ESG Presentation (Data end 2016)

Transcription

1 ESG Presentation (Data end 2016)

2 Disclaimer These preliminary materials and any accompanying oral presentation (together, the Materials ) have been prepared by MYTILINEOS Holdings SA (the Company ) and are intended solely for the information of the Recipient. The Materials are in draft form and the analyses and conclusions contained in the Materials are preliminary in nature and subject to further investigation and analysis. The Materials are not intended to provide any definitive advice or opinion of any kind and the Materials should not be relied on for any purpose. The Materials may not be reproduced, in whole or in part, nor summarised, excerpted from, quoted or otherwise publicly referred to, nor discussed with or disclosed to anyone else without the prior written consent of the Company. The Company has not verified any of the information provided to it for the purpose of preparing the Materials and no representation or warranty, express or implied, is made and no responsibility is or will be accepted by the Company as to or in relation to the accuracy, reliability or completeness of any such information. The conclusions contained in the Materials constitute the Company s preliminary views as of the date of the Materials and are based solely on the information received by it up to the date hereof. The information included in this document may be subject to change and the Company has no obligation to update any information given in this report. The Recipient will be solely responsible for conducting its own assessment of the information set out in the Materials and for the underlying business decision to effect any transaction recommended by, or arising out of, the Materials. The Company has not had made an independent evaluation or appraisal of the shares, assets or liabilities (contingent or otherwise) of the Company. All projections and forecasts in the Materials are preliminary illustrative exercises using the assumptions described herein, which assumptions may or may not prove to be correct. The actual outcome may be materially affected by changes in economic and other circumstances which cannot be foreseen. No representation or warranty is made that any estimate contained herein will be achieved.

3 ESG Investors Presentation Contents 1 st Part 2 nd Part Value statement Our values & who we are Major Shareholders evolution Growth Productivity Risk Our business model How we create value for our Stakeholders Our Sustainability Key Landmarks 2

4 ESG Investors Presentation Value Statement MYTILINEOS Group is one of Greece s largest industrial companies with a long track record of successful international growth in the sectors of Metallurgy, EPC (Engineering - Procurement - Construction) Projects and Energy. Faithful to the business strategy and to its vision of continuous evolution and responsible development that has been following for more than three decades, MYTILINEOS Group today stands out for its unique and modern employment model, its active social profile, the innovative mechanisms it adopts for business growth, its strategic investments in leading-edge solutions to modernise operations and the successful consolidation of its presence in the global markets. At the same time, as a responsible industrial Group, MYTILINEOS strives for constant business excellence and for ensuring the application of best practices, balancing business growth with social responsibility and the protection of the environment. In late 2016, MYTILINEOS Group made one more business move that demonstrates its continuous efforts for business progress, evolution and growth, by announcing the merger of all its subsidiaries under a single umbrella. The business activity of MYTILINEOS remains inextricably linked to social responsibility. Our key concern is to ensure that our responsible development always creates added value for the our business, our shareholders and the people we work alongside. The new investments planned and carried out will aim to bolster competitiveness and to create new jobs. Guided by our strategy of extroversion, we strengthen our ties with society, we invest in our people and, together, we plan the company s future. 3

5 Our Values & who we are Data 2016 What we stand for Business Excellence We are pursuing the continuous improvement of our performance in order to achieve optimal business results Financial soundness / High profitability High efficiency / Excellent result Competitive advantage Continuous progress / Innovation High Safety & Quality standards Human Capital Our Business success is based on our people Team Spirit Integrity Communication Professional attitude Health & Safety at the Workplace Society & Environment We elevate our corporate social responsibility to a daily practice Socially responsible development Gaining the trust of the society around us Respect towards the environment Safety & Environmental Conscience Who we are MYTILINEOS is one of Greece s largest industrial companies with a long track record of successful international growth in the sectors of Metallurgy, EPC (Engineering - Procurement - Construction) Projects and Energy. As a responsible industrial company, MYTILINEOS strives for constant business excellence, balancing economic growth with sustainable development. The end of 2016 finds the Group stronger, ready for the next step in its business evolution. With the announcement of the merger of all subsidiaries under the single umbrella of MYTILINEOS, we turn the page in our course so far, creating a united, strong and flexible Greek business Group with an international identity, which combines strategic knowhow with successful industrial growth and the loyalty of all its employees. 1,246m Turnover 222.4m EBITDA 601m Social Product 34.2m Net Profits 91.8m Investments 3 Activity Sectors 25 Industrial production & RES plants 2,817 Employees (Direct & Indirect) 29 Countries of operation 5,002 Suppliers Data as published in 2016 Consolidated Reports and Accounts 4

6 Major Shareholders evolution A significant increase of the Foreign Institutional Investors trust 2013 Entry of FAIRFAX FINANCIAL HOLDINGS. The interest held by Fairfax in MYTILINEOS stands at 6.1%, making Fairfax the third largest MYTILINEOS shareholder. Share Price Information Market Cap: 696mn Avg. Trading Value: 1.0 mn {12M} Total No of shares: 116,915,862 Free Float: 68.0% Listing FTSE LARGE CAP 25 Tickers: MYTIL.GA, MYTr.AT 5

7 Our Business model MYTILINEOS business model targets long-term value creation for its stakeholders by delivering on profitability and growth, efficiency and operational excellence and handling operational risks of its businesses, as well as environmental conservation, and local communities relationships, preserving health and safety of people working in its subsidiaries, in respect of human rights, ethics and transparency. The main capitals used by MYTILINEOS (financial, industrial, natural, human and social) are classified in accordance with the criteria included in the International IR Framework published by the International Integrated Reporting Council (IIRC). Business model Integrated Risk Management 2016 financial results and sustainability performance rely on the responsible and efficient use of our capitals. Here under is articulated the map of the main capitals exploited by and actions positively effecting on their quality and availability. At the same time, the scheme evidences how the efficient use of capitals create value for the company and its stakeholders. For more detailed information on results associated to each capital you can advise the Integrated Value creation SCORECARD 2016 tool. Corporate Governance Strategic directions for Continuous Sustainable Growth Capitals inputs Business Activities Differentiated Products Value outcomes 6

8 How we create value for our Stakeholders Capital Inputs Value Outcomes Financial Capital Cash flow generated by our operations, Equity funding, Debt funding, Efficient systems, controls and processes. Main business activities Appropriate allocation of financial capital Sales focus Financial Capital Strong balance sheet, able to fund our business, Shareholder returns, financial stability and business sustainability. Financial accounting Management accounting Industrial Capital Business units, Industrial facilities, Equipment technology, Mining infostructure below ground, Mining and mineral rights, Quality systems, Appropriate skills. Cost management and treasury system Supply chain management Production line Safety, health, environment and operational risk management Industrial Capital Through the effective delivery of our commodities and the collaborative business partnerships, we develop high quality products that benefit our customers and the society at large. Industry benchmarking and research Natural Capital Raw materials, Water, Energy, land, air, biodiversity. Enterprise risk management Developing and implementing governance systems and processes Manage costs Research and develop new products Continuous reassessment of effectiveness of operational systems and processes Natural Capital We manage and mitigate environmental risks by implementing specific policies and procedures. As a responsible company we aim to minimize the environmental impact of our operations and products. Rehabilitation, Waste treated and recycled. Environmental Compliance Human Capital People, Skills, Ability, Knowledge. Environmental Policy & initiatives Management - Employee relations Labor practices (e.g. training, human rights) Engaging with communities and other relevant stakeholders Human Capital A healthy and fairly compensated workforce that is provided with the necessary training and development to achieve their personal and professional objectives and potential. Social Capital Open and honest engagement with our stakeholders is critical in gaining and maintaining our social and legal license to operate and, therefore, the sustainability of our business. Social Contribution Program Social Capital We create mutually beneficial partnerships with all our stakeholders. We contribute to society through our products, our tax payments, the products and service we buy and our investments in local communities. (Strategy, Risks & Opportunities) - Company s Organizational Model - (Performance, Outlook) 7

9 Our Sustainability Key Landmarks Implementation of the OHSAS H&S Standard Implementation of the ISO Environmental Standard The Group joins The Hellenic Network of CSR The Group joins the UN GLOBAL COMPACT Disclosure of Group CSR commitments 1 ST UNGC CoP (Active Level) Establishment of the formal CSR Governance system Establishment of the formal Stakeholders Engagement Process 1 st GRI (G3.1) Sustainability Report 1 st GRI (G3) Sustainability Report 1 ST Code of Professional Ethics Main challenges ISO CSR International Standard Implementation 1 ST Suppliers & Business Partners Code of Conduct 1 st GRI (G4) Sustainability Report 1 st ESG Investors Presentation 1 st Integrated Value Creation Scorecard Group s 2 nd Code of Professional Ethics Aligning with the UN SDGs Bloomberg ESG survey admission Sustainability Report GRI G3.1 (A+) (ESG Criteria) 1 ST UNGC CoP (Advanced Level) Introduction of the ISO Environmental Standard Greek Sustainability Code admission CDP (Water) Admission B Company s Social Contribution program Corporate Voluntarism policy & program Transparency due diligence process Supply chain ESG screening Group s 1 st Integrated Report CDP (Carbon) Admission 8

10 ESG Investors Presentation Growth What s in the Growth section: Company s long term long term strategy. Our main Business units & Market shares. Product & service - Contribution to a sustainable future. Productivity Export Oriented Intensifying activities abroad Sustainability beyond our boundaries. Potential business impacts of our sustainability plan. Risk Sustainability quality of revenue 9

11 Company s long term strategy Continues Responsible Growth Pursue regional leadership position in all three main sectors Maximise operating synergies Create value for stakeholders Business : Vision Metallurgy Sector Pursuit of new vertical integration projects or projects for expanding Metallurgy operations Increase competitiveness through strategic investments and hedging methods. Concentration on exports. Further strengthening of competitiveness through the implementation of cost reduction programs EPC Projects Sector Exploration of new opportunities for securing infrastructure projects in the domestic market. Expansion to existing and new developing markets, building on the Group s significant industrial know-how and infrastructure. Business focus on large-scale turn-key projects. Energy Sector Increase of share in the retail market for electricity and establishment of the Company as the largest independent electricity producer in Greece. Continuation of the investment plan in RES plants, to develop full integrated electricity production/supply operations. Pursuit of strategic alliances. Optimisation of the coverage under competitive terms of business needs in natural gas and achievement of strategic synergies in natural gas trading to third parties. Sustainability : Vision Continuous adherence to the law across all hierarchical levels and activities of the Group. Strict commitment to employees Health & Safety. Continuous Stakeholder engagement and collaboration. Implementation of best practices that enhance harmonious coexistence with the local communities. Maintaining transparency and strengthening of the corporate governance system. Strengthening of the Group s role as a key sustainability actor in Greece. Improvement in the use of natural resources. Further strengthening of waste recycling and utilisation. Stabilisation and reduction of air emissions. Maintaining the high efficiency rate of power plants. Raising public awareness of issues related to Responsible Entrepreneurship. 10

12 Our main Business units & Market shares Mytilineos Holdings SA, founded in 1908, is one of the leading industrial groups in SE Europe active in Metallurgy and Mining, Power and Gas, and EPC sectors. Mytilineos is listed on the Athens Stock Exchange (ASE) and is 32.0% owned by the Mytilineos family Business Units METALLURGY BUSINESS UNIT Largest vertically integrated producer of refined alumina and primary aluminium in South-East Europe. Own bauxite mines, an alumina refinery and an aluminium smelter with annual production capacity of 815k MT and 185k MT respectively. ELECTRIC POWER BUSINESS UNIT Leading independent power producer (IPP) in Greece, with a long term strategy of becoming an integrated energy player. Sole private Gas importer after the local incumbent DEPA. Total Power capacity of 1.2GW. Portfolio of Renewable Energy Sources (RES) projects in various stages of development: 225 MW On track to become the largest private electricity supplier. Market share on the retail level 2.7% (2016) EPC BUSINESS UNIT EPC contractor in the EMEA region. Its capability extends across the full range of thermal power generation technologies (including combined cycle, cogeneration and simple cycle technologies), as well as hydro and solar power generation. Currently c. 1.1bn backlog, of which 70% stems from projects outside Greece 11

13 Συμβάλλουμε Product & service με τη - δραστηριότητα Contribution to μας a sustainable στη βιώσιμη future ανάπτυξη METALLURGY BUSINESS UNIT EPC BUSINESS UNIT ELECTRIC POWER BUSINESS UNIT We contribute to the development of the products and solutions that help people to reduce energy consumption and emissions. We produce Aluminium which is one of the most environmentally friendly metals. Aluminum is 100% recyclable and can be reborn an endless number of times. About 75% of aluminium that has ever been produced is still in use. In many regions of the world, the absence of reliable sources of electricity generation significantly affects economic development. We provide a broad range of complete, specialized and cost effective fast-track power solutions, to support governments, local communities and industrial customers around the world. We execute projects to improve environmental performance, either by upgrading existing equipment or by installing new state-of-theart emission control technologies. We produce and supply the National Grid with electricity from Renewable Energy Sources (RES). From Wind Farms (112 MW in operation), Photovoltaic Parks (11,5 MW in operation) and Small Hydropower Plants (6 MW in operation). Also our total 1.2GW capacity through 3 gas-fired power plants is making a significant contribution to the efforts to reduce carbon dioxide emissions at the national level, as the electricity supplied to the National Grid substitutes the power which under the previous conditions would be obtained from lignite combustion. 12

14 Export Oriented Intensifying activities abroad Key Highlights Exports of Metallurgy & Mining Sector Non-Greek revenues and exports represent 75% of the consolidated turnover. MYTILINEOS Group exports account to > 2% of Total Greek exports. Puerto Rico Projects Group s production units in Greece Gradually expanding to high growth potential markets Recently established in Sub-Sahara Africa. In 2016 the Group expanded it s presence in Americas. Diversified sources of revenues in terms of activities, geographies and currencies. Ghana Projects Revenues almost equally split between USD and EURO. 13

15 Sustainability beyond our boundaries Respecting cultural differences, MYTILINEOS responsibly strives to unite its subsidiaries on the basis of values, policies and rules applied in the countries where undertaking projects. Africa Europe Middle East Asia C&L America Definition and deployment of local projects plans according to MYTILINEOS policies Compliance/Governance Social Commitment/Employment Project Quality Health & Safety Environmental Protection 14

16 Potential business impacts of our sustainability plan Maintain a Stable Cash Flow Cash flow allows MYTILINEOS to meet its obligations such as payroll and to fund marketing and business development programs. As an ethical and socially responsible company, MYTILINEOS avoids the cost of litigation and other problems such as fines and penalties assessed by the government for lack of regulatory compliance and lawsuits from customers due to product defects or from employees due to unsafe working conditions that could have a negative effect on its cash position. Maintaining a stable cash flow keeps the Company on its growth track. Secure Corporate Reputation MYTILINEOS s image affects its relationship with all of its stakeholder groups. Avoiding impacts on corporate reputation and as a consequence indirectly financial risks, the company saves money and keeps its managerial resources focus on the important tasks of productivity. Access to Funding Capital is needed to fund company s investment plans and can be viewed as a mechanism to ensure its organizational stability. MYTILINEOS recognize its shareholders trust and corresponds to investors groups who focus on the ethical and social standards when deciding whether to commit capital to a company. Preserve Stability MYTILINEOS strives for Continues Responsible Growth and as a dynamic, rapidly evolving company, becomes a leading force in its main activity sectors. In this framework company s long-term goals of revenue growth and increased profits can be served by maintaining stability with certain aspects of its sectors, retain at the same time its social license to operate in local communities. Increase the loyal Customer Base For the MYTILINEOS, its loyal customer base is a valuable asset. Company s sustainable initiatives are part of the perceived value of its products and services which result higher customer satisfaction and can increase its market share especially in Greek electricity market. Continue to be Reliable Partner In EPC Projects sector, the company undertakes large-scale power generation projects, either as a main contractor, or in consortium with leading power generation equipment manufacturers. Sustainability plan helps the company to fully respond to the non-financial demanding requirements (Social & Environmental) of the public tenders in Greece and other countries in which participates to undertake projects. 15

17 Sustainability quality of revenue (2016) Energy is central to nearly every major challenge and opportunity the world faces today. Universal access to energy is essential. Energy is a key factor for sustainable development and poverty eradication. According to the target 7 of the UN s Sustainable Development Goals: AFFORTABLE & CLEAN ENERGY, a significant proportion of MYTILINEOS turnover, each year, comes from two main sustainable activities such as the construction of energy projects in markets and countries with substantial energy needs and the RES energy sold. Sustainability quality of revenue 2014 Sustainability quality of revenue 2015 Sustainability quality of revenue 2016 Key Ratio Total revenue/sustainability revenue 2.2x Key Ratio Total revenue/sustainability revenue 2.3x Key Ratio Total revenue/sustainability revenue 4.3x 16

18 ESG Investors Presentation What s in the Productivity section: Our socio-economic impact. Growth Operational efficiency. Business environmental investments. Emissions & Energy. Water & Waste. Productivity Employment. Health & Safety. Labor practices. Risk Community projects 17

19 Our socio-economic impact (2016) 28.9 m m 91.7 m 87.7 m On Environmental improvements To local & international suppliers In company s future development To employees salaries & pensions Aiming to be one of the world s most responsible companies in our Business Sectors from an economic, social and environmental perspective, we use our unique strengths, resources and relationships to create sustainable value for a wide range of our stakeholders m 54.1 m 1,4 εκ. 100 In taxes to national authorities To capital providers In community projects New jobs 18

20 Operational efficiency (2016) Metallurgy & Mining EBITDA Semi Annual Performance - All in Aluminium Prices Safeguarding profitability through the cycle MELLON Implementation EXCELLENCE Implementation 2H2016 EBITDA at 47.3 m. up 45.0% vs 2H2015. All-In Prices rebounded in 2H2016 from their multi year low levels in 1H Strong USD against Euro. 1. MELLON Cost Cutting Program ( ) 2. EXCELLENCE Cost Cutting Program ( ) 3. BEST new Cost Cutting Program to run over Competitive Electricity Tariff CHP Commercial Operation Labor Cost -Productivity Logistics Freight Costs Raw Materials Replacement of HFO with NG Investments in new Technology Source: Company Information Bloomberg, Harbour Intelligence. 19

21 Business environmental investments ( ) Business investments over 300 million with a direct environmental impact in Metallurgy Sector Establishment of a High-Efficiency Combined Heat and Power (CHP) Plant which uses Natural Gas as combustion fuel. Metallurgy Sector: Investment of 200 m. The CHP Plant contributes in a highly effective way to the efforts to save on primary energy and to significantly reduce CO 2 emissions at the local, national and European level. Breakthrough collaboration between Aluminium of Greece and General Electric (GE) to optimize productivity and reduce energy costs Establishment of a new alumina calcination plant Investment value of 33 m. Involves the modernisation of the equipment in the wider electrolysis area. Improves the production capacity, creates new jobs, helps to reduce farther the energy consumption & CO 2 emissions. Installation of 4 Filter Presses for drying bauxite residues. Investment value of 15 m for the installation of 4 Filter Presses for drying bauxite residues and the design and layout of the corresponding areas and of pilot plants.. Construction of new Cells of the Controlled Landfill for Hazardous Waste Investment value of 4.7 m, to address the needs for the disposal of hazardous waste, the 6 th & 7 th cells of the Controlled Landfill for Hazardous Waste, regarded as a model construction in the Greek industry, was successfully completed and is now in full operation. ENEXAL European research program. This investment, with value of 4,7 m, covered the costs for the installation of a prototype pilot unit, in order to develop a specific technology for the treatment of bauxite residues with the aim of producing pig iron and stone wool. Aluminium of Greece (AoG) in cooperation with GE, installs the world's first Digital Smelter, an innovative digital solution in the electrolysis process. The Digital Smelter will be developed by GE's teams in the US and the UAE, constituting an example of international cooperation for the world's first of its kind project. This digital solution will optimize the electrolysis process of AoG by reducing energy consumption, reducing the amount of aluminum fluoride used in the aluminum and allowing provision on pot leakages By applying GE's digital solutions for aluminum electrolysis, AoG paves the way to increase productivity and reduce energy consumption of this crucial aluminum sector in Europe. 20

22 Emissions & Energy (2016) Total emissions (Scope 1 & 2) Total energy consumption 1 (Mio t CO 2 e) (TJ ) The Metallurgy Sector, represents nearly the 88%-90% of the total Company s emissions produced and the 55% of the total energy consumption. The increase in energy consumption & emissions volumes, comparing to 2015, is mainly due to the increase of energy production (+75% from 2015) from the company s thermal power plants. With the establishment of the new alumina calcination plant, in Metallurgy & Mining Sector, it is expected in 2017 a reduction of CO 2 emissions by about 20,000 tons/year, Nox emissions by about 15 tons/ year and a reduction of 25% in energy consumption. Specific emissions (PFC s) (kt CO 2 e per year) Metallurgy & Metal Sector +11% Carbon intensity of energy purchased for consumption (t CO 2e /TJ ) -3.6% In Electricity Power Sector we try to maintain the efficiency rates achieved in the operation of the thermal power plants, which are among the highest in Greece, making the best possible use of natural gas as their primary fuel. To produce electricity, the company s thermal plants use natural gas. This is a fossil fuel that has a lower carbon content compared to other mineral fuels, does not release SO 2 and particles, emits less NOx (mainly N0 2 ) in exhaust gases compared to the maximum allowed quantities under the applicable laws, and produces less C0 2 (by 70%) compared to lignite-fired plants. Targets Total energy consumption = Energy consumption from Non-renewable sources + Energy consumption from Renewable sources + Energy purchased for consumption + Energy produced Energy sold. Stabilise CO2 emissions in aluminum production below 3.9 m tones. 21

23 Water & Waste (2016) Water Total water consumption (in million m 3 ) MYTILINEOS 2016 water score MYTILINEOS score relative to companies responding to CDP Water; companies in the regional sample; and industry and sector peers. Benchmarking The number of companies in the Energy sector receiving each score. The band of MYTILINEOS is in red. Water consumption is defined as the amount of water that is used but not returned to its original source. B CDP comment: A good result. MYTILINEOS is measuring its impacts to try and reduce them, has implemented a policy and a strategic framework within which to take action, and has set targets on water issues. Target 2020 CDP Water Score A Waste Total waste recycled, recovered or reused (in thousands t) Participation in EU programs on cost efficient green technologies in the aluminum industry. (full utilisation of bauxite residues) Innovation Hub Bauxite residues, represent nearly the 90% of the total company s waste each year. Percentage of waste recycled, recovered or reused (other than bauxite residues) involves industrial waste as well as various types of materials collected. Targets 2020 Total waste reduction by 18% comparing to average figure Increase the waste recycle up 23 to 45% comparing to 2014 figure 22 CDP.

24 Employment (2016) Creation of 100 new jobs in 2016 Targets 2020 Maintain direct & indirect jobs Percentage of women at work above 14% Percentage of young employees above 12,5% MYTILINEOS supports direct and indirect jobs Unemployment rate 27,1% Sterea Ellas Thessally 23

25 Health & Safety (2016) Zero incidents of Occupational Diseases Zero Fatal Accidents Implementation of OHSAS in Metallurgy Sector Implementation of OHSAS in EPC Projects Sector Implementation of OHSAS in Electrical Power Sector Stakeholder Engagement: 1 st thematic consultation concerning H&S in Metallurgy Sector, with the participation of specialised market executives and Health & Safety professionals. Targets Zero Fatal Accidents Zero Accidents Zero Occupational Diseases Increase H&S awareness to subcontractors Increase H&S culture among Business Units Injury Rate decrease by 88.3% Lost Day Rate decrease by 64.5% 0.21 Injuries/200,000 working hours 5.9 lost days/200,000 working hours 25 24

26 Labor practices (2016) Human Rights No incidents of child or compulsory labour No incidents of employee rights restriction to exercise freedom of association or collective bargaining Equal Opportunities No incidents of discrimination in the workplace Emphasis is given on recruitment of young people who suffer the highest rates of unemployment as well as on women employment strengthening. The women employment amounted to 13.4%. The percentage of women in positions with extended responsibility amounted to 18.2%. The percentage of employees who returned to work following parental leave amounted to 93.5% MYTILINEOS seeks to ensure the prosperity of its employees, as it considers them to be the most important factor of its growth. Therefore, employees are considered to be "integrated" into the company beyond the mere employment-remuneration relationship that formally connects them with it, in the sense of the constant improvement of their capabilities and of the outcome of their work. Training & Development In 2015, a total of 53,122 man-hours of training programs took place in all Business Sectors. Training cost per employee: 166 euro. Average training hours per employee: 23.1 hours Percentage of employees who received a performance review: 91.1% For the last year deviations you may consult the Integrated Value SCORECARD tool. Targets 2020 Employee turnover below 12% Development an Employee Voluntary Program To be a first choice in our employees professional career 25

27 Community projects (2016) Social Expenditures m Creating long-term employment opportunities for young people is good for a world that needs to engage and empower youth, cover skills gaps and drive economic growth; good for the sustainability of the local communities where we operate; and good for the vitality and creativity of our business. In 2016, we continue to implement our educational and internship programs aligned with our commitment to the European Pact for Youth. The European Pact for Youth is a mutual engagement of business and European Union leaders, aiming to develop and consolidate partnerships in support of quality internships and apprenticeships that safeguard youth employability and inclusion. The added value created by our business activity in the Electricity Power Sector, through the development of Renewable Energy Source (RES) projects, is reflected in the significant benefits for the local communities, as well as in our contribution to the achievement of the national environmental goals. In 2016, the total investment in sponsorships, donations and infrastructure projects in Municipalities where RES projects are in operation or will be developed amounted to 474,000. Additionally, over 230,000 was invested in initiatives to meet specific local needs, such as: reconstructing the turf of a football pitch in Aspra Spitia, providing financial support to the families of the «Arogi» foundation of the Holy Metropolitan Church of Thebes and Livadia, supporting NGOos, associations, charitable institutions (children with disabilities, chronic diseases, etc). Social Programs in place ENGINEERS IN ACTION 2 nd year of implementation. A 12-month paid employment program. This is an action of great social value as it supported, showcased and boosted the prospects of talented young engineers regarding their entry in the labour market. NEW GENERATION IN ACTION 1 st year of implementation A 12-month paid employment program. The programme is an initiative of MYTILINEOS aiming to offer an access point to young people, who at the moment are outside the labour market, and to open up career prospects, providing them with a strong incentive to stay in our country. I m In! 3 rd year of implementation An innovative program in partnership with the Together for Children Association to tackle the School Drop out phenomenon in Greece. 26

28 ESG Investors Presentation Growth What s in the Risk section: Corporate Governance Pillars Business Risk Management. Productivity Reputation & Leadership. Combating corruption & bribery. Manufacturing & operational process risk certification. Risk 27

29 Corporate Governance Pillars Governance tools are applied to ensure that internal rules, processes and corporate activities comply with regulatory framework and Company policies. Governance legislation We follow the Greek Corporate Governance Code set on the Greek legislation requirements by the Greek Council of Corporate Governance. Corporate Values Non executive members 75% Executive members 25% Male 87,5% Board Composition Board members 8 Board Diversity Non Independent members 62,5% Independent members 37,5% Female 12,5% Audit Committee (3 members) Independent Non executive members 66,6% Board Committees Committees 3 Other Committees Corporate Social Responsibility Committee (5 members) Remuneration Committee (3 members) Independent Non executive members 33,3% Business Excellence Human Capital Society & Environment Code of Conduct Internal Audit System CSR Governance System Risk Management System The Code of Conduct includes the general principles which define the ethical rules that all the employees and business partners of MYTILINEOS are expected to follow, as well as the commitments of the Company s Management towards its people. The Internal Audit is implemented by the Internal Audit Division which is an independent, objective and consulting to the BoD activity designed to add value and to improve the Company s operations. CSR Committee Legal & Regulatory Affairs Division Executive Management of Business Units Business Units CSR Teams Stakeholder Engagement Process Codes & Policies All Management Executives are involved in the identification and initial assessment of risks and actively contribute to the scheme and the adoption of specific management measures. 28

30 Business Risk Management By operating in three in three basic business sectors, Metallurgy, EPC Projects and Electrical Power, the MYTILINEOS is faced with a number of different risk factors. Political, legal and regulatory Risks Health & Safety Risks Environmental lows & regulations Risks Climate Change Risks Sustainability Risks Financial Risks Foreign Exchange Risk Price Risk Interest rate Risk Credit Risk Liquidity Risk - Counter balancing the risk stemming from the fluctuation of the aluminum price with the use of various financing tools. - Counter balancing the risk stemming from its exposure to the fluctuations of the parity /$ with the use of derivatives - Restructuring energy cost items. Market Risks EPC Sector Risks Risk Management IT Risks Rising cost of row materials and unfavorable conjunctures The Group tries to negotiate and lock the main freight contracts with competitive terms. At the same time, the Group has implemented a new system of assessing the prices for the procurement of raw materials, while it also runs a continuous cost optimization and reduction program. Business Interval Risks 29

31 Business Risk Management CO 2 e intensity of revenue (kg CO 2 per euro) Energy intensity of revenue (kwh per euro) Main sustainability Risks intensity as reflected in certain dimensions. The 2016 performance, shown an increase in 3 out of the 4 dimensions that was mainly due to the significant increased participation of the thermal power plants of Electricity Sector in the wholesale electricity market, in conjunction with the decline of 33% of the turnover comparing to 2015 due primarily to the reduced contribution of the EPC Projects Sector. Water consumption intensity of revenue (Lit per euro) Number of accidents per 100 m euro of revenue +2.5% 30

32 Reputation & Leadership METALLURGY BUSINESS UNIT EPC BUSINESS UNIT ELECTRIC POWER BUSINESS UNIT Is the largest vertically integrated European Metallurgy & Mining Group in SE Europe, and the 2 nd largest bauxite producer in Greece. Is one of the strong pillars of Greek industry and a driving force for the growth of the Greek economy and the development of the Greek periphery. 3 rd place in Alumina production in Europe. Is ranked in the list of the 250 Top International Contractors for 7th consecutive year, reinforcing its position as a leading Study- Supply-Construction Company in integrated energy projects internationally.(engineering News Record - ENR magazine) Is, today, a leading Greek exporting company and one of the top Greek businesses in the construction sector. It competes on an equal footing with global giants and has been established as one of the strongest players in the global market for EPC and Energy projects. Is Greece s largest independent electricity producer and first-ever private supplier of natural gas. It leads the way towards a decarbonized energy system in Greece investing in RES and NG capacity that replaces carbon - intensive lignite fired plants. Under the Greek electricity market liberalisation, Protergia has seen its market share increasing by 163% in the end of 2016 (2.7% - 1 ST place according to the data of the private electricity suppliers in Greece). 31

33 Reputation & Leadership CoP Active level CoP ADV Level: Implementation Percentage of suggested best practices 50.4% 51.5% 54.8% 59.1% Communication of Progress ADVANCED LEVEL MYTILINEOS Group is the only Greek company that creates & submit its CoP in Global Compact official website as a stand - alone document including relevant information in terms of the implementation of the suggested best practices of the 21 advanced criteria. ESG Survey 2012 Total SCORE 2013 Total SCORE 2014 Total SCORE 2015 Total SCORE 2016 Total SCORE Environmental Score Social Score Governance - Score According to 2016 official results, MYTILINEOS ranks No. 1 ( for the 6 th consecutive year) among all participating Greek companies and No.2 at a global level (Bloomberg platform official data 26/10/2016). 32

34 Combating corruption & bribery Zero incidents of Corruption and Bribery Committed to 10 th Principle of UN Global Compact against corruption & bribery 1 st Edition of Professional Ethics Code Disclosure Management approach : NO TOLERANCE against Corruption 1 st Self Assessment implementation to all our subsidiaries against Corruption and Bribery Participation to Call to Action initiative against Bribery and Corruption Specific anticorruption policy in EPC sector Publication of the 2 nd edition of the MYTILINEOS Code of Business Conduct Targets Zero incidents of Corruption and Bribery Establishment of a new due diligence procedure to enhance Transparency. 2 nd Self Assessment implementation against Corruption & Bribery MYTILINEOS Business Development Division, in EPC Projects Business Sector, operates as a transparency safeguard in the countries where undertakes projects Its role is mainly the identification of new projects, business development with potential customers (local State Utilities, Ministries and IPPs) and long-term relationship building with existing customers and partners in strategic countries, aiming to optimize long-term cooperation and develop more favorable project management/execution conditions. Dedicated Area Directors are appointed for each region of strategic interest. The team is responsible for the systematic market research & analysis, gathering of geographical information, activity sectors of interest, potential customer-base, competition monitoring, etc. The respective market intelligence, along with new project opportunities/tenders, is communicated to Management, who decides in each case which ones to pursue further. Depending on the strategic interest and general viability of the project, the initial tender phase may lead to the final stage where an official contract is signed for the execution of the project. 33

35 Manufacturing & operational process risk certification 100% of our Business sectors certified 100% of our Business sectors applied 100% of our Business sectors certified 100% of our Business sectors certified Metallurgy Sector certified Aluminum of Greece quality control laboratory has been accredited by Hellenic Accreditation System S.A. (ESYD S.A.) in accordance with the requirements of the ISO 17025:2005 International Standard, for the chemical analysis of bauxite, alumina (both hydrated and calcined), and of aluminium and its alloys. This accreditation concerns the Quality Management System of the Laboratory and its technical competencies and overall adequacy for carrying out tests in the areas for which it has been accredited. 33% of our Business sectors certified 66% of our Business sectors applied Stakeholder Engagement process 100% of our Business sectors applied The Stakeholder Engagement process expresses in a systematic way, the longstanding principle of MYTILINEOS which refers to the ongoing and honest dialogue with the social groups that affect its activity and are affected by it, in the context of its responsible operation. This initiative is continuing with consistency and is subject to self-evaluation and self-improvement procedures. The effectiveness and transparency of this process is assured through the Group's CSR Governance system, under which the individual CSR teams of the subsidiaries have been tasked with recording and evaluating all Stakeholder proposals, ideas and concerns related to sustainability issues. Once this has been done, the most important issues are forwarded to the Management of the companies, so that decisions can be made concerning the responses to them and, where feasible, their integration in the corporate strategy. 34

36 ESG Presentation Annexes 35

37 Main KPIs progression ENVIRONMENTAL Indicators Environmental expenditure (mio ) Greenhouse gas emissions (Scope 1, thousand tonnes) 2, , , ,353.6 Greenhouse gas emissions (Scope 2, thousand tonnes) 2, , , ,321.0 Total energy consumption (TJ) 1-31,835 35,954 49,323 Total water withdrawal (million m 3 ) Total water consumption (million m 3 ) Carbon Disclosure Project (Water - Score) B Total bauxite consumption (tonnes) 1,830,398 1,830,996 1,833,201 1,875,509 Total Natural Gas consumption (mio Nm 3 ) - 556,9 651,5 900,3 Total non Hazardous waste (thousand tonnes) Total Hazardous Waste (thousand tonnes) Solid waste recycled 3 (tonnes) - 28,107 32,463 36,137 Rehabilitation percentage of usable areas from the mining activity 78% 79% 80% 80% Percentage of business sectors with ISO certification 100% 100% 100% 100% Incidents of non-compliance with environmental laws and regulations Total energy consumption = Energy consumption from Non-renewable sources + Energy consumption from Renewable sources + Energy purchased for consumption + Energy produced Energy sold. 2 This figure shows the water intake in our industrial & energy plants for cooling purposes (brackish for cast house in aluminium production and seawater for the High Efficiency Combined Heat and Power plant). The limit on the volume of seawater withdrawn annually is determined by a Decision of the Water Resources Management Directorate of the Regional Administration of the Prefecture of Sterea Hellas. The use of the water is under permission by the local Authorities. Withdrawal of this kind of water has decreased (by 23.8%) with respect to last year due to the temporary halting of operation for maintenance purposes of the High Efficiency Combined Heat and Power (CHP) plant. 3 This percentage refers to waste other than bauxite residues. 36

38 Main KPIs progression SOCIAL Indicators Number of employees (direct & indirect) 1 2,001 2,137 2,199 2,696 Percentage of full-time employees covered by collective bargaining agreements 76.0% 79.2% 78.6% 75.5% Percentage of employees from local communities 85.0% 87.6% 88.4% 86.6% Turnover rate 17.2% 13.7% 17.5% 14.0% Full time employees retention rate % 95.6% Work-related fatalities (direct employees) Lost-time injury incidents Lost-time injury rate (per 200,000 working hours) Lost days due to accidents (per 200,000 working hours ) Occupational diseases rate (per 200,000 working hours) Percentage of women in total employment 13.1% 12.8% 12.3% 13.4% Percentage of women in positions with extended responsibility 16.0% 15.4% 16.3% 18.2% Percentage of employees who received formal performance evaluation reviews 85.0% 80.0% 86.5% 91.1% Training man-hours 53,917 53,995 56,540 53,122 Average training hours per employee Cost of training per employee ( ) Investments in local communities (mio ) Total number of suppliers - 4,941 4,808 5,002 Percentage of domestic suppliers - 78% 81.7% 86% Outlays to domestic suppliers (mio ) The displayed deviation from the previous years, is due to the fact that the number of indirect employees of the ALUMINIUM of GREECE is included for the first time. 37

39 Main KPIs progression CORPORATE GOVERNANCE Indicators Corporate Governance Code Greek Corporate Governance Code Greek Corporate Governance Code Greek Corporate Governance Code Greek Corporate Governance Code Board Members President duality Yes Yes Yes Yes Independent Members on the Board Non executive Members on the Board Women on Board Voting standard Majority Majority Majority Majority Number of the Board meetings Number of members attending <75% of the Board meetings Board committees Audit & Remuneration Audit & Remuneration Audit & Remuneration Audit & Remuneration Audit committee members Independent Members on the Audit committee Other committees CSR CSR CSR CSR CSR Governance system Yes Yes Yes Yes Political contributions Code of Conduct 1 st Edition st Edition st Edition nt Edition 2016 Suppliers Code of Conduct 1 st Edition st Edition st Edition st Edition Concerning to the number of BoD meetings we note that Mytilineos S.A. is a holding company, enlisted with the Athens Exchange Stock market. Pursuant to the Greek Law, the Articles of Association of the company and respective Shareholders resolutions regarding delegation of authorities within the BoD, collective action of the members of the BoD is required for provision of any corporate guarantee in favor of any third party, including companies- members of the Mytilineos Group. Taking into consideration the extended activities of the Group members, Mytilineos is very often requested to provide Parent Company Guarantee in favor of daughter companies to bank institutions, suppliers and/or in the course of tender calls. For such guarantees to be granted, the members of the BoD must act collectively, meaning there needs to be a respective resolution for each guarantee depicted in minutes to BoD meeting. Considering also how often such guarantees are being requested by Mytilineos and that respective resolution is always prerequisite before validly entering into a guarantee agreement, it is not feasible to schedule several respective resolutions in a single meeting agenda (e.g. on a monthly basis). 38

40 Contact Information Dimitris Katralis IR Officer Tel: Fax: Georgios Galanis CSR Supervisor Tel: Fax: Mytilineos Holdings S.A. 5-7 Patroklou Str Maroussi Athens Greece Tel: Fax:

41 Thank you for your interest 31_10_2017 mytilineos.gr