Nyrstar Investor Presentation - January 2018
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Nyrstar Investor Presentation January 2018
Important notice
This presentation has been prepared by the management of Nyrstar NV (the "Company"). It does not constitute or form part of, and should not
be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any
member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for
any securities of the Company or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any
contract or commitment whatsoever
The information included in this presentation has been provided to you solely for your information and background and is subject to updating,
completion, revision and amendment and such information may change materially. Unless required by applicable law or regulation, no person
is under any obligation to update or keep current the information contained in this presentation and any opinions expressed in relation thereto
are subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, accuracy, reasonableness
or completeness of the information contained herein. Neither the Company nor any other person accepts any liability for any loss howsoever
arising, directly or indirectly, from this presentation or its contents
This presentation includes forward-looking statements that reflect the Company's intentions, beliefs or current expectations concerning, among
other things, the Company’s results of operations, financial condition, liquidity, performance, prospects, growth, strategies and the industry in
which the Company operates. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that
could cause the Company's actual results of operations, financial condition, liquidity, performance, prospects, growth or opportunities, as well
as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking
statements. The Company cautions you that forward-looking statements are not guarantees of future performance and that its actual results of
operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from
those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company's results of
operations, financial condition, liquidity and growth and the development of the industry in which the Company operates are consistent with the
forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in
future periods. The Company and each of its directors, officers and employees expressly disclaim any obligation or undertaking to review,
update or release any update of or revisions to any forward-looking statements in this presentation or any change in the Company's
expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required
by applicable law or regulation
This document and any materials distributed in connection with this document are not directed to, or intended for distribution to or use by, any
person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication,
availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction
The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this document comes
should inform themselves about, and observe any such restrictions. The Company’s shares have not been and will not be registered under the
US Securities Act of 1933 (the “Securities Act”) and may not be offered or sold in the United States absent registration under the Securities Act
or exemption from the registration requirement thereof
2Table of Contents
I. Introduction
II. Key investment highlights
III. Financial and operating results
IV. Delivering a strong future for Nyrstar
V. Appendix
3Introduction
Nyrstar today
Global multi-metals business, with a market leading position in zinc and lead, and growing positions
in other base and precious metals
Geographically diverse smelters operating in OECD countries1
HOYANGER
BALEN / OVERPELT Fumer
Norway
Smelter & Oxide Washing Plant
LTM2 Revenue Belgium
LANGLOIS
EUR 3.4bn Operating Mine BUDEL
Canada Smelter
The Netherlands
LTM2 Underlying MYRA FALLS
EBITDA AUBY
Restarting Mine
EUR 236m Canada CLARKSVILLE Smelter
Mines and Smelter Complex France
Tennessee, USA
c. 4,300 employees Operating Smelters
PORT PIRIE
Operating Mines Multi-metals Processing Facility HOBART
Australia Smelter
LTM2 production Australia
1,028kt zinc metal
Non-operating Assets
112kt zinc in conc.
Second largest zinc metal producer globally… …with consistent long term production
Metal (kt) Stable zinc processing
2016 zinc smelter production3 (kt Zn) guidance (1.0 – 1.1 mt)
1,241
1,015 195 158 179 178 185
1,003 187 167
612 611
462 1,125 1,084 1,088 1,097 1,115 1,015 1,028
Korea Zinc Nyrstar Glencore Votorantim Hindustan Boliden 2011 2012 2013 2014 2015 2016 LTM
Zinc
Market 9.1% 7.5% 7.4% 4.5% 4.5% 3.4%
Share2 Lead Zinc
1Excludescorporate offices and mining assets where sale has been agreed or completed
2LTM – last 12 months from October 2016 to September 2017; restated to exclude El Toqui, El Mochito, Contonga, Coricancha and Campo Morado discontinued operations
3Wood Mackenzie Q3-17 Global zinc long-term outlook figures other than Nyrstar 4
Source: Wood Mackenzie; Nyrstar company informationTable of Contents
I. Introduction
II. Key investment highlights
III. Financial and operating results
IV. Delivering a strong future for Nyrstar
V. Appendix
5Key investment highlights
Key investment highlights
#1 Strong progress on key strategic initiatives
#2 Excellence in smelting and mining
#3 Robust industry backdrop
#4 Significantly enhanced liquidity, capital structure and maturity profile
#5 Expert management and Board
#6 Strategic relationship with supportive cornerstone shareholder
6Key investment highlights
#1 Strong progress on key strategic initiatives
Proactive operational and financial initiatives to transform Nyrstar into the leading global multi-
metals business
Upgrade Board • Board and management substantially strengthened with a focus on operational expertise
and management • Hilmar Rode appointed as CEO and Frank Rittner as COO to draw on their significant metals & mining experience
• Project optimised to accelerate construction completion, de-risk ramp-up and maximise long term cash flows
Deliver Port Pirie • Underlying EBITDA uplift of ~ €130m per annum from 20201 vs previous guidance of ~ €80m per annum
Redevelopment • Construction complete; hot commissioning commenced end September 2017 and first feed to TSL furnace achieved end
October 2017
• Successful divestment from Latin American mining completed
Extract maximum
• Divestment process now concluded with the North American mines to be held as a core component of the Nyrstar
value from mining
business and optimised
Optimise • Full potential assessments completed across all five zinc smelters by end Q3 2017
zinc smelting • Low-capex initiatives set to deliver improved operating performance and zinc production of c. 1.2m tonnes per annum
• Balance sheet strengthened in 2016 and 2017 demonstrating access to capital markets: €274m rights offering, US$185m
upsized zinc metal prepay, €115m convertible bond issuance, €400m high yield bond issuance upsized to €500m, €100m
Strengthen upsize of the Structured Commodity Trade Finance Facility (SCTFF), €100m private equity placement and repeat
balance sheet issuance of silver prepayments to roll forward amortising prepays
• Trafigura US$250m committed working capital facility extended to end of 2019
1Uplift vs 2016 Underlying EBITDA applying 2016 macros
Source: Nyrstar company information 7Key investment highlights
#2 Excellence in smelting and mining
Clearly defined business model in metals processing generates significant gross profit from
diverse sources
Diverse sources of smelting gross profit
• Paid to the smelters by miners in the form of concessions
Treatment – Consistent source of gross profit driven by the annual
charges benchmark TC LTM Metals Processing sources of gross profit1
(“TC”) – Small proportion (5-10%) of purchases are at spot treatment
charge terms By-product
Sales
14%
• Metal produced over and above the content the smelter has
paid for in concentrates purchased Zinc and
– Nyrstar’s operational excellence helps extract maximum free Lead TCs
Free metal 36%
metal to supplement earnings from the TC Zinc and lead
– Free metal set to increase once Port Pirie is fully operational Premium
as higher value feedstock is processed 16%
• Sales of refined metal made above the LME zinc and lead
Metal reference price
premiums – Significant portion of zinc / lead production above commodity
Zinc and lead free
grade due to strong R&D and technical know-how
Metal
34%
• Extraction of additional metals and by-products from the
concentrates Total2:
By-
– High quality assets extract significant amounts of high value
products by-products from the feedstock
EUR 890m
– Exposure set to increase once Port Pirie is fully ramped-up
1 LTM – last 12 months from July 2016 to June 2017; Note that the percentages in the chart refer to the gross profit contributed by each source as a percentage of Gross Profit excluding Other Gross Profit (total of EUR 990m)
2 Includes Other Gross Profit of EUR (89)m 8Key investment highlights
#2 Excellence in smelting and mining
Port Pirie delivering long term cash flow uplift
Port Pirie update How Port Pirie allows Nyrstar to leverage its zinc smelter network
POLY-METALLIC PROCESSING & RECOVERY CENTRE
• The Port Pirie Redevelopment will help maximise long term cash
flow generation for Nyrstar 3rd party lead Third party
Nyrstar Zinc concentrates residues
Smelters
• The redevelopment will mark a step change in operational residues
performance in the Metals Processing division:
– Improved operational flexibility
Other
material
– Approximately 70% increase in throughput (vs 2016 base)
PORT
– Processing of higher margin feed maximising gross profit from PIRIE
by-products and free metal
Complex waste
streams
– Ability to treat internal residue from across the smelter network Nyrstar mine
helping improve efficiency concentrates
E-waste
• Following a detailed review, the ramp-up profile has been extended to
de-risk the project and maximise the long term earnings uplift
Port Pirie funding sources
• The extended schedule and incremental engineering improvements Perpetual securities AUD 291m
have increased the capital cost from AUD 567m to AUD 660m
Silver prepay AUD 120m
– As of 30 September 2017, AUD 632m incurred
Nyrstar direct contribution AUD 249m1
– Remaining cost to complete to be financed via Australian Total AUD 660m
government backed perpetual securities
1Increase from previous direct contribution forecast of AUD 152m
Source: Company information 9Key investment highlights
#2 Excellence in smelting and mining
Project and earnings uplift overview
Redevelopment allows Nyrstar to leverage the zinc smelter network
• The Port Pirie Redevelopment will help maximise long term cash flow generation for Nyrstar
• The redevelopment will mark a step change in operational performance in the Metals
Processing division:
– Improved operational flexibility
– Approximately 70% increase in throughput (vs 2016 base)
– Processing of higher margin feed maximising gross profit from by-products and free metal
– Ability to treat internal residue from across the smelter network helping improve
efficiency
• Total project cost to complete of c. AUD 660m with AUD 632m incurred at 30 September
2017. Remaining cost to complete to be financed via the issuance of perpetual securities
backed by the Australian government
Projected increase in throughput - greater ability to use residues Revised Underlying EBITDA uplift profile1
Optimisation expected to
620kt
drive run-rate earnings uplift
in the region of EUR 130m
p.a. compared to 2016
260 ~ EUR130m
360kt ~ EUR 100m
Internal 60
Full
~ EUR 40m ramp-up
Primary Pb
360
300
~ EUR 0m
2016 2020+ 2017 2018 2019 2020+
1Against 2016 Underlying EBITDA using 2016 macroeconomic assumptions
Source: Company information 10Key investment highlights
#2 Excellence in smelting and mining
Port Pirie Redevelopment in-line with revised schedule and budget
TSL furnace first heat-up – 25 October 2017
• Major milestone reached with hot commissioning
commencing at end September 2017, first feed to TSL
furnace achieved at the end of October 2017 and first cast of
slag onto slag caster in December 2017
• Project cost to complete of c. AUD 660 million in-line with
revised guidance provided in February 2017
• Re-work of modules and enhanced slag tapping
arrangements have been implemented
• Training of Nyrstar personnel at Kazzinc lead smelting
operations in Kazakhstan completed and commissioning
assistance by Kazzinc personnel at Port Pirie ongoing
TSL furnace control room– October 2017 First cast of slag on slag casters – 15 December 2017
11Key investment highlights
#2 Excellence in smelting and mining
Latin American assets divested , North American mines demonstrating solid potential
• Latin American Mining assets sold (5 mines), with additional upside through price participation at El Toqui, earn-out at
Coricancha and royalty at Campo Morado
• Divestment process now concluded with the North American mines to be held as a core component of the Nyrstar business
and optimised
• Myra Falls mine restart approved in August 2017 and proceeding as planned
− Total restart capex of EUR c.70m split evenly between H2 2017 and 2018; agreed terms for prepay of USD 30m to
partially fund the restart capex
• North American mining operations continue to increase their quarterly run rate of EBITDA generation and are expected to
generate robust free cash flow in 2018
Continued improvement in Mining EBITDA Full indicative potential - North American mines
€128m Production C1 cash cost
(kt) (USD/t)
220 2,500
200
€14m €32m
180
160
€11m
2,000
140
€128m 120
€18m €3m
100
€32m
80
1,500
€10m
60
€18m
€5m 40
€10m
20
€5m
0 1,000
Q1’17 (23kt Q2’17 (30kt Q3’17 (34kt Q3’17 Q3’17 Q3’17 Annualised 2016 2017F 2018F 2019F 2020F
zinc in conc) zinc in conc) zinc in conc) Normalisation Normalised and Nomalised
Mining Mining EBITDA
EBITDA (34kt (136kt zinc in conc) C1 cash cost (USD/t) Zinc contained production (kt)
zinc in conc)
Strategic hedge Myra Actual
12Key investment highlights
#2 Excellence in smelting and mining
Full potential review of zinc smelting network completed
• Zero to low-capex operational excellence initiatives identified for implementation over the coming years, focusing on:
− Zinc smelter asset integrity;
− Asset management;
− Metallurgical excellence;
− Productivity improvements
• Low capex debottlenecking initiatives to drive output to 1.2m tonnes per annum by 2020 on a consistent basis
• Operating cost reductions to be achieved by:
− Production volume increases over a reduced fixed cost base; and
− External spend optimisation
Full indicative potential – Zinc smelters Substantial improvement potential for Nyrstar Zinc smelters
Zn market metal DOC
(kt) (EUR/t)
1,300 600
1,200
550
1,100
1,000 500
900
800 450
700
400
600
500 350
400
300 300
200
250
100
0 200
2016 2017F 2018F 2019F 2020F
Zn smelting DOC/t market metal (EUR/t) 13
Wood Mackenzie industry cost curve data used for global comparison zinc smelters
Zinc market metal production (kt)Key investment highlights
#3 Robust industry backdrop Strong macro
fundamentals
Continued robust demand
Key Sources of Demand(1) Global Slab Zinc Consumption(2)
Zinc (kt)
• The construction industry is the largest end consumer and 20,000
accounts for c. 50% of overall demand
• Zinc is used for its corrosion resistance in galvanised 16,000
steel, which accounts for c. 60% of zinc first use
• China is the biggest consumer of zinc accounting for c. 48% 12,000
of global demand
• Urbanisation and industrialisation in China has 8,000
resulted in a sharp increase in per capita zinc
consumption (from 4.8kg per head in 2015 to an 4,000
estimated 6.5kg per head by 2030)
0
2000 2005 2010 2015 2020 2025 2030 2035
China Asia (ex. China) Russia and Caspian
Europe North America Other
• Continued positive global industrial production growth
Demand • World consumption growth is forecast to average 2.4% p.a. from 2017 to 2024 with consumption
expected to reach 17.2Mt/a
outlook
(3)
• Ongoing urbanisation and industrialisation of the developing world will be a key driver
• Zinc premiums hit a 3.5 year high in August ’17 in Shanghai due to tightening supply-demand balance
(1) AME (3) WoodMckenzie LTO Q4 2017 14
(2) Wood MackenzieKey investment highlights
#3 Robust industry backdrop Strong macro
fundamentals
Additional concentrate production will return the market to balance
Requirement and Sources of
Tight Concentrate Supply Future Mine Production(1)
• Current concentrates supply is challenged, driven by
mine closures including Century, Lisheen and Glencore
• Year-on-year mine production declined c.6% for which
has contributed to a tight concentrates market, with stock
days at 27 in Q3 (vs 48 in 2015, 53 in 2014 and 52 in 2013)
• Miners retain substantial bargaining power for now, but the
current zinc price is incentivising brownfield expansions and
de-bottlenecking of mines
• The average annual requirement for new mine production is 500kt/a from 2017 to 2024
• Global mine production is forecast to increase by 7% in 2017 with 895kt of new production and expected
Supply to stabilise over the medium to long term. Major capacity additions in 2017 include:
outlook
(1) • Antamina 165kt, Rampura Agucha 150kt, Sindesar Khurd 50kt, Bisha 50kt and Penasquito 35kt
• Although still tight this additional capacity will move the concentrates market to balance in 2017, with a
small surplus expected to 2019. Tightness forecast to continue through to 2020
(1) Wood Mackenzie LTO Q4 2017 15Key investment highlights
#3 Robust industry backdrop Strong macro
fundamentals
The bottleneck and pricing power will move from mines to smelters
Tight refined metal market to tighten further(1) Record refined metal deficits driving prices (1,2)
• Decline in concentrate stocks during 2017 together with
smelter outages led to falling refined supply and record
metal deficits - with total refined production c.200kt below
consumption in Q3 and an overall c.755kt deficit expected
for 2017.
• Further deficits in the refined market are expected to
squeeze stocks to critical levels in H1 2018, potentially
driving the zinc price to a cyclical peak in Q3 2018.
• A prolonged zinc price environment is expected to
incentivise concentrate supply, with feed balance returning
to a surplus in 2019
• Smelter capacity growth is however expected to lag mine
supply in the medium term thus keeping the refined
market tight.
• Probable smelter projects due to add additional capacity,
redressing the balance in the longer term.
(1) CRU, October 2017 16
(2) Forecasts as per Wood MackenzieKey investment highlights
#3 Robust industry backdrop
Zinc Market and Treatment Charges Treatment charges and metal price relationship
• Mines and Smelters operate in a symbiotic relationship of Treatment charge
dependence at the top end of the zinc market: • Surplus metal and concentrates • Concentrate surplus
• LME price falls • Power shifts to smelters
• TCs increase
• They share zinc price exposure through free and metal(1) • Mines cut production
(2) • Smelters increase
escalators on treatment charges , negotiating these TC production
terms between each other
Metal price
• Over the medium term zinc smelters receive a relatively • Concentrates draw • Metals draw down
down
constant share of the total value, with the zinc price having • LME price increases
• Power shifts to miners • Miners increase
been positively correlated with TCs in the past • TCs fall production
• Over the short term however, market dynamics influence the We are here
balance between metal prices and the treatment charges Treatment Charge and LME zinc price
negotiated between smelters and mines
Share % Zinc price (USD/t)
• The realised contract TC currently represents a historic low 100 3,500
of c.12.8% of the payable zinc price. This compares to 90
3,000
22.2% in 2016 and is lower than the last price cycle peak in 80
70 2,500
2007 (19% of paid zinc price). TC value share is forecast to
60 2,000
fall further to 9.4% in 2018(3) 50
40 1,500
• As the bottleneck moves from concentrates to refining 30 1,000
capacity pricing power shifts to smelters, possibly leading to 20
500
10
a period of sustained high prices and rising TCs
0
H1 2017
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Smelter Share, % Mine Share, %
(1) Zinc smelters only pay for 85% of the metal contained in concentrates, but are able to recover approximately 96%. The difference is free metal
(2) Escalators and de-escalators were set at 0% for the 2017 benchmark terms
(3) Wood Mackenzie LTO Q4 2017 17Key investment highlights
#3 Robust industry backdrop
Proactive approach to risk management
During the implementation of the transformation and turnaround strategy, the company has taken prudent measures
to mitigate downside risk on Zinc price and currency
4,000 H2’18: $3,842 Call
Upside from $3,117 Zinc Price
3,500 Upside from $2,800 H1’18: $3,094 Call Zinc hedge collars were effected to
ZINC PRICE
3,000 $2,437 Call protect 70% of free metal through to
Q2-Q4’17: $2,543 Call
2,500 $2,496 Call end June 2018 and 50% of free metal
H2’18: $2,600 Put in H2 2018 on the recent market move
2,000 Q2-Q4’17: $2,172 Put H1’18: $2,300 Put
$2,100 Put $2,127 Put higher
1,500 Nyrstar will continue to implement zinc
price and FX hedges on a rolling 6-9
Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19 month basis to protect downside risk
1.30
EUR-USD FX RATE
1.15 Call 1.14 Call
1.20 FX
1.10 Call No EUR-USD hedges have been
1.10 entered into for 2018
1.08 Put
1.00 1.05 Put
1.00 Put AUD-USD hedges cover 100% of
0.90 total transactional expenses for
20181
Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19
CAD-USD hedges cover 100% for
AUD-USD D FX RATE
0.85 H2’16: 0.83 Call
2017: 0.81 Call 2018: 0.80 Call
20182
0.80
0.75
2018: 0.69 Put
0.70 H2’16: 0.68 Put H1’17: 0.68 Put
Other
0.65 H1’17: 0.62 Put All FX and commodity exposure for
0.60 Myra Falls hedged until 2019
Jan.16 Jul.16 Jan.17 Jul.17 Jan.18 Jul.18 Jan.19
1 100% of 2018 AUD-USD exposure buying 0.6965 puts and selling 0.7997 calls
2 100% of 2018 CAD-USD exposure for Langlois buying 1.32 puts and selling 1.3618 calls#4 Significantly enhanced liquidity, capital structure and maturity profile
Liquidity and average maturity profile extended over past 18 months
Solid financial position Committed liquidity at the end of 9m 2017
• Diversified sources of funding backed by broad banking syndicate €m Capacity Drawn Available
• EUR 400m Bond Offering in March 2017 upsized by EUR 100m in SCTF Facility 500 (226) 274
September 2017 to EUR 500m and tender on the 2018 convertible KBC Facility 50 - 50
bond has substantially increased liquidity and Nyrstar’s average
Trafigura Facility 212 - 212
debt maturity
Cash 65 - 65
• Borrowing base (SCTF) facility refinanced and extended in
Total 826 (226) 600
December 2017 to December 2021; upsized by EUR 100m to
EUR 600m
• Silver prepays of USD 60m in March 2017, USD 50m in May 2017
and USD 50m in June 2017 to roll forward prepays that are
amortizing in 2017
• Equity placement of EUR 100m in November 2017
• Trafigura USD 250m committed WC facility extended to end 2019
Jul’16 Aug’16Dec’15
Nov’15 Sep’16 Jan’16
Oct’16 Feb’16
Nov’16 Dec’16
Mar’16 Jan’17
Apr’16Feb’17 Mar’17
May’16 Apr’17Jul’16
Jun’16 May’17 Aug’16
Jun’17 Sep’16
Jul’17 Aug’17
Oct’16 Sep’17
Nov’16Oct’17 Nov’17 Dec’17
Dec’16
Convertible Upsize zinc Upsize & extension Silver Prepay HY Bond Upsize Silver Silver HY Bond Tap Equity SCTF
bond metal of Trafigura (USD 50m) (EUR 400m) SCTFF (by Prepay Prepay (EUR 100m) to ABB refinance
(EUR prepay working capital EUR 100m (USD (USD EUR 500m (EUR (EUR
Upsize zinc metal Silver prepay
115m) (USD 175m) facility (USD 250m) to EUR 50m) 50m) 2018 CB tender 100m) 100m)
prepay (USD 185m) (USD 60m)
500m)
19#4 Significantly enhanced liquidity, capital structure and maturity profile
Further funding activities planned to extend maturities and maintain strong liquidity position
Outstanding balances at 30 Sept 2017 (€m) Continued proactive approach to balance sheet management
Drawing Capacity
Maturity
€m €m
• Continue to monitor the market for additional opportunistic
Structural Debt
financings to further strengthen the balance sheet, extend the
2018 Convertible Bond 29 29 Sept 2018
existing maturity profile and maintain strong liquidity
2019 High Yield Bond 350 350 Sept 2019
2022 Convertible Bond 115 115 July 2022 • Rollover prepays to offset amortisation profile
2024 High Yield Bond 500 500 Mar 2024
Structural Debt 994 994 • Issuance of new HY bond to address 2019 maturity
Working Capital Facilities
SCTF 226 500 June 2019 Outstanding maturity / anticipated amortisation profile
Loan from Related Party (Trafigura) 0 212 Dec 2019
KBC 0 50 July 2018
Working capital facilities 226 762
Prepays in Other Financial Liabilities /
Deferred Income €32m
Zinc Prepay (Dec-2015) – 12 month grace 98 Dec 2018 €220m €32m
Silver Prepay PPR 58 Aug 2019 €29m €20m
Silver Prepay (Mar-17) – 6 month grace 51 Mar 2018 €32m
Silver Prepay (May-17) – 11 month grace 42 Nov 2018 €500m
Silver Prepay (Jun-17) – 9 month grace 42 Aug 2018
Prepays 291 €350m €32m
€226m
€32m €115m
Perpetual Securities1 €81m
€50m
€0m
Perpetual Securities 161
2017 2018 2019 2020 2021 2022 2023 2024
Perpertual Securities HY Bonds KBC
All Prepays Convertible Bonds
SCTF Trafigura facility 20Key investment highlights
#5 Expert management and Board
Nyrstar Management Committee
Hilmar Rode Chris Eger Frank Rittner Sebastião Balbino Willie Smit
Chief Executive Officer Chief Financial Officer Chief Operating Officer Chief Commercial Officer Chief HR Officer
Superior operational expertise
• Strengthening of Board and management since November 2015
• Management team are fully committed to Nyrstar’s stated strategy
• Focus on operational excellence with knowledge of bringing complex metals projects into production
• Hilmar Rode appointed as CEO to draw on his significant metals processing experience to bring operational and
technical best practices to Nyrstar:
– Over 20 years of industry experience
– Recently led the successful transformation at Minera Escondida
– Led the restructuring and business optimisation of Kazzinc
21Key investment highlights
#6 Strategic relationship with supportive cornerstone shareholder
Trafigura support demonstrated through a variety of commercial and financial agreements
• This has effect for as long as Trafigura holds at least 20% but less than 50% of the shares in Nyrstar
Relationship
• Ensures all business dealings to continue on arm’s length basis and on normal commercial terms
Agreement
• Trafigura has two dependent directors on Nyrstar’s six person board
• Long term purchase agreements for approximately one third of Nyrstar’s zinc concentrate requirements
(600Kdmt per annum) and zinc metal off-take sales agreements for approximately one fifth of Nyrstar’s
Commercial zinc metal production (200Kt per annum) with a prepayment mechanism
Agreements
• Based on market prices with annually agreed premiums and TCs
• Provides Nyrstar with additional certainty of supply and leverages Trafigura’s strong marketing presence
• Trafigura WC Facility upsized to US$250m on a committed basis and current negotiations to extend on
similar terms to end 2019
Capital • Nyrstar’s December 2015 US$150m zinc prepayment facility (ultimately upsized to US$185m)
Commitment • Supported Nyrstar’s February 2016 €274m rights offering by underwriting up to €125m and participated
in the November 2017 €100m placement to maintain equity holding at c. 24.6%
• Leverage Trafigura’s financial relationships to achieve more beneficial terms for Nyrstar
1 The prepayment financing is linked to the physical delivery of refined zinc metal to Trafigura under the terms of a three-year offtake agreement
22Table of Contents
I. Introduction
II. Key investment highlights
III. Financial and operating results
IV. Delivering a strong future for Nyrstar
V. Appendix
23Financial and operating results
9m’17 Financial summary
Underlying EBITDA (€’m)
57 54 51
54 45
Metals Processing 63
€m 9m’164 9m’17 ∆ ∆%
Revenue 1,976 2,630 654 33% Mining1 18
5 10
MP U. EBITDA 143 162 19 13% Other (11) (12)
(11)
Mining U. EBITDA 2 33 31 1,550%
Q1’174 Q2’174 Q3’17
Other U. EBITDA (25) (34) (9) 36%
Group Underlying EBITDA 120 162 42 35% Capex (€’m)
106
96
18
Capex 10
MP Sustaining 62 97 35 56% 65 36 39
Growth capex 8
Port Pirie Redevelopment 85 103 18 21% Port Pirie Redevelopment 27
Growth 21 36 15 71% MP Sustaining capex 38 38
21
Mining 10 31 21 210% Mining Sustaining1
8 11 12
Group Capex 179 267 88 49% Q1’174 Q2’174 Q3’17
Net Debt (€’m)
€m Dec’16 Sep’17 ∆ ∆%
1,387 Net Debt,
Net Debt6 865 1,138 273 32% 1,272 1,243
249 Incl Zn Prepay
286 257 & Perp Sec.
1,138
986 986 Net Debt,
Net Debt, inclusive of Zinc
1,167 1,387 220 19% ex Zn Prepay
Prepay and perpetual securities
963 & Perp Sec.
Bonds 921 921
Working Capital
Facilities 226
110 146
(65)
Cash (58) (95)
Mar’17 Jun’17 Sep’17 24Financial and operating results
9m’17 Stable safety performance, improved zinc metal and mine
production
Lagging Safety Indicators3
Safety, Health & Environment
9.0
• Preventing harm is a core priority of Nyrstar 8.2
8.7
• LTIR of 2.0 in first 9 months of 2017 was higher 6.9
6.2
than that achieved in first 9 months of 2016 5.7 5.5
(1.7) LTIR
2.5 RIR
• No environmental events with material business 2.3 2.1 2.3
1.7 1.8
consequences occurred in the first 9 months of 0.8
2017
Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17
Production
• Zinc metal production of 766kt, up 2% over first Zinc metal production Lead metal production at Zinc in concentrate
nine months of 2016 despite the impact of per site (kt) Port Pirie (kt) per site (kt)
unplanned outages at Budel and Hobart in first +22%
+2% -14%
9 months of 2017
752 766 143 88
• Lead production at Port Pirie of 123kt, down Auby 107 123 123
72 26 Langlois
14% vs. first 9 months of 2016 due to heat
Balen 175 181
exchanger failure in old acid plant in January 25
2017, and two 12 day blast furnace outages in Budel 212 197 East
49
March 2017 and September 2017 (planned Tennessee
Clarksville 81 85 46
Q4’17 roaster outage was brought forward to Middle
Hobart 177 181 Tennessee
September 2017) 13
0
9m’16 9m’17 9m’16 9m’17
• Zinc in concentrate production of 88kt, up 22% 9m’16 9m’17
on first 9 months of 2016, primarily due to
restart of MTN 25Financial and operating results
Group underlying EBITDA – 9m’17 on 9m’16
(€m)
Macro Metals Processing Mining
+€80m €(11)m €(19)m
(26)
175
6 FX
18 Other (4) (65)
(32) Zinc
2 USD
(6) AUD (63)TC
Group
6 19 €162m
156 Zinc (17)
(2) Other (38)
Group 162
(8)
€120m
162 MP
MP 143
Mining 2 33 Mining
Other (25) (34) Other
9m’16 Metal Strategic FX TC rate/ MP MP Mining Mining Other & 9m’17
EBITDA7 prices hedges Other Volume Costs Volume Costs Eliminations EBITDA
macro8
9m’16 9m’17 ∆
Zinc price (USD/t) 1,955 2,783 828
B/M Zn TC (USD/dmt)9 202 172 (30)
FX (EUR/USD) 1.12 1.11 (0.01)
FX (EUR/AUD) 1.50 1.45 (0.05)
Zinc metal (kt) 752 766 14
Zinc in concentrate (kt) 72 88 16
26Financial and operating results
Net Debt evolution over Q3’17
€m Zn Prepay & Perp Notes
(1,387)
Net Debt 23 (16)
(1,243) (257)
(249)
(26) 18
(257) (54)
(40)
(54)
51 (47)
1138
• PPR €(41)m
• Perp Note 16m (1,138) 1387
(986) • MP Growth €(15)m
(1,138)
(986)
(257)
Net Debt Group Sustaining Interest & Net Growth Working Change Proceeds Net Debt Change in Change in Net Debt
Jun’17 EBITDA Capex10 Tax Capex Capital in Ag from exclusive Zn Zn prepay Perp Notes inclusive Zn
Prepays divestment Prepay and Prepay and
Perp Notes Perp Notes
Sep’17 Sep’17
• Net debt (excluding the zinc prepay and perpetual Committed liquidity at the end of Sep’17
securities) increased by EUR 152m over the quarter,
predominantly due to: €m Capacity Drawn Available
− working capital outflow due to higher commodity SCTF Facility 500 (226) 274
prices; KBC Facility 50 - 50
− capex in-line with guidance; and Trafigura Facility 212 - 212
Cash 65 - 65
− amortisation of Ag prepays.
Total 826 (226) 600
Excluding intra-month
liquidity needs of 27
~USD 150-200mTable of Contents
I. Introduction
II. Key investment highlights
III. Financial and operating results
IV. Delivering a strong future for Nyrstar
V. Appendix
28Delivering a strong future for Nyrstar
Delivering a strong future for Nyrstar
Set to become cash flow positive from 2018
• Nyrstar is set to become a cash flow positive business from 2018 on the basis of three key pillars:
– Locking in an earnings uplift of ~ EUR 130m1 per annum from the fully ramped-up Port Pirie Redevelopment with
commissioning of TSL furnace on-track. Hot commissioning commenced end of September 2017 and first feed of new TSL at
end of October 2017
– Delivering a step change in operational performance to unlock the full potential of the existing zinc smelter asset base
– Extracting maximum value from Mining by optimising the North American mines, including the restart of Middle Tennessee and
Myra Falls, to operate for strong free cash flow
• Balance sheet has been substantially strengthened utilising a diverse range of funding opportunities with liquidity of EUR 600m
at the end of September 2017 and average maturity profile increased to 4 years
• Zinc industry macros are supportive and fundamentals look strong
– Expecting a period of sustained demand growth
– Supply response likely to be muted
– Metal stocks are low and declining
1 EUR 130m uplift against 2016 Underlying EBITDA using 2016 macroeconomic assumptions
29Table of Contents
I. Introduction
II. Key investment highlights
III. Financial and operating results
IV. Delivering a strong future for Nyrstar
V. Appendix
30Appendix
Zinc market fundamentals remain strong
Zinc
• Zinc outperformed the base metals complex in Q3 2017, with the price on both the LME and Shanghai Futures Exchange
moving beyond $3,200/t and $3,900/t respectively by the end of September 2017. The average monthly price for zinc on
the LME of $3,121/t in September 2017 was the highest since August 2007
• The supply of zinc concentrate has remained tight and has now been accompanied by a tightening of availability of
refined metal, as evidenced by the emergence of a sustained backwardation in the cash to three month spreads on the
LME and increased imports of zinc metal into China
• Exchange stocks of zinc at the end of Q3 2017 on the LME and SHFE continue to be at decade lows, having reduced by
c. 250,000 tonnes over the first 9 months of 2017
• Higher prices are triggering a supply response from miners (largely in India, Peru and Turkey) with the market now slightly
less tight than at the start of the year
FX
• The USD has weakened materially over the first 9 months of 2017. In H1 2017 the EUR/USD averaged 1.08 whilst in Q3
2017 it weakened to average 1.17, causing a material headwind for the translation of Nyrstar’s earnings
LME zinc price USD/t EUR: USD Exchange Rate
3,400
Q3’17 $2,963/t 1.22 Q3’17 1.17
3,200 1.20
Q1’17 $2,780/t
3,000 Q4’16 $2,517/t 1.18
1.16
2,800 Q3’16 1.12
1.14 Q2’17 1.10
2,600 Q4’16 1.08
1.12
Q3’16 $2,196/t
2,400 Q2’17 $2,596/t 1.10 Q1’17 1.06
2,200 1.08
Zn price USD/t
1.06 EUR/USD
2,000
Average zinc price 1.04 Average EUR:USD
0
0.00
Jul/16 Sep/16 Nov/16 Jan/17 Mar/17 May/17 Jul/17 Sep/17
Jul/16 Sep/16 Nov/16 Jan/17 Mar/17 May/17 Jul/17 Sep/17
31Appendix
H1 2017 underlying EBITDA sensitivity – excluding hedging
H1 2017 Estimated unhedged annual H1 2017 underlying EBITDA impact (€’m)
Change
Parameter average
+/-10% Metals
price/rate
Processing Mining Group
EUR:USD* 1.08 -/+ 10% +83 (68) +19 (15) +101 (83)
Zinc price $2,690/t -/+ 10% (34) +45 (18) +18 (52) +63
Zinc Base (25) +25 +3 (3) (22) +22
$172/dmt -/+ 10%
TC
EUR:AUD* 1.44 -/+ 10% (31) +26 - - (31) +26
Silver price $17.32/oz -/+ 10% (4) +4 (1) +1 (5) +5
Copper price $5,749/t -/+ 10% (2) +2 (1) +1 (3) +3
Gold price $1,238/oz -/+ 10% (1) +1 - - (1) +1
Lead price $2,221/t -/+ 10% (1) +1 - - (1) +1
Lead TC $138/dmt -/+ 10% (3) +3 - - (3) +3
EUR:CHF 1.08 -/+ 10% - - - - (6) +5
* In 2017, Nyrstar has implemented a strategic foreign exchange hedging program to reduce the transactional impact of foreign exchange rate movements
(transactional impact defined as cash outflows due to expenses in non-USD currencies). Nyrstar has executed strategic foreign exchange hedges utilizing put
and call collar structures. For the EUR/USD transactional exposure, various collars have been executed resulting in a weighted average collar of 1.05 to 1.14 for
approximately 100% of the total transactional expenses for H1 2017 and 1.00 to 1.10 for approximately 100% of the total transactional expenses for H2 2017
. For the AUD/USD transactional exposure, various collars have been executed resulting in a weighted average collar of 0.62 to 0.81 for approximately 100% of
the total transactional expenses for H1 2017 and 0.68 to 0.81 for approximately 100% of the total transactional expenses for H2 2017.
The sensitivities give the estimated effect on underlying EBITDA assuming that each individual price or exchange rate moved in isolation. The relationship between currencies and
commodity prices is a complex one and movements in exchange rates can affect movements in commodity prices and vice versa. The exchange rate sensitivities include the effect on
operating costs but exclude the effect on the revaluation of foreign currency working capital. They should therefore be used with care. 32Metals Processing
MP Capex (EURm) Zinc production (kt)
MP EBITDA (EURm)
90
84
39
36
56
63 27 10 14 261 257 247
54
45
7
38 38
21
Q1’17 Q2’17 Q3’17 Q1’17 Q2’17 Q3’17 Q1’17 Q2’17 Q3’17
Port Pirie Redevelopment Sustaining
Lead (kt)
Growth
49
39
35
EBITDA of EUR 45m (down 18% on Q2’17), due primarily to higher energy prices,
reduced production at Port Pirie and Budel and a weakening of the US dollar
against the Euro
Total capex up 7% on Q2’17, in-line with higher sustaining capex guidance Q1’17 Q2’17 Q3’17
provided for 2017 (EUR 100 to 135m), planned maintenance shuts in Q3’17 and
increased spend at Port Pirie with the completion of the redevelopment works
Silver (k toz)
Zinc metal production down 4% on Q2’17 and in line with full year 2017 guidance
of 1 to 1.1 million tonnes, predominantly due to planned maintenance outages in
Q3’17 and unplanned outages at Budel caused by defluidisations in August 2017
3.6
2.8 3.1
Q1’17 Q2’17 Q3’17
33Mining
Mining EBITDA (EURm) Capex (EURm) Zinc in concentrate production (kt)
16
4
11
18 0
8 34
0 5 30
8
10 3 23
5 5 6
4
Q1’17 Q2’17 Q3’17 Q1’17 Q2’17 Q3’17 Q1’17 Q2’17 Q3’17
Growth Exploration & Development
Sustaining
EBITDA of EUR 18m in Q3’17, up 76% on Q2’17, due to higher zinc price, operational improvements and restart of
the Middle Tennessee Mines
Capex in Q3’17 was EUR 16m, up EUR 5m on Q2’17, primarily due to the re-start of the Middle Tennessee Mine
and Myra Falls mine
• Zinc in concentrate production in Q3’17 of 34kt was up 13% on Q2’17 due primarily to the ramp-up of the Middle
Tennessee mines and improved production at East Tennessee which was impacted in Q2’17 due to lack of
development
34Appendix
Transformation EBITDA uplift driven by substantially increased
throughput and margin on internal zinc smelter residues
Indicative Port Pirie
Port Pirie throughput feed content1 Indicative margin per metal2
k dmt
Int. Int.
2016 2020 2016-20
Internal Residues Res. Res.
Pb Concentrates 620 Lead
3 30 Lead ~99%
(kt)
Silver
0.4 3.8 Silver 75-85%
(Moz)
Gold Blended
5 25 Gold 80-90% 2016-20
260 (koz) Margin
Copper
1 3 Copper 90-95%
(kt) Lead 12-21%
Zinc
360 10 25 Zinc ~15%
(kt) Silver 8-17%
60
Pb Pb Gold 15-16%
2016 2020 2016
Conc.’s Conc.’s
Lead Copper 90-95%
180 220 Lead ~10%
(kt)
360 Silver Zinc Uplift3 0.5-1.0%
300 15.0 20.0 Silver 5-7%
(Moz)
Gold
40 160 Gold 6-9%
(koz)
Copper
5 6 Copper 90-95%
(kt)
Zinc
2016 2020 15 18 Zinc ~90%
(kt)
1 Content values presented on rounded basis
2 Indicative margin represents approx. net value capture i.e. (Payable out – Payable in / Recoveries)
3 Blended Zinc margin uplift represents increase in average zinc free metal capture at segment level attributable to Port Pire Transformation
35Appendix
Increased throughput and increased margins provide a substantial
segment earnings uplift once ramped-up
1 Indicative production and consumption 2 Indicative margin %1 3 Prices2
2016 Average
Production 2016 2018 2019 2020 Margin 2016 2018 2019 2020 Prices
Lead (kt) 182 185 230 250 Lead 12% 19% 20% 21% Lead USD 1,872/t
Silver (Moz) 15 16 21 23 Silver 8% 12% 17% 17% Silver USD 17/oz
Gold (koz) 46 125 165 180 Gold 16% 16% 16% 16% Gold USD 1,250/oz
Copper (kt)
Zinc (kt, segment)
5
1016
6
1060
7
1060
8
1060
X Copper
Zinc
95%
0.50%
90%
1.0%
90%
1.0%
90%
1.0%
X Copper USD 4,863/t
Zinc USD 2,095/t
=
Acid (kt) 1357 1600 1725 1725 Acid n/a n/a n/a n/a Acid USD 40/t
2016 Avg Realised
Consumption 2016 2018 2019 2020
Pb TC
Pb conc. (k dmt) 300 280 340 360 USD 190/dmt
Int Res (k dmt) 60 150 210 260 n/a
4 Indicative Gross Profit uplift less DOC = EBITDA uplift (mEUR)
Indicative U.EBITDA Uplift 2018 2019 2020
Uplift in Gross Profit 66 138 164
Change in Port Pirie DOC3 (24) (34) (34)
Uplift in EBITDA 42 104 130
1 Margin represents increase in net value capture i.e. (Payable out – Payable in / Recoveries)
2 Uplift based on applying 2016 annual average metal prices, FX rates and 2016 commercial terms
3 Increase in Port Pirie DOC converted to EURm applying 2016 annual average EUR:AUD FX rate 36Appendix
2017 guidance
Production Capex
2016 2017 2016 2017
€’m
Actual Guidance Actual Guidance
Metals Processing
Zinc (kt) 1,015 1,000 – 1,100 Metals Processing 236 205 – 255
Sustaining 97 100 – 135
Mining - metal in concentrate Growth 44 25 – 35
Zinc (kt) 96 115 – 135 Port Pirie Redevelopment 95 80 - 85
Mining 21 65 – 85
Myra Falls restart - 35
Group capex 261 275 – 340
• Estimated impact of maintenance shuts on 2017 Planned maintenance shuts
production have been taken into account when Smelter & production step Timing and duration Estimated
determining zinc metal guidance for 2017 impacted impact
Auby – roaster, acid plant Q3: 2 weeks Nil
Balen – cellhouse Q2: 3 weeks 11,000 tonnes
Balen – roaster F5 Q3: 4 weeks Nil
Budel – roaster N1, roaster N2, Q2: 4 weeks 4,000 tonnes
acid plant
Budel – HV Transformer 1 & 2 Q2 & Q4: 1 week 2,500 tonnes
(each) (each)
Clarksville – roaster, acid plant, Q3: 1 week 3,000 tonnes
cellhouse
Hobart – roaster, acid plant Q2-Q311: 5 weeks 5,500 tonnes
Port Pirie – blast furnace, lead Q1-Q2 ‘18* 6 weeks 22,000 tonnes
refinery
* Shutdown was moved from Q4-17 to Q1-18 37For further information:
Anthony Simms
Head of Investor Relations & Insured Risk
D: +41 (0)44 745 8157
M: +41 (0)79 722 2152
E: anthony.simms@nyrstar.com
www.nyrstar.com
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