Slide 1: First quarter results 2021
First quarter results 2021
Slide 2: Agenda
Agenda Business update By CEO Michael Koenig Financial performance By CFO Morten Viga Outlook By CEO Michael Koenig Illustration: NASA Mars 2020 Perseverance Rover
Slide 3: Delivering on growth and profitability
Delivering on growth and profitability Elkem is delivering on its growth strategy and ambition to be a leading integrated provider of silicones solutions The operating revenue for the first quarter reached another all- time high with the best quarterly result since third quarter 2018 The board has a
Slide 4: ESG - a key priority for Elkem
Environment, Social & Governance ESG - a key priority for Elkem A clear focus on ESG = Astrong improvement in environmental impact was a key criteria for the new investment decision in China = In 2020, Elkem received an A rating from CDP, ranking in the world’s top 5% on climate = In 2020, Elkem aga
Slide 5: Elkem to further strengthen its silicones position in Asia
China strategic investment Elkem to further strengthen its silicones position in Asia . Investment decision for brownfield expansion in China = Further strengthening of Elkem’s position as China’s leading fully-integrated silicones producer = Increasing the capacity at Elkem Xinghuo by approx. 50% =
Slide 6: Strong strategic rationale to pursue capacity expansion
China strategic invest Strong strategic rationale to pursue capacity expansion Industry fundamentals underpin strategy + Global annual growth of ~4.5% + Attractive industry margins over-the-cycle pporting the specialisation strategy Strengthen position in the fastest growing market + China is the fa
Slide 7: Significantly improving financial and environmental performance
China strategic investment Significantly improving financial and environmental performance Strong financials and improved environmental performance Delivering on Elkem’s strategy Profitability CA +35% EBITDA margin ol Attractive investment / Leading positions in Integrated value peer 85 50% capacity
Slide 8: Share issue concluded to capture specialised growth initiatives
Share issue concluded to capture specialised growth initiatives = On 26 April 2021, Elkem raised MNOK 1,891 of new equity (gross proceeds) to further strengthen the growth platform = The subscription price was NOK 33.50 per share and determined through bookbuilding after close of trading in Oslo on
Slide 9: Battery materials opportunity: pilot plant in operation
Battery materials opportunity Pilot plant in operation — progress according to plan Elkem aims to establish a leading position in the fast-growing market for battery anode materials Elkem’s technology significantly more environmentally friendly, reducing total emissions by ~90% Global Li-ion battery
Slide 10: Continued recovery in key markets and regions
General markets Continued recovery in key markets and regions "Global automotive markets have continued to recover after the Covid-19 effects in 1H-2020, but show regional differences because of Covid restrictions Automotive - units sold (million) = Constraints on supply of semi-conductors have impa
Slide 11: Silicones market: strong markets driving price increases
Silicones market Strong markets driving price increases = The silicones demand was strong in all major regions during the first quarter = Increased demand for specialties in APAC, Europe and the US following economic recovery = Most major suppliers have announced price increases in the range of 10 -
Slide 12: Silicon and ferrosilicon markets: prices continued to rise
Silicon and ferrosilicon markets Prices continued to rise in the first quarter Market prices have continued to rise during the first quarter = Silicon prices up 22% and ferrosilicon prices up 26% from December to March = Strong demand mainly driven by steel and automotive = Still low supply, restart
Slide 13: Carbon market: market fundamentals continue to improve
Carbon market Market fundamentals continue to improve = Steel markets and ferroalloys are key demand drivers for carbon products * Global steel production has shown strong recovery since the second quarter 2020 = Production is estimated to grow by 7% in 1Q-2021 vs 19-2020 " China is driving the YOY
Slide 14: Strong results driven by good markets and operational excellence
Elkem group Strong results driven by good markets and operational excellence Total operating EBITDA income 7129 13% . 5,798 5879 5,886 = Reaching another = More than doubled 938 all-time high from 1Q-2020 % 512 19 2Q 3Q 4Q 1Q 2Q 3Q 4Q = Strong sales = Improv 9 191 WW 7.193 proved . 5 1231 volumes ac
Slide 15: Higher EBITDA driving improvements in key ratios
Elkem Group Higher EBITDA driving improvements in key ratios EBITDA MNOK 1,231 = Segment Other included realised currency hedging gains of MNOK 13 Productivity Improvement Programme continues to proceed ahead of plan = Annual run rate of MNOK 230 by end of 190-2021 = Annual improvement target MNOK 3
Slide 16: Silicones: strong markets in major regions
Silicones Strong markets in major regions = Total operating income of MNOK 3,723 up 48% from first quarter 2020 = Increased operating income was mainly explained by higher sales volumes. 1Q-2020 was impacted by Covid-19 in China = EBITDA of MNOK 587, up 209% from first quarter last year = Mainly exp
Slide 17: Silicon Products: good operations and attractive market conditions
Silicon Products Good operations and attractive market conditions = Total operating income of MNOK 3,136 up 6% from first quarter last year = Explained by higher sales prices and higher sales volumes = EBITDA of MNOK 526, up 41% compared to first quarter last year = Explained by higher sales prices
Slide 18: Carbon Solutions: operational excellence driving record results
Carbon Solutions Operational excellence driving record results " Total operating income MNOK 486, up 2% from first quarter last year = Higher volumes partly offset by currency effects due to stronger NOK " EBITDA of MNOK 121, all-time high and up 19% from first quarter last year = Improved EBITDA ex
Slide 19: Strong earnings per share and robust equity
Elkem Group Earnings per share (EPS) Strong earnings per share and robust equity 0.43 = Earnings per share (EPS) = EPS amounted to NOK 1.17 in the first quarter oe = The improvement in EPS reflected stronger underlying results -0.02 -0.18 and positive net currency effects from stronger NOK QI-20 2-2
Slide 20: Successful bond issue and improved leverage ratio
Elkem Group Net interest-bearing debt (NIBD) Successful bond issue and my as improved leverage ratio ) 68 * Net interest-bearing debt (NIBD) was BNOK 7.7 as at 31 March 2021 = Leverage ratio was 2.3x based on LTM EBITDA of BNOK 3.3 = The leverage ratio was clearly improved over the past two quarters
Slide 21: Good cash flow and stable investments
Elkem Group Good cash flow and stable investments * Cash flow from operations™ was MNOK 590 in the first quarter and clearly improved from the corresponding quarter last year = Improvement mainly explained by improved EBITDA generation = Investments ex. M&A amounted to MNOK 443 in the first quarter
Slide 22: Outlook for the second quarter 2021
Outlook for the second quarter 2021 = Positive market sentiment for all divisions. Elkem will continue to develop its market positions and focus on sustainable growth = The silicones market is strong. Market reference prices in China expected to remain at attractive levels in the second quarter. Glo
Slide 23: Important notice
Important notice it, estimate or projection included in this presentation (or upon which any of the conclusions contained herein are based) with respect to anticipated future performance (including, without limitation, any statement, estimate or projection with respect to the condition (financial or
Slide 24: Appendix
2 Elkem Appendix 24
Slide 25: Currency sensitivity
Currency sensitivity = The result and cash flow are exposed to currency fluctuations. The main currencies are EUR and USD = EUR - net exposure approx. MEUR 300 = USD - net exposure approx. MUSD 150 = Current cash flow hedging programme = 90% hedging of net cash flows occurring within 0-3 months = 45
Slide 26: Other financial sensitivities
Other financial sensitivities POWER = Electric power is a key input factor in Elkem’s production. Total consumption for the group was 6.4 TWh in 2020. Near term exposure to spot power prices is limited = Norway, hedging programme mainly consisting of long-term contracts covering 80% of the power con
Slide 27: Delivering your potential
~ Elkem Delivering your potential