Elkem Asa · OSL:ELK
Elkem Asa — Q4 2021 Earnings Presentation
24 slides from Elkem Asa's earnings presentation, Feb 9, 2022
Slide 1: Fourth quarter results 2021
+ 1) ES \~S WW @ Elkem Fourth quarter results 2021
Slide 2: Agenda
Agenda Business update By CEO Helge Aasen Financial performance By CFO Morten Viga Outlook By CEO Helge Aasen
Slide 3: A strong fourth quarter concludes a record year
A strong fourth quarter concludes a record year Elkem has delivered the best quarterly and annual result ever, benefitting from excellent cost and market positions All divisions delivered strong results; the fourth quarter was particularly driven by strong performance for Silicon Products Elkem has
Slide 4: Sustainable business model delivering record results in 2021
Sustainable business model delivering record results in 2021 High temperature/chemical production processes Examples of high value applications and markets ¥; ( Quartz ey Silicones wi 4 se) fy ind j turbines a Low cost sustainable input factors Infra- we a8 id structure Airbags Coal Silicon, ferrosi
Slide 5: Environment, Social & Governance
Environment, Social & Governance ESG - a key priority A clear focus on ESG = On 15 November 2021, Elkem’s new energy recovery plant at Salten was opened by the Norwegian PM = Elkem’s CO, roadmap will reduce emissions in line with the Paris agreement = The pilot plant in Canada for production of bio-
Slide 6: Vianode - commercial and technological development ongoing
Vianode - commercial and technological development ongoing " Vianode, developing as a newly established company and brand, successfully commissioned its industrial pilot for battery materials in April 2021 = The business represents cutting-edge technology development and processes are ongoing with p
Slide 7: General markets
General markets Automotive recovering, attractive EV growth = Automotive markets have recovered in 2021, but the growth was hampered by lack of semiconductors, constrained transportation capacity and covid shutdowns in Asia Light vehicles sales (in million) = Global sale of light vehicles was around
Slide 8: Silicones market
Silicones market Specialty prices increasing, commodity prices in China normalising " Significant price increases in China going into 4Q-2021 driven by tight supply and raw material constraints = Improved power situation in China during 4Q has eased market conditions, and prices for silicon and comm
Slide 9: Silicon and ferrosilicon markets
Silicon and ferrosilicon markets Strong market conditions continue CRU silicon 99 price EU (EUR/mt) 9000 = Market prices reaching new record levels in 4Q, but started to level 7000 ray off towards the end of the quarter | \ 5000 = Silicon and ferrosilicon index prices expected to continue to 3000 )
Slide 10: Carbon market
Carbon market Increased steel production outside China driving demand for Elkem’s products = Global steel demand growing by ~3% in 2021 = Demand outside China has returned to pre-covid levels Total steel production million mt * China is restricting steel production as a measure to reduce energy mEU
Slide 11: Elkem group
Elkem group New record levels in 4Q concluding the best year ever Total operating EBITDA income 8,796 = New all-time high 7193 7,332 7129 = New all-time high driven by higher 6,798 5,879 5,886 for group EBITDA 7% 19 % sales prices 4,371 10% Mee 1% 1 ° 9% 938 690 644 512 19 2Q 3Q 49 1Q 2Q 3Q 4Q =...
Slide 12: Elkem Group
Elkem Group Strong financial ratios EBITDA MNOK 3,059 = Segment Other included realised currency hedging gains of MNOK 24 Productivity Improvement Programme concluded ahead of plan = By end of 4Q-2021 the annualised run-rate was MNOK 395 which was above the initial target of MNOK 350 r items MNOK -8
Slide 13: Silicones
Silicones Strong 4Q result, despite increasing raw material costs = Total operating income of MNOK 5,269, up 34% from the fourth quarter last year = Increased operating income was driven by higher sales prices, particularly in China at the beginning of the quarter = EBITDA of MNOK 1,344, more than d
Slide 14: Silicon Products
Silicon Products Favourable market prices driving new record results = Total operating income of MNOK 4,735 up 64% from the fourth quarter last year = Increased operating income was driven by higher sales prices = EBITDA of MNOK 1,646, up 386% from fourth quarter last year " Strong EBITDA explained
Slide 15: Carbon Solutions
Carbon Solutions High sales volumes, but increasing raw material costs " Total operating income MNOK 624, up 35% from the fourth quarter last year = Operating income reaching all-time high, explained by higher sales volumes and sales prices = EBITDA of MNOK 129, up 22% from fourth quarter last year
Slide 16: Elkem Group
Elkem Group Strong EPS, proposed dividend NOK 3.00 per share = Earnings per share (EPS) = EPS amounted to NOK 3.11 in the fourth quarter and NOK 7.49 YTD-2021 = EPS clearly up from 2020 due to strong improvement in results = Proposed dividend NOK 3.00 per share, 41% of profit for 2021 = Total equity
Slide 17: Net interest-bearing debt (NIBD)
Net interest-bearing debt (NIBD) Elkem Group Further strengthened . financing position Sm 8G 5.4 * Net interest-bearing debt (NIBD) of BNOK 4.8 as at 31 Dec. 2021 = Leverage ratio of 0.6x based on LTM EBITDA of BNOK 7.8 = Reduction in leverage ratio driven both by improved EBITDA r T T and reduction
Slide 18: Elkem Group
Elkem Group High strategic growth investments * Cash flow from operations was MNOK 712 in the fourth quarter, which was down from fourth quarter last year = Higher operating profit was more than offset by increased working capital = Increased working capital mainly explained by higher inventory due
Slide 19: Outlook for the first quarter 2022
Outlook for the first quarter 2022 = Strong demand for Elkem’s products, driven by strong market positions. Elkem’s integrated value chain providing sustainable competitive edge as a basis for solid profitability going forward = Price increases implemented for specialties in Silicones from 1% quarte
Slide 20: 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 21: Appendix
2 Elkem Appendix 21
Slide 22: Currency sensitivity
Currency sensitivity = The result and cash flow are exposed to currency fluctuations. The main currencies are EUR, USD and CNY = EUR - exposure approx. MEUR 430 in 2022 = USD - exposure approx. MUSD 250 in 2022 = CNY - exposure approx. MCNY 1,700 in 2022 = Current cash flow hedging programme = 90% h
Slide 23: Other financial sensitivities
Other financial sensitivities POWER = Electric power is a key input factor in Elkem’s production. The normal consumption is around 6.4 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 24: Delivering your potential
~ Elkem Delivering your potential