Elkem Asa · OSL:ELK
Elkem Asa — Q4 2020 Earnings Presentation
25 slides from Elkem Asa's earnings presentation, Feb 10, 2021
Slide 1: Fourth quarter results 2020
Fourth quarter results 2020 q@Elkem
Slide 2: Agenda
Agenda Business update By CEO Michael Koenig Financial performance By CFO Morten Viga Outlook By CEO Michael Koenig
Slide 3: A good result driven by a robust business model and improved markets
A good result driven by a robust business model and improved markets Elkem’s EBITDA for the fourth quarter reached the highest level since 2018 The business model shows improved results in terms of specialisation, operational performance, good cost management and record sales volumes Elkem has
Slide 4: Top ESG ratings achieved – further improvement initiatives ongoing
Environment, Social and Governance Top ESG ratings achieved – further improvement initiatives ongoing, strengthening Elkem’s competitive position Safety Environment Ambition zero injuries Biocarbon strategy to reduce fossil CO2 emissions 40% by 2030 Selected for CDP’s A List on climate change for 20
Slide 5: Battery materials project a significant green value creation opportunity
Battery initiatives in Europe and North America Battery materials project Annual need for anode graphite is estimated to 0.8 million tons by 2030 a significant green value creation opportunity Elkem aims to establish a leading position in the fast-growing market for battery anode materials in Euro
Slide 6: Key markets and regions showing continued recovery
Automotive – units sold (million) Key markets and regions showing continued recovery Global automotive continued to recover in September and remained stable at pre-covid levels in October and November Sales in China close to historic record levels EU Industrial Production YOY EU industrial pro
Slide 7: New specialised silicones complementing Elkem's portfolio
New specialised Organo-functional silicones (OFS) silicones complementing OFS combine the unique performance of silicones Elkem’s portfolio with the functionality, compatibility and potential reactivity that organics can provide Advanced manufacturing process creates OFS products with highly spe
Slide 8: Silicones - strengthening the position in an attractive industry
Silicones - strengthening the position in an attractive industry Elkem’s silicones business has shown a good development in 2020 and is delivering on its specialisation strategy The acquisitions of Basel Chemie and Polysil have strengthened Elkem’s product offering and R&D capabilities The new
Slide 9: Silicones market update, strong demand but high price volatility in China
Silicones market update, strong demand but high price volatility in China Silicones demand in China was strong in 4Q-2020 but the pricing was volatile Lack of available material caused an artificial price spike in spot markets Supply was further disrupted by a fire at a silicones plant in Zhej
Slide 10: Silicon and ferrosilicon market update, good price and demand recovery
Silicon and ferrosilicon market update, good price and demand recovery CRU silicon 99 price EU (EUR/mt) Silicon and ferrosilicon Market prices have increased during the fourth quarter 2020 and continued to rise into first quarter 2021 Strong demand, back to pre-covid levels, mainly driven by s
Slide 11: Carbon market update, global steel production continues to increase
Carbon market update, global steel production continues to increase Steel markets and ferroalloys are key demand drivers for carbon products Global steel production estimated to grow by 3% in Q4-2020 vs Q3-2020 EU and North America are driving the increase in production Industry forecasts fo
Slide 12: Elkem group good results driven by specialisation, operational improvements and all-time high sales
Elkem group good results driven by specialisation, operational improvements and all-time high sales Total operating income EBITDA ‒ Total operating income ‒ Up 81% from 4Q-2019 was all-time high and up 28% from 4Q-2019 ‒ Increase driven by ‒ Strong performance all-time high sales across all segments
Slide 13: Elkem group improved key ratios
Elkem group Consolidated key figures improved key ratios (NOK million, except where specified) 4Q 2020 4Q 2019 YTD 2020 YTD 2019 FY 2019 Total operating income 7,129 5,559 24,691 22,668 22,668 EBITDA 938 517 2,684 2,656 2,656 EBIT EBITDA MNOK 938 449 92 957 1,189 1,189 Segment Other included rea
Slide 14: Silicones stronger markets and good operations
Silicones Total operating income NOK million stronger markets and good operations Total operating income of MNOK 3,891 up 38% from fourth quarter last year EBITDA and margin Increased operating income explained by higher sales volumes and price NOK million and % recovery in China EBITDA of MNO
Slide 15: Silicon Products improvements reflecting strong market positions
Silicon Products Total operating income NOK million improvements reflecting strong market positions Total operating income of MNOK 3,084 up 19% from fourth quarter last year EBITDA and margin Strong increase mainly explained by higher sales volumes NOK million and % EBITDA of MNOK 318, up 76%
Slide 16: Carbon Solutions strong quarter and best annual result ever
Carbon Solutions Total operating income NOK million strong quarter and best annual result ever Total operating income MNOK 461, in line with the fourth quarter last year EBITDA and margin Stable volumes and sales prices NOK million and % EBITDA of MNOK 106, up 46% from fourth quarter last year
Slide 17: Elkem group proposed dividend of NOK 0.15 per share
Elkem group Earnings per share (EPS) proposed dividend of NOK per share NOK 0.15 per share Earnings per share (EPS) EPS amounted to NOK 0.18 in the fourth quarter and NOK 0.41 YTD Improvement in EPS reflected stronger underlying results, but included negative impact from other items and high t
Slide 18: Elkem group improved leverage ratio
Elkem group Net interest-bearing debt (NIBD) improved leverage ratio NOK billion Net interest bearing debt (NIBD) was BNOK 8.1 as at 31 December 2020 Leverage ratio was 3.0x based on LTM EBITDA of BNOK 2.7 The leverage ratio clearly improved from 3.8x in the previous quarter explained by highe
Slide 19: Elkem group strong cash flow
Elkem group Cash flow from operations strong cash flow NOK million Cash flow from operations(1) was MNOK1,064 in the fourth quarter, significantly improved from the corresponding quarter last year Explained by improved EBITDA combined with all-time low working capital levels Investments ex. M&
Slide 20: Outlook for the first quarter
Outlook for the first quarter Elkem is entering 2021 from a robust position, continuing to improve on specialisation and operational excellence as a basis for further growth The market sentiment is positive but macroeconomic uncertainty still persists Silicones prices in China at attractive le
Slide 21: Important notice
Important notice Any statement, 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 (f
Slide 22: Appendix
Appendix
Slide 23: Currency sensitivity
Currency sensitivity Currency development The cash flow is exposed to operating income and costs in different currencies. The main currencies are EUR and USD EUR - net cash flow approx. MEUR 310 USD - net cash flow approx. MUSD 150 Current cash flow hedging programme 90% hedging of net cas
Slide 24: Other financial sensitivities
Other financial sensitivities POWER SALES PRICES Electric power is a key input factor in Elkem’s production. Total consumption for Changes in sales prices could significantly affect operating income and EBITDA the group was 6.4 TWh in 2020. Near term exposure to spot power prices is 1% margin
Slide 25: @Elkem
@Elkem