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Aluminium
for the world
INVESTOR RELATIONSPRESENTATION
2015
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
032015Results
04IndustryPerspectivesin 2016
052016ALBA Priorities
Aluminium
for the world
Aluminium
for the world
01INDUSTRY HIGHLIGHTS
Industry Highlights - 2015
World consumption up by 4% YoY (56.2 million metric tonnes)
Asian demand up by 5% YoY supported by softer consumption in China (+6% YoY)
Demand in North America up by 3% YoY mainly denominated by the automobile production
MENA demand is mainly driven by major infrastructure spending (+4% YoY)
Europe consumption remains flat at 1% YoY
Aluminium
for the world
Global Physical Demand Remains Healthy
5
Industry Highlights - 2015
World production up by 6% YoY
Chinese output continue to rise (+31.2 million metric tonnes, 10% YoY) albeit at a slower pace due to smelters’ closure
World market in surplus with China (+1.3Mt) and in deficit w/o China (-970Kt)
2015 marked the curtailment and closure of smelters (China and North America) on the back of the collapse of all-in-prices
Aluminium
for the world
Production Evolution
6
Industry Highlights - Q4 2015
LME inventories at 2.8 million metric tonnes in December
Q4 2015 cash-average was $1,495/t with LME ranging between$1,424/t on November 23 and $1,607/t on October 12
Regional collapse in physical premiums ($/t):
Aluminium
for the world
LME & Premiums
7
Major Japanese Ports (MJP) US Midwest DDP Rotterdam
407388
210
97 88
0
200
400
FY2014
Q12015
Q22015
Q32015
Q42015
510 505
276
178 175
100
250
400
550
FY2014
Q12015
Q22015
Q32015
Q42015
500
428
213167 150
100
300
500
FY2014
Q12015
Q22015
Q32015
Q42015
Aluminium
for the world
02ALBA HIGHLIGHTS
Alba Highlights - 2015
Continuous improvement in Safety performance
Alba wins Gold at the International Green Apple Awards
Production up by 3.1% YoY (960,643 mt) thanks to strong operational performance
Successful Early Retirement Scheme (ERS) Campaign
Alba managed to close 2015 with its Value-Added (VA) sales averaging 64%of total shipments versus 66% in 2014
Alba secures natural gas supply for Alba’s Line 6 Expansion Project
Aluminium
for the world
Operational Highlights & Achievements
9
Alba Highlights - 2015
Aluminium
for the world
Sales Breakdown by Geographic Footprint (2015 vs. 2014)Maintain Core Middle East Market & Expand in North America
10
Bahrain49%
MENA18%
Asia13%
Europe15%
Americas5%
Bahrain48%
MENA16%
Asia17%
Europe10%
Americas9%
86.5K48.9K
2014 2015
Alba Highlights - 2015
Aluminium
for the world
Project Titan - Improve Cash Cost Full-Year 2015: Project Titan Achieved Savings of $148/t
11
102
148 150
Project Titan - US$ per MT
TargetDecember December
2014 2015
*Savings from Project Titan represent the annual $cost per mt improvement once all projects are fully implemented
January 2016
Alba Highlights - Q4 & FY 2015
EBITDA (excluding One-Off Costs) down due to lower LME prices
Q4: US$56 million down by 61% YoY
FY: US$401 million down by 17% YoY
Net Income (excluding One-Off Costs) down driven primarily by lower EBITDA level in Q4 and One-Off Costs relating to early retirement pay-out
Q4: US$ 5 million down by 95% YoY
FY: US$ 208 million down by 25% YoY
Q4 2015 Free-Cash Flow favourable due to sound working capital management
Q4: US$72 million up by 54% YoY
FY: US$332 million down by 9% YoY
Alba Board recommends a final dividend of US$ 20.6 million to be paid in March 2016 (total dividend for 2015 was US$ 41.3 million)
Aluminium
for the world
Financial Key Performance Indicators
12
Aluminium
for the world
13
613 605
66% 64%
% of Total Sales Value Added Sales
2014 2015
Account Receivable Days Inventory Days Trend
40 38
2014 2015
83 91
2014 2015
Alba Highlights - 2015
Operational Excellence Continues to Sustain Momentum
Value-Added Sales (MT’000) as a % of Total Sales
Aluminium
for the world
14
Alba Highlights - 2015
Optimal Manpower & A Leaner Structure
1,000
2,000
3,000
4,000
2014 2015 Jan-16
2,907 2,9272,656
729 663654
3,636 3,5903,310
Internal External Total Head Count
Early Retirement Scheme (ERS)launched in December 2015and closed by January 31st
2016
Alba’s Manpower down by 271employees
Alba’s Manpower down to2,656 after ERS
Aluminium
for the world
15
Cash, Net Debt & Net Debt to EBITDA
613513
362184
-71
265
164
172
179
309
1.25
0.4-0.2
Net Debt Cash Net Debt to EBITDA
1.05
1.0
Alba Highlights - 2015
Maintain Sound Balance Sheet & Ready for Line 6 Financing
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Aluminium
for the world
032015 RESULTS
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Sales Analysis 2015 vs. 2014 Favourable Management Performance Offset by Low LME Prices
17
LMEMetal Sales2014
Pricing Power Metal Sales 2015
Volume
1000
1400
1800
2200
2,034 1,993
164
4
82
45
2015 vs. 2014 - Metal Sales Bridge (US$M)
Product Mix
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Maintain Optimum Product MixFavourable Management Performance
18
2015 vs. 2014 - Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
Sales 2014
ValueAdded
Sales 2015
LiquidMetal
Commodity 2014 2015
700
1000
932 952
9
7 22
100
300
500
328410
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
19
2015 vs. 2014 - Direct Cost Bridge (US$M)
Direct Cost2014
RMPrice
Alumina Sales Cost
RMConsumption
EnergyCons.
Plant Spending
One-OffCosts
Cost Analysis 2015 vs. 2014
Line-6Costs
1400
1550
1700
1,653 1,643
2
28
106
177
31
31 2
InventoryChange
Direct Cost2015
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
EBITDA Bridge Gap Analysis - 2015 vs. 2014 EBITDA Margin at 17.3%
20
2015 vs. 2014 - EBITDA Bridge (US$M)
EBITDA 2014Adjusted
Metal Sales
DerivativesOther Sales Direct Cost Selling Expenses
EBITDA 2015Adjusted
250
375
500
465
352
41
105
11 2 20
EBITDA 21.3%
EBITDA 17.3%
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Cash Flow Bridge - FY 2015 vs. FY 2014 Achieving Constant Cash Flow Trend
21
FY14 to FY15 Cash Flow Bridge (US$M)
Cash Balance
2014
CF from
Operations
Payment to
Shareholders
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
2015
Free Cash Flow (US$M)
0
200
400
600
179
350
106 124
77
125
309
250
300
350
305
332
2014 2015
Operating & Investing Cash Flow
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
22
Working Capital as Percentage of Sales
Working Capital Trend as Percentage of Sales - Cash is King
18%
16%
12%
17%
22%
PERCENTAGE2014 2015
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
23
Favourable Management Performance Partially Offset by LME Prices
Financial Summary Q4 2015 Q4 2014 FY 2015 FY 2014
Average Cash LME (US$/MT) 1,495 1,968 1,663 1,866
Sales (US$M) 469 591 2,039 2,185
EBITDA (US$M) 9 140 352 465
EBITDA% 2.0% 23.7% 17.3% 21.3%
EBITDA (Excl. One-Off Costs) (US$M) 56 145 401 485
EBITDA% (Excl. One-Off Costs) 12.0% 24.5% 19.7% 22.2%
Net Income/ (Loss) (US$M) (42) 92 159 257
Net Income/ (Loss) (US$M) (Excl. One-Off Costs) 5 97 208 242
Net Income/ (Loss) (US$M) (Excl. One-Off Costs)% 1.1% 16.4% 10.2% 11.1%
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
24
Total Debt Trend (US$M)
Total Debt Reduction Trend - Continue to Strengthen
0
350
700
2014 2015
17188
192
150
363
238
Long-Term Short Term Total Debt
2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Alba Continues to Deliver Cash to its Shareholders
25
At Alba’s Board Meeting on February 18, 2016, the Directors recommended a total dividend of US$ 41.3 million (26% of 2015 Net Income), where US$ 20.6 million (interim dividend) were paid in September 2015 and US$ 20.6 million will be payable in March 2016 (subject to Bahrain Bourse and Alba Shareholders’ approval)
The Shareholders’ approval will be requested at March 16, 2016 Annual General Meeting
Aluminium
for the world
04INDUSTRY PERSPECTIVES IN 2016
Industry Perspectives in 2016
Aluminium
for the world
Global Physical Demand to Remain Healthy
27
Key factors to be observed:
LME volatility will continue
Lower LME prices & strong US dollar will continue to pressure marginal producers to cut output in North America, Europe and China
North America demand is set to grow at a fast pace fuelled by strong automotive production
MENA output stable despite geopolitical tensions
LME price to range between $1,400/t - $1,500/t
Industry Perspectives in 2016
Aluminium
for the world
Raw Materials Price Trends
28
Alumina spot index to soften and expected to remain stable with minor fluctuations
Green Petroleum Coke prices to slightly soften in 2016
Alumina Fluoride (ALF3) and Liquid Pitch prices to remain at current levels in 2016 and likely to decrease
Aluminium
for the world
052016 ALBA PRIORITIES
2016 Alba Priorities
Aluminium
for the world
Sustainable Improvement & Preparation for Future Growth
30
Continuous Focus on Safety Initiatives & Talent Management
Introduce “Titan 2”
Focus on Value-Added Sales
Increase Creep Capacity with Minimal Capital Investment
Kick-off the early works for Line 6 Expansion Project
Aluminium
for the world
06APPENDIX
Q4 2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Sales Analysis 4Q15 vs. 4Q14 Favourable Management Performance Offset by Low LME Prices
32
350
425
500
575
565
459
0
11
24
4Q15 vs. 4Q14 - Metal Sales Bridge (US$M)
Product MixLMEMetal Sales4Q14
Pricing Power Metal Sales 4Q15
Volume
119
Q4 2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Maintain Optimum Product MixFavourable Management Performance
33
100
200
300
242 253
8 2
21
4Q15 vs. 4Q14 - Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
200
400
350
306
Sales 4Q14
ValueAdded
Sales 4Q15
LiquidMetal
Commodity4Q14 4Q15
Q4 2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
34
Direct Cost4Q14
RMPrice
Alumina Sales Cost
RMConsumption
EnergyCons.
Plant Spending
One-OffCosts
Cost Analysis 4Q15 vs. 4Q14
Line-6Costs
250
350
450
431446
208
9
8
173 42
0
InventoryChange
Direct Cost4Q15
4Q15 vs. 4Q14 - Direct Cost Bridge (US$M)
Q4 2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Adjusted EBITDA Bridge Adjusted EBITDA Margin at 2%
35
4Q15 vs. 4Q14 - EBITDA Bridge (US$M)
EBITDA 4Q14Adjusted
Metal Sales
DerivativesOther Sales Direct Cost Selling Expenses
EBITDA 4Q15Adjusted
0
60
120
140
9
106
16
15 4 2
EBITDA 23.7%
EBITDA 2.0%
Q4 2015 ResultsAluminium Industry: Collapse of All-In-Prices
Aluminium
for the world
Cash Flow Bridge - 3Q15 to 4Q15 Achieving Constant Cash Flow Trend
36
3Q15 to 4Q15 Cash Flow Bridge (US$M)
Cash Balance
3Q15
CF from
Operations
Payment to
Shareholders
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
4Q15
Free Cash Flow (US$M)
50
150
250
350
224
9
118
550 13
309
0
47
72
3Q14 4Q15
Operating & Investing Cash Flow
37
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Aluminium
for the world
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