Arconic Inc. (NYSE: ARNC) today announced the divestiture of its Fusina,
Italy rolling mill to Slim Aluminium. The transaction follows a thorough
review process and is part of Arconic Global Rolled Products’ (GRP)
continued drive to convert the business from a commodity producer to a
high-margin aerospace and automotive supplier.
Arconic expects to record restructuring-related charges representing the
loss on sale of approximately $60 million after tax, or $0.12 per
diluted share, in its Statement of Consolidated Operations for the first
quarter of 2017. The charges primarily relate to the non-cash impairment
of the net book value of the business as well as the injection of $10
million in cash into the business prior to its sale.
GRP has increased its adjusted EBITDA margin by 890 basis points – from
3 percent in 2008 to 11.9 percent in 2016 – through portfolio
optimization, manufacturing excellence and commercializing innovations.
Arconic (NYSE: ARNC) creates breakthrough products that shape
industries. Working in close partnership with our customers, we solve
complex engineering challenges to transform the way we fly, drive, build
and power. Through the ingenuity of our people and cutting-edge advanced
manufacturing techniques, we deliver these products at a quality and
efficiency that ensure customer success and shareholder value. For more
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About Slim Aluminium SpA
Slim Aluminium is an Italy-based rolling mill business. At present Slim
Aluminium has a production capacity of around 92,000 metric tons per
year, which includes the production of foil, a wide range of coils and
sheets, circles and shaped blanks. For more information: www.slimaluminium.com.
Slim Aluminium SpA is fully owned by funds managed by Quantum
Capital Partners GmbH.
Dissemination of Company Information
Arconic intends to make future announcements regarding Company
developments and financial performance through its website on www.arconic.com
This release contains statements that relate to future events and
expectations and as such constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include those containing such words as
“anticipates,” “estimates,” “expects,” “may,” “plans,” “projects,”
“should,” “will,” “would,” or other words of similar meaning. All
statements that reflect Arconic’s expectations, assumptions or
projections about the future, other than statements of historical fact,
are forward-looking statements, including, without limitation,
statements regarding charges in first quarter of 2017. Forward-looking
statements are not guarantees of future performance and are subject to
risks, uncertainties, and changes in circumstances that are difficult to
predict. Although Arconic believes that the expectations reflected in
any forward-looking statements are based on reasonable assumptions, it
can give no assurance that these expectations will be attained and it is
possible that actual results may differ materially from those indicated
by these forward-looking statements due to a variety of risks and
uncertainties. Such risks and uncertainties include, but are not limited
to, the risk factors discussed in Arconic’s Form 10-K for the year ended
December 31, 2016, and other reports filed with the U.S. Securities and
Exchange Commission. Arconic disclaims any obligation to update publicly
any forward-looking statements, whether in response to new information,
future events or otherwise, except as required by applicable law.
Non-GAAP Financial Measures
Some of the information included in this communication is derived from
Arconic’s consolidated financial information but is not presented in
Arconic’s financial statements prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP).
Such non-GAAP financial measures supplement our GAAP disclosures and
should not be considered an alternative to the GAAP measure.
Reconciliations to the most directly comparable GAAP financial measures
and management’s rationale for the use of the non-GAAP financial
measures can be found below.
Arconic and subsidiaries
Calculation of Financial
(dollars in millions)
Reconciliation of Global Rolled Products(1) Adjusted EBITDA
|($ in millions)||
|After-tax operating income (ATOI)||$||(15||)||$||269|
|Depreciation and amortization||190||201|
|Third Party Sales||$||7,659||$||4,864|
|Adjusted EBITDA Margin||
Arconic’s definition of Adjusted EBITDA (Earnings before interest,
taxes, depreciation, and amortization) is net margin plus an
add-back for depreciation and amortization. Net margin is equivalent
to Sales minus the following items: Cost of goods sold; Selling,
general administrative, and other expenses; Research and development
expenses; and Provision for depreciation and amortization. The Other
line in the table above includes gains/losses on asset sales and
other nonoperating items. Adjusted EBITDA is a non-GAAP financial
measure. Management believes that this measure is meaningful to
investors because Adjusted EBITDA provides additional information
with respect to Arconic’s operating performance and the Company’s
ability to meet its financial obligations. The Adjusted EBITDA
presented may not be comparable to similarly titled measures of
Excludes the Warrick, IN rolling operations and the equity interest
in the rolling mill at the joint venture in Saudi Arabia, both of
which were previously part of the Global Rolled Products segment but
became part of Alcoa Corporation effective November 1, 2016.