Alcoa (AA) Investor presentation summary

Strategic initiatives and acquisitions

• Announced acquisition of South32's bauxite, alumina, and aluminum assets for $4.1B upfront, with a total implied enterprise value of $4.7B, expected to close in 1H27 and deliver $900M in synergies, including $50M in cost savings within 12 months.

• Acquisition strengthens supply chain resilience, enhances market positioning, and is accretive to earnings per share and cash flow.

• Locked-box mechanism and contingent value right (CVR) up to $750M over four years, with revenue sharing if index prices exceed agreed strike prices.

• S&P and Moody's affirmed credit ratings post-acquisition, with leverage expected to remain ~2.0x.

Financial performance and outlook

• 2Q26 revenue reached $3.97B, with adjusted EBITDA of $901M and adjusted EPS of $2.12, driven by higher metal prices and aluminum shipments.

• Cash from operations was $608M and free cash flow $422M in 2Q26; adjusted net debt at $1.4B, within target range.

• YTD return on equity at 26.4%, highest since 2022; days working capital improved to 46 days.

• FY26 outlook includes alumina production of 9.5–9.6 Mmt and aluminum production of 2.4–2.6 Mmt.

Market and operational highlights

• LME aluminum prices and regional premiums remain strong, supported by low inventories and Middle East supply curtailments; global market deficit expected for 2026.

• Alumina prices stable despite Middle East disruptions; Chinese demand remains robust, while ex-China market is more subdued.

• Operational improvements include record production in 1H26, higher value-add product volumes, and successful labor agreements in key regions.

• Capital allocation focused on maintaining a strong balance sheet, disciplined growth, and returning cash to stockholders.