Hindalco Industries Ltd. — Investor Presentation 2021

Nov 3, 2021

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3[rd] November, 2021

BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor Dalal Street Plot No. C/1, G Block Mumbai: 400 001 Bandra Kurla Complex Scrip Code: 500440 Bandra (East) Mumbai – 400 051 Scrip Code: HINDALCO Mr. Daniel Schammo Banque Internationale A Luxembourg Societe Anonyme 69, Route d’Esch L-2953 Luxembourg Fax No. 00 352 4590 2010 Tel. No. 00 352 4590-1

Dear Sir/ Madam,

Sub: Investor Presentation of Novelis Inc. (wholly owned subsidiary of Hindalco Industries Limited “the Company”) Q2 Financial year 2021-2022

Ref: Regulation 30 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

Enclosed herewith is the Investor Presentation of Novelis Inc. (wholly owned subsidiary) of the Company for the Second quarter Financial year 2021-2022.

Thanking you

Yours faithfully

For HINDALCO INDUSTRIES LIMITED

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ANIL MALIK

President & Company Secretary

Encl: as above

Hindalco Industries Limited

6[th] & 7[th] Floor, Birla Centurion, Pandurang Budhkar Marg, Worli, Mumbai – 400030, India T:+91 22 66626666/62610555 | F:+912262610400/62610500 | W: www.hindalco.com Registered Office : Ahura Centre, 1[st] Floor, B wing, Mahakali Caves Road, Andheri (East), Mumbai – 400093, India

Corporate ID No: L27020MH1958PLC011238

NOVELIS Q2 FISCAL YEAR 2022 EARNINGS CONFERENCE CALL

November 3, 2021

Steve Fisher

President and Chief Executive Officer Dev Ahuja Executive Vice President and Chief Financial Officer

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© 2021 Novelis

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SAFE HARBOR STATEMENT

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Forward-looking statements

Statements made in this presentation which describe Novelis' intentions, expectations, beliefs or predictions may be forwardlooking 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 are statements about our plans to invest approximately $500 million in growth capital projects. 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 forwardlooking 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; the capacity and effectiveness of our hedging activities; 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; changes in the relative values of various currencies and the effectiveness of our currency hedging activities; 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 ongoing COVID-19 outbreak; 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, 2021.

© 2021 Novelis

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HIGHLIGHTS

• Top priority remains the safety, health and well-being of our employees, facilities and communities

• Navigating near-term supply chain challenges and inflationary cost pressures

• Strong underlying demand fundamentals for aluminum FRP

• Generating strong cash flow and improved net leverage position to 2.4x

• Investing in strategic organic capital expansion projects to capture market growth and achieve sustainability targets

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TTM Shipments

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(kilotonnes) 3,857
3,613
3,274 3,273
3,188
3,067
FY17 FY18 FY19 FY20 FY21 TTM
Q2FY22
2,114
TTM Adjusted EBITDA
($ millions)
1,714
1,472
1,368
1,215
1,085
FY17 FY18 FY19 FY20 FY21 TTM
Q2FY22
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Free cash flow from cont. operations, before capital expenditures
($ millions)
1,225
1,182
994
761
632
585
FY17 FY18 FY19 FY20 FY21 TTM
Q2FY22
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© 2021 Novelis

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Trailing Twelve Month (TTM) ended Sep 30, 2021

CAPITAL PROJECTS UPDATE

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 Recently completed organic growth projects ramping up

• Pinda rolling & recycling expansion already in production

• New Guthrie & China CASH lines increase total automotive finishing capacity to approximately 1 million tonnes

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Casting pit in Pinda, Brazil

 Recently announced new investments to begin early 2022

 $375 million China rolling & recycling expansion

• Upgrades to the existing hot mill, a new cold mill, and a new recycling and casting center

• Expansion fully integrates automotive business and add closed loop recycling in Asia

• Provides over $100 million in acquisition strategic synergies

 $130 million plant upgrades in Oswego, US

• Debottleneck hot mill rolling capacity at Oswego, New York plant by 124kt

• Enhance finishing capabilities for automotive sheet

© 2021 Novelis

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NEAR-TERM END MARKET OUTLOOK

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	Automotive  Short-term uncertainty created by semi-conductor shortage into CY2022  Strong underlying demand driven by new program adoption and increased consumer preference for SUVs, pick-up trucks, electric and premium vehicles	20-25%
	Specialty  Favorable housing fundamentals in the US and Europe driving strong B&C demand  Strong demand across markets, including electronics, container and painted products	5-10%
	Aerospace  Do not expect significant improvement in CY21 as consumer air travel remains restricted  Bookings improving but recovery could be prolonged and uneven	5-10%

*CY 2021 vs 2020 estimated end market growth, Novelis internal estimates

© 2021 Novelis

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FINANCIAL HIGHLIGHTS

© 2021 Novelis

Q2 FISCAL 2022 FINANCIAL HIGHLIGHTS

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Q2FY22 vs Q2FY21

Quarterly Shipments trend

(kilotonnes)

• Net income from continuing operations up 66% to $239 million

• Excluding tax-effected special items*, net income of $244 million up 54%

• Sales up 38% to $4.1 billion

• Total FRP Shipments up 5% to 968kt

• Record Can and Specialty shipments

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983 973 968
923 933
774
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Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

• Automotive shipments impacted by semiconductor shortage

• Adjusted EBITDA up 22% to $553 million

• Adjusted EBITDA per ton increased to $571, compared to prior year $493

Quarterly Adjusted EBITDA trend

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($ millions)
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555 553
501 505
455
253
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Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

© 2021 Novelis

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*Tax-effected special items may include restructuring & impairment, metal price lag, gain/loss on assets held for sale, loss on extinguishment of debt, loss on sale of business, business acquisition and other integration costs. See today’s earnings press release for a reconciliation of special items.

Q2 ADJUSTED EBITDA BRIDGE

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$ Millions

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14 553
52
25
(18)
45
(20)
455
Q2FY21 Volume Price/Mix Operating Cost SG&A & R&D FX Other Q2FY22
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© 2021 Novelis

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Q2 SEGMENT RESULTS

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Adjusted EBITDA Shipments
($ millions) (kts)
$300 400
350
$250 $227
$205 300
$200
250
$150 200
150
$100
100
$50
50
$0 0
Q2FY21 Q2FY22
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$150 300
$125 250
$100 200
$78
$75 $63 150
$50 100
$25 50
$0 0
Q2FY21 Q2FY22
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Q2 Shipments +2% EBITDA +11%

• Record shipments and strong demand for can, B&C and specialties

• Automotive shipments impacted by semiconductor shortages

• Favorable pricing and metal costs mitigating inflation

Q2 Shipments +8% EBITDA +24%

• Higher shipments across markets excluding automotive semiconductor shortage impact

• Increased production and inflation costs partially offset by favorable metal costs

• Favorable FX translation

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© 2021 Novelis

Q2 SEGMENT RESULTS

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Adjusted EBITDA Shipments
($ millions) (kts)
$125 200
$100 $92
150
$74
$75
100
$50
50
$25
$0 0
Q2FY21 Q2FY22
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Asia
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$250 175
150
$200
125
$154
$150
100
$113
75
$100
50
$50
25
$0 0
Q2FY21 Q2FY22
South America
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Q2 Shipments +11% EBITDA +24%

• Strong markets, excluding semiconductor constraints

• Favorable price & mix

• Supply chain challenges leading to higher costs (ocean freight)

Q2 Shipments -1% EBITDA +36%

• Strong end market demand

• Favorable metal benefit

• Favorable FX

© 2021 Novelis

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FREE CASH FLOW AND NET LEVERAGE

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			YTD	YTD
	$ Millions		FY22	FY21
	Adjusted EBITDA		1,108	708
	Interest paid		(124)	(124)
	Taxes paid		(117)	(88)
	Capital expenditures		(194)	(226)
	Metal price lag		113	(35)
	Working capital & other		(515)	(66)
	Free cash flow from continuing operations		158	169
	Free cash flow from discontinued operations		(5)	(37)
	Free cash flow		153	132
	Free cash flow from continuing operations before capex		352	395

Net Leverage ratio Net debt/TTM Adjusted EBITDA

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5.0
Aleris acquisition
close Q1FY21
3.8
4.0 3.7
3.3
2.9
3.0
2.5 2.5
2.4 2.4
2.3
2.1
2.0
1.0
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• Significant working capital pressure from aluminum price increase largely offset by higher Adjusted EBITDA, favorable metal price lag and timing of capital expenditures

• Further improvement in net leverage to 2.4x

• Maintain very strong liquidity of $2.1 billion at September 31, 2021

• $100 million return of capital to our common shareholder in August

• Completed $1.5 billion Senior Notes refinancing in August

© 2021 Novelis

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SUMMARY

© 2021 Novelis

SUMMARY

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• Delivered another exceptional quarter

• Integration of Aleris continues, with total synergies forecast to exceed $220 million

• Strong demand for sustainable aluminum FRP across end markets

• Beginning new investment projects to grow with our customers, with additional opportunities on the horizon

• Working across the supply chain to achieve sustainability goals

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© 2021 Novelis

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THANK YOU QUESTIONS?

© 2021 Novelis

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APPENDIX

© 2021 Novelis

NET INCOME RECONCILIATION TO ADJUSTED EBITDA

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(in $ m) Q1 Q2 Q3 Q4	FY21	Q1 FY22 Q2 FY22
Net income (loss) attributable to our common shareholder (79) (37) 176 176	236	240 237
- Noncontrolling interests - - 1 - - Income tax provision (29) 68 80 119 - Interest, net 67 69 63 59 -Depreciation and amortization 118 141 137 147	1 238 258 543	- - 108 79 56 59 134 134
EBITDA 77 241 457 501	1,276	538 509
- Unrealized (gain) loss on derivatives 33 (6) (13) (3) - Realized loss (gain) on derivative instruments not included in segment income 3 1 (2) (1) - Adjustment to reconcile proportional consolidation 14 15 13 14	11 1 56	4 16 (1) - 14 15
- (Gain) loss on sale of fixed assets (2) - 2 1	1	- 2
- Loss (gain) on extinguishment of debt - - - 14	14	(2) 64
- Purchase price accounting adjustments 28 1 - -	29	- -
- Loss from discontinued operations, net of tax 18 11 18 4	51	63 2
- Loss on sale of discontinued operations, net of tax - 170 - -	170	- -
- Restructuring and impairment, net 1 7 20 1	29	(2) -
- Metal price lag (income) expense 20 12 - (26)	6	(54) (59)
- Business acquisition and other integration costs 11 - - -	11	- -
-Other, net 50 3 6 -	59	(6) 4
Adjusted EBITDA $253 $455 $501 $505	$1,714	$555 $553

© 2021 Novelis

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FREE CASH FLOW

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Q1 Q2
(in $ m) Q1 Q2 Q3 Q4 FY21
FY22 FY22
Cash provided by (used in) operating activities – continuing operations (123) 496 275 561 1,209 65 274
Cash provided by (used in) investing activities – continuing operations (2,643) (183) (101) (152) (3,079) (94) (87)
Plus: Cash used in Acquisition of a business, net of cash acquired 2,550 64 - - 2,614 - -
Plus: Accrued merger consideration 70 (60) (10) - - - -
Less: Proceeds from sale of assets and business, net of transaction fees, - (2) (2) - (4) (1) 1
cash income taxes and hedging
Free cash flow from continuing operations $(146) $315 $162 $409 $740 $(30) $188
Net cash used in operating activities – discontinued operations (15) (16) (47) (4) (82) (3) (2)
Net cash provided by investing activities – discontinued operations 10 207 140 - 357 - -
Less: Proceeds from sale of assets and businesses, net of transaction - - - -
(223) (180) (403)
fees, cash income taxes and hedges - discontinued operations
Free cash flow $(151) $283 $75 $405 $612 $(33) $186
Q1 Q2
(in $ m) Q1 Q2 Q3 Q4 FY21
FY22 FY22
Cash provided by (used in) operating activities – continuing operations (123) 496 275 561 1,209 65 274
Cash provided by (used in) investing activities – continuing operations (2,643) (183) (101) (152) (3,079) (94) (87)
Plus: Cash used in Acquisition of a business, net of cash acquired 2,550 64 - - 2,614 - -
Plus: Accrued merger consideration 70 (60) (10) - - - -
Less: Proceeds from sale of assets and business, net of transaction fees, - (2) (2) - (4) (1) 1
cash income taxes and hedging
Free cash flow from continuing operations $(146) $315 $162 $409 $740 $(30) $188
Capital expenditures 112 114 107 152 485 101 93
Free cash flow from continuing operations before capex $(39) $397 $182 $557 $1,097 $71 $281
© 2021 Novelis
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NET DEBT AND LIQUIDITY

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Q1 Q2
(in $ m) Q1 Q2 Q3 Q4 FY21
FY22 FY22
Long-term debt, net of current portion 5,671 6,767 6,295 5,653 5,653 4,960 4,942
Current portion of long-term debt 50 55 59 71 71 541 443
Short-term borrowings 2,176 393 151 236 236 359 247
Cash and cash equivalents (1,729) (1,627) (1,164) (998) (998) (872) (659)
Net debt $6,168 $5,588 $5,341 $4,962 $4,962 $4,988 $4,973
Q1 Q2
(in $ m) Q1 Q2 Q3 Q4 FY21
FY22 FY22
Cash and cash equivalents 1,729 1,627 1,164 998 998 872 659
Cash and cash equivalents of discontinued operations 89 - - - - - -
Availability under committed credit facilities 308 1,005 1,226 1,223 1,223 1,380 1,490
Liquidity $2,126 $2,632 $2,390 $2,221 $2,221 $2,252 $2,149
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© 2021 Novelis

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