704 20 17.5 15 employees Terrafame 12.3 10 736 5 6.3 - - PowerPoint PPT Presentation

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704 20 17.5 15 employees Terrafame 12.3 10 736 5 6.3 - - PowerPoint PPT Presentation

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Business review January September 2019 Joni Lukkaroinen CEO 24 Oct 2019 January September 2019 in brief Net sales for the reporting period were EUR 243.6 (248.4) million EBITDA EUR 31.3 (33.8) million. Supported by higher

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SLIDE 1

Joni Lukkaroinen CEO 24 Oct 2019

»Business review

January–September 2019

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SLIDE 2

»January–September 2019 in brief

  • Net sales for the reporting period were EUR 243.6 (248.4) million EBITDA EUR 31.3

(33.8) million.

  • Supported by higher nickel price, Q3 net sales reached EUR 102.4 (86.0) million.
  • Q3 EBITDA was EUR 29.8 (12.9) million, or 29% of the net sales, which is an excellent

result for an individual quarter.

  • Metals production volumes at good level.
  • Construction works for the battery chemicals plant proceed as

planned.

  • Increased attention has been directed to safe working methods at the

industrial site.

  • In January-September, the total sulphate load of discharge water to

Nuasjärvi was 3,566 t, which is 36 % of the quota in the environmental permit.

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SLIDE 3

» Työturvallisuudessa

erinomaisia tuloksia

Kuva vaihdettava

» Työturvallisuudessa

erinomaisia tuloksia

» Turvallisuuskehitys

erinomaista

»Occupational

safety is one of

  • ur core values
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SLIDE 4

»We will not make compromises on occupational safety –

increased attention directed to safe working at the site

Lost-time injury frequency (LTIFR) = number of injuries per one million pershon-hours worked

6.3 12.3 17.5

5 10 15 20 25 30

2015 2016 2017 2018 2019

Terrafame Combined Partner companies

Lost-time injury frequence, rolling 12-month

Partner companies

704

employees Terrafame

736

employees

2019

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SLIDE 5

»Construction works for

the battery chemicals plant proceed as planned

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SLIDE 6

»The average pack size has risen from 46 kWh in August 2018

to 55 kWh in August 2019

1 2 3 4 5 6 200 100 50 150 250 300 350 500 400 450 550 600 650 700 750 800 850

‘000 BEV & PHEV Sales

% BEV PHEV penetration rate

EU & EFTA ROW US & Canada China Asia Pacific Other Japan

8m 2019 BEV & PHEV Penetration and Sales by Region

1,300 500 200 700 100 300 400 1,400 600 800 900 1,000 1,100 1,200

‘000 BEV & PHEV sales

8m 2018 8m 2019

+28%

Global EV sales 8m 2018 & 2019

BEV PHEV

Source: Rho Motion

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SLIDE 7

20 75 40 80 85 10 65 5 15 35 70 30 45 50 90 25 55 60 2038 2034 2032 2026 2028 2036 Million units 2016 2018 2020 2022 2030 2040 2024 Passenger car and light duty vehicles Medium Duty Vehicles Buses and Coaches Upside Downside Heavy Duty Vehicles

EV sales outlook by vehicle class

NCM111 LFP LMO LTO NCA NCM523 NCM622 NCM811 muut

2019 2025 2030 2040

»Solid outlook for EV sales – share of nickel

increasing in batteries

Source: Rho Motion

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SLIDE 8

»Battery chemicals plant project update

  • The installation of the steel, cladding and roofing structures

for the first production buildings of the plant almost completed.

  • Installation of the building service systems have been

started inside the production buildings.

  • Kristian Granit M.Sc. (Eng.) was appointed Chief Refining

Officer and member of the Management Team at Terrafame Ltd as of 1 October 2019.

  • First recruitment actions started for the plant production
  • rganization.
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SLIDE 9

»Key figures January–

September 2019

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SLIDE 10

»Despite the increase in Q3, average price for nickel in

Jan-Sep 2019 still 1,8% lower year-on-year

  • Market speculations on Indonesia’s

export ban resulted in upturn in nickel price in July.

  • In September Indonesia confirmed the

ban.

  • In Q3, the average price of nickel was

15,528 (13,266) USD/t

  • 17.0% higher year-on-year and

26.7% higher than in Q2/2019.

  • Combined LME and SHFE nickel stocks

correspond to less than 4 (5.5) weeks’ demand.

Data source: Metal Bulletin LME = London Metal Exchange, SHFE = Shanghai Futures Exchange

Day price for nickel on the London Metal Exchange (USD/t) Day price for nickel on the London Metal Exchange (USD/t), 90 day average

Nickel price development (USD/t) 1 Jan 2016–30 Sep 2019

6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000

1.1.2016 6.2.2016 13.3.2016 18.4.2016 24.5.2016 29.6.2016 4.8.2016 9.9.2016 15.10.2016 20.11.2016 26.12.2016 31.1.2017 8.3.2017 13.4.2017 19.5.2017 24.6.2017 30.7.2017 4.9.2017 10.10.2017 15.11.2017 21.12.2017 26.1.2018 3.3.2018 8.4.2018 14.5.2018 19.6.2018 25.7.2018 30.8.2018 5.10.2018 10.11.2018 16.12.2018 21.1.2019 26.2.2019 3.4.2019 9.5.2019 14.6.2019 20.7.2019 25.8.2019 30.9.2019

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SLIDE 11

»Uncertainty of the global economy and low

demand for galvanized steel depressed zinc price

  • Average zinc price in January–

September 2019 down 13.9% year-on- year.

  • Q3 zinc price down 7.4% year-on-year

and 15.0% lower than in Q2/2019.

  • Combined LME and SHFE zinc stocks

correspond to less than a week’s demand. Zinc price development (USD/t) 1 Jan 2016–30 Jun 2019

Data source: Metal Bulletin LME = London Metal Exchange, SHFE = Shanghai Futures Exchange

Day price for zinc on the London Metal Exchange (USD/t) Day price for zinc on the London Metal Exchange (USD/t), 90 day average 1 000 1 500 2 000 2 500 3 000 3 500 4 000

1.1.2016 6.2.2016 13.3.2016 18.4.2016 24.5.2016 29.6.2016 4.8.2016 9.9.2016 15.10.2016 20.11.2016 26.12.2016 31.1.2017 8.3.2017 13.4.2017 19.5.2017 24.6.2017 30.7.2017 4.9.2017 10.10.2017 15.11.2017 21.12.2017 26.1.2018 3.3.2018 8.4.2018 14.5.2018 19.6.2018 25.7.2018 30.8.2018 5.10.2018 10.11.2018 16.12.2018 21.1.2019 26.2.2019 3.4.2019 9.5.2019 14.6.2019 20.7.2019 25.8.2019 30.9.2019

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SLIDE 12

5 000 10 000 15 000 20 000 25 000 30 000 Q3/2019 Q3/2018 Q3/2017 Q3/2016 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000 50 000 55 000 60 000 65 000 Q3/2019 Q3/2018 Q3/2017 Q3/2016

»Metals production at good level

Nickel production, rolling 12-month (t) Zinc production, rolling 12-month (t)

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SLIDE 13

»The net sales in Q3 were at EUR 102.4 (86.0) million

Net sales (EUR million)

50 100 150 200 250 300 350 Q1-Q3 2019 Q1-Q3 2018 2018 2017 20 40 60 80 100 120 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018

Quarterly net sales (EUR million)

243,6 248,4

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SLIDE 14

»Strong net sales in Q3 raised EBITDA for the reporting

period at almost the same level as in the same period 2018

EBITDA (EUR million) EBIT (EUR million)

5 10 15 20 25 30 35 Q1-Q3 2019 Q1-Q3 2018 FY 2018 FY 2017

  • 10
  • 5

5 10 15 Q1-Q3 2019 Q1-Q3 2018 2018 2017

31.3 33.8 10,5 3,5

H1 H1 Q3 Q3

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SLIDE 15

»Jan-Sep 2019 capex for development and growth totalled

EUR 84,8 million

Key capital expenditures:

  • Construction works and

equipment purchases for the battery chemicals plan.

  • Construction work of the new

gypsum pond.

  • Construction work of the third

block in the waste rock area.

34.9 84.8 18.1 13.2

10 20 30 40 50 60 70 80 90 100 110 Q1-Q3 2018 Q1-Q3 2019

Capital expenditure (EUR million)

Sustaining capex Development and growth Year 2018: EUR 81.5 million

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SLIDE 16

322 342 349 366 310 305

100 200 300 400 500 600 700 800 30.9.2019 30.6.2019 31.3.2019 31.12.2018 30.9.2018 30.6.2018

Equity and liabilities (EUR million)

30.9.2019

704

Equity Liabilities

»Terrafame’s solidity is at good level

617 685 616 682

Environmental provision 764

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SLIDE 17

»Near-term outlook

  • Since the end of the review period, the price of nickel in the

London Metal Exchange (LME) has remained above 16 000 USD/t level. Nonetheless, the fluctuation of prices has continued strong.

  • The installation of the battery chemicals plant’s process

equipment will begin in late 2019 and continue till the summer of 2020.

  • The environmental impact assessment (EIA) process for the

Kolmisoppi open pit located within the mining district will be launched in early 2020.

  • The Government is expected to issue a decision on the

application for a uranium recovery permit in 2019.

  • Terrafame will continue to further improve safety culture as

well as production and cost efficiency.

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SLIDE 18

24.10.2019 Dokumentin nimi

www.terrafame.com