 2019 • Appendices 15/05/2019 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 1Q 2019 1Q 2018 Net result (9,065) 124,621 Impairment of non-current assets (36) (6) Derivative financial instruments that do not 7,232 (54,052) qualify for hedge accounting Deferred incom
Slide 25: Supporting information – Adjusted EBITDA calculation
Supporting information – Adjusted EBITDA calculation (Alro Stand-Alone) Alro Stand-alone – Adjusted EBITDA RON '000 2011 2012 2013 2014 2015 2016 2017 2018 1Q 2018 1Q 2019 EBITDA 482.794 292.164 (6.743) 114.700 223.501 246.627 455.611 354.740 104.492 57.614 EBITDA Margin (%) 21,3% 13,1% -0,3% 5,8% 9
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