Novelis Reports First Quarter Fiscal Year 2025 Results
Q1 Fiscal Year 2025 Highlights
- Net income attributable to our common shareholder of
$151 million , down 3% YoY; Net income attributable to our common shareholder excluding special items was$204 million , up 32% YoY - Adjusted EBITDA of
$500 million , up 19% YoY - Rolled product shipments of 951 kilotonnes, up 8% YoY
- Adjusted EBITDA per tonne shipped of
$525 , up 10% YoY
"Novelis delivered meaningful year-over-year improvement across a number of financial metrics in the quarter, led by a double-digit increase in beverage packaging shipments benefiting from normalized demand, our broad global presence and solid customer relationships," said
First Quarter Fiscal Year 2025 Financial Highlights
Net sales for the first quarter of fiscal year 2025 increased 2% versus the prior year period to
Net income attributable to our common shareholder decreased 3% versus the prior year to
Net cash flow provided by operating activities was
"We continue to take a prudent approach to capital allocation, investing in our future while maintaining a disciplined net leverage position," said
The company had a total liquidity position of
Flooding in Sierre,
On
First
Quarter Fiscal Year 2025 Earnings Conference Call
Novelis will discuss its first quarter fiscal year 2025 results via a live webcast and conference call for investors at
About Novelis
Non-GAAP Financial Measures
This news release and the presentation slides for the earnings call contain non-GAAP financial measures as defined by
Attached to this news release are tables showing the condensed consolidated statements of operations, condensed consolidated balance sheets, condensed consolidated statements of cash flows, reconciliation of Adjusted EBITDA, Adjusted EBITDA per Tonne, Adjusted Free Cash Flow, Net Leverage Ratio, Net Income attributable to our common shareholder excluding Special Items, and segment information.
Forward-Looking Statements
Statements made in this news release which describe Novelis' intentions, expectations, beliefs or predictions may be forward-looking within the meaning of securities laws. Forward-looking statements include statements preceded by, followed by, or including the words "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," or similar expressions. Examples of forward-looking statements in this news release are statements about our beliefs that insurance recoveries will be available for the Sierre outage, the amount and timing of the net cash and Adjusted EBITDA impacts from the Sierre outage, and the timing of the resumption of production at the Sierre plant. Novelis cautions that, by their nature, forward-looking statements involve risk and uncertainty and Novelis' actual results could differ materially from those expressed or implied in such statements. We do not intend, and we disclaim any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Factors that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements include, among other things: disruptions or changes in the business or financial condition of our significant customers or the loss of their business or reduction in their requirements; price and other forms of competition from other aluminum rolled products producers and potential new market entrants; competition in our end-markets, and the willingness of our customer to accept substitutes for our products, including steel, plastics, composite materials and glass; our failure to realize the anticipated benefits of strategic investments; increases in the cost of volatility in the availability of primary aluminum, scrap aluminum, sheet ingot, or other raw materials used in the production of our products; risks related to the energy-intensive nature of our operations, including increases to energy costs or disruptions to our energy supplies; downturns in the automotive and ground transportation industries or changes in consumer demand; union disputes and other employee relations issues; the impact of labor disputes and strikes on our customers; loss of our key management and other personnel, or an inability to attract and retain such management and other personnel; unplanned disruptions at our operating facilities, including as a result of flooding or other adverse weather phenomena; economic uncertainty, capital markets disruption and supply chain interruptions, including as a result of geopolitical instability due to the ongoing military conflict between
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
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|
Three Months Ended
|
||
(in millions) |
2024 |
|
2023 |
Net sales |
$ 4,187 |
|
$ 4,091 |
Cost of goods sold (exclusive of depreciation and amortization) |
3,481 |
|
3,501 |
Selling, general and administrative expenses |
181 |
|
174 |
Depreciation and amortization |
140 |
|
131 |
Interest expense and amortization of debt issuance costs |
72 |
|
77 |
Research and development expenses |
25 |
|
25 |
Restructuring and impairment expenses, net |
19 |
|
3 |
Equity in net income of non-consolidated affiliates |
(1) |
|
(3) |
Other expenses (income), net |
60 |
|
(27) |
|
3,977 |
|
3,881 |
Income before income tax provision |
210 |
|
210 |
Income tax provision |
60 |
|
54 |
Net income |
150 |
|
156 |
Net loss attributable to noncontrolling interest |
(1) |
|
— |
Net income attributable to our common shareholder |
$ 151 |
|
$ 156 |
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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
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(in millions, except number of shares) |
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 886 |
|
$ 1,309 |
Accounts receivable, net |
|
|
|
— third parties (net of allowance for uncollectible accounts of |
2,021 |
|
1,760 |
— related parties |
161 |
|
161 |
Inventories |
2,755 |
|
2,515 |
Prepaid expenses and other current assets |
148 |
|
152 |
Fair value of derivative instruments |
91 |
|
45 |
Assets held for sale |
1 |
|
1 |
Total current assets |
6,063 |
|
5,943 |
Property, plant and equipment, net |
5,849 |
|
5,741 |
|
1,073 |
|
1,074 |
Intangible assets, net |
548 |
|
545 |
Investment in and advances to non–consolidated affiliates |
903 |
|
905 |
Deferred income tax assets |
146 |
|
143 |
Other long-term assets |
|
|
|
— third parties |
275 |
|
274 |
— related parties |
2 |
|
3 |
Total assets |
$ 14,859 |
|
$ 14,628 |
LIABILITIES AND SHAREHOLDER'S EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term debt |
$ 33 |
|
$ 33 |
Short-term borrowings |
623 |
|
759 |
Accounts payable |
|
|
|
— third parties |
3,292 |
|
2,992 |
— related parties |
285 |
|
280 |
Fair value of derivative instruments |
201 |
|
144 |
Accrued expenses and other current liabilities |
579 |
|
627 |
Total current liabilities |
5,013 |
|
4,835 |
Long-term debt, net of current portion |
4,859 |
|
4,866 |
Deferred income tax liabilities |
244 |
|
253 |
Accrued postretirement benefits |
537 |
|
559 |
Other long-term liabilities |
293 |
|
305 |
Total liabilities |
10,946 |
|
10,818 |
Commitments and contingencies |
|
|
|
Shareholder's equity |
|
|
|
Common stock, no par value; unlimited number of shares authorized; 600,000,000 shares issued and outstanding as of |
— |
|
— |
Additional paid-in capital |
1,108 |
|
1,108 |
Retained earnings |
3,223 |
|
3,072 |
Accumulated other comprehensive loss |
(428) |
|
(381) |
Total equity of our common shareholder |
3,903 |
|
3,799 |
Noncontrolling interest |
10 |
|
11 |
Total equity |
3,913 |
|
3,810 |
Total liabilities and equity |
$ 14,859 |
|
$ 14,628 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
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Three Months Ended
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(in millions) |
2024 |
|
2023 |
OPERATING ACTIVITIES |
|
|
|
Net income |
$ 150 |
|
$ 156 |
Adjustments to determine net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
140 |
|
131 |
Gain on unrealized derivatives and other realized derivatives in investing activities, net |
(18) |
|
(31) |
Loss on sale of assets, net |
1 |
|
— |
Non-cash restructuring and impairment charges |
15 |
|
— |
Deferred income taxes, net |
(1) |
|
25 |
Equity in net income of non-consolidated affiliates |
(1) |
|
(3) |
(Gain) loss on foreign exchange remeasurement of debt |
(1) |
|
1 |
Amortization of debt issuance costs and carrying value adjustments |
3 |
|
4 |
Non-cash charges related to Sierre flooding |
40 |
|
— |
Other, net |
3 |
|
1 |
Changes in assets and liabilities including assets and liabilities held for sale: |
|
|
|
Accounts receivable |
(284) |
|
(200) |
Inventories |
(264) |
|
(155) |
Accounts payable |
364 |
|
125 |
Other assets |
1 |
|
(6) |
Other liabilities |
(74) |
|
(80) |
Net cash provided by (used in) operating activities |
$ 74 |
|
$ (32) |
INVESTING ACTIVITIES |
|
|
|
Capital expenditures |
$ (348) |
|
$ (333) |
(Outflows) proceeds from investment in and advances to non-consolidated affiliates, net |
(7) |
|
6 |
(Outflows) proceeds from the settlement of derivative instruments, net |
(2) |
|
6 |
Other |
3 |
|
4 |
Net cash used in investing activities |
$ (354) |
|
$ (317) |
FINANCING ACTIVITIES |
|
|
|
Proceeds from issuance of long-term and short-term borrowings |
$ 50 |
|
$ 50 |
Principal payments of long-term and short-term borrowings |
(55) |
|
(35) |
Revolving credit facilities and other, net |
(134) |
|
(115) |
Net cash used in financing activities |
$ (139) |
|
$ (100) |
Net decrease in cash, cash equivalents and restricted cash |
(419) |
|
(449) |
Effect of exchange rate changes on cash |
(8) |
|
(8) |
Cash, cash equivalents and restricted cash — beginning of period |
1,322 |
|
1,511 |
Cash, cash equivalents and restricted cash — end of period |
$ 895 |
|
$ 1,054 |
|
|
|
|
Cash and cash equivalents |
$ 886 |
|
$ 1,041 |
Restricted cash (included in other long-term assets) |
9 |
|
13 |
Cash, cash equivalents and restricted cash — end of period |
$ 895 |
|
$ 1,054 |
R econciliation of Adjusted EBITDA (unaudited) to Net Income Attributable to our Common Shareholder |
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The following table reconciles Adjusted EBITDA, a non-GAAP financial measure, to net income attributable to our common shareholder. |
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Three Months Ended
|
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Year Ended |
|
TTM Ended(1) |
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(in millions) |
2024 |
|
2023 |
|
|
|
|
Net income attributable to our common shareholder |
$ 151 |
|
$ 156 |
|
$ 600 |
|
$ 595 |
Net loss attributable to noncontrolling interests |
(1) |
|
— |
|
— |
|
(1) |
Income tax provision |
60 |
|
54 |
|
218 |
|
224 |
Interest, net |
64 |
|
70 |
|
275 |
|
269 |
Depreciation and amortization |
140 |
|
131 |
|
554 |
|
563 |
EBITDA |
$ 414 |
|
$ 411 |
|
$ 1,647 |
|
$ 1,650 |
|
|
|
|
|
|
|
|
Adjustment to reconcile proportional consolidation |
$ 13 |
|
$ 14 |
|
$ 44 |
|
$ 43 |
Unrealized gains on change in fair value of derivative instruments, net |
(7) |
|
(4) |
|
36 |
|
33 |
Realized losses (gains) on derivative instruments not included in Adjusted EBITDA |
2 |
|
(3) |
|
(6) |
|
(1) |
Loss on extinguishment of debt, net |
— |
|
— |
|
5 |
|
5 |
Restructuring and impairment expenses, net |
19 |
|
3 |
|
42 |
|
58 |
Loss on sale or disposal of assets, net |
1 |
|
— |
|
6 |
|
7 |
Metal price lag |
7 |
|
(5) |
|
70 |
|
82 |
Other, net(2) |
51 |
|
5 |
|
29 |
|
75 |
Adjusted EBITDA |
$ 500 |
|
$ 421 |
|
$ 1,873 |
|
$ 1,952 |
____________________ |
|
(1) |
The amounts in the TTM column are calculated by taking the amounts for the year ended |
(2) |
Other, net for the three months ended |
The following table presents the calculation of Adjusted EBITDA per tonne. |
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|
Three Months Ended
|
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|
2024 |
|
2023 |
Adjusted EBITDA (in millions) (numerator) |
$ 500 |
|
$ 421 |
Rolled product shipments (in kt) (denominator) |
951 |
|
879 |
Adjusted EBITDA per tonne |
$ 525 |
|
$ 479 |
_________________________ |
|
(1) |
Adjusted EBITDA per tonne may not recalculate due to rounding. |
Adjusted Free Cash Flow (unaudited) |
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The following table reconciles Adjusted Free Cash Flow and Adjusted Free Cash Flow from Continuing Operations, |
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|
Three Months Ended
|
||
(in millions) |
2024 |
|
2023 |
Net cash provided by (used in) operating activities – continuing operations(1) |
$ 74 |
|
$ (32) |
Net cash used in investing activities – continuing operations(1) |
(354) |
|
(317) |
Adjusted Free Cash Flow |
$ (280) |
|
$ (349) |
_________________________ |
|
(1) |
For the three months ended |
Net Leverage Ratio (unaudited) |
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The following table reconciles long-term debt, net of current portion to Net Debt. |
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(in millions) |
|
|
|
Long–term debt, net of current portion |
$ 4,859 |
|
$ 4,866 |
Current portion of long-term debt |
33 |
|
33 |
Short-term borrowings |
623 |
|
759 |
Cash and cash equivalents |
(886) |
|
(1,309) |
Net Debt |
$ 4,629 |
|
$ 4,349 |
The following table shows the calculation of the Net Leverage Ratio (in millions, except for the Net Leverage Ratio). |
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|
|
|
|
Net debt (numerator) |
$ 4,629 |
|
$ 4,349 |
TTM Adjusted EBITDA (denominator) |
$ 1,952 |
|
$ 1,873 |
Net Leverage Ratio |
2.4 |
|
2.3 |
Reconciliation of Net Income Attributable to our Common Shareholder, Excluding Special Items (unaudited) to |
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The following table presents net income attributable to our common shareholder excluding special items. We adjust for |
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|
Three Months Ended
|
||
(in millions) |
2024 |
|
2023 |
Net income attributable to our common shareholder |
$ 151 |
|
$ 156 |
Special Items: |
|
|
|
Metal price lag |
7 |
|
(5) |
Restructuring and impairment expenses, net |
19 |
|
3 |
Sierre flooding(1) |
40 |
|
— |
Tax effect on special items |
(13) |
|
1 |
Net income attributable to our common shareholder, excluding special items |
$ 204 |
|
$ 155 |
_________________________ |
|
(1) |
On |
Segment Information (unaudited) |
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The following tables present selected segment financial information (in millions, except shipments which are in kilotonnes). |
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Selected Operating Results
Three Months Ended |
|
North |
|
|
|
|
|
South |
|
Eliminations |
|
Total |
Adjusted EBITDA |
|
$ 183 |
|
$ 90 |
|
$ 92 |
|
$ 132 |
|
$ 3 |
|
$ 500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments (in kt) |
|
|
|
|
|
|
|
|
|
|
|
|
Rolled products – third party |
|
388 |
|
261 |
|
159 |
|
143 |
|
— |
|
951 |
Rolled products – intersegment |
|
— |
|
2 |
|
35 |
|
11 |
|
(48) |
|
— |
Total rolled products |
|
388 |
|
263 |
|
194 |
|
154 |
|
(48) |
|
951 |
|
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Selected Operating Results
Three Months Ended |
|
North |
|
|
|
|
|
South |
|
Eliminations |
|
Total |
Adjusted EBITDA |
|
$ 166 |
|
$ 88 |
|
$ 87 |
|
$ 84 |
|
$ (4) |
|
$ 421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments (in kt) |
|
|
|
|
|
|
|
|
|
|
|
|
Rolled products – third party |
|
370 |
|
245 |
|
153 |
|
111 |
|
— |
|
879 |
Rolled products – intersegment |
|
— |
|
5 |
|
23 |
|
8 |
|
(36) |
|
— |
Total rolled products |
|
370 |
|
250 |
|
176 |
|
119 |
|
(36) |
|
879 |
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