Alro S.a. · BVB:ALR
Alro — Investor Presentation (June 2022)
35 slides from Alro's investor presentation, Jun 30, 2022
Slide 1: Equity Story - ALRO Group Presentation
Equity Story 30 June 2022 ALRO Group Presentation (BSE: ALR)
Slide 2: Disclaimer
Disclaimer This material is 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 restriction may cons
Slide 3: Contents
Contents Section 1: ALRO Group overview 4 Section 2: Financials 20 Appendix: Supporting materials 31 3
Slide 4: ALRO Group overview
Section 2 ALRO Group overview
Slide 5: Highlights 2022 - Sustainability & Environmental Strategies Main Pillars (1/2)
ALONG with a durable ROMANIA HIGHLIGHTS 2022 - Sustainability & Environmental Strategies Main Pillars (1/2) ✓ Committed to a sustainable future and complying with the applicable international sustainability targets, ALRO has been publishing since 2017 an annual Consolidated Sustainable Value Report.
Slide 6: Highlights 2022 - Sustainability & Environmental Strategies Main Pillars (2/2)
ALONG with a durable ROMANIA HIGHLIGHTS 2022 - Sustainability & Environmental Strategies Main Pillars (2/2) Reduction of industrial water consumption Energy efficiency increase • Installation and commissioning of forced • Reduction of specific power consumption cooling tower and water treatment • Au
Slide 7: Highlights 2022
ALONG with a durable ROMANIA HIGHLIGHTS 2022 ✓ The aluminium price continued to show quotations over 3,000 USD/tonne in 1Q 2022, while in 2Q 2022, in the second part of the period, a descending trend was visible, with values around 2,500 USD/tonne achieved in June; ✓ The average for the first half o
Slide 8: Highlights 2022
ALONG with a durable ROMANIA HIGHLIGHTS 2022 ✓ At the beginning of 2022, ALRO and ALUM developed scenarios to adapt their operations to the current conditions in the energy markets; ✓ In such market volatility, one of the key advantages of ALRO was adaptability. Therefore, ALRO is permanently monito
Slide 9: Highlights 2022
ALONG with a durable ROMANIA HIGHLIGHTS 2022 ✓ On 15 March 2022, ALRO signed a non-revolving working-capital loan facility of RON 470 million with a syndicate of banks within the COVID-19 state aid scheme dedicated to large enterprises. The loan is repayable within four years; ✓ At the same time, th
Slide 10: One of the largest vertically integrated aluminium producers in Europe
ALONG with a durable ROMANIA One of the largest vertically integrated aluminium producers in Europe by production capacity Overview Key figures ⚫ Vertically integrated primary and processed aluminium (Flat Rolled Product "FRP" and extrusion) producer 1H 2022 Sales/ EBITDA: RON 2,136 m (USD 472 m) /
Slide 11: Simplified business overview
ALONG with a durable ROMANIA Simplified business overview Fully integrated business producing high value added product mix End products End markets Sierra Leone Tulcea, Romania Slatina, Romania Slatina, Romania Primary Wire rod, Billets, Energy & Transport Bauxite Alumina Slabs Power Aluminum cables
Slide 12: Fully integrated business with global distribution
ALONG with a durable ROMANIA Fully integrated business with global distribution •1 Bauxite is mined in Sierra Leone mine 3• Primary Aluminium (wire rods, slabs, billets, ingots) is produced and sold internationally¹: – The business model has been adjusted in 2022 and the production is being directed
Slide 13: ALRO short history and main stages of evolution
ALONG with a durable ROMANIA ALRO – short history and main stages of the Company’s evolution Significant investment in technology, state-of-the-art equipment and strategic acquisitions to streamline operations maintained ALRO in the top European aluminium producers Continuous investment in technolog
Slide 14: Bauxite - SMHL asset overview
ALONG with a durable ROMANIA Bauxite – SMHL asset overview Overview Asset location ⚫ Sierra Mineral Holdings 1 Limited (“SMHL”) operates a bauxite mine in Sierra Leone – acquired by ALRO Group in May 2011 ⚫ SMHL consists of several deposits in the Gondama and Mokanji area, total concession Sierra Le
Slide 15: Alumina - asset overview
ALONG with a durable ROMANIA Alumina – asset overview Overview Alumina production (kt) ⚫ Wholly-owned alumina refinery located in Tulcea on the Danube river ⚫ The production capacity of c.600 kt alumina per annum has been 600 suspended since August 2022 499 500 461 ⚫ ALUM needs approx. 2.9 tonnes of
Slide 16: Primary Aluminium
ALONG with a durable ROMANIA Primary Aluminium Overview Simplified flow ⚫ Total capacity of 265,000 tpa of electrolytic aluminium* and 332,000 tpa of cast Secure supply source aluminium Coke; Pitch; Other raw materials ⚫ State-of-the-art production facilities in Slatina include electrolysis, anode p
Slide 17: Processed Aluminium: Flat Rolled Products
ALONG with a durable ROMANIA Processed Aluminium: Flat Rolled Products Overview Processing facilities ⚫ Flat rolled products plant located beside smelter in Slatina ⚫ Facilities comprise rolling mill shops in the processed division and an extrusion company in separate areas within the processing div
Slide 18: Processed Aluminium: Vimetco Extrusion
ALONG with a durable ROMANIA Processed Aluminium: Vimetco Extrusion Overview Facilities overview ⚫ Extrusion operations located in Slatina and established in 2006 with a wide geographical distribution of customers (i.e. the German market is Extrusion press Billet diameter Maximum Width (mm) Yearly c
Slide 19: Operational and Environmental excellence
ALONG with a durable ROMANIA Strategic focus to increase higher margin products and act as a decarbonisation vector for other industries Focus on HVAP Diversifying Permanent focus Factory of the future product mix on cost • Circular economy: • Increase FRP • Adapt output • Improve capacity and waste
Slide 20: Financials
Section 3 Financials alro =
Slide 21: Good results in an unpredictable context: revenue
ALONG with a durable ROMANIA Good results in an unpredictable context Revenue evolution per segments* (RON m) Total revenue Δ (YoY growth) +9% -7% -10% +39% +39% 1H 2021-1H 2022 3,500 4,000 2,982 +598m 2,725 2,778 2,515 162 3,500 34 157 6 17 15 3,000 273 10 109 141 2,136 52 97 1,696 14 2,500 74 77 1
Slide 22: Good results: Gross Profit and EBITDA margins
ALONG with a durable ROMANIA Good results in an unpredictable context Gross Profit and EBITDA margins (%) 30.0% 25.2% Δ 22.4% 25.0% 1H 2021 – 1H 2022 22.5% 20.8% 16.3% 20.0% 14.1% 15.9% 12.5% 14.4% 15.0% 8.9% +1.9% 11.0% 10.3% 10.0% 8.2% 9.4% 5.0% +0.9% 0.0% -0.3% -5.0% 2017 2018 2019 2020 2021 1H 2
Slide 23: Revenues protected through natural and financial hedging
ALONG with a durable ROMANIA Revenues protected through natural and financial hedging Hedging strategy Sales financially hedged 1 -100% 74% -100% 0% 100% Aluminium Natural hedging • Aluminium scrap bought in the market at a price linked to LME. 23 Financial hedging 38 26 20 • Preferred instruments:
Slide 24: CAPEX evolution
ALONG with a durable ROMANIA CAPEX evolution CAPEX evolution (RON m) CAGR 2017-2021 Total Capex (YoY growth) -38% +88% +35% +8% increase of HVAP’s share in portfolio, product quality, 300 energy efficiency 10.0% 250 8.0% 200 6.0% 4.6% 5.0% 150 3.6% 3.5% 3.4% 4.0% 100 162 139 2.0% 50 86 74 55 0 0.0%
Slide 25: Increased pressure on the cash due to a volatile context
ALONG with a durable ROMANIA Increased pressure on the cash due to a highly volatile context Debt and cash evolution* (RON m) Δ 1,292 1,135 1H 2021 – 1H 2022 834 872 802 +556m 710 562 1,596 1,254 1,183 919 950 976 381 1,039 +137m 357 240 304 119 142 167 +420m 2017 2018 2019 2020 2021 1H 2021 1H 2022
Slide 26: Flexibility and constant adaptation to market conditions
ALONG with a durable ROMANIA Flexibility and constant adaptation to market conditions proven even if acting in an adverse context ALRO’s Adjusted(1) Net Result and EBITDA long term evolution (RONm) 2017 2018 2019 2020 2021 1H 2021 1H 2022 500 3,082 400 2,480 300 402 2,246 2,110 451 1,969 200 1,791 3
Slide 27: Financial Summary
ALONG with a durable ROMANIA Financial Summary ✓ Solid revenue driven by a successful strategy to focus on high and very-high value processed products despite the COVID-19 pandemic: ‒ 2019 Revenues: USD 655 m (RON 2,778 m) ‒ 2020 Revenues: USD 593 m (RON 2,515 m) ‒ 2021 Revenues: USD 841 m (RON 3,50
Slide 28: ALRO Group's advantages in key product markets
ALONG with a durable ROMANIA ALRO Group's advantages in key product markets Located in Europe, a market that is net short aluminium products Experienced management team Significant growth driven by with exceptional record of focus on HVAPs delivery High margin business and Advanced asset base suppor
Slide 29: IR Information
ALONG with a durable ROMANIA IR INFORMATION 2022 Financial Calendar 25 February Publication of 2021 Preliminary Annual Financial Results 28 March Conference Call for 2021 Annual Results proposed for shareholders approval 28 April Annual General Shareholders Meeting for the approval of 2021 results 2
Slide 30: ALRO - Investor Relations Contact
ALONG with a durable ROMANIA ALRO - Investor Relations Contact Ana-Maria IMBREA, CIR, MIRSoc, FCCA Investor and Corporate Relations Rivergate Center 64 Splaiul Unirii St. District 4, 040036 Bucharest, Romania Phone: +40 374 570 717 Mobile: +40 752 105 339 Fax: +40 21 408 35 89 E-mail: amimbrea@alro.
Slide 31: Appendix: Supporting materials
Appendix Supporting materials
Slide 32: ALRO Group - Financial summary (1/2)
ALRO Group - Financial summary (1/2) Income Statement (RON m) Cashflow Statement (RON m) Dec-19 Dec-20 Dec-21 Jun-21 Jun-22 Dec-19 Dec-20 Dec-21 Jun-21 Jun-22 Result before income taxes -33 366 57 -25 35 Revenues 2,778 2,515 3,500 1,538 2,136 Adjustments for: Cost of goods sold -2,551 -2,522 3,007 -
Slide 33: ALRO Group - Financial summary (2/2)
ALRO Group - Financial summary (2/2) Assets (RONm) Liabilities and shareholders’ equity (RONm) % of total % of total Dec-19 Dec-20 Dec-21 Jun-21 Jun-22 Dec-19 Dec-20 Dec-21 Jun-21 Jun-22 liabilities assets Current assets Current liabilities Cash and cash equivalents 83 106 328 114 204 6% Bank and ot
Slide 34: Pricing of products
Pricing of products Pricing is based on London Metal Exchange (LME) prices plus a premium, with inter-company Bauxite and Alumina pricing based on market prices Primary products pricing Processed products pricing Base-case for several products – Similarly to primary products, pricing is based on LME
Slide 35: Ownership: current operational and shareholding structure
Current operational and shareholding structure Paval Holding Vimetco Fondul Proprietatea Freefloat Ownership 12.39% 23.21% 54.19% 10.21% ALRO GROUP Sierra Leone Romania Divisions Primary Processed Bauxite mining Alumina Aluminium Aluminium 35