Q1 Fiscal Year 2021 Highlights

• Net loss from continuing operations of $61 million, down 148% YoY; excluding special items, net income of $22 million
• Shipments of 774 kilotonnes, down 7% YoY
• Adjusted EBITDA of $253 million, down 32% YoY
• Strong balance sheet with $2.1 billion in liquidity
• Completed acquisition of Aleris on April 14 and began integration to drive synergies; Q1 fiscal 2021 results include the acquired business

Novelis Inc., the world leader in aluminum rolling and recycling, today reported a net loss attributed to its common shareholder of $79 million, and a net loss from continuing operations of $61 million for the first quarter of fiscal year 2021, down 162 percent and 148 percent, respectively, versus the prior year period. Excluding tax-effected special items in both years, first quarter fiscal 2021 net income was $22 million, down 85 percent versus the prior year period. This decline is due mainly to the after-tax impact of lower Adjusted EBITDA, as well as higher depreciation and amortization and unrealized derivative losses mainly associated with the acquisition of Aleris.

While the company's financial results were impacted by the COVID-19 pandemic, the resiliency of the beverage can market provided stability and demand trends in the automotive and specialty markets recovered significantly towards the end of the quarter. Most notably, its automotive customers across regions are trending positively toward pre-pandemic production levels. In addition to healthy automotive customer pull, the company is beginning to realize targeted operating fixed costs, general administrative expenses and R&D savings. Novelis has also maintained substantial liquidity to help navigate the current dynamic environment and manage the successful integration of Aleris. As demand trends increase in certain markets, the company continues working closely with customers to leverage its global manufacturing footprint and adjust production levels to meet their needs.

"With employee safety as our top priority, Novelis continues implementing a number of measures to protect our colleagues from COVID-19-related challenges, while successfully serving our customers and integrating Aleris with minimal disruption," said Steve Fisher, President and CEO, Novelis Inc. "We entered this fiscal year in a position of strength based on four consecutive years of record earnings and remain confident in our ability to handle this near-term uncertainty. With our diverse product portfolio, reliable and efficient operations, and world-class workforce, we have the flexibility and expertise to provide the solutions our customers need."

Net sales decreased 17 percent from the prior year period to $2.4 billion for the first quarter of fiscal 2021. This was driven by sharply lower average LME aluminum prices and local market premiums, as well as a seven percent decline in total flat rolled product shipments. Shipments of 774 kilotonnes were impacted by weak market conditions, partially offset by the addition of the acquired Aleris business.

Adjusted EBITDA decreased 32 percent to $253 million in the first quarter of fiscal 2021 compared to $372 million in the prior year period. The decrease was driven mainly by lower shipments and unfavorable product mix but partially offset by strong cost control, and EBITDA contribution from the acquired Aleris business.

Year-to-date fiscal 2021 free cash flow of negative $151 million compares to negative $94 million in the prior year period, driven primarily by lower Adjusted EBITDA, timing of taxes, and exceptional items, partially offset by lower capital expenditures. Capital expenditures decreased versus the prior year to $106 million, as the company defers non-strategic capital spending to conserve cash. While the first quarter free cash flow was pressured as a result of the pandemic, the company expects it can achieve strong positive free cash flow for the full 2021 fiscal year.

"We swiftly implemented a number of cost reduction initiatives to create sustainable flexibility in our cost structure, and are prepared to take further action if needed based on customer demand trends," said Devinder Ahuja, Senior Vice President and Chief Financial Officer, Novelis Inc. "These initiatives, combined with our strong liquidity position and identified business combination synergies provide us the confidence to manage through near-term market headwinds while continuing to strengthen the business for future success."

As of June 30, 2020, the company reported a strong total liquidity position of $2.1 billion. Net leverage increased during the quarter to 3.8x, reflecting higher debt levels related to funding the acquisition of Aleris. Net leverage is in line with the company's guidance at deal announcement to be below 4x at acquisition close, with a commitment to bring this below 3x within two years.

COVID-19 Response

Novelis' primary focus remains the health and well-being of its employees. The company is closely monitoring the changing landscape with respect to the COVID-19 pandemic and taking actions to manage its business and support customers. Novelis has bolstered its Environmental Health and Safety protocols to align with guidance from global health authorities and government agencies across company operations to help ensure the safety of its employees, customers, suppliers, communities and other stakeholders. The COVID-19 pandemic has caused travel and business disruption and economic volatility. There have been government mandates to stay at home or avoid large gatherings. As a result, some customers have temporarily shut down manufacturing facilities at times due to lack of demand, government decree, and/or public health concerns. Similarly, Novelis temporarily shut down some of its production to align with customer demand and reduce operating costs. We have identified approximately $250 million in potential cost reductions, between operating fixed costs, SG&A and R&D, should market conditions remain soft. The company will continue to scale production based on customer demand.

Aleris Acquisition

On April 14, 2020, Novelis closed its acquisition of Aleris Corporation and has begun integrating the two companies. The acquisition provides a number of strategic benefits, including product portfolio diversification with the entry into high-value aerospace and enhances our strategic position in Asia. We also believe that the acquisition of Aleris allows for approximately $150 million in potential annual cost synergies. The results from continuing operations reported today for the period ending June 30, 2020 reflect the acquired businesses. This excludes the Lewisport and Duffel plants pending divestment, reflected as results from discontinued operations. The company filed a form 8-K/A with the Securities and Exchange Commission on June 30, 2020, providing historical and pro forma financial information related to the acquisition.

About Novelis

Novelis Inc. is driven by its purpose to shape a sustainable world together. As a global leader in innovative products and services and the world's largest recycler of aluminum, we partner with customers in the aerospace, automotive, beverage can and specialties industries to deliver solutions that maximize the benefits of lightweight aluminum throughout North America, Europe, Asia and South America. Novelis is a subsidiary of Hindalco Industries Limited, an industry leader in aluminum and copper, and the metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India. For more information, visit novelis.com.