Ladies and gentlemen, thank you for standing by, and welcome to Novelis Earnings Conference Call. During the presentation, all participants will be in listen-only mode. Afterwards, we'll conduct a question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. This conference is being recorded on Wednesday, May 10th, 2023. I would now like to turn the conference over to Megan Kokot, Director of Investor Relations for Novelis. Please go ahead. Thank you, Bailey. Good morning or evening, everyone. Welcome to Novelis's fourth quarter and full 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 and 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 some 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. Thanks for joining us today. Starting with the highlights on Slide 3, I am pleased with the solid performance delivered in fiscal 2023, in a year that was marked by macroeconomic and geopolitical headwinds and supply chain challenges. We faced extraordinary inflation in energy costs, rising interest rates, falling aluminum prices, and tighter scrap availability. These headwinds led to lower shipments in the latter part of the year in some of our end markets, including building and construction and beverage packaging. At the same time, our strategically diverse product portfolio is allowing us to capture strong demand in the premium automotive and aerospace markets. High pent-up consumer demand and improved supply chains are driving up automotive build rates, resulting in higher aero and record automotive shipments for Novelis this year. We also continue to generate very robust operating cash flow that allows us to maintain a strong balance sheet and reinvest back into the business to drive future growth and meet our sustainability targets. Turning to Slide 4. Novelis is a leading global provider of low-carbon, sustainable aluminum solutions that advance our business, industry, and society toward the benefits of a circular economy. Striving to further cement this position, we made a commitment to be carbon neutral by 2050 or sooner, and to reduce our CO2 footprint 30% by 2026. Our decarbonization strategy delivered fantastic progress in fiscal 2023, reducing absolute carbon emissions by 18% compared to our baseline, and by 21% on a carbon intensity basis. In fiscal 2023, we recycled over 82 billion used beverage cans. We increased our recycled material inputs to 2.3 million tons. Our recycled content rate went to 61%. Our midterm 2026 carbon reduction target is ambitious. We are confident in our ability to achieve it. By decarbonizing the remelt process and increasing energy efficiencies, by innovating in high recycled content alloys and recycling technologies, by partnering with communities and governments to increase the availability of post-consumer scrap and decarbonization of our upstream primary suppliers, and by investing in expanded recycling capacities and capabilities. When our recycling expansions that are currently underway are complete, we will be able to increase our total recycled inputs to approximately 3 million tons. I'd now like to turn the call over to Dev for a detailed review of the fourth quarter full year financial results. Thank you, Steve, and good morning or good evening. Starting with our fourth quarter financial highlights on Slide 6, net sales decreased 9% to $4.4 billion, primarily driven by lower average aluminum prices and lower product shipments, partially offset by increased product pricing and favorable product mix. Total flat-rolled product shipments were muted by softer market conditions than the prior year, decreasing 5% to 936 KT. Inventory reductions across the beverage supply chain in reaction to more normalized beverage packaging demand post-pandemic led to lower shipments this year, while macroeconomic pressures, mainly in building and construction, led to lower specialties shipments. However, automotive shipments grew to a new quarter record, and aerospace also grew year-over-year. Adjusted EBITDA decreased 6% to $403 million, leading to an EBITDA of $431 per ton.... As we guided, our fourth quarter EBITDA is a significant improvement on a sequential basis from the low point that we experienced in the third quarter of fiscal 2023, primarily due to higher can and automotive shipments, new pricing, and PPI pass-throughs, and easing of South American scrap spreads. On a year-over-year basis, the EBITDA decline in Q4 is mainly coming from the impact of lower can and specialty shipments, higher energy and inflation. While aluminum prices and scrap spreads have improved since Q3, they were less favorable than the record prior year levels. We partially offset these headwinds with higher pricing and some PPI clauses taking effect in January, as well as favorable product mix with the record automotive shipments in the quarter. Net income from continuing operations was down 28% over the prior year to $156 million in Q4, driven primarily by lower Adjusted EBITDA, a metal lag benefit in the prior year that did not recur, higher interest expense, and a $26 million restructuring charge related to the shutdown of casting and hot rolling assets in our Richmond, Virginia, facility in the U.S. Excluding these and other tax-affected special items, net income from continuing operations was down 7% versus the prior year to $175 million. Let's turn to Slide 7 and Q4 performance year-over-year by segment. North America shipments decreased 3% year-over-year due to lower demand for beverage, packaging, and specialty shipments on customer destocking and a soft macroeconomic environment, partially offset by record-high automotive shipments as supply chain constraints in the industry have eased. Adjusted EBITDA was up 25% versus an easy prior year comp that had been impacted by temporary internal supply chain challenges that drove inefficiencies and high costs in the prior year. We also benefited from better price and mix this quarter, partially offset by operating cost inflation. Europe shipments were down 9%, also due to lower beverage packaging and specialties shipments, partially offset by higher automotive shipments. EBITDA was up 25%, higher pricing and favorable product mix more than offset the headwinds from inflation, energy, and unfavorable currency translation. Turning to Slide 8, Asia shipments declined 8% versus the prior year. Lower shipments to beverage packaging customers in North America and lower specialties shipments due to planned portfolio shift to higher-margin products in an expected capacity-constrained system, were partially offset by higher beverage can shipments to domestic customers. Adjusted EBITDA decreased 25%, due mainly to inflationary cost pressures and less favorable mix, partially offset by higher pricing. South America shipments were down 8% due to beverage packaging destocking and lower demand going into the region's seasonally low period in a weak macroeconomic environment, including in a weak macroeconomic environment. EBITDA was down 26% year-over-year, primarily driven by the lower volume, lower metal benefits than the abnormally favorable quarter last year, and continued inflationary impacts on energy and other operating costs, partially offset by higher pricing. Moving to the full-year financial highlights on Slide 9. Net sales increased 8% to a record $18.5 billion, primarily driven by higher average aluminum prices, higher product pricing, and favorable product mix, partially offset by lower shipments. Total flat-rolled product shipments ended the year down 2% to 3.8 million tons, as demand in the second half of the year was muted by softer market conditions and excess inventory across the supply chain, impacting beverage, packaging, and specialties shipments. However, shipments to the automotive and aerospace end markets grew robustly, reflecting strong market recovery post-pandemic and supply chain normalization. Adjusted EBITDA was a very solid $1.8 billion, or $478 on a per-ton basis. Both were metrics lower than the prior year. As you can see, in the EBITDA bridge, we faced a number of significant macroeconomic and market headwinds this year. In addition to the pullback in demand impacting volume, we also faced a significant inflationary hurdle, which drove higher operating costs nearly across the board, compounded by the impact of the geopolitical conflict in Europe has had on global energy prices. We also saw less favorable metal benefits due to higher costs for alloys and hardness, as well as lower aluminum prices and normalization of scrap spreads compared to unsustainably high prior period levels during the pandemic. The SG&A, R&D, and other column includes a $47 million prior year litigation benefit in Brazil that did not recur and also reflects wage inflation and the impact of rising interest rates on factoring costs. Lastly, the strong US dollar led to a $52 million currency headwind for the year, mainly a translation effect in Europe. Our efforts to mitigate these headwinds is seen in the very favorable price and mix result. Our diverse product portfolio drove a significant mix benefit from the higher automotive and aerospace shipments. Additionally, higher contract pricing, mainly in specialties and can, PPI clauses taking effect and passing through some of the extraordinary cost increases this year, have eased some of the pressure from these headwinds. Fiscal 2023 net income from continuing operations was down 35% versus the prior year, driven primarily by a metal price lag benefit compared to a negative lag this year, as well as lower Adjusted EBITDA. Excluding the significant swing in metal price lag, as well as other special items outlined in today's press release, net income from continuing operations was down 16% versus the prior year to $781 million, primarily driven by lower Ad justed EBITDA and higher interest expense, partially offset by a lower tax provision. Let's turn to cash flow on Slide 10. In fiscal 2023, we generated very strong adjusted free cash flow from continuing operations of $443 million, despite higher CapEx, lower Adjusted EBITDA, and a significant swing in metal price lag from a prior year benefit to a current year headwind. This was due to our relentless focus on working capital efficiency, particularly inventory reduction, that resulted in a large working capital release in the fourth quarter, as well as a disciplined approach to capital spending. As we embarked on our transformational investment plan, our CapEx spending increased 76% in fiscal 2023. Notably, our adjusted free cash flow from continuing operations before capital expenditures grew 12% year-over-year to more than $1.2 billion. Our balance sheet is and will remain strong. We ended the year with a net leverage ratio of 2.3x and total liquidity of $2.6 billion. Looking ahead, we will continue to manage a proven balance sheet and expect a healthy operating cash flow in fiscal 2024. With announced capital expenditure projects ramping up, largely associated with Bay Minette and Guthrie, we anticipate fiscal 2024 total CapEx to be in the range of $1.6 billion-$1.9 billion for the full year. This guidance includes approximately $300 million for maintenance CapEx. I'd now like to turn the call back over to Steve. Thanks, Dev. Let's turn to Slide 12 and talk about our near and long-term market outlook. In this case, as we were with you all a month ago, this outlook has not changed. In beverage packaging, normalized supply and consumption trends post-pandemic have led to lower inventory requirements in the supply chain and impacting near-term demand for aluminum sheet. We believe this will be with us through our 1st fiscal quarter, and we are optimistic that promotional activity will boost consumption in the 2nd half of fiscal 2024. Looking further out, our view of long-term demand remains unchanged, growing in the 3% range, driven by the secular change in consumer preference for sustainable packaging. In automotive, our order book remains strong. Vehicle production levels are forecast to grow this year, given high pent-up demand and low dealer inventory as supply chain challenges have eased. Longer term, we continue to expect demand for automotive aluminum sheet will grow at an approximate 11% compounded annual growth rate, supported by vehicle growth rates and lightweighting needs for fuel efficiency, performance, and electric vehicle range. Our specialties markets are mixed, but the largest single market within here is building and construction, which is more sensitive to economic cycles. With high interest rates and low housing starts, we assume in our outlook today that market demand will remain soft this calendar year. Lastly, demand for premium aerospace sheet continues to grow as OEM build rates and passenger traffic levels increase post-pandemic. While this is a relatively small component of the Novelis portfolio, the outlook for aerospace plate and sheet remains positive. While there are uncertainties on the macroeconomic front, we like our diverse portfolio and remain positive on the long-term fundamentals driving aluminum demand now and into the future. Turning to Slide 13. With long-term aluminum FRP demand strong, we remain committed to investing in our future. Last year, we announced a transformational organic growth plan, identifying over $4.5 billion of capital expansions over a five-year period. We remain committed to that plan to grow alongside our customers. We're going to execute it based on market conditions. As such, we are currently prioritizing $3.3 billion of projects that are already underway. The largest single project is our $2.5 billion, fully integrated rolling and recycling facility in Bay Minette, Alabama. This state-of-the-art facility will be a highly efficient, low carbon plant of the future with 600 KT of finished good production capacity. We are on track to commission in fiscal year 2026 and have committed nearly all the beverage packaging capacity with long-term customer contracts. The new recycling capabilities at Bay Minette, combined with two additional recycling expansions, also demonstrate our commitment to growing sustainably and reducing our carbon emissions. These two standalone projects include the $365 million investment for an automotive-focused recycling facility in Kentucky, and a $50 million recycling and casting expansion in South Korea. We are investing in a number of high-return, quick payback, debottlenecking projects expected to come online over the next couple of years. We have specific projects underway totaling $350 million, to unlock approximately 265 KT of finished goods capacity globally. In summary, fiscal 2023 was challenging, pressured by intensified costs and macroeconomic uncertainty. However, I am proud of our team pulling together to deliver solid performance and strong cash flow in spite of these headwinds. While these headwinds will curb our near-term EBITDA per ton as guided, the fundamentals driving long-term demand for aluminum products remain intact. We continue to be disciplined in our approach to capital investment, prioritizing growth investments to meet growing customer demand and sustainability goals across the value chain. With that, we're happy to take your questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question, please do ensure that you have unmuted locally. Our first question today comes from the line of Pinakin Parekh from JP Morgan. Please go ahead. Your line is now open. Thank you very much. I have two questions. My first question is on the margin profile. When you guys were over here in India, you had highlighted that you expected to go back to the normalized levels of $500 plus by March 2024. At this point of time, do you see that continuing, or do you see that the margins will continue to improve and you can reach $500 per ton before the fourth quarter earlier guidance? Pinakin, I think that we will stick to exactly what we told you. We'll be very happy if things get there a little earlier, but we are just in a bit of a short-term, choppy time. Therefore, I would just say that we will keep our expectation of EBITDA per ton with a five handle for the fourth quarter of this fiscal. There is not much that has changed since the time we met you. We are just reasserting everything that we said during the Investor Day. Sure. My second question is: If I look at the CapEx guidance of $1.6 billion-$1.9 billion, that's more than twice of the CapEx incurred in F23 of $0.8 billion. How do you see this broadly being funded? I'm just trying to understand with the net debt, which came down to $4.1 billion, will it rise up again very sharply to fund this CapEx? So Pinakin, again, I will just say what we have been saying. Number one, we will be able to fund our CapEx, even at these elevated levels, by not going to the market to raise any fresh debt and by using a combination of our short-term debt facilities and some supplier financing facilities. Basically, in short, you know, the operating cash flow will continue to be strong, like it is strong this year. Mm-hmm. There will be some gap because of the elevated CapEx, and our short-term facilities are adequate for us to be able to manage to these elevated levels. On a net leverage, I mean, you know, we will again say, Pinakin, that, you know, we will see some elevated leverage, but we will not cross the three handle. We will keep our net leverage, even with the elevated CapEx and seasonality of cash flows. Always keep in mind, please, that our cash flow is weighed towards the back end of the year. The first couple of quarters will be a draw of cash because CapEx intensity will be evenly going up. Therefore, you know, net-net, there will be some use of short-term borrowings, particularly in the first few quarters, pressuring net leverage from the current levels, which are really very healthy, but we will not cross the three handles. This is everything that I should tell you. Understood. My last question, just trying to understand the volume trend better. Now, while management has called out the softness in the beverage can market, expected to last one more quarter, but if we look at the rolled product shipment data, Q3 and Q4 was weak versus run rate in Europe and Asia and South America. That's an all-round weakness in rolled product shipments. When do we see it go back to the near 980, 990 KT volume trend? Should we start seeing that from Q2 onwards, or is it more towards the end of F 2024? Yes, and again, this is Steve. When you go back to Q3, as we talked about in our previous calls and when we were together in India. Destocking did start in Q3, and there were a few other disruptions in supply chain still in Q3. We started to see the weakness in building and construction impacting our specialties business in that quarter. Those have both continued through Q4, as we've just articulated today, and we do anticipate from a destocking standpoint, that that will be with us through Q1 of fiscal 2024. It could linger into Q2, but we're becoming more optimistic that destocking is nearing the end as we get through first quarter. Some promotional activities will start to take hold in the second half of our fiscal year, that will start to pull back up shipments. We believe from a building and construction standpoint, that that will stay soft through the calendar year, and we're anticipating some recovery as we get into our fourth quarter. Auto and aero stay robust, and we see those staying robust through the entire fiscal year. Hopefully that gives you some help on how we're thinking about shipments. Sure. That's very helpful. Thank you very much. Thank you. The next question today comes from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Your line is now open. Hi, thank you for the opportunity. A couple of questions tied to the transformational CapEx, the new beverage can capacity coming online. First question on how the U.S., both the existing capacity that you and the entire industry has for beverage can U.S. right now, and the new capacity is coming online, including Bay Minette. How do they compare on the cost structure with the imports? I'm guessing at least the existing capacity might not be competitive with some of the Chinese imports. Historically, the industry has dependent, maybe up to 15% of the volumes on imports. If the demand growth doesn't play out, why would the customer replace imports with the domestic production, including the existing domestic capacity that is there in the system? What is the incentive for the customer in case the demand is not there, to switch the, from imports to, some of the existing capacity that is already there, which is slightly higher cost than the new capacities coming on? That's the first question. Sure. First of all, the new capacity that we're putting in place at Bay Minette will be more cost efficient even than our most cost-efficient plant today. It is a very, very automated, efficient plant that we will be bringing on. Now, as it relates to imports that we've talked about, that there is in the past calendar year, roughly about 500 KT of import. Some of that is coming in from our facilities in Asia, but most of it, as you're articulating, is coming from China. We have heard and been very clear across the board from every single one of our customers, they do not want long supply chains anymore. They want domestic supply. Why? They've seen the supply chain disruptions over the past couple of years, that they had to deal with and are, quite frankly, dealing with now as they're taking inventory down. They also are looking at it from a decarbonization of the package itself as well. Shipping aluminum metal all around the world is not carbon friendly. One, we do think we can get competitive, but on top of that, we're hearing loud and clear from all of our customers, and we've got this with backed contracts already signed on Bay Minette, as we've talked about, that they want to build these supply chains on a domestic regional basis. What I understand is, even if the demand doesn't play out, just even if the existing capacity, not Bay Minette, the existing capacity is not competitive with the imports, given the longer lead distance, supply chain issues, sustainability, the customers would still prefer the domestic capacity. Just want to clarify, that's what the customers are saying? Yes, that is what the customers are saying, and they're saying it with signed contracts, long-term signed contracts. It's not just they're saying it, we have the contracts in place. Secondly, just want to come back on the contracts. Tied to that would be the promotional activity has been somewhat surprising, given where the prices of fell pack cans, CST cans, are roughly 2x what we used to see historically. Despite that, we're not seeing promotional activity yet. What is driving that lack of promotional activity this cycle versus historical cycles? What gives you confidence? What needs to happen for the industry to start giving promotional activity in the second half? Tied to that is the contracts that you that Ball Corporation has with some of these customers for new capacity coming online. In case the demand doesn't play out, just saying that scenario analysis. In case the demand doesn't play out, is there flexibility to move that capacity to something else? I know it's 0.4 million ton of can sheet and 0.2 million ton of auto. Given you'll have 1.2 million ton of auto cash lines, which might be operating at full capacity by the time these capacities come online, would there be flexibility to move that capacity to somewhere else? That points out so million ton of can in case the demand doesn't fail. Starting with the promotional activity, historically, there has been, and we talk mostly about North America, which is a very large beverage packaging, aluminum beverage packaging market, has historically had promotional activities. Why the brand owners decided not to push some of the promotional activities over the past year, I think was just a choice of price versus volume. As you rightly point out, prices have gotten to a point where I think there's a lot of optimism in the supply chain from our customers and what they're hearing from retail brand owners of more promotional activity starting to occur later part of this year. We do have some optimism around that, but historically, it's been there. Now, Satyadeep, also keep in mind one thing, the best bang for the buck for the end beverage companies comes when summer comes in. You know, the best returns on all promotional activities will come as we get into summer in North America. That's also another factor probably driving their own intent. I think that we are optimistic that this is going to come back, and it will come back at the time when the season starts to, you know, sort of really go up. We feel generally good about that. On the, on the new capacity coming on, again, we do feel very confident in the growth of beverage packaging. Feel very confident in what we're gonna see, you know, through the end of this decade as it relates to contracts that we've signed. With that said, these assets that we are putting on have capability. They're, they're highly sophisticated assets that have the capability to roll auto, can, and specialty products. Obviously, we've designed them to have the flexibility from a portfolio standpoint in the event that something was to shift. Okay. Thank you so much. Thank you. The next question today comes from the line of Sumangal Nevatia from Kotak. Please go ahead. Your line is now open. Yeah, thank you for the opportunity. The first question is, just want to understand what is the driver behind the sequential change in earnings? We see that Europe has been a big swing. Just want to understand what has led to that. Is it lower energy prices based on spot, better scrap spread sequentially? Yes, Sumangal, there are a couple of factors. One is that Q4 volumes are sequentially better than Q3 volumes, and that, you know, always remember that, you know, every 1 KB of incremental volume in our case, has a great leverage impact, you know, number one. Number two, that, we were facing some very difficult conditions on scrap spreads, abnormally difficult conditions on scrap spreads in South America, and we got the brunt of that in the third quarter of the fiscal. We told you that things are normalizing when we spoke with you in February and, during the investor date. That is what has also played in positively, normalization. We, we also told you that a new PPI and pricing takes effect from January 1. That has also played in, into the improvement. It is exactly, you know, along the lines that we have been telling you, that, you know, third quarter was a low point, and fourth quarter will be a more normalized recovery towards our, towards our, you know, sort of expected trends. Really, this is. These are the factors that contributed to a sequential improvement, in short. Are you there? Yeah, sorry. Yeah, yeah, I got that. Sorry, I was on mute. That's helpful. Secondly, in Asia, we are seeing margins, sequentially being under pressure, say, from $600 odd dollars per ton 6 months back to now, so $400. Anything specific to highlight here? You know, it's indirectly linked to what is happening in the U.S. Keep in mind that we were supporting U.S. demand-supply gap using our Asia capacities, and until the time the Bay Minette capacity comes up, that will have to be the case. Now, because of the destocking and the market pressures that we are facing in North America, there was a pullback in shipments from Asia to North America, and that has had a margin impact, in short. That is really what resulted in some pullback in the margin in Asia. Indirectly, it is largely related to the North American situation, Sumangal. Got that. Secondly, on CapEx, on Slide 13, the three heads under which we are focusing on, roughly around three and a half billion dollars, should we expect large part of this to be spent over two years, which is, this financial year and 2025? Very true, yes. We should expect the next two years, this fiscal year and next fiscal year, to be our big CapEx years, Sumangal. Next year would be a higher intensity, right? From this year as well. All the pending CapEx will be spent, completed in FY 25. not too- The direction is? Not too different. Okay. I think that directionally, you know, both the years will be having the same intensity. Got that. Got that. Dev, in terms of margin trajectory, I mean, from today at around $430-$535 odd in, say, four quarters, I mean, should we expect a gradual improvement each quarter, or it's gonna be a volatile line, directionally? Sumangal, I wouldn't like to go too much into being precise about that, just because in the kind of markets we are in, you know, I mean, we are not in even markets. All that I'm telling you is that we will be well within the guidance range. We will be well within the guidance range like we are now, you know? I mean, we are in the center of that guidance range. I don't want to... I don't have the ability to predict every market event in the short term, customer behavior, and so on. What I would say is that for the next couple of quarters, let's just kind of be ready for a bit of choppiness, depending upon what happens in the macroeconomic environment and so on. I think that let's just leave it at that. We will be in that guidance range, and well in that guidance range, is all I'm telling you. Got that. Got that. Just one very last question on the beverage can. I mean, there's been a lot of emphasis on destocking. I mean, just want to understand, I mean, how much of a demand slowdown or shift are we seeing in terms of consumption pattern being more on-premise, and also lack of promotional activities, et cetera? Or it's just entirely destocking, what we are seeing? Yeah. From a consumption standpoint, we are not seeing a slowdown in consumption. As we've talked about, there's different substrates that compete in different on/off premises that did impact us back in Q2 and Q3. That's normalized more in Q4. We are waiting and optimistic, as we've talked about, on some more promotional activity coming in in the second half of this fiscal year. You know, as we've talked about, the destocking overall, you know, when you put it in, you know, terms of how much this is, the destocking we've seen in Q3, which would have been similar to Q4, is, you know, less than 3% of our can shipments. It feels large. It feels like a big impact to us. It's because, you know, we are a volume business, and those last incremental shipments come at high margins. We're confident as we get into the second half of this year, that we'll get through this choppiness, as Dev talked about, and we'll see the recovery in the shipments in beverage packaging. Yeah. Sumangal, in some of the markets, I mean, in addition to what Steve said, I mean, just be aware that in some of the markets, like in South America, now we'll be entering winter, you know? That is not the best of the times, you know. I mean, winter is not the best season for a pickup. you know, besides the overall, you know, factors that we mentioned, just be aware that in one of our markets, like South America, we are also going to pass through some winter months, this is not helping for the time being. Got that. That's really very helpful. Thanks, Steve and Dev, and all the best. Thank you. Thank you. Thank you. We request that each person keeps to two questions and then rejoins the queue. Thank you. The next question today comes from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead. Your line is now open. Thank you, sir, for giving this opportunity. One question for the margin trajectory from 430 to 525. Far, you have explained as the elements which has kept it down, but if you want to sort of look it from the other side, what could improve from here? My understanding would be, one would be the key, would be the beverage can pricing improvement. Second, is this somewhat more scrap spread normalization. Are these two factors which will be the largely responsible for driving this important, the change, normalization, or are there more more factors to it? Yeah. As we sit here today, what's gonna move us from current levels of EBITDA per ton back to 525, does not have anything to do with pricing, except for some of the pass-through pricing due to the inflation. Catching up on some of the historical inflation that's been born into the business. But no additional pricing related to new contracts as a is assumed in the guidance that we've given. Second, we are not assuming different levels of scrap spreads from this point to get back to 525. We are assuming current levels of scrap spreads. What has to improve is really volume. We need to see us get through this period, next, one to two quarters of the destocking and see the volume return in beverage packaging. Second, we anticipate getting some level of recovery in our building and construction business as we get into our fourth quarter of fiscal year. Those are really the big drivers that will bring us back into the EBITDA $525 EBITDA per ton level. Obviously, we're doing a lot of other things from a cost initiatives, but we've been doing those for the last several quarters as well. Those are the two large items that you should be looking for to get us back to the, to the $525 level. Thanks, Steven. This is quite helpful. One more question was about, we have seen Novelis sort of utilizing the capacity in the alternative market, particularly when auto was weak during the COVID period, I think we were able to use it for the specialty products. Similarly, when now BNC is weak, what are the options that we are considering to utilize the available excess capacity? We certainly have the ability to move some of our capacity in the short term to some of the spot business. Unfortunately, as beverage packaging destocking occurred, some of the weakness in our specialty business occurred too, primarily in the building and construction business. While we look for those opportunities, they're not as ripe as they were back when maybe we were moving it in COVID. Secondly, if you do have to look for spot business because we see this as temporary, and ultimately we will return back to the levels we were at in the near future. It has to be in the form of spot business. Yes, we look for all those opportunities for maximizing those in the short term. Great. Just to follow through on this, in terms of the auto line capacity utilization, what level of utilization would it be operating at currently? Overall, we have about 1,000 KT of finishing capacity for auto on a global basis. We will continue to debottleneck that and get more out of it over time. Currently, we're running probably around 75% is about the utilization. We see strong order books over the next several years to move that up in towards, you know, more fully utilizing all those finishing lines. Thank you. Yes. Thank you. The next question today comes from the line of Ritesh Shah from Investec. Please go ahead. Your line is now open. Yeah, hi. Thanks for the opportunity. A couple of questions. First is it possible for us to quantify the impact on both CapEx and at EBITDA level because of Inflation Reduction Act, the Infrastructure Investment and Jobs Act? Related question would be, how are we looking at the impact of CBAM once it stands implemented? That's the first question. I'll squeeze three in one. Okay. Let me just talk about Inflation Reduction Act. Really, as you would have followed that the government is incentivizing relocating manufacturing into the U.S. in a very significant way. Part of what came with the Inflation Reduction Act is Section 48C, which incentivizes companies which are, you know, setting up manufacturing, creating employment, reducing emissions, and really bringing in more technology onshore, and we meet every single one of these criterias. Net-net, what we are saying is that we are optimistic that we will be able to benefit from some of the things that are happening on the positive side from the Inflation Reduction Act. We should also tell you that inflationary pressures are there on the two and a half billion expansion projects, and we see the Inflation Reduction Act as a way to counter and offset those inflationary pressures. We will not get too precise. We hope that we are able to get a net benefit between the incentives that we get from the U.S. government. We are in the process of, you know, making our applications. We hope that it's a net positive, but we don't assure you that it will be a net positive. You know, I mean, let's say that the two will help offset each other for sure. That is something that I can tell you at this moment. Dev, that's helpful. Any quantification, if at all, so when we give the CapEx number, obviously we'll have baked in something, and even at the EBITDA level, I'm not sure. When you say the number of $525, is there an element on back of any of those regulatory changes that we are actually baking in? It will be very speculative. I mean, Ritesh, I don't think it will be responsible on our part to start quantifying that, so I would stay away from quantifying. We will keep doing our work, and we will push hard in the right direction. Let's just wait, and the outcomes will be known in some time, and we will tell you about it. was, we have over time indicated, emphasized the impact of operating leverage at Novelis operations. Now, if one goes through the SEC filings, we don't see much of detailing on the cost structure, the way in which we see, at least for the Indian operations in the Indian annual reports. So if I had to ask you a question, if we look at the cost structure for Novelis operations, say, on FY 2022 basis, that's around $16 billion. If one had to bifurcate this between fixed cost and variable cost, how much would that be? I've run my numbers. I think the fixed cost component which I'm getting is actually quite small. In fact, it's lower than the Indian operations Some sort of guidance, some color over here, just trying to understand the impact of operating leverage. Say, if hypothetically, there's a swing of 5%, 10% volumes, then how does it impact EBITDA? Ritesh, I think that we are giving all the information that the industry gives. You know, I don't think that we are giving any worse information than you would see from some of the other peers. You know, we follow industry practice. We give as much information as we think is prudent to give, because beyond the point, it becomes sensitive information. I can only stay broad strokes, and we keep telling you that there is a significant element of fixed cost in our business. Payroll and energy are the two biggest, let's say, fixed costs in the business. Really, that is what drives our operating leverage. Honestly, I think that the information that we give in our filings is really the most prudent information that we can share, and we can give you directional inputs, but not more than that. Sure. Just last question. Any trends on physical market premiums, specifically the actions that U.S. and Canada has taken on the Russian aluminum cargo? So any directional flavor on physical market premiums? Secondly, is any updates on hedges for FY 2024 at Novelis level? We have the last updates, but if there's anything incremental with that. Thank you. Okay. I think that as far as premiums are concerned, they continue to be in, like the Midwest, continues to be in the $500 range. There is really no major moves because of any political or rather any geopolitical implications from Russia. That is really what we see for the time being. As far as hedges are concerned, as per our policy, we keep doing offset hedges all the time, we don't take any exposure on LME. We continue to take exposure on premiums, as we have always been saying. metal price lag is largely the exposure because of premiums going up and down. As far as other hedges are concerned, in Europe, we are protected for 75% for this year, for this fiscal year. We have really done a good coverage on the energy side. This is what we can tell you as far as energy goes, as far as hedges go. This is Yusuf. I'll join back if you have more questions. Thank you so much. Thank you. As a reminder, if you would like to ask a question, please do keep it to two questions and then join the queue. Our next question today comes from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead. Your line is now open. Good morning. You know, again, a related question on the metal price lag. Q3, we saw a pretty big number, a negative number, and Q4, I guess, you know, it's not so significant. Given that premiums are stable, do we expect that, you know, going ahead, we will not have any significant metal price lag, at least in the first or second quarter? As you can see that in the fourth quarter, we really had no metal price lag, and that should give you some indication that in a steady environment, metal price lag does not become an issue. I think that, you know, we should think about metal price lag as something that is timing. Because if you look at a two-year period, look at last fiscal year, look at this fiscal year, the two kind of neutralize each other. Over time, what we have seen is that generally, you know, I mean, we have ups and downs, and then over time, you know, what we get, we give back and vice versa. Really, it is difficult to read the future. All that we can say is that in a steady premiums environment, we will have really no noise from metal price lag. In a rising premium environment, we will gain, and then, you know, when the reverse, we will lose. That is all that we can say. It's very difficult to really be more predictive about metal price lag. It's more of a cash flow impact, rather than probably any impact on. It is a timing impact on the net income? Yeah, it is a timing impact. It's a yes. I mean, our net income, unadjusted net income and cash flow timing does get impacted by metal price lag. Sure. You know, the other question was on the European energy hedges. You know, we had another company stating that since the hedges were at a higher level, once natural gas prices corrected, you know, the impact or the benefit of that did not flow through immediately. Is that the case with our European operations as well? No, I can tell you, I can tell you that our hedges are running more or less around the spot prices today, which is good because spot prices are a bit abnormally low. For the unhedged portion, we are gaining from the spot prices. For the hedged portion, we are not deviating very far from the hedge prices. Looking at the future, the spot price does not represent the price at which we will get our hedges, or we are getting our hedges. The hedges, the lock-in comes at higher prices. We are waiting for summer to set in fully, because at that time, we will have an opportunity. We feel like we will have an opportunity to go even beyond 75%, but we will wait for the right moment and do it gradually. What I'm telling you is, no, because of taking hedges, we are not at any big disadvantage. A little bit of noise, but we are not at a disadvantage because of the hedge, and we are gaining from the spot prices for the unhedged portion as we speak right now. Sure, yeah. Thank you very much. Thank you. Thank you. The next question today comes from the line of Vishnu Kumar from Spark Capital. Please go ahead. Your line is now open. Thanks for your time. Follow up on the energy hedges again. For the next financial year, how much have you hedged? Is the futures price similar to what we are getting for the lock-in contracts, or is it higher? I mean, until what rates do we kind of go ahead and lock it in case if it starts moving higher? It is not a very material hedge for the following year, and we will look at summer as a time to kick in some hedging, because as I just said to the previous question, that right now there is a bit of a softening as we see summer and very high gas reserves in Europe. We think that we will have an opportunity to start locking in some positions for the following year, and we will do it, and we will come back to you on that. We are keeping a very close eye, and we will do the right thing as we head into summer. As we head into next year, at least the way we look at it, would the overall energy on a per megawatt hour basis or on, if on those metrics, would it be lesser than this year? At least the way we look at it, at least, should that be a number? Look, I can only make a very educated guess, who knows? My educated guess on this is that Europe is working very well. Western Europe, Germany and, you know, the countries in that zone are working in the right direction about keeping their reserves at a high level, about reducing dependence on Russian gas. I think things are heading in a good direction. Just based upon that, we think that the situation cannot get worse, and it should go on the better side. You know, the best thing would be if some positive outcome happens on the geopolitical conflict, because that can be the best thing for energy prices. In short, we think that things will be heading in a better direction, but, you know, it's difficult to read everything in the geopolitical environment. Got it, sir. Two other companies are having plans to set up greenfield plants in U.S. Just trying to understand, if you could help us with how are they impacting, let's say, they may have or are likely to impact in terms of your contracting percentages or pricing or volume disruption? If you could just help us understand whether they will have some impact at some point in the next future on these metrics? Yeah, I'm not sure I am very clear on the question, but we have at our greenfield facility, Bay Minette, we've been clear that about two-thirds of that will be moved or sold into the beverage packaging market, and about a third of it into the auto. For beverage packaging, we are virtually fully contracted on a long-term basis already. And on auto, we've got a strong order book and feel very confident that we'll sell that, will be contracted over the next one to two years. But I'm not sure if that's helpful with your question or if there was something more you were looking for. I know. I was asking more from SDI and Nucor plans for starting up the plant. Are they disrupting anything on contracting or pricing or when they start up in terms of the plant? Will we have some impact on volumes? Yeah. I can't comment on what SDI is doing. you know, they've announced their facility. Manna has not had any further announcements. I'm not sure where the Manna announcement sits at this point in time. We're focused on what we've been doing for decades very well and with our customer relationships, and we feel very confident about our ability to execute on our facility. We certainly have a first mover advantage, to be clear, in the contracting. Got it, sir. Thank you. Thank you. Our final question on today's call comes from the line of Ashish Kejriwal from Nuvama. Please go ahead. Your line is now open. Yeah, hi. Thanks for giving the opportunity. Sir, do you wish to give any volume guidance for FY 2024 by looking at the first half conditions, which we have already indicated? Any volume guidance for FY 2024 could be helpful. Here's the thing, you know, just given the choppiness of the next couple of quarters, I would just, we would just wait before being any precise. What we are telling you is that the full recovery of our volumes heading closer to a 1 million ton number in the high 900s, you know, like, edging towards 1 million, really would be fourth quarter. For reasons which we have been saying, this quarter is going to be a peak destocking quarter. Please keep that in mind. Next quarter is not, you know, a great quarter. I mean, you know, like, we still see the macroeconomic environment being choppy, whether it is building and construction. There will be a bit of a lag when promotional activity happens, you know, so we won't see the full quarter benefit of that. You know, the third quarter is, anyway, a seasonally low quarter. What I would say is that rather than, you know, being, getting ahead of ourselves and giving volume guidance, let's say that fourth quarter is when we see our volumes getting to the place which we would like. Again, we can tell you with a fair degree of confidence that we will stay in the EBITDA guided range that we have been saying, you know, like $400-$450 a ton. Somewhere in the middle of that range, we are having a very good confidence on being there. Sure. The second thing is, when you are discussing about quarter-on-quarter improvement, you mentioned about two reasons like, you know, volume growth as well as somewhat improved scrap spread in South America and new PPI coming in. If you look at the regional operating performance, we get a sense that in Europe, we get a sharp increase in Adjusted EBITDA per ton, which is from $157 to around $367, which is $210 increase. Whereas in other regions, like North America and South America, it's around $30-$35 only. Is there any one-off in Europe? Because this kind of EBITDA per ton in Europe is, I think, a one-year high also. Just wondering, you know, what is there in Europe which is not there in other countries? You know, we kind of are benefiting a little bit from from a better product mix because auto did very well in Europe. I think that auto will will look generally good in Europe, so the product mix helps us a lot. We had some contracts for pass-through getting activated, so new pricing got activated in Jan. You know, we had some favorability on the cost side. A part of it is sustainable, some of it is, you know, sort of timing. We also have some some benefit of, you know, sort of PCA, which is, you know, when you produce a better mix and add some inventories, some finished goods inventory. So there are some timing elements in this. I mean, if it helps you, I'll tell you that the level of $367 a ton is not a level that you should kind of bake in as something happening every quarter. I think that you should take sustainable levels by averaging out, you know, sort of three to four quarters. It will be on the better side. I mean, you know, like, in this case, because some of the quarters in the last calendar year saw the brunt of energy, which is not going to be at the same level again. I would say that, you know, while the 367 is not exactly a level that is sustainable in the next couple of quarters, it will pull back a little bit. You know, let's say that around 300 or a little north of 300 is a good, is a good way to think about it, but I wouldn't say more than that. Sure. Sure, the thing which I was trying to look at is what could be the one-off in that which was not present in other regions? The things which you have mentioned about PPI passing through automotive build rates improvement, that should have been reflected in North America also. 367, which is from an average of 276, it's something like $90 higher. Just wondering, you know, what could be one-off in that, which obviously will not be repeated going forward? Well, there's always a lag in some of the price pass-throughs, and when price pass-throughs come together in a quarter, you know, it does give us a bit of a lift. That is what I mean by there are also some timing issues in pass-through. You know, as energy pulls back, you know, in some of the specialty contracts, we may have to give some benefit to the customers to stay competitive, you know. I mean, if energy pulls back significantly, it is not like, you know, we can keep charging the same amount to the customer. There's always a lag, you know, that we could have on pass-throughs. I wouldn't go more than that. I mean, you know, we have given you enough indication that there are some things in this quarter, which kind of are a timing impact, and I think I told you what to expect, you know, going forward. Fair enough, sir. Thank you and all the best. Thank you. Thank you. There are no additional questions waiting at this time, so I'd like to pass the call over to Mr. Fisher for any closing remarks. Please go ahead. Great. Thank you, operator, appreciate everyone attending our call today. I just say I'm very thankful to all of our employees and partners for the remaining focus on what we can control in this environment and for, you know, really advancing Novelis's transformational growth journey. Again, thank you for your time today, and look forward to providing our Q1 results update in August. This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.