DNB Small & Medium Enterprises Conference

Oslo, 21 March 2024

We are Elkem

Advanced silicon-based materials shaping a better & more sustainable future

Silicones

Silicon Products

Carbon Solutions

Sustainable business model delivering good results

Low-cost sustainable input factors

Quartz

Coal

Biocarbon

Power

High temperature/chemical production processesSiliconesSilicon, ferrosilicon, foundry products and microsilicaCarbon solutionsExamples of high value applications and markets

Wind turbines

Airbags

Solar

Infra-structure

Automotive EV

Electronics

Cooking, utensils

Release coating

Environmental, Social & Governance

Strong ESG performance

Green leadership

  • ▪ Elkem has been awarded A score from CDP on Forests and A- on Climate and Water Security for 2023

  • ▪ In December 2023, an agreement was reached with reindeer district 7 for the expansion of Elkem's quartz mining in

    Tana

  • ▪ Elkem has completed the pilot for carbon capture at the Rana plant. The pilot recorded CO2 capture rates up to 95%

Fourth quarter concluded a challenging year, signs of recovery in 2024

  • ▪ Elkem's EBITDA was NOK 632 million in the fourth quarter 2023

  • ▪ Silicones delivering positive EBITDA in challenging markets, as internal improvement programmes take effect

  • ▪ Silicon Products negatively impacted by lower contract prices, maintenance stop at Iceland, and fire at the Salten plant

  • ▪ Carbon Solutions with strong results despite lower demand, delivering the best full-year result ever

Total operating income

MNOK 8,436

EBITDA

MNOK 632

EBITDA margin

7%

Silicones market

Signs of recovery, but still significant uncertainty

  • ▪ Silicones markets in China and Europe generally weak, negatively impacted by construction, and weak automotive markets in EU

  • ▪ Demand for most specialty grades remain low in EU and the US, but signs of improvement

  • ▪ Improved demand and higher silicones prices in China after Chinese New Year

    • ▪ DMC prices in China up 15% from year-end 2023

DMC reference price China (KCNY/mt)

DMC reference prices are based on quotes incl. VAT and transportation. Quotes may not always reflect accurate sales prices.

Silicon and ferrosilicon markets

Price recovery in Europe

  • ▪ Price recovery in Europe in 1Q-2024 despite weak market conditions

    • ▪ Silicon prices in EU up 15-20% from year-end 2023

    • ▪ Ferrosilicon prices in EU up more than 10% from year-end 2023

  • ▪ In China, silicon prices are marginally down in 1Q-2024, mainly due to high inventory levels

  • ▪ Silicon exports from Asia impacted by rising sea freight prices caused by disruptions in the Red Sea

Comprehensive programme for EBITDA improvements and capex reductions

EBITDA improvements - Target 2024 > BNOK 1.5

  • ▪ Elkem has introduced a comprehensive programme to counter the current challenging market conditions, particularly in Silicones

  • ▪ The target is to improve EBITDA by > BNOK 1.5 in 2024. The initiatives are organised along several dimensions:

    Capex reductions - Target 2024 > BNOK 2.0

    • ▪ Sales and product value improvements

    • ▪ Reduce raw material costs by sourcing of cheaper materials

    • ▪ Operational improvements and streamlining production structure

  • ▪ The target is to reduce capex by > BNOK 2.0

    • ▪ Reinvestment within target range of 80-90% of D&A

    • ▪ Strategic capex reduced to approx. BNOK 1.2, mainly related to ongoing Silicones and Carbon Solutions projects

Expansion projects according to plan, improving cost positions in Silicones

  • ▪ The Silicones expansion projects in France and China will be finalised in 2024, according to plan

  • ▪ In China, the project has reached mechanical completion. Commercial production expected to start in April and reach 65 kt in 2024, generating a potential revenue of NOK 1.5 billion

  • ▪ In France, project completion is expected in October 2024

  • ▪ These projects will improve the plants' cost positions, mainly through lower energy and raw material consumption. The new production line in China is expected to be on level with the current lowest cost producers

10 10

Silicones project in France Capacity increase: +25% / +20 ktpa Total capacity: 100ktpa

Start-up: 2H-2024 Investment ≈400 MNOKSilicones project in China Capacity increase: +50% / +120 ktpa Total capacity: 360 ktpa

Start-up: 1H-2024

Investment ≈4,000 MNOK

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Disclaimer

Elkem ASA published this content on 26 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2024 08:01:07 UTC.