Elkem Asa · OSL:ELK
Elkem Asa — Q1 2023 Earnings Presentation
27 slides from Elkem Asa's earnings presentation, Apr 28, 2023
Slide 1: Elkem First quarter results 2023
Elkem First quarter results 2023
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 Good results, but impacted by more challenging markets = Elkem delivered an EBITDA of NOK 1,565 million (16% margin) in the first quarter 2023 = Strong results for Silicon Products and Carbon Solutions, based on superior cost and markets positions = Weak results for the Silicones division
Slide 4: Environmental, Social & Governance
Environmental, Social & Governance Rated among the world’s leading companies Delivering on carbon footprint reductions = Product carbon footprint reduced by 7% from 2021 to 2022 = World’s first carbon capture pilot for smelters inaugurated at Elkem Rana = Awarded double A- scores from CDP for the co
Slide 5: Dual-play growth, 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: Global EV production forecast and silicones content per car
Global EV production forecast, 2023-2029 (in million) ▪ ▪ Silicones content per car ▪ ▪ Silicones sales to EV market 2022 vs 2021 Silicones are critical components EVs: Power-train sealing Electronic control units (ECU) Battery modules & packs Connectors
Slide 7: Supplying the green transition
Supplying the green transition European Green Deal implies opportunities for Elkem = EU's Green Deal Industry Plan & Net Zero Industry Act aims to offer financial incentives for clean technologies — this could drive demand for both silicones and silicon = EU's Solar Energy Strategy aims to bring onl
Slide 8: Ongoing specialisation projects
ONGOING SPECIALISATION PROJECTS Biocarbon Si/FeSi Silicon to batteries Biobased binder PAH free paste Effective from 2024 After 2025 Effective 2025 Effective in 2024-25 ▪ ▪ ▪ ▪ ▪ Medical silicones Organo func. Silicones Silicone rubber EV Green sealant Effective in 2023 Effective in 2023-24 Effectiv
Slide 9: Power price levels
▪ < 50 EUR/MWh 50 – 75 EUR/MWh > 75 EUR/MWh ▪ ▪ ▪
Slide 10: Announced capacity expansion projects
Announced capacity expansion projects ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Brazil Roussillon Xinghuo ▪ Capacity increase pitch: 40% Capacity increase: 25% Capacity increase: 50% ▪ Investment MNOK 200 Investment MNOK 360 Investment MNOK 3,800 Start-up: 3Q 2024 Start-up: 4Q 2023 Start-up: 1Q 2024
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 Strong performance by Silicon Products and Carbon Solutions, Silicones impacted by weak markets Total operating EBITDA 33% 32% income 11,876 p22) aes 3,875 3,924 29% 10,404 3,302 * Down from 1Q- = Down froma 2022 due to lower historic record ®% sales prices level in 10-2022 1,825 19 2Q 3
Slide 15: Elkem Group Consolidated key figures
Elkem Group Consolidated key figures Overview financial ratios ‘focrmossmpurweqeacy BREET 10 2022 RBBB vio 2022 evz0a2 Total operati 11,876 9,934 EBITDA 875 565 EBIT D 4,025 * EBITDA MNOK 1,565 Other items 553 = Segment Other included realised currency hedging losses of Net finance income (expens: 1
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 second quarter 2023
Outlook for the second quarter 2023 = Market sentiment still weak going into the second quarter, but Elkem benefits from strong market positions and robust financials = Elkem accelerating planned maintenance positioning for expected demand recovery and improved market conditions = Silicones markets
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 1.70 Currency sensitivity 1250 1.60 150 140 3 1.30 SDNOK & EURNOK 1.20 = The result and cash flow are exposed to currency fluctuations. The main currencies are EUR, USD and CNY 5C = EUR - exposure approx. MEUR 550 1.00 = USD - exposure approx. MUSD 175 = CNY - exposure
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