Capral Limited · ASX:CAA
Capral — H1 2012 Earnings Presentation
16 slides from Capral's earnings presentation, Aug 22, 2012
Slide 1: 2012 Half Year Results Presentation
2012 Half Year Results Presentation This presentation includes forward-looking estimates that are subject to risks, uncertainties 22nd 21August 2012 August 2012 1 22 AUGUST 2012 and assumptions outside of Capral’s control and Capral CAPRALLimited LIMITED CAPRAL HALF YEAR RESULTS should be viewed acc
Slide 2: Weathering the Storm: Highlights
WEATHERING THE STORM SIX MONTHS TO JUNE 2012 Highlights • Achieved in tough trading conditions ... EBITDA¹ profit of $0.3m - Housing at a cyclical low - High A$ sustaining imports (dumped) (before restructuring & LME mark to market) - Ill-timed capacity expansion in the Australian industry resulting
Slide 3: Financial Summary
FINANCIAL SUMMARY SIX MONTHS TO JUNE 2012 H1 H1 2012 2011 % Sales Volumes - External (‘000 tonnes) 22.0 24.5 -10.2% $m $m Sales Revenue 149.2 179.5 -16.7%¹ ¹ Impacted by lower LME (London Metal Exchange) EBITDA 0.3 5.2 (before LME mark to market and restructuring) Less LME mark to market (0.2) 0.5 R
Slide 4: Project Relaunch cost savings mitigating volume, price and inflation impacts
PROJECT RELAUNCH COST SAVINGS CONTINUE TO PLAY A CRITICAL ROLE MITIGATING NEGATIVE VOLUME, PRICE AND INFLATION IMPACTS EBITDA¹ $m $6.1m ($3.0m) 6 4 ($2.2m) 2 ($2.4m) $2.4m ($0.4m) 0.2m 0 ($0.5m) $0.2m ($0.2m) $0.1m -3 EBITDA Volume Price Inflation LME Valuation Billet Premium Equity LME Valuation Pr
Slide 5: First half trading EBITDA break even reduced by 32% since 2008
The first half Trading EBITDA1 break even of the business has reduced by 32% since 2008 Tonnes per day 350 Underlying costs have reduced in excess 331 of $33m pa over the 2008 base. • Employee head count has reduced in excess of 40% 300 since 2008 to around 820 employees • Manufacturing efficiency 2
Slide 6: The Cash Position Is in Good Shape
THE CASH POSITION IS IN GOOD SHAPE $m $m 6 months to JUN 12 JUN 11 EBITDA (0.6) 6.1 Working Capital 3.8 (6.8) Operating Cash Flow is positive Finance Cost (0.3) (1.3) Equity Compensation Amortisation 0.4 0.5 Other 0.2 0.5 Operating Cash Flow 3.5 (1.0) Capex Spend (2.2) (2.5) Increase in Net Cash 1.3
Slide 7: Dwelling Commencements and Outlook
DWELLING COMMENCEMENTS AND OUTLOOK MONTHLY UNITS DWELLING APPROVALS MONTHLY ‘000 ANNUAL DWELLING COMMENCEMENTS 17000 200 16000 175 15000 168 173 Underlying demand 160 14000 -20% fall TREND SEASONALLY 150 148 Commencements are ADJUSTED 145 +18% forecast to rise by 13000 -10% 135 18% by 2014 12000 125
Slide 8: Aluminium extrusion demand expected to decline a further 6% in 2012
ALUMINIUM EXTRUSION DEMAND IS EXPECTED to decline A FURTHER 6% IN 2012 TO A CYCLICAL LOW 000 Tonnes ALUMINIUM EXTRUSION MARKET PA 200 200 • Market has fallen 30% from its high in 2007 and is poised for a recovery 183.3 175 30% • Low consumer sentiment has delayed the 170.7 165.2 recovery phase. 148.
Slide 9: Anti Dumping
ANTI DUMPING The impact of the imposed • The levels of duties are relatively low • There are indications of a concerning level of circumvention by anti dumping measures to importers of the measures imposed date has been modest • The Australian Government is implementing an Anti Dumping reform agenda
Slide 10: Safety and Environmental
SAFETY Measure/Year 2008 2009 2010 2011 H1 2012 LTI/MTI 41 31 43 30 10 LTI/MTI Frequency* 17.5 16.3 22.8 18.7 16.9 LTI Severity* 162.1 92.9 273.0 186.0 193.7 ENVIRONMENTAL * Frequency = No. of injuries per million work hours * Severity = No. of days lost per million hours worked Excludes Austex Dies
Slide 11: A Comprehensive Strategic Plan Is Being Implemented
A COMPREHENSIVE STRATEGIC PLAN IS BEING IMPLEMENTED • Leading Market Share • Long term customer relationships DEFEND • Experienced and committed workforce • Commitment to excellence What we have • National footprint of world class extrusion plants • National distribution and logistics capability • L
Slide 12: Outlook
OUTLOOK • Manufacturing generally continues to encounter challenging conditions with subdued demand and rising input costs, exacerbated by a high $A and negative consumer sentiment • Housing commencements are forecast to be 135k for calendar 2012, down ~10% on the prior year • In the absence of a ma
Slide 13: Capral Profile
APPENDIX 1 CAPRAL PROFILE • Australia’s largest manufacturer and distributor of aluminium profiles • A National footprint of world class extrusion plants 8 operating presses with annual capacity of 70KT • A network of 5 major distribution facilities, 6 regional centres and 11 metropolitan trade cent
Slide 14: The Turnaround Strategy Is Delivering
APPENDIX 2 THE TURNAROUND STRATEGY IS DELIVERING • Stabilise the Business - Recapitalise the Balance Sheet - Embed a new operating philosophy The First Phase has been completed - Implement a lean management structure with increased accountability - Realise significant cost savings - Launch an Anti D
Slide 15: Growth in Chinese extrusion imports enabled by 3 key factors
APPENDIX 3 THE GROWTH IN CHINESE EXTRUSION IMPORTS HAS BEEN ENABLED BY 3 KEY FACTORS Yuan 25,000 Jan 05 to June 08 08/09 09/10 10/11 11/12 • Primary aluminium represents around 70% of PERIOD OF INVESTIGATION AUSTRALIA 08/09 Chinese extrusion costs 1. Subsidised Primary • Chinese extrusion companies
Slide 16: Capral Proved Its Case Against China
APPENDIX 4 CAPRAL PROVED ITS CASE AGAINST CHINA Capral did ‘win’ the dumping and countervailing duty case against China. In October 2010 the Australian Government imposed Anti Dumping and countervailing duty measures on aluminium extrusions from China. It found: 1. There is an Australian Industry pr