2015 Full Year Results Presentation 19 FEBRUARY 2016 CAPRAL LIMITED 1 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
GENERAL INFORMATION Important Notes Footprint This presentation includes forward-looking estimates that are Darwin subject to risks, uncertainties and assumptions outside of Capral’s control and should be viewed accordingly. Cairns Trading EBITDA is the Statutory EBITDA adjusted for signifjcant items that are material items of revenue or Townsville expense that are unrelated to the underlying performance of Mackay the business. Capral believes that Trading EBITDA provides a better understanding of its fjnancial performance and allows for a more relevant comparison of fjnancial performance between fjnancial periods. These items are LME and Premium revaluation, and costs relating to restructuring that Kunda Park are non-recurring in nature. Springwood Bremer Park Gold Coast Trading EBITDA is presented with reference to the Australian Securities and Investment Commission Regulatory Guide 230 “Disclosing non-IFRS fjnancial information” issued in Newcastle December 2011. Wangara Rockdale Angaston Penrith Welshpool Parramatta Erskine Park Canning Vale Kilburn Minto Bibra Lake Extrusion site Laverton Campbellfield Warehouse/ Aluminium Centre Lynbrook Corporate office Austex Dies 2 19 FEBRUARY 2016 Hobart CAPRAL FULL YEAR RESULTS
OVERVIEW OF RESULTS FULL YEAR TO DECEMBER 2015 • Trading EBITDA¹ profjt of $13.0m (2014: $9.2m) $13.0m Trading EBITDA • EBITDA profjt of $5.1m (2014: $11.0m) • Sales revenue up 7.5% on 2014 $5.1m EBITDA • Volumes up 2.3%. Extrusion up 3.5%, Rolled products down 4.5% • Strong housing market driving volume increase • Net loss of $2.5m (2014: $2.7m profjt) includes: - LME and Premium revaluation of negative $7.0m Net loss of $2.5m - Restructuring costs of $0.7m to complete OneSteel Aluminium integration - Depreciation and amortisation of $6.4m - Finance costs of $1.2m • Dwelling commencements increase to 211,500 in 2015² - Detached housing and medium density up 9% Housing market is strong, - High density (apartments) up 43% industrial markets turning • Non-residential building activity increased by 3%² • Business conditions remained soft in the manufacturing, marine and transport sectors but are showing signs of improvement • Ongoing dumping of aluminium extrusions from China was found and Highly competitive environment increased measures have been imposed • Dumping measures are beginning to assist in addressing excess domestic capacity • TRIFR³ of 13.3 (2014: 7.9) Safety performance remains • LTI severity rate (days lost per million hours worked) of 51 (2014:74) a key focus • Ongoing focus on leading safety indicator management 1 See Important Notes (page 2) and reconciliation to EBITDA (page 4) 2 Source: BIS Shrapnel year end June 2015 actual 3 TRIFR is total reportable lost time and medically treated injuries per million work hours 3 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
FINANCIAL SUMMARY TWELVE MONTHS TO DECEMBER 2015 2015 2014 Sales Volumes - External (‘000 tonnes) 57.8 56.5 $m $m Sales Revenue 402.6 374.7 1 Trading EBITDA 13.0 9.2 (0.7) (0.6) Restructuring related cost (7.0) LME Revaluation 3.2 (0.2) (0.8) Other one off costs EBITDA 5.1 11.0 (6.4) (7.1) Depreciation/Amortisation 3.9 EBIT (1.3) Finance Cost (1.2) (1.2) Statutory (Loss)/Profit after Tax (2.5) 2.7 1 See Important Notes (page 2) 4 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
TRADING EBITDA BRIDGE Trading EBITDA $m 14 $0.1m $13.0m $3.8m ($3.3m) $1.9m 12 $1.3m 10 10 $9.2m 8 6 4 2 0 Trading EBITDA Volume Margin and Mix Inflation Cost Management Other Trading EBITDA FY14 Initiatives FY15 5 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
BALANCE SHEET REMAINS STRONG $m $m $m 12 months to Dec 15 Dec 14 Dec 13 EBITDA 5.1 11.0 (41.4) Working Capital 2.9 (1.2) 3.6 Operating cash fmow level Acquisition Restructuring Costs - (2.2) - maintained, supported by reducing Finance Cost (1.2) (1.2) (0.8) inventory levels and metal cost Equity Compensation Amortisation 0.6 0.7 0.8 - 41.5 Impairment - - (3.1) Gain on acquisition - Other (0.1) 0.6 (0.1) Operating Cash Flow 7.3 7.7 0.5 Capex Spend (3.7) (3.0) (3.6) - - Interest Received 0.1 Acquisition - (2.8) (15.9) Capital Raising - - 13.8 Increase/ (Decrease) in Net Cash 3.6 1.9 (5.1) $m $m $m Dec 15 Dec 13 Dec 14 Net Assets 110.7 112.9 109.5 Robust fjnancial position Net Cash 1 20.1 16.5 14.6 Franking Credits 27.1 27.1 27.1 Accumulated unrecognised 297.6 287.7 289.6 tax losses ¹ Intramonth average net debt levels $5.6m, $15.6 maximum debt level The fjnance facility with GE is $m Drawn Down Capral Finance Facilities Limit Dec 15 Dec 14 primarily utilised for working GE Revolver 60 Nil Nil capital funding 6 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
METAL COSTS HAVE FALLEN FROM MULTI-YEAR HIGHS Metal Cost (AUD - Quarterly Average) A$/kg 3.00 2.50 • Metal costs reached multi-year highs in Q1 2015 2.00 • M etal costs collapsed during the second half of 2015 1.50 - LME down from USD $1,802t to $1,495t - MJP down from USD $425t to $95t 1.00 • Resulted in a negative raw material inventory revaluation of $7.0m during the period 0.50 0.00 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 LME MJP Premium (Major Japanese Ports) Source: London Metal Exchange, Reserve Bank of Australia, Reuters 7 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
LEVERAGE TO RECOVERY IN RESIDENTIAL CONSTRUCTION RECOVERY STARTED IN 2013. VERY STRONG MULTI-RES ANTICIPATED TO GROW AT A SLOWER PACE THROUGH 2016 ANNUAL DWELLING COMMENCEMENTS ‘000 MONTHLY DWELLING APPROVALS AND QUARTERLY DWELLING COMMENCEMENTS 225 217 MONTHLY 214 BIS Shrapnel UNITS 198 forecast 200 20000 18000 175 175 169 16000 A P P R O V A L S 155 152 150 14000 C O M M E N C E M E N T S 12000 125 10000 8000 100 6000 75 4000 2000 50 0 March June Sept Dec March Dec March Dec June Sept June Sept March June Sept Dec March June Sept Dec March June Sept Dec 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 25 Source: ABS and BIS Shrapnel 0 2010 2011 2012 2013 2014 2015E¹ 2016F¹ SOURCE: BIS SHRAPNEL, ABS ¹ BIS Shrapnel Feb 2016 - two quarters delayed 8 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
ALUMINIUM EXTRUSION DEMAND IS RECOVERING FROM CYCLICAL LOW LEVELS ‘000 ALUMINIUM EXTRUSION MARKET SALES VOLUME Tonnes • Extrusion Market in 2015 still ~11% below 2007 high PA 200 • Recovery is ongoing in the housing sector with 200 Forecast dwelling approvals exceeding 211,500 units 1 183.6 178.7 183.3 • An increase in apartments relative to houses 175 has increased the lag between approval and 173.0 171.5 165.2 completion and reduced the intensity of 160.5 160.9 156.0 aluminium extrusions 150 (Based on BIS Shrapnel forecasts and GDP projections) • Non-residential building demand increased by 3% 1 125 • Key Industrial sectors (manufacturing, marine and transport) remained soft in 2015 but are CAPRAL EXTRUSION PRODUCTION VOLUME showing signs of improvement 80 Note: 62.0 59.1 • C apral has an estimated 28% share of the 60 52.4 Australian aluminium extrusion sales volume 50.6 45.7 45.9 45.4 42.2 42.8 • New domestic extrusion capacity has been 40 32.7 commissioned over recent years, including 30.3 28.8 28.1 29.3 26.725.7 extrusion capability installed by traditional 22.7 23.2 23.0 23.0 22.4 22.5 22.7 22.2 21.7 20.6 20.5 Capral customers 20 • Import market share has fallen to around 35% 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 e H1 H2 FY 1 Source BIS Shrapnel year end June 2015 actual 9 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
KEY STRATEGIC INITIATIVES • Widest aluminium product offer BUILD • Large scale extrusion capability On our strengths • National distribution network • Committed and experienced people • Continue to reduce cost base OPTIMISE • L ean manufacturing drive to world class productivity What we do • Optimise the supply chain to reduce inventory levels GROW • Leverage our technical expertise with key customers In the future • Develop innovative new products and value-add opportunities • Capitalise on positive anti-dumping outcomes 10 19 FEBRUARY 2016 CAPRAL FULL YEAR RESULTS
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