Novelis (Novelis) Q1 2027 earnings summary

Executive summary

• Adjusted EBITDA rose 24% year-over-year to $516 million, with per ton EBITDA up 30% to $563, reflecting strong operational performance, insurance recoveries from the Oswego fire, and resilient demand for aluminum products.

• Net income attributable to the common shareholder increased 71% year-over-year to $164 million, driven by higher EBITDA and favorable metal price lag; excluding special items, net income was $265 million, up 128%.

• Oswego hot mill restarted in June 2026 after two major fires, with production ramping up and most cost impacts already realized; $300 million in insurance recoveries received to date.

• Bay Minette commissioning is underway, with commercial shipments expected in Q1 FY 2028 and ramp-up to full capacity over 18-24 months.

• Underlying business performance remained strong, supported by a high-recycled-content business model and positive market trends.

Financial highlights

• Net sales increased 23% year-over-year to $5.8 billion, primarily due to higher aluminum prices despite a 5% decline in rolled product shipments to 916 kt, impacted by Oswego fires.

• Adjusted EBITDA per ton, excluding the $18 million net positive fire impact, was $525.

• Over $225 million in run-rate cost savings achieved under the global efficiency program, targeting $350-$400 million by end of FY 2028.

• Net cash used in operating activities: outflow of $455 million vs. inflow of $105 million prior year.

Outlook and guidance

• Market demand remains broadly stable, with long-term beverage packaging growth expected at 4% annually.

• Full-year capital expenditures expected at $2.1-$2.4 billion, including $350 million for maintenance, mainly for Bay Minette.

• Free cash flow positive position anticipated by end of FY 2027 as Oswego normalizes and Bay Minette ramps up.

• Net leverage expected to fall below 4x by year-end, down from 4.5x in Q1.