Korea Zinc Co., Ltd. · KRX:010130
Korea Zinc — Q3 2022 Earnings Presentation
27 slides from Korea Zinc's earnings presentation, November 2022
Slide 1: Korea Zinc IR Presentation
Korea Zinc IR Presentation November 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking information and statements with respect to market conditions, financial conditions, results of operations and business, and plans of the management. Please note they may differ from actual results. Financial results herein are under audit review,
Slide 3: 3Q 2022 Earnings
3Q 2022 Earnings KZ Standalone Sorin Corporation Sun Metals Corporation Steel Cycle Company KZ Consolidated
Slide 4: KZ Standalone Key Index
KZ Standalone Key Index Revenue by Product (bn KRW) 2,500 2,052 2,048 Others ▪ 3Q22 base metal sales volume was still below 1,953 2,000 1,706 109 1,817 158 214 projection while precious metal and ‘Others’ sales 74 86 67 137 Copper 100 234 74 226 227 made up the gap 70 1,500 196 212 451 Gold 510 516
Slide 5: KZ Standalone P&L summary
KZ Standalone P&L summary ▪ Sales 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY (bn KRW) . QoQ sales comparison: Almost broke even due to ‘Others’ Sales 1,706 1,953 1,817 2,052 2,048 -0.2% 20.1% sales and increased sales volume of lead, sliver and gold COGS 1,467 1,679 1,571 1,671 1,803 7.9% 23.0% ▪ Cost / Opera
Slide 6: KZ Standalone BS summary
KZ Standalone BS summary 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ (bn KRW) Assets 7,965 8,321 8,256 8,580 9,566 11.5% Current assets 4,017 4,444 4,247 4,247 4,749 11.8% Cash and financial instruments 2,100 2,125 1,744 1,725 2,397 38.8% ▪ Cash and financial instruments . Private placement in August: +472b KRW In
Slide 7: Sorin Corporation
Sorin Corporation P&L summary 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY (bn KRW) Sales 567.2 896.5 674.4 684.0 549.6 -19.6% -3.1% ▪ Sales & Operating Profit COGS 539.4 867.3 615.4 658.8 544.2 -17.4% 0.9% . Sharp drop in various metal prices(Zn, Pb, Al) and SG&A 7.4 9.0 9.3 8.9 12.6 40.7% 70.3% softening of t
Slide 8: Sun Metals Corporation
Sun Metals Corporation P&L summary 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY (‘000 USD) ▪ Production Sales 201,527 174,430 151,924 176,938 117,212 -33.8% -41.8% . Production volume was higher than the sales volume in 3Q22 COGS 172,650 155,810 143,389 160,318 141,978 -11.4% -17.8% ▪ Sales SG&A 10,695 10,869 7
Slide 9: Steel Cycle Company (Formerly Zinc Oxide Corporation)
Steel Cycle Company (Formerly Zinc Oxide Corporation) P&L summary 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY (bn KRW) Sales 17.5 25.0 31.0 24.3 23.1 -4.7% 32.2% COGS 14.0 15.6 17.9 16.8 18.4 9.6% 30.9% ▪ Sales . Production on track while slight price drop pulled the SG&A 0.6 0.9 0.6 0.7 0.8 3.0% 28.1% revenue
Slide 10: KZ Consolidated
KZ Consolidated P&L summary 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY (bn KRW) Sales 2,415 2,986 2,661 2,851 2,744 -3.7% 13.7% COGS 2,116 2,653 2,333 2,414 2,520 4.4% 19.1% ▪ Sales . Key reasons behind 3Q22 consolidated revenue decline SG&A 33 45 44 56 74 32.2% 126.5% were 1)low utilization of SMC and 2)Sori
Slide 11: DEFINE: Redefining KZ's Next Years
DEFINE 50 Redefining KZ’s Next 50 Years Troika Drive Secondary Battery Materials ESG Update Green Hydrogen & Battery Alliance Onsan Fumer Retrofitting Project Acquisition of the remaining stakes in Igneo
Slide 12: Troika Drive
Troika Drive Korea Zinc presents “TROIKA DRIVE”
Slide 13: Secondary Battery Materials Copper Foil
Secondary Battery Materials Copper Foil Preparing for a flawless launch Timeline for commercial production . Aiming for initial SOP in 3Q23 by getting approval from global major battery cell makers 2022 2023 2024 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Customer A Domestic customers Customer B . System setup . Co
Slide 14: ESG Update: Environmental Aspect
ESG Update Big Step Forward in ESG Environmental Aspect Korea Zinc is striving to contribute to solving the Climate Change, a global environmental problem. To this end, we have calculated Scope3 GHG emissions for the first time in 2022 and won the ‘Korea Environment Award. Based on its endeavor to h
Slide 15: ESG Update: Social & Governance Aspect
ESG Update Big Step Forward in ESG Social & Governance Aspect As COVID-19 quarantine policies were relaxed, volunteer activities resumed. In addition, Korea Zinc is strengthening the company's ESG standards based on the ESG expertise of independent directors appointed in 2021. Korea Zinc employees a
Slide 16: Green Hydrogen & Battery Alliance: Backgrounds
Green Hydrogen & Battery Alliance: Backgrounds ▪ Despite steady growth since its foundation in 1974, Korea Zinc faced market and shareholder demand for ensuring sustainable growth - (Market) Demand for a paradigm shift to ESG management due to the energy-intensive nature of the smelting business - (
Slide 17: Green Hydrogen & Battery Alliance: Summary
Green Hydrogen & Battery Alliance: Summary ▪ Solidify strategic partnerships to ramp up business alliance through Korea Zinc’s treasury stock exchange/disposal deals with strategic partners well suited to create synergy with the new businesses ▪ Secure medium- and long-term growth momentum for Korea
Slide 18: Alliance Details: LG Chem, Hanwha Corp.
Green Hydrogen & Battery Alliance: Details LG Chem Hanwha Corp. Purpose of business partnership Purpose of business partnership ▪ To collaborate across the hydrogen value chain (e.g., ammonia tank ▪ To beef up collaboration in battery materials including recycling (back- terminals and cracking facil
Slide 19: Alliance Details: Trafigura, MSIM, Korea Investment & Securities
Green Hydrogen & Battery Alliance: Details Trafigura Morgan Stanley Investment Management Purpose of business partnership ▪ Invest in Troika Drive, i.e., three new businesses Purpose of business partnership ▪ Trafigura supplies nickel concentrate, and Korea Zinc seeks to establish KRW 64.3bn a nicke
Slide 20: Onsan Fumer Retrofitting Project
Onsan Fumer Retrofitting Project ▪ Purpose Upgraded process Feedstock To be retrofitted Of six fumers that Onsan Smelter has to recover valuable metals from byproducts from zinc and lead (Cu 23%) New facilities smelting, one will be retrofitted to enable recycled copper smelting. In response to the
Slide 21: Acquisition of Remaining Stakes in IGNEO
Acquisition of Remaining Stakes in IGNEO ▪ Purpose Following the acquisition of a 75.53% stake in Igneo Technologies for USD332 million via its US subsidiary Pedalpoint Holdings, Korea Zinc plans to take over the remaining stake in the e-waste recycler to accelerate the global resource recycling bus
Slide 22: Appendix
APPENDIX Metal Market Sales Volume Breakdown Sales Revenue Breakdown 3Q22 Metal Prices & FX rates
Slide 23: Metal Market
Metal Market 2022 2023 Global (kt) ▪ Glencore has signaled its plan to idle the 165kt/a Nordenham zinc Mine Production 12,957 13,592 smelter in Germany Refined Production 13,274 14,088 ▪ The idling of Portoveseme, Budel and Nordenham theoretically Consumption 13,837 14,066 cut European demand for co
Slide 24: Sales Volume Breakdown
Sales Volume Breakdown KZ Standalone KZ 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY Zinc(MT) Domestic 53,613 54,891 57,379 53,717 49,429 -8.0% -7.8% Export 93,801 109,177 89,090 100,030 96,099 -3.9% 2.5% Total 147,414 164,069 146,470 153,746 145,528 -5.3% -1.3% Lead(MT) Domestic 28,751 29,189 28,166 27,707 26,
Slide 25: Sales Revenue Breakdown
Sales Revenue Breakdown KZ Standalone (bW) 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY Zinc Domestic 194 227 260 282 237 -16.1% 21.8% Export 340 438 402 529 481 -9.0% 41.2% Total 535 665 662 811 718 -11.5% 34.2% Lead Domestic 86 90 89 89 78 -12.8% -8.9% Export 194 271 231 231 228 -1.3% 17.3% Total 280 362 320
Slide 26: 3Q22 Metal Prices & FX rates
3Q22 Metal Prices & FX rates Quarterly Average Index (KRW) 3Q21 4Q21 1Q22 2Q22 3Q22 QoQ YoY Zinc (USD/MT) 2,991 3,365 3,743 3,925 3,269 -16.7% 9.3% Lead (USD/MT) 2,341 2,331 2,334 2,203 1,976 -10.3% -15.6% Gold (USD/oz) 1,790 1,795 1,874 1,874 1,730 -7.7% -3.4% Silver (USD/oz) 24.36 23.32 23.94 22.6
Slide 27: IR contact
APPENDIX IR contact [email protected]