En+ Group Ipjsc Ord Shs · RUS:ENPG
En+ Group Ipjsc Ord Shs — En+ Group — FY2020 Earnings Presentation
50 slides from En+ Group Ipjsc Ord Shs's earnings presentation, Mar 25, 2021
Slide 1: FY 2020 Financial Results Presentation
FY 2020 Financial Results Presentation Webcast & Conference Call 25 March 2021
Slide 2: Disclaimer
Disclaimer THIS DOCUMENT AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This presentation may contain “f
Slide 3: Agenda
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 3
Slide 4: 2020 Key Highlights
2020 Key Highlights Market En+ performance Corporate developments Year of unprecedented Minimal operational disruption RUSAL received ‘A’ rating from disruption CDP Safeguarding our employees, Aluminium demand recovery in customers and communities was Simplification of ownership 2H 2020
Slide 5: Pathway to Net Zero
Pathway to Net Zero In January 2021 En+ Group announced its mid- and long-term GHG reduction targets. The Group believes that these stretching targets represent the most ambitious climate change targets in the global aluminium industry. En+ targets1: to become net zero by 2050 to reduce GHG emis
Slide 6: Corporate Governance and Compliance
Corporate Governance and Compliance Corporate governance Sanctions compliance • Having undergone comprehensive restructuring and updated its governance, EN+ has proven its commitment to the highest standards or • EN+ Group strictly adheres to the terms of sanctions removal agreed corporate accountab
Slide 7: Agenda
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 7
Slide 8: 2020 Financial and Operational Highlights
2020 Financial and Operational Highlights Revenue 5.0% decline in the average LME aluminium price Aluminium Aluminium production was broadly unchanged USD 10,356 mn 6.0% decline in sales volumes of primary production y-o-y down 11.9% y-o-y aluminium and alloys 3,755 kt Recovery in global alu
Slide 9: Coronavirus Response in En+ Group
Coronavirus Response in En+ Group People • Regular qualified trainings for employees providing information on the infection. Launch of hotline • Provision of personnel with protective equipment including gloves, masks and sanitizers • Thermometry control. Personnel flows are maximally delimited • Di
Slide 10: Sustainability Performance (1/2)
Sustainability Performance1 (1/2) ⬛⬛Power ⬛⬛Metals ⬛⬛En+ Group Target Comment 5 1 4 Work-related Management considers work-related fatalities unacceptable 2 4 To achieve zero fatalities. and conducts comprehensive investigations of all fatalities in employee fatalities 2 order to develop and impleme
Slide 11: Sustainability Performance (2/2)
Sustainability Performance1 (2/2) ⬛⬛Power ⬛⬛Metals ⬛⬛En+ Group Target Comment The reduction of GHG emissions in the Power segment was 50.9 50.6 due to reduction of fossil fuels consumption on CHPs caused Gross by the structure and volume of heat and electric loads in 22.8 22.0 GHG emissions To reduc
Slide 12: Agenda
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 12
Slide 13: Power Market Update
Power Market Update Power supply and demand in Siberia1 Average electricity spot prices2 TWh FY’20 FY’19 Change Average market price, FY’20 FY’19 Change RUB/MWh Production in Siberia 207.0 208.7 (0.8%) 2nd price zone 872 890 (2.0%) HPPs production 117.7 107.8 9.2% Irkutsk region 793 789 0.5% Consump
Slide 14: Aluminium Market Update
Aluminium Market Update Price is on a solid upward trajectory LME stocks stay at low level Regional premiums turned to growth in 2H 2020 LME cash settlement monthly avr, $/t mn t Only 300kt growth between Feb 2021 and Feb 2020 Monthly avr, $/t Monthly avr, US cent/lbs 2,150 2.0 ON WRNT CNLD WRNT Eur
Slide 15: FY 2020 Financial Highlights
FY 2020 Financial Highlights USD mn FY 2020 FY 2019 Change Revenue 10,356 11,752 (11.9%) Adj. EBITDA1 1,861 2,127 (12.5%) Adj. EBITDA margin 18.0% 18.1% (0.1pp) Net profit 1,016 1,304 (22.1%) Net profit margin 9.8% 11.1% (1.3pp) Capex 1,128 1,061 6.3% Net debt2 9,826 10,204 (3.7%) Free cash flow3 96
Slide 16: En+ Group Revenue and EBITDA Breakdown
En+ Group Revenue and EBITDA Breakdown 2019 to 2020 Revenue bridge 2019 to 2020 Adj. EBITDA2 bridge (USD mn) Change FY2020 to FY2019(%) (USD mn) Change FY2020 to FY2019 (%) 11,752 -11.8% -9.8% 2,989 41 10,356 -9.8% -11.9% (1,145) 2,127 (948) (292) 2,697 1,861 (907) (95) (134) 1,127 (37) USD -1,396 m
Slide 17: En+ Group Debt Overview as of 31 December 2020
En+ Group Debt Overview as of 31 December 2020 Net debt change in FY 2020 Key debt metrics (USD mn) (USD mn) 31 Dec 2020 31 Dec 2019 10,204 2,599 5 9,826 Total debt, IFRS 12,388 12,482 (805) 83 1,907 (788) (1,091) 211 (376) 3,738 692 (1,164) (1,896) 5 (128) 4,263 Cash and cash equivalents 2,562 2,27
Slide 18: Capital Expenditure
Capital Expenditure Capital expenditure dynamics1 Power Segment (USD mn) • Capex increased 0.4 % y-o-y to USD 237 mn 1,084 2 1,1342 • Maintenance capex c.51% of total 237 236 • The Group's Power segment continued investment in technical connections to its power supply infrastructure (including a new
Slide 19: Power Segment's HPP Modernisation Programs
Power Segment’s HPP Modernisation Programs • ‘New Energy’ is an ongoing program, focused on modernising the power plants at Angara and Yenisei cascades, to improve efficiency, reliability and safety as well as reduce potential GHG emissions by augmented HPP generation • As part of the program: • Ust
Slide 20: Agenda
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 20
Slide 21: En+ Climate Change Ambition
En+ Climate Change Ambition Initial setup Key actions January 2021 – Climate targets approved by Analysis of the activities within value chain of both segments and access efficient abatement Board of Directors and compensation measures to develop GHG reduction strategy, in line with 1.5°C pathwa
Slide 22: En+ is the World Leader in Low-Carbon Aluminium
En+ is the World Leader in Low-Carbon Aluminium SPOT TRADING MARKET SHARE 20% RUSAL share in global low- carbon aluminium En+ is an industry leader in low carbon aluminium PLATFORM FOR LOW- CARBON ALUMINIUM LME proposed voluntary disclosure of production1 carbon-related metrics for aluminium and lau
Slide 23: Global Aluminium Demand is on the Way to Full Recovery in 2021
Global Aluminium Demand is on the Way to Full Recovery in 2021 with Transportation Segment in Lead PRIMARY ALUMINIUM DEMAND DYNAMICS٭ mn t mn t mn t GLOBAL CHINA EX-CHINA +6.1% +5.0% -1.7% +3.9% -8.9% +7.9% 67.8 39.8 65.0 63.8 37.9 28.5 36.5 28.0 25.9 2019 2020 2021F 2019 2020 2021F 2019 2020 2021
Slide 24: Green Recovery Drives Aluminium Demand Across Sectors and Geographies
Green Recovery Drives Aluminium Demand Across Sectors and Geographies INDUSTRY WINNERS SMART MOBILITY GREEN BUILDING RECYCLABLE MATERIALS RENEWABLE ENERGY EV penetration accelerates Improve energy-efficiency of old Can revolution 2.0: Aluminium Tripling Renewables Investment to across all segments a
Slide 25: Decarbonisation in China Leads to a Structural Shift in Global Aluminium Industry
Decarbonisation in China Leads to a Structural Shift in Global Aluminium Industry China set ambitious goals to rapidly cut emissions To have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. STRICT CONTROL OF By 2025 reach a non-fossil fuel share of 20% (up from a 15 per cent
Slide 26: Strong Market Position in Low-Carbon Aluminium Drives VAP Sales Growth
Strong Market Position in Low-Carbon Aluminium Drives VAP Sales Grows in Turbulent Market Environment Rusal is the only key producer who increased VAP sales in 2020 and gained VAP share in sales portfolio Key primary aluminium producers below represent >50% of total VAP market supply Ex-China, VAP s
Slide 27: Agenda
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 27
Slide 28: En+: Best Positioned to Enable the Transition to Low-Carbon Aluminium
En+: Best Positioned to Enable the Transition to Low-Carbon Aluminium Industry leader in low-carbon aluminium Russia Lowest-cost aluminium producer Sweden Ireland Strong long-term fundamentals for aluminium Krasnoyarsk market Moscow Boguchany HPP Ust-Ilimsk HPP Strong and resilient cashflow
Slide 29: Thank you for your attention!
Thank you for your attention! For further information, please visit: https://www.enplusgroup.com/en/investors/ For investors: E: ir@enplus.ru For media: E: press-center@enplus.ru T: +7 (495) 642 7937 29
Slide 30: Appendix
3 7 12 20 27 30 Introduction 2020 highlights Financial Enabler of Conclusion Appendix performance decarbonisation overview 30
Slide 31: Strong Investment Fundamentals
Strong Investment Fundamentals “Best in class” equity story characteristics En+ Group alignment Industry 1.1. Leadership in geography, sector and World class asset – global benchmark in aluminium market 1 segment position #1 aluminium producer by production volumes in the world (ex-China)1 1.2.
Slide 32: Global Leader in Hydro Power among independent producers
Global Leader in Hydro Power among independent producers Global leader in hydro power generation… Top power companies by installed hydro capacity globally (GW where available1) Competitive landscape in Siberia (core region of operations, by installed capacity in 2020 ) (GW) Country State 4 State Sta
Slide 33: FY 2020 Operational Highlights
FY 2020 Operational Highlights FY 2020 FY 2019 Change Total aluminium production, kt 3,755 3,757 (0.1%) Total aluminium sales, kt 3,926 4,176 (6.0%)2 VAP share 44% 37% 7 pp Sales and Total electricity production1 , TWh 82.2 77.8 5.7% production • HPPs, TWh 69.3 64.2 7.9% • CHPs, TWh 12.9 13.6 (5.1%)
Slide 34: Segment Highlights
Segment Highlights Power segment USD mn FY 2020 FY 2019 Change • Power segment revenues decreased mainly reflecting rouble depreciation in 2020 vs. 2019 Revenue 2,697 2,989 (9.8%) (the average RUB/USD exchange rate went up 11.4%) Adj. EBITDA1 993 1,127 (11.9%) • Adj. EBITDA decline was mainly driven
Slide 35: Water Inflows as a Driver to Increase HPP Generation
Water Inflows as a Driver to Increase HPP Generation Overview Water inflows, Angara cascade1 (m3 per sec.) • The Group’s Angara cascade HPPs (Irkutsk, Bratsk and Ust-Ilimsk) increased power 8,000 generation to 47.3 TWh in 2020 (up 6.3% y-o-y) and 13.1 TWh in 4Q 2020 (up 6.5% 7,000 y-o-y). The increa
Slide 36: Power Generation Volumes
Power Generation Volumes Hydro power generation1 69.3 64.2 63.5 (TWh) 22.0 19.7 18.5 17.7 17.8 17.9 19.5 47.3 45.0 14.2 14.6 16.4 15.6 44.5 5.1 5.5 4.7 6.0 6.4 4.5 4.7 5.0 9.7 9.9 12.6 12.3 11.8 10.5 11.9 13.1 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2019 FY 2020 Long-term
Slide 37: Power Segment Sales Breakdown
Power Segment Sales Breakdown Electricity sales Capacity sales1 (TWh) (GW) 97.8 93.6 17.2 17.8 178.5 170.4 3.7 Retail 3.8 38.9 28.7 Regulated contracts 39.3 Regulated contracts 39.3 KOM 3 Free bilateral contracts Free bilateral contracts 6.3 118.5 5.5 Balancing market 141.7 31.4 Spot market 2 27.2 2
Slide 38: Power Segment EBITDA Analysis
Power Segment EBITDA Analysis Power segment EBITDA in 2020 2020 adj. EBITDA bridge build-up (USD mn) EBITDA margin (%) (USD mn) 85 4 13 na 37 30 1,127 914 30 19 993 44 993 (116) (4) (59) HPPs CHPs Coal Other and interco Total Adj. EBITDA FY FX Spot prices HPP Others Adj. EBITDA FY 2019 generation 20
Slide 39: Power Segment's Modernisation Programs
Power Segment’s Modernisation Programs CHP modernisation program Projects Commence of capacity supply Capacity, MW CAPEX2 USD mn • The Group participated in the state programs for CHP modernisation providing guaranteed return on investment.1 Segozerskaya HPP, 01.12.2022 8.1 19.3 • Capacity Allocatio
Slide 40: Power Segment Debt Overview
Power Segment Debt Overview Key debt metrics Net debt change in FY 2020 (USD mn) (USD mn) 31 Dec 2020 IFRS 31 Dec 2019 IFRS 1,907 3,738 4,263 Loans and borrowings (788) - Corporate Debt 3,552 2,978 211 - Operational Debt 1,044 1,257 (805) Total debt 4,596 4,235 Cash and cash equivalents 333 497 31 D
Slide 41: Metals Segment Production
Metals Segment Production Aluminium (kt) 3,757 3,755 120 117 142 139 939 3,495 3,499 928 942 949 940 927 939 31 29 950 32 29 29 28 29 31 35 35 35 36 35 35 35 34 861 873 878 884 876 864 875 885 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2019 FY 2020 Russia Siberia Russia Europ
Slide 42: Aluminium Sales and Revenue
Aluminium Sales and Revenue (Kt) -6.0% y-o-y Primary • In 2020, aluminium sales decreased 6.0% y-o-y, to 3,926 kt. In 4Q 2020, sales were 4,176 3,926 4,176 Ingots 1,028 kt (down 7.1% y-o-y). This reduction in sales is mainly attributable to sales 13 3,926 aluminium 261 66 volumes above normal levels
Slide 43: Metals Segment EBITDA Breakdown
Metals Segment EBITDA Breakdown 2020 EBITDA bridge build-up 2020 adj. EBITDA bridge build-up (USD mn) EBITDA margin (%) (USD mn) EBITDA margin (%) 2.1 16.0 na 9.9 47 10.2 48 10.2 (245) 1,068 966 871 871 (459) (107) (424) Aluminium Alumina Unallocated (3) 2020 EBITDA 2019 Premiums / Effect of LME Alu
Slide 44: Metals Segment Capital Expenditure
Metals Segment Capital Expenditure Capex semi-annual dynamics Capex 2020 Capex guidance 2021 USD mn 897 842 848 834 Taishet Aluminium 600 Smelter 25% 22% 500 Taishet Anode Plant 400 300 USD 897 mn USD 1.0–1.1 bn 521 495 496 56% 200 417 417 8% Other development 56% 13% 353 401 321 capex 100 11% 0 Mai
Slide 45: Metals Segment Debt Overview
Metals Segment Debt Overview Net debt change in FY 2020 • In November 2020 RUSAL negotiated with Sberbank new terms under a bilateral loan (USD mn) backed by NN shares: 6,466 o final maturity was extended from 2024 to 2027 692 5,563 o USD interest rate was reduced from 3mLibor+3.75% (with floor on L
Slide 46: En+ Group Statement of Profit or Loss
En+ Group Statement of Profit or Loss Statement of profit or loss Year ended USD mn 31-December-2020 31-December-2019 Revenue 10,356 11,752 Cost of sales (7,808) (8,873) Gross profit 2,548 2,879 Distribution expenses (545) (632) General and administrative expenses (775) (839) Impairment of non-curre
Slide 47: En+ Group Business Segments
En+ Group Business Segments Statement of profit or loss by Business segment Year ended 31-December-2020 En+ Group Metals Power USD mn Adjustments Consolidated segment segment Revenue 10,356 8,566 (907) 2,697 Operating expenses (excluding depreciation and loss (8,495) (7,695) 904 (1,704) on disposal
Slide 48: En+ Group Statement of Financial Position
En+ Group Statement of Financial Position Statement of financial position Statement of financial position (cont’d) USD mn 31-Dec-2020 31-Dec-2019 USD mn 31-Dec-2020 31-Dec-2019 EQUITY AND LIABILITIES ASSETS Equity Non-current assets Share capital - - Property, plant and equipment 9,577 9,883 Share p
Slide 49: En+ Group Statement of Cash Flows
En+ Group Statement of Cash Flows Statement of cash flows Statement of cash flows (cont’d) Year ended Year ended USD mn 31-Dec-2020 31-Dec-2019 USD mn 31-Dec-2020 31-Dec-2019 OPERATING ACTIVITIES INVESTING ACTIVITIES Proceeds from disposal of property, plant and equipment 19 46 Profit for the year 1
Slide 50: EBITDA Reconciliation
EBITDA Reconciliation Year ended Year ended 31 December 2020 31 December 2019 USD mn En+ Group Metals Power En+ Group Metals Power Results from operating activities 1,010 279 731 976 87 855 Add: Amortisation and depreciation 781 570 214 806 566 240 Loss/(gain) on disposal of property, plant and equi