Elkem Asa · OSL:ELK
Elkem Asa — Debt Investor Presentation (August 2021)
34 slides from Elkem Asa's debt investor presentation, Aug 17, 2021
Slide 1: Investor meeting – NOK bond transaction
Investor meeting NOK bond transaction 17 August 2021
Slide 2: Disclaimer
Disclaimer This presentation and its appendices (collectively the “Presentation’) have been produced by Elkem ASA (the “Company’), with assistance from Skandinaviska Enskilda Banken AB (publ) and Swedbank Norge, branch of Swedbank AB (pub!) (together the "Managers’) in connection with the offering o
Slide 3: Disclaimer (continued)
‘The Managers have not engaged any external advisors to carry out any due diligence investigations and have not taken any steps to verify any of the information contained herein other than a due diligence call with representatives of the Company. No representation or warranty (express or implied) is
Slide 4: Agenda
Agenda Brief introduction to Elkem Business and financial update Outlook Q&A 2 Elkem
Slide 5: Advanced material solutions shaping a better and more sustainable future
Advanced material solutions shaping a better and more sustainable future Silicones Silicon Products Carbon Solutions
Slide 6: Elkem's global business combines the strengths of three unique platforms
Elkem’s global business combines th strengths of three unique platforms Elkem’s global business combines the strengths of three unique platforms = Elkem was founded in 1904 and the metallurgical business in Norway represents strong industrial traditions and continuous improvement = The chemical busi
Slide 7: Elkem operates through three divisions
Elkem operates through three divisions: All with global scale, leadership positions and global footprint Silicones Fully integrated silicones manufacturer with focus on specialities BNOK 12.7* 51% of group sales Markets Paper & film release Automotive Silicone rubber = Chemical formulators — on = Pe
Slide 8: Our products are vital for modern societies
Our products are vital for modern societies and you meet them in your life every day Low cost sustainable input factors ¢ Quartz Coal Biocarbon Power High temperature/chemical production processes ey Silicones Silicon, foundry products and microsilica Carbon solutions Examples of high value applicat
Slide 9: We help our customers create and improve essential innovations
We help our customers create and > improve essential innovations for everyday life Automotive & transport Renewable energy alll Food and beverage Tr Digital communication 3) Su Health care ani Release coatings Oo Construction & smarter cities effi Personal care Active anode materials
Slide 10: Global positions and strong geographical diversification
Global positions and strong geographical diversification @® Production site @ Sales Office @ Ho @Elkem 10
Slide 11: Agenda
Agenda Brief introduction to Elkem Business and financial update Outlook Q&A 2 Elkem
Slide 12: Strong second quarter results and good market conditions
Strong second quarter results and good market conditions + Elkem is delivering another strong quarterly result, despite the planned maintenance stops for Silicones both in China and France = Market conditions have been good in all major regions in the second quarter = The strategic expansion of the
Slide 13: Environment, Social & Governance
Environment, Social & Governance ESG - a key priority for Elkem ee ye. Aclear focus on ESG = In 2020, Elkem received an A rating from CDP, ranking in the world’s top 5% on climate = In 2Q 2021 Elkem announced an investment of MNOK 140 in Rana, Norway to enable use of biocarbon * Elkem’s pilot plant
Slide 14: 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 = Total equity increased from MNOK 13,440 as at 31 March 2021 to MNOK 16,046 as at 30 June 2021. The equity ratio was 4
Slide 15: Silicones Xinghuo expansion leveraging on growth and specialisation in Asia
Silicones Xinghuo expansion leveraging on growth and specialisation in Asia = The expansion of Silicones Xinghuo has started and the cornerstone for the project was laid in April 2021. The project is scheduled to be completed within 3 years = Integral part of Elkem’s growth and specialisation strate
Slide 16: Silicones
LV fluids OFS Medical Silicones ▪ ▪ ▪ ▪
Slide 17: From Vianode's R&D facility in Kristiansand
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ From Vianode’s R&D facility in Kristiansand
Slide 18: Strong development in key sectors
General markets Strong development in key sectors ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 19: Markets conditions remain attractive
Silicones market Markets conditions remain attractive ▪ ▪ ▪ ▪ ▪
Slide 20: Tight supply resulting in continued price increases
Silicon and ferrosilicon markets Tight supply resulting in continued price increases ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 21: Increasing demand, raw material prices up
Carbon market Increasing demand, raw material prices up ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 22: EBITDA
EBITDA ▪ ▪ Improved EBITDA and higher margins ▪ … driven by attractive ▪ … reflecting strong market conditions and market positions and higher prices good operations
Slide 23: Good EBITDA and strong financial ratios
Elkem Group Good EBITDA and strong financial ratios EBITDA MNOK 1,371 * Segment Other included realised currency hedging gains of MNOK 48 The Productivity Improvement Programme continues according to plan = By end of 2Q-2021 the annualised run-rate was MNOK 261 versus target of MNOK 350 by end of 20
Slide 24: Silicones
Silicones Strong and stable market conditions = Total operating income of MNOK 3,588 up 15% from second quarter 2020 = Increased operating income explained by higher sales prices = EBITDA of MNOK 573, up 148% from second quarter last year = Improved EBITDA explained by higher sales prices, but partl
Slide 25: Silicon Products
Silicon Products Good results reflecting strong markets = Total operating income of MNOK 3,355 up 34% from second quarter last year = Higher sales prices and higher sales volumes, partly offset by effects of stronger NOK = EBITDA of MNOK 672, up 83% compared to second quarter last year = Mainly expl
Slide 26: Carbon Solutions
Carbon Solutions Stable results, but raw material costs increasing = Total operating income MNOK 506, up 5% from second quarter last year = Higher sales volumes partly offset by currency impact = EBITDA of MNOK 118, down 2% from second quarter last year = Lower EBITDA and reduced margin mainly expla
Slide 27: Robust financial position, strengthened by capital increase
Elkem Group Robust financial position, strengthened by capital increase * Strong liquidity buffer of BNOK 9.8 = Significant cash component of BNOK 6.0 = Undrawn RCF of MEUR 250 maturing in 2023 = Undrawn Bridge-to-bond BNOK 0.8 to cover 2021 maturities, due in 2023 * Total equity amounted to BNOK 16
Slide 28: Significant reduction in debt and leverage
Elkem Group Significant reduction in debt and leverage = Net interest-bearing debt (NIBD) was BNOK 5.6 as at 30 June 2021 = Leverage ratio was 1.4x based on LTM EBITDA of BNOK 4.1 "The leverage ratio down significantly due to capital increase and improved LTM EBITDA = Debt maturities in 2021 well ma
Slide 29: A strategy for specialisation and growth
A strategy for specialisation and growth Silicones Carbon Solutions New areas Battery materials Unique growth opportunity based on graphite and silicon + Improve and stabilise profitability through + Improve profitability through operational» Maintain good profitability through Biocarbon operational
Slide 30: Agenda
Agenda Brief introduction to Elkem Business and financial update Outlook Q&A 2 Elkem
Slide 31: Outlook for the third quarter 2021
Outlook for the third quarter 2021 = Strong market sentiment across all divisions = The market momentum for silicones is strong. Prices are at high levels in China and expected to increase in Europe and the US. The high price level in China not seen as sustainable = Market prices for silicon- and fe
Slide 32: Key Elkem highlights
Key Elkem highlights + Elkem has more than 110 years of history and is a truly global company with strong market positions = Well diversified business profile across silicones, silicon products and carbon solutions = Leading market positions in each of the segments in which it operates * Strong focu
Slide 33: Elkem
OSA 2 Elkem
Slide 34: Delivering your potential
« Elkem Delivering your potential