Elkem (ELK) Lunch presentation summary

Key highlights and strategic developments

• Stable financial results achieved despite weak market conditions, supported by strong cost positions and operational performance.

• Silicon Products faced weak demand and price pressure, mainly from Chinese imports, while Carbon Solutions delivered strong performance and Silicones improved results versus prior periods.

• Norwegian Ministry of Climate and Environment ruled in favor of equal treatment in EU ETS emission allowances; strategic review of the business portfolio is ongoing.

• New long-term power contracts secure favorable energy costs for Norwegian plants, with coverage extending to 2037.

• Strong ESG performance recognized by top ratings from EcoVadis and CDP, with ongoing initiatives for emission reduction and circularity.

Market trends and outlook

• Market conditions remain subdued, with Silicon Products and Silicones facing challenging pricing and demand, but cost leadership mitigates impact.

• Automotive sector shows slight improvement in outlook, especially in China and North America, but overcapacity and price competition persist.

• Silicon prices in the EU declined sharply due to Chinese imports, while China saw some price recovery in Q3 after policy interventions.

• Ferrosilicon prices rose in the EU in August due to potential safeguard measures, while US prices fluctuated with anti-dumping actions.

• Carbon Solutions remains resilient due to specialty offerings, despite global steel production decline and weak ferroalloy markets.

Financial performance and position

• Group EBITDA for Q2 2025 was MNOK 803, down 22% year-on-year, mainly due to lower sales prices in Silicon Products and Carbon Solutions.

• Silicones division, under strategic review, showed EBITDA improvement driven by cost efficiencies and higher sales volumes in Asia Pacific.

• Earnings per share (EPS) was NOK -0.49 for Q2, impacted by Silicones losses; equity ratio remains robust at 50%.

• Net interest-bearing debt stood at BNOK 11.4 with a leverage ratio of 2.8x; maturity profile is well managed with low near-term repayments.

• Cash flow from operations was MNOK 308 in Q2, with investments focused on reinvestments and smaller strategic projects.