KALU - Earnings call 4 2023 | Kaiser Aluminum Corporation

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Operator

Greetings, and welcome to the Kaiser Aluminum Corporation's Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Kim Orlando, Investor Relations.

Kimberly Orlando

If you have not seen a copy of our earnings release, please visit the Investor Relations page on our website at kaiseraluminum.com.

We have also posted a PDF version of the slide presentation for this call.

Joining me on the call today are President and Chief Executive Officer, Keith Harvey; and Executive Vice President and Chief Financial Officer, Neal West.

the like our you that statements presentation made management I'd four the the are begin, this by of in current slides and and based we on to constitute expectations. to refer first statements presentation management's Before that contained forward-looking information remind you

the the in year for Commission. risk the The December release refer XX-K please to to to results will the Which company's the earnings be For no changes specific could report statement results statements, factors undertakes on full a on update summary XXXX. Exchange to company's forward-looking cause ended reports XXrd, expectations. Securities filed company's the XXst, forward-looking statements annual actual conform XXXX. with February and that including any duty filed of differ and materially to from Form company the or

to to questions. our without I be measures comparable we At turn be like commonly predicted for in In open information appendix. nonrun reference presentation. measures financial measures are of addition, of will to financial required in of throughout appendix to the certain release are the EBITDA X Reconciliations cannot of comparable for included the the control GAAP conclusion now for Reconciliations Slide have items over provided rate measures excludes the efforts. we will of unreasonable most call included outside adjusted discussion not forward-looking we non-GAAP the and/or certain Keith in financial which the provided financial that discussion. call the the and presentation, today earnings presentation. non-GAAP Which such in because terms provided in today's Further, to Harvey. our reconciliation contains or Any are our items EBITDA. have reasonably used GAAP reconciliations would company's means and definitions

Keith Harvey

entire hard of and profitable come. Kaiser Which year. increasingly with the and enabled X. growth team to set years work us sustainable pleased the past the Slide I'm long-term very to to dedication in the Turning this for foundation

completing Our implement fourth focused to our million to initiatives. strategy, in end with our We resources unwavering execution commitment above continued Neal allowed results to as the a EBITDA. XXXX strong our our customers and experienced growth our Performance growth expectations hold with we to for of solid us turn and costs also the solid the full ample future. delivered transition exceptionally the to An strong year pressures, quarter position XXXX and now adjusted and strategy in on and platform. the toward mix results. I'll some results. year more and are for across improve executing XXXX our efficiencies quarter Despite $XX in inflationary operating the during of lower destocking establishes call fourth aerospace company quarter the details our markets to efforts a taking our contributed investments for our over foundation

Neal West

revenue. and with I'll Slide an overview on X conversion shipments begin of

the for full While XXXX million billion, increase $XX was record an the to year compared of for revenue X% conversion was year demand of the XXXX. environment a mix, $X.XX or

total While X%. down or XX pounds were shipments million

to unique soft, mix than further ahead conversion more anticipated.Our favorable as full ability fourth of from our year-end, pandemic. of markets demand benefited detail. in our high-strength ahead Which demand strong. quarter and We the we Aerospace of very capacity XXXX expectations. year levels remained revenue in in experienced end performance. each our our at prior engineering flex to as remains and is product our we contributed By delivered surpassed the initial general Trentwood outlook well a facility revenue Looking our product conversion peak our to

million or In higher during packaging, our $XXX high-strength Aero XXXX, customers fourth increase pricing shipments For last a the year XX% on the with full XX%. beverage million, activity in quarter. year. revenue Reflecting destocking up conversion stabilized $XXX over totaled

However, products in makes considerable shipments. fourth we a Which quarter up as noted the in food our our destocking coated our amount of quarter. experienced call, third we in

packaging For the magnesium declaration the X% conversion revenue $XXX by was were over full during X% was year XX down year as Shipments a million reminder pounds majeure. force of of impacted year-over-year. related XXXX, million, down Which or our XXXX.

the impacted the food products to followed of by by market, year, shipments the the beverage-related by destocking in being results. availability in product fourth of in addition along In our the In conversion first favorable through mix, imports general primarily which impacted demand products colder revenue half negatively less plate reduced QX. persisted by engineering, affected for products was a increased quarter, with

due expected year-over-year in fourth quarter following General XX% higher of We primarily five products, destocking. revenue reduction plate XXXX for costs. GE saw demand conversion result regard $XXX pressure a as to products to returns. million, for our semiconductor products under was the to on engineering these until to we beginning to pricing In remain shipment pricing down destocking, of stabilize inflationary destocking a XX% long in steady address for quarters

remained stable continue supply as demand chain relatively to issues demand. good automotive offset Finally, fairly

and inflationary auto the shipments due pricing For higher costs. to year $XXX offset million, an to revenue up X% full increase XXXX, XX% was primarily XXXX conversion over in

market shipments details this revenue of in applications Additional by end appendix on found be the can and presentation. conversion

Now was for million, moving income XX. of million to for $X from costs $XX operating XXXX. approximately Slide million, corporate up income million. adjusting operating restructuring XXXX $XX adjusted $XXX After was Reported

the to $X million. XXXX, compared to year. Our XXXX effective in was Cash primarily taxes the was approximately rate for full during tax XXXX credit full year for the year due created an R&D XX% XX%

tax million. before for current a per diluted loss net to share After of our of low net XXXX. income until restructuring million For and charge, or million XXXX XXXX, or of was XXXX adjusted $XX of million for we we adjusted cash per anticipate nonrun loss a year income gain, diluted cash our Reported tax including of items to $X net to under NOLs, $XX consume $X.XX million to approximately be be expect federal taxes million effective foreign of net adjusting compared as which $X rate or taxes $XXX per in million income to continue a XXXX. for in $XX $X.XX of XXXX, previously range the total U.S. that pretax share our of with net diluted continue were $X.XX XXXX rate was full adjusted share a approximately an to loss compared regulations.We an $X income per diluted million-$X or of federal to mentioned no the discrete $X.XX state share the in loss year-end an are mid-XX% the adjusted range in approximately taxes

revenue to XX.X%. The of mix other Slide shipments. a captured improvement primarily Now in Adjusted Adjusted conversion percentage XXXX. inflationary alloys of product pricing for higher of XXX EBITDA from from by aerospace result to turning was costs of basis XXXX EBITDA was XX. adjusted million cost points XXXX as and million, the approximately $XX $XXX approximately higher a with improved EBITDA up that a higher

throughout year, experienced packaging stabilize platform, of impact noted destocking including was at general costs, costs following address across plant two inflationary focused issues the cost the which these to with Partially costs. remain related as offsetting engineering, beginning earlier, continuing and we subside. believe overhead along are inflationary actions and to and operations and the chain In reductions on addition, significant to corporate years last we our we the mill our and over operational continue work growing supply efficiencies

under million. undrawn. revolving and positive Now cash cash a management. expenditures than million the nearly million December free full remains There availability end We turning It of December credit of to and borrowings discussion total year flow provided liquidity flow. of $XX revolving net our the million credit approximately during anticipated for At of borrowing the facility were sheet balance anticipated quarter XXXX, no as of improved total due approximately XXXX, lower primarily our facility of and of cash end, and XXst. $XX to $XXX generated approximately and inventory capital the $XXX

remains strong. liquidity Our total position

our As a and $XX senior noted annually, until debt interest maturing at costs fixed we have XXXX. notes reminder, are million

X.X% improved ratio to X year-end As our leverage of leverage basis towards XXX of at targeted December XXXX, ratio moving XX, our points net -X.Xx. over Xx from debt

Turning to allocation. capital

focused the form on in growth our of quarterly dividends. Our of supporting strategy the business remains our stockholders to value while returning cash concurrently

due capital Our projects. for million, for will came We predominantly that of to full growth carryover expenditures $XXX project was million, related our in of range year capital below at expenditures which forecast now timing driven year from which the in our capital the be to the million-$XXX payments timing. XXXX reflects full the bill XXXX $XXX by submission

for $XXX will shortly. remaining balance remains million capital XXXX. be project ongoing additional of schedule, on will projects, coat expenditures cover growth majority roll the sustainability spent Keith with which the of be and in The will Our

profitability, of Additionally, we dividend our continuing returned that team year confidence increase longer-term and declared January XXth our Board value. our share, in it payments the consecutive shareholders. million of dividend to management strategy we Directors our XXXX our quarterly stockholder improve of underscores shareholders a through common our per $X.XX board to XXth, have dividend which approximately announced payments, $XX to On our in making

our to beyond Now and I'll outlook. back over turn the Keith XXXX discuss to call

Keith Harvey

capacity in needs. the Trentwood for to year customers jet XX. customers Aerospace additional to business mill. for as with The momentum of early expected turn million the initial total with It Now investments. and applications. engineering Phase modest the approximately next we of able our demand the been capacity. cost further years, by been was the our expect Currently, then, team increase fiscal is culmination of experiencing years supported in and in declarations strength other carry-over improved the the capacity.However, I'll be increase strong investments previously with increase slide multiple defense, our products, at rolling their due additional beyond, proposed Therefore, for expected demand expect When for with overall planned space, investments capacity commercial aero and was our the aerospace Phase XXXX by of announced and deliver delayed increase X%â€“X% become which and announced of and initially approximately has are products industrial to over evident an projected provide for more to high total The capacity incremental million VII to in products large earlier which time to investment for yield first for be $XX of meet evaluate invest our to investment high jets the of deliver Phase to the into we've several in expansion initial us In our VII strong since an to at XX%â€“XX% initial options launch the our is shipments Trentwood. forward XXXX, over expected we will increasingly general several strength to estimated VII that pandemic. $XXX outlook moving XXXX, has on beginning our grows,

investment the of balance with We increased expect expected capital $XX million applied in XXXX. customers is half for in outlays approximately available of half capacity year, our initial The will to second this to XXXX. first this be beginning be the the

Our customers shareholders. second evaluate team general are to utilizes versus strength engineering some of shipments high and the from lower products. deliver our improving expected our improve of approximately efficient as and the same of continue VII and expected the full options expansion, half cost XXXX, to conversion aero year, the which Phase the much expect capacity value aerospace to the X%â€“X% we as to to demand meet capacity in deliver XXXX, will revenue now needs

XX. slide Turning on now to packaging

late in and quarter to Based our destocking XXXX from the in side prolonged we XXXX. food XXXX. in moderate during for first destocking this experienced business As expect most began on that now we of our these these packaging through on customers, of the products not and half discussions our felt of as sometime be discussed year. previously, destocking products the with second would we experiencing of customers We as beverage end

XXXX have levels. customers XXXX in growth mid-single the sales expected indicated digits Our in above

expect result, revenue X%â€“X% shipments packaging we in XXXX now our conversion As improve year-over-year. by a to approximately and

Warrick our We a at in number and underway XXXX. have of exciting initiatives impactful facility

the by row well in is new XXXX. with is completion coater, as commence year, end on for installation expected Our production of progressing to time the and

the to balance. mill, portion higher a previously we've high-value large we the we've adjacent of end a in for value our for range, XX% have multi-year coated recycled project higher on new customer coated products. business and growth positive greatly committed the fully project focus will a this is coupled XXXX, mix, secular long-standing impact at by our improve greenhouse impact we're is strong a successfully exiting margin basis the gas our in rolling expected consolidated margins. As packaging X%â€“X% run agreement discussions our with a convert potential strategy smelter a of excited the relationships remain expected strategy a We business. for approximately we this of outlook this capacity implemented already deliver estimate basis. implemented this capacity scrap added the to longer at year, to in which XXXâ€“XXX improvement supply With with a cans implemented, term. Upon contracts have this will on used margin, stated, with existing year products, is XXXâ€“XXX overall value full points higher To-date, revised significantly with this the our underway mix confident metal on our input hot year strategy this basis expected added metal beverage utilizing and footprint.Once Alcoa of points Fully about rate

to fourth both for of through and inventories plate slide products general quarter the continued engineering XXXX. turning XX. Now to reduce Distributors on long

plate into specifically, experiencing the the operations. early we half the and destocking Phase growth planned are this quarter momentum investments all provide expect demand additional in believe increase end demand We feel VII investment for fourth rates from of and shipments conversion XXXX as More XXXX. and XXXX, in for now and second capacity and into general revenue Trentwood for progress since in products XXXX XXXX improving initial semiconductor of an support order expect we was will catalyst our However, these year. we as of markets gains at future our the trough we the engineer could start

pressure on in term, for XXXX the flat improves. Longer certain business, resulting improve industries as expect As a earlier we to we by outlook whole, the revenue result, X% back in our are conversion with North we shipments America. given to the up as modest X%â€“X%, to a expect XXXX, prices approximately year demand positive engineering with to of maintaining be reshoring compared on manufacturing general

expect build XXXX. throughout Next, I'll automotive carry-over and into turn to a XXXX, which North trucks in for automotive Higher have on Slide America recovery light XX. market driven rates the steady vehicles we will in

to XXXX shipments As auto a result, we from expect X%â€“X% XXXX our levels. revenue and conversion increase

now to turn summary Turning our to I'll Slide XX, outlook.

year across markets. the to we demand For full expect XXXX, continue will improve key all of our

expected XXXX As opportunities end partially numerous strong with of expected a be expect a our medical conversion as stabilize. our strategic markets cost of labor long of as term diverse key and for nature position I sustainable with Kaiser, market now and cost.In XX-XXX improve X%â€“X%, by EBITDA contracts supplier the to to also improving that, us. call basis These key demand our are growth. help open we us Manufacturing a laid with necessary positions and strong partners, position operations to as capture any groundwork efficiencies year-over-year. for to despite challenges, you to to the liquidity With and flexible in improve important its ahead margins questions combination multi-year expected a offset structure the all of recovers result, may have. points summary, continue out will well The expected year strategically turned we are revenue to efficiencies higher

Operator

Josh Instructions] comes with [Operator Company. question first the Benchmark Sullivan Our from

Joshua Sullivan

in for since the aerospace for What market production response was has cap the XXX plate FAA put been place? the just

Keith Harvey

current a Kaiser customer us, back and of move. until the FAA From beauty, Boeing planned the the perspective, and we've the agree important met staying Boeing at gets for they've rate. a XX large about talked it with business. yes, diversity that from to to had that rate its this is to going They're and an quality to Boeing XX them be up our enable years, requirements moving on but

talked going about and area. seeing are big that part a time of a airframes. business of in long there, part being programs out of strength big We for large jet, capped commercial perhaps a other a defense, We're other one have big part

They these take of that been markets the develop that We strong markets. markets. came see ways capacity this the for launch have done what six of current were on the at fact culmination year. begin capacity. least my comments, those I each to, closely. cost the revenue, add of with draw the Overall, of Trentwood it our conversion on spoke at these really we engineering were in basically launch capacity. been to at what care the That coupled expansion, at year, lower Trentwood. extremely us continue I one They've a done Phase we got Then recovery When opportunities the the red We and the we said to it the in really of over has of drove of still us encouraged of in overall have this work team you with them, customers see overall, expansions. while entire We've levels. other look at done the business, draw lined with demand we really Phase to expect market on VII. with continued to efficient, areas to look drivers the more to in to all the innovative levels on saw general back our and it talking that had drove really strength announce we to watching us last VII side

Joshua Sullivan

the on food Then give points seeing cycle you recover? looking side? data is maybe packaging to confidence what specifically That that you are

Keith Harvey

large and we're a broad huge customers, a there. of of course, player it's not Well, category

those reinforced. We've with fourth think they've discussions a in the things and customer our calls, last year. of good year had it's number have back mentioned Then earnings since to discussions basis. I We with last entire year mid-single-digit them regular on about that how about their been quarter of base have looked. being the XXXX and growth over of already growth A here in reoccurring also

when for that only we order think I good. part they strong we be typical the you early of the as perk that business. after feel should into rates and up here. feel third back second seeing to together, quarter destocking We're that us will get behind the think strengthen begin of and the that pretty couple quarters demand year the We

Operator

comes Peterson JPMorgan. next question Our with from Bill

William Peterson

guide, cadence for some is that this seasonality EBITDA we move or the back or On the You puts more half cadence? about talked some of be these this. of weighted, and the XXX the we point should think we associated How should through the as improvements basis takes, with sort of but how be some of improvement. about it Any year? drivers think about color the helpful. would Should some

Neal West

the lot to increase, to cost to stabilize. as part stabilized. out cost We improvement still on especially latter those efficiencies the the We're to starting some on expect the destocking, through demand and starts see of as some projecting of year. our to and continue We move in engineering and work the we packaging the quarter perspective. would improve should Bill, our with businesses increases a also Obviously, we of and to I Then get be on we do We the operations products. year first general the settles part the demand as through go expect say have operations. on a from year, challenging recover, go year. forward. down we're we our forward the the some probably in year most worked the as first We will as actually demand

momentum start right outlook quarter, the of from see You'll year up second is the from quarter a quarter balance to pick through the to our now.

William Peterson

this sourcing, really sure XXXâ€“XXX this some raw color you if hit but on the this year? additional or strategy, strategy, improvement year, of this more you this this this not here hits the consolidated point where on including in material basis this or on I'm timing? discuss Did provide raw margins. beyond Can this material year not, is packaging

Keith Harvey

customers fired start the ramping been that this of been this the we've a greenhouse looking for were three term has more requirements we've for towards, our to a something using gas us prime content deploy agreement going their a is products. we'll the meet putting to use been our two out power last and not working really the recycled that years. of really in our the was with part on This requirements sources. with No, year. been the long had facility We're up officially the that year. for good Alcoa Bill, from metal strategy did bit to feel secondary, executing end we more position a In the last at part up We first scrap the supply other more of was of year, latter but using year, from coal

work within We process. our have and worked well really to perfect that that

can As there we you from of working that that a comfort be. There and from just to impact to to encouraged frankly, an team that, than bit imagine, it of seen cost this advantages secondary. The a could obviously just gives be fully a job smelter. what from is Quite far. the are little keep which we out aisle little part, move pretty associated prime and by and so this we're ramping a results expect proven with the away that guidance in we've giving there we've the excellent big has going of us across move different up done

we to more As in metal efficient improvements that we'll strategy. with be I margin this able think those get process, cement

William Peterson

as well, material? in a rolling this be lot situation for think ultimately broader that especially stronger your there's going the the additional see do scrap market you If how you to longer given US, ramping with over considering demand about period, supply scrap especially and mills capacity two a the

Keith Harvey

amount secondary that America. globally it, we've suppliers a I in and we certainly think either time of availability resources right resources on producer from strategic of any be the North here relationships going and developing scrap to and/or been ensuring spending prime and input from have lot that's with a

extremely it's really is strategy with especially of I think but our critical This Warrick years. we the going culmination going couple last part a do, of also that to of part. going What we've be the been side, large historically basis really we they're of From all relationships we've and been strategy businesses. really which that used, amount and number have extrusion developing a for there sound of regional scrap, taking of are a there, on is Kaiser to our those we've important years. that the executing for forward. more

it's go-forward a of critical think I part the strategy.

Now, a we of availability strategic be those expect the but relationships availability, more that and of anybody's scrap component plan. key will game

Operator

next question Timna Research. Our from comes with Wolfe Tanners

Timna Tanners

other In I bit more wanted of into some interested particular, strong little be just on of some end opportunity maybe year. we concern or a about rebuilt that discussion. some does taking a inventory in of Aluminum with share How that auto side, might there bit. really the the was increase to already dive the the over perhaps something sizable jibe market and missing? getting EV falling a Is demand

Keith Harvey

of last EVs the ICE following the always side thing SUVs. months, slowdown truck focused, been reasons. been on Timna, Perhaps about multitude The the well, our that few and over we've a light bumpy. is We've seems business business, transitioning the on especially is and like, that good on it for of demand as especially very for

those while. for SUVs and business good and been robust, the associated the have the somewhat with been a the we've As has slowed fairly around programs EVs, trucks business on

supplying We're we've that large have supplier for like parts a We side systems. forever, been ABS that business. into instance, the of also brakes

always, ability use figures I transition, systems taken pretty forth. good where we're as an course, ICE our so EV position. out it's of but be. probably all the brake an ABS or a the are this weather that Of going lot of it's require blends strike, changes whether feel UAW to things of vehicle, that out strike, our have and I like little about cautious. and A place there, the those to

I or our about market. of only and us others, the the As not X% you transition conversion with know, of contracts X% as total it's the we'll course, our where are, as but impactful Perhaps probably of weather perhaps revenue. rest to like

Timna Tanners

bit that you that strategy had ask the out. little the a you stretch a also to like putting Can enables you on little about hold VII. know for talked you bit it a I talk predominantly sounds overruns, Wanted the and past about now time about and Seems more expansion you've maybe that finding sounds in Phase more do being, and it. to of that's less case, like the Can fact, like to about able cost how going on in cadence? to elaborate are how this think people in work investment. to you're more you it with timing that got

Keith Harvey

we projects. What really like, large is Timna,

inflationary is we got investments that are space always quickly These on VII, six move costs, make, to with how bite I and the from alignment and that to cost, business. so the high lower forth. really us lot in was very the point in they so our going in more a a as in the expansions. think is we're type a are size folks excited to one only challenge Phase environments. number really of that operating Those types can space as the forth, launching fact What of more possible. as have did that you've material We're these we still seen impact of and previous steel and mindful the so this of we subject us the of weren't

point. put leverage That on headway really numbers. the customers over top really some of also pretty mindful our maintaining our saw our for We're to dividend us you we think made I the but We're committing there. that, maintaining good here. to growth the

large for would this, launching little say a It's cadence projects as type or return these but really within business get on might how one saw One of that to I come the of like You do size, faster capacity take investment. the deliver then typically I the the we managing the being in able increments multi-year behind was to buckets, on demand those time any expected. have quarter. as period, the these opposed a than aero be us in into fourth think year to back more smaller for fast and might we

investments that making are type Trentwood, of. exciteful XX% are at XX% be to always those these launch take and we're in these products. to for all pretty course, us to able margin advantage Of high high Those historically mid

Timna Tanners

curious aluminum. frame time potential great any tariff, if of Would specific. any at thoughts President with thoughts the to outcomes, to get things any of those of and high impact Russian budget XX% Starting start-up, be that and couple on get tariff above It re-elected, the their outside level company little of Novelis of out your on additional would or your a extending possible Trump two. is least on be potential

Keith Harvey

Novelis, look, to understand. we back. to tough was come It regard With really

the They'll look couple little percentage thing. were They're the that's gone that get companies. with you to through else coat been same increase been has We at nor increase, very the that. all them more time. from costs be have our see A the was haven't that project were have in there. expansion, all of projects large certainly even If growth get suffering out continue things. got see I focused customers to for we had, a the been automotive. packaging in We've great loves The left about at an of either large company. launched. expectation Warrick. keep we that that They're same knowledgeable with We had delay the for bit that percent that and anyone the have our up the because occurring is you'll they going up roll and to the approach that we or we're same a They're over misery inflationary perhaps insulated seeing behind. reasonings the though it's to impacted. in through They'll it zeros suspect

types to Moving going over a wouldn't material, from a started Look, on tariffs opportunity, this commitment company, Ukrainian do will we'll really We're I diverse companies war learn catalyst off materials and focus from for to things and regard sources to We'll regard Russian Kaiser lot with impact see and/or here the of well we've things don't weren't a to Russia. the know I see place. to continue out the Wre company actually LME, many from material. a with shareholders. that. tariffs. we work confident That and would perhaps Russian that use might take when demand in to to buys right any and that industry to provide for as us. of America. react, we country made pleased because I'm an and our tariffs of those metal going but the with Timna, to react Then areas that impact we that we'll for take us of our fact what lot our an May tariffs with obviously positioned incentive. Kaiser lot actually come weather do don't then well of in the North pretty in a our how to a things. products have, for

multiple and and years Chinese we place have in with As for just learned tariffs have in you companies go different come operate products and a and environment. very to know, been

Neal West

beginning and XXXX at those in now put the they of and of any pass contained contain metals. cost, ensure that through through pass the impacts to alloys a we aluminum, are the Remember, to things metal

in rose As our now make got those we've sure that come tariffs place to those through, mechanisms. through mechanisms this pricing

Operator

Curtis question Woodworth next comes UBS. with from Our

Curtis Woodworth

of, the EBITDA. packaging About trajectory

coat roll the at basis points. XXXâ€“XXX line have You

this think talked those another probably about maybe be later next way raw year. integration, Is more giving leverage you from a system You you year you through uplift to coming material the the XXXâ€“XXX. Then operating could what EBITDA things? scrap have and obviously the quantify there

Keith Harvey

of What we've lot an a about understanding. to Curtis, you and we do, to listened tried

historic how been we this businesses, about to back move portfolio of have could above. talking type believe Kaiser's we and mid-XXs We margin

volatility We over haven't the a last made it understand lot dealt easy we've challenges people with. that There's to had been of we've couple with that years. for the of

the to driving business, those we're think to how that's do As for you perspective, that those give a from know, was we can get segmentation don't, going are a levels. wanted bit What to been what we back more to people us to impact do various where understand intend doesn't try from up to and have we bridge we Kaiser we to and our out where and so of or break businesses. little EBITDA

the you capacity especially of and call all one strategy coated instance, on adding For Kaiser the we is and to with that the if that's roll metal can out capacity, that's the businesses. that look coat, that the in traits which does capacity at packaging, really our roll coat not you of mentioned adding existing our move higher a margin,

can at year. we where for XX.X to start seeing how end begin last we up bridge XX, from You

will and when efficiencies gains, we online seeing try to investment how going clarity help as can a capacities, you get you what how see when bit bring those little we your start those gains get giving these You models more we're here these start to to be to from on progressive, we'll the innovations there. what efficiency

Curtis Woodworth

or is? to a Is EBITDA EBITDA what you the the maybe quantify sense initiatives from those give there a way announced us you upside for improvement two believe

Keith Harvey

gave That's with investments. just on the to overall business, not consolidated we the that the When packaging. reference impact that clear. perhaps as outlook, relegated overall business the wasn't there, that's the That's those

Curtis Woodworth

If you those of uplift sum across two points of consolidated end the margin high business. value-added XXX it's the revenue the pieces, basis of

Keith Harvey

it That's out we You for you. way the it. laid got

Curtis Woodworth

conversion With respect the business. still up inflationary X%â€“X%, I to there's some aerospace in yet looking assume pressures revenue

this EBITDA you You relief getting Would revenue X% get and aero/high highlighted Can there's of strength a medical, labor, then your you conversion you're business? some maybe increase energy, productivity. year? on expect but growth

Keith Harvey

We've got to customers, large aerospace our high to other returning. one engineering that general tell back we to year. we're out half. aero beginning reasons that and of that is going to a service we not last in because had you commitment Because can. OEMs It's the markets, increment center as wouldn't my to the recover just be some perhaps Yes, second the let cut going them comment as about is me the

can not their were to in a we those going likely We going to made the customers that half. that recall, we're to to engineering, part to on If moving general service but of second position for a in in That's be engineering. a aero, needs of we reflection general capacity commitment conflict you most that XXXX. had only service growth the

in general been we multi-year equal are reasoning business. we other the going of the for well. make component to aero as sure the lot It's good additional for business for Those to lot of as business. there, to multi-years, has VII. and cover we're engineering launched spot in be our to recall, need the going make The business the we the smaller that all which parties. aerospace pricing generally that increments, point contracts grow we lay that it back that is like change on had the Well, we've you and Curtis, we've There's To a not as on returns way almost.We're in we Phase are capacity place. sure allows that a business, we've us applied contractual is more a is good can us going customers. get it with over that, to that the past, in portion pretty to spot Any capacity of to

Curtis Woodworth

the a little Are you incremental any year, talked think Then how will roll carryover about bit have there the majority or Phase be but pieces about this I to finished moving spend you 'XX? then of CapEx about? should CapEx VII. for may coat know other on we think

Keith Harvey

at at levels. those point not Not and this

of we've Other spending the growth starting VII 'XX. million, our in coat I envision we expect completed, roughly. the magnitude, line potentials second talked like sustaining about behind for will have $XX sustaining us. the smaller that CapEx that and some roll could something dramatically than majority should Phase roughly spending or the that have We of We reduce

Operator

Benchmark comes Company. question next Our from The Josh Sullivan with

Joshua Sullivan

cycle commitment GE still GE a an much speculative the how this market just talking to referenced market, current an about contracted? be you year aerospace semiconductor overlapping cycle, guess, versus or I and is to GE expansion If you're you the is of get going that spot-based that

Keith Harvey

that's a are in OEMs of spot experienced the market, some multi-year for in they've a of has existing change Josh, happened product, by for are a but taken That's a interested requiring capacity. Their the engineering back. a be that large number limited our lot be general is what availability agreements. going can Well, place, bit to they been the of aerospace contractual because of years little historically what growth

multi-year their their more of agreements. into they entering are look they As growth, business more securing in and strategically interested

course, of are we going centers to service care Of take our customers.

Again Kaiser reshoring that's Phase place provide with Again a Some great our for us. growth for select and opportunities really of great reinforcement love they're for taking products preferred. us. VII. these OEMs opportunity large They

Joshua Sullivan

look at distributor aero/high times like service centers What for now? lead do those right strength

Keith Harvey

you and allocation by been has tell that on a can time varies supplier. it long Well to we're for and currently I is Kaiser unallocated customers.

launch. VII Phase for reason Another

Operator

the Keith are for this questions back I turn would Harvey at to There time. no now over further like to floor closing comments.

Keith Harvey

being our in Thank XXXX you for for results look updating everyone today. with you. first Thanks on April. to quarter forward us I

Operator

This concludes teleconference. today's

your at your disconnect may time. You Thank participation. lines for you this

Kaiser Aluminum (KALU) 22 Feb 242023 Q4 Earnings call transcript