Harbor Aluminum Conference Chicago, IL June 9, 2016 Cautions about - PowerPoint PPT Presentation

Harbor Aluminum Conference Chicago, IL June 9, 2016

Cautions about forward-looking statements and other notices Cautionary Statement Regarding Forward-Looking Statements. This presentation contains forward-looking statements, which are based on our current expectations, estimates and projections about Real Industry, Inc. and its subsidiaries' (the “Company”) businesses and prospects, as well as management’s beliefs and certain assumptions made by management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “should,” “will” and variations of these words are intended to identify forward-looking statements. Such statements speak only as of the date hereof and are subject to change. The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason. These statements include, but are not limited to, statements regarding estimated secondary aluminum demand in future periods; secondary aluminum outlook; scrap market outlook; automotive end use outlook as well as future performance, growth, operating results, financial condition and prospects of the Company. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Accordingly, actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference include, but are not limited to the Company’s ability to successfully identify, consummate and integrate acquisitions and/or other businesses; changes in business or other market conditions; the difficulty of keeping expense growth at modest levels while increasing revenues; the difficulty of making operating and cost improvements; the Company and its subsidiaries' ability to successfully defend against current and new litigation and indemnification matters, as well as demands by investment banks for defense, indemnity, and contribution claims; the Company’s ability to access and realize value from its federal net operating loss tax carryforwards; the Company’s ability to identify and recruit management; the Company’s ability to maintain the listing requirements of the NASDAQ; and other risks detailed from time to time in the Company’s SEC filings, including but not limited to the most recently filed Annual Report on Form 10-K and subsequent reports filed on Forms 10-Q and 8-K. 2

Real Alloy at a Glance  Global leader in third-party aluminum recycling  Headquarters in Beachwood, OH  30+ year operating history  Convert aluminum scrap and by-products into recycled metal and specification alloys  24 facilities in North America and Europe  300+ customers worldwide  1,700+ employees globally  Summary financials as of or LTM 3/31/16: — Volume invoiced over 2.6B pounds — Revenues of $1.3B — Leverage ratio of approximately 4.1 — Liquidity over $78M Our mission is to responsibly capture the inherent economic value of aluminum recycling solutions 3

Secondary Aluminum Industry Value Proposition Scrap Suppliers Customers  Cost advantages over primary aluminum Wrought alloy Industrial  Closed-loop (maximizes consumption of processors (new) owned metal units and cheapest source of (e.g., rolling mills, extruders) metal)  Molten delivery reduces cost and can SECONDARY expand capacity Aluminum recycling − Post-consumer (old) wrought, cast and specification alloys  Scale and expertise boost efficiency and quality Automotive OEMs, Aluminum foundries and  Production and delivery flexibility by-products casters (e.g. dross)  Scrap procurement capabilities Key Bridge in the Supply Chain 4

Secondary Aluminum Demand % Share of aluminum production – NA and Europe Global aluminum production (Tonnes in millions) 69.4% 63.1% CAGR % '12 - '22E 57.4% 52.9% 50.4% 104.9 5.2% 6.7% 82.5 37.7 49.6% 47.1% 63.2 27.7 42.6% 4.5% 50.7 19.7 36.9% 13.8 30.6% 35.7 67.3 9.8 54.9 43.5 36.9 26.0 2002 2007 2012 2017E 2022E 2002 2007 2012 2017E 2022E Primary Secondary Primary Secondary Source: Freedonia Group, October 2013. Secondary aluminum production is expected to grow faster than primary production and should account for half of all production in North America and Europe by 2022 5

Aluminum Pricing P1020 Price vs. LME Primary Inventory 6,000,000 $3,000 $2,800 5,000,000 $2,600 4,000,000 $2,400 Metric Tonnes $/T 3,000,000 $2,200 $2,000 2,000,000 $1,800 1,000,000 $1,600 0 $1,400 3-May-11 3-Nov-11 3-May-12 3-Nov-12 3-May-13 3-Nov-13 3-May-14 3-Nov-14 3-May-15 3-Nov-15 3-May-16 Aluminum stock P1020 price NASAAC/380 Price vs. NASAAC LME Inventory 180,000 $2,800 160,000 $2,600 140,000 $2,400 120,000 $2,200 Metric Tonnes 100,000 $/T 80,000 $2,000 60,000 $1,800 40,000 $1,600 20,000 0 $1,400 3-May-11 3-Nov-11 3-May-12 3-Nov-12 3-May-13 3-Nov-13 3-May-14 3-Nov-14 3-May-15 3-Nov-15 3-May-16 NASAAC stock NASAAC price MW380 Source: Metalprices.com Price Movements Tied to Inventory??? 6

Automotive End Use Outlook Auto Builds  Auto builds forecasted to rise in all regions — North American increases largely in Mexico — European producers expanding to Eastern Europe  Huge growth projected in body, bumper and closure  Castings pounds per vehicle to increase Aluminum Content per Vehicle — Powertrain to increase from 196 lbs Future Component Mix Current Component Mix to 209 lbs Powertrain Powertrain 15% 12% — Chassis, Suspension and Steering to Wheels Wheels increase from 21 lbs to 38 lbs 5% 38% Chassis, Suspension 6% Chassis, Suspension  & Steering & Steering Capacity exists to process the 57% 32% Body, Bumper and Body, Bumper and expanded alloy mix from new products 17% Closure Closure and applications All Other All Other 11% 7% 343 Pounds/Vehicle 550 Pounds/Vehicle Source: Ducker Worldwide, October 2012. Ramp Up is Underway – Impact to be Determined 7

Scrap Market and Outlook US Exports of Aluminum Scrap to China (Metric Tonnes 000's)  Industrial Scrap 120 120 116 114 112 102 102 101 102 100 99 99 98 − 96 Flow remains fairly strong 90 88 85 85 85 82 83 83 81 81 81 80 80 74 74 74 72 71 66 60 57 − 56 54 54 Auto body scrap supply chain being defined  Post-Consumer Scrap − Low prices driving down flow Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 − Steel industry slowdown has negative impact Source: USGS − China remains less active  Aluminum by-products (dross) $1.40 Platts MW A-380 vs. MB226 (USD) − Driven by rolling mill / extrusion / casting volumes $1.30 − Expected to increase with auto body trends $1.20 $1.10  Impact of currency fluctuations $/Lb $1.00 − Leads to changes in flow of scrap, ingot and $0.90 products $0.80 $0.70 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May MTD MB226 (USD) MW380 Bumpy Ride to Continue 8

Financial Strength of Supply Chain Scrap Suppliers Customers Wrought alloy Industrial processors (new) (e.g., rolling mills, extruders) SECONDARY Aluminum recycling Post-consumer − wrought, cast and (old) specification alloys Automotive Aluminum OEMs, foundries by-products and casters (e.g. dross) Aluminum Supply Chain Remains Strong 9

Secondary Aluminum Outlook Opportunities Risks  Increasing use of aluminum  Currency  Global expansion of the industry  Relocation of production  Technology  Financial health of industry  Demand for eco-friendly products  Impact of low prices  Legislation  Global balance of prime and scrap Positive Outlook Despite Risks 10