Financial Overview

(in million USD)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	Rate of Change (%)	Factors
Overall
Net Sales	9,767	9,812	(0.5)	1)
Net Income	104	203	(48.8)	-
Segment sales
North America	3,050	3,405	(10.4)	2)
Europe	3,280	3,181	3.1	3)
Asia	1,876	1,762	6.5	4)
South America	1,588	1,391	14.2	5)

Factors
1) Net Sales
-In the FY ended March 31, 2014, the Company had USD 9,767 million in net sales, which was a decrease of 0.5% from the previous year. The slight decrease in sales was caused primarily by a 10% decrease in average aluminum prices and lower sales in Europe due to the Company's sale of three plants. These factors were offset by higher sales to the automotive and can markets and favorable currency translations.

2) North America
-Sales in North America decreased 10.4% in the FY ended March 31, 2014 to USD 3,050 million. Factors contributing to the decrease in sales included lower can volumes and lower aluminum prices. These losses were slightly offset by increased sales in the automotive and light gauge market.

3) Europe
-The Company's operations in Europe had sales of USD 3,280 million in the FY ended March 31, 2014, an increase of 3.1% over the previous year. Increased shipments of products for the automotive and can segments were partially offset by lower aluminum prices, and decreased shipments in light gauge and industrial products.

4) Asia
-In Asia, the Company's sales for the FY ended March 31, 2014 increased 6.5% to USD 1,876 million due to increased shipments of its can products. This was partially offset by lower shipments of foil stock products and lower aluminum prices.

5) South America
-The Company's sales in South America for the FY ended March 31, 2014 was USD 1,588 million, an increase of 14.2% from the previous year. The increase in sales was caused by an increase in overall product volumes sold and was slightly offset by lower aluminum prices.

Business Partnership

-The Company and ThyssenKrupp Tailored Blanks announced the signing of a cooperation agreement for the development of tailored aluminum blanks. Tailored blanks allow individual aluminum sheets of different grades, thicknesses and coatings to be joined to produce customized stamping blanks. These stamping blanks can be used by car makers for the production of lightweight body parts such as doors and hoods, and structural components including cross members and longitudinal members. (From a press release on May 22, 2013)

Outlook

-In the fiscal year ending March 31, 2014, 9% of the Company's products were dedicated to the automotive market. The Company plans to increase that percentage to 20% by the fiscal year ending March 31, 2017.

R&D Expenditure

(in million USD)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
Overall	45	46	44

R&D Structure

-As of March 2014, the Company has approximately 140 employees dedicated to research and development.

R&D Facilities

-The Company has six satellite research and technology centers in the following locations:

• Kennesaw, Georgia, US
• Spokane, Washington, US
• Kingston, Ontario, Canada
• Goettingen, Germany
• Sierre, Switzerland
• Ulsan, Korea

Capital Expenditure

(in million USD)

	FY ended Mar. 31, 2014	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012
North America	147	183	108
Europe	241	80	73
Asia	198	251	151
South America	117	197	177
Eliminations and others	14	64	7
Total	717	775	516

 

Investment in US

-The Company announced plans to invest approximately USD 120 million to install a third aluminum automotive sheet finishing line at its plant in Oswego, New York, US. The finishing line will have the capacity to manufacture 120,000 metric tons per year and will create 90 new jobs at the Oswego plant. When combined with the expansion planned at the Company's Nachterstedt plant in Germany, the Company will have an automotive sheet capacity of 900,000 tons per year. Both expansions are expected to be completed in late 2015. (From a press release on December 17, 2013)

-The Company commissioned a USD 200 million expansion of its rolling operations in Oswego, New York, US. The expansion increased the Company's North American capacity for producing aluminum sheet for the automotive industry by 240,000 tons, which was five times the Company's capacity in the region prior to the expansion. 100 new jobs were added at the Oswego plant as a result of the expansion. (From a press release on October 24, 2013)

Investment Outside US

<Germany>
-The Company announced plans to invest approximately USD 85 million to install a new aluminum automotive sheet finishing line at its plant in Nachterstedt, Germany. The finishing line will have the capacity to manufacture 120,000 metric tons per year and will create 120 new jobs in Nachterstedt. Completion of both this expansion and the expansion at Oswego, US is expected to occur in late 2015. Including the operations at both expansions, the Company is expected to have an automotive sheet capacity of 900,000 tons per year. (From a press release on December 17, 2013)

-The Company announced that its Novelis Europe division has qualified its rolling and finishing facility in Gottingen, Germany to produce automotive aluminum sheets. The Company currently produces automotive sheets in Europe at its Nachterstedt, Germany and Sierre, Switzerland facilities. Initially, 20,000 tons will be manufactured per year at the Gottingen plant. A planned second expansion phase will increase annual capacity to 40,000 tons. (From a press release on May 24, 2013)

<UK>
-The Company completed the expansion of its recycling plant in Latchford, Warrington, UK. EUR 13.6 million was invested into the plant to increase its recycling capacity by a third to 220,000 tons processed a year. With the expansion, the Latchford plant is now Europe's largest closed-loop recycling plant for automotive aluminum rolled products. The expansion is expected to create over 30 jobs and will provide considerable savings in greenhouse gas emissions. (From a press release on November 4, 2013)

<Korea>
-The Company announced the completion of a two-year, USD 400 million expansion program in South Korea. The expansion of its Yeongju and Ulsan plants increases the Company's production capacity in the region by more than 50% to approximately one million metric tons of aluminum sheet per year. The Company looks to utilize this additional capacity to expand into new markets in the region, such as the automotive market. (From a press release on October 10, 2013)

<Brazil>
-The Company announced the opening of its expanded aluminum rolling operations in Pindamonhangaba, Sao Paulo, Brazil. The expansion increases production capacity at the plant by more than 50% to over 600,000 metric tons of aluminum sheet per year. The USD 340 million investment represents the largest capital expansion by the Company in South America during the past decade. (From a press release on July 30, 2013)