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Alcoa : 2Q21 Earnings Presentation

07/15/2021 | 04:17pm EDT

2nd Quarter Earnings

Alcoa Corporation

July 15, 2021

Important information

Cautionary statement regarding forward-looking statements

This presentation may contain statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private

Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates," "believes," "could," "estimates," "expects,"

"forecasts," "goal," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning. All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future or targeted financial results, or operating or sustainability performance; statements about strategies, outlook, and business and financial prospects; and statements about capital allocation and return of capital. These statements reflect beliefs and assumptions that are based on Alcoa Corporation's perception of historical trends, current conditions, and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa Corporation believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: (a) current and potential future impacts of the coronavirus (COVID-19) pandemic on the global economy and our business, financial condition, results of operations, or cash flows and judgments and assumptions used in our estimates; (b) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices and premiums, as applicable, for primary aluminum and other products, and fluctuations in indexed-based and spot prices for alumina; (c) deterioration in global economic and financial market conditions generally and which may also affect Alcoa Corporation's ability to obtain credit or financing upon acceptable terms or at all; (d) unfavorable changes in the markets served by Alcoa Corporation; (e) the impact of changes in foreign currency exchange and tax rates on costs and results; (f) increases in energy or raw material costs or uncertainty of energy supply or raw materials; (g) declines in the discount rates used to measure pension and other postretirement benefit liabilities or lower-than-expected investment returns on pension assets, or unfavorable changes in laws or regulations that govern pension plan funding; (h) the inability to achieve improvement in profitability and margins, cost savings, cash generation, revenue growth, fiscal discipline, sustainability targets, or strengthening of competitiveness and operations anticipated from portfolio actions, operational and productivity improvements, technology advancements, and other initiatives; (i) the inability to realize expected benefits, in each case as planned and by targeted completion dates, from acquisitions, divestitures, restructuring activities, facility closures, curtailments, restarts, expansions, or joint ventures; (j) political, economic, trade, legal, public health and safety, and regulatory risks in the countries in which Alcoa Corporation operates or sells products; (k) labor disputes and/or work stoppages; (l) the outcome of contingencies, including legal and tax proceedings, government or regulatory investigations, and environmental remediation; (m) the impact of cyberattacks and potential information technology or data security breaches; (n) risks associated with long-term debt obligations; and (o) the other risk factors discussed in Part I Item 1A of Alcoa Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and other reports filed by Alcoa Corporation with the U.S. Securities and Exchange Commission. Alcoa Corporation disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Market projections are subject to the risks described above and other risks in the market.


Important information (continued)

Non-GAAP financial measures

Some of the information included in this presentation is derived from Alcoa's consolidated financial information but is not presented in Alcoa's financial statements prepared in

accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. Alcoa Corporation believes that the presentation of non-GAAP financial measures is useful to investors because such measures provide both additional information about the operating performance of Alcoa Corporation and insight on the ability of Alcoa Corporation to meet its financial obligations by adjusting the most directly comparable GAAP financial measure for the impact of, among others, "special items" as defined by the Company, non-cash items in nature, and/or nonoperating expense or income items. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. Reconciliations to the most directly comparable GAAP financial measures and management's rationale for the use of the non-GAAP financial measures can be found in the appendix to this presentation.

Glossary of terms

A glossary of abbreviations and defined terms used throughout this presentation can be found in the appendix.


This presentation can be found under the "Events and Presentations" tab of the "Investors" section of the Company's website, www.alcoa.com.


Roy Harvey

President and Chief Executive Officer

Most profitable quarter, first half since standalone company

Alcoa values, strategic priorities, and key takeaways for 2Q21

2Q21 Takeaways

Continued focus on safety; two serious injuries in the quarter

Highest ever profitability since 2016 inception

For both the quarter and six months, highest earnings per share and highest Aluminum segment Adjusted EBITDA, excluding special items

Profiting from operational stability during favorable market conditions

Cash used to strengthen the balance sheet

Redeemed $750 million, 6.75%, 2024 maturity notes

Funded U.S. pension with $500 million; global funded status >90% Sold former Eastalco smelter site for $100 million

Strong aluminum fundamentals continuing

Historically high LME prices and regional premiums generating highest ever third party realized price since 2016 inception

Strong demand evidenced by returning value add volumes, prices China supply constraints appear to continue

At forefront of sustainable solutions

New sales of SUSTANATM EcoSourceTM and EcoLumTM low carbon products

Continued work on breakthrough carbon reduction research and development including ELYSISTM zero-carbon smelting technology


This is an excerpt of the original content. To continue reading it, access the original document here.


Alcoa Corporation published this content on 15 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 July 2021 20:16:03 UTC.

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Financials (USD)
Sales 2021 11 664 M - -
Net income 2021 1 185 M - -
Net Debt 2021 41,4 M - -
P/E ratio 2021 7,82x
Yield 2021 0,08%
Capitalization 9 061 M 9 061 M -
EV / Sales 2021 0,78x
EV / Sales 2022 0,64x
Nbr of Employees 12 900
Free-Float 99,0%
Duration : Period :
Alcoa Corporation Technical Analysis Chart | AA | US0138721065 | MarketScreener
Technical analysis trends ALCOA CORPORATION
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 11
Last Close Price 48,49 $
Average target price 53,23 $
Spread / Average Target 9,78%
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Managers and Directors
Roy C. Harvey President, Chief Executive Officer & Director
William F. Oplinger Chief Financial Officer & Executive Vice President
Steven Walter Williams Non-Executive Chairman
John D. Slaven Chief Operations Officer & Executive VP
Catherine L. Garfinkel SVP, Chief Compliance, Ethics & Privacy Officer
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