Integrated
annual report
2024
Delivering your potential
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We are Elkem
Advanced silicon-based
materials shaping a better
and more sustainable future
The Elkem share
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Financial statements
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Table
of contents
Annual report
Elkem's history
12
Elkem s value chain
16
Elkem in brief
20
Letter from the CEO
22
The Elkem way
26
Silicones
28
Silicon Products
30
Carbon Solutions
32
The Elkem share
36
Board of directors’ report
42
Board and management
58
Corporate governance
60
Overview of main risk areas
76
Risk descriptions
78
Sustainability statement
82
General disclosures (ESRS 2)
88
Climate change (ESRS E1)
104
Statement on the EU Taxonomy (ESRS E1)
120
Pollution (ESRS E2)
130
Water and marine resources (ESRS E3)
136
Biodiversity and ecosystems (ESRS E4)
142
Resource use and circular economy (ESRS E5)
148
Own workforce (ESRS S1)
156
Workers in the value chain (ESRS S2)
166
Affected communities (ESRS S3)
172
Business conduct (ESRS G1)
180
ESRS index
188
Financial statements
192
Consolidated financial statements
196
Notes to the consolidated financial statements
202
Financial statements – Elkem ASA
300
Notes to the financial statements – Elkem ASA
303
Declaration by the board of directors
336
Independent auditor’s report
337
Alternative Performance Measures (APMs)
342
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Financial statements
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Table of contents
Elkem is a world-leading supplier of advanced silicon-
based materials shaping a better and more sustainable
future. The company produces silicones, silicon products
and carbon solutions by combining natural raw materials,
renewable energy and human resourcefulness. Elkem
helps customers develop and improve products that
are essential for the green and digital transitions, such
as electric mobility, digital communication, health and
personal care, as well as smarter, more sustainable cities.
With a strong track record since 1904, Elkem's global
team of around 7 200 people has a joint commitment to
stakeholders: Delivering your potential. Elkem is listed
on the Oslo Stock Exchange (ticker: ELK) where it
is part of the OBX® ESG Index, a selection of
40 companies demonstrating best Environmental,
Social and Governance (ESG) practices.
Who we are
and what
we do
33.0
NOK billion total
operating income
13%
EBITDA margin
High share of
renewable energy
0
net zero
emissions
by 2050
8
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Board of directors' report
Sustainability statement
Financial statements
Annual report
Who we are and what we do
One company,
three divisions
Elkem is organised in three divisions, providing silicones,
silicon products and carbon solutions. These products
are essential to making a large number of innovative
products that people use in their daily life and which are
necessary components for sustainable solutions for the
future, from digital communication, health and personal
care to green mobility and transportation, as well as
energy and power.
Elkem aims to grow profitably, through a focus on
building strong cost and market positions, with
integrated and regionally based value chains. Elkem also
has a strong emphasis on innovation and R&D to enable
a higher degree of product specialisation, creating
added value for customers.
Silicones
A fully integrated producer
from silicon metal to upstream
siloxanes and downstream
silicone specialities.
Silicon
Products
A leading producer of silicon-
based materials, including silicon,
ferrosilicon, specialty alloys based
on ferrosilicon and Microsilica.
Carbon
Solutions
A leading producer of speciality
carbon products for various
metallurgical smelting processes
and primary aluminium industries.
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One company, three divisions
A collection
of milestones
1918
Patenting of the Søderberg
electrode technology
1904
Elkem was founded
1913
Elkem listed on the Oslo
Stock Exchange
1944
First trial batch of
silicones in Lyon, France
1951
World’s largest ferrosilicon
smelter put into operation
at Fiskaa
1964
Silgrain© first
production (Bremanger)
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Elkem's history
A collection
of milestones
2011
Orkla aquired Elkem in 2005,
and de-listed the company.
Ownership changed to China
National Bluestar in 2011
1978
Beginning of
silicones production
in China (Xinghuo)
1981
Acquisition of
Union Carbide
Ferroalloys Division
2018
Re-listing on Oslo
Stock Exchange
2023
Inauguration of world's
first carbon capture pilot
at Elkem's smelter in
Rana, Norway
2024
Elkem is a top five global silicones
producer, a top producer of silicon
and foundry alloys in Western
markets, and the only global
producer of carbon products
2005 -
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Elkem's history
Elkem's value chain
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Elkems value chain
2024
in brief
1Q-2024
→
On 2 January 2024, Elkem celebrated its 120-year
anniversary. Since its beginning as an industrial
start-up in 1904, the company has developed into one
of the world's leading providers of advanced silicon-
based materials.
→
Elkem signed an agreement to acquire REC Solar
Norway AS, in a transaction that gave the company
control of industrial areas and facilities in Norway,
including areas near its Fiskaa operations in
Kristiansand.
→
Elkem completed its first pilot for carbon capture and
storage (CCS) at the Rana plant in Norway, recording
CO
2
capture rates of up to 95 per cent.
2Q-2024
→
Elkem received high scores from CDP with A- for
Climate and Water, as well as A for Forest, making
Elkem one of only 30 companies globally with top
performance in this area.
→
In line with its comprehensive programme to improve
earnings and reduce capital expenditures, Elkem
exited its financial investment in the advanced battery
materials company Vianode to focus on core business.
→
The silicones expansion project in China was finalised
in May, on time and on budget. The start-up was
successful and exceeded expectations.
→
Elkem was awarded NOK 31 million in support from
Enova for the groundbreaking Sicalo® (Silicon
production with carbon looping) project, which aims
to eliminate all CO
2
emissions from silicon production.
The technology involves capturing the carbon
emitted from the silicon furnace and reusing it in the
production process. In October, Elkem received EUR
1.8 million in funding from the European Union for the
project.
3Q-2024
→
Elkem successfully issued NOK 1 500 million new
senior unsecured bonds. Of these, NOK 400 million
was issued with a tenor of 3 years, NOK 800 million
with a tenor of 5 years, and NOK 300 million with a
tenor of 7 years.
→
Elkem earned Platinum rating for sustainability
transparency from EcoVadis, one of the world’s
largest and most trusted providers of business
sustainability ratings.
4Q-2024
→
Elkem reached a successful scaling of its chemical
silicone waste recycling project from a laboratory to
a pilot unit at its Saint-Fons production site in Lyon,
France. This marks a significant milestone in driving
the transition to a circular economy for silicones.
→
Elkem signed a long-term power agreement
with Hafslund. The contract covers a capacity of
approximately 400 GWh per year for the 2028 – 2035
period, providing Elkem’s plants with competitively
priced power and predictability of supply.
→
Elkem met its improvement programme targets,
achieving more than NOK 1 500 million in EBITDA
improvements and NOK 2 000 million in investment
reductions. These results position Elkem for stronger
financial performance when the markets recover.
The challenging market conditions of 2023
persisted throughout 2024, impacting sales prices
and demand for most of Elkem’s products. Elkem
worked extensively to counter these challenges
and to improve financial results, through both
internal measures and reduced investment levels.
This improvement programme gradually improved
Elkem’s financial performance, despite the absence
of tailwind in the market.
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2024 in brief
Plants
Offices
HQ
Total operating income
Operating income growth
EBITDA
EBIT
Profit (loss) for the period
Cash flow from operations
Reinvestments in % of D&A
Total assets
Net interest-bearing debt
Debt leverage
Equity
Equity share
Return on capital employed (ROCE)
Earnings per share (EPS)
Number of employees
Total recordable injury rate H1+H2
NO
x
emissions
Total CO
2
emissions (scope 1, 2 and 3)*
Energy consumption
2023
34 760
-24%
3 771
1 365
170
3 027
102%
50 500
8 373
2.2
24 458
48%
4%
0.11
7 436
3.0
5 830
9.84
7.27
2024
33 004
-5%
4 146
1 294
577
1 484
77%
53 432
10 327
2.5
26 020
49%
4%
0.77
7 262
3.5
5 460
11.53
7.15
2021
33 717
37%
7 791
5 899
4 664
4 100
91%
41 850
3 341
0.4
19 874
47%
26%
7.49
7 074
3.7
8 932
11.60
6.54
2019
22 668
-10%
2 656
1 189
897
2 133
80%
29 004
5 106
1.9
12 952
45%
7%
1.47
6 370
2.2
6 718
6.01
2018
25 230
20%
5 793
4 522
3 367
4 031
84%
31 129
2 101
0.4
13 722
44%
26%
5.74
6 280
2.2
7 068
6.23
2020
24 691
9%
2 675
948
278
1 513
81%
30 888
7 327
2.7
12 635
41%
5%
0.41
6 856
2.3
6 610
10.27
6.40
2022
45 898
36%
12 925
10 898
9 642
9 551
84%
52 781
1 280
0.1
28 773
55%
39%
15.09
7 372
3.2
6 519
10.74
6.54
Unit
NOK million
Ratio
NOK million
NOK million
NOK million
NOK million
Ratio
NOK million
NOK million
Ratio
NOK million
Ratio
Ratio
NOK
Number
Ratio
Tonnes
Mill tonnes
TWh
Key figures
2017
20 985
26%
3 188
1 927
1 249
2 336
72%
25 507
6 481
2.0
8 565
34%
12%
2.08
6 113
3.1
7 109
5.28
20
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Key figures
21
Annual report 2024
* Total scope not reported before 2020.
Improving results and
positioning for growth
Dear Elkem shareholder,
In 2024, we celebrated Elkem’s 120-year
anniversary.
Since our beginning as an industrial
start-up in 1904, our company has evolved into
one of the world's leading providers of advanced
silicon-based materials.
Today, Elkem counts
more than 7 200 talented employees across more
than 30 different countries. We deliver critical
materials to around 36 000 customers worldwide,
many of whom are global leaders in their sectors,
ranging from construction to electronics,
renewable energy, healthcare, mobility and
aerospace applications.
Our materials are
essential to the products future digital, low-
emissions societies will rely upon, and will be
increasingly critical to the markets we operate in.
The foundation of Elkem’s robust business model
is a combination of strong market positions
supported by efficient and lean manufacturing,
technology innovation, a diversified portfolio and
a commitment to continuous improvement. All
these tools were successfully leveraged in 2024, to
counter
challenging macro-economic conditions.
Prolonged downturn and geopolitical turmoil
The past two years have presented significant
challenges for our industry. Weak global
economic growth, inflationary pressures and high
interest rates have led to a slump in demand in
the construction market in China and in Europe,
and created headwinds for the automotive and
steel sectors in Europe and the US. There has
been an oversupply of silicone capacity in China.
These factors have put pressure on sales prices for
commodity silicones, silicon and ferrosilicon in all
three markets in 2024.
While inflationary pressures are easing, 2025
has been off to a slow start. Global GDP growth
outlook remains modest, with downside risks
in the form of regional conflicts, geopolitical
instability and shifts towards protectionist trade
policies, threatening supply disruptions. The
integration of the global economy is under strain,
driven by geopolitical rivalries. In my 35 years at
Elkem, I have not experienced price volatility as
significant and changes as rapid as those we have
witnessed since the pandemic.
In response to the weak market conditions, Elkem
initiated a comprehensive improvement programme
in 2024 aimed at increasing margins, particularly in
the Silicones division. Measures were implemented
to reduce costs and capital expenditures, enhance
operational efficiencies and optimise capacity. The
target was to improve EBITDA by at least NOK 1.5
billion and to reduce capital expenditures by NOK
2.0 billion year-on-year.
Despite the challenging market conditions in 2024, Elkem
once again demonstrated its resilience and adaptability,
a hallmark of our 120-year history. Profitability has been
improved through a broad range of internal initiatives
and
we are
well positioned to
seize new
opportunities once
demand recovery gets underway.
Helge Aasen
CEO, Elkem ASA
22
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Annual report 2024
23
Annual report
Letter from the CEO
Improvement programme exceeding targets
I am proud to report that Elkem not only met but
exceeded its targets. The realised effects of the
EBITDA improvement programme stood at NOK
1.7 billion as per year-end 2024, while capex was
reduced by NOK 2.2 billion compared to 2023.
All three of our divisions reported satisfactory
fourth-quarter results, with Silicones delivering its
best result since the third quarter 2022.
Behind those numbers lie a tremendous amount
of hard work to drive sales optimisation,
productivity improvements and organisational
efficiencies. I want to commend our Elkem
employees for their collective efforts to
strengthen our profitability. Despite relatively
weak results in 2024, Elkem has delivered on its
financial targets over the business cycle, with
strong top line growth, good profitability, and a
sound financial position.
We are well positioned to deliver a strong
performance and seize attractive growth
opportunities once demand recovery gets
underway. We believe demand will be bolstered
by regulations such as the European Union’s (EU)
Critical Raw Materials Act. The Act entered into
force in May 2024 and aims to ensure a secure
and sustainable supply of raw materials that are
integral to key industrial sectors and to the EU’s
transition to a green and digital economy. Silicon
metal has been classified as both a critical and
strategic material by the EU, illustrating its critical
role in multiple sectors.
Strategic review of the Silicones division initiated
In January 2025, we announced a strategic
review of the Silicones division. The purpose is
to streamline our business portfolio, and enable
capital allocation to accelerate growth in the
Silicon Products and Carbon Solutions divisions.
This decision follows a thorough assessment
of Elkem’s position in the silicones industry.
Significant investments have been made in the
division, which have improved our market and
cost positions. However, to further develop the
Silicones division and retain a leading position
in the industry, Elkem’s board of directors and
management are of the view that continued
significant investments will be required.
The Silicones division’s profitability is improving
and the expansion projects in China and France
have been completed. Therefore, this is the right
time to initiate this process.
We are carefully considering several alternatives
and aim to advance the process in a timely manner.
Investments in growth, environmental
performance and specialisation
Beyond our improvement programme, 2024 also
included important highlights within operations,
innovation, digitalisation and sustainability.
We completed the silicones expansion project
in China on time and on budget in May. The
plant was ramped up in six months, increasing
overall production capacity by 50 per cent, i.e.
an additional 120 kmt silox annually.
We also
expanded our silicones production in France,
which is increasing total capacity by 25 per cent.
These expansions will improve Elkem’s cost
position, environmental performance, and deliver
better product quality upstream, which in turn
will support further downstream specialisation.
In the fourth quarter, the new line in China was
already generating a positive EBITDA contribution
estimated at approximately NOK 120 million.
Elkem also signed new long-term power contracts
in Norway, securing our future cost position and
predictability of supply. Elkem is well-positioned
with long-term power contracts in Norway with
around 75 per cent of its electricity consumption
secured until end of 2029.
At the heart of Elkem are its people and our
focus on safety. We believe that all injuries are
preventable and have therefore adopted a zero-
harm philosophy in our operations. Following a
setback in our safety performance during the
pandemic, we rolled out a new and reinforced
system for Health, Safety and the Environment
(HSE) improvement. While the initiative showed
positive results in 2023, the number of low severity
incidents rose in 2024.
We take this very seriously
and have taken steps to reinforce management
focus in the affected areas. The safety of our
employees shall always be our first priority.
Innovation at our core
Research and innovation are at the core of
Elkem’s DNA, with 3.2 per cent of 2024 revenues
dedicated to new products and new processes,
including technical support to customers.
We’re continuously exploring new ways of
manufacturing our existing product-portfolio
more sustainably and efficiently, and developing
new and more specialised products for our
customers.
We have around 550 researchers
globally, working in areas such as energy
efficiency and CO
2
emissions reduction, circular
economy, new materials and digitalisation.
In 2024, we reported pioneering achievements in
several of these areas.
At our Test Center in Kristiansand, Norway, we
completed the first pilot phase of Elkem Sicalo®,
which aims to eliminate all CO
2
emissions from
silicon production. The concept is based on
recycling the carbon emitted from the furnace,
using it again as a reductant in the production
process in a closed loop. The project received a
NOK 31 million grant from Enova earlier in the
year. Subsequently, the EU granted EUR 9.9
million in funding for the Horizon Europe project
MECALO, which builds on our project. MECALO
will develop the concept of carbon looping
further for general metal production, with the
aim of achieving zero CO
2
silicon and manganese
alloys. If successful and fully implemented in all
European production of silicon and manganese,
this project could save 33 million tonnes of CO
2
emissions per year in 2050.
Other climate technology breakthroughs included
the successful completion of the world’s first pilot
for carbon capture and storage (CCS) at a smelter,
at our Rana facility in Northern Norway. The high
capture rates of up to 95 per cent, combined
with low amine degradation, proved the technical
effectiveness of the technology. Carbon capture,
along with the use of biocarbon, can potentially
contribute significantly towards our global climate
strategy of reducing emissions towards net zero.
Now the challenge is to strengthen the business
case for CCS, to make it commercially viable in an
industry with global competition.
In France, our research team at Saint-Fons in Lyon
successfully scaled its chemical silicone waste
recycling project. Recycling waste is a central
tenet of the circular economy, yielding significant
advantages such as reduced material consumption
and a diminished environmental footprint. As part
of its climate strategy, Elkem aims to increase
recycling in its own operations and develop circular
loops with customers and suppliers.
Green leadership:
Sustainability and innovation go
hand in hand at Elkem and green
leadership is what will keep us
relevant also for the next 120 years.
Our climate roadmap is based on cutting
emissions and resource-use in our operations to
reach net zero production and focus growth on
enabling the green transition by supplying critical
materials to customers.
In 2024, our sustainability efforts and our
commitment to corporate social responsibility
were recognised with high scores from CDP and
a Platinum rating for sustainability transparency
from EcoVadis, one of the world’s largest and
most trusted providers of business sustainability
ratings. The Platinum rating is awarded to the top
1 per cent of companies globally.
In 2025, Elkem will continue to focus on
operational excellence, digitalisation to accelerate
productivity improvement, the health and safety
of our people, and sustainability. Our divisions will
keep strengthening their leading positions within
their respective markets, enhancing their strong
cost positions, expanding their product portfolios
and pursuing selective growth initiatives.
In doing so, we will ensure that Elkem remains a
competitive producer of world-leading advanced
materials, creating value for all stakeholders
through profitable and sustainable growth.
Helge Aasen,
CEO, Elkem ASA
24
25
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The Elkem way
We are Elkem
Our purpose
Delivering your potential
Our values
Involvement
Respect
Precision
Continuous improvement
→
A leading global provider of silicon-based advanced materials
→
Elkem’s materials are essential to most products used in daily life,
such as digital communication, health and personal care, green
mobility and transportation, as well as renewable energy and power.
Elkem’s products are therefore critical to the green and digital
transition, enabling sustainable solutions for the future.
→
Elkem’s goal is to create value through profitable and sustainable
growth. We aim to develop our business in accordance with the UN
Sustainable Development Goals and to reduce emissions to reach
climate neutral production.
→
Elkem’s team of professionals is dedicated to developing innovative, high-
quality, specialised solutions to unleash the potential of our customers.
→
We believe that the long-term megatrends will drive growth in demand for
advanced materials, including silicones, silicon and carbon solutions.
→
Involvement
commits people. We believe that our employees closest to
the production processes are best positioned to identify problems and
opportunities, and to find solutions. By involving colleagues, customers
and other stakeholders, and by being transparent and committed to
teamwork, we increase our ability to learn and develop new solutions.
→
We
respect
the law, the environment, our employees, colleagues,
customers, suppliers, owners, local communities and different cultures.
Respect is about being fair, open and honest, trusting your colleagues and
partners and appreciating diversity.
→
Commitment to
precision
expresses itself through our work to develop
and follow standards of best practice and safe and stable production. By
establishing work and safety standards, we can measure and continuously
improve our performance.
→
We know that the value chain can always be improved. We do this through
experimenting, using new technology and looking for ways to eliminate
waste.
Continuous improvement
means that we are always looking for
improvement potential, keeping an open mind and always ready to learn
and share our knowledge.
Our mission
To produce advanced
silicon-based materials
shaping a better and
more sustainable future
Our corporate strategy
Dual-play growth
→
Driving growth and
value creation in all
three divisions.
→
Securing supply
chain resilience
through geographical
diversification.
Green leadership
→
Cutting emissions
and resource-use to
reach climate-neutral
production.
→
Enabling the green
transition through
the supply of critical
materials.
>5%
Growth per year
-25%
Reduce CO
2
(2022-2030)
Dual-play
growth and green
leadership
Silicones
→
Improve underlying profitability
and value creation.
→
Accelerate product
specialisation and the drive
towards a circular economy.
→
Pursue selective growth
initiatives.
Silicon Products
→
Strengthen leading cost
positions.
→
Pursue organic growth and bolt-
on acquisitions.
→
Reduce CO
2
emissions and
energy consumption.
Carbon Solutions
→
Further improve profitability
through operational excellence.
→
Expand our green product
portfolio.
→
Pursue organic growth and
bolt-on acquisitions.
>15%
EBITDA margin
per year
0
net zero emissions
by 2050
Who we are, how we work and why we are here
26
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The Elkem way
End markets
→ Construction
→ Automotive
→
Chemical formulators
→
Personal care
→ Healthcare
→
Paper and film release
→
Silicone rubber
→ Textile
13 main production sites
China
Xinghuo, Shanghai,
Zhongshan ,
Yongdeng (silicon)
France
Roussillon, Saint-Fons,
Salaise-sur Sanne
Italy
Caronno
Spain
Santa Perpetua
USA
York
Brazil
Joinville
India
Pune
Korea
Gunsan
Elkem is a global leader in fully integrated silicone
manufacturing, from silicon metal to upstream siloxane
and downstream silicone specialties. Silicones can be
manufactured into many forms including solids, liquids,
semi-viscous pastes, foams, oils and rubber. They are
flexible and can resist moisture, chemicals, heat, cold and
ultraviolet radiation. Due to its wide range of application
areas, silicones are used in a large number of products and
industries, including manufactured goods, construction
materials, electronics, consumer and medical items.
Silicones can be encountered every day in several areas,
including in personal care products, in cars, in the gel on
wound dressing, and in sealing and insulating materials in
electrical equipment.
The main growth drivers are the green transition and
the rise of middle class worldwide to serve markets
such as electrification of transportation, electronics,
and healthcare.
The division’s key strategic focus is to improve profitability
and value creation through continuous cost improvement
and accelerated product specialisation. The division
completed an expansion project in China in 2024, and
a project in France will be completed first quarter 2025.
The division is well-invested in the upstream siloxane
production, and the focus going forward will be on R&D
and further specialisation of the product portfolio.
In 2024, the Silicones division’s main focus has been to
complete the expansion of the upstream siloxane capacity
in France and China. These projects will improve the
plants’ cost positions and underlying profitability, as well
as the environmental footprint and upstream product
quality. In addition, a key focus area has been to improve
profitability through a comprehensive and well-defined
improvement programme, which was successfully
implemented.
15.1
NOK billion in total
operating income
46%
of group sales*
2024
15 091
521
3%
4 335
388
2022
19 288
2 022
10%
4 637
394
2023
14 163
-605
-4%
4 525
332
2021
17 429
3 672
21%
4 395
409
Key figures
Total operating income (in NOK million)
EBITDA (in NOK million)
EBITDA margin (in %)
Number of employees
Sales volume (thousands metric tonnes)
2020
12 800
1 326
10%
4 224
372
*Share of group sales from external customers ex. Other
New investments improving
competitive positions
28
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Financial statements
Annual report
Silicones
End markets
→ Automotive
→
Construction/industrial equipment
→ Electronics
→
Specialty steel
→
Solar and wind turbines
→ Refractories
→
Oil and gas
12 main production sites
Norway
Salten, Thamshavn,
Rana, Bremanger,
Bjølvefossen, Tana
Iceland
Grundartangi
China
Shizuishan
India
Nagpur
Paraguay
Limpio
Canada
Chicoutimi
Spain
Erimsa has various
locations
Elkem is a leading producer of silicon-based materials,
including silicon, ferrosilicon, specialty alloys based on
ferrosilicon, and Microsilica.
Silicon is used in silicones, aluminium alloys and
polysilicon, and has a number of favourable chemical and
physical properties, including semi-conductivity, making
it highly versatile for numerous industrial and electronic
applications. Ferrosilicon is used in steel industry, with
Elkem’s specialty grades primarily employed in the
production of electrical steel for motors and power
network components, supporting the electrification.
Foundry alloys are used in the production of iron castings to
improve their properties such as tensile strength, ductility,
and impact properties. Microsilica is a process product
of the silicon and ferrosilicon production and is used in
construction, refractory, oilfield, and polymer industries.
Drivers for the division’s growth are key mega trends,
such as the green transition, digital communications, and
smarter and more sustainable cities. Its main markets
are automotive, construction, electronics, and renewable
energy sectors.
Elkem has low-cost positions driven by scale and
operational excellence, as well as strong market positions
in specialty niches based on deep application knowledge
and close customer relationships.
The division’s strategy is to strengthen its leading cost
positions and pursue selected organic growth initiatives
and opportunities for bolt-on acquisitions. In addition,
the target is to reduce carbon emissions and energy
consumption throughout the value chain. In 2024,
the key focus areas have been to improve cost and to
increase the share of bio-based reduction materials in the
smelting process.
*Share of group sales from external customers ex. Other
Industry leader with strong
cost and market positions
15.5
NOK billion in total
operating income
44%
of group sales*
Key figures
Total operating income (in NOK million)
EBITDA (in NOK million)
EBITDA margin (in %)
Number of employees
Sales volume (thousands metric tonnes)
2024
15 506
2 864
18%
2 114
422
2023
17 836
3 304
19%
2 070
462
2021
14 789
3 704
25%
1 904
566
2022
24 489
10 226
42%
1 958
522
2020
10 807
1 214
11%
1 890
479
30
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Financial statements
Annual report
Silicon Products
End markets
→
Ferroalloys
→
Silicon
→
Aluminium
→
Iron foundries
6 main production sites
Norway
Kristiansand
Slovakia
Žiar nad Hronom
Brazil
Serra (Carboindustrial
and Carboderivados)
South Africa
Emalahleni
China
Shizuishan
Elkem is a leading producer of specialty carbon products
for various metallurgical smelting processes and primary
aluminium industries, uniquely positioned as the only
producer with a global reach.
Carbon products are used in electric arc furnaces and
by the aluminium and iron foundries industries. Elkem’s
Søderberg electrode paste is the most common electrode
system used in submerged arc furnaces to ensure that the
raw material reaches the required process temperatures.
The Søderberg electrode technology has more than 100
years of successful technology leadership. The technology
and carbon products are used by producers of silicon,
ferrosilicon, ferrochromium, ferronickel, ferromanganese,
silicomanganese, calcium carbide and copper and
platinum matte.
The main market drivers are linked to the production of
steel and ferroalloys critical for the green transition, and for
transportation and construction. High-quality electrodes
are critical for the customers to ensure stable and reliable
production processes.
The division's strategy is to further strengthen profitability
through operational excellence, develop selective growth
projects organically and through acquisitions, and to
expand its green product portfolio.
In 2024, the Carbon Solutions division has focused on the
integration of Elkem Carbon Slovakia (former VUM), which
was acquired in 2023, and a project in Brazil to expand its
capacity for high-quality products. The project in Brazil
will start production in 2025. The division has delivered
excellent results in challenging markets.
A leading supplier of
specialty products to
metallurgical industries
3.6
NOK billion in total
operating income
10%
of group sales*
Key figures
Total operating income (in NOK million)
EBITDA (in NOK million)
EBITDA margin (in %)
Number of employees
Sales volume (thousands metric tonnes)
*Share of group sales from external customers ex. Other
2024
3 649
1 131
31%
455
274
2022
3 752
1 166
31%
401
302
2023
4 210
1 286
31%
454
279
2021
2 176
508
23%
395
294
2020
1 870
437
23%
394
256
32
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Sustainability statement
Financial statements
Annual report
Carbon Solutions
The Elkem share
Elkem aims to be an attractive
investment for shareholders by
delivering sustained growth and
competitive profitability through
the cycle.
→
Elkem ASA is a public limited company. The share
is listed on the Oslo Stock Exchange and the ticker
code is ELK
→
Elkem ASA was re-listed on Oslo Stock Exchange on
22 March 2018
→
Elkem ASA has one share class with 639 441 378
ordinary shares, each with a nominal value of NOK 5
→
All shares have equal rights and are freely
transferable. Each share grants the holder one vote
and there are no structures granting disproportionate
voting rights
→
Bluestar Elkem International Co. Ltd. SA, owned by
China National Bluestar is the majority shareholder
with 52.9 per cent
→
Eight analysts are covering Elkem, providing market
updates and estimates for Elkem’s financial
development
NOK 11.2 bn
Elkem’s market capitalisation
as at 31 December 2024
18 448
shareholders as at 31 December 2024
NOK 0.30
divided
per share for 2024
639.4
million shares
Elkem intends to pay dividends reflecting the underlying
earnings and cash flow and will target a dividend pay-out
ratio of 30-50 per cent of the group’s profit for the year
The proposed dividend for 2024, subject to approval from
the annual general meeting in 2025, is NOK 0.30 per share,
representing 39 per cent of the group’s profit for the year
Year
2024
2023
2022
2021
2020
2019
2018
Earnings
per share
0.77
0.11
15.09
7.49
0.41
1.47
5.74
Dividend
per share
0.30
0.00
6.00
3.00
0.15
0.60
2.60
Date
proposed
12.02.2025
08.02.2024
08.02.2023
09.02.2022
09.02.2021
12.02.2020
11.02.2019
Date of
approval
30.04.2025
18.04.2024
28.04.2023
27.04.2022
27.04.2021
08.05.2020
30.04.2019
Ex date
02.05.2025
19.04.2024
02.05.2023
28.04.2022
28.04.2021
11.02.2020
02.05.2019
Pay-out ratio
39%
0%
40%
40%
37%
41%
45%
Dividend
yield (%)
1%
0%
17%
9%
1%
2%
8%
36
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Annual report 2024
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Financial statements
Annual report
The Elkem share
Combined graphs: Share price + number of share traded
Share price performance compared to Oslo Stock Exchange and OBX Basic Materials (indexed)
Elkem
OSE
OBX Basic Materials
Elkem's historical performance on key figures
2018
2019
2020
2021
2022
2023
2024
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Jul-24
Aug-24
Sep-24
Okt-24
Nov-24
Dec-24
60
80
100
120
Share price high (NOK)
Share price low (NOK)
Share price avg (NOK)
Share price year-end (NOK)
Volume
Turnover
EPS (NOK)
Market cap. year-end (NOK billion)
Shares outstanding as of 31.12
Shares issued
2019
36.10
20.20
25.10
24.80
369 570 346
9 438 910 774
1.47
14.4
581 310 344
581 310 344
2020
29.60
11.20
20.40
28.40
303 729 619
6 114 487 641
0.41
16.5
581 310 344
581 310 344
60
80
100
120
2021
38.50
25.70
32.20
29.80
438 749 361
14 103 001 272
7.49
19.1
633 037 606
639 441 378
2023
39.90
16.50
26.90
21.20
267 010 261
6 779 641 881
0.11
13.5
633 890 288
639 441 378
2024
23.58
16.59
20.19
17.52
280 820 162
5 677 871 575
0.77
11.2
634 169 478
639 441 378
2022
43.70
27.30
35.60
35.20
290 206 422
10 324 893 777
15.09
22.5
634 476 985
639 441 378
Common share data
50
40
40
30
20
20
10
0
Operating income
CAGR 8%
Avg: 17%
Avg: 48%
2020
2021
2022
2023
2024
24.7
33.7
45.9
34.8
33.0
Equity ratio
Leverage ratio
EBITDA margin
2020
2020
2020
2021
2021
2021
2022
2022
2022
2023
2023
2023
2024
2024
2024
11%
41%
2.7
48%
2.2
49%
2.5
23%
47%
0.4
28%
55%
0.1
11%
13%
Avg: 1.6
Elkem’s financial targets
Target metric
Revenue growth (%)
EBITDA margin (%)
Reinvestments % of D&A
Debt leverage ratio
Dividend target
Targets
5 - 10%
15 - 20%
80 - 90%
1.0x - 2.0x
30 - 50%
of group profit
Comments
Grow faster than market through specialisation,
organic growth and acquisitions
Target average margin through
the economic cycle
Ensure appropriate and disciplined capital
allocation following long-term plans
Ensure efficient and robust capital structure
Stable and predictable over time
Number of shares traded (million)
Share price (NOK)
38
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Sustainability statement
Financial statements
Annual report
The Elkem share
38
39
The 20 largest shareholders as of 31 December 2024
Share ownership (number of shares)
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
China National Bluestar
Folketrygdfondet
Must Invest
Pareto Asset Management
Storebrand Asset Management
DNB Asset Management AS
Vanguard
Nordea Funds
Arctic Fund Management
Dimensional Fund Advisors
BlackRock
First Fondene
Elkem ASA
KLP Kapitalforvaltning AS
Forsvarets Personellservice
Cape Invest AS
Alfred Berg Kapitalforvaltning
Fidelity International (FIL)
Charles Schwab Investment Management Inc
Zolen & Månen AS
Total 20 largest shareholders
Holding
338 338 536
27 352 230
19 618 035
16 853 626
16 822 744
15 856 880
11 033 453
7 327 333
7 200 000
5 968 791
5 732 138
5 556 219
5 271 900
5 263 234
4 578 300
3 495 299
2 332 881
2 305 754
2 297 848
2 050 000
505 255 201
Stake
52.91 %
4.28 %
3.07 %
2.64 %
2.63 %
2.48 %
1.73 %
1.15 %
1.13 %
0.93 %
0.90 %
0.87 %
0.82 %
0.82 %
0.72 %
0.55 %
0.36 %
0.36 %
0.36 %
0.32 %
79.0 %
Change from
2023
%
∙
-
↑
6%
↑
11%
↑
10%
↑
15%
↑
124%
↑
10%
↑
20%
↓
-3%
↑
151%
↑
4%
↓
-35%
↓
-5%
↑
41%
↑
26%
↓
-22%
↓
-72%
↓
-12%
∙
New
∙
New
Citizenship
China
Norway
Norway
Norway
Norway
Norway
United States
Finland
Norway
Norway
United States
United States
Norway
Norway
Norway
Norway
Norway
Great Britian
United States
Norway
Geographical distribution of shareholders
As of 31 Decmber 2024 Elkem had 18 448 shareholders
Geographical distribution of shareholders
As of 31 Decmber 2023 Elkem had 19 322 shareholders
37.8%
52.9%
2.3%
4.8%
1.3%
0.9%
China
Norway
United States
Finland
Sweden
Other
1-100
101-500
501-1000
5 001-10 000
10 001-100 000
100 001 - 1 000 000
> 1000 000
Unknown holding size
Total
Number of shares
151 314
1 224 262
2 016 875
22 193 540
44 048 460
43 218 819
521 885 777
4 702 331
639 441 378
Share of capital
0.02%
0.19%
0.32%
3.47%
6.89%
6.76%
81.62%
0.74%
100%
36.1%
52.9%
4.6%
4.1%
1.2%
1.1%
China
Norway
United States
Sweden
Finland
Other
40
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Sustainability statement
Financial statements
Annual report
The Elkem share
On 23 January 2025, Elkem announced a strategic review
of the Silicones division. The purpose of the review is to
streamline Elkem, and to reallocate capital to accelerate
growth in the Silicon Products and Carbon Solutions
divisions. The decision by the board of directors to
initiate this review follows a lengthy and thorough
assessment of Elkem’s growth and return prospects,
capital allocation strategy, as well as the dynamics in
Elkem’s various markets.
The Silicones division has been reclassified in the financial
statements as discontinued operations and assets held
for sale, following the strategic review decision. The
tables and reporting segments in this report reflect
the combined results of the three divisions, including
Silicones. The reason for this is that the Silicones
division was, and will continue to be, managed as an
integrated part of Elkem Group and included in corporate
management’s reporting and responsibility. Note 40
shows the reconciliation of Elkem Group figures with
Elkem’s continued operations, the Silicones division, and
respective eliminations.
The challenging economic conditions that marked
2023 persisted throughout 2024 with generally weak
growth, inflationary pressures and high interest rates.
Elkem experienced weak demand particularly from the
construction market in China and Europe, headwinds on
automotive and steel in Europe and the US, in addition to
oversupply of upstream silicones in China. These factors
have contributed to weaker silicones prices in China and
weaker silicon and ferrosilicon prices in the EU, compared
to 2023. Despite challenging market conditions in 2024,
Elkem realised extensive margin improvement initiatives,
strengthened underlying profitability, in particular in the
Silicones division, succeeded in the ramp up of more than
120 kmt/y new siloxane capacity in China, executed high
impact investment projects and carried out maintenance
programmes. These measures position Elkem for
attractive financial results once markets recover. The
board of directors believes that the long-term underlying
growth and development prospects remain positive for
Elkem and is of the opinion that Elkem has a solid asset
base and financial capability to support further growth,
creating value for all stakeholders.
Elkem’s consolidated operating income decreased by
5 per cent Year-over-Year (YoY) to NOK 33 004 million
in 2024. EBITDA improved to NOK 4 146 million in 2024
resulting in an EBITDA
1
margin of 13 per cent compared to
11 per cent in 2023. The leverage
2
ratio was 2.5x as at 31
December 2024. This is above the leverage target of 1.0x
to 2.0x over the cycle and is a consequence of the weak
results and higher debt levels. Despite relatively weak
Profitability improved in 2024 compared to the preceding
year, despite weaker and more challenging markets.
2024 marks the second consecutive year with a weak
macro-economic environment impacting sales prices
and demand for most of Elkem’s products. The company
has carried out comprehensive EBITDA improvement
programmes, concluded growth investment projects and
ramped up new capacity in Elkem Silicones China. Elkem
is well positioned to deliver improved financial results
once the markets recover.
Total Operating income
NOK million
EBITDA
NOK million
Leverage ratio
1
EBITDA commented under APM section
2
Leverage ratio commented under APM section
Improved profitability
in a challenging year
results in 2024, Elkem is delivering on its financial targets
over the business cycle, based on strong top line growth,
good profitability, and a sound financial position.
Elkem’s policy is to pay a dividend of 30-50 per cent of
the owners of the parent's share of profit for the year. The
board of directors has proposed to the annual general
meeting a dividend payment of NOK 0.30 per share for
2024, which would represent 39 per cent of profit for
the year, in line with the dividend policy. The board of
directors’ view is that the proposed dividend is appropriate
based on the current financial position, market outlook
and investment plans.
Elkem’s commitment to a safe workplace remains a top
priority. The total injury rate own employees per million
working hours has been 3.5 in 2024 compared to 3.0 in
2023. Elkem made significant efforts in enhancing its
Health, Safety, and Environment (HSE) practices through
the implementation of the FORUS programme 2024. This
upgraded HSE initiative aimed to improve awareness,
precision, and follow-up of safe behaviour across all
operations. The programme included comprehensive
training sessions covering essential topics related to the
lifesaving rules and FORUS introductions. A comprehensive
understanding of health and safety risks has the highest
priority in the company, and the understanding is founded
on critical process control combined with a culture of
precision and continuous improvement.
Environmental, Social and Governance (ESG) activities
enable Elkem to operate environmentally friendly and
socially responsible production of advanced silicon-based
materials. Elkem is continuously pursuing its global
climate roadmap to reduce the average product group
carbon footprint by 32 per cent by 2030, and achieve
carbon-neutral production globally by 2050. The ambition
is to strengthen our position at the forefront of green
leadership and be a part of the solution to combat climate
change by reducing our emissions, supplying the green
transition, and enabling circular economies. Furthermore,
social and governance principles are advocated to support
a diverse workforce built on respect and inclusive work
culture, and protection of human rights throughout the
value chains.
Key business developments 2024
Investments supporting growth and specialisation
Elkem’s ambition is to grow revenue by 5-10 per cent
per year through the cycle, supported by organic growth
initiatives and acquisitions. The compound annual
growth has been an attractive 8 per cent since 2020. Key
investment projects in 2024 include:
→
The silicones expansion project in China was finalised
in May. The upstream silox capacity has increased by
50 per cent yielding additional 120 kmt silox capacity
annually. The ramp-up has been successful and has
exceeded expectations. The new line will improve
Elkem’s cost position, environmental performance,
and deliver higher upstream product quality.
→
Elkem acquired assets of REC Solar Norway AS from
REC Solar Holdings AS, a subsidiary of Reliance
Industries. The acquisition secures control of
industrial areas and facilities in Kristiansand and at
Herøya, enabling the realisation of local synergies
and providing access to attractive facilities for
testing and optimisation of products and green
production processes.
42
43
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Financial statements
Annual report
Board of directors' report
→
Elkem is investing around NOK 200 million to
increase its production capacity in Brazil for pitch
binder, a key material for carbon anode to aluminium
smelters and electrode paste to industrial smelters.
The investment is an expansion of an existing
facility based on known technology, thereby
further improving productivity and profitability. The
investment will increase the facility’s production
capacity by up to 40 per cent, once production starts
in the first quarter of 2025.
→
The silicones expansion in France is expected to
be ramped up during the first quarter of 2025.
The upgraded facilities will provide a 25 per cent
capacity increase resulting in 20 kmt silox capacity
annually. The new capacity will improve the plant’s
cost position and allow for higher speciality volumes
through existing lines in France.
→
As part of the comprehensive earnings improvements
and investment reductions programme, which
entails focusing on the company’s core business,
Elkem decided to exit its financial investment in the
advanced battery materials company Vianode.
Strategic initiatives to accelerate improved profitability
Key initiatives to accelerate and optimise shareholder
value have been implemented during the year, providing
a continuous basis for improved profitability and secure
strategic positions.
→
Throughout the year, a comprehensive programme
for EBITDA improvements was executed across
Elkem’s divisions. In addition, investment levels were
reduced to reflect the weaker market conditions.
In total, Elkem realised NOK 1.7 billion in EBITDA
improvements and NOK 2.2 billion in investment
reductions, both parameters ahead of targets. In
particular, extensive EBITDA improvements have
been realised in the Silicones division which turned
negative EBITDA in 2023 to positive in 2024.
→
Elkem signed two new, large long-term power con-
tracts in Norway. The contracts provide Elkem’s plants
with competitively priced power and predictability of
supply. Elkem is well-positioned with long-term power
contracts in Norway with around 80 per cent of the
electricity supply secured until end of 2027.
→
Elkem successfully issued NOK 1 500 million new
senior unsecured bonds. Of these, NOK 400 million
was issued with a tenor of 3 years, NOK 800 million
with a tenor of 5 years, and NOK 300 million with a
tenor of 7 years.
→
Elkem reached a successful scaling of its chemical
silicone waste recycling project from a laboratory to
a pilot unit at its Saint-Fons production site in Lyon,
France. This marks a significant milestone in driving
the transition to a circular economy for silicones.
Elkem places a high priority on its ESG and
climate roadmap
At the heart of Elkem are its people and their safety, along
with sustainable operations conducted responsibly through
operational excellence. Elkem strives to be an attractive
employer and aims to be a leader in the green transition,
playing a pivotal role in combating climate change.
→
Elkem completed its first pilot for carbon capture and
storage (CCS) at the Rana plant in Norway, recording
CO
2
capture rates of up to 95 per cent.
→
Elkem was awarded NOK 31 million in support
from Enova for the groundbreaking Sicalo
®
(Silicon
production with carbon looping) project, which
aims to eliminate all CO
2
emissions from silicon
production. The technology involves capturing
the carbon emitted from the silicon furnace and
reusing it in the production process. In October,
Elkem received EUR 1.8 million in funding from the
European Union for the project.
→
Elkem received high scores from CDP with A- for
Climate and Water, as well as A for Forest, making
Elkem one of only 30 companies globally with top
performance in this area.
→
Elkem earned Platinum rating for sustainability
transparency from EcoVadis, one of the world’s
largest and most trusted providers of business
sustainability ratings.
→
Elkem is committed to reducing its total fossil
CO
2
emissions by 25 per cent from 2022 to 2030.
Additionally, the company aims to increase the supply
of products that support the green transition, leading
to a 32 per cent improvement in its average product
carbon footprint over the same period. Elkem's long-
term goal is to achieve net-zero emissions by 2050.
About Elkem
Established in 1904, Elkem is one of the world's leading
providers of advanced silicon-based materials shaping
a better and more sustainable future. The company is
headquartered in Oslo, Norway and is
listed on the Oslo
Stock Exchange (ticker code: ELK). The company has
more than 7 200 full time equivalents (FTE), about 31
main production sites and an extensive network of sales
offices worldwide. In 2024, Elkem had a total operating
income of NOK 33 004 million. To learn more, please visit
.elkem.com.
↗
Elkem's mission is to provide advanced silicon-based
materials shaping a better and more sustainable
future. The board of directors believes that a safe
and environmentally responsible business model is a
prerequisite for value creation. With a highly competent
organisation, well-invested assets, attractive market
positions and ongoing growth initiatives, Elkem is
committed to creating value for all stakeholders.
Elkem is a fully-integrated producer with operations
throughout the silicon value chain from quartz to silicon
and downstream silicone specialities as well as speciality
ferrosilicon alloys and carbon materials. Elkem has
organised its operations into three business divisions:
Silicones, a fully integrated silicones producer; Silicon
Products, a provider of silicon, ferrosilicon, foundry alloys,
Elkem MICROSILICA
®
and related speciality products;
and Carbon Solutions, a supplier of electrode paste
and speciality products to the ferroalloys, silicon and
aluminium industries.
The Silicones division
is one of the world's leading fully-
integrated silicone companies, with approximately 4 300
FTEs and a global footprint. The division has R&I centres
in Europe and Asia, sales offices worldwide, and plants in
China, France, Italy, Spain, USA, Brazil, India, and South
Korea. The Silicones division represents 46 per cent of the
group total operating income.
The markets for the Silicones division’s products are
large and growing. Demand is driven by megatrends,
such as the green transition, digitalisation and energy
demand growth. The Silicones division serves diverse
markets, from electric cars to construction, via electronics,
aerospace, healthcare, personal care, packaging, airbag
coating and more. Elkem has a comprehensive range
of silicone products (> 5 000 stock keeping units) with
leading market positions in engineering elastomers for
EV’s, coatings for packaging, hygiene and bakery paper
and airbag coatings.
The Silicon Products division
is a world-leading
supplier of silicon, ferrosilicon, foundry alloys, Elkem
MICROSILICA
®
and other speciality products. The Silicon
Products division represents 44 per cent of the group total
operating income. Silicon Products has about 2 100 FTEs
and has plants in Norway, Iceland, Canada, India, Paraguay
and China, and quartz mines in Norway and Spain.
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Silicon has a number of favourable chemical and physical
properties, including semi-conductivity, making it
highly versatile for numerous industrial and electronic
applications. As such, it has a wide range of applications,
predominantly as an alloying material for aluminium and in
the production of silicones and polysilicon for electronics
and solar cells. Ferrosilicon and foundry alloys are used in
the steel industry and iron foundry industry, respectively.
The Silicon Products division serves customers in a
number of end markets, such as chemicals, aluminium,
electronics, automotive, speciality steel segments, solar,
construction, refractories, military equipment, and oil and
gas. China has been the largest growth market for silicon
in recent years, however the material is critical for the
green transition in Europe and the United States.
The Carbon Solutions division
is the world-leading
supplier of electrode paste, prebaked electrodes and
speciality products to the ferroalloys, silicon, and
aluminium industries. The division has approximately 400
FTEs, with plants in Norway, South Africa, Brazil, Malaysia,
Slovakia and China. The Carbon Solutions division
represents 10 per cent of Elkem’s operating income from
external customers. The steel and aluminium industries
account for a significant portion of the division’s end-user
applications and, as a result, drive the demand dynamics
in the industry.
Financial performance
The consolidated financial statements are prepared and
based on International Financial Reporting Standards
(IFRS) as endorsed by the European Union (EU) and
effective at 31 December 2024.
The analysis in this section reflects the combined results
of the three divisions, including Silicones. Note 40
shows the reconciliation of Elkem Group figures with
Elkem continued operations, the Silicones division, and
respective eliminations.
Consolidated profit and loss statement
Consolidated operating income for the Elkem group
amounted to NOK 33 004 million compared to NOK
34 760 million in 2023. The 5 per cent decrease was
driven by lower sales prices. The Silicones division saw a
7 per cent increase in operating income driven by higher
sales volumes countered partially by weaker sales prices
in particular in China. Operating income for the Silicon
Products division decreased by 13 per cent due to negative
price development for silicon and ferrosilicon driven by
weaker demand, in addition to lower sales volume. Carbon
Solutions’ operating income decreased by 13 per cent,
driven by lower prices and lower sales volumes.
Consolidated EBITDA ended at NOK 4 146 million
compared to NOK 3 771 million in 2023. The
corresponding margin improved from 11 per cent in 2023
to 13 per cent in 2024. EBITDA improved YoY supported
by improved EBITDA from Silicones driven by higher
sales volumes and comprehensive margin improvement
initiatives. Silicon Products and Carbon Solutions
delivered weaker EBITDA as a result of lower sales prices
and sales volumes. We refer to “Divisions business
performance” for further descriptions.
Consolidated operating profit was NOK 712 million in
2024 compared to NOK 1 682 million in 2023, a decrease
of NOK 969 million explained mainly by increased
amortisation, depreciation and impairment losses and
negative contributions from other items. Amortisation and
depreciation were NOK 2 674 million in 2024 compared
to NOK 2 312 million in 2023. The increase in amortisation
and depreciation is attributed to higher investment levels
in recent years, in particular in Silicones. Impairment
losses were NOK 178 million in 2024 compared to NOK
94 million in 2023. Impairment losses were mainly related
to write-down of assets in BioCarbon and Silicones
Lübeck. Other items were negative NOK 460 million in
2024 compared to positive NOK 516 million in 2023.
Other items effect in 2024 are largely related to currency
exchange hedge losses, embedded EUR derivatives in
power contracts, and restructuring expenses primarily in
the Silicones division.
Consolidated profit before income tax ended at NOK 47
million for the year, compared to NOK 951 million in 2023.
Net financial items were negative NOK 665 million in 2024
compared to negative NOK 731 million in 2023. The share
of profit from equity-accounted financial investments was
negative NOK 143 million in 2024 compared to negative
NOK 63 million in 2023. Finance income was NOK 147
million and foreign exchange gain were NOK 247 million in
2024 compared to NOK 182 million and negative NOK 106
million in 2023 respectively. Finance expenses were NOK
916 million compared to NOK 743 million in 2023 driven
by higher interest rate charges and higher interest bearing
debt level.
The consolidated profit for the year was NOK 577 million,
after NOK 530 million in tax income. The tax income is
driven by a positive effect of NOK 1 067 million due to
recognition of tax losses forward from the REC Solar
Norway acquisition. The tax expenses are driven by
positive results in most countries whereas negative results
in France and China are not capitalised as deferred tax
assets. The tax income mainly consisted of taxes on the
current year’s result.
The main items recognised in the consolidated statement
of other comprehensive income are related to cash flow
hedges (foreign currency hedges and power price hedges)
and currency translation differences. These items had a
net income of NOK 1 100 million for 2024, compared to a
net expense of NOK 566 million in 2023.
The share of consolidated profit attributable to
shareholders of Elkem ASA was NOK 488 million, resulting
in basic earnings per share NOK 0.77 per share in 2024
compared to NOK 0.11 per share in 2023.
The total comprehensive income for the year was positive
NOK 1 677 million in 2024 compared to negative NOK 396
million in 2023.
Divisions business performance
The Silicones division had an operating income in 2024
of NOK 15 091 million (NOK 14 163 million in 2023).
EBITDA was positive NOK 521 million in 2024 compared
to negative NOK 605 million in 2023. The EBITDA
improvement was driven by higher sales volumes in
all regions and comprehensive margin improvement
initiatives, while partially countered by weaker sales prices.
DMC market index prices in China fell to a new 10 year
low level in December 2024 and averaged 6 per cent
lower in 2024 compared with 2023 level. Prices overall
was weak as a result of weak demand in all regions and
segments of Elkem. Sales volumes increased by 17 per
cent YoY from 332 thousand metric tons (mt) in 2023 to
388 thousand mt in 2024 supported by the ramp up of a
new production line in China and less maintenance stops
in 2024 compared to 2023.
The Silicon Products division had an operating income
in 2024 of NOK 15 506 million (NOK 17 836 million in
2023). EBITDA was NOK 2 864 million in 2024 compared
to NOK 3 304 million in 2023. EBITDA fell during the
year mainly due to lower sales prices and sales volumes
partially compensated by lower raw material cost. During
2024 sales prices developed negatively on continued
weak demand. Silicon and ferrosilicon sales prices were
on average 4 per cent and 12 per cent lower respectively in
2024 compared to 2023. Sales volumes decreased from
462 thousand mt in 2023 to 422 thousand mt in 2024
driven by weak demand and rebuild of furnaces at Salten
after the fire in late 2023.
The Carbon Solutions’ division had an operating income
in 2024 of NOK 3 649 million (NOK 4 210 million in 2023).
EBITDA was 1 131 million in 2024 compared to all time
high NOK 1 286 million in 2023. The reduced EBITDA was
mainly due to lower prices partially countered by lower raw
material cost. Sales volumes decreased by 2 per cent from
279 thousand mt in 2023 to 274 thousand mt in 2024.
Cash flow and statement of financial position
Cash flow from operating activities (IFRS) was NOK 2 030
million for the year, compared to NOK 2 769 million in
2023. Positive cash flow contribution from EBITDA (NOK
4 146 million) was reduced by operating loss discontinued
operations (NOK 1 382 million), increased working capital
(NOK 629 million), changes in provisions, bills receivable
and other (NOK 27 million), interest payments made (NOK
885 million) and income taxes paid (NOK 614 million). This
was countered partially by gains from equity accounted
companies (NOK 27 million), changes in fair value of
derivatives (NOK 475 million) and interest payments
received (NOK 119 million).
In 2024, amortisation, depreciation, and impairment saw
an increase due to higher investment levels over the past
few years. A significant portion of these investments
were directed towards expanding production capacity
for Silicones in China and France. The expansion
Operating income
NOK million
2023
34 760
928
-2 330
-531
207
33 004
2024
Other
/Elim
Carbon
Solutions
Silicon
Products
Silicones
EBITDA
NOK million
2023
3 771
1 126
-439
-155
-156
4 146
2024
Other
/Elim
Carbon
Solutions
Silicon
Products
Silicones
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project in China, completed in May 2024, is exceeding
expectations, while the expansion in France is anticipated
to ramp up in the first quarter of 2025. These extensive
growth investments, along with maintenance programs,
underscore the dual-play growth strategy and green
leadership ambition.
Changes in working capital were negative YoY primarily
due to an increase in inventories. This rise in inventories
was a result of the production strategy. Management
remains highly focused on optimising working capital.
Optimisation actions include a thorough review and
adjustments to align production and sales forecasts,
optimising minimum and maximum stock levels, actively
pushing to sell slow-moving stocks, individually following
up on credit days with customers and suppliers, and
adjusting factoring arrangements for the group.
Cash flow from investing activities amounted to
NOK 3 303 million negative for the year, compared to
NOK 5 299 million negative in 2023. Elkem invested
NOK 2 060 million in maintenance, environment, health and
safety, and productivity improvement initiatives during the
year. In addition, Elkem had NOK 957 million in strategic
investments. The cash flow from investing activities in 2024
is mainly explained by investments in the Silicones division
particularly related to expansion of production capacity
in China and France, Carbon Solutions’ expansion project
in Brazil and continuous maintenance and improvement
investments at selected plants in all divisions.
Cash flow from financing activities was positive NOK 737
million, compared to negative NOK 487 million in 2023.
The positive cash flow from financing activities in 2024
was mainly related to new interest-bearing loans and
borrowings of NOK 2 470 million, countered by payment
of interest-bearing loans and borrowings of 1 474 million,
dividends paid to non-controlling interests (NOK 123
million) and payment of lease liabilities (NOK 143 million).
Change in cash and cash equivalents was negative NOK
536 million for the year.
Elkem’s financial position was strong at the end of 2024.
The group’s equity ratio ended at 49 per cent at the end
of the year, which was similar to 48 per cent in 2023. The
leverage ratio for the group increased from 2.2x in 2023
to 2.5x at the end of 2024 due to higher Net interest-
bearing debt
3
(NIBD).
The board of directors views the group’s underlying
competitive positions and strong equity ratio as a good
basis to support further profitable growth of the group.
Total interest-bearing liabilities were NOK 12 907 million
as of 31 December 2024, of which NOK 1 090 million
matures in 2025. Cash and cash equivalents amounted
to NOK 4 397 million in addition to NOK 6 519 million in
undrawn credit facilities. NIBD amounted to NOK 10 327
million as of 31 December 2024. The board views the
group’s cash and financial position to be strong.
Going concern
The board of directors is of the opinion that Elkem has the
ability to continue its business in the foreseeable future
and hence confirms that the financial statements have
been prepared on a going concern basis and that this
assumption is appropriate at the date for the accounts,
and that the group has sufficient equity and liquidity to
fulfil its obligations.
Strategic priorities
The board of directors conducts an annual review
of Elkem’s strategy, which includes an assessment
of strategic priorities and financial scenarios based
on industry trends, market development, and other
framework conditions.
The challenging market conditions of 2023 continued
throughout 2024, affecting sales prices and demand for
most of Elkem’s products. Elkem has taken measures to
address these challenges and improve financial results
through a comprehensive programme aimed at enhancing
EBITDA and cash flow generation, while also reducing
investments to conserve cash and lower debt leverage.
Elkem is among the few companies with complete and
integrated value chains, covering both Eastern and
Western markets. Additionally, the company holds strong
cost and market positions. The board views Elkem as well-
positioned to benefit from a macroeconomic recovery
when markets improve.
In the longer term, global megatrends are expected to
remain strong and drive demand for Elkem’s products,
creating opportunities based on the company’s geographic
presence and solid market positions. Elkem aims to grow
by more than 5 per cent annually, with an EBITDA margin
over the cycle of at least 15 per cent. Since 2020, Elkem
has achieved a compound annual growth rate of 8 per cent
with an average EBITDA margin of 17 per cent.
The main strategic priorities are dual-play growth and
green leadership. Dual-play growth means driving growth
and value creation in all divisions while securing supply
chain resilience through geographical diversification.
Green leadership means focusing on cutting emissions
and resource use to reach climate-neutral production
and enabling the green transition through supply of
critical materials.
Elkem’s approach to product specialisation through
Research and Innovation (R&I) and selected acquisitions
remains a strategic measure to improve and stabilise the
group’s profitability throughout the business cycle.
To achieve its strategic goals, Elkem will concentrate on
operational excellence, digitalisation, people development,
and ESG. The divisions of Elkem will work on developing
and sustaining low-cost positions in their respective
markets. Operational excellence and lean manufacturing
principles are integrated into the Elkem Business System
(EBS). Built on Elkem's core values, EBS is designed
to involve everyone in improvement activities and
promote a culture of operational excellence, continuous
improvement, and deep learning. The objective is to
maintain Elkem as a competitive producer through strong
operational performance, economies of scale, and an
integrated value chain from raw materials to advanced
end products.
Elkem announced in January 2025 that it has initiated a
strategic review of the Silicones division. The purpose of
the review is to streamline Elkem and enable allocation
of capital to accelerate growth in the Silicon Products
and Carbon Solutions divisions. The decision follows a
thorough review of the growth and return prospects of
Elkem, as well as its capital allocation strategy and the
market dynamics in the silicones business.
Research and Innovation is key to Elkem’s strategy on
sustainable growth and specialisation
Elkem devotes considerable effort and resources to R&I
activities, with 3.2 per cent of 2024 revenues dedicated
to new products and new processes, including technical
support to customers. Through this investment, and
with more than 550 researchers working globally across
14 R&I and application centres, the R&I teams filed
68 patents across the world in 2024. New products
introduced less than five years ago represent 18 per cent
of Elkem’s revenue.
R&I efforts are key to create and develop innovative
products that meet new needs in the market, including
demand for environmentally-friendly products and
energy-efficient production technologies. Optimising the
global value chain is at the heart of the projects managed
by Elkem and is a key part of Elkem’s strategy.
Elkem’s R&I facilities within chemistry and new chemicals,
new materials and supporting laboratories, play a crucial
role in our customers’ success. Elkem’s R&I efforts
contribute to the development of new products with
tailored properties for high-end markets, new additives
for process aids, or reinforced materials and support with
critical analysis information needed for troubleshooting.
Elkem’s R&I is also important to support Elkem’s
ambitions related to specialisation and growth based on
global megatrends.
Open innovation and collaborative mindset
With around 30 national and European collaborative
projects conducted with start-ups, small and medium-
sized enterprises, groups, academics and clusters, Elkem
3
See APM section
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is recognised for its open and innovative mindset. Elkem
aims to be at the forefront of new technologies in five
prioritised areas:
→
Energy efficiency and CO
2
emission reductions,
notably by replacing fossil coal with biomass in the
production of silicon and ferrosilicon alloys
→
Circular economy, mainly through recycling
(including waste and end-of-life) and eco-design
(products and processes)
→
New materials, including 3D printing and additive
manufacturing processes, battery cells and batteries,
and lightweight materials
→
R&I digitalisation, processes and new materials
modelling to speed up the capture of value
→
Technology scouting, to better anticipate the future
needs of our customers and markets
Highlights from 2024 include:
→
Focus on energy efficiency and CO
2
emission
reductions:
•
Elkem completed the first pilot phase of Elkem
Sicalo®, which aims to eliminate all CO
2
emissions
from silicon production. The project, which has
now entered a three-year phase of medium-
scale testing at Elkem’s centre in Kristiansand,
Norway, entails capturing the carbon emitted
from the furnace and reusing it as a reductant in
the production process. During 2024, the project
received a NOK 31 million grant from Enova and
subsequently, the EU granted EUR 9.9 million in
funding for the Horizon Europe project MECALO,
which builds on Elkem’s project. MECALO will
develop the concept of carbon looping further
for general metal production, with the aim of
achieving silicon and manganese alloys produced
with zero CO
2
emissions. If successful and fully
implemented in all European production of silicon
and manganese, this project could save 33 million
tonnes of CO
2
emissions per year in 2050.
• Elkem successfully completed the world’s first
pilot for carbon capture and storage at a smelter
at the Rana plant in Northern Norway. The pilot
recorded high capture rates of CO2, up to 95 per
cent, demonstrating the technical viability of CCS
in smelters. The project received financial support
from Gassnova CLIMIT, and was a collaboration
between Elkem and Mo Industripark, SINTEF,
Alcoa, Celsa, Ferroglobe, SMA Mineral, Norcem,
Norfrakalk, Arctic Cluster Team and SLB Capturi
(formerly Aker Carbon Capture).
→
Focus on 3D printing and new materials:
• Elkem expanded its portfolio of silicone
solutions within the new AMSil™ 20 503 and
AMSil™ Silbione™ 24 503 ranges for additive
manufacturing. Additive manufacturing, commonly
known as 3D printing, has gained traction across
various industries due to its ability to produce
complex and customised products more efficiently
than traditional manufacturing methods. In
addition, Elkem has invested in the startup
3Deus Dynamics, which offers a new 3D printing
technology for particularly complex shapes and
new functionalities.
→
Focus on climate strategy and circular economy:
•
In France, Elkem’s research team at Saint-Fons
in Lyon successfully scaled a chemical silicone
waste recycling project, which could reduce CO
2
emissions from silicone production by around 65
per cent and waste by around 75 per cent. The
project was funded by the France 2030 national
innovation and industry investment programme,
operated by ADEME (the French Agency for
Ecological Transition), and the European Union’s
NextGenerationEU fund.
•
Elkem is also a partner of the European PLANETS
project. The consortium will receive EUR 14.5
million from the EU’s research and innovation
programme to demonstrate the applicability of
the SSbD (Safe and Sustainable by Design) Draft
Framework published by the JRC 5Joint Research
Centres), while developing technical alternatives for
three of the most important classes of molecules in
chemical industries: plasticisers, flame retardants
and surfactants.
→
Technology scouting to better anticipate the future
needs of our customers and markets
• Elkem entered a strategic partnership with
Startuplab, Norway’s leading incubator and early-
stage investor for ambitious technology startups,
to accelerate the development of green industrial
technologies and digital solutions.
To maintain and develop this technological edge, Elkem
is evolving through internal projects and the support of
collaborative platforms, such as:
→
Axel One in Lyon, France, is one of the hubs for
smart processes, online analysis, new materials and
circular economy. The partnerships with the region
and the French government have created a centre
of excellence around the industry of the future,
integrating environmental and societal concerns and
process optimisation. Elkem is highly involved in this
platform with new collaborative projects, both at the
national and European level.
→
The pilot facility at Elkem’s corporate R&I centre in
Kristiansand, Norway, is an important asset for both
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process and product development. The partnership
with the Norwegian Catapult Centre, Future
Materials, and new collaborative projects, national
and European, has further strengthened the position
of the centre.
R&I initiatives and expansion
At Elkem’s production sites, new applications are
developed and supported by laboratory expertise and
analysis to ensure that the latest technologies and
capabilities are put to use. The working methodology is
used across all segments and markets, to optimise the
customer or market interaction.
→
In 2021, Elkem’s new R&I centre ATRiON opened at
the Saint-Fons site in Lyon, France, at the heart of the
so-called “Chemistry Valley” to reinforce innovation
within Elkem and Open Innovation together with
external partners. The state-of-the-art R&I centre
is dedicated to the Silicones division and brings
together more than 130 researchers.
→
In 2022, Elkem announced a plan to invest more
than RMB 100 million to enlarge its Flagship Asia-
Pacific R&I Center in Shanghai. The new centre was
inaugurated in 2024 following a comprehensive
upgrade of the centre’s research system and
hardware, and the establishment of four application
centers for E-mobility, bioscience, coating and 3D
printing, to develop high-performance products and
promote the innovative development of the industry.
The centre supports customers in the Asia-Pacific
region improve their innovation capabilities, accelerate
the development of new products and applications
and seize emerging opportunities for advanced
silicone products and technology in the region.
Sustainability and Environmental, social
governance (ESG)
Elkem, as a signatory to the UN Global Compact, is
dedicated to developing its business in alignment with
the UN Sustainable Development Goals and the Paris
Agreement. The company emphasises the increasing
importance of safe and environmentally friendly
production. Elkem collaborates with customers and
partners to create both current and future solutions,
recognising the vital role of responsible practices.
For 2024, Elkem will report according to the requirements
of the Corporate Sustainability Reporting Directive
(CSRD), and the material topics have been identified by
a double materiality assessment. The material topics are
areas where Elkem has an impact on its surroundings and
stakeholders, and topics that has a financial materiality
to Elkem. The topics that were identified as material are
climate change (ESRS E1), pollution (ESRS E2), water and
marine resources (ESRS E3), biodiversity and ecosystems
(ESRS E4), resource use and circular economy (ESRS
E5), own workforce (ESRS S1), workers in the value chain
(ESRS S2), affected communities (ESRS S3), and business
conduct (ESRS G1).
For detailed information on Elkem's response to material
topics, refer to the sustainability statement (previously
ESG report) detailing commitments and activities within
environmental, social, and governance. The chapters
on own workforce and workers in the value chain are
compliant with the requirements stated in the Norwegian
Transparency Act (2021), the UK Modern Slavery Act
(2015) and the Forced Labour in Canadian Supply Chains
Act (2023). This report, an integral part of the annual
report, has undergone independent verification by a third
party, and it can be accessed on page 190-191.
Health, Safety and Environment
HSE forms the foundation of Elkem's business,
consistently holding the top priority. Guided by a zero-
harm philosophy, our HSE management system is
methodically implemented to progress toward this
paramount goal.
The safety of our employees stands as the cornerstone
of our philosophy. The group firmly believes, and has
demonstrated, that Elkem's operations can be conducted
without harm to employees and individuals. Elkem
allocates significant resources to hazard identification
and the implementation of suitable measures, aiming
to reduce risks to an acceptable level. This ensures that
all employees and contractors working at Elkem can
conclude their tasks as healthy as when they commenced.
Elkem’s commitment to a safe workplace remains the top
priority. The total injury rate own employees per million
working hours has been 3.5 in 2024 compared to 3.0 in
2023. Elkem made significant efforts in enhancing its
Health, Safety, and Environment (HSE) practices through
the implementation of the FORUS program in 2024. This
upgraded HSE initiative aimed to improve awareness,
precision, and follow-up of safe behaviour across all
operations. The program included comprehensive training
sessions covering essential topics related to the lifesaving
rules and FORUS introductions. A comprehensive
understanding of the health and safety risks has the
highest priority in the company, and the understanding
is founded on critical process control combined with a
culture of precision and continuous improvement.
For detailed insights into Elkem's management system,
reporting, safety metrics, and organizational and value
chain follow-up, consult the chapter on own workforce in
the sustainability statement on page 156.
Elkem’s total emissions increased by 17 per cent
(location based) in 2024. The group’s scope 1 emissions
were decreased by 16 per cent, primarily due to lower
production and maintenance. Scope 2 emissions
increased by 25% (location-based) in 2024, primarily due
to higher production at our sites in China. The expansion
of the Silicones division at the Xinghou production site
increased plant efficiency in 2024. While the introduction
of a cogeneration boiler reduced scope 1 emissions, the
increased production led to higher energy consumption,
resulting in higher scope 2 emissions. Increased use
of biocarbon as a reduction agent in the production
of silicon and ferrosilicon is a key element in Elkem’s
climate roadmap to reduce fossil GHG emissions. In
2024, the biocarbon share decreased slightly, mainly
due to shifts in production, and the biogenic share of
Elkem’s total emissions was at 19 per cent. The access
to sufficient amounts of biocarbon is expected to be
challenging in the coming years, hence continued
research on carbon capture and storage (CCS) and usage
(CCU) are expected to be key to reduce Elkem’s absolute
emissions in the long term. For more on these topics
please refer to the sections in climate change in the
sustainability statement on pages 104-109.
Diversity, inclusion, and equality
Elkem is dedicated to fostering equal opportunities within
a diverse and inclusive work environment. The company
recognises and values the uniqueness of each individual,
emphasising respect for their distinct abilities. Elkem
expects all colleagues to adhere to these principles and
champion the four Elkem values.
The company views its human capital as its most valuable
asset. The collective wealth of individual differences, life
experiences, knowledge, creativity, self-expression, unique
capabilities, and talent that employees bring to their
work not only shapes Elkem's culture but significantly
influences its reputation and business outcomes.
Elkem maintains a zero-tolerance policy for any form of
harassment or discrimination.
Well-established policies and practices in place
encompass diversity, equality, and inclusion (DEI).
These include the Code of Conduct, human rights
policy, people policy, and global standard procedures
covering recruitment, working conditions, promotions,
development, on- and off-boarding, and protection
against harassment.
Elkem's DEI vision is to cultivate a workplace that is
diverse, equitable, and inclusive, where all employees
feel engaged, valued, and enjoy a sense of belonging.
The promotion of diversity, inclusion, and equality is
crucial in attracting and retaining talent, establishing and
maintaining profitability, competitive advantage, and
sustained success at Elkem. The group aims to create an
inclusive culture where all voices are heard, encouraging
individuals to ask questions, embrace new approaches,
and bring diverse perspectives to the table. Through
maintaining a diverse, equal, and inclusive working culture,
Elkem seeks to enhance its ability to deliver market-
leading products and services profitably.
In 2024, Elkem conducted its global employee
engagement survey, and though there was a slight
decrease on the score on the DEI dimensions (from 84 to
81) the sentiment of the employees is still very positive.
For further information on Elkem’s activities related to
DEI please refer to the sections on own workforce in the
sustainability statement and the Activity and Reporting
Duty Report.
Governance
The board of directors recognises the importance of
good corporate governance. The goal is to ensure equal
treatment and protection of all shareholders’ interests,
compliance with laws and regulations, and adherence to
high ethical and social standards.
Elkem is subject to corporate governance reporting
requirements under section 2-9 of the Norwegian
Accounting Act and the Norwegian Code of Practice for
Corporate Governance, cf. section 7 of the continuing
obligations of publicly listed companies. The Accounting
Act may be found (in Norwegian) at .lovdata.no. The
Norwegian Code of Practice for Corporate Governance
can be found at .nues.no.
Elkem’s board consist of 11 persons as of 31 December
2024, of which eight are shareholder-elected and three
are elected by and among the company’s employees. Four
of the shareholder-elected board members represent the
majority shareholder, while the other four shareholder-
elected members are independent. Elkem had 10 board
meetings in 2024. A detailed overview of the board
members’ attendance may be found in the board of
directors’ report on salary and other remuneration to
leading personnel in Elkem.
The board of directors’ report on corporate governance
can be found on page 61 in this report and is an integral
part of the Report of the board of directors.
Risk management
Elkem’s board and management have a robust approach to
risk management, which is a key part of Elkem’s corporate
governance structure to monitor the risk profile and ensure
that adequate risk management processes are in place.
To monitor the group’s risk profile and to ensure that
adequate risk management processes are in place,
Elkem carries out a yearly risk mapping process
based on interviews with divisions and corporate staff
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explosions in connection with high temperature and
chemical production processes. The safety of our
employees and contractors is a main priority, and Elkem
uses considerable resources to prevent hazards and
reduce risk to an acceptable level. This includes safety
instructions, training, physical protection, and adherence
to EBS principles.
Elkem operates in an international market and is exposed
to a variety of financial risk factors, including currency
risk, interest rate risk, liquidity risk and counterparty
risk. Elkem’s result, cash flow and equity are exposed to
fluctuations in currency exchange rates, and Elkem seeks
to reduce the impact from changes in currency exchange
rates by a pre-defined cash flow hedging programme. The
balance sheet risk is mitigated by keeping loans in foreign
currencies to match the underlying assets.
Liquidity risk pertains to a company’s capability to
fulfil its financial obligations. Elkem maintains a robust
cash position, has substantial access to undrawn credit
facilities, and possesses satisfactory long-term financing
arrangements. To prevent a potential breach of financial
covenants in loan agreements, Elkem obtained a waiver
from lenders to reduce the interest cover covenant from
4.0x to 3.0x in 2024. At year-end 2024, Elkem remains
compliant with the original covenant requirement. During
2024, Elkem secured new bond loans amounting to
NOK 1 500 million. Additionally, Elkem raised local long-
term loans in China to finance the expansion project for
silicones. Elkem holds an investment-grade rating of
BBB- from Scope. This rating was downgraded in 2024
due to a slower-than-anticipated recovery in credit metrics
amidst ongoing market challenges. Elkem is dedicated
to maintaining an investment-grade profile, aiming for a
leverage ratio of 1.0 – 2.0x over the business cycle.
Counterparty credit risk is managed by monitoring
the receivables portfolio and using credit insurance
and payment conditions. Elkem's financial transactions
and deposits are conducted with established and
reputable banks.
Elkem has entered into a liability insurance policy that
provides coverage for any past, present, or future member
of the board of directors and company officers. This
insurance encompasses pure financial losses, including
defence costs, that the insured individuals are legally
required to pay as a result of or in connection with a claim.
The liability insurance extends to cover any financial
losses incurred by the company and its subsidiaries due to
securities claims and indemnified claims against the board
of directors and company officers.
See note 32 in the financial statements for more details on
financial risk.
Financial reporting process
Elkem has established routines to ensure that financial
statements are reported in compliance with applicable
laws and regulations, as well as adopted accounting
policies. These routines are detailed in internal reporting
manuals, which are regularly updated to reflect new
accounting principles.
The financial reporting plan includes controls and checks
of reports to ensure consistency of the financial reporting.
The financial information is consolidated and controlled at
multiple levels within the respective divisions.
The audit committee reviews the quarterly, half-year, and
annual reports, with a particular focus on accounting topics
such as provisions and liabilities, estimates and judgments,
and issues with a significant impact on the financial
statement. Additionally, the committee reviews Elkem’s
ESG and climate-related reporting. External auditors
participate in these meetings, along with representatives
from Elkem’s management and finance functions.
Future prospects
Elkem has initiated a strategic review of the Silicones
division to streamline Elkem and accelerate growth in
Silicon Products and Carbon Solutions. The decision
follows a thorough review of the growth and return
prospects of Elkem, as well as its capital allocation strategy
and the market dynamics in the silicones business.
The macro-economic sentiment continued to be
challenging in 2024 with generally weak growth,
inflationary pressures and high interest rates. Elkem
experienced weak demand in all regions and markets
combined with an oversupply situation of siloxane in
China. Markets are challenging going into the first
quarter of 2025. In the near term, we continue to see
significant uncertainty regarding the macroeconomic
development combined with high geopolitical and
sanctions risk. The board of directors’ assessment is that
the fundamentals and long-term prospects for Elkem are
positive. Elkem has a dedicated and competent global
organisation, a cost competitive and a well-integrated
business model in addition to a solid financial position at
the end of 2024.
Elkem aims to expand its presence in both the Eastern
and Western markets while prioritising financially
attractive opportunities. The company closely monitors
the geopolitical situation and potential trade restrictions.
Climate risk and environmental regulations necessitate
reduced emissions and more sustainable solutions.
Elkem is well-positioned to meet these challenges,
thanks to its high proportion of renewable energy and
targeted climate ambitions.
functions. Each risk factor is evaluated based on internal
and external conditions and takes deemed likelihood,
estimated financial impact, time horizon and mitigating
activities into consideration. By identifying the top risks
for each division and corporate function, the board and
management gain a thorough understanding of the risk
profile and financial risk tolerance. A summary of the risk
analysis is presented on page 76 in this annual report.
Assessment of climate-related risks and opportunities is
an integral part of Elkem’s risk management processes,
involving both transitional and physical risks. Elkem's
production facilities are typically situated near the coast
or rivers, or within cities or local communities. Rising
temperatures and extreme weather events may lead to
business interruptions and damage to assets. Climate
change exposure has been evaluated for each business unit
in line with the Corporate Sustainability Reporting Directive
(CSRD) requirements. Elkem actively works to reduce its
impact on the climate and environment by focusing on
sustainable raw material sourcing, renewable energy-based
production, energy recovery projects, investments to
minimise dust and NO
x
emissions, and the use of biogenic
reduction materials in smelting processes. Additional focus
areas include recycling and waste reduction.
In recent years, significant crises have been caused by
rare and unforeseen events, known as "black swans."
Examples include the global financial crisis of 2008 and
the Covid-19 pandemic. These incidents highlight the
importance of general risk preparedness, strong supply
chains, and maintaining a stable financial position.
To address these risks, Elkem has concentrated on
developing a resilient and geographically diverse supply
chain and ensuring a robust financial position.
Geopolitical tensions, sanctions and regulatory framework
conditions have gained importance over recent years.
Elkem operates in various countries and may face
trade tensions, sanctions, and changes in regulatory
frameworks. These factors could affect access to raw
materials and markets. Elkem monitors sanction lists and
trade restrictions to ensure compliance. The business
model focuses on supply chain resilience through
geographical diversification, minimising reliance on
shipping intermediate products or finished goods across
regions. This dual business model aims to reduce Elkem’s
exposure to trade restrictions, sanctions, and disruptions
in global logistics and transportation.
Elkem's financial performance has been affected by
macroeconomic conditions, including weak growth, high
inflation, and rising interest rates, reducing demand in
sectors like construction and automotive. By closely
monitoring market conditions and maintaining strong
cost positions, Elkem aims to mitigate these effects.
Additionally, its integrated value chain allows flexibility
in production across different product groups, helping
manage economic downturns.
Elkem's working environment includes a significant
inherent risk of injuries and there are risks of fires and
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Elkem’s financial position is considered to be good at the
end of the year, with a robust equity ratio and healthy cash
flow generation and strong liquidity position.
Elkem ASA
Elkem ASA is the parent company of the Elkem group. The
company’s accounts have been presented in accordance
with the Norwegian Accounting Act and generally
accepted accounting practices in Norway. The accounts
are prepared on the basis of a going concern assumption.
For Elkem ASA, the operating income amounted to NOK
9 710 million in 2024 compared to NOK 11 070 million in
2023. The operating profit ended at NOK 181 million in
2024, compared to NOK 1 065 million in 2023.
The net change in cash and cash equivalents amounted
to NOK 600 million negative. Cash flow from operating
activities amounted to NOK 81 million, investing activities
of NOK 381 million and negative cash flow from financing
activities of NOK 1 062 million.
Elkem ASA’s equity was NOK 15 665 million at the end
of 2024. The equity ratio
4
ended at 43 per cent. Profit
for the year was NOK 2 323 million. The net interest-
bearing liabilities amounted to NOK 10 880 million per 31
December 2024. Cash and cash equivalents amounted
to NOK 2 730 million. The board of directors’ view is that
the dividend proposal for the year is appropriate given the
financial position of the company.
Allocation of 2024 net profit:
The Board of Directors
proposes the profit for the year of NOK 2 323 million to
be allocated to retained earnings. The board of directors
proposes to distribute NOK 0.30 per share corresponding
to NOK 192 million as dividend distributed from retained
earnings. In total the board of directors proposes the
following allocation (in NOK million):
Dividends from retained earnings
NOK -192 million
Profit for the year to retained earnings
NOK 2 323 million
4
See Note 26 Interest-bearing liabilities
The board of directors of Elkem ASA
Oslo, 12 March 2025
Helge Aasen,
CEO
Marianne Elisabeth Johnsen
Board member
Terje Andre Hanssen
Board member
Nathalie Brunelle
Board member
Marianne Færøyvik
Board member
Thomas Eggan
Board member
Bo Li
Chair
Dag Jakob Opedal
Vice chair
Olivier Tillette de
Clermont-Tonnerre
Board member
Wei Yao
Board member
Dachuan Dong
Board member
Grace Tang
Board member
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2024
Marianne Færøyvik
Board member
Thomas Eggan
Board member
Board of directors
2024
Dag Jakob Opedal
Vice chair
Olivier Tillette de
Clermont-Tonnerre
Board member
Bo Li
Chair
Nathalie Brunelle
Board member
Grace Tang
Board member
Wei Yao
Board member
Dachuan Dong
Board member
Marianne Elisabeth
Johnsen
Board member
Terje Andre Hanssen
Board member
Katja Lehland
SVP Human Resources
Morten Viga
CFO
Asbjørn Søvik
SVP Green Ventures & Digital
Håvard Moe
SVP Technology
Louis Vovelle
SVP Innovation and R&D
Sandy Chen
SVP Silicones
Morten Magnus Voll
SVP Strategy & Business
Development
Inge Grubben-Strømnes
SVP Silicon Products
Luiz Simao
SVP Carbon Solutions
Helge Aasen
CEO
For more information, please see Elkem.com
↗
For more information, please see Elkem.com
↗
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The board of directors’
report on corporate
governance
Good corporate governance is important to ensure
confidence in the company and value creation in the
best interest of shareholders, employees and other
stakeholders. Elkem emphasises the importance of good
relationships with society and stakeholder groups that
are affected by the company’s activities. Elkem strives to
meet high standards in the areas of corporate governance,
and environmental and social criteria (ESG). This report,
combined with the sustainability statement, annual report
and website, document Elkem’s group activities and results.
Elkem is subject to corporate governance reporting
requirements according to section 2-9 of the Norwegian
Accounting Act and the Continuing obligations of stock
exchange listed companies at Oslo Stock Exchange.
Further, Elkem’s board of directors endorses "The
Norwegian Code of Practice for Corporate Governance"
(the "Code"), most recently revised on 14 October 2021
and issued by the Norwegian Corporate Governance
Policy Board (NCGB). The Code of Practice is available at
.nues.no. This report follows the system used in the
Code, and forms part of the board of directors’ report.
Elkem generally follows the recommendations set out in
the Code, but has deviations in the following sections:
The board of directors' authorisation to increase
the share capital corresponding to 10% of the
current share capital can be used for several
purposes, to ensure flexibility and ability to act
quickly. Pursuant to the Code, such authorisation
should be intended for a defined purpose.
Voting on members to the board of directors
and the nomination committee takes place as a
combined vote, reference to section 7. Pursuant
to the Code the shareholders should be able to
vote on each individual candidate nominated
for election.
The nomination committee justifies its proposals
combined, and not separately for each board
member pursuant to the Code. The nomination
committee focuses on the combined qualifications
and experience, as well as diversification on
background and gender.
Section 3
Section 6
Section 7
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Elkem is a signatory to the UN Global Compact and applies
sustainability in line with the principles of the UN Global
Compact. Elkem is committed to develop its business in
support of the ambitions of the Paris climate agreement
and the UN Sustainable Development Goals (SDGs).
Elkem is also committed to follow the United Nations
Guiding Principles on Human Rights and Business. Elkem’s
Silicones division is a member of the Responsible Care
Global Charter which is the chemical industry’s global
initiative to drive continuous improvement in environment,
health, safety and security.
Elkem has implemented guidelines and procedures in
accordance with section 2-9 of the Accounting Act,
including Code of Conduct, policy on anti-corruption and
CSR polices. Elkem's ESG report is included in the annual
report for 2024.
Elkem's objectives, strategy, risk profile and financial
targets are evaluated by the board of directors on an annual
basis. The board also reviews the group’s performance in
ESG and evaluates the climate risks and opportunities and
makes regular assessments to ensure compliance and high-
quality standards.
No deviations from the Code.
3. Equity and dividends
As at 31 December 2024, the group’s equity was
NOK 26 020 million, which is equivalent to 49 per cent
of total assets. The total issued share capital of Elkem
amounted to NOK 3 197 206 890 divided into
639 441 378 shares, each with a nominal value of NOK 5.
Elkem aims to maintain an investment grade profile and
targets a leverage ratio, defined as net interest-bearing
debt to EBITDA, in the level of 1.0 - 2.0x, based on
earnings over the business cycle. As at 31 December 2024,
the leverage ratio was 2.5x. The leverage ratio weakened
from 2.2 as at 31 December 2023, as a result of higher net
interest-bearing debt. The board of director’s target is to
ensure a leverage ratio in line with policy over the business
cycle. In addition, Elkem aims to keep a robust liquidity
reserve and a smooth maturity profile on its loan portfolio
to mitigate financing and liquidity risk. As at 31 December
2024, available cash and cash equivalents amounted to
NOK 6 070 million, providing a strong liquidity position. In
addition, Elkem has undrawn credit facilities amounting to
NOK 6 519 million.
1. Implementation and reporting on
corporate governance
Elkem’s corporate governance policy is based on the
Code, and as such designed to establish a basis for good
corporate governance to support achievement of the
company’s core objectives, strategies, and risk profile on
behalf of its shareholders, including the achievement of
sustainable profitability.
Elkem believes good corporate governance involves
openness and trustful cooperation between all parties
involved in the group: the shareholders, the board of
directors and executive management, employees,
customers, suppliers, public authorities, and society
in general.
By pursuing the principles of corporate governance,
the board of directors and management contributes
to achieving open communication, equal rights for all
shareholders, and good control and corporate governance
mechanisms. The board of directors assesses and
discusses Elkem’s corporate governance policy, strategy,
and risk profile on a yearly basis.
Elkem aspires to comply with the recommendations of
the Code. If the Code is deviated from, the deviation is
described and explained in the relevant section of this
statement. A summary of the deviations is also
provided above.
No deviations from the Code.
2. Business
Elkem’s mission is to provide advanced silicon-based
materials shaping a better and more sustainable future.
Elkem develops its business in support of the ambitions
of the UN Sustainable Development Goals and the Paris
agreement. Our strategy is focused on dual play growth
and green leadership. Dual-play growth means to drive
growth and value creation in all three divisions while
securing supply chain resilience through geographical
diversification. Green leadership is a key part of Elkem’s
strategy, focusing on cutting emissions and resource use
to reach climate-neutral production and enabling the green
transition through supply of critical materials. Operational
excellence, selective growth initiatives, a higher degree of
specialisation, and securing sustainable low-cost positions
are key strategic goals on divisional level.
Elkem’s business scope is clearly described in section 3 of
the articles of association:
→
The object of the company is to develop and engage
in industry, mining, trade and transportation, as well as
exploration and exploitation of natural resources. The
company may also develop, acquire and exploit patents
inventions and technical knowhow. The company may
participate directly or indirectly or by other means in
companies engaged in activities outlined above or
activities that promote or support such objects.
With a strong track record since 1904, Elkem is one of
the world’s leading suppliers of advanced silicon-based
materials shaping a better and more sustainable future. The
company develops silicones, silicon products and carbon
solutions by combining natural raw materials, renewable
energy, and human ingenuity. Elkem helps its customers
create and improve essential innovations like electric
mobility, digital communications, health, and personal care
as well as smarter and more sustainable cities.
Elkem is operating in capital intensive and cyclical
industries and has 31 main production sites and an
extensive network of sales offices around the world. While
this gives competitive strengths, it also gives exposure to
a range of risk factors. The board of directors has defined
goals and strategies for the business and has a clear focus
on risk management to create value for the company’s
shareholders. The past two years have been marked
by weak macro-economic conditions in most markets,
and the board of directors has focused on actions to
mitigate negative impact on Elkem by reducing costs and
investments. More details on risk management principles
and an overview of Elkem’s main risks are presented in the
annual report. See also section 10 below.
Elkem’s main strategic goals are dual play growth and
green leadership. Dual-play growth means to drive growth
and value creation in all three divisions while securing
supply chain resilience through geographical diversification.
Green leadership means that Elkem is cutting emissions
and resource use to reach climate-neutral production and
enabling the green transition through supply of critical
materials. To support its strategic goals, Elkem will focus on
operational excellence, digitalisation, people development
and ESG (Environmental, Social and Governance). In
addition, Elkem’s divisions will focus on developing and
maintain sustainable low-cost positions. Together these
initiatives comprise the group’s strategic and operational
goals to secure profitable and sustainable growth.
Risk management and internal control systems are in place
to manage operational risks. The company aims to maintain
a sound financial profile with a robust capital structure.
The target, based on earnings over the business cycle, is to
have a leverage ratio of 1.0x - 2.0x, defined as net interest-
bearing debt to EBITDA.
Sustainability is central in Elkem’s business strategy.
Elkem defines sustainability work as continuous efforts
to maximise the positive impact on the environment and
societies, as well as to minimise any negative impact.
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an authorisation to acquire shares in the company,
with a nominal value of up to NOK 319 720 689,
equal to 10 per cent of the current share capital. The
authorisation can be used to fulfil the company's
obligations in connection with acquisitions, incentive
arrangements for employees, fulfilment of earn-
out arrangements, sale of shares to strengthen the
company's equity or deletion of shares. The maximum
amount that can be paid for each share is NOK 150
and the minimum is NOK 1. The authorisation is
valid until the annual general meeting in 2025, but
no longer than to and including 30 June 2025.
This
authorisation was not utilised in the financial year
ended 31 December 2024.
Deviations from the Code: The board of directors'
authorisation to increase the share capital with an amount
up to NOK 319 720 689, corresponding to 10 per cent of
the current share capital can be used for several purposes.
Elkem believes that this authorisation is important in
order to allow the board of directors, in the interest of
time, to act quickly in connection with a transaction or
other corporate events where it is in the shareholders and
Elkem's interest to increase the share capital.
4. Equal treatment of shareholders
All shareholders shall be treated on an equal basis, unless
there is just cause for treating them differently.
No deviations from the Code.
5. Freely negotiable shares
The shares in Elkem are freely negotiable and there are
no restrictions on any party’s ability to own, trade or vote
for the share in the company. Elkem has only one class of
shares. Each share grants the holder one vote and there
are no structures granting disproportionate voting rights.
No deviations from the Code.
6. General meetings
The board of directors will ensure that the company’s
shareholders can participate in the general meetings.
The annual general meeting in 2024 was held as a digital
meeting. The shareholders could attend the general meeting
through a live webcast and submit questions relating to the
items on the agenda and cast their votes in real time. The
webcast was organised by DNB Bank ASA, Elkem’s registrar
in the Central Security Depository, Verdipapirsentralen ASA
(Euronext Securities Oslo), and its subcontractor.
The board of directors will further ensure that:
→
notices for the general meetings are sent to all
shareholders individually, or to their depository
banks, at least 21 days in advance, that all matters
to be considered by the meeting are specified and
that relevant documents are made available on the
company’s website;
→
the resolutions and any supporting documentation
are sufficiently detailed, comprehensive and specific,
allowing shareholders to understand and form a view
on all matters to be considered at the general meeting;
→
the CEO, the chair of the board of directors and the
chair of the nomination committee attend the general
meeting; and
→
the general meeting is able to elect an independent
chair for the general meeting.
The articles of association of Elkem do not specify a
deadline for shareholders to give notice of their attendance
at the general meeting. The board of directors may still
encourage shareholders to give such notice within a set
deadline. A shareholder holding shares through a nominee
account must, however, notify Elkem two days prior to the
date of the general meeting (unless the board of directors
has included a shorter notification deadline in the notice
for the general meeting).
Shareholders who are unable to participate in the general
meeting will be given the opportunity to vote by proxy
or through written voting in a period prior to the general
meeting. The company will in this respect provide
information on the procedure and prepare a proxy form/
written voting form.
The company will nominate a person to act as proxy.
All board members and members of the nomination
committee are encouraged, but not obliged, to participate
in the annual general meeting.
Elkem has chosen not to follow the recommendation
to vote separately on each candidate nominated for the
board of directors and the nomination committee. The
process of the nomination committee is focused on the
combined qualification and experience of the proposed
members to the board of directors and the nomination
committee, and the voting should therefore also be carried
out as a combined vote.
Deviations from the Code: Voting on members to the
board of directors and the nomination committee takes
place as a combined vote.
7. Nomination committee
According to section 7 of Elkem’s articles of association,
the company shall have a nomination committee
In 2024, Elkem signed new bond loans of
NOK 1 500 million with tenors of 3, 5 and 7 years. The
main purpose of the bond loans was to refinance loans
maturing in 2024 and 2025. The board of directors
considers Elkem’s capital structure, including equity
and debt structure, to be appropriate to the company’s
objective, strategy and risk profile.
Elkem’s dividend policy aims to align dividend
distributions with the underlying earnings and cash flow of
the group, targeting a dividend pay-out ratio of 30-50 per
cent of the group’s annual profit.
The board of directors has proposed to the annual general
meeting to pay a dividend of NOK 0.30 per share for 2024.
The proposed dividend represents a pay-out ratio of
39 per cent. The board of directors has not been granted
any authorisation to approve distribution of dividends.
At the annual general meeting on 18 April 2024, the board
of directors was granted the following authorisations:
→
To ensure that the board of directors has financial
flexibility and to enable quick access to the market in
the event of an acquisition with shares as settlement
or for general corporate purposes, the board of
directors was granted an authorisation to increase the
company's share capital by up to NOK 319 720 689
corresponding to 10 per cent of the company’s current
share capital. To exercise the authorisation in the
best possible commercial manner, it may be relevant
in certain situations to make a private placement
of shares directed at certain named persons and/
or enterprises. It may also be appropriate to use the
authorisation in the event of acquisition of business/
assets with shares as settlement. It was therefore
approved that the board of directors was authorised
to deviate from the shareholders’ preferential rights
when using the authorisation. The authorisation
covers share capital increases against contribution in
kind and share capital increase in connections with
mergers. The authorisation is valid until the annual
general meeting in 2025, but no longer than to and
including 30 June 2025. This authorisation was not
utilised in the financial year ended 31 December 2024.
→
In order to allow the board of directors to utilise
the mechanisms permitted by the Norwegian
Public Limited Liability Companies Act to acquire
treasury shares, the board of directors was granted
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→
Terje Andre Hanssen
/ Board member / Elected by
and from the employees / Elected for a term of office
until the annual general meeting in 2025;
→
Marianne Færøyvik
/ Board member /
Elected by
and from the employees / Elected for a term of office
until the annual general meeting in 2025 and;
→
Thomas Eggan
/ Board member /
Elected by and
from the employees / Elected for a term of office until
the annual general meeting in 2025.
Wei Yao and Dachuan Dong were elected as new board
members at an extraordinary general meeting on
8 October 2024 representing the majority shareholder.
Wei Yao replaced Zhigang Hao and Dachuan Dong
replaced Yougen Ge.
The composition of the board of directors is considered
to attend to the common interests of all shareholders
and meet the company's need for expertise, capacity
and diversity. Four of the board members are women,
and none of the members of the company's executive
management are members of the board of directors.
The board of directors is composed so that it can act
independently of any special interests. The majority of
the shareholder elected board members are independent
of the executive management and material business
connections of the company.
Further, four out of the current eight shareholder elected
board members are independent of the company’s majority
shareholder. Further information on each of the board
members is presented at .elkem.com and information
on their record of attendance at board meetings can be
found in the board of directors’ report on salary and other
remuneration for leading personnel for 2024.
Members of the board of directors are encouraged to own
shares in the company, however, with caution not to let
this encourage a short-term approach which is not in the
best interests of the company and its shareholders over
the longer term. As of 31 December 2024, the following
board members owned shares in the company: Olivier
Tillette de Clermont-Tonnerre (15,517 shares), Dag Jakob
Opedal (40,000 shares through Alcaran AS), and Marianne
Færøyvik (4,950 shares).
No deviations from the Code.
consisting of two or three members in accordance with
the decision of the general meeting. The members of
the nomination committee are elected by the annual
general meeting. The general meeting has also approved
guidelines for the duties of the nomination committee,
elected the chairperson and determined the remuneration
of the members of the committee.
As of 31 December in 2024 the nomination committee
comprises the following members:
→
Sverre S. Tysland
/ Chair / Practicing lawyer /
Independent / Re-elected in 2024 for a term of office of
two (2) years until the annual general meeting in 2026:
→
Lingxiao Liu
/ Committee member / HR Director of
China National Bluestar (Group) Co, representing the
majority shareholder / Elected in 2024 for a term of
office until the annual general meeting in 2026; and
→
Anne Grete Dalane
/ Committee member / Vice
President Improvement Project Finance in Yara
International ASA / Independent / Elected in 2023
for a term of office of two (2) years until the annual
general meeting in 2025.
Lingxiao Liu was elected as member of the nomination
committee at an extraordinary general meeting on 8
October 2024. Lingxiao Liu replaced Dachuan Dong who
was elected to the board of directors of Elkem ASA.
The members of the nomination committee have been
elected to take into account the interests of shareholders
in general, and to consider and ensure compliance with
the guidelines in section 9 of the Code regarding the
composition and independence of the board of directors.
The nomination committee does not include members of
the board of directors or the executive management.
The nomination committee shall make recommendations to
the general meeting for the election of shareholder elected
board members and members of the nomination commit-
tee, and the remuneration of the board of directors and
the nomination committee. When nominating shareholder
representatives to the board of directors, the nomination
committee presents relevant information about the candi-
dates, together with an evaluation of their independence.
In connection with the nomination committee’s work with
proposing candidates, and to ensure that the candidates
represent a broad group of the company’s shareholders,
the nomination committee is in contact with the board of
directors, the CEO and major shareholders. The nomination
committee will consider holding individual discussions with
each member of the board of directors, and furthermore,
ensure that the board of directors is composed to comply
with legal requirements and the corporate governance code.
The nomination committee have justified its proposal for
the board of directors. While the nomination committee
presents relevant information about each candidate
separately, the nomination committee focuses on the
combined qualifications and experience of the proposed
members of the board of directors when presenting its
proposal to the general meeting. Information on how to
propose candidates is available on Elkem’s webpage.
Deviations from the Code: The nomination committee
justifies its proposals combined and not separately for
each board member.
8. Composition and independence of the board
As of 31 December 2024, the board of directors of
Elkem comprises 11 members, of which eight members,
including the chair, are shareholder elected. The
remaining three members are elected by and among the
company’s employees.
As of 31 December 2024, the board of directors of Elkem
comprise of the following persons:
→
Bo Li
/ Chair / Representing the majority shareholder
/ Elected in 2023 as new board member until the
company’s annual general meeting in 2025;
→
Dag Jakob Opedal
/ Vice chair / Independent /
Re-elected in 2024 for a term of office of one (1) year
until the company’s annual general meeting in 2025;
→
Olivier Tillette de Clermont-Tonnerre
/ Board
member / Representing the majority shareholder /
Re-elected in 2024 for a term of office of two (2) years
until the company’s annual general meeting in 2026;
→
Nathalie Brunelle
/ Board member / Independent /
Re-elected in 2024 for a term of two (2) years until the
company’s annual general meeting in 2026;
→
Wei Yao
/ Board member / Representing the majority
shareholder / Elected in 2024 as new board member
until the company’s annual general meeting in 2026;
→
Grace Tang
/ Board member / Independent /
Re-elected in 2023 for a term of two (2) years until the
company’s annual general meeting in 2025;
→
Marianne Elisabeth Johnsen
/ Board member /
Independent / Re-elected in 2023 for a term of office
of two (2) years until the company’s annual general
meeting in 2025;
→
Dachuan Dong
/ Board member / Representing the
majority shareholder / Elected in 2024 as new board
member until the company’s annual general meeting
in 2026;
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The members of the remuneration committee are
elected by and amongst the members of the board
of directors for a term of up to two years and are
independent of the company’s executive management.
The board of directors has issued instructions for the work
of the remuneration committee.
No deviations from the Code.
10. Risk management and internal control
It is ultimately the responsibility of the board of directors
to ensure that the company has sound and appropriate
internal control systems and risk management systems
reflecting the extent and nature of the company’s activities.
Sound risk management is an important tool to create trust,
ensure a good environment, health and safety standards
and enhance value creation. Evaluation of climate related
risks and opportunities is an important part of Elkem’s
overall risk management processes. As part of this work
Elkem has prepared a global climate roadmap targeting
reductions of absolute CO
2
emissions and of the group’s
relative product carbon footprint. Elkem is reporting on
climate risks and opportunities according to the Corporate
Sustainability Reporting Directive (CSRD) implemented
by EU. Evaluation of climate related risks have been
implemented as an integrated part of Elkem’s yearly risk
assessment. Elkem complies with all laws and regulations
that apply to the group’s business activities. The group’s
Code of Conduct sets out the overall ethical guidelines,
which apply to all Elkem employees, members of the board
of directors, as well as those acting on Elkem’s behalf.
The company has a comprehensive set of relevant
corporate manuals and procedures, which provide
detailed descriptions of procedures covering all aspects of
managing the operational business. The procedures and
manuals are continuously revised to reflect best practice
derived from experience or adopted through regulations.
The board of directors conducts annual reviews of the
company’s most important areas of exposure to risk and
such areas’ internal control arrangements. A summary of
the main risks is presented in the annual report. The board
of directors describes the main features of the company’s
internal control and risk management systems connected to
the company’s financial reporting in the company’s annual
report. This covers the culture of control, risk assessment,
controlling activities and information, communication and
follow-up. The board of directors is obligated to ensure
that it is updated on the company’s financial situation,
and to continuously evaluate whether the company’s
equity and liquidity are adequate in terms of the risk from,
and the scope of, the company’s activities. The board of
directors shall immediately take necessary actions if it is
demonstrated at any time that the company’s capital or
liquidity is inadequate. This work has had a particular focus
in 2024 due to the weak market conditions and to follow
up on the status of Elkem’s improvement programme. The
company focuses on frequent and relevant management
reporting to the board of directors. The reports contain
matters related to health and safety, market development,
operations, and financial performance. The purpose is to
ensure that the board of directors has sufficient information
for decision-making and is able to respond quickly to
changing conditions or important incidents. Board meetings
are held regularly, and management reports are provided to
the board on a monthly basis.
No deviations from the Code.
11. Remuneration of the board of directors
The remuneration to the board of directors is determined
by the shareholders at the annual general meeting based
on a proposal from the nomination committee. The level
of remuneration to the board of directors is considered to
reflect an international level and the board of directors’
responsibility, expertise, the complexity of the company and
its business, as well as time spent and the level of activity in
both the board of directors and any board committees.
The remuneration of the board of directors is not linked
to the company’s performance and Elkem does not grant
share options to its members of the board of directors.
The board members, or companies associated with board
members, have not been engaged in specific assignments
for the company in addition to their appointments as
members of the board of directors.
The remunerations for the period from May 2024 until the
annual general meeting in 2025 are as follows:
Board of directors:
→
Chair: NOK 936 936
→
Vice chair: NOK 702 702
→
Board members: NOK 468 468
→
Observers: NOK 234 234
Audit committee:
→
Leader: NOK 168 648
→
Member: NOK 112 432
Remuneration committee:
→
Leader: NOK 168 648
→
Members: NOK 112 432
The total compensation to members of the board of
directors is disclosed in the board of directors’ report on
salary and other remuneration for leading personnel
for 2024.
No deviations from the Code.
9. The work of the board of directors
The board of directors' work follows an annual plan, with a
particular focus on objectives, strategy and implementation.
The plan is evaluated and approved around the beginning
of each calendar year. The board of directors also annually
evaluates its performance and expertise, the evaluation is
presented to the nomination committee.
The board of directors has implemented instructions for
the board of directors and the executive management,
which are focused on determining allocation of internal
responsibilities and duties. The objectives, responsibilities
and functions of the board of directors and the CEO are
in compliance with rules and standards applicable to the
group and are described in the company’s annual report.
The board of directors has also implemented procedures
to ensure that members of the board of directors and
executive personnel make the company aware of any
material interests they may have to be considered by
the board of directors. The board of directors will also be
chaired by some other member of the board if the board
is to consider matters of a material character in which the
chair of the board is, or has been, personally involved.
The board of directors held 10 board meetings in 2024.
Most board members have attended all board meetings
during their respective terms of office, and the overall
attendance rate was 92 per cent. The instructions for the
board of directors state how agreements with related parties
shall be handled. In the event of a not immaterial transaction
between the company and its shareholders, a shareholder's
parent company, members of the board, executive
management, or closely related parties of any such parties,
the board will arrange for a valuation to be obtained from an
independent third party. Agreements with related parties will
be disclosed in the directors’ annual report.
The board of directors has established an audit committee
and a remuneration committee.
No deviations from the Code.
The audit committee
The board of directors has established an audit committee
which is a working committee for the board of directors,
preparing matters and acting in an advisory capacity. The
audit committee is responsible for overseeing the financial
and sustainability reporting and disclosure. The audit
committee assists the board of directors with assessments
of the integrity of the company’s financial statements,
financial reporting processes and internal controls, risk
management and performance of the external auditor.
The audit committee is responsible for preparatory work
and supervision related to the board’s management of
sustainability and non-financial reporting, internal control
over sustainability and non-financial reporting, and
sustainability-related risk management.
The board of directors has issued instructions for the work
of the audit committee, and the duties and composition of
the committee are in compliance with the Norwegian Public
Limited Liability Companies Act. The members of the audit
committee are elected by and amongst the members of
the board of directors for a term of up to two years and
comprised the following persons as of 31 December 2024:
→
Dag Jakob Opedal
/ Chair/ Independent
→
Grace Tang
/ Member / Independent
→
Wei Yao
/ Member / Representing the
majority shareholder
Wei Yao replaced Zhigang Hao as member of the audit
committee with effect from 8 October 2024, following
Zhigang Hao’s resignation from the board of directors.
The committee members have the overall competence
required to fulfil their duties based on the organisation
and operations of the group, at least one member of the
audit committee is competent in respect of finance and
audit. The majority of the members are independent of
the business.
No deviations from the Code.
The remuneration committee
The board of directors has appointed a remuneration
committee which comprised the following persons as of
31 December 2024:
→
Bo Li
/ Chairperson / Representing the
majority shareholder
→
Dachuan Dong
/ Member / Representing the majority
shareholder
→
Marianne Elisabeth Johnsen
/ Member / Independent
Dachuan Dong replaced Olivier Tillette de Clermont-
Tonnerre as member of the remuneration committee
with effect from 8 October 2024. The remuneration
committee is a preparatory and advisory committee
for the board of directors in questions relating to
the company’s compensation of the executive
management. The purpose of the remuneration
committee is to ensure thorough and independent
reparation of matters relating to compensation to the
executive personnel. The remuneration committee puts
forth a recommendation for the board of directors’
guidelines for remuneration to senior executives in
accordance with section 6-16a of the Norwegian Public
Limited Liability Companies Act.
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12. Remuneration of executive personnel
The board of directors prepares guidelines for the
remuneration of executive management. These
guidelines include the main principles for the company’s
remuneration policy and contributes to Elkem's
commercial strategy, long-term interests and financial
viability, which align the interests of the shareholders
and the executive management. The guidelines were
communicated to the annual general meeting in 2023
and will be presented to the annual general meeting
every four years, or if there should be substantial
changes. A report on the salary and other remuneration
to the executive management will be prepared in
accordance with the rules of the Norwegian Public
Companies Act and relevant regulations.
Performance-related remuneration of the executive
management in the form of share options, bonus
programmes or similar are linked to value creation for
shareholders or the company’s profit over time. Such
performance-related remuneration is subject to an
absolute limit.
No deviations from the Code.
13. Information and communications
Elkem is under an obligation to continuously provide its
shareholders, Oslo Stock Exchange and the financial
markets in general with timely and precise information
about the company and its operations. Relevant
information is given in the form of annual reports,
quarterly reports, press releases, notices to the stock
exchange and investor presentations in accordance with
what is deemed appropriate from time to time. Elkem
maintains an open and proactive policy for investor
relations and has given regular presentations in connection
with annual and quarterly results. The goal is that Elkem’s
information work shall be in accordance with best practice
at all times and all communications with shareholders shall
be in compliance with the provisions of applicable laws
and regulations and in consideration of the principle of
equal treatment of the company’s shareholders.
Investor contact/investor relations (IR) activities are
conducted in accordance with the IR policy and by the
IR team only. The IR team comprises the CEO, the CFO
and the VP Finance and Investor relations.
The company publishes an annual, electronic financial
calendar with an overview of dates for important events,
such as the annual general meeting, interim financial
reports, and payment of dividends, if applicable.
In addition to the board of directors’ dialogue with
the company’s shareholders at general meetings, the
board of directors promotes suitable arrangements for
shareholders to communicate with the company at other
times. The board of directors has delegated this task to
the IR team. Elkem has held regular investor meetings in
connection with each of the quarterly presentations in
2024 and attended several investor conferences. The
IR team has conducted meetings with both domestic and
international investors from for example United Kingdom,
United States, Germany, France, Switzerland, and
Benelux. The plan is to arrange regular investor meetings
and capital market updates when considered expedient,
in order to keep the market updated on the company’s
development, goals, and strategies.
No deviations from the Code.
14. Take-overs
Elkem has one major shareholder controlling 52.9 per cent
of the shares as of 31 December 2024. Elkem has not been
subject to any takeover bids in 2024.
In the event of a takeover bid, the board of directors
and executive management each have an individual
responsibility to ensure that the company’s shareholders
are treated equally and that there are no unnecessary
interruptions to the company’s business activities.
The board of directors has a particular responsibility in
ensuring that the shareholders have sufficient information
and time to assess the offer. In the event of a take-over
process, the board of directors shall abide by the principles
of the Code, and also ensure that the following take place:
→
the board of directors will not seek to hinder or
obstruct any takeover offer for the company’s
operations or shares unless they have valid and
particular reasons for doing so;
→
the board of directors shall not exercise mandates or
pass any resolutions with the intention of obstructing
the takeover offer unless this is approved by the
general meeting following announcement of the offer;
→
the board of directors shall not undertake any
actions intended to give shareholders or others an
unreasonable advantage at the expense of other
shareholders or the company;
→
the board of directors shall not enter into an
agreement with any offeror that limits the company's
ability to arrange other offers for the company's
shares, unless it is self-evident that such an
agreement is in the common interest of the company
and its shareholders;
→
the board of directors and executive management
shall not institute measures with the intention of
protecting the personal interests of its members at
the expense of the interests of the shareholders; and
→
the board of directors must be aware of the particular
duty it has for ensuring that the values and interests
of the shareholders are protected.
In the event of a take-over offer, the board of directors
will, in addition to complying with relevant legislation and
regulations, seek to comply with the recommendations
in the Code. This includes obtaining a valuation from an
independent expert. On this basis, the board of directors
will make a recommendation as to whether or not the
shareholders should accept the offer.
A takeover process gives rise to a particular duty of care
to disclose information, where openness is an important
tool for the board of directors to ensure equal treatment
of all shareholders. The board of directors shall strive to
ensure that neither inside information about the company,
nor any other information that must be assumed to be
relevant for shareholders in a bidding process, remains
unpublished.
There are no other written guidelines for procedures to
be followed in the event of a takeover offer. The company
has not found it appropriate to draw up any explicit basic
principles for Elkem’s conduct in the event of a take-over
offer, other than the actions described above. The board
of directors otherwise concurs with what is stated in the
Code regarding this issue.
No deviations from the Code.
15. Auditor
The board of directors is responsible for ensuring that the
board and the audit committee are provided with sufficient
insight into the work of the auditor. In this regard, the board
of directors ensured that the auditor submitted the main
features of the plan for the audit of the company to the
audit committee in 2024. Further, the board of directors
invited the auditor to participate in the board meeting
that dealt with the annual accounts. At these meetings,
the auditor (i) reports on any material changes in the
company's accounting principles and key aspects of the
audit, (ii) comments on any material estimated accounting
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figures, and (iii) reports all material matters on which
there has been disagreement between the auditor and the
executive management of the company.
Once a year, the board of directors reviews the company's
internal control procedures with the auditor, including
weaknesses identified by the auditor and proposals for
improvement. In this regard, a review of the company's
internal control procedures with the auditor, including
weaknesses identified by the auditor and proposals for
improvement, was carried out by the board of directors
in 2024.
In order to ensure the auditor's independence of the
company's executive management, the board of directors
has established guidelines in respect of the use of the
auditor by the management for services other than
the audit.
No deviations from the Code.
The board of directors of Elkem ASA
Oslo, 12 March 2025
Helge Aasen,
CEO
Bo Li
Chair
Dag Jakob Opedal
Vice chair
Marianne Færøyvik
Board member
Thomas Eggan
Board member
Wei Yao
Board member
Marianne Elisabeth Johnsen
Board member
Terje Andre Hanssen
Board member
Nathalie Brunelle
Board member
Dachuan Dong
Board member
Olivier Tillette de
Clermont-Tonnerre
Board member
Grace Tang
Board member
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Overview of main
risk areas
Strategic risks
ESG and climate
Financial risks
Raw material risks
Production and
process risks
Market and
product risks
Elkem’s board and management have a robust approach
to risk management, which is a key part of Elkem’s
corporate governance structure and important to create
trust and to enhance value creation. To monitor the
group’s risk profile and to ensure that adequate risk
management processes are in place, Elkem carries out
a yearly risk mapping process based on interviews with
divisions and corporate staff functions.
By identifying the top risks for each division and
corporate function, the board and management gain a
thorough understanding of the group’s risk profile and
financial risk tolerance.
Each risk factor is evaluated based on internal and
external conditions and takes deemed likelihood,
estimated financial impact, time horizon and mitigating
activities into consideration. Individual risks are then
aggregated into 10 group risks, as detailed below. These
group risks fall under five main categories structured
according to Elkem’s value chain: strategic risks, financial
risks, raw material risks, production and process risks,
and market and product risks.
Assessment of risks related to climate and ESG
(Environmental, Social and Governance) are integrated
parts of the five risk categories, because Elkem
considers that these could impact strategic positioning,
raw material supply, end-markets, and financial
performance. Please refer to the sustainability statement
for more information.
The board is responsible for overseeing the group’s
risk management activities, and line management is
responsible for risk monitoring and handling of the day-
to-day activities.
On the following pages is a summary of the main
group risks.
>7 200
employees
31
main
production
sites
worldwide
presence
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4.
Sales prices and
volumes
Elkem's sales volume and sales prices may vary depending on the economic
conditions and the competitive environment. This constitutes one of the main risks
affecting the group’s financial performance. In 2024, macro-economic conditions
have been challenging, and the silicones market in China has been characterised by
excess supply. Specialty products tend to have more stable pricing over the business
cycle, but sales prices, particularly for commodities, could be volatile depending
on economic cycles and the supply and demand development. In addition, sales
volumes and prices are impacted by industry conditions and capacity. Elkem seeks
to mitigate price and volume risks by developing a diversified and specialised
product portfolio based on good cost positions. In addition, Elkem has a diverse
customer base, a global presence, and an integrated value chain which offers
flexibility to realise sales in various markets.
5. Regulatory frame-
work conditions
6.
Health and safety
Elkem’s global operations could be exposed to changes in regulatory framework
conditions. Examples of such conditions are environmental regulations, product
related regulations, anti-dumping duties, export taxes, export control, sanctions,
and electrical power regulations. Changes to regulatory framework conditions could
negatively affect the group’s competitive position, profitability and market access.
Elkem seeks to manage and mitigate these risks by securing supply chain resilience
through diverse geographical presence and integrated value chains. In addition,
Elkem is closely monitoring the regulatory landscape to ensure that the company
can comply with new requirements when possible.
Elkem's operations and working environment includes a significant inherent risk
of injuries and even fatalities. This is due to high temperature smelting processes,
advanced chemical processes, potential leakages of hazardous substances, and
other potential hazards. Elkem’s target is zero injuries, but accidents and injuries
could still happen. In December 2023, the Salten plant had a large fire. Fortunately,
no one was injured, but the fire caused significant damage to buildings and
production equipment.
The safety of employees and contractors is our main priority, and Elkem uses
considerable resources to identify hazards and implement appropriate measures
to avoid incidents and to reduce risk to an acceptable level. This includes safety
instructions, training, physical protection, and adherence to Elkem Business
System principles. In 2024, Elkem launched an upgraded HSE programme
named FORUS to improve awareness, precision and follow-up of safe behaviour
in operations. Processes have also been initiated to improve fire safety at Elkem’s
plants. Insurance and risk survey programmes are in place to mitigate risks and
financial exposure.
Risk descriptions
1.
Black Swan
2. Geopolitical tensions
and sanction risks
3. Macro economic
development
A “Black swan” is a rare, unexpected event with major ramifications such as
the global financial crisis of 2008 and the Covid-19 pandemic. “Black swans”
demonstrate the need for general risk preparedness, strong supply chains, and
the importance of a generally sound financial position. Elkem’s global operations
expose the company to unforeseen risks on a local, regional and global level.
Elkem's key mitigating actions include developing a competent organisation
to pro-actively manage changing conditions, having strong and regionally
independent value chains, and keeping a robust financial position at all times to
limit risk of financial distress.
Geopolitical tensions and sanction risks have increased in recent years, and
related trade sanctions and tariffs could impact Elkem's access to raw materials
and/or attractive end-markets. In addition, there is a risk that Elkem, or a business
partner, could get involved in activities with sanctioned entities or individuals. This
could result in business disruptions, breach of contract or other legal proceedings.
Elkem has independent value chains in Europe and Asia and is not dependent
on shipping raw materials, intermediaries or finished goods between the regions,
which mitigates exposure to trade restrictions and tariffs. Elkem closely monitors
prevailing sanction lists and trade-related restrictions to ensure compliance and
to avoid activities with sanctioned entities or individuals, by either the company or
its business partners.
Elkem is exposed to macro-economic conditions. The challenging conditions
of 2023 persisted throughout 2024, with weak growth, high inflation, and high
interest rates. This has generally resulted in weak demand, particularly from
construction and automotive, which are important end-markets to Elkem.
Consequently, sales volume and sales prices have been negatively impacted, and
higher inflation and interest rates have increased costs. In addition, high power
prices in Europe have affected several of Elkem’s end-markets.
Elkem aims to mitigate macro-economic risks through its global presence and
integrated value chains, and by maintaining its attractive cost positions through
a lean manufacturing model, supported by cost- and margin improvement
programmes. Elkem is actively working to ensure adequate financing and liquidity
reserves to manage fluctuations in earnings. Market conditions are closely
monitored to ensure adequate and timely response to changes in market conditions.
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8.
Cyber and IT risk
9. Environment and
climate
Virtually all business-related activities, including sales, production systems,
planning, procurement, and financial management rely heavily on IT systems.
The financial impact of an IT or cyber incident could be significant, and the
operations could be severely halted. Many companies have experienced significant
operational disturbances and losses from cyber-attacks. Good IT procedures with
a high focus on security, segmentation of systems, training of employees, up-to-
date equipment, and frequent software updates are important actions to mitigate
and prevent these risks. In addition, Elkem has a cyber insurance in place to
mitigate the financial impact in case of an incident.
Elkem’s global operations are exposed to environmental regulations, and potential
impact of climate change. Climate risks comprise transitional and physical risks.
Elkem's production facilities are generally located close to sea or river, or near
cities or local communities and rising temperatures and extreme weather events
may cause business interruptions and damages to assets. Exposure to climate
change has been assessed for each business unit according to the requirements
in the Corporate Sustainability Reporting Directive (CSRD). Elkem seeks to ensure
a sustainable business model by reducing emissions and ensuring compliance
with regulations. Sustainable sourcing of raw materials and increased use of
biogenic materials are key initiatives to reduce fossil carbon emissions from the
production processes. Elkem is also working on energy recovery and efficiency.
Long-term initiatives include research and development of carbon capture
projects to eliminate direct CO
2
emissions from the production process. Recycling
and reduction of waste are also key focus areas and an integrated part of Elkem
Business System.
10. Compliance and
legal risks
Elkem has operations in many countries, including countries ranked high on
indices for corruption and human rights violations. This carries an inherent risk of
unacceptable business behaviour through corruption, breach of competition law,
breach of sanctions, breach of human rights, or other unethical activities, either
by employees or business partners. There are also legal and litigation risks in
connection with contracts and/or intellectual property. The negative reputational
and financial impact could be material. Elkem has a high focus on compliance and
internal control and has strengthened these functions in recent years. Guidelines
for ethical conduct, training of all employees, and a visible and accessible channel
for reporting misconduct (whistleblower) are in place. Insurance coverage is in
place for directors and officers, employment practices liability and crime.
7.
Return on
investment
projects
Elkem’s strategy is to grow the business based on organic growth projects and
potential M&As. Investment projects carry an inherent risk of delays, cost overruns,
and underperformance compared to expectations, and the development of new
technology projects implies a high risk. Elkem has made significant reinvestments
and strategic investments over the past years, such as the Silicones division's
expansions in China and France. The project in China was completed in 2024 on
cost and on time, and the start-up exceeded project expectations. In relation to
M&A, there is a risk that an acquired entity does not deliver the expected profit or
synergies, or that due diligence processes have failed to identify potential claims or
other obligations. Elkem seeks to mitigate project related risks by diligent project
management and thorough due diligence processes, comprising professional
support from legal, financial, audit and industry expertise. Elkem carries out post
evaluation of projects to identify improvement potentials and risk mitigation
actions that can be utilised in future projects.
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Sustainability statement
Financial statements
Annual report
Risk descriptions
Sustainability
statement
Delivering your potential
Table of
contents
The sustainability statement presents Elkem's
management of material environmental, social and
governance (ESG) topics. The report covers the key
strategy of the company, how the company manages
sustainability and climate change issues, and the
progress on each topic.
Operations:
31 main production sites
world-wide and more
than 7 200 employees
Operating income 2024:
NOK 33.0 billion
Total scope 1+2+3
emissions 2024:
11.53 million tonnes
>80 per cent of production
based on electricity from
regions where renewable
energy is abundant
Introduction to sustainability statement
General disclosures (ESRS 2)
88
Climate change (ESRS E1)
104
Statement on the EU Taxonomy (ESRS E1)
120
Pollution (ESRS E2)
130
Water and marine resources (ESRS E3)
136
Biodiversity and ecosystems (ESRS E4)
142
Resource use and circular economy (ESRS E5)
148
Own workforce (ESRS S1)
156
Workers in the value chain (ESRS S2)
166
A
ff
ected communities (ESRS S3)
172
Business conduct (ESRS G1)
180
ESRS index
188
Sustainability statement
Elkem’s approach to
sustainability
Elkem’s products are foundational to a low-carbon society and essential
for the green transition. They support various sectors, including renewable
energy, energy storage, mobility solutions, infrastructure improvements,
digitalisation, and healthcare. At the core of Elkem are our people and our
commitment to safe, sustainable operations, conducted responsibly and
with excellence.
Elkem develops silicones, silicon products and carbon solutions by combining
natural raw materials, renewable energy and human resourcefulness. The
production requires signi
fi
cant amounts of energy, and a key component
of our low CO
2
-footprint is due to most of our silicon production is in areas
where hydropower being readily available. Still, the production of silicon
requires reductants to free the silicon from the quartzite. This, in addition
to our scope 2 and scope 3 emissions, is the reason why Elkem focuses on
improving production e
ffi
ciency and reducing emissions. Climate change is
one of our material topics, together with other key topics such as HSE, water
management, circularity, and more. Our material topics are categorised into
environmental, social and governance areas.
In the following sections, we will describe how we identify, manage and
mitigate our impact, risks and opportunities related to the topics identi
fi
ed
in the double materiality analysis.
Sustainability foundation: Material topics
Elkem follows the principles, requirements, and guidelines of the Corporate Sustainability
Reporting Directive (CSRD), and the European Sustainability Reporting Standards (ESRS).
Environmental
Climate action
→
Climate change (ESRS E1)
→
Pollution (ESRS E2)
→
Water and marine resources
(ESRS E3)
→
Biodiversity and ecosystems
(ESRS E4)
→
Resource use and circular
economy (ESRS E5)
Social
Safety
fi
rst
→
Own workforce (ESRS S1)
→
Workers in the value chain
(ESRS S2)
→
A
ff
ected communities
(ESRS S3)
Governance
Responsible
business partner
→
Business conduct (ESRS G1)
ESRS 2
General disclosures
The sustainability statements are prepared according to
the requirements in European Sustainability Reporting
Standards (ESRS) issued by the European Financial
Reporting Advisory Group (EFRAG). All the data points
included in the E, S, and G sections have been assessed as
material according to our double materiality assessment
(DMA). Please see the pages below for information on
our DMA's limitations to scope and our methodology. All
greenhouse gas data points (GHG scope 1-3) are reported
based on the Greenhouse Gas Protocol.
Consolidation
This report covers the fiscal year 2024. The data is
consolidated according to the same principles as the
financial
tatements. Therefore, the consolidated
quantitative ESG data includes the parent company Elkem
and its controlled subsidiaries. However, associates and
joint ventures are not included in the consolidated ESG
data points.
Elkem will report numbers from our downstream and
upstream value chain for certain topics. Our scope 3
reporting includes categories 1-7, and 11 and 12. We will also
report on grievances received, screening and audit results
from our supply chain.
All quantitative ESG data is consolidated following these
principles, unless otherwise specified in the accounting
policy accompanying each reported data point in the tables
in sections E, S, and G.
Statutory reporting and reporting standards
Elkem’s sustainability statement is prepared in compliance
with the Norwegian Accounting Act and other applicable
regulations. Disclosures required by the Norwegian
Equality and Anti-Discrimination Act are included in Own
workforce. Disclosures required by the UK Modern Slavery
Act 2015, and the Norwegian Transparency Act 2021 are
provided in the chapters Own Workforce, Workers in the
value chain, and A
ff
ected communities.
In 2024, Elkem has changed and restructured its
sustainability disclosures based on the EU Corporate
Sustainability Reporting Directive (CSRD) and the
applicable European Sustainability Reporting Standards
(ESRS). Elkem will report in compliance with the
implementation schedule of the CSRD and applicable
ESRS in the 2024 annual report.
Key accounting estimates and judgements
We use assessments and estimates for reporting certain
data points, such as our taxonomy KPIs and scope 3
emissions. These estimates and judgements are regularly
reassessed based on experience, developments in ESG
reporting, and various other factors. Changes in estimates
are recognised in the period in which the estimate is
revised. Additionally, we make judgements when applying
accounting policies. For further information on the key
estimates, judgements, and assumptions applied, please
refer to the pages with quantitative ESG data tables.
Threshold for restatements
For adjustments to financial numbe
s, we follow the
financial
tatements. For adjustments to ESG data, we
exercise judgement to determine whether restatements
are necessary. We clearly indicate where data has been
restated.
External review
KPMG has performed a limited assurance of Elkem’s
sustainability statements according to the requirements
in the CSRD. Please see the auditor’s limited assurance
report on page 190.
Governance
GOV-1, GOV-2, GOV-3
The board's commitment to ESG and sustainability
ESG and sustainability are integral components of Elkem’s
overarching business strategy, collectively overseen by the
board. ESG-related risks and opportunities are regularly
featured on board meeting agendas, refle
ting our
commitment to responsible corporate practices. Annually,
the board evaluates the group’s ESG strategy as part of
the strategic review process. Comprehensive information
on the company’s ESG performance and projects is
consistently presented to the board during regular
reporting sessions and meetings.
ESG and sustainability governance structure
General meeting
Board of directors
Audit committee
Chief Executive Offic
SVP
Technology
VP HSE
Climate director
SVP Human
Resources
Chief Financial
Offic
ESG offi
SVP
Innovation
and R&D
SVP Strategy
& Business
Development
SVP
Silicones
SVP Silicon
Products
SVP
Carbon
Solutions
SVP Green
Ventures &
Digital
* Functions marked in green are members
of the ESG steering committee
The audit committee handles preparatory work for
sustainability and non-financial
eporting. It plays a crucial
role in preparing the board for subsequent follow-up,
review, and internal control of Elkem’s sustainability and
other non-financial eporting. The committee actively
oversees sustainability-related risk management and
monitors the company’s performance in sustainability
ratings. These e
ff
orts ensure the board maintains e
ff
ective
procedures and internal controls over sustainability and
non-financial eporting, reinforcing Elkem’s commitment
to transparency and accountability.
The board conducts an annual assessment of its
performance, competence, and expertise. This
assessment includes a thorough evaluation of the board’s
composition, the e
ff
ectiveness of its individual members,
and group dynamics. Additionally, the board evaluates its
overall performance, considering aspects such as agenda
management, meeting topics, and preparation processes.
The assessment also appraises the board’s competence
in alignment with both existing and newly established
objectives and requirements for its operations.
Management and operational oversight
The CEO holds operational responsibility for ESG and
sustainability at Elkem, acting under the board’s direction
and oversight. The CFO is in charge of daily operations
related to ESG and sustainability and leads the ESG
steering committee, a management body comprised
of members from corporate management with a
specific focus on ESG responsibilities. The ESG steering
committee operates on behalf of the CEO. Elkem’s board
of directors approves the business strategy and corporate
governance policy, establishing the overarching framework
for the group’s strategic direction and governance.
The ESG steering committee meets monthly to review,
discuss, and propose actions according to the strategy.
The committee assesses and proposes changes to the
strategy to the board and monitors the development of
key indicators. The implementation of the strategy is the
responsibility of the business units and divisions. The ESG
steering committee consists of key members of Elkem’s
top management, with topical experts invited to discuss
and decide on key ESG topics.
The main coordinator of ESG within the organisation
is the ESG office
The ESG office
eports to the ESG
steering committee and collaborates closely with business
units and divisions to review and advise on relevant
sustainability and ESG issues, set targets, and drive
systematic improvements. As part of the Elkem Business
System (EBS), we believe that what gets measured gets
managed. An essential part of this work is to advise on
and improve key performance indicators monitored by
corporate management.
Strategy
Map sustainability/
ESG areas that are
important to our business
and stakeholders, and
prioritise an annual list of
improvements.
Sustainability-related performance in incentive
schemes
GOV-3
The CEO and group management receives performance-
based compensation tied to predefined m
trics
aligned with their respective areas of responsibility. The
performance-related short-term incentives (STI) are
capped at 100 per cent of the CEO's base salary and 50
per cent for corporate management.
The group management is evaluated on the progress and
achievement of ESG-related targets, such as the transition
plan, set by the board. This progress is validated by the
performance on chosen ESG ratings.1 1.5 per cent of the
group management’s variable bonus is determined by the
ESG-related target achievement and performance.
Corporate management's bonus for 2024 aligns with
CEO metrics, emphasising compliance and sustainability.
Additional criteria involve employees completing
compliance training to foster a robust compliance culture,
mitigating the risk of substantiated misconduct cases.
For a detailed overview of remuneration management,
refer to the board of directors' report on salary and other
remuneration for leading personnel in 2024.
↗
Performance
Evaluate performance to
be able to map, adjust
and prioritise again.
Targets
Anchoring with those
responsible in the
organisation, set targets and
develop plans to improve.
Reporting
Track progress in
accordance with targets
set, and communicate
transparently.
Action
Corporate ESG
functions support and
advise line functions in
improvement work.
Figure: Management and operational oversight
Governing documents
E1-2, E2-1, E3-1, E4-2, E5-1, S1-1, S2-1, S3-1, G1-1
Elkem's governing documents establish the guiding
principles for the group's business conduct. Central
to these documents are the Code of Conduct and the
Governance policy.
1 The prioritised ESG ratings are Carbon Disclosure Project’s
scoring of Elkem, S&P’s Corporate Sustainability Assessment,
and EcoVadis.
The
Governing policy
provide direction for common
objectives, commitments, and behaviours, defining
principles and commitments for Elkem's governing
processes while allocating roles and responsibilities within
the group's functions. This policy impose mandatory
requirements on all Elkem group companies and
operational units, irrespective of division and geography.
Most group policies are available online, and all governing
documentation is available to employees on our intranet.
Each policy owner formulates an implementation plan
tailored to specific target groups based on roles and
responsibilities. To ensure consistency in responsible
business conduct across all activities and relationships,
company governing documents must align with the Code
of Conduct.
The
Code of Conduct
is a cornerstone of Elkem’s
culture, defining ou
business conduct based on honesty
and respect. It mandates compliance with all applicable
laws and regulations, upholding ethical standards, and
respecting the dignity and rights of individuals globally.
Where local law
s diff
er from the Code, the highest
standard will be applied. This Code outlines Elkem’s
ethical guidelines, ensuring all representatives act
ethically, exercising good judgment and care. It serves
as a framework for responsible conduct, supplemented
by detailed policies and procedures. All governing
documents must align with the Code, and the Code is
reinforced by various group policies, procedures, and
supporting documentation.
The
Elkem People policy
outlines the principles,
objectives, and commitments related to the people
processes within Elkem. It aims to ensure standardised
HR procedures across all business units, supporting
employees throughout their employment lifecycle. The
policy emphasises a sustainable working environment,
equality, inclusion, and respect for human rights. It
covers various aspects such as recruitment, competency
development, employment terms, diversity, and
work-life balance. The policy also details the roles and
responsibilities for implementation, monitoring, and
correction of HR practices, ensuring compliance with both
global and local regulations.
Key components include the recruitment process, which
prioritises internal candidates and requires HR involvement
in all stages, and the competency development cycle,
which focuses on continuous improvement and regular
feedback. The policy also addresses employment terms,
promoting diversity and inclusion, and ensuring fair
treatment and equal opportunities for all employees.
Additionally, it includes guidelines for handling exits,
maintaining employee data privacy, and ensuring a safe
and respectful working environment. The policy is reviewed
annually to remain current and relevant, with amendments
approved by the CEO.
The Elkem
Health, Safety, and Environment (HSE) policy
outlines the company’s commitment to maintaining a
safe and healthy working environment while minimising
environmental impact. It emphasises continuous
improvement, risk management, and adherence to
local and international regulations. The policy includes
principles such as the “Zero Harm Philosophy” and the
use of the FORUS HSE system to ensure consistent
safety practices across all operations. It also highlights
the importance of sustainability, with goals aligned with
the Paris Agreement to achieve net-zero emissions by
2050, and focuses on energy efficie
y, biodiversity
conservation, and responsible resource management.
The policy assigns clear roles and responsibilities for
HSE management, from the group CEO to individual
employees, ensuring accountability at all levels. It
mandates regular risk assessments, compliance
monitoring, and corrective actions to address any
non-compliance. The policy also includes specific
commitments to sustainable practices, such as waste
reduction, circular economy principles, and supply chain
management. Overall, the HSE policy aims to integrate
health, safety, and environmental considerations into all
aspects of Elkem’s operations, promoting a culture of
continuous improvement and sustainability.
The
Speak Up policy
at Elkem outlines the process for
reporting suspected violations of the company’s Code
of Conduct and how these reports are managed. It
encourages employees and stakeholders to report issues
such as bribery, fraud, discrimination, and environmental
violations, ensuring reports are handled confide
tially and
professionally. The policy applies globally and provides
multiple reporting channels, including anonymous options.
It emphasises good faith reporting, protection against
retaliation, and the importance of privacy for both the
reporter and the subject of the report. The policy aims to
maintain ethical standards and improve business practices
through transparent and responsible conduct.
Elkem’s
Code of Conduct for Business Partners
aligns
with international standards and outlines expectations for
ethical business practices, human rights, worker’s rights,
and environmental protection. It mandates compliance
with laws, prohibits corruption, and promotes fair
treatment and safe working conditions. Business partners
must also minimise environmental impact and ensure
their own partners adhere to similar standards. The policy
includes provisions for audits and encourages reporting of
misconduct through a confide
tial channel. By partnering
with Elkem, businesses commit to these principles,
ensuring responsible and sustainable operations.
The Elkem
Human Rights programme
outlines the
company's commitment to supporting and respecting
internationally recognised human and labour rights. It
applies to all employees, directors, and majority-owned
subsidiaries. The programme includes governance
structures, human rights due diligence, risk assessments,
communication strategies, training, third-party risk
management, and monitoring and reporting mechanisms.
It emphasises continuous improvement and adherence
to international guidelines, such as those from the UN
and OECD. The programme also includes mechanisms
for whistleblowing, grievance handling, and regular audits
to ensure compliance and address any human rights
concerns e
ff
ectively.
The Elkem
Anti-Corruption Compliance programme
outlines the company's zero-tolerance approach to
corruption and facilitation payments, applicable to all
employees, directors, and majority-owned subsidiaries.
It includes adherence to international and national anti-
corruption laws, risk assessments, training, and strict
procedures for gifts, hospitality, and third-party interactions.
The programme emphasises the importance of reporting
concerns through the Speak Up channel, conducting due
diligence on third parties, and maintaining accurate records.
It also details the roles and responsibilities of management
and employees in preventing, detecting, and responding
to corruption, with regular monitoring and audits to ensure
compliance.
Elkem's
Procurement policy
regulates all procurement
activities to ensure e
ff
ective processes and risk
management globally. It applies to all employees and
organisational units, promoting strong governance,
competition, sustainable practices, and supplier
management. The policy outlines principles for sourcing,
contracting, and supplier management, emphasising
transparency, integrity due diligence, and compliance
with internal controls and international standards. Elkem
will implement sustainable procurement practices and
manage its supplier relationships in accordance with the
UN Guiding Principles on Business and Human Rights,
aiming to optimise total cost of ownership, reduce risks,
and support Elkem's long-term competitive position.
Elkem's
Raw Material Sourcing and Qualific
tion
procedure
outlines the process for sourcing and qualifying
raw materials, ensuring they meet the company's
environmental, social, and governance commitments.
It includes steps for market screening, integrity due
diligence, pre-qualific
tion audits, trial planning,
process verific
tion, and commercial contracting. The
procedure emphasises compliance with internal controls,
risk management, and supplier management, with all
documentation stored in the Ivalua platform. It applies to
all personnel involved in raw material procurement across
Elkem's divisions and subsidiaries.
Elkem's
Corporate Standard for Sourcing of Biocarbon
outlines the company's commitment to sustainable and
ethical sourcing of wood and charcoal for silicon alloy
production. It mandates the use of legally established and
sustainably managed wood sources, ensures acceptable
working conditions and respect for human rights, and
enforces zero tolerance for corruption and legal non-
compliance. The policy requires cooperation with NGOs
and local authorities, regular audits, and adherence to
international standards to maintain transparency and
traceability throughout the biocarbon value chain.
Elkem's
Confli
t Minerals policy
ensures that the
company sources minerals such as tin, tantalum, tungsten,
cobalt, and gold responsibly, in alignment with the OECD
Due Diligence Guidance. The policy prohibits procurement
from confli
t-a
ff
ected areas to avoid supporting human
rights abuses or environmental degradation.
Elkem's
Third-Party Risk Management procedure
ensures that all third-party relationships are managed
to mitigate risks related to corruption, human rights
breaches, environmental impacts, and legal non-
compliance. The procedure involves identifying,
categorising, conducting due diligence, approving,
and managing third parties throughout the business
relationship. It applies to all Elkem employees and includes
specific guidelines for
diff
erent types of third parties,
emphasising transparency, regular audits, and adherence
to international standards and Elkem's internal policies.
The
Communication and Public A
ff
airs policy
outlines
the principles, objectives, and commitments for managing
communication and public a
ff
airs activities within the
organisation. It emphasises open, honest, and accurate
communication, with specific guidelines for authorised
spokespersons and the handling of sensitive information.
The policy applies to all employees and organisational units,
detailing roles and responsibilities for implementation,
monitoring, and corrective actions. It also includes
guidelines for internal and external communication
channels, social media use, and engagement with
government and other stakeholders, ensuring alignment
with Elkem's Global Communications Strategy and
compliance with relevant procedures and laws.
Elkem's
Sponsoring and Donations procedure
ensures
that all sponsorships, charitable donations, and
community support activities align with the company's
values and compliance policies. It includes guidelines
on restricted organisations, confli
t of interest, anti-
corruption measures, and documentation requirements,
with specific app
oval processes for contributions over
EUR 5 000. The procedure promotes transparency, proper
accounting, and due diligence to support ethical and
compliant practices.
The company adheres to the principles outlined in "The
Norwegian Code of Practice for Corporate Governance"
issued by the Norwegian Corporate Governance Board
("NUES" or the "Code"). This Code aims to ensure that
companies listed on regulated markets in Norway adhere
to comprehensive corporate governance practices that go
beyond legal requirements. For further details on Elkem's
corporate governance, refer to the board of directors'
report on corporate governance in the annual report.
This section covers all relevant governing documents
requested in
the diff
erent sections on the report. This
includes references E1-2, E2-1, E3-1, E4-2, E5-1, S1-1, S2-1,
S3-1 and G-1.
①
Embed responsible
business conduct
into policies and
management systems
Identify and asess adverse impacts
into operations, supply chains and
business relationships
②
③
Cease, prevent
or mitigate
adverse impacts
④
Track
implementation
and results
Communicate
how impacts are
addressed
⑤
⑥
Provide for or cooperate
in remediation when
appropriate
Figure: Elkem's ESG due diligence process
Statement on due diligence
GOV-4
Elkem has aligned its due diligence process with the
OECD Guidelines for Multinational Enterprises and the
UN Guiding Principles on Business and Human Rights.
It also seeks to follow OECD Due Diligence Guidance
for Responsible Business Conduct. Elkem conducts due
diligence to avoid and address adverse impacts related
to workers, human rights, the environment, bribery,
corruption, and corporate governance. Elkem conducts
due diligence processes with all new business ventures,
such as M&As or JVs, but more importantly when
engaging business partners such as suppliers, agents and
customers and resellers. We always seek to follow the
recommended steps as recommended by OECD.
In addition to assessing business ventures and
partnership, we work to integrate the same due diligence
principles in our own operations and projects. We do
extensive assessments of environmental and social
impacts of all our projects and operations, and we have
conducted a double materiality assessment that covers
the group. We have conducted a group wide human
rights risk assessment, and developed an action plan
accordingly. We have also performed a group wide
biodiversity risk assessment, and we are working to
develop an action plan and related initiatives.
Risk management and internal controls over
sustainability reporting
GOV-5
Elkem’s board and management prioritise risk
management to monitor the group’s risk profile and
ensure adequate processes are in place. They view risk
management as a key part of corporate governance,
essential for building trust and enhancing value creation.
Elkem conducts an annual risk mapping process through
interviews with divisions and corporate sta
ff
to identify top
risks. Each risk is evaluated based on likelihood, financial
impact, time horizon, and mitigating activities, and then
aggregated into group risks to understand the overall risk
profile
and financial tolerance.
Elkem categorises risks into fi
e main areas: strategic,
financial, aw material, production and process, and
market and product risks, structured according to the
value chain. Environmental, Social, and Governance
(ESG) risks and climate-related risks are integral to these
categories, as they can impact strategic positioning, raw
material supply, end-markets, and financial per
ormance.
Elkem follows the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations for reporting
on climate risks and opportunities and has assessed
biodiversity risk in 2024.
As described in the section on governance (GOV-
1, GOV-2, GOV-3) Elkem’s board and management
prioritise ESG and sustainability as key components
of the business strategy. The board regularly reviews
ESG-related risks and opportunities, evaluates the ESG
strategy annually, and receives comprehensive updates
on ESG performance. The audit committee prepares
the board for sustainability and non-financial eporting,
ensuring e
ff
ective procedures and internal controls. The
CEO oversees ESG operations, with the CFO leading
the ESG steering committee, which meets monthly to
review and propose strategic actions. The board conducts
annual assessments of its performance and competence,
ensuring alignment with strategic objectives and
governance policies.
The ESG steering committee is an essential part of
Elkem’s internal control related to sustainability topics, but
in the day-to-day operations the internal control is carried
out in the line, as described in our governing documents
(see section above).
The Corporate Internal Control function support corporate
management and the Internal control and internal audit
committee in their responsibilities related to design of
an adequate internal control system and compliance to
internal regulations, described and deployed through
group governing documents. The function shall provide
regular reports to owners of group governing documents
on identified
eaknesses and potential improvements in
design, implementation and functioning of the internal
control system for the group, and give recommendations
for corrective actions..
Elkem's risk management methodology involves organising
risk management within line management, ensuring
adherence to laws, regulations, and internal policies. The
process includes mapping and analysing risks based on
interviews with divisions and corporate sta
ff
, evaluating
risks by financial impa
t and likelihood, and categorising
them into strategic, financial,
aw material, production,
and market risks, with ESG and climate risks integrated
into these categories. Risks are ranked by their impact on
EBIT (high: >10 per cent, medium: 5-10 per cent, low: <5
per cent) and their frequency (high: 1-4+ times per year,
medium: every 1-5 years, low: every 5-10+ years).
The top 10 risks identified for 2024 include geopolitical
tensions, macroeconomic development, return on
investment projects, health and safety, cyber and IT risk,
environment and climate, regulatory conditions, and
compliance. Mitigating activities are implemented to
address and reduce these risks, focusing on maintaining
effici
t operations and realising business opportunities.
In addition to the annual enterprise risk review, the double
materiality analysis (DMA) includes a comprehensive risk
analysis related to the specific
sustainability topics. The
result from the DMA, and the related impacts and risks
are discussed in each topical sections. Please refer to the
sections on ESRS E1, E2, E3, E4, E5, S1, S2, S3 and G1 for
more details.
Strategy, business model and value
chain
SBM-1
Elkem's growth ambitions and strategy focus on dual-
play growth and green leadership. The company aims
for growth and value creation in all three divisions while
securing supply chain resilience through geographical
diversific
tion. The strategy contains the following targets:
5 per cent annual growth and a 25 per cent reduction
in CO
2
emissions (scope 1 and 2) by 2030. Elkem seeks
to strengthen its position as an industry leader in low
CO
2
emissions, support the green transition, and create
green ventures. Specific
trategies include balanced
geographical growth and cost improvements in silicones,
selective growth and lower carbon emissions in silicon
products, and sustainable low-cost positions in carbon
solutions. Elkem also aims for a 15 per cent EBITDA
margin per year and net zero emissions by 2050.
Elkem's climate roadmap aims to achieve fully climate-
neutral production throughout its value chain by 2050,
with an interim target of reducing absolute scope 1 and
2 emissions by 25 per cent from 2022 to 2030. We also
intend to reduce the carbon footprint of our products by
32 per cent in the same period. 2The roadmap focuses on
three key pillars: reducing emissions, supplying advanced
materials for the green transition, and enabling circular
economies. Elkem has made significa
t progress, reducing
total GHG emissions by 7 per cent from 2022 to 2024, but
we have seen an increase in our product footprint of 29 per
cent due to shifts in sourcing.
Elkem is a leading provider of advanced silicon-based
materials essential for the green transition. The company
supplies materials for various green applications, including
electric vehicles, renewable energy, and energy storage.
Elkem's products, such as silicone solutions for EV battery
protection and high-purity ferrosilicon for electrical steel,
play a crucial role in enhancing the performance and
sustainability of these applications. The increasing demand
for low-carbon technologies like solar panels and batteries
is expected to drive growth in Elkem's product segments.
Elkem is committed to reducing its environmental
impact through improved water and waste management
and reducing local emissions to air. The company also
focuses on increasing recycling in its operations and
with customers, developing eco-designed products, and
engaging in new green markets such as battery materials
and biomass. Elkem's e
ff
orts are aligned with global
sustainability goals, and the company actively participates
in initiatives to secure key materials for the green
transition, contributing to a more sustainable future.
2This is a revised version of the strategy and transition
plan launched in 2021. The revision is due to the reporting
requirements of CSRD, and included a new baseline (2022) and
a shorten timeframe (from 2022 to 2030).
Civil society
Political
authorities
Regulatory
authorities
Customers
and suppliers
Employees
and unions
Investors and
shareholders
Figure: Key stakeholders
Interests and views of stakeholders
SBM-2
Engaging with Elkem’s stakeholders helps the company
understand expectations, important issues, and impacts.
Elkem consults stakeholders to identify and manage
social, health, safety, environmental, and economic
impacts. This dialogue informs action plans and integrates
stakeholder views into sustainability reporting. Elkem aims
to act ethically and transparently, gathering views for a
common understanding and integrity in decisions.
Elkem’s engagement includes unions, works councils,
local community groups, NGOs, suppliers, business
partners, customers, and industry associations. Elkem
also partners with sustainability experts and engages
authorities, banks, and investors on sustainability
commitments and progress.
Stakeholder engagement is organised at both corporate
and business levels through local meetings, bilateral
engagements, multi-stakeholder meetings, and industry
associations. All business areas have forums for dialogue
between management and employee representatives.
The views of stakeholders help shape Elkem’s DMA, and
our consequent strategy.
Business model and value chain
Elkem's business model and value chain focus on
producing advanced silicon-based materials, and are
cantered on the production and supply of advanced
silicon-based materials, leveraging an integrated value
chain to ensure quality and sustainability. The company
operates across the entire value chain, from raw material
extraction to the production of specialised products.
Here are the key components:
1. Raw material sourcing
:
Elkem sources high-quality
raw materials such as quartz, coal, and wood, which are
essential for producing silicon and its derivatives.
2. Production process:
The company operates state-
of-the-art manufacturing facilities to produce silicon,
silicones, and carbon solutions. This includes refinin
raw materials and transforming them into high-purity
silicon and specialised products.
3. Specialisation and customisation:
Elkem develops
customised products tailored to the needs of various
industries, including renewable energy, electronics,
automotive, and construction. This specialisation allows
Elkem to meet specific cu
tomer requirements and
market demands.
4. Sustainability focus:
A core aspect of Elkem's
business model is its commitment to sustainability.
The company emphasises reducing CO
2
emissions
and implementing sustainable practices throughout its
operations. This includes energy-effici
t production
methods and recycling initiatives.
5. Innovation and R&D:
Elkem invests significa
tly
in research and development to drive innovation.
This focus on R&D helps the company develop
new products, improve existing ones, and enhance
production processes, ensuring they remain at the
forefront of technological advancements.
6. Integrated value chain:
By controlling the entire
value chain—from raw material extraction to the
production of finished goods—El
em ensures high
standards of quality, efficie
y, and sustainability. This
integration also allows for better cost management and
responsiveness to market changes.
Elkem's business model is designed to create value for
stakeholders by delivering high-quality, sustainable
products while maintaining a strong focus on innovation
and environmental responsibility.
The Elkem House
The Elkem House serves as a visual representation of the
fundamental components of Elkem's business model.
At its core, our mission and values form the foundation
for our working practices and defines ou
organisational
culture. These elements - mission, values, and working
practices - combine to strengthen and advance our
corporate strategy.
Corporate strategy
Working practices
Values
Mission
Our mission is to produce advanced silicon-based materials
shaping a better and more sustainable future
EBS
Elkem
Business
System
Respect
Involvement
Precision
Continuous
improvement
HSE
Health
Safety
Environment
ESG
Environmental
Social
Governance
Culture
Foundation
Figure: The Elkem House
Double materiality approach
Impact materiality
(inside-out)
Financial materiality
(outside-in)
Planet and society
Elkem
Double materiality assessment – Material
impacts, risks and opportunities
SBM-3, IRO-1
The foundation for Elkem’s sustainability approach is the
double materiality analysis (DMA). We have conducted
this DMA with referance to the requirements in ESRS. This
approach assess impact materiality, – meaning the impact
Elkem has on its surroundings, – and financial m
teriality,
which refers to the impac
t diff
erent factors have on Elkem.
Our starting point was an impact assessment (inside-
out) of Elkem's e
ff
ects on the environment and society,
building on our previous evaluations of sustainability-related
impacts within our operations and value chain. Additionally,
we conducted a financial assessme
t (outside-in) of the
sustainability-related risks our business faces.
Where possible, we quantified these e
ff
ects and supple-
mented them with qualitative assessments. Given our prior
work in assessing sustainability impacts and the complexity
of quantifying sustainability-related risks, our e
ff
orts this
year focused primarily on the impact assessment.
Due to the extensive ESRS principles on double materiality
and assessment requirements, we limited the number and
groups of stakeholders involved to internal subject-matter
experts only. To verify and calibrate the results of our new
DMA, we also performed a light update of our former
materiality assessment using our previous approach.
This served as a proxy for direct external stakeholder
involvement, informing us about the interests and views of
stakeholders relevant to our business.
We believe the outcome presented below provides a
true and fair picture of our impacts and risks, though
we acknowledge our methodology has limitations. The
following pages provide detailed information on the
results of our double materiality assessment and the
process we applied.
Double materiality analysis results
We have identified ou
impacts on the environment and
society through an impact materiality assessment, as
well as the sustainability-related risks we face through a
financial m
teriality assessment. The results, aggregated
by ESRS topic, indicate that all main topics, apart from
consumers and end-users (S4), are material to Elkem. As
Elkem only sells business-to-business, it has little direct
impact on consumers. Since
the diff
erent ESRSs have
several sub-topics and sub-sub-topics, these have been
assessed, and not all sub-topics are material to Elkem.
Given the nature of Elkem’s operations, the environmental
risks and impact in E1, E2 and E3 are especially important
to Elkem. We have significa
t emissions, consumption
and use of energy and water, and the potential and actual
impact of local emissions and pollutants is important to
mitigate. These topics are also related to transitional risks
related to regulation changes and emission costs.
Own workforce, and especially HSE, is a topic that
does not rank very high on financial impa
t, but it is
still a key topic for Elkem. This is an area where we have
invested significa
t resources and time to improve our
performance. This is a tendency that we find when
analysing several of the topics. The financial impa
t,
meaning the outside-in impact, is limited, but we still
consider them important, and we acknowledge that there
is considerable risk, and some opportunities, related to
these topics.
The material impacts, risks and opportunities (IROs) are
disclosed in the various chapters on the material topics
(ESRS E1, E2, E3, E4, E5, S1, S2, S3 and G1). Here we also go
into detail on how this IROs shape our actions, investments,
and how the integrate into our business model.
Methodology
All assessed impacts and risks have been aligned
with the relevant topical ESRS standards. We have
assessed whether the topics have an actual or a
potential impact, what stakeholder would be a
ff
ected,
the relevant time horizon, irremediability, scale,
scope, and likelihood. This has given us an impact
score. We have applied a similar approach for our
positive impacts. For the opportunities we have
mapped the topics, the source of the opportunity,
time horizon, financial impa
t, and likelihood. We
have assessed the value chain where required, or we
have deemed it prudent.
Figure: Double materiality matrix
Financial materiality
High
High
Low
Low
Impact materiality
Pollution
Climate change
Water and marine resources
Resource use and circular economy
Business conduct
A
ff
ected communities
Workers in the value chain
Consumers and end-users
Own workforce
Biodiversity and ecosystems
Disclosure requirements in ESRS covered by sustainability statement
IRO-2
Standard
Pages
E1
Climate change
pp. 104-129
E2
Pollution
pp. 130-135
E3
Water and marine resources
pp. 136-141
E4
Biodiversity and ecosystems
pp. 142-147
E5
Circular economy
pp. 148-153
S1
Own workforce
pp. 156-165
S2
Workers in value chain
pp. 166-171
S3
A
ff
ected communities
pp. 172-177
G1
Business conduct
pp. 180-186
Disclosure of topics assessed not to be material
Standard
Explanation
S4
Consumers and end-users
ESRS S4 is omitted and assessed to be not material to
Elkem. Elkem sells its goods to other companies who in
turn produce consumer goods. Thus we have deemed
our direct impact on consumers and end-users as non-
existent, and our possibility to a
ff
ect our indirect impact
as very limited. This means that the associated risks and
opportunities are also limited.
Minimum disclosure requirements – Policies, actions, metrics
and targets
MDR-P, MDR-A, MDR-M, MDR-T
All policies, actions, metrics and targets relevant to
the diff
erent topics are
described in
the diff
erent sections covering ESRS 2 (policies), E1, E2, E3, E4,
E5, S1, S2, S3 and G1.
102
Environmental
Social
Governance
E
ESRS E1
Climate change disclosure
for Elkem
As a company in the process industry, Elkem’s
environmental footprint is of crucial importance,
particularly related to GHG emissions. Converting
quartz to silicon is an energy-intensive process
that uses carbon sources like fossil coal, charcoal,
and wood chips, for reduction, resulting in
CO2, NO
×
, SO2, and dust emissions. While CO2-
equivalent emissions are inherent to the process,
Elkem aims to reduce its fossil CO2 footprint by
increasing renewable carbon use and developing
innovative production processes.
Elkem supports the goal of the Paris Agreement
to limit global warming to well below 2 degrees
Celsius. Elkem’s strategy includes increasing
material and energy e
ffic
iency, replacing fossil
carbon with biocarbon, and developing carbon-
neutral smelting technologies.
Material impacts, risks and opportunities -
Resilience of Strategy and Business Model
ESRS 2, SBM-3
Elkem’s operations have an impact on the climate, both
directly and indirectly. Scope 1 emissions result directly
from the dependence on carbon sources for reduction in
the process,
resulting in CO
2
emissions. As the smelting
process requires large amounts of electricity for the
furnaces, Elkem’s scope 2 emissions are also significa
t.
Fortunately, Elkem’s silicon production is almost
exclusively based in regions where renewable power, i.e.
hydropower, is abundant. We acknowledge the impact
Elkem has on the climate through its value chain, both
through upstream sourcing of raw materials and through
our products as input factors in high emitting industries.
Elkem’s products are critical to the green transition
as Elkem supplies materials for various applications,
including EV battery protection with reliable silicone
solutions and silicon-enhanced aluminium for eco-friendly
vehicles. We provide high-purity ferrosilicon for electrical
steel used in EVs, wind turbines, and power lines. Elkem
also o
ff
ers cost-e
ff
ective products for durable photovoltaic
panels and improves concrete sustainability with our
Microsilica
®
brand.
ESRS topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope, and
likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
E1
Climate
change
Climate change
adaptation
Climate change
mitigation
Use of reductants in production of silicones results in CO
2
emissions
Actual
Yes
Yes
Negative
High
Short
OO, VC
Use of coal in various in own products (e.g. carbon paste), and used in value chain (e.g. steel,
aluminium)
Actual
Yes
Yes
Negative
High
Short
OO, VC
Transportation of quartz and other purchased goods
Actual
Yes
Yes
Negative
High
Short
OO, VC
Silicon and related products (Si, FeSi, Microsilica) are used in high-emitting products (e.g.
concrete, steel, aluminium)
Actual
Yes
Yes
Negative
High
Short
VC
Production of silicon is mainly based in regions (Norway, Iceland, Paraguay) where
renewable energy is abundant
Actual
Yes
Yes
Positive
High
Short
VC
Silicon and silicone products are enablers for the green transition and help reduce
emissions through other technologies and products (e.g. EV production, more sustainable
construction, renewable power construction and infrastructure)
Actual
Yes
Yes
Positive
High
Short
VC
Energy
Prodcution of silicon and silicone powder is energy intensive
Actual
Yes
Yes
Negative
High
Short
OO
The use of silicones, siloxanes and silanes generates energy savings and reductions in
greenhouse gas emissions that exceed the impacts of production and end-of-life disposal.
The durability makes silicone result in less waste over time
Actual
Yes
Yes
Positive
High
Short
VC
Elkem’s approach to climate-related risks and
opportunities is fully integrated into its governance
and strategic processes. Climate strategy oversight is
centrally governed by the board of directors, with regular
annual reviews of climate risks and opportunities as
part of the overall business strategy. This governance
framework includes the audit committee, which
supervises sustainability reporting and climate-related risk
management, ensuring compliance and alignment with
emission reduction targets.
Climate-related risk management spans short-, medium-,
and long-term horizons and includes both transition
and physical risks. The CFO presents a comprehensive
risk assessment, including climate factors, at board
meetings. Climate risks are systematically categorised as
low, medium, or high based on probability and potential
financial impa
t on Elkem’s EBIT, cash fl
w, and equity.
These assessments help evaluate the likelihood and
frequency of risks over
diff
erent time horizons. For
instance, regulatory changes in emissions trading systems
(ETS) and carbon pricing mechanisms present key
transition risks due to the inherent CO2emissions from
silicon production, while extreme weather events and
droughts are assessed as low-impact physical risks due to
Elkem’s operational geography.
Transitional risks are significa
t in areas such as regulatory
changes in emissions allowances under the ETS in
Europe and evolving quota systems in China, which could
increase operational costs. A type of transitional risk is
technological risks, which for Elkem involve potential
shifts in demand due to the EU Taxonomy’s requirements
for sustainable production. Elkem mitigates this risk by
increasing biocarbon use as a reduction agent, developing
low-GHG technologies, and exploring carbon capture and
storage (CCS).
Opportunities also emerge from the green transition.
Elkem’s focus on advanced silicon-based materials
positions the company to benefit from the growing
demand for electric vehicles (EVs), energy storage,
and renewable power. Products such as EV battery
components, silicone insulation, and low-carbon graphite
enable Elkem to contribute to the transition while
increasing its market share.
Transitional risks
Risk type
Probability
Potential
financial
impact
Time
horizon
Description
Mitigation
Regulatory
High
Medium
Short
Elkem produces silicon and ferrosilicon in
Norway and Iceland, and silicones in France,
all under the EU's emission trading system
(ETS). Changes in free allowances or higher
prices may raise Elkem's direct costs. In
China, Elkem has silicon and silicones
production, and the evolving quota system
could potentially increase operational costs.
The introduction of CBAM will also pose
challenges to Elkem as we compete in a
global market.
Increase share of biocarbon
as reduction agent in silicon
production
Technological
Medium
High
Medium
Elkem faces potential impacts from the
EU Taxonomy, requiring technological
upgrades for sustainability. Global e
ff
orts to
reduce fossil GHG emissions could diminish
Elkem's product attractiveness, leading
to substitutes. The cost of transitioning to
low emission technologies such as CCS, is
significa
t. Additionally, reliance on coal and
char as reduction agents poses a risk due to
potential scarcity, a
ff
ecting access to critical
raw materials.
Reinforce e
ff
orts to reduce
energy consumption, reduce
GHG emissions, and continue
to develop products that enable
GHG emission reductions
Increase share of biocarbon as a
reduction agent
Continue research and
development of CCS and CCU
Market
High
Medium
Short
Political instability and uncertainty related
to framework conditions, such as the CO
2
compensation scheme, may increase the
costs for Elkem.
E
ff
orts to explain Elkem’s
competitive situation through
industrial organisations (i.e.
Norsk Industri, Eurometaux).
Market
Medium
Medium
Medium
Elkem faces the potential risk of increased
cost of lower emitting raw materials, such as
certified biocarbon, l
wer emitting coal and
iron, due to increased demand (i.e. biocarbon)
and increased competition among companies
compete for the same resources.
Develop good relationships with
reliable suppliers
Market
Medium
High
Medium
Electrific
tion of our society may lead to
an increase in demand and thus result in
increased power prices. This may a
ff
ect all
Elkem’s locations.
Regulatory
Low
Low
Short
More regulatory requirements and directives
may follow, which can result in increased
operational costs to monitor and meet
requirements.
Physical climate risks have been mapped since Elkem’s fi
st
TCFD report in 2021, with regular updates based on new
research and mapping services, such as the World Bank
Group’s Climate Change Knowledge Portal. For instance,
site-specific anal
ses in 2023 led to a downgrading of risks
in Canada due to location resilience and an increased risk in
France related to drought and heatwaves.
Hypothetical future scenarios, including 2°C and 4°C
global warming scenarios, provide a basis for long-term
strategic planning. Elkem’s physical climate risks vary as
Elkem has global operations. The key risk for most sites
include an increase in extreme weather events such as
storms, floods, and d
wnpours, but no sites have been
deemed at such risk that mitigation has been necessary.
For our silicone production in France, access to water
is identified as a risk due to an increase in dry periods
on certain regions of France, and the government has
established a directive that enables it to limit the water
withdrawal to industry. However, the region where Elkem
is located has not yet been a
ff
ected, though we are closely
monitoring the development. Our operations in Brazil also
face water access as a key risk, as droughts have increased.
Transitional opportunity
Opportunity
type
Products and
services
Products and
services
Probability
High
High
Potential
financial
impact
High
High
Time
horizon
Short
Medium
Description
The increasing demand for electric vehicles
(EVs) and battery cells presents an
opportunity for Elkem, as the company supply
key components needed for these products.
Silicones are used as a non-flammabl
insulation for wiring and batteries, and EVs
require four times more silicone compared to
internal combustion vehicles. Li-ion batteries
have a key component that is the anode that
usually consists of graphite.
The shift otwards a circular economy and
increased recycling and reuse presents
opportunities for Elkem. In silicones production,
there is potential to recycle silicones in order
to reduce emissions, up to as much as 65 per
cent. By-products from silicon production also
represents an opportunity for Elkem.
Strategy to realise opportunity
Elkem is already capitalising
on these opportunities as the
company is already a qualified
supplier of wire and battery
insulation and speciality silicones
to the EV industry.
Elkem has developed technology
to produce graphite, main
component in anodes, with
90 per cent lower GHG emissions
than today's standard graphite.
This has led to the establishment of
Vianode. Elkem has sold its share in
Vianode now.
Elkem is exploring the possibilities
to recycle silicone through projects
such as REPOS and RENOV.
Elkem is looking into opportunities
to increase the use of recycled
packaging materials and the
reuse of wooden pallets used in
transport.
Elkem has developed products
such as Microsilica, a by-product
from silicon production, that
makes concrete less brittle and
increase the lifespan of concrete
construction.
Products and
services
Technology
High
Medium
Medium
Low
Short
Long
Increased demand for renewable power, power
storage, electrific
tion and improvement of
electrical infrastructure presents an opportunity
for Elkem to expand in these sectors.
Most of Elkem’s silicon production is located
in industrial clusters in Norway, which are
suitable for installation of CCS facilities. There
is also a positive sentiment towards CCS in
Norway, which presents an opportunity for
Elkem to leverage on.
Elkem has increased its use of
biocarbon as a reduction agent in
the silicon production to 24 per cent.
Elkem supplies products that
enable these developments,
contributing to a more sustainable
society. One of Elkem's goals is
green leadership by increasing our
deliveries to these sectors.
Elkem continues its research on
CCS to assess new and more cost
e
ff
ective options.
Global overview of risks analysed: low emission scenario
Low
Iceland
Low-medium
Norway
(country average)
Medium
Canada
(Elkem Chicoutimi)
Low-medium
USA
(Elkem Silicones NA Plant)
Low-medium
Brazil
(Elkem Carbon Brazil)
Low-medium
China
(country average)
Low
The Netherlands
(Elkem Distribution centre)
Low
France
(Saint Fons & Roussillon Plant)
Low risk
Medium risk
High risk
Global overview of risks analysed: high emission scenario
Low
Iceland
Medium
Norway
(country average)
Medium-high
Canada
(Elkem Chicoutimi)
Medium
USA
(Elkem Silicones NA Plant)
Medium-high
Brazil
(Elkem Carbon Brazil)
Medium-high
China
(country average)
Low-medium
The Netherlands
(Elkem Distribution
centre)
Medium
France
(Saint Fons & Roussillon Plant)
Low risk
Medium risk
High risk
Transition plan for climate change mitigation
Disclosure requirement E1-1
Elkem’s climate roadmap aligns with the Paris
Agreement’s goal of limiting global warming to well
below 2°C. Elkem has a target of reducing scope 1 and
2 emissions by 25 per cent from 2022 to 2030, and this
equals a reduction of approximately 840 000 tCO2e.
Elkem also plans to reduce the carbon intensity of our
main products by 32 per cent in the period from 2022 to
2030. Aiming for net zero by 2050, Elkem has identified
several decarbonisation levers: shifting to biomass in
smelting, reducing the emissions in our supply chain,
increasing the renewable energy share in China, and
implementing carbon capture and storage (CCS).
Elkem presented its global climate roadmap and transition
plan in 20211, closely aligned with the corporate strategy of
green leadership. By 2024, Elkem has continued its e
ff
orts
to reduce GHG emissions, and in the period from 2022 to
2024 we have reduced our scope 1 emissions by 16 per
cent, i.e. 390 000 tCO
2
e. In the same period we saw in
increase in scope 2 emissions of approx.
220 000 tCO2e (23 per cent) due to increased
production in China. The roadmap outlines how Elkem
aims to mitigate global warming resulting from climate
change, focusing on three key pillars: reducing fossil CO
2
emissions, supplying materials for the green transition,
and enabling more circular economies.
In addition to reducing our own emissions, Elkem also
aims to grow its supply of advanced materials to the
transition to a more sustainable economy. Elkem is
capitalising on the growing demand for key materials
essential for the green transition, such as silicon and
electrical steel, which are critical for renewable energy,
energy storage, and electric vehicles. The company is
committed to reducing its environmental impact by
lowering greenhouse gas emissions and improving water
and waste management. Elkem's products, including
silicone solutions for EV battery protection, silicon alloys
for vehicle electrific
tion, and high-purity ferrosilicon
for electrical steel, play a vital role in various sustainable
applications. Elkem’s innovations support the durability
and efficie
y of photovoltaic panels and concrete
structures, contributing significa
tly to the advancement
of low-carbon technologies and infrastructure
improvements.
Elkem is working to increase recycling and develop more
sustainable products. We already supply products based
on circular economy principles, such as Microsilica, which
is used in major construction projects. Elkem is also
involved in a project to reduce the carbon footprint of
silicones by over 65 per cent through chemical recycling.
1 The current transition plan and targets are a revision of the
transition launched in 2021. The revision was done to comply with
the requirements in CSRD. We have adjusted the baseline year
to 2022 and the target year to 2030, but staying on the same
absolute emissions linear reduction trajectory and target.
Elkem’s transition plan:
- 25%
2022
Growth
Silicones process
efficie
y
Biomass
in smelters
ore China renewables
2030 target
Phase 1 Low-carbon
supply chain
Phase 2 Low-carbon
supply chain
CCS at smelteres
CC, recycling and
other
2050 net zero target
M
Elkem aims to cut absolute CO
2
emissions by 25 per
cent by 2030 (scope 1 and 2), despite projections of
increased growth owing to its strong product alignment
with the green transition. Subsequently, the company
has established a goal to reduce the carbon intensity
of our main products by 32 per cent by 2030. While
absolute CO
2
reduction is crucial, the relative decrease
in carbon intensity is vital to evaluate the group's overall
performance.
Elkem's intensity target encompasses reduction strategies
covering scope 1, scope 2 and upstream scope 3
emissions resulting from our two main product categories.
These categories are characteristic of Elkem’s primary
product segments, which contributed to approximately
93 per cent of total operating income in 2022 and include:
i) upstream production of silicones (silox), and ii) tapped
silicon and ferrosilicon metal, measured in CO
2
e (scope 1,
2 and 3 to-gate) per kilogram of product produced.
Scope 3 to-gate reductions are to be achieved through
supply chain decarbonisation, majorly related to raw
material sourcing and efficie
y. Market conditions have
proven such sourcing difficult i
the current target period.
Though we have not yet set an absolute target for our
scope 3 emissions, value chain activity data is improving,
providing us a better basis to design and follow-up the
target. In addition to the scope 3 emissions captured in
the current carbon intensity target, an absolute scope 3
target is planned to be launched in 2025.
Policies related to climate change mitigation
and adaptation
E1-2
Elkem’s policies address climate mitigation through GHG
emissions reduction, adaptation to climate impacts,
and promoting energy efficie
y and renewable energy.
The company’s emissions reduction policy emphasises
replacing fossil-based reduction materials with biocarbon.
Additionally, policies support circular economies, aligning
with EU critical raw material priorities for products
like silicon. Please refer to the section on governing
documents under ESRS 2 for more details.
Actions and resources in relation to climate
policies
E1-3
Elkem is actively pursuing several initiatives to enhance
its energy efficie
y and reduce its environmental impact.
One of the key areas of focus is improving the energy
efficie
y of existing facilities and equipment. This
includes replacing old, ineffici
t electrical motors with
new, effici
t ones featuring variable frequency drives.
Additionally, Elkem is transitioning from ineffici
t coal
boilers to cogeneration technology at its Xinghuo site,
which helps reduce coal consumption and expand siloxane
capacity at lower energy intensity.
Another significa
t initiative is Elkem's commitment to
energy recovery from processes that generate surplus
heat. The company has been a pioneer in waste heat
utilisation since the 1970s, using recovered heat for
district heating, steam for various production processes,
and generating new electricity. This approach not only
improves energy efficie
y, but also reduces the overall
environmental footprint.
Elkem is also dedicated to reducing CO
2
emissions
through innovative projects like Sicalo, which aims
to achieve zero emissions by 2050. This project, in
collaboration with SINTEF and supported by The Research
Council of Norway and the EU, involves medium-scale
pilot testing and the development of new technologies
to eliminate CO
2
emissions in silicon production. In 2024
Elkem spent NOK 21.7 million on the Sicalo project and
received NOK 9.5 million in support. Elkem has several
other research projects to reduce GHG emissions, and in
2024 the group spent NOK 42.8 million on these projects.
In its e
ff
orts to replace fossil carbon sources with
biocarbon, Elkem aims to reach a 50 per cent biocarbon
share in its smelting operations by 2031. The company
is actively seeking sustainable and financiall
viable
sources of biocarbon, including pioneering new
production technologies in Canada that use residues
from sawmills. Elkem ensures that all biocarbon is
sourced sustainably, adhering to certific
tion schemes
like FSC, SFI, SVLK, and PEFC.
Since the implementation of the transition plan (Elkem's
Climate Roadmap) Elkem has invested NOK 397 million
in the biocarbon research including recieved grants, and
pilot production in Canada. The OpEx related to the shift to
biocarbon reductants from fossil reductants equals
NOK 2 439 million over the last three years.
Going forward, we will continue to work to increase the
share of biocarbon in our smelters. We are also working
on further improving the efficie
y of our silicones
production, reducing the footprint of our supply chain, and
studying the potential for carbon capture at our smelters.
Targets for climate change mitigation and
adaptation
E1-4
Elkem’s targets focus on absolute greenhouse gas
emissions and carbon intensity of our main products:
By 2030, Elkem has set a target of 25 per cent reduction
from 2022 in scope 1 and 2 emissions, and a 32 per cent
reduction in the carbon intensity of its main products.
An absolute scope 3 target will be set in 2025.
Energy consumption and mix
E1-5
Elkem’s total energy consumption in 2024 was
7 153 GWh, where the brunt of this being sourced
in regions where renewable power is abundant. The
company’s smelting facilities, except for one in China,
operate on
renewable electricity (Paraguay, Island,
Canada, and Norway). Energy-saving measures include
reducing fossil fuel use and transitioning to more effici
t
production technology. Energy intensity per net revenue
is calculated annually, and the company aims to improve
efficie
y in high-impact sectors, particularly silicon and
ferrosilicon production.
Parts of Elkem’s value chain involve high-energy
processes, particularly in the production of silicon,
ferrosilicon, and foundry alloys using high-temperature
electric arc furnaces. These processes imply both impacts,
risks and opportunities. In relation to this chapter, the high-
energy processes are primarily seen as an opportunity for
Elkem, as Elkem is a forerunner in waste heat utilisation.
Recovered heat finds
ersatile applications, serving as hot
water for district heating, steam for various production
processes, and new electricity generation. In 2024 Elkem
recovered 738 GWh of energy from our facilities. This
equates to the annual consumption of more than
46 000 Norwegian households.
Energy consumption and mix (E1-5):
Energy consumption and mix,
(scope 2 market based reporting)
2024
2023
2022
(base year)
Development vs. base year
Fuel consumption from coal and coal products (GWh)
-
694
852
-100%
Driven by the decommissioning
of coal fi
ed steam boilers at the
Xinghuo plant and the changes in
the electricity residual mix factors
for Norway and Iceland
Fuel consumption from crude oil and petroleum
products (GWh)
88
83
77
14%
Fuel consumption from natural gas (GWh)
497
434
499
0%
Fuel consumption from other fossil sources (GWh)
-
-
1
-100%
Consumption of purchased or acquired electricity,
heat, steam, and cooling from fossil sources (GWh)
5 101
4 717
3 913
30%
Total fossil energy consumption
(GWh) (calculated as
the sum of lines 1 to 5)
5 686
5 928
5 341
6%
Consumption from nuclear sources
(GWh)
558
766
1 139
-51%
Driven by changes in the electricity
residual mix factors for Norway
and Iceland
Fuel consumption for renewable sources, including
biomass (also comprising industrial and municipal
waste of biologic origin, biogas, renewable hydrogen,
etc.) (GWh)
0.35
0.21
-
100%
Consumption of purchased or acquired electricity, heat,
steam, and cooling from renewable sources (GWh)
909
578
1 543
-41%
The consumption of self-generated non-fuel renewable
energy (GWh)
-
-
-
Total renewable energy consumption
(GWh)
(calculated as the sum of lines 8 to 10)
909
578
1 543
-41%
Driven by changes in the electricity
residual mix factors for Norway
and Iceland
Total energy consumption
(GWh) (calculated as the
sum of
lines 6, 7 and 11
)
7 153
7 272
8 024
-11%
Share of fossil sources in total energy consumption (%)
79%
82%
67%
13%
Share of consumption from nuclear sources in total
energy consumption (%)
8%
11%
14%
-6%
Share of renewable sources in total energy
consumption (%)
13%
8%
19%
-7%
Energy consumption and mix,
2024
2023
2022
Development vs. base year
(scope 2 location based reporting)
(base year)
Total fossil energy consumption (GWh)
2 434
2 363
2 593
-6%
Consumption from nuclear sources (GWh)
112
102
105
6%
Driven by lower activity levels of the
Total renewable energy consumption (GWh)
4 607
4 807
5 325
-13%
smelters in Norway and Iceland
Share of fossil sources in total energy consumption (%)
34%
32%
32%
2%
Share of consumption from nuclear sources in total
2%
1%
1%
0%
energy consumption (%)
Share of renewable sources in total energy
64%
66%
66%
-2%
Driven by lower activity levels of the
smelters in Norway and Iceland
consumption (%)
Share of renewable electricity in total electricity
80%
82%
81%
-1%
consumption*
Driven by lower activity
Energy recovery (GWh)*
738
995
892
-17%
levels of the smelters in
Norway and Iceland
Energy recovery percent of total energy consumption*
10%
14%
11%
-1%
Energy intensity based on net revenue (MWh/Net
0.00022
0.00020
0.00017
revenue NOK)
*These are Elkem specific KPIs
Gross scopes 1, 2 and 3 and total GHG
emissions
E1-6
Scope 1 emissions primarily stem from smelting,
representing 95 per cent of emissions. In 2024, scope 1
and 2 location-based emissions emissions totaled
3.19 million tonnes, a decrease vs. the 2022 base year
driven by activity level changes at the major production
plants. Scope 2 emissions for indirect energy use include
location-specific emissions factors for China’s grid. Scope 3
emissions, reported since 2021, encompass activities from
“purchased goods and services” to “end-of-life treatment”.
Gross scopes 1, 2, and 3 GHG Emissions (E1-6)
Retrospective
Milestones and target years
2024
2023
Scope 1 GHG emissions
2022
(base year)
Development vs. base year
2030
2050
Annual % target
target
target
/base year
Gross scope 1 GHG emissions
(million tCO2eq)
2.03
2.21
2.42
-16%
Decrease driven by the stop of
the Xinghuo coal fi
ed boilers and
reduced activity at some smelters.
1.82
0
-3.10%
Percentage of scope 1 GHG
emissions from regulated emission
trading schemes (%)
69%
62%
67%
2%
Driven by activilty level changes.
na
na
-
Biogene CO2 share of
1 emissions
total scope
19%
20%
20%
-1%
Driven by activilty level changes
47%
Scope 2 GHG emissions
Gross location-based scope 2
GHG emissions (million tCO2eq)
1.16
0.83
0.94
23%
Increase driven by the start of
Xinghuo external cogen plant.
the
0.71
0
-3.10%
Gross market-based scope 2 GHG
emissions (million tCO2eq)
3.42
2.89
2.64
30%
Increase driven by the increase
of the electricity residual mix
emission factors for Norway and
Iceland (+48% and +41%).
na
na
na
Scope 3 emissions
8.34
6.81
7.38
13%
4.83
Total GHG emissions
Total GHG emissions (location-
based) (million tCO2eq)
11.53
9.85
10.74
7%
na
na
na
Total GHG emissions (market-
based) (million tCO2eq)
13.79
11.91
12.44
11%
na
na
na
Product Group Carbon Footprint
(PGCF) (kg CO2e/kg product)
8.9
8.0
6.9
29%
na
na
na
GHG Intensity based on net
revenue (location based) (tCO2e/
Net revenue NOK)
0.00035
0.00028
0.00023
49%
na
na
na
GHG Intensity based on net
revenue (market based) (tCO2e/
Net revenue NOK)
0.00042
0.00034
0.00027
54%
na
na
na
GHG removals and carbon credits
E1-7
While Elkem’s primary strategy is emissions reduction,
the company also evaluates potential carbon credits and
GHG removal projects. Current e
ff
orts include researching
CCS for smelting and expanding sustainable biocarbon
sources. All carbon credits follow third-party verific
tion
standards.
Internal carbon pricing
E1-8
Elkem applies an internal price of carbon. This internal
carbon pricing mechanism is designed to refle
t the true
cost of carbon emissions, and the price is therefore set
to match the prevailing market price. By doing so, we
ensure that our carbon pricing refle
ts current market
conditions and thus the real alternative cost to reduce
carbon emissions. The market price also represents the
cumulative knowledge of market participants, not only the
view of one or a few market analysts.
Financial e
ff
ects of climate-related risks and
opportunities
E1-9
Climate risks, such as shifts in energy policy, may
impact Elkem’s financial position
ver the long term.
Conversely, growing demand for green materials presents
opportunities for revenue growth. Elkem projects
cost savings through improved energy efficie
y and
renewable energy reliance, and anticipates increased
revenue from low-carbon products, such as EV materials
and eco-designed silicones. Quantitative assessments of
these financial impa
ts are ongoing.
None of Elkem's assets are considered to be exposed to
material physical climate risk, and we have not seen the
need to improve sites or change operations to accomodate
for such risk. The transitional risk of our assets is explained
in the section on climate risk.
Elkem’s climate roadmap, policy framework, and annual
disclosures are integral to its commitment to transparency
and alignment with ESRS E1 standards. The company’s
strategy and targets for climate neutrality by 2050 ensure
compliance with EU regulations and contribute to global
climate objectives.
Statement on the EU
Taxonomy for sustainable
economic activities
The EU Taxonomy serves as a classi
fi
cation
framework that outlines a list of environmentally
sustainable economic activities. Its primary aim is to
enhance sustainable investments directed toward
environmentally sustainable initiatives, thereby
supporting the EU’s climate and environmental
objectives for 2050 and the goals outlined in the
European Green Deal.
The EU Taxonomy
The EU Taxonomy Regulation specifies six e
vironmental
objectives to which predefined economic a
tivities may
contribute significa
tly, as defined
y the EU Commission:
1.
Climate change mitigation (CCM)
2.
Climate change adaptation (CCA)
3.
Sustainable use and protection of water and marine
resources (WTR)
4.
Transition to a circular economy (CE)
5.
Pollution prevention and control (PPC)
6.
Protection and restoration of biodiversity and
ecosystems (BIO)
An activity is deemed Taxonomy-eligible if it is outlined
in the EU Commission’s Delegated Acts, irrespective of
whether it meets the technical criteria. Conversely, non-
eligible activities are those not yet described in these Acts.
A Taxonomy-aligned activity fulfills the technical criteria in
the Delegated Acts by making a substantial contribution
to an environmental objective, while not significa
tly
harming other objectives, and adhering to minimum
safeguards (e.g., human rights, labour rights, consumer
interests, anti-corruption, taxation, fair competition).
Scope
Elkem falls within the scope of the EU Taxonomy
Regulation, as it applies to large public interest entities
with more than 500 employees.
Elkem, with a financial year running from
1 January to 31
December, provides Taxonomy disclosures in this report
for the period spanning 1 January 2024, to 31 December
2024. For the financial year 2024, companies are required
to report their eligibility against all six environmental
objectives of the EU Taxonomy.
Disclosure Requirements
Companies within the regulation's scope are obligated
to report performance indicators on net turnover, capital
expenditure (CapEx), and operational expenditure (OpEx)
associated with both Taxonomy-eligible and aligned
economic activities across the various environmental
objectives outlined in the regulation.
Elkem Taxonomy-eligible and aligned activities
The subsequent section details the percentage of Elkem's
net turnover, capital expenditure (CapEx), and operating
expenditure (OpEx) attributed to economic activities
eligible for the EU Taxonomy and aligned with the six
environmental goals of the EU Taxonomy. This data
pertains to the financial
eporting period of 2024.
Taxonomy-eligible activities
Elkem has identified the following economic activities as
Taxonomy-eligible across the six environmental objectives
in the Taxonomy Regulation:
Economic Taxonomy activity
3.17 Manufacture of plastics in primary form
Description
The manufacture of plastics in primary form is recognised
as an eligible activity under the EU Taxonomy. Although
silicones are not defined within the general terms of
plastics (from oil), this activity gathers all Elkem's silicones
products that have generic applications. The description
of this economic activity in the Taxonomy refers to NACE
code C20.16, which includes silicones. As of the reporting
date, Elkem considers silicones as an eligible activity.
Relevant environmental objective in the EU Taxonomy
Climate change mitigation
Climate change adaptation
3.1 Manufacture of renewable energy
technologies
Description
The manufacture of renewable energy technologies with
specialised applications qualifies as eligible unde
the EU
Taxonomy. Ferrosilicon and foundry alloys are specialised
products for wind power equipment and, as such, comply
with the EU Taxonomy’s definition for this activity.
Relevant environmental objective in the EU Taxonomy
Climate change mitigation
Climate change adaptation
3.6 Manufacture of other low carbon
technologies
Description
The manufacture of other low carbon technologies,
that aim to significa
tly reduce GHG emissions in use,
can qualify under this category. Microsilica significa
tly
reduces carbon impact by decreasing cement use and
increasing longevity compared to conventional cement
production, meeting the EU Taxonomy's definition
f this
activity.
Relevant environmental objective in the EU Taxonomy
Climate change mitigation
Climate change adaptation
Assessment of Taxonomy-alignment
Many of Elkem's upstream products are defined as
Taxonomy-non-eligible economic activities, meaning that
these activities are not described in the supplementing
delegated acts. Silicon-based advanced materials are
essential to the green transition, with silicon metal on the
EU's 2023 list of critical raw materials.
As long as the EU Taxonomy regulation does not cover
silicon-based materials, the company's assessment of the
taxonomy-aligned activities will be limited.
Over the past years, Elkem has conducted initial
assessments of the EU Taxonomy to determine the
eligibility of its portfolio. These e
ff
orts have included
identifying eligible activities and expanding assessments
to cover alignment with the Taxonomy's criteria.
Activities not assessed as core and material to Elkem have
been scoped out from reporting for 2024.
3.17 Manufacture of plastics in primary form
Substantial contribution to Climate change mitigation:
Manufacturing of plastics in primary form has been
included in the technical screening criteria of the
delegated acts. For silicones to meet the sustainable
contribution criteria, the production must be derived
wholly or partially from renewable feedstock. Silicon
metal is essential to the production of silicones. Elkem
Silicones sources silicon-metal from, e.g., Norwegian
plants that use a biocarbon as a reduction material in the
production process. This criterion is also in line with one
of Elkem’s primary CO
2
strategies, which aims to replace
fossil carbon with biocarbon in our smelting operations.
Silicones derived partly from silicon metal with a share
of biocarbon will qualify as aligned and, therefore, meet
the fi
st "alignment test" as a substantial contribution to
climate change mitigation.
Do no significa
t harm (DNSH):
Elkem has reviewed its activities against DNSH criteria
and identified a
eas needing further evaluation. As of the
reporting date, Elkem reports zero alignment with DNSH,
demonstrating its commitment to integrity and ongoing
assessment.
3.1 Manufacture of renewable energy
technologies
Substantial contribution to Climate change mitigation:
This activity is automatically complying with the criteria.
Do no significa
t harm (DNSH):
As of the reporting date, Elkem has not yet completed
the assessment of the DNSH criteria for this activity.
Consequently, the company will report zero alignment.
3.6 Manufacture of other low carbon
technologies
Substantial contribution to Climate change mitigation:
Elkem’s Microsilica improves concrete performance,
making it more durable, increasing the service life and
reducing maintenance costs. It also contributes to
reducing the carbon footprint for a concrete mix. Elkem
has performed an LCA of Microsilica. As of the reporting
date, the LCA has not yet been verified
y a third party;
hence this eligible activity does not meet the substantial
contribution criteria for climate change Mitigation.
Do no significa
t harm (DNSH):
As of the reporting date, Elkem has not yet completed
the assessment of the DNSH criteria for this activity.
Consequently, the company will report zero alignment.
Minimum safeguards
The next section outlines Elkem’s compliance with the
minimum safeguards criteria across four areas: Human
rights, anti-corruption, taxation, and fair competition,
demonstrating Elkem’s commitment to maintaining high
standards in its operations.
Human rights (including labour rights and consumer
interests, as well as issues related to science,
technology and innovation):
Based on the UNGPs and the OECD MNE Guidelines,
including the OECD Due Diligence Guidance for
Responsible Business Conduct, Elkem has implemented
a six-step approach to identify, prevent, and, if necessary,
mitigate and remediate any actual and potential
negative impacts on human rights. Elkem's human rights
programme, which outlines the company's strategy, key
focus areas, and measures to prevent negative impacts,
is available on the company's website. It is also detailed in
the annual ESG report, fulfilling the reporting duties under
the Norwegian Transparency Act.
Elkem's strategy for combating human rights violations
is based on a third-party impact assessment that takes
account of geographical and sectoral risks. The impact
assessment considers Elkem's own business units,
subsidiaries, business partners, and value chain. The
company continuously take measures to identify, prevent,
and mitigate actual and potential adverse human rights
impacts. Elkem's processes ensure that remedial action
is taken promptly in the event of an acute human rights
violation and, if necessary, remedy is provided to a
ff
ected
individuals. The e
ff
ectiveness of these processes is
monitored by internal reviews on a regular basis.
Corruption and bribery
To prevent and combat corrupt practices, Elkem has
implemented an anti-corruption programme. The
company's control mechanisms to prevent corruption and
bribery in its business units and value chains are based
on a risk assessment, including geographical and sectoral
criteria. Anti-corruption is an integral part of Elkem's Code
of Conduct and is detailed in the dedicated anti-corruption
programme description. The company's zero tolerance for
corruption and bribery is also communicated to business
partners through the Code of Conduct for business
partners. The company provides regular mandatory
training on anti-corruption rules and their application to
target groups who are identified as particularl
exposed to
corruption risks.
Taxation
In line with Elkem’s ethical business values, tax
governance and tax compliance are important elements
of the company's oversight, and Elkem is committed
to complying with all relevant tax laws and regulations.
Therefore, in line with the group’s strategy, the company’s
tax strategy is transparent, sustainable in the long
term, and complies with the Code of Conduct. Tax risk
management is an essential component of the corporate
management system and is embedded in the overall
company risk management system. Elkem’s risk-based
tax governance framework is managed by a team of
dedicated, qualified tax experts, who work closely with
group management.
Fair competition
Elkem carry out activities in a manner consistent with all
applicable competition laws and regulations, taking into
account the competition laws of all jurisdictions in which
the company’s activities might have anticompetitive
e
ff
ects. With the company’s competition law procedure
and guidelines, Elkem pursue the goal of achieving
and maintaining lively competition in a free market
environment for the entire group by establishing a
corresponding corporate culture. The company’s guideline
provides the employees with assistance in preventing and
detecting any competition violations. Raising awareness
and conducting training that addresses competition law
risks of our business activities are of particular importance
to ensure fair competition.
3. KPIs and accounting policy
Turnover KPI
The denominator of the turnover KPI is based on our
consolidated net turnover in accordance with paragraph
82(a) of IAS 1. For further details on our accounting
policies regarding our consolidated Revenue, see page
220 of our Annual report 2024. Our consolidated net
turnover can be reconciled to our consolidated financial
statements revenue, see the income statement on page
300 of our Annual report 2024.
To calculate the turnover from activity 3.1, Manufacture
of renewable energy technologies, customer information
has been used as the basis. Since all foundry customers
operate in more than one market segment, they are
categorised by revenue. If a foundry customer generates
over half of their revenue from the 'wind energy turbines'
sub-segment, that revenue is counted towards this activity.
For activity 3.6, Manufacture of other low carbon
technologies, the volume of Microsilica sold to construction
was used to calculate the revenue in this segment.
At 31 December 2024 the total revenue from activity 3.17,
Manufacture of plastic in primary forms, is held for sale
and is therefore classified as disco
tinued operations in
the 2024 financial
tatement. Please see note 40 Assets
held for sale and discontinued operations on page 291 of
our Annual report 2024. Consequently, the revenue from
this activity as set to zero.
CapEx KPI
The CapEx KPI is defined as Taxonomy-eligible and
aligned CapEx (numerator) divided by our total CapEx
(denominator).
Total CapEx consists of additions to tangible and
intangible fi
ed assets during the financial year, before
depreciation, amortisation, and any remeasurements,
including those resulting from revaluations and
impairments, as well as excluding changes in fair value.
It includes acquisitions of tangible fi
ed assets (IAS
16), intangible fi
ed assets (IAS 38), right-of-use assets
(IFRS 16) and investment properties (IAS 40). Additions
resulting from business combinations are also included.
Goodwill is not included in CapEx, because it is not
defined as an i
tangible asset in accordance with IAS 38.
For further details on our accounting policies regarding
our CapEx, see page 251 of our Annual report 2024
(the CapEx definition needs to be adapted to the actual
CapEx of Elkem).
Given the nature of Elkem’s production processes, CapEx
projects impact both eligible and non-eligible activities. At
31 December 2024 the CapEx for the Silicones activity is
included in the additions to tangible and intangible fi
ed
assets. Hence, the total CapEx for this division has been in
included as taxonomy-eligible CapEx, both in numerator
and denominator. For other eligible activities, we have
used the total revenue split as proxy.
OpEx KPI
The OpEx KPI is defined as Taxonomy-eligible and aligned
OpEx (numerator) divided by total OpEx as defined in the
Taxonomy (denominator).
Total OpEx as defined in the Taxonomy (restrictive
scope) consists of direct non-capitalised costs related
to research and development, building renovation
measures, short-term leases, maintenance and repair
and any other direct expenses relating to the day-to-day
maintenance of fi
ed assets.
→
Research and development expenditure is recognised
as an expense during the reporting period in our
income statement (see page 232 of our Annual
report 2024). In line with our consolidated financia
statements (paragraph 126 of IAS 38), this includes
all non-capitalised expenditure that is directly
attributable to research or development activities.
→
The volume of non-capitalised leases was determined
in accordance with IFRS 16 and includes expenses for
short-term leases and low-value leases (see page 243
of our Annual report 2024).
→
Maintenance and repair expenditures were
determined based on the maintenance and repair
costs allocated to our internal cost centres. The
related cost items can be found in various lines items
in our income statement, including production costs
(maintenance in operations), sales and distribution
costs (maintenance logistics) and administration
costs (such as maintenance of IT systems). This also
includes building renovation measures.
In general, this includes sta
ff
costs, costs for services and
material costs for daily servicing, as well as for regular and
unplanned maintenance and repair measures. These costs
are directly allocated to our PP&E. This does not include
expenditures relating to the day-to-day operation of PP&E,
such as raw materials, costs of employees operating
the machinery, electricity or fluids that are necessary to
operate PP&E. Amortisation and depreciation costs are
also not included in the OpEx KPI.
The total operating expenditures included in the
OpEx KPI are:
→
Research and development costs cover NOK 176
million, related to employee benefits
→
Building renovation measures are currently of limited
relevance to Elkem, as there is no ongoing significa
t
project related to this subject.
→
Short term leases cover NOK 55 million, described in
note 13.
→
Maintenance and repair expenses include Elkem`s
maintenance and repair costs not qualifying for
capitalisation as part of the relevant asset. Repair and
maintenance activities consist of NOK 778 million.
To calculate the proportion for the eligible OpEx, the total
revenue split has been used as proxy. Hence, OpEx for the
silicones activity is set to zero.
Turnover KPI
DNSH criteria
2024
Substantial contribution criteria
('Does not significa
tly har
Bio
ersity (10)
div
Cli
te change mitigation (11)
Cli
te change adaptation (12)
ater (13)
ol
14)
lution (
m') (h)
economy (15)
Bio
ersity (16)
div
Mi
feguards (17)
sa
of taxonomy
ali
1.) or eligible
(A.
(A.
turnover, 2023 (18)
2.)
egory enabling activity (19)
Category transitional activity (20)
Economic
2)(a)
ur
ver
no
(3)
o
f
portion o
turnover, 2024
(4)
Cli
te change mitigation (5)
ma
li
te change adaptation (6)
ater (7)
ol
8)
lution (
Circular economy (9)
activities (1)
Code (
T
Pr
C ma
W
P
ma
ma
W
P
Circular
nimum
Proportion
gned
Cat
A. Taxonomy-eligible activites
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Enabling
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Transitional
0
0%
0%
%
%
%
0%
A.2 Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (g)
(f)
(f)
(f)
(f)
(f)
(f)
3.17 Manufacture of plastics in
CCM
0
0.0 %
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-40%
primary form
3.1 Manufacture of renewable
CCM
245
1.4 %
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1%
energy technologies
3.6 Manufacture of other low
CCM
444
2.5 %
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1%
carbon technologies
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
689
4 %
42%
0%
0%
0%
0%
0%
-38%
A. Turnover of Taxonomy-eligible activities
(A.1+A.2)
689
4 %
42%
0%
0%
0%
0%
0%
B. Taxonomy-non-eligible activities
Turnover of Taxonomy-eligible activities
17 121
96%
Total
17 810
100%
OpEx KPI
DNSH criteria
2024
Substantial contribution Criteria
('Does not significa
tly har
Bio
ersity (10)
div
Cli
te change mitigation (11)
Cli
te change adaptation (12)
ater (13)
ol
14)
lution (
m') (h)
economy (15)
Bio
ersity (16)
div
Mi
feguards (17)
sa
of Taxonomy
ali
1.) or eligible
(A.
(A.
Ex, 2023 (18)
2.) Op
egory enabling activity (19)
Category transitional activity (20)
Economic
2)(a)
OpEx (3)
o
f
portion o
turnover, 2024 (4)
Cli
te change mitigation (5)
ma
li
te change adaptation (6)
ater (7)
ol
8)
lution (
Circular economy (9)
activities (1)
Code (
Pr
C ma
W
P
ma
ma
W
P
Circular
nimum
Proportion
gned
Cat
A. Taxonomy-eligible activites
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Enabling
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Transitional
0
0%
0%
%
%
%
0%
A.2 Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (g)
(f)
(f)
(f)
(f)
(f)
(f)
3.17 Manufacture of plastics in
CCM
0
0.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-40%
primary form
3.1 Manufacture of renewable
CCM
14
1.4%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1%
energy technologies
3.6 Manufacture of other low
CCM
25
2.5%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1%
carbon technologies
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
39
4%
4%
0%
0%
0%
0%
0%
-38%
A. OpEx of Taxonomy-eligible activities
(A.1+A.2)
39
4%
4%
0%
0%
0%
0%
0%
B. Taxonomy-non-eligible activities
OpEx of Taxonomy-eligible activities
970
96%
Total
1 009
100%
CapEx KPI
DNSH criteria
2024
Substantial Contribution Criteria
('Does Not Significa
tly Ha
Bio
ersity (10)
div
Cli
te change mitigation (11)
Cli
te change adaptation (12)
ater (13)
ol
14)
lution (
rm') (h)
economy (15)
Bio
ersity (16)
div
Mi
feguards (17)
sa
of Taxonomy
ali
1.) or eligible
(A.
(A.
turnover, 2023 (18)
2.)
egory enabling activity (19)
Category transitional activity (20)
Economic
2)(a)
Ca
Ex (3)
o
f
portion o
turnover, 2024 (4)
Cli
te change mitigation (5)
ma
li
te change adaptation (6)
ater (7)
ol
8)
lution (
Circular economy (9)
activities (1)
Code (
p
Pr
C ma
W
P
ma
ma
W
P
Circular
nimum
Proportion
gned
Cat
A. Taxonomy-eligible activites
A.1. Environmentally sustainable
activities (Taxonomy-aligned)
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Enabling
0
0%
0%
0%
0%
0%
0%
0%
0%
of which Transitional
0
0%
0%
%
%
%
0%
A.2 Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (g)
(f)
(f)
(f)
(f)
(f)
(f)
3.17 Manufacture of plastics in
CCM
1 416
44.7%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
-23%
primary form
3.1 Manufacture of renewable
CCM
17
0.5%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0%
energy technologies
3.6 Manufacture of other low
CCM
31
1.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1%
carbon technologies
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
1 464
46%
46%
0%
0%
0%
0%
0%
-22%
A. CapEx of Taxonomy-eligible activities
(A.1+A.2)
1 464
46%
46%
0%
0%
0%
0%
0%
B. Taxonomy-non-eligible activities
CapEx of Taxonomynon-eligible activities
1 700
54%
Total
3 165
100%
Nuclear and fossil gas related activities
Row
Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research,
development, demonstration and deployment of innovative electricity
NO
generation facilities that produce energy from nuclear processes with
minimal waste from the fuel cycle.
2.
The undertaking carries out, funds or has exposures to construction
and safe operation of new nuclear installations to produce electricity or
process heat, including for the purposes of district heating or industrial
NO
processes such as hydrogen production, as well as their safety upgrades,
using best available technologies
3.
The undertaking carries out, funds or has exposures to safe operation
of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes
NO
such as hydrogen production from nuclear energy, as well as their safety
upgrades.
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to construction or
operation of electricity generation facilities that produce electricity using
NO
fossil gaseous fuels.
5.
The undertaking carries out, funds or has exposures to construction,
refurbishment, and operation of combined heat/cool and power
NO
generation facilities using fossil gaseous fuels.
6.
The undertaking carries out, funds or has exposures to construction,
refurbishment and operation of heat generation facilities that produce
NO
heat/cool using fossil gaseous fuels.
ESRS E2
Pollution
Pollution of air, soil, and water is closely monitored
in our operations. Local emissions are inherent to
many of Elkem’s main production processes and are
therefore deemed material to the company. Measures
to control and reduce emissions are priority areas
for improvement. These local emissions can impact
our employees and local biotopes, and Elkem is
committed to reducing these emissions and limiting
the impact.
Description of processes to identify and assess
material pollution-related impacts, risks and
opportunities
IRO-1
Elkem’s operations and products rely on specific
aw
materials and industrial processes where emissions occur,
and the raw materials are the source of these emissions.
Any emission to water, air or soil is subject to strict permits
and closely monitored where relevant. Pollutants, such
as heavy metals and polycyclic aromatic hydrocarbons
(PAHs), are strictly regulated under international and local
frameworks. For example, the production of our carbon
products involves raw materials that inherently contain
hazardous substances, requiring stringent controls and
mitigation measures.
Elkem identifies and assesses pollution-
elated impacts,
risks, and opportunities by leveraging scientific esearch,
collaborating across the value chain, and maintaining
a proactive approach to regulatory compliance. Elkem
engages in regional and international industry associations
to anticipate and understand emerging regulations and
standards impacting its industry. This process provides a
clear understanding of both the negative environmental
impacts and potential positive contributions of our
products and processes. The risks associated with
pollution include regulatory non-compliance, reputational
harm, and operational challenges.
On the other hand, opportunities arise from market
demand for more sustainable practices and products
that align with emerging environmental standards. By
balancing these factors, Elkem aims to mitigate pollution-
related risks while exploring innovative solutions to create
value for stakeholders and the environment. In addition
to materials defined as critical for the green shift, Elkem
actively supports customers with knowledge for more
effici
t production.
Results of our double materiality assessment on pollution
can be found in the figu
e on the next page.
ESRS
topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope, and
likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
E2
Pollution
Pollution of water
Tailings from mining operations can pollute water bodies.
Potential
Yes
Yes
Negative
Low
Short
OO, VC
Production of carbon products use raw materials that contain hazardous substances (e.g.
heavy metals, PAHs) that can pollute water bodies if not managed properly.
Actual
Yes
Yes
Negative
Medium
Short
OO
The process to produce silicones involves substantial quantities of water efflu
t that is
treated before discharge to remove residuals from the process (e.g. COD). If not managed
properly, this could lead to anaerobic conditions, which are harmful to fish and bi
ta.
Potential
Yes
Yes
Negative
Medium
Short
OO
Pollution of air
Use of fossil based reductants in production of silicon and carbon products result in local
emissions of SO
, NO
and dust.
2
X
Actual
Yes
Yes
Negative
High
Short
OO
Local emissions of SO
2
and NO
X
can lead to acid rain.
Potential
Yes
Yes
Negative
Low
Short
OO
If not handled correctly silicon powder can result in diseases. The severity depending on
levels of crystalline silica and exposure.
Potential
Yes
Yes
Negative
Low
Long
OO
Pollution of soil
Silicon products are often combined with graphite that are produced in China. The air
pollution from the mines may impact the drinking water, the air quality etc. and impact the
biodiversity in the area. The mines are shown to damage crops.
Potential
Yes
Yes
Negative
Low
Medium
VC
Substances of
very high concern
PAHs released from coke manufacturing, sintering, iron making, casting, mold poring and
cooling, and steel making can cause health issues to downstream workers. Health issues
depend on levels and exposure.
Potential
Yes
Yes
Negative
Low
Short
VC
Cyclotetrasiloxane (D4) from silicone products can end up and accumulating in nature,
compromising ecosystems.
Actual
Yes
Yes
Negative
Low
Long
VC
Improper management of D4, D5 and D6 can lead to soil contamination and water pollution,
due to strong absorbing potential to organic matter.
Potential
Yes
Yes
Negative
Medium
Long
OO
Policies related to pollution
E2-1
The HSE principles in Elkem highlight our pollution
strategy: “Focus on hazard identific
tion, risk analysis,
action implementation through understanding and
removing causes.” Please refer to the section on governing
documents under ESRS 2 for more details.
Actions and resources related to pollution
E2-2
Local air emissions are closely monitored for compliance
with public permits, and applicable sites report 17
parameters related to air emissions quarterly to corporate
HSE. The HSE managers at the sites are responsible for
reporting this data, which is reviewed by corporate HSE
team that reports to the Vice president HSE.
Elkem ensures compliance with various chemical product
regulations, covering registrations, authorisations, safety
data sheets, and labels. Elkem globally complies with
regulatory requirements, providing safety data sheets
(SDS) following the UN Globally Harmonised System
of classific
tion and labelling of chemicals. Products
must meet specific technical, regulatory, health, and
environmental standards in all markets. Specific indu
try
regulations are followed, especially for products in contact
with food, water, or healthcare applications. With over
4 000 diverse products, regulatory and product
compliance is a priority.
Elkem consistently monitors its product portfolio for
SVHC substances that are subject to existing or future
regulatory requirements or that are associated with
particular concerns. We review our management plans
regularly defining the specific ris
s associated with
each identified
VHC substance. We review all possible
options to mitigate identified ris
s, including possible
substitution where possible, phasing out substances
posing an unacceptable risk to human health and/
or the environment, or limiting the exposure of the
SVHC substance if substitution is not deemed possible.
No SVHCs currently listed on REACH annex XIV are
intentionally added to Elkem’s silicon and ferroalloy
products.
Some of the key enablers to reduce pollution in our
operations and value chain in 2024 are:
→
As part of the Xinghuo expansion project, Elkem
changed the old boilers with effici
t Co-Gen
Technology reducing dust, CO
2
, NO
X
and SO
2
. The
Xinghuo expansion project also significa
tly reduced
the carbon and water intensity of the silicones
production.
→
2024 SEAL Sustainable Product Award recognises
Elkem’s low-VOC, high-compatibility silicone
innovation for automotive airbag coating.
→
SILCOLEASE™ UV POLY 125 and POLY 126 are
coatings that reduce toxic substances such as
mercury and ozone.
→
Elkem will invest NOK 60 million to improve cleaning
of SO
2
at Elkem Ferroveld.
Targets related to pollution
E2-3
Elkem will develop new targets related to pollution in
2025. The previous voluntary target has been to:
→
Reduce dust by 30 per cent by 2025 from baseline
year 2015 (1 970 tonnes). By 2024, Elkem has reduced
dust emissions by 59.9 per cent, and we will develop
new targets.
→
Reduce SO
2
emissions by 3 000 tonnes from
baseline year 2015. By 2025 we have reduced SO
2
emissions by 26.1 per cent, equaling 1 932 tonnes. The
development is closely linked to the introduction of
biocarbon reductants.
→
Elkem has reduced its NO
X
emissions by 27.9 per cent
since the baseline year of 2015. Targets will be further
developed in 2025.
→
Elkem has a target of full discharge permit
compliance, meaning no significa
t spills to water.
Pollution of air, water and soil – general
E2-4
Previous variations in emissions are primarily tied to
production volume changes inherent to the process,
influenced
y raw material quality, process control, and
investments in filt
ation or scrubber systems, all regulated
by public permits. All production sites with emissions to
air/water are ISO 14001 certified and subje
t to regularly
third-party audits and control.
Substances of concern and substances of very
high concern
E2-5
Substances of concern:
A vital part of the European REACH regulation (Regulation
(EC) 1907/2006 on the Registration, Evaluation,
Authorisation and Restriction of Chemicals) is the
identific
tion and authorisation of substances of very high
concern (SVHC). The European Chemicals Agency ECHA
regularly updates its SVHC candidate list for authorisation.
Elkem has three main product areas where SVHC occur:
→
In carbon products: High-temperature coal tar pitch
(CAS no. 65996-93-2) is used as an intermediate in
the production of Söderberg electrode paste. The pith
is transformed to coke in the following process.
→
In silicones: D4, D5 and D6 are key intermediates
(building blocks) in the production of silicones-based
polymers. In addition, some other essential SVHC
substances are used under strict conditions in a
limited number of products.
→
In silicon products and ferroalloys: These are made
from natural raw materials, such as quartz, carbon,
and iron oxide, which often contain trace amounts of
heavy metals. Cadmium and lead are listed as SVHC,
but their concentrations in Elkem’s products are far
below the generic threshold limit value of 0.1 per cent
weight per weight and do not trigger regulatory action.
The only exception is Söderberg electrode paste
from Elkem Carbon, which is used as an intermediate
and which is as such exempted from authorisation
requirements. Elkem Carbon is successfully developing
alternative products with new and safe binders.
ESRS E2 Pollution
Metric
2024
2023
2022
Development
Dust to air
Tonnes
789
1 012
1 204
-22.0%
SO
2
to air
Tonnes
6 440
6 700
7 229
-3.9%
NO
X
to air
Tonnes
5 460
5 830
6 519
-6.3%
COD to air
Tonnes
2 38
237
183
0.4%
PAH to air*
Kg
686.2
PAH to water*
Kg
35.5
Nickel to water*
Kg
43.3
HFC-134 to air*
Kg
2 900
HCFC to air*
Kg
619.6
Copper to air*
Kg
136
Copper to water*
Kg
126.4
Chrome to water*
Kg
110.2
Arsenic to air*
Kg
65.2
Arsenic to water*
Kg
7.1
*Emissions exceeding threshold levels
ESRS E3
Water and marine
resources at Elkem
Elkem recognises the criticality in e
ffic
ient water and
marine resources management, as a leading provider
advanced silicon-based materials in the chemical
manufacturing industry. As an international company
with indirect dependence on water for its production
processes and hydropower consumption, Elkem is
committed to ensuring a sustainable water footprint
in its direct operations and value chain.
Material water and marine resources-related
impacts, risks and opportunities
ESRS 2 IRO-1
Water is a crucial input in numerous Elkem production
processes, and its indirect dependence on water is
significa
t, with over 80 per cent of its electricity sourced
from hydropower. Ensuring a sustainable water footprint
is vital. Challenges related to water vary considerably
throughout Elkem's value chain, primarily focused
on preventing hazardous discharge. As water is a key
component in the production of silicones there is a
potential negative impact if areas where Elkem produces
should be hit by prolonged periods of drought.
Elkem is dependent on water for various parts of its
production. This implies that Elkem to maintain solid water
management practices, both in treating discharge water
to avoid emissions or spills of hazardous substances and
making sure that cooling water is discharged in a manner
that minimises the impact on marine biotopes. Elkem also
has operations in areas where water is scarce, but not
classified as
ater stressed, and Elkem works to minimise
the water consumption in these areas. Fortunately, these
are small operations that require limited amounts of water.
On an annual basis, Elkem uses the WWF Water risk fil
er
to assess sites in which it operates for water stress. This
assessment is also applied when considering expanding
to new sites of operation. Further, Elkem assesses water
risk by conducting scenario analysis following the TCFD
framework.
While Elkem's production sites in water-abundant
areas pose low water consumption risks, the focus
sharpens on environmental repercussions linked to water
discharge. The majority of Elkem’s largest production
sites neighbour substantial bodies of water, warranting
stringent water management to avert enduring negative
environmental impacts. This involves comprehensive
understanding of the environmental e
ff
ects of all water
discharges connected to production, ensuring e
ff
ective
water monitoring, and treatment systems to comply with
discharge permits and meet targets for reducing harmful
substance discharges.
Violations of water quality and marine conservation
regulations could lead to reputational damage if linked
to Elkem's activities. Additionally, compromising local
drinking water sources could negatively a
ff
ect worker
health and harm the company's reputation. Elkem has
operations in areas with occasional water scarcity, but the
water consumption is very low in these sites, as they are
mainly distribution hubs (less than 0.2 per cent of Elkem
water withdrawals), and thus the related risk is low.
Financial impacts could arise from increased costs
related to water pollution control and the need to upgrade
technology due to stricter regulations. Pollution can also
degrade the quality of water used in operations, leading to
higher treatment costs.
Community sentiment and confli
ts may arise from
perceived or actual harm caused by Elkem's water-related
activities. Failure to adapt to changing water reporting
dynamics could decrease competitiveness. Water
supply shortages, exacerbated by climate change and
drought, pose risks to production continuity and revenue.
Water stress at supplier locations could lead to raw
material shortages, impacting prices and sold volumes.
New regulations may require significa
t investments
in wastewater treatment. Changes in cooling water
temperatures and drought-induced water rationing could
further disrupt operations. Lastly, evolving perceptions
and regulations on water pollution could necessitate costly
adaptations and a
ff
ect financial terms.
Impact score
(based on
Actual or
irremediability,
Own
ESRS
potential
Material
Financial
Positive or
scale, scope, and
operations (OO) or
topic
Sub-topic
Description
impact (A/P)
impact
impact
negative impact
likelihood)
Timeframe
value chain (VC)
E3
Water and
Water
Water is a component in the production of silicone products. Water consumption in areas
Potential
Yes
Yes
Negative
Medium
Medium
OO
marine
consumption
more prone to prolonged periods of drought, and in areas where water can be scarce, could
resources
have a negative impact on surroundings and access to water.
Policies related to water and marine
resources
E3-1
Elkem is committed to responsible consumption of water
and marine resources. Water and marine resources-related
policies focus on driving Elkem's overall consumption
down, providing facilities that adhere to the UNICEF
WASH principle and continuously making sure that
no deviations occur in any of Elkem's sites globally.
Furthermore, policies outline water maintenance and
e
ff
ective waste-water discharge to ensure that Elkem is
always compliant with applicable efflu
t and discharge
regulations wherever it operates.
Elkem has outlined our commitments for sustainable
water stewardship in our HSE and Elkem Corporate
policies. Please refer to the section on governing
documents under ESRS 2 for more details.
Actions and resources related to water
and marine resources
E3-2
Recognising water as a vital shared resource, Elkem
has initiated programmes to enhance corporate water
stewardship. We monitor water withdrawal, consumption,
and discharge to uphold responsible water management.
Most production units benefit from abundant water
access, crucial for both production and hydropower-
based electricity. A few sites in regions like north-east
China, South Africa, and India, face occasional water
scarcity, though not water stress. Elkem implements
water management measures, conducts systematic
risk assessments (including those related to TCFD), and
limits withdrawals in these areas. All Elkem sites provide
free potable water for employees and contractors, along
with sanitary facilities. Showers and changing rooms
are available where needed, and working uniforms are
provided and cleaned by the company. Indirect water
use in the value chain beyond Elkem is yet to be fully
evaluated, with ongoing discussions centring on the
critical role of hydroelectric power as an energy source
for Elkem's smelters. This is identified as a possible risk
in Elkem’s mapping of physical climate risk, and the
developments in water reservoirs that Elkem depends on
are monitored, but it is not considered a significa
t risk.
Key enablers to attain strategic water-related goals
include:
→
Substitution of raw materials.
→
Implementation of good housekeeping practices.
→
Continuous development of new processes and
production technology.
→
An advanced control programme incorporating
environmental monitoring.
→
Wastewater treatment and reduction through
recycling or reuse.
→
Transparency, including participation in CDP Water (A
obtained for 2024).
Targets related to water and marine
resources
E3-3
Ensuring Elkem's commitment to safe and sustainable
water management, KPIs and targets are continuously
implemented and updated with regard to water
consumption, water pollution, the provision of WASH
facilities, and compliance with applicable regulations.
Water-related targets are developed following the
Sustainable Development Goal 6: Clean water and
sanitation, and the Sustainable Development Goal 12:
Sustainable consumption and production.
Key targets include:
→
Per unit of produced silicones by 12 per cent by 2031
from baseline year 2020. Production of silicones
accounts for 71 per cent of Elkem’s total water
consumption.
The target is aimed at water withdrawals at Elkem sites
in Roussillon, Saint-Fons and Xinghuo per tonne silox
produced. In 2024, an increase in production capacity at
site Xinghuo, without a corresponding increase in water
withdrawals, show Elkem’s commitment to increasing
water efficie
y and driving down overall consumption.
Further, Elkem has implemented targets that include having
fully functioning WASH services on all Elkem facilities, and
at all sites adhering to production permits on thresholds
for discharge pollutants. Any non-compliance with these
targets is treated as an HSE deviation, reported, and
corrected in accordance with Elkem’s internal procedures.
Water consumption
E3-4
The primary water consumption in Elkem is related to
silicone production which accounts for 71 per cent of
Elkem’s water consumption.
→
Water intensity (freshwater withdrawals) related to
silicone production has increased by 8.4 per cent by
2024 compared to 2020 (base year), driven by reduce
production volumes. Driven by reduced production
→
CDP water security: A (up from A- in 2024)
Elkem’s use of freshwater is typically related to water
as a raw material for production (silicones), water for
cooling of production equipment and products, water
for cleaning purposes, and for emergency preparedness.
The majority of water usage falls into the fi
st two
categories, demanding high-quality water to prevent
product contamination, equipment corrosion, and
clogging, as well as safeguarding water infrastructure.
Water consumption, including discharge and withdrawals,
is regularly monitored and reported quarterly to
corporate. Measurement methods vary based on
availability and source, utilising in-line water meters for
direct measurement or capacity calculations refle
ting
operational time. In regions with water scarcity, third
parties control water withdrawals, typically via external
suppliers. Process water discharge volumes are reported
quarterly to corporate, excluding cooling water, which is
returned to the source at similar quality.
d
Elkem's production sites adhere to discharge regulations,
reporting annual parameters specified in permits. 17
water discharge parameters are reported quarterly to
corporate from applicable plants. The top three critical
discharges include organic substances a
ff
ecting oxygen
concentration (COD), Silicone cyclic (D4, D5, and D6), and
Polycyclic aromatic hydrocarbon (PAH). Elkem employs
extensive monitoring and maintenance measures to
ensure compliance:
→
COD:
Monitoring and minimising organic waste
generation, infrastructure maintenance, and
optimal on-site water treatment to purify before
discharge.
→
Silicone Cyclics (D4, D5, D6):
A focus on process
control, avoidance of spills and leakages, R&D
collaboration with customers to reduce residues, and
substantial investments in China to replace cyclic
materials.
→
PAH Discharges:
Originating from coal-tar pitch
in carbon product production, Elkem ensures
compliance through process control, on-site water
treatment, and substantial R&D investments in
alternative binders without PAH.
In the last three years, Elkem has seen water consumption
per production unit decrease. This is due to our rigorous
maintenance of water consumption and the continuous
implementation of initiatives focused on reducing
consumption.
ESRS E3 Water and marine resources
Water consumption, megaliters
2024
2023
2022
Development vs. 2023
Total water withdrawals from freshwater
77 481
80 636
89 587
-4%
Withdrawals from fresh surface water, including rainwater, water
from wetlands, rivers, and lakes
46 358
39 385
46 509
Not comparable
Development
mainly due to
improvement
of data
Withdrawals from groundwater - renewable
3 059
2 321
452
Not comparable
quality
Withdrawals from third party sources
28 064
3 8391
42 716
Not comparable
Total water discharges
70 532
70 923
62 147
-1%
Discharge of cooling water
63 848
60 423
54 542
6%
Discharge of process water
6 684
7 766
7 605
-14%
Development
mainly due to
improvement
of data
quality
Discharge to fresh surface water, including
wetlands, rivers, and lakes
8 537
4 621
4 489
Not comparable
Discharge to brackish water or seawater
19 208
39 961
56 347
Not comparable
Discharge to third party destinations
42 787
13 416
1 210
Not comparable
Water consumption
6 949
9 713
27 439
Not comparable
Water consumption in areas of high water stress*
85
91
105
-6%
Water recycled and reused
(circulating cooling water excluded)
290
300
288
-3%
Share of the measure obtained from direct measurement, from sampling and extrapolation, or from
best estimates
2024
Water withdrawals
Water discharges
Direct measurement
69%
56%
Sampling and extrapolation
1%
0%
Best estimates
30%
44%
Anticipated financial e
ff
ects from material
water and marine resources-related risks and
opportunities
E3-5
Elkem’s indirect dependence on water and marine
resources results in high financial
ff
ects of associated
risks. As evident in our double materiality assessment,
water and marine resources (ESRS E3) are material topics
for Elkem. Water maintenance, including measuring,
auditing, and water treatment facilities, is resource-
demanding. However, the potential loss of access to water
sources for Elkem’s production sites, could have a high
financial impa
t.
Key water-related risks include:
→
Water availability, directly as process water and
indirectly as power source
→
Water quality (contamination and discharge)
→
Water-related regulatory framework and permits
→
Biodiversity and ecosystems
→
Stakeholder confli
t
Key water-related opportunities include:
→
Improvements of water handling, particularly the
production expansion project at the Xinghuo plant in
China
→
Improved water efficie
y and management reduces
the physical climate risk and biodiversity risk for
production sites
Financial impacts on the identified ris
s and
opportunities vary in size, depending on identified time
horizon as well as their likelihood of occurrence. Risks
involving water availability, such as Elkem production
sites becoming water-stressed in the long term due to
climate change and withdrawals, may pose the highest
potential financial impa
t. On the contrary, increased
water efficie
y and management, driving costs down
related to water consumption, may pose the greatest
positive financial
impact.
ESRS E4
Biodiversity and
ecosystems
Elkem recognises the critical importance of
biodiversity and environmental stewardship in
achieving a sustainable future. As a global company
with operations spanning diverse ecosystems,
Elkem is committed to addressing biodiversity and
ecosystem challenges throughout its value chain.
Material impacts, risks and opportunities and
their interaction with strategy and business
model
E4 SBM-3
Over the past three years, Elkem has gone beyond
regulatory requirements to deepen its understanding of
its impact, risks, and opportunities related to biodiversity.
Elkem has locations close to key biodiversity areas but
not inside these sites. Mining, high-temperature calcining,
high-temperature smelting processes, and chemical
production have the potential to impact biodiversity and
ecosystems. Pollution is a by-product of the industrial
process and pollution of air, soil, and water has the
potential to impact surrounding areas. Pollution has been
strictly regulated and consistently reduced over the past
decades, with the main risks is now associated with to
incidents such as fi
es or spills.
Quartz mining
Environmental and biodiversity risk assessments are
conducted as part of mining permit applications, and
Elkem excludes protected areas from mining operations,
working closely with national mining authorities.
Monitoring programmes track emissions to air and water,
as well as impacts on soil, vegetation, and landscapes.
Quartz mining, while presenting inherent biodiversity
risks, has comparatively lower ecological impacts than
other mining practices. The key risks include water and
terrestrial ecosystem disturbances, GHG emissions, soil
contamination, and solid waste generation.
Elkem’s sustainable mining practices have been
acknowledged in Spain, and the company adheres to
IMA-Europe’s sustainability charter and the Towards
Sustainable Mining Initiative through its membership in
the Norwegian Mineral Industry. Annual contributions to a
restoration fund ensure post-mining site rehabilitation.
Smelting and calcination processes
Elkem’s smelting and calcination processes impact
biodiversity through emissions of SO2, NO2, and dus
t,
as well as noise and heat pollution. The radius of impact
is limited, and mitigating measures, such as advanced
emission control technologies, are in place. Major
biodiversity risks are linked to operational incidents, such
as fi
es or chemical spills.
ESRS
topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope, and
likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
E4
Biodiversity
and
ecosystems
Direct impact
drivers of
biodiversity loss
If not managed properly Elkem's intervention with nature, through mining operations, could
impact biodiversity at sites. The negative impact on the local biodiversity and ecosystems
can come from heavy metals, noise, light pollution, waste, efflu
t etc.
Potential
Yes
Yes
Negative
Low
Short
OO
If not sourced from trusted and certified sou
ces the use of biocarbon can have an indirect
negative impact on biodiversity and soil quality through deforestation.
Potential
Yes
Yes
Negative
Low
Short
VC
Hydropower production can have adverse e
ff
ects on marine life in rivers and lakes if
production has large flu
tuations. Installation of new hydropower will also e
ff
ect biodiversity.
Potential
Yes
No
Negative
Medium
Short
VC
Efflu
t and spills of hazardous substances may cause harm to ecosystems through
pollution or bioaccumulation. E.g. accumulation of heavy metals from silicon production and
mining, toxic by-products from carbon solutions, and hydrogen chloride from hydrolysis and
cyclosiloxanes from silicone production.
Potential
Yes
Yes
Negative
Low
Short
OO, VC
Chemicals
The production of silicones carries biodiversity risks
because of impacts, including water withdrawal and
process water discharge, and the potential release of
hazardous air pollutants (HAPs) and persistent organic
pollutants (POPs) due to accidents. Elkem mitigates
these risks through rigorous water management and
chemical safety protocols, comprehensive biodiversity risk
assessments for new processing plants, and collaboration
with local authorities and biodiversity experts to minimise
environmental impacts. The company aligns with the
Responsible Care Global Charter, emphasising safe
chemical management and sustainable development. As
a member of Silicones Europe, Elkem remains actively
engaged with the latest scientific
esearch on the
applications and environmental impact of silicones.
Elkem’s chemical and smelting plants and mines are
expected to remain in full operation in the foreseeable
future. Site closures are very rare for the company.
However, Elkem is committed to ensure good practice by
incorporate closure planning in the early stages of site’s
life cycle.
Any closure activities will be integrated into our business
plans and will include a short-, medium- and long-term
planning process for the possible closure. Elkem is
committed to rehabilitate and minimise the negative
impacts on biodiversity and ecosystem. This includes
impacts on water, soil, habitats, vegetation, and the
physical condition and stability of landforms.
Value chain
Impacts, risks, and opportunities related to biodiversity
are integral to Elkem's value chain, refle
ting the industrial
nature of our business operations. A key positive impact
of our strategy is the increased use of biocarbon. Elkem
sources materials such as wood, wood waste, and other
biocarbon (e.g. charcoal) for use as chemical components
in the production of silicon and silicon alloys. Our
biocarbon sourcing policy emphasises sustainable forest
management, aligning with international standards.
Elkem is committed to ethical and sustainable biocarbon
sourcing, contributing to the elimination of deforestation,
the prevention of natural ecosystem conversion, and
adherence to best practices for soil and peatland
conservation. These measures mitigate potential negative
impacts, such as land degradation and desertific
tion.
Elkem recognises the potential negative impacts on
biodiversity in its upstream value chain, particularly
related to coal and char sourcing. To address this, Elkem
employs a rigorous raw material sourcing process. In the
downstream value chain, while some of our products
may be involved in chemical processes with potential
biodiversity impacts, Elkem actively works to minimise
these risks. Notably, our products contribute positively by
enabling alternatives such as synthetic leather, extending
product lifespans, and collaborating with key customers to
enhance existing products. These e
ff
orts refle
t Elkem’s
dedication to reducing biodiversity impacts while driving
innovation and sustainability.
Description of processes to identify and assess
material biodiversity and ecosystem-related
impacts, risks, dependencies, and opportunities
E4 IRO-1
In 2023, the Integrated Biodiversity Risk Assessment Tool
(IBAT) expanded the scope of reporting to where we have
operations in protected areas and key biodiversity areas.
Data have been collected with 5 km, 15 km, and 50 km
granularity for all of Elkem’s sites.
The sites have been
prioritised based on their exposure to the concentration
of protected species, what kind of species (migratory or
stationary), the proximity of protected or key biodiversity
areas within 5 km, 15 km, or 50 km, and an assessment of
the sites’ preparedness to address the biodiversity risk.
In the vicinity (5-15 km)
→
of protected areas
→
of key biodiversity areas
Close (1-5 km)
→
of protected areas
→
of key biodiversity areas
Adjacent (<1 km)
→
of protected areas
→
of key biodiversity areas
Inside
→
of protected areas
→
of key biodiversity areas
Assets
6
5
14
7
4
2
3
0
Figure 1: If several protected areas (PA) or Key Biodiversity Areas
(KBA) are present within a proximity category around a given
asset or operation, they are counted as one. If a given PA or KBA
are within proximity categories for several assets or operations,
it is counted in for each of these assets or operations.
Elkem has identified focus sites where the biodiversity
risk is most significa
t. For security reasons, we do not
disclose the specific loc
tions of our sites. The identified
sites are associated with carbon solutions, silicon and
silicone production, and mining. While there are some
negative impacts from our operations related to silicon
and silicone production, our e
ff
orts to reduce these
impacts (e.g. reducing our local emissions of SO
2
, NO
X
and
dust, and improving our water management) have been
successful. However, there is still an incident risk for the
sites that handle hazardous substances. Our mining sites
also have a negative impact through area usage, and there
is a risk of tailings, but this is well managed and limited
due to the nature of quartz mining. The focus sites are in
Norway, France, and Brazil, but we also monitor the risk at
our remining locations. Actions are implemented to avoid
and/or minimise impact.
Elkem has a dedicated resource working on mapping
biodiversity impacts, risks, and opportunities at its mining
sites, while maintaining an active dialogue with a
ff
ected
stakeholders, such as local communities. One example is
Elkem’s dialogue and agreement on mitigation measures
with reindeer grazing district 7 (Rákkonjárga), which
enables the expansion of Elkem’s mining operations
in Tana, Norway – home to one of the world’s largest
quartzite mines and a critical source of raw materials for
the green transition.
For our silicon production, we continue to focus on
reducing local emissions, and for our silicone production,
good water management and solid management of
hazardous substances remain essential.
Transition plan on biodiversity and ecosystems
in strategy and business model
E4-1
While industrial processes inherently impact biodiversity
through air, water, and soil pollution, Elkem diligently
complies with regulations and continuously works to
mitigate and reduce these e
ff
ects. Most of Elkem's
production facilities are located near rivers, coastal
regions, or urban areas, stringent environmental
safeguards are essential.
Additionally, Elkem acknowledges the potential risks
of incidents at its plants that could negatively a
ff
ect
surrounding areas. To address these concerns, the
company has long adhered to strict regulations on
pollution control and incident mitigation.
The mitigation hierarchy forms the foundation of Elkem’s
strategy, prioritising avoidance and reduction while
incorporating restoration activities where feasible. This
proactive approach has delivered positive outcomes, with
these e
ff
orts systematically embedded into the company’s
operations.
Elkem’s existing business is overall resilient to changes
in biodiversity and ecosystem, being less dependent on
resources from nature that are vulnerable to biodiversity
change or ecosystem collapse.
Policies related to biodiversity and
ecosystems
E4-2
Elkem has an HSE and sustainability policy covering
biodiversity and ecosystem. For sourcing of biocarbon a
separate policy document is available. Please refer to the
section on governing documents under ESRS 2 for more
details.
Actions and resources related to biodiversity
and ecosystems
E4-3
Elkem has worked with the Integrated Biodiversity Risk
Assessment Tool (IBAT) to focus our e
ff
orts where our
impacts might do the most harm. In 2024, our focus has
been on consolidating our e
ff
orts to get a comprehensive
overview of our mining sites.
In-house competence building within the organisation
has fostered a common understanding of our impacts.
Competence development will remain a key priority in
2025, ensuring that expertise grows across relevant areas
and is strengthened locally at each site.
Looking ahead, Elkem will also focus on setting clear
targets and developing comprehensive metrics to measure
progress e
ff
ectively. A key aspect of this process will be
to determinate whether ecological thresholds should be
included as a target. A deeper understanding of impacts,
risks, and opportunities across the value chain, together
with assessment of the resilience of our current strategy,
will also be key items on the future agenda.
For more details on planned actions, refer to the sections
on pollution, water management, and GHG emissions in
this report.
E4-4
Targets related to biodiversity and
ecosystems
Elkem is committed to achieving zero net loss of
biodiversity in new projects, including mining operations.
This target aligns with the EU Biodiversity Strategy
for 2030, which emphasises preventing and restoring
biodiversity loss, as well as with Goal A of the Kunming-
Montreal Global Biodiversity Framework (GBF), which
aims to halt biodiversity loss.
Our approach incorporates ecological thresholds,
particularly by reducing pollutants such as PAHs
(Polycyclic Aromatic Hydrocarbons) and VOCs (Volatile
Organic Compounds), which can accumulate in
ecosystems and adversely a
ff
ect biodiversity. We are
committed to the precautionary principle, implementing
preventive actions to mitigate these risks.
Elkem follows the mitigation hierarchy, prioritising
pollution avoidance and minimisation as the most e
ff
ective
means of protecting biodiversity. This is integrated into all
stages of our operations, including during mine or plant
closures, where restoration and rehabilitation e
ff
orts are
key. At present, Elkem does not engage in biodiversity
o
ff
sets but is focused on preventive and restorative
measures to ensure that our impact on biodiversity is
minimised.
These actions, guided by the mitigation hierarchy, refle
t
Elkem’s broader commitment to sustainable development
and biodiversity conservation. We continue to evaluate
our targets and strategies to ensure that we are aligned
with global biodiversity goals and contribute to halting
biodiversity loss through the precautionary approach and
targeted mitigation e
ff
orts.
E4-5
Impact metrics related to biodiversity and
ecosystems change
Elkem has several sites witin close proximity to protected
areas and key biodiversity areas (see figu
e 1 on the
previous page for the specifics
. Given this exposure
to biodiversity risk it is important for Elkem to secure
sites to reduce incident risk, and continue our work to
reduce our negative impact on the surroundings. Elkem
operates within strict regulations, and we are within the
requirements with regards to efflu
ts and local emissions
to air (see data under chapter on pollution (ESRS E2)).
Elkem has identified high risk si
es, and we are working
to map our negative impact through land use and local
emissions. We will develop targets and metrics on this topic.
E4-6
Anticipated financial e
ff
ects from material
biodiversity and ecosystem-related risks and
opportunities
Biodiversity considerations are deeply integrated into
Elkem's environmental management system and aligned
with broader sustainability metrics, under the oversight of
the Vice President of Health, Safety, and Environment (VP
HSE). Elkem has dedicated resources specificall
tasked
with monitoring and managing biodiversity at mining sites
and ensuring responsible sourcing of biocarbon.
As part of Elkem’s strategy to increase the share of
biocarbon in its operations, the company anticipates
higher investments aimed at mitigating potential negative
impacts on biodiversity and ecosystems. Additionally,
Elkem is allocating further resources to enhance pollution
control, prevent environmental incidents at its facilities,
and strengthen employee competencies in these areas.
ESRS E5
Resource use and
circular economy
Enabling circular economies is one of Elkem’s three
main pillars in the green transition. Elkem’s business
system (EBS) adheres to a zero-waste philosophy,
emphasising the reduction of waste across the
value chain. The primary focus lies on e
ffic
iently
utilising resources, minimising waste generation,
and promoting the reuse, recycling, or sale of
residual waste. This aligns seamlessly with circularity
principles, and Elkem remains dedicated to exploring
fresh opportunities for the recycling and reuse of
waste and products.
Description of processes to identify and assess
material resource use and circular economy-
related impacts, risks, and opportunities
IRO-1
Elkem’s value chain includes numerous process fl
ws,
including mining, high-temperature calcining, high-
temperature smelting, and chemical processing. This
results in a variety of impacts, risks, and opportunities
related to resource use and circular economy. Our R&D
departments look continuously into opportunities to
reduce waste and increase resource efficie
y, being a
top priority in reaching our emission reduction targets and
enabling customers to achieve their goals.
Quartz
Quartz is extracted from mountain seams using explosives
or riverbeds with diggers. The process involves washing,
crushing, and sizing without the use of hazardous
chemicals. Waste streams include tailings, o
ff
-spec
qualities, and sizes, most of which are repurposed for mine
restoration or sold as by-products (such as construction
sands and gravels). Some o
ff
-specific
tion quartz rock from
the operations is used for mining site restoration. Elkem
explores alternative uses for sands in agriculture and sports.
Carbon production
Carbon production involves high-temperature treatment
of anthracite and petroleum coke, creating various pastes
for metallurgical smelting. Most of the o
ff
-specific tion
production and degraded raw materials can safely be
reprocessed into new batches. The remaining waste is sent
to approved suppliers for hazardous waste treatment. Non-
hazardous (green) binders are in development to reduce
reliance on high-temperature coal tar pitch (CTPht).
Waste in connection with shipment:
Primary raw materials
are shipped in bulk, eliminating the need for packaging.
Finished products are delivered in big bags or on pallets,
which may potentially generate customer waste. Packaging
materials are of suffici
t quality for multiple reuses.
Hazard classification
Degraded raw materials and o
ff
-
spec production may contain CTPHT binders, which are
listed as a substance of very high concern.
Silicon smelting
Silicon smelting involves a high-temperature chemical
reaction, transforming quartz and carbon into silicon, with
additional operations for alloying, crushing, and sizing to
meet customer specific
tions in electronics, foundry, and
chemical industries.
ESRS
topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope, and
likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
E5
Resource
use and
circular
economy
Waste
Improper handling of material at the end of life, can cause hazardous waste to end up in
landfills causing probable damage to environment and local communities).
Potential
Yes
Yes
Negative
Low
Short
OO
Improper handling of waste resources, may lead to ineffici
t use of materials and greater
impact on environment.
Actual
Yes
Yes
Negative
Medium
Short
OO
Resource infl
w,
including resource
use
Increasing the share of sustainably sourced, and certified, biocarbon as a
eductant in silicon
production, reduces the environmental impact (reducing emission of SO
). It also ensures
2
that Elkem does not contribute to deforestation or conversion.
Actual
Yes
Yes
Positive
Low
Short
OO, VC
Key waste streams include degraded raw materials,
smelting slag, o
ff
-gas emissions particles, and fines from
crushing and sizing. Since the 1970s, Elkem pioneered
o
ff
-gas capture, converting waste into valuable products,
totalling 150 000 tonnes annually. Historically, other
waste streams were either sold as low-value products or
landfilled.
owever, dedicated teams have significa
tly
increased utilisation, treating these streams as valuable
raw materials for reintroduction into Elkem's processes or
as value-added products, recovering over 100 000 tonnes
annually, reducing costs and o
ff
ering new solutions.
Waste in connection with shipment:
Except for charcoal
and alloying materials (often shipped in smaller
containers), most raw materials are shipped in bulk,
minimising the need for packaging. Finished products are
shipped in bulk or big bags on reusable pallets.
Hazard classification
Major waste streams are non-
hazardous, while some hazardous materials used in
post-smelting processing are sent to certified third-party
suppliers for disposal.
Silicone formulation
Silicone formulation involves various chemical processes
producing specialised products tailored to customer
needs. It generates diverse waste streams, both hazardous
and non-hazardous, including acid water, used solvents,
hydrolysis by-products, sludge, and waste masses. Waste
reduction is integrated into the annual objectives and
improvement plans by production teams and research
departments.
Waste in connection with shipment:
Significa
t packaging
is required for raw materials, intermediates, and finished
products. Waste reduction focuses on reuse (IBCs, pallets,
drums) and recycling.
Hazard classification:
A substantial portion of generated
waste during production is hazardous. Hazardous waste is
either treated on-site (incineration, neutralization, reuse) or
sent to certified p
oviders for destruction.
Recycling, whether mechanically or chemically, is another
way of increasing circularity in our traditionally linear
value chain. Today, the very nature of silicones and their
longevity in end-applications means the need for recycling
at the end of life is hard to identify. Therefore, Elkem’s
main focus is on recycling waste from our own processes.
Generic waste streams
Elkem manages generic waste streams, including used
oil from vehicles and equipment, and packaging materials
from sourced goods. Each site implements dedicated
waste sorting systems, delivering waste to approved
service providers for recycling or reuse whenever possible.
The results of our Double Materiality Assessment
regarding pollution can be found in the figu
e below.
The figu
e below illustrates Elkem’s opportunities for circular economy in the Silicones division:
ECO-design
Mechanical recycling
Chemical recycling
Fuel pellets recycling
E5-1
Policies related to resource use and circular
economy
Elkem is committed to invest in sustainable and
renewable sources. Developing a 3R culture to reduce,
reuse, and recycle will be key to protecting and
preserving rare resources. Our research and innovation
teams are already integrating eco-design principles into
current and future projects, with significa
t successes
from bio-based solutions, design for recycling projects,
and reprocessing services.
Our statements on biocarbon, circular economy, and
confli
t minerals can be found here. Please refer to
the section on governing documents under ESRS 2 for
more details on our policies related to resource use and
circular economy.
E5-2
Actions and resources related to resource
use and circular economy
Throughout 2024, Elkem has undertaken multiple initiatives
to enhance efficie
y, minimise waste, and collaborate
with customers on circular designs and materials aimed at
extending the lifespan of their products.
Biocarbon
We are dedicated to exploring the integration of biobased
materials into our production processes, which can reduce
the dependence on fini
e raw materials. To achieve this,
Elkem is developing a new industrial process for bio-
based materials, specificall
tailor-made for silicon and
ferrosilicon production processes.
Packaging
E
ff
orts have been implemented to minimise waste from
packaging, primarily through process improvements
focusing on reducing, reusing, and recycling.
In alignment
with the EU’s Packaging Directive, Elkem has introduced
new projects to reduce packaging waste. Elkem is
adopting big bags with at least 30 per cent recycled
polypropylene (rPP), reducing their carbon footprint by
approximately 15 per cent annually. This transition, in
collaboration with Accon, incorporates a closed-loop
recycling system and advanced bio-water treatment
technology to ensure quality and sustainability.
Another important initiative is stemming from the DISH
programme: A circular economy approach in pallet
management that minimises new purchases by reusing
and repairing inbound wooden pallets to minimise
new purchases. For example, Elkem Nagpur in India,
which introduced the initiative, successfully repurposes
approximately 6 000 pallets annually, showcasing a strong
commitment to sustainability and resource efficie
y.
Waste becomes products
We prioritise eco-design principles in our products and
processes, embedding environmental considerations
from concept through the entire lifecycle. Working closely
with customers and researchers, Elkem applies the four
R’s of the circular economy: Reduce, Reuse, Recycle,
and Renewable. Notably, 80 per cent of a product’s
environmental impact is determined at the design stage,
and eco-design helps minimise material and energy
consumption.
Our BRIQSIL™ product exemplifies inn
vation in material
reuse. This ferrosilicon substitute is crafted from fine
materials generated during quartz and coal processing.
These durable briquettes, designed to withstand handling
and transportation, are reintegrated into furnaces,
boosting production efficie
y while significa
tly reducing
associated waste.
About one quarter of the quartz processed for silicon
production is deemed unsuitable for use due to size
or quality constraints. Over the past year, Elkem has
successfully repurposed this rejected material into
aggregates for the construction market, including
applications in buildings and public works projects. In our
carbon product division, most of the o
ff
-spec products
and degraded raw materials can safely be reprocessed
into new batches.
One key initiative is the REPOS project (Resourcing
Polymers from Silicones). This collaborative innovation
project aims to develop new processes economically and
industrially viable for the chemical recycling of silicone
polymers. Initially targeting our waste streams, it has the
potential to reduce 65 per cent of the waste. The project
will develop intensified depolymeris
tion processes of
silicone waste to return to monomer or oligomer units
reused in polymerisation and functionalisation.
Silica fume, also known as Microsilica, is a byproduct of
the carbothermic reduction of high purity quartz in electric
arc furnaces. Originally a residual product emitted into
the air until the 1980s, Elkem transformed this by-product
into a range of valuable materials, contributing to the
construction of iconic structures such as some of the
world’s tallest buildings and longest bridges.
One of the biggest milestones in 2024, was the successful
scaling of our chemical silicone waste upcycling project
from a laboratory to a pilot unit at our Saint-Fons
production site in Lyon, France. This will enable high
conversion rates, chemical selectivity, and lower carbon
emissions due to low process temperatures.
Another milestone in 2024 is the secured funding of the
Sicalo project, where Elkem investigates capturing carbon
looping.
The project entails capturing the carbon emitted
from the silicon furnace and reusing it as a reductant in
the silicon production process.
E5-3
Targets related to resource use and circular
economy
Biocarbon targets include:
→
Reach a 50 per cent biocarbon share at the smelters
by 2031
→
100 per cent of the biocarbon used annually is
sourced from verified, d
forestation-free sources
Waste target (year-on-year):
→
Hazardous waste to landfill:
eduction of 10 per cent
→
Waste to disposal: Reduction of 10 per cent
→
Waste recycled: Increase by 10 per cent
In 2024, we reduced the amount of hazardous waste to
landfill
y 58 per cent year over year, a slight increase in
waste to disposal, but Elkem managed to increased the
amount of recycled waste by 114 per cent from the prior year.
The shifts are significa
t and a combination of improved
data quality and e
ff
orts to reduce and recycle. We saw a
significa
t decrease in the total waste generated in 2024.
Elkem has a target to reduce the carbon footprint per
product, with a key focus on recycling and reusing existing
materials. Specific targets are still to be developed.
E5-4
Resource infl
ws
Biocarbon as a reductant is a key tool for Elkem to
reduce scope 1 emissions. By sourcing deforestation and
conversion free biomass and using this as a reductant we
reduce the need for fossil based carbon reductants, and
reduce our emissions. In 2024, the biogene share of scope
1 emissions slipped to 19 per cent, from 20 per cent in
2023, due to shifts in production.
Certified biocarbon:
100 per cent in 2024, 2023 and 2022.
In 2024, 100 per cent of the biocarbon was based on
verified sou
ces as deforestation-free. 94 per cent of the
biocarbon was under certific
tion schemes (FSC/PEFC/
SFI/SVLK), while the remaining six per cent were followed
up with regular audits including traceability checks.
E5-5
Resource outfl
ws
Elkem has a product line of about 4 000 products, and
no metric currently exists for the number of products
designed according to circular principles. However, most
of our products are results of our three main product
divisions, which implement circular principles. The results
will be refle
ted in our product carbon footprint over time.
ESRS E5 Resource use and circular economy
2024
tonnes
2023
tonnes
2022
Base year
tonnes
Development vs. 2022
Total waste generated
271 485
353 992
462 745
-41%
Changes in
waste tonnages
are linked to
changes in
business activity
and e
ff
orts to
reduce waste
and improve
circularity
Non-recycled waste
111 595
123 337
121 225
-8%
Non-hazardous waste to landfil
53 407
55 163
45 273
18%
Hazardous waste to landfil
2 617
7 781
6 301
-58%
Non-hazardous waste to incineration
3 173
1 718
2 485
28%
Hazardous waste to incineration
52 397
58 674
67 166
-22%
Recycled waste
159 891
70 825
74 784
114%
Non-hazardous waste recycled
148 963
65 071
65 386
128%
Hazardous waste recycled
10 928
5 754
9 398
16%
By-products excl. Microsilica, sold to customers
90 171
53 503
129 318
-30%
Microsilica sold to customer
111 689
106 327
137 418
-19%
Total recycled waste, incl. by-products and microsilica
361 750
230 655
341 520
6%
Percentage of non-recycled waste
41%
35%
26%
Mining ativities (Quartz rock fines
or landscape restoration)
400 964
332 717
354 456
13%
Total waste including mining activities
672 449
686 709
817 201
-18%
Environmental
Social
Governance
S
ESRS S1
Own workforce
Elkem values a strong, inclusive company culture that
prioritises safety, equity, employee empowerment and
continuous improvement. Organisational optimisation,
competency development and performance
management are key to its growth. Employees are
supported through respect, involvement, and a focus
on continuous development. Health and safety of
people are core to Elkem’s operations, guided by a
zero-harm philosophy and systematic HSE practices.
While 2024 saw an increase in the total recordable
injury rate the severity of injuries decreased, with only
low and medium severity injuries being reported. The
number of contractor injuries also decreased through
dedicated follow up at sites and proactive HSE work.
Elkem views its people as its most important asset.
Embracing diversity and inclusion strengthens the
company’s culture, innovation and customer focus,
driving its success.
Material impacts, risks, and opportunities -
Resilience of strategy and business model
S1, SBM3
Elkem’s operations include handling and storage of
hazardous substances, and hazardous operations
(smelting operations, moving equipment, working at
height, etc.), and these factors constitute potential
negative impacts on our employees and contractors
through potential injury, or worst-case, fatalities. The
impact score is low on both these potential impacts, while
the irremediability and scale (gravity of impact) is defined
as high or highest, the scope and likelihood for severe
injuries or death are very low. If there would be a case of
child or forced labour in operations the impact would be
negative, but we have strict controls in place and have yet
to uncover a case in our operations.
On the positive side Elkem provides a stable, secure and
fl
xible workplace for our employees, and opportunity
for career and competency development. Furthermore,
direct involvement in decisions impacting the work of the
individuals, is highly valued in Elkem.
As many of Elkem’s operations are hazardous, many of
the key risks are related to health and safety on site and
working conditions. Key risks derive from working at
height, exposure to hazardous substances, and moving
equipment and safeguarding. These highlight the need
for suffici
t training, as a key mitigating factor. A strong
safety culture depends on reliable reporting of incidents
and near-accidents, and if our employees and contractors
fail to report, this represents another risk. The continuous
development of FORUS, Elkem’s HSE management
system is an essential mitigating factor.
Even though the number of recordable injuries only
decreased slightly from the previous year, it is foreseen
that the improvement in training and improved awareness
by all employees and contractors will lead to an improved
performance in 2025.
Sharing learnings from injuries
and high-risk incidents enables Elkem to learn across
the organisation and prevent recurrence. Continued
implementation of FORUS establishes good systems
for ongoing HSE improvement. This could also be an
opportunity for Elkem to distinguish itself from its
competitors.
There are other risks related to the workforce, such as
availability of qualified pe
sonnel. It can be challenging
to find and
ttract qualified
orkers to some of our
locations as they are in rural areas. An aging workforce,
in some units, could also lead to Elkem losing valuable
knowledge and competence, and it may prove difficu
to find qualified
eplacements. Thus, it is key for Elkem
to work to retain and attract good talent across the
organisation, as well to invest in developing the critical
competencies in-house. This represents an opportunity
for the employees, as Elkem is a global employer,
recruiting globally and o
ff
ering opportunities for
employees who are willing to relocate.
There is a risk of non-compliance with legal requirements
(i.e. HSE-regulations, and directives) and our Code of
Conduct that could result in fines o
damaged reputation.
This is mediated by continuous, risk-based, and targeted
training, and a good internal compliance function.
Elkem invests in leadership development at all levels
globally, enhancing employee performance and
motivation, while maintaining focus on increasing
diversity and further developing a diverse workforce.
These factors represent key elements to attract and
retain talent and contribute to improved performance
and well-being of employees and teams.
ESRS
topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope,
and likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
S1
Own
workforce
Working
conditions
Various parts of Elkem's production processes involve hazardous substances that may cause
damage or health issues, depending on exposure, for employees, contractors, and local
communities. e.g. silica dust and heavy metals from silicon production, coal tar pitch (carbon
solutions), VOC, methyl chloride and chlorosiloxanes from silicone production.
Potential
Yes
Yes
Negative
Low
Short
(injuries)
and long
(health issues)
OO
Elkem's production processes often involve hazardous operations, moving equipment, and
working at height. This represents a potential negative impact on employees and contractors
through injuries or fatalities.
Potential
Yes
Yes
Negative
Low
Short
OO
Secure employment and fl
xible workplace for our employees
Actual
Yes
Yes
Positive
High
Short
OO
Career development and progression through competency development, development
discussions, and leadership development
Actual
Yes
Yes
Positive
High
Short
OO
Child or forced labour in own operations through contractors
Potential
Yes
Yes
Negative
Low
Short
OO
Policies related to own workforce
S1-1
Topics related to our workforce are covered in our People
policy, our HSE policy, our Code of Conduct and related
procedures. Please refer to the section on governing
documents in the chapter on ESRS 2.
Health and safety
S1-14
Elkem's production activities involve high risks, such as
high-temperature smelting and hazardous chemicals.
The company is committed to a zero-harm philosophy,
emphasising the health and safety of employees and
contractors. Each site has a tailored HSE organisation,
overseen by a divisional HSE organisation and finall
the
corporate Vice President for HSE, with regular audits to
ensure compliance. Elkem invests in training employees
and contractors to manage workplace risks, using
comprehensive risk management systems. In 2024,
the continued development and implementation of the
FORUS HSE management system has started to improve
the awareness to HSE principles. The rollout of training
for the organisation and alignment of life saving rules
has ensured that severity of injuries have continued to
decrease. Elkem follows strict reporting and investigation
procedures for all incidents to prevent recurrence and
share lessons learned across sites.
Employees
Work-related injuries
Metric
2024
2023
2022
Development
Fatalities
Absolute numbers
Rate
0.0
0.0
0
0.0
0.0
0.0
No change
High-consequence work-
related injuries
Absolute no.
Rate
0.0
0.0
0
0.0
1
0.1
No change
Lost workday injuries
Absolute no.
Rate
20
1.3
11
0.7
13
0.9
81.8%
Other recordable injuries
Absolute no.
Rate
32
2.1
31
2.2
31
2.2
3.2%
Total recordable injuries
Absolute no.
Rate
52
3.5
42
3.0
44
3.2
23.8%
Hours worked
Number
15 042 063
14 216 585
13 936 109
5.8%
Contractors
Work-related injuries
Metric
2024
2023
2022
Development
Fatalities
Absolute numbers
Rate
0.0
0.0
4
0.4
2
0.3
-100%
High-consequence work-
related injuries
Absolute no.
Rate
0.0
0.0
4
0.4
2
0.3
-100%
Lost workday injuries
Absolute no.
Rate
12
2.6
24
2.1
14
2.4
-50%
Other recordable injuries
Absolute no.
Rate
13
2.8
14
1.3
8
1.4
-7.1%
Total recordable injuries
Absolute no.
Rate
25
5.4
38
3.4
22
3.8
-34.2%
Hours worked
Number
4 596 943
11 176 605
5 722 932
-589%
Processes to engage with own workforce
S1-2, S1-3, S1-4, S1-13
Key topics for Elkem are health and safety on our site, as
well as our people and the organisation. In order to engage
with our employees on these topics, Elkem employs
several tools to mitigate risks and negative impacts, and to
capitalise on opportunities.
Elkem emphasises the importance of employee
engagement in health and safety management. The
company expects its workforce to actively contribute to
maintaining a safe and healthy workplace, reinforcing
this through tailored HSE organisations at each site and
comprehensive training programmes. Employees and
contractors are equipped with the necessary skills and
tools to identify and manage workplace risks. Elkem's
HSE management system, FORUS, requires all employees
to undergo basic and specific
ork-related training,
ensuring they understand workplace hazards and how to
mitigate them. Regular audits, internal self-assessments,
and continuous improvement e
ff
orts further support this
commitment.
On the organisational side, Elkem values its employees
as its most critical asset, focusing on developing one
company culture based on the Elkem Business System
(EBS), leadership development at all levels, as well as
driving employee performance through continuous
competency development and high engagement and
involvement. The company o
ff
ers standardised global
leadership programmes and a multitude of
diff
erent
professional, internal training programmes, accessible
through both digital and physical channels. Employees are
encouraged to take ownership of their learning, supported
by a global Learning Management System. Development
Discussions (DD) are key for giving and receiving feedback
between the leader and the employee, setting individual
work targets and identifying development needs. Elkem's
People policy ensures consistent HR practices, and
the Elkem Business System (EBS) fosters a culture of
continuous improvement and employee involvement.
Flexibility and work-life balance are prioritised, and
diversity, equity, and inclusion (DEI) e
ff
orts are integral to
Elkem's HR strategy.
In addition to training and development of our employees,
and to making our sites as safe as possible, Elkem engages
with its employees through employee representation on
the board of directors (three of our board members are
employee representatives), open continuous dialogue and
negotiations with unions, internal communication through
intranet and other channels, town hall meetings, as well as
a speak-up channel available globally (i.e. whistleblower).
All employees are free to join unions, and 39 per cent of our
employees globally are covered by collective bargaining
agreements determining salary and working conditions.
Our Speak Up channel ensures that suspected violations
of Elkem’s Code of Conduct can be reported anonymously,
without fear of retribution, and ensuring the privacy of both
the reporter and the subject. This is described in detail in
our Speak Up policy (see section on governing documents
in ESRS 2).
Collective bargaining coverage and social
dialogue
S1-4, S1-8
39 per cent of our workers are covered by collective
bargaining agreements, and all employees are free
to join unions. We have the following coverage in the
diff
erent countries/regions:
Collective bargaining coverage
Employees EEA
Employees non-EEA
Total
Coverage rate
71%
12%
39%
Training and skills development metrics
S1-13
Female
Male
Total
Female
Male
Metric
2024
2023
2024
2023
2024
2023
Development
2023 to 2024
Percentage of employees
that participated in regular
performance and career
development reviews
%
96
78
18
Average number of training
hours per employee
Hours
23.5
7.4
18.3
9.8
19.3
9.0
16.1
8.5
Participation in company
internal leadership
development programmes
%
37.5
25
62.5
75
100
100
12.5
-12.5
Percentage of employees participating in regular
performance and career development reviews
This metric indicates the extent to which Elkem is
engaging its workforce in regular performance and
career development discussions. A high participation
rate suggests that the organisation is actively involving
its employees in evaluating their performance, setting
goals, and planning their career paths. This can lead to
increased job satisfaction, better alignment of individual
goals with organisational objectives, and improved overall
performance. The consistent participation rates across
diff
erent gender categories and disclosure statuses refle
t
the organisation's commitment to inclusivity and equal
opportunities for development.
Average number of training hours per employee and
non-employee
This measures the average amount of time employees
spend on training and development activities. An increase
in the average number of training hours indicates that the
organisation is investing in the continuous learning and
skill enhancement of its workforce. This can lead to higher
competency levels, better job performance, and increased
adaptability to changing job requirements.
Elkem leadership programmes
This metric aims to increase the percentage of female
participants in various leadership programmes. Elkem
believes that diversity contributes to better decision making,
involvement, job satisfaction, and well-being. Increasing
diversity in the leadership population is also important in
light of career development and retention of talents.
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S1-5
As HSE is critical to Elkem we aim to follow a zero-harm
philosophy, reduce frequency rates by 10 per cent from
the 2022 baseline, and ensure all site personnel meet
required training hours per job level.
On the organisational side we have a target of 100 per
cent completion of the annual development discussions
as the main vehicle for giving and receiving feedback
on employee and leader performance, setting targets
supporting the organisation’s main goals and planning for
individual development and career advancement.
Elkem has set additional targets to enhance diversity,
equity and inclusion.
Workforce distribution
Balanced gender distribution:
The organisation aims to
increase the percentage of females in the total workforce
and all leadership levels.
The target is to achieve a more
balanced gender distribution throughout the organisation,
where female share also at the leadership levels should
refle
t the female share of the overall organisation.
Age distribution:
The goal is to maintain a balanced age
distribution within the total workforce, blue/white-collar
positions, and the management teams. This ensures a
diverse range of perspectives and experiences.
Nationality distribution:
The organisation aims to have
a diverse cultural workforce. This target emphasises the
importance of cultural diversity and inclusion.
Recruitment
Diverse applicant pool:
Our objective is to attract a more
diverse group of applicants, with a particular focus on
increasing the number of female candidates. We are
actively monitoring the proportion of female applicants
wherever this data is available.
Unbiased recruitment:
The objective is to ensure that
recruiters in Elkem are making good and objective
recruitment decisions ensuring equal opportunities for all
applicants and contributing to increased diversity in the units.
Internal mobility:
With our global HR system, our aim is to
track and analyse internal recruitments and promotions to
ensure employees are given opportunities for growth and
development.
Succession planning
Systematic development of female leaders:
The
organisation aims to identify female successor for each
position in corporate and divisional management. This
ensures a pipeline of female leaders for future
leadership roles.
Critical position planning (CPP) process:
Our goal is to
further develop the company’s CPP process for strategic
workforce planning and competency development of
successors to ensure a strong “bench” of future critical
position holders and to further increase all aspects of
diversity in talent pool.
Training
Mandatory training:
100 per cent completion of all
mandatory training is our target.
Human and organisational performance (HOP) and
safety leadership:
The goal is to increase leaders’
competency in maintaining a good safety and
organisational culture. This includes tracking the
percentage of leaders who have completed relevant
training programmes.
Elkem leadership programmes:
The organisation aims to
increase the percentage of female participants and diversity
in general in all company internal leadership programmes.
Introduction to FORUS (Elkem HSE system):
The target is
to achieve a 100 per cent completion rate for the FORUS
programme.
Turnover
Turnover analysis:
To better understand and address
turnover trends in
the diff
erent Elkem units, the company
analyses the gender distribution among leavers, service
years of leavers, and the average age of leavers.
Pay equity
Our organisation is dedicated to promoting pay equity
across all levels. To achieve this, we are performing pay
equity audits and external benchmarks to identify and
address any disparities. These e
ff
orts will help us create a
more inclusive and fair workplace, where every employee
feels valued and fairly compensated.
Health and well-being
Employee satisfaction:
The organisation aims to achieve a
high average engage score on specific dimensions
elated
to employee satisfaction.
Organisational health:
The targets include reducing short-
term and long-term sick leave.
These targets are designed to create a more diverse,
equitable, and inclusive workplace, ultimately leading
to improved organisational performance and employee
satisfaction.
Overall, this highlight the Elkem’s dedication to fostering
a culture of continuous improvement, professional
development, and inclusivity. By regularly reviewing
performance and career development and providing
ample training opportunities, we aim to enhance employee
engagement, satisfaction, and overall organisational
e
ff
ectiveness.
Our workforce
KPIs
S1-6, S1-7, S1-9, S1-12
Metric
2024
2023
2022
Development
2023 to 2024
Female share
In the company
In the management (Corporate mgmt, div. mgmt, plant mgmt)
Among all leaders with personnel responsibility
In the Elkem leadership -programmes
In the global technical trainee programmes
Among blue collar
Among white collar
Among part time workers
Among temporary workers
Among new hires
Among leavers
Parental leave - average women (Norway only)
Parental leave - average men (Norway only)
%
%
%
%
%
%
%
%
%
%
%
weeks
weeks
25.4
27
27
38
41
17
36
44
31
33
31
39
18.6
25.1
24
25
32
31
14
32
42
27
30
29
37.3
21
25
30
22
36
38
17
35
31
25
26
27
38.3
17.5
1%
13%
8%
19%
32%
21%
13%
5%
15%
10%
6%
5%
-11%
Age distribution, employees
< 30 years of age
30 - 50
> 50
%
%
%
16
55
29
17
53
30
16
56
28
-6%
4%
-
Age distribution, leaders
< 30 years of age
30 - 50
> 50
Salary: CEO to median employee in Norway
%
%
%
ratio
2
60
38
11:01
2
56
42
11:01
3
59
38
10:1
-
7%
-10%
-
Metric
APAC
EMEA
AMER
TOTAL
Number of employees
3 398
3 399
733
7 530
Number of permanent employees
3 391
3 050
722
7 163
Number of temporary employees
7
119
8
134
Number of non-guaranteed hours employees
0
230
3
233
Number of full-time employees
3 390
3 017
727
7 134
Number of part-time employees
8
382
6
396
Explanation:
1.
Number of permanent employees:
These are employees
who have an ongoing employment contract with the
company, typically without a predetermined end date. They
usually receive full benefits and job securit
.
2.
Number of temporary employees:
These employees are
hired for a specific period o
project. Their employment has
a set end date, and they might not receive the same benefits
as permanent employees.
3.
Number of non-guaranteed hours employees:
These
employees do not have a fi
ed number of working hours
guaranteed by their contract. Their work hours can vary
based on the company's needs, and they are often called in
as needed.
4.
Number of full-time employees:
These employees work the
full number of hours defined as full-time by the company,
typically around 35-40 hours per week. They usually receive
full benefits
5.
Number of part-time employees:
These employees work
fewer hours than full-time employees, often less than 35
hours per week. They may receive partial benefits depending
on the company's policies.
Elkem employs persons with disabilities (S1-12) but we do not
collect this kind of data nor report on the number of individuals
with disabilities. Our office spaces
e adapted to be used
by persons with disabilities, and in Norway we follow the
requirements in the Norwegian Equality and Anti-Discrimination
Act and other relevant requirements. The same applies for other
countries where Elkem operates, i.e. we always comply with local
rules and regulations.
Some of the operations at our production
sites are exempt from the requirements due to the nature of the
operations and are thus not suitable for persons with disabilities.
KPIs
Development 2023
metric
2024
2023
2022
to 2024
Turnover rate
%
6.7
4.5
6.0
49%
Blue collar / operators
%
59
55
59
7%
White collar / sta
ff
%
41
45
41
9%
Temporary hire rate (%) to permanent employment
%
4
5.5
5
-27%
Part time workers rate (%) to permanent employment
%
2
3.9
1
-49%
Development discussions
%
96
78
89
23%
Total contractors
no
342
283
331
21%
Europe
no
149
96
125
55%
Asia
no
167
160
171
4%
Americas
no
26
27
35
-4%
Africa
no
0
0
0
-
Adequate wages, social protection,
renumeration metrics, and incidents and
complaints
S1-10, S1-11, S1-16, S1-17
Elkem aims to o
ff
er competitive, but not leading, salaries
based on local standards. Surveys are conducted to
ensure equal pay for equal responsibilities, with annual
reviews of base salaries. Other compensation elements,
such as bonus programmes, follow corporate standards.
All employees, including part-time and temporary
workers, have written documentation outlining their
compensation, benefits, and
orking hours. This
documentation is subject to complying with national laws,
industry standards (whichever o
ff
ers greater protection),
and company agreements. Employees are entitled to at
least one day o
ff
for every seven-day period. Full-time
employees must receive wages and benefits suffic
t
to meet basic needs for food, clothing, and housing.
Pensions and insurance are provided to all employees
according to local legal requirements. For more on the
e
ff
orts to ensure a safe working environment please refer
to the sections concerning HSE. For our pay gap-analysis
for Norway, please review our ARP report.
These metrics concern our own operations:
2024
Note/comment
Number of substantiated incidents of discrimination
0
Number of complaints filed through channels for own
26
Total number of cases registered in Speak Up case management
workers to raise concerns
system from 1 January 2024 to 31 December 2024. Includes both
unsubstantiated and fully or partially substantiated cases.
Number of severe human rights issues and incidents
0
connected to own workforce
Number of severe human rights issues and incidents
0
No mention of “Elkem” in the OECD Database of Specifi
connected to own workforce that are violations of UN
Instances
↗
Global Compact Principles and OECD Guidelines for
Multinational Enterprises
ESRS S2
Workers in the
value chain
Responsible sourcing is a strategic imperative for
Elkem. With an annual global procurement spend
of approximately NOK 25 billion, encompassing raw
materials, energy, goods, services, and logistics,
Elkem actively engages with a diverse supply base
of around 18 000 global suppliers. While the count
of raw material suppliers is relatively low, the spend
is signi
fi
cant and this is an area of sourcing that
is connected to higher risk levels. Elkem also uses
independent contractors on our sites, and this has
proven to be an area of signi
fi
cant HSE risk. For more
information on contractors and HSE risk and data,
please refer to the section on ESRS S1 Own workforce.
Material impacts, risks, and opportunities and
their interaction with strategy and business
model
S2-SBM3
There are potential negative impacts related to Elkem’s
operations that could a
ff
ect workers in our value chain.
Given the nature of the raw materials we source there is
an inherent risk of HSE impacts, and violations of workers’
rights, and child or forced labour.
Elkem operates globally with a value chain extending into
regions where human rights violations can be systemic
and widespread. To address these risks, Elkem has
established robust measures, including integrity due
diligence for intermediaries and producers, audits, and
on-site visits for critical raw material suppliers. Health
and safety are essential components of labour rights for
Elkem's suppliers and customers, refle
ting the inherent
risks of the industry. Health and safety training is a
cornerstone of Elkem's operations and is supported by a
strong commitment to improving practices throughout
the value chain. The company enforces stringent health,
safety, and environmental (HSE) standards, particularly for
high-risk suppliers.
We recognise the responsibility of businesses to respect
human rights and remain dedicated to the UN Declaration
and International Conventions on Human Rights, the
OECD Guidelines for Multinational Enterprises, the
ILO Declaration on Fundamental Principles and Rights
at Work, ILO’s core conventions, and applicable local
legislations in the countries where we operate. Our
commitment aligns with the United Nations Guiding
Principles on Business and Human Rights. Suppliers and
contractors are also required to uphold fair employment
practices, including o
ff
ering transparent employment
contracts, educating employees about their rights, and
enabling them to organise and bargain collectively where
legally permitted. These e
ff
orts refle
t Elkem's dedication
to ethical operations and the promotion of human rights
throughout its global value chain.
Raw material sourcing
There are high environmental and social risks associated
with the extraction and production of raw materials in
Elkem’s value chain. To mitigate these risks, Elkem has
implemented a range of measures, including signature
of the Business Party Code of Conduct, integrity due
diligence for intermediaries and producers, and on-site
supplier audits for critical raw material suppliers. Elkem
strives to pre-audit all new raw material suppliers. If,
for any reason Elkem is unable to pre-audit a potential
raw material supplier, Elkem shall document why an
exemption has been granted.
Exemptions are decided
on a case-to-case basis and may include the security
situation in source country, that the material is assessed to
be both low risk and low criticality, and/or the supplier can
document equivalent third-party audit / certific
tion (ISO
and/or EcoVadis).
Elkem is committed to promoting sustainable mining
practices through active collaborations with industry
partners and participation in key initiatives. As a member
of the Towards Sustainable Mining Initiative, through
its affil
tion with Norsk Bergindustri, Elkem works to
enhance environmental and social performance in the
mining sector. Additionally, as part of IMA-Europe, the
Industrial Minerals Association, Elkem contributes to
advancing sustainability within the industrial minerals
industry while driving continuous improvements in mining
operations worldwide.
ESRS
topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope,
and likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
S2
Workers in
value chain
Working
conditions
Mining of quartz and coal could lead to third party workers developing health issues (i.e.
silicosis and black lungs) due to inhalation of silica dust or flo
t coal.
Potential
Yes
No
Negative
Medium
Long
VC
Improper handling of hazardous materials and substances in transport or handling at
suppliers may lead to incidents that can cause harm.
Potential
Yes
No
Negative
Medium
Short
VC
Chinese internal migrant construction workers are often informally employed, and have no
right to collective bargaining.
Actual
Yes
No
Negative
High
Short
VC
Other work-
related rights
Downstream violations of workers' rights in the construction industry (downstream).
Potential
Yes
No
Negative
Medium
Short
VC
Child labour or forced labour in Elkem's upstream or downstream value chain.
Potential
Yes
No
Negative
Medium
Medium
VC
Elkem prioritises sourcing certified aw materials,
including biocarbon, to support sustainable practices. As
an example, 100 per cent of the biocarbon was verified
as deforestation-free, contributing to the protection of
indigenous peoples and other a
ff
ected communities.
Elkem has approximately 190 raw material suppliers, and
of these approximately 25 per cent are ISO 9001 certifie
and 15 per cent are ISO 45001 certified. Critical supplie
s
without ISO-certific
tion are audited annually, and all
new raw material suppliers are audited. If adverse human
rights incidents, or severe breaches to our Code of
Conduct for business partners, are suspected we follow
up the supplier. If improvement is not seen we will not
purchase from the supplier.
Indirect materials
For Elkem’s indirect materials, the risk of human rights
and labour rights violations is considered less critical.
Packaging is one of the key categories of indirect
materials. Due diligence processes are supported by
dedicated software, enabling effici
t pre-qualific
tion
and risk management of suppliers. The sourcing of indirect
materials is considered an area of lower risk compared
to raw material sourcing. This is due to the fact that
most suppliers are based in low-risk countries, and the
expenditure on these goods represents only a small share
of the company’s total purchasing expenses. However,
there are suppliers of indirect goods in high-risk countries
that require closer follow-up.
Distribution
At Elkem’s plant sites, hazardous goods are transported by
truck under stringent procedures to ensure safety during
loading, unloading, and handling. Standard protocols
include detailed checklists to verify vehicle and equipment
conditions, enforce speed limits, and conduct alcohol
checks. The plant sites are ISPS-compliant ports with
restricted access, ensuring enhanced security.
All personnel involved in handling hazardous goods
undergo comprehensive safety training. Additionally,
transport companies actively participate in safety drills
in collaboration with the plant’s fi
e brigade to ensure
preparedness for emergencies.
International regulations, including UN Transport
Regulations and IMO standards, govern the transportation
of hazardous goods. These regulations establish specific
requirements for packaged materials (IMDG), solid bulk
cargoes (IMSBC), and bulk liquids (IBC). Professional
transport companies manage all hazardous goods
transportation, strictly adhering to these standards.
Customers
Elkem is committed to ensuring safe and responsible
practices throughout its downstream value chain. This
includes adherence to international sanctions and trade
controls, and strict regulatory and technical standards
across all markets, supported by a robust global
compliance framework. All sales channels are subject
to initial screening and continuous monitoring against a
sanctions- and blacklists database, facilitated by integration
into our customer relationship management platform.
Intermediaries (distributors, traders, and sales agents) are
required to commit to the principles of ethical business
conduct expressed in the Business partner Code of
Conduct. Safety Data Sheets (SDS), aligned with the UN
Globally Harmonised System, serve as essential tools for
hazard communication, ensuring safe product handling
by customers and employees. Products in sensitive
applications, such as food, water, and healthcare, are
subject to specific indu
try regulations.
Elkem's Silicones division employs an advanced
document management system for easy access to
regulatory compliance information, certific
tions, and
statements. To stay ahead of emerging regulations, the
company actively participates in international trade
associations and collaborates closely with customers
and researchers. This collaboration drives innovation in
eco-design, recycling processes, and the development of
safer, more sustainable products, such as alternatives to
cyclic silicones (D4, D5, D6).
By fostering transparency, teamwork, and innovation,
Elkem recognises the vital role of its customers and
partners in driving responsible practices and developing
solutions that align with evolving regulatory and market
expectations.
Policies related to value chain workers
S2-1
Elkem’s policies and statements regarding value chain
workers are supported by the HSE and sustainability
policy, Code of Conduct for business partners, and
human rights programme. Please refer to the section on
governing documents under ESRS 2 for more details.
Processes for engaging with value chain
workers about impacts
S2-2
Elkem’s approach to human rights due diligence is guided
by the United Nations Guiding Principles on Business and
Human Rights. Elkem maintains regular engagement with
suppliers to reinforce its expectations and commitment to
ethical practices throughout the value chain. All suppliers
are required to comply with legal requirements and
proactively address operational hazards by presenting
actionable plans to mitigate or eliminate risks while
working with Elkem.
When working with high-risk suppliers, Elkem conducts
audits during both routine visits and unannounced
inspections, involving external auditors when necessary
to maintain impartiality. In cases of non-compliance,
the company issues warnings and requires immediate
corrective actions. Persistent violations are addressed
decisively through improvement plans, financial penalties,
or contract termination. These measures underscore
Elkem's dedication to upholding a responsible and
sustainable value chain.
The head of the compliance function and responsible for
the development and maintenance of Elkem’s human
rights programme. Elkem’s Corporate Procurement Council
shapes and implements the company’s global procurement
and logistics strategy, policies, and procedures. Additionally,
Elkem has allocated dedicated resources for critical
aspects of its operations: one focuses on human rights due
diligence and the rollout of a new Supplier Relationship
Management (SRM) system while another ensures the
sourcing of certified and d
forestation-free biocarbon.
These e
ff
orts refle
t Elkem’s proactive approach to
embedding sustainability and ethical practices across its
value chain.
The Norwegian Transparency Act and similar legislation
The chapters Human Rights Responsible Value Chain
Management and Responsible Economic Practices have
been developed to comply with the legal requirements
to report/produce an annual statement as stated in the
Forced Labour in Canadian Supply Chains Act (2023), the
Norwegian Transparency Act (2021), and the UK Modern
Slavery Act (2015). The reporting requirements apply
to Elkem as an enterprise resident in Norway with total
assets of more than NOK 35 million combined with, on
average, more than 50 full-time employees, a supplier of
goods with a total turnover of GBP 36 million or more in
the UK, and as an entity engaged in producing, selling or
distributing goods in Canada having with CAD 20 million or
more in assets, CAD 40 million or more in revenue, and/or
an average of 250 or more employees. The information is
valid for Elkem ASA and its consolidated subsidiaries. The
statement is approved and signed by the board of directors
of the parent company Elkem ASA as part of their approval
of the annual sustainability statement.
Processes to remediate negative impacts
and channels for value chain workers to raise
concerns
S2-3
Elkem is dedicated to fostering trust with stakeholders
and addressing concerns related to our operations.
Elkem’s grievance mechanism is designed for individuals
and communities a
ff
ected by our plants, projects, or other
business activities worldwide. This mechanism enables
stakeholders to provide feedback or raise concerns that
are not related to compliance with the Elkem Code of
Conduct. The grievance mechanism is managed by
Elkem’s environmental, social, and governance (ESG)
team, which coordinates with relevant parts of the
organisation to resolve issues e
ff
ectively. Each grievance is
monitored and followed by the ESG team to ensure timely
and appropriate resolution.
The Speak Up channel is a secure reporting platform for
external and internal parties to report potential non-
compliance with Elkem’s Code of Conduct. This channel
is hosted by an independent external supplier, ensuring
anonymity for whistleblowers. Investigations related to
Speak Up channel reports are led by Elkem’s Corporate
Compliance Offic
and are conducted following strict
confide
tiality protocols. The Speak Up channel is
available in multiple Elkem languages.
Elkem strongly encourages stakeholders to report
any behaviour that violates our ethical guidelines. The
company is fully committed to protecting whistleblowers
from retaliation and ensures all reports are handled with
confide
tiality. Our processes ensure that remedial action
is taken promptly in the event of an acute human rights
violation and, if necessary, compensation is provided to
a
ff
ected individuals.
Taking action on material impacts on value
chain workers, and approaches to managing
material risks and pursuing material
opportunities related to value chain workers,
and e
ff
ectiveness of those actions
S2-4
In 2022, Elkem engaged independent third-party advisors
to conduct a human rights risk assessment to evaluate
the e
ff
ectiveness of current due diligence processes.
The final
eport was issued in January 2023. It concluded
that Elkem has a high inherent risk of adversely a
ff
ecting
human rights due to the company’s nature of operations,
geographic presence, and size and complexity of the
supply chain. In addition, a human rights risk assessment
previously identified inconsi
tent practices in supply chain
management processes. It was noted that Elkem has
good systems and processes in place to manage the risk
of adverse impacts on our operations. The main observed
gap was the lack of a global supplier management
system, which reduces our ability to work risk-based and
systematically address human rights risks in our supply
chain. The advisors also noted that Elkem could benefit
from more systematic training and awareness e
ff
orts.
Incidents and investigations that uncover unwanted
practices that put the company at risk of causing,
contributing to or being complicit in human rights
violations, shall result in recommended remediation and
improvement actions to reduce the future risk for similar
non-compliances in the organisation. Such improvements
could include updates and strengthening of governing
documents, introduction of new internal controls,
enhanced training and awareness activities, change of
roles and responsibilities.
The e
ff
ectiveness of our processes is regularly monitored
through internal reviews. A full GAP analysis of current
human rights work should be conducted every two years,
informing priorities and strategic direction. These reviews
can be performed internally or with external support.
During 2024, Elkem has implemented a SRM system.
This global platform strengthens the company’s ability
to identify human rights risks, prioritise areas of high
impact, and conduct systematic, risk-based supplier
qualific
tion and follow-up. The SRM system streamlines
screening processes, standardises vetting procedures
across divisions and jurisdictions, monitors compliance
throughout the contract lifecycle, and improves supplier
risk management. This initiative represents a significa
t
step forward in Elkem’s responsible sourcing approach.
Reducing raw material extraction is a central focus for
Elkem, as the company seeks to minimise its impact on
high-risk sectors. By prioritising circular solutions, Elkem
aims to reduce dependency on primary resources and
address potential risks to workers’ well-being associated
with mining activities.
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S2-5
Elkem has aims to assess and screen all suppliers, and all
raw material suppliers are subject to audits. This is done
to reduce the risk of breaches of our Code of Conduct
for Business Partners. In 2024 Elkem introduced a new
supplier relations managment system, Ivalua, to better
manage our suppliers and the associated risks.
2024
2023
2022
Share of new suppliers subjected to assessment and pre-
qualific
tion screening
100%
80%
100%
Share of new raw material suppliers subjected to supplier audit
100%
50%
No audits due to Covid-19
Adverse human rights concerns in supply chain reported
0
0
0
Reported confirmed cases
f child or forced labour
0
0
0
Number of cases reported through grievance mechanisms
5
1
6
ESRS S3
A
ff
ected
communities
As an international organisation with operations
in several countries globally, Elkem recognises
the importance of engaging with and
understanding the local communities in which
it operates. Elkem advocates for responsible
business conduct and human rights in all areas
of its operation and value chain and consider
local communities in its sustainability e
ff
orts.
Interests and views of stakeholders
ESRS 2 SBM-2
Elkem actively identifies and add
esses the interests and
concerns of stakeholders to ensure that its operations,
strategies, and decisions align with societal expectations
and contribute to Elkem's responsible business conduct.
Through structured stakeholder engagement, grievance
management, and targeted action plans, Elkem ensures
alignment with the interests and views of stakeholders. This
approach underpins its commitment to responsible and
sustainable business practices. This is done in several ways:
→
Regular and scheduled meetings with certain
stakeholders, e.g. meetings twice annually with Sámi
reindeer districts close to our mining operations
→
Running dialogue and scheduled meetings with
policymakers through industrial organisations, e.g.
Norsk Industri and Eurometaux
→
Ad-hoc meetings and running dialogue with
stakeholders, e.g. meetings and dialogue with
investors and banks
→
Participation in workshops and forums with peers
and NGOs, e.g. ZERO’s trilemma workshop series on
biodiversity risks and land-use in Norway
→
Elkem’s grievance mechanism and Speak Up channel
is open to all stakeholders, and all concerns are
handled securely and to maintain the privacy of the
person or entity who has contacted Elkem
→
In 2024, Elkem received fi
e cases through our
grievance mechanism. The cases concerned suppliers
that were unhappy with commercial conditions or
who had lost contracts. The cases were investigated,
but no further action was deemed necessary.
Identifying stakeholder interests
Elkem maintains ongoing dialogue with a broad
range of stakeholders, including employees, local
communities, academic institutions, industry partners,
and environmental groups. Stakeholder input is gathered
through regular consultations, partnerships, and grievance
mechanisms to identify material concerns such as climate
change, resource efficie
y, and community development.
Collaborative initiatives
Elkem fosters partnerships to address stakeholder
concerns through collective action. By participating in over
30 R&D projects across Europe and Norway and initiatives
like the Heroes Race in Lyon, Elkem demonstrates its
commitment to teamwork, innovation, and community
well-being.
Continuous improvement through dialogue
Elkem recognises that stakeholder engagement is
dynamic and requires constant adaptation. Feedback
mechanisms and direct dialogue inform Elkem’s decision-
making processes, ensuring alignment with evolving
societal and environmental expectations. This approach
helps secure the long-term viability of Elkem’s operations
while contributing to shared goals for sustainability and
community resilience.
Material impacts, risks, and opportunities and
their interaction with strategy and business
model
ESRS 2 SBM-3
As can be seen in the double materiality assessment,
large mining, smelting and commercial activities around
the world carry the risk of having an adverse impact on
local communities. The risk of pollution through spills
into local water bodies or soil, as well as air pollution as a
result of business activities, can have an e
ff
ect on local
communities.
Elkem is committed to mitigating these impacts through
sound business practices and management. Furthermore,
it is of interest to Elkem to engage local communities and
foster open dialogue. Elkem acknowledges its role in every
local community where it operates and is committed to
impacting local communities in a positive manner. This
is achieved through traineeships, learnerships, as well as
voluntary initiatives that supports the local community.
In several operational sites, Elkem is one of the main
employers of the a
ff
ected community and is also on
the contrary dependent on available workforce from
local communities. This is also a motivation for Elkem
to work towards being the employer of choice in local
communities and having a positive impact, for example by
creating more job opportunities.
Results of our double materiality assessment regarding
a
ff
ected communities can be found in the figu
e
below. For further details of Elkem’s double materiality
assessment, please refer to section on governing
documents under ESRS 2.
Topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope,
and likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
S3
A
ff
ected
communities
Communities’
economic, social
and cultural rights
Elkem plants are often cornerstone companies in small, underserved communities, and thus
provide the basis to maintain the local communities.
Actual
Yes
Yes
Positive
High
Long
OO, VC
Elkem plants creates new jobs in underserved communities, both through own operations
and among suppliers or supporting sectors.
Actual
Yes
Yes
Positive
High
Short
OO, VC
Elkem sites represent significa
t tax contribution to underserved communities where Elkem
is present, thus positively contributing to local communities.
Actual
Yes
Yes
Positive
High
Long
OO, VC
Human rights violations, and rights of indigentous people, are a potential negative impact
through Elkems sourcing, e.g. quartz mining, biocarbon sourcing, hydropower, deforestation,
and land and resource use.
Potential
Yes
Yes
Negative
Low
Short to
medium
VC
Poor water treatment at plants may negatively a
ff
ect the water quality around the plant thus
impacting local wildlife and the drinking water of local communities.
Potential
Yes
Yes
Negative
Low
Short
OO
Policies related to a
ff
ected communities
S3-1
Elkem’s operations directly a
ff
ect people and the
environment around our plants. In 2023, we codified
our ambitions within energy management, biodiversity
stewardship, and water-, resource-, and waste
management in the new HSE policy. Policy engagements,
involving external stakeholders and local communities in
which Elkem operates, are outlined in the new HSE policy.
Elkem is committed to ensuring it has a positive impact
on the local communities in which it operates or is
considering expanding into. Further, Elkem is committed
to mitigating any adverse impacts on local communities
and external stakeholders, both through responsible
business conduct and by providing channels for
conversation between the organisation and its external
stakeholders.
Please refer to the section on governing documents under
ESRS 2 for more details.
Processes for engaging with a
ff
ected
communities about impacts
S3-2
Elkem provides channels for external stakeholders to
reach out to local Elkem sites or Elkem corporate, both
with negative and positive concerns. Elkem is committed
to limiting adverse impacts on a
ff
ected communities and
fostering positive impacts. Elkem aims to provide safe
and stable job opportunities, as well as contribute to the
economic and human development of our employees and
the communities in which we operate.
Local stakeholder dialogue and the nature of community
involvemen
t diff
er from site to site to cater for historical
and local needs and diff
erences. Several Elkem
plants have implemented local initiatives and support
programmes, including initiatives for better education
and local infrastructure, sports activities, local community
poverty reduction and food support, healthcare, and other
social impact initiatives.
Significa
t changes to Elkem operations require more
extensive stakeholder dialogue. A recent example is
the negotiations with the reindeer grazing district 7
(Rákkonjárga) in Tana, Norway. The expansion of one of
the world’s largest quartzite mines will secure access
to a key source of raw materials for the green transition.
However, the expansion will impact local reindeer herding
activities, and the parties have reached an agreement on
mitigating measures to ensure sustainable coexistence.
Processes to remediate negative impacts and
channels for a
ff
ected communities to raise
concerns
S3-3
Elkem provides accessible channels for feedback
and issue resolution, both for internal and external
stakeholders. For specific numbe
s related to these
channels, such as numbers of grievances and reported
cases of misconduct, please review the section on
Business conduct (ESRS G1):
→
A public grievance mechanism, accessible through
Elkem’s website, allows external stakeholders to raise
concerns confide
tially.
→
A secure Speak Up channel supports internal
and external parties in reporting misconduct or
operational issues. These mechanisms are managed
by the ESG Office, which
versees the resolution
process in collaboration with relevant teams.
Taking action on material impacts on a
ff
ected
communities, approaches to managing material
risks and pursuing material opportunities
related to a
ff
ected communities, and
e
ff
ectiveness of those actions
S3-4
Elkem has implemented tailored initiatives that address
the diverse priorities of stakeholders:
Environmental Stewardship:
The new sustainability policy
codified in 2023, outlines goals for energy efficie
y,
biodiversity, water stewardship, and waste management.
For example, in Tana, Norway, Elkem engaged in extensive
consultations with local reindeer herders to mitigate
the impacts of a quartzite mine expansion, ensuring
sustainable coexistence.
Community Support:
Programmes such as the Ferroveld
learnerships in South Africa and the Colorir project in
Brazil focus on education and skill-building, addressing
local socio-economic needs while preparing future talent.
Innovation:
Collaborative projects like Sicalo and BioSiMS
align with stakeholder expectations for decarbonisation
and a circular economy, demonstrating Elkem’s
commitment to the green transition.
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
S3-5
Elkem actively works to address and maintain the material
impacts it has on the a
ff
ected communities where it
has operations. This includes implementing voluntary
initiatives to strengthen its ties with the community. For
example, Elkem sponsors local sports teams, schools,
and institutions. Further, targets to ensure compliance
with permits and regulations, thus mitigating impacts on
local soil, air and water through pollution, are rigorously
maintained. Any deviations are treated as HSE deviations
and corrected as per permit allowances and internal
processes. Elkem will explore the possibility to establish
a outcome-oriented and time-bound target related to
a
ff
ected communities.
For sites where Elkem is a primary employer, initiatives
are continuously implemented to ensure that Elkem
would be the employer of choice in the community and
that the community feels heard and seen in regard to any
grievances. As Elkem sites are often located in or close
to underserved communities, Elkem often serves as a
cornerstone employer and a significa
t source of tax
revenue for these communities. Given this role, Elkem is
critical for these communities’ survival.
178
Environmental
Social
Governance
G
ESRS G1
Business conduct
Elkem prioritises sound corporate governance
to drive value creation and reinforce trust
among stakeholders. The company adheres
to responsible economic practices, explicitly
advocating for zero tolerance toward corruption
and strict compliance with anti-money
laundering and antitrust laws. By upholding
honesty, respect, and ethical standards in its
operations, Elkem is committed to conducting
business responsibly in a global marketplace
with ever-evolving regulatory requirements.
Role of administrative, supervisory and
management bodies
GOV-1
Elkem’s governance policy outlines the roles and
responsibilities of its administrative, supervisory, and
management bodies. The General Meeting, Elkem’s
highest governing body, elects the board of directors
and makes key decisions such as approving the annual
report and deciding on dividends. The board of directors
manages the overall direction and strategy of the group,
ensuring compliance with governance principles and
overseeing the management team. Within the board,
there are several committees, including the nomination
committee, which recommends candidates for the board
and other key positions, the audit committee, which
oversees financial eporting and internal controls, and
the remuneration committee, which advises on executive
compensation.
The governance framework also includes the internal
control and Internal audit committee and the compliance
committee, which play crucial roles in maintaining the
integrity and ethical standards of the organisation. The
internal control and Internal audit committee is tasked with
reviewing Elkem’s internal control system and governance
processes, ensuring compliance with regulations, and
evaluating risk management systems. This committee
reports its findings to the audit committee and the board,
providing recommendations for improvements. The
compliance committee oversees the group’s compliance
programme, ensuring that operations are conducted
ethically and in line with regulatory requirements. It advises
on compliance-related matters and promotes a culture of
integrity within the organisation. Together, these committees
ensure that Elkem operates with a high standard of
corporate governance, maintaining transparency,
accountability, and sustainable growth.
Topic
Sub-topic
Description
Actual or
potential
impact (A/P)
Material
impact
Financial
impact
Positive or
negative impact
Impact score
(based on
irremediability,
scale, scope,
and likelihood)
Timeframe
Own
operations (OO) or
value chain (VC)
G1
Business
conduct
Corruption and
bribery
Corruption taking place in our value chain, and thus can contribute to shadow economies.
Potential
Yes
No
Negative
Medium
Short
VC
Solid corporate culture and training can reduce the risk of bribery, and established Speak Up
channels and policy protecting internal and external whistleblowers.
Actual
Yes
Yes
Positive
Low
Short
OO, VC
Material impacts, risks and opportunities
IRO-1
Elkem has global value chains and this constitutes a
potential negative impact related to corruption, bribery,
and economic misconduct. The risk and potential negative
impact are evident in both our supply chain, but perhaps
especially where we use external distributors and sales
agents. Conversely, Elkem has a positive impact through
our management of this topic. We have comprehensive
training for all employees, and specific training for
personnel in procurement or other exposed roles, and the
group has solid internal control and compliance experts, at
corporate level but also in the line. A dedicated Speak Up
channel, that ensures the privacy of the whistleblower and
the subject, is established and open to all stakeholders.
Elkem also reports transparently on suspected cases of
misconduct. These elements are key elements of a strong
corporate culture to reduce the potential negative impact
and related risk.
Elkem faces several grouped risks that could impact
its operations and reputation. Increasing regulatory
requirements for due diligence and transparency may
necessitate additional resources to screen, monitor, and
manage the relationship with third parties that Elkem
interact with, including customers, intermediaries, and
suppliers. Elkem must adhere to numerous sanctions and
trade regulations, financial crime legisl
tion, and laws
enacted to protect the human rights of people a
ff
ected
by Elkem’s operations. Breach of sanctions and trade
regulations or becoming directly or indirectly involved in
human rights violations or financial crime, could
esult
in significa
t financial penalties. Gi
en the shifting
geopolitical landscape, severe violations could also result
in direct sanctions on Elkem, which would be detrimental
to Elkem. In light of our internal controls the probability
of this is low, but given the potential significa
t financial
impact, the risk is categorised as medium to Elkem.
Reputational and ethical risks arise from increasing
stakeholder expectations to responsible sourcing and
procurement. Limited capacity to manage supplier
relationships and ensure their compliance with the Code of
Conduct for business partners poses a risk of associating
with high-risk suppliers, potentially leading to reputational
damage. The risk is partially mitigated by existing
screening processes for all new suppliers and audit
requirements for high risk raw material suppliers, and the
risk impact is therefore categorised as low.
Furthermore, insuffici
t transparency in Elkem's political
engagements acr
oss diff
erent markets could harm its
reputation, but this is also considered a low risk as Elkem’s
political influence is primaril
done transparently, through
industry organisations.
Operational and strategic risks include the potential for
supply shortages if key suppliers fail to meet screening
requirements or if increased demands from Elkem lead
to compliance issues. Additionally, Elkem must navigate
the stringent requirements set by the EU, and this could
in turn result in unfavourable framework conditions for
Elkem. This is also a medium risk as the financial impa
t
is significa
t. These grouped risks highlight the need for
robust governance, comprehensive risk management,
and proactive stakeholder engagement to ensure Elkem's
sustainable growth and integrity.
Business conduct policies and corporate culture
G1-1
Elkem’s governing documents set out principles for
how business should be conducted. These apply to all
Elkem entities. Elkem’s Code of Conduct and governance
policy is anchored at the top and approved by the board
of directors in Elkem. The operational management of
compliance issues is handled through our corporate
compliance team. The team supports Elkem employees
and management with the tools and advice on the need to
act responsibly and in line with Elkem’s Code of Conduct.
These documents are described in detail under the ESRS
2 section on governing documents.
Elkem invests significa
tly in developing relevant, engaging
compliance training for its workforce. Elkem has reinforced
its training programme with eLearning courses on the
Code of Conduct, compliance awareness to newcomers,
and anti-corruption modules covering high risk processes
such as gifts and hospitality, confli
ts of interest, and
sponsoring and donations. Many modules are available in
multiple languages spoken across the group.
In 2024, Code of Conduct training is mandatory for all
office-based emp
yees and all new hires. Several other
modules and courses were made mandatory for specific
target groups based on an assessment of risk exposure.
This training is supported by a global learning platform
and new in-house content development tools, enabling
tailored, risk-based training that meets the specific needs
of diverse employee roles.
To mitigate the risk of anti-competitive behaviour, Elkem
conducts assessments to identify high-risk jurisdictions
and employee groups vulnerable to such practices. The
company provides targeted eLearning on competition law,
as well as bespoke training sessions to ensure employees
comply with established standards. Elkem's commitment
is further strengthened by dawn raid guidelines
implemented across all major sites, coupled with specific
training to prepare employees and management for
compliance with competition laws.
Prevention and detection of corruption and
bribery
G1-2, G1-3
Elkem enforces a strict anti-bribery and corruption policy,
especially in jurisdictions where it operates in high-risk
environments. A risk-based approach enables Elkem to
continuously improve its anti-bribery measures, including
risk assessments that guide both existing and new
business ventures. By proactively engaging in this way,
Elkem reaffirms its
ero-tolerance policy and dedication to
ethical business practices.
Elkem acknowledges the role that business partners
play in maintaining high ethical standards. Through
our Business partner Code of Conduct, Elkem requires
business partners such as agents, consultants, suppliers,
and joint ventures to adhere to these standards. In 2024,
the company launched a global supplier relationship
management (SRM) platform to further strengthen risk
management, providing a robust framework for evaluating
and controlling supplier relationships.
Elkem encourages a culture where employees and
external stakeholders can report potential misconduct
securely and without fear of retaliation. A professional
Speak Up channel securely hosted by a third party
supports confide
tial and anonymous reporting in
multiple languages via web or telephone. Significa
t
matters may be escalated to senior management or the
audit committee, and Elkem maintains a zero-tolerance
policy against retaliation.
Elkem is committed to full compliance with tax laws
across its global operations, focusing on transparency and
collaboration with tax authorities. With a low-risk tolerance
in tax planning, Elkem’s tax function aligns with the
company’s risk management framework and undergoes
annual reviews. Elkem engages third-party advisors where
necessary, ensuring adherence to legal requirements and
maintaining open relationships with tax authorities.
In 2024, Elkem reported no significa
t legal or regulatory
violations that resulted in material penalties. The
company defines significance based on imp
ts on
the environment, production continuity, and economic
e
ff
ects, maintaining stringent internal controls to prevent
non-compliance. Elkem has not uncovered any instances
where Elkem or Elkem’s subsidiaries have not adopted or
refused to adopt the governing documents approved and
implemented by the board.
Compliance training table
Number of
people in target
Completion
Training module
Target group
Frequency
Course type
group 2024
rate 2024
Introduction to Elkem’s
All new employees
At start of employment
Elearning (alternatively
451
87.4%
Code of Conduct
with Elkem
classroom for blue
collar employees)
Compliance awareness
All new white-collar
At start of employment
Elearning
23
95.7%
training to newcomers
employees
with Elkem
Code of Conduct
All current white collar
Annual
Elearning
6 668
99.1%
refresher
employees
Elkem Sanctions
Risk based target group
One-o
ff
risk-based
Elearning
861
99.4%
School
campaigns.
Introduction to human
Risk based target group
Subsequent
Elearning
391
100%
rights
assignment to new
employees meeting
target group definitio
Anti-trust
Risk based target group
Elearning
1 022
96.3%
Actions and resources related to business
I
conduct
G1-MDR-A
To address the listed impacts and risks Elkem has
improved its internal training, as described above, and
strong internal controls and compliance resources are
in place. Our ambition is to continuously improve our
compliance programme in accordance with evolving
requirements and best practice.
One short-term priority is to continue to refine ou
third
party risk management processes, with particular focus on
high risk intermediaries (resellers / distributors and sales
agents). These e
ff
orts will build on our existing sanctions
compliance programme but also incorporate anti-
corruption controls to ensure a holistic and streamlined
process for qualific
tion, approval, and relationship
management of such high risk third parties.
The compliance team will also work closely with the
procurement organisation to add and refine functionality to
extract maximum value from our SRM platform. Our aim is
to further improve upon our risk-based supplier qualific
tion
and follow-up requirements to encompass all relevant
compliance risks such as sanctions, corruption, and human-
and labour rights. For our legacy suppliers we will prioritise
high risk categories of suppliers and engage through the
supplier owners to renew / update their commitment to
Elkem’s Code of Conduct for business partners.
Our training programme will continue to evolve, with an
aim to provide relevant and targeted training to increase
training e
ff
ectiveness. In 2024 Elkem developed anti-
corruption training modules covering high risk processes
such as gifts and hospitality, confli
ts of interest, and
sponsoring and donations.
These will be assigned to
specific target groups deemed to be in risk exposed roles,
e.g. the sponsoring and donation course will be targeted
towards plant managers and others involved in approving
such expenditure.
n 2025, the compliance programme will be subject to
a review by an independent external party. The scope
of the engagement is to conduct a top-down approach
assessment focusing on Elkem’s compliance management
system and whether it is comprehensive, systematic
and e
ff
ective, refle
ting Elkem’s complexity and needs.
The findings and
ecommendations from this review will
provide strategic direction for the compliance team for the
medium term.
Incidents of corruption or bribery
G1-4, G1-MDR-T
In 2024, Elkem recorded the following instances of suspected misconducts, and the table shows the overview,
and also the number of substantiated cases.
Metric
2024
2023
2022
Development
Total number and nature of
misconduct reports
Number
26
15
14
73.3%
Inappropriate workplace
behaviour and
harassment: 13
HSE violation: 2
Corruption and fraud: 4
Confli
t of interest: 3
Company/professional
code violation: 3
Sanction violation: 1
Company/
professional code
violation: 2
Confli
t of interest: 3
Corruption and
fraud: 4
HSE violation: 1
Inappropriate
workplace behaviour
and harassment: 2
Rights and
protection of
individuals: 1
HR case: 2
Number of confirmed cases
f
corruption** and fraud
Number
1
1
6
No change
Number of confirmed incide
ts in
which employees were dismissed or
disciplined for corruption**
Number
1
0
2
Public legal cases regarding
corruption** brought against the
organisation or its employees
Number
1
0
0
100%
"Confirmed incide
ts when contracts
with business partners were
terminated or not renewed due to
violations related
to corruption**"
Number
0
0
5
No change
Political influence and lob
ying activities
G1-5
Elkem actively engages with government policymakers,
media, civil society, non-governmental organisations and
international institutions to communicate its stance on
key industry issues. Elkem does not support political or
religious organisations, individuals or groups not part of
recognised charities, discriminatory or harmful activities,
or any activities violating laws, Elkem’s Code of Conduct,
or internal policies. This is outlined in our Sponsoring and
donations procedure. Exceptions include small symbolic
gestures around employees' religious holidays, which
follow the gifts and hospitality procedure.
Elkem primarily represents its interests in external
dialogues through industrial organisations. If external
lobbyists are hired, it is done legally and transparently,
with prior approval from the VP of Corporate
Communications & Public A
ff
airs, and in line with the
third party risk management procedure. All sponsorships
and social contributions must adhere to Elkem’s Code of
Conduct and anti-corruption requirements.
Organisation
Partnership/membership fee for 2024
Norsk Industri
NOK 1 045 167 (EUR 88 949)
Eurometaux
EUR 57 917
Euroalliages
EUR 280 393
Miljøstiftelsen ZERO
NOK 403 500 (EUR 34 340)
Silicones Europe/CEFIC
EUR 371 000
Global Silicones Council /SEHSC
EUR 917 000
Payment practices
G1-6
Elkem strives to pay all invoices within reasonable time.
The key guideline is to pay the invoice within 45 days of
it being issued. This is regardless of whether it is a large
corporate supplier or an SME.
ESRS Index of material disclosures
ESRS standard
DR
Page number
Description
ESRS 2
BP-1
BP-2
GOV-1
GOV-2
GOV-3
GOV-4
GOV-5
SBM-1
SBM-2
SBM-3
IRO-1
IRO-2
89
89
89
89
89, 91
94
94
95
96
99
99
188
General basis for preparation of sustainability statement
Disclosures in relation to specific ci
cumstances
The role of the administrative, management and supervisory bodies
Information provided to and sustainability matters addressed by the undertaking's administrative,
management, and supervisory bodies
Integration of sustainability-related performance in incentive schemes
Statement on due diligence
Risk management and internal controls over sustainability reporting
Strategy, business model, and value chain
Interests and view of stakeholders
Material impacts, risks and opportunities, and their interaction with strategy and business model
Description of the process to identify and assess material impacts, risks, and opportunities
Disclosure requirements in ESRS covered by the undertaking's sustainability statement
ESRS E1
ESRS 2
SBM-3
IRO-1
E1-1
E1-2
E1-3
E1-4
E1-5
E1-6
E1-7
E1-8
E1-9
105
105
105
112
91, 113
113
114
114
117
119
119
119
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Transition plan for climate change mitigation
Policies related to climate change mitigation and adaptation
Actions and resources in relation to climate policies
Targets for climate change mitigation and adaptation
Energy consumption and mix
Gross scopes 1, 2, and 3 GHG Emissions
GHG removals and carbon credits
Internal carbon pricing
Financial e
ff
ects of climate-related risks and opportunities
ESRS E2
IRO-1
E2-1
E2-2
E2-3
E2-4
E2-5
E2-6
131
91, 132
132
134
134
134
133
Description of processes to identify and assess material pollution-related impacts,
risks and opportunities
Policies related to pollution
Actions and resources related to pollution
Targets related to pollution
Pollution of air, water and soil – general
Substances of concern and substances of very high concern
Anticipated financial
ff
ects from material pollution-related risks and opportunities
ESRS E3
ESRS 2
SBM-3
IRO-1
E3-1
E3-2
E3-3
E3-4
E3-5
137
137
137
91, 138
138
138
139
140
Material water and marine resources-related impacts, risks and opportunities
Material water and marine resources-related impacts, risks and opportunities
Material water and marine resources-related impacts, risks and opportunities
Policies related to water and marine resources
Actions and resources related to water and marine resources
Targets related to water and marine resources
Water consumption
Anticipated financial
ff
ects from material water and marine resources-related risks and opportunities
ESRS E4
ESRS 2
SBM-3
IRO-1
E4-1
E4-2
E4-3
E4-4
E4-5
E4-6
143
143
144
145
91, 145
145
146
146
146
Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks and opportunities and their interaction with strategy and business model
Description of processes to identify and assess material biodiversity and ecosystem-related
impacts, risks, dependencies and opportunities
Transition plan on biodiversity and ecosystems in strategy and business model
Policies related to biodiversity and ecosystems
Actions and resources related to biodiversity and ecosystems
Targets related to biodiversity and ecosystems
Impact metrics related to biodiversity and ecosystems change
Anticipated financial
ff
ects from material biodiversity and ecosystem-related risks and opportunities
ESRS E5
ESRS 2
SBM-3
IRO-1
E5-1
E5-2
149
149
149
91, 151
151
Description of processes to identify and assess material resource use and circular economy-
related impacts, risks and opportunities
Description of processes to identify and assess material resource use and circular economy-
related impacts, risks and opportunities
Description of processes to identify and assess material resource use and circular economy-
related impacts, risks and opportunities
Policies related to resource use and circular economy
Actions and resources related to resource use and circular econom
y
ESRS standard
DR
Page number
Description
E5-3
E5-4
E5-5
152
152
152
Targets related to resource use and circular economy
Resource infl
ws
Resource outfl
ws
ESRS S1
ESRS 2
SBM-3
IRO-1
S1-1
S1-14
S1-2
S1-3
S1-4
S1-13
S1-8
S1-13
S1-5
S1-6
S1-7
S1-9
S1-12
S1-10
S1-11
S1-16
S1-17
157
157
157
91, 160
160
161
161
161
161, 162
162
164
164
164
164
165
165
165
165
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Material impacts, risks and opportunities - Resilience of Strategy and Business Model
Policies related to own workforce
Health and safety
Processes to engage with own workforce
Processes to engage with own workforce
Actions related to own workforce
Processes to engage with own workforce
Collective bargaining coverage and social dialogue
Training and skills development metrics
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
Our workforce
Our workforce
Our workforce
Our workforce
Adequate wages, social protection, renumeration metrics, and incidents and complaints
Adequate wages, social protection, renumeration metrics, and incidents and complaints
Adequate wages, social protection, renumeration metrics, and incidents and complaints
Adequate wages, social protection, renumeration metrics, and incidents and complaints
ESRS S2
ESRS 2
SBM-3
IRO-1
S2-1
S2-2
S2-3
S2-4
S2-5
167
167
167
91, 168
168
169
169
170
Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks and opportunities and their interaction with strategy and business model
Policies related to value chain workers
Processes for engaging with value chain workers about impacts
Processes to remediate negative impacts and channels for value chain workers to raise concerns
Taking action on material impacts on value chain workers, and approaches to managing material risks
and pursuing material opportunities related to value chain workers, and e
ff
ectiveness of those actions
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
ESRS S3
SBM-2
ESRS 2
SBM-3
S3-1
S3-2
S3-3
S3-4
S3-5
173
173
173
91, 176
176
176
176
177
Interests and views of stakeholders
Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks and opportunities and their interaction with strategy and business model
Policies related to a
ff
ected communities
Processes for engaging with a
ff
ected communities about impacts
Processes to remediate negative impacts and channels for a
ff
ected communities to raise concerns
Taking action on material impacts on a
ff
ected communities, and approaches to managing material risks
and pursuing material opportunities related to a
ff
ected communities, and e
ff
ectiveness of those actions
Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
ESRS G1
GOV-1
IRO-1
G1-1
G1-2
G1-3
G1-MDR-A
G1-4
G1-MDR-T
G1-5
G1-6
181
182
91, 182
183
183
184
185
185
186
186
Role of administrative, supervisory and management bodies
Material impacts, risks and opportunities
Business conduct policies and corporate culture
Prevention and detection of corruption and bribery
Prevention and detection of corruption and bribery
Actions and resources related to business conduct
Incidents of corruption or bribery
Incidents of corruption or bribery
Political influence and lob
ying activities
Payment practices
KPMG AS
Sørkedalsveien 6
P.O. Box 7000 Majorstuen
N
-0306 Oslo
Telephone +47 45 40 40 63
Internet www.kpmg.no
Enterprise 935 174
627 MVA
To the General Meeting of Elkem ASA
Independent Sustainability Auditor’s Limited Assurance Report
Limited Assurance Conclusion
We have conducted a limited assurance engagement on the consolidated sustainability statement of Elkem ASA (the
«Company»), included in the section Sustainability Statement of the Board of Directors' report (the «Sustainability Statement»),
as at 31 December 2024 and for the year then ended.
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that
causes us to believe that the Sustainability Statement is not prepared, in all material respects, in accordance with the
Norwegian Accounting Act section 2-3, including:
•
compliance with the European Sustainability Reporting Standards (ESRS), including that the process carried out by
the Company to identify the information reported in the Sustainability Statement (the «Process») is in accordance with
the description set out in section Double Materiality Assessment - Material impacts, risks and opportunities; and
•
compliance of the disclosures in the section Statement on the EU Taxonomy for Sustainable Economic Activities of
the Sustainability Statement with Article 8 of EU Regulation 2020/852 (the «Taxonomy Regulation»).
Basis for Conclusion
We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements
(ISAE) 3000 (Revised), Assurance engagements other than audits or reviews of historical financial information («ISAE 3000
(Revised)»), issued by the International Auditing and Assurance Standards Board.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Our
responsibilities under this standard are further described in the
Sustainability Auditor’s Responsibilities
section of our report.
Our Independence and Quality Management
We have complied with the independence and other ethical requirements as required by relevant laws and regulations in
Norway and the International Code of Ethics for Professional Accountants (including International Independence Standards)
issued by the International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental principles
of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Other Matter
The comparative information included in the Sustainability Statement was not subject to an assurance engagement. Our
conclusion is not modified in respect of this matter.
Responsibilities for the Sustainability Statement
The Board of Directors and the Managing Director (Management) are responsible for designing and implementing a process to
identify the information reported in the Sustainability Statement in accordance with the ESRS and for disclosing this Process in
section Double Materiality Assessment - Material impacts, risks and opportunities of the Sustainability Statement. This
responsibility includes:
•
understanding the context in which the Group's activities and business relationships take place and developing an
understanding of its affected stakeholders;
•
the identification of the actual and potential impacts (both negative and positive) related to sustainability matters, as
well as risks and opportunities that affect, or could reasonably be expected to affect, the Group's financial position,
financial performance, cash flows, access to finance or cost of capital over the short-, medium-, or long-term;
•
the assessment of the materiality of the identified impacts, risks and opportunities related to sustainability matters by
selecting and applying appropriate thresholds; and
•
making assumptions that are reasonable in the circumstances.
Management is further responsible for the preparation of the Sustainability Statement, in accordance with the Norwegian
Accounting Act section 2-3, including:
•
compliance with the ESRS;
•
preparing the disclosures in the section Statement on the EU Taxonomy for Sustainable Economic Activities of the
Sustainability Statement, in compliance with the Taxonomy Regulation;
•
designing, implementing and maintaining such internal control that Management determines is necessary to enable
the preparation of the Sustainability Statement that is free from material misstatement, whether due to fraud or error;
and
•
the selection and application of appropriate sustainability reporting methods and making assumptions and estimates
that are reasonable in the circumstances.
Inherent limitations in preparing the Sustainability Statement
In reporting forward-looking information in accordance with ESRS, Management is required to prepare the forward-looking
information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the
Group. Actual outcomes are likely to be different since anticipated events frequently do not occur as expected.
Sustainability
Auditor’s Responsibilities
Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about whether the
Sustainability Statement is free from material misstatement, whether due to fraud or error, and to issue a limited assurance
report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the Sustainability
Statement as a whole.
As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise professional judgement and
maintain professional scepticism throughout the engagement.
Our responsibilities in respect of the Sustainability Statement, in relation to the Process, include:
•
Obtaining an understanding of the Process, but not for the purpose of providing a conclusion on the effectiveness of
the Process, including the outcome of the Process;
•
Considering whether the information identified addresses the applicable disclosure requirements of the ESRS; and
•
Designing and performing procedures to evaluate whether the Process is consistent with the Company’s description
of its Process set out in section Double Materiality Assessment - Material impacts, risks and opportunities.
Our other responsibilities in respect of the Sustainability Statement include:
•
Identifying where material misstatements are likely to arise, whether due to fraud or error; and
•
Designing and performing procedures responsive to where material misstatements are likely to arise in the
Sustainability Statement. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Summary of the Work Performed
A limited assurance engagement involves performing procedures to obtain evidence about the Sustainability Statement. The
procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable
assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially
lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
The nature, timing and extent of procedures selected depend on professional judgement, including the identification of
disclosures where material misstatements are likely to arise in the Sustainability Statement, whether due to fraud or error.
In conducting our limited assurance engagement, with respect to the Process, we:
•
Obtained an understanding of the Process by:
o
performing inquiries to understand the sources of the information used by management (e.g., stakeholder
engagement, business plans and strategy documents); and
o
reviewing the Company’s internal documentation of its Process; and
•
Evaluated whether the evidence obtained from our procedures with respect to the Process implemented by
the Company was consistent with the description of the Process set out in section Double Materiality Assessment -
Material impacts, risks and opportunities.
In conducting our limited assurance engagement, with respect to the Sustainability Statement, we:
•
Obtained an understanding of the Group’s reporting processes relevant to the preparation of its Sustainability
Statement by:
o
Obtaining an understanding of the Group's control environment, processes and information system relevant
to the preparation of the Sustainability Statement, but not for the purpose of providing a conclusion on the
effectiveness of the Group’s internal cont
rol; and
o
Obtaining an understanding of the Group’s risk assessment process;
•
Evaluated whether the information identified by the Process is included in the Sustainability Statement;
•
Evaluated whether the structure and the presentation of the Sustainability Statement is in accordance with the ESRS;
•
Performed inquiries of relevant personnel on selected information in the Sustainability Statement;
•
Performed substantive assurance procedures on selected information in the Sustainability Statement;
•
Where applicable, compared disclosures in the Sustainability Statement with the corresponding disclosures in the
financial statements and other sections of the Board of Directors' report;
•
Evaluated the methods, assumptions and data for developing estimates and forward-looking information;
•
Obtained an understanding of the Company’s process to identify taxonomy
-eligible and taxonomy-aligned economic
activities and the corresponding disclosures in the Sustainability Statement;
•
Evaluated whether information about the identified taxonomy-eligible and taxonomy-aligned economic activities is
included in the Sustainability Statement; and
•
Performed inquiries of relevant personnel and substantive procedures on selected taxonomy disclosures included in
the Sustainability Statement.
Oslo, 19 March 2025
KPMG AS
Stian Tørrestad
State Authorised Public Accountant
–
Sustainability Auditor
Financial
statements
Table
of contents
Financial statements
Consolidated statement of profit or loss
196
Consolidated statement of comprehensive income
197
Consolidated statement of financial position
198
Consolidated statement of cash flows
199
Consolidated statement of changes in equity
200
General information
Note 1
General information
202
Note 2
Basis for preparing the consolidated financial statements
202
Note 3
Accounting estimates
204
Group structure
Note 4
Composition of the group
204
Note 5
Equity accounted investments and joint operations
210
Information about statement of profit or loss
Note 6
Operating segments
214
Note 7
Revenue
220
Note 8
Other operating income
222
Note 9
Grants
222
Note 10 Raw materials and energy
224
Note 11
Employee benefits
224
Note 12 Share-based payments
230
Note 13 Other operating expenses
232
Note 14 Other items
233
Note 15
Finance income and expenses
234
Note 16 Taxes
235
Information about statement of financial position
Note 17
Property, plant and equipment
240
Note 18 Leases
243
Note 19 Other intangible assets
245
Note 20 Goodwill
248
Note 21 Impairment assessments
249
Note 22 Inventories
254
Note 23 Trade receivables
255
Note 24 Other assets
257
Note 25 Cash and cash equivalents and restricted deposits
258
Note 26 Interest-bearing liabilities
258
Note 27 Trade payables
262
Note 28 Bills payables
262
Note 29 Provisions and other liabilities
263
Note 30 Financial assets and liabilities
265
Note 31 Hedging
272
Other information
Note 32 Financial risk
276
Note 33 Capital management
284
Note 34 Number of shares
285
Note 35 Earnings per share
286
Note 36 Supplemental information to the consolidated statement of cash flows
286
Note 37 Related parties
287
Note 38 Pledge of assets and guarantees
288
Note 39 Changes in presentation
289
Note 40 Assets held for sale and discontinued operations
291
Note 41
Events after the reporting period
296
APM
Alternative Performance Measures
342
Consolidated statement of profit or loss
Amounts in NOK million
Note
2024
2023 Restated
1)
1 January - 31 December
Revenue
Other operating income
Share of profit (loss) from equity accounted investments
Total operating income
7
8
5
6, 40
(6 )
Raw materials and energy
Employee benefit expenses
Other operating expenses
Amortisation and depreciation
Impairment losses
Other items
10
11
13
17, 18, 19
17, 18, 19
14
(8 313 )
(2 766 )
(4 283 )
(931 )
(168 )
(316 )
(10 825 )
(2 662 )
(4 173 )
(844 )
(25 )
Operating profit (loss)
Share of profit (loss) from equity accounted financial investments
Finance income
Foreign exchange gains (losses)
Finance expenses
5
15
15
15, 18
(143 )
(778 )
(63 )
(106 )
(666 )
Profit (loss) before income tax
Income tax (expense) benefit
16
(781 )
Profit (loss) for the year for the year from continuing operations
Profit (loss) for the year from discontinued operations
40
(1 538 )
(1 927 )
Profit (loss) for the year
Attributable to:
Non-controlling interests' share of profit (loss)
Owners of the parent's share of profit (loss)
Earnings per share in NOK:
Basic
Diluted
35
35
1)
See note 39 Change in presentation
↗
Consolidated statement of comprehensive income
Amounts in NOK million
Note
2024
2023
1 January - 31 December
Profit (loss) for the year
Remeasurement of defined benefit pension plans
Tax effects on remeasurement of defined benefit pension plans
Change in fair value of equity instruments
Share of other comprehensive income (loss) from equity accounted companies
Total items that will not be reclassified to profit or loss
11
16
5
(1 )
(19 )
(0 )
(12 )
Currency translation differences
Hedging of net investment in foreign operations
Tax effects hedging of net investment in foreign operations
Cash flow hedges
Tax effects on cash flow hedges
Share of other comprehensive income (loss) from equity accounted companies
Total items that may be reclassified to profit or loss in subsequent periods
31
16
31
16
5
(128 )
(13 )
(199 )
(1 294 )
(686 )
Cash flow hedges
Tax effects on cash flow hedges
Total reclassification adjustments for the period
31
16
(37 )
Other comprehensive income (loss) for the year, net of tax
(566 )
Total comprehensive income for the year
(396 )
Attributable to:
Non-controlling interests' share of comprehensive income
Owners of the parent's share of comprehensive income
Total comprehensive income for the year
(498 )
(396 )
Consolidated statement of financial position
Amounts in NOK million
Note
31.12.2024
31.12.2023
Assets
Property, plant and equipment
Right-of-use assets
Other intangible assets
Goodwill
Deferred tax assets
Equity accounted investments
Derivatives
Other assets
Total non-current assets
17, 21
18, 21
19, 21
20, 21
16
5
30, 31
24
Inventories
Trade receivables
Derivatives
Other assets
Restricted deposits
Cash and cash equivalents
Total current assets
22
23
30, 31
24
25
25
Assets classified as held for sale
Total assets
40
Equity and liabilities
Paid-in capital
Retained earnings
Non-controlling interests
Total equity
34
Interest-bearing liabilities
Deferred tax liabilities
Employee benefit obligations
Derivatives
Provisions and other liabilities
Total non-current liabilities
18, 26
16
11
30, 31
29
Trade payables
Income tax payables
Interest-bearing liabilities
Bills payables
Employee benefit obligations
Derivatives
Provisions and other liabilities
Total current liabilities
18, 26
28
11
30, 31
29
Liabilities classified as held for sale
Total equity and liabilities
40
Oslo, 12 March 2025
Olivier Tillette de
Bo Li
Dag Jakob Opedal
Dachuan Dong
Terje Andre Hanssen
Thomas Eggan
Clermont-Tonnerre
Chair
Vice chair
Board member
Board member
Board member
Board member
Wei Yao
Marianne E. Johnsen
Marianne Færøyvik
Grace Tang
Nathalie Brunelle
Helge Aasen,
Board member
Board member
Board member
Board member
Board member
CEO
Consolidated statement of cash flows
Amounts in NOK million
Note
2024
2023
1 January - 31 December
Operating profit (loss) from continuing operations
40
Operating profit (loss) from discontinued operations
40
(1 382 )
(1 895 )
Amortisation, depreciation and impairment losses
17, 18, 19
Changes in working capital
36
(629 )
Equity accounted investments
5
Changes in fair value of derivatives
(59 )
Changes in provisions, bills receivable and other
(27 )
(47 )
Interest payments received
Interest payments made
(885 )
(716 )
Income taxes paid
(614 )
(2 281 )
Total cash flow from operating activities
Investments in property, plant and equipment and intangible assets
17, 19
(3 398 )
(4 988 )
Received investment grants
9
Proceeds from sale of property, plant and equipment
17, 19
Business combinations
4
(152 )
Disposal of equity accounted investments
Payment of contingent consideration related to acquisitions (IFRS 3)
29, 36
(38 )
Acquisition of and capital contribution to equity accounted investments
5
(4 )
(329 )
Other investments / sales
(1 )
Total cash flow from investing activities
(3 303 )
(5 299 )
Dividends paid to non-controlling interests
(123 )
(104 )
Dividends paid to owners of the parent
33
(3 815 )
Net sale (purchase) of treasury shares
34
(8 )
Payment of lease liabilities
18, 26
(143 )
(209 )
New interest-bearing loans and borrowings
26
Payment of interest-bearing loans and borrowings
26
(1 474 )
(262 )
Total cash flow from financing activities
(487 )
Change in cash and cash equivalents
(536 )
(3 017 )
Currency translation differences
Cash and cash equivalents opening balance
Cash and cash equivalents closing balance
Of which cash and cash equivalents in assets held for sale
40
Of which cash and cash equivalents in continuing operations
25
Consolidated statement of changes in equity
2024
Amounts in NOK million
Share
capital
Other paid-in
capital
Total paid-in
capital
Foreign currency
translation
reserve
Cash flow
hedge reserve
Other retained
earnings
Total retained
earnings
Total owners
share
Non-controlling
interest
Total
Opening balance
(79 )
Profit (loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
Share-based payments (note 12)
Net movement treasury shares (note 34)
Dividends to equity holders (note 33)
Closing balance
(46 )
(123 )
(123 )
2023
Amounts in NOK million
Share
capital
Other paid-in
capital
Total paid-in
capital
Foreign currency
translation
reserve
Cash flow
hedge reserve
Other retained
earnings
Total retained
earnings
Total owners
share
Non-controlling
interest
Total
Opening balance
Profit (loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
(878 )
(878 )
(10 )
(570 )
(498 )
(570 )
(498 )
(566 )
(396 )
Share-based payments (note 12)
Net movement treasury shares (note 34)
Dividends to equity holders (note 33)
Closing balance
(3 )
(2 734 )
(3 )
(2 734 )
(79 )
(5 )
(1 081 )
(5 )
(1 081 )
(8 )
(3 815 )
(104 )
(8 )
(3 919 )
Notes to the consolidated financial statements
and whose shares are publicly traded on Oslo Børs. Elkem
ASA is owned 52.9 per cent by Bluestar Elkem International
of Sinochem Holdings Co., Ltd (Sinochem), a company
registered and domiciled in China.
material solutions shaping a better and more sustainable
future. The company develops silicones, silicon products
and carbon solutions by combining natural raw materials,
renewable energy and human ingenuity. Elkem helps its
customers create and improve essential innovations like
electric mobility, digital communications, health and personal
strong track record since 1904, its global team of more than
7 200 people have a joint commitment to stakeholders:
Delivering your potential. In 2024, Elkem Group total achieved
an operating income of NOK 33 004 million.
(hereafter Elkem/the group), including notes, for the year
2024 were authorised for issue by the board of directors´ of
The consolidated financial statements are prepared and in
accordance with International Financial Reporting Standards
(IFRS®) as endorsed by the European Union (EU) and effective
at 31 December 2024 . All accounting policies are used
consistently by all subsidiaries in the consolidated financial
statement. Relevant financial reporting principles are described
Preparation of consolidated financial statements
The consolidated financial statements are prepared on a
historical cost basis, with the exception of derivative financial
instruments and other financial assets measured at fair value.
The presentation currency of Elkem is Norwegian Krone
(NOK). All financial information is presented in NOK million,
unless otherwise stated. As a result of rounding adjustments,
the amounts shown in one or more rows and columns
included in the consolidated financial statements, may not
add up to the total.
In text, the current year's figures are presented outside
parentheses, followed by the comparative figures presented in
parentheses.
On 23 January 2025 the group announced its intention to
perform a strategic review of the Silicones business area, and
it initiated an active programme to locate a buyer for the Elkem
Silicones operating segment. At the end of the fourth quarter it
was assessed that Elkem Silicones meets the criteria for held
for sale. Elkem Silicones operating segment represents a major
line of business and per 31 December 2024 a sale is regarded
to be highly probable to occur within one year. Elkem Silicones
operating segment is held for sale and is therefore classified
as discontinued operations in the 2024 financial statement.
The income statement for 2023 has been restated to classify
Silicones operating segment as discontinued operations. In the
2024 statement of financial position, the Silicones segment
is presented as held for sale. The statement of cash flows and
note 6 Operating segments provide information for the entire
Elkem group (Elkem group total). Unless otherwise specified,
notes related to the income statement reflect continuing
operations. For the statement of financial position, the 2024
numbers relate to continuing operations, while the 2023
numbers relate to Elkem group total. When totals for both
continuing and discontinued operations are disclosed, it will
be specified that the information is for Elkem group total. See
note 40 Assets held for sale and discontinued operations for
further information.
based on the economic environment in which it operates,
and items included in the financial statements of each entity
are measured using that functional currency. When preparing
the financial statements of each individual group entity,
transactions in currencies other than the entity's functional
currency are recognised in the functional currency, using the
Monetary items denominated in foreign currencies are
translated to each entity's functional currency using the
closing rate at the end of the reporting period, and any gains
(losses) are reported in the statement of profit or loss. Non-
monetary items that are measured at fair value in a foreign
currency are translated using the exchange rate at the date
when the fair value was measured. Currency gains (losses)
related to operating activities, i.e. receivables, payables, cash
and cash equivalents for operating purposes including current
intragroup balances, are recognised as a part of other items.
Currency effects recognised in finance income and expenses
are only related to financing activities such as loans, lease
liabilities, long-term placements and dividends.
Foreign currency differences are recognised in other
comprehensive income for the following items:
→
a financial asset or liability designated as a hedging
instrument in a cash flow hedge, to the extent that the
hedge is effective
→
loans in foreign currencies designated as hedging
instruments in a hedge of a net investment in a
foreign operation
In consolidation of the statement of profit or loss and the
statement of financial position, separate group entities with
other functional currency than the group's presentation
currency, are translated directly into the presentation currency
as follows:
→
Assets and liabilities are translated using the exchange
rate at the end of the reporting period
→
Income and expenses are translated using an average
exchange rate per month
→
Equity transactions, except for profit or loss for the period,
are translated using the transaction date rates
All resulting exchange differences are booked as a separate
component in other comprehensive income (OCI)
Any goodwill arising on acquisition of a foreign operation and
any fair value adjustment to the carrying amount of assets and
liabilities arising on the acquisition, are treated as assets and
liabilities of the foreign operations. On disposal of a foreign
entity, the deferred cumulative amount recognised in other
comprehensive income relating to that particular foreign
The statement of cash flows is prepared under the indirect
method. Cash inflows and outflows are shown separately for
investing and financing activities, while operating activities
include both cash and non-cash effect items. Interest received
and paid and other financial expenses, such as bank guarantee
expenses, are reported as a part of operating activities. Net
currency gains or losses related to financing activities are
reported as part of financing activities. Dividends received from
joint ventures and associates that do not operate within Elkem's
Dividend is recognised as a liability when the shareholders'
right to payment is established, which is when the dividend is
of material errors
Changes in accounting policies and correction of material
errors are recognised retrospectively by restating the
comparative amounts for the prior period presented, including
Changes in accounting policy
From 1 January 2024 Elkem has changed the principle for
presentation of grants related to income from other operating
income to net presentation where the grants are deducted
from the expenses for which the grants have compensated.
This results in more relevant information about the impact
of grants related to income and is consistent with the
presentation of investment grants as reduction of depreciation.
Please refer to note 39.
-
not yet effective
IFRS 18 will replace IAS 1 Presentation of financial statements,
effective from January 1 2027. The standard introduces new
requirements with the intention to achieve comparability of
the financial performance of similar entities and provide more
relevant information and transparency to users. Even though
IFRS 18 will not impact the recognition or measurement
of items in the financial statements, is expected to impact
presentation and disclosure. Management is currently assessing
the detailed implications of applying the new standard on the
group’s consolidated financial statements. No other standards,
interpretations or amendments published at the balance sheet
The preparation of the consolidated financial statements
according to IFRS requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, income and expenses. When management makes
estimates and assumptions concerning the future, the
resulting accounting estimates will, by definition, seldom equal
the actual outcome.
Estimates are continually evaluated and are based on historical
experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. Revisions of reported estimates are recognised
in the period in which the estimates are revised and in any
future period affected. Changes in accounting estimates are
recognised prospectively by including them in the statement of
profit or loss in the period of the change and future periods if
the change affects both.
The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
addressed in the following notes:
→
Note 16 Taxes
→
Note 21 Impairment assessments
→
Note 29 Provisions and other liabilities
→
Note 30 Financial assets and liabilities
→
The consolidated financial statements include the financial
statements of Elkem ASA and entities controlled directly or
The acquisition method of accounting is used to account for
business combinations made by the group.
IFRS 3 allows two different approaches to accounting for an
asset acquisition. Elkem have decided to first determine the
individual transaction price for each identifiable asset and
liability based on their relative fair value and subsequently
apply the initial measurement requirements in applicable
standards to each identifiable asset and liability. Any difference
between the amount at which the asset and liability is initially
measured and its individual transaction price is accounted for
operations make up the composition of the group and are
included in the consolidated financial statements
31.12.2024 31.12.2023 | |||||
Functional | Country of | Equity | Equity | ||
Company | currency | incorporation | interests | interests | Owner |
Elkania DA (Joint operation) | NOK | Norway | 50 % | 50% | Elkem ASA |
Elkem (Thailand) Co., Ltd. | THB | Thailand | 100 % | 100% | Elkem ASA |
Elkem Carbon (China) Co., Ltd. | CNY | China | 100 % | 100% | Elkem Carbon |
Singapore Pte. Ltd. | |||||
Elkem Carbon AS | NOK | Norway | 100 % | 100% | Elkem ASA |
Elkem Carbon Malaysia Sdn. Bhd. | MYR | Malaysia | 100 % | 100% | Elkem Carbon AS |
Elkem Carbon Singapore Pte. Ltd. | SGD | Singapore | 100 % | 100% | Elkem Carbon AS |
Elkem Carbon Slovakia, a.s. | EUR | Slovakia | 100 % | 100% | Elkem Carbon AS |
Elkem Chartering Holding AS | NOK | Norway | 80 % | 80% | Elkem ASA |
Elkem Digital Office AS | NOK | Norway | 100 % | 100% | Elkem ASA |
Elkem Distribution Center B.V. | EUR | Netherlands | 100 % | 100% | Elkem ASA |
Elkem Dronfield Ltd. | GBP | United Kingdom | 100 % | 100% | Elkem UK |
Holdings Ltd. | |||||
Elkem Egypt for Industry, | USD | Egypt | 100 % | 100% | Elkem International AS |
Contracting & Trading S.A.E. | |||||
Elkem Ferroveld JV (Joint operation) | ZAR | South Africa | 50 % | 50% | Elkem Carbon AS |
Elkem Foundry (China) Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
Elkem GmbH | EUR | Germany | 100 % | 100% | Elkem ASA |
Elkem Iberia S.L.U | EUR | Spain | 100 % | 100% | Elkem ASA |
Elkem International AS | NOK | Norway | 100 % | 100% | Elkem ASA |
Elkem International Trade (Shanghai) Co., Ltd. | CNY | China | 100 % | 100% | Elkem International AS |
Elkem Ísland ehf. | NOK | Iceland | 100 % | 100% | Elkem ASA |
Elkem Japan K.K. | JPY | Japan | 100 % | 100% | Elkem ASA |
Elkem Korea Co., Ltd. | KRW | Republic | 100 % | 100% | Elkem ASA |
of Korea | |||||
Elkem Ltd. | GBP | United Kingdom | 100 % | 100% | Elkem UK |
Holdings Ltd. | |||||
Elkem Madencilik Metalurji | EUR | Turkey | 100 % | 100% | Elkem International AS |
Sanayi Ve Ticaret Ltd. STI | |||||
Elkem Materials, Inc. | USD | USA | 100 % | 100% | NEH LLC |
Elkem Materials Processing (Tianjin) Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
Elkem Materials Processing Services BV | EUR | Netherlands | 100 % | 100% | Elkem ASA |
Elkem Materials South America Ltda. | BRL | Brazil | 100 % | 100% | Elkem Materials, Inc. |
Elkem Metal Canada Inc. | CAD | Canada | 100 % | 100% | Elkem ASA |
Elkem Milling Services GmbH | EUR | Germany | 100 % | 100% | Elkem ASA |
Elkem Nordic A.S. | DKK | Denmark | 100 % | 100% | Elkem ASA |
Elkem Oilfield Chemicals FZCO Ltd. | AED | UAE | 51 % | 51% | Elkem ASA |
Elkem Paraguay S.A. | USD | Paraguay | 100 % | 100% | Elkem ASA 1) |
Elkem Participaçòes Indústria e Comércio Limitada | BRL | Brazil | 100 % | 100% | Elkem Carbon AS |
Elkem Processing Services S.A. | EUR | Belgium | 100 % | 100% | Elkem ASA |
Elkem S.à r.l. | EUR | France | 100 % | 100% | Elkem ASA |
Elkem S.r.l. | EUR | Italy | 100 % | 100% | Elkem ASA |
31.12.2024 31.12.2023 | |||||
Functional | Country of | Equity | Equity | ||
Company | currency | incorporation | interest | interest | Owner |
Elkem Silicon Materials (Lanzhou) Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
Elkem Silicon Product Development AS | NOK | Norway | 100 % | 100% | Elkem ASA |
Elkem Siliconas España S.A.U | EUR | Spain | 100 % | 100% | Elkem ASA |
Elkem Silicones (UK) Ltd. | GBP | United Kingdom | 100 % | 100% | Elkem UK Holdings Ltd. |
Elkem Silicones Brasil Ltda. | BRL | Brazil | 100 % | 100% | Elkem ASA |
Elkem Silicones Canada Corp. | CAD | Canada | 100 % | 100% | Elkem ASA |
Elkem Silicones Czech Republic, s.r.o. | CZK | Czech Republic | 100 % | 100% | Elkem ASA |
Elkem Silicones Finland OY | EUR | Finland | 100 % | 100% | Elkem ASA |
Elkem Silicones France SAS | EUR | France | 100 % | 100% | Elkem ASA |
Elkem Silicones Germany GmbH | EUR | Germany | 100 % | 100% | Elkem ASA |
Elkem Silicones Guangdong Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
Elkem Silicones Hong Kong Co., Ltd. | HKD | Hong Kong | 100 % | 100% | Elkem ASA |
Elkem Silicones Korea Co., Ltd. | KRW | Republic | 100 % | 100% | Elkem ASA |
of Korea | |||||
Elkem Silicones Material Zhongshan Co., Ltd. | CNY | China | 100 % | 100% | Elkem Silicones |
Guangdong Co., Ltd. | |||||
Elkem Silicones México S. De R.L. De C.V. | MXN | Mexico | 100 % | 100% | Elkem ASA |
Elkem Silicones Poland sp. z o.o. | PLN | Poland | 100 % | 100% | Elkem ASA |
Elkem Silicones Scandinavia AS | NOK | Norway | 100 % | 100% | Elkem ASA |
Elkem Silicones Services S.à r.l. | EUR | France | 100 % | 100% | Elkem ASA |
Elkem Silicones Shanghai Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
Elkem Silicones USA Corp. | USD | USA | 100 % | 100% | Elkem ASA |
Elkem Siliconi Italia S.r.l. | EUR | Italy | 100 % | 100% | Elkem ASA |
Elkem Singapore Materials Pte. Ltd. | SGD | Singapore | 100 % | 100% | Elkem ASA |
Elkem South Asia Private Limited | INR | India | 100 % | 100% | Elkem ASA |
Elkem UK Holdings Ltd. | GBP | United Kingdom | 100 % | 100% | Elkem ASA |
Elkem Uruguay S.A. | USD | Uruguay | 100 % | 100% | Elkem ASA |
Euro Nordic Logistics BV | EUR | Netherlands | 80 % | 80% | Elkem Chartering |
Holding AS | |||||
Euro Nordic Netherlands BV | EUR | Netherlands | 80 % | 80% | Euro Nordic Logistics BV |
Explotación de Rocas Industriales y | EUR | Spain | 100 % | 100% | Elkem ASA |
Minerales S.A. (ERIMSA) | |||||
Iniconce, S.L. | EUR | Spain | 100 % | 100% | Explotación de Rocas |
Industriales y Minerales S.A. | |||||
Jiangxi Bluestar Xinghuo Silicones Co., Ltd. | CNY | China | 100 % | 100% | Elkem ASA |
NEH LLC | USD | USA | 100 % | 100% | Elkem ASA |
NorenoComercial Importada e | BRL | Brazil | 100 % | 100% | Elkem Participaçòes |
Exportadora Limitada | Indústria e Comércio | ||||
Limitada | |||||
Norsil, S.A. | EUR | Spain | 100 % | 100% | Iniconce, S.L |
Tifwer Trade S.A. | USD | Uruguay | 100 % | 100% | Elkem Uruguay S.A. |
1)
Elkem ASA owns 79% and Elkem Uruguay S.A owns 21%
Changes in composition of the group in 2024
On 14 May 2024 Elkem acquired Elkem Testvirksomhet AS
(previously REC Solar Norway AS) for USD 22 million (NOK
238 million). Elkem Testvirksomhet AS was subsequently
merged with Elkem ASA. The transaction gives Elkem
control of industrial areas and facilities in Norway, including
areas next to Elkem's activities at Fiskaa in Kristiansand.
The transaction is accounted for as an asset acquisition
of which NOK 245 million has been allocated to assets,
whereof NOK 108 million to property, plant and equipment
and NOK 128 million to deferred tax asset and NOK 7 million
has been allocated to liabilities. The application of the initial
measurement criteria for the respective assets and liabilities
after the allocation of the purchase price has resulted in the
following effects in the statement of profit and loss:
(Amounts in NOK million) Gain/(loss) | |
Other items | (27) |
Finance income | 11 |
Income tax (expenses) benefits | 1 067 |
Total | 1 052 |
Changes in composition of the group in 2023,
business combination
31 May 2023 Elkem acquired Elkem Carbon Slovakia a.s
(formerly VUM a.s), a Slovak producer of carbon materials.
The transaction will further increase Elkem’s capacity and
competence in attractive specialty markets and increase its
flexibility in the supply chain. Revenues of NOK 97 million
and a loss after tax of NOK 6 million after the acquisition
date from the company have been included in consolidated
statement of profit or loss. If the company had been part
of the group from 1 January 2023 revenue and profit after
tax would have increased with NOK 101 million and NOK 10
million respectively. Elkem Carbon Slovakia a.s is presented
within the Carbon Solutions operating segment.
Net cash outflow | (Amounts in NOK million) 2023 |
Cash transferred on acquisition | (152) |
Cash and cash equivalents of the acquiree | 0 |
Acquisition of subsidiaries, net of cash acquired | (152) |
The table below summarises the total consideration and
the provisional amounts recognised for assets acquired and
liabilities assumed in the business combination:
Consideration | (Amounts in NOK million) 2023 |
Cash transferred on acquisition | 152 |
Total consideration | 152 |
The net loss in other items relate to remeasurement after
initial recognition of operating items such as provisions, lease
liabilities and right of use assets. Finance income relates to
the remeasurement of financial instruments. The income
tax benefits relate to the remeasurement of deferred tax
asset originating from tax loss carry forwards and limitations
on interest rate deductions. Deferred tax asset related to
temporary differences of NOK 357 million has not been
recognised. The impact from temporary differences will be
recognised over the period it is reversed. Property, plant
and equipment and inventory is measured at cost on initial
recognition and therefore not subsequently remeasured.
Assets acquired and liabilities assumed
Amounts in NOK million | Carrying amount | Excess value | Fair value |
Property, plant and equipment | 14 | 67 | 81 |
Other intangible assets | 0 | 29 | 29 |
Inventories | 71 | (1) | 70 |
Trade receivables | 26 | - | 26 |
Other assets, current | 10 | - | 10 |
Cash and cash equivalents | 0 | - | 0 |
Deferred tax liabilities | (0) | (20) | (20) |
Employee benefit expenses | (1) | - | (1) |
Trade payables | (18) | - | (18) |
Income tax payables | (11) | - | (11) |
Interest-bearing liabilities, current | (31) | - | (31) |
Provisions and other liabilities, current | (6) | - | (6) |
Total identifiable net assets | 54 | 75 | 129 |
Goodwill | - | 23 | 23 |
Total recognised | 54 | 98 | 152 |
Acquisition-related costs of NOK 13 million (NOK 4 million in
2022) are recognised in other items in the statement of profit
and joint ventures
Share of profit (loss) from investments in associates and
joint ventures is presented in the statement of profit or loss
depending on the purpose of the investments. Investments that
are closely related to the group's main activities are presented
as share of profit from equity accounted companies, included
in total operating income. Investments in associates and joint
ventures that do not operate within Elkem's main business areas
are presented as share of profit from equity accounted financial
investments. Judgement is applied in determining the category
arrangements and associates
% equity | % equity | |||||
Principal | interests | interests | ||||
Name of entity | Business office | Country | actvities | Classification | 2024 | 2023 |
Elkem Ferroveld JV | Ferrobank | South Africa | Electrode paste | Joint | 50% | 50% |
Emalahleni | production | operation | ||||
Elkania DA | Hauge i Dalane | Norway | Microfine weighting | Joint | 50% | 50% |
material | operation | |||||
North Sea Container Line AS | Haugesund | Norway | Shipping services | Joint venture | 50% | 50% |
North-Sea Management AS | Haugesund | Norway | Shipping services | Joint venture | 50% | 50% |
Klafi EHF | Grundartangi, | Iceland | Transportation / | Joint venture | 50% | 50% |
Akranes | harbour services | |||||
Weldermate AS | Oslo | Norway | Robot welding systems | Joint venture | 50% | 50% |
Vianode AS | Oslo | Norway | Battery materials | Joint venture | - | 40% |
Jiangxi Guoxing Intelligence | Yangjialing | China | Energy production | Joint venture | 35% | 35% |
Energy Co. Ltd 1) | ||||||
Jiangxi Ganjiang New | Ganjiang | China | Research center | Joint venture | 30% | - |
District Silicones Innovative | ||||||
Research Center Ltd. 1) | ||||||
Euro Partnership BV | Moerdijk | Netherlands | Ship management | Associate | 50% | 50% |
services | ||||||
Combined Cargo | Moerdijk | Netherlands | Warehousing | Associate | 33% | 33% |
Warehousing BV | ||||||
Euro Nordic Agencies | Antwerpen | Belgium | Ship agencies services | Associate | 50% | 50% |
Belgium NV | ||||||
EPB Chartering AS | Oslo | Norway | Deep sea charter services | Associate | 25% | 25% |
Osiris GIE 1) | Roussillon | France | Business supplies | Associate | 25% | 25% |
and equipment | ||||||
3Deus Dynamics SAS 1) | Lyon | France | 3D printing | Associate | 21% | 21% |
Future Materials AS | Grimstad | Norway | Marketing of | Associate | 20% | 20% |
research facilities |
1)
The joint arrangements and associates are held by discontinued operations
The share of equity interests is equal to Elkem's voting
rights, with the exception of Elkem's investments in Vianode
AS where the parties in accordance with the shareholder
agreement had 33.3 per cent ownership influence until the
disposal of the shares in 2024.
The shareholder agreements for Jiangxi Guoxing Intelligence
Energy Co. Ltd requires a two-third majority in order to
approve a majority of business decision on behalf of the
entity, making Elkem together with one other party in control
of the business.
Of the entities above, Vianode AS is classified to not operate
within Elkem's main business areas.
There is no quoted market price for the investments.
In February 2024 Elkem group sold its shares in Vianode AS,
a synthetic graphite manufacturer for a total nominal amount
of NOK 847 million to AV Anodos AS a company controlled by
Altor Equity Partners AS from 4th quarter of 2024. NOK 10
million of the compensation was received at closing while NOK
315 million (second instalment) and NOK 522 million (third
instalment) are tied to Vianode meeting two future milestones
relating to the building of a full-scale plant. At initial recognition
in the first quarter of 2024 the fair value of the receivable was
estimated to NOK 749 million after the payment of the NOK 10
million. The sale resulted in a loss on disposal of NOK 128 million.
6 December 2023 Elkem increased its ownership and invested
EUR 2.2 million (NOK 26 million) in 3Deus Dynamics SAS, an
entity operating to develop a dynamic moulding process for
3D printing with the help of Elkem's expertise with silicones.
Elkem held warrants and shares in the company prior to the
increase in ownership. With the transaction Elkem recognised
a fair value gain of EUR 1 million (NOK 11.6 million) of the
previously held interest in the company, resulting in a total fair
value of Elkem's share in 3Deus Dynamics SAS of EUR 3.2
million (NOK 37 million).
See note 37 Related parties for commitments and transactions
related to the joint ventures and associates.
Movements in equity accounted investments
| 2024 | 2023 | |||||
Joint | Joint | |||||
Amounts in NOK million | ventures | Associates | Total | ventures | Associates | Total |
Opening balance | 1 054 | 242 | 1 296 | 822 | 217 | 1 039 |
Acquisition of and capital contribution to joint ventures | 4 | - | 4 | 303 | 26 | 329 |
Change in equity interest, transfer from financial instruments (note 30) | - | - | - | - | 11 | 11 |
Disposal of shares | (759) | - | (759) | - | - | - |
Dividends received | (7) | (17) | (23) | (18) | (50) | (68) |
Share of profit (loss) from equity accounted companies | (8) | 2 | (6) | 15 | 29 | 44 |
from continuing operations | ||||||
Share of profit (loss) from equity accounted companies | 4 | - | 4 | 1 | - | 1 |
from discontinued operations | ||||||
Share of profit (loss) from equity accounted financial | (15) | - | (15) | (63) | - | (63) |
investments from continuing operations | ||||||
Amortisation of excess value from equity accounted | - | (2) | (2) | - | - | - |
companies from discontinued operations | ||||||
Gain on sales of assets to equity accounted companies | - | - | - | (4) | - | (4) |
Gain (loss) on sales of shares | (128) | - | (128) | - | - | - |
Part of other comprehensive income | 0 | 4 | 4 | (0) | 3 | 2 |
Assets classified as held for sale | (69) | (88) | (157) | - | - | - |
Currency translation differences | 5 | 7 | 12 | (2) | 6 | 4 |
Closing balance | 81 | 149 | 230 | 1 054 | 242 1 296 | |
Share of profit and loss and carrying amount for equity
accounted investments
2024 | 31.12.2024 | 2023 | 31.12.2023 | |
Amounts in NOK million | Share of profit | Carrying amount | Share of profit | Carrying amount |
North Sea Container Line AS | (10) | 74 | 13 | 90 |
North-Sea Management AS | 2 | 7 | 2 | 5 |
Klafi EHF | (0) | 0 | 0 | 1 |
Weldermate AS | 0 | 0 | - | 0 |
Vianode AS | (15) | - | (63) | 903 |
Jiangxi Guoxing Intelligence Energy Co. Ltd | - | - | - | 56 |
Jiangxi Ganjiang New District Silicones Innovative Research Center Ltd. | - | - | - | - |
Euro Partnership BV | 10 | 48 | 18 | 43 |
Combined Cargo Warehousing BV | (1) | 4 | 2 | 4 |
Euro Nordic Agencies Belgium NV | 1 | 6 | 1 | 5 |
EPB Chartering AS | (8) | 91 | 8 | 105 |
Osiris GIE | - | - | - | 49 |
3Deus Dynamics SAS | - | - | - | 36 |
Future Materials AS | - | 0 | - | 0 |
Total | (21) | 230 | (19) | 1 296 |
Gain (loss) on sales of assets to equity accounted companies | (128) | - | ||
Total | (149) | 230 | (19) | 1 296 |
Cash-flow from operations, equity accounted investments
Amounts in NOK million | 2024 | 2023 |
Share of profit (loss) from equity accounted investments from continuing operations | 6 | (44) |
Share of profit (loss) from equity accounted investments from discontinued operations | (2) | (1) |
Dividend received | 23 | 68 |
Equity accounted investments | 27 | 22 |
Summary of unaudited financial information for
joint ventures on a 100%
basis
Vianode | Total | Vianode | Total | |||
Amounts in NOK million | AS | Other | 2024 | AS | Other | 2023 |
Current assets, including cash and cash equivalents | - | 213 | 213 | 805 | 460 | 1 264 |
NOK 73 million (NOK 866 million) | ||||||
Non-current assets | - | 18 | 18 | 1 653 | 436 | 2 089 |
Current liabilities, including current financial liabilities | - | 67 | 67 | 203 | 124 | 328 |
NOK 0 million (NOK 26 million) | ||||||
Non-current liabilities, including non-current financial | - | 2 | 2 | 148 | 421 | 569 |
liabilities NOK 0 million (NOK 547 million) | ||||||
Net assets/equity | - | 162 | 162 | 2 107 | 350 | 2 457 |
Excess value | - | - | - | 60 | - | 60 |
Elkem's carrying amount | - | 81 | 81 | 903 | 151 | 1 054 |
Total revenue | (0) | 827 | 827 | 0 | 833 | 833 |
Total expenses, including depreciation and amortisation | (35) | (848) | (884) | (187) | (815) | (1 002) |
NOK 3 million (NOK 4 million) and other items | ||||||
Financial income, including interest income | 12 | 8 | 20 | 38 | 13 | 52 |
NOK 10 million (NOK 42 million) | ||||||
Financial expenses, including interest expenses | (4) | (0) | (4) | (10) | (1) | (11) |
NOK 2 million (NOK 9 million) | ||||||
Tax expense | - | (2) | (2) | - | (1) | (1) |
Total profit for the year | (27) | (16) | (43) | (158) | 30 | (128) |
Other comprehensive income | 0 | - | 0 | (0) | 0 | (0) |
Total comprehensive income | (27) | (16) | (43) | (159) | 30 | (129) |
Elkem's share of profit for the year | (15) | (8) | (23) | (63) | 15 | (48) |
Elkem's share of other comprehensive income | - | - | - | (0) | 0 | (0) |
Summary of unaudited financial information for
associates on a 100%
basis
Amounts in NOK million | Total 2024 | Total 2023 |
Revenue | 25 | 102 |
Profit for the year | (12) | 70 |
Other comprehensive income | 16 | 10 |
Total comprehensive income | 4 | 80 |
Elkem's share of profit for the year | 2 | 29 |
Elkem's share of other comprehensive income | 4 | 3 |
Net assets/equity | 483 | 775 |
Excess value | - | 26 |
Elkem's carrying amount | 149 | 242 |
Operating segments are components of a business that
are followed up and evaluated regularly by the chief
operating decision maker, defined as the CEO, for the
purpose of assessing performance and allocating resources.
Elkem's operating segments represent separately managed
business areas with unique products serving different
markets. Elkem’s operating segments are aligned with the
three reporting segments.
Segment performance is evaluated based on EBITDA and
EBIT, see definitions below. Elkem's financing and income
tax are managed on group basis and are not allocated to
operating segments.
Revenues are, in addition, disaggregated by geographical
market based on the location of the customer.
Non-current assets by geographical areas are based on the
location of the entity owning the assets.
The segment reporting is based on the IFRS accounting
policies applied for the group except for: Realised effects
from hedge ineffectiveness and from the discontinuation
of hedging is included in other items in statement of profit
and loss, but included in operating expenses in the segment
reporting. This is because management follows up the
operating segments including the impact of the realised
effects from power contracts.
Lease payments under internal lease agreements are
recognised as operating expenses on a straight-line basis
Elkem identifies its segments according to the organisation
and reporting structure used by group management. Elkem
has three reportable segments; Silicones, Silicon Products and
Carbon Solutions. In the fourth quarter of 2024 the Silicones
segment was assessed to meet the criteria for held for sale and
discontinued operations. However, the segment will continue
to be followed up by the chief operating decision maker in
the same manner as before the reclassification. The Silicones
operating segment will therefore continue to be included in
the segment disclosure. Please refer to note 40 Assets held for
sale and discontinued operations.
The Silicones division produces and sells a range of silicone-
based products across various sub-sectors including release
coatings, engineering elastomers, healthcare products,
specialty fluids, emulsions and resins.
The Silicon Products division produces various grades of
metallurgical silicon, ferrosilicon, foundry alloys and microsilica
for use in a wide range of end applications.
The Carbon Solutions division produces carbon electrode
materials, lining materials and specialty carbon products for
metallurgical processes for the production of a range of metals.
Other comprise Elkem group management and centralised
functions within finance, logistics, power purchase,
technology, digital office and strategic projects such as
biocarbon.
Eliminations comprise intersegment sales and profit. Elkem
follows internationally accepted principles for transactions
between related parties within the group. In general, Elkem
seeks to use transaction-based methods (comparable
uncontrolled price, transactional net margin method, cost
plus and resale price method) in order to set the price for the
transaction.
The main related party transactions between operating
segments in Elkem can be divided as follows:
→
Silicon Products sale of metallurgical silicon to Silicones.
Sales prices are based on sale to external customers and
CRU prices.
→
Carbon Solutions sale of electrode paste and lining
material to Silicon Products. Sales prices are based on
prices to external customers.
→
Other sale of management services e.g., logistics,
procurement, financial services, technical support and
R&D services. Prices are based on cost plus.
Major customers
Elkem has a range of customers, but no single customer
amounts to 10 per cent or more of total operating income.
Main items by operating segment
2024 | ||||||
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Total |
Revenue from sale of goods (note 7) | 14 871 | 13 548 | 3 243 | (167) | - | 31 495 |
Other revenue (note 7) | 109 | 76 | 16 | 226 | - | 427 |
Other operating income (note 8) | 20 | 1 023 | 26 | 17 | - | 1 086 |
Share of profit from equity accounted investments (note 5) | 2 | (0) | 0 | (6) | - | (4) |
Total operating income from external customers | 15 003 | 14 647 | 3 285 | 70 | - | 33 004 |
Operating income from other segments | 88 | 859 | 364 | 592 | (1 903) | - |
Total operating income | 15 091 | 15 506 | 3 649 | 662 | (1 903) | 33 004 |
Operating expenses | (14 570) | (12 642) | (2 518) | (986) | 1 857 | (28 858) |
EBITDA | 521 | 2 864 | 1 131 | (324) | (46) | 4 146 |
EBIT | (1 233) | 2 091 | 1 003 | (521) | (46) | 1 294 |
Cash flow from operations | (426) | 1 398 | 1 139 | (663) | 36 | 1 484 |
Working capital | 1 938 | 5 019 | 521 | (44) | (126) | 7 308 |
Capital employed | 19 612 | 12 178 | 1 754 | 960 | (126) | 34 377 |
Reinvestments | (2 061) | |||||
Strategic investments | (957) | |||||
Movement CAPEX payables | (317) | |||||
Cash flow from investments in property, plant and equipment | (3 334) | |||||
and intangible assets, including received investment grants |
Main items by operating segment
2023 | ||||||
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Total 1) |
Revenue from sale of goods (note 7) | 14 055 | 16 535 | 3 742 | (401) | - | 33 931 |
Other revenue (note 7) | 23 | 113 | 17 | 280 | - | 434 |
Other operating income (note 8) | 19 | 323 | 2 | 6 | - | 350 |
Share of profit from equity accounted investments (note 5) | 1 | 0 | - | 44 | - | 46 |
Total operating income from external customers | 14 099 | 16 971 | 3 761 | (71) | - | 34 760 |
Operating income from other segments | 63 | 865 | 450 | 506 | (1 884) | - |
Total operating income | 14 163 | 17 836 | 4 210 | 436 | (1 884) | 34 760 |
Operating expenses | (14 768) | (14 532) | (2 924) | (968) | 2 203 | (30 989) |
EBITDA | (605) | 3 304 | 1 286 | (532) | 318 | 3 771 |
EBIT | (2 142) | 2 610 | 1 164 | (585) | 318 | 1 365 |
Cash flow from operations | (1 033) | 3 511 | 1 394 | (859) | 14 | 3 027 |
Working capital | 1 790 | 4 388 | 641 | (356) | (80) | 6 383 |
Capital employed | 18 183 | 11 068 | 1 724 | 1 553 | (80) | 32 449 |
Reinvestments | (2 351) | |||||
Strategic investments | (2 866) | |||||
Movement CAPEX payables | 361 | |||||
Cash flow from investments in property, plant and equipment | (4 856) | |||||
and intangible assets, including received investment grants |
1)
2023 have been restated, see note 39
2024
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Elke m |
Profit (loss) for the year | 2 11 5 | |||||
Income tax (expense) benefit | (58 8) | |||||
Finance expenses | 77 8 | |||||
Foreign exchange gains (losses) | (24 7) | |||||
Finance income | (10 7) | |||||
Share of profit from equity accounted financial investments | 14 3 | |||||
Other items | 31 6 | |||||
Realised effects from hedge ineffectiveness and | 12 2 | |||||
discontinuation of hedging | ||||||
EBIT from discontinued operations | (1 23 7) | |||||
EBIT | (1 233) | 2 091 | 1 003 | (521) | (46) | 1 29 4 |
Impairment losses | 16 8 | |||||
Amortisation and depreciation | 9 31 | |||||
Amortisations, depreciations and impairment losses from | 1 75 4 | |||||
discontinued operations | ||||||
EBITDA | 521 | 2 864 | 1 131 | (324) | (46) | 4 14 6 |
2023
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Elkem |
Profit (loss) for the year | 2 097 | |||||
Income tax (expense) benefit | 781 | |||||
Finance expenses | 666 | |||||
Foreign exchange gains (losses) | 106 | |||||
Finance income | (137) | |||||
Share of profit from equity accounted financial investments | 63 | |||||
Other items | (596) | |||||
Realised effects from hedge ineffectiveness and | 199 | |||||
discontinuation of hedging | ||||||
EBIT from discontinued operations | (1 815) | |||||
EBIT | (2 142) | 2 610 | 1 164 | (585) | 318 | 1 365 |
Impairment losses | 25 | |||||
Amortisation and depreciation | 844 | |||||
Amortisations, depreciations and impairment losses from | 1 537 | |||||
discontinued operations | ||||||
EBITDA | (605) | 3 304 | 1 286 | (532) | 318 | 3 771 |
Definitions
The segments' performance are evaluated based on EBITDA
and EBIT.
EBITDA
is defined as Elkem’s profit (loss) for the period,
less income tax (expense) benefit, finance expenses, foreign
exchange gains (losses), finance income, share of profit
from equity accounted financial investments, other items
(except realised gains and losses from hedge ineffectiveness
and discontinuation of hedging), impairment losses and
amortisation and depreciation.
EBIT
is defined as Elkem’s profit (loss) for the period, less
income tax (expense) benefit, finance expenses, foreign
exchange gains (losses), finance income, share of profit from
equity accounted financial investments and other items
(except realised gains and losses from hedge ineffectiveness
and discontinuation of hedging).
Cash flow from operations
is EBITDA including reinvestments,
changes in working capital and equity accounted companies.
Reinvestments
generally consist of capital expenditure
to maintain existing activities or that involve investments
designed to improve health, safety or the environment.
Strategic investments
generally consist of investments
which result in capacity increases at Elkem’s existing plants
or that involve an investment made to meet demand in a new
geographic or product area.
Working capital
is defined as accounts receivable, inventories,
other current assets, accounts payable, current employee
benefit obligations and other current liabilities. Accounts
receivables are defined as trade receivables less bills
receivables. Other current assets are defined as other current
assets less current receivables to related parties, current
interest-bearing receivables, tax receivables, grants receivable,
assets at fair value through profit or loss and accrued interest
income. Accounts payable are defined as trade payables
less CAPEX payables. Other current liabilities are defined as
provisions and other current liabilities less current provisions,
contingent considerations, contract obligations and liabilities
to related parties.
Capital employed
consists of working capital as defined above,
property, plant and equipment, right-of-use assets, other
intangible assets, goodwill, equity accounted investments,
grants payable, trade payables and prepayments related to
purchase of non-current assets.
The definitions are not specified by IFRS Accounting Standards
and therefore may not be comparable to apparently similar
definitions used by other companies.
Below is a reconciliation of profit (loss) for the year against EBIT and EBITDA:
Below is a reconciliation of working capital and capital employed:
Capital employed and working capital
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Inventories | 6 038 | 9 018 |
Trade receivables | 1 960 | 3 209 |
Bills receivables | (269) | (823) |
Accounts receivable | 1 691 | 2 386 |
Other assets, current | 1 254 | 2 062 |
Other receivables to related parties, interest free | - | (8) |
Grants receivables | (576) | (671) |
Tax receivables | (241) | (261) |
Accrued interest | (0) | (0) |
Other current assets included in working capital | 436 | 1 122 |
Trade payables | 2 076 | 5 281 |
Trade payables related to purchase of non-current assets | (184) | (1 313) |
Accounts payables included in working capital | 1 892 | 3 968 |
Employee benefit obligations | 471 | 912 |
Provisions and other liabilities, current | 815 | 1 381 |
Provisions, contingent considerations and contract obligations | (19) | (101) |
Liabilities to related parties | (0) | (17) |
Other current liabilities included in working capital | 795 | 1 263 |
Working capital assets and liabilities as held for sale | 2 302 | - |
Working capital | 7 309 | 6 383 |
Property, plant and equipment | 8 405 | 22 754 |
Right-of-use assets | 403 | 854 |
Other intangible assets | 216 | 1 458 |
Goodwill | 329 | 1 015 |
Equity accounted investments | 230 | 1 296 |
Grants payable | (17) | (17) |
Trade payables- and prepayments related to purchase of non-current assets | (171) | (1 295) |
Other capital employed effects assets and liabilities as held for sale | 17 674 | - |
Capital employed | 34 378 | 32 449 |
The table below show realised effects from Elkem's power and
foreign exchange hedging programmes, including realised
effects from hedge ineffectiveness and discontinuation of
hedging, on the different group segments.
2024
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Total |
Revenue from sale of goods (note 31) | 0 | 41 | - | (166) | (125) | |
Operating expenses (note 31) | - | 107 | (9) | 36 | 134 | |
Total realised effects from derivatives included in EBITDA | 0 | 148 | (9) | (130) | 10 |
2023
Silicon | Carbon | |||||
Amounts in NOK million | Silicones | Products | Solutions | Other | Eliminations | Total |
Revenue from sale of goods (note 31) | 1 | 34 | - | (400) | (366) | |
Operating expenses (note 31) | - | 290 | (2) | 23 | 311 | |
Total realised effects from derivatives included in EBITDA | 1 | 323 | (2) | (377) | (55) |
Total revenue by geographic market
based on customer location
Amounts in NOK million | 2024 | 2023 |
Norway | 978 | 1 157 |
Other Nordic countries | 862 | 1 020 |
United Kingdom | 408 | 546 |
Germany | 1 917 | 2 870 |
France | 1 092 | 1 108 |
Italy | 742 | 1 049 |
Poland | 328 | 474 |
Spain | 441 | 574 |
Other European countries | 1 305 | 1 810 |
Europe | 8 073 | 10 609 |
Africa | 277 | 353 |
USA | 2 309 | 2 367 |
Canada | 177 | 404 |
Brazil | 1 477 | 1 704 |
Other American countries | 260 | 295 |
America | 4 223 | 4 770 |
China | 1 305 | 1 219 |
Japan | 1 112 | 1 231 |
South Korea | 329 | 238 |
India | 1 049 | 1 127 |
Other Asian countries | 1 448 | 1 834 |
Asia | 5 243 | 5 649 |
Rest of the world | 118 | 120 |
Total revenue before hedging effects | 17 935 | 21 500 |
Realised effects from hedging | ||
programmes (note 31) | (125) | (366) |
Total revenue | 17 810 | 21 134 |
Non-current assets by geographic
areas based on entity location
Amounts in NOK million | 2024 | 2023 |
Norway | 6 956 | 6 548 |
Other Nordic countries | 1 045 | 855 |
United Kingdom | 23 | 40 |
Germany | 39 | 102 |
France | 0 | 4 730 |
Italy | 2 | 147 |
Poland | - | 2 |
Spain | 148 | 380 |
Other European countries | 265 | 209 |
Europe | 8 478 | 13 013 |
Africa | 124 | 115 |
USA | 129 | 990 |
Canada | 548 | 686 |
Brazil | 458 | 448 |
Other American countries | 494 | 454 |
America | 1 630 | 2 578 |
China | 161 | 11 827 |
Japan | 9 | 9 |
South Korea | - | 226 |
India | 122 | 111 |
Other Asian countries | 46 | 54 |
Asia | 337 | 12 228 |
Total non-current assets | 10 569 | 27 934 |
Non-current assets are presented less derivatives and
Revenue
Revenue is measured based on the consideration specified in
a contract with a customer. Elkem recognises revenue when
Elkem transfers control over a goods or service to a customer.
A five-step process is applied before revenue can be recognised:
→
identify contracts with customers
→
identify the separate performance obligation
→
determine the transaction price of the contract
→
allocate the transaction price to each of the separate
performance obligations, and
→
recognise the revenue as each performance obligation
is satisfied.
Sale of goods
Elkem's main performance obligation is related to sale of goods
where the obligation is to deliver agreed volume of products
with the agreed specification. Elkem has both short-term and
long-term contracts. Short-term contracts, normally within one
month, cover delivery of an agreed volume at market price at
the date the order is placed. These types of contracts are most
common for commodity products, such as sales of ferrosilicon
and sales to customers in China. The long-term contracts
cover a period of a few months and up to one year, where the
prices normally are fixed within a volume range. Elkem has for
sale of metallurgical silicon some contracts that cover a period
longer than one year. In these contracts the prices are normally
negotiated on an annual basis. Some of Elkem's sales contracts
include an element of freight services, see separate section
below for accounting policies.
Revenue is recognised when control of the goods is transferred
to the customer, at an amount that reflects the consideration
to which Elkem expects to be entitled in exchange for those
goods. Control is transferred to the buyer, according to the
agreed delivery term for each sale. Delivery terms are based
on Incoterms® 2020 issued by International Chamber of
Commerce, and the main terms are
"F" terms, where the buyer arranges and pays for the main
carriage. The risk is transferred to the buyer when the goods are
handed to the carrier engaged by the buyer.
"C" terms, where the group arranges and pays for the main
carriage but without assuming the risk of the main carriage.
The risk is transferred to the buyer when the goods are handed
over to the carrier engaged by the seller.
"D" terms, where the group arranges and pays for the carriage
and retains the risk of the goods until delivery at the agreed
destination. The ownership is transferred to the buyer upon
arrival at the agreed destination, usually the purchaser's
warehouse.
The goods are normally sold with standard warranties that
the goods comply with the agreed-upon specifications. These
standard warranties are accounted for using IAS 37 Provisions,
Contingent Liabilities and Contingent Assets. Elkem does not
have any other significant obligations for returns or refunds.
Freight services included in sale of goods
Freight components included in sale of goods on incoterms "C"
terms are considered as a separate performance obligation and
recognised over the period the service is performed. Shipping
and handling services that occur before the customer takes
control of the goods for sales on "D" terms are considered to
be part of fulfilling the sale of the goods and are presented as
other operating expense.
Revenue from sale of services
Revenue from sale of services is recognised when the services
have been provided. Sale of services are mainly related to
management agreements with related parties based on a cost
2024
Silicon | Carbon | |||
Amounts in NOK million | Products | Solutions | Other | Total |
Sale of goods, Silicon Products | 13 507 | - | (1) | 13 506 |
Sale of goods, Carbon Solutions | - | 3 243 | - | 3 243 |
Sale of goods to related parties 1) | 697 | - | - | 697 |
Revenue from energy recovery and other energy related income | 31 | 0 | 75 | 106 |
Service agreements with related parties (note 37) 1) | 20 | 1 | 168 | 189 |
Other revenue from contracts with customers | 45 | 15 | 133 | 193 |
Total revenue from contracts with customers | 14 300 | 3 259 | 375 | 17 935 |
Realised effects from hedging programmes (note 31) | 41 | (166) | (125) | |
Total revenue | 14 341 | 3 259 | 209 | 17 810 |
1)
Includes revenues with discontinued operations
Details of revenue from contracts with customers
2023
Silicon | Carbon | |||
Amounts in NOK million | Products | Solutions | Other | Total |
Sale of goods, Silicon Products | 16 501 | - | (1) | 16 500 |
Sale of goods, Carbon Solutions | - | 3 742 | - | 3 742 |
Sale of goods to related parties 1) | 689 | - | - | 689 |
Revenue from energy recovery and other energy related income | 63 | - | 92 | 154 |
Service agreements with related parties (note 37) 1) | 16 | 4 | 215 | 234 |
Other revenue from contracts with customers | 50 | 14 | 117 | 181 |
Total revenue from contracts with customers | 17 319 | 3 759 | 422 | 21 501 |
Realised effects from hedging programmes (note 31) | 34 | - | (400) | (367) |
Total revenue | 17 353 | 3 759 | 22 | 21 134 |
1)
Insurance settlements
Income from insurance settlements is recognised as other operating
income when it is virtually certain that the group will receive the
compensation. Expected cash flows from credit insurance contracts
where such contracts are deemed to be an integral part of the sale
transactions is presented net against impairment losses trade and
other receivables, included in other operating expenses. See note 23
Amounts in NOK million | 2024 | 2023 |
Sale of CO 2 emission allowances | 169 | 288 |
Gain on disposal of fixed assets | 3 | 24 |
Insurance settlements | 849 | 8 |
Other | 46 | 12 |
Total other operating income | 1 066 | 331 |
Principle application and judgements
CO
2
Compensation
Changes to the compensation scheme for 2024-2030 was
presented in February 2024 and included in an updated
regulation in December 2024. Elkem is still entitled to receive
compensation under the updated scheme. The main changes
from the previous compensation scheme is a cap on the
total cost of the government and that 40 per cent of the
compensation must be used for projects aiming to reduce CO
2
emissions and/or improving energy efficiency. Compliance with
the condition can be achieved over multiple years, but no later
than 2034.
Elkem has recognised its estimated share of the total
compensation for 2024 based on the power consumption at
the Norwegian silicon product plants. Elkem has identified
projects which are expected to be compliant with the
requirements to qualify for the 40 per cent conditional
compensation and have therefore recognised full compensation
in 2024. Application and payment of compensation for the CO
2
component of the cost of energy for production in 2024 will be
made during the first months of 2025. As the grant partially
compensates power costs, which are costs recognised as part
of the cost price of inventory during the production process, the
compensation is recognised in the statement of profit or loss
when the produced goods are sold.
of profit or loss as a reduction of raw materials and energy,
employee benefit expenses or other operating expense over
the periods necessary to match them with the cost they are
intended to compensate.
Grants relating to property, plant and equipment (fixed assets)
and intangible assets are deducted from the carrying amount of
the asset and recognised in profit or loss as a reduction of the
depreciation charge over the lifetime of the asset.
Details of grants
2024 | Other | Raw | Employee | Other | Amortisation |
operating | materials | benefit | operating | and depreciation | |
income | and energy | expenses | expenses | ||
R&D grants from government | 1 | - | 21 | 23 | - |
Other government grants | 7 | - | 5 | 2 | - |
CO 2 compensation from the Norwegian Environment Agency | - | 593 | - | - | - |
Grants related to investment projects | - | - | - | - | 58 |
Total government grants | 8 | 593 | 26 | 25 | 58 |
Details of grants
2023 1) | Other | Raw | Employee | Other | Amortisation |
operating | materials | benefit | operating | and depreciation | |
Amounts in NOK million | income | and energy | expenses | expenses | |
R&D grants from government | - | - | 15 | 10 | - |
Other government grants | - | 2 | 4 | 3 | - |
CO 2 compensation from the Norwegian Environment Agency | - | 549 | - | - | - |
Grants related to investment projects | - | - | - | - | 35 |
Total government grants | - | 550 | 20 | 14 | 35 |
1)
Restated - see note 39 Changes in presentation
Balances related to grants
Amounts in NOK million | 2024 | 2023 |
Grants receivable related to fixed and intangible assets (note 24) | - | - |
Grants receivable related to income (note 24) | 576 | 891 |
Grants payable (note 29) | (17) | (17) |
Grants, deferred income (note 29) | (0) | (34) |
Details of grants recognised as a reduction of property,
plant and equipment (fixed assets) and intangible assets
Amounts in NOK million | 2024 | 2023 |
Government grants, R&D | 35 | 38 |
Government grants, other | - | 1 |
Grants from other than government, Norwegian NO x Fund | - | 28 |
Total | 35 | 67 |
CO
2
emission allowances
CO
2
emission allowances allocated from the government
are classified as grants, measured at nominal value (zero).
The CO
2
allowance scheme pertains to the group's plants in
Europe. If actual emissions exceed the number of allocated
allowances, additional allowances must be purchased and the
cost is included as a part of production cost of inventory. The
allocation of free allowances for the period 2021-2025 has
been decided by the national authorities. Gain on sale of CO
2
emission allowances are included in other operating income.
NO
x
fund
The industry in Norway pays a fee for their emission of NO
x
to a public foundation run by 15 industry and commerce
associations. The foundation is self-financed by the fees and
the purpose is to support projects that reduces NO
x
emissions
from the industry in Norway.
Other
Principle application
Cost of production is presented in different lines in the
statement of profit or loss based on nature, raw materials and
energy, employee benefits and other operating expenses.
Energy for production comprise energy for smelting and
processing machinery. Energy for light, heating, ventilation etc.
is auxiliary power and is included in other operating expenses.
Actual cost of conversion related to goods sold is reported net
of change in cost of conversion in inventory and is included in
line item Raw materials and energy.
Raw materials and energy
Amounts in NOK million | 2024 | 2023 1) |
Raw materials and energy for production | (8 591) | (10 636) |
Change in inventories own production | 278 | (189) |
Total raw materials and energy | (8 313) | (10 825) |
1)
Employee benefits
Employee benefits include both current and non-current
benefits, and are expensed as incurred, together with any
social security taxes applicable. Short-term benefits consist
of wages and salaries, bonuses, holiday payments and other
short-term benefits that are expected to be settled within 12
months after the reporting period. Long-term benefits consist
mainly of jubilee and long-service benefits, post-employment
benefits and post-retirement benefits, not expected to be
wholly settled within the next twelve months.
Defined contribution plans
Defined contribution plans comprise of arrangements where
Elkem makes monthly contributions to the employees' pension
plans, and where the future pensions are determined by the
amount of the contributions and the return on the individual
pension plan asset. The contributions are expensed as incurred
and there is no further obligation related to the contribution
plans. Prepaid contributions are recognised as an asset.
Defined benefit plans
Defined benefit plans are pension plans where Elkem is
responsible for paying pensions at a certain level, based on
employees' salaries when retiring. Defined benefit plans are
recognised at present value of future liabilities considered
retained at the end of the reporting period, calculated
separately for each plan.
Multi-employer defined benefit plans where available
information is insufficient to be able to calculate each
Amounts in NOK million | 2024 | 2023 1) |
Salaries, holiday pay and variable compensation | (2 277) | (2 207) |
Employer's national insurance contributions / social security tax | (318) | (287) |
Pension expenses | (163) | (129) |
Share-based payments (note 12) | (2) | (7) |
Other payments / benefits | (48) | (76) |
Grants | 26 | 20 |
Capitalised employee benefit expenses on PPE development | 15 | 25 |
Total employee benefit expenses | (2 766) | (2 662) |
Average number of full-time equivalents | 3 010 | 2 957 |
1)
Restated - see note 39 Changes in presentation
Amounts in NOK million | 2024 | 2023 |
Fixed compensation | (41) | (36) |
Variable compensation - STI | (19) | (9) |
Variable compensation - LTI | (1) | (3) |
Other benefits | (2) | (1) |
Pension benefits | (4) | (4) |
Total remuneration to corporate management | (67) | (54) |
Remuneration provided to the board of directors | (6) | (6) |
Remuneration provided to the committee remuneration | (1) | (1) |
For more details on the remuneration to corporate
management see "Report on salary and other remuneration to
leading personnel in Elkem ASA for the financial year 2024".
The report is published on Elkem's website.
↗
Shares and options granted to corporate
management and board members
2024 | 2023 | ||||
Number | Number of | Number | Number of | ||
Name | Position | of shares | options | of shares | options |
Helge Aasen | CEO | 68 406 | 67 333 | 68 406 | 101 000 |
Morten Viga | CFO | 46 896 | 300 000 | 46 896 | 300 000 |
Katja Lehland | SVP Human Resources | - | 300 000 | - | 300 000 |
Asbjørn Søvik | SVP Green Ventures & Digital | 10 000 | 300 000 | 10 000 | 300 000 |
Håvard Moe | SVP Technology | 10 000 | 300 000 | 10 000 | 300 000 |
Louis Vovelle | SVP Innovation and R&D | 6 896 | 300 000 | 6 896 | 308 380 |
Morten Magnus Voll | SVP Strategy and Business Development | 10 384 | 150 000 | 10 384 | 200 000 |
Inge Grubben-Strømnes | SVP Silicon Products | 35 189 | 300 000 | 35 189 | 300 000 |
Luiz Simao | SVP Carbon Solutions | 22 000 | 300 000 | 22 000 | 300 000 |
Sandy Chen | Acting SVP Silicones | - | 150 000 | - | - |
Li Bo (from April 2024) 1) | Chair of the board | - | - | - | - |
Dag Jakob Opedal | Vice chair of the board | 40 000 | - | 40 000 | - |
Zhigang Hao (until October 2024) 1) | Board member | - | - | - | - |
Olivier Tillette de | Board member | 15 517 | - | 15 517 | - |
Clermont-Tonnerre 1) | |||||
Dong Dachuan | Board member | - | - | - | - |
(from October 2024) 1) | |||||
Yougen Ge (until October 2024) 1) | Board member | - | - | - | - |
Marianne Johnsen | Board member | - | - | - | - |
Grace Tang | Board member | - | - | - | - |
Nathalie Brunelle | Board member | - | - | - | - |
Wei Yao (from October 2024) 1) | Board member | - | - | - | - |
Terje Andre Hanssen 2) | Board member | - | - | - | - |
Marianne Færøyvik 2) | Board member | 4 950 | - | 4 950 | - |
Thomas Eggan 2) | Board member | - | - | - | - |
Heidi Feldborg 2) | Observer | - | - | - | - |
Jan Harald Karlsen 2) | Observer | - | - | - | - |
1)
Representatives for the majority shareholder.
2)
Employee benefit assets and obligations
Non-current | Current | |||
Amounts in NOK million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
Pension plan assets, net (note 24) | 31 | 28 | - | - |
Pension contribution fund (note 24) | 1 | 1 | 4 | 3 |
Total employee benefit assets | 32 | 29 | 4 | 3 |
Salaries, holiday pay and variable compensation | - | - | 403 | 684 |
Employer's national insurance contributions / social security tax | - | - | 66 | 210 |
Pension plan obligations, net | 219 | 375 | - | - |
Other benefit plans | 20 | 132 | 2 | 18 |
Total employee benefit obligations | 238 | 507 | 471 | 912 |
(a) Salaries, holiday pay and variable compensation
The obligations are related to incurred employee benefits,
not paid.
Elkem has both defined contribution and defined benefit
plans. For defined contribution plans the cost is equal to
Elkem's contribution to the employee's pension savings during
the period. For defined benefit plans the cost is calculated
based on actuarial valuation methods, taking assumptions
related to the employee's salary, turnover, mortality, discount
rate, etc. into consideration.
Defined contribution plans
Defined contribution plans are the main pension plan for
Elkem's Norwegian entities, where the contribution to each
individual pension plan is 5 per cent of annual salary up to 7.1G
and 15 per cent of annual salary between 7.1-12G. 1G refers to
the Norwegian national insurance scheme's basic amount,
which is NOK 124 028 as at 1 May 2024. Pension on salary
above 12G is not supported by external service providers and
is therefore handled as a separate plan and included under
defined benefit plans.
In addition, a Norwegian multi-employer early retirement
scheme called AFP, where sufficient information to calculate
each participant's pension obligation is not available, is
accounted for as it is a defined contribution plan in accordance
with the Ministry of Finance's conclusion. The participants in
the pension plan are jointly responsible for 2/3 of the plan's
pension obligation, the government is responsible for the
remaining part. The pension premium in 2024 is 2.7 per cent of
the employees' salary between 1 and 7.1G, covering this year's
pension payments and contribution to a security fund for
future pension obligations. The yearly premium for 2025 is set
to 2.7 per cent.
Defined benefit plans
Defined benefit plans are pension plans where the group is
responsible for paying pensions at a certain level, based on
employees' salaries when retiring. The group has funded and
unfunded benefit plans in Norway, France, Germany, UK,
Canada, Japan and South Africa. The pension scheme in UK
and two of Canada's schemes are overfunded and are net in an
asset position. The schemes that are underfunded and are net
in a liability position as at 31 December 2024 are distributed
as follows; Norway 48 per cent, Germany 25 per cent, Canada
18 per cent other countries 8 per cent. In Canada provisions
are also made for medical insurance as well as pension benefit
plans.
The Norwegian pension plans are unfunded and comprise
pension on salaries above 12G, where the expense is 15 per
cent of annual base salary that exceeds 12G plus interest
on the individual calculated pension obligation, and some
individual retirement schemes that are closed.
Breakdown of net pension expenses
Amounts in NOK million | 2024 | 2023 |
Current service expenses | (20) | (18) |
Administration expenses | (1) | (1) |
Curtailments | 0 | - |
Net pension expenses, defined benefit plans | (21) | (19) |
Defined contribution plans | (119) | (88) |
Early retirement scheme AFP (Norway) | (23) | (22) |
Total pension expenses | (163) | (129) |
In addition, interest expenses on net | (6) | (5) |
pension liabilities are recognised as a part | ||
of finance expenses |
Net defined benefit obligations
Amounts in NOK million | 2024 | 2023 |
Present value of funded pension obligations | (463) | (438) |
Fair value of plan assets | 494 | 466 |
Net funded pension obligations | 31 | 28 |
Present value of unfunded pension obligations | (219) | (375) |
Net value of funded and unfunded obligations | (188) | (347) |
Movements in the defined benefit obligations and plan assets
| 2024 | 2023 | |||||
Defined | Defined | Net | Defined | Defined | Net | |
benefit benefit plan pension plan | benefit | benefit plan | pension plan | |||
Amounts in NOK million | obligations | assets | obligations | obligations | assets | obligations |
Opening balance | (813) | 466 | (347) | (754) | 425 | (329) |
Current service cost and social contribution | (20) | - | (20) | (18) | - | (18) |
tax from continuing operations | ||||||
Current service cost and social contribution | (10) | - | (10) | (8) | - | (8) |
tax from discontinued operations | ||||||
Interest (expenses) income from | (29) | 22 | (6) | (28) | 23 | (5) |
continuing operations | ||||||
Interest (expenses) income from | (5) | 0 | (5) | (6) | - | (6) |
discontinued operations | ||||||
Administration cost from | - | (1) | (1) | - | (1) | (1) |
continuing operations | ||||||
Administration cost from | - | - | - | - | - | - |
discontinued operations | ||||||
Remeasurement gains / (losses) | (12) | 20 | 8 | (30) | 11 | (19) |
Contributions from employer | - | 3 | 3 | - | 6 | 6 |
Benefits paid | 63 | (36) | 27 | 44 | (23) | 21 |
Curtailments from continuing operations | 0 | - | 0 | - | - | - |
Curtailments from discontinued operations | - | - | - | 23 | - | 23 |
Other changes | (6) | - | (6) | 4 | - | 4 |
Liabilities classified as held for sale | 181 | - | 181 | - | - | - |
Currency translation | (32) | 20 | (12) | (41) | 25 | (16) |
Closing balance | (682) | 494 | (188) | (813) | 466 | (347) |
Breakdown of pension plan assets
31.12.2024 | 31.12.2023 | |||
Fair value of | Fair value of | |||
Amounts in NOK million | Distribution% | plan assets | Distribution% | plan assets |
Cash, cash equivalents and money market investments | 9% | 47 | 12% | 54 |
Bonds | 15% | 73 | 14% | 67 |
Shares | 32% | 159 | 34% | 156 |
Property | 36% | 179 | 33% | 155 |
Other plan assets | 7% | 37 | 7% | 33 |
Total pension plan assets | 100% | 494 | 100% | 466 |
Actual return on plan assets | 9% | 43 | 8% | 34 |
In addition, some Norwegian entities have pension
contribution funds, mainly based on excess pension assets
from settlement of the defined benefit plans in 2010. The
pension contribution funds are classified as non-current
pension funds, except next year's expected contributions
which are classified as current (see note 24 Other assets).
Principal assumptions used for the actuarial valuations in
2024 (2023) | ||||||||||
Norway | France | Canada | Germany | UK | ||||||
Discount rate | 4.8% | (4.8%) | na | (3.0%) | 4.8% | (4.8%) | 3.7% | (3.7%) | 4.8% | (4.8%) |
Expected rate of salary increase | na | (na) | na | (3.0%) | 3.5% | (3.5%) | na | (na) | na | (na) |
Annual regulation of pensions paid | 2.3% | (2.3%) | na | (na) | na | (na) | 2.0% | (2.0%) | na | (na) |
Assumptions regarding future mortality are based on
actuarial advice in accordance with published statistics and
experience in each country.
Sensitivity on pension obligations based on changes in main
actuarial assumptions
The defined benefit pension schemes expose Elkem to
actuarial risk such as investment risk, interest rate risk, salary
growth risk, mortality risk and longevity risk.
A decrease in corporate bond yields, a rise in inflation or an
increase in life expectancy would result in an increase to
plan liabilities.
The sensitivity analysis below shows estimated effects in the
defined pension obligation based on reasonable changes in
the main assumptions.
The calculations are based on a change in one assumption while
holding all other assumptions constant. Negative amounts show
an expected decrease in the net pension liability.
Assumptions
Discount rate | Life expectancy | Salary growth | ||||
0.5% | 0.5% | 1 year | 1 year | 0.5% | 0.5% | |
Amounts in NOK million | increase | decrease | increase decrease | increase | decrease | |
2024: Effect on the pension obligation | (36) | 40 | 18 | (19) | 12 | (10) |
2023: Effect on the pension obligation | (43) | 48 | 17 | (17) | 19 | (17) |
As the group's main pension plans are defined contribution
plans, there are no group policies for funding of the defined
benefit plans. This is managed locally, based on the terms and
status for the individual plan.
Expected contribution for the pension plans next year and
average duration for the main defined benefit plans
Amounts in NOK million | Norway | Canada | Germany | UK |
Contribution to be paid to defined pension plans next year | 9 | 22 | 4 | 7 |
Weighted average duration of the defined benefit obligations | 6 years | 15 years | 11 years | 11 years |
(c) Other benefit plans
Other employee benefits consist of provisions related to jubilee
and long-service benefits, and post-employment benefits to
be paid until ordinary retirement age for former employees in
Elkem’s Chinese entities (discontinued operations).
Of total non-current provisions, NOK 0 million (NOK 76 million)
relate to jubilee and long-service benefits in the Silicones
segment, mainly in France. Non-current provisions for other
employee benefits for Elkem’s Chinese entities, in the Silicones
segment, are NOK 0 million (NOK 31 million), mainly consisting
of post-employment benefits related to employees laid off due
Elkem's share option scheme
The group has in 2018 - 2021 granted share options to
corporate management and selected key employees. Each
option gives the right to acquire one share in Elkem ASA
on exercise. In 2022, the board of directors decided to
terminate the option scheme and replace it with a Long-
term Bonus Scheme (LTBS). See the "Report on salary and
other remuneration to leading personnel in Elkem ASA for the
financial year 2024" for description of the LTBS. The previous
granted options are still exercisable over the exercise period.
The share options vest annually in equal tranches over a three-
year period following the date of grant, with one-third vesting
each year. The options will expire two years after vesting, in
total 5 years after the date of grant. No option holder may in
any calendar year realise a total gain on exercise of options
in excess of twice the option holder's base salary in the same
calendar year, however provided that the maximum gain for
Elkem's CEO shall be four times the CEO's base salary. See
note 11 Employee benefits for an overview of options granted
to Elkem's corporate management.
When the options are exercised, the corresponding number
of shares are transferred to the employee. The proceeds
received from the exercise of the options (net of
any directly
Amounts in NOK million | 2024 | 2023 |
Share-based payment | (2) | (7) |
Social security contribution | 0 | 4 |
Total expenses related to share-based payments | (1) | (3) |
Parameters connected to share options granted in years respectively
Amounts in NOK million | 2021 | 2020 | 2019 |
Number of options granted | 7 451 000 | 8 000 000 | 8 000 000 |
Date of Grant | 29 Jul 2021 | 29 Jul 2020 | 29 Jul 2019 |
Exercise price (NOK) | 31.20 | 19.10 | 23.53 |
Share price (NOK) | 32.90 | 17.19 | 24.66 |
Expected lifetime* | 3.34 | 3.12 | 3.12 |
Volatility* | 34.4% | 46.0% | 35.8% |
Interest rate* | 0.9% | 0.2% | 1.3% |
Dividend* | 6.5% | 6.5% | 6.5% |
FV per instrument* | 5.19 | 2.95 | 4.08 |
Vesting conditions | Service | Service | Service |
*Weighted average parameters of instruments
Outstanding instruments
31 December 2024 | 31 December 2023 | ||||
Number of | Number of | ||||
Grant | instruments | Remaining | instruments | Remaining | |
Amounts in NOK million | Exercise price | outstanding | contractual life | outstanding | contractual life |
2019 programme | 23.53 | - | 0.00 | 259 190 | 10.58 |
2020 programme | 19.10 | 2 150 000 | 0.58 | 2 433 380 | 1.50 |
2021 programme | 31.20 | 4 667 333 | 1.08 | 4 921 950 | 2.01 |
Total outstanding | 6 817 333 | 0.93 | 7 614 520 | 1.80 | |
Overview of outstanding options
31 December 2024 | 31 December 2023 | |||
Overview of outstanding options | Number of | Weighted average | Number of | Weighted average |
Amounts in NOK million | instruments | exercise price | instruments | exercise price |
Outstanding options 1 January | 7 614 520 | 27.07 | 11 636 203 | 29.18 |
Granted during the year | - | - | - | - |
Exercised during the year | (279 190) | 19.10 | (1 413 303) | 25.76 |
Forfeited during the year | - | - | (408 380) | 30.03 |
Expired during the year | (517 997) | 27.26 | (2 200 000) | 38.52 |
Outstanding options 31 December | 6 817 333 | 27.38 | 7 614 520 | 27.07 |
Of which exercisable (vested) | 6 817 333 | 27.38 | 5 280 854 | 25.25 |
Average share price at exercise date (NOK per share) | 22.26 | 37.52 | ||
Details of operating expenses
Amounts in NOK million | 2024 | 2023 2) |
Loss on disposal of fixed assets | (1) | (0) |
Freight and commission expenses | (1 200) | (1 217) |
Leasing short-term and low value contracts (note 18) | (55) | (48) |
Machinery, equipment, spare parts and operating materials | (778) | (753) |
External services 1) | (1 415) | (1 379) |
Insurance expenses | (130) | (93) |
Impairment losses trade and other receivables | 2 | 2 |
Grants | 25 | 14 |
Other operating expenses | (731) | (699) |
Total other operating expenses | (4 283) | (4 173) |
1)
Including services from auditor, see specification below
2)
Restated - see note 39 Changes in presentation
During 2024, Elkem expensed NOK 294 million (NOK 335
million) related to research and innovation activities, which
includes product and business development, technical
customer support and improvement projects. In addition,
Elkem group total capitalised development expenses of NOK
45 million (NOK 100 million).
Grants relating to research and development amount to NOK
46 million (NOK 26 million). In addition NOK 58 million (NOK
KPMG is the group auditor of Elkem.
Fees to KPMG and other audit firms
Amounts in NOK million | 2024 | 2023 |
KPMG | ||
Audit fee | (23) | (23) |
Other assurance services | (0) | (1) |
Tax services | - | (0) |
Other services | - | - |
Other audit firms | ||
Audit fee | (4) | (4) |
Other assurance services | (0) | (0) |
Tax services | (2) | (2) |
Other services | (1) | (1) |
Total fees to KPMG and other audit firms | (30) | (30) |
Other gains (losses) consist of changes in fair value of financial
instruments that are not designated as a part of a hedging
relationship, any ineffective part of hedging relationships,
effects from discontinuation of hedging and foreign exchange
gains (losses) related to operating activities such as trade
receivables, trade payables, bank accounts / overdrafts. Foreig
n
exchange gains (losses) related to financing activities, mainly
interest-bearing liabilities and group loans, are classified as a
Other income (expenses)
Other income (expenses) consist of transactions and events
that are related to acquisition of business, gains / (losses)
on disposal of businesses and restructuring programmes.
In addition, performance incentives for Elkem employees
related to such items. Cost related to liquidated / wound-up
businesses, or updated regulations with retroactive effect
related to events / periods before purchase of the business, e.g.,
environmental measures, are also included in other income and
expenses.
Acquisition related costs may include both costs related to
completed acquisitions, acquisitions in progress and cancelled
projects.
Investments in equity instruments with an ownership below
20 per cent are normally classified as other shares. Dividends
from such shares are recognised when shareholders' right to
receive dividends is determined by the shareholder's meeting.
Fair value changes related to listed companies classified as
Amounts in NOK million | 2024 | 2023 |
Changes in fair value commodity contracts (note 30) | (1) | (1) |
Net gains (losses) on embedded EUR derivatives power contracts (note 30) | (106) | (73) |
Ineffectiveness on cash flow hedges (note 31) | (196) | 357 |
Net foreign exchange gains (losses) - forward currency contracts | (5) | (26) |
Operating foreign exchange gains (losses) | 39 | 350 |
Total other gains (losses) | (269) | 608 |
Dividends from other shares | 3 | 3 |
Change in fair value from other shares measured at fair value through profit or loss | 8 | 2 |
Restructuring expenses (note 29) | (9) | - |
Dismantling and environmental expenses (note 29) | (1) | (4) |
Other 1) | (49) | (13) |
Total other income (expenses) | (47) | (12) |
Total other items | (316) | 596 |
1)
including group loans are classified as a part of financial
income and expenses, and foreign exchange gains (losses)
self-constructed item of property, plant and equipment when
the construction period takes a substantial period of time,
meaning more than 9-12 months. Judgement is applied in
determining if a project is expected to last for a substantial
period of time.
Financial expenses also include interest on net pension
liabilities, unwinding of the discount effect from provisions and
contingent consideration from acquisition of subsidiaries, and
interest on lease liabilities.
Interest expenses from factoring and supply finance
Amounts in NOK million | 2024 | 2023 |
Interest income on loans and receivables | 78 | 136 |
Fair value adjustments on financial instruments | 16 | - |
Other financial income | 12 | 1 |
Total finance income | 107 | 137 |
Net foreign exchange gains (losses) 1) | 247 | (106) |
Interest expenses on interest-bearing liabilities measured at amortised cost | (694) | (575) |
Interest expenses from other items measured at amortised cost | (9) | (17) |
Interest expenses on factoring agreements | (50) | (52) |
Interest expenses on lease liabilities (note 18) | (15) | (13) |
Unwinding of discounted liabilities | (2) | (2) |
Interest expenses on net pension liabilities (note 11) | (6) | (5) |
Other financial expenses | (3) | (2) |
Total finance expenses | (778) | (666) |
Net finance income (expenses) | (424) | (635) |
1)
Some / part of loans are designated as a hedging instrument, hence the unrealised part of net foreign exchange gains (losses) are recognised
Penalties and interest related to income taxes are recognised as
Deferred tax assets are not recognised for start-up projects
and entities with longer periods of losses unless there is
convincing evidence of recoverability. Elkem recognises a
previously unrecognised deferred tax asset to the extent that
it has become probable that future taxable profit will allow
the deferred asset to be recovered. For example, when start
up projects becomes profitable, or the market condition has
changed so the entity has longer periods with historic taxable
profits and future forecasted taxable profits.
Judgement has been applied in the assessment of the
probability of being able to apply the group’s carry forward loss
against future taxable profit. Based on the current facts and
circumstances Elkem has concluded that it is not probable
that the carry forward loss will be applied against future profit
within a reasonable period and have therefore not recognised a
deferred tax asset. When assessing the recognition of deferred
tax assets, a five-year historic performance is applied in order
to determine if future profit is probable. All entities with carry
forward loss, except for Paraguay, have had negative taxable
result this year. To reconsider and recognise deferred tax assets,
an entity must experience stable taxable income for 3-5 years.
The exception from this is the tax loss carry forward acquired
in the asset acquisition of Elkem Testvirksomhet (previously
REC Solar Norway AS). Elkem Testvirksomhet was merged into
Elkem ASA in November 2024. It is assessed that the tax loss
carry forward can be applied towards taxable income in Elkem
ASA and towards group contributions from other Norwegian
entities, primarily Elkem Carbon AS.
tax position related to a pending tax issues with the Norwegian
tax authorities (se details below). Based on Elkem’s own
assessment and the advice from third party expertise it has
been concluded that it is more likely than not that Elkem will be
Part of the basis for recognising deferred tax assets is based
on applying the loss carried forward against future taxable
income, which requires use of estimates for calculating future
taxable income.
When estimating uncertain tax positions, the most probable
amount, including interests and penalties, is used because in
most cases the outcome of the tax review is binary. See details
on current uncertain tax positions below.
When estimating uncertain tax positions, the most probable
amount, including interests and penalties, is used because in
most cases the outcome of the tax review is binary. See details
Income tax recognised in profit or loss
Amounts in NOK million | 2024 | 2023 |
Profit (loss) before income tax | 1 526 | 2 879 |
Current taxes | (455) | (648) |
Deferred taxes | 1 043 | (133) |
Total income tax (expense) benefit | 588 | (781) |
Income taxes recognised in other comprehensive income (OCI)
Amounts in NOK million | 2024 | 2023 |
Remeasurement of defined benefit pension plans | (1) | 4 |
Hedging of net investment in foreign operations | 28 | 44 |
Cash flow hedges | (9) | 247 |
Total tax charged to OCI | 18 | 295 |
Reconciliation of income tax (expense) benefit
Amounts in NOK million | 2024 | 2023 |
Profit (loss) before income tax | 1 526 | 2 879 |
Expected income taxes, 22% of profit before tax (22%) | (336) | (633) |
Tax effects of: | ||
Difference in tax rates for each individual jurisdiction | (22) | (16) |
Preferential tax rates | 5 | 4 |
Permanent differences | ||
Tax effects of income from Norwegian controlled foreign companies (NOKUS) | (23) | (22) |
Tax effects share of profit (loss) from equity accounted companies | (17) | (5) |
Tax effects non-deductible expenses from continuing operations | (15) | (10) |
Tax effects non-deductible expenses from discontinued operations | (73) | (61) |
Tax relief based on value of equity | 7 | 10 |
Tax effects non-taxable income | 20 | 14 |
Other effects | ||
Tax effects of changes in unrecognised deferred tax assets | 1 060 | (31) |
Other current taxes | (4) | (20) |
Previous year tax adjustment | (14) | (12) |
Total income tax (expense) benefit | 588 | (781) |
Effective tax rate | -39 % | 27 % |
One company in China is taxed under the regulations for "High
and new technology company" which mean that the tax rate is
15 per cent compared to the regular 25 per cent. The company
has to confirm to the authorities every year that they fulfil the
conditions for "High and new technology company" in order to
apply the preferential tax rate.
Tax effect of non-taxable income is mainly related to R&D,
additional R&D deduction and non-taxable R&D grants,
and additional deduction on investments in fixed assets
equipment.
Other current taxes relates mainly to taxes that are indirectly
calculated based on profit (loss) before income tax and
withholding taxes.
Tax effects of changes in unrecognised deferred tax assets
are mainly the effect of recognising the tax loss coming from
the acquired company Elkem Testvirksomhet (previously REC
Solar Norway AS).
31.12.2024 | 31.12.2023 | |||
Temporary | Temporary | |||
Amounts in NOK million | difference | Deferred tax | difference | Deferred t ax |
Property, plant and equipment and intangible assets | 154 | 37 | 177 | 36 |
Pension liabilities | 182 | 45 | 339 | 86 |
Trade receivables | 8 | 2 | 879 | 5 |
Inventories | 325 | 72 | 755 | 1 58 |
Provisions | 249 | 65 | 661 | 1 46 |
Other differences | 467 | 110 | 294 | 55 |
Debt waiver | - | - | 595 | 1 53 |
Tax losses carried forward | 5 065 | 1 107 | 6 151 | 1 2 61 |
Gross deferred tax assets | 6 449 | 1 437 | 9 850 | 1 9 00 |
Not capitalised deferred tax asset to tax loss carry forward | (242) | (45) | (5 800) | (1 1 66) |
Debt waiver | - | - | (595) | (1 53) |
Unrecognised deferred tax assets other items | (1 623) | (357) | (91) | ( 11) |
Recognised deferred tax assets | 4 584 | 1 036 | 3 366 | 5 70 |
Netting | (297) | (4 36) | ||
Net deferred tax assets | 738 | 1 34 | ||
Derivatives including cash flow hedges | 654 | 144 | 1 087 | 2 39 |
Property, plant and equipment and intangible assets | 1 092 | 265 | 4 437 | 9 72 |
Inventories | 72 | 16 | 96 | 20 |
Other differences | 514 | 110 | 651 | 1 39 |
Gross deferred tax liabilities | 2 332 | 535 | 6 271 | 1 3 70 |
Netting | (297) | (4 36) | ||
Net deferred tax liabilities | 238 | 9 35 | ||
Net deferred tax (liabilities) assets recognised | 501 | (8 01) | ||
Unrecognised deferred tax assets other items, are mainly
related to property, plant and equipment and inventories. The
tax assets are not recognised due to uncertainty regarding
future taxable income and the long period for which the tax
asset shall be amortised.
Movements in net deferred tax assets and deferred tax liabilities
Amounts in NOK million | 2024 | 2023 |
Opening balance | (801) | (972) |
Recognised in profit or loss for the year for continuing operations | 1 043 | (133) |
Recognised in profit or loss for the year for discontinued operations | - | 35 |
Effect of business combination | - | (20) |
Effect of assets acquisition (see note 4) | 128 | - |
Recognised in other comprehensive income | 18 | 295 |
Assets classified as held for sale | 112 | - |
Currency translation differences | 1 | (6) |
Closing balance | 501 | (801) |
Tax losses carried forward
31 December 2024
Gross tax losses | Net tax losses | Unrecognised tax | Recognised deferred tax | |
Amounts in NOK million | carried forward | carried forward | losses | losses carried forward |
Norway | 4 811 | 1 058 | - | 1 058 |
Malaysia | 38 | 9 | (9) | - |
Paraguay | 96 | 9 | (9) | - |
Uruguay | 105 | 26 | (26) | - |
France | 12 | 3 | - | 3 |
Slovakia | 3 | 1 | (1) | - |
Total tax losses to carried forward | 5 065 | 1 107 | (45) | 1 061 |
Tax losses carried forward
31 December 2023
Gross tax losses | Net tax losses | Unrecognised tax | Recognised deferred tax | |
Amounts in NOK million | carried forward | carried forward | losses | losses carried forward |
France | 2 692 | 695 | (623) | 73 |
China | 2 774 | 416 | (416) | - |
Brazil | 206 | 70 | (70) | - |
Paraguay | 345 | 46 | (46) | - |
Malaysia | 29 | 7 | (7) | - |
US | 87 | 22 | - | 22 |
Canada | 11 | 3 | (3) | - |
Korea | 6 | 1 | (1) | - |
UK | 1 | - | - | - |
Total tax losses to carried forward | 6 151 | 1 261 | (1 167) | 95 |
Tax losses carried forward by expiry date
31.12.2024 | 31.12.2023 | |||
Total | Total | Total | Total | |
unrecognised | recognised | unrecognised | recognised | |
Amounts in NOK million | losses | losses | losses | losses |
Loss car.forw.which exp. within 1 year | - | - | (5) | - |
Loss car.forw.which exp. within 2 years | (7) | - | (9) | - |
Loss car.forw.which exp. within 3 years | (3) | - | (10) | - |
Loss car.forw.which exp. within 4 years | - | - | (3) | - |
Loss car.forw.which exp. within 5 years | - | - | - | - |
Loss car.forw.which exp. within 5-10 years | - | - | (40) | - |
Without maturity | (35) | 1 061 | (1 100) | 95 |
Total tax losses carried forward | (45) | 1 061 | (1 166) | 95 |
Pending tax issues with tax authorities
The Norwegian Tax Office decided in February 2021 to
increase Elkem ASA’s taxable income for the fiscal years
2016-2019 by in total NOK 781 million, which would have led
to an increase in the income tax expense of NOK 181 million.
The reassessments relate to loan arrangements / debt
waiver agreements acquired by Elkem ASA in 2016 through
the cross-border parent-subsidiary merger with Bluestar
Silicones International Sarl. Elkem is of the opinion that the
reassessment is unfounded and has appealed. Based on legal
advice, Elkem’s assessment is that the defence against the
action will be successful, and the increase in taxable income is
therefore not recognised in profit or loss. The amount was paid
in first quarter of 2021 and a corresponding receivable for the
paid income tax was recognised in 2021.
Debt waiver
Elkem Silicones France SAS has four Elkem internal debt
waiver agreements where internal loans were converted to
equity and the converted amounts were treated as taxable
income. Elkem Silicones France SAS can only reinstate the
loans to the extent that the company has an accounting
profit according to IFRS. All debt that is reinstated under the
agreements can be deducted against taxable income. The
gross taxable value of the agreements as of 31 December
2023 was NOK 595 million. Elkem Silicones France SAS
has not reinstated any loan amounts in 2024 or 2023 and
correspondingly no tax credit is recognised in 2024 or 2023.
Debt waiver 31 December 2023
Amounts in NOK million | 2010 | 2012 | 2013 | 2014 | Total |
Gross value of debt waiver | 54 | 186 | 149 | 207 | 595 |
Utilised 2023 | - | - | - | - | - |
Total debt that can be reversed | 54 | 186 | 149 | 207 | 595 |
Deferred tax asset unrecognised 1) | 14 | 48 | 38 | 53 | 153 |
The respective agreements expire in | 3 years | 5 years | 6 years | 7 years |
1)
Property, plant and equipment (PPE) are stated in the statement
of financial position at cost less accumulated depreciation and
accumulated impairment losses.
Initial cost includes expenditures that are directly attributable
to the acquisition of the asset. In projects depending on new
technology all cost up to final investment decision is expensed
when incurred. In projects using known technology the cost
incurred in the preparation for the final investment decision is
capitalised due to the close integration with the investment. This
is for example relevant for relining of furnaces.
When substantial parts of an installation are replaced with a
new component, the cost is capitalised. The replacement is
substantial when the costs associated with the replacement
account for more than approximately 70 per cent of the value of
an equivalent new installation. Upon capitalisation, the carrying
amount of the replaced part is derecognised.
than every year is capitalised and depreciated over the period
until the next periodic maintenance. Major periodic maintenance
typically requires curtailment of production during the
maintenance period. Silicon products typically perform relining
of a furnace approximately every 10 to 15th year, Silicones
performs mainly biennial maintenance of production equipment,
while maintenance within Carbon Solutions is mostly performed
on a day-to-day basis. Costs related to restarting the production
after major maintenance are expensed when incurred.
Costs that do not relate to replacement of substantial parts or
major periodic maintenance that is carried out less frequently
than every year, are classified as “day-to-day servicing” and are
expected residual value for each item of PPE and are recognised
in the statement of profit or loss using the straight-line method.
Elkem has certain leases with local governments. Unless there
are indications to the contrary it is assumed that these leases
are extended at expiry when determining the useful life of the
assets situated on the land. Depreciation commences when the
assets are ready for their intended use. Judgement is applied to
The main rule is to classify spare parts as inventory. However,
major spare parts and stand-by equipment qualify as property,
plant, and equipment when Elkem expects to use them during
more than one period. Depreciation for major spare parts starts
when the asset is recognised in the asset register.
Accounting principle application and judgements for
2024
Plant, | ||||||
machinery, | ||||||
Buildings | equipment | Office | ||||
and other | and motor | and other | Construction | |||
Amounts in NOK million | Land | property | vehicles | equipment | in progress | Total |
Cost | ||||||
Opening balance | 276 | 9 575 | 26 965 | 2 328 | 6 842 | 45 987 |
Additions | - | 40 | 71 | 23 | 2 783 | 2 917 |
Transferred from CiP | 4 | 450 | 4 308 | 1 381 | (6 144) | - |
Disposals | (0) | (20) | (144) | (23) | (6) | (194) |
Assets classified as held for sale | (160) | (6 757) | (19 993) | (3 604) | (2 080) | (32 595) |
Currency translation differences | 15 | 530 | 1 333 | 188 | 287 | 2 353 |
Closing balance | 134 | 3 819 | 12 540 | 293 | 1 682 | 18 468 |
Accumulated depreciation | ||||||
Opening balance | (3 639) | (15 650) | (1 043) | (20 332) | ||
Additions from continuing operations | (134) | (677) | (15) | (827) | ||
Additions from discontinued operations | (194) | (992) | (288) | (1 475) | ||
Disposals | 16 | 118 | 23 | 157 | ||
Assets classified as held for sale | 1 964 | 10 400 | 1 202 | 13 566 | ||
Currency translation differences | (133) | (706) | (77) | (917) | ||
Closing balance | (2 121) | (7 507) | (199) | (9 827) | ||
Impairment losses | ||||||
Opening balance | (12) | (446) | (2 398) | (15) | (30) | (2 900) |
Additions from continuing operations | - | (3) | (35) | (0) | (0) | (38) |
Additions from discontinued operations | - | (1) | (9) | (0) | - | (10) |
Disposals | - | 3 | 17 | 0 | 0 | 20 |
Assets classified as held for sale | - | 469 | 2 419 | 15 | 31 | 2 935 |
Currency translation differences | (1) | (41) | (197) | (1) | (3) | (242) |
Closing balance | (13) | (18) | (202) | (1) | (1) | (235) |
Carrying amount | ||||||
Closing balance | 121 | 1 680 | 4 831 | 92 | 1 681 | 8 405 |
Original cost of assets fully depreciated | 0 | 1 919 | 4 903 | 97 | - | 6 919 |
but still in use | ||||||
Estimated useful life | Indefinite | 5–50 years | 3–50 years | 3–20 years | ||
Depreciation plan | Straight-line | Straight-line | Straight-line |
discontinued operations. The weighted average cost of capital
for capitalisation of loan interest in 2024 is in the range of 2.6
Impairment losses from continuing operations in 2024 are
2023
Plant, | ||||||
machinery, | ||||||
Buildings | equipment | Office | ||||
and other | and motor | and other | Construction | |||
Amounts in NOK million | Land | property | vehicles | equipment | in progress | Total |
Cost | ||||||
Opening balance | 233 | 8 957 | 25 406 | 1 078 | 5 022 | 40 696 |
Additions | 0 | 14 | 97 | 22 | 4 883 | 5 016 |
Transferred from CiP | 12 | 532 | 1 534 | 976 | (3 053) | - |
Reclassification | (1) | 2 | (286) | 285 | - | 0 |
Business combinations (note 4) | 21 | 33 | 25 | - | 2 | 81 |
Disposals | - | (76) | (227) | (17) | (13) | (333) |
Currency translation differences | 10 | 113 | 417 | (15) | 2 | 526 |
Closing balance | 276 | 9 575 | 26 965 | 2 328 | 6 842 | 45 987 |
Accumulated depreciation | ||||||
Opening balance | (3 322) | (14 437) | (580) | (18 339) | ||
Additions from continuing operations | (116) | (620) | (17) | (753) | ||
Additions from discontinued operations | (203) | (819) | (191) | (1 213) | ||
Reclassification | 1 | 267 | (268) | - | ||
Disposals | 40 | 204 | 16 | 260 | ||
Currency translation differences | (39) | (245) | (2) | (287) | ||
Closing balance | (3 639) | (15 650) | (1 043) | (20 332) | ||
Impairment losses | ||||||
Opening balance | (11) | (435) | (2 358) | (1) | (30) | (2 836) |
Additions from continuing operations | - | (0) | (24) | - | (0) | (25) |
Additions from discontinued operations | - | (13) | (56) | - | - | (69) |
Reclassification | - | (9) | 22 | (14) | - | - |
Disposals | - | 10 | 18 | 0 | 1 | 29 |
Currency translation differences | (1) | 1 | 1 | 0 | 0 | 1 |
Closing balance | (12) | (446) | (2 398) | (15) | (30) | (2 900) |
Carrying amount | ||||||
Closing balance | 264 | 5 490 | 8 917 | 1 271 | 6 812 | 22 754 |
Original cost of assets fully depreciated | ||||||
but still in use | 0 | 2 214 | 7 979 | 240 | - | 10 433 |
Estimated useful life | Indefinite | 5–50 years | 3–50 years | 3–20 years | ||
Depreciation plan | Straight-line | Straight-line | Straight-line |
average cost of capital for capitalisation of loan interest in 2023
is in the range of 2.8 per cent and 3.6 per cent per annum.
Impairment losses in 2023 are primarily related to impairment
of production units at Xinghuo NOK 69 million and impairment
Right-of-use assets are presented separately in the statement
of financial position, whereas lease liabilities are presented in
interest-bearing liabilities.
the production cycle, including production buildings and land
where this is not controlled by the local government. The
group`s main lease contracts comprise office buildings and
machinery / storage assets to be used at production sites.
The less significant lease contracts comprise employee cars,
machinery, and equipment.
Elkem applies a single recognition and measurement approach
for all leases, except for:
→
Lease contracts for which the lease term ends within
12 months as of the commencement date are not
capitalised (short-term leases). Elkem's short-term
lease commitments are related to rental of equipment
in connection with maintenance or installation of new
equipment.
→
Lease contracts for which the underlying asset is of low
value, mainly office equipment, are not capitalised.
→
Lease of intangible assets are not capitalised.
→
Lease payments on contracts that are not capitalised are
recognised as other operating expenses on a straight-line
basis over the lease term.
2024 | Buildings | Plant, machinery, | |||
and other | equipment and | Office and other | |||
Amounts in NOK million | Land | property | motor vehicles | equipment | Total |
Cost | |||||
Opening balance | 397 | 733 | 153 | 2 | 1 285 |
Additions / lease modifications / remeasurements | 8 | 78 | 60 | 0 | 148 |
Partial or full termination of agreements | - | (53) | (41) | (2) | (96) |
Assets classified as held for sale | (378) | (260) | (143) | (0) | (782) |
Currency translation differences | 33 | 25 | 7 | 0 | 65 |
Closing balance | 60 | 523 | 36 | 0 | 619 |
Accumulated depreciation | |||||
Opening balance | (80) | (258) | (92) | (2) | (431) |
Additions from continuing operations | (6) | (52) | (9) | - | (68) |
Additions from discontinued operations | (8) | (42) | (36) | (0) | (87) |
Partial or full termination of agreements | - | 48 | 36 | 2 | 86 |
Assets classified as held for sale | 81 | 143 | 84 | 0 | 308 |
Currency translation differences | (7) | (12) | (4) | (0) | (23) |
Closing balance | (20) | (174) | (22) | (0) | (216) |
Impairment losses | |||||
Opening balance | - | - | - | - | - |
Closing balance | - | - | - | - | - |
Carrying amount | |||||
Closing balance | 40 | 349 | 15 | 0 | 403 |
Estimated useful life | 1–99 years | 1–25 years | 1–5 years | 3-4 years | |
Depreciation plan | Straight-line | Straight-line | Straight-line | Straight-line |
Details of right-of-use assets
2023
Buildings | Plant, machinery, | ||||
and other | equipment and | Office and other | |||
Amounts in NOK million | Land | property | motor vehicles | equipment | Total |
Cost | |||||
Opening balance | 326 | 659 | 150 | 2 | 1 138 |
Additions / lease modifications / remeasurements | 73 | 95 | 57 | - | 225 |
Partial or full termination of agreements | - | (30) | (63) | - | (93) |
Currency translation differences | (3) | 9 | 9 | 0 | 15 |
Closing balance | 397 | 733 | 153 | 2 | 1 285 |
Accumulated depreciation | |||||
Opening balance | (70) | (191) | (96) | (1) | (359) |
Additions from continuing operations | (2) | (45) | (4) | (0) | (52) |
Additions from discontinued operations | (7) | (48) | (34) | (0) | (90) |
Partial or full termination of agreements | - | 30 | 48 | - | 77 |
Currency translation differences | 0 | (3) | (6) | (0) | (9) |
Closing balance | (80) | (258) | (92) | (2) | (431) |
Impairment losses | |||||
Opening balance | - | - | |||
Closing balance | - | - | - | - | - |
Carrying amount | |||||
Closing balance | 317 | 476 | 61 | 0 | 854 |
Estimated useful life | 8–99 years | 2–25 years | 2–6 years | 3-4 years | |
Depreciation plan | Straight-line | Straight-line | Straight-line | Straight-line |
Carrying amounts of lease liabilities and the movements during the period
Amounts in NOK million | 2024 | 2023 |
Opening balance | 589 | 578 |
Additions / lease modifications / remeasurements | 148 | 225 |
Partial or full termination of agreements | (10) | (16) |
Payments | (170) | (236) |
Interest expenses on lease liabilities from continuing operations | 15 | 13 |
Interest expenses on lease liabilities from discontinued operations | 13 | 14 |
Liabilities classified as held for sale | (195) | - |
Currency translation differences | 17 | 10 |
Closing balance (note 26) | 405 | 589 |
The maturity analysis of lease liabilities is disclosed in note 26
Interest-bearing liabilities.
Amounts recognised in consolidated statement of profit or loss
Amounts in NOK million | 2024 | 2023 |
Depreciation of right-of-use assets | (68) | (52) |
Interest expenses on lease liabilities (note 15) | (15) | (13) |
Leasing expenses, short-term leases (note 13) | (53) | (47) |
Leasing expenses, low value assets (note 13) | (2) | (1) |
Leasing expenses, variable lease payments (note 13) | (1) | (0) |
Total amount recognised in consolidated statement of profit or loss | (138) | (113) |
from the research phase to the development phase for
internally developed intangible assets. To ensure consistent
judgement, different activities are grouped in four different
phases. Expenses incurred in phase 1 are classified as
research and expensed directly to profit and loss. Expenses
incurred in phase 2-4 are normally capitalised as long as the
criteria for capitalisation are met. Phase 4 may also contain
commercialisation/industrialisation of technology developed in
phase 1-3 into full scale plants and judgement must be applied
both in terms of separation between fixed and intangible
assets as well as the correct starting point for depreciation. In
general depreciation of the intangible assets starts when the
Expenditures related to research and development activities,
Accounting principle application and judgements for
2024
Intangible | |||||||
Land use | Technology | Other assets under | |||||
Amounts in NOK million | rights | and licences | Software Development | intangible 1) | construction | Total | |
Cost | |||||||
Opening balance | 116 | 911 | 714 | 1 030 | 384 | 407 | 3 563 |
Additions | - | 0 | 12 | - | - | 88 | 100 |
Transferred from CiP | - | 0 | 44 | 61 | 11 | (116) | - |
Disposals | - | - | (2) | - | - | - | (2) |
Assets classified as held for sale | - | (945) | (490) | (1 152) | (333) | (201) | (3 121) |
Currency translation differences | 6 | 56 | 31 | 61 | 24 | 14 | 192 |
Closing balance | 121 | 23 | 309 | - | 86 | 193 | 732 |
Accumulated amortisation | |||||||
Opening balance | (65) | (654) | (514) | (711) | (159) | (2 103) | |
Additions from continuing operations | (2) | (1) | (25) | - | (8) | (35) | |
Additions from discontinued operations | - | (42) | (33) | (77) | (31) | (182) | |
Disposals | - | - | 2 | - | - | 2 | |
Assets classified as held for sale | - | 712 | 335 | 826 | 173 | 2 045 | |
Currency translation differences | (3) | (38) | (22) | (39) | (10) | (112) | |
Closing balance | (70) | (23) | (257) | - | (35) | (385) | |
Impairment losses | |||||||
Opening balance | (1) | - | - | - | - | - | (1) |
Additions from continuing operations | - | - | (1) | - | - | (129) | (130) |
Currency translation differences | (0) | - | - | - | - | 0 | (0) |
Closing balance | (1) | - | (1) | - | - | (129) | (131) |
Carrying amount | |||||||
Closing balance | 50 | 0 | 51 | - | 51 | 64 | 216 |
Estimated useful life | 3–10 years | 3–15 years | 3–10 years | 3–16 years | 3–10 years | ||
Amortisation plan | Straight-line | Straight-line | Straight-line | Straight-line | Straight-line | ||
1)
Other intangible assets consists mainly of customer relationships.
Details of intangible assets
2023
Intangible | |||||||
| Technology | Land use | Other assets under | |||||
Amounts in NOK million | rights | and licences | Software Development | intangible 1) | construction | Total | |
Cost | |||||||
Opening balance | 108 | 868 | 627 | 880 | 350 | 377 | 3 209 |
Additions | - | - | 17 | - | - | 183 | 200 |
Transferred from CiP | - | 5 | 67 | 94 | 3 | (170) | - |
Business combinations (note 4) | - | - | 0 | - | 29 | - | 29 |
Disposals | - | - | (9) | - | - | - | (9) |
Currency translation differences | 7 | 38 | 13 | 56 | 2 | 17 | 133 |
Closing balance | 116 | 911 | 714 | 1 030 | 384 | 407 | 3 563 |
Accumulated amortisation | |||||||
Opening balance | (59) | (579) | (457) | (606) | (122) | (1 824) | |
Additions from continuing operations | (2) | (2) | (29) | - | (6) | (39) | |
Additions from discontinued operations | - | (41) | (28) | (65) | (31) | (166) | |
Disposals | - | - | 9 | - | - | 9 | |
Currency translation differences | (4) | (32) | (8) | (40) | (0) | (84) | |
Closing balance | (65) | (654) | (514) | (711) | (159) | (2 103) | |
Impairment losses | |||||||
Opening balance | (1) | - | - | - | - | - | (1) |
Currency translation differences | (0) | - | - | - | - | - | (0) |
Closing balance | (1) | - | - | - | - | - | (1) |
Carrying amount | |||||||
Closing balance | 49 | 257 | 200 | 319 | 225 | 407 | 1 458 |
Estimated useful life | 3–10 years | 3–15 years | 3–10 years | 3–16 years | 3–10 years | ||
Amortisation plan | Straight-line | Straight-line | Straight-line | Straight-line | Straight-line | ||
1)
If the fair value at the time of acquisition of the group’s interest
in the net assets of the acquired subsidiary exceeds the cost
of the acquisition (negative goodwill), the differences are
presented directly in the statement of profit or loss as other
items. Judgement is applied in determining net identifiable
assets and hence in determining the amount of goodwill.
Accounting principle application and judgement for
Amounts in NOK million | 2024 | 2023 |
Opening balance | 1 015 | 984 |
Business combinations (note 4) | - | 23 |
Assets classified as held for sale | (756) | - |
Currency translation differences | 70 | 8 |
Closing balance | 329 | 1 015 |
Origin of goodwill per CGU and operating segment
31 December 2024
Amounts in NOK million | Silicon Products | Carbon Solutions | Total |
Elkem Nagpur | 42 | - | 42 |
Elkem Rana AS | 40 | - | 40 |
Elkem Oilfield Chemical FZCO Ltd. | 26 | - | 26 |
Elkem Dronfield Ltd. | 19 | - | 19 |
Elkem Materials Processing Services BV | 0 | - | 0 |
Elkem Ferroveld JV | - | 45 | 45 |
Elkem Carbon Slovakia a.s. | - | 22 | 22 |
Elkem Participaçòes Indústria e Comércio Limitada | - | 8 | 8 |
Elkem Carbon (China) Co., Ltd. | - | 1 | 1 |
NEH LLC | 107 | 20 | 126 |
Total goodwill | 234 | 95 | 329 |
Origin of goodwill per CGU and operating segment
31 December 2023
Amounts in NOK million | Silicones | Silicon Products | Carbon Solutions | Total |
Elkem Silicones Guangdong Co., Ltd. | 499 | - | - | 499 |
Elkem Silicones Korea Co., Ltd | 126 | - | - | 126 |
Elkem Silicones excluding Xinghuo/Yongdeng, Elkem | ||||
Guangdong, and Elkem Silicones Korea | 85 | - | - | 85 |
Elkem Rana AS | - | 40 | - | 40 |
Elkem Nagpur | - | 38 | - | 38 |
Elkem Oilfield Chemical FZCO Ltd. | - | 24 | - | 24 |
Elkem Dronfield Ltd. | - | 17 | - | 17 |
Elkem Materials Processing Services BV | - | 0 | - | 0 |
Elkem Ferroveld JV | - | - | 41 | 41 |
Elkem Carbon Slovakia a.s. | - | - | 21 | 21 |
Elkem Participaçòes Indústria e Comércio Limitada | - | - | 9 | 9 |
Elkem Carbon (China) Co., Ltd. | - | - | 1 | 1 |
NEH LLC | - | 96 | 18 | 113 |
Total goodwill | 710 | 215 | 89 | 1 015 |
This disclosure covers the impairment assessment for
goodwill, intangible assets, property plant and equipment and
right-of-use assets (non-current non-financial assets).
Impairment is recognised when the carrying value of an asset
or cash generating unit (CGU) exceeds its recoverable amount.
As a starting point Elkem uses the value in use method for
estimating recoverable amount in an impairment test. The
value in use calculation is based on a discounted cash flow
(DCF) model. The cash flows are derived from the strategic
plan for the next five years and do not include restructuring
activities that Elkem is not yet committed to or significant
future investments that will enhance the performance of the
assets of the CGU being tested. An exception from this is
ongoing projects with known technology where both future
cash inflows and remaining investments are included.
A long-term growth rate is calculated and applied to project
future cash flows after the fifth year. If the value in use
calculation indicates an impairment, the fair value less cost to
sell will be estimated and the higher of this amount and the
value in use is applied as the recoverable amount.
impairment trigger exist. Management assesses a wide range
of quantitative and qualitative information before concluding on
the trigger review. Triggers normally assessed in Elkem include:
→
performance compared to budget since the last
trigger review
→
the expected development in sales prices and the cost
of materials, employees and other operating expenses in
both the short and medium term
→
supply/demand balance
→
regulatory changes and new technology
→
competitive situation
There is significant judgment required to determine the CGU
for impairment testing. For impairment testing of property,
plant and equipment intangible and right of use assets the
CGU is the lowest level that generates cash inflows. This can
be both a single plant or a combination of plants depending on
the facts and circumstances. For goodwill the unit of testing
is a combination of CGUs and is based on the level where
synergies are expected to be realised following a business
combination. The combination of CGUs for impairment testing
of goodwill is determined to be the operating segments as
The value-in-use calculations are based on estimated future
cash flows. The uncertainty in the cash flows relates to future
prices for both key input factors in the production and market
prices for the sale of Elkem's products. There is uncertainty
regarding these factors both for the next 12 months and for
the rest of the forecast period. There is also uncertainty in
estimating replacement investments and the growth rate
in the terminal value. The estimated future pre-tax cash
flows are discounted using a discount rate before tax. The
estimation uncertainty in the discount rate relates to the
determination of the risk-free rate, the market risk premium
and the beta. Elkem uses a beta per business segment and
the beta is found using observable betas of comparable
companies for each business segment.
Elkem has performed
sensitivity analysis for key drivers in the impairment test to
Impairment assessment for non-current non-financial assets
including goodwill
The impairment assessment for non-current non-financial
assets is performed on two levels.
→
For non-current non-financial assets other than goodwill
a quarterly trigger assessment is performed for each of
the separate CGUs within the three operating segments
Silicones, Silicon Products and Carbon Solutions. If
a trigger is identified an impairment assessment is
performed for the CGU.
→
Goodwill acquired through business combinations are
allocated to the operating segments Silicones, Silicon
Products and Carbon Solutions. Each of the operating
segments consist of several CGUs, typically a plant
or a group of plants. Impairment testing of goodwill is
done annually, or more frequently if indicators exist,
for the group of CGUs that is included in the respective
operating segments.
On 23 January 2025 the group announced its intention to
perform a strategic review of the Silicones division. At the
end of the fourth quarter the Silicones division is classified as
held for sale and discontinued operations. Immediately before
the re-classification of the Silicones division as discontinued
operations an impairment assessment was performed
and no impairment loss was identified. Subsequent to the
reclassification, the disposal group classified as held for sale
shall be measured at the lower of its carrying amount and
fair value less costs to sell. Please refer to note 40 Assets
held for sale and discontinued operations for assumptions
used in estimating fair value of the assets held for sale at 31
December 2024. The following disclosure for 2024 will cover
the continuing operations in Elkem Silicon Products and
Elkem Carbon Solutions divisions. Held for sale assets are
not reclassified in comparable figures. The 2023 impairment
assessment of the Silicones division is therefore included in
this disclosure.
The following table gives an overview of carrying amount of
total non-current non-financial assets and goodwill allocated
to each of the operating segments. The table also includes the
pre-tax discount rate for each operating segment.
Operating segment
Carrying amount | Of which goodwill | Pre-tax discount rate | ||||
Amounts in NOK million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
Silicones | - | 17 458 | - | 710 | - | 11.9 % |
Silicon Products | 7 447 | 6 874 | 234 | 215 | 11.1 % | 11.9 % |
Carbon Solutions | 1 259 | 1 108 | 95 | 89 | 10.5 % | 12.3 % |
Total | 8 706 | 25 440 | 329 | 1 015 | ||
Elkem analyses both quantitative and qualitative triggers that
may indicate that a CGU is impaired. Quantitative indicators
include Elkem’s market capitalisation, return on capital
employed compared to WACC and EBITDA margin compared
to budget. Qualitative indicators include significant adverse
changes in expected sales volumes or margins, raw material
prices, power prices and supply and changes in regulations.
The impairment assessment for goodwill allocated to the
operating segments and for the respective CGUs within the
operating segments performed at year-end is covered for each
operating segment below.
Discounted cash flow models are applied to determine the
value in use for the operating segments. Key assumptions used
in the calculation of value in use are sales prices and volumes,
raw material prices and discount rates.
A range of important assumptions used in the impairment
assessment is common for all GGUs/operating segments
and are to large extent determined at the group level in
relation with the budget and strategic forecast process.
These assumptions are described below. In addition, certain
assumptions such as sales prices, cost of materials and supply
/ demand balance are specific for the respective CGUs /
operating segments. These assumptions are described within
the below impairment assessments done for each operating
segment and underlying CGUs.
Common assumptions for all operating segments
Financial forecasts
The 2025 budget approved by the board is used as a basis for
the 2026-2029 strategic plan and hence the forecasts which
is used for the impairment assessment. When preparing the
budget and strategic plan a range of both external and internal
sources are considered. External sources include market
reports and price indexes. Internal sources include agreed
sales volumes for the period, the effect of implemented cost
saving initiatives and planned investments and maintenance.
EBITDA level represents the operating profit (loss) before
depreciation and amortisation. The key assumptions used in
reaching the forecast figures are sales prices, total volume and
product mix, operating costs, and productivity targets. See
Note 6 Operating segments for Elkem’s definition of EBITDA.
Other operating costs
These are estimated based on the current level and adjusted
for expected inflation in the respective locations where the
business is situated. Operating costs are also impacted by
ongoing operational efficiency programmes. Changes to the
outcome of these initiatives may affect future EBITDA levels.
Capital expenditure (“Capex”)
A normalised capex is assumed in the long run and are based
on today’s maintenance level and technology. Estimated
capital expenditures do not include capital expenditures that
significantly enhance the current performance, as such effects
are not included in the cash flow projection. However, capex
includes remaining investments on strategic projects in an
advanced stage where only a small part of the total investment
remains before start up.
Discount rates
The required rate of return is calculated by the WACC method.
The cost of a company's equity and liabilities, weighted to
reflect its target capital structure of 50:50, respectively, derive
from its weighted average cost of capital. The WACC rates
are based on 10-year risk-free interest rate for the relevant
currency of the CGU. For the operating segments with
cash inflows and outflows in different currencies these are
translated to NOK in the goodwill impairment test and a NOK
10 year risk-free interest rate is used in the WACC. The rates
are adjusted for inflation differential and country risk premium.
The discount rates also consider the debt premium, market
risk premium, corporate tax rate and asset beta. The WACC
are adjusted for tax to determine a pre-tax rate that is used for
discounting the estimated future cash flows.
Growth rates
The expected growth rates for a cash-generating unit (CGU)
converge from its current level experienced over the last few
years, to the long-term growth level in the market in which
the entity operates. The growth rates used to extrapolate cash
flow projections beyond the explicit forecast period are based
on management’s experience, assumptions in terms of marke
share and expectations for the market development in which
the entity operates. Growth rate used in Elkem’s DCF models
is 2 per cent for Silicon Products and Carbon Solutions with a
significant market exposure in Europe.
t
Currency rates and inflation
The value-in-use calculation is performed in the functional
currency for the CGU. The currency rates used to translate
future incomes and expenses in other currencies than the
functional currency is based the currency rates used in
the strategic planning process. These are also used when
translating the cash inflows and outflows in the operating
segments to NOK in the goodwill impairment test.
The long-
term inflation (CPI) is based on external predictions and reflect
the CPI in which each CGU is located.
Climate related risk
The calculation of value in use reflects the expected
development in both the cost of CO
2
quotas and the income
from CO
2
compensation going forward, in line with the current
regulatory framework. Outside of this no climate related
legislation has been passed at the current time that will impact
the group. However, there is an expectation that any increase
in cost due to new legislation will be covered by increased
sales prices, full or partial compensation by incentive schemes
or increased effectiveness resulting in limited impact on
operating cash flows. See also the climate risk assessment in
note 32 Financial risk.
Mandatory tests
Silicon Products and Carbon Solutions
For Silicon Products and Carbon Solutions the goodwill
impairment test has been done based on approved business
plans for the period 2025-2029 and a terminal value for the
subsequent years. The estimated value in use exceeds the
carrying amount. Further, no triggers were identified for the
CGUs in Elkem Silicon Products and Carbon Solutions.
2023 Impairment assessment
In 2023 Elkem identified impairment indicators for Elkem
Silicones Xinghuo/Yongdeng, Elkem Silicones Guangdong and
Elkem Silicones excluding Xinghuo/Yongdeng, Guangdong and
Elkem Silicones Korea.
No impairment was recognised. The
assumptions used are included below.
Elkem Silicones
The Silicones division has experienced a challenging market
situation that has resulted in a weak financial performance in
2023. The challenging market situation can be explained by
several factors:
→
Supply/demand imbalance in the market following
increased production capacity in China and delayed
recovery of demand in Chinese construction industry
after the COVID pandemic as well as lower demand for
specialties in all regions.
→
Chinese commodity prices reaching a 10-year low in
August 2023 without a comparable reduction in raw
material cost resulting in a significant pressure on EBITDA
and ROCE.
→
Higher pressure on commodity prices compared to
specialty prices.
Based on the above indicators and weak financial
performance, impairment triggers have been identified for the
following CGUs:
→
Xinghuo/Yongdeng
→
Elkem Guangdong (Polysil)
→
Elkem Silicones excluding Xinghuo/Yongdeng, Elkem
Guangdong, and Elkem Silicones Korea
Impairment tests have been performed for these CGUs in
parallel with the goodwill impairment test performed for the
Silicones division. The assumptions used, and the assessments
made for the goodwill impairment test for the division is to
a large extent applicable to the different CGUs due to the
global characteristics of the Silicones market and Elkem’s
ability to adapt production at the plants across the different
geographies based on supply and demand in the different
markets. However, there are some differences in markets and
product mix that will impact the outcomes. Below the results
for each test is summarized including sensitivities.
Silicones operating segment
The conclusion is no impairment for the goodwill allocated to
the Silicones operating segment. Key assumptions used in
reaching this conclusion:
→
External markets analysts expect continued challenging
supply/demand balance both in China and globally for the
next two years, before a gradual recovery towards the end
of the forecast period resulting in a more balanced market.
→
The strategic capacity increase investments in China
and France are expected to ramp up production during
2024 and 2025. The new assets are expected to yield
cost savings, more efficient production and an improved
specialty ratio that will improve both absolute and stability
in margins.
→
Cost saving programmes initiated in 2023 are expected
to give lasting reductions through reduced operating
expenses going forward.
→
A more balanced market, combined with an increased
specialty ratio, results in improved average sales prices
and combined with reduced cost leads to a gradually
improving EBITDA-margin throughout the forecast period.
Given the challenging market situation throughout 2023 and
the uncertainties regarding the timeline and level of market
improvement both within the next 12 months and in the
longer term, relevant and reasonable sensitivities have been
performed to indicate a range of outcomes.
→
A scenario where volumes and prices decrease with 5
per cent across all years in the forecast would result in no
impairment. In this scenario employee benefit and other
operating expenses have been adjusted to reflect lower
activity. Further, as sales prices for commodity products
are closely aligned with raw material prices these have
also been reduced with 5 per cent.
→
An increase in WACC of 0.5 percentage point – would not
result in an impairment.
→
A 11 per cent reduction in base case EBITDA for each
year in the forecast period would result in a break even
scenario.
Elkem Silicones Xinghuo/Yongdeng
Elkem has identified impairment indicators within Elkem
Silicones Xinghuo/Yongdeng. The total carrying amount of
the CGU is NOK 9 849 million. The impairment indicators
are largely due to falling sale prices and volumes caused by a
supply/demand imbalance in the Silicones markets globally.
The assumptions applied follow the assumptions as applied
for the goodwill, see above. It is expected that 2024 and 2025
will be challenging before gradually improving towards the end
of the forecast period. Pre-tax discount rate used in the DCF
calculation for the CGU is 10.4 per cent.
Given the challenging market situation throughout 2023 and
the uncertainties regarding the timeline and level of market
improvement both within the next 12 months and in the
longer term, relevant and reasonable sensitivities have been
performed to indicate a range of outcomes.
→
A scenario where volumes and prices decrease with 5
per cent across all years in the forecast– would result in
no impairment. In this scenario employee benefit and
other operating expenses have been adjusted to reflect
lower activity. Further, as sales prices for commodities are
closely aligned with raw material prices these have also
been reduced with 5 per cent.
→
Increased WACC of 0.5 percentage point – would not
result in an impairment.
→
A 12 per cent reduction in base case EBITDA for all future
periods – would result in a break even scenario.
Elkem Silicones excluding Xinghuo/Yongdeng, Elkem
Guangdong, and Elkem Silicones Korea
Elkem has identified impairment indicators within Elkem
Silicones excluding Xinghuo/Yongdeng, Elkem Guangdong,
and Elkem Silicones Korea which primarily includes operations
in EMEA and AMS. The total carrying amount of the CGU is
NOK 6 177 million. The impairment indicators are largely due
to falling sale prices and volumes caused by a supply/demand
imbalance in the Silicones markets globally and pressure on
specialty prices.
The assumptions applied follow the assumptions as applied
for the goodwill, see above. It is expected that 2024 and 2025
will be challenging before gradually improving towards the end
of the forecast period. Pre-tax discount rate used in the DCF
calculation for the CGU is 11.5 per cent.
Given the challenging market situation throughout 2023 and
the uncertainties regarding the timeline and level of market
improvement both within the next 12 months and in the
longer term, relevant and reasonable sensitivities have been
performed to indicate a range of outcomes.
→
A scenario where volumes and prices decrease with 5 per
cent across all years in the forecast– would result in no
impairment. In this scenario employee benefit and other
operating expenses have been adjusted to reflect lower
activity. Further, as sales prices are closely aligned with
raw material prices these have also been reduced with 5
per cent.
→
Increased WACC of 0.5 percentage point – would not
result in an impairment.
→
A 12 per cent reduction in base case EBITDA for all future
periods – would result in a break even scenario.
Elkem Silicones Guangdong
Elkem has identified impairment indicators within Elkem
Silicones Guangdong. The total carrying amount of the CGU
is NOK 627 million. The impairment indicators are largely due
to weaker financial performance than forecasted in last year’s
impairment test due to lower sales prices and volumes.
The assumptions applied follow the assumptions as applied
for the goodwill, see above. It is expected that 2024 and 2025
will be challenging before gradually improving towards the end
of the forecast period. Pre-tax discount rate used in the DCF
calculation for the CGU is 9.9 per cent.
Given the challenging market situation throughout 2023 and
the uncertainties regarding the timeline and level of market
improvement both within the next 12 months and in the
longer term, relevant and reasonable sensitivities have been
performed to indicate a range of outcomes.
→
A scenario where prices decrease with 5 per cent across
all years in the forecast would result in an impairment
of NOK 50 million. In this scenario employee benefit
and other operating expenses have been adjusted to
reflect lower activity. For Guangdong sales prices are
less correlated with raw material prices than for the
other CGUs. The raw material prices have therefore been
reduced with 2 per cent
→
Increased WACC of 0.5 percentage point – would result in
Inventory consists of raw materials, semi-finished goods
and finished goods, in addition to operating materials and
spare parts that do not meet the definition of property, plant
and equipment. Raw materials, and operating materials and
spare parts, are recognised at cost of purchase including
transport and handling to their present location. Finished and
semi-finished goods are measured at cost of raw materials,
energy for production and cost of conversion up to the actual
completion stage. Cost of conversion comprise operating
expenses directly related to manufacturing of the products and
an allocation of direct fixed operating expenses. Judgement
is applied in determining the share of cost to be allocated to
inventory from departments that perform both production and
overhead related tasks.
The cost of CO
2
allowances that Elkem needs to purchase in
addition to allowances received from the government, see note
8 Other operating income, are based on estimated production
/ emissions for the year. The cost is allocated to cost of
conversion proportionally with estimated produced volumes
over the year as the number of allocated allowances will not be
revised unless there is a substantial change in the production
level at the plants.
The income from the Norwegian government CO
2
compensation scheme is recognised in inventory based on
estimated compensation per produced ton and accrued
proportionally with produced volumes.
Entities within the group sell goods to other group entities,
consequently finished goods from one entity become raw
materials or semi-finished goods for another group entity.
The classification of goods in the consolidated statement
of financial position is based on the separate entity's
classification.
The allocation of fixed production overheads to the costs of
conversion is based on the normal capacity of the production
facilities. Judgement is applied in determining normal level
of production per plant, but is also aligned with comparable
| 31.12.2024 | 31.12.2023 | |||||
Amounts in NOK million | Cost price | Provision | Net total | Cost price | Provision | Net total |
Raw materials | 1 616 | (1) | 1 614 | 2 359 | (39) | 2 321 |
Semi-finished goods | 570 | - | 570 | 467 | (0) | 466 |
Finished goods | 3 227 | (66) | 3 162 | 5 385 | (238) | 5 147 |
Operating materials and spare parts | 695 | (4) | 692 | 1 121 | (36) | 1 084 |
Total inventories | 6 108 | (71) | 6 038 | 9 331 | (314) | 9 018 |
This year's change in provision for impairment of inventory, a
gain of NOK 30 million (loss of NOK 86 million), is recognised
Trade and bills receivables are initially recognised at transaction
price, which in most cases corresponds to their nominal amount.
Elkem mainly has receivables without stated interest rate and
no significant financing component and the trade and bills
receivables are therefore subsequently measured at nominal
amount, less any provision for expected credit loss. Judgement
has been applied in assessing derecognition of trade receivables
included in factoring arrangements.
When Elkem’s Chinese entities sells goods to a customer a trade
receivable is established. The customer can then issue a bank
guaranteed bill that is used to settle the trade receivable. A bill
receivable is transferable and can be used to pay trade payables
(endorsed) or be settled in cash with a finance institution
(discounted). Bills receivables are mainly bank acceptance bills
that are guaranteed by a financial institution
The duration of a
bill receivable is normally below 6 months.
Trade receivables are derecognised when settled, replaced by
bills receivables or when transferred to a third party and Elkem
has no further risk related to the receivables. Bills receivables
are derecognised when they are settled on due date or when the
risk and reward are transferred to a third party. Transferral to a
third party can be done by discounting a bill receivable before
due date or by endorsing the bill receivable, meaning that it
is accepted by the supplier as payment for goods or services
received. See below for details on the different agreements.
receivables and bills receivables in accordance with the
simplified approach. All expected cash flows, including cash
flows from credit insurance contracts where such contracts
are deemed to be an integral part of the transactions, is taken
into consideration. The assessment is based on historical
experienced losses adjusted for forward-looking estimates on
changes in risk / probability that credit losses will occur for the
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Trade receivables | 1 615 | 2 417 |
Trade receivables, related parties 1) | 105 | 29 |
Allowance for expected credit losses | (29) | (59) |
Bills receivables | 269 | 823 |
Total trade receivables | 1 960 | 3 209 |
1)
Includes trade receivables to discontinued operations
Elkem has entered into factoring agreements with a credit
limit of a total of EUR 100 million (EUR 195 million),
NOK 1 179 million (NOK 2 191 million), to sell on continuing
basis trade receivables that meet specific conditions. The
agreements include a recourse clause for maximum 5-10 per
cent, depending on the agreement, of the face value of the
individual receivables sold. The non-recourse amount of the
receivables sold is derecognised and the recourse amount
is recognised as a current liability when the title to the
receivables is transferred. As at 31 December 2024, NOK 53
million (NOK 94 million) is recognised as current liability (see
note 29 Provisions and other liabilities). In addition, Elkem
has entered into factoring agreements without recourse.
Receivables that are sold without recourse are derecognised
in its entirety when the title is transferred, as there is no
remaining credit risk after transfer. As at 31 December 2024
NOK 1 182 million (NOK 1 806 million) of Elkem’s trade
receivables are derecognised under these agreements.
Bills receivables consist of NOK 267 million (NOK 822 million)
bank acceptance bills and NOK 2 million (NOK 1 million)
commercial acceptance bills.
A total of NOK 0 million (NOK 1 531 million) in unmatured
bills receivables are endorsed to a third party where the final
payment of the bill is guaranteed by a highly rated financial
institution. Elkem will only suffer losses on an endorsed bill
if the bank that have issued the bill or all companies that has
endorsed the bill before Elkem goes bankrupt. These bills are
derecognised as there is very low remaining credit risk related
to endorsed bills.
Analysis of gross trade receivables by age, presented based on the due date
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Not due | 1 306 | 1 956 |
Overdue by: | ||
1–30 days | 251 | 312 |
31–60 days | 75 | 78 |
61–90 days | 31 | 38 |
More than 90 days | 57 | 62 |
Total trade receivables 1) | 1 720 | 2 445 |
1)
Bills receivables are not included in the ageing table
Movements in allowance for expected credit losses
Amounts in NOK million | 2024 | 2023 |
Opening balance | (59) | (65) |
Realised losses during the year / Received on earlier losses from continuing operations | (1) | (0) |
Realised losses during the year / Received on earlier losses from discontinued operations | (0) | 1 |
Provision for expected credit losses from continuing operations | (6) | (9) |
Provision for expected credit losses from discontinued operations | (5) | (4) |
Reversal of earlier provisions from continuing operations | 7 | 11 |
Reversal of earlier provisions from discontinued operations | 3 | 5 |
Assets classified as held for sale | 40 | - |
Currency translation differences | (8) | 2 |
Closing balance | (29) | (59) |
Analysis of allowance for expected credit losses, presented
based on related trade receivables
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Not due | (6) | (10) |
Overdue by: | ||
1–30 days | (0) | (1) |
31–60 days | (0) | (4) |
61–90 days | (1) | (4) |
More than 90 days | (21) | (41) |
Total allowance for expected credit losses | (29) | (59) |
Other shares consist of equity investments in both listed and
unlisted companies. Shares in listed companies are measured
at fair value through profit or loss with gains and losses
presented in other items. Investments in equity instruments
that do not have a quoted market price in an active market are
classified as financial assets measured at fair value through
other comprehensive income (OCI). Dividends from such
investments are presented as other items in the statement of
Loans and receivables are non-derivative hold to collect
financial assets with fixed or determinable payments that are
not quoted in a regulated market. After initial recognition, they
are recognised at amortised cost using the effective interest
method. Gains and losses are recognised in the statement of
profit or loss when the loans and receivables are derecognised
loans and receivables outside of trade and bills receivables and
in determining the level of credit loss.
Judgement is applied when determining the estimated
expected credit loss on other receivables and prepayments.
The judgement is based on experienced losses in the past
and expectations about future economic conditions for the
different counterparties. Elkem calculates the expected credit
losses (ECL) for other receivables in accordance with the
simplified approach. The assessment is based on historical
experienced losses adjusted for forward-looking estimates on
| Non-current | Current | |||
Amounts in NOK million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
Other shares | 36 | 26 | - | - |
Restricted deposits | 60 | 51 | - | - |
Other deposits | 9 | 15 | - | - |
Pension assets, defined benefits and contribution plans (note 11) | 32 | 29 | 4 | 3 |
Prepayments for construction of fixed assets | 13 | 18 | - | - |
Prepayments for goods and equipment | - | - | 22 | 143 |
Prepayments for other expenses | - | 80 | 82 | 103 |
Prepayments to related parties (note 37) | - | - | - | 2 |
Receivables from related parties, interest-bearing (note 37) | 0 | 1 | - | - |
Receivables from related parties, interest free (note 37) | - | - | - | 8 |
Grants receivable (note 9) | - | 220 | 576 | 671 |
Value added tax | 68 | 61 | 297 | 742 |
Corporate income tax receivables | - | - | 241 | 261 |
Interest receivables | - | - | 0 | 0 |
Other receivables | 0 | 9 | 13 | 115 |
Assets at fair value through profit (loss) | 765 | - | - | - |
Fixed assets under disposal | - | 2 | - | - |
Other assets | 2 | 45 | 18 | 14 |
Total other assets | 985 | 556 | 1 254 | 2 062 |
Provision for impairment included in total other assets, | ||
mainly prepayments. | - | (68) |
Restricted deposits consist mainly of restricted deposits
related to the ongoing tax litigation in Elkem's business
in Brazil of NOK 11 million (NOK 18 million), see note 29
Provisions and other liabilities, and deposit for pension
guarantee, related to unfunded pension liabilities for salaries
above 12G, of NOK 37 million (NOK 32 million).
Assets at fair value through profit (loss) relates to the sale of
Principle application and judgements
Deposits with a term of 3 months or less on acquisition are
included. Bank overdrafts are presented within interest-
bearing current liabilities in the statement of financial position.
Deposits where the access are restricted for use by the
bank (more than 3 months) are presented separately in the
statement of financial position and excluded from cash and
cash equivalents presented in the statement of cash flows.
Cash and cash equivalents
Cash pooling is used to secure availability and access to cash
across the group. Due to local legislation, not all subsidiaries are
able to participate in international cash pooling arrangements.
As at 31 December, NOK 1,780 million (NOK 3,058 million) of
Elkem's cash and cash equivalents of NOK 4,397 million (NOK
6,367 million) was outside Elkem's cash pooling arrangements,
Restricted deposits
As at 31 December, NOK 0 million (NOK 351 million) of Elkem's
restricted deposits of NOK 7 million (NOK 388 million) was
See note 18 Leases for accounting policies for right-of-use
Non-current | Current | |||
Amounts in NOK million | 31.12.2024 | 31.12.2023 1) | 31.12.2024 | 31.12.2023 1) |
Lease liabilities (note 18) | 338 | 464 | 67 | 125 |
Loan agreements, bank | 5 856 | 7 767 | 706 | 18 |
Loan agreements, bonds | 3 500 | 2 750 | 295 | 646 |
Loan agreements, other than bank | 2 123 | 2 529 | 0 | 414 |
Accrued interest | - | - | 23 | 28 |
Total interest-bearing liabilities | 11 817 | 13 509 | 1 090 | 1 231 |
1)
Interest-bearing liabilities by currency
31.12.2024 | 31.12.2023 1) | |||
Amounts in NOK million | Currency amount | NOK | Currency amount | NOK |
EUR | 711 | 8 386 | 771 | 8 664 |
USD | 0 | 2 | 2 | 20 |
NOK | 4 501 | 4 501 | 3 647 | 3 647 |
CNY | 4 | 6 | 1 632 | 2 334 |
Other currencies | - | 12 | - | 74 |
Total interest-bearing liabilities | 12 907 | 14 741 | ||
1)
Restated - see note 39 Changes in presentation
Maturity of interest-bearing liabilities
31 December 2024
2030 | |||||||
Amounts in NOK million | 2025 | 2026 | 2027 | 2028 | 2029 | and later | Total |
Lease liabilities | 67 | 41 | 38 | 34 | 32 | 193 | 405 |
Loan agreements | 1 001 | 2 210 | 6 796 | 1 413 | 800 | 300 | 12 519 |
Accrued interest | 23 | 23 | |||||
Total interest-bearing liabilities excluding prepaid loan fees | 1 090 | 2 251 | 6 834 | 1 446 | 832 | 493 | 12 947 |
Prepaid loan fees | (41) | ||||||
Total interest-bearing liabilities | 12 907 |
Maturity of interest-bearing liabilities
31 December 2023
1)
2029 | |||||||
Amounts in NOK million | 2024 | 2025 | 2026 | 2027 | 2028 | and later | Total |
Lease liabilities | 125 | 79 | 63 | 48 | 44 | 230 | 589 |
Loan agreements | 1 078 | 1 114 | 2 901 | 6 270 | 1 584 | 1 221 | 14 169 |
Accrued interest | 28 | 28 | |||||
Total interest-bearing liabilities excluding prepaid loan fees | 1 231 | 1 193 | 2 964 | 6 318 | 1 628 | 1 452 | 14 786 |
Prepaid loan fees | (45) | ||||||
Total interest-bearing liabilities | 14 741 |
1)
Restated - see note 39 Changes in presentation
Loan agreements
The main non-current loan agreements as at 31 December
2024 are granted to Elkem in Norway for financing of the
group; a term loan with bank institutions, bond loans and
series of loans in Schuldshein market (other than bank).
Loan agreements, bank
The term loan of EUR 500 million (EUR 500 million)
is unsecured, but there are related covenants. As at 31
December 2024 the interest rate is 4.02 per cent. The term
loan is linked to two sustainability KPIs,
KPI 1 Lost Time Injury
Rate and KPI 2 – Product Group Carbon Footprint. The margin
of the RCF and term loan shall be reduced by 0.025 per cent if
both KPIs are met, and increased by 0.025 per cent if none of
the KPIs are met. If one KPI is met there shall be no change to
the margin. Based on initial testing of the KPI's there will be no
change to the margin in 2025.
Loan agreements, bonds
The series of issued bond loans listed on Oslo Børs is in the size
of NOK 3 500 million (NOK 2 750 million) where of NOK 3 150
million (NOK 2 750 million) is registered as bonds with floating
rate and NOK 350 million (NOK 350 million) is registered as a
bond with fixed rate. The bond loans are unsecured and there
are no related covenants. As of 31 December 2024 the interest
rates are in the range of 4.88 per cent to 6.43 per cent.
Elkem has entered into an interest swap agreement to swap
the NOK 350 million bond from fixed to floating interest rate.
As at 31 December 2024 the fair value of this swap is NOK 1
million (NOK 12 million).
Elkem has entered into an interest rate swap agreement to
swap the NOK 800 million bond loan from floating interest
rates to fixed interest rates of 4.88 per cent. As at 31 December
2024 the fair value of this swap is NOK 21 million (entered into
in 2024). A swap agreement has also been entered into to
swap the NOK 400 million bond loan to a EUR 34 million loan
with fixed interest rates of 3.72 per cent. As at 31 December
2024 the fair value of this swap is negative NOK 2 million
(entered into in 2024).
The bond loans are listed on Oslo Børs from January 2024,
as at 31 December 2024 the fair value of the bond loans are
positive NOK 2 million (negative NOK 12 million).
Loan agreements, other than bank
The series of loans issued in the Schuldschein market is of
the size of EUR 180 million (EUR 210 million) with floating
rate and EUR 0 million (EUR 15 million) with a fixed rate. The
loan series is unsecured, but there are related covenants. As
of 31 December 2024 the interest rates are in the range of 4.1
per cent to 4.35 per cent.
Credit facilities
As of 31 December 2024 the group is granted credit facilities
of NOK 6 519 million. The facilities remain undrawn at 31
December 2024.
As of 31 December 2023 the group is granted credit facilities
of NOK 6 293 million. The facilities remain undrawn at 31
December 2023.
The main revolving credit facilities are granted to Elkem
ASA, but the facilities can be utilised by Elkem ASA and its
subsidiaries. The main facilities amount to EUR 500 million,
CNY 199 million and NOK 250 million respectively. See note 32
Financial risk, section (c) liquidity risk for more information.
Hedging
Some / part of loans are designated as a hedging instrument,
see note 31 Hedging.
Loan covenant
Elkem has financial covenants related to part of its loan
agreements in Norway. The financial covenants are based
on last 12 months figures, and reported quarterly. Elkem was
compliant with the covenants at the end of 2024 and 2023.
Elkem initiated a waiver process in 2024, and got consent from
the lenders to reduce the Interest Cover covenant from 4.0x to
3.0x for each and every quarter of the 2024 financial year. In
2025 the Interest Cover covenant will return to be 4.0x.
The covenants for the interest-bearing loan facilities in Norway
relate to the financial performance of Elkem and are as
specified in the table below.
Covenant Elkem related to drawn loan agreements of
NOK 8,019 million (NOK 8,148 million) in Elkem ASA
Amounts in NOK million | 31.12.2024 | Loan covenant | 31.12.2023 | Loan covenant |
Equity ratio | 49 % | > 30% | 48 % | > 30% |
Interest cover ratio | 5.2 | > 3.00 | 6.2 | > 4.00 |
Movements in interest-bearing liabilities 2024
Cash | |||||||
flows | Non-cash changes | ||||||
Additions, lease | |||||||
modifications, | Liabilities | Currency | |||||
Receipts/ remeasurements | classified as | translation | |||||
Amounts in NOK million | 31.12.2023 | Payments | and terminations | held for sale | Reclassification | differences | 31.12.2024 |
Lease liabilities | 464 | - | 137 | (129) | (147) | 12 | 338 |
Loan agreements | 13 091 | 2 118 | - | (3 162) | (1 149) | 620 | 11 519 |
Total movements non-current | 13 555 | 2 118 | 137 | (3 290) | (1 295) | 632 | 11 857 |
Lease liabilities | 125 | (143) | - | (66) | 147 | 5 | 67 |
Loan agreements | 1 078 | (1 121) | - | (130) | 1 149 | 26 | 1 001 |
Total movements current | 1 203 | (1 264) | - | (197) | 1 295 | 31 | 1 068 |
Total | 14 758 | 854 | 137 | (3 487) | - | 663 | 12 925 |
Movements in interest-bearing liabilities 2023
Cash | |||||||
flows | Non-cash changes | ||||||
Additions, lease | |||||||
modifications, | Acquisition | Currency | |||||
Receipts/ remeasurements | / Disposal of | translation | |||||
Amounts in NOK million | 31.12.2022 | Payments | and terminations | subsidiaries Reclassification | differences | 31.12.2023 | |
Lease liabilities | 475 | - | 210 | - | (227) | 6 | 464 |
Loan agreements | 9 898 | 3 876 | - | - | (1 183) | 499 | 13 091 |
Total movements non-current | 10 374 | 3 876 | 210 | - | (1 410) | 506 | 13 555 |
Lease liabilities | 103 | (209) | - | - | 227 | 3 | 125 |
Loan agreements | 84 | (228) | - | 31 | 1 183 | 7 | 1 078 |
Total movements current | 187 | (436) | - | 31 | 1 410 | 11 | 1 203 |
Total | 10 561 | 3 440 | 210 | 31 | - | 516 | 14 758 |
Elkem has entered into supplier finance agreements with a
carrying amount of NOK 113 million as at 31 December 2024
(NOK 143 million). Under the agreements the suppliers have
received payment. The duration is from six to twelve months.
Range of payment due dates for comparable trade payables
that are not part of an arrangement are from 5 to 60 days.
The agreements are presented within trade payables in the
statement of financial positions and changes in working capital
in the statement of cash flows.
28. Bills payables
Principle application
When Elkem’s Chinese entities purchases goods from a
supplier a trade payable is established. Elkem can issue a bank
guaranteed bill that is used to settle Elkem’s trade payable.
The issued bill payable is a document where Elkem as the
buyer formally agrees to pay for purchased goods or services
at maturity date and is normally guaranteed by a financial
institution. The bills payables are initially recognised when
the supplier accepts the bill of exchange and is recognised
at the amount equal to the trade payables it replaces. The
duration of a bill payable is normally below six months. When
the bill payable is guaranteed by a financial institution Elkem
is normally required to deposit a certain per centage of the
nominal value of the bill payable into a restricted bank account.
The deposit is assessed to be a collateral/prepayment for
the issued bill and is presented net with bills payable in the
statement of cash flows, but presented gross in the statement
of financial position. All bills payables in Elkem are bank
acceptance bills which is guaranteed by a financial institution
Net bills payable
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Restricted deposits bills payable | - | (351) |
Bills payable | - | 1 466 |
Net bills payable | - | 1 114 |
The cost of CO
allowances that Elkem needs to purchase in
2
addition to allowances received from the government (see
note 9 Grants), are based on estimated production / emissions
for the year. The liability related to the purchase of allowances
is accrued for using an average cost method with the
assumption that the allowances received from the government
is consumed evenly across the year. The provision for the
purchase of allowances is measured at the agreed purchase
price for forward purchases and the remaining at the market
Elkem has several types of provisions due to its operations.
Such liabilities are normally uncertain in timing and amount,
and recognised amounts are estimates based on available
information at the end of the reporting period. The estimated
liability is based on expected cash flows necessary to settle
the obligation, adjusted for any related risk and discounted by
using the pre-tax interest applicable for the specific entity. The
estimates are updated when new or updated information is
available, or at a minimum at each reporting date. The actual
outcome will differ from the estimate.
The estimate uncertainty primarily relates to environmental
measures related to closed production sites and landfills.
The potential outcome can vary within a relatively wide range
depending on the final scope of the measures required and the
cost of fulfilling the measures. In these cases, the estimated
provision is made based on a combination of expert opinions
and management’s assessment of the known facts and
Details of provision and other liabilities
| Non-current | Current | |||
Amounts in NOK million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
Employee withholding taxes and other public taxes | - | - | 113 | 143 |
Value added tax | - | - | 93 | 252 |
Prepayments | - | - | 63 | 112 |
Prepayments from related parties (note 37) | - | - | - | 10 |
Liabilities to related parties (note 37) | - | - | 0 | 17 |
Provisions | 250 | 262 | 19 | 101 |
Accrued expenses | - | - | 361 | 389 |
Grants, deferred income (note 9) | - | - | 0 | 34 |
Grants payable (note 9) | 17 | 17 | - | - |
Advances on export exchange contracts (ACC) | - | - | 72 | 106 |
Recourse liabilities factoring agreement (note 23) | - | - | 53 | 94 |
Settlement liabilities factoring agreements | - | - | 31 | 71 |
Other liabilities | - | - | 9 | 53 |
Total provisions and other liabilities | 267 | 279 | 815 | 1 381 |
Elkem has for its Carbon operations in Brazil entered into
Advances on foreign exchange contracts (ACC) with financial
institutions. Under these contracts Elkem receives full or
partial prepayments from the financial institution before the
goods are shipped. The prepayments are used to finance
imports of raw materials.
Movements in contingent consideration
Amounts in NOK million | 2024 | 2023 |
Opening balance | - | 42 |
Fair value adjustment of contingent consideration upon payment | - | (3) |
Unwinding | - | 0 |
Payments | - | (38) |
Currency translation differences | - | (1) |
Closing balance | - | - |
Movements in provision
2024 | |||||||
Site Environmental | Other | Total | |||||
Amounts in NOK million | Restructuring restoration | measures | Litigations | Customers provisions | provisions | ||
Opening balance | 44 | 35 | 203 | 71 | 5 | 5 | 363 |
Additional provisions recognised from | 9 | 9 | 11 | 3 | 0 | 0 | 32 |
continuing operations | |||||||
Additional provisions recognised from | 130 | - | - | - | 8 | 10 | 148 |
discontinued operations | |||||||
Used during the year | (101) | (0) | (13) | (8) | (2) | (10) | (134) |
Reversal of provisions recognised from | - | - | (3) | - | - | - | (3) |
continuing operations | |||||||
Reversal of provisions recognised from | - | - | - | - | (1) | - | (1) |
discontinued operations | |||||||
Liabilities classified as held for sale | (85) | - | (29) | (10) | (10) | (5) | (138) |
Currency translation differences | 4 | 0 | 5 | (7) | 0 | 0 | 3 |
Closing balance | 0 | 44 | 175 | 49 | 0 | 1 | 270 |
Hereof non-current | - | 38 | 163 | 49 | - | 1 | 250 |
Hereof current | 0 | 6 | 12 | 1 | 0 | 0 | 19 |
Closing balance | 0 | 44 | 175 | 49 | 0 | 1 | 270 |
Movements in provision
2023 | |||||||
Site Environmental | Other | Total | |||||
Amounts in NOK million | Restructuring restoration | measures | Litigations | Customers provisions | provisions | ||
Opening balance | 17 | 34 | 190 | 62 | 9 | 7 | 318 |
Additional provisions recognised from | - | 2 | 6 | 5 | - | - | 13 |
continuing operations | |||||||
Additional provisions recognised from | 43 | - | - | - | 1 | 10 | 54 |
discontinued operations | |||||||
Used during the year | (15) | (1) | (1) | (3) | (5) | (12) | (37) |
Reversal of provisions recognised from | - | - | - | - | - | - | - |
continuing operations | |||||||
Reversal of provisions recognised from | - | - | - | - | (1) | - | (1) |
discontinued operations | |||||||
Currency translation differences | (0) | 0 | 9 | 7 | 1 | 0 | 16 |
Closing balance | 44 | 35 | 203 | 71 | 5 | 5 | 363 |
Hereof non-current | - | 35 | 167 | 59 | - | 1 | 262 |
Hereof current | 44 | - | 36 | 11 | 5 | 5 | 101 |
Closing balance | 44 | 35 | 203 | 71 | 5 | 5 | 363 |
Restructuring
The provision is related to Elkem's cost saving programme in
Silicones division.
Site restoration
The site restoration provisions are related to the necessary site
remediation work that Elkem will have to undertake in respect
of its quartz mines.
Environmental measures
Elkem has worldwide operations representing potential
exposure towards environmental consequences. Elkem has
established clear procedures to minimise environmental
emissions, well within public emission limits. The provisions
relate to clean up costs for a closed down production site and
landfills, mainly in Canada and Norway, and also estimated
cost for clean-up cost of polluted soil and fjord in relation to
production sites in Norway. Provisions are made for each case
based on estimates that are quality assured by external parties.
The estimates are manly unchanged from last year, except from
effects from inflation. The engineering work in Canada started
in 2024 and is expected to be finalised during first quarter
2025. For the other projects the timing of when the work will
start is uncertain. A reasonable possible change in the estimate
for the environmental measures are around 20 per cent.
Litigations
The provisions due to litigations are mainly related to the
Carbon Solutions division in Brazil.
Federal tax cases in Brazil can take a substantial amount
of time before resolution by the authorities, hence the time
of settlement is uncertain. The main part of the provision
is related to cases back to 2006. Provisions are made for
each case based on the estimated amount expected to be
paid, including interest and penalties. In accordance with
Brazilian regulations, agreed amounts have been transferred
to restricted bank accounts and are adjusted for interest. The
restricted cash is recognised in other non-current assets, see
note 24 Other assets.
Customers
The provisions are related to customer complaints, mainly in
the Silicones division.
Due to its operations Elkem could be included in criminal or
civil proceedings related to, among others, product liability,
environment, health and safety, anti-competitive, anti-
corruption, trade sanctions or other similar laws or regulations
or other forms of commercial disputes which could have a
material adverse effect on Elkem. See section litigation above
for ongoing cases and see note 16 Taxes for ongoing tax audits
Non-derivative financial assets include trade receivables,
Non-derivative financial liabilities include interest-bearing
Elkem has long-term power purchase contracts settled in Euro
which is different from both Elkem and the counterparty’s
functional currency. The currency portion of these contracts is
an embedded derivative and is recognised and presented as
Commodity contracts within the scope of IFRS 9
Non-financial commodity contracts where the relevant
commodity is readily convertible to cash and where the
contracts are not for own use, fall within the scope of IFRS 9
Financial instruments - recognition and measurement. Elkem’s
principle is that power delivered in a different grid area than
the grid area where the power is consumed will meet the own
use criteria.
The group currently has no energy contracts in Norway that
do not meet the own use criteria except for the 30-øringen
power contract and one other power contract. The 30-øringen
contract originally had net settlement and was therefore
classified as a derivative and cannot subsequently be
reclassified to own use. The other contract entered into in
2024 has net settlement. Both derivatives are designated as
Estimates are used to estimate fair value for financial assets and
liabilities where there are no listed prices or direct observable
prices. Calculation of fair value is in such cases based on
observable prices for similar contracts, as far as possible. For
contracts with a duration beyond the period of observable
prices, the assumptions are derived based on the latest
observable data. Due to the current market situation in the
energy market with very high prices and high volatility there is
significant uncertainty in the estimation of forward power prices
with direct impact on the value of the power contracts classified
as
financial instruments. The estimated value of the power
co
ntracts can be impacted by the changes in the power prices
bot
h within the next 12 months, but also in the period beyond
12
months. There is also uncertainty related to the discount rate
us
ed for discounting future cash flows and the expectation to
the
development in the consumer price index going forward.
Se
e assumptions used at the balance sheet date in chapter (a)
Fai
r value measurement below, and sensitivity of the main power
co
Assets by category
31 December 2024
Assets at fair value | |||||||
Assets at fair | Assets at fair | through other | Loans and | Non- | |||
value through | value - hedging | comprehensive | receivables at | financial | |||
Amounts in NOK million | Note | profit or loss | instruments | income | amortised cost | assets | Total |
Derivatives, non-current | 572 | 440 | - | - | - | 1 012 | |
Other assets, non-current | 24 | 781 | - | 20 | 70 | 115 | 985 |
Trade receivables | 23 | - | - | - | 1 960 | - | 1 960 |
Derivatives, current | 130 | 137 | - | - | - | 267 | |
Other assets, current | 24 | - | - | - | 13 | 1 241 | 1 254 |
Restricted deposits | 25 | - | - | - | 7 | - | 7 |
Cash and cash equivalents | 25 | - | - | - | 4 397 | - | 4 397 |
Total | 1 483 | 577 | 20 | 6 447 | 1 355 |
Liabilities by category
31 December 2024
Liabilities | ||||||
at fair value | Liabilities at fair | |||||
through | value - hedging | Liabilities at | Non-financial | |||
Amounts in NOK million | Note | profit or loss | instruments | amortised cost | liabilities | Total |
Interest-bearing liabilities, non-current | 26 | - | - | 11 817 | - | 11 817 |
Derivatives, non-current 2) | 31 | 453 | - | - | 485 | |
Provisions and other liabilities, non-current | 29 | - | - | - | 267 | 267 |
Trade payables | 27 | - | - | 2 076 | - | 2 076 |
Interest-bearing liabilities, current 1) | 26 | - | - | 1 090 | - | 1 090 |
Bills payables | 28 | - | - | - | - | - |
Derivatives, current 2) | (43) | 183 | - | - | 140 | |
Provisions and other liabilities, current | 29 | - | - | 525 | 290 | 815 |
Total | (11) | 636 | 15 508 | 557 |
Assets by category
31 December 2023
Assets at fair value | |||||||
Assets at fair | Assets at fair | through other | Loans and | Non-financial | |||
value through | value - hedging | comprehensive | receivables at | assets | |||
Amounts in NOK million | Note | profit or loss | instruments | income | amortised cost | Total | |
Derivatives, non-current | 745 | 232 | - | - | - | 977 | |
Other assets, non-current | 24 | 7 | - | 18 | 75 | 456 | 556 |
Trade receivables | 23 | - | - | - | 3 209 | - | 3 209 |
Derivatives, current | 269 | 142 | - | - | 411 | ||
Other assets, current | 24 | - | - | - | 123 | 1 939 | 2 062 |
Restricted deposits | 25 | - | - | - | 388 | - | 388 |
Cash and cash equivalents | 25 | - | - | - | 6 367 | - | 6 367 |
Total | 1 022 | 374 | 18 | 10 163 | 2 394 |
Liabilities by category
31 December 2023
Liabilities | ||||||
at fair value | Liabilities at fair | |||||
through | value - hedging | Liabilities at | Non-financial | |||
Amounts in NOK million | Note | profit or loss | instruments | amortised cost | liabilities | Total |
Interest-bearing liabilities, non-current 1) | 26 | - | - | 13 509 | - | 13 509 |
Derivatives, non-current 2) | (127) | 362 | - | - | 235 | |
Provisions and other liabilities, non-current | 29 | - | - | - | 279 | 279 |
Trade payables | 27 | - | - | 5 281 | - | 5 281 |
Interest-bearing liabilities, current 1) | 26 | - | - | 1 231 | - | 1 231 |
Bills payables | 28 | - | - | 1 466 | - | 1 466 |
Derivatives, current 2) | (48) | 114 | - | - | 66 | |
Provisions and other liabilities, current | 29 | - | - | 729 | 652 | 1 381 |
Total | (174) | 475 | 22 216 | 930 |
1)
In addition to the hedging instruments included in derivatives, currency effect of EUR loan is designated as a hedging instrument in a cash
flow hedge of highly probable future sales. This hedge terminated in 2023. See note 31 Hedging.
2)
The group applies hedge accounting for certain currency contracts and certain parts of power contracts. The negative value reported as
assets and liabilities at fair value is representing the value of parts of power contracts where hedge accounting is not applied.
There are no material differences between fair value and the
carrying amount for financial liabilities and financial assets at
amortised cost.
Elkem's financial instruments measured to fair value are
categorised into three levels based on the inputs to the
valuation techniques used to measure fair value.
Level 1 inputs are quoted prices (unadjusted) in active markets
for identical assets or liabilities that the entity can access at the
measurement date.
Level 2 inputs are inputs, other than quoted prices included
within level 1, that are observable for the asset or liability, either
directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
Assets and liabilities measured at fair value
31.12
Total | Total | |||||||
Amounts in NOK million | Level 1 | Level 2 | Level 3 | 2024 | Level 1 | Level 2 | Level 3 | 2023 |
Financial assets at fair value through profit or loss | 15 | 16 | 1 451 | 1 483 | 7 | 24 | 990 | 1 022 |
Derivatives designated in a hedging relationship | - | 81 | 496 | 577 | - | 153 | 221 | 374 |
Assets at fair value through other comprehensive income | - | - | 20 | 20 | - | - | 18 | 18 |
Total assets | 15 | 97 | 1 968 | 2 080 | 7 | 178 | 1 229 | 1 414 |
Financial liabilities at fair value through profit or loss | - | (11) | - | (11) | - | (174) | - | (174) |
Derivatives designated in a hedging relationship | - | 636 | - | 636 | - | 475 | - | 475 |
Total liabilities | - | 625 | - | 625 | - | 301 | - | 301 |
Level 1:
Financial assets measured at level 1 apply to external quoted
shares, which are measured based on the quoted prices.
Level 2:
Financial assets and liabilities measured at level 2 applies to
forward currency contracts, interest rate swaps and embedded
currency derivatives.
The contracts are measured at fair value by estimating the
future cash flows.
Level 3:
The financial assets and liabilities at fair value through profit or
loss measured at level 3 consist of power derivative contracts,
shares in unlisted companies and other assets measured at fair
value through profit and loss.
When valuing the power contracts observable data is used,
such as power price, currency rates, CPI and CfD, when
available. The power prices for long-term electricity contracts
in Norway are not directly observable in the market for the
whole contract length. Power prices are observable until
2031, CfD prices are only observable for a short time period
and currency rates are observable until 2027. Valuation of the
contracts for the remaining periods are based on the latest
observable data adjusted for CPI, if relevant.
Overview of contracts and the assumptions used for
assessment of fair value for the level 3 contracts
Power contract "30-øringen"
"30-øringen" power contract lasts until 31 December 2030
and the power from the contract is restricted to be used at
Elkem ASA plants. For the years 2019 - 2020 the price under
the contract was fixed except if the spot price at the relevant
grid points exceeds a certain threshold, in which case the price
equals the spot price. For the last 10 years of the contract,
starting 1 January 2021, the price is fixed based on the average
spot price the five years preceding 1 January 2021, adjusted
for inflation. The fixed price and the threshold price are
based on a start date and thereafter adjusted with inflation
annually. Changes in fair value for the "30-øringen" contract
was classified as other items before 1 January 2021. Due to the
change in the contact's price structure of the instrument from
2021, the contract is designated as a hedging instrument from
1 January 2021. This means that fair value changes from the
effective part of the hedging relationship from 1 January 2021 is
recognised as raw materials and energy in statement of profit
or loss in the same period(s) as the hedged objects affects the
profit or loss. The ineffective part of the hedging relationship is
recognised in other items.
Power contract with Axpo
In February 2024 Elkem has entered into a new financial
power contract with Axpo covering the period 2027 to 2035.
The contract has been designated as hedging instrument in
a cash flow hedge of highly probable future purchases, hence
changes in fair value for the power contract are from the
inception of the contract booked against OCI. Please refer to
note 31 Hedging.
Assumptions for valuation of the contracts
→
Discount rate: 5.60 per cent (4.98 per cent) p.a. for both
contracts. The assumptions are based on the estimated
risk of the contract, including credit risk.
→
Inflation: 2 per cent (2 per cent) p.a.
→
Power prices: Market prices per 31 December 2024
until 2035.
→
CfDs: 4-year average historic CfD prices based on Nord
Pool prices for 30-øringen. For Axpo the implicit CFD at
the contractual agreement date is used.
→
Exchange rate EUR: Observable rates for the next 5 years,
thereafter calculated rates based on long-term interest
rates is used to translate estimated future power prices to
NOK for 30-øringen which is priced in NOK.
For external shares measured at level 3, book value of equity
adjusted for excess values at purchase date is used as an
approximation of fair value.
The Vianode receivable at fair value through profit and loss
In February 2024 Elkem group sold its shares in Vianode AS,
a synthetic graphite manufacturer for a total nominal amount
of NOK 847 million to AV Anodos AS a company controlled
by Altor from 4th quarter of 2024. NOK 10 million of the
compensation was received at closing while NOK 315 million
(second instalment) and NOK 522 million (third instalment)
are tied to Vianode meeting two future milestones relating
to the building of a full-scale plant. Interest shall accrue on
the second instalment if the due date is later than 30 June
2025 and for the third instalment 31 December 2027. At initial
recognition in the first quarter of 2024 the fair value of the
receivable was estimated to NOK 749 million after the payment
of the NOK 10 million. The receivable is measured at fair value
through profit and loss and is included in Level 3.
Vianode AS and AV Anodos are dependent on additional
funding around the end of the first quarter of 2025 to be able
to perform the investments necessary to meet the milestones
required for the settlement of Elkem’s receivable. If additional
funding is not obtained there is a risk that Elkem’s receivable
will be worth zero.
Based on the need for additional funding and recent market
developments Elkem considers that the value of the deferred
payments is uncertain. Elkem monitors the situation closely.
Based on information available at year end it has been assessed
that the fair value of the receivable is NOK 765 million.
Movements in fair value measurement level 3
Amounts in NOK million | 2024 | 2023 |
Opening balance | 1 229 | 2 016 |
Acquisition / business combinations | 0 | 2 |
Transfer to investment in equity accounted companies | - | (11) |
Transfer from investment in equity accounted companies | 759 | - |
Change in fair value recognised in OCI, cash flow hedges | 412 | (704) |
Hedge ineffectiveness | (338) | 58 |
Disposal | - | (1) |
Settlement / realised effects | (109) | (137) |
Other changes in fair value through profit or loss, unrealised | 15 | 4 |
Currency translation differences | 0 | 1 |
Net bills payable | 1 968 | 1 229 |
(b) Details of financial instruments
Details of currency exchange contracts 31 December 2024
Notional | ||||||||
Purchase | Purchase | Sale | Sale | Type of | Currency | Fair value | amount 1) | |
currency | ccy million | currency | ccy million | instrument | deal rate | Due | NOK | NOK |
NOK | 1 864 | EUR | 159 | Fwd | 11.7621 | 2025 | (20) | 1 869 |
NOK | 201 | JPY | 1 954 | Fwd | 0.1028 | 2025 | 57 | 141 |
NOK | 33 | JPY | 312 | Fwd | 0.1052 | 2026 | 9 | 23 |
NOK | 375 | USD | 35 | Fwd | 10.7453 | 2025 | (21) | 396 |
USD | 1 | JPY | 101 | Fwd | 0.0068 | 2024 | 0 | 7 |
NOK | 818 | EUR | 76 | Embedded 2) | 10.7941 | 2025 | (89) | 894 |
NOK | 5 984 | EUR | 518 | Embedded 2) | 11.5528 | 2026-2035 | (483) | 6 108 |
Total fair value 3) | (547) |
Details of currency exchange contracts 31 December 2023
Notional | ||||||||
Purchase | Purchase | Sale | Sale | Type of | Currency | Fair value | amount 1) | |
currency | ccy million | currency | ccy million | instrument | deal rate | Due | NOK | NOK |
CAD | 9 | USD | 7 | Fwd | 1.3454 | 2024 | 1 | 68 |
NOK | 1 897 | EUR | 164 | Fwd | 11.5408 | 2024 | 43 | 1 848 |
NOK | 193 | JPY | 1 976 | Fwd | 0.0975 | 2024 | 48 | 142 |
NOK | 234 | JPY | 2 266 | Fwd | 0.1031 | 2025-2026 | 61 | 163 |
NOK | 167 | USD | 16 | Fwd | 10.1675 | 2024 | 0 | 167 |
USD | 1 | JPY | 168 | Fwd | 0.0070 | 2024 | (0) | 12 |
NOK | 807 | EUR | 76 | Embedded 2) | 10.6493 | 2024 | (54) | 851 |
NOK | 5 101 | EUR | 458 | Embedded 2) | 11.1367 | 2025-2034 | (235) | 5 148 |
Total fair value 3) | (136) |
1)
Notional value of the contracts, based on currency rates 31 December.
2)
Embedded EUR derivatives in own use power contracts.
3)
The spot element of forward currency contracts with duration more than 3 months are designated as hedging
instruments in a cash flow hedge of highly probable future sales, hence this part is classified
as "Derivatives used for
hedging" in the table
"Assets and liabilities classified by category" above. The interest element of these contracts and
contracts of duration < 3 months are classified as
"Assets/liabilities at fair value through profit or loss".
Details commodity contracts and interest rate swap within the scope of IFRS 9 31 December 2024
Notional | ||||
Amounts in NOK million | Volume GWh / Oz | Due | Fair value | amount 1) |
Commodity contracts Power | 501 GWh | 2025 | 196 | 177 |
Commodity contracts Power | 4478 GWh | 2026-2035 | 986 | 1 950 |
Interest rate swap | 1550 MNOK | 2025-2029 | 19 | 301 |
Total fair value contracts within scope of IFRS 9 2) | 1 201 |
1)
Notional value of underlying asset at the end of reporting period, calculated as volume * price * currency rate as at 31 December
(if other currencies than NOK).
2)
Certain power contracts
are designated as hedging instruments, the remaining contracts / parts of contracts are classified as
"Assets/liabilities at fair value through profit and loss".
Details of power contracts and other commodity contracts within the scope of IFRS 9 31 December 2023
Notional | ||||
Volume GWh / Oz | Due | Fair value | amount 1) | |
Power contract '30-øringen' | 501 GWh | 2024 | 303 | 172 |
Power contract '30-øringen' | 3006 GWh | 2025-2030 | 907 | 1 105 |
Commodity contracts Platinum | 1176 Oz | 2024 | 0 | 3 |
Interest rate swap | 350 MNOK | 2024-2028 | 12 | 94 |
Total fair value contracts within scope of IFRS 9 2) | 1 223 |
1)
Notional value of underlying asset at the end of reporting period, calculated as volume * price * currency rate as at 31 December
(if other currencies than NOK).
2) Certain power contracts
are designated as hedging instruments, the remaining contracts / parts of contracts are classified as
Financial assets
31 December 2024
Gross amount | ||||||
of financial | Net | Financial | ||||
liabilities set | amounts | instruments | ||||
Gross | off in the | of financial | not set off in | |||
amount of | statement | assets | the statement | Cash | ||
financial | of financial | recognised / | of financial | collateral | Net | |
Amounts in NOK million | assets | position | presented | position | pledged | amount |
Power contracts including embedded derivatives | 1 182 | - | 1 182 | - | - | 1 182 |
Forward currency contracts | 75 | - | 75 | 5 | - | 80 |
Total | 1 257 | - | 1 257 | 5 | - | 1 262 |
Financial liabilities
31 December 2024
Gross amount | ||||||
of recognised | Financial | |||||
Gross financial assets | Net | instruments | ||||
amount of | set off in the | amounts | not set off in | |||
recognised | statement | of financial | the statement | Cash | ||
financial | of financial | liabilities | of financial | collateral | Net | |
Amounts in NOK million | liabilities | position | presented | position | pledged | amount |
Power contracts including embedded derivatives | 572 | - | 572 | - | - | 572 |
Forward currency contracts | 50 | - | 50 | 5 | - | 54 |
Total | 622 | - | 622 | 5 | - | 626 |
Financial assets
31 December 2023
Gross amount | ||||||
of financial | Net | Financial | ||||
liabilities set | amounts | instruments | ||||
Gross | off in the | of financial | not set off in | |||
amount of | statement | assets | the statement | Cash | ||
financial | of financial | recognised / | of financial | collateral | Net | |
Amounts in NOK million | assets | position | presented | position | pledged | amount |
Power contracts including embedded derivatives | 1 211 | (1) | 1 211 | - | - | 1 211 |
Forward currency contracts | 153 | - | 153 | 7 | - | 160 |
Total | 1 364 | (1) | 1 364 | 7 | - | 1 371 |
Financial liabilities
31 December 2023
Gross amount | ||||||
of recognised | ||||||
financial | Financial | |||||
Gross | assets set | Net | instruments | |||
amount of | off in the | amounts | not set off in | |||
recognised | statement | of financial | the statement | Cash | ||
financial | of financial | liabilities | of financial | collateral | Net | |
Amounts in NOK million | liabilities | position | presented | position | pledged | amount |
Power contracts including embedded derivatives | 289 | - | 289 | - | - | 289 |
Forward currency contracts | 12 | - | 12 | 7 | - | 19 |
Total | 301 | - | 301 | 7 | - | 308 |
Elkem has applied IFRS 9 for hedge accounting. Elkem applies
cash flow hedging and net investment hedging. Cash flow
hedging is applied to two power contracts, interest rate swaps
and for hedging of sales in foreign currency.
The 30-øringen power contract is delivered in the power
price area NO2 in the south of Norway but is used to hedge
cash flows for all the Norwegian plants including plants in
other power price areas. At initial hedge designation there
was a strong economic relationship between the prices in the
different price areas. However, due to the at times significant
differences in prices between the price areas the last 2.5
years, significant judgement is required to assess if there is
still an economic relationship between the hedged item and
the hedging instrument. There is an expectation that the price
differences will be reduced over time due to for example grid
improvements and changes in the supply/demand balance.
Given the strict requirements in IFRS 9 for being allowed to
discontinue hedging and the fact that the 30-øringen is a long-
term contract with expiry in 2030 it has been assessed that
there is still an economic relationship between the hedging
See disclosures describing estimation uncertainty for financial
assets in note 30 Financial assets and liabilities.
Elkem's hedging instruments
Cash flow hedge
Elkem has forward currency contracts and embedded EUR
derivatives in power contracts where the spot element is
designated as hedging instruments and Elkem's highly
probable future revenue in corresponding currencies is
designated as the hedging objects in this hedging relationship,
defined as a cash flow hedge. In addition, certain power
derivative contracts, are designated as hedging instruments
in a cash flow hedge of price fluctuations for highly probable
future purchases. Hence, the effective part of changes in
fair value of the financial instruments is booked against OCI,
and recycled to profit or loss as an adjustment of revenue
and power cost (included in raw materials and energy) when
realised. The ineffective part of changes in the fair value
of the financial instrument is recognised in other items in
the statement of profit and loss. Elkem should primarily
pursue a floating interest rate policy for long-term financing.
Interest rate hedging will be considered in specific cases, e.g.
when there is a need to protect financial covenants in loan
agreements. In 2024, Elkem entered into interest rate swaps
to change from floating to fixed interest rates. In 2023 Elkem
issued financing with fixed interest rate and entered into a
interest rate swap from fixed to floating interest rate. Hence,
the effective part of changes in fair value of the financial
instruments is booked against OCI, and recycled to profit or
loss as an adjustment interest expense when realised.
Net investment hedge
Elkem has a EUR 500 term loan. EUR 275 million of the loan
was designated as a hedge of the net investment in the group’s
subsidiaries with EUR as functional currency. In November
2023 EUR 45 million was discontinued as a consequence of
reduced value of net investments in euro, reducing the amount
of the loan designated as a hedge of the net investment to
EUR 230 million. In June 2024 a further EUR 30 million was
discontinued, reducing the amount of the loan designated as
a hedge of the net investment to EUR 200 million
The fair
value and carrying amount of the borrowing at 31 December
2024 was NOK 2 358 million (NOK 2 585 million). The change
in foreign exchange loss of NOK 128 million (a loss of NOK
199 million) on translation of the borrowing from EUR to
NOK at the end of the reporting period is recognised in other
comprehensive income and accumulated in the foreign
currency translation reserve in the statement of changes in
equity. There was no ineffectiveness recognised from the net
investment hedge.
See note 32 Financial risk for Elkem's hedging policy.
Cash flow hedging instruments, by
type
31.12.2024 | 31.12.2024 | 31.12.2023 | 31.12.2023 | |
Assets | Liabilities | Assets | Liabilities | |
Amounts in NOK million | fair value | fair value | fair value | fair value |
Forward currency contracts | 60 | 43 | 141 | 12 |
Financial power contracts | 496 | - | 220 | - |
Power contracts embedded derivatives | - | 591 | - | 463 |
Interest rate swap | 21 | 3 | 12 | |
Commodity contracts Platinum | - | - | 0 | - |
Total hedging instruments | 577 | 636 | 374 | 475 |
Less non-current portion: | ||||
Forward currency contracts | 8 | - | 60 | - |
Financial power contracts | 415 | - | 162 | - |
Power contracts embedded derivatives | 451 | 362 | ||
Interest rate swap | 17 | 2 | 9 | - |
Commodity contracts Platinum | - | - | - | - |
Current portion of hedging instruments | 137 | 183 | 142 | 114 |
As at 31 December 2024 financial power contracts designated
in a hedging relationship comprise 15 per cent of expected
consumption in Norway in 2025, 14 per cent in 2026, 21per
cent in the period 2027-2030 and 6 per cent from 2031-2035
Elkem has hedged approximately 22 per cent of the expected
revenues in EUR and approximately 4 per cent of expected
revenues in USD for 2025. For the years 2026-2035 EUR is
hedged at a range of 2 - 6 per cent.
Financial instruments
31 December 2024
Effects to be recycled from OCI | ||||||
Hereof | Within | |||||
Net fair | recognised | Within | Within | Within | 4 years | |
Amounts in NOK million | value | in OCI | 1 year | 2 years | 3 years | or more |
Forward currency contracts | 25 | 17 | 9 | 8 | - | - |
Embedded EUR derivatives | (572) | (591) | (140) | (124) | (84) | (243) |
Power contracts | 1 182 | 496 | 81 | 84 | 80 | 252 |
Interest rate swaps | 19 | 18 | 3 | 3 | 4 | 7 |
Total 1) | 654 | (59) | (46) | (28) | (1) | 16 |
Financial instruments
31 December 2023
Effects to be recycled from OCI | ||||||
Hereof | Within | |||||
Net fair | recognised | Within | Within | Within | 4 years | |
Amounts in NOK million | value | in OCI | 1 year | 2 years | 3 years | or more |
Forward currency contracts | 153 | 129 | 69 | 52 | 8 | - |
Embedded EUR derivatives | (289) | (463) | (101) | (96) | (84) | (182) |
Power contracts | 1 211 | 220 | 58 | 42 | 38 | 83 |
Interest rate swap | 12 | 12 | 3 | 3 | 3 | 4 |
Commodity contracts Platinum | 0 | 0 | 0 | - | - | - |
Total 1) | 1 087 | (102) | 28 | 1 | (36) | (95) |
1)
Hedge accounting is applied for certain contracts and for parts of contracts.
Of total changes in fair value of power contracts designated as
hedging instruments a loss of NOK 197 million (gain of NOK
357 million) is recognised in profit or loss, and classified as
other items (see note 14 Other items), due to ineffectiveness
in the hedging relationship and discontinuation of hedging.
The ineffectiveness on cash flow hedges primarily relates to
Elkem's hedges of future power purchase. The ineffectiveness
is caused by the extraordinary developments in the Norwegian
power market with significant differences in prices between
the different price areas. Consequently, the cumulative change
in fair value of some of the hedging instruments are higher
than the cumulative changes in the present value of the hedge
objects from the inception of the hedge. The difference between
the two is the recognised as ineffectiveness. Of the loss of NOK
196 million (gain of NOK 357 million) recognised in 2024, a loss
of NOK 300 million (gain of NOK 273 million) relates to hedge
ineffectiveness caused by these price differences. The loss is
partially reduced by a gain of NOK 102 million (NOK 84 million)
related to discontinuation of power hedging caused by furnace
curtailments in Norway and a gain of NOK 1 million related to
cash flow hedges of future sale of goods in currency.
Realised effects hedge accounting
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Realised effects from forward currency contracts, recognised in revenue | 10 | (229) |
Realised effects from embedded derivatives EUR, recognised in revenue | (135) | (122) |
Realised effects from EUR loans, recognised in revenue | - | (15) |
Realised effects from power contracts, recognised in raw materials and energy | 13 | 112 |
Realised effects hedge discontinuation, recognised in other items | 102 | 85 |
Realised effects from interest rate swap, recognised in finance expenses | (4) | (1) |
Total realised effects hedge accounting | (14) | (170) |
In addition, Elkem applies hedge accounting principles related
to currency risk from a net investment in foreign operation, see
note 26 Interest-bearing liabilities.
Movements in OCI related to hedging instruments
2024
Opening | Net change | Reclassified | Closing | |
Amounts in NOK million | balance | in fair value | to P&L | balance |
Hedging of future sales, forward currency contracts | 129 | (102) | (10) | 17 |
Hedging of future sales, embedded EUR derivatives in own use power contracts 1) | (463) | (263) | 135 | (591) |
Hedging of future sales, platinum contracts from discontinued operations | 0 | 0 | (0) | - |
Hedging of future need for power, contract '30-øringen' 2) | 220 | 322 | (115) | 427 |
Hedging of future need for power, contract Axpo | - | 69 | - | 69 |
Change in fair value of derivatives designated as a hedging of future interest expense | 12 | 2 | 4 | 18 |
Total (before tax) | (102) | 29 | 14 | (59) |
Movements in OCI related to hedging instruments
2023
Opening | Net change | Reclassified | Closing | |
Amounts in NOK million | balance | in fair value | to P&L | balance |
Hedging of future sales, forward currency contracts | 30 | (130) | 229 | 129 |
Hedging of future sales, embedded EUR derivatives in own use power contracts 1) | (263) | (322) | 122 | (463) |
Hedging of future sales, currency effects EUR loan | (8) | (7) | 15 | - |
Hedging of future sales, platinum contracts | 2 | (1) | (1) | 0 |
Hedging of future need for power, contracts with financial institutions | 28 | (22) | (6) | 0 |
Hedging of future need for power, contract '30-øringen' 2) | 1 235 | (824) | (190) | 220 |
Change in fair value of derivatives designated as a hedging of future interest expense | - | 11 | 1 | 12 |
Total (before tax) | 1 023 | (1 294) | 170 | (102) |
1)
Hedge accounting from 2016.
2)
Elkem is exposed to financial risk from fluctuations in market
prices for finished goods, raw materials, currency exchange
rates and interest rates (a) Market risk. In addition, Elkem is
exposed to financial risks related to (b) Counterparty credit
risk (c) Liquidity risk and (d) Climate risk. This may have
considerable impact on Elkem’s financial performance.
Elkem’s principle is to organise resources close to the value
chain. Risk management is an integrated part of Elkem’s
business activities, included in the line management’s
responsibility. Financial risk, including financing, liquidity,
currency, interest rates, and counterparty risks are generally
managed centrally by Group Finance and Treasury. Elkem
has financial risk policies in place, approved by the board
of directors.
Elkem’s financial risk exposure and business performance are
evaluated regularly, and the main risks are analysed in terms
of impact, likelihood and correlation. Based on the overall risk
evaluation Elkem may accept or seek to further reduce the
risks arising from operational activities.
(i) Price risk
Commodity prices
Elkem is exposed to fluctuations in market prices for finished
goods and raw materials. The market risk assessment is
based on a holistic approach as prices for Elkem’s products
tend to fluctuate with underlying macroeconomic conditions.
The same dynamics tend to apply to prices for the main raw
materials, giving Elkem a certain degree of natural hedging.
For the main upstream products and raw materials Elkem
seeks to reduce the risk exposure by entering sales and
purchase contracts for corresponding time periods and
volumes. The goal is to partly offset changes in sales prices
through changes in raw material costs.
A significant part of Elkem's sales consist of specialised
products. These products have generally more stable pricing.
Elkem’s integrated value chain mitigates the supply chain and
pricing risks and also give flexibility to realise value at various
levels through the value chain. Elkem aims to ensure sales
volumes and raw material supply by entering into long-term
customer relationships.
Power
Electric power is a key input factor and Elkem enters into long-
term power contracts to reduce the future exposure to changes
in power prices, particularly in Norway where electricity prices
based on hydro power tend to have different pricing dynamics
than for Elkem’s products and other raw materials.
Normally all plants have covered their main future need for
power by entering into power contracts, primarily classified as
own use contracts according to IFRS 9, hence such contracts
are off-balance. In addition to the own use contracts certain
financial power contracts are classified as derivatives and
designated in a cash flow hedging relationship in accordance
with IFRS (see notes 30 Financial assets and liabilities and 31
Hedging). For plants located in Norway, Elkem’s policy is that
minimum 80 per cent of the expected power consumption
shall be covered by fixed price contracts for current and next
year. This includes both own use and derivative contracts at fair
value. For the following periods, the ratio extends until 4 years
ahead, declining with 10 percentage point per year ending at
50 per cent. Elkem currently fulfils this minimum hedge policy,
and also has a substantial amount of contracts at fixed price
for the period after 5 years. Optimisation of 24-hour-, seasonal-
and capacity utilisation variations are solved through utilising
financial and physical contracts that are traded bilaterally. The
purpose of entering into long term power contracts is to reduce
volatility in the power cost and to increase the predictability of
the cost base. Fair value of commodity contracts is especially
sensitive for future changes in energy prices.
Changes in fair value of commodity contracts, classified as
financial instruments, reflect unrealised gains or losses, and
are calculated as the difference between market price and
contract price, discounted to present value. Valuations are
based on market information where this is available, if not,
valuations are based on estimated market price for non-
observable parameters.
Valuation of the power contracts
The assumptions for the fair value measurement of power
contracts are described in note 30 Financial assets and liabilities.
Sensitivity analysis - power contracts
Sensitivity on the "30-øringen" and Axpo contracts is as follows.
Power contracts
31.12.2024 | 31.12.2023 | ||||
Amounts in NOK million | Fair value | Adjusted NPV | Fair value | Adjusted NPV | |
Discount rate (used 5.6% (5.0%)) | change with -3.5 %-point | 1 182 | 1 313 | 1 211 | 1 323 |
Discount rate (used 5.6% (5.0%)) | change with +3.5 %-point | 1 182 | 1 073 | 1 211 | 1 115 |
CPI (used 2.0%) | change to 1% | 1 182 | 1 204 | 1 211 | 1 241 |
CPI (used 2.0%) | change to 3% | 1 182 | 1 160 | 1 211 | 1 180 |
Power price | decrease -10% | 1 182 | 904 | 1 211 | 982 |
Power price | increase + 10% | 1 182 | 1 461 | 1 211 | 1 439 |
Elkem has revenues and operating costs in various currencies.
The prices of finished goods are to a large extent determined
in international markets, primarily denominated in US dollar,
Chinese yuan and Euro. This is partly offset by purchases of
raw materials denominated in the same currencies. Elkem
aims to establish natural hedging positions if this is possible
and economically viable. Financial derivatives are then used
to hedge the remaining net currency risk exposures. Elkem
has net positive operating cash flows mainly in Euro, US
dollar, Chinese yuan and Brazilian real. Due to the location
of its plants, Elkem has net cost positions in certain other
currencies, mainly Norwegian krone, but also Canadian dollars
and Icelandic krona.
Elkem's policy is to hedge the net positive cash flows in foreign
currencies against NOK to even out fluctuations in result and
cash flow. The target is to hedge expected net cash flow for
0–3 months on a 90 per cent hedging ratio. Expected net
cash flow for 4–12 months should be hedged on a rolling basis
targeting a 45 per cent hedging ratio. The hedging ratio for
4–12 months may vary subject to internal approval. Chinese
yuan (CNY) is not included in the hedging programme. Elkem
has hedged Japanese yen until 2026, related to a long-term
customer contract. Elkem uses hedge accounting for all cash
flow hedges over 3 months. Embedded EUR derivatives in
power contracts are included in the foreign exchange hedging
programme. To ensure an effective hedge, according to the
hedge accounting principles, the spot element of the forward
currency contracts is designated as hedging instruments and
highly probable future revenue as hedging object in a hedging
relationship, covering the exposure beyond 3 months.
Elkem realised a loss of NOK 125 million from hedging
programme (loss of NOK 367 million).
Elkem aims to mitigate the currency risk in the statement of
financial position by keeping interest-bearing debt in the same
currencies as the group’s assets. Elkem has mainly interest-
bearing debt in Euro, Chinese yuan and Norwegian krone.
The table below is for Elkem continued.
Currency effects recognised in total comprehensive income
for the year, excluding effects from cash flow hedging
Amounts in NOK million | 2024 | 2023 |
Net foreign exchange gains (losses) - forward currency contracts - recognised in other items | (5) | (26) |
Operating foreign exchange gains (losses) - recognised in other items | 39 | 350 |
Net foreign currency exchange gains (losses) on financing activities - recognised in foreign exchange gains (losses) | 247 | (106) |
Currency translation differences - recognised in other comprehensive income | 1 154 | 476 |
Hedging of net investment in foreign operations - recognised in other comprehensive income | (128) | (199) |
Total | 1 307 | 496 |
Currency exposure
The amounts in the tables below are translated to NOK using
exchange-rates against NOK as at 31 December.
Exchange rates against NOK per 31 December
2024 | 2023 | |
USD | 11.3484 | 10.1655 |
EUR | 11.7921 | 11.2380 |
CNY | 1.5390 | 1.4308 |
CAD | 7.8723 | 7.6706 |
Currency exposure affecting statement of profit or loss
The tables show carrying amount of assets and liabilities for
Elkem group total denominated in foreign currencies different
from the entities functional currency, where changes in
currency rates will affect profit and loss. The tables include
notional amount of currency exchange contracts (note 30
Financial assets and liabilities). Amounts are presented in
NOK based on currency rates as at 31 December 2024.
31 December 2024
Amounts in NOK million | USD | EUR | CNY | CAD | NOK | Other | Total |
Other non-current assets | - | - | - | - | - | - | - |
Trade receivables | 627 | (7) | - | - | - | 96 | 715 |
Other assets | - | - | - | - | - | - | - |
Restricted deposits | - | - | - | - | - | - | - |
Cash and cash equivalents | 709 | 1 293 | (123) | (282) | 0 | 358 | 1 955 |
Total monetary assets | 1 336 | 1 285 | (123) | (282) | 0 | 454 | 2 670 |
Interest-bearing liabilities | - | 8 714 | - | - | - | - | 8 714 |
Other liabilities | - | - | - | - | - | - | - |
Trade payables | 341 | 218 | - | 0 | 1 | 53 | 613 |
Bills payable | - | - | - | - | - | - | - |
Total monetary liabilities | 341 | 8 932 | - | 0 | 1 | 53 | 9 327 |
Derivatives, notional value | 396 | 8 871 | - | - | - | 164 | 9 431 |
Net currency exposure financial position | 599 | (16 518) | (123) | (282) | (1) | 237 | (16 088) |
31 December 2023
Amounts in NOK million | USD | EUR | CNY | CAD | NOK | Other | Total |
Other non-current assets | - | - | - | - | - | - | - |
Trade receivables | 544 | 27 | - | - | - | 113 | 685 |
Other assets | - | - | - | - | - | - | - |
Restricted deposits | - | - | - | - | - | - | - |
Cash and cash equivalents | 913 | 3 380 | 329 | (331) | 0 | 673 | 4 964 |
Total monetary assets | 1 457 | 3 408 | 329 | (331) | 0 | 786 | 5 649 |
Interest-bearing liabilities | - | 8 560 | - | - | - | - | 8 560 |
Other liabilities | - | - | - | - | - | - | - |
Trade payables | 650 | 219 | - | - | 0 | 89 | 959 |
Bills payable | - | - | - | - | - | - | - |
Total monetary liabilities | 650 | 8 778 | - | - | 0 | 89 | 9 518 |
Derivatives, notional value | 167 | 7 847 | - | - | - | 305 | 8 318 |
Net currency exposure financial position | 641 | (13 217) | 329 | (331) | 0 | 392 | (12 187) |
Sensitivity on profit and loss from
financial assets and liabilities
The following tables demonstrate the sensitivity to a
reasonable possible change in EUR and USD exchange
rates by 5 per cent, with all other variables held constant.
The impact on Elkem group total’s profit before tax is due
to changes in the fair value of monetary assets and liabilities
including foreign currency derivatives and embedded
derivatives not designated for hedging. The impact on Elkem
group total’s pre-tax equity is due to changes in the fair value
of forward exchange contracts designated as cash flow
hedges and net investment hedges. The impact on pre-tax
equity would be booked against OCI and recycled through profit
before tax, when the hedged items are realised. In addition the
profit and loss will be affected by translation differences on intra
group balances, mainly in EUR, USD and CNY.
Currency
31.12.2024 | 31.12.2023 | ||||
Change in | Effect on profit | Effect on | Effect on profit | Effect on | |
Amounts in NOK million | FX rate | before tax | pre-tax equity | before tax | pre-tax equity |
EUR | 5 % | (288) | (517) | (113) | (548) |
EUR | -5 % | 288 | 517 | 113 | 548 |
USD | 5 % | 50 | (20) | 40 | (8) |
USD | -5 % | (50) | 20 | (40) | 8 |
Currency exposure affecting currency
translation differences /equity
The table shows Elkem group total's total assets and liabilities
denominated in the group's main currencies translated to NOK
at the currency rates at 31
December and gives an overview
of the group's total currency exposure that will affect currency
translation differences both in the consolidated statement of
comprehensive income and / or profit and loss.
31 December 2024
Amounts in NOK million | USD | EUR | CNY | CAD | NOK | Other | Total |
Other non-current assets | 68 | 166 | 23 | 31 | 849 | 50 | 1 186 |
Trade receivables | 966 | 176 | 1 798 | 18 | 84 | 619 | 3 661 |
Other assets | 57 | 196 | 592 | 13 | 1 023 | 263 | 2 144 |
Restricted deposits | 1 | - | 356 | - | 0 | - | 356 |
Cash and cash equivalents | 1 132 | 1 665 | 1 324 | (72) | 1 324 | 698 | 6 070 |
Total monetary assets | 2 224 | 2 202 | 4 093 | (11) | 3 279 | 1 630 | 13 418 |
Asset non-monetary items | 2 826 | 7 428 | 13 864 | 974 | 12 822 | 2 100 | 40 014 |
Total assets | 5 050 | 9 631 | 17 957 | 963 | 16 102 | 3 730 | 53 432 |
Interest-bearing liabilities | 2 | 8 386 | 3 448 | - | 4 501 | 60 | 16 397 |
Other liabilities | 60 | 246 | 329 | 17 | 450 | 235 | 1 337 |
Trade payables | 469 | 1 200 | 2 046 | 106 | 949 | 389 | 5 159 |
Bills payable | - | - | 1 549 | - | (0) | - | 1 549 |
Total monetary liabilities | 532 | 9 832 | 7 371 | 123 | 5 900 | 685 | 24 442 |
Liabilities non-monetary items | 136 | 772 | 292 | 216 | 1 338 | 215 | 2 969 |
Total liabilities | 668 | 10 605 | 7 663 | 338 | 7 238 | 900 | 27 411 |
31 December 2023
Amounts in NOK million | USD | EUR | CNY | CAD | NOK | Other | Total |
Other non-current assets | 61 | 319 | 36 | 28 | 69 | 43 | 556 |
Trade receivables | 879 | 243 | 1 366 | 13 | 101 | 607 | 3 209 |
Other assets | 36 | 293 | 460 | 14 | 1 018 | 241 | 2 062 |
Restricted deposits | 0 | 0 | 383 | - | 4 | 1 | 388 |
Cash and cash equivalents | 1 265 | 3 672 | 1 536 | (14) | (1 155) | 1 063 | 6 367 |
Total monetary assets | 2 242 | 4 526 | 3 781 | 41 | 37 | 1 955 | 12 583 |
Asset non-monetary items | 2 562 | 6 687 | 13 685 | 1 075 | 12 033 | 1 876 | 37 917 |
Total assets | 4 803 | 11 213 | 17 466 | 1 116 | 12 070 | 3 831 | 50 500 |
Interest-bearing liabilities | 20 | 8 664 | 2 334 | - | 3 647 | 74 | 14 741 |
Other liabilities | 67 | 222 | 198 | 9 | 595 | 290 | 1 381 |
Trade payables | 756 | 1 172 | 2 418 | 92 | 576 | 268 | 5 281 |
Bills payable | - | - | 1 466 | - | - | - | 1 466 |
Total monetary liabilities | 843 | 10 058 | 6 416 | 101 | 4 818 | 632 | 22 868 |
Liabilities non-monetary items | 118 | 708 | 264 | 210 | 1 646 | 228 | 3 174 |
Total liabilities | 960 | 10 766 | 6 680 | 311 | 6 464 | 860 | 26 042 |
(iii) Interest rate risk
Elkem's interest rate risk arises from interest-bearing liabilities
granted by external financial institutions, factoring agreements
(Note 23 Trade receivables), liabilities related to factoring
agreements and advances on export exchange contracts
(Note 29 Provisions and other liabilities). In addition Elkem
has supplier finance agreements of NOK 113 million (NOK
143 million) classified as trade payables. Elkem's liabilities are
mainly drawn in Euro, Chinese yuan and Norwegian krone.
Elkem’s policy is to primarily have floating interest rates
on its debt financing. Whilst this exposes the company to
fluctuations in interest rates, the group will benefit from
lower rates during economic downturns. The prices and
sales volumes of Elkem's core products tend to correlate with
general economic conditions. Interest rates remained low
for several years due to a low-rate economic environment.
However, from 2022 to 2024, interest rates increased as many
central banks hiked rates to control inflation.
Elkem has two financial covenants in its EUR 1 000 million
bank facility and Schuldschein loans: an Equity Ratio equal to
or greater than 30 per cent, and an Interest Cover Ratio of not
less than 4.0x. Due to the high interest rate environment in
2023 and 2024, combined with weaker results. Elkem initiated
a waiver process in 2024, and got consent from the lenders to
reduce the Interest Cover covenant from 4.0x to 3.0x for each
and every quarter of the 2024 financial year. In addition. Elkem
entered into fixed rate swaps to reduce financing costs and
hedge against the uncertainty of future interest rate hikes.
Elkem has the following items exposed to interest rate risk
31 December 2024
Amounts in NOK million | Floating | Fixed | Total |
Interest-bearing liabilities (note 26) | 11 707 | 1 200 | 12 907 |
Derecognised trade receivables under factoring agreements (note 23) | 1 182 | - | 1 182 |
Advances on export exchange contracts (note 29) | 72 | - | 72 |
Recourse liability factoring agreement (note 29) | 53 | - | 53 |
Settlement liability factoring agreements (note 29) | 31 | - | 31 |
Supplier finance agreements (note 27) | 113 | - | 113 |
Cash and cash equivalents (note 25) | (4 397) | - | (4 397) |
Restricted deposits (note 25) | (7) | - | (7) |
Receivables from related parties (note 24) | (0) | - | (0) |
Net exposure | 8 753 | 1 200 | 9 953 |
Sensitivity
The interest rate sensitivity is based on a parallel shift in the
interest rates that Elkem is exposed to. If interest rates had been
100 basis points higher for a full year, based on net debt as at 31
December 2024, with all other variables held constant, the profit
(loss) for the year would have been NOK 68 million (NOK 97
million) lower. The expense that Elkem is charged for the issued
bills relates to the fact that Elkem does not receive interest on
the deposit that is paid into a restricted bank account when a bill
Credit risk is the risk of financial losses to the group if a
customer or counterparty fails to meet contractual obligations.
For Elkem this arises mainly to trade receivable and financial
trading counterparties.
Trade receivables are generally secured by credit insurance
from a reputable credit insurance company. For customers
where credit insurance cannot be obtained, other methods
are generally used to secure the sales proceeds, such as
prepayment, letter of credit, documentary credit or guarantees.
In particular, when sales are made in countries with a high
political risk, or to remote customers, trade finance products
are used to reduce the credit risk. Of Elkem's revenue outside
China 85 per cent - 95 per cent is covered by credit insurance
or other trade finance tools.
Elkem realised credit losses of NOK 2.2 million (NOK 1.6 million)
on trade receivables.
The maximum exposure to credit risk for trade receivables for
the group is NOK 3 164 million as at 31 December 2024
(NOK 3 218 million). See note 23 Trade receivables.
Evaluation of financial counterparties is based on external credit
ratings from Moody's and / or Standard and Poor's. The general
policy is that financial counterparties should have a rating
equal to, or higher than, A- (or the equivalent) from the rating
agencies, but exceptions may be made on a case-by-case basis,
mainly for local banks in emerging markets. Elkem has not had
Liquidity risk is the risk that the group will encounter difficulty
in meeting the obligations associated with its financial
liabilities. Elkem is exposed to liquidity risk related to its
operations and financing.
Elkem's cash flow will fluctuate due to economic conditions and
financial performance. In order to assess its future operational
liquidity risk, short-term and long-term cash flow forecasts are
provided. The short-term forecast is updated each week, and
the long-term cash flow projection is updated each quarter.
In order to mitigate the operational liquidity risk, Elkem has cash
and revolving credit facilities with banks. As at 31 December
2024 Elkem has unrestricted cash and cash equivalents of NOK
6 070 million (NOK 6 367 million). In addition, revolving credit
facilities amount to NOK 6 519 million (NOK 6 293 million), of
which NOK 6 519 million is undrawn (NOK 6 293 million).
The external loan agreements contain two financial covenants.
The ratio of EBITDA to consolidated Net interest payable,
a
s defined herein, for each measurement period, where the
p
eriod is calculated as the 12 months ending on the last day
o
f a financial quarter, must exceed 4. Elkem initiated a waiver
p
rocess in 2024, and got consent from the lenders to reduce
t
he Interest Cover covenant from 4.0x to 3.0x for each and
e
very quarter of the 2024 financial year. Additionally, the ratio
o
f total equity to total assets must be more than 30 per cent
a
t all times. Elkem complies with these covenants as of 31
D
ecember 2024 and also complied with the covenants as of 31
D
ecember 2023, see note 26 Interest-bearing liabilities.
T
he policy is to have cash equivalents and available credit
f
acilities to cover known capital needs and generally not less
t
han 10 per cent of annual total operating income. In addition,
t
he policy is to ensure that the main credit facilities have a
r
emaining maturity of at least 12 months. The maturity profile
o
f the credit facilities as at 31 December 2024 for Elkem
c
ontinued is shown in the table below.
Year / maturity
Amounts in NOK million | 2024 | 2027 | Total |
Total amount of credit facilities | 623 | 5 896 | 6 519 |
The table below analyses the Elkem group continuing's
financial liabilities and assets into relevant maturity
groupings based on the remaining period at the date of the
statement of financial position to the contractual maturity
date. The amounts disclosed in the table are the contractual
undiscounted cash flows, and the amounts are including
interest payments.
31 December 2024
2030 | Carrying | |||||||
Amounts in NOK million | 2025 | 2026 | 2027 | 2028 | 2029 | and later | Total | amount |
Trade receivables | 1 960 | - | - | - | - | - | 1 960 | 1 960 |
Derivative assets | 272 | 243 | 247 | 261 | 279 | 199 | 1 501 | 1 279 |
Total assets | 2 233 | 243 | 247 | 261 | 279 | 199 | 3 462 | 3 240 |
Trade payables | 2 076 | - | - | - | - | - | 2 076 | 2 076 |
Derivative liabilities | 141 | 94 | 85 | 56 | 62 | 312 | 750 | 625 |
Lease liabilities | 67 | 54 | 49 | 43 | 40 | 216 | 468 | 405 |
Loan agreements | 1 581 | 2 738 | 7 225 | 1 552 | 864 | 335 | 14 296 | 12 519 |
Bills payables | - | - | - | - | - | - | - | - |
Total liabilities | 3 865 | 2 886 | 7 358 | 1 651 | 966 | 863 | 17 590 | 15 625 |
31 December 2023
2029 | Carrying | |||||||
Amounts in NOK million | 2024 | 2025 | 2026 | 2027 | 2028 | and later | Total | amount |
Trade receivables | 3 209 | - | - | - | - | - | 3 209 | 3 209 |
Derivative assets | 384 | 292 | 241 | 240 | 239 | 124 | 1 520 | 1 388 |
Total assets | 3 593 | 292 | 241 | 240 | 239 | 124 | 4 729 | 4 597 |
Trade payables | 5 281 | - | - | - | - | - | 5 281 | 5 281 |
Derivative liabilities | 67 | 54 | 51 | 42 | 20 | 117 | 352 | 301 |
Lease liabilities | 125 | 105 | 84 | 65 | 58 | 264 | 701 | 589 |
Loan agreements | 1 798 | 1 781 | 3 505 | 6 726 | 1 711 | 1 326 | 16 848 | 14 169 |
Bills payables | 1 466 | - | - | - | - | - | 1 466 | 1 466 |
Total liabilities | 8 737 | 1 940 | 3 640 | 6 833 | 1 789 | 1 708 | 24 646 | 21 805 |
(d) Climate risk
Governance
In Elkem the responsibility for climate-related issues sits with
the board, and the management of risks and opportunities
related to climate is integrated into Elkem’s overall business
strategy. The audit committee has board level responsibility
related to managing sustainability, non-financial reporting,
internal control, and sustainability-related risk. The CEO,
supported by the CFO and SVP Technology, ensures daily
operational responsibility for climate-related issues. Regular
reporting to the board and proactive engagement with
stakeholders, including investors and banks, are integral to
Elkem's governance structure.
Strategy
Elkem's climate strategy spans short-, medium-, and long-
term horizons, evaluating transition risks and opportunities.
Recognising its role in the full silicon value chain, Elkem
addresses specific climate risks tied to its carbon-intensive
production process. Elkem has established its climate
roadmap, which is the company's transition plan that
outlines the initiatives and actions to be taken to meet the
goal of the Paris Agreement of well below 2°C temperature
increase. Elkem proactively identifies climate impacts and
pursues a dual-play growth strategy focused on reducing
fossil CO
emissions and promoting circular economies. The
2
climate roadmap integrates with Elkem's corporate strategy,
emphasising its commitment to a sustainable future.
Risk Management
Climate-related considerations are a key part of Elkem's risk
management process, with a comprehensive assessment
presented annually to the board. The evaluation identifies
potential financial impacts on Elkem's EBIT and equity within
a 5 year timeframe. The risk mapping process categorises
risks into strategic, financial, raw material, production and
process, and market and product risks. Climate related risks
can be split into transitional and physical climate risks. The
key transitional risks include regulatory risks, such as changes
in the framework for CO
quotas and CO
compensation.
2
2
Elkem monitors physical climate risks through site-specific
analyses, recognising the potential impact of climate change
on its operations. Central physical climate risks for Elkem are
drought and extreme weather events, but the effects differ
from site to site. Elkem has not identified any immediate need
for action related to the buildings and assets identified.
In addressing emission abatement project profitability, Elkem
employs an internal carbon price aligned with market trends.
Risks are categorised by financial impact (high, medium,
low) and frequency (low, medium, high). As Elkem navigates
climate-related challenges and opportunities, the company
remains committed to responsible governance, sustainable
strategies, and effective risk management practices.
Key risks and opportunities
Elkem’s key transitional climate risk is changes to existing
regulations and carbon pricing mechanisms, and the
emergence of new regulations. Use of a carbon material is
necessary when producing silicon and ferrosilicon, hence
emissions of CO
is inevitable, resulting in significant scope
2
1 emissions. Elkem falls under the ambit of EU’s emission
trading system (ETS), and changes to the number of free
allowances and pricing of quotas influence Elkem’s cost of
raw materials and energy for production. In addition, Elkem is
eligible for CO
compensation in Norway for the implicit CO
2
2
quota costs in Norwegian electricity prices. In March 2024
the Norwegian government and the parties representing the
industry agreed on a revised CO
compensation scheme.
2
The new scheme has a cap of NOK 7 billion in annual
compensation to the industry. The cap will be KPI adjusted
annually. In the new scheme 40 per cent of compensation will
be dependent on investments in climate and energy efficiency
measures by the recipients. It has been assessed that there
is reasonable assurance that Elkem will continue to receive
CO
2
compensation and fulfil the requirements to receive
full compensation including the 40 per cent conditioned by
climate and energy efficiency measures.
Elkem is not covered by Carbon Border Adjustment
Mechanism (CBAM) currently, but if Norway choses to adopt
CBAM this would also affect Elkem, and there is significant
concern that the scheme has shortcomings that would be
unfavourable for Elkem when competing in global markets. To
mitigate this risk Elkem is working to reduce its CO
2
emissions
through the use of biocarbon as a reductant, and research and
testing of carbon capture technology.
China does not currently have a CO
2
emission trading system,
but introduction of such a scheme could potentially increase
operational costs.
Elkem’s production sites face different levels of physical
climate risk. Changes to severity and frequency of extreme
weather could pose risk to many of the sites, but the location
and infrastructure mitigates this risk. Elkem has not identified
any immediate need for action related to buildings and assets
identified. Elkem is however, monitoring temperature increases,
increased dry spells, ocean rise, and extreme weather events to
secure assets and avoid business interruptions.
Elkem’s opportunities related to climate change are significant.
Elkem’s products are a key component to the green transition,
examples of this being silicones used in electric vehicles (EVs),
silicones, silicon and foundry products used in renewable and
nuclear energy production, and silicones and microsilica in
construction. There is also a potential in recycling and reuse
Elkem focuses on having a balanced capital structure, which
seeks to reflect the return requirements for the shareholders and
the need for a strong financial position to facilitate the group’s
strategy for growth and specialisation. The target is to have
a leverage between 1.0x and 2.0x over a cycle. The leverage
ratio is defined as net interest-bearing assets, less non-current
interest-bearing assets (see note 26 Interest-bearing liabilities),
divided by EBITDA, as defined in the APM section.
Elkem is managing its financing and liquidity position to
reduce liquidity risk and to ensure that the company can meet
its financial obligations at all times. Elkem has centralised the
responsibility for group financing and liquidity handling. The
policy is to raise financing at parent company level, however,
country specific exceptions may be made due to local
legislation or currency restrictions. Loan maturities are subject
to liquidity and refinancing risk and the company aims to have
a long-term and smooth maturity profile on its loan portfolio.
Cash pooling is used to secure availability and access
to cash across the group. Due to local legislation, not all
subsidiaries are able to participate in international cash pooling
arrangements. In these cases, repatriation of excess cash
is mainly executed through dividend payments and inter-
company deposits, while liquidity needs are covered through
capital injections and inter-company loans. Liquidity forecasts
are prepared and updated on a regular basis. The short-
term forecasts are updated weekly. Elkem’s cash position
is reported on a daily basis and tracked against respective
forecasts. The policy is that available liquidity reserves, defined
as cash and cash equivalents and available long-term credit
facilities, should exceed 10 per cent of total operating income.
Financial covenants are applicable in some of Elkem’s loan
agreements. Financial covenants, if required, are standardised
across all loan agreements. Financial covenants and other
financial policy targets are monitored monthly and included in
Elkem’s management reports. Elkem initiated a waiver process
in 2024, and got consent from the lenders’ to reduce the
Interest Cover covenant from 4.0x to 3.0x for each and every
quarter of the 2024 financial year. In 2025 the Interest Cover
covenant will return to be 4.0x.
Elkem intends to pay dividends reflecting the underlying
earnings and cash flow. Elkem envisages a dividend pay-
out ratio of 30 - 50 per cent based on profit for the year.
When deciding the annual dividend level, Elkem’s leverage,
capital expenditure plans and financing requirements will be
taken into consideration. Focus will also be on maintaining
appropriate strategic flexibility. For 2024 the Board have
proposed to pay a dividend of NOK 0.3 per share.
For the year 2023 Elkem did not pay any dividend.
31 December 2024, Elkem's equity was NOK 26,020 million,
including non-controlling interests of NOK 109 million. The
The development in share capital and other paid-in equity is
set out in the consolidated statement of changes in equity. The
largest shareholders are listed in note 22 Shareholders to the
financial statement of Elkem ASA.
Number of shares
| 2024 | 2023 | |||||
Shares | Treasury | Total issued | Shares | Treasury | Total issued | |
outstanding | shares | shares | outstanding | shares | shares | |
Beginning of the year | 633 890 288 | 5 551 090 | 639 441 378 | 634 476 985 | 4 964 393 | 639 441 378 |
Increase in treasury shares | - | - | - | (2 000 000) | 2 000 000 | - |
Sale of treasury shares | 279 190 | (279 190) | - | 1 413 303 | (1 413 303) | - |
End of the year | 634 169 478 | 5 271 900 | 639 441 378 | 633 890 288 | 5 551 090 | 639 441 378 |
The share capital of Elkem ASA is NOK 3 197 206 890 divided
on 639 441 378 shares of NOK 5 nominal value. Of this amount
Elkem ASA held 5 271 900 treasury shares, 0.8 per cent of total
issued shares. Elkem has in 2024 sold 279 190 shares
in connection with Elkem's share option scheme. Total
consideration was NOK 5 million.
In the annual general meeting held on 18 April 2024, the board
of directors was granted an authorisation to repurchase the
company’s own shares within a total nominal value of up to
NOK 319 720 689. The maximum amount that can be paid
for each share is NOK 150 and the minimum is NOK 1. The
authorisation is valid until the annual general meeting in 2025,
but not later than 30 June 2025. The authorisation can be used
to acquire shares as the board of directors deems appropriate,
provided however, that acquisition of shares shall not be by
subscription. Shares acquired under the authorisation may
either be used to fulfil Elkem's obligations in connection with
acquisitions, incentive arrangements for employees, fulfilment
of earn-out arrangements, sale of shares to strengthen Elkem's
equity or deletion of shares.
In the annual general meeting held on 18 April 2024, the board
of directors was granted an authorisation to increase the
company’s share capital with an amount up to NOK 319 720 689
- corresponding to 10 per cent of the current share capital. The
authorisation is valid until the annual general meeting in 2025,
but not later than 30 June 2025. The authorisation can be used
to cover share capital increases against contribution in kind
The calculation of basic earnings per share (EPS) has been
based on profit attributable to ordinary shareholders and
weighted-average number of ordinary shares outstanding.
The calculation of diluted EPS has been based on profit
attributable to ordinary shareholders and weighted-average
number of ordinary shares outstanding after adjustment for
2024 | 2023 | |
Weighted average number of shares outstanding | 634 005 481 | 634 991 082 |
Effects of dilution | 128 351 | 798 645 |
Weighted average number of shares outstanding - diluted | 634 133 832 | 635 789 727 |
Owners of the parent's share of profit (loss) (NOK million) from Elkem group total operations | 488 | 72 |
Earnings per share (NOK) | 0.77 | 0.11 |
Diluted earnings per share (NOK) | 0.77 | 0.11 |
Owners of the parent's share of profit (loss) (NOK million) from continuing operations | 2 026 | 1 999 |
Earnings per share (NOK) | 3,20 | 3,15 |
Diluted earnings per share (NOK) | 3,20 | 3,14 |
Owners of the parent's share of profit (loss) (NOK million) from discontinued operations | (1 538) | (1 927) |
Earnings per share (NOK) | (2,43) | (3,04) |
Diluted earnings per share (NOK) | (2,42) | (3,03) |
The following table gives a detailed overview of changes
in working capital in the statement of cash flows. Working
capital is defined as accounts receivables, inventories, other
current assets, accounts payables, current employee benefit
obligations and other current liabilities. Accounts receivables
are defined as trade receivables less bills receivables. Other
current assets are defined as other current assets less
current receivables to related parties, current interest-bearing
receivables, tax receivables, grants receivable, assets at fair
value through profit or loss and accrued interest income.
Accounts payables are defined as trade payables less trade
payables related to purchase of non-current assets. Other
current liabilities are defined as provisions and other current
liabilities less current provisions, contingent considerations,
contract obligations and liabilities to related parties.
Changes in working capital
Amounts in NOK million | 2024 | 2023 |
Changes in accounts receivable | 13 | 924 |
Changes in inventories | (447) | 1 660 |
Changes in other current assets | (97) | (375) |
Changes in accounts payable | (45) | (349) |
Changes in other current liabilities including employee benefit obligations | (53) | (275) |
Total | (629) | 1 584 |
Liquidity effects of contingent considerations
Amounts in NOK million | 2024 | 2023 |
Settlement of contingent consideration | - | 39 |
Discounting element on settlement of contingent consideration | - | 4 |
Fair value adjustment on settlement of contingent consideration | - | (3) |
Foreign exchange gains (losses) from date of control | - | (2) |
Total payment of contingent consideration related to acquisitions (IFRS 3) | - | 38 |
Elkem group that are under control (either directly or indirectly),
joint control or significant influence by the owners of Elkem.
The related party disclosure is prepared based on related
parties of Elkem group total. A significant level of related party
transactions and balances are with the Silicones segment which
International Co. Ltd S.A., Luxembourg, which is under control
of Sinochem Holdings Co., Ltd (Sinochem), a company
registered and domiciled in China. All companies under control
by Sinochem are considered to be related parties, including
among others China Blue Chemicals Ltd and Jiangxi Xinghuo
spaceflight New Material Co., Ltd..
Elkem also consider equity accounted companies as
related parties.
The structure of Elkem group is disclosed in note 4
Composition of the group and note 5 Equity accounted
investments and joint operations.
Transactions with related parties
2024
Sale of | Purchase | Sale of | Purchase of | Interest | Financial | |
Amounts in NOK million | goods | of goods | services 1) | services | income | expenses |
Bluestar Elkem International Co. Ltd S.A. | - | - | - | - | - | - |
Joint ventures and associates | - | (202) | 20 | (192) | 0 | - |
Related parties within Sinochem | 130 | (619) | 1 | (112) | - | - |
Other related parties | 4 | (8) | - | (23) | - | - |
Total | 133 | (830) | 21 | (327) | 0 | - |
Transactions with related parties
2023
Sale of | Purchase | Sale of | Purchase of | Interest | Financial | |
Amounts in NOK million | goods | of goods | services 1) | services | income | expenses |
Bluestar Elkem International Co. Ltd S.A. | - | - | - | - | - | - |
Joint ventures and associates | - | (282) | 77 | (223) | 0 | - |
Related parties within Sinochem | 206 | (636) | 2 | (102) | - | - |
Other related parties | - | (17) | - | (23) | - | - |
Total | 206 | (935) | 79 | (348) | 0 | - |
1) Including sub-lese
Balances with related parties
| Non-current | Current | |||
Amounts in NOK million | 31.12.2024 | 31.12.2023 | 31.12.2024 | 31.12.2023 |
Receivables from joint ventures and associates, interest-bearing | 0 | 1 | - | - |
Receivables from joint ventures and associates, interest free | - | - | 4 | 0 |
Receivables from related parties within Sinochem, interest free | - | - | 10 | 8 |
Trade receivables, joint ventures and associates | - | - | 18 | 12 |
Trade receivables, related parties within Sinochem | - | - | 1 | 16 |
Prepayments to related parties within Sinochem | - | - | - | 2 |
Liabilities to related parties within Sinochem, interest free | - | - | (14) | (17) |
Trade payables, Bluestar Elkem Investment Co. Ltd. S.A | - | - | (48) | (5) |
Trade payables, joint ventures and associates | - | - | (47) | (94) |
Trade payables, related parties within Sinochem | - | - | (4) | (54) |
Prepayments from joint ventures and associates | - | - | (3) | (10) |
Prepayments from related parties within Sinochem | - | - | (1) | (0) |
Net balances with related parties | 0 | 1 | (83) | (141) |
Outstanding balances at year-end are unsecured, and the
current receivables and payables are interest-free, with an
exception of the non-current receivables. The interest rate
for the non-current receivables to the joint ventures and
associates are currently 3.0 per cent (3.8 per cent).
Information about main transactions with related parties:
Related parties within Sinochem
→
Sale of silicone to China Bluestar International Chemical
Ltd,
Jiangxi Xinghuo Spaceflight New Material Co., Ltd
and other companies within Sinochem
→
Purchase of raw materials from companies within Sinochem
Equity accounted companies
→
Purchase of short and deep sea transport from North Sea
Containerline AS and EPB Chartering AS
→
Purchase of warehousing for Combined Cargo
Warehousing BV
→
Purchase of services related to steam from Jiangxi
Guoxing Intelligence Energy Co. Ltd
→
Purchase of services related to shared infrastructure such
as laboratory analysis, IT and telephone, warehousing
and purchase of basic chemistry products such as gas,
nitrogen, compressed air from GIE Osiris
There are no other contingent liabilities or commitments
related to the joint ventures and associates.
Key management personnel and board of directors
Information on transactions with key management personnel
and /or their related parties, see note 11 Employee benefits and
"Report on salary and other remuneration to leading personnel
Pledges
The main part of Elkem's interest-bearing liabilities are not
pledged. Details of liabilities that have pledged assets or
guarantees related to them are stated below.
Pledged liabilities
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Pledged liabilities | 53 | 94 |
Book value pledged assets
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Building | - | 10 |
Machinery and plant | - | 7 |
Accounts receivables | 53 | 102 |
Inventories | - | 67 |
Elkem makes limited use of guarantees, see specification below.
Guarantee commitments
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Guarantee commitment KLIF (Climate and Pollution Agency) | 40 | 40 |
Guarantee commitment tax cases Brazil | 42 | 47 |
Elkem has with effect from 1 January 2024 changed
presentation of the items mentioned below;
→
Presentation of grants related to income is changed from
other operating income to net presentation where the
grants are deducted from the expenses for which the
grants have compensated in the statement of profit or loss.
→
Presentation of capitalised salary of own developed fixed
and intangible assets is changed from other operating
expenses to employee benefit expenses in the statement
of profit and loss.
→
Presentation of changes in inventories of finished goods
and work in progress for the activity cost part is changed
from other operating expenses to raw materials and
energy for production in the statement of profit and loss.
Elkem has with effect from 1 July 2024 changed presentation
of the items mentioned below;
→
Elkem has with effect from 1 July 2024 changed its
definition of net interest-bearing debt (NIBD). Going
forward bills payable net of restricted deposits, will be
followed up as a part of managing Elkem’s day-to-day
liquidity positions. Bills payable are deemed to be part of
the operational activities linked to the product cycle and
hence no longer included in NIBD. As a consequence,
bills payable and restricted deposits are moved from cash
flow from financing activities to cash flow from operating
activities, included in line-item changes in provisions, bills
and other in the statement of cash flows.
The impact on comparable figures in the statement of profit or
loss and statement of cash flows are shown in the tables below.
Consolidated statement of profit or loss
2024 | Impact | Impact | 2024 | ||
before | Impact | capitalised | changes in | after | |
Amounts in NOK million | change | grants | salary | inventories | change |
Other operating income | 1 711 | (644) | - | - | 1 066 |
Raw materials and energy | (9 024) | 593 | - | 118 | (8 313) |
Employee benefit expenses | (2 807) | 26 | 15 | - | (2 766) |
Other operating expenses | (4 175) | 25 | (15) | (118) | (4 283) |
Operating profit (loss) | 2 094 | - | - | - | 2 094 |
Consolidated statement of profit or loss
Financial | Impact | Impact | Financial | ||
statement | Impact | capitalised | changes in | statement | |
Amounts in NOK million | 2023 | grants | salary | inventories | 2023 restated |
Other operating income | 915 | (584) | - | - | 331 |
Raw materials and energy | (11 493) | 550 | - | 118 | (10 825) |
Employee benefit expenses | (2 706) | 20 | 25 | - | (2 662) |
Other operating expenses | (4 045) | 14 | (25) | (118) | (4 173) |
Operating profit (loss) | 1 682 | - | - | - | 1 682 |
Consolidated statement of cash flows
2024 | 2024 | ||
before | after | ||
Amounts in NOK million | change | Impact | change |
Changes in provisions, bills and other | (48) | 21 | (27) |
Net changes in bills payable and restricted deposits | 21 | (21) | - |
Change in cash and cash equivalents | (536) | - | (536) |
Consolidated statement of cash flows
Financial | |||
Financial | statement | ||
statement | 2023 | ||
Amounts in NOK million | 2023 | Impact | restated |
Changes in provisions, bills and other | 190 | (237) | (47) |
Net changes in bills payable and restricted deposits | (237) | 237 | - |
Change in cash and cash equivalents | (3 017) | - | (3 017) |
On 23 January 2025 the group announced its intention to
perform a strategic review of the Silicones division. At the end
of the fourth quarter, significant judgement has been applied to
conclude that a sale is highly probable to occur within one year
and that the held for sale criteria is met. Elkem Silicones is an
operating segment and represents a major line of business per
31 December 2024. Silicones division is therefore classified as
discontinued operations in the 2024 financial statement.
Continuing operations include internal transactions with the
Silicones division that are expected to continue after the sale.
This includes sale of goods from Elkem Silicon Products to
Elkem Silicones. Financial income and expense are eliminated.
Discontinued operations are still included in the segment
reporting as it will continue to be the followed up by the Chief
operating decision maker in the same manner as before the
reclassification. This will be continuously reviewed as the
strategic review process progresses. Please refer to note 6
Estimates
The calculations for fair value less cost to sell are based on
estimated future cash flows. These cash flows are uncertain
due to potential changes in the prices of key production
input factors and the market prices of Elkem’s products. This
uncertainty affects both the next 12 months and the rest of the
forecast period. Additionally, there is uncertainty in estimating
replacement investments and the growth rate for the terminal
value. The estimated future pre-tax cash flows are discounted
using a pre-tax discount rate. The uncertainty in this discount
rate relates to the determination of the risk-free rate, the
market risk premium and the beta. Elkem uses a beta specific
to each business segment, found using observable betas of
comparable companies for each business segment. To address
the uncertainty in these estimates, Elkem has conducted
sensitivity analyses on key drivers in the fair value less cost to
sell calculations.
Internal transactions are eliminated in the presentation of profit
and loss from discontinued operations in the below table
Profit and loss from discontinued operations
Amounts in NOK million | 31.12.2024 | 31.12.2023 |
Revenue | 14 113 | 13 230 |
Other operating income | 20 | 19 |
Share of profit(loss) from equity accounted investments | 2 | 1 |
Total operating income | 14 134 | 13 250 |
Raw materials and energy | (8 718) | (8 615) |
Employee benefit expenses | (2 469) | (2 413) |
Other operating expenses | (2 431) | (2 500) |
Amortisation and depreciation | (1 744) | (1 468) |
Impairment loss | (10) | (69) |
Other items | (145) | (80) |
Operating profit (loss) | (1 382) | (1 895) |
Share of profit(loss) from equity accounted financial investment | - | - |
Finance Income | 41 | 45 |
Foreign exchange gains (losses) | - | - |
Finance expenses | (138) | (77) |
Profit (loss) before income tax | (1 480) | (1 928) |
Income tax (expenses) benefits | (58) | 0 |
Profit (loss) for the year from discontinued operations | (1 538) | (1 927) |
Cumulative income or expense recognised in other comprehensive
income from discontinued operations
Amounts in NOK million | 2024 | 2023 |
Exchange differences on translation of discontinued operations | 2 048 | 1 333 |
Earnings per share - discontinued operations
Amounts in NOK million | 2024 | 2023 |
Basic earnings per share in NOK | (2.43) | (3.04) |
Diluted earnings per share in NOK | (2.42) | (3.03) |
The below tables shows profit and loss from continuing
operations, from the Silicones operating segment and
eliminations booked in discontinued operations in order to
show the profit and loss from Elkem group total
Reconciliation between continuing and discontinued operations with
Elkem group total 2024
Silicones | Eliminations in | Elkem | ||
Continuing | operating | discontinued | group | |
Amounts in NOK million | operations | segment | operations | total |
Revenue | 17 810 | 15 069 | (956) | 31 922 |
Other operating income | 1 066 | 20 | (1) | 1 086 |
Share of profit(loss) from equity accounted investments | (6) | 2 | - | (4) |
Total operating income | 18 870 | 15 091 | (957) | 33 004 |
Raw materials and energy | (8 313) | (9 439) | 720 | (17 032) |
Employee benefit expenses | (2 766) | (2 469) | - | (5 234) |
Other operating expenses | (4 283) | (2 663) | 232 | (6 714) |
Amortisation and depreciation | (931) | (1 744) | - | (2 674) |
Impairment loss | (168) | (10) | - | (178) |
Other items | (316) | (145) | - | (460) |
Operating profit (loss) | 2 094 | (1 377) | (5) | 712 |
Share of profit(loss) from equity accounted financial investment | (143) | - | - | (143) |
Finance Income | 107 | 41 | (0) | 147 |
Foreign exchange gains (losses) | 247 | - | - | 247 |
Finance expenses | (778) | (471) | 332 | (916) |
Profit (loss) before income tax | 1 526 | (1 807) | 328 | 47 |
Income tax (expenses) benefits | 588 | (58) | (0) | 530 |
Profit (loss) for the year from continuing operations | 2 115 | (1 865) | 328 | 577 |
Reconciliation between continuing and discontinued operations with
Elkem group total 2023
Silicones | Eliminations in | Elkem | ||
Continuing | operating | discontinued | group | |
Amounts in NOK million | operations | segment | operations | total |
Revenue | 21 134 | 14 142 | (912) | 34 364 |
Other operating income | 331 | 19 | (1) | 350 |
Share of profit(loss) from equity accounted investments | 44 | 1 | - | 46 |
Total operating income | 21 510 | 14 163 | (912) | 34 760 |
Raw materials and energy | (10 825) | (9 658) | 1 042 | (19 441) |
Employee benefit expenses | (2 662) | (2 413) | - | (5 074) |
Other operating expenses | (4 173) | (2 697) | 197 | (6 673) |
Amortisation and depreciation | (844) | (1 468) | - | (2 312) |
Impairment loss | (25) | (69) | - | (94) |
Other items | 596 | (80) | - | 516 |
Operating profit (loss) | 3 577 | (2 222) | 327 | 1 682 |
Share of profit(loss) from equity accounted financial investment | (63) | 0 | - | (63) |
Finance Income | 137 | 46 | (1) | 182 |
Foreign exchange gains (losses) | (106) | 0 | - | (106) |
Finance expenses | (666) | (358) | 281 | (743) |
Profit (loss) before income tax | 2 879 | (2 534) | 606 | 951 |
Income tax (expenses) benefits | (781) | 0 | 0 | (781) |
Profit (loss) for the year from continuing operations | 2 097 | (2 534) | 606 | 170 |
Cash flows from internal transactions are eliminated in cash
flows from discontinued operations in the below table .
Cash flows from discontinued operations
Amounts in NOK million | 2024 | 2023 |
Net cash inflow from operating activities | 262 | 41 |
Net cash inflow from investing activities | (1 734) | (3 235) |
Net cash outflow from financing activities | 769 | 1 131 |
Net increase (decrease) in cash generated from discontinued operations | (703) | (2 064) |
Assets reclassified as held for sale in relation to the discontinued operation
as at 31 December 2024:
Amounts in NOK million | 2024 |
Property, plant and equipment | 16 095 |
Right of use assets | 474 |
Other intangible assets | 1 075 |
Goodwill | 756 |
Deferred tax assets | 36 |
Investments in equity accounted companies | 157 |
Other assets | 201 |
Total non-current assets | 18 793 |
Inventories | 3 783 |
Trade receivables | 1 700 |
Other assets | 891 |
Restricted deposits | 350 |
Cash and cash equivalents | 1 673 |
Total current assets | 8 396 |
Total assets | 27 189 |
Liabilities directly associated with assets classified as held for sale
as at 31 December 2024:
Amounts in NOK million | 2024 |
Interest-bearing liabilities | 3 290 |
Deferred tax liabilities | 137 |
Employee benefit obligations | 292 |
Provisions and other liabilities | 12 |
Total non-current liabilities | 3 731 |
Trade payable | 3 084 |
Income tax payables | 52 |
Interest-bearing liabilities | 200 |
Bills payable | 1 549 |
Employee benefit obligations | 530 |
Provisions and other liabilities | 522 |
Total current liabilities | 5 937 |
Total liabilities | 9 668 |
Immediately before the re-presentation of the Silicones division
as discontinued operations an impairment assessment was
performed and no impairment loss was identified. Subsequent
to the reclassification, the disposal group classified as held for
sale shall be measured at the lower of its carrying amount and
fair value less costs to sell. An estimate of fair value less cost to
sell of the disposal group has been performed, and no loss was
recognised. In estimating fair value less cost to sell the income
approach (discounted cash flow method) is used. Future
cash flows are estimated using a combination of external and
internal sources. In estimating future cash flows the following
assumptions are used:
Key assumptions for fair value less cost to sell estimate
Financial performance 2024
Silicones markets remained challenging in 2024 due to weak
market sentiment and Chinese overcapacity. The Chinese
property market has been in a severe downturn since 2021.
During the second half of 2024 there were some positive
developments. The Chinese central bank announced its
biggest stimulus package since the pandemic. Further, several
producers, including Elkem announced global price increases
for specialties which gave a positive impact on profitability.
DMC prices in China showed a modest increase in the last two
quarters of 2024. The EBITDA-margin for the Silicones segment
in 2024 is 3.5 per cent and with an improving trend through the
year. The 2024 EBITDA of NOK 521 million is an improvement
from a negative EBITDA of NOK 605 million in 2023.
Financial forecasts 2025-2029
The 2025 budget and 2026-2029 strategic plan approved
by the board is used a basis for the forecasts which is used
for the fair value estimate. When preparing the budget and
strategic plan a range of both external and internal sources are
considered. External sources include market reports and price
indexes. Internal sources include agreed sales volumes
for the
period, the effect of implemented cost saving initiatives and
planned investments and maintenance.
EBITDA level represents the operating profit (loss) before
depreciation and amortisation. The key assumptions used in
reaching the forecast figures are sales prices, total volume and
product mix, operating costs, and productivity targets. See
Note 6 Operating segments for Elkem’s definition of EBITDA.
→
External markets
analysts expect continued challenging
supply/demand balance both in China and globally for the
next two years, before a gradual recovery towards the end
of the forecast period resulting in a more balanced market
→
The Silicon division capacity increase following strategic
investments in China in the previous years was ramped
up during 2024 and is performing better than target. The
Silicon division production in France is expected to ramp
up production during 2025 and
reach full capacity during
the first half of 2025. These new assets are expected
to yield cost savings, more efficient production and an
improved specialty ratio that will improve both absolute
and stability in margins
→
Cost saving programmes initiated in 2023 and continued
in 2024 are expected to give permanent cost reductions
through improved productivity and better process quality.
→
A more balanced market, combined with an increased
specialty ratio, results in improved average sales prices
and combined with reduced cost leads to a gradually
improving EBITDA-margin throughout the forecast period.
Forecasted sales prices are based on a weighted average
of sales prices for commodity and specialty volumes.
Other operating costs
These are estimated based on the current level and adjusted
for expected inflation in the respective locations where the
business is situated. Operating costs are also impacted by
ongoing operational efficiency programmes. Changes to the
outcome of these initiatives may affect future EBITDA levels.
Capital expenditure (“Capex”)
A normalised capex is assumed in the long run and are based
on today’s maintenance level and technology. Capex includes
remaining investments on strategic projects in an advanced
stage where the projects are substantially commenced per 31
December 2024.
Discount rate
A weighted average cost of capital is used to discount the
cash flows. The WACC is calculate by using a target capital
structure of 50:50. Cash inflows and outflows in different
currencies are translated to NOK and a NOK 10 year risk-free
interest rate is used in the WACC. The discount rates also
consider the debt premium, market risk premium, corporate
tax rate and asset beta. For the Elkem Silicones division the
cash flows have been discounted with a pre-tax rate of
10.5 per cent, derived from a WACC of 8.44 per cent.
Growth rates and inflation
The expected growth rates converge from its current level,
to the long-term growth level in the markets in which the
entity operates. The growth rates used to extrapolate cash
flow projections in the terminal value are based on expected
inflation in relevant markets, assumptions in terms of market
share and expectations for the market development in which
the entity operates.
Currency rates
The fair value calculation is performed in the presentation
currency for the Silicones segment which is NOK. The currency
rates used to translate future incomes and expenses in other
currencies than the functional currency is based the currency
rates used in the strategic planning process.
Steady state 2030 and onwards
After the forecast period 2025-2029 the cash flows from
operations are expected to a reach a steady state. The steady
state cash flows in 2030 is used to calculate the terminal
value. An EBITDA-margin of 17.5 per cent and a growth rate of
2 per cent is estimated in the steady state.
The estimated fair value less cost of sale of Elkem Silicones
is higher than the net value of Silicones assets and liabilities
held for sale of NOK 17.5 billion as at 31 December 2024, and
no reduction of the carrying amount to fair value less cost to
sell is recognised. There is significant uncertainty regarding
the sales value of Elkem Silicones and therefore a range of
fair values are presented to illustrate the sensitivity in the fair
value. In estimating the range of values the same cash flows
has been used for the forecast period 2025-2029. However,
different WACCs is used to discount estimated future cash
flows and different EBITDA-margins is used in the steady state
and applied in calculation the terminal value. The range can be
summarized in the following matrix:
Sensitivity of fair value less cost to
sell of discontinued operations
EBITDA-margin in steady state (in per cent) | ||||
Amounts in NOK billion | 17.5 % | 15.0 % | 12.7 % | |
8.44% | 21.1 | 17.1 | 13.3 | |
WACC(in per cent) | 9.44% | 17.9 | 14.5 | 11.4 |
10.0% | 16.4 | 13.4 | 10.5 | |
Events after the reporting period
Events after the reporting period related to the group’s financial
position at the end of the reporting period, are considered in
the financial statements. Events after the reporting period that
have no effect on the group’s financial position at the end of
the reporting period, but will have effect on future financial
would have had a material impact on the financial statements
Table
of contents
Financial statements
Income statement
300
Balance sheet
301
Cash flow statement
302
General information
Note 1
General information
303
Note 2
Significant accounting policies
303
Note 3
Accounting estimates
308
Income statements
Note 4
Operating income
308
Note 5
Grants
309
Note 6
Raw materials and energy
310
Note 7
Employee benefit expenses
311
Note 8
Employee retirement benefits
312
Note 9
Other operating expenses
313
Note 10 Operating lease
314
Note 11
Other gains (losses) related to operating activities
314
Note 12
Finance income and expenses
315
Note 13 Taxes
315
Balance sheet
Note 14 Property, plant and equipment
317
Note 15
Intangible assets and goodwill
318
Note 16 Investment in subsidiaries
319
Note 17
Investment in joint ventures
320
Note 18 Inventories
322
Note 19 Trade receivables
322
Note 20 Other assets
323
Note 21 Equity
324
Note 22 Shareholders
325
Note 23 Interest-bearing assets and liabilities
325
Note 24 Provisions and other liabilities
328
Note 25 Financial instruments
329
Other information
Note 26 Financial risk
331
Note 27 Related parties
331
Note 28 Pledge of assets and guarantees
333
Note 29 Supplemental information to the cash flow statement
333
Note 30 Merger
334
Note 31 Change in presentation
334
Note 32 Events after the reporting period
335
Income statement - Elkem ASA
Amounts in NOK million
Note
2024
2023 Restated
1)
1 January - 31 December
Revenue
Other operating income
Total operating income
4
4
8 881
829
9 710
11 034
35
11 070
Raw materials and energy
Employee benefit expenses
Other operating expenses
Other gains (losses) related to operating activities
Amortisation and depreciation
Impairment losses
Total operating expenses
6
7,8
9
11
14,15
14,15
(4 138)
(1 480)
(2 918)
(450)
(507)
(36)
(9 529)
(5 734)
(1 399)
(2 822)
433
(463)
(20)
(10 005)
Operating profit (loss)
181
1 065
Income from subsidiaries and associates
Income (loss) from joint ventures
Finance income
Foreign exchange gains (losses)
Finance expenses
16
17
12
12
12
1 758
(84)
465
78
(1 003)
203
(63)
426
(313)
(851)
Profit (loss) before income tax
1 395
467
Income tax (expenses) benefit
13
928
(102)
Profit (loss) for the year
2 323
365
1)
See note 31 Change in presentation
Balance sheet - Elkem ASA
Amounts in NOK million
Note
31.12.2024
31.12.2023
Assets
Property, plant and equipment
Goodwill
Other intangible assets
Deferred tax assets
Investment in subsidiaries
Investment in joint ventures
Derivatives
Other assets
Total non-current assets
14
15
15
13
16
17
25
20
5 144
8
73
633
16 729
-
1 012
3 986
27 586
4 578
12
88
-
12 902
843
977
6 295
25 695
Inventories
Trade receivables
Derivatives
Other assets
Cash and cash equivalents
Total current assets
18
19
25
20
23
2 685
1 146
267
1 723
2 730
8 551
2 421
1 312
410
904
3 331
8 379
Total assets
36 136
34 074
Equity and Liabilities
Paid-in capital
Retained earnings
Total equity
21,22
21
3 502
12 163
15 665
3 498
9 912
13 410
Interest-bearing liabilities
Deferred tax liabilities
Pension liabilities
Derivatives
Provisions and other liabilities
Total non-current liabilities
23
13
8
25
24
11 738
-
100
485
85
12 407
11 103
514
84
235
84
12 019
Trade payables
Income tax payables
Interest-bearing liabilities
Derivatives
Dividend
Provision and other liabilities
Total current liabilities
13
23
25
21
24
1 258
-
5 684
140
190
792
8 064
1 261
55
6 459
66
-
803
8 644
Total equity and liabilities
36 136
34 074
Oslo, 12 March 2025
Olivier Tillette de
Bo Li
Dag Jakob Opedal
Dachuan Dong
Terje Andre Hanssen
Thomas Eggan
Clermont-Tonnerre
Chair
Vice chair
Board member
Board member
Board member
Board member
Wei Yao
Marianne E. Johnsen
Marianne Færøyvik
Grace Tang
Nathalie Brunelle
Helge Aasen,
Board member
Board member
Board member
Board member
Board member
CEO
Cash flow statement - Elkem ASA
Amounts in NOK million
Note
2024
2023
1 January - 31 December
Operating profit (loss)
Changes in fair value of derivatives
Amortisation, depreciation and impairment losses
Changes in working capital
Changes in provisions, pension obligations and other
Interest payments received
Interest payments made
Income taxes paid
Cash flow from operating activities
14,15
29
181
587
543
(369)
158
112
(954)
(178)
81
1 065
(157)
483
474
(90)
147
(787)
(1 332)
(198)
Investments in property, plant and equipment and intangible assets
Received investment grants
Proceeds from sale of property, plant and equipment
Cash effect from merged companies
Acquisition and capital increase in subsidiaries
Acquisition of and cash contribution to joint ventures
Proceeds from sale of joint ventures
Increase in loans to subsidiaries
Repayment on loans to subsidiaries
Dividend and group contribution
Other investments / sales
Cash flow from investing activities
14, 15
5
14
30
16
17
23, 27
23, 27
16
(879)
-
1
0
(238)
-
10
29
(10)
1 458
9
381
(1 035)
93
24
-
(337)
(267)
-
(795)
12
203
1
(2 100)
Dividend paid to owners
Net sale (purchase) of treasury shares
New interest-bearing loans and borrowings
Repayment of interest-bearing loans and borrowings
New cash deposits to / from subsidiaries
Repayment of cash deposits to / from subsidiaries
Cash flow from financing activities
21
21
23
23
23, 27
23, 27
0
5
1 599
(1 443)
665
(1 888)
(1 062)
(3 815)
(8)
2 590
(167)
2 064
(351)
312
Change in cash and cash equivalents
(600)
(1 986)
Currency translation differences
Net change in cash and cash equivalents
0
(600)
0
(1 985)
Cash and cash equivalents opening balance
23
3 331
5 316
Cash and cash equivalents closing balance
23
2 730
3 331
Notes to the financial statements - Elkem ASA
1. General information
Elkem ASA is a limited liability company located in Norway,
whose shares are publicly traded on Oslo Børs. The main
activities are related to production and sale of silicon materials,
ferrosilicon, specialty alloys for the foundry industry and
microsilica. Elkem ASA is owned 52.9 per cent by Bluestar
Elkem International Co. Ltd S.A., Luxembourg, which is under
the control of Sinochem Holdings Co., Ltd (Sinochem), a
company registered and domiciled in China.
The presentation currency of Elkem ASA is Norwegian Krone
(NOK). All financial information is presented in NOK million,
unless otherwise stated. As a result of rounding adjustments,
the amounts shown in one or more columns included in the
financial statements may not add up to the total. In text the
current year's figures are presented outside parentheses,
followed by the comparative figures presented in parentheses.
2. Significant accounting policies
The financial statements have been prepared in accordance
with the Norwegian Accounting Act and generally accepted
accounting principles in Norway. The accounts have been
prepared
under the going concern assumption.
Changes in accounting policies
Changes in accounting policies are recognised directly in
equity and the opening balance is adjusted as if the new
accounting policy had always been applied. Last year's figures
are changed correspondingly, for comparative purposes.
From 1 January 2024 Elkem has changed the principle for
presentation of grants related to income from other operating
income to net presentation where the grants are deducted
from the expenses for which the grants have compensated.
This change results in more relevant information about the
impact of grants related to income and is consistent with
the presentation of investment grants as a reduction of
depreciation. See note 31 Changes in presentation.
Accounting estimates
In the event of uncertainty, the best estimate is applied, based
on the information available when the financial statements are
prepared. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period for which the estimates are revised and
in any future periods affected. See note 3 Accounting estimates.
Foreign currency translation
Elkem ASA's functional currency is Norwegian Krone (NOK).
Transactions in currencies other than the Elkem ASA's functional
currency are translated using the transaction date's currency
rate. Monetary items in foreign currencies are presented at
the exchange rate applicable on the balance sheet date. Non-
monetary items measured at fair value in a foreign currency
are translated using the exchange rate at the date fair value
is measured. If the currency exposure of a transaction is
designated as a part of a hedging relationship, realised effects
from the associated hedging instrument are classified on the
same line in the financial statements as the hedged transaction.
Currency gains (losses) related to operating activities, i.e.
receivables, payables, bank accounts for operating purposes, are
classified as a part of other gains (losses) related to operating
activities. Currency effects included in finance income and
expenses are related to loans and dividends.
Revenue recognition
Sale of goods
Revenue is recognised when it is earned
and the revenue can
be measured reliably. Revenue is measured at the fair value
of the consideration received or receivable, net of any taxes,
rebates and discounts. Expenses are recognised in the same
period as the related revenue. When products are sold with
warranties, the expected warranty amounts are recognised
as expenses at the time of the sale, and are subsequently
adjusted for any changes in estimates or actual outcome.
Revenue from sale of goods is recognised when the significant
risk and reward of the ownership of the goods have passed
to the buyer, according to the agreed delivery term for each
sale. Delivery terms are based on Incoterms® 2020 issued by
International Chamber of Commerce, and the main terms are:
"F" terms, where the buyer arranges and pays for the main
carriage. The risk and reward are passed to the buyer when the
goods are handed over to the carrier engaged by the buyer.
"C" terms, where Elkem ASA arranges and pays for the main
carriage but without assuming the risk of the main carriage.
The risk and reward are passed to the buyer when the goods
are handed over to the carrier engaged by the seller.
"D" terms, where Elkem ASA arranges and pays for the
carriage and retains the risk and reward of the goods until
delivery at agreed destination. The risk is transferred to
the buyer upon arrival at agreed destination, usually the
purchaser's warehouse.
Sale of power and revenue connected to energy recovery
Sale of electric power and revenue connected to energy
recovery, mainly heat supply in form of steam and hot water,
el-certificates and el-tax, are recognised as revenue based
on volume and price agreed with the customer. Revenue
connected to energy recovery is mainly based on long-term
contracts where the prices are regulated yearly based on
changes in CPI or government regulated prices, except for
the el-certificates where the price is based on the observable
market price at date of delivery.
Revenue from sale of services
Revenue from sale of services is recognised when the services
have been provided. Sale of services are mainly related to
management agreements with related parties, based on cost
plus a margin.
Other
Income from insurance settlements are recognised when it is
virtually certain that Elkem ASA will receive the compensation,
and is recognised as other operating income. Cash flows from
credit insurance contracts where such contracts are deemed
to be an integral part of the sale transactions are presented
net as reduction of impairment losses to assets / receivables,
included in other operating expenses. Interest income is
recognised on accrual basis. Dividends are recognised when
Elkem ASA's right to receive dividends is determined by the
shareholders' meeting. Group contributions are recognised in
the year the subsidiary accrues the amount payable.
Grants
Grants are recognised when it is reasonably assured that the
company will comply with the conditions attached to them
and the grants will be received. Grants relating to cost of
production of goods are recognised in profit or loss when the
produced goods are sold. Grants relating to property, plant
and equipment and intangible assets are deducted from the
carrying amount of the asset, and recognised in the income
statement over the lifetime of a depreciable asset by reducing
the depreciation charge. Grants related to expenses are
presented in the income statement as as a reduction of raw
materials and energy, employee benefit expenses or other
operating expense over the periods necessary to match them
with the cost they are intended to compensate.
Investment in subsidiaries, associates and jointly
controlled entities
Subsidiaries are companies in which Elkem ASA has
controlling interests, normally obtained when Elkem ASA owns
more than 50 per cent of the shares.
Associates are those entities in which Elkem ASA has
significant influence, but no control, over the financial and
operating policy decisions. Significant influence is presumed
to exist when Elkem ASA holds between 20 per cent and
50 per cent of the voting power of another entity. Jointly controlled
entities are those entities over whose activities Elkem ASA has
joint control, established by contractual agreement and requiring
unanimous consent for decisions about the relevant activities.
Interests in subsidiaries and associates are recognised at cost
less any write-down for impairment. Dividends and group
contributions are recognised as an income
from subsidiaries
and associates when Elkem ASA's right to receive dividends is
determined by the shareholders' meeting. If dividends or group
contributions exceed withheld profits after the acquisition
date, the excess amount represents repayment of invested
capital, and the distribution will be deducted from the recorded
value of the acquisition in the balance sheet.
Joint ventures
Elkem ASA's interests in jointly controlled entities, which
operates within Elkem ASA's main business areas (silicon
materials and foundry products), are accounted for using
the gross method, meaning that the company's share of the
income, expense, assets and liabilities are recognised. Elkem
ASA combines its share of the joint ventures' individual income
and expenses, assets and liabilities and cash flows on a line-
by-line basis with similar items in the financial statements.
Elkem ASA's interests in joint controlled entities, which do
not operate within Elkem ASA's main business areas, are
accounted for using the equity method. Under the equity
method, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the
investor’s share of the profit or loss and other comprehensive
income of the investee after the date of acquisition. In cases
where a joint venture's loss
increases the initially recognised
cost, the carrying amount is presented to reflect Elkem's
liability to finance the joint venture. Any liability to finance
a joint venture is presented either as part of provisions and
other liabilities, current, or netted against Elkem's receivables
towards the joint venture.
Impairment of investment in subsidiaries, associates and
jointly controlled entities
Impairment loss is recognised if the carrying amount exceeds
the recoverable amount and the impairment is not considered
to be temporary. The recoverable amount is the higher of fair
value less costs to sell, or its value in use. Value in use is the
present value of the future cash flow expected to be derived
from the asset or the cash generating unit to which it belongs,
after taking into account all other relevant information. The
impairment is reversed if the basis for the write-down is no
longer present.
Intangible assets
Intangible assets are presented at cost less subsequent
accumulated amortisation and subsequent accumulated
impairment losses. Intangible assets with a finite useful life
are amortised, using the straight-line method. The estimated
useful life and amortisation method are reviewed at the end of
each reporting period.
An intangible asset is derecognised on disposal, or when no
future economic benefits from its use are expected to be
derived. Gain or loss arising from derecognition of an intangible
asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, is recognised
in the income statement.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. An intangible asset arising
from an internal development project is recognised if the
company can demonstrate technical feasibility of completing
the intangible asset, has intention to complete it, ability to
use it, can demonstrate that it will generate probable future
economic benefits and the cost can be reliably measured.
Property, plant and equipment
Property, plant and equipment are presented at cost, less
accumulated depreciation and any accumulated impairment
losses. Construction in progress is carried at cost, less any
recognised impairment loss. Such assets are classified to
the appropriate class of property, plant and equipment when
completed and ready for its intended use. Significant parts of
an item of property, plant and equipment, which have different
useful life, are accounted for as separate items. Depreciation
commences when the assets are ready for their intended use.
Initial cost includes expenditures that are directly attributable to
the acquisition of the asset, cost of materials, direct labour, any
other costs directly attributable to bringing the assets to working
condition for their intended use and estimated dismantling or
removal charges, and capitalised borrowing costs.
Subsequent costs are included in the asset's carrying amount
or recognised as a separate asset, as appropriate, when future
benefits are probable and the cost can be measured reliably.
The carrying amount of the replaced part is derecognised.
Major periodic maintenance that is carried out less frequently
than every year, is capitalised and depreciated over the period
until the next periodic maintenance is performed. All other
repairs and maintenance are charged to the income statement
when incurred.
Depreciation is recognised using the straight-line method. The
estimated useful life, residual values and depreciation method
are reviewed at the end of each reporting period.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss from
disposal or retirement is determined as the difference between
the sales proceeds and the carrying amount of the asset, and is
recognised in the income statement.
Impairment of tangible and intangible assets
At the end of each reporting period, the carrying amounts
of tangible and intangible assets are reviewed to determine
whether there is any indication of impairment. If any such
indication exists, the recoverable amount of the individual
asset is estimated in order to determine the extent of the
impairment loss. If it is not possible to estimate the recoverable
amount of the individual asset, the recoverable amount of
the lowest possible cash generating unit to which the asset
belongs is estimated. The recoverable amount is the higher
of fair value less costs to sell, or its value in use. Value in use
is the present value of the future cash flows expected to be
derived from use of the cash generating unit, after taking into
account all other relevant information. If an impairment loss for
assets other than goodwill is recognised in a previous period,
Elkem ASA assesses whether there are indications that the
impairment may have decreased or no longer exists. If so, the
impairment loss is reversed, based on an updated estimate
of the recoverable amount, but not exceeding the carrying
amount that would have been determined had no impairment
loss been recognised for the asset. Any impairment of goodwill
is not reversed.
Leasing
Leases are classified as financial leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases and expenses are recognised as incurred.
Assets held under finance leases are initially recognised as
assets at the present value of the minimum lease payment.
The corresponding liability to the lessor is included in the
financial statements as a finance lease obligation. Each lease
payment is allocated between the liability and finance charges
so as to achieve a constant rate on the obligation.
Non-derivative financial assets and liabilities
A financial asset or a financial liability is recognised in the
balance sheet when the entity becomes party to a contract.
Assets to be acquired and liabilities to be incurred as a result
of a firm commitment to purchase or sell goods or services are
recognised at the time one of the parties has performed under
the agreement.
Financial assets are initially recognised in the balance sheet
at fair value plus any transaction costs directly attributable
to the acquisition or issue of the asset. Financial assets are
derecognised once the right to future cash flows has expired or
when all substantial risks and rewards related to control of the
assets are transferred to a third party.
Financial assets with a maturity exceeding one year are
classified as non-current financial assets. Short-term
investments that do not meet the definitions of a cash
equivalent, and financial assets with a maturity of less than
one year, are classified as current financial assets. Non-current
financial assets are recognised and subsequently measured at
cost less any impairment loss, if the impairment is assessed
not to be temporary.
Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in a
regulated market. They are recognised at amortised cost using
the effective interest method. Gains and losses are recognised
in the income statement when the loans and receivables are
derecognised or impaired, as well as through the amortisation
process. An impairment loss is recognised when the carrying
amount exceeds the estimated recoverable amount.
The category includes trade receivables, deposits, guarantees
and loans. These assets are classified in the balance sheet as
either other non-current assets or other current assets. Other
current assets are receivables with maturity less than one year.
Trade and other receivables are recognised at nominal value
less provisions for doubtful accounts.
Cash and cash equivalents
Cash and cash equivalents are held for the purpose of meeting
short-term fluctuations in liquidity, rather than for investment
purposes. Cash and cash equivalents comprise cash funds
and short-term deposits with a term of 3 months or less on
acquisition. Bank overdrafts are shown within current interest-
bearing liabilities in the balance sheet. Elkem ASA's deposits
and drawings within the group cash pool are netted by
offsetting deposits against withdrawals.
The subsidiaries' deposits and drawings are classified as
current assets / liabilities.
Derivative financial instruments
Currency derivatives are initially recognised at fair value on
the date the derivative contracts are entered into, and are
subsequently remeasured to their fair value at the end of the
reporting period. The resulting gain or loss is recognised in the
income statement immediately, unless when the derivative
is designated and is effective as a hedging instrument. If the
derivative is designated as a hedging instrument, timing of
recognition in the income statement depends on the nature of
the hedging relationship.
The part of commodity derivative contracts that do not qualify
as hedging instruments and are not held for trading are booked
at the lower of cost and fair value.
Embedded currency derivatives are separated from the host
contract and booked at fair value, as an independent derivative.
Non-financial commodity contracts, where the relevant
commodity is readily convertible to cash and where the
contracts are for own use, are recognized in the balance sheet
at cost and in the income statement on realisation. This applies
to power purchase contracts intended for use in the plants'
production processes.
Hedge accounting
Elkem ASA may designate certain derivatives as hedging
instruments for fair value hedges and cash flow hedges. At the
inception of the hedging relationship, the entity documents the
relationship between the hedging instrument and the hedged
item, along with its risk management objectives and its strategy
for undertaking various hedge transactions. Elkem ASA applies
IFRS 9 Financial Instruments for all hedge accounting.
Cash flow hedges
The effective portion of changes in the fair value of derivatives
that are designated and qualified as cash flow hedges, are
recognised in equity and accumulated under the heading of
retained earnings.
Gains / losses recognised in equity are
reclassified into the income statement in the same period(s)
as the forecasted transaction occurs. The unrealised gains
/ losses relating to the ineffective portion is recognised
immediately in the income statement.
When a hedging instrument expires or is sold, or when a
hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in
equity until the forecast transaction is ultimately recognised in
the income statement. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was reported
in equity is immediately transferred to the income statement.
Inventories
Inventories are recognised at the lowest of cost and net
realisable value. The cost of inventory comprises of the costs
incurred in bringing the goods to their current condition and
location, such as raw materials, energy for production, direct
labour, other direct costs and production overhead costs
based on normal capacity. Net realisable value represents the
estimated selling price for inventories less estimated costs of
completion and variable selling expenses.
Cost of goods sold is included in different lines in the income
statement based on nature; raw materials and energy for
production, employee benefits and other operating expenses,
for the remaining part.
The cost of CO2 allowances that Elkem needs to purchase in
addition to allowances received from the government (note 5),
are based on estimated production / emissions for the year.
The cost is allocated to cost of producing semi-finished and
finished goods proportionally over the year, as the number
of allocated allowances will not be revised unless there is a
substantial change in the production level at the plants.
Taxation
Income taxes
Current tax assets and liabilities are measured at the amount
expected to be recovered or paid to the tax authorities.
Current tax payable includes any adjustment to tax payable
in respect of previous years. Income tax is recognised in the
income statement except to the extent that it relates to items
recognised directly in equity. Income tax relating to items
recognised directly in equity is recognised in equity.
Uncertain tax positions are included when it is virtually certain
that the tax position will be sustained in a tax review by the
Norwegian Tax Office (NTO). Provisions are made at the
amount expected to be paid or according to the decision by the
NTO for cases where the NTO has reached a conclusion. The
provision for cases where the NTO has reached a conclusion
is reversed when it is virtually certain that the decision will be
overruled, which is normally when the tax position is settled in
favour of Elkem ASA and can no longer be appealed.
Deferred tax
Deferred tax assets and liabilities are calculated using the
liability method with full allocation for all temporary differences
between the tax base and the carrying amount of assets
and liabilities in the financial statements, including tax
losses carried forward. Deferred tax items are recognised in
correlation to the underlying transaction either in the income
statement or directly in equity.
Deferred tax assets are recognised in the balance sheet to
the extent it is more likely than not that the tax assets will be
utilised. The enacted tax rate at the end of the reporting period
and undiscounted amounts are used. Deferred tax assets
arising from tax losses are recognised when there is convincing
evidence of recoverability. Deferred tax assets and liabilities
items are offset if there is a legally enforceable right to offset
current tax liabilities and assets.
Employee benefits
Employee benefits consist of wages and salaries, bonuses,
holiday payments, share-based payments and other
considerations paid in exchange for services rendered from
employees, and are expensed as incurred together with any
social security tax applicable.
Employee retirement benefits
Defined contribution plans
Defined contribution plans comprise arrangements whereby
Elkem ASA makes monthly contributions to the employees'
pension plans, and where the future pensions are determined
by the amount of the contributions and the return on the
individual pension plan asset. Payments related to the
contribution plans are expensed as incurred, as a part of
employee benefit expenses.
Defined benefit plans
Defined benefit plans are recognised at present value of
future liabilities considered retained at the end of the reporting
period, calculated separately for each plan. Social security tax
related to pension payments is included in estimated pension
liability. Plan assets are measured at fair value and deducted in
calculating the net pension obligation. Actuarial assumptions
are used to measure both the obligation and the expense
and effects of changes in estimates due to financial and
actuarial assumptions that are recognised in equity. Service
costs are classified as part of employee benefit expenses,
and net interest on pension liabilities / assets are presented
as a part of finance expenses. Past service cost arising due to
amendments in benefit plans are expensed as incurred.
Multi-employer defined benefit plans where available
information is insufficient to be able to calculate each
participant's obligation, are accounted for as contribution plans.
Share-based payment
The fair value of options granted under the share-based
payment programme is recognised as an employee benefit
expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the fair
value of the options granted. The total expense is recognised
over the vesting period, which is the period over which all of
the specified vesting conditions are to be satisfied. At the
end of each period, Elkem ASA revises its estimates of the
number of options that are expected to vest based on the non-
market vesting and service conditions. Elkem ASA recognises
the impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
Social security contributions payable in connection with an
option grant are considered an integral part of the grant itself
and the charges are treated as cash-settled transactions.
Provisions
A provision is recognised when a present obligation exists and
it is probable that an outflow of resources is required to settle
the obligation. The amount recognised is the best estimate of
the consideration required to settle the obligation, taking into
account the risks and uncertainties surrounding the obligation,
known at the end of the reporting period. Provisions are
measured at present value, unless the time value is assessed to
be immaterial.
Contingent assets and liabilities
Contingent liabilities are liabilities that are not recognised
because they are possible obligations that have not yet been
confirmed, or they are present obligations where an outflow
of resources is not probable. Contingent assets are not
recognised. Any significant contingent assets and
liabilities
are disclosed in the notes.
Events after the reporting period
Events after the reporting period related to Elkem ASA's
financial position at the end of the reporting period, are
considered in the financial statements. Events after the
reporting period that have no effect on the company's
financial position at the end of the reporting period, but will
have effect on future financial position, are disclosed if the
future effect is material.
3. Accounting estimates
In the event of uncertainty the best estimate is applied,
based on the information available when the annual accounts
are prepared.
Taxes
When estimating uncertain tax positions, the most probable
amount, including interests and penalties, is used because in
most cases the outcome of the tax review is binary. Part of the
basis for recognising deferred tax assets is based on applying
the loss carried forward against future taxable income for
Elkem ASA, which requires use of estimates for calculating
future taxable income. See details on current uncertain tax
positions in note 13 Taxes.
Provisions and other liabilities
Elkem has several types of provisions due to its operations,
see note 24 Provisions and other liabilities. Such liabilities are
normally uncertain in timing and amount, and recognised
amounts are estimates based on available information at the
end of the reporting period. The estimated liability is based on
expected cash flows necessary to settle the obligation, adjusted
for any related risk and discounted by using the pre-tax interest
applicable for Elkem ASA. The estimates are updated when new
or updated information is available, or at a minimum at each
reporting date. The actual outcome will differ from the estimate.
The estimate uncertainty primarily relates to environmental
measures and site restoration related to closed production
sites and landfills. The potential outcome can vary within
a relatively wide range depending on the final scope of the
measures required and the cost of fulfilling the measures.
In these cases, the estimated provision is made based
on a combination of expert opinions and management’s
assessment of the known facts and circumstances.
Financial instruments
Elkem ASA holds financial instruments such as forward
currency contracts, interest rate swap and commodity
derivative contracts, which are booked at fair value. For
commodity contracts denominated in EUR, the embedded
EUR derivative is separated from the host contract and
booked at fair value. Hedge accounting is applied for these
contracts. Fair value for the contracts is based on observable
prices and assumptions derived from observable prices for
comparable instruments. For assumptions applied in fair value
measurement of the contracts see note 30 Financial assets
and liabilities in the consolidated financial statement. Non-
financial commodity contracts, where the relevant commodity
is readily convertible to cash and where the contracts are for
own use, are booked at the lower of cost and the estimated
obligation if it is an onerous contact.
Net book value of contracts booked at fair value as at
31 December 2024 is in total positive NOK 654 million (positive
NOK 1 087 million), see note 25 Financial instruments.
Impairment of investments in subsidiaries,
associates, jointly controlled entities and tangible
and intangible assets
The value-in-use calculations are based on estimated future
cash flows. The uncertainty in the cash flows relates to future
prices for both key input factors in the production and market
prices for the sale of Elkem's products. There is uncertainty
regarding these factors both for the next 12 months and for the
rest of the forecast period. There is also uncertainty in estimating
replacement investments and the growth rate in the terminal
value. The estimated future pre-tax cash flows are discounted
using a discount rate before tax. The estimation uncertainty in
the discount rate relates to the determination of the risk-free
rate, the market risk premium and the beta. Elkem uses a beta
per business segment and the beta is found using observable
betas of comparable companies for each business segment.
4. Operating income
Operating income by type
Amounts in NOK million
2024
2023 Restated
Revenue from sale of goods, Silicon Products
6 402
8 553
Revenue from sale of goods to related parties
1 846
1 749
Other operating revenue
149
161
Other operating revenue to related parties
484
571
Total revenue
8 881
11 034
Grants (note 5)
1
-
Insurance settlement
815
0
Other
12
35
Total other operating income
829
35
Total operating income
9 710
11 070
Operating income by geographic market
Amounts in NOK million
2024
2023 Restated
Nordic countries
United Kingdom
Germany
France
Italy
Poland
Spain
Netherlands
Other European countries
2 205
375
1 320
1 041
482
133
312
63
994
1 733
487
2 245
1 107
661
235
422
64
1 408
Europe
6 926
8 363
Africa
20
37
North America
South America
808
124
521
120
America
932
640
China
Japan
South Korea
Other Asian countries
213
403
276
917
101
482
137
1 294
Asia
1 809
2 013
The rest of the world
23
16
Total operating income
9 710
11 070
5. Grants
2024
Details of grants related to income
Other
operating
income
Raw
materials
and energy
Employee
benefit
expenses
Other
operating
expenses
Amortisation
and
depreciation
R&D grants from government
1
-
17
8
-
Other government grants
-
-
4
1
-
CO
compensation from the Norwegian Environment Agency
2
Grants related to investment projects
-
-
593
-
-
-
-
-
-
48
Total government grants
1
593
20
9
48
2023 Restated
Details of grants related to income
R&D grants from government
-
-
13
(3)
-
Other government grants
-
-
-
(0)
-
CO
compensation from the Norwegian Environment Agency
-
2
Grants related to investment projects
-
549
-
-
-
-
-
-
24
Total government grants
-
549
13
(4)
24
Details of grants recognised as a reduction of property, plant and equipment
(fixed assets) and intangible assets
2024
2023
Government grants, R&D
Grants from other than government, Norwegian NOx Fund
Total
-
-
-
1
28
29
Balances related to grants
31.12.2024
31.12.2023
Grants receivable related to fixed and intangible assets (note 20)
Grants receivable related to income (note 20)
Grants payable (note 24)
Grants, deferred income (note 24)
-
571
-
(0)
-
583
-
(1)
CO
2
allowances
CO2 emission allowances allocated from the government
are classified as grants, measured at nominal value (zero). If
actual emissions exceed the number of allocated allowances,
additional allowances must be purchased. The allocation of free
allowances for the period 2021-2025 has been decided by the
Norwegian government.
CO
2
compensation
Changes to the compensation scheme for 2024-2030 was
presented in February 2024 and included in an updated
regulation in December 2024. Elkem is still entitled to receive
compensation under the updated scheme. The main changes
from the previous compensation scheme is a cap on the total
cost of the government and that 40 per cent of the compensation
must be used for projects aiming to reduce CO2 emissions and/or
improving energy efficiency. Compliance with the condition can
be achieved over multiple years, but no later than 2034.
Elkem has recognised its estimated share of the total
compensation for 2024 based on the power consumption at the
Norwegian silicon product plants. Elkem has identified projects
that are expected to be compliant with the requirements to
qualify for the 40 per cent conditional compensation, and
has for this reason recognised full compensation in 2024.
Application and payment of compensation for the CO2
component of the cost of energy for production in 2024 will be
made during the first months of 2025. As the grant partially
compensates power costs, which are costs recognised as part
of the cost price of inventory during the production process, the
compensation is recognised in the income statement when the
produced goods are sold.
NO
x
Fund
The industry in Norway pays a fee for its emission of NOx
to a public foundation run by 15 industry and commerce
associations. The foundation is self-financed by the fees and the
purpose is to support projects that reduce NOx emissions from
the industry in Norway.
Other
The remaining grants are mainly related to R&D projects.
6. Raw materials and energy
Raw materials and energy
2024
2023 Restated
Raw materials expenses and energy for production
(4 259)
(5 681)
Change in inventories own production
121
(53)
Total raw materials and energy
(4 138)
(5 734)
7. Employee benefit expenses
2024
2023 Restated
Salaries, holiday pay and variable compensation
(1 234)
(1 152)
Employer's national insurance contributions / social security tax
(154)
(154)
Pension expenses (note 8)
(94)
(89)
Share-based payments
(1)
(6)
Other payments / benefits
(27)
(28)
Grants
20
13
Capitalised employee benefit expenses on PPE development
10
17
Total employee benefit expenses
(1 480)
(1 399)
Average number of full time equivalents
1 386
1 348
For information concerning remuneration to management and share-based payments, see "Report on salary and other
remuneration to leading personnel in Elkem ASA for the financial year 2024", note 11 Employee benefits and note 12 Share-based
payments in the consolidated financial statements.
8. Employee retirement benefits
Defined contribution plans
Pension for employees in Elkem ASA are mainly covered by
pension plans that are classified as contribution plans.
Elkem ASA's contributions to the employees' individual
pension plan assets constitute 5 per cent of base salary up
to 7.1 G and 15 per cent between 7.1 G and 12 G. G refers to
the national insurance scheme's basic amount in Norway,
amounting to NOK 124 028 as at 1 May 2024. Pension
on salary above 12 G is not supported by external service
providers and is therefore handled as a separate plan and
included under defined benefit plans.
Elkem ASA participates in the early retirement scheme AFP.
This is a multi-employer plan accounted for as a defined
contribution plan, in accordance with the
Ministry of Finance's conclusion. The participants in the
pension plan are jointly responsible for 2/3 of the plan's
pension obligation, the government is responsible for the
remaining part. The yearly pension premium in 2024 is 2.7 per
cent of the employee’s salary between 1 and 7.1 G, covering
this year’s pension payments and contribution to a security
fund for future pension obligations. The premium in per cent
of salary for 2025 will be 2.7 per cent. At 31 December 2024
there is 1 672 (1 544) participants below the age of 61 years in
the scheme.
Defined benefit plans
The defined benefit pension plans are unfunded and
comprise pension on salaries above 12 G, for which the
expense is 15 per cent of annual base salary that exceeds 12 G
plus interest on the individual calculated pension obligation,
and some individual retirement schemes. The individual
retirement schemes are closed.
Net interest is calculated based on pension liability at the
start of the period multiplied by the discount rate and is
presented as a part of finance expenses.
Remeasurements of the defined benefit plans are recognised
directly in equity.
The company's retirement schemes meet the minimum
requirement of the Norwegian Act of Mandatory
Occupational Pension.
Breakdown of pension expenses
Amounts in NOK million
2024
2023
Defined benefit plans
(4)
(4)
Defined contribution plans
(70)
(66)
Early retirement scheme (AFP)
(20)
(19)
Total pension expenses
(94)
(89)
Amounts in NOK million
31.12.2024
31.12.2023
Present value of pension obligations
(100)
(84)
Net value pension liabilities
(100)
(84)
Active participants in pension scheme for salary above 12G
49
47
Retired participants
40
42
Changes in actuarial gains / (losses) recognised in equity / deferred tax
(8)
(1)
Principal assumptions used for the actuarial valuation
2024
2023
Discount rate
1)
4.4%
4.8%
Annual regulation of pensions paid
2.3%
2.3%
1)
The discount rate is based on high quality corporate bonds reflecting the timing of the benefit payments.
9. Other operating expenses
Amounts in NOK million
2024
2023 Restated
Distribution expenses
(613)
(623)
Commission expense sales
(90)
(126)
Machinery, tools, fixtures and fittings
(491)
(459)
Repair, maintenance and other operating expenses
(337)
(301)
Other expenses (fees, transport, IT services, etc.)
(667)
(554)
Energy and fuel expenses
(107)
(99)
Leasing expenses (note 10)
(56)
(58)
Travel expenses
(37)
(37)
Loss on trade receivables
(2)
(2)
Grants
8
4
Miscellaneous manufacturing, administration and selling expenses
(527)
(567)
Total other operating expenses
(2 918)
(2 822)
During 2024, Elkem ASA expensed NOK 165 million (NOK 163 million) related to research and innovation activities, which
includes product and business development, technical customer support and improvement projects.
Grants received related to research and development amount to NOK 26 million (NOK 9 million) and are included in other
operating income.
Audit and other services
Amounts in NOK million
2024
2023
Audit fee
(8)
(8)
Other assurance services
(1)
(1)
Total fees to auditor
(9)
(8)
10. Operating lease
Future leasing obligations are mainly related to rental of office
buildings. One of the rental agreements contains an extension
option for 5+5 years. The future nominal obligation for the
extension option is approximately NOK 145 million.
Amounts in NOK million
2024
2023
Leasing expenses, current year (note 9)
(56)
(58)
Minimum future lease payments due in accordance with
non-cancellable operating lease contracts:
Within one year
(42)
(25)
Within two years
(30)
(27)
Within three years
(27)
(26)
Over three years
(234)
(255)
11. Other gains (losses) related to operating activites
Amounts in NOK million
2024
2023
Changes in fair value commodity contracts (note 25)
(1)
(1)
Embedded EUR derivatives power contracts, interest element (note 25)
(106)
(73)
Ineffectiveness on cash flow hedges (note 25)
(199)
357
Net foreign exchange gains (losses) - forward currency contracts (note 25)
(106)
(156)
Operating foreign exchange gains (losses)
(39)
306
Total other gains (losses) related to operating activities
(450)
433
12. Finance income and expenses
Foreign exchange gains (losses) in 2024 and 2023 are mainly related to the bank loans in EUR and loans
to related parties in EUR, USD and CNY.
Amounts in NOK million
2024
2023
Interest income
59
106
Interest income from related parties (note 27)
370
319
Other financial income
36
2
Total finance income
465
426
Net foreign exchange gains (losses)
78
(313)
Interest expenses
(744)
(646)
Interest expenses to related parties (note 27)
(253)
(200)
Interest on net pension liabilities
(3)
(3)
Other financial expenses
(2)
(2)
Total finance expenses
(1 003)
(851
Net finance income (expenses)
(460)
(738)
13. Taxes
Income tax recognised in income statement
Amounts in NOK million
2024
2023
Current tax expenses
(115)
(64)
Deferred tax
1 051
(44)
Other taxes
(8)
6
Total income tax (expenses) benefit
928
(102)
Reconciliation of income tax (expense) benefit
Amounts in NOK million
2024
2023
Profit before tax
Applicable tax rate Norway
Tax expense at applicable tax rate
Permanent differences
Tax effects of income from Norwegian controlled foreign companies (NOKUS)
Tax effects share of profit (loss) from joint ventures
Dividend within the Tax exemption method
Change in non-capitalised deferred tax assets
1)
Tax effects other permanent differences
Other effects
Previous year tax adjustment
Other current taxes
Total income tax (expenses) benefit
1 395
22 %
(307)
(23)
(18)
216
1 087
(4)
(15)
(8)
928
467
22%
(103)
(22)
(14)
45
-
(3)
(11)
6
(102)
Effective tax rate
-67 %
22%
1)
The change in
non-capitalised deferred tax assets primarily relates to the remeasurement of deferred tax asset originating from tax loss
carry forwards and limitations on interest rate deductions following the acquistion and subsequent merger of Elkem Testvirksomhet AS. See
note 30 Merger.
Pending tax issues with tax authorities
Elkem ASA has four debt waiver agreements with Elkem
Silicones France SAS. The gross taxable value of these
agreements as of 31 December 2024 is NOK 595 million (NOK
595 million), book value NOK 0. Elkem Silicones France SAS
has not repaid anything under this agreement in 2024 or 2023.
Elkem has previously assessed that the effect of repayment is
tax exempted.
The Norwegian Tax Office (NTO) decided in February 2021
to increase Elkem ASA's
taxable income for the fiscal years
2016-2019 by NOK 781 million, which increased the income tax
expenses by NOK 181 million in 2020. The amount was paid in
the first quarter of 2021. The reassessments relate to the debt
waiver agreements acquired by Elkem ASA in 2016 through
the cross-border parent-subsidiary merger with Bluestar
Silicones International Sarl. Elkem is of the opinion that the
reassessment is unfounded and has appealed. Based on legal
advice, Elkem’s assessment is that the defence against the
action will be successful. Elkem needs to be virtually certain
that the decision by the NTO will be overruled by the Tax
Appeal Board, in order for the decision not to be reflected in
the financial statements. Due to the complexity of the case,
Elkem is not currently able to reach a conclusion with that high
level of certainty and the paid amount concerning this case is
not reflected in the balance sheet.
Deferred tax assets and deferred tax liabilities
Amounts in NOK million
31.12.2024
31.12.2023
Derivatives
(143)
(239)
Property, plant, equipment and intangible assets
(33)
(291)
Pension liabilities
21
18
Trade receivable
3
3
Inventory
2
(8)
Provisions and other liabilities
79
3
Other differences
(3)
0
Tax loss carry forward
1 040
-
Not capitalised defferred tax on other items
(333)
-
Net deferred tax assets (liabilities)
633
(514)
Movement in net deferred tax assets (liabilities)
Amounts in NOK million
2024
2023
Opening balance
(514)
(741)
Charged to profit (loss)
1 051
(44)
Changes in deferred tax hedges charged to equity
(34)
271
Change in actuarial gains (losses) charged to equity
2
0
Effect of merger
128
-
Closing balance
633
(514)
14. Property, plant, and equipment
2024
Plant, machinery,
Buildings and
equipment and
Office and other
Construction
Amounts in NOK million
Land
other property
motor vehicles
equipment
in progress
Total
Opening balance
9
857
2 814
36
861
4 578
Additions
-
-
2
-
973
975
Disposals
(0)
-
-
-
-
(0)
Transferred from CiP
-
275
542
1
(819)
-
Merger
-
37
72
0
-
108
Impairment losses
-
(3)
(32)
-
(0)
(35)
Depreciation
-
(87)
(388)
(8)
-
(482)
Closing balance
9
1 080
3 010
30
1 015
5 144
Historical cost
9
2 310
7 114
113
1 015
10 561
Accumulated depreciation
-
(1 225)
(4 003)
(83)
-
(5 311)
Accumulated impairment losses
(0)
(5)
(101)
(0)
-
(106)
Closing balance
9
1 080
3 010
30
1 015
5 144
Estimated useful life
Indefinite
5-40 years
3-30 years
3-20 years
Depreciation plan
Straight-line
Straight-line
Straight-line
Impairment losses in 2024 are primarily related to impairment as a
result of lining damage at Rana of NOK 35 million.
2023
Amounts in NOK million
Land
Buildings and
other property
Plant, machinery,
equipment and
motor vehicles
Office and other
equipment
Construction
in progress
Total
Opening balance
10
805
2 683
25
575
4 098
Additions
-
0
4
0
929
934
Transferred from CiP
-
125
499
19
(643)
-
Reclassifications
(1)
1
(1)
-
-
-
Impairment losses
-
(0)
(20)
-
(0)
(20)
Depreciation
-
(73)
(352)
(8)
-
(433)
Closing balance
9
857
2 814
36
861
4 578
Historical cost
10
2 013
6 588
114
861
9 586
Accumulated depreciation
-
(1 151)
(3 688)
(78)
-
(4 917)
Accumulated impairment losses
(0)
(5)
(86)
(0)
-
(92)
Closing balance
9
857
2 814
36
861
4 578
Estimated useful life
Indefinite
5-40 years
3-30 years
3-20 years
Depreciation plan
Straight-line
Straight-line
Straight-line
Impairment losses in 2023 are primarily related to impairment as a
result of fire at Salten plant NOK 17 million.
15. Intangable assets and goodwill
2024
Amounts in NOK million
Goodwill
Software
Other
intangible
assets
Intangible
assets under
construction
Total
intangible
assets
Opening balance
Additions
Transferred from CiP
Merger
Impairment losses
Amortisation
Closing balance
12
-
-
-
-
(4)
8
43
3
3
1
(1)
(18)
31
12
-
11
-
-
(3)
20
33
2
(14)
-
-
-
22
88
5
-
1
(1)
(21)
73
Historical cost
Accumulated amortisation
Accumulated impairment losses
Closing balance
40
(32)
-
8
238
(206)
(1)
31
42
(23)
-
20
22
-
-
22
303
(229)
(1)
73
Estimated useful life
Amortisation plan
10 years
Straight-line
3-10 years
Straight-line
3-10 years
Straight-line
2023
Amounts in NOK million
Goodwill
Software
Other
intangible
assets
Intangible
assets under
construction
Total
intangible
assets
Opening balance
Additions
16
-
40
1
11
-
30
32
81
33
Disposals
Transferred from CiP
Amortisation
Closing balance
-
-
(4)
12
-
25
(23)
43
-
4
(3)
12
-
(29)
-
33
-
-
(25)
88
Historical cost
40
234
31
33
298
Accumulated amortisation
Closing balance
(28)
12
(191)
43
(19)
12
-
33
(210)
88
Estimated useful life
Amortisation plan
10 years
Straight-line
3-10 years
Straight-line
3-10 years
Straight-line
16. Investments in subsidiaries
I
Carrying
Carrying
Owner share
amount
amount
nvestment in subsidiaries of Elkem ASA
Vote rights (%)
Country
31.12.2024
31.12.2023
lkem Carbon AS
100%
Norway
123
122
lkem Chartering Holding AS
80%
Norway
1
1
lkem Digital Office AS
100%
Norway
8
8
lkem Distribution Center B.V.
100%
Netherlands
0
0
lkem Foundry (China) Co., Ltd.
100%
China
66
66
lkem GmbH
100%
Germany
1
1
lkem Iberia S.L.U
100%
Spain
0
0
lkem International AS
100%
Norway
5
5
lkem International Trade (Shanghai) Co. Ltd.
1)
11%
China
1
1
lkem Ísland ehf.
100%
Iceland
785
785
lkem Japan K.K
100%
Japan
0
0
lkem Korea Co., Ltd.
100%
Republic of Korea
19
19
lkem Madencilik Metalurji Sanayi Ve Ticaret Ltd. STI
1)
1%
Turkey
0
0
lkem Materials Processing (Tianjin) Co., Ltd.
100%
China
1
1
lkem Materials Processing Services BV
100%
Netherlands
1
1
lkem Metal Canada Inc.
100%
Canada
7
7
lkem Milling Services GmbH
100%
Germany
12
12
lkem Nordic A.S.
100%
Denmark
5
5
lkem Oilfield Chemicals FZCO Ltd.
51%
UAE
13
13
lkem Paraguay S.A.
1)
79%
Paraguay
498
498
lkem Processing Services S.A.
100%
Belgium
34
34
lkem S.à.r.l.
100%
France
-
-
lkem S.r.l.
100%
Italy
6
6
lkem Silicon Materials (Lanzhou) Co., Ltd.
100%
China
1 033
1 033
lkem Silicon Product Development AS
100%
Norway
8
8
lkem Siliconas España S.A.U
100%
Spain
125
125
lkem Silicones Brasil Ltda.
100%
Brazil
214
214
lkem Silicones Canada Corp.
100%
Canada
6
6
lkem Silicones Czech Republic, s.r.o.
100%
Czech Republic
2
2
lkem Silicones Finland OY
100%
Finland
5
5
lkem Silicones France SAS
100%
France
5 992
2 165
lkem Silicones Germany GmbH
100%
Germany
130
130
lkem Silicones Guangdong Co., Ltd.
100%
China
1 543
1 543
lkem Silicones Hong Kong Co., Ltd.
100%
Hong Kong
102
102
lkem Silicones Korea Co., Ltd.
100%
Republic of Korea
219
219
lkem Silicones México S. De R.L. De C.V.
100%
Mexico
5
5
lkem Silicones Poland sp. z o.o.
100%
Poland
4
4
lkem Silicones Scandinavia AS
100%
Norway
15
15
lkem Silicones Services S.à.r.l
100%
France
4
4
lkem Silicones Shanghai Co., Ltd.
100%
China
109
109
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
Carrying
Carrying
Owner share
amount
amount
Investment in subsidiaries of Elkem ASA
Vote rights (%)
Country
31.12.2024
31.12.2023
Elkem Silicones USA Corp.
USA
100%
261
261
Elkem Siliconi Italia S.r.l.
Italy
100%
24
24
Elkem Singapore Materials Pte. Ltd.
Singapore
100%
0
0
Elkem South Asia Private Limited
India
100%
34
34
Elkem (Thailand) Co., Ltd.
Thailand
100%
3
3
Elkem UK Holdings Ltd.
United Kingdom
100%
78
78
Elkem Uruguay S.A.
Uruguay
100%
33
33
Explotación de Rocas Industriales y Minerales S.A. (ERIMSA)
Spain
100%
80
80
Jiangxi Bluestar Xinghuo Silicones Co., Ltd.
China
100%
5 015
5 015
NEH LLC
USA
100%
98
98
Total
16 729
12 902
1)
Elkem ASA and a subsidiary own 100 per cent of Elkem International Trade (Shanghai) Co. Ltd., Elkem Madencilik Metalurji
Sanayi Ve Ticaret Ltd and Elkem Paraguay S.A.
On 14 May 2024 Elkem ASA acquired Elkem Testvirksomhet AS (previously REC Solar Norway AS) for USD 22 million (NOK 238
million). Elkem Testvirksomhet AS was subsequently merged with Elkem ASA. See note 30 Merger.
Impairment
For details see note 21 Impairment assessments and note 40
Assets held for sale and discontinued operations in the consolidated financial statement.
Income from investments in subsidiaries and associated companies
Amounts in NOK million
2024
2023
Dividends and group contributions from subsidiaries
1 748
181
Dividends from associates (note 20)
10
22
Total income from subsidiaries and associated companies
1 758
203
17. Investments in joint ventures
Owner share
Owner share
Company
Voting rights
Voting rights
Accounting
address
Country
2024
2023
method
Elkania DA
Hauge i Dalane
Norway
50%
50%
Gross method
Vianode AS
Oslo
Norway
-
40%
Equity
In February 2024 Elkem group sold its shares in Vianode AS, a synthetic graphite manufacturer for a total nominal amount of NOK 847 million to
AV Anodos AS, a company controlled by Altor Equity Partners AS from 4th quarter of 2024. NOK 10 million of the compensation was received at
closing, while NOK 315 million (second instalment) and NOK 522 million (third instalment) are tied to Vianode meeting two future milestones relating
to the building of a full-scale plant. At initial recognition in the first quarter of 2024
the value of the receivable was estimated to NOK 749 million
after the payment of the NOK 10 million. The sale resulted in a loss on disposal of NOK 68 million.
Main figures for the investments accounted for by equity
method. The figures show Elkem ASA's portion.
Main figures for Elkania DA accounted for using the gross
method, showing Elkem ASA's portion.
Total interests in joint ventures
Amounts in NOK million
2024
2023
Opening balance
843
639
Acquisition of shares and capital contribution
-
267
Sale of shares
(759)
-
Share of profit / (loss)
(15)
(63)
Share of other comprehensive income
0
(0)
Loss on sale of shares
(68)
-
Closing balance
0
843
Amounts in NOK million
31.12.2024
31.12.2023
Current assets
65
48
Non-current assets
25
28
Current liabilities
6
4
Non-current liabilities
0
9
Net assets
83
63
Total revenue
51
46
Total expenses
(33)
(28)
Financial items
1
(0)
Tax
-
-
Total profit / (loss) for the year
19
18
18. Inventories
Amounts in NOK million
31.12.2024
31.12.2023
Finished goods
1 107
1 029
Semi-finished goods
358
273
Raw materials
812
742
Operating materials and spare parts
408
377
Total inventories
2 685
2 421
Provisions for write down of inventories
38
81
19. Trade receivables
Amounts in NOK million
31.12.2024
31.12.2023
Trade receivables
215
364
Trade receivables, related parties
945
961
Provision for doubtful accounts
(13)
(13)
Total trade receivables
1 146
1 312
Elkem ASA and its subsidiary Elkem Carbon AS have entered
into a factoring agreement with a credit limit of EUR 100 million,
NOK 1 124 million, to sell on continuing basis trade receivables
that meet specific conditions. The agreement includes a
recourse clause for maximum 5 per cent of the face value of
the individual receivables sold. The non-recourse amount of
the receivable sold is derecognised and the recourse amount is
recognised as a current liability when the title to the receivables
is transferred. As of 31 December 2024, NOK 51 million
(NOK 61 million) is recognised as current liability (see note 24
Provisions and other liabilities). In addition, Elkem has entered
into factoring agreements without recourse for some specific
customers. Receivables that are sold without recourse are
derecognised in its entirety when the title is transferred, as there
is no remaining credit risk after transfer. As at 31 December
2024 NOK 778 million (NOK 999 million) of Elkem ASA’s trade
receivables is derecognised under these agreements.
Analysis of gross trade receivables by age,
presented based on the due date
Amounts in NOK million
31.12.2024
31.12.2023
Not due
129
267
1 - 30 days
55
70
31 - 60 days
5
12
61 - 90 days
7
6
More than 90 days
19
9
Total trade receivables
215
364
Trade receivables are generally secured by credit insurance
from a reputable credit insurance company. For customers
where credit insurance cannot be obtained, other methods
are generally used to secure the sales proceeds, such as
prepayment, letter of credit, documentary credit or guarantees.
In particular, when sales are made in countries with a high
political risk, or to remote customers, trade finance products
are used to reduce the credit risk.
Movements in allowance for expected credit losses
Amounts in NOK million
2024
2023
Opening balance
(13)
(11)
Losses during the year
2
(0)
New provisions
(4)
(4)
Reversed provisions
2
2
Closing balance
(13)
(13)
Analysis of allowance for expected credit losses,
presented based on related trade receivables
Amounts in NOK million
31.12.2024
31.12.2023
Not due
(1)
(1)
Overdue by:
1 - 30 days
(0)
(0)
31 - 60 days
(0)
(2)
61 - 90 days
(0)
(2)
More than 90 days
(12)
(8)
Total provisions for doubtful accounts
(13)
(13)
20. Other assets
Non-current
Current
Amounts in NOK million
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Shares in associates
1)
9
9
-
-
Other shares
17
9
-
-
Restricted deposits
47
32
-
-
Other deposits
0
1
-
-
Pension assets, defined benefits and contribution plans
-
-
3
2
Prepayments
-
1
67
56
Loans and deposits to related parties, interest-bearing (note 27)
3 148
6 236
533
122
Receivables from related parties, interest free (note 27)
-
-
300
-
Grants receivable (note 5)
-
-
571
583
Value added tax
-
-
151
69
Interest receivable from related parties (note 27)
-
-
83
62
Other receivables
765
9
2
4
Other assets
0
0
13
6
Total other assets
3 986
6 295
1 723
904
1)
Elkem ASA owns 25% of the shares in EPB Chartering AS and 20% of the shares in Future Materials AS. Elkem has received NOK 10 million
(NOK 22 million) in dividends during 2024, see note 16 Investment in subsidiaries.
In February 2024 Elkem group sold its shares in Vianode AS, a
synthetic graphite manufacturer for a total nominal amount of
NOK 847 million to AV Anodos AS, a company controlled by Altor
Equity Partner AS from 4th quarter of 2024. NOK 10 million of
the compensation was received at closing, while NOK 315 million
(second instalment) and NOK 522 million (third instalment) are
tied to Vianode meeting two future milestones relating to the
building of a full-scale plant. Interest shall accrue on the second
instalment if the due date is later than 30 June 2025 and for the
third instalment 31 December 2027. At initial recognition in the first
quarter of 2024 the present value of the receivable was estimated
to NOK 749 million after the payment of the NOK 10 million.
Vianode AS and AV Anodos AS are dependent on additional
funding around the end of the first quarter of 2025 to be able
to perform the investments necessary to meet the milestones
required for the settlement of Elkem’s receivable. If additional
funding is not obtained there is a risk that Elkem’s receivable will
be worth zero.
Based on the need for additional funding and recent market
developments Elkem considers that the value of the deferred
payments is uncertain. Elkem monitors the situation closely.
Based on information available at year end it has been assessed
that the fair value of the receivable is NOK 765 million.
21. Equity
2024
Share
Other paid
Total paid
Retained
Total
Amounts in NOK million
capital
in capital
in capital
earnings
equity
Opening balance
3 197
301
3 498
9 912
13 410
Profit for the year
-
-
-
2 323
2 323
Cash flow hedge
-
-
-
120
120
Share of items booked against equity from joint ventures
-
-
-
0
0
Remeasurement pension obligations gains (losses)
-
-
-
(7)
(7)
Currency translation differences
-
-
-
0
0
Share-based payments
-
2
2
-
2
Net movement treasury shares
-
1
1
4
5
Dividends
-
-
-
(190)
(190)
Closing balance
3 197
304
3 502
12 163
15 665
Share capital
The share capital of Elkem ASA is NOK 3 197 206 890 divided
on 639 441 378 shares of NOK 5 nominal value. Of this amount
Elkem ASA held 5 271 900 treasury shares as at 31 December
2024. Each share has one vote.
Other paid-in capital
Other paid-in capital consists of par value of Elkem ASA's
treasury shares negative NOK 26 million (negative NOK 28
million) and other capital contributions from owners (e.g. share-
based payments).
Other retained earnings and dividends
Other retained earnings consist of all other net gains and losses
not recognised elsewhere. For the year 2024 the board of
directors has proposed to pay NOK 0.30 per share in dividends.
2023
Amounts in NOK million
Share
capital
Other paid
in capital
Total paid
in capital
Retained
earnings
Total
equity
Opening balance
3 197
296
3 493
10 515
14 009
Profit for the year
-
-
-
365
365
Cash flow hedge
-
-
-
(960)
(960)
Share of items booked against equity from joint ventures
-
-
-
(0)
(0)
Remeasurement pension obligations gains (losses)
-
-
-
(1)
(1)
Currency translation differences
-
-
-
0
0
Share-based payments
-
8
8
-
8
Net movement treasury shares
-
(3)
(3)
(5)
(8)
Dividends
-
-
-
(2)
(2)
Closing balance
3 197
301
3 498
9 912
13 410
22. Shareholders
The table shows shareholders holding 1 per cent or more of the
total 639 441 378 shares outstanding as of 31 December 2024,
according to information in the Norwegian "securities registry
system" (Verdipapirsentralen).
1)
Nominee accounts
Information on shares held by key management personnel is
included in "Report on salary and other remuneration to leading
personnel in Elkem ASA for the financial year 2024" and note 11
Employee benefits in the consolidated financial statement.
Name
Number of Shares
Ownership
Bluestar Elkem International Co., Ltd. S.A.
338 338 536
52.9%
Folketrygdfondet
22 072 685
3.5%
Must Invest AS
19 307 862
3.0%
Pareto Aksje Norge Verdipapirfond
16 853 626
2.6%
Verdipapirfondet Storebrand Norge
9 142 222
1.4%
DNB Asset Management
7 620 389
1.2%
State Street Bank and Trust Comp
1)
7 110 889
1.1%
JPMorgan Chase Bank
1)
6 428 636
1.0%
Total shareholders with ownership greater than 1%
426 874 845
66.8%
23. Interest-bearing assets and liabilities
Non-current
Current
Amounts in NOK million
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Interest-bearing liabilities
Deposits from related parties (note 27)
Loan agreements, bank
Loan agreements, bonds
Loan agreements, other than bank
Accrued interest, related parties
Accrued interest
Total interest-bearing liabilities
260
5 856
3 500
2 123
-
-
11 738
251
5 573
2 750
2 529
-
-
11 103
4 660
-
706
295
-
23
5 684
5 382
0
646
405
-
26
6 459
Interest-bearing assets
Cash and cash equivalents
Restricted deposits
Loans to related parties (note 27)
Deposits to related parties (note 27)
Loans to external parties
Interest receivable from related parties (note 27)
Interest receivable from external parties
Total interest-bearing assets
-
47
3 148
-
-
-
-
3 195
-
32
6 236
-
9
-
-
6 276
2 730
0
-
533
-
83
-
3 347
3 327
4
-
122
-
62
-
3 515
Interest-bearing liabilities by currency
31.12.2024
31.12.2023
Currency
Currency
Amounts in NOK million
amount
NOK
amount
NOK
EUR
780
9 199
905
10 170
USD
149
1 688
157
1 597
NOK
6 183
6 183
5 274
5 274
Other currencies
-
352
-
520
Total interest-bearing liabilities
17 422
17 561
The table below analyses the financial liabilities into relevant
maturity groupings based on the remaining period at the date of
the statement of financial position to the contractual maturity
date. The amounts disclosed in the table are discounted.
Maturity of interest-bearing liabilities
31 December 2024
Amounts in NOK million
2025
2026
2027
2028
2029
2030 and later
Total
Loans from related parties
Loan agreements, bank
Loan agreements, bonds
Loan agreements, other than bank
Accrued interest
4 660
-
706
295
23
260
-
500
1 710
-
-
5 896
900
-
-
-
-
1 000
413
-
-
-
800
-
-
-
-
300
-
-
4 920
5 896
4 206
2 417
23
Total
5 684
2 470
6 796
1 413
800
300
17 462
Prepaid loan fees
Total interest-bearing liabilities
(41)
17 422
Maturity of interest-bearing liabilities
31 December 2023
Amounts in NOK million
2024
2025
2026
2027
2028
2028 and later
Total
Deposits from related parties
Loan agreements, bank
Loan agreements, bonds
Loan agreements, other than bank
Accrued interest
5 382
0
646
405
26
251
-
750
281
-
-
-
500
1 854
-
-
5 619
500
-
-
-
-
1 000
393
-
-
5 632
-
5 619
-
3 396
-
2 933
-
26
Total
6 459
1 282
2 354
6 119
1 393
-
17 607
Prepaid loan fees
Total interest-bearing liabilities
(45)
17 561
Loan agreements
The main non-current loan agreements as of 31 December
2024 are granted to Elkem ASA for financing of the group; a
term loan with bank institutions, bond loans and series of loans
in Schuldshein market (other than bank).
Loan agreements, bank
The term loan of EUR 500 million (EUR 500 million) is
unsecured, but there are related covenants. As of 31 December
2024 the interest rate is 4.02 per cent. The term loan is linked
to two sustainability KPIs,
KPI 1 Lost Time Injury Rate and KPI
2 Product Group Carbon Footprint. The margin of the RCF and
term loan shall be reduced by 0.025 per cent if both KPIs are
met, and increased by 0.025 per cent if none of the KPIs are
met. If one KPI is met there shall be no change to the margin.
Based on inital testing of the KPI's there will be no change to
the margin in 2025.
Loan agreements, bonds
The serie of issued bond loans listed on Oslo Børs is in the size
of NOK 3 500 million (NOK 2 750 million), whereof NOK 3 150
million (NOK 2 400 million) is registered as bonds with floating
rate and NOK 350 million (NOK 350 million) is registered as a
bond with fixed rate. The bond loans are unsecured and there
is no related covenants. As of 31 December 2024 the interest
rates are in the range of 4.88 per cent to 6.43 per cent.
Elkem has entered into an interest swap agrement to swap the
NOK 350 million bond from fixed to floating interest rate. As at
31 December 2024 the fair value of this swap is NOK 1 million
(NOK 12 million).
Elkem has entered into an interest rate swap agreement to
swap the NOK 800 million bond loan from floating interest
rates to fixed interest rates of 4.88 per cent. As at 31 December
2024 the fair value of this swap is NOK 21 million (entered into
in 2024). A swap agreement has also been entered into to
swap the NOK 400 million bond loan to a EUR 34 million loan
with fixed interest rates of 3.72 per cent. As at 31 December
2024 the fair value of this swap is negative NOK 2 million
(entered into in 2024).
The bond loans are listed on Oslo Børs from January 2024,
as of 31 December 2024 the fair value of the bond loans are
postive NOK 2 million (negative NOK 12 million).
Loan agreements, other than bank
The series of loans issued in the Schuldschein market is of
the size of EUR 180 million (EUR 210 million) with floating rate
and EUR 0 million (EUR 15 million) with a fixed rate. The loan
series is unsecured, but there are related covenants. As of 31
December 2024 the interest rates are in the range of 4.1 per
cent to 4.35 per cent.
Credit facilities
Elkem ASA is granted credit facilities of EUR 500 million
(NOK 5 896 million) and NOK 250 million, a total of NOK
6 455 million in granted credit facilities. Both facilities remained
undrawn at 31 December 2024 and 31 December 2023.
Covenants
The credit facilities and the bank financing in Elkem ASA
contain financial covenants based on the consolidated
financial statements of Elkem group. In addition, parts of the
loans from external parties, other than bank, contain financial
covenants. The financial covenants are calculated monthly,
based on last 12 months figures, and reported quarterly. Elkem
initiated a waiver process in 2024, and got consent from the
lenders’ to reduce the Interest Cover covenant from 4.0x to
3.0x for each and every quarter of the 2024 financial year. In
2025 the Interest Cover covenant will return to be 4.0x.
Covenants Elkem group
Amounts in NOK million
31.12.2024
Loan covenant
31.12.2023
Loan covenant
Total equity
Total assets
Equity ratio
26 020
53 432
49%
> 30%
24 458
50 500
48%
> 30%
EBITDA excluding income/loss from associated
entities and joint ventures
Net interest payable
Interest cover ratio
4 150
797
5.20
> 3.00
3 726
597
6.24
> 4.00
24. Provisions and other liabilities
Non-current
Current
Amounts in NOK million
31.12.2024
31.12.2023
31.12.2024
31.12.2023
mployee withholding taxes, social security
E
tax and other public taxes
-
-
97
94
alue added tax
V
-
-
13
39
repayments from customers
P
-
-
11
25
ayables to related parties (note 27)
P
-
-
90
44
rovisions
P
48
47
18
6
bligation to finance subsidiary
O
37
37
-
-
ccrued expenses
A
-
-
250
285
mployee benefits
E
-
-
231
214
eferred income, government grants
D
-
-
0
1
ecourse liability
R
factoring agreement (note 19)
-
-
51
61
ettlement liability
S
factoring agreements
-
-
31
32
ther liabilities
O
-
-
-
2
otal provisions and other liabilities
T
85
84
792
803
Movements in provision
2024
Amounts in NOK million
Site restoration
Environmental
measures
Total provisions
Opening balance
Additional provisions recognised
Used during the year
Closing balance
34
8
-
41
20
11
(5)
25
53
18
(5)
67
Hereof non-current
Hereof current
Closing balance
35
6
41
13
12
25
48
18
67
Site restoration
The site restoration provisions are related to the necessary site
remediation work that Elkem ASA will have to undertake in
respect of its quartz mines.
Environmental measures
Elkem ASA has nationwide operations representing potential
exposure towards environmental consequences. Elkem ASA
has established clear procedures to minimise environmental
emissions, well within public emission limits. The estimated
provisions relate to estimated clean-up costs in connection
with closed landfills.
25. Financial instruments
Currency exchange contracts
Elkem ASA enters into forward currency contracts to mitigate
Elkem group's foreign currency exposure. Hedge accounting
is not applied, the contracts are classified as held for trading
and booked at fair value in the income statement. Elkem
ASA's Treasury department also offers internal currency
hedging for major purchase / sale-contracts entered into by
the subsidiaries. Such contracts cannot be designated in
a hedging relationship, hence the changes in fair value are
recognised in the income statement.
Elkem has embedded EUR derivatives in own use power
contracts where the spot element is designated as hedging
instruments in a cash flow hedge to hedge currency
fluctuations in highly probable future sales, from 1 January
2016. Unrealised effects are from that date booked against
equity and later reclassified to revenue when realised. Realised
hedging effects from such derivatives in 2024 constitute a loss
of NOK 135 million (loss of NOK 122 million).
Details of currency exchange contracts
31 December 2024
Purchase
Purchase
Sale
Sale
Type of
Currency
Fair
Notional
currency
ccy million
currency
ccy million
instrument
rate
Due
value
1)
value
2)
NOK
1 864
EUR
159
Fwd
11.762
2025
(20)
1 869
NOK
201
JPY
1 954
Fwd
0.103
2025
57
141
NOK
33
JPY
312
Fwd
0.105
2026
9
23
NOK
375
USD
35
Fwd
10.745
2025
(21)
396
NOK
818
EUR
76
Embedded
3)
10.794
2025
(89)
894
NOK
5 984
EUR
518
Embedded
3)
11.553
2025-2035
(483)
6 108
Total fair value
(547)
Details of currency exchange contracts
31 December 2023
Purchase
currency
Purchase
ccy million
Sale
currency
Sale
ccy million
Type of
instrument
Currency
rate
Due
Fair
value
1)
Notional
value
2)
CAD
NOK
NOK
NOK
NOK
NOK
NOK
EUR
Total fair value
9
1 897
193
234
167
807
5 101
1
USD
EUR
JPY
JPY
USD
EUR
EUR
USD
7
164
1 976
2 266
16
76
458
1
Fwd
Fwd
Fwd
Fwd
Fwd
Embedded
3)
Embedded
3)
4)
Fwd
1.345
11.541
0.098
0.103
10.167
10.649
11.137
0.917
2024
2024
2024
2024-2026
2024
2024
2024-2034
2024
1
43
48
61
0
(54)
(235)
(0)
(136)
68
1 848
142
163
167
851
5 148
1
1)
The currency exchange contracts are measured at fair value based on the observed forward exchange rate for contracts with a
corresponding maturity term, on the balance sheet date.
2)
Notional value of underlying asset, based on currency rates at 31 December.
3)
Embedded EUR derivatives in own use power contracts.
Power contracts recognised at fair value
Elkem ASA enters into power derivative contracts to meet its
need for power at the plants. These contracts are designated
as hedging instruments in a cash flow hedge to mitigate price
fluctuations in highly probable future need for power. The fair
value of these contracts is based on observable nominal values
for similar contracts, adjusted for interest effects.
The effective part of change in fair value of contracts
designated in hedging relationships is booked temporarily
in equity, and recycled to the income statement when the
hedged items are realised. Realised effects from the hedging
of future need for power are a gain of NOK 13 million (gain of
NOK 112 million), which is included in raw materials and energy
for production. The ineffective part of change in fair value of
contracts designated in hedging relationships is recognised as
a part of other gains (losses) related to operating activities, see
note 11 Other gains (losses) related to operating activities.
In addition, Elkem ASA holds power contracts, which are
entered into and continue to be held for the purpose of the
receipt of power. These contracts are booked at the lower of
cost and fair value. As at 31 December 2024 the fair value of
these contracts is higher than cost (zero).
Interest rate swap
Elkem should primarily pursue a floating interest rate policy for
long-term financing. Interest rate hedging will be considered
in specific cases, e.g. when there is a need to protect
financial covenants in loan agreements. In 2024, Elkem
issued financing with a floating interest rate and entered into
interest rate swaps to change from floating to fixed interest
rates. In 2023 Elkem issued financing with fixed interest rate
and entered into an interest rate swap from fixed to floating
interest rate. The effective part of changes in fair value of the
financial
instruments is booked against OCI, and recycled to
profit or loss as a regulatory interest expense when realised.
Details of fair value of power derivative contracts and
interest rate swap 31 December 2024
Amounts in NOK million
Volume
Due
Fair value
Notional amount
1)
Commodity contracts Power
501 GWh
2025
196
177
Commodity contracts Power
4478 GWh
2026-2035
986
1 950
Interest rate swap
1550 MNOK
2025-2029
19
301
Total fair value
1 201
Details of fair value of power derivative contracts and
interest rate swap 31 December 2023
Amounts in NOK million
Volume
Due
Fair value
Notional amount
1)
Commodity contract "30-øringen"
501 GWh
2024
303
172
Commodity contract "30-øringen"
3 006 GWh
2025-2030
907
1 105
Interest rate swap
350 MNOK
2024-2028
12
94
Total fair value
1 223
1)
Notional amount based on currency rates at 31 December.
26. Financial risk
Financial risk management in Elkem ASA is described in
note 32 Financial risk, and capital management policies are
described in note 33 Capital management, in the consolidated
financial statement. Elkem ASA's use of derivative instruments
are described in note 30 Financial assets and libilities and note
31 Hedging. See note 26 Interest-bearing assets and liabilities
for details of credit facilities and maturity profile of interest-
bearing liabilities. The exposure to credit risk is represented by
the carrying amount of each class of financial assets, including
derivative financial instruments, recorded in the balance sheet.
27. Related parties
Elkem ASA is owned 52.9 per cent by Bluestar Elkem
International Co. Ltd S.A., Luxembourg, which is under control
of Sinochem Holdings Co., Ltd (Sinochem), a company
registered and domiciled in China. The structure of the Elkem
group is disclosed in notes to the consolidated financial
statement; in note 4 Composition of the group and note 5
Equity accounted investments and joint operations. Details of
transactions between Elkem ASA and the parent company,
subsidiaries, joint ventures and associates, and related parties
within Sinochem are disclosed below.
2024
Sale of
Purchase
Sale of
Purchase
Interest
Interest
Amounts in NOK million
goods
of goods
services
of services
income
expenses
Bluestar Elkem International Co., Ltd. S.A.
-
-
-
-
-
-
Related parties within Sinochem
-
-
-
-
-
-
Subsidiaries
1 846
(1 005)
477
(518)
370
(253)
Joint ventures and associates
-
-
7
(119)
-
-
Total related parties transactions
1 846
(1 005)
484
(637)
370
(253)
2023
Sale of
Purchase
Sale of
Purchase
Interest
Interest
Amounts in NOK million
goods
of goods
services
of services
income
expenses
Bluestar Elkem International Co., Ltd. S.A.
-
-
-
-
-
-
Related parties within Sinochem
-
-
-
(0)
-
-
Subsidiaries
1 749
(1 325)
519
(571)
319
(200)
Joint ventures and associates
-
-
52
(145)
-
-
Total related parties transactions
1 749
(1 325)
571
(716)
319
(200)
Balances with related parties
Non-current
Current
Amounts in NOK million
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Trade receivables, subsidiaries
-
-
945
957
Trade receivables, joint ventures and associates
-
-
-
4
Loans to subsidiaries, interest-bearing
3 148
6 236
-
-
Deposits from subsidiaries, interest-bearing
-
-
533
122
Interest receivable from subsidiaries
-
-
83
62
Receivables from subsidiaries, interest-free
-
-
300
-
Deposits from subsidiaries, interest-bearing
(260)
(251)
(4 660)
(5 382)
Other payables to subsidiaries, interest free
-
-
(90)
(44)
Trade payables, Bluestar Elkem Investment Co. Ltd. S.A
-
-
-
(5)
Trade payables, related parties within Sinochem
-
-
-
(0)
Trade payables, subsidiaries
-
-
(297)
(422)
Trade payables, joint ventures and associates
-
-
(8)
(12)
Transactions with key management personnel
Information on transactions with key management personnel
and /or their related parties, is included in ""Report on salary
and other remuneration to leading personnel in Elkem ASA for
the financial year 2024"" and note 11 Employee benefits in the
consolidated financial statement.
Commitment with related parties
Elkem has no commitments to related parties.
Information about transactions between related
parties
Elkem follows internationally accepted principles for
transactions between related parties. In general, Elkem seeks
to use transaction based methods (comparable uncontrolled
price, cost plus and resale price method) in order to set the
price for the transaction.
The majority of the transactions between related parties relate
to products involving:
→
Raw materials (quartz) from quarries to plants
→
Metallurgical silicon to Silicones
→
Electrode paste from Carbon plants to FeSi and Silicon
plants
→
Surplus raw materials between plants
→
Ad-hoc supplies of finished goods to Elkem’s internal
distributors
→
Purchase of short and deep-sea transport
→
Sale of management and technology services
→
Rent of plant facilities and related services
→
Purchase of management services for the Silicones
segment
Elkem’s set-up for sales is based on an agent structure, rather
than a distribution network. Elkem also owns companies
sourcing key raw materials and other supplies from selected
suppliers world-wide. In both activities above, the transaction
between the related parties is a delivered service, either sales-
service or sourcing-service. Additionally, Elkem has internal
help chains that are established to serve several operating
units more efficiently.
Elkem ASA has both non-current receivables and non-current
payables to related parties. The intra-group loans are normally
interest-bearing and interest is calculated based on interbank
rates (for example NIBOR) and a margin.
28. Pledge of assets and guarantees
Guarantee commitments
Amounts in NOK million
31.12.2024
31.12.2023
Guarantees given on behalf of the operating plants regarding environmental obligations
40
40
Guarantees given on behalf of subsidiaries regarding financing
888
738
As part of the factoring agreement parts of Elkem's trade
receivables are pledged (see note 19 Trade receivables). The
book value of the pledged assets and liabilities is NOK 51 million
(NOK 61 million).
29. Supplemental information to the cash flow statement
The following table gives a detailed overview of changes in
working capital in the cash flow statement. Working capital is
defined as trade receivables, inventories, other current assets,
accounts payable, current employee benefit obligations and
other current liabilities. Other current assets are defined as
other current assets less current receivables to related parties,
current interest-bearing receivables, tax receivables, grants
receivable and accrued interest income. Accounts payable
are defined as trade payables less trade payables related to
purchase of non-current assets. Other current liabilities are
defined as provisions and other current liabilities less current
provisions, contingent considerations, contract obligations and
liabilities to related parties.
Changes in working capital
Amounts in NOK million
2024
2023
Changes in trade receivables
166
269
Changes in inventories
(263)
331
Changes in other current assets
(99)
(4)
Changes in accounts payable
(104)
(53)
Changes in other current liabilities including employee benefit obligations
(69)
(69)
Total
(369)
474
30. Merger
Elkem ASA merged with its subsidiary Elkem Testvirksomhet
AS in 2024. Elkem Testvirksomhet AS was acquired on 14 May
and subsequently merged with Elkem ASA.
Elkem Testvirksomhet AS (former REC Solar Norway AS) controls
industrial areas and production facilities at Fiskaa in Kristiansand
and at Herøya. The merger is done with group continuity.
Nets assets
Note
Total
Property, plant and equipment
14
108
Intangible assets
15
1
Deferred tax assets
13
128
Investments in subsidiaries
(238)
Other non-current assets
1
Total non-current assets
1
Inventories
3
Trade receivables
0
Other current assets
0
Cash and cash equivalents
0
Total currents assets
4
Pension liabilities
(0)
Total non-current liabilities
(0)
Trade payables
(1)
Other current liabilities
(3)
Total current liabilities
(4)
Net assets / equity contributed in the merger
21
0
31. Change in presentation
Elkem has with effect from 1 January 2024 changed
presentation of the items mentioned below;
→
Presentation of grants related to income is changed
from other operating income to net presentation where
the grants are deducted from the expenses for which the
grants have compensated in the income statement.
→
Presentation of capitalised salary of own developed fixed and
intangible assets is changed from other operating expenses
to employee benefit expenses in the income statement.
→
Presentation of changes in inventories of finished goods
and work in progress for the activity cost part is changed
from other operating expenses to raw materials and
energy for production in the income statement.
The impact on comparable figures in the statement of profit or
loss are shown in the tables below.
2024 before
Impact
Impact
Impact changes
2024 after
Income statement
change
grants
capitalised salary
in inventories
change
Other operating income
1 451
622
-
-
829
Raw materials and energy
(4 697)
(593)
-
34
(4 138)
Employee benefit expenses
(1 491)
(20)
10
-
(1 480)
Other operating expenses
(2 971)
(9)
(10)
(34)
(2 918)
Operating profit (loss)
181
-
-
-
181
Financial
statement
Impact
Impact
Impact changes
Income statement
2023
grants
capitalised salary
in inventories
2023 restated
Other operating income
593
(558)
-
-
35
Raw materials and energy
(6 340)
549
-
57
(5 734)
Employee benefit expenses
(1 429)
13
17
-
(1 399)
Other operating expenses
(2 745)
(3)
(17)
(57)
(2 822)
Operating profit (loss)
1 065
-
-
-
1 065
32. Events after the reporting period
No events have taken place after the reporting period that
would have had a material impact on the financial statements
or any assessments carried out.
Declaration by the board of directors
We confirm that, to the best of our knowledge, the financial
statements for the period from 1 January to 31 December 2024
have been prepared in accordance with applicable standards
and give a true and fair view of the group and the company’s
assets, liabilities, financial position and results of operations.
We confirm that the board of directors' report provides a
true and fair view of the development and performance of
the business and the position of the group and the company,
together with a description of the key risks and uncertainty
factors that they are facing.
The board of directors of Elkem ASA
Oslo, 12 March 2025
Bo Li
Chair
Dag Jakob Opedal
Vice chair
Olivier Tillette de
Clermont-Tonnerre
Board member
Wei Yao
Board member
Dachuan Dong
Board member
Grace Tang
Board member
Nathalie Brunelle
Board member
Marianne Elisabeth Johnsen
Board member
Terje Andre Hanssen
Board member
Marianne Færøyvik
Board member
Thomas Eggan
Board member
Helge Aasen,
CEO
KPMG AS
Sørkedalsveien 6
P.O. Box 7000 Majorstuen
N
-0306 Oslo
Telephone +47 45 40 40 63
Internet
www.kpmg.no
Enterprise 935 174
627 MVA
To the General Meeting of Elkem ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Elkem ASA, which comprise:
•
the financial statements of the parent company Elkem ASA (the Company), which comprise
the balance sheet as at 31 December 2024, the income statement and cash flow statement for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and
•
the consolidated financial statements of Elkem ASA and its subsidiaries (the Group), which
comprise the consolidated statement of financial position as at 31 December 2024, the
consolidated statement of profit or loss, the consolidated statement of comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial statements, including material accounting
policy information.
In our opinion
•
the financial statements comply with applicable statutory requirements,
•
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2024, and its financial performance and its cash flows for the year then ended in
accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway, and
•
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2024, and its financial performance and its cash flows for the year
then ended in accordance with IFRS Accounting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities for the
Audit of the Financial Statements
section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (includin
g
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
2
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of Elkem ASA for 9 years from the election by the general meeting of the
shareholders on 20 April 2016 for the accounting year 2016.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Impairment assessment of the carrying amount of Goodwill and Property, plant and equipment
allocated to the Silicones division.
Refer to Note 3
Accounting estimates
and Note 40
Assets held for sale and discontinued operations
The key audit matter
How the matter was addressed in our audit
Markets conditions for the Silicones division
continued to be challenging in 2024, with low
sales prices and decreased global demand,
resulting in weak financial performance for the
division.
Following a strategic review of the Silicones
division, management has assessed that the
criteria for reclassifying the silicones segment as
held for sale and discontinued operations
according to IFRS 5 are met. Further,
management has identified impairment
indicators for goodwill allocated to the Silicones
division, as well as the carrying amount for the
following CGUs within the Silicones division:
-
Elkem Silicones Xinghou/Yongdeng with
a total carrying amount of
NOK 10 834 million,
-
Elkem Guangdong (Polysil) with a total
carrying amount of NOK 649 million,
-
Elkem Silicones excluding
Xinghou/Yongdeng, Elkem Guangdong
(Polysil), and Elkem Silicones Korea
with a total carrying amount of
NOK 10 097 million.
The Group’s carrying amount of Goodwill as of
31 December 2024 is NOK 1 085 million, where
NOK 756 million is allocated to the Silicones
segment.
The annual impairment test of Goodwill for the
Silicones division and the impairment test for the
three CGUs of Property, plant and equipment
Our audit procedures in this area included:
•
Assessing management’s evaluation for
whether the criteria are met for
reclassifying the Silicones segment as
held for sale and discontinued
operations according to IFRS 5,
.
•
Assessing management’s process and
results for identification and
classification of CGUs to assess
whether they were appropriate and in
accordance with relevant accounting
standards,
•
Evaluating management’s assessment
of impairment indicators,
•
Performing retrospective reviews of the
accuracy of management’s estimate in
terms of timing of cash flows and other
assumptions where historical data is
available,
•
Evaluating the sensitivity of in the
estimate based on reasonable changes
to key assumptions,
•
Evaluating and challenging the
forecasted cash flows including the
timing of future cash flows applied in the
models with reference to historical
accuracy and approved business plans,
•
Evaluating key assumptions such as
forecasted sales prices, sales volumes,
raw material prices and the EBITDA
3
mentioned above, was significant to our audit
because of the size of the balances, the
challenging market conditions experienced 2024,
as well as the significant estimation uncertainty
in developing the estimates to determine the
recoverable amounts. In addition, management’s
assessment process is complex and highly
judgmental and is based on significant
assumptions, mainly sales prices, sales
volumes, EBITDA margin in the terminal year
and discount rates used.
Based on management’s assessment of the
recoverable amounts, no impairment has been
recognised for the year ended 31 December
2024.
margin used in the terminal period with
reference to external sources and other
relevant benchmarks,
•
Assessing, with the assistance of our
valuations specialists, the mathematical
accuracy and methodological integrity of
management’s impairment models and
the reasonableness of discount rates
applied with reference to external
sources; and
•
Evaluating the adequacy and
appropriateness of the disclosures in
the financial statements related to
Assets held for sale and discontinued
operations.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between th
e Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appears to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
•
is consistent with the financial statements and
•
contains the information required by applicable statutory requirements.
Our opinion on the Board of Directors' report applies correspondingly to the statement on Corporate
Governance.
Our opinion on whether the Board of Directors’ report contains the information required by applicable
statutory requirements, does not cover the Sustainability Statement, on which a separate assurance
report is issued.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements of the Company that give a true
and fair view in accordance with the Norwegian Accounting Act and accounting standards and
practices generally accepted in Norway, and for the preparation of the consolidated financial
statements of the Group that give a true and fair view in accordance with IFRS Accounting Standards
as adopted by the EU. Management is responsible for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
4
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
•
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
5
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our au
ditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Elkem ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name 549300CVBE06T0SH6T76-2024-12-31-0-en, have been prepared, in
all material respects, in compliance with the requirements of the Commission Delegated Regulation
(EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant
to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s
Responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all
material respects, the financial statements included in the annual report have been prepared in
compliance with ESEF. We conduct our work in compliance with the International Standard for
Assurance Engagements (ISAE) 3000
–
“Assurance engagements other than audits or reviews of
historical financial information”. The standard requires us to plan and perform procedures to obtain
reasonable assurance about whether the financial statements included in the annual report have been
prepared in compliance with the ESEF Regulation.
As part of our work, we have performed procedures to obtain an understanding of the Company’s
processes for preparing the financial statements in compliance with the ESEF Regulation. We
examine whether the financial statements are presented in XHTML-format. We evaluate the
completeness and accuracy of the iXBRL tagging of the consolidated financial statements and assess
management’s use of judgement. Our procedures include reconciliation of the iXBRL tagged data with
the audited financial statements in human-readable format. We believe that the evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 19 March 2025
KPMG AS
Stian Tørrestad
State Authorised Public Accountant
Appendix - Alternative Performance Measures (APMs)
An APM is defined as a financial measure of historical or
future financial performance, financial position, or cash
flows, other than a financial measure defined or specified
in the applicable financial reporting framework (IFRS).
Elkem uses EBITDA and EBITDA margin to measure
operating performance at the group and segment level. In
particular, management regards EBIT and EBITDA as useful
performance measures at segment level because income tax,
finance expenses, foreign exchange gains (losses), finance
income and other items are managed on a group basis and
are not allocated to each segment. Elkem uses cash flow from
operations to measure the segments cash flow performance,
this measure is excluding items that are managed on a group
level. Elkem uses ROCE, or return on capital employed as
measures of the development of the group’s return on capital.
Elkem relies on these measures as part of its capital allocation
strategy. Elkem uses net interest-bearing debt less non-
current interest-bearing assets / EBITDA as leverage ratio for
measuring the group's financial flexibility and ability for step-
change growth and acquisitions.
The APMs presented herein are not measurements of
performance under IFRS or other generally accepted accounting
principles and should not be considered as a substitute for
measures of performance in accordance with IFRS. Because
companies calculate the APMs presented herein differently,
Elkem’s presentation of these APMs may not be comparable to
similarly titled measures used by other companies.
Elkem’s financial APMs, EBITDA and EBIT
→
EBITDA is defined as Elkem’s profit (loss) for the period,
less income tax (expense) benefit, finance expenses,
foreign exchange gains (losses), finance income, share
of profit from equity accounted financial investments,
other items (except realised gains and losses from
hedge ineffectiveness and discontinuation of hedging),
impairment losses and amortisation and depreciation.
→
EBITDA margin is defined as EBITDA divided by total
operating income.
→
EBIT is defined as Elkem’s profit (loss) for the period,
less income tax (expense) benefit, finance expenses,
foreign exchange gains (losses), finance income, share of
profit from equity accounted financial investments and
other items (except realised gains and losses from hedge
ineffectiveness and discontinuation of hedging).
Below is a reconciliation of EBIT and EBITDA.
2024
Amounts in NOK million
Silicones
Silicon
Products
Carbon
Solutions
Other
Eliminations
Total
Profit (loss) for the year
Income tax (expense) benefit
Finance expenses
Foreign exchange gains (losses)
Finance income
Share of profit from equity accounted financial investments
Other items
Realised effects from hedge ineffectiveness and
discontinuation of hedging
EBIT from discontinued operations
EBIT
(1 233)
2 091
1 003
(521)
(46)
2 115
(588)
778
(247)
(107)
143
316
122
(1 237)
1 294
Impairment losses
Amortisation and depreciation
Amortisations, depreciations and impairment losses from
discontinued operations
EBITDA
521
2 864
1 131
(324)
(46)
168
931
1 754
4 146
2023
Amounts in NOK million
Silicones
Silicon
Products
Carbon
Solutions
Other
Eliminations
Total
Profit (loss) for the year
Income tax (expense) benefit
Finance expenses
Foreign exchange gains (losses)
Finance income
Share of profit from equity accounted financial investments
Other items
Realised effects from hedge ineffectiveness and
discontinuation of hedging
EBIT from discontinued operations
EBIT
(2 142)
2 610
1 164
(585)
318
2 097
781
666
106
(137)
63
(596)
199
(1 815)
1 365
Impairment losses
Amortisation and depreciation
Amortisations, depreciations and impairment losses from
discontinued operations
EBITDA
(605)
3 304
1 286
(532)
318
25
844
1 537
3 771
Elkem’s financial APMs: Cash flow from operations
→
Cash flow from operations is defined as cash flow from
operating activities, less income taxes paid, interest
payments made, interest payments received, changes
in provision, (gains) losses on disposal of subsidiaries,
changes in provisions, bills receivables and other,
changes in fair value of derivatives, other items (from the
statement of profit or loss), realised effects from hedge
ineffectiveness and discontinuation of hedging and
including reinvestments.
→
Reinvestments generally consist of maintenance capital
expenditure to maintain existing activities or that involve
investments designed to improve health, safety or the
environment.
→
Strategic investments generally consist of investments
which result in capacity increases at Elkem’s existing
plants or that involve an investment made to meet
demand in a new geographic or product area.
Below is a split of the items included in investment in
property, plant and equipment and intangible assets.
Amounts in NOK million
2024
2023
Reinvestments
(2 061)
(2 351)
Strategic investments
(957)
(2 866)
Periodisations
1)
(317)
361
Investments in property, plant and equipment and intangible assets
(3 334)
(4 856)
1)
Periodisations reflects the difference between payment date and accounting date of the investment.
Amounts in NOK million
2024
2023
Cash flow from operating activities
2 030
2 769
Income taxes paid
614
2 281
Interest payments made
885
716
Interest payments received
(119)
(179)
Changes in provisions, bills receivables and other
27
47
Changes fair value of derivatives
(475)
59
Other items
460
(516)
Realised effects from hedge ineffectiveness and discontinuation of hedging
122
199
Reinvestments
(2 061)
(2 351)
Cash flow from operations
1 484
3 027
Elkem’s financial APMs: ROCE
→
ROCE, Return on capital employed, is defined as EBIT
divided by the average capital employed.
→
Working capital is defined as accounts receivable,
inventories, other current assets, accounts payable,
current employee benefit obligations and other current
liabilities. Accounts receivable
defined are as trade
receivables less bills receivable. Other current assets are
defined as other current assets less current receivables
to related parties, current interest-bearing receivables,
tax receivables, grants receivables, assets at fair value
through profit or loss and accrued interest income.
Accounts payable are defined as trade payables less
trade payables related to purchase of non-current assets.
Other current liabilities are defined as provisions and
other current liabilities less current provisions, contingent
considerations, contract obligations and liabilities to
related parties.
→
Capital employed consists of working capital as defined
above, property, plant and equipment, right-of-use assets,
other intangible assets, goodwill, equity accounted
investments, grants payable, trade payables and
prepayments related to purchase of non-current assets.
→
Average capital employed is defined as the average of the
opening and ending balance of capital employed for the
relevant reporting period.
→
Below is a reconciliation of working capital and capital
employed, which are used to calculate ROCE:
Capital employed and working capital
Amounts in NOK million
31.12.2024
31.12.2023
Inventories
6 038
9 018
Trade receivables
Bills receivable
Accounts receivable
1 960
(269)
1 691
3 209
(823)
2 386
Other assets, current
Other receivables to related parties, interest free
Grants receivables
Tax receivables
Accrued interest
Other current assets included in working capital
1 254
-
(576)
(241)
(0)
436
2 062
(8)
(671)
(261)
(0)
1 122
Trade payables
Trade payables related to purchase of non-current assets
Accounts payables included in working capital
2 076
(184)
1 892
5 281
(1 313)
3 968
Employee benefit obligations
471
912
Provisions and other liabilities, current
Provisions, contingent considerations and contract obligations
Liabilities to related parties
Other current liabilities included in working capital
815
(19)
(0)
795
1 381
(101)
(17)
1 263
Working capital assets and liabilities as held for sale
Working capital Elkem group total
Property, plant and equipment
Right-of-use assets
Other intangible assets
Goodwill
Equity accounted investments
Grants payable
Trade payables- and prepayments related to purchase of non-current assets
Other capital employed effects assets and liabilities as held for sale
Capital employed
2 302
7 309
8 405
403
216
329
230
(17)
(171)
17 674
34 378
0
6 383
22 754
854
1 458
1 015
1 296
(17)
(1 295)
-
32 449
Elkem’s financial APMs: Leverage ratio
Elkem has with effect from 1 July 2024 changed its definition
of net interest-bearing debt (NIBD). Going forward bills
payable net of restricted deposits, will be followed up as a
part of managing Elkem’s day-to-day liquidity positions. Bills
payable are deemed to be part of the operational activities
linked to the product cycle and hence no longer included in
NIBD. Bills payable and bills receivable will then have the same
classification. Bills do not carry interest, and the change does
not affect the interest-cover ratio.
→
Net interest-bearing debt that is used to measure
leverage ratio consists of current and non-current
interest-bearing liabilities, reduced with cash and cash
equivalents. Below a calculation of Elkem's leverage ratio.
Leverage ratio
Amounts in NOK million
31.12.2024
31.12.2023
Interest-bearing liabilities
12 907
14 741
Cash and Cash equivalents
(4 397)
(6 367)
Interest-bearing liabilities as held for sale liabilities
3 490
-
Cash and Cash equivalents as held for sale assets
(1 673)
-
Net interest-bearing debt
10 327
8 373
EBITDA
4 146
3 771
Leverage ratio
(2,5)
(2,2)
Elkem ASA
Visiting address:
Postal address:
P.O. Box 334 Skøyen,
NO-0213 Oslo
T:
+47 22 45 01 00
F:
+47 22 45 01 55
.elkem.com