735 17.9 15,0 14.2 Terrafame employees 754 10,0 9.6 5,0 - - PowerPoint PPT Presentation

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735 17.9 15,0 14.2 Terrafame employees 754 10,0 9.6 5,0 - - PowerPoint PPT Presentation

Dec 07, 2023 555 likes •750 views

Business review January December 2019 Joni Lukkaroinen CEO 21 Feb 2020 January December 2019 in brief Net sales for the financial year EUR 310.4 (325.8) million. EBITDA EUR 32.0 (32.8) million. Operating result EUR -5.6

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SLIDE 1

Joni Lukkaroinen CEO 21 Feb 2020

»Business review

January–December 2019

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SLIDE 2

»January–December 2019 in brief

  • Net sales for the financial year EUR 310.4 (325.8) million.
  • EBITDA EUR 32.0 (32.8) million.
  • Operating result EUR -5.6 (3.0) million.
  • Metal prices fluctuated strongly during the year.
  • Nickel production increased to 27,468 (27,377) tonnes.
  • Zinc production 55,222 (61,608) tonnes.
  • The construction of the new battery chemicals plant progressed as planned and process

equipment installations and the establishment of the production organisation were launched.

  • Occupational safety matters have been systematically emphasised at the site.
  • The discharge pipe of Lake Nuasjärvi was in operation from April to mid-July, and the

release of water was restarted in late August. The substance concentrations of purified water released from the site remained below permit levels.

Unless otherwise stated, the figures in parentheses refer to the corresponding period of the previous year.

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SLIDE 3

»Safety is one of

  • ur cornerstones
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SLIDE 4

»Last year was challenging with occupational safety especially

at the battery chemicals plant construction site

LTIFR on 31 Dec 2019.

9.6 17.9 14.2

0,0 5,0 10,0 15,0 20,0 25,0 30,0

2015 2016 2017 2018 2019

Terrafame Partner companies Total

Rolling 12 mont lost-time injury frequency (LTIFR) Partner companies appr.

735

employees Terrafame

754

employees

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SLIDE 5

»Battery chemicals

plant’s commercial production will start in 2021

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SLIDE 6

»In Europe, electric vehicle sales increased 35% compared to

full year 2018

China US & Canada EU & EFTA Japan Asia Pacific Other Rest of the World

100 200 300 400 500 600 700 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Source: Rho Motion

Regional monthly EV sales (‘000 units)

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SLIDE 7

0 % 20 % 40 % 60 % 80 % 100 % Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

NCM811 NCM622 NCM523 NCM111 NCA LTO LMO LFP

»Both battery size of electric vehicles and the amount of

nickel in the battery have increased

Average battery size (kWh) EV battery chemistry

10 20 30 40 50 60 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Lähde: Rho Motion NCMXXX = N nickel, C cobalt, M manganese and their mutual relations

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SLIDE 8

»Terrafame is moving forward in the value chain

RAW MATERIALS CHEMICALS/SALTS PROCESSED MATERIALS CELL & PACK DOWNSTREAM APPLICATIONS Nickel ore Cobalt ore Manganese ore Nickel sulphate Cobalt sulphate Manganese sulphate Anode materials Battery management system Electrolyte materials Separator materials

PRE-CURSOR MATERIALS CATHODE ACTIVE MATERIALS CELL PACK

Electric vehicles Plug-in hybrids Cathode materials Battery cell

Source: Internal, 2019

Lithium ore Lithium hydroxide

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SLIDE 9

»Key figures January ̶

December 2019

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SLIDE 10
  • The uncertainty of the global economy

and markets’ speculation on Indonesia’s nickel ore ban affected the price development during the year.

  • In 2019, the average price of nickel was

13,926 USD/t, which was 6% higher than in 2018.

  • In Q4 2019 the average price was 15,450

USD/t which was 34.0% higher than the price in Q4 2018, but very close to the price in Q3 2019.

  • At the end of the year, combined LME

and SHFE nickel stocks corresponded to

  • appr. 4 (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

»Strong nickel price fluctuations continued in 2019

5 000 10 000 15 000 20 000 1.1.16 1.4.16 1.7.16 1.10.16 1.1.17 1.4.17 1.7.17 1.10.17 1.1.18 1.4.18 1.7.18 1.10.18 1.1.19 1.4.19 1.7.19 1.10.19 31.12.19

Nickel price development (USD/t) 1 Jan 2016–31 Dec 2019

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»The price of zinc kept declining in 2019

  • The zinc prices have been declining,

although reported stocks levels were on low levels. During the end of the year, the uncertainty of the global economy affected also to the price.

  • In 2019, the average price was 2,547

USD/t, which was appr. 12.8% lower than in 2018.

  • In Q4 2019, the average price was

2,388 USD/t, which was 9.2% lower than in Q4 2018 and 1.6% lower than in Q3 2019.

  • At the end of the year, combined LME

and SHFE nickel stocks corresponded to under one week’s demand.

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

1 000 2 000 3 000 4 000 1.1.16 1.4.16 1.7.16 1.10.16 1.1.17 1.4.17 1.7.17 1.10.17 1.1.18 1.4.18 1.7.18 1.10.18 1.1.19 1.4.19 1.7.19 1.10.19 31.12.19

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

Zinc price development (USD/t) 1 Jan 2016–31 Dec 2019

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SLIDE 12

,0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 ,0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018

»Metals production was affected by repair measures in the

bioleaching as well as the metals production plant’s scheduled maintenance stoppage and power failure with its multiplier impacts in Q4

Rolling 12 month nickel production (t) Rolling 12 month zinc production (t)

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»Net sales EUR 310.4 million ̶ EBITDA was at the 2018 level

Net sales (EUR million) 310.4 325.8

50 100 150 200 250 300 350 FY 2019 FY 2018

32.0 32.8

10 20 30 40 FY 2019 FY 2018

EBITDA (EUR million)

  • 5.6

3.0

  • 10
  • 5

5 FY 2019 FY 2018

Operating result (EUR million)

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»EUR 88.5 million were used to improve productivity and

increase capacity

53,1 88,5 28,4 42,1

20 40 60 80 100 120 140 2018 2019

Capital expenditure (EUR million)

Sustaining capex Improving productivity and increasing capacity (mainly the battery chemicals plant)

81,5 130,6 350 322 349 345 366

100 200 300 400 500 600 700 800 31.12.2019 30.9.2019 30.6.2019 31.3.2019 31.12.2018

Equity and liabilities (EUR million) 764 685 682 750

Equity Liabilities

685

Environmental provision

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»Significant events after the end of the financial period

  • The Finnish Government decided on 6 February 2020,

to grant a uranium recovery permit to Terrafame.

  • The end of 2019 was extremely rainy. As a result, a

neutralization process was put into operation in December in order to purify and reduce the process

  • solution. This is estimated to increase the sulphate load
  • f water released from the area during 2020.
  • A new record for monthly nickel production, 2,887

tonnes, was achieved in January 2020.

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SLIDE 16

»Near-term outlook

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

in the London Metal Exchange (LME) has remained at the USD 13,000 per tonne level. Nonetheless, the fluctuation of prices has continued to be strong.

  • The process equipment installation work at the battery

chemicals plat is progressing and the commercial production of battery chemicals will commence in early 2021.

  • Terrafame will continue to take measures to improve

its safety culture, production and cost efficiency.

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SLIDE 17

21.2.2020 Dokumentin nimi

www.terrafame.com