Hindalco Industries : Novelis Q2 Fiscal Year 2023 - Investor Presentation

NOVELIS Q2 FISCAL YEAR 2023 EARNINGS CONFERENCE CALL

November 8, 2022

Steve Fisher

President and Chief Executive Officer

Dev Ahuja

Executive Vice President and Chief Financial Officer

SAFE HARBOR STATEMENT

Forward-looking statements

Statements made in this presentation 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 presentation include but are not limited to, statements about our expectations of $4.5 billion in possible capital expenditures; statements about our expectations of increased demand in each of our end markets; statements about our belief that long term demand for flat-rolled aluminum remains strong; statements about improving semiconductor supply and the lessening of the impact of the global semiconductor shortage on automotive production and demand for automotive aluminum sheet; statements about our expectation that aerospace demand and shipments will continue to improve toward pre-COVID-19 levels; statements about the impact of pent-up automotive demand and low dealer inventory on demand for our products; statements about our belief that significant aircraft industry order backlogs for key OEMs will translate into growth in the future; and statements about the expected timing and results from investments in certain operating facilities, including our recently announced greenfield, fully-integrated rolling and recycling mill to be built in Bay Minette, Alabama. 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: changes in the prices and availability of aluminum (or premiums associated with such prices) or other materials and raw materials we use; inflationary pressures impacting the price of energy, labor, freight, coatings and alloys, such as magnesium; the capacity and effectiveness of our hedging activities; inflationary pressures affecting end market demand for our aluminum products; relationships with, and financial and operating conditions of, our customers, suppliers and other stakeholders; fluctuations in the supply of, and prices for, energy in the areas in which we maintain production facilities; our ability to access financing including in connection with potential acquisitions and investments; risks arising out of our acquisition of Aleris Corporation, including uncertainties inherent in the acquisition method of accounting; disruption to our global aluminum production and supply chain as a result of COVID-19; rising interest rates or geopolitical factors, such as Russia's war in Ukraine; changes in the relative values of various currencies and the effectiveness of our currency hedging activities; decreases in demand for our aluminum products due to macroeconomic headwinds due in part to rising interest rates and geopolitical factors, such as Russia's war in Ukraine, risks related to sanctions, tariffs, a ban or similar actions impacting the supply of Russian aluminum and the global aluminum supply; factors affecting our operations, such as litigation, including pending and future litigation settlements, environmental remediation and clean-up costs, breakdown of equipment and other events; ability to manage existing facilities and workforce to operate the business, economic, regulatory and political factors within the countries in which we operate or sell our products, including changes in duties or tariffs; competition from other aluminum rolled products producers as well as from substitute materials such as steel, glass, plastic and composite materials; changes in general economic conditions including deterioration in the global economy; the risks of pandemics or other public health emergencies, including the continued spread and impact of, and the governmental and third party response to, the COVID-19 pandemic; changes in government regulations, particularly those affecting taxes, tax policies and effective tax rates, derivative instruments, environmental, health or safety compliance; changes in interest rates that have the effect of increasing the amounts we pay under our credit facilities and other financing agreements; and our ability to generate cash. The above list of factors is not exhaustive. Other important risk factors are included under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.

© 2022 Novelis

2

HIGHLIGHTS

• Strong Q2 production and shipments, supported by diverse geographic & product portfolio
• • Higher automotive and aerospace shipments, as COVID and supply chain challenges ease
  • Resilient and stable beverage can
• Navigating a challenging macro-economic environment
• • Rising operating and energy costs
  • Stronger US dollar
  • Ongoing supply chain disruptions
  • Falling aluminum prices
• Aluminum FRP demand fundamentals remain intact
• Committed to long-term capital expansion projects, with disciplined, paced spending

Quarterly Shipments trend

(kilotonnes)

	983	973	968	987	962	984
923	933	930

774

Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23

TTM Shipment mix

(% kilotonnes)

Auto 18%

Can

3,863kt 58%

Specialties

21%

Aerospace

3%

Trailing twelve month total FRP shipments, ended September 30, 2022

© 2022 Novelis	3

CAPITAL PROJECTS UPDATE

• Novelis remains committed to its transformational organic growth journey to further strengthen its industry leading position
• Identified more than $4.5 billion of potential investment opportunities
• • Approximately $3.4 billion of planned capital investments underway

US Automotive Recycling Plant

• Location: Guthrie, Kentucky
• Capex: $365 million
• Status: Construction underway

1. Korea Recycling Expansion

• Location: UAL, South Korea
• Capex: $50 million
• Status: Broke ground in November

US Debottlenecking

• Location: Oswego, New York, US
• Capex: $130 million
• Status: On track

Brazil Debottlenecking

• Location: Pinda, Brazil
• Capex: $50 million
• Status: On track

China Integration & Expansion

• Location: Zhenjiang, China
• Capex: $375 million
• Status: Groundbreaking end of FY23

© 2022 Novelis

4

BAY MINETTE: A PLANT OF THE FUTURE

• Launched construction of first new US aluminum plant in over 40 years
• Highly automated, fully integrated, low-carbon plant utilizing state-of-the-art production technology
• Investment supported by macro trends in sustainability and customer demand for flat- rolled, low-carbon aluminum
• Leveraging our long-term customer partnerships and decades of leadership in delivering quality & innovative aluminum products and efficient recycling

Project Status:

 Broke ground in October 2022

 Secured critical equipment supply

 Secured pricing, volume and terms at levels that justify investment

 $2.5 billion investment on track for completion in mid-2025

The most sophisticated, sustainable and safest aluminum plant in the world

© 2022 Novelis

5