#1alba Aluminium for the world INVESTOR RELATIONS PRESENTATION Q3 2015#22 aba Aluminium for the world DISCLAIMER This document has been prepared and issued by and is the sole responsibility of Aluminium Bahrain B.S.C. (the "Company"). The document is being supplied to you solely for your information and for use at the Company's presentation. No information made available to you in connection with the presentation may be passed on, copied, reproduced, in whole or in part, or otherwise disseminated, directly or indirectly, to any other person. This document and its contents are directed only to the intended audience. It is being made on a confidential basis and is furnished to you solely for your information. By accepting this material the recipient confirms that he or she is a relevant person. This document must not be acted on or relied on by persons who are not relevant persons. 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No representation or warranty, express or implied, is given by the Company, its undertakings or affiliates or directors, officers or any other person as to the fairness, accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever for any loss howsoever arising from any use of this presentation or its contents otherwise arising in connection therewith is accepted by any such person in relation to such information.#33 alba Aluminium for the world CONTENTS 01 Industry Highlights 9 02 03 ALBA Highlights Q3 2015 Results 04 Industry Perspectives in 2015 9 05 2015 ALBA Priorities#4aba Aluminium for the world 01 INDUSTRY HIGHLIGHTS#55 aba Aluminium for the world Industry Highlights - Q3 2015 Global Physical Demand Still Growing World consumption up by +5% YoY ☑Asian demand up by 7% YoY supported by softer consumption in China (+9% YoY) on the back of government stimulus MENA demand remains healthy (+6% YoY) - driven by major infrastructure spending in Saudi Arabia and Qatar Prospects for demand in North America continues to be good (+3% YoY) due to the growth in the transport & construction sectors Europe consumption up by 1% YoY and is denominated mainly by the transport sector#66 aba Aluminium for the world Industry Highlights - Q3 2015 Production Evolution World production up by 7% YoY Chinese output up despite slower demand growth (+8 million metric tonnes, +12% YoY) supported by new capacity ramp-ups from both greenfield & brownfield expansions World market in surplus with China (+41 Kt) & and in deficit without China (-301 kt)#77 aba Aluminium for the world Industry Highlights - Q3 2015 LME & Premiums LME inventories at 3.1 million metric tonnes in September 3Q15 cash-average was $1,590/t with LME ranging between $1,486/t on August 24 (lowest since July 2009) and $1,693/t on July 2 Regional collapse in physical premiums ($/t) Major Japanese Ports (MJP) 400 550 US Midwest 500 DDP Rotterdam 400 510 505 200 407 388 300 500 250 428 210 276 97 178 213 167 0 100 100 FY 2014 Q1 Q2 Q3 FY 2014 Q1 Q2 Q3 FY 2014 Q1 Q2 Q3 2015 2015 2015 2015 2015 2015 2015 2015 2015#8aba Aluminium for the world 02 ALBA HIGHLIGHTS#99 aba Aluminium for the world Alba Highlights - Q3 2015 Operational Highlights & Achievements Significant boost in Summer Safety campaigns: "Alba wins the 2015 ROSPA Gold Award for Occupational Health and Safety" Alba was able to increase its sales (metric tonne) by 2.5% YoY Production up by 2.9% YoY due to strong operational performance Value-Added Sales at 64% of total shipments in Q3 2015#1010 aba Aluminium for the world Alba Highlights - Q3 & YTD 2015 Financial Key Performance Indicators Adjusted EBITDA down due to lower LME prices Q3: US$72 million down by 47% YoY YTD: US$343 million up by 1% YoY Adjusted Net Income down driven by lower EBITDA levels in Q3 Q3: US$21 million down by 73% YoY YTD: US$190 million up by 20% YoY Free-Cash Flow favourable due sound working capital management Q3: US$119 million up by 19% YoY YTD: US$260 million up by 1% YoY Alba Board recommends an interim dividend (1st tranche of 2015 dividend) of US$ 21 million paid on 1 September 2015#11aba Aluminium for the world Alba Highlights - Q3 2015 Project Titan - Improve Cash Cost of $150/t by January 2016 YTD 2015: Project Titan on Track with Projected Savings of $135/t Project Titan - US$ per MT 150 135 100 2014 Target YTD 2015 January 2016 Final Target 11 1. Savings from Project Titan represent the annual $ cost per mt improvement once all projects are fully implemented 2. Actual project implementation dates are on a project by project basis#1212 aba Aluminium for the world Alba Highlights - Q3 2015 Maintain Sound Balance Sheet & Ready for Line 6 Financing Cash, Net Debt & Net Debt to EBITDA 1.60 159 1.05 265 1.25 164 1.0 894 172 0.4 613 513 179 362 184 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Net Debt Cash Net Debt to EBITDA#13aba Aluminium for the world 03 Q3 2015 RESULTS#14alba Aluminium for the world 14 Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Lower LME Prices Partially Offset by Higher Sales Volume & Premiums 600 500 400 531 Q3 2015 vs. Q3 2014 - Metal Sales Bridge (US$M) 80 | - 1 14 14 477 300 Product Mix Metal Sales Q3 2014 LME Pricing Power Volume Metal Sales Q3 2015#1515 alba Aluminium for the world Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Favourable Management Performance & Higher Premiums 250 225 3Q15 vs. 3Q14 Sales by Product Line Bridge (MT'000) 233 5 3 3 200 Sales Q3 2014 Added 239 Premium Above LME Trend US$ Per MT 400 385 331 200 Q3 2014 Q3 2015 Q3 2015 Value Liquid Commodity Sales Metal#1616 alba Aluminium for the world Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Cost Analysis 3Q15 vs. 3Q14 Q3 2015 vs. Q3 2014 - Direct Cost Bridge (US$M) 500 400 300 442 9 4 2 51 15 0 2 11 408 200 Direct Cost RM Q3 2014 Price RM Cons. Energy Cons. Sales Cost Alumina Inventory Plant Change Spending One-Off Costs Line-6 Costs Direct Cost Q3 2015#17alba Aluminium for the world 17 Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Adjusted EBITDA Margin at 14.6% Q3 2015 vs. Q3 2014 - EBITDA Bridge (US$M) 150 100 50 50 EBITDA 22.6% 134 54 54 49 35 | - 5 EBITDA 14.6% 72 0 EBITDA Q3 2014 Adjusted Metal Sales Other Sales Direct Cost Derivatives Selling Expenses EBITDA Q3 2015 Adjusted Adjusted EBITDA includes impact of actual realised derivative payments#18alba 18 Aluminium for the world Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Cash Flow Bridge - 3Q15 vs. 2Q15 Maintain Solid Cash Flow Despite Tough Market Conditions Q2 2015 to Q3 2015 Cash Flow Bridge (US$M) Free Cash Flow (US$M) 300 225 150 75 184 70 20 69 21 58 80 80 100 119 224 Q3 2015 Operating & Investing Cash Flow 0 0 Cash CF WC CAPEX Payment Net Debt Cash Balance from Changes Spent to Service Balance 2Q15 Operations Shareholders 3Q15 Q3 2014#1919 alba Aluminium for the world Q3 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Sound Management Performance Partially Offset by Lower LME Prices Financial Summary Q3 2015 Q3 2014 YTD 2015 YTD 2014 Average Cash LME (US$/MT) 1,589 1,989 1,719 1,832 Total Sales (US$M) 490 593 1,570 1,595 EBITDA (US$M) EBITDA% Net Income/ (Loss) (US$M) 72 134 343 325 14.6% 22.6% 21.9% 20.4% 23 78 201 165 Gain/ (Loss) Unrealised Derivatives (US$M) 2 6 11 Adjusted Net Income/ (Loss) (US$M) 21 78 190 158 Adjusted Net Income% 4.3% 13.2% 12.1% 9.9%#20alba Aluminium for the world 04 INDUSTRY PERSPECTIVES IN 2015#2121 aba Aluminium for the world Industry Perspectives in 2015 Prices to Remain under pressure Key factors to be observed: LME prices to remain depressed on the back of continued pressure from Chinese exports and stronger US dollar North America deficit will rise to around 3 million metric tonnes in 2016 after smelter cutbacks (Alcoa and Century Aluminium) Chinese smelters cutbacks still inadequate to lift LME prices as projects continue to ramp-up LME price expected to range between $1,400/t - $1,500/t in Q4#2222 aba Aluminium for the world Industry Perspectives in 2015 Raw Materials Price Trends Alumina spot index expected to slightly decline on expectation of lower aluminium prices Green Petroleum Coke (GPC) and Liquid Pitch prices to slightly soften for the remainder of 2015 Alumina Fluoride (ALF3) to remain at current levels in Q4#23aba Aluminium for the world 05 2015 ALBA PRIORITIES#2424 aba Aluminium for the world 2015 Alba Priorities Gear for Line 6 Expansion Continuous Focus on Safety, Training & Development Initiatives Deliver on Project Titan Sustained Focus on Value-Added Sales Increase Creep Capacity with Minimal Capital Investment Line 6 Expansion Project#25aba Aluminium for the world 06 APPENDIX#26alba Aluminium for the world 26 YTD 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Favourable Management Performance & Higher Premiums 1700 1500 1300 1100 1,468 900 700 YTD 2015 vs. YTD 2014 - Metal Sales Bridge (US$M) 46 46 92 3 22 1,533 500 Metal Sales LME Pricing Power Volume Product Mix YTD 2014 Metal Sales YTD 2015#2727 alba Aluminium for the world YTD 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Favourable Management Performance & Higher Premiums YTD15 vs. YTD14 Sales by Product Line Bridge (MT'000) 700 1 600 689 10 1 Premium Above LME Trend US$ Per MT 500 300 699 320 448 500 100 Sales Value YTD 2014 Added Liquid Commodity Sales Metal YTD 2015 YTD 2014 YTD 2015#2828 alba Aluminium for the world YTD 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Cost Analysis YTD15 vs. YTD14 YTD 2015 vs. YTD 2014 - Direct Cost Bridge (US$M) 1300 20 17 29 97 9 10 1200 11 2 1100 1222 1000 900 1197 800 Direct Cost RM YTD14 Price RM Cons. Energy Cons. Alumina Inventory Plant Sales Change Spending Cost One-Off Costs Line-6 Direct Cost Costs YTD15#2929 alba Aluminium for the world YTD 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Adjusted EBITDA Margin at 21.9% 400 300 YTD 2015 vs. YTD 2014 - EBITDA Bridge (US$M) 65 EBITDA 20.4% EBITDA 21.9% 89 18 25 1 325 200 343 100 EBITDA YTD 2014 Adjusted Metal Sales Other Sales Direct Cost Derivatives Selling Expenses EBITDA YTD 2015 Adjusted Adjusted EBITDA includes impact of actual realised derivative payments#30alba Aluminium for the world 30 YTD 2015 Results Aluminium Industry Challenged by Significant Drop in All-in-Prices Cash Flow Bridge - YTD 2015 vs. YTD 2014 Maintain Solid Cash Flow Despite Tough Market Conditions YTD 2014 to YTD 2015 Cash Flow Bridge (US$M) Free Cash Flow (US$M) 500 400 341 300 200 100 179 0 12 69 77 139 224 WC CAPEX Payment Net Debt Cash Service Balance YTD 2015 Cash CF Balance from Changes Spent to YTD 14 Operations Shareholders 160 80 60 258 261 YTD 2014 YTD 2015 Operating & Investing Cash Flow#3131 alba Aluminium for the world f For More Information, Contact Us on: [email protected] Alba4World alba4world YouTube user/Alba4World flickr photos/alba4world