5 February 2019 Novelis continues reporting a robust operating performance. Adj. EBITDA increased 6% YoY to USD322m, led by strong demand across product segments, operating efficiencies and favorable recycling spreads, partially offset by some temporary headwinds in autos (China and the UK) and a transport strike. USD2.3b funding has been arranged for the Aleris acquisition. USD23m in 3Q (after USD96m capex) and USD127m in 9MFY19 (after USD210m capex and USD360m WC increase). Barring the temporary pull-back in the auto market in the UK and China, the earnings outlook remains robust on the back of tightening in the beverage can market and operating efficiencies. Despite tapering of recycling spreads, management guided for robust EBITDA/t of USD400, which is still 3% better than our FY20 estimate. Aleris acquisition is strategic and value accretive, in our view, and it too will be FCF positive at margin.