ESG presentation. October 2016

Transcription

1 October 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. 2

3 Contents 1 st Part Value statement Our values & who we are Shareholder Structure Our business model Creating value for our Stakeholders Well diversified and export oriented Our Sustainability Key Landmarks 2 nd Part Growth Long-term Strategy Main business units & Market Shares Product Innovation - Contribution to a sustainable future Existing & new markets Sustainability beyond our boundaries Potential business impacts of our sustainability plan Sustainability quality of revenue Productivity Social product & Socioeconomic impact Operational efficiency Natural Capital Management Human Capital Management Risk Corporate Governance Pillars Business Risk Management Reputation & Leadership Transparency Manufacturing & operational process risk certification 3

4 Value Statement Firmly focused on its strategic goal of CONTINUOUS RESPONSIBLE DEVELOPMENT, MYTILINEOS Group has strengthened its presence in all its areas of activity. It consolidated its position as the largest private producer-supplier of electricity in Greece, targeted new markets in the construction sector, and maintained its consistently high performance in the metallurgy sector. With a turnover standing at 1.38 billion, the Group contributes 0.78% of the Greek GDP, while its export activity, estimated at million, accounts for 1.8% of total Greek exports. The business activity of MYTILINEOS Group 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 Group s future. With the new business investments carried out by the Group s subsidiaries, we continue our robust and consistent investment plan, driven by the vision to establish MYTILINEOS Group as one of the world s leading industries of its kind. 4

5 Our Values & who we are 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 Group is one of Greece s leading industrial groups, with a dynamic presence in a number of different, yet crucial to the country's development, production sectors. With efficient strategic planning, the Group has worked out a flexible deployment of its resources in the sectors of: Metallurgy & Mining, in which it promotes the global competitiveness of the products of Greek metallurgy Turn-key Construction Projects, in which it ranks as one of the world's top EPC contractors in the energy sector Energy & Gas, where through pioneering investments it has been established as Greece s largest private electricity producer-supplier and the very first private alternative natural gas supplier. 3 Activity Sectors 4 Affiliated Companies & Participations 21 Industrial production & RES plants 7 Countries of operation Data 2015 Turnover 1,383 m m (2014) EBITDA m 253,9 m (2014) Net profits 47.6 m 64,9 m (2014) Employees (direct & indirect) 2, (2014) Social Product m 261,5 m (2014) 5

6 Shareholder Structure Shareholder structure December 2010 Shareholder structure* December 2015 Foreign Institutional Investors: 16% Domestic Institutional Investors: 13% Mytilineos Family: 39% A significant increase of the Foreign Institutional Investors trust Foreign Institutional Investors: 29% Domestic Institutional Investors: 10% Mytilineos Family: 32% Retail Investors: 32% 2013 Entry of FAIRFAX FINANCIAL HOLDINGS. The interest held by Fairfax in MYTILINEOS Group stands at 5.88%, making Fairfax the third largest MYTILINEOS Group shareholder. Retail Investors: 29% Market Cap: 476mn 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 6

7 Our Business model MYTILINEOS Group 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 Group (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) 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 Group and its stakeholders. For detailed information on results associated to each capital see the Integrated Value creation SCORECARD Business model Integrated Risk Management Corporate Governance Strategic Directions for Business & Sustainable Growth Capitals inputs Business Activities Differentiated Products Value outcomes 7

8 Creating Value for our Stakeholders Financial Capital Capital Inputs 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 accounting Management accounting Cost management and treasury system Supply chain management Financial Capital Value Outcomes Strong balance sheet, able to fund our business, Shareholder returns, financial stability and business sustainability. Industrial Capital Natural Capital Business units, Industrial facilities, Equipment technology, Mining infostructure below ground, Mining and mineral rights, Quality systems, Appropriate skills. Raw materials, Water, Energy, land, air, biodiversity. Production line Safety, health, environment and operational risk management Industry benchmarking and research 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 Industrial Capital Natural 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. 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. Human Capital People, Skills, Ability, Knowledge. Environmental Compliance Environmental Policy & initiatives Management - Employee relations Labor practices (e.g. training, human rights) 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. Engaging with communities and other relevant stakeholders 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) - Group s Organizational Model - (Performance, Outlook) 8

9 MYTILINEOS Group a well diversified and export oriented group. Revenue (FY 2015) EPC Sector 47% 86,1% of revenues generated through projects abroad Revenue (FY 2015) Metallurgy & Mining Sector 39.7% 75% of revenues generated through exports, mainly to EU countries Revenue (FY 2015) Energy & Gas Sector 13.3% 100% of revenues generated within Greece Non-Greek revenues and exports represent 69.7% of the 2015 consolidated turnover 9

10 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 Establishment of the formal CSR Governance system Group s 1 st GRI (G3.1) Sustainability Report Group s 1 ST UNGC CoP (Active Level) Establishment of the formal Stakeholders Engagement Process Group s 1 st GRI (G3) Sustainability Report Group s 1 ST Code of Professional Ethics ISO CSR International Standard Implementation Group s 1 ST Suppliers & Business Partners Code of Conduct Group s 1 st GRI (G4) Sustainability Report Group s 1 st ESG Investors Presentation Group s 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) Group s 1 ST UNGC CoP (Advanced Level) Introduction of the ISO Environmental Standard Greek Sustainability Code adaptation CDP (Water) Admission Group s Social Contribution program Corporate Voluntarism policy & program Supply chain ESG screening Group s 1 st Integrated Report CDP (Carbon) Admission 10

11 Growth Productivity Risk 11

12 Group s long-term Strategy GROUP STRATEGY Continues Responsible Growth Pursue regional leadership position in all three main sectors Maximise operating synergies Create value for stakeholders Business Plan: Vision Metallurgy & Mining Sector Further strengthening of competitiveness through the implementation of the new Excellence cost reduction program. Concentration on exports. Continuation of investments. Pursuit of new vertical integration projects or projects for expanding Metallurgy operations EPC Projects Sector 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. Expansion of activities to new products. Exploration of new opportunities for securing infrastructure projects in the domestic market. Energy Sector Increase market share in the electricity market and establishment of the Group 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 Plan: 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. 12

13 Our main Business units & Market shares After a major move in 2005, when it acquired Aluminium of Greece, MYTILINEOS Group gave top priority to the efforts to develop and enhance the competitiveness of its metallurgical branch, and has since evolved into one of the sector s strongest players in Europe. ALUMINIUM OF GREECE, together with DELPHI-DISTOMON, are today a driving force for the growth of the Greek economy as well as for the development of the Greek periphery. Highlights Since 1960, ALUMINIUM OF GREECE has consistently been a pillar of the Greek heavy industry. Its production accounts for 17% of Europe s total alumina production, and an annual capacity that exceeds 182,000 tons of aluminium and 820,000 tons of alumina. The company is today the largest vertically integrated and one of the lowest cost Alumina and Aluminium producers in Europe. Its subsidiary DELPHI - DISTOMON is the second largest bauxite producer in Greece and in Europe, with an annual production of 650,000 tons. METKA is today a leading international EPC (Engineering- Procurement-Construction) contractor in the energy sector, undertaking the implementation of large-scale turn-key power plant projects, from design and procurement through to construction and commissioning. Highlights The company s turn-key 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. METKA also has a strong industrial manufacturing base, with several decades of experience in complex, high value-added manufacturing of equipment and components, The company has established close ties with world class technology providers. METKA has been listed on the ATHEX since 1973 and its share is a constituent of the FTSE/ATHEX Large Cap Index, which tracks the top 25 companies ranked by market capitalisation. Protergia is the flagship company of MYTILINEOS Group in the electricity production and supply sector, bringing under the same roof the management of all energy assets and activities of the Group. Having invested in state of the art power plants, Protergia is the largest independent producer supplier of electricity in Greece. Highlights Owning and operates the most efficient Gas plants. Market share on the retail level 2.4% (July 2016) Progeria's approach, concerning the retail electricity market, is based on its competitive charges, clear pricing mechanisms and customer rewards. Energy portfolio from thermal plants in full operation: 1,215 MW Portfolio of Renewable Energy Sources (RES) projects in various stages of development: 1,233.2 MW 13

14 Product & service innovation - Contribution to a sustainable future Metallurgy & Metal Sector EPC Sector Energy & Gas Sector We contribute to the development of the products and solutions that help people to reduce energy consumption and emissions. We produce Bauxite Alumina Aluminium 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-ofthe-art emission control technologies. We produce and supply the National Grid with electricity from Renewable Energy Sources (RES). Wind: Operational: 85,4 MW Solar: Operational: 11,5 MW Aluminium is one of the most environmentally friendly metals in terms of how it is produced and applied. 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. Aluminium downstream applications include: Automotive and aerospace: Lower GHG emissions through lighter vehicles and through recycling post-use Infrastructure: Bringing energy efficiency for cities and buildings in an energy constrained world Packaging: Preserving food and medicines through its unique barrier properties Also, with the new global venture for the utility scale solar power market, METKA EGN is a worldclass EPC and O&M contractor for utility-scale solar power projects. Building on its extensive experience of medium large scale solar projects, the company is well positioned to meet the challenges of the rapidly growing global solar market. Hydro: Operational: 6MW 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. 14

15 Existing & new markets Opened 8 new markets over the last 7 years EUROPE SPAIN ITALY UNITED KINGDOM ROMANIA GERMANY GREECE MYTILINEOS GROUP HEADQUARTERS We produce our products in our 21 production facilities mainly in the prefectures of Viotia, Fokida, Magnesia and Corinthia. C. AMERICA PUERTO RICO ASIA TURKEY PAKISTAN AFRICA ALGERIA GHANA Middle EAST JORDAN IRAQ 15

16 Sustainability beyond our boundaries Respecting cultural differences, MYTILINEOS Group 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 Group policies Compliance/Governance Social Commitment/Employment Project Quality Health & Safety Environmental Protection 16

17 Potential business impacts of our sustainability plan Maintain a Stable Cash Flow Secure Corporate Reputation Cash flow allows the Group to meet its obligations such as payroll and to fund marketing and business development programs. As an ethical and socially responsible company, MYTILINEOS Group 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 Group s on its growth track. Group s image affects its relationship with all of its stakeholder groups. Avoiding impacts on corporate reputation and as a consequence indirectly financial risks, Group saves money and keeps its managerial resources focus on the important tasks of productivity. Access to Funding Preserve Stability Increase the loyal Customer Base Capital is needed to fund Group s investment plans and can be viewed as a mechanism to ensure its organizational stability in the sense that it helps the Management team to make continued progress toward achieving Group s longrange growth objectives. MYTILINEOS Group 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. MYTILINEOS Group s strives for Continues Responsible Growth and as a dynamic, rapidly evolving organization, becomes a leading force in its activity sectors. In this framework Group s long-term goals of revenue growth and increased profits can be served by maintaining stability with certain aspects of its subsidiaries, retain at the same time their social license to operate in local communities. For the Group, its loyal customer base is a valuable asset. Group s sustainable initiatives are part of the perceived value of its products and services which result higher customer satisfaction and can increase Group s market share especially in Greek electricity market which is under liberalization. Continue to be Reliable Partner In EPC sector, Group undertakes large-scale power generation projects, either as a main contractor, or in consortium with leading power generation equipment manufacturers. Sustainability plan helps the Group 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. 17

18 Sustainability quality of revenue 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, MYTILINEOS Group has achieved an increase of its 2015 turnover sustainability quality by 1,5% comparing to Sustainability quality of revenue 2013 Sustainability quality of revenue 2015 Sustainability quality of revenue 1H2016 Acces to energy (Construction of Energy projects) Acces to energy (Construction of Energy projects) Acces to energy (Construction of Energy projects) 60,1% 38,7% Renewable energy (RES Energy sold) 59,5% 39,5% Renewable energy (RES Energy sold) 66% 14,1% 19,3% Renewable energy (Construction of Solar projects + RES Energy sold ) 1,2% Rest of revenue 1% Rest of revenue Rest of revenue Key Ratio Total revenue/sustainability revenue 2.5x Key Ratio Total revenue/sustainability revenue 2.4x Key Ratio Total revenue/sustainability revenue 2.9x 18

19 Growth Productivity Risk 19

20 Our Social product & Socioeconomic impact Social Product Mio Employees 3% increase comparing to , ,3% Turnover 0.78% of the Greece GDP. Exports 1.77% of the Greece total exports. 1,383 Mio Mio Other basic Socioeconomic impact elements (Av) Supply Chain outlays 33.2% to the Greek suppliers Mio Employee salaries and benefits Public Administration Income tax & other taxes Capital Providers Fixed asset investments Environmental Investments Social Investments 87.2 Mio 64.3 Mio 64.5 Mio 65.4 Mio 11.7 Mio 1.13 Mio 20

21 Our Social product & Socioeconomic impact Social Expenditures Mio MYTILINEOS GROUP supports youth employability and inclusion through the implementation of the following programs: MYTILINEOS GROUP supports students to complete free, equitable and quality secondary education ,9% ENGINEERS IN ACTION 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. Implementation of an innovative pilot program titled I m In! in partnership with the Together for Children Association to tackle the School Drop out phenomenon in Greece NEW GENERATION IN ACTION A 12-month paid employment program. The programme is an initiative of MYTILINEOS Group 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. 21

22 Operational efficiency Metallurgy & Metal Sector MELLON One of the world s most ambitious cost - cutting programs completed successfully EXCELLENCE A new cost-cutting program targets to save additional 200 $/tn Al. Sustainable Cost Reduction 2014 vs 11 = $145 m p.a. Contribution of the Group s Sustainable Strategy to EXCELLENCE program Investments and employee training to improve productivity and our environmental footprint. Competitive Electricity Tariff CHP Commercial Operation Rationalization of labor cost - Productivity Logistics Freight Costs Improving raw materials purchasing terms Replacement of HFO with NG Numerous other actions Investments in production line of $300 m. Contribution of the Group s Sustainable Strategy Production of new products. Continuous Progress (Health & Safety, internal communication, employee satisfaction and more) 22

23 Operational efficiency Safeguarding profitability through the cycle Metallurgy & Mining EBITDA Semi Annual Performance - All in Aluminium Prices MELLON Effect EXCELLENCE Effect 1H 2016 EBITDA at 37.0 up 13.4% vs 2H2015. Solid Financial Performance despite All-In Prices settled at low levels (down 5% vs 2H2015). Cost cutting program with code name EXCELLENCE underway. A 3 rd cost cutting program announced for the period

24 Natural Capital Management Business investments over 300 million with a direct environmental impact ( ) Establishment of a High-Efficiency Combined Heat and Power (CHP) Plant which uses Natural Gas as combustion fuel. Investment value of 200 million. This plant is the only large-scale cogeneration plant in Greece and in the wider region of SE Europe. The plant s operation helped directly reduce by 150,000 tones the annual consumption of fuel oil required to produce steam for use in the aluminium production process. 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 (it is estimated that in the last five years it has helped prevent the release of approximately 2,000,000 tons of CO 2 emissions). Construction of new Cells of the Controlled Landfill for Hazardous Waste Investment value of 4.7 million, to address the needs for the disposal of hazardous waste, the 6th cell 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. In parallel, the Landfill s 7th cell, whose construction is expected to be completed in 2016, is currently in the licensing stage. ALUMINIUM OF GREECE as coordinator of the ENEXAL European research program. This investment, with value of 4,7 million, covered the costs for the installation of a prototype pilot unit, the consumption of energy as well as the costs of consumables and personnel in order to develop a specific technology for the treatment of bauxite residues with the aim of producing pig iron and stone wool. More than 35 tones of bauxite residues were treated during the program. Installation of 4 Filter Presses for drying bauxite residues. ALUMINIUM OF GREECE invested 15 million for the installation of 4 Filter Presses for drying bauxite residues and the design and layout of the corresponding areas and of pilot plants. In these installations, the inert bauxite residues from the alumina production process are filtered, their humidity content is removed. Annual investments in the protection of the environment. Annual expenditures in excess of 7.5 million. The company s policy is to secure the annual funds that allow it to implement its environmental protection policies and to ensure that all actions under them achieve the desired performance. Establishment of a new alumina calcination plant Investment value of 33 million. The investment will be completed in 2016 and involves the modernisation of the equipment in the wider electrolysis area. It is expected, in addition to increasing production and the number of jobs, to also help reduce farther the CO 2 emissions. 24

25 Natural Capital Management Emissions & Energy 10,0 8,0 6,0 4,0 2,0 0,0 Total Group s emissions (Scope 1 & 2) (Mio t CO 2 e) 4,7 4,6 3,8 4,1-12.7% Total Group s energy consumption 1 (TJ ) The Metallurgy & Mining Sector, represents nearly the 88%-90% of the total Group s emissions produced and the 70%-75% of the total Group s energy consumption. With the establishment of the new alumina calcination plant, in Metallurgy & Mining Sector, it is expected 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. In Energy 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 Specific emissions (PFC s) (kt CO 2 e per year) 82,70 79,50 65,90 Metallurgy & Metal Sector -20.3% Carbon intensity of energy purchased for consumption (t CO 2e /TJ ) 235,4 235,9 236,1 235, Total energy consumption = Energy consumption from Non-renewable sources + Energy consumption from Renewable sources + Energy purchased for consumption + Energy produced Energy sold. To produce electricity, the Group 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 2020 Stabilise CO2 emissions in aluminum production below 3.9 mio tones. Stabilise Fluorine emissions below 1.37 kg/tal 25

26 Natural Capital Management Water 10,0 8,0 6,0 4,0 2,0 0,0 Total water consumption (in million m 3 - Ground water sources & Municipal water supplies) 4,6 4,3 4,4 4, (Av) WATER Admission We withdrawal water from renewable ground water sources in which are located at shallow depth an the water can be replenished relatively quickly (according to our monthly measurements) 2014 vs 2015: 41.2% reduction of water consumption from municipal water supplies. 3.2% increase of water consumption from renewable ground water supplies. The Metallurgy & Mining Sector, represents nearly the 95% of the total Group s water consumption each year. Water-related OPEX costs (-1.97% comparing to 2014) are generally consistent over time, although they can increase mainly due to the increased demand for water use from municipal sources and for maintenance reasons of water facilities especially in Metallurgy & Mining sector. Volume of seawater used in the cooling systems of the Combined Heat and Power (CHP) plant of ALUMINIUM OF GREECE. The volume of water withdrawn remains stable on an annual basis (161.7 million m 3 ), in strict compliance with the provisions of the relevant Decision of the Water Resources Management Directorate of the Sterea Regional Administration. ALUMINION OF GREECE commissions, on an annual basis, an authoritative independent organisation to conduct a research study for monitoring the status of benthic biocoenoses, placing emphasis on thermophilic species on the Antikyra Gulf seabed. Target 2020 Total water consumption <14,000 m 3 /day in Metallurgy & Metal Sector Waste Total waste (in thousands t) % 803 Participation in European programs on cost efficient green technologies in the aluminum industry. (full utilisation of bauxite residues) Bauxite residues, represent nearly the 90% of the total Group s waste produced each year. The cost of treatment and disposal waste decreased by 22% from 2013 ( 0.6Mio) Percentage of waste recycled, recovered or reused (other than bauxite residues) reached the percentage of 43.1% increased by 15.5% compared to Involves mainly industrial waste as well as various types of materials collected (Av) -15,8% Innovation Hub Targets 2020 Total waste reduction by 5% comparing to 2014 figure Increase the percentage of waste recycle up to 55% 26

27 Human Capital Management Human Rights No incidents of child or compulsory labour No incidents of employee rights restriction to exercise freedom of association or collective bargaining The Group 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 Group 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. 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 in the Group amounted to 13.4%. The percentage of women in positions with extended responsibility amounted to 16.3%. The percentage of employees who returned to work following parental leave amounted to 92.5% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% Employee Turnover rate 17,4% (Av) 17,1% 13,7% 13,8% -19,2% Training & Development In 2015, a total of 56,540 man-hours of training programs took place in all Group subsidiaries. Training cost per employee: 174 euro. Average training hours per employee: 25.7 hours Percentage of employees who received a performance review: 76.2% Targets 2020 Employee turnover below 12% Development an Employee Voluntary Program To be a first choice in our employees professional career 27

28 Human Capital Management Employment Local Employees 81,6% 85,0% 87,6% 88,4% +4% Total Employees % Local Managers 60,2% 57,7% 61,6% 63,1% +9,3% (Av) Women at work 13,4% 13,1% 13,7% 13,4% (Av) (Av) (Av) Creation of 208 new jobs in two years ( ) Targets 2020 Maintain direct & indirect jobs Percentage of women at work above 14% Percentage of young employees above 13% MYTILINEOS GROUP supports direct jobs Unemployment rate 27,1% Sterea Ellas Thessally 28

29 Human Capital Management Health & Safety Zero incidents of Occupational Diseases Targets Zero Fatal Accidents Zero Fatal Accidents Zero Accidents Zero Occupational Diseases Increase H&S awareness to subcontractors Increase H&S culture among subsidiaries Implementation of OHSAS in Metallurgy & Mining Sector Implementation of OHSAS in EPC Projects Sector Implementation of OHSAS in Energy Sector Stakeholder Engagement: Implementation of the 1 st thematic consultation concerning HEALTH & SAFETY, in Metallurgy & Mining Sector, with the participation of specialised market executives and Health & Safety professionals. 2 1,5 1 0,5 0 1,8 IR (Injury Rate) 1,1 0,28 0,18 0,17 0, ,6 LDR (Lost Day Rate) Lost Day Rate decrease by 91.5% ,1 12,8 Injury Rate 10 decrease by 9,3 5 6,4 90.5% 1,4 0 0,17 Injuries/200,000 working hours ,4 lost days/200,000 working hours 29

30 Growth Productivity Risk 30

31 Corporate Governance Pillars GOVERNANCE STRUCTURE according to Greek Corporate Governance Code. Governance tools are applied to ensure that internal rules, processes and corporate activities comply with regulatory framework and Group policies. Board of Directors Board members 8 Percentage of Independent members on board 37,5% Percentage of non-executive members on board 75% Voting standard Majority Percentage of women on board 12,5% Number of Committees 3 Internal Audit Committee Remuneration Committee CSR Committee Ethics & Integrity Respect for employees Corporate Values Code of Conduct Conflicts of interest Protection of Human Rights Political contributions No corruption & bribery Suppliers & Business Partners Code of Conduct. ESG CRITERIA Gifts & Entertainment Internal Audit System 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 Group s operations. CSR Governance System Group CSR Committee Group Legal & Regulatory Affairs Division Executive Management of GROUP Subsidiaries CSR Teams of Group Subsidiaries Group Communication Division Stakeholder Engagement Process Codes & Policies Risk Management System 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. 31

32 Business Risk Management By operating in three in three basic business sectors, Metallurgy and Mines, Energy and Integrated Energy Projects (EPC), the MYTILINEOS Group 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 Market Risks Risk Management Rising cost of row materials and unfavorable conjunctures - 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. EPC Sector Risks Business Interval Risks IT Risks 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. 32

33 Business Risk Management Main sustainability Risks intensity as reflected in the following dimensions: 8,00 CO 2 e intensity of revenue (kg CO 2 per euro) 20,00 Energy intensity of revenue (kwh per euro) 6,00 15,00 10,77 4,00 3,28 3,07 2,93 10,00 7,10 7,20 2,00-10,7% 5,00-33,1% 0, , Target 2020 To identify the uncovered Supplier Risk 1,00 0,80 0,60 0,40 0,20 Water consumption intensity of revenue (Lit per euro) 0,29 0,27 6,9% 0,31 1,00 0,80 0,60 0,40 0,20 Number of accidents per 100 Mio euro of revenue 0,56 0, % 0,29 0, ,

34 Reputation & Leadership 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 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 ranked in the 50 Top European construction companies for the year (Deloitte) 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 Greece s largest independent electricity producer and firstever 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 130% in the last 6 months. (2.4% - 2 nd place according to the data of the private electricity suppliers in Greece). 34

35 Reputation & Leadership Communication of Progress ADVANCED LEVEL CoP Active level CoP ADV Level: Implementation Percentage of suggested best practices 50.4% 51.5% 54.8% 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 2011 Total SCORE Total SCORE Total SCORE Total SCORE Total SCORE 78.1 Environmental Score Social Score Governance According to 2015 official results, MYTILINEOS Group ranks No. 1 ( for the 5 th consecutive year) among all participating Greek companies and No.2 at a global level (Bloomberg platform official data 10/10/2016). 35

36 Transparency Committed to 10 th Principle of UN Global Compact 1 st Edition of Code of Professional Ethics NO TOLERANCE DMA against Corruption Global Compact Call to Action against Bribery and Corruption signatory Zero incidents of Corruption and Bribery METKA s Business Development Division 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. 1 st Self Assessment implementation to all our subsidiaries against Corruption and Bribery Specific anticorruption policy in EPC sector Targets 2020 Zero incidents of Corruption and Bribery Publication of 2 nd Version of the Group s Code of Professional Ethics Establishment of a new due diligence procedure 36

37 Manufacturing & operational process risk certification 100% of our subsidiaries certified Stakeholder Engagement process 100% of our subsidiaries applied 100% of our subsidiaries certified 100% of our subsidiaries certified The Stakeholder Engagement process expresses in a systematic way, the long-standing principle of MYTILINEOS Group 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. 33% of our subsidiaries certified Aluminium of Greece certified (WATER) 66% of our subsidiaries applied 100% of our subsidiaries applied 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. 37

38 Annexes 38

39 Annexes Main KPI Progression ENVIRONMENTAL Indicators Environmental expenditure (million ) Greenhouse gas emissions (Scope 1, thousand tonnes) 2, , ,666.3 Greenhouse gas emissions (Scope 2, thousand tonnes) 2, , ,392.6 Total energy consumption (TJ) 1-31,835 35,954 Total water withdrawal (million m 3 ) Total water consumption from public water supply utilities (thousand m 3 ) Extracted raw materials (tonnes of bauxite) 1,830,398 1,830,996 1,833,201 Total waste (million tonnes) Percentage of waste recycled % 42.7% 43.1% Incidents involving lubricant spills in the soil* Rehabilitation percentage of usable areas from the mining activity 84% 84% 85% Percentage of subsidiaries with ISO certification 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 percentage refers to waste other than bauxite residues. 3 The increase in the number of incidents in 2014 is mainly due to the increased awareness of personnel (machinery operators - technicians) of the need to report such incidents, combined with the simultaneous decrease in the number of unreported incidents. These incidents are an unavoidable part of the mining process, as they are caused primarily by wear and tear of lubricant pipes and by damages to machinery by falling rocks. They do not involve serious spills and are dealt with immediately by carefully collecting the quantity of contaminated soil and forwarding it to the hazardous waste area for appropriate handlings 39

40 Annexes Main KPI Progression SOCIAL Indicators Number of employees 2,001 2,137 2,199 Percentage of full-time employees covered by collective bargaining agreements 76.0% 79.2% 78.6% Percentage of employees from local communities 85.0% 87.6% 88.9% Turnover rate 13.8% 13.7% 13.8% Work-related fatalities 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% 13.7% 13.4% Percentage of women in positions with extended responsibility 16.0% 15.4% 16.3% Percentage of employees who received formal performance evaluation reviews 85.0% 80.0% 76.2% Training man-hours 53,917 53,995 56,540 Average training hours per employee Cost of training per employee ( ) Investments in local communities (thousand ) Total number of suppliers - 4,941 4,808 Percentage of domestic suppliers - 78% 81.7% Outlays to domestic suppliers (as a percentage of total outlays)

41 Annexes Main KPI Progression CORPORATE GOVERNANCE Indicators Corporate Governance Code Greek Corporate Governance Code Greek Corporate Governance Code Greek Corporate Governance Code Board Members President duality Yes Yes Yes Independent Members on the Board Non executive Members on the Board Women on Board Voting standard Majority Majority Majority Number of the Board meetings* Number of members attending <75% of the Board meetings Total number of committees Audit committee members Independent Members on the Audit committee CSR committee members Number of the CSR committee meetings Code of Conduct 1 ST Edition ST Edition ST Edition 2010 Suppliers Code of Conduct 1 ST Edition ST Edition ST Edition

42 Thank You for Your Interest

43 Contact Information Dimitris Katralis Vivian Bouzali IR Officer Group Communications Director Tel: Tel: Fax: Fax: Georgios Galanis Group CSR Supervisor Tel: Fax: Mytilineos Holdings S.A. 5-7 Patroklou Str Maroussi Athens Greece Tel: Fax: