Elkem Asa · OSL:ELK
Elkem Asa — Q2 2023 Earnings Presentation
27 slides from Elkem Asa's earnings presentation, Jul 14, 2023
Slide 1: Second quarter results 2023
Elkem Second quarter results 2023
Slide 2: Agenda
Agenda Business update By CEO Helge Aasen Financial performance By CFO Morten Viga Outlook By CEO Helge Aasen
Slide 3: Highlights: An overall good performance in weak markets
Highlights An overall good performance in weak markets = Elkem delivered an EBITDA of NOK 1,039 million in the second quarter 2023. The result was negatively impacted by NOK 250 million related to one-offs * Silicon Products and Carbon Solutions continue to deliver strong Total operating income resu
Slide 4: Environmental, Social & Governance
Environmental, Social & Governance Strong ESG focus and performance Green leadership Product carbon footprint reduced by 7% from 2021 to 2022 Elkem is a key supplier to the green transition with silicon defined as a critical material in EU and the US Elkem and the environmental foundation Zero have
Slide 5: Top 3 in silicones worldwide, Number 1 in silicon products and carbon solutions in the West
Top 3 in silicones worldwide Number 1 in silicon products and carbon solutions in the West 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 t
Slide 6: Corporate strategy: Increasing capacity in attractive specialty markets
Corporate strategy Increasing capacity in attractive specialty markets = Elkem has entered into an agreement to acquire VUM, a Slovak producer of carbon based-materials = The company produces carbon-based materials for industrial smelters, including anode paste, electrode paste and recarburisers Add
Slide 7: Corporate strategy: Upgrades and digitalisation enhancing efficiency
Corporate strategy Upgrades and digitalisation enhancing efficiency and cost improvements = Accelerated maintenance and improvement projects at the Thamshavn and Rana plants successfully completed Upgrading and digitalisation projects = Both plants have restarted production, well positioned for futu
Slide 8: Ongoing specialisation and capacity expansion projects
Ongoing specialisation projects ▪ ▪ ▪ Ongoing capacity expansion projects ▪
Slide 9: Systematic improvement work to counter weak Silicones markets
Systematic improvement work to counter weak Silicones markets = Elkem taking measures to counter challenging markets for Silicones = Systematic improvement work organised along several dimensions = Fixed cost reductions, e.g. freezing new hires, reduction of manning, reduce third party services, low
Slide 10: China new construction areas; construction and light-vehicle growth
China – New construction areas (unit 10,000 square meters) Source: China National Bureau of Statistics Construction – global annual growth and key regions ( in %) ▪ ▪ Source: Oxford Economics Light-vehicles production: Annual growth in key regions (changes in %) ▪ ▪ Source: IHS Markit
Slide 11: DMC reference price China (CNY/mt)
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 price EU
CRU silicon 99 price EU (EUR/mt) ▪ ▪ CRU ferrosilicon 75 price EU (EUR/mt) ▪ ▪
Slide 13: Crude steel production (million mt)
▪ Crude steel production (million mt) ▪ ▪ ▪ ▪
Slide 14: Elkem group
Elkem group Still strong in Silicon Products and Carbon Solutions, but weak results for Silicones Total operating EBITDA 33% 32% income 11,876 [gaze fago3 2875 3,924 29% 9,934 aS pioislere 3,302 * Down from 2Q- . = Down froma 18% 2022, due to lower historic record ° sales prices and level in 2Q-2022
Slide 15: Elkem Group: Overview financial ratios
Elkem Group Overview financial ratios = EBITDA MNOK 1,039 = Segment Other included realised currency hedging losses of MNOK -119. = Other items MNOK 37 = Mainly loss on power and currency derivatives MNOK -86, offset by currency gains on working capital items MNOK 129 = Net finance income (expenses)
Slide 16: Total operating income, EBITDA and margin, 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 margin, 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 margin, 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 (EPS) and Equity ratio
Earnings per share (EPS) ▪ ▪ Equity ratio ▪ ▪
Slide 20: Net interest-bearing debt (NIBD) and Maturity profile
Net interest-bearing debt (NIBD) ▪ ▪ Maturity profile ▪ ▪ ▪
Slide 21: Cash flow from operations and Investments ex. M&A
Cash flow from operations ▪ ▪ Investments ex. M&A ▪ ▪ ▪
Slide 22: Outlook for the third quarter 2023
Outlook for the third quarter 2023 = Continued weak market sentiment. Elkem well positioned to benefit from recovery due to strong market positions and robust financials = Silicones markets expected to remain challenging, and Elkem plans to run at reduced capacity to optimise product mix = Prices fo
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 1250 SDNOK § EURNOK 5 a io} = The result and cash flow are exposed to currency fluctuations. The main currencies are EUR, USD and CNY 850 = EUR - exposure approx. MEUR 550 = USD - exposure approx. MUSD 100 = CNY - exposure approx. MCNY 200 Us 2020
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. 3.6 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