INVESTOR RELATIONS PRESENTATION · presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such ... Higher Prices on Market

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INVESTOR RELATIONSPRESENTATION

Q2 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

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3

01IndustryHighlights

CONTENTS

02ALBAHighlights

03Q2 2018Results

04IndustryPerspectivesin 2018

052018ALBA Priorities

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Aluminium

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01INDUSTRY HIGHLIGHTS

1 Industry Highlights are based on CRU analysis

Industry Highlights - Q2 2018

World consumption up by 5% YoY

MENA demand surge by +9% YoY driven by major infrastructure spending in Saudi Arabia (+20% YoY)

Demand in Asia up by 6% YoY supported by Chinese consumption (+6% YoY) on the back of real-estate developments

Europe consumption up by 3% YoY due to strong demand across building, construction and transport sectors

North America demand up by 3% YoY driven by auto production (heavy-duty trucks)

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Global Physical Demand Remain Healthy

5


World production down by ~ 0.5% YoY

Asian supply almost flat & Chinese supply down by 2% YoY due to delays in smelters’ ramp-up

Production in North America dropped by 5% YoY due to outages in Warrick and Sebree smelters

World market in deficit with China (-1,425 Kt) & (-959 Kt) without China

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Global Production Growth Flat

6


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LME & Premiums

7

Q2 2018 cash-average was $2,259/t with LME ranging between $1,967/t on April 6 and $2,602/t on April 19

LME inventories at 1.1 million metric tonnes in June

Physical premium prices ($/t) up driven by tight supply & Rusal sanctions

Major Japanese Ports (MJP) US Midwest DDP Rotterdam

0

225

Q22017

Q32017

Q42017

Q12018

Q22018

144 143 156 168202

0

250

500

Q22017

Q32017

Q42017

Q12018

Q22018

203 172 208305

480

0

75

150

Q22017

Q32017

Q42017

Q12018

Q22018

11790 94 108

130

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02ALBA HIGHLIGHTS

Alba Highlights - Q2 2018

Launch of Summer Safety Campaign ‘Selfie Safety’

Production up by 23% YoY (252,081 mt) while Sales volume up by 19% YoY (249,595 mt)

Alba Value-Added Sales averaged 60% of total shipments in Q2 2018

Line 6 Expansion Project in progress:

- Closed first part of 2nd tranche ECA-covered facilities (EUR 204.5 million)

- Line 6 Smelter [overall progress > 61%]

- Power Expansion Project [PS 5 & PDS overall progress: 63% & 91%]

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Operational Highlights & Milestones

9

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Safety in Focus - Safety Selfie

10

Alba Highlights - Q2 2018

0

4

8

2014 2015 2016 2017 YTDJune 2018

56

3

6

210

70

2014 2015 2016 2017 YTDJune 2018

57

6964

57

17

Lost Time Injury (LTI) Trend Total Injuries Trend

Alba Highlights - Q2 & H1 2018

EBITDA up due to higher LME prices & impact of Line 5 recovery in Q2 2017

Q2: US$ 117 million up by 22% YoY

H1: US$ 242 million up by 15% YoY

Net Income up supported by higher EBITDA levels

Q2: US$ 77 million up by 65% YoY

H1: US$ 155 million up by 46% YoY

Free-Cash Flow1 up due to higher LME prices & impact of Line 5 recovery in Q2 2017

Q2: US$ 250 million

H1: US$ 383 million

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Financial Key Performance Indicators

11 1 Free Cash Flow excluding Line 6 CAPEX spending

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Project Titan - Phase III: Improve Cash Cost Structure by US$ 60/MT Q2 2018: Achieved Savings of US$ 81/ MT

12

Q2 2018 Target

8160

Project Titan - US$ per MT

*Savings from Project Titan represent the annual US$ cost per mt improvement once all projects are fully implemented

Alba Highlights – Q2 2018

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03Q2 2018 RESULTS

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14

250

350

450

550

650

445

623

75

1 19

83

Q2 2018 vs. Q2 2017 - Metal Sales Bridge (US$M)

Product MixLMEMetal SalesQ2 2017

Pricing Power Metal Sales Q2 2018

Volume

Sales Bridge Analysis Q2 2018 vs. Q2 2017 Higher Sales Volume Due to Line 5 Recovery in 2017 & Higher LME Prices

Q2 2018 ResultsAluminium Industry: Higher Prices on Market Volatility & Trade Wars

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15

100

150

200

250

210

250

23

107

Q2 2018 vs. Q2 2017 Sales by Product-Line Bridge (MT’000)

Premium Above LME Trend US$ Per MT

80

180

280

199

276

Sales Q2 2017

ValueAdded

Sales Q2 2018

LiquidMetal

CommodityQ2 2017 Q2 2018

Higher Sales Volume Due to Line 5 Recovery in 2017 & Higher LME Prices


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16

Q2 2018 vs. Q2 2017 - Direct Cost Bridge (US$M)

Cost Analysis Q2 2018 vs. Q2 2017: Higher Raw Materials Prices

200

375

550

Direct CostQ2 2017

RMPrice

RMConsumption

EnergyConsumption

OtherRM

AluminaSales Cost

InventoryChange

PlantSpending

Direct CostQ2 2018

376

523

2 2

85

48

8 2 8


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Favourable Management Performance EBITDA Margin at 17.9%

17

Q2 2018 vs. Q2 2017 - EBITDA Bridge (US$M)

0

150

300

MetalSales

OtherSales

DirectCost

SellingExpenses

96117

178

5

147

5EBITDA 19.9%

EBITDA 17.9%


EBITDAQ2 2017

EBITDAQ2 2018

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Cash Flow Bridge - Q1 2018 to Q2 2018: Maintain Good Cash Position

18

Q1 2018 to Q2 2018 Cash Flow Bridge (US$M) Free Cash Flow (US$M)

Operating & Investing Cash Flow

(Excluding L6 CAPEX)

-100

100

300

500

CashBalance

1Q18

CFfrom

Operations

WCChanges

CAPEXSpent

Line 6CAPEX

LoanDrawdown

Paymentto

Shareholders

CashBalance

2Q18

114 120

117

150

121

17

365

-20

110

240

Q2 2017 Q2 2018

-17

250


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19

Solid Management Performance Coupled With Higher LME Prices

Financial Summary Q2 2018 Q2 2017 H1 2018 H1 2017

Average Cash LME (US$/MT) 2,259 1,911 2,209 1,880

Total Sales (US$M) 653 480 1,254 996

EBITDA (US$M) 117 96 242 210

EBITDA% 17.9% 19.9% 19.3% 21.1%

Net Income/ (Loss) (US$M) 77 47 167 115


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04INDUSTRY PERSPECTIVES IN 2018

Industry Perspectives in 2018

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Physical Demand to Remain Healthy

21

Key factors to be observed:

LME volatility to continue on the back of trade-war tensions and stronger US$

Consumption to slow-down in China while Europe and North America to maintain healthy growth

Global market to face supply shortages

Physical premiums to remain tight

LME price expected to range between $2,000/t - $2,100/t

Industry Perspectives in 2018

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Raw Materials Price Trends

22

Spot alumina prices to remain high pending resolution of Alunorte’sproduction cutbacks

Green Petroleum Coke (GPC) price to remain at the higher range led by Chinese environmental regulations and supply constraints

Liquid pitch & Aluminium Fluoride prices to slightly soften in the second half of 2018

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052018 ALBA PRIORITIES

2018 Alba Priorities

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Sustainable Improvement & Preparation for Future growth

24

Continued focus on Safety initiatives

Deliver on Project Titan - Phase III [2018: 1 Million MT & US$ 60/t]

Leverage strong demand on Value-Added Sales

Focus on future upstream opportunities

Prepare for the start-up of Line 6

- Close final part of 2nd ECA-covered facility tranche

- Award remaining packages within 2nd half of 2018

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06APPENDIX

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26

LMEMetal SalesH1 2017

Pricing Power Metal Sales H1 2018

Volume

750

1,000

1,250

929

1,219168

2 21

99

H1 2018 vs. H1 2017 - Metal Sales Bridge (US$M)

Product Mix

Sales Bridge Analysis H1 2018 vs. H1 2017 Higher Sales Volume Due to Line 5 Recovery in 2017 & Higher LME Prices

H1 2018 ResultsAluminium Industry: Higher Prices on Market Volatility & Trade Wars

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27

H1 2018 vs. H1 2017 Sales by Product-Line Bridge (MT’000)

Premium Above LME Trend US$ Per MT

Sales H1 2017

ValueAdded

Sales H1 2018

LiquidMetal

Commodity H1 2017 H1 2018

200

400

600

453501

309 9

0

100

200

190 238

Higher Sales Volume Due to Line 5 Recovery in 2017 & Higher LME Prices


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H1 2018 vs. H1 2017 - Direct Cost Bridge (US$M)

Cost Analysis H1 2018 vs. H1 2017: Higher Raw Materials Prices

0

200

400

600

800

1000

Direct CostH1 2017

RMPrice

RMConsumption

EnergyConsumption

OtherRM

AluminaSales Cost

InventoryChange

PlantSpending

Direct CostH1 2018

766

982

20 16

147

37 15 43 10


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Favourable Management Performance EBITDA Margin at 19.4%

29

H1 2018 vs. H1 2017 - EBITDA Bridge (US$M)

0

250

500

MetalSales

OtherSales

DirectCost

SellingExpenses

210242

290

33

216

9EBITDA 21.1%

EBITDA 19.4%


EBITDAH1 2017

EBITDAH1 2018

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Cash Flow Bridge - FY 2017 to Q2 2018: Maintain Good Cash Position

30

FY 2017 to H1 2018 Cash Flow Bridge (US$M) Free Cash Flow (US$M)


-200

0

200

400

600

CashBalance

2017

CFfrom

Operations

WCChanges

CAPEXSpent

Line 6CAPEX

LoanDrawdown

Paymentto

Shareholders

CashBalance

1H18

206120

242

169

385

28

756

98

-10

185

380

YTD2017

YTD2018

-6

383

Operating & Investing Cash Flow

(Excluding L6 CAPEX)

31

Alba4World alba4world user/Alba4World photos/alba4world

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For more information, contact us on:

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Manama (ALBH)

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Documents

INVESTOR RELATIONS PRESENTATION · presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such ... Higher Prices on Market