North American Aluminum Extrusion Market Dynamics

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•  August 24, 2016 •  GALM •  Detroit, Michigan •  Eric McElroy – SAPA •  Business Development •  Automotive Fabrication

North American Extrusions Market 2

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Extrusions to the Automotive Industry 3

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North American Aluminum Extrusion – Business Models

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Three Business Models: Dedicated Automotive Market Focus

Serve Multiple Markets Including Automotive / Plus Next Column:

Non-Automotive / Distribution B&C and Other Markets

Approximate Number of Company’s & Presses

Six (6) Individual Companies (11) Extrusion Presses

Ten (10) Individual Companies (42) Total Extrusion Presses

* Includes Sapa (18) Automotive Presses & 2 Largest Competitors

Seventy Eight (78) Companies (201) Presses

*Sapa & all other companies non automotive

Annual Capacity In Pounds: 6000 Series 7000 Series

6000 Series: 160 Million Lbs.

7000 Series: 75 Million Lbs. *Estimated Capacity

6000 Series: 700 Million Lbs

7000 Series: 100 Million Lbs. *Potential Estimated Automotive

Pounds Capacity

6000 Series: 3.7 Billion Lbs.

1000/2000/5000/7000 Series: 1.1 Billion Lbs.

Main Market Focus/ Customers:

OEM Direct and Tier 1 & 2 Some: European & Japanese OEM

Transplant Focus OEM Direct / Tiers 1, 2 & 3 OEM / Tier Suppliers / Jobbers

Primary Product(s):

CMS: Crash Management Systems

ABS: Anti-lock Brake Bodies BIW: Body in White

Trim: Int/Ext -Roof Rails & Sun Roof

BIW: Body in White CMS: Crash Management Systems

Chassis / Underbody ABS: Anti-Lock Brake

Forging & Impact Stock: Rod & Bar HVAC: Precision Tube & Connector’s

Steering & Electronics

Residential & Commercial B&C Truck/ Trailer- Mass Transit

Metal Distribution Aerospace & Defense

Machinery and Equipment OEM Consumer Durables

Electrical

Equipment/Capabilities: 7” – 10” Dia. Container Presses

2200 Ton – 3600 Ton Some: Value Add Processing

3” – 21” Dia. Container Presses 500 Ton – 8600 Ton

Focused: Value Add Processing

3” - 29” Dia. Plus Rectangular 500 Ton – 16,000 Ton

Some: Value Add processing

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4%

15%

81%

6000 Series (4.6 billion lbs total capacity)

Dedicated Automotive Market Focus (160m lbs)

Serve Multiple Markets Including Automotive (700m lbs)

Non-Automotive/Distribution B&C and Other Markets (3.7 billion lbs)

6% 8%

86%

1-2-5-7000 Series *mostly Defense and aerospace

(1.1 billion Lbs total capacity)

Dedicated Automotive Market Focus (75m lbs)

Serve Multiple Markets Including Automotive (100m lbs)

Non-Automotive/Distribution B&C and Other Markets (1.1 billion lbs)

North American Extrusion Market by Business Model

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50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

A) 7" - 10" Container Presses B) 9" - 14" Container Presses / Some Indirect

C) 8" - 9" Container Presses: Primarily Coiled Stock

Estimated Current Annual Pounds

CMS - Crash Management Systems ABS- Anti Lock Brake HVAC Precision Tubing/ Fin Tubing Steering & Electronics Forging & Impact Stock: Rod & Bar Air Bag Canisters Chassis / Underbody BIW: Body In White Drive shafts HVAC Connectors Body In White Int/Ext Trim Roof rails

North American Auto Market by Press Size

Key Conclusions – Aluminum Extrusion Market:

•  Market growth is primarily due to increase in Automotive applications. •  Growth Curve points to Capacity constraint in year 2020 if additional capacity

is not added or facilities and presses allocated for automotive growth. •  6000 Series extrusions are utilized for most automotive applications. •  7000 Series applications market is at capacity now and is primarily used for

aerospace and defense applications. •  94 Extrusion Companies in NA with 253 extrusion presses. Only 16

Companies and 53 extrusion presses currently used for automotive. •  Projected capacity expansion in North America and Re-allocation of assets

should meet demand growth by 2025 projections.

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