Elkem Asa · OSL:ELK
Elkem Asa — Q4 2022 Earnings Presentation
27 slides from Elkem Asa's earnings presentation, Feb 13, 2023
Slide 1: Fourth quarter results 2022
‘ ma a —— Fourth quarter results 2022
Slide 2: Agenda
Agenda Business update By CEO Helge Aasen Financial performance By CFO Morten Viga Outlook By CEO Helge Aasen 2 Elkem
Slide 3: Highlights
Highlights Fourth quarter concludes a record year for Elkem = Elkem delivered a good result for the fourth quarter, based on strong performance from Silicon Products and Carbon Solutions = The market conditions have generally been weak, particularly in China, severely impacting the Silicones divisio
Slide 4: Environmental, Social & Governance
Environmental, Social & Governance ESG - rated among the world’s leading companies A clear focus on ESG Awarded double A- scores from CDP. for the company’s efforts on climate and forests. Elkem also achieved a B score on water security Elkem has closed its first sustain- ability linked loan facilit
Slide 5: Green leadership
Dual-play growth Green leadership → Balanced between geographic → Strengthening position as best in the regions (East & West) industry on low CO2 → Balanced across the value chain → Growing supplies to green transition & (Upstream & Downstream) creating green ventures → → → → → → → → →
Slide 6: Capacity increase investment
▪ ▪ ▪ Investment amount MNOK 200 ▪ Capacity increase 40% Additional annual sales > MNOK 300
Slide 7: Power price levels and sales by region
▪ ▪ < 50 EUR/MWh Elkem smelter 50 – 75 EUR/MWh > 75 EUR/MWh ▪ EU 3,9 % 1,8 % Norway & Iceland 6,6 % 3,6 % North America 4,5 % 2,3 % South America 5,9 % 4,5 % China 74,5 % 72,5 % Asia Pacific 3,5 % 5,0 % Russia & Central Asia 1,0 % 7,9 % Rest of the world 0,1 % 2,4 % SUM 100,0 % 100 %
Slide 8: Power price levels
▪ < 50 EUR/MWh 50 – 75 EUR/MWh > 75 EUR/MWh ▪ ▪ ▪ ▪ ▪
Slide 9: Global light vehicles and EV production
Global light vehicles production, 2018 – 2022 (in million) ▪ ▪ ▪ Global EV production forecast, 2023-2029 (in million) ▪ ▪
Slide 10: General markets
General markets Covid situation severely impacting Chinese markets = The Covid situation has impacted Chinese markets throughout 2022, with forecasted GDP growth down to approx. 3% = Lock downs and travel restrictions have negatively impacted consumption and production, particularly for downstream s
Slide 11: DMC reference price China
▪ DMC reference price China (CNY/mt) ▪ ▪ ▪ ▪ ▪ DMC reference prices are based on quotes incl. VAT and transportation. Quotes may not always reflect accurate sales prices.
Slide 12: CRU silicon and ferrosilicon prices EU
CRU silicon 99 price EU (EUR/mt) ▪ ▪ CRU ferrosilicon 75 price EU (EUR/mt) ▪ ▪
Slide 13: Crude steel production
▪ Crude steel production (million mt) ▪ ▪ ▪ ▪ ▪
Slide 14: Elkem group
Elkem group Weak result for Silicones, but another st Products and Carbon Solutions Total operating income = In line with 49-2021 = Lower operating income for Silicones offset by Silicon Products & Carbon Solutions 2 Elkem 11,876 2,326) 8,796 7193 7,332 29 3Q 19 4Q 10,397 A32 10,404 7 “ 4Q 2021 Sili
Slide 15: Elkem Group overview financial ratios
Elkem Group Overview financial ratios Consolidated key figures (NOK million, except where specified) 4Q 2022 YTD 2022 YTD 202 FY 2021 Total operating income 10,404 45,898 EBITDA 1.787 i 12,887 EBIT 1,229 10,861 EBITDA MNOK 1,787 Other items 168 1,554 = Segment Other included realised currency hedgin
Slide 16: Total operating income, EBITDA and sales volume
Total operating income ▪ EBITDA and margin ▪ ▪ ▪ ▪ Sales volume Share of operating income from Share of EBITDA ex. external customers ex. Other Other and Eliminations
Slide 17: Total operating income, EBITDA and sales volume
Total operating income ▪ EBITDA and margin ▪ ▪ ▪ ▪ Sales volume ▪ Share of operating income from Share of EBITDA ex. external customers ex. Other Other and Eliminations
Slide 18: Total operating income, EBITDA and sales volume
Total operating income ▪ EBITDA and margin ▪ ▪ ▪ ▪ Sales volume Share of operating income from Share of EBITDA ex. external customers ex. Other Other and Eliminations
Slide 19: Earnings per share and equity ratio
Earnings per share (EPS) ▪ ▪ ▪ ▪ Equity ratio ▪ ▪ ▪
Slide 20: Net interest-bearing debt and maturity profile
Net interest-bearing debt (NIBD) ▪ ▪ ▪ Maturity profile ▪ ▪ ▪ ▪
Slide 21: Cash flow from operations and investments
Cash flow from operations ▪ ▪ ▪ Investments ex. M&A ▪ ▪ ▪
Slide 22: Outlook for the first quarter 2023
Outlook for the first quarter 2023 = Market sentiment impacted by macroeconomic uncertainty and lower growth in key sectors = The silicones market in China is weak going into the first quarter but expected to improve after Chinese New Year. In addition, Silicones could be negatively impacted by stri
Slide 23: 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 24: Appendix
2 Elkem Appendix 24
Slide 25: Currency sensitivity
——USDNOK —EURNOK EURUSD CNYNOK Currency sensitivity wo ‘on 1.60 150 140 3 1.30 SDNOK & EURNOK fe) a 3 2 950 1.20 = The result and cash flow are exposed to currency fluctuations. g 440 The main currencies are EUR, USD and CNY 850 = EUR - exposure approx. MEUR 430 in 2022 1.00 = USD - exposure approx.
Slide 26: Other financial sensitivities
Other financial sensitivities POWER = Electric power is a key input factor in Elkem’s production. The normal consumption is around 6.5 TWh of which approx. 3.7 TWh is in Norway. Near term exposure to spot power prices is limited = Norway, hedging programme mainly consisting of long-term contracts co
Slide 27: Delivering your potential
«~ Elkem Delivering your potential