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

» 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 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.

Kuva vaihdettava » Occupational safety is one of » Työturvallisuudessa our core values erinomaisia tuloksia » Turvallisuuskehitys » Työturvallisuudessa erinomaista erinomaisia tuloksia

» We will not make compromises on occupational safety – increased attention directed to safe working at the site Lost-time injury frequence, rolling 12-month 30 Partner 25 companies 704 20 17.5 15 employees Terrafame 12.3 10 736 5 6.3 employees 0 2015 2016 2017 2018 2019 2019 Terrafame Combined Partner companies Lost-time injury frequency (LTIFR) = number of injuries per one million pershon-hours worked

» Construction works for the battery chemicals plant proceed as planned

» The average pack size has risen from 46 kWh in August 2018 to 55 kWh in August 2019 8m 2019 BEV & PHEV Penetration and Sales by Region Global EV sales 8m 2018 & 2019 ‘ 000 BEV & PHEV Sales ‘000 BEV & PHEV sales 1,400 +28% 850 BEV 800 1,300 PHEV 750 1,200 China 700 1,100 650 1,000 600 900 550 500 800 450 700 400 US & 600 350 Canada EU & EFTA 500 300 250 400 200 300 150 Asia Pacific 200 100 Other Japan ROW 100 50 0 0 8m 2018 8m 2019 0 1 2 3 4 5 6 % BEV PHEV penetration rate Source: Rho Motion

» Solid outlook for EV sales – share of nickel increasing in batteries 2019 2025 2030 2040 EV sales outlook by vehicle class Million units 90 85 80 75 LFP NCA NCM622 70 LMO NCM111 NCM811 65 LTO NCM523 muut 60 55 50 45 40 35 Passenger car and light duty vehicles 30 Buses and Coaches 25 Medium Duty Vehicles 20 Heavy Duty Vehicles 15 Downside 10 Upside 5 0 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Source: Rho Motion

» 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 organization.

» Key figures January – September 2019

» Despite the increase in Q3, average price for nickel in Jan-Sep 2019 still 1,8% lower year-on-year Nickel price development (USD/t) 1 Jan 2016 – 30 Sep 2019 20 000  Market speculations on Indonesia’s 18 000 export ban resulted in upturn in nickel price in July. 16 000  In September Indonesia confirmed the 14 000 ban. 12 000  In Q3, the average price of nickel was 10 000 15,528 (13,266) USD/t  17.0% higher year-on-year and 8 000 26.7% higher than in Q2/2019. 6 000 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  Combined LME and SHFE nickel stocks correspond to less than 4 (5.5) weeks’ demand. 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 Data source: Metal Bulletin LME = London Metal Exchange, SHFE = Shanghai Futures Exchange

» Uncertainty of the global economy and low demand for galvanized steel depressed zinc price Zinc price development (USD/t) 1 Jan 2016 – 30 Jun 2019 4 000  Average zinc price in January – September 2019 down 13.9% year-on- 3 500 year. 3 000  Q3 zinc price down 7.4% year-on-year and 15.0% lower than in Q2/2019. 2 500  Combined LME and SHFE zinc stocks 2 000 correspond to less than a week’s 1 500 demand. 1 000 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 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 Data source: Metal Bulletin LME = London Metal Exchange, SHFE = Shanghai Futures Exchange

» Metals production at good level Nickel production, rolling 12-month (t) Zinc production, rolling 12-month (t) 30 000 65 000 60 000 55 000 25 000 50 000 45 000 20 000 40 000 35 000 15 000 30 000 25 000 10 000 20 000 15 000 5 000 10 000 5 000 0 0 Q3/2016 Q3/2017 Q3/2018 Q3/2019 Q3/2016 Q3/2017 Q3/2018 Q3/2019

» The net sales in Q3 were at EUR 102.4 (86.0) million Net sales (EUR million) Quarterly net sales (EUR million) 120 350 100 300 248,4 243,6 250 80 200 60 150 40 100 20 50 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2018 Q1-Q3 Q1-Q3 2018 2018 2018 2018 2019 2019 2019 2018 2019

» 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) 33.8 15 35 31.3 10,5 30 10 Q3 25 5 3,5 20 Q3 15 0 H1 10 -5 5 H1 0 -10 FY 2017 FY 2018 Q1-Q3 Q1-Q3 2017 2018 Q1-Q3 Q1-Q3 2018 2019 2018 2019

» Jan-Sep 2019 capex for development and growth totalled EUR 84,8 million Capital expenditure (EUR million) 110 Key capital expenditures: 100  Construction works and 13.2 90 equipment purchases for the 80 battery chemicals plan. 70 60  Construction work of the new 50 gypsum pond. 18.1 84.8 Sustaining capex 40 Development and  Construction work of the third 30 growth block in the waste rock area. 20 34.9 10 0 Q1-Q3 2018 Q1-Q3 2019 Year 2018: EUR 81.5 million

» Terrafame’s solidity is at good level Equity and liabilities (EUR million) 764 704 800 685 682 616 617 700 322 600 Equity 342 366 349 500 305 310 400 300 Liabilities 200 100 0 30.6.2018 30.9.2018 31.12.2018 31.3.2019 30.6.2019 30.9.2019 30.9.2019 Environmental provision

» 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.

24.10.2019 Dokumentin nimi www.terrafame.com