Century Aluminum Company · NASDAQ:CENX
Century Aluminum — Q2 2022 Earnings Presentation
24 slides from Century Aluminum's earnings presentation, Aug 9, 2022
Slide 1: Century Aluminum Company 2nd Quarter Earnings Call
Century Aluminum Company 2nd Quarter Earnings Call August 9, 2022
Slide 2: Cautionary Statement
Cautionary Statement This presentation and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21
Slide 3: Speakers
Speakers • Jesse Gary – President and Chief Executive Officer • Shelly Harrison – Senior Vice President, Finance and Treasurer • Peter Trpkovski – Vice President, Finance and Investor Relations 2
Slide 4: Company and Market Update
Company and Market Update ◼ Global markets expected to remain in slight deficit Industry ◼ Lowest LME inventory levels since 1990 Fundamentals ◼ Delivery premiums in U.S. and Europe remain elevated due to continued strong demand and further supply curtailments ◼ Quarterly adjusted EBITDA of $87MM ◼
Slide 5: Industry Environment
Industry Environment Aluminum Supply and Demand Balance – FY22 Primary Aluminum Balance – US and EU Global Inventory Days of Primary Aluminum Consumption Billet Premiums – Upcharge 1) Source: CRU Group, Century Aluminum Company 4
Slide 6: Industry Environment - Prices
Industry Environment - Prices LME Aluminum Regional Premiums Alumina Price Index Power Actuals and Forwards Century power markets 1) Source: CRU Group, Century Aluminum Company 5
Slide 7: Summary of Financial Results
Summary of Financial Results ($MM, except per share and tonne amounts) Q122 Q222 Income statement Shipments (tonnes) 211,411 214,084 Net sales $ 754 $ 857 Net income/(loss) 18 37 Earnings/(loss) per share 0.18 0.36 Adjusted net income/(loss)1 61 30 Adjusted earnings/(loss) per share1 0.59 0.30 Adjus
Slide 8: Financial Results: Q1 vs. Q2 Adjusted EBITDA
Financial Results Q122 vs. Q222 Adjusted EBITDA ($MM) 1 1 1) See reconciliation to comparable GAAP financial measure in appendix 7
Slide 9: Financial Results: Q1 vs. Q2 Cash Flow
Financial Results Q122 vs. Q222 Cash Flow ($MM) 1 1) See reconciliation to comparable GAAP financial measure in appendix 8
Slide 10: Q3 Outlook at Lagged Prices
Q3 Outlook at Lagged Prices Adjusted EBITDA $MM CENX Price Lag Spot 2 Q2 Actual Adjusted EBITDA $87 Lagged LME, Delivery Premiums, & Alumina ~$(97) LME realized $2,660/MT Primarily ~3 month lag ~ $2,450/MT US Midwest Premium realized $660/MT ~1 month lag ~ $605/MT European Duty Paid Premium realized
Slide 11: Appendix
Appendix
Slide 12: 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 13: Adjusted Net Income (Loss) Non-GAAP Reconciliation
Adjusted Net Income (Loss) Non-GAAP Reconciliation Q122 Q222 $MM EPS $MM EPS Net income (loss) as reported1 $ 17.3 $ 0.18 $ 35.5 $ 0.36 Lower of cost or NRV inventory adjustment, net of tax - - 52.8 0.54 Unrealized (gain) loss on derivative contracts, net of tax 39.0 0.40 (221.8) (2.27) Asset impair
Slide 14: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation $MM Q122 Q222 Net income (loss) as reported $ 17.7 $ 37.4 Interest expense 7.3 5.7 Interest income (0.1) - Net (gain) loss on forward and derivative contracts 56.7 (231.8) Other income - net (2.0) (3.1) Income tax expense 1.7 42.3 Operating income (loss) $ 81.
Slide 15: 2022 Financial Outlook
2022 Financial Outlook Income Statement YTD FY22 Outlook Cash Flow YTD FY22 Outlook Shipments 425,500 790,000 Sustaining Capex $15MM ~$20MM D&A $43MM $70-$80MM MH Restart $15MM $15MM SGA $17MM $40-45MM Iceland Casthouse1 $21MM ~$50MM Interest Expense $13MM ~$30MM Investment Capex $1MM $5-10MM Varies
Slide 16: 2022 Financial Information
2022 Financial Information Sensitivities ($MM) Variance Annual EBITDA6 Annual Cash7 Pricing Convention LME +/- $100/MT $ 44 $ 39 U.S.: 50% ~1-month lag / 50% ~3-month lag LME Iceland: primarily ~3-month lag MWP1 +/- $22.04/MT 8 4 MWP ~1-month lag EDPP2 +/- $22.04/MT 7 7 EDPP Primarily ~3-month lag A
Slide 17: Financial Hedge Landscape
Financial Hedge Landscape Volume (unit) / % Hedged / Price/unit Commodity (unit) 2H22 FY23 FY24 Volume % Hedged Price Volume % Hedged Price Volume % Hedged Price LME (MT) 30,000 9% $ 2,110 45,000 6% $ 2,305 35,000 5% $ 2,325 MWP (MT) 98,000 52% $ 320 - - - - - - EDPP (MT) - - - - - - - - - Indiana H
Slide 18: Century well positioned for 2022 and beyond
Century well positioned for 2022 and beyond Aluminum Smelter Aluminum smelter Carbon Anode Plant Corporate Headquarters Grundartangi, Iceland ◼ FY22 production: 315k MT Corporate Headquarters Chicago, IL Aluminum Smelter Carbon Anode Plant Hawesville, KY Vlissingen, Netherlands ◼ FY22 production: 10
Slide 19: Capital Allocation
Capital Allocation Capital Allocation Framework Current Status Update ◼ $250-$300MM liquidity Q222 Target Maintain Liquidity Through the target Investment Cycle Capital Liquidity $226 $250-300 ◼ $300MM net debt target Projects Net Debt1 $364 $300 Sustaining Capital ◼ $30-35MM in historical ◼ Organic
Slide 20: Capacity and Production Information
Capacity and Production Information Aluminum operating 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 operating facility (kMT) Plant Country Capacity % Operating Vlissingen N
Slide 21: Value-Added Products
Value-Added Products Value added products (MT) FY22 Outlook Sebree – Billet 155,000 Mt. Holly – Billet 110,000 Grundartangi – Primary Foundry Alloy 60,000 Grundartangi – Natur-AlTM and other low carbon metal 105,000 Total 430,000 20
Slide 22: Low-Carbon Billet Casthouse Expansion Project
Low-Carbon Billet Casthouse Expansion Project Will produce 150,000 tonnes of Natur-AlTM and 60,000 tonnes of incremental primary foundry alloy to short EU market • Commenced building new billet • $120MM investment • The European market for billet is short casthouse at Grundartangi, Iceland approxima
Slide 23: Natur-Al products are made with energy from 100% renewable sources
“Natur‐Al™ products are made with energy from 100% renewable sources” 22
Slide 24: For Additional Information
For Additional Information Peter Trpkovski 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 23
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