United Company RUSAL Plc

United Company RUSAL — Q1 2012 Earnings Presentation

24 slides from United Company RUSAL's earnings presentation, May 14, 2012

  1. Slide 1: 1Q 2012 Results Presentation

    1Q 2012 Results Presentation 14 May 2012

  2. Slide 2: Disclaimer

    Disclaimer These materials and the subsequent discussion are not an offer for sale of any securities of United Company RUSAL Plc (the “Company”). The distribution of these materials in certain jurisdictions may be restricted by law and therefore persons into whose possession these materials come sho

  3. Slide 3: Agenda

     Operational and financial highlights  Market update  Growth projects  Corporate Governance  Appendix 3

  4. Slide 4: 1Q 2012 highlights

    1Q 2012 highlights Increased physical sales offset by weaker market environment  Aluminium production decreased by 1% in 1Q2012 vs 4Q2011 to 1,049Kt  VAP(1) output up to 37% of total production volumes in 1Q2012  Increased physical aluminium sales to 1,095Kt and achieved record high premium (US$1

  5. Slide 5: Decrease in production

    Decrease in production Aluminium production Kt (1%) 1,060 1,049 4Q2011 1Q2012 Alumina production Bauxite and nepheline production Kt Kt Increased self-sufficiency in bauxite and nepheline 2,082 (2%) 2,034 3,622 bauxite +10% 3,288 1,221 nepheline +3% 1,187 4Q2011 1Q2012 1Q2012 4Q2011 Decreased output

  6. Slide 6: Weaker top line due to deteriorating global economic environment

    Weaker top line due to deteriorating global economic environment LME aluminium price US$/t 1Q2011 av. 1Q2012 av. 2900 2,503 (13%) 2,177 2700 2500 2300 2100 1900 1700 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Source: Bloomberg Physical aluminium sales Revenue by product Kt US$m +3% 2,882 +9% 1,095 2,

  7. Slide 7: Exchange rate and oil price put upwards pressure on costs

    Exchange rate and oil price put upwards pressure on costs Aluminium segment cash cost Cost of sales US$/t US$m +10% 2,460 2,227 192 2,058 219 incentive program 241 162 158 136 payments to production personnel 339 263 +0.6% 1,980 Increase in physical 676 602 sales 1,962 1,963 1,952 845 Increase in oi

  8. Slide 8: Reacting to challenging market environment

    Reacting to challenging market environment Operating expenses US$m 331 (2%) 323 35 13 180 189 116 121 4Q2011 1Q2012 distribution administrative other operating expenses Further reduction of power tariff (1) 1Q 2012 industry cost curve USc/kWh US$/t 3 000 (15%) 2 500 Cash operating cost, C1 3.68 3.59

  9. Slide 9: Achieved record high premiums and raised VAP production

    Achieved record high premiums and raised VAP(1) production Realized premiums above LME Al price (2) Sales to end-users by regions US$/t US$/t Asia 3,400 200 15% 161 164 165 180 3,200 159 153 160 3,000 131 140 America 114 9% 2,800 6.1% 120 95 7.6% Europe 83 2,600 100 52% 2,600 80 2,343 2,399 2,400 2,

  10. Slide 10: No debt pressure in 2012

    No debt pressure in 2012 Obtained flexibility Interest expenses  US$630m repaid under PXF and other US$m 183 (20%) facilities in 1Q 2012  No short-term debt obligations in 2012 146  Introduction of the period during which financial covenants are not applied starting from 1 January 2012  Provides

  11. Slide 11: Agenda

     Operational and financial highlights  Market update  Growth projects  Corporate Governance  Appendix 11

  12. Slide 12: Aluminium consumption expected to continue growing

    Aluminium consumption expected to continue growing Global aluminium consumption Aluminium consumption growth rate by end- use sector, 2012 vs 2011 Mt 9.6% 5.4% 2.6% 2.1% 3.8% 6.1% 2.7% CAGR(1) Global 7% 90 80 70 Machinery & 6% 60 Equipment Consumer 5% 50 Goods 40 Packaging 6% 30 Electrical 4% 20 10

  13. Slide 13: Aluminium continues to be locked in warehouses

    Aluminium continues to be locked in warehouses Cancelled Warrants in the LME Warehouses Financial Deals Profitability Estimate Kt % 2 000 11 1 500 8 1 000 5 500 2 0 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 -1 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Global CW Vlissingen CW Detroit CW US TB 10Y (CoC 3M - LIBOR 1

  14. Slide 14: Regional premiums at historically high levels

    Regional premiums at historically high levels LME Aluminium forward curves Primary Aluminium Regional Premiums US$/t US$/t Current(1) Europe Japan US 250 220 200 203 150 121 100 50 0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Source: Bloomberg Source: Bloomberg  Western European, Japan

  15. Slide 15: Aluminium production cuts to support price

    Aluminium production cuts to support price Aluminium production rate & price US$/t 3500 95% 3000 90% 2500 85% 2000 80% 1500 75% 1000 70% Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 LME cash Capacit

  16. Slide 16: China will resume capacity cuts unless SHFE rebounds

    China will resume capacity cuts unless SHFE rebounds  Chinese smelters have on average been accumulating losses of ~$75/ton since October and will resume production China’s smelters average profit margin(1)(2) cuts unless SHFE rebounds in 2Q-3Q 2012 - expectations of the government’s shift towards

  17. Slide 17: Agenda

     Operational and financial highlights  Market update  Growth projects  Corporate Governance  Appendix 17

  18. Slide 18: Near-term growth projects on track

    Near-term growth projects on track Recent picture from BEMO HPP construction site Closure of three bottom sluice gates at Water Discharge 1 in April-May 2012 and start of impoundment filling 18

  19. Slide 19: Agenda

     Operational and financial highlights  Market update  Growth projects  Corporate Governance  Appendix 19

  20. Slide 20: Further changes to the Board composition

    Further changes to the Board composition Changes to the Board composition New composition of the Board (1) New independent member recommended by the Board Dmitry Troshenkov to be elected at the AGM on +1  Non-executive Director, EN+ resigned June 15, replacing Anatoly Tikhonov (non-executive INED 4

  21. Slide 21: Agenda

     Operational and financial highlights  Market update  Growth projects  Corporate Governance  Appendix 21

  22. Slide 22: Summary results Income statement

    Summary results Income statement US$m 1Q2012 1Q2011 % Change Revenue 2,882 2,993 (4%) Cost of sales (2,460) (2,004) 23% EBITDA 237 682 (65%) EBITDA Margin 8% 23% - Share of profits of associates 240 (138) - Income tax (23) (171) (87%) Net Profit 74 451 (84%) Adjusted Net Profit (90) 288 - Recurring

  23. Slide 23: Summary results Balance Sheet and Cash Flow

    Summary results Balance Sheet and Cash Flow As at 31 As at 31 US$m % Change Mar 2012 Dec 2011 Cash and Cash Equivalents 558 646 (14%) Equity Attributable to Shareholders of the 12,089 10,539 15% Company Total Liabilities 14,771 14,806 - Total working capital 2,245 2,367 (5%) Net Debt 11,126 11,049 1

  24. Slide 24: Summary results Segment results

    Summary results Segment results 1Q2012 1Q2011 US$m Aluminium Alumina Aluminium Alumina Segment Revenue 2,552 571 2,557 567 Segment Results (EBIT) 244 (81) 521 19 EBITDA 354 (55) 613 42 EBITDA margin 14% (10%) 24% 7% Segment CapEx 91 30 73 32  Aluminium segment is involved in the production and sale

United Company RUSAL — Q1 2012 Earnings Presentation on 6ix