Alcoa Delivers Strong Value-Add Revenue Growth And Improved Upstream Portfolio, Sets New Business Targets At 2013 Investor Day

Alcoa (NYSE: AA) today announced new three-year business targets through 2016, building on the Company’s strong execution of its strategy to grow its value-add businesses and lower the cost structure of its commodity business. Alcoa executives confirmed their new targets, and reviewed achievements against existing three-year goals, at the Company’s annual Investor Day event in Cleveland, Ohio.

For the 2010 to 2013 period, Alcoa is on track to generate an additional combined $1.8 billion in revenue through innovation and market share gains at historically high profitability levels in the mid and downstream businesses. The Company also reported a strengthened commodity business, with lower cost positions in both alumina and aluminum.

“Alcoa’s strategy to grow our value-add businesses while lowering the cost base of our commodity business is working,” said Alcoa Chairman and CEO, Klaus Kleinfeld. “We have made significant strides to reposition the Company and are announcing a clear road map to further strengthen our competitive position while driving value-add growth at historic profitability levels.”

The following business performance highlights for the 2010 to 2013 period were confirmed:
  • Engineered Products and Solutions, Alcoa’s downstream business, is on track to generate $1 billion incremental revenue from share gains through innovation, and grow adjusted EBITDA margins on an annualized basis to a record high of 21.9 percent in 2013, up from 16.8 percent in 2010.
  • Global Rolled Products, Alcoa’s midstream business, is expected to generate $800 million incremental value-add revenue at historically high average adjusted EBITDA levels for the 2010 to 2013 period.
  • Global Primary Products, Alcoa’s upstream business, has significantly lowered its cost position in both aluminum smelting and alumina refining, having now reached the 43rd percentile on the global aluminum cost curve, and 27th percentile on the global alumina cost curve. These shifts represent an 8 point movement and 3 point movement respectively since 2010.

The following new business targets were announced for the 2013 to 2016 time period:

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