Alcoa (AA) investor relations material

Strategic Priorities and Operational Focus

• Emphasis on safe operations, stability, and continuous improvement, with improved safety performance in 1Q26 and strong Q1 results.

• Progressing Western Australia bauxite mining approvals, monetizing closed and curtailed assets targeting $500 million–$1 billion, and completing the San Ciprián smelter restart.

• Recent $65 million investment in Norway to expand recycling capabilities, addressing European customer needs for recycled content.

• Ongoing execution of strategic initiatives and maintaining agility despite global industry volatility and Middle East conflict.

• Issued notice to redeem remaining 2028 Notes, supporting balance sheet strength.

Financial Performance and Capital Allocation

• 1Q26 net income rose to $425M, with adjusted EPS at $1.40 and adjusted EBITDA at $595M, driven by higher metal prices despite lower seasonal volumes.

• Return on equity reached 21.9% in 1Q26; cash balance remained strong at $1.4B, though working capital build led to negative free cash flow of $298M.

• Capital allocation focused on maintaining $1.0B–$1.5B adjusted net debt, sustaining operations, and returning cash to stockholders, with $27M in 1Q26 dividends.

Market Dynamics and Industry Outlook

• Middle East conflict has removed 2.5+ million metric tons of aluminum capacity, inflating prices and premiums in Europe and North America.

• Alumina market is oversupplied by about 13 million metric tons, with some Chinese capacity coming offline and weak global alumina prices.

• Midwest and Rotterdam premiums have risen sharply, with Midwest at $1.16/lb ($2,400–$2,500/ton), driven by supply disruptions and CBAM.

• Demand remains strong, with order books improving and customers prioritizing supply security over price sensitivity.

• North America and Europe are highly exposed to Middle East supply disruptions, with significant increases in regional value-add product premiums.