Hulamin Limited · JSE:HLM
Hulamin — UBS Steel Conference 2013
23 slides from Hulamin's conference presentation, Mar 7, 2013
Slide 1: Presentation to UBS Steel Conference, 7 March 2013
PRESENTATION TO UBS STEEL CONFERENCE 7 March 2013
Slide 2: Agenda
Agenda 1 Introduction 2 China and the Aluminium Industry 3 Demand in South Africa 4 Primary Aluminium Supply 5 Aluminium Cans in South Africa 6 Questions 2
Slide 3: Introduction
INTRODUCTION
Slide 4: Aluminium – The Wonder Metal
Aluminium – The Wonder Metal • 100% recyclable – high scrap value • Low melting point – saves 95% of energy and carbon footprint on recycling • Non-corrosive – high aesthetic durability and structural integrity • Highly conductive • Heat - beverage cans and heat exchangers • Electrical – cables and
Slide 5: The Aluminium Value Chain (in Southern Africa)
The Aluminium Value Chain (in Southern Africa) BHP Billiton Hulamin and others Fabricators /Distributors 1.3 million tons p.a. 275 000 tons p.a. e.g. Nampak, MacSteel, etc. 180 000 tons p.a. 5
Slide 6: Hulamin - In a Nutshell
Hulamin - In a Nutshell First established 1949 Listed (First listing) 2007 (1969) Core business Rolling and extruding aluminium Impact of LME Aluminium price Turnover, working capital Employment, energy, logistics, Major cost drivers maintenance Preferred supplier in small regional market and Niche
Slide 7: Key Indicators
Key Indicators 2012 2011 Rand/ US Dollar 8.22 7.27 Turnover (R billion) 6.5 6.9 Rolled Products sales (tons) 194000 208000 Earnings (R million) 133 80 Earnings Adjusted (for one off items) (R million) 64 54 Headline Earnings (R million) 182 80 HEPS 57 25 No. of Employees 2087 2190 Hulamin Rolled Pro
Slide 8: China
@HULAMIN
Slide 9: Observations about China
Observations about China • Put emerging market growth on the map • Impact on global inflation through prices of manufactured goods Trends • International trade reaction to Chinese “dumping” • Interventionist / non-market forces in domestic economy • Wipe everyone off the map • Domestic spill-overs i
Slide 10: Growth in Chinese Production
Growth in Chinese Production Semis Primary Volume (million tons per year) 25 15 5 World’s largest primary importer 2003 2012 • Semis import/ export balance shifting • Volatile balance between Chinese domestic demand and production • Growth in Chinese capacity driven by provincial rivalries and incen
Slide 11: Hulamin (Jackal) in the Shadow of the Chinese (Elephant)
Hulamin (Jackal) in the Shadow of the Chinese (Elephant) Niche positions – 250 000 tons in global market (>16 million tons) • Hulamin brand • Culture, language, time zones, geography • Trade restrictions and incentives e.g. Counter trade deals, AGOA, Free Trade Agreements, local content requirements
Slide 12: Demand in South Africa
DEMAND IN SOUTH AFRICA
Slide 13: Current Trajectory
Current Trajectory Manufacturing shrinking • Hulamin record local sales last seen in 2006 Manufacturing employment under pressure • Hulamin shedding jobs (16%) since 2008 Imports growing • All aluminium imports surge 47% in 2010 and 37% in 2011 Investment in manufacturing slowing • Private sector 2.
Slide 14: Primary Aluminium Supply
PRIMARY ALUMINIUM SUPPLY
Slide 15: Hulamin Metal Supply
Hulamin Metal Supply 550 000 tons melting ingot export sales Hillside 96 000 tons slab Bayside 154 000 tons melting ingot 249 000 tons slab Rolling Slab Hulamin 345 000 tons Rolling Mill 30 000 tons Sales Twin Roll 250 000 tons Casters 125 000 tons scrap Hulamin Remelt 15
Slide 16: Scenarios for Rolling Slab Supply
Scenarios for Rolling Slab Supply • Bayside continues to supply 96 000 tons slab per year – Current contract extended to June 2013 – Existing limited product range • Expanded Bayside slab supply – Grow slab supply to 160 000 tons per year by 2016 – Synergy benefits from improved product range — R50
Slide 17: Aluminium Cans in South Africa
ALUMINIUM CANS IN SOUTH AFRICA
Slide 18: Key Facts
Key Facts Global market >2.5 million tons* Initial contracted sales volume 15 000 tons p.a. Market requirement 12 000 tons per billion cans Typical sheet thickness Approx. 0.26 mm Cash cycle Approx. 42 days Hulamin forecast recycling rate by 2017 70% Brazilian recycling rate 98.3%** Regional opportu
Slide 19: Hulamin Tasks Ahead in Can Stock
Hulamin Tasks Ahead in Can Stock • Successful customer product qualification underway – Commenced mid-2010 – Successful trials in Europe in 2012 – Completion by Q3 2013 • Meet performance benchmarks – Capital equipment R2.2 million to date – Quality, yield, cost, working capital, productivity – Comm
Slide 20: Scrap Value Per 100kg Load
Scrap Value Per 100kg Load 700 600 500 400 Rands 300 200 100 0 Paper Plastic PET Glass Steel Cans Alu Cans Other (Bottle) 20
Slide 21: Aluminium Beverage Can Life Cycle
Aluminium Beverage Can Life Cycle Closed Loop Recycling Primary metal – 99.7% aluminium Scrap processing Scrap consolidation and procurement Can stock rolling Post-Consumer Scrap collection Filler Can maker Cans not recycled – (brand owner) (target <15%) 21
Slide 22: Value Chain for Used Beverage Cans
Value Chain for Used Beverage Cans % of World Aluminum Price Collector Tier 1 Scrap Tier 2 Scrap Delivery to After Process into Benefit to Melting Ingot Dealer Dealer Hulamin Material Liquid metal LME from Hillside Losses 22
Slide 23: Any Questions?
ANY QUESTIONS?