Novelis, Inc. Business Report FY ended Mar. 2016
Financial Overview |
(in million USD) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Factors | |
| Overall | ||||
| Net Sales | 9,872 | 11,147 | (11.4) | 1) |
| Net Income | (38) | 148 | - | - |
| Segment sales | ||||
| North America | 3,266 | 3,483 | (6.2) | 3) |
| Europe | 3,223 | 3,783 | (14.8) | 4) |
| Asia | 1,992 | 2,340 | (14.9) | 5) |
| South America | 1,575 | 1,850 | (14.9) | 6) |
Factors
1) Net Sales
-In the fiscal year ended March 31, 2016, the Company’s net sales decreased 11.4% to USD 9,872 million. Despite an increase in flat rolled product shipments, sales decreased due to a decrease in average base aluminum prices and a decrease in local market premiums.
2) Net Income
-The Company had a net loss of USD 38 million for the fiscal year ended March 31, 2016. Decreases in net sales from declining base aluminum prices and local market premiums, restructuring and impairment costs of USD 48 million, and negative impacts due to weakness in European currency all contributed to the decrease in income. This was despite tighter cost control measures employed by the Company.
3) North America
-Net sales in North America decreased by 6.2% to USD 3,266 million in the fiscal year ended March 31, 2016. An increase in automotive shipments was offset by lower aluminum prices, lower market premiums and a decrease in can and specialty shipments.
4) Europe
-The Company’s Europe segment had sales of USD 3,223 million in the fiscal year ended March 31, 2016, a decrease of 14.8% from the previous year. Lower average base aluminum prices, lower local market premiums, and a decrease in specialty and non-flat rolled products contributed to the decrease in sales, despite higher shipments in can and automotive applications.
5) Asia
-In the fiscal year ended March 31, 2016, sales in the Company’s Asia operations decreased by 14.9% from the previous year to USD 1,992 million. Decreases in average aluminum prices and specialty products shipments were partially offset by higher can and automotive shipments.
6) South America
-The Company’s South America operations had sales of USD 1,575 million in the fiscal year ended March 31, 2016, a decrease of 14.9% compared to the previous year. This was caused by lower average aluminum prices and lower specialty and non-flat rolled products shipments.
Contracts
-The Company announced it is supplying high-strength, military-grade, aluminum for the upcoming Ford F-Series Super Duty lineup of trucks. Following the launch of the 2015 Ford F-150, the aluminum-intensive F-Series Super Duty trucks also feature high-strength, military-grade, aluminum alloys in the body and bed, reducing overall vehicle weight by up to 350 pounds. The Company will produce the aluminum sheet for the F-Series Super Duty trucks at its plant in Oswego, New York, U.S. The plant is in the process of commissioning its third automotive sheet finishing line, which has been contracted to support production of the Super Duty and will begin shipping product in Spring 2016. (From a press release on December 15, 2015)
Awards
-The Company announced that it has received the FAW-Volkswagen (FAW-VW) Excellent Supplier Award for the second consecutive year in 2015. The Company has assisted FAW-VW with the development of aluminum parts for their Audi models in China. (From a press release on February 8, 2016)
-The Company announced that its subsidiary, Novelis China, won the "2014 Excellent Supplier" award from FAW-Volkswagen (FAW-VW). Novelis China has been engaged in a strategic partnership with FAW-VW by officially supplying aluminum materials since 2012. Four Audi models produced by FAW-VW (Audi A6L, Audi Q3, Audi Q5 and Audi A3) have used the Company’s aluminum parts. (From a press release on January 15, 2015)
R&D Expenditure |
(in million USD) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Overall | 54 | 50 | 45 |
R&D Structure
-As of March 2016, the Company has approximately 330 employees dedicated to research and development.
R&D Facilities
-The Company’s automotive research and development centers are located in Kennesaw, Georgia, U.S. and Sierre, Switzerland.
Patents
-As of March 2016, the Company has approximately 180 patents and patent applications.
Technological Alliance
-The Company and Henkel Adhesive Technologies announced the signing of a long-term agreement to collaborate on the development of advanced bonding technologies for the use of aluminum in high-volume vehicles. The first product to launch as a result of this partnership is BONDERITE M-NT 8453, an aluminum surface pre-treatment coating. BONDERITE M-NT 8453 is a chrome-free conversion coating that improves the adhesion and durability of bonded joints in vehicle structures as well as paint finishes on exterior components. BONDERITE M-NT 8453 was jointly developed by scientists at Henkel's Madison Heights, Michigan facility and at the Company’s Global Research and Technology Center in Kennesaw, Georgia. The product is commercially available today and is currently being qualified with several global automakers. BONDERITE M-NT 8453 is initially being manufactured at Henkel's Warren, Michigan, plant and will be offered by the Company to all of its global customers. (From a press release on March 5, 2015)
Product Development
Aluminum alloy made primarily of recycled content
-The Company announced that its RC5754 aluminum alloy, a new automotive product designed to contain up to 75% recycled content, has been successfully integrated into the structural components of high volume production passenger vehicles. RC5754 was developed with Jaguar Land Rover and serves as a key component of Jaguar's REALCAR (REcycled ALuminum CAR) project. First introduced in the new Jaguar XE, the RC5754 alloy will also be featured in all new and legacy Jaguar Land Rover models. (From a press release on February 11, 2016)
High-strength aluminum alloy
-The Company announced that it has developed a new aluminum alloy material for automotive safety components called the Novelis Advanz 7000 series. The new material offers a high strength level that is two or three times larger than that of conventional aluminum materials used in automobiles. The new aluminum alloy is suitable for use in bumpers, collision prevention rings, and door beams. (From news releases issued by multiple sources on August 17, 2015)
Capital Expenditure |
(in million USD) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| North America | 143 | 122 | 147 |
| Europe | 146 | 257 | 241 |
| Asia | 35 | 85 | 198 |
| South America | 39 | 53 | 117 |
| Eliminations and others | 7 | 1 | 14 |
| Total | 370 | 518 | 717 |
-The decrease in capital expenditures in the fiscal year ended March 31, 2016 compared to the previous fiscal year is primarily due to the Company’s larger projects that have either been recently commissioned or are in the commissioning phase.
-The Company’s capital expenditures for the fiscal year ended March 31, 2015 were primarily focused on its automotive sheet finishing expansions in the U.S. and Germany, having commissioned a third line at the Oswego, New York facility and a second line in Nachterstedt, Germany.
Investments outside U.S.
-The Company announced the opening of a new aluminum automotive heat treatment line in Nachterstedt, Germany, to serve European and global automotive customers. Located adjacent to the Company’s existing rolling mill and aluminum recycling center, the USD 85 million investment will increase production capacity by 120,000 metric tons of automotive sheet annually and will create 56 new jobs. At full production, this line will increase the Company’s European automotive sheet capacity to 350,000 metric tons per year and will provide global customers with high-quality automotive sheet, including the Novelis Advanz portfolio of alloys used in lightweight vehicle structures and body panels. (From a press release on November 18, 2015)