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Aluminium
for the world
INVESTOR RELATIONSPRESENTATION
Q1 2018
DISCLAIMER
2
This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the“Company”). The document is being supplied to you solely for your information and for use at the Company’s presentation.No information made available to you in connection with the presentation may be passed on, copied, reproduced, in wholeor in part, or otherwise disseminated, directly or indirectly, to any other person. This document and its contents aredirected only to the intended audience. It is being made on a confidential basis and is furnished to you solely for yourinformation. By accepting this material the recipient confirms that he or she is a relevant person. This document must notbe acted on or relied on by persons who are not relevant persons. Any investment activity to which this document relatesis available only to relevant persons and will be engaged in only with relevant persons. If you are not a relevant person youshould not attend the presentation and should immediately return any materials relating to it currently in your possession.Forward-looking statements speak only as at the date of this presentation and Aluminium Bahrain B.S.C. expresslydisclaims any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in thispresentation. No statement in this presentation is intended to be a profit forecast. As a result, you are cautioned not toplace any undue reliance on such forward-looking statements. You should not base any behaviour in relation to financialinstruments related to the Company’s securities or any other securities and investments on such information until after it ismade publicly available by the Company or any of their respective advisers. Some of the information is still in draft formand has not been legally verified. The Company, its advisers and each of their respective members, directors, officers andemployees are under no obligation to update or keep current information contained in this presentation, to correct anyinaccuracies which may become apparent, or to publicly announce the result of any revision to the statements madeherein except where they would be required to do so under applicable law, and any opinions expressed in them are subjectto change without notice. No representation or warranty, express or implied, is given by the Company, its undertakings oraffiliates or directors, officers or any other person as to the fairness, accuracy or completeness of the information oropinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of thispresentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to suchinformation.
Aluminium
for the world
3
01IndustryHighlights
CONTENTS
02ALBAHighlights
03Q1 2018Results
04IndustryPerspectivesin 2018
052018ALBA Priorities
Aluminium
for the world
Aluminium
for the world
01INDUSTRY HIGHLIGHTS1
1Industry Highlights are based on CRU analysis
Industry Highlights – Q1 2018
World consumption up by 4% YoY
Asian demand up by 5% YoY supported by Chinese demand (+5% YoY)
MENA demand rose up by 8% YoY mainly driven by major infrastructure spending in KSA (+18% YoY)
North America continues to report solid demand (+3% YoY) supported by auto production
Europe consumption up by 3% YoY due to strong demand in transport (auto body sheet) and construction sectors
Aluminium
for the world
Global Physical Demand to Continue to Grow
5
Chinese supply dips by ~ 1.5% YoY due to slower ramp-ups and winter closure restarts
North America supply dropped by 5% YoY [idle capacity to restart in Q3 2018]
World market in surplus with China (+22 Kt) and in deficit w/o China
(-533 Kt)
Aluminium
for the world
Global Production Growth Almost Flat
6
Industry Highlights – Q1 2018
LME inventories at ~ 1.3 million mt as of March-end
Q1 2018 Cash-Average was $2,159 /t with LME ranging between $1,997/t on March 29 and $2,226/t on February 19
Physical premiums prices on the rise:
Aluminium
for the world
LME & Premiums
7
Major Japanese Ports (MJP) US Midwest DDP Rotterdam
0
100
200
Q12017
Q22017
Q32017
Q42017
Q12018
145 144 143 156 168
0
175
350
Q12017
Q22017
Q32017
Q42017
Q12018
211 203 172 209
306
0
75
150
Q12017
Q22017
Q32017
Q42017
Q12018
100117
90 94 108
Industry Highlights – Q1 2018
Aluminium
for the world
02ALBA HIGHLIGHTS
Driving continuous improvement in Plant Safety with the launch of ‘Safety ABC’ Campaign
Sales volume up by 3.6% YoY (251,637 mt) and production up by 4.3% YoY (259,399 mt)
Alba Value-Added Sales averaged 58% of total shipments in Q1
Line 6 Expansion Project Milestones:
- Line 6 Smelter [overall progress: 49%]
- Power Expansion Project [PS 5 & PDS overall progress: 58% & 82%]
Aluminium
for the world
Operational Highlights & Achievements
9
Alba Highlights – Q1 2018
Aluminium
for the world
Safety in Focus - Safety Selfie
10
Alba Highlights – Q1 2018
2
6
10
2014 2015 2016 2017 YTDMarch2018
56
3
6
1
5
45
85
2014 2015 2016 2017 YTDMarch2018
5769 64 57
9
Lost Time Injury (LTI) Trend Total Recordable Injuries Trend
EBITDA up driven by higher LME prices and Favourable Management Performance
Q1: US$126 million up by 9% YoY
Adjusted Net Income up driven by higher EBITDA levels
Q1: US$ 80 million up by 16% YoY
Free-Cash Flow 1 favourable due to higher LME prices
Q1: US$ 141 million up by 1,145% YoY
Alba paid a dividend of US$ 98 million in March 2018
Aluminium
for the world
Financial Key Performance Indicators
11
1 Free Cash Flow excluding Line 6 CAPEX spending
Alba Highlights – Q1 2018
Aluminium
for the world
Project Titan - Phase III: Improve Cash Cost Structure by US$ 60/MT Q1 2018: Achieved Benefits of US$ 41/ MT
12
4160
Project Titan - US$ per MT
AchievedQ1 2018
Target2018
* Achieved Benefits from Project Titan represent the annual US$ cost per mt improvement once all projects are fully implemented
Alba Highlights – Q1 2018
Aluminium
for the world
03Q1 2018 Results
Aluminium
for the world
14
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Sales Bridge Analysis Q1 2018 vs. Q1 2017 Favourable Management Performance Coupled With Higher LME Prices
250
450
650
Metal Sales1Q17
LME Product Mix Pricing Power Volume Metal Sales1Q18
483
596
91
2 317
Q1 2018 vs. Q1 2017 - Metal Sales Bridge (US$M)
Aluminium
for the world
Higher Sales Volume Denominated by Favourable Shift in Product Mix
15
100
200
300
243 252
8 1 2
Q1 2018 vs. Q1 2017Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
100
200
1Q17 1Q18
183
199
Sales 1Q17
ValueAdded
Sales 1Q18
LiquidMetal
Commodity
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Aluminium
for the world
16
Cost Analysis Q1 2018 vs. Q1 2017
200
350
500
Direct Cost1Q17
RM Price RMConsumption
EnergyConsumption
AluminaSales Cost
InventoryChange
PlantSpending
Direct Cost1Q18
390
460
10 18
61
7 2010
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Q1 2018 vs. Q1 2017 - Direct Cost Bridge (US$M)
Aluminium
for the world
Adjusted EBITDA Bridge Gap Analysis - Q1 2018 vs. Q1 2017 Adjusted EBITDA Margin at 20.9%
17
Q1 2018 vs. Q1 2017- EBITDA Bridge (US$M)
0
125
250
EBITDA 1Q17(Adjusted)
Metal Sales Other Sales Direct Cost SellingExpenses
EBITDA 1Q18(Adjusted)
115 126
112
28
70
3EBITDA 22.3%EBITDA 20.9%
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Aluminium
for the world
Cash Flow Bridge - Q4 2017 to Q1 2018: Maintain Good Cash Position
18
Q4 2017 to Q1 2018 Cash-Flow Bridge (US$M) Free Cash-Flow (US$M)
0
75
150
1Q 2017 1Q 2018
11
141
Operating & Investing Cash Flow
(Excluding Line 6 CAPEX)
-100
0
100
200
300
400
500
CashBalance
4Q17
CFfrom
Operations
WCChanges
CAPEXSpent
Line 6CAPEX
Loan Paymentto
Shareholders
CashBalance
1Q18
206
114
132
20
256
11
391 98
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Drawdown
Aluminium
for the world
19
Favourable Management Performance
Financial Summary Q1 2018 Q1 2017
Average Cash LME (US$/MT) 2,159 1,850
Sales (US$M) 600 517
EBITDA (US$M) 126 115
EBITDA% 20.9% 22.3%
Net Income/ (Loss) (US$M) 90 68
Q1 2018 Results Aluminium Industry: Rally in LME Prices
Aluminium
for the world
04INDUSTRY PERSPECTIVES IN 2018
Industry Perspectives in 2018
Aluminium
for the world
Global Physical Demand to Remain Healthy
21
Key factors to be observed:
LME volatility to continue on the back of Rusal Sanctions, US tariffs and Chinese output
World market to face supply shortages thanks to US sanctions on Russia and Hydro’s production cuts in Brazil (surge in premiums)
North America demand is set to increase supported by residential construction market and automotive production
MENA output to accelerate on the back of infrastructure spending
LME price to range between $2,150/t - $2,250/t
Industry Perspectives in 2018
Aluminium
for the world
Raw Materials Price Trends
22
Alumina spot prices to increase on the back of Alunorte production cuts and Rusal sanctions
Green Petroleum Coke (GPC) prices will continue to be high due to supply constraints
Liquid Pitch and Aluminium Fluoride prices are set to be at higher-range due to continued environmental regulations in China
Aluminium
for the world
052018 ALBA PRIORITIES
2018 Alba Priorities
Aluminium
for the world
Sustainable Improvement & Preparation for Future Growth
24
Focus on Safety Selfie Initiative
Deliver on Project Titan - Phase III [2018: 1 Million MT & US$ 60/t]
Leverage strong physical demand on Value-Added Sales
Focus on future upstream opportunities
Line 6 on Schedule
Close final tranche of ECA-covered facility
Award remaining packages by Q2 2018
25
Alba4World alba4world user/Alba4World photos/alba4world
Aluminium
for the world
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