Elkem Asa · OSL:ELK
Elkem Asa — BofA Securities Materials & Infrastructure Conference 2021
32 slides from Elkem Asa's conference presentation, Dec 1, 2021
Slide 1: BofA Securities Materials & Infrastructure Conference
@ Elkem BofA Securities Materials & Infrastructure Conference Elkem ASA 1 December 2021
Slide 2: Agenda
Agenda = Introduction and market update = Appendix = About Elkem = Financial performance 3Q-2021 = Strategy and projects Speaker * Morten Viga, CFO
Slide 3: Record results in the quarter
Record results in the 34 quarter = Elkem is delivering its best quarterly result ever, benefitting from a strong business model and attractive market positions = Strong market demand while supply has been hampered by capacity constraints and power curtailments. Elkem has kept normal production in th
Slide 4: ESG & Climate roadmap
ESG & Climate roadmap ESG - a key priority A clear focus on ESG = Received A rating from CDP in 2020, ranking Elkem in the world’s top 5% on climate = Received Gold sustainability rating from EcoVadis in 2020 = The Norwegian prime minister opened the energy recovery plant at Elkem Salten on 15 Novem
Slide 5: Sustainable energy sourcing
Sustainable energy sourcing Well positioned with long-term renewable energy contracts Silicon and ferrosilicon plants based on renewable energy = Iceland - reliable access to renewable power, long-term fixed pricing contract = Canada - reliable access, captive renewable power supply combined with an
Slide 6: Elkem's climate actions
Elkem’s climate actions A. Changing to biomass in production * Production of silicon and ferrosilicon require a carbon source R ed uC j n g t h e car bo n as reduction material (to reduce oxygen from the quartz) + Elkem’s strategy is to reduce scope 1 emissions through fo ot p ri nt 3 O% by 2 O 31 r
Slide 7: General markets
General markets Semiconductors hampering automotive, EV sales up = Post-pandemic strong demand from construction sector in all major regions. Risk that activity may slowdown in China from next year = Automotive markets impacted by lack of semiconductors, constrained transportation capacity and covid
Slide 8: Silicones market
Silicones market Strong markets, normalisation expected Strong demand combined with supply disruptions have led to a tight supply-demand balance in all regions This resulted in a significant price spike in for silicones during 3Q The price level for DMC in China has come down from the peak level, bu
Slide 9: Silicon and ferrosilicon markets
Silicon and ferrosilicon markets Prices reaching all-time high CRU silicon 99 price EU (EUR/mt) 9000 ei , . 7000 Cc = Market prices in Europe have risen to new record levels in | October/November both for silicon and ferrosilicon. Elkem is 5000 entering into contracts for 2022 at very attractive lev
Slide 10: Outlook for the fourth quarter 2021
Outlook for the fourth quarter 2021 = Strong underlying demand for Elkem’s products going into the fourth quarter. Industry supply hampered by energy and raw material constraints = Elkem well positioned to benefit from current market conditions despite inflationary pressure, due to its integrated va
Slide 11: Agenda
Agenda = Introduction and market update = Appendix = About Elkem = Financial performance 3Q-2021 = Strategy and projects
Slide 12: 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 51% of group sales Markets Paper & film release Automotive Silicone rubber Chemical formulators daca Personal care {_{
Slide 13: 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 a= Coal Biocarbon Power 2 Elkem High temperature/chemical production processes Tp ey Silicones if Silicon, foundry products and microsilica Carbon solutions Examples of high
Slide 14: Global positions and strong geographical diversification
Global positions and strong geographical diversification @ Production site @ +Q \ a u @Elkem Ni 14
Slide 15: Agenda
Agenda = Introduction and market update = Appendix = About Elkem « Financial performance 3Q-2021 = Strategy and projects
Slide 16: Elkem group: New record levels
Elkem group New record levels Total operating EBITDA 24% . ’ income 7193 7,332 7129 . All-time high 5798 5.879 5,886 = All-time high operating income group EBITDA 19 2Q 3Q 49 1Q 2Q 3Q 4Q .. driven by record 1085 108 81 8,796 driven by strong . prices for silicones, D improvements in 718 29 53 2,13 s
Slide 17: Elkem Group: Strong financial ratios
Elkem Group Strong financial ratios EBITDA MNOK 2,131 = Segment Other included realised currency hedging gains of MNOK 10 The Productivity Improvement Programme continues according to plan = By end of 3Q-2021 the annualised run-rate was MNOK 304 versus target of MNOK 350 by end of 2021 r items MNOK
Slide 18: Silicones
Silicones Extraordinary markets = Total operating income of MNOK 4,849, up 50% from the third quarter 2020 " The increase in operating income was largely explained by higher sales prices, but also higher sales volumes = EBITDA of MNOK 1,168, up 235% from the third quarter last year = Improved EBITDA
Slide 19: Silicon Products
Silicon Products Excellent market positions " Total operating income of MNOK 3,558 up 44% from the third quarter last year * Mainly explained by higher sales prices, with contribution from slightly higher sales volumes = EBITDA of MNOK 858, up 513% compared to third quarter last year * Mainly explai
Slide 20: Carbon Solutions
Carbon Solutions Record results = Total operating income MNOK 560, up 24% from the third quarter last year = Higher operating income due to higher sales volumes and higher sales prices, partly offset by currency = EBITDA of MNOK 140, up 26% from third quarter last year * Improved EBITDA mainly expla
Slide 21: Elkem Group: Excellent EPS and robust equity
Elkem Group Excellent EPS and robust equity = Earnings per share (EPS) = EPS amounted to NOK 2.16 in the third quarter and NOK 4.34 YTD-2021 = EPS YTD-2021 clearly up from YTD-2020 due to strong improvement in results = Total equity amounted to BNOK 17.5 as at 30 September 2021, up by BNOK 4.9 from
Slide 22: Elkem Group: Financing position further improved
Elkem Group Financing position further improved * Net interest-bearing debt (NIBD) of BNOK 5.4 as at 30 Sept. 2021 = Leverage ratio of 1.0x based on LTM EBITDA of BNOK 5.7 = Reduction in leverage ratio driven by improved LTM EBITDA and capital increase in April 2021 = Maturity profile further improv
Slide 23: Elkem Group: Strong cash flow, higher strategic investments
Elkem Group Strong cash flow — higher strategic investments = Cash flow from operations was MNOK 1,886 in the third quarter, up from MNOK 182 in the third quarter last year = The improvement was mainly driven by record high operating profit and improved working capital = Investments ex. M&A amounted
Slide 24: Agenda
Agenda = Introduction and market update = Appendix = About Elkem « Financial performance 3Q-2021 = Strategy and projects
Slide 25: ESP chemical sales by end-market
4%2% 1% 10% 35% 16% 32% Note: ESP chemical sales have been allocated to the various end-markets based on Freedonia market split.
Slide 26: Growth driven by operational excellence and increased specialisation
Growth driven by operational excellence and increased specialisation Significant investments in R&D capabilities and downstream silicones to accelerate specialisation = Consumer goods products for tissue B: . 4] softening, hygiene and labels SEI Chemie = Tech driven downstream silicones producer = P
Slide 27: Silicones expansion in France
Silicones expansion in France Expanding specialty business in EMEA & Americas The board has approved an expansion of Elkem’s silicones plant in Roussillon, France The investment amounts to MNOK 350 and will be finalised in 3Q-2023 Designed to deliver higher capacity, improved cost The project will f
Slide 28: Silicones expansion in China
Silicones expansion in China 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 strat
Slide 29: Battery materials opportunity
Battery materials opportunity Vianode — enabling efficient, sustainable energy storage for a cleaner world = Vianode developing as a newly established company and brand for production of sustainable anode materials = Environmentally friendly and cost competitive Anode material demand in Europe and N
Slide 30: Indirect CO2 emissions footnote
1 Indirect CO2 emissions based on data from www.nve.no and www.iea.org
Slide 31: 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 32: Delivering your potential
~ Elkem Delivering your potential
Elkem — BofA Securities Materials & Infrastructure Conference 2021 on 6ix