Alumetal Group

1H 2020 financial results

28 August 2020

1H 2020 and LTM at glance

  • Volume sales - 70,2 k tons in 1H 2020 and 159,2 k tons in LTM
  • EBITDA - PLN 36,7 mn in 1H 2020 and PLN 82,2 mn in LTM
  • Normalized net profit - PLN 19,5 mn in 1H 2020 and PLN 48,3 mn in LTM
  • Operating cash flow - PLN 22,6 mn in 1H 2020 and PLN 103,3 mn in LTM
  • Net debt - PLN 51,9 mn (0,6x EBITDA)

Alumetal Group activities during the pandemic

  • Safety
    • anti-pandemicprocedures and measures implemented at the beginning of March 2020 and constantly updated
  • Financial liquidity
    • uphold the recommendation of profit distribution for 2019 - allocation of 70% of the normalized consolidated net profit to reserve capital for the payment of dividends in the future or permanent retention of these funds in the Company
    • implementation of additional solutions related to circulating capital management
    • transfer minor part of planned capex from 2020 to 2021
    • very solid balance sheet, low net debt and sound financial liquidity
    • renewal of credit agreements with existing banks for the next year
  • Operating activities
    • Alumetal Group didn't use the Polish anti-crisis shield in the 1H 2020 (apart from the reduction of real estate tax by PLN 115 k), while it benefits from the public funds in 2H 2020 (anti-crisis shield 4.0)
    • limited production level in our plants and short-term downtime adapted to the key customers production schedules performed in accordance with the adopted assumptions
    • the savings plan implemented
      • reduction of operating costs
      • effective renegotiation of most permanent contracts
      • resignation from part of planned in the budget costs
      • 9% reduction in employment

Motor vehicle registrations in the EU and UK in k units

5 500

5 000

-26%

-52%

4 500

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

-

1Q

2Q

3Q

4Q

2013

2014

2015

2016

2017

2018

2019

2020

In

1H 2020 new motor vehicle registration

in the EU and Great Britain decreased by 39%

(passenger cars (PC) decreased by 40% and commercial vehicles (CV) decreased by 36%)

In LTM sales volume of motor vehicles in the EU and Great Britain amounted to 13,25 mn units,

decrease by 21% in comparison to 2019 (21% decrease in PC and 19% in CV)

Metal Bulletin 226 alloy spread in EUR/t

550

500

450

400

350

300

250

200

150

100

50

0

344

01-200804-200807-200810-200801-200904-200907-200910-200901-201004-201007-201010-201001-201104-201107-201110-201101-201204-201207-201210-201201-201304-201307-201310-201301-201404-201407-201410-2014

01-201504-201507-201510-201501-201604-201607-201610-201601-201704-201707-201710-201701-201804-201807-201810-201801-201904-201907-201910-201901-202004-2020

monthly average

long-term average

  • Significant decrease in the benchmark margin in 2Q 2020 (from 464 EUR/t in March 2020 to 252 EUR/t in June 2020). The margin of June 2020 was 27% below the long-term average.
  • The average margin in the 1H 2020 amounted to 381 EUR/t and was 2% higher than the average margin in 2019 and 11% higher than the long-term average.

Volume sales in thou. tons

120

225

104,2

200

197,7

193,1

100

175

176,0

164,8159,3

159,2

156,1

80

70,2

150

126,9

125

60

49,8

99,4

100

88,1

40

75

22,6

50

20

25

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 sales volume decreased by 33% yoy to 70,2 k tons
  • In LTM sales volume amounted to 159,2 k tons, decrease by 18% in comparison to 2019

Sales revenue in mn PLN

900

1800

1 655,3

800

774,3

1600

1 441,9

1 456,2

700

1400

1 383,8

1 235,3

1 271,8

600

1200

1 015,3

1 091,9

482,3

1000

500

811,7 844,6

367,8

800

400

300

600

200

160,2

400

100

200

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 sales revenue decreased by 38% yoy to PLN 482,3 mn
  • In LTM sales revenue amounted to PLN 1,09 bn, decrease by 21% in comparison to 2019

EBITDA in mn PLN

60

140

50,0

115,9

121,4

50

120

106,6

40

100

97,0

95,4

36,7

82,2

78,3

80

30

25,2

63,0

60

54,0

52,9

20

10,6

40

10

20

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 EBITDA decreased by 27% yoy to PLN 36,7 mn
  • In LTM EBITDA amounted to PLN 82,2 mn, decrease by 14% in comparison to 2019

EBITDA per ton in PLN

800

800

727

715

700

700

647

614

600

600

551

506

523

532

502

494

516

470

479

500

500

425

400

400

300

300

200

200

100

100

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019

LTM

  • In 1H 2020 EBITDA per ton increased by 9% yoy to 523 PLN/t
  • In LTM EBITDA per ton amounted to 516 PLN/t, increase by 5% in comparison to 2019

Net profit in mn PLN

40

100

90

89,9

35

30

28,2

80

74,7

70,7 74,3

70

25

60

58,9

50,5

20

50

43,9

15,7

40

34,5 35,8

38,0

15

13,2

10

30

20

5

4,0

10

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 net profit decreased by 44% yoy to PLN 15,7 mn
  • In LTM net profit amounted to PLN 38,0 mn, derease by 25% in comparison to 2019

Normalized net profit in mn PLN

40

100

92,1

90,4

90

35

33,9

80

77,7

30

67,5

70

62,7

25

58,9

60

20

19,5

50

43,9

48,3

17,0

15

40

34,5 35,8

10

30

20

4,5

5

10

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 normalized net profit decreased by 42% yoy to PLN 19,5 mn
  • In LTM normalized net profit amounted to PLN 48,3 mn, decrease by 23% in comparison to 2019

Capex in mn PLN

40

37,1

120

108,4

35

100

30

25

80

21,6

64,2

20

19,1

60

53,2

47,3

48,4

15

12,5

40

38,6

34,1 35,2

33,5

10

5

20

10,8

0

0

2Q'19

2Q'20

1H'19

1H'20

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

  • In 1H 2020 capex amounted to PLN 37,1 mn
    • PLN 4,6 mn maintenance capex
    • PLN 32,5 mn development capex
  • In LTM capex amounted to PLN 53,2 mn, increase by 51% in comparison to 2019

EBITDA vs OCF in mn PLN

120

98,5

100

80

65,3

60

50,0

40

33,8

36,7

25,2

22,6

20

10,6

0

2Q'19

2Q'20

1H'19

1H'20

EBITDA

OCF

200

180

160

140

120

100

80

60

40

20

0

179,2

115,9

121,4

106,6

95,4

103,3

97,0

96,0

85,9

82,2

78,3

63,0

60,9

70,1

58,5

52,9

54,0

36,5

40,2

17,2

2011 2012 2013 2014 2015 2016 2017 2018 2019

LTM

EBITDA

OCF

  • In 1H 2020 OCF amounted to PLN 22,6 mn vs PLN 36,7 mn of EBITDA
  • In LTM OCF amounted to PLN 103,3 mn vs PLN 82,2 mn of EBITDA

Net debt and effective CIT rate

Dług netto

Efektywna stawka CIT

140

1,8

131,7

120

112,1

114,6

100

1,4

1,3

94,1

1,4

80

72,1 70,2

0,9

60

0,8

45,4 46,7

51,9

40

33,0

0,6

0,6

20

0,4

0,3

0

2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM

Net debt

Net debt/EBITDA

2,0

25%

1,8

18,8%

19,5%

20%

1,6

17,9%

1,4

15%

12,3%

1,2

10%

7,8%

7,1% 7,8%

1,0

6,0%

6,4%

11,4%

4,8%

5%

4,7%

4,6% 4,5%

0,8

6,9%

6,9%

4,1%

0,6

0%

1,7%

1,1%

0,4

2011 2012 2013 2014 2015 2016 2017 2018 2019 1H'20

0,2

-5%

-4,7%

0,0

-10%

Effective CIT rate

Current CIT rate

  • At the end of 1H 2020 net debt amounted to PLN 51,9 mn, and Net debt/EBITDA ratio increased from the level of 0,3x at the end of 2019 to 0,6x at the end of June 2020
  • Effective CIT rate in 1H 2020 amounted to 19,5% and current CIT rate amounted to 6,4%

Kęty plant modernization

  • The advancement of construction works contracting exceeds 98%
  • All the machines and equipment delivered to the plant and the level of advancement of assembly exceeds 90%
  • Due to the COVID-19, some of the assembly works carried out by foreign companies has been moved to 3Q 2020
  • In 1H 2020 capex amounted to PLN 23,3 mn and from the beginning of the project PLN 48,6 mn
  • Despite the pandemic, the project is progressing according to the schedule

Summary

  • In 2Q 2020, unprecedented collapse in sales volume of new motor vehicles in the EU and Great Britain, in consequence very large decrease in the benchmark margin
  • Despite an unfavorable market situation and a drastic decrease in sales volume, Alumetal Group achieved positive financial results in the 1H 2020 and the EBIDTA margin per ton increased yoy
  • The Management Board of Alumetal Group notes the growing demand in the 2H 2020
  • Modernization of the plant in Kęty is carried out according to the schedule and the assumed budget
  • Very good financial standing of Alumetal Group (strong balance sheet, solid OCF)

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Disclaimer

Alumetal SA published this content on 28 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2020 13:23:04 UTC