As a reminder, this conference is being recorded Wednesday, August 3rd, 2022. I would now like to turn the conference over to Megan Colcord, Director of Investor Relations for Novelis. Please go ahead. Thank you, Chris, and good morning or evening, everyone. Welcome to Novelis's first quarter fiscal year 2023 earnings conference call. Hosting our call today is Steve Fisher, our President and Chief Executive Officer, and Dev Ahuja, our Chief Financial Officer. Following the presentation, the call will be open to analysts and investors for questions. This conference call is being broadcast on the Internet at novelis.com in the Investors section. A replay of this call will also be available on our website. Before I turn the call over to Steve, let me remind you that today's earnings release and presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the Securities and Exchange Commission. Today's presentation also includes certain non-GAAP measurements. Reconciliation of these measurements is provided in the financial statements included with our earnings release, as well as in the appendix of our presentation. Now let me turn the call over to Steve. Thanks, Megan. Good morning or evening, everyone, and thanks for joining us today. I am so pleased to report a record first quarter after a record fiscal year. We delivered a sharp improvement in adjusted EBITDA per ton to a record $583, demonstrating our team's ability to capture strong market demand and deliver solid operational performance after a tough fourth quarter. Global aluminum flat roll markets remain very robust across the board, driving favorable market pricing opportunities that, together with our robust hedging and recycling strategy, is helping us mitigate continuing cost challenges. These challenges are broad, steep inflation and input costs, global supply chain and logistics disruptions. While it appears to be improving, still some uneven OEM production in the automotive segment, driven by semiconductor shortages. More recently, the weaker EUR and higher energy costs from geopolitical instability in Europe remain headwinds. We are confident in our ability to continue navigating and mitigating these headwinds and continue to deliver strong financial results while also executing our growth and sustainability strategy. Turning to slide four, Novelis has firmly established itself as a committed industry leader and business partner to our customers on sustainability. As an enabler of the circular economy, aluminum is a material of choice for our customers today and in the future, and Novelis is committed to leading the decarbonization of the aluminum industry. This can be accomplished by adopting low carbon and low energy production processes, designing high recycled content alloys and reducing the number of alloys to ease recycling, optimizing quality and sorting of materials at end of life, and fostering a circular economy with increased recycling. These will require partnering with companies throughout the entire value chain, from suppliers to customers to peers all across the aluminum industry. Over the last few months, we have taken a number of actions in support of this endeavor through partnerships and innovation. At the end of May, Novelis took an important step in accelerating the decarbonization of the aluminum industry by joining the First Movers Coalition. The FMC launched in 2021 during the United Nations Climate Change Conference, with a focus on decarbonizing eight hard-to-abate sectors. Novelis will help lead this by being one of the companies creating a demand for clean energy technologies, targeting to drastically reduce carbon emissions in the primary aluminum manufacturing process. By joining the FMC, Novelis has pledged to purchase 10% of its primary aluminum from suppliers with near zero carbon emissions by 2030. The pledge is... The pledge also includes an assurance that by 2030, at least 50% of all aluminum Novelis uses is from recycled sources, a metric we have already surpassed, with closer to 60% of our inputs coming from recycled sources, and which we expect will continue to grow. We also entered into a strategic partnership with Sortera Alloys, an innovative industrial scrap metal sorting company. Novelis will utilize Sortera's advanced sorting technologies to recycle higher amounts of both automotive post-production and post-consumer scrap. This is an important step, particularly in the automotive space, to help in closing the loop at the end of vehicle lives. Last week, we received certification by the Aluminum Stewardship Initiative, an organization that fosters responsible production, sourcing and stewardship of aluminum at three of our North American plants. We will continue working to achieve ASI certification at all of our plants, but pleased now that we have recognized ASI performance certification at 18 out of our 33 plants across all four regions in which we operate, including all plants producing material for the beverage can market. We continue to develop innovative, high-recycled content alloys for customers who desire more sustainable solutions, like Ball Aluminum Cup, Nespresso coffee capsules, and our recently released evercycle product of certified 100% recycled content alloys for cosmetic packaging. The new alloy offers an infinitely recyclable solution compared to plastic alternatives for the global cosmetics industry. We are taking meaningful actions today to foster a circular economy. Importantly, as we enter a significant growth phase for the company, all future major investments, such as our new greenfield mill in the U.S., will be low-carbon facilities. I'd now like to turn the call over to Dev for a detailed review of our quarterly financial results. Dev? Thank you, Steve. Let's start with a review of first quarter results on slide five. Net income from continuing operations was up 1% over the prior year to $307 million in Q1. Excluding tax-affected special items, as outlined at the end of today's earnings press release, net income from continuing operations increased 18%, mainly driven by higher underlying adjusted EBITDA, unrealized derivative gains, and a lower tax provision in the current year, partially offset by a tax litigation gain benefiting prior year net income. Net sales increased 32% to $5.1 billion, primarily driven by higher aluminum prices. Total flat-rolled product shipments were 962 kilotons, 1% lower than prior year shipments of 973 kilotons. Demand remains strong in all our end markets. Shipments were constrained by ongoing supply chain disruptions, including a Korean truckers strike and COVID lockdowns in China in Q1. Adjusted EBITDA grew 1% to a record $561 million. Let me remind you that the prior year first quarter EBITDA included a $47 million one-off gain related to a favorable decision in a Brazilian tax litigation. Excluding this gain from the prior year, underlying EBITDA increased 10% year-over-year, and we achieved a record high adjusted EBITDA per ton of $583. Turning to the EBITDA bridge on slide seven, the 1% decline in shipments resulted in a $13 million negative impact to EBITDA. Favorable price and mix was a significant contributor to the improvement year-over-year at $162 million. This is mostly driven by our ability to secure better market pricing in a strong demand environment, mainly in can and specialties, as well as our ability to negotiate BPI and other inflationary cost pass-throughs. We also benefited from favorable product mix, driven by higher automotive and aerospace shipments. The increase in operating costs is a factor of broad inflationary cost pressures, but more specifically, energy costs. These costs were largely offset by favorable recycling benefits as a result of high aluminum prices. Currency was a $15 million headwind in Q1, mainly unfavorable translation in our European segment due to the weaker euro. The negative other column here largely reflects the $47 million prior year Brazilian VAT tax litigation benefit. Let's turn to slide 8 and Q1 performance year-over-year by segment. North America shipments increased 8% year-over-year to a new quarterly record due to strong can demand and improving automotive shipments as some semiconductor constraints at our largest customer eased versus the prior year. Adjusted EBITDA rebounded sharply off Q4, recovering from internal supply chain disruptions and capacity constraints, and increased 32% versus the prior year. The improvement year-over-year is due to a more favorable pricing environment and metal benefits, partly offset by inflationary cost pressures. Europe shipments were down 3%, as strong demand for can and improving aerospace shipments were offset by lower automotive and specialty heat exchanger shipments due to ongoing semiconductor chip shortages. EBITDA was down 18% versus the prior year, driven mainly by unfavorable foreign exchange translation and inflationary cost pressures. Cost is impacted mainly from the unhedged portion of energy requirements at our German plants, driven by the Russia-Ukraine conflict, partially offset by a favorable market pricing environment, cost pass-throughs, and metal benefits. Turning to slide nine, Asia shipments were down 4%. Can and aerospace shipments rose on strong demand, but were constrained by supply chain disruptions, including a national truckers strike in Korea during the quarter. Automotive shipments were also impacted by significant COVID-related lockdowns at our customers' facilities in the quarter. Despite these challenges, EBITDA was up 7% due to a favorable pricing environment, favorable product mix and pricing, and metal benefits more than offsetting inflationary cost pressures. South America shipments were down 6%, mainly due to timing of a planned maintenance shutdown. Reported EBITDA is down 19%, but excluding the $47 million tax litigation benefit in the prior year, underlying EBITDA increased 7%. This improvement is driven by favorable pricing, including PPI pass-throughs, as well as metal benefit and favorable currency, partially offset by higher costs due to inflation. Now let's turn to cash flow on slide 10. Q1 adjusted free cash flow from continuing operations was an outflow of $72 million compared to an outflow of $30 million in the prior year. We are seeing the benefits from our refinancing actions on interest and lower tax paid this year due to timing of tax refunds in the quarter. This is offset by less favorable metal price lag compared to the prior year, when aluminum prices were rapidly accelerating. Our net leverage ratio remains below our target at 2.2 times, and we reported a strong liquidity position of $2.4 billion as of June 30th. We are in a very strong position entering our next ambitious capital expenditure phase to meet our customers' sustainability-driven growth plans. We continue to anticipate fiscal 2023 total CapEx to be between $1.3 billion and $1.6 billion, but more likely to be on the lower end of this range. I'd now like to turn the call back over to Steve. Thanks, Dev. Turning to our market outlook on slide 12. Near-term demand trends generally remain quite strong across the end markets, which we participate. Beverage can demand remains very strong now and into the foreseeable future, driven by the secular change in demand for infinitely recyclable aluminum as consumers increasingly prefer more sustainable packaging options. In automotive, the mid to long-term outlook also remains robust, supported by light weighting for fuel efficiency, performance, and electric vehicle range, along with high levels of pent-up vehicle demand. Semiconductor shortages impacting the automotive industry appear to be easing, and we are prepared to respond quickly to higher customer production, but elements of uncertainty remain due to continued supply chain disruptions. The near-term order book for specialty products also remains strong, and demand for the premium aerospace sheet for OEMs continues to improve off last year's low levels. Turning to slide 13. Amid this backdrop of strong demand for both the near and long term, Novelis is embarking on a multi-year transformational organic growth investment period to further strengthen our position as the global leader in developing sustainable and innovative aluminum solutions for our customers. We have identified over $4.5 billion worth of investment opportunities, of which approximately $3.4 billion of specific capital expansion projects are underway. This includes a 600 kt fully integrated rolling mill in Bay Minette, Alabama. This $2.5 billion plant will be a highly efficient, low-carbon plant of the future and is expected to begin production in 2025. Work is beginning at the site, and commercial contracting is progressing at terms that support our mid-teens investment return. We also have underway a state-of-the-art automotive recycling plant in Guthrie, Kentucky, which broke ground in May, a hot metal deballing project in Oswego, New York, a recycling expansion at our joint venture in Ulsan, South Korea, and an automotive integration and expansion project in China. While this China project has faced some delays since we initially announced it about a year ago, we now estimate we will begin the project this fall. I look forward to updating you all on these projects as work progresses. As you can see, a significant portion of the initial investment is focused on the North American market. Demand for quality, sustainable aluminum sheet far outstrips domestic supply in key end markets in which we participate, even after our investments are complete. We are extremely confident in our ability to execute our strategy to add needed capacity for our customers in North America and around the world, leveraging our first-mover advantage and successful track record in recycling, quality, and innovation. Novelis delivered another strong quarter after a record year last year, overcoming operational challenges in Q4 to deliver a record $583 adjusted EBITDA per ton in Q1. Our team continues to navigate a number of headwinds, supply chain challenges, inflationary cost pressures, geopolitical instability, driving elevated energy costs and currency volatility, which continue to limit our visibility. We will continue to attempt to mitigate these headwinds through our robust hedging strategy, increased pricing, and continued operational and portfolio optimization. We continue to see strong demand for sustainable aluminum solutions across end markets for both the near and long term. As such, our focus is on executing a multi-year transformational investment period to grow with our customers and achieve our ambitious sustainability goals, while continuing to deliver robust operational and financial results. With that, we're happy to take any of your questions. Ladies and gentlemen, if you would like to register for a question, please press the one followed by the four on your telephone. You will hear a 3-tone prompt to acknowledge your request. If your question has been answered and would like to withdraw your registration, please press the one followed by the three. If you're using a speakerphone, please lift your handset before entering your request. Once again, to register for a question, please press the one followed by the four. One moment, please, for the first question. The first question comes from the line of Sumangal Nevatia from Kotak. Please go ahead. Yeah, thanks for the opportunity. Congratulations for a very strong quarter. My first question is on the overall end market outlook. I mean, we see the near-term outlook in the presentation not changing much in the last two or three quarters. Now, given the backdrop of growing economic headwinds in the U.S. and Europe, I mean, what sort of impact do we see in the medium term across our business segments? Yeah, so, in the near term, next couple of quarters, we continue to see a very strong demand, based on the order books that we see. I think, you know, when you piece it apart, market by market, you know, the can market, it is demand that we've been talking about for quite some time, a shift towards more sustainable solutions. That's gonna continue. We continue to see that. I also think you have to understand that 60% of our portfolio, that beverage packaging, is also very recessionary resistant, and we've seen that time and time again. The second end market is automobiles, and again, the trends that we've been talking about for quite some time do continue. I think in the short term, the pent-up demand associated with vehicles that have not been able to be delivered due to semiconductor shortages over the last year, one and a half, is gonna continue to drive near-term demand in the automotive market. Again, you can look at some of our largest customers' comments and their bullish remarks on their earnings calls as well that support that. Aerospace, another market that's recovering, and we're seeing that on a year-over-year basis for aerospace plate. Pent-up demand to travel, need to travel for business requirements is, I'm sure everyone has seen, the overall situations in the overall travel market itself, continues to drive order books associated with aircraft as well. Again, we still see strong order books across our specialties business. Of course, this is one area where rising interest rates could have some impact on building in construction markets in Europe and in the U.S., so we're monitoring that. As we sit here today, the order book looks strong. We're quite optimistic about the overall market demand in the near term, and certainly the longer-term trends continue. Got it. Thanks, Steve. The second question is on the scrap price. Now, given the very sharp contraction in the all in aluminum prices, I mean, what sort of impact do we see in contracting scrap spreads on our margins in the coming quarters? Any quantification will be great. Yeah. Sumangal, let me just give you an overview of what's really happening in the scrap market. As we stand here, we see some tightness in markets in the two Americas, North and South America. Spreads are relatively tighter in these two markets. We are in a pretty good place in Asia and in Europe on availability and, you know, spreads as well. They are pretty steady and generally positive. The thing is, the Americas, where spreads are tighter. Let me also make another point here, that as our end markets grow and as we, you know, sort of invest more in recycling, we have to be ready that there will be a time lag between the flow of scrap going up and our need for scrap. The need comes first, the increase in flow comes later. In general, we just need to be prepared for some tightness overall as our requirements grow. Part of it is also the work that we need to do, and we are doing, particularly in the U.S., where recycling rates are low and, you know, we are working with governments, we are working with local administrations to promote, you know, circularity legislations, deposit legislations, we are working on end of life. We take it upon ourselves that over time, we need to also not just invest in recycling, but also do things that will improve the flow of scrap. This is just the big picture on scrap. The other thing that you just need to keep in mind, to say the obvious, that between last quarter and starting from the end of June, metal prices have eased off a bit. That has an impact on the scrap on the scrap margin. This is just an overall overview. Despite the tightness, you see that we delivered a very, very strong EBITDA and EBITDA per ton in this quarter. That's just something to note. Yeah, got it. Got it, Dev. Thanks. If I can just squeeze in one small question. This is more on a big picture. I mean, we were quite surprised by the announcement of Steel Dynamics and entry into the FRP industry with a $2.2 billion CapEx. I just want to know your thoughts on this development, and if you could just explain a bit, I mean, what sort of entry barriers are there in our industry? I mean, what is the risk of new entrants in future, given how favorable the market dynamics are for us, for the FRP and more for the beverage can industry? Yeah. I think it validates what we've been talking about with the growth in the aluminum market, both globally, and particularly, the underserved market in the North America space, both for beverage packaging, but for all types of products, right? It doesn't surprise us that there's other investments that are coming into this space. We stay very confident in our ability to execute what we put in front of us, at Bay Minette. You know, our long-standing track record associated with being able to invest, execute on projects and successfully ramp up with our customers that we've had decades of relationships with and have really moved into strategic relationships with, gives us all the confidence in the world that we're on the right track, and aluminum is winning versus other materials in the marketplace. So, you know, from a, from seeing others invest, not a surprise. You know, quite frankly, the aluminum market's gonna need it based on the growth that we're seeing. Yeah, got it. Back with you. Thanks a lot, and all the best. Our next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, good morning. A few questions from my side. First, on the cost inflation that we are seeing, whether in terms of energy cost or in terms of some of the inputs, magnesium, lithium, et cetera, are we trying to impose any kind of, you know, pricing mechanism, either PPI rate linked or any energy surcharge, in our existing contracts? We do have a decent amount of PPI coverage in our contracts. Part of the reason, a good reason, why we are able to deliver these kind of results in this highly inflationary environment is exactly that. There are two things happening. One, that we are able to pass on a very decent portion of our cost. For example, things like freight, you know, I mean, we are able to pass on well, around 50%, if not more, of some of these. On top of that, we are also getting the right pricing to take care of these inflationary conditions. Two things are happening together. One is that we are that we are getting good pricing in the current constrained markets, and second is pass-throughs. You see that in the EBITDA bridge that we presented. Now, specifically, are we going to have energy add-on, specific cost pass-through around energy? No. Energy, we are absorbing it, and despite absorbing that, we are able to, you know, sort of deliver the results that you see. So really, I think that overall, a combination of good pass-throughs, PPIs, which are getting invoked, starting from the beginning of this year, and, you know, favorable pricing conditions are all helping us to continue delivering strong results. You know, we believe that there will be a time, hopefully not too long from now, when some of these things will settle down. They are bound to settle down, so we don't see this as a long-term phenomenon. Sure, this is helpful. Secondly, there has been some news flows in the past about, you know, scrap exports out of U.S. picking up, particularly to China or other Asian countries. Do you think that can also contribute to the tightness in the scrap market, or do you think that is mostly overdone, as you see it now? Not at all. I mean, we don't see that as a factor at all, Indrajit. Sure. Last one question, if I may: If I look at your slide 12, you have given your shipment mix for 1Q 2022. Given that you have highlighted some pent-up demand in autos, has it changed meaningfully for first quarter 2023, or that remains broadly the same? I'll tell you what's happening. If you follow the results of some of the large auto OEMs in the last few days, you see that conditions are easing, on the semiconductor side. That's one thing that you guys need to just follow, that the OEMs, our two very large customers whose results we have seen, have both been consistent that they are seeing an easing of the chip situation. To your specific point on slide 10, you know, where we are talking about the market demand, the market demand projections, you know, yeah, I mean. It should be 2023. Yeah, it should be actually Q1 FY 2023, by the way. There is a bit of a typo in that slide, but it is this quarter. Basically what we are saying is that the current easing of conditions, particularly on the chip side and the pent-up demand, is just helping us validate the demand projections that we are projecting for future on that slide. In short, you know, we see, we see the 10% auto demand getting validated with everything that is happening now. In short, we have good confidence in the trends and the demand projections that we are telling you. Sure. That's all from my side. I'll come back and thank you. Thank you. Our next question is from the line of Amit Dixit with Edelweiss. Please go ahead. Yeah. Good morning or good evening, everyone. Thanks for the opportunity and congratulations for the set of numbers. I have two questions. The first one is rather, you know, a very strong price, product mix, impact on the order flow that is charged. Just wanted to understand, you know, what does this comprise? Does this comprise your ability to pass on the PPI related stuff, or is it fresh contracts getting negotiated at better prices? Because some of your competitors have highlighted this. Just wanted to understand how much of this gap is sustainable. A significant part of that is really higher prices that we have been able to negotiate. If you see the $162 million that we have highlighted in slide number seven, a very significant part, I would say, you know, almost about 70% plus is related to just better pricing, and the rest is on other things like PPIs and passthroughs, et cetera. I hope that that helps you get some ballpark. Yeah, very helpful. The second one is essentially on energy cost. Is it possible to quantify the energy cost in absolute terms in Europe for YOY 3? Whenever hedges end in this year, what kind of increase do you expect to see by 2023? You're talking about hedges? Sorry. Hedges. Energy? Energy. Okay. All right. Yeah. Okay, so, yeah, so. In Europe. In Europe. Okay, fine. As far as energy in Europe is concerned, for this year, actually, we are in a very nicely hedged position of almost about 80%. Our exposure is only limited to 20% of unhedged energy for fiscal year 2023. I must quickly add that even for fiscal year 2024, we are now hedged in the range of 50%. Opportunistically, whenever we see some moderation in energy prices, we take the opportunity to keep hedging our position. Long and short, for this year, we are in a very good place in terms of being largely secured through our hedging in Europe, and we are in a fairly good position even for the following year. Therefore, the volatility should be getting a bit more limited. Wonderful. A third question, if I may please, just one. The South Korean truckers strike, what was the quantum of shipments that was impacted, and do we expect the quantum to be impacted due to? Yes, for sure. I think that the impact of this was in the range of around 5-7 kt directionally. We will get it back. We will get it. In a couple quarters. Yep. Great. Thank you, and all the best. Thank you. Our next question is from the line of Satyadeep Jain with Ambit Capital. Please go ahead. Hi, thank you. First question was on the pricing bit. I think, From some of the previous calls, we understood that most of the significant pricing resets would actually be 18 months, 24 months from now, and PPI resets would also be likely next year. You're indicating maybe you've already booked some decent pricing resets and PPI resets at the start of this year only. Is that correct? I think you got to look at it by each end market that we're talking about. We have seen strong pricing in markets that are shorter term duration contracts or spot pricing, so that would be more the specialties business. In our beverage packaging and automotive, those are longer-term contracts, and those contracts will come up over periods of time. For the ones that have come up, we continue to see a good, strong dynamics as it relates to pricing. I think the reference that you might be making to further pricing increases, is also associated with contracts that we have signed in support of our investment in Bay Minette, and that will come more in line with the actual time frames of when those investments will come into the marketplace. Hopefully that helps with a little bit of clarification on what we're talking about near term versus medium and longer term. That I understood. In addition to the pricing, higher pricing on the new contracts, I'd have to be greenfield invest. Impression that you'll get pricing resets in the next two years on existing balance sheet contracts? There are some, but, those are. Yes. Yes, they're still to come. Still to come? Yeah, secondly, on the, as we look into the second and third quarter, you're looking at certain headwinds, as one of the earlier participants also mentioned, significant compression in flat price. Essentially, aluminum also idling this metal in U.S., you have trucking issues there, offset by pent-up demand that you're indicating by automakers. Do you feel confident of achieving $500 per ton EBITDA in the next couple of quarters, given all the headwinds and a couple of tailwinds you're looking at? Well, let me take the opportunity of asserting that we would actually like to now guide you to $525 per ton, and this is despite everything that you mentioned. You see that this quarter came very strong, over $580 per ton. We want to moderate this number because this quarter, you know, we had elevated metal prices almost until late part of June, and these prices have eased off. That is something that we want to moderate. All the other headwinds that you mentioned, for example, energy, we have already been absorbing that, and unless something happens to really worsen that situation for our 20% remaining exposure in Europe in general, I would say that we have factored in all the headwinds that you see, and we have all talked about. Overall, our confidence, in short, is pretty good. Actually, we are telling you that you can take our guidance of sustainable EBITDA per ton of $525 from here onwards. Okay. That's, that's good to hear. Yeah, just if I can squeeze one small question on as a follow-up to one of the earlier participant's question on Steel Dynamics. Looking at expanding capacity, their capital cost seems to be even lower than what Novelis is looking at for the greenfield capacity expansion. Is that, I just want to understand, is that the same facility that Unity Aluminum was looking at expanding, was starting up a few years ago? Why is their capital cost even lower, materially, somewhat materially lower than what Novelis is looking at for its greenfield capacity? Yeah, I can't comment on Steel Dynamics. I can just comment on the thoroughness of what we put into our review of our investment, we're very comfortable at the $2.5 billion. It's a significant integrated mill that hasn't been built in, you know, in the U.S. for decades. We've done a lot of work, and are very comfortable with the numbers that we put in. As far as, is it the same facility or place as the Unity or Guthrie site? It's not clear to us, so can't comment on that either. Thank you so much. Thank you. Mm-hmm. Our next question is from the line of Ritesh Shah with Investec. Please go ahead. Yeah, hi. Thanks for the opportunity. A couple of questions. First, as a clarification, you indicated on the energy side, 80% hedged and 20% unhedged for FY 2023, and 50% for FY 2024. Is that only for Europe or is it at a company level? That is only for Europe. Possible, if you can quantify the same at the company level? I'll tell you what, I mean, in South America, in our Brazilian plants, the opportunity to hedge is limited to nothing because these are all regulated markets. There is no forward market there. Honestly, the energy inflation in the non-European market is not as big a challenge in proportion, and, you know, pricing is easily absorbing some of those things. In Asia as well, in Korean plants or in China, there is no hedging opportunity there. Europe is really where the biggest challenge is, and Europe is also where we have the opportunity to do the hedging that we are doing. In North America, we do some gas hedging, we do some diesel hedging for our, for our transportation. I would say that really the focus remains on Europe, because the rest is all getting more or less absorbed in the current environment through better pricing. You know, it's not the same proportion as in Europe when it comes to inflation on energy. Uh, that helps. A related question over here, uh, one is, uh, the cost, second is the availability. Uh, availability for novelis and, uh, availability for gas, uh, for, uh, for the companies whom we supply, uh, company two. Uh, so is, is there a risk on volumes either to us or, uh, to the companies that we supply to? And hence, can there be risk to some volumes to into next two quarters? You know, you keep reading all the headlines in the newspapers about all the threats of stoppage of supplies from Russia. We don't know, you know? I mean, it's a very difficult geopolitical environment. Can there be rationing? Can there be cuts? You know, we have to just watch the space. Cannot rule it out. If those things happen, what will happen to us is what will happen to everybody, you know? So we just need to deal with the situation as it happens. Very difficult to comment on, you know, what can happen on that area, because it's a complex geopolitical situation, as I said. Right. Sorry, just to dig in a bit over here. I think few of the mills, they actually have gone ahead and gone for captive inventory for gas. Is it something that we have looked at, or is it something we will take it as it comes? Well, I don't know how you could do a captive for gas. I'd have to really see what you're referring to. No, I would not really, you know, sort of think about this as a possibility. I mean, to mitigate with captive, no, that is not something. I mean, we will, from a sustainability point of view, we will keep looking at alternative energy that we are anyway doing. You know, this is not like a mitigation to the geopolitical situation. That's what I would say. I mean, that geopolitical risk just remains. At some point, Europe and specifically Germany, who has the most exposure, will have to, if this continues, will have to find a way to be self-sufficient as a country. You know, I, you know, they obviously are working on that. You can understand kind of that timeframe isn't overnight either. You know, we continue to monitor the situation and actively work with governments and others to ensure that, you know, we have minimal impact, but it is a potential risk. Sure. My second question is on the Alabama greenfield rolling mill expansion. I just wanted to understand the mass balance on hot roll versus cold roll. If at all, we had the optionality to do something brownfield over here to enhance the capacity. Is that the optionality that we have? The reason to ask this is, if I'm looking at a long-term NPV of the asset, with ROCs in mind, the hunch is the incremental capital, CapEx intensity will be significantly lower. If you could provide some flavor over here, that would be quite useful. Thank you so much. I didn't catch the beginning of the question. You're asking is there an opportunity to do brownfield expansion where? Yes. After the stated greenfield, which is phase 1, is there an optionality to do brownfield at the same location? Yes. Yes. It should typically come at a lower CapEx intensity. I just wanted to take a little bit of longer-term view of the asset. Yes, got it. Got it. Thank you for the clarification. Yes. The greenfield Bay Minette site will be long hot mill capacity, no doubt about that. Absolutely, we have the ability to very efficiently in a brownfield, expand the cold rolling capacity and the finishing capacity much, much more efficiently than a greenfield. As we look at the market dynamics going forward, we absolutely are thinking about phase two already associated with that plant. Your point's absolutely valid in the ability to expand it in a much more efficient way. To add to that, when we told you about the IRR profile of the project, you know, I mean, mid-teens IRR, 15% plus, it does not take into account this opportunity. This, the benefit of any kind of a brownfield later, will be an additional return that is not factored in the base case when we spoke about this project extensively a couple of months ago. Right. Dear, thanks. Just to take one step more over here, from humble math, we just divide CapEx by the capacity numbers, what you indicated, it comes to around $4,000. I just wanted to get a sense of if hypothetically we had to go to phase two, the 2.5, you'll have to add by another $500 million. The capacity can increase by 1 million tons or 500 kt. How should one look at it? I'm just trying to understand the CapEx intensity number on a precise basis, if it's possible. Yeah, yeah. We're focused on the $4.5 billion that's in front of us right now, and we'll talk about that, but we're not, we're not gonna get into laying out the phase two of Bay Minette quite yet. We'll come back as we get closer to that. I think the point you should take away, it is extremely efficient to expand that facility, and when we're ready to talk, in more detail, we'll come back with more of the details for you. Sure. That's quite helpful. Thank you so much. Our next question is from the line of Andreas Christoffersen with Nordea Asset Management. Please go ahead. Just want to follow again on this German plants there. Can you give us how large a share of the European sales or maybe just the corporate sales that comes from these German plants? Also, is the energy mix there, is that mainly nat gas or also other energy sources? Thank you. You're asking how much portion of the sales comes from these German plants? Yes, exactly. Yes. I mean, significant portion. Germany is our biggest manufacturing base, and I think the German plants would contribute well, about two thirds of our total sales in Europe. That is significant. What was the other question you had, sorry? Just wanted to understand the energy sources. Is it mainly natural gas or also other energy sources? Well, it's electricity and natural gas. Both play an important role. My other question is regarding, you mentioned that, you're looking at the lower end of the CapEx, investments now. Yeah. Also you have leverage below the medium-term targets now. Do you have any thoughts on alternative use of cash or are you comfort at these leverage slightly below targets? Thank you. First of all, the reason why we are guiding you to the lower end of the $1.3 billion-$1.6 billion is that there have been some more than anticipated delay, for example, in the China project starting off, and essentially it is timing. The overall number of $4.5 billion that we guided you to is a very robust number, and it stands, but it's just that, you know, the timing is getting a bit pushed forward. That is around the guidance. As far as, you know, the leverage is concerned, yes, you know, I mean, we told you, we told you that we will not go above 2.5, and we are at 2.2. Nothing different or nothing new that we will do. We have our hands full to execute the capacity and recycling expansion projects. We will stay focused on that, and that is really going to absorb the cash generation to a significant extent over the next few years. Nothing changes. Nothing changes compared to what we have been telling you consistently. Okay, great. Thank you. Congrats on the quarter. Thank you. Our next question is from the line of Rajesh Majumdar with B&K Securities. Please go ahead. Yeah. Hi, sir. Thank you for taking my question. I had a couple of questions. One is that, if you look at your cash flow position on slide 10, the working capital position has deteriorated a little bit despite the fact that LME is down. Is this a kind of a lag impact, which we see improving substantially in Q2? Is the first question. Yes. Yes, the answer is that you talked about dropping aluminum prices. We did not have the opportunity to get that benefit in quarter one. If energy prices stay as they are today, we will start seeing some release of cash in the coming quarters. That benefit will come if prices stay if LME stays where it is today. You can expect to look forward to that. We have generally been telling you that for every $100 change in metal prices, you can expect about $80 million, $70-$80. Now we are saying $80 because of growth and higher inventories. We are telling you that $80 million would get released for every $100, that money will flow in over a period of time. Keep in mind, as you will see on slide number 10, in the previous year also, we had some use of cash and working capital, and this year also it is the same. Keep in mind that we have built inventories during this quarter, to service future quarters. Increase in inventory levels, which is a build-up, is also a factor that is going into the use of working capital. Basically coming to the core question that you're asking, the drop in metal prices, will create a benefit on release of cash and working capital if prices stay at this level. At the rate of $80 million or so, is the research? Yeah, roughly. Ballpark. Ballpark about $80 million for every $100 change in metal prices. My second question was a related question, actually, because if you look at the CapEx for this quarter, it's just about $110, and we are talking about a $1.2 billion additional CapEx for the rest of the year. If you go by your run rate of 520 also, it means about, net of the interest and taxes paid, we'll be generating about $1.1 billion or $1.2 billion in terms of cash flow before CapEx. Does this mean that we have to have a substantial reduction in the working capital that our net debt to EBITDA standard remaining at 2.5? Just a ballpark number is suggesting that if the working capital were to reduce by even $200 million, then also your cash flow operation is not enough to suffice the additional CapEx. Let me say this, we do anticipate release of working capital because metal prices were in excess of $3,000 for the most part of last year. We do expect, you know, release of working capital happening. We do expect that our cash flow before working cap, sorry, before CapEx, will be better than last year for this one reason, and also other factors like growing EBITDA, et cetera, will contribute to a better operating cash flow. In short, our operating cash flow will be enough to take care of all the CapEx. You know, we are early in the year, but to your point, that there was only a $110 million outflow of cash. We are a bit early in the year. Maintenance CapEx will pick up, growth CapEx will pick up as we pick up speed on Bay Minette and all of that. By no means, you know, I mean, you should take this, I mean, we are telling you how we see things at the moment, and we will keep coming back to you every quarter as things progress. There can always be timing issues. Bottom line, we have confidence that the operating cash that we generate this year, cash flow before working before CapEx, will be enough to take care of all the CapEx outflows, and will probably leave us with even more. We are fully confident about that. Thank you, sir. Thank you. Our next question is from the line of Ashish Kejriwal with Centrum. Please go ahead. Yeah, hi. Thanks for the opportunity. Sir, just a small clarification. Is there any one of in North American EBITDA numbers this quarter? Because our last quarter also when we were targeting about. Okay, what was the reason? Because last quarter also when we were targeting and you have given some sense on all the operations, region-wise, in fact, only North America has far exceeded that, $5-$8 per ton. What specific reasons we can attribute to this? Yeah. First, you know, we talked in the last earnings call that we did have some negative impacts from how we reacted to some of the supply chain and overall forecasting from some of our customers associated with semiconductor chips. We didn't react to it the way we should have. We learned from that. We said it on the last call that we were gonna fix that in this quarter, and we did fix that. That was the first substantial increase on a from Q4 to Q1. Also, there was an environmental reserve that was put up in Q4, not in North America as well. Those did not repeat into the Q1, which is really what we signaled that we did have control over how we were gonna operate and, and produce in the North America region. Specifically, the Q1, enhancements on top of that. Dev, do you want to talk about some of those? Yeah, that is right. Among other things, some of those events that constrained the profitability in Q4 did not repeat in Q1. Our production was much more smoother. auto picked up very well in this quarter, and that improved the mix for us. Much smoother production. We did not have to make some of the cost decisions around supply chain disruptions because of which we were forced to purchase more expensive materials to meet customer requirements. All those things went away in this quarter. This was a way smoother quarter with none of those events. That is what really helped us to reach this level. Yeah, that's really the answer to the question. No one-offs in this quarter, to be clear. No one-offs in this quarter. Because we are not comparing with fourth quarter. I'm just looking at from the first quarter last year also. you know, we did $40 per ton. Yeah. 588. Okay. Yeah. Better pricing. Okay. Better pricing. I mean, we have got higher prices. So- Please, go ahead. Is it possible to share some thoughts in that, you know, in which products, whether it's beverage can or auto? As you mentioned one thing, that we have a product mix in favor of auto this quarter, so which is somewhat beneficial. Within the products also, like beverage can, have we seen better pricing as compared to fourth quarter? Well, we have seen better pricing on can. We have seen better pricing on the specialty side. Specialty prices have gone up very meaningfully. Pricing has been a contributor. Product mix has been a contributor. Yes, in short, yes, we have good tailwinds from pricing, which have added to the numbers as compared to last year. Okay. Secondly, sir, in terms of our new capacity, which greenfield capacity, which we are building in, is it possible to share that, have we booked any of the quantities, which gives us more confidence of achieving our mid-teen ROC numbers? Yeah, we've already booked on the greenfield side, 50% of the capacity, at pricing that is well in line with our ability to achieve the mid-teens return. You know, we are extremely confident to be able to book the remainder of that, as we continue to build out the project and commission it. Sure. Thank you so much. Sir, last question is, despite such a number, do we think that we are still conservative in giving sustainable EBITDA guidance? Well, remember what I said earlier, the $583 that we achieved in Q1 was with metal prices, which were generally very elevated during the quarter, and that helps recycling benefit. If I be more specific, you know, I mean, you know, the average aluminum prices that we achieved in the first quarter was almost like $3,200. Now we see levels of $2,400, you know. We want to be careful because there has been some backing off. That is one of the factors, and that would contribute to the lower guidance as compared to what we have achieved in Q1. The other thing is that we generally need to be mindful that we are not in a very stable environment yet. As the macros improve, we will keep looking at our guidance, you know, just given the number of uncertainties in the macro environment, we just want to be a bit more careful before we get ahead of ourselves. That is really what is behind the $525. Sure. All the best. Thank you so much for this question. Thank you. Our next question is from the line of Neyla Velimoukhametova with BlackRock. Please go ahead. Hi, good afternoon. Thank you very much for taking my questions. I've got a couple, three, actually. The first one is a follow-up on some of the gas supply, potential gas supply issues in Germany. Thank you very much for giving color on that. I just wanted to check for the mill, for the plants or sort of manufacturing that you have there, are you able to switch to other energy sources? I understand natural gas is the main one, but is it possible to switch to fuel oil or any other sort of a diesel or any other, basically, energy source at these mills? Can you shift production to other sites in Europe, for instance? I guess there's not much, and/or perhaps are they all at full capacity? Just want to check also, are you stocking up on inventory at all, just to, in anticipation of potential sort of curtailment and volumes? Thank you. Or production rather. Yes. Yeah, where we need the natural gas is not necessarily on the rolling mills, it's in the remelt and casting side of the business. There are other energy sources that you could potentially use, but it's not something that's from a capital standpoint, that you can switch over very easily and not something that we would likely do. We are building inventory in the event that we could see some curtailment. We are actively looking at ways that we can work with governments to, if curtailed, best optimize our plants so that we will have as limited impact as possible. It's really not possible. We're running at capacity, so it's really not possible to shift this to another place in Europe. That's not really an option. As Dev said, the majority of our operations are in Germany, which seems to be the more focal point of where there potentially could see some curtailment if the geopolitical situation continues. It's, it's a difficult situation. We're doing everything we can to actively manage it where we can. It, it certainly would have an impact on all industry if it occurs. Thank you. This is super helpful. Just to also clarify, are there any programs envisaged or talked about, government programs that will offset, you know, any potential lost production or maybe sort of workforce going on furlough or anything like that? Just, if you've heard any discussions or indications. No, we haven't seen anything at this point in time. Got it. Okay, great. Thanks. Second question was on, I do apologize, I had a technical issue, so it may have been asked, but on the Rhine River water levels, are you affected by that at all, or like, could be affected? Do you use the river for any of your deliveries? Yeah, no, we haven't been impacted and I don't see that as an impact for Novelis. Okay, cool. Thanks. The third question was with regards to your financial policy. You have, I think, indicated in the past or guided to a dividend of, I think it was 80%-10% of post-maintenance CapEx, free cash flow. Do you expect to stick to the policy considering the new sort of CapEx cycle, phase, or is that something that you can sort of decide on pausing, basically, going forward? No, when we announced our capital allocation policy, we knew that we are heading into a heavy capital investment program. We did not have precise details, but we were well aware that that is coming. We fully accounted for everything that is in front of us, we continue to say that we will be returning capital post-maintenance CapEx, I would say around 10%. That's all factored in, into all the things that we have said earlier. Just to clarify your previous comments on sort of cash flow generation, post the CapEx that you expect to spend in 2023, fiscal 2023, am I correct in understanding that you expect to basically break even considering strong EBITDA prospects and potential inflow from working capital? I think that we should be pretty good in terms of being able to fund the entire CapEx from operating cash flows. That's what I said earlier. I say that again. We don't think that we will get into a negative cash flow situation unless something really happens in a way that metal prices get so elevated, you know, over $3,000 and all of that. Other than that, we don't see any reason why we should not be able to have enough operating cash flow to meet our CapEx plans for this year. Okay, excellent. Thank you so much for your help. Our final question is from the line of Kamlesh Jain with PL India. Please go ahead. Thanks for the opportunity, and congratulations to Steve Fisher and Dev Ahuja for the super performance. Just one question on the part of the competition adding capacity. How easy is to put up the recycling capacity? Because it's easier to put up the hot metal capacity, but how to have the integration on the recycling facility side, because over the years, you have built such a strong competitive advantage over there. On the recycling, how easy is to, for the competitor and the new competitor to come in and set up those facilities? Yeah, I mean, I don't want to speak specifically to anyone that's coming in. We can speak from our years of experience, and it's not easy to put up either the rolling or the recycling capacity. We know that from what we've done at this company in our investments. We've got years and years of experience of doing this. So we're comfortable with what we can do, but it is not easy. It is difficult to get these projects up and running on the timescales of what we've outlined. We're doing everything we can to stay focused on meeting our commitments with our customers and getting our assets up and running. It will be a challenge for Novelis, for sure, but we're up for it. We've got years and years of experience of doing this, track record of investment, and long-standing relationships with our customers, in order to not only get the plant up and running, but to qualify the material with our customers. By the way, Kamlesh, it is not just a matter of adding capacity. It is not like you can add recycling assets on the ground and just start recycling. There are supply chains. There are customer arrangements. We have, over the years, built a lot of supply chain competencies. We have tie-ups with customers for closed-loop recycling on the auto side, also on the can side. It takes a lot more than just putting a plant on the ground for recycling. It is a whole supply chain. It is relationships in the supply chain and, you know, complex logistics. These are things that you need to keep in mind. Yeah. Thanks for the reply. Secondly, on the part of your mid-term return guidance on your expansion. On the current operations, how that transition would happen, I believe, by 2025, these capacities, which are currently in the operation, they would also transition to that particular margin levels of upwards of $1,100. When do you see that inflection point to come in, when your margins for the current operations also get transitioned to those levels? I think there's been a step change in the market overall, with, you know, the demand associated with getting to a more sustainable packaging solutions and being driven by the end consumers wanting that. With that demand, we've seen pricing increase to the place where we and others see the opportunity to invest. Yes, you're right, the contracts are across the entire portfolio, and the overall lift in the pricing will come as we sign those contracts, which are long-term contracts, and begin to execute against them. That is not part of the guidance we're giving today with the $525 per ton. That is still to come as we continue to execute against the commercial aspects of the project itself. Does that help? Unfortunately, the line disconnected. There seems to be no further questions on the phone lines at this time. Mr. Fisher, I'll turn the call back to you for closing remarks. Thank you. Thanks, to everyone for attending the call today. Again, I'm pleased with the results Novelis delivered in the quarter and our long-term path to lead the aluminum industry in fostering a circular economy and driving long-term value for our stakeholders. Thank you for your time today, and we look forward to sharing our Q2 results in November with you. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.