Alcoa Inc. (NYSE:AA) Q4 2014 Earnings Conference Call - Final Transcript

Jan 12, 2015 • 05:00 pm ET

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Alcoa Inc. (NYSE:AA) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good day, ladies and gentlemen. Welcome to the First Quarter 2015 Alcoa Earnings Conference Call. My name is Kyle, and I'll be your operator for today. As a reminder, today's conference is being recorded for replay purposes.

I would now like to turn the call over to your host for today, Nahla Azmy, Vice President of Investor Relations. Please proceed.

Executive
Nahla Azmy

Thank you, Kyle. Good afternoon and welcome to Alcoa's first quarter 2015 earnings conference call. I'm joined by Klaus Kleinfeld, Chairman and Chief Executive Officer, and William Oplinger, Executive Vice President and Chief Financial Officer. After comments by Klaus and Bill, we will take your questions.

(Forward-Looking Cautionary Statements)

In addition, we've included some non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release in the appendix to today's presentation, and on our website, www.alcoa.com under the Investor section. Any reference in our discussion today to historical EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix.

And with that, I will turn the call over to Mr. Klaus.

Executive
Klaus Kleinfeld

Thank you very much, Nahla. So welcome, everybody. Let me in the usual fashion quickly summarize the quarter. And I assume that you have had a little chance of looking at it and I hope you all conclude it's been a strong operational quarter and the transformation is fully on track.

Just let's look at the operational performance. And let's start with revenue. Revenue has been growing year-over-year by 7%. And if you look under the hood, you actually see that this has been driven primarily by the organic growth coming from auto and aero.

And obviously over a year, when you look at all the transformational portfolio moves that we have made, that we have had, I mean, capacity reductions, as well as some portfolio actions, as well as currency, if you put all of this together, that's pretty much a wash, and the only thing that stands out is the organic growth in the auto and aero. That's been the reason for the 7%, and I assume that we'll have more of a discussion around that. I'm happy to provide more color on that later in the Q&A.

So when you then look at profits, you also see on the downstream side, I mean, we have another first quarter record there with $191 million ATOI. On the midstream, we have $34 million ATOI. There's challenge on the can sheets on the one hand and at the same time, we have record auto shipments. And I'll explain the dynamics and what we are going to do on that end in detail when it comes to my presentation.

On the upstream, good news, 14th consecutive quarter of improvement. Alumina segment stands at $221 million. Primary segment is at $187 million of ATOI. And then, you again see in the quarter nice productivity, $238 million productivity.

And the good news is, again, like in the last