March 2013 2012 Annual Results Corporate Presentation
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March 2013
2012 Annual Results
Corporate Presentation
1
Disclaimer
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contents or otherwise arising in connection with this document.
2
Contents
2012 Annual Results Highlights
Operational Highlights
Development Strategies
2012 Annual Results
Highlights
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4
Industrial extrusion
83.2%
Deep processed products
7.1%
Construction extrusion
5.6% Others 4.1%
2012 Results Highlights
For the year ended 31 Dec
RMB millions 2011 2012 Change (%)
Revenue 10,306 13,497 +31.0
Gross profit 2,222 3,260 +46.7
Profit before taxation 1,528 2,342 +53.3
Profit attributable to equity shareholders 1,105 1,807 +63.5
Adjusted EBITDA 2,387 3,174 +33.0
Basic earnings per share (RMB) 0.20 0.33 +63.5
China 91.6%
Others 8.4%
Revenue by Geographical Regions in 2012 Revenue by Products in 2012
5
403
487 7
28
33
41
2011 2012
Industrial Deep-processed Construction
Steady Sales Growth
Sales Volume*
Gross Profit Margin Average Selling Price
Revenue
(Kilotonnes)
443
556
23,297 23,038
39,673
34,437
19,799 18,704
2011 2012
Industrial Deep-processed Construction
21.6% 25.0%
50.0% 44.1%
9.5% 3.9%
2011 2012
Industrial Deep-processed Construction
Overall
23,289 23,293
Overall
21.6% 24.2%
9,376 11,223
273
960 657
760
554
2011 2012
Industrial Deep-processed Construction Others
13,497
10,306
* Excluding sales under “Others”
(RMB millions)
(RMB/tonne)
6
22 17
2011 2012
107
122
2011 2012
77
115
2011 2012
Effective Working Capital Management
Accounts Receivable Turnover Days1
(Days)
Accounts Payable Turnover Days2
(Days)
Inventory Turnover Days3
(Days)
Remarks:
1. Trade receivable turnover in days = 365* ((trade receivables balance at the beginning of the year + trade receivables balance at the end of the year)／2) ／sales
for the year
2. Trade payable turnover in days = 365* ((trade and bills payable balance at the beginning of the year + trade and bills payable balance at the end of the year) ／2)
／cost of sales for the year
3. Inventory turnover in days = 365* ((inventory balance at the beginning of the year + inventory balance at the end of the year)／2) ／cost of sales for the year
Extended credit period allowed
flexibility in working capital
management
Majority of inventory
comprising aluminium ingots;
stable inventory level
maintained to satisfy increasing
production need
Domestic clients were mainly
large-scale SOEs, with good
credit and strong ability to settle
payments
7
(RMB millions) 31 December 2011 31 December 2012
Total assets 27,775 33,650
Bank balances and cash1 12,582 9,555
Net assets 15,678 17,508
Gearing ratio 2 43.6% 48.0%
Solid Financial Position
Remarks:
1. Bank balances and cash = cash and cash equivalents + short-term deposits + pledged bank deposits
2. Gearing ratio = total liabilities/total assets*100%
8
CAPEX in 2012
CAPEX for 2012 amounted to RMB7.6
billion, including: (RMB billion)
3.2
4.4
Industrial AluminiumExtrusion and Deep
Processing Businesses
High-End Aluminium FlatRolled Project
2012 CAPEX Amount (RMB) Usage
1.6 billion Purchase of large extrusion
presses and deep
processing equipment
1.6 billion Purchase of land for
expanding industrial
aluminium extrusion capacity
and purchase of large
extrusion presses and deep
processing equipment
4.4 billion Purchase of production
facilities, production base
construction, and land for our
high-end aluminium flat
rolled business
Operational
Highlights
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10
New Business Model with
Three Core Businesses
Synergies from common upstream raw material resources,
alloy smelting and casting technologies, product R&D and customer network
Current Major Revenue Stream
New Growth Engine in Development
High-end Aluminium Flat Rolled Products (FRP)
Industrial Aluminium Extrusion Products Deep-processing of Industrial Aluminium
Extrusion Products
Products in the Pipeline
Existing Product Portfolio
Increased Profitability
11
2012 Accreditations, Awards and Accolades
International Certification
ISO/TS16949 automotive industry
certification
IRIS’s (International Railway Industry
Standards) Quality Management System
Certification
EN15085 European Railway Vehicles
Welding Certification
IQNet ISO 14001:2004 Standard for
manufacture of aluminium alloy profile
architecture and railway vehicle aluminium
alloy components
Industry Awards
“China’s Top 10 Enterprises in Industrial
Aluminium Extrusion Products” by China
Non-ferrous Metals Processing Industry
Association
The one and only aluminium alloy
processing enterprise in Liaoning Province
to receive this national award “Nationally
Accredited Enterprise Technology Centre”
“National-Grade Pilot Innovative Enterprise”
“Top Ten Aluminium Enterprises in China”
12
8
6 4 3
ChinaZhongwang
China Plant 1 China Plant 2 China Plant 3 China Plant 4
21
Industrial Aluminium Extrusion Business – Addition of New Large Extrusion Presses to Optimise Product Mix
Shifted business focus to the China market and expanded
customer base which mainly comprises large-scale SOEs
Currently owns 20+ large extrusion presses of 75MN or
above, including 4 sets of 125MN extrusion presses. 14
large extrusion presses were put into production at the
end of 2012, and another 8 are expected to go into
production in 2013. By then, the annual production
capacity will exceed 1million tonnes
Placed an order for two sets of the world’s largest 225MN
horizontal single-action aluminium extrusion presses with
their core components imported from Germany in May
2012 to enhance overall production capacity. Delivery and
installation scheduled for 2014
No. of Large Extrusion Presses in China
in 2012 Highest No. of Large Extrusion Presses
Leading Production Capacity in the World
14 large extrusion presses commenced
production in 2012, 8 additional presses,
installed and undergoing final testing, are
expected to commence operation in 2013
Source：BCG report (August 2012）
13
Deep-Processing Business – Diversified High Value-Added Products to Tap Export Markets
Industrial Aluminium
Extrusion Products Cutting Welding Grinding
Surface
Treatment
Finished /
Semi-finished
Products
The newly constructed Deep-Processing Centre, which gradually commenced production at the end of 2012, is
equipped with advanced welding production lines and processing equipment from Europe
Highly automated equipment allows the Group to precisely weld large-scale deep-processed products, such as
aluminium alloy vehicle bodies and parts etc
2012 recorded sales of about 28,000 tonnes, accounting for 7.1% of the revenue, with gross profit margin at 44.1%
Deep-Processing Centre Commenced Production
14
High-Precision Aluminium Flat Rolled Business – Phase I Development with Production Capacity
of 1.8 Million Tonnes in Tianjin
Oct 2011 Mar 2012 2015 2018
Complete infrastructure construction and
equipment installation for phase I with a
planned annual production capacity of
1.8 million tonnes and commence production
Obtained the land use right
for industrial purposes
in Wuqing District of Tianjin City
Placed orders to
import equipment
from Germany and US
Aim to achieve designed
production capacity
of 3 million tonnes
Production base
construction & equipment
installation
Aluminium Flat Rolled Product
Production Diagram
Aluminium ingot
Pre-heating
Sheet mill Roughing mill Finishing mill
Aluminium
plate
Aluminium
sheet
Aluminium
foil
15
Extensive Applications of
Aluminium Flat Rolled Products
Thicknesses >0.20mm;
usually with cut or sawn edges,
and delivered in plates
Thicknesses >0.20mm; usually
with horizontal cut edge and
delivered in rolls
Thickness between 0.001mm -
0.20mm, delivered in rolls
Aluminium Plates Aluminium Sheets Aluminium Foil
Development
Strategies
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17
12th Five-Year Plan Offers
Steady Growth Momentum in China
Market
Trends
Rising demand for industrial
aluminium extrusion products
from transportation, machinery
and equipment, and electric
power engineering sectors
The increasing use of energy-
saving materials as a trend
Industrial Aluminium
Extrusion Products
Major
Products
Sectors like automobiles,
aluminium railway passenger
compartments, aviation and
beverage cans etc. are under-
developed
High technology barriers
encourage industry leaders to
further develop and strengthen
their leading position
High-End Aluminium
Flat Rolled Products
Deep-processed products are the
trend in the industrial aluminium
extrusion products industry
Rising demand for high-end
aluminium deep-processed
products in strategic emerging
industries and the national defense
technology industry
Deep-Processed
Products
Favourable
Policies
“The State Guiding Catalog of Industrial Structure
Adjustment (2011)”
“Special Development Plan for the Aluminium Industry
during the 12th Five-Year Period (2011-2015)”
“12th Five-Year (2011-2015) Development Plan for the
Non-ferrous Metal Industry”
“Industrial Transformation and Upgrade Plan (2011-
2015)”
“12th Five-Year Development Plan for the New
Materials Industry”
“12th Five-Year (2011-2015) Development Plan for the
High-end Equipment Manufacturing Industry”
“Development Plan for the Energy-saving and New
Energy Automobile Industry”
18
Global Industrial Aluminium Extrusion Market
China to Play a Dominant Role
Strong Demand from the Transportation
Industry
• Automobiles: 14% CAGR of industrial
aluminium extrusion consumption till 2020
• High-speed and metro railway: demand for
aluminium extrusion will see a steady
growth
• Large-scale upgrade and rapid development
in the shipping industry
Continuous Development in the Machinery and
Equipment Industry
• Demand for automated and large-scale
equipment orders due to industry
restructuring
• China's support for agriculture has
encouraged the growth of agricultural
machinery
• Expanding domestic demand and
development strategies in western regions
The construction of a new energy and UHV
power grid drives demand for electrical
equipment and upgrade of the product mix
Rising
Demand of
High-end
Products
High-end aluminium products satisfy strategic
emerging industries and technology industry
demand
Sales revenue for high-end aluminium
products accounted for 8% of aluminium
processing sales in 2010 and the proportion
will increase to 20% in 2015
Rising
Demand in
Downstream
Industries
Industry’s Favourable Factors / Advantages Industrial Aluminium Extrusion Products Consumption
in the Downstream Segments across the World
Industrial Aluminium Extrusion Products Consumption
in the Downstream Segments in China
Source: BCG Analysis Report
8%
7%
7%
8%
6%
6%
6%
8%
12%
13%
16%
14%
12%
10%
14%
6%
11-15E
CAGR
15-20E
CAGR
11-15E
CAGR
15-20E
CAGR
28% 29% 30% 8%
8%
7% 30%
29%
28% 34%
34%
35%
7,591
10,168
14,221
2011 2015E 2020E
Others Electric Power Engineering Machinery and Equipment Transportation
(Kilotonnes)
39% 39%
33% 9%
10%
12%
24%
24%
25%
28%
27%
30%
3,651
6,038
9,461
2011 2015E 2020E
Others Electric Power Engineering Machinery and Equipment Transportation
(Kilotonnes)
19
17,064 18,550
23,999
31,661
6,772 7,600
10,851
15,990
2010 2012 2015 2020
Lower Consumption of High Value-Added Flat Rolled
Products in China Offers a Promising Outlook
Source: BCG Industry Database, BCG Analysis Report (August 2012)
Total Sales Volume of Aluminium Flat Rolled Products
(Kilotonnes)
China market is growing rapidly and will account for half of global aluminium flat rolled market in 2020
67%
33%
2011
18,550
7,600
China Global
2011 Aluminium Flat Rolled Product Consumption
High value-added aluminium flat rolled products
Other aluminium flat rolled products
The aviation and aluminium railway cargo segments in China are under-developed
Beverage can consumption in China is significantly lower than the global level
Insufficient domestic capacity in China is driving imports of some products, and suppressing overall demand
Global China
(Kilotonnes)
88%
12%
20112011 2010 2015 2020
20
The High Value-Added Aluminium Flat Rolled
Products Industry Has a Bright Future in China
Industry Favourable Factors / Advantages
Rising Demand
in Downstream
Industries
The major growth drivers in the China
market are transportation, packaging, and
electric power engineering
Industries like automobiles, metro
railways and aviation will maintain high
growth trajectory resulting in a strong
demand for aluminium plate
With rising consumption levels, high-end
packaging supplies like chemical
containers and beverage cans will be the
key drivers for future development of
aluminium flat rolled products
Aluminium Plate and Sheet Consumption
in the Downstream Segments in China
Aluminium Foil Consumption
in the Downstream Segments in China
Source: BCG Analysis Report
Large
Demand –
Supply Gap for
High-end
Products
High-end aluminium flat rolled products
market is still in the early stage, relying
on imports to meet market demand
Automobile aluminium plates, aluminium
railway passenger compartments plus
cargo carriages, aviation and other
sectors are still under-developed, while
the beverage can consumption is
significantly lower than that of the rest of
the globe
Production
Capacity and
Technology of
Enterprises in
China Keep
Rising
Enterprises that produce flat rolled
products have expanded investments in
production equipment and capacity over
the past two years, and are actively
exploring new downstream applications
5% 4% 3% 9% 7% 6% 14% 14%
14% 12% 11%
10% 12%
11%
10%
10%
9%
8%
13%
12%
11%
12%
17%
21%
12%
14%
16%
6,155
8,886
13,172
2011 2015E 2020E
Others Aluminium Foil Raw Materials ConstructionsDurables Metal Molding Machinery and EquipmentElectric Power Engineering Packaging Transporatation
(Kilotonnes) 15-20E
CAGR
7%
8% 2% 2%
6%
6%
6%
13%
12%
9%
10% 4% 4%
6%
7%
8%
18%
13%
11-15E
CAGR
11%
4%
8%
6%
12%
4%
10%
8%
15-20E
CAGR
11-15E
CAGR
22% 22% 20% 19%
20% 21% 35%
30%
26% 24%
28%
32%
1,445
1,966
2,817
2011 2015E 2020E
Others Electric Power Engineering Machinery and Equipment Transportation
(Kilotonnes)
21
Development Strategies
Continue to focus on the domestic
market as the primary market
while the export market takes a
supplementary role
Step up efforts to develop
customers through flexible and
diversified approaches, with a
view to enlarging market shares
for industrial aluminium extrusion
products and deep-processed
products while paving the way for
futures sales of high value-added
aluminium flat rolled products
Reinforce cooperation in
scientific research with leading
research institutes, so as to
improve our integrated capability
from production processes to
new product development
Complete the installation and
testing of the remaining 8
presses of the 18 large extrusion
presses of 75MN or above in our
expansion plan by 2013 and 2
mega-sized 225MN extrusion
presses by the end of 2014
Extend the product categories
and market coverage of deep-
processed products and
enhance the share of deep-
processing products in
total sales
Develop the first phase of
construction work in full gear,
and target to complete
construction of a production
base with an annual capacity
of 1.8 million tonnes
production, which will
commence operation by 2015
Implement the high value-added flat rolled project in
full gear to provide new impetus
Reinforce
the leading
edge of the
aluminium
extrusion
business
Step up market
development efforts and
explore new market
segments
Open Forum
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