Aluminium
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INVESTOR RELATIONSPRESENTATION
Q3 2017
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
03Q3 2017Results
04IndustryPerspectivesin 2017
052017ALBA Priorities
Aluminium
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Aluminium
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01INDUSTRY HIGHLIGHTS
1 Industry Highlights are based on CRU analysis
Industry Highlights - Q3 2017
World consumption up by 6% YoY
Asian demand rose by 6% YoY supported by Chinese Consumption (+7% YoY) on the back of construction projects and grid-infrastructure spending
MENA demand up by 4% YoY driven by infrastructure spending in Saudi Arabia (+11% YoY)
Europe consumption remains firm, up by 4% YoY, led by steady demand across the transport and packaging sectors
North America demand up by +3% YoY supported by continued growth in Automotive and Construction markets
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Global Physical Demand Remains Strong
5
Industry Highlights - Q3 2017
World production up by 7.5% YoY
Asian supply rose by 11% YoY led by Chinese output ( +13% YoY) due to smelters’ restarts in some provinces and partially offset by winter-closures
North America production flat due to delays in creep-up projects and the reschedule of smelters’ restarts to 2018
World market in deficit with China (-59 Kt) & (-505 Kt) w/o China
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Production Evolution
6
Industry Highlights - Q3 2017
LME inventories at 1.3 million metric tonnes in September
Q3 2017 cash-average was $2,012/t with LME ranging between $1,877/t on July 12 and $2,164/t on September 20
Physical premiums prices continue to fluctuate
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LME & Premiums
7
0
75
150
Q4 2016 Q1 2017 Q2 2017 Q3 2017
132145 144 151
0
100
200
Q4 2016 Q1 2017 Q2 2017 Q3 2017
166211 203
172
Major Japanese Ports (MJP) US Midwest DDP Rotterdam
0
60
120
Q4 2016 Q1 2017 Q2 2017 Q3 2017
69
100117
90
Aluminium
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02ALBA HIGHLIGHTS
Alba Highlights - Q3 2017
Launch of ‘Summer Challenge’ Safety Campaign
Line 5 normalized and Alba sets the benchmark for speed of recovery
Sales volume and throughput up by 0.5% YoY (247,540 mt) and 3% YoY (253,475 mt)
Value-Added Sales averaged 59% of total shipments in the third quarter
Project Titan -- Phase II: YTD savings of US$ 65/mt (impacted by timing of Line 5 recovery)
Line 6 Expansion Project on track with overall progress of 30% from inception till to-date [engineering advanced by more than 60% while contracts and procurement by more than 75%]
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Operational Highlights & Achievements
9
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Safety in Focus -- Towards Safety Tomorrowland
10
Alba Major Highlights - 2017
2
6
10
2013 2014 2015 2016 YTDSep 2017
8
56
3
5
10
70
130
2013 2014 2015 2016 YTDSep 2017
119
5769 64
48
Lost Time Injury (LTI) Trend Total Injuries Trend
Alba Highlights - Q3 & YTD 2017
EBITDA up driven by higher LME prices and solid management performance
Q3: US$ 117 million up by 34% YoY
YTD: US$ 327 million up by 36% YoY
Adjusted Net Income up due to higher EBITDA levels
Q3: US$ 71 million up by 87% YoY
YTD: US$ 189 million up by 103% YoY
Favourable Free-Cash Flow1 up due to higher LME prices
Q3: US$ 93 million up by 111% YoY
YTD: US$ 87 million down by 42% YoY
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Financial Key Performance Indicators
11 1 Free Cash Flow excluding Line 6 CAPEX spending
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03Q3 2017 RESULTS
Aluminium
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13
250
400
550
442
531
0
1 2
86
Q3 2017 vs. Q3 2016 - Metal Sales Bridge (US$M)
Product MixLMEMetal SalesQ3 2016
Pricing Power Metal Sales Q3 2017
Volume
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Sales Bridge Analysis Q3 2017 vs. Q3 2016 Higher LME Prices & Recovery of Line 5
Aluminium
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14
210
235
260
246 248
32
3
3Q17 vs. 3Q16 Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
100
150
200
179 184
Sales Q3 2016
ValueAdded
Sales Q3 2017
LiquidMetal
Commodity Q3 2016
Q3 2017
Higher Sales Volume Coupled With Higher Premiums
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
for the world
15
Q3 2017 vs. Q3 2016 - Direct Cost Bridge (US$M)
Alumina Sales Cost
Cost Analysis Q3 2017 vs. Q3 2016
200
275
350
425
500
367
484
59
12
288
8
18
Direct CostQ3 2017
Plant Spending
Inventory Change
EnergyCons.
RMCons.
RMPrice
Direct CostQ3 2016
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
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Favourable Management Performance EBITDA Margin at 19%
16
Q3 2017 vs. Q3 2016 - EBITDA Bridge (US$M)
EBITDA Q3 2017Adjusted
0
100
200
300
87117
89
61
117
318.8%
19.0%
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Selling Expenses
Direct CostOther Sales Metal Sales
EBITDA Q3 2016Adjusted
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Cash Flow Bridge – Q2 2017 to Q3 2017 Maintain Good Cash Position
17
Q2 2017 to Q3 2017 Cash Flow Bridge (US$M) Free Cash Flow (US$M)
-240
-120
0
120
240
128 152
11812 13
413
Cash Balance
2Q17
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
3Q17
LINE 6CAPEX
CF from
Operations
0
50
100
44
93
Q3 2016 Q3 2017
Operating & Investing Cash Flow excluding LINE 6 Capex
343
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
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18
Favourable Management Performance
Financial Summary Q3 2017 Q3 2016 YTD 2017 YTD 2016
Average Cash LME (US$/MT) 2,011 1,620 1,924 1,569
Total Sales (US$M) 613 463 1,609 1,320
EBITDA (US$M) 117 87 327 241
EBITDA% 19.0% 18.8% 20.3% 18.3%
Net Income/ (Loss) (US$M) 69 38 184 93
Gain/ (Loss) Unrealised Derivatives (US$M) (2) 0 (5) 0
Adjusted Net Income/ (Loss) (US$M) 71 38 189 93
Adjusted Net Income% 11.5% 8.2% 11.7% 7.0%
Q3 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
for the world
04INDUSTRY PERSPECTIVES IN 2017
Industry Perspectives in 2017
Aluminium
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Global Physical Demand to Remain Healthy
20
Key factors to be observed:
Impacts of significantly higher Alumina prices
China pollution crack-down coupled with lower Chinese exports are set to further boost LME prices
Physical premiums expected to remain flat
Global market is expected to be in deficit in 2017 and 2018
LME price expected to range between US$ 2,000/t - US$ 2,100/t
Industry Perspectives in 2017
Aluminium
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Raw Materials Price Trends
21
Alumina prices at multi-year highs due to spike in Chinese demand
Green Coke (GPC) prices are set to edge higher due to shortages and stricter environmental regulations in China
Liquid Pitch and Aluminium Fluoride prices are to increase on the back of higher LME price
Aluminium
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052017 ALBA PRIORITIES
2017 Alba Priorities
Aluminium
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Sustain Operational Performance & Progress Line 6 Expansion Project
23
Continuous Focus on Safety TomorrowLand Initiatives
Deliver on Project Titan - Phase II
Increase Value-Added Sales
Accelerate Line 6:
- Secure Second Tranche of ECA-Covered Facility
- Award Remaining Packages
Aluminium
for the world
06APPENDIX
Aluminium
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Sales Bridge Analysis YTD 2017 vs. YTD 2016 Higher LME Prices Partially Offset With Lower Sales Volume
25
400
800
1,200
1,600
1,2531,460
239
5
829
YTD 2017 vs. YTD 2016 - Metal Sales Bridge (US$M)
Product Mix
YTD 2017 Results Chinese Smelters’ Closures Boost LME Prices
LMEMetal SalesYTD 2016
Pricing Power Metal Sales YTD 2017
Volume
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26
YTD16 vs. YTD15Sales by Product Line Bridge (MT’000)
Premium Above LME Trend US$ Per MT
350
550
750
718701
14
1615
0
100
200
192 188
Sales Volume Down Following the Power Outage Incident
YTD 2016 YTD 2017
YTD 2017 Results Chinese Smelters’ Closures Boost LME Prices
Sales YTD 2016
ValueAdded
Sales YTD 2017
LiquidMetal
Commodity
Aluminium
for the world
27
YTD 2017 vs. YTD 2016 - Direct Cost Bridge (US$M)
500
700
900
1,100
1,300
1,054
1,250
93
22 77
53
23
26
Direct CostYTD17
Cost Analysis YTD 2017 vs. YTD 2016
Direct CostYTD16
RMPrice
Alumina Sales Cost
RMCons.
EnergyCons.
Inventory Change
Plant Spending
YTD 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
for the world
Higher LME Prices and Favourable Management Performance Adjusted EBITDA Margin at 20.3%
28
YTD 2017 vs. YTD 2016 - EBITDA Bridge (US$M)
0
200
400
600
241327
206
83
196
7
20.3%
18.3%
EBITDA YTD16Adjusted
Metal Sales
Other Sales Direct Cost Selling Expenses
EBITDA YTD17Adjusted
YTD 2017 Results Chinese Smelters’ Closures Boost LME Prices
Aluminium
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Cash Flow Bridge – YTD 2017 vs. FY 2016 Maintain Good Cash Position
29
FY 2016 to Q3 2017 Cash Flow Bridge (US$M) Free Cash Flow (US$M)
0
50
100
150
149
87
YTD 2016 YTD 2017
Operating & Investing Cash Flowexcluding LINE 6 CAPEX
-500
-250
0
250
500
177 152
327
170
71
737 704
78
Cash Balance
2016
Payment to
Shareholders
WCChanges
CAPEXSpent
Net Debt Service
Cash Balance
3Q17
LINE 6CAPEX
CF from
Operations
YTD 2017 Results Chinese Smelters’ Closures Boost LME Prices
30
Alba4World alba4world user/Alba4World photos/alba4world
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