Capral Limited · ASX:CAA
Capral — FY2017 Earnings Presentation
22 slides from Capral's earnings presentation, 2018
Slide 1: 2017 Full Year Results Presentation
2017 Full Year Results Presentation
Slide 2: Australia's leading supplier of aluminium products and solutions
Australia's leading supplier of aluminium products and solutions 5 plants; 8 extrusion presses 18 distribution centres Australia-wide Annual extrusion capacity 70k tonnes Annual turnover ~$450 million¹ Residential, commercial construction, industrial Over 1,050 FTEs ¹ 12 months to 31 Dec 2017 2
Slide 3: National footprint of aluminium extrusion plants and distribution centres
National footprint of aluminium extrusion plants and distribution centres Extrusion Extrusion plants plants Distribution Distribution centres centres QLD - Bremer Capacity 35k tonnes, 4 presses 2 paint lines and anodising line 2018: Automated product handling project WA - Canning Vale Capaci
Slide 4: Agenda
Agenda 1. FY17 Highlights 2. FY17 Financials 3. Strategy and Outlook 4. Questions 4
Slide 5: FY17 Highlights
FY17 Highlights Tony Dragicevich, CEO & MD “A strong second half delivered earnings at the upper end of guidance” 5
Slide 6: FY17 Performance Highlights
FY17 Performance Highlights Full year result at the upper end of guidance Trading EBITDA¹ of $18.4m (2016: $20.3 m) and EBITDA of $18.8m (2016: $21.1m) EPS 2.54c (2016: 3.02c), DPS maintained at 1.25c (fully franked) Second highest earnings in 7 years Volumes in line with LY but margins im
Slide 7: Volume Breakdown
Volume Breakdown Channels to market (volume) Diverse industry exposure Tonnes Volume Seasonality (‘000) 40 35 Extrusion Industrial** Residential Direct Ex Mill 42% Building* 30 50% 43% Extrusion 25 via RDC 35% 20 Rolled Non Residential 15 via RDC Building 15% 15% 10 Source: Capral * Residential buil
Slide 8: Where Capral's residential & commercial products end up
Where Capral’s residential & commercial products end up Beach House – St Andrews VIC Project Home Walan Apartments - Brisbane Adagio Apartments - Perth 8
Slide 9: Conditions softening in Residential market
Conditions softening in Residential market Annual Dwelling Commencements¹ (‘000) Residential commencements slower ‒ Detached housing, Capral's primary 250 market, fell 2%¹ during 2017 200 ‒ Multi-Residential decreased by 9%¹ 150 Facade Solutions division established in 2017 100 Strong pipeline
Slide 10: Where Capral's industrial products end up
Where Capral’s industrial products end up Fred Olsen Trimaran - Spain Perth Stadium Maxi CUBE Tautliner 10
Slide 11: Industrial sector robust
Industrial sector robust Total Capral Industrial Volumes (Index 2012) New Truck and Van builds¹ (‘000) 40 120 35 100 30 80 25 20 60 15 40 10 20 5 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Source: Capral ¹ Source: TIC (Truck Industry Council of Australia) (Prime Mover Magazine)
Slide 12: Extrusion market remains relatively strong
Extrusion market remains relatively strong '000 Aluminium Extrusion Market Sales Volume Extrusion market grew in 2016 but was Tonnes PA 200 marginally lower in 2017 due to a slowdown in 186 184 183 residential construction 173 179 175 161 Non-residential building demand was better 156 than expec
Slide 13: FY17 Financials
FY17 Financials Tertius Campbell, CFO “Cash flow generation continues to improve, enabling the business to invest in operational improvement projects" 13
Slide 14: Result at the upper end of guidance
Result at the upper end of guidance Stronger H2 in line with historical pattern FY17 FY16 Sales Volume ('000 tonnes) 63.2 63.4 H2 volume offset the H1 shortfall resulting in total volume in line with LY $m $m Sales Revenue 448.7 424.8 Selling prices continue to be under pressure due to Trading
Slide 15: Margins impacted by significant rise in LME during 2017
Margins impacted by significant rise in LME during 2017 Metal Cost LME (USD) continued its rise in H2, increased A$/kg ~23% in FY17 vs prior year average 3.00 2.80 Total Metal Cost (AUD) increased ~20% over 2.60 the same period 2.40 2.20 Capral was unable to fully recover the higher 2.00 metal
Slide 16: Increased aluminium cost significantly impacted profit
Increased aluminium cost significantly impacted profit Reduction in extrusion volume offset by increase in rolled product Under recovery of higher metal cost Inflationary pressure ¹ ¹ ¹ ¹ ¹ See Important Note (page 14) 16
Slide 17: Financial position supports re-investment
Financial position supports re-investment FY17 FY16 Dec 17 Dec 16 $m $m $m $m Current Assets EBITDA 18.8 21.1 Inventory 77.0 75.2 Working Capital (3.0) (5.0) Trade Receivables 68.0 63.1 Finance Cost (1.0) (0.8) Net Cash and Equivalents 34.4 31.4 Other 0.7 1.4 Other 0.2 0.3 180.1 171.1 Operating Cash
Slide 18: Strategy and Outlook
Strategy and Outlook Tony Dragicevich, CEO & MD “Invest in technology to ensure Capral’s long term competitive position" BUILD OPTIMISE GROW On our strengths What we do For the future 18
Slide 19: Key Capital Investment Projects to improve competitiveness
Key Capital Investment Projects to improve competitiveness Plans and strategies implemented over recent years have reduced operating costs and lowered Capral’s breakeven point Invest in automation and new technology in extrusion plants to further reduce operating costs (2018 Capex ~$10m) Autom
Slide 20: Dumped imports suppress prices and injure local industry
Dumped imports suppress prices and injure local industry 2010 – Modest impact from initial measures on Chinese imports Case won in 2010 2014 – Anti-Circumvention with low level duties imposed on Chinese Anti-Circumvention imports case initiated and 2015 – Measures increased successfully prosecut
Slide 21: Outlook
Outlook Capral is well-positioned to benefit from market conditions Commentators are forecasting a gradual fall in LME¹ during 2018 AUD ~$US0.80 through 2018² Housing commencements are expected to soften³ Slowdown mainly driven by high density dwellings Demand for detached dwellings fore
Slide 22: Questions
CAPRAL ALUMINIUM SHAPING THE FUTURE Questions