NorNickel GMK · RUS:GMKN
NorNickel GMK — Norilsk Nickel — BAML Global Metals, Mining & Steel Conference 2019
23 slides from NorNickel GMK's conference presentation, May 2019
Slide 1: Advancing on the path of sustainable growth
Advancing on the path of sustainable growth Investor Presentation BAML Global Metals, Mining & Steel Conference Barcelona, May 2019 1
Slide 2: Disclaimer
Disclaimer The information contained herein has been prepared using information available to PJSC MMC Norilsk Nickel (“Norilsk Nickel” or “Nornickel” or “NN”) at the time of preparation of the presentation. External or other factors may have impacted on the business of Norilsk Nickel and the content
Slide 3: Health & Safety: Delivering Steady Improvements
Health & Safety: Delivering Steady Improvements LTIFR: Improved to Record Low Levels Accident Statistics Improved in 2018 LTIFR (1*10-6) Employees Fatal -71% Lost time injury 12 14 8 8 0.80 13 94 0.62 74 0.48 0.44 56 6 0.35 52 43 0.23 26 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Slide 4: Improving Assessment of ESG Performance
Improving Assessment of ESG Performance Recognition of Norilsk Nickel ESG Efforts… …Leads to Gradual Improvement of ESG Assessment Signatory to UN Global Sustainalytics ESG Score: 69 points (out of Compact since 2016 100), Rated «Average Performer» since 2017 Rating in the global industry #13/45 #61
Slide 5: Leading Nickel and PGM Mining Major
Leading Nickel and PGM Mining Major The World’s Largest Producer of Class-1 Nickel Industry’s Best Tier 1 Assets and Palladium (3) TAIMYR PENINSULA (1) % of global output # position in the industry Ore reserves: ~ 650 Mt Reserve life: ~ 80 years Metal grades: Ni 0,92%, Cu 1,75%, 6PGM 5,54 g/t #1 Kol
Slide 6: Uniquely Rich Polymetallic Mineral Resource Base
Uniquely Rich Polymetallic Mineral Resource Base Lowest Cost Nickel Producer Globally, Naturally Diversified Metals Basket: C1 Cash Cost Revenue Breakup (1) [USD/t] Modified (1) C1 Cost Curve with Real NPI cost As of FY2018 20,000 Other 15,000 2018 Average 13,122 USD/t 6% -21% Platinum 5% Nickel 10,
Slide 7: Leading Financial Performance Through the Cycle
Leading Financial Performance Through the Cycle Strong Margins Through the Cycle … … and Conservative Balance Sheet [USD bn] [Х] 51% 53% 48% 50% 47% 44% 7.2 41% 37% 6.2 5.7 2.1 4.9 4.2 4.3 3.9 4.0 1.1 1.2 1.1 1.0 0.8 0.6 0.5 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017
Slide 8: Delivering Industry Leading Shareholder Returns
Delivering Industry Leading Shareholder Returns Nornickel Continues to Lead the Global Industry in …and Provides the Highest Dividend Yield Terms of Shareholder Returns… Compared to Global Peers TSR, 2013–2018 YTD, % Global Industry average dividend yield, 2013–2018 YTD, % x4 65 10.6 2.6 Industry -2
Slide 9: Strategic Roadmap for Key Production Assets
Strategic Roadmap for Key Production Assets Roadmap to Advanced, Efficient and Environmentally Friendly Production Processes After 2022 2019 Kola concentrator upgrade to Smelting Shop achieve SO2 emission Perspective growth projects: reduction in the region Polar Division South Cluster (9 Mtpa of
Slide 10: Reducing Environmental Footprint
Reducing Environmental Footprint Polar Division: Suphur Dioxide Emissions Kola Division: Sulphur Dioxide Emissions Down 5% from 2015 Reduced 30% from 2015 SO2 Emissions, kt SO2 Emissions, kt ~ -30% 180 2,000 -5% 150 1,600 120 90 1,200 60 800 30 400 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2010
Slide 11: Environmental Program – Key Pillar of the Strategy
Environmental Program – Key Pillar of the Strategy Comprehensive environmental program Kola Division for Norilsk region Total SO2 emissions in Norilsk Region CAPEX1 -75% Polar Division US$2.5 bn 2015 2023 Environmental initiatives aimed at material Nickel Smelter shut down in 2016 reduction of cross
Slide 12: Focus on Efficiency Improvement: Tangible Impact in 2019-2020
Focus on Efficiency Improvement: Tangible Impact in 2019-2020 Operational Efficiency Improvement Targets Drivers Production growth Improving utilization of the existing in 2019-2020 asset base throughout the entire 5-8% (by 2020 vs. 2017) value chain: from mining to refining Stringent controls over
Slide 13: «2025+ Strategy»: Scaling Up the Existing Assets
«2025+ Strategy»: Scaling Up the Existing Assets Mineral Resources Growth Opportunity of the existing assets in Norilsk for the Existing Assets Ore Production Metal Production Growth in the Norilsk Region, Mt (2025+ vs. 2017) Value of Resources Resources to in the Ground Production Ratio >45% >25 Ni
Slide 14: 3rd Stage of Talnakh Concentrator Upgrade
3rd Stage of Talnakh Concentrator Upgrade Location Project Rationale Talnakh Cluster Unlocking Norilsk region resource potential requires concentrator capacity expansion Current Talnakh Concentrator design allows installation of additional equipment without construction of major new buildings
Slide 15: South Cluster Development Update
South Cluster Development Update Location Project Rationale Large PGM asset at the bottom of the global PGM cost curve Estimated resources for South Cluster on the global PGM cost curve, new development (1): Operating Costs2, US$/4E oz Ore reserves: 165 Mt (of disseminated ore) PGMs – >20 Moz Cu –
Slide 16: Ramp-up of Bystrinsky Project
Ramp-up of Bystrinsky Project Project Overview The project is ramping up with full capacity expected in 2020 Ore reserves: 341 Mt, grades: Cu – ~0.7%; Fe – ~21%; Au – ~0.9 g/t Site infrastructure completed: open pit and concentrator (grinding and flotation) External infrastructure completed:
Slide 17: US$10.5-11.5bn CAPEX Plan for 2019-2022E
US$10.5-11.5bn CAPEX Plan for 2019-2022E CAPEX 2019-2022, US$ bn Base Investment Program Perspective Growth Projects US$6.5 – 7.5 bn ~US$1.3 bn Talnakh mining projects 16% 12% (Skalisty and brownfields) Projects: Talnakh Concentrator Upgrade, South Cluster and other Equipment replacement progr
Slide 18: CAPEX Program: New Investment Cycle in 2019-2022
CAPEX Program: New Investment Cycle in 2019-2022 Perspective growth projects (e.g. Talnakh concentrator, South Cluster) Commercial projects (incl. Bystrinsky Project) Environmental program Stay-in business: infrastructure, equipment replacement & capitalized maintenance, social US$ bn 0.30-0.40 2.2
Slide 19: Long Term Trends Supporting Consumption Growth for Norilsk Nickel Metal Basket
Long Term Trends Supporting Consumption Growth for Norilsk Nickel Metal Basket Current consumption trends Prospective consumption trends Rising global stainless steel demand in Vehicles electrification China on construction, urbanization and growth of living standards Vehicle electrification, rollou
Slide 20: Metal Markets Outlook – View on Fundamentals
Metal Markets Outlook – View on Fundamentals Metal Ni Cu Pd Pt Kt Kt Moz Moz -250 -120 -1.6 +0.8 Other Stocks, Non- Non- elastic days of exchange exchange Other Other consumption 80 non-elastic Exchange 9 32 Exchange 5 116 ETF 56 28 ETF 11 4 Jan-17 Dec-18 Jan-17 Dec-18 Jan-17 Dec-18 Jan-17 Dec-18 Kt
Slide 21: Premium of Palladium to Platinum is Sustainable in the Mid-Term
Premium of Palladium to Platinum is Sustainable in the Mid-Term Palladium Established a Sustainable Premium to … as Pd Loadings in Gasoline Vehicles are Platinum on Stronger Fundamentals… Supported by Higher Fair Value-in-Use USD/oz Palladium Platinum Higher Lower 1,000 500 Thermal durability Platin
Slide 22: Nornickel’s Metal Basket Content by Light Vehicle Type
Nornickel’s Metal Basket Content by Light Vehicle Type Hybrid Gasoline Diesel incl. PHEV BEV FCEV CAGR1 0% 0% +27% +26% +21% Market Share2 61% 17% 17% 6% <1% Stainless Steel & Parts +Batteries Ni 2–3 kg 2-4 kg 2-4 kg 5–15 kg 30–110 kg Wires & Parts +Electric Motor, Generator Winding Cu 20-25 kg 20-2
Slide 23: IR Contact Details
IR Contact Details Vladimir Zhukov Mikhail Borovikov Vice-President Investor Relations Head of Investor Relations Department Deputy Head of Investor Relations MMC Norilsk Nickel MMC Norilsk Nickel Tel: +7 495 797 8297 Tel: +7 495 787 7662 E-mail: [email protected] E-mail: [email protected] 23
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