ELKEM ASA...ELKEM ASA (A public limited liability company incorporated under the laws of Norway) Initial public offering of up to 267,402,757 Shares with an indicative price range

ELKEM ASA

(A public limited liability company incorporated under the laws of Norway)

Initial public offering of up to 267,402,757 Shares with an indicative price range of NOK 29 to NOK 35 per Share

Admission to listing and trading of the Company’s Shares on the Oslo Stock Exchange

This prospectus (the “Prospectus”) has been prepared in connection with the initial public offering (the “Offering”) of shares of Elkem ASA (the “Company”), a public limited liability company incorporated under the laws of Norway (together with its consolidated subsidiaries, “Elkem” or the “Group”), and the related listing (the “Listing”) of the Company’s shares, each with a nominal value of NOK 5.00 (the “Shares”) on Oslo Børs, a stock exchange operated by Oslo Børs ASA (the “Oslo Stock Exchange”). The Offering comprises up to 179,310,344 new Shares to be issued by the Company to raise gross proceeds of NOK 5,200 million (the "New Shares") and up to 71,657,143 existing Shares (the “Sale Shares”) offered by the Company’s sole shareholder, Bluestar Elkem International Co., Ltd. S.A. (the “Selling Shareholder” or “Bluestar”).

The Offering consists of: (i) a private placement to (a) investors in Norway, (b) institutional investors outside Norway and the United States of America (the “U.S.” or the “United States”), subject to applicable exemptions from applicable prospectus requirements, and (c) “qualified institutional buyers” (“QIBs”) in the United States as defined in, and in reliance on, Rule 144A (“Rule 144A”) or another available exemption under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) (the “Institutional Offering”) and (ii) a retail offering to the public in Norway (the “Retail Offering”). All offers and sales outside the United States will be made in offshore transactions in compliance with Regulation S under the U.S. Securities Act (“Regulation S”).

In addition, the Selling Shareholder will grant an option to the Managers (as defined below), which may be exercised on behalf of the Managers by Morgan Stanley as stabilisation manager, to purchase additional Shares (the “Additional Shares” and, unless the context indicates otherwise, together with the New Shares and the Sale Shares, the “Offer Shares”) equalling up to approximately 15% of the maximum number of New Shares and Sale Shares to be sold in the Offering, exercisable, in whole or in part, within a 30-day period commencing at the time at which “if issued/if sold” trading in the Shares commences on the Oslo Stock Exchange to cover any over-allotments made in connection with the Offering on the terms and subject to the conditions described in this Prospectus (the “Over-Allotment Option”). If the Managers will over-allot Shares in connection with the Offering, a stock exchange notice will be made on the first day of “if issued/if sold” trading in the Shares, which will also state that stabilisation activities may occur.

The price (the “Offer Price”) at which the Offer Shares will be sold is expected to be between NOK 29 and NOK 35 per Offer Share (the “Indicative Price Range”). The Offer Price may be set within, below or above the Indicative Price Range. The Offer Price will be determined following a bookbuilding process and will be set by the Company and the Selling Shareholder, in consultation with the Managers (as defined below). See Section 20 “The terms of the Offering” for further information on how the Offer Price is set. The Offer Price, and the number of Offer Shares sold in the Offering, is expected to be announced through a stock exchange notice on or before 22 March 2018 at 07:30 hours (Central European Time, “CET”). The offer period in the Institutional Offering (the “Bookbuilding Period”) will commence at 09:00 hours (CET) on 12 March 2018 and close at 14:00 hours (CET) on 21 March 2018. The application period in the Retail Offering (the “Application Period”) will commence at 09:00 hours (CET) on 12 March 2018 and close at 12:00 hours (CET) on 21 March 2018. The Bookbuilding Period and the Application Period may, at the Company's and the Selling Shareholder’s sole discretion, in consultation with the Managers and for any reason, be shortened or extended beyond the set times, but will in no event be shortened to expire prior to 12:00 hours (CET) on 19 March 2018 or extended beyond 14:00 hours (CET) on 29 March 2018.

The Shares (including the Sale Shares) are, and the New Shares will be, registered in the Norwegian Central Securities Depository (the “VPS”) in book-entry form. All Shares rank in parity with one another and carry one vote. Except where the context otherwise requires, references in this Prospectus to the Shares will be deemed to include the Offer Shares.

Investing in the Offer Shares involves a high degree of risk. Prospective investors should read the entire Prospectus and, in particular, consider Section 2 “Risk Factors” beginning on page 19 when considering an investment in the Company.

The Offer Shares have not been, and will not be, registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States, and are being offered and sold: (i) in the United States only to persons who are QIBs in reliance on Rule 144A or another available exemption from registration requirements of the Securities Act; and (ii) outside the United States in offshore transactions in compliance with Regulation S. Prospective investors are hereby notified that any seller of the Offer Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. The distribution of this Prospectus and the offer and sale of the Offer Shares may be restricted by law in certain jurisdictions. Accordingly, neither this Prospectus nor any advertisement or any other Offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with applicable laws and regulations. Persons in possession of this Prospectus are required by the Company, the Selling Shareholder and the Managers to inform themselves about and to observe any such restrictions. Any failure to comply with these regulations may constitute a violation of the securities laws of any such jurisdictions. See Section 21 “Selling and Transfer Restrictions”.

Prior to the Offering, the Shares have not been publicly traded. On or about 12 March 2018, the Company expects to apply for the Shares to be admitted for trading and listing on the Oslo Stock Exchange, and completion of the Offering is subject to the approval of the listing application by the board of directors of the Oslo Stock Exchange, the satisfaction of the conditions for admission to listing set by the Oslo Stock Exchange and certain other conditions as set out in Section 20.15 “Conditions for completion of the Offering – Listing and trading of the Offer Shares”. The Shares will be eligible for clearing through the facilities of the Oslo Stock Exchange.

The due date for the payment of the Offer Shares is expected to be on 23 March 2018 in the Retail Offering, and on 26 March 2018 in the Institutional Offering. Delivery of the Offer Shares is expected to take place on or about 26 March 2018 in the Retail Offering and on 26 March 2018 in the Institutional Offering through the facilities of the VPS. Trading in the Shares on the Oslo Stock Exchange on an “if issued/if sold” basis is expected to commence on or about 22 March 2018, under the ticker code “ELK”. If closing of the Offering does not take place on 26 March 2018 or at all, the Offering may be withdrawn, resulting in all applications for Offer Shares being disregarded, any allocations made being deemed not to have been made and any payments made will be returned without any interest or other compensation. All dealings in the Shares prior to settlement and delivery are at the sole risk of the parties concerned.

Joint Global Coordinators and Joint Bookrunners

ABG Sundal Collier Morgan Stanley

Joint Bookrunners

Carnegie Citigroup Nordea

The date of this Prospectus is 9 March 2018

Elkem ASA – Prospectus

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IMPORTANT INFORMATION This Prospectus has been prepared in connection with the Offering of the Offer Shares and the Listing of the Shares on the Oslo Stock Exchange.

This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the “Norwegian Securities Trading Act”) and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway (the “EU Prospectus Directive”). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) (the “Norwegian FSA”) has reviewed and, on 9 March 2018, approved this Prospectus in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information included in this Prospectus. The approval by the Norwegian FSA only relates to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in or referred to in this Prospectus.

For definitions of certain other terms used throughout this Prospectus, see Section 23 “Definitions and Glossary”.

The Company has engaged ABG Sundal Collier ASA (“ABGSC”) and Morgan Stanley & Co. International plc (“Morgan Stanley”) as “Joint Global Coordinators” and the Joint Global Coordinators together with Carnegie AS, Citigroup Global Markets Limited and Nordea Bank AB (publ), filial i Norge as “Joint Bookrunners”. The Joint Global Coordinators and the Joint Bookrunners are together referred to herein as the “Managers”.

The information contained herein is current as at the date hereof and subject to change, completion and amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the assessment by investors of the Offer Shares between the time of approval of this Prospectus by the Norwegian FSA and the Listing, will be included in a supplement to this Prospectus. Neither the publication nor distribution of this Prospectus, nor the sale of any Offer Share, shall under any circumstances imply that there has been no change in the Group’s affairs or that the information herein is correct as at any date subsequent to the date of this Prospectus.

No person is authorised to give information or to make any representation concerning the Group or the Selling Shareholder or in connection with the Offering or the sale of the Offer Shares other than as contained in this Prospectus. If any such information is given or made, it must not be relied upon as having been authorised by the Company, the Selling Shareholder or the Managers or by any of the affiliates, representatives, advisors or selling agents of any of the foregoing.

The distribution of this Prospectus and the offer and sale of the Offer Shares in certain jurisdictions may be restricted by law. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the Offer Shares in any jurisdiction in which such offer or sale would be unlawful. Neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with applicable laws and regulations. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions. In addition, the Offer Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. See Section 21 “Selling and Transfer Restrictions”.

This Prospectus and the terms and conditions of the Offering as set out herein and any sale and purchase of Offer Shares hereunder shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Offering or this Prospectus.

In making an investment decision, prospective investors must rely on their own examination, and analysis of, and enquiry into the Group and the terms of the Offering, including the merits and risks involved. None of the Company, the Selling Shareholder or the Managers, or any of their respective representatives or advisers, is making any representation to any offeree or purchaser of the Offer Shares regarding the legality of an investment in the Offer Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares.

All Sections of the Prospectus should be read in context with the information included in Section 4 “General Information”.

NOTICE TO INVESTORS IN THE UNITED STATES

The Offer Shares have not been recommended by any United States federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not passed upon the merits of the Offering or confirmed the accuracy or determined the adequacy of this Prospectus. Any representation to the contrary is a criminal offense under the laws of the United States.

The Offer Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be offered, sold, pledged or otherwise transferred within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws.

Accordingly, the Offer Shares are being offered and sold: (i) in the United States only to QIBs in reliance upon Rule 144A or another available exemption from the registration requirements of the U.S. Securities Act; and (ii) outside the United States in offshore transactions in compliance with Regulation S. For certain restrictions on the sale and transfer of the Offer Shares, see Section 21 “Selling and Transfer Restrictions”. Nordea Bank AB (publ), filial i Norge is not a SEC registered broker/dealer and will only participate in the Offering outside the U.S.

Prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Offer Shares, and are hereby notified that sellers of Offer Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act. See Section 21 “Selling and Transfer Restrictions”.

In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a prospective investor to consider purchasing the particular securities described herein. The information contained in this Prospectus has been provided by the Company and other sources identified herein. Distribution of this Prospectus to any person other than the offeree specified by the Managers or their representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised, and any disclosure of its contents, without prior written consent of the Company, is prohibited. Any reproduction or distribution of this Prospectus in the United States, in whole or in part, and any disclosure of its contents to any other person is prohibited. This Prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to purchase Offer Shares or subscribe for or otherwise acquire any Shares.

NOTICE TO INVESTORS IN THE UNITED KINGDOM

In the United Kingdom (the “UK”), this Prospectus is only being distributed to and is only directed at persons (i) who have professional experience in matters falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations etc) of the Order; and/or (iii) to whom it may lawfully be communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”). The Offer Shares are only available to, and any invitation, offer or


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agreement to subscribe, purchase or otherwise acquire such Shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this Prospectus or any of its contents.

NOTICE TO INVESTORS IN THE EEA

In any member state of the European Economic Area (the “EEA”), other than Norway (each, a “Member State”), this communication is only addressed to and is only directed at persons who are “qualified investors” within the meaning of Article 2(1)(e) of the EU Prospectus Directive. The Prospectus has been prepared on the basis that all offers of Offer Shares outside Norway will be made pursuant to an exemption under the EU Prospectus Directive from the requirement to produce a prospectus for offer of shares. Accordingly, any person making or intending to make any offer within the EEA of Offer Shares which is the subject of the Offering contemplated in this Prospectus within any EEA member state (other than Norway) should only do so in circumstances in which no obligation arises for the Company or any of the Managers to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the EU Prospectus Directive, in each case, in relation to such offer. Neither the Company nor the Managers have authorised, nor do they authorise, the making of any offer of Shares in circumstances in which an obligation arises for either the Company or the Managers to publish or supplement a prospectus for such offer. Neither the Company nor the Managers have authorised, nor do they authorise, the making of any offer of Offer Shares through any financial intermediary, other than offers made by Managers which constitute the final placement of Offer Shares contemplated in this Prospectus.

Each person in a Member State other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway, who receives any communication in respect of, or who acquires any Offer Shares under, the offers contemplated in this Prospectus will be deemed to have represented, warranted and agreed to and with the Managers and the Company that:

a) it is a “qualified investor” within the meaning of the law in that Member State implementing Article 2(1)(e) of the EU Prospectus Directive; and

b) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive, (i) such Offer Shares acquired by it in the Offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State other than qualified investors, as that term is defined in the EU Prospectus Directive, or in circumstances in which the prior consent of the Managers has been given to the offer or resale; or (ii) where such Offer Shares have been acquired by it on behalf of persons in any Member State other than qualified investors, the offer of those Offer Shares to it is not treated under the EU Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an “offer to the public” in relation to any of the Offer Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any of the Offer Shares, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State, and the expression “EU Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Member State), and includes any relevant implementing measure in each Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

See Section 21 “Selling and Transfer Restrictions” for certain other notices to investors.

NOTICE TO INVESTORS IN CANADA

The Offer Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Offer Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this Prospectus.

(including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the Managers are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that they each are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. Conversely, an investment in the Shares is not compatible with investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile.

The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Shares and determining appropriate distribution channels.

STABILISATION

In connection with the Offering and in accordance with all applicable laws and rules, Morgan Stanley (the “Stabilisation Manager”) acting for the account of the Managers, may (but will be under no obligation to) over-allot Shares or effect stabilisation transactions with a view to supporting the market price of the Shares during the Stabilisation Period at a level higher than that which might otherwise prevail (provided that the aggregate principal amount of Shares allotted does not exceed 15 percent of the aggregate principal amount of the Offer Shares). However, stabilisation action may not necessarily occur and may cease at any time. Any stabilisation action may begin on or after the date of commencement of trading of the Shares on the Oslo Stock Exchange and, if


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begun, may be ended at any time, but it must end no later than 30 days after that date. Any stabilisation action or over-allotment must be conducted by the Stabilisation Manager in accordance with all applicable laws and rules and can be undertaken at the offices of the Stabilisation Manager and on the Oslo Stock Exchange. Stabilisation may result in an exchange or market price of the Shares that is higher than might otherwise prevail, and the exchange or market price may reach a level that cannot be maintained on a permanent basis.

The Stabilisation Manager will act as the central point under Art (6)5 of Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016 supplementing regulation (EU) No. 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures.

Any stabilisation measures will be conducted in accordance with Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse (the “Market Abuse Regulation” or “MAR”) and the Commission Delegated Regulation (EU) 2016/1052 supplementing the Market Abuse Regulation with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures.

ENFORCEMENT OF CIVIL LIABILITIES

Elkem ASA is a public limited liability company incorporated under the laws of Norway. As a result, the rights of holders of the Shares will be governed by Norwegian law and Elkem ASA’s articles of association (the “Articles of Association”). The rights of shareholders under Norwegian law may differ from the rights of shareholders of companies incorporated in other jurisdictions. The members of Elkem ASA’s board of directors (the “Board Members” and the “Board of Directors”, respectively) and the members of the senior management of Elkem ASA (the “Management”) are not residents of the United States. Virtually all of the Company’s assets and the assets of the Board Members and members of Management are located outside the United States. As a result, it may be impossible or difficult for investors in the United States to effect service of process upon the Company, the Board Members and members of Management in the United States or to enforce against the Company or those persons judgments obtained in U.S. courts, whether predicated upon civil liability provisions of the federal securities laws or other laws of the United States.

The United States and Norway do not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and commercial matters. Uncertainty exists as to whether courts in Norway will enforce judgments obtained in other jurisdictions, including the United States, against Elkem ASA or its Board Members or members of Management under the securities laws of those jurisdictions or entertain actions in Norway against the Company or the Board Members or members of Management under the securities laws of other jurisdictions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Norway.

AVAILABLE INFORMATION

The Company has agreed that, for so long as any of the Offer Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of the U.S. Securities Exchange Act of 1934 (the “U.S. Exchange Act”), nor exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners of Shares, or to any prospective purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective owner, the information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.


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TABLE OF CONTENTS

1 SUMMARY ....................................................................................................................................... 1

2 RISK FACTORS .............................................................................................................................. 19 2.1 Risks related to the business of Elkem and the industry in which Elkem operates ....................... 19 2.2 Risks related to the Listing and the Shares ............................................................................ 36

3 RESPONSIBILITY FOR THE PROSPECTUS ........................................................................................... 40 3.1 The Board of Directors of Elkem ASA .................................................................................... 40 3.2 The Selling Shareholder ...................................................................................................... 40

4 GENERAL INFORMATION ................................................................................................................. 41 4.1 Other important investor information ................................................................................... 41 4.2 Presentation of financial and other information ...................................................................... 41 4.3 Cautionary note regarding forward-looking statements ........................................................... 46 4.4 Exchange rates .................................................................................................................. 48

5 REASONS FOR THE OFFERING AND THE LISTING ............................................................................... 49

6 REORGANISATION ......................................................................................................................... 50 6.1 Introduction ...................................................................................................................... 50 6.2 Transfer of Xinghuo Silicones to Elkem ................................................................................. 52 6.3 Transfer of Yongdeng Silicon Materials to Elkem .................................................................... 52 6.4 Accounting treatment of the acquisition of Xinghuo Silicones and Yongdeng Silicon Materials ...... 53

7 DIVIDENDS AND DIVIDEND POLICY ................................................................................................. 55 7.1 Dividend policy .................................................................................................................. 55 7.2 Legal constraints on the distribution of dividends ................................................................... 55 7.3 Manner of dividend payments .............................................................................................. 56

8 INDUSTRY AND MARKET OVERVIEW ................................................................................................. 57 8.1 Overview .......................................................................................................................... 57 8.2 Silicones ........................................................................................................................... 57 8.3 Silicon Materials ................................................................................................................. 63 8.4 Foundry Products ............................................................................................................... 70 8.5 Carbon ............................................................................................................................. 74

9 BUSINESS OF THE GROUP ............................................................................................................... 77 9.1 Introduction ...................................................................................................................... 77 9.2 Key strengths .................................................................................................................... 79 9.3 Strategy ........................................................................................................................... 84 9.4 History and important events .............................................................................................. 86 9.5 Overview of the Group’s operations ...................................................................................... 87 9.6 Energy ............................................................................................................................. 99 9.7 Research and development ............................................................................................... 101 9.8 Intellectual property ......................................................................................................... 105 9.9 Elkem Business System .................................................................................................... 105 9.10 Sourcing of raw materials ................................................................................................. 106 9.11 Logistics and distribution .................................................................................................. 108 9.12 Material contracts ............................................................................................................ 108 9.13 Environmental matters ..................................................................................................... 109 9.14 Health and safety matters ................................................................................................. 112 9.15 Insurance ....................................................................................................................... 113 9.16 Legal proceedings. ........................................................................................................... 113 9.17 Dependency on contracts, patents, licenses etc. .................................................................. 113 9.18 Corporate social responsibility ........................................................................................... 113

10 CAPITALISATION AND INDEBTEDNESS ........................................................................................... 115 10.1 Introduction .................................................................................................................... 115 10.2 Capitalisation .................................................................................................................. 116 10.3 Indebtedness .................................................................................................................. 117 10.4 Working capital statement ................................................................................................ 118 10.5 Contingent and indirect indebtedness ................................................................................. 118


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11 SELECTED FINANCIAL AND OTHER INFORMATION ............................................................................ 119 11.1 Introduction and basis for preparation ................................................................................ 119 11.2 Summary of accounting policies and principles .................................................................... 119 11.3 Selected data from the combined statement of income ......................................................... 119 11.4 Selected data from the combined statement of financial position ........................................... 120 11.5 Selected data from the combined statement of cash flows..................................................... 121 11.6 Selected data from the combined statement of changes in equity .......................................... 122 11.7 Selected data from the consolidated statement of income ..................................................... 122 11.8 Selected data from the consolidated statement of financial position ....................................... 123 11.9 Selected data from the consolidated statement of cash flows................................................. 124 11.10 Selected data from the consolidated statement of changes in equity ...................................... 124 11.11 Key financial information data by segment .......................................................................... 125 11.12 Sales revenues by geographic area .................................................................................... 128 11.13 Independent auditors ....................................................................................................... 128

12 OPERATING AND FINANCIAL REVIEW ............................................................................................. 130 12.1 Overview ........................................................................................................................ 130 12.2 Operating divisions and reporting segments ........................................................................ 131 12.3 Factors affecting the Group’s results of operations ............................................................... 132 12.4 Factors affecting the comparability of financial information.................................................... 137 12.5 Description of income statement line items ......................................................................... 143 12.6 Recent developments and trends ....................................................................................... 145

13 INVESTMENTS ............................................................................................................................. 171 13.1 Principal historic investments ............................................................................................ 171 13.2 Ongoing investments ........................................................................................................ 172 13.3 Future planned/committed investments .............................................................................. 172 13.4 Additional information about certain investments ................................................................. 173

14 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE .......................... 174 14.1 Introduction .................................................................................................................... 174 14.2 The Board of Directors ...................................................................................................... 174 14.3 Management ................................................................................................................... 177 14.4 Remuneration and benefits ............................................................................................... 181 14.5 Bonus programme and share incentive scheme ................................................................... 181 14.6 Benefits upon termination ................................................................................................. 182 14.7 Pension and retirement benefits......................................................................................... 182 14.8 Employees ...................................................................................................................... 182 14.9 Nomination committee ..................................................................................................... 183 14.10 Audit committee .............................................................................................................. 183 14.11 Remuneration committee .................................................................................................. 183 14.12 Corporate governance ...................................................................................................... 184 14.13 Conflict of interests etc. .................................................................................................... 184

15 THE SELLING SHAREHOLDER ......................................................................................................... 185 15.1 Bluestar Elkem International Co., Ltd. S.A. ......................................................................... 185

16 RELATED PARTY TRANSACTIONS ................................................................................................... 186 16.1 Introduction .................................................................................................................... 186 16.2 Transactions with related parties outside the Group ............................................................. 186 16.3 Information about eliminated transactions between related parties within the Group ................ 186 16.4 Transactions carried out with related parties in the years ended 31 December 2017, 2016 and

2015 .............................................................................................................................. 186 16.5 Transactions carried out with related parties in the period following 31 December 2017 ............ 188

17 CORPORATE INFORMATION AND DESCRIPTION OF THE SHARE CAPITAL............................................. 189 17.1 Company corporate information ......................................................................................... 189 17.2 Legal structure ................................................................................................................ 189 17.3 Share capital and share capital history ............................................................................... 190 17.4 Admission to trading ........................................................................................................ 190 17.5 Ownership structure ......................................................................................................... 190 17.6 Authorisations to increase the share capital and to issue Shares ............................................ 191 17.7 Authorisation to acquire treasury Shares ............................................................................ 191


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17.8 Other financial instruments ............................................................................................... 191 17.9 Shareholder rights ........................................................................................................... 191 17.10 The articles of association and certain aspects of Norwegian law ............................................ 191 17.11 Certain aspects of Norwegian corporate law ........................................................................ 192 17.12 Shareholder agreements ................................................................................................... 194

18 SECURITIES TRADING IN NORWAY ................................................................................................ 195 18.1 Introduction .................................................................................................................... 195 18.2 Trading and settlement ..................................................................................................... 195 18.3 Information, control and surveillance.................................................................................. 195 18.4 The VPS and transfer of shares .......................................................................................... 196 18.5 Shareholder register – Norwegian law ................................................................................ 196 18.6 Foreign investment in shares listed in Norway ..................................................................... 196 18.7 Disclosure obligations ....................................................................................................... 196 18.8 Insider trading ................................................................................................................. 196 18.9 Mandatory offer requirement ............................................................................................. 197 18.10 Compulsory acquisition ..................................................................................................... 197 18.11 Foreign exchange controls ................................................................................................ 198

19 TAXATION ................................................................................................................................... 199 19.1 Norwegian taxation .......................................................................................................... 199 19.2 United States taxation ...................................................................................................... 202

20 THE TERMS OF THE OFFERING ....................................................................................................... 205 20.1 Overview of the Offering ................................................................................................... 205 20.2 Timetable ....................................................................................................................... 207 20.3 Resolution relating to the Offering and the issue of New Shares ............................................. 207 20.4 The Institutional Offering .................................................................................................. 208 20.5 The Retail Offering ........................................................................................................... 209 20.6 Mechanism of allocation .................................................................................................... 212 20.7 VPS account .................................................................................................................... 212 20.8 Product governance ......................................................................................................... 212 20.9 National Client Identifier and Legal Entity Identifier .............................................................. 213 20.10 Mandatory anti-money laundering procedures ..................................................................... 213 20.11 Over-allotment and stabilisation activities ........................................................................... 213 20.12 Publication of information in respect of the Offering ............................................................. 214 20.13 The rights conferred by the Offer Shares ............................................................................ 214 20.14 VPS registration ............................................................................................................... 214 20.15 Conditions for completion of the Offering – Listing and trading of the Offer Shares ................... 215 20.16 Dilution .......................................................................................................................... 215 20.17 Expenses of the Offering and the Listing ............................................................................. 215 20.18 Lock-up .......................................................................................................................... 216 20.19 Interest of natural and legal persons involved in the Offering ................................................ 217 20.20 Participation of major existing shareholders and members of the Management, supervisory and

administrative bodies in the Offering .................................................................................. 217 20.21 Governing law and jurisdiction ........................................................................................... 218

21 SELLING AND TRANSFER RESTRICTIONS ........................................................................................ 219 21.1 General .......................................................................................................................... 219 21.2 Selling restrictions ........................................................................................................... 219 21.3 Transfer restrictions ......................................................................................................... 221

22 ADDITIONAL INFORMATION .......................................................................................................... 224 22.1 Independent auditors ....................................................................................................... 224 22.2 Advisors ......................................................................................................................... 224 22.3 Documents on display ...................................................................................................... 224

23 DEFINITIONS AND GLOSSARY ....................................................................................................... 225


viii

APPENDICES

APPENDIX A ARTICLES OF ASSOCIATION OF ELKEM ASA .................................................................... A1 APPENDIX B COMBINED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2017 AND

2016 .......................................................................................................................... B1 APPENDIX C CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2017,

2016 AND 2015 ........................................................................................................... C1 APPENDIX D APPLICATION FORM FOR THE RETAIL OFFERING .............................................................. E1


1

1 SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections A – E (A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of securities and the Company. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of “not applicable”.

Section A – Introduction and Warnings

A.1 Warning This summary should be read as introduction to the Prospectus;

any decision to invest in the securities should be based on consideration of the Prospectus as a whole by the investor;

where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the Prospectus before the legal proceedings are initiated; and

civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Warning Not applicable. No consent is granted by the Company for the use of the Prospectus for subsequent resale or final placement of the Shares.

Section B - Issuer

B.1 Legal and commercial name Elkem ASA.

B.2 Domicile and legal form, legislation and country of incorporation

The Company is a public limited liability company organised and existing under the laws of Norway pursuant to the Norwegian Public Limited Companies Act. The Company was incorporated in Norway on 2 January 1904, and the Company’s registration number in the Norwegian Register of Business Enterprises is 911 382 008.

B.3 Current operations, principal activities and markets

Elkem is a market leader in the production of silicon-based advanced materials with a global portfolio and history of more than 110 years of technology driven growth. Elkem is a fully integrated producer with operations throughout the silicon value chain from quartz to silicon and downstream silicone specialities as well as speciality ferrosilicon alloys and carbon materials.

Elkem operates its business in four divisions: Silicones, Silicon Materials, Foundry Products and Carbon. In addition to its operating divisions, Elkem has a technology division conducting research and development projects for all parts of the Group’s value chain.1 Elkem’s research strategy builds on close cooperation between the operational divisions and the research teams. Elkem's business is operated under the EBS (as defined below), which is a concept of lean manufacturing and targets efficient operational processes throughout the manufacturing process.

Elkem has a strong global footprint with thirteen production facilities in Europe, seven production facilities in Asia, six production facilities in the Americas (one of which is under construction in Paraguay) and one

1 The technology division is from a financial reporting perspective part of the “other” segment, see Section 12.2 “Operating divisions and reporting segments”.


2

production facility in Africa. Elkem also operates two quartz mines in Norway and four quartz mines in Spain. Elkem's global footprint ensures competitive strengths such as economies of scale, production cost optimisation and production flexibility across the world. In addition, Elkem has an extensive network of more than twenty sales offices and agents covering Elkem’s most important markets. Having production facilities on each of the main industrial continents enables Elkem to respond quickly and effectively to customer needs on a global basis.

On a combined basis (as described in Section 4.2 “Presentation of financial and other information”), the Group had a total operating income of NOK 21,368.2 million and Operating EBITDA of NOK 3,153.6 million as of 31 December 2017. As of 31 December 2017 2 , the Group had 6,114 employees worldwide, of which 2,171 are employees of Xinghuo Silicones and Yongdeng Silicon Materials.

Elkem's four operating divisions are:

The Silicones division which produces siloxanes and a comprehensive range of silicones, which are a family of specialty, high performance products and materials, as well as commoditized products produced by reacting silicon with methyl chloride through various chemical reactions and formulations. The division, which is the largest within the Group, had a total combined operating income3 of NOK 10,025.8 million (47% of the Group’s total combined operating income) and combined Operating EBITDA of NOK 1,515.4 million (48% of the Group’s combined Operating EBITDA) in 2017.4

The Silicon Materials division manufactures and sells silicon and microsilica for a large number of applications, including for the production of silicones. Silicon is produced from quartz or quartzite, which consists of silicon and oxygen. Elkem mainly obtains quartz from its own mines, which ensures that it has control of the quality of the quartz it uses. The Silicon Materials division delivers products to customers in the chemical, solar, electronics, aluminium, construction, refractory, oil and gas industries worldwide. The division had a total combined operating income5 of NOK 6,412.3 million (30% of the Group’s total combined operating income) and combined Operating EBITDA of NOK 804.0 million (25% of the Group’s combined Operating EBITDA6) in 2017.7

The Foundry Products division provides metal treatment solutions to iron foundries and is a supplier of high quality speciality ferrosilicon to the steel industry. Foundry alloys and ferrosilicon, both of which are alloys of iron and silicon, are produced with raw materials containing iron and other materials added in the smelting furnace. The automotive, engineering, pipe and steel industries are important markets for the division. The division had a total combined operating income8 of NOK 4,247.3 million (20% of the Group’s total combined operating income) and combined

2 See Section 14.8 “Employees” for an overview of the number of employees per operating division and geographic location per 31 December 2017 on a combined basis. 3 Total operating income of the Silicones division including intra group revenues. 4 The percentage of total operating income and Operating EBITDA also takes into account the “other” segment and eliminations, and does accordingly not sum to 100%. See Section 12.2 “Operating divisions and reporting segments”. 5 Total operating income of the Silicon Materials division including intra group revenues. 6 See section 12.7.6 “Gross operating profit (loss)/Operating EBITDA” for further details and explanation regarding the divisions’ portions of the Group’s Operating EBITDA. 7 The percentage of total operating income and Operating EBITDA also takes into account the “other” segment and eliminations, and does accordingly not sum to 100%. See Section 12.2 “Operating divisions and reporting segments”. 8 Total operating income of the Foundry Products division including intra group revenues.


3

Operating EBITDA of NOK 707.4 million (22% of the Group’s combined Operating EBITDA) in 2017.9

The Carbon division produces carbon materials used in the production of silicon and ferroalloys. The Carbon division supplies third parties across the globe in addition to Elkem's own silicon and ferrosilicon plants. The main products are Søderberg electrode paste, lining materials, pre-baked electrodes and specialty carbon products for various metallurgical smelting processes and primary aluminium industries. The division had a total combined operating income10 of NOK 1,576.7 million (7% of the Group’s total combined operating income) and combined Operating EBITDA of NOK 273.7 million (9% of the Group’s combined Operating EBITDA) in 2017.11

All four of Elkem’s operating divisions operate globally and have leading12 market positions in their respective key market segments due to its strong position throughout the value chain, and as such Elkem believes it is well positioned to capture the growing market demand.

B.4a Significant recent trends In the period since 31 December 2017, Elkem’s total operating income and gross operating profit (loss)/Operating EBITDA 13 have significantly exceeded Management’s expectations.

Sales prices so far in 2018 have been particularly strong for Silicon Materials, Foundry Products and Silicones, as market prices for silicon and ferrosilicon have been on an upward trend from the second half of 2017 and into 2018, following a fundamentally improved supply/demand balance.

For the months of January and February 2018, production volume has been in line with Management's expectations for all segments, whereas sale volumes were higher than Management’s expectations in the Silicones and Foundry Product divisions and below expectations for Silicon Materials.

The integration of Xinghuo Silicones and Yongdeng Silicon Materials has continued at a faster pace and with better results in January and February than previously expected.

For other factors mentioned under Section 12.3 “Factors affecting the Group’s results of operations”, the Company has not observed any adverse material developments or trends during January and February.

Acquisitions of Xinghuo Silicones and Yongdeng Silicon Materials

Elkem entered into two separate equity transfer agreements on 30 January 2018, with Bluestar Elkem Investment Co. Ltd. pursuant to which Bluestar Elkem Investment Co. Ltd. has agreed to transfer 100% of the shares in Xinghuo Silicones and Yongdeng Silicon Materials to the Company. Completion of these transfers are conditional only upon a completion of the Listing.

The New Loan Facilities Agreement

Elkem signed the New Loan Facilities Agreement (as defined below) with four banks, Nordea, DNB Bank ASA, Citibank and Natixis, dated as of 13 February 2018. The financing arrangement consists of a revolving credit facility (RCF) of EUR 250 million (NOK 2,461 million), a term loan facility of EUR 400 million (NOK 3,938 million), and a bridge financing term loan

9 The percentage of total operating income and Operating EBITDA also takes into account the “other” segment and eliminations, and does accordingly not sum to 100%, see Section 12.2 “Operating divisions and reporting segments”. 10 Total operating income of the Carbon division including intra group revenues. 11 The percentage of total operating income and Operating EBITDA also takes into account the “other” segment and eliminations, and does accordingly not sum to 100%, see Section 12.2 “Operating divisions and reporting segments”. 12 Company estimate based on the total size of the market, knowledge of own production, and estimates of the production of other players in the market place. 13 See Section 4.2.2 “Alternative Performance Measures” for an overview of the APMs presented in this Prospectus.


4

facility of EUR 500 million (NOK 4,922 million). The New Loan Facilities Agreement provides sufficient capacity for the refinancing of the Group’s outstanding indebtedness, including outstanding indebtedness of Xinghuo Silicones and Yongdeng Silicon Materials. The availability of the facilities under the New Loan Facilities Agreement is conditional upon completion of the Listing.

Revenue and Operating EBITDA targets

In early January 2018, Elkem established the below revenue and Operating EBITDA targets.

As of 31 December 2017, Elkem's Silicones and Silicon Materials divisions accounted for 77% of Elkem's total operating income on a combined basis including intragroup sales (i.e., including Xinghuo Silicones and Yongdeng Silicon Materials). As a result of the acquisition of Xinghuo Silicones and Yongdeng Silicon Materials, Elkem will gain access to a significant and well invested capacity reservoir which will ensure an attractive growth option. On a combined basis, Elkem's total operating income increased by 26% from 2016 to 2017. In the medium term, Elkem's established target for revenues to reach approximately double world GDP growth and for 2018, the target is double digit revenue growth.

For 2018, Elkem expects that continued focus on efficiency improvements, effect of operational improvements at Fesil Rana and achieved benefits of operational leverage from its expected growth and current market conditions are some of the factors that will lead to an improved Operating EBITDA margin and Elkem's established target is Operating EBITDA margin improvements for 2018 in the area of 1.5 – 2.0 percentage points compared to 2017 levels. In the medium term, Elkem expects Operating EBITDA margins to gradually increase through specialisation and continued focus on efficiency improvement.

Certain ratios

Elkem estimates its equity ratio, defined as Elkem’s total equity divided by its total assets, will be approximately 40% after giving effect to the Listing, the Reorganisation and the refinancing as described below. This estimate is based on Elkem’s balance sheet as of 31 December 2017 and assumes that Elkem’s net proceeds from the Offering will be NOK 5,000 million, that the total purchase price of Xinghuo Silicones and Yongdeng Silicon Materials will be RMB 3,274 million (NOK 4,126.1 million), that the refinancing is carried out on the terms described in Section 12.11.4.2 “The refinancing”, and further assumes the settlement of all intra-group receivables.

B.5 Description of the Group Elkem is the ultimate parent company in the Group. The Group comprises in total 72 legal entities in Europe, Asia, the Americas and Africa, in addition to 3 affiliated entities.

Upon completion of the IPO, Elkem will acquire Xinghuo Silicones and Yongdeng Silicon Materials, and the information provided in this Prospectus intends to describe the business of the Group on a combined basis (as defined below), i.e. including the effects of the Reorganisation as further described in Section 6 “Reorganisation”.

B.6 Interests in the Company and voting rights

Shareholders owning 5% or more of the Shares have an interest in the Company’s share capital which is notifiable pursuant to the Norwegian Securities Trading Act.

As of the date of this Prospectus, the Company has one shareholder, being the Selling Shareholder. The Selling Shareholder will remain the majority shareholder following completion of the Offering.


5

There are no differences in voting rights between the Shares.

Following the completion of the Offering, the Company is not aware of any persons or entities other than the Selling Shareholder who, directly or indirectly, jointly or severally, will exercise or could exercise control over the Company. The Company is not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.

B.7 Selected historical key financial information

The following selected financial information has been extracted from the Group’s combined financial statements as of and for the years ended 31 December 2017 and 2016 (the Combined Financial Statements as defined below), and selected financial information extracted from the Group's consolidated financial statements as of and for the years ended 31 December 2017, 2016 and 2015 (the Consolidated Financial Statements as defined below).

The Combined Financial Statements as of and for the years ended 31 December 2017 and 2016 have been prepared in accordance with IFRS as adopted by the EU to the extent appropriate since IFRS does not provide explicit guidance for the preparation of combined financial information. The Consolidated Financial Statements as of and for the years ended 31 December 2017, 2016 and 2015 have been prepared in accordance with IFRS (as defined in Section 4.2.1 “Financial information”).

The Combined Financial Statements and the Consolidated Financial Statements do not provide explicit information regarding the continuity differences recognised against equity as a result of the acquisition of Xinghuo Silicones and Yongdeng Silicon Materials. See Sections 6.4 “Accounting treatment of the acquisition of Xinghuo Silicones and Yongdeng Silicon Materials”, 10 “Capitalisation and Indebtedness” and 12.4.3 “Continuity differences recognised against equity as a result of the acquisition of Xinghuo Silicones and Yongdeng Silicon Materials” for a description of the effects these acquisitions will have on the equity of the Group and the accounting treatment of these acquisitions. The continuity differences booked as a reduction of consolidated equity are NOK 3,888.8.

The selected financial information included in this Prospectus should be read in connection with, and is qualified in its entirety by reference to, the Combined Financial Statements and the Consolidated Financial Statements included in this Prospectus as Appendix B and Appendix C, respectively.

Selected data from the combined statement of income

Year ended 31 December

In NOK thousands 2017 2016

Revenues ............................................................................................. 21,132,609 16,721,639

Other operating income .......................................................................... 235,637 199,168

Total operating income ....................................................................... 21,368,246 16,920,807

Raw materials and energy for smelting ..................................................... (10,824,536) (8,941,764)

Employee benefit expenses ..................................................................... (3,144,819) (2,817,339)

Other operating expenses ....................................................................... (4,245,278) (3,625,302)

Gross operating profit (loss) .............................................................. 3,153,613 1,536,402

Amortisations and depreciations .............................................................. (1,244,025) (1,217,255)

Impairment losses ................................................................................. (16,809) (77,767)

Other gains and losses ........................................................................... 43,638 57,287

Operating profit (loss) ........................................................................ 1,936,417 298,667

Income from associates and joint ventures ............................................... 34,144 22,130

Finance income ..................................................................................... 30,436 36,565

Foreign exchange gains (losses) ............................................................. (7,701) 49,661


6

Finance expenses .................................................................................. (474,499) (486,696)

Profit (loss) before income tax ........................................................... 1,518,797 (79,673)

Tax (expenses)/income .......................................................................... (269,391) (188,567)

Profit (loss) for the year ..................................................................... 1,249,406 (268,240)

Selected data from the combined statement of financial position

As of 31 December


ASSETS

Property, plant and equipment ................................................................ 11,950,419 11,410,401

Goodwill ............................................................................................... 326,323 342,645

Other intangible assets ........................................................................... 911,022 891,989

Deferred tax assets ................................................................................ 89,584 67,348

Investment in joint ventures ................................................................... 97,871 108,978

Interest in associated and other companies .............................................. 111,967 100,516

Derivatives ........................................................................................... 151,574 119,161

Other non-current assets ........................................................................ 355,874 392,808

Total non-current assets ..................................................................... 13,994,634 13,433,846

Inventories ........................................................................................... 4,099,200 3,792,297

Accounts receivables .............................................................................. 2,518,423 1,952,473

Derivatives ........................................................................................... 33,357 56,388

Other current assets .............................................................................. 2,090,949 1,621,919

Restricted deposits ................................................................................ 1,019,791 915,013

Cash and cash equivalents ...................................................................... 1,750,930 1,319,797

Total current assets ............................................................................ 11,512,650 9,657,887

Total assets ........................................................................................ 25,507,284 23,091,733

As of 31 December


EQUITY AND LIABILITIES

Paid-in capital ....................................................................................... 2,918,203 3,088,203

Retained earnings .................................................................................. 5,545,130 2,654,513

Non-controlling interest .......................................................................... 101,557 87,553

Total equity ........................................................................................ 8,564,890 5,830,269

interest-bearing non-current liabilities ...................................................... 4,584,974 5,113,490

Deferred tax liabilities ............................................................................ 104,587 114,182

Pension liabilities ................................................................................... 444,807 425,488

Derivatives ........................................................................................... 378,955 561,131

Provisions and other non-current liabilities ................................................ 426,215 506,028

Total non-current liabilities ................................................................ 5,939,538 6,720,319

Accounts payable................................................................................... 2,650,387 2,310,509

Income tax payables .............................................................................. 138,916 99,631

Interest-bearing current liabilities ............................................................ 3,647,297 4,204,240

Bills payable ......................................................................................... 2,649,760 2,418,946

Derivatives ........................................................................................... 246,683 128,001

Provisions and other current liabilities ...................................................... 1,669,813 1,379,818

Total current liabilities ....................................................................... 11,002,856 10,541,145

Total equity and liabilities .................................................................. 25,507,284 23,091,733

Selected data from the combined statement of cash flows



Operating activities


7

Operating profit (loss) ............................................................................ 1,936,417 298,667

Changes fair value commodity contracts ................................................... (79,093) (77,598)

Amortisation, depreciation and impairment changes .................................. 1,260,834 1,295,022

Changes in working capital ..................................................................... (127,825) 218,259

Changes in provisions, pension obligations and other ................................. (137,315) (135,379)

Interest payments received .................................................................... 23,629 34,442

Interest payments made ........................................................................ (446,136) (408,079)

Other financial items .............................................................................. (1,034) 1,394

Income taxes paid ................................................................................. (198,456) (201,013)

Cash flow from operating activities .................................................... 2,231,021 1,025,715

Investing activities

Investments in property, plant and equipment and intangible assets ............ (1,126,068) (833,952)

Sale of property, plant and equipment ..................................................... 17,758 6,760

Acquisition of subsidiaries, net of cash acquired ........................................ 4,063 (439,788)

Dividend received from associates and joint ventures ................................. 25,037 26,190

Acquisition of joint ventures .................................................................... (19,528) -

Loan to associate and joint ventures ........................................................ (12,150) (34,258)

Other investments/sales ......................................................................... 7,978 3,713

Cash flow from investing activities ..................................................... (1,102,910) (1,271,335)

Financing activities

Dividends paid to non-controlling interests................................................ (26,121) (40,364)

Dividends paid to owner of the parent ...................................................... (143,947) -

Payments due to increase in ownership interests in subsidiaries .................. - (31,224)

New interest-bearing loans and borrowings ............................................... 60,175 1,283,140

Repayment of interest-bearing loans and borrowings ................................. (859,191) (204,603)

Net changes in bills payable and restricted deposits ................................... 285,054 (698,138)

Repayment of short term loan from related parties .................................... (29,698) (149,425)

Cash flow from financing activities ..................................................... (713,728) 159,386

Change in cash and cash equivalents .................................................. 414,383 (86,234)

Currency exchange differences ................................................................ 16,750 (38,110)

Cash and cash equivalents opening balance ....................................... 1,319,797 1,444,141

Cash and cash equivalents closing balance ......................................... 1,750,930 1,319,797

Selected data from the combined statement of changes in equity

In NOK thousands

Share capital

Other paid-in capital

Total paid in capital

Foreign currency translation reserve

Cash flow hedge

reserve

Other retained earnings

Total retained earnings

Total owners share

Non-controll

ing interest Total

Balance 1 January 2016 2,010,000 1,078,203 3,088,203 440,734 (1,133,971) 1,258,562 565,325 3,653,528 123,219 3,776,747

Profit (loss) for the year - - - - - (304,359) (304,359) (304,359) 36,119 (268,240)

Other comprehensive income for the year - - - 193,683 691,794 (41,013) 844,464 844,464 (4,100) 840,364

Total comprehensive income for the year - - - 193,683 691,794 (345,372) 540,105 540,105 32,019 572,124

Conversion of liabilities1 - - - - - 1,552,986 1,552,986 1,552,986 - 1,552,986

Dividends to equity holders - - - - - - - - (40,364) (40,364)

Changes in the composition of the group - - - - - (3 903) (3 903) (3 903) (27 321) (31 224)

Balance 31 December 2016 2,010,000 1,078,203 3,088,203 634,417 (442,177) 2,462,273 2,654,513 5,742,716 87,553 5,830,269

Balance 1 January 2017 2,010,000 1,078,203 3,088,203 634,417 (442,177) 2,462,273 2,654,513 5,742,716 87,553 5,830,269

Profit (loss) for the year - - - - - 1,210,724 1,210,724 1,210,724 38,682 1,249,406

Other comprehensive income for the year - - - 116,287 (10,417) 3,402 109,272 109,272 1,443 110,715


8

Total comprehensive income for the year - - - 116,287 (10,417) 1,214,126 1,319,996 1319,996 40,125 1,360,121

Conversion of liabilities2 - - - - 1,570,621 1,570,621 1,570,621 - 1,570,621

Dividends to equity holders - (170,000) (170,000) - - - - (170,000) (26,121) (196,121)

Balance 31 December 2017 2,010,000 908,203 2,918,203 750,704 (452,594) 5,247,020 5,545,130 8,463,333 101,557 8,564,890

1 In December 2016, a shareholder loan of RMB 1,256 million (NOK 1,553 million) in Xinghuo Silicones was converted into equity.

2 In May 2017, a shareholder loan of RMB 543 million (NOK 670 million) in Yongdeng Silicon Materials and in August 2017 a shareholder loan of RMB 761 million (NOK 900 million) in Xinghuo Silicones was converted to equity.

Selected data from the consolidated statement of income


In NOK thousands 2017 2016 2015

Revenues ....................................................................... 16,441,894 14,045,397 14,361,403

Other operating income .................................................... 215,988 180,772 179,654

Total operating income ................................................. 16,657,882 14,226,169 14,541,057

Raw materials and energy for smelting ............................... (8,125,907) (6,899,039) (6,847,021)

Employee benefit expenses ............................................... (2,857,634) (2,559,950) (2,438,997)

Other operating expenses ................................................. (3,575,874) (3,149,390) (3,048,051)

Gross operating profit (loss) ........................................ 2,098,467 1,617,790 2 206,988

Amortisations and depreciations ........................................ (776,023) (717,781) (674,383)

Impairment losses ........................................................... (16,809) (11,818) (1,813)

Other gains and losses ..................................................... 49,313 52,438 (221,006)

Operating profit (loss) .................................................. 1,354,948 940,629 1,309,786

Income from associates and joint ventures ......................... 34,144 22,130 21,327

Finance income ............................................................... 19,219 22,617 57,492

Foreign exchange gains (losses) ........................................ (7,701) 49,661 32,533

Finance expenses ............................................................ (119,376) (88,501) (154,067)

Profit (loss) before income tax ..................................... 1,281,234 946,537 1,267,071

Income tax (expense) benefit ........................................... (269,390) (188,567) (424,663)

Profit (loss) for the year from continued operations .... 1,011,844 757,969 842,408

Profit (loss) for the year from discontinued operations ......... - - (7,097)

Profit (loss) for the year ............................................... 1,011,844 757,969 835,311

Selected data from the consolidated statement of financial position

As of 31 December


ASSETS

Property, plant and equipment .......................................... 6,568,934 5,909,087 5,602,208

Goodwill ......................................................................... 326,323 342,645 244,088

Other intangible assets ..................................................... 719,350 693,013 643,493

Deferred tax assets .......................................................... 89,584 67,348 323,969

Investment in joint ventures ............................................. 97,871 108,978 67,476

Interest in associated and other companies ........................ 111,967 100,516 96,046

Derivatives ..................................................................... 151,574 119,161 40,480

Other non-current assets .................................................. 324,615 370,697 217,226

Total non-current assets ............................................... 8,390,218 7,711,445 7,234,986

Inventories ..................................................................... 3,561,007 3,339,415 3,302,196

Accounts receivables ........................................................ 2,264,479 1,870,770 1,864,010

Derivatives ..................................................................... 33,357 56,388 14,332

Other current assets ........................................................ 601,822 600,861 755,737

Restricted deposits .......................................................... 3,773 3,771 -

Cash and cash equivalents ................................................ 1,493,279 1,230,668 1,305,592

Total current assets ...................................................... 7,957,717 7,101,897 7,241,867


9

Total assets .................................................................. 16,347,935 14,813,342 14,476,853

As of 31 December


EQUITY AND LIABILITIES

Paid-in capital ................................................................. 2,918,203 3,088,203 3,088,203

Retained earnings ............................................................ 5,313,102 4,283,286 2,955,626

Non-controlling interest .................................................... 101,557 87,553 123,219

Total equity .................................................................. 8,332,862 7,459,042 6,167,048

Interest bearing non-current liabilities ................................ 2,681,975 2,834,859 3,051,916

Deferred tax liabilities ...................................................... 104,587 114,182 124,475

Pension liabilities .............................................................