Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q3 2023 Earnings Presentation
25 slides from Century Aluminum's earnings presentation, Nov 8, 2023
Slide 1: Century Aluminum Company 3rd Quarter Earnings Call
Century Aluminum Company 3rd Quarter Earnings Call November 8, 2023
Slide 2: Cautionary Statement
Cautionary Statement Certain statements in this presentation, and those made by Century Aluminum Company management on the quarterly conference call, relate to future events and expectations and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 19
Slide 3: Speakers
Speakers • Jesse Gary – President and Chief Executive Officer • Jerry Bialek – Executive Vice President and Chief Financial Officer • Peter Trpkovski – Senior Vice President, Finance and Treasurer 2
Slide 4: Company and Market Update
Company and Market Update • Strong Chinese demand growth, mainly driven by solar and EV production Industry • ~1.2 million MTs annual Chinese capacity cuts announced; third consecutive year of winter production cuts Fundamentals • Near-term RoW demand remains soft, impacting delivery premiums in U.S
Slide 5: Industry Environment: Aluminum Supply and Demand Balance
Industry Environment Aluminum Supply and Demand Balance – FY23 Primary Aluminum Balance – US and EU - Primary Aluminum Balance (MT in MM's) 70.4 69.8 (0.5) 75 Primary Aluminum (T in MM's) (1.0) 65 (1.5) 55 41.3 42.3 (2.0) 45 (2.5) (2.3) 35 29.0 27.6 (3.0) 25 (2.9) (3.0) (3.5) (3.1) (3.3) (3.3) 15 (3
Slide 6: Industry Environment: LME, Premiums and Power Prices
Industry Environment LME Aluminum Alumina Price Index 3,400 500 3,200 450 3,000 2,800 400 LME $/MT API $/MT 2,600 350 2,400 300 2,200 2,000 250 1,800 200 1,600 1,400 150 Regional Premiums Power Actuals and Forwards 300 900 800 250 Regional Premiums $/MT Power Rates $/MWh 700 200 600 500 150 400 300
Slide 7: Industry Environment: Smelter and Refinery Input Prices
Industry Environment Indy Hub $/MWh Nord Pool €/MWh Coke $/MT (62%) (84%) (28%) Smelter Input Prices $90 € 175 $723 € 135 $703 $62 $670 $582 $518 € 85 $33 $33 $34 € 56 € 28 Q322 Q422 Q123 Q223 Q323 Q322 Q422 Q123 Q223 Q323 Q322 Q422 Q123 Q223 Q323 Caustic $/MT Henry Hub $/mmbtu HFO $/bbl $945 (55%)
Slide 8: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q223 Q323 Income statement Aluminum shipments (tonnes) 173,649 171,995 Net sales $ 576 $ 545 Net (loss) income attributable to Century stockholders 8 (42) Diluted (loss) income per share attributable to Century stockholders 0.07
Slide 9: Q223 vs. Q323 Adjusted EBITDA
Financial Results Q223 vs. Q323 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Q223 to Q323 Cash Flow
Financial Results Q223 to Q323 Cash Flow ($MM) 2 1 1) Mt. Holly land sale proceeds are restricted and are required to be used on capital expenditures 2) Balance includes $22.9MM of restricted cash to be used on capital expenditures 9
Slide 11: Q4 Outlook at Realized Prices
Q4 Outlook at Realized Prices Adjusted EBITDA1 $MM Q3 Adjusted EBITDA Attributable to Century $9 LME / Delivery Premiums $(25) – (20) LME $2,161/MT US Midwest Premium $425/MT European Duty Paid Premium $279/MT Energy - Indy Hub $35/MWh Nord Pool $44/MWh HFO $67/bbl Henry Hub $3.25/mmbtu Other Raw Ma
Slide 12: Appendix
Appendix
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted net income (loss), adjusted earnings (loss) per share, adjusted EBITDA and net debt are non- GAAP financial measures that management uses to evaluate Century's financial performance. These non-GAAP financial measures facilitate comparisons of this period’s result
Slide 14: Adjusted Net (Loss) Income Non-GAAP Reconciliation
Adjusted Net (Loss) Income Attributable to Century Non-GAAP Reconciliation Q223 Q323 $MM EPS $MM EPS Net (loss) income attributable to Century stockholders1 $ 6.9 $ 0.07 $ (42.0) $ (0.43) Lower of cost or NRV inventory adjustment, net of tax 6.6 0.06 (4.2) (0.04) Unrealized loss (gain) on derivative
Slide 15: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q223 Q323 Net (loss) income attributable to Century stockholders, as reported $ 7.5 $ (42.0) Add: Net loss attributable to noncontrolling interests (0.9) (3.9) Net (loss) income 6.6 (45.9) Interest expense 8.7 9.2 Interest income (0.4) (0.4) Net gain (loss
Slide 16: 2023 Financial Assumptions
2023 Financial Assumptions Income Statement ($MM) YTD FY23 Cash Flow ($MM) YTD FY23 Aluminum shipments (kMT) 527 700 Sustaining Capex $9 $15-20 Iceland Casthouse1 $44 $60-75 D&A $58 $80-90 Investment Capex2 $10 $10-15 SGA $36 $40-45 SGA $30 $35-40 Interest Expense $27 $40-45 Interest $22 $40-45 Vari
Slide 17: 2023 Financial Information
2023 Financial Information Sensitivities ($MM) Variance Annual EBITDA8 Annual Cash9 Pricing Convention LME +/- $100/MT $ 49 $ 35 U.S.:50% ~1 month lag / 50% ~3 month lag LME MWP 1 +/- $22.04/MT 9 9 Iceland: primarily ~3 month lag MWP ~1 month lag EDPP2 +/- $22.04/MT 7 7 EDPP Primarily ~3 month lag A
Slide 18: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit1 Commodity (unit) FY24 FY25 Volume % Hedged Price Volume % Hedged Price LME (MT) 35,000 5% $ 2,325 - - - MWP (MT) - - - - - - EDPP (MT) - - - - - - Indiana Hub (MWh) - - - - - - Nord Pool (MWh) n/a n/a n/a n/a n/a n/a Natural Gas (mmbtu
Slide 19: Capacity and Production Information
Capacity and Production Information Aluminum facilities (kMT) Plant Country Capacity % Operating Sebree U.S. 220 100 Hawesville U.S. 250 0 Mt. Holly U.S. 230 75 Grundartangi Iceland 320 100 Total 1,020 70 Carbon anode facility (kMT) Plant Country Capacity % Operating Vlissingen Netherlands 150 100 T
Slide 20: Value-Added Products
Value-Added Products Value-added products capacity (kMT) FY23 FY24 Sebree – Billet/Slab 175 175 Mt. Holly – Billet/Slab 110 120 Grundartangi – Natur-Al TM Foundry Alloy 60 120 Grundartangi – Natur-Al TM and other low carbon metal 105 Grundartangi – Natur-Al TM Billet 150 Total 450 565 19
Slide 21: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update • $250-$300MM liquidity Q323 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $306 $250-300 • $300MM net debt target Projects Net Debt1 $334 $300 Sustaining Capital • $30-35MM in historical • Organic
Slide 22: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM billet and increase total primary foundry alloy production to 120,000 tonnes • Construction well underway; • $120MM investment • The European market for billet is short commercial production expected Q124 approxi
Slide 23: Natur-Al products made with 100% renewable energy
“Natur‐Al™ products are made with energy from 100% renewable sources” 22
Slide 24: Century Well Positioned for 2023 and Beyond
Century Well Positioned for 2023 and Beyond • Duty free access for U.S. and EU regional delivery premiums • Reliable supply to customers in short markets • Balanced operational footprint Aluminum Smelter Corporate Norðurál Headquarters Grundartangi Chicago, IL Iceland Carbon Anode United States Plan
Slide 25: For Additional Information
For Additional Information Ryan Crawford investorrelations@centuryaluminum.com 312-696-3132 (Office) Century Aluminum Company One South Wacker Dr, Suite 1000 Chicago, IL 60606 312-696-3102 (Fax) www.centuryaluminum.com 24
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