Description
Nyrstar is an integrated mining and metals business with market-leading positions in zinc and lead and growing positions in other base and precious metals: essential resources that are fuelling the rapid urbanisation and industrialisation of our changing world.
Annual Report 2013
FOR TOMORROW
TRANSFORMING
Nyrstar is an integrated mining and metals business with
market-leading positions in zinc and lead and growing
positions in other base and precious metals: essential resources
that are fuelling the rapid urbanisation and industrialisation
of our changing world.
Nyrstar has mining, smelting and other operations located
in the Americas, Australia, China and Europe, and employs
approximately 6,600 people. ROLAND JUNCK, CEO
Discover the 2013
production and
?nancial details on:
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MINING PRODUCTION 2013 2012 2011
Zinc in concentrate (‘000 tonnes)
*
285 312 207
Gold (‘000 troy ounces) 75.2 94.6 49.9
Silver (‘000 troy ounces)
1
4,746 5,517 3,673
Copper in concentrate (‘000 tonnes) 12.9 13.0 7.7
METALS PROCESSING PRODUCTION
2
Zinc metal (‘000 tonnes) 1,088 1,084 1,125
Lead metal (‘000 tonnes) 179 158 195
MARKET
Average LME zinc price (USD/t) 1,909 1,946 2,191
Average exchange rate (EUR/USD) 1.33 1.28 1.39
KEY FINANCIAL DATA (EUR million)
Group Revenues 2,824 3,070 3,348
EBITDA
3
185 221 265
Mining EBITDA 78 129 72
Metals Processing EBITDA
3
149 135 235
Other & Eliminations EBITDA
3
(43) (43) (42)
KEY FINANCIAL DATA 2013 2012 2011
Results from operating activities before
exceptional items
(46) (6) 122
Loss for the period (195) (96) 36
EBITDA/t
6
135 158 199
Mining EBITDA/t
4
274 413 348
Metals Processing EBITDA/t
5
118 109 209
Underlying EPS (EUR)
7
(0.83) (0.44) 0.38
Basic EPS (EUR) (1.27) (0.57) 0.24
Capital Expenditure (CAPEX) 200 248 229
CASH FLOW AND NET DEBT
Net operating cash ?ow 299 362 121
Net debt/(cash), end of period 670 681 718
Gearing
8
43.5% 37.0% 35%
Key ?gures 04
2013 Highlights 04
Nyrstar in 2013 06
Strategy into action 09
Year in review 14
Mining 17
Metals Processing 21
Marketing, Sourcing & Sales 25
Market Overview 29
Corporate responsibility 31
The Nyrstar Excellence Awards 36
Contact 39
*
Numbers include Talvivaara zinc in concentrate production ?gures.
million
cost savings with a total target
of EUR 75 million through Group
wide review of operating costs.
€
million
200
€
DISCIPLINED CAPEX
CONTROL, AT THE LOW
END OF GUIDANCE
(DOWN 19% ON 2012)
million
€
NET OPERATING
CASH FLOW
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FINANCIAL CALENDAR
KEY SHARE FACTS
FOR THE YEAR ENDED 31 DECEMBER 2013 2012 2011
Market capitalisation EUR 392,752,077 EUR 764,081,313 EUR 1,037,137,518
Ordinary shares 170,022,544 170,022,544 170,022,544
Treasury shares 15,338,429 7,345,826 9,413,138
Free ?oat 85% 85% 85%
Gross capital distribution EUR 0 EUR 0.16 EUR 0.16
Underlying EPS (12 months to 31/12) EUR (0.83) EUR (0.55) EUR 0.38
Closing share price EUR 2.31 EUR 4.49 EUR 6.10
Intra day high EUR 4.72
(14/01/2013)
EUR 7.74
(08/02/12)
EUR 10.62
(13/01/11)
Intra day low EUR 2.03
(19/11/2013)
EUR 3.24
(26/07/12)
EUR 5.51
(23/11/11 and
25/11/11)
Average daily number of shares 2013 624, 569 1,036,883 993,666
30 April 2014 Annual General Meeting
30 April 2014 2014 First Interim Management Statement
24 July 2014 2014 Half Year Results
23 October 2014 2014 Second Interim Management Statement
5 February 2015 2014 Full Year Results
29 April 2015 Annual General Meeting
29 April 2015 2015 First Interim Management Statement
Dates are subject to change.
Please check the Nyrstar website for ?nancial calendar updates.
1
75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013, Campo
Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes production from Metals Processing segment only. Zinc production at Föhl,
Galva 45 & Genesis.
3
All references to EBITDA in the table above are Underlying EBITDA. Underlying
measures exclude exceptional items related to restructuring measures, M&A relat-
ed transaction expenses, impairment of assets, material income or expenses arising
from embedded derivatives recognised under IAS 39 and other items arising from
events or transactions clearly distinct from the ordinary activities of Nyrstar. Under-
lying EPS does not consider the tax effect on underlying adjustments. 2012 group
underlying EBITDA restated (previously EUR 220 million) due to Nyrstar adopting
international accounting standard IAS 19R (see notes to the Interim Condensed Con-
solidated Financial Statements for the period ended 31 December 2013).
4
Mining segment underlying EBITDA per tonne of zinc in concentrate produced.
5
Metals Processing segment underlying EBITDA per tonne of zinc metal produced.
6
Group underlying EBITDA per tonne of zinc in concentrate and zinc metal produced
7
Underlying measures exclude exceptional items related to restructuring measures,
impairment of assets, material income or expenses arising from embedded deriva-
tives recognised under IAS 39 and other items arising from events or transactions
clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not con-
sider tax effect on underlying adjustments.
8
Gearing: net debt to net debt plus equity at end of period.
Net debt
UNDERLYING EBITDA
(2012: -16%)
185
€
million
million 670
€
AT THE END OF 2013
DOWN 2% ON 2012
1,909 USD/t
average Zinc price
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Nyrstar in 2013
During 2013, despite a challenging year, we continued our transforma-
tion into an integrated mining and metals business to meet the chal-
lenges of tomorrow. Our Group underlying EBITDA of EUR 185 million
decreased 16% from 2012. This decline was partly driven by tough mac-
roeconomic headwinds and markedly weaker commodity prices, par-
ticularly copper, gold and silver prices, and also company-speci?c chal-
lenges. However, particularly from the second half of the year onwards,
we note solid underlying performance, especially in cash generation,
cost control and management of capital expenditure.
FINANCIAL OVERVIEW
Mining segment EBITDA was down 40% on 2012 at EUR 78 mil-
lion, adversely impacted by lower commodity prices, operational
challenges during the ?rst half and signi?cantly reduced deliveries
from Talvivaara. We remain keenly focused on improving the per-
formance of our Mining segment. During the second half of 2013,
we commenced an asset level Mining Strategic Review aimed at
identifying opportunities to make a step-change improvement in
the Mining segment’s operational and ?nancial performance.
Metals Processing EBITDA was up 10% on 2012 at EUR 149
million. This was driven by higher realised premiums and the
recognition of a EUR 45 million termination fee received from
Glencore that compensated Nyrstar for agreeing to end the Eu-
ropean component of its commodity grade metal off-take con-
tract, partially offset by lower average acid prices.
We continue to seek sustainable cost reductions across our entire
business through Project Lean. We achieved costs savings at the end
of 2013 of EUR 43 million and are con?dent of achieving our targeted
cost savings of EUR 75 million by the end of 2014. Net debt at the end
of 2013 was EUR 670 million, down 11% on the ?rst half of 2013 and
we have committed undrawn liquidity headroom and cash on hand of
EUR 721 million at the end of 2013. The Metals Processing segment
generated strong cash ?ows at the end of 2013 driven by our effec-
tive management of working capital and capital expenditure. During
2013 we successfully re?nanced the EUR 120 million bond maturing
in 2014 with new EUR 120 million convertible bonds due 2018.
As a result of our disciplined approach, capital expenditure in
2013 was signi?cantly down on the prior year at EUR 200 million
and at the bottom end of our 2013 guidance.
SEGMENT OPERATIONAL PERFORMANCE
Our operational performance was impacted by a number of
planned maintenance shuts across our Metals Processing segment
and, disappointingly, operational events across our Mining seg-
ment. Most notably, the Mining segment was affected by a two-
month suspension of mining operations at Campo Morado due to
a licensing issue. Whilst own mine zinc in concentrate production
in the second half of 2013 was down marginally on the ?rst half
of 2013, this largely re?ected the focus on gold at El Toqui. Full
year own zinc in concentrate production was 271,000 tonnes (in
line with our 2013 guidance, although down 4% on 2012). Lead
in concentrate production was marginally down on our guidance
whilst the production of other metals (copper, gold and silver)
was in line with guidance. Deliveries of zinc in concentrate from
Talvivaara of 14,000 tonnes in 2013 were signi?cantly down on
2012 (30, 000 tonnes). Talvivaara’s liquidity position weakened
further in H2 2013 and Nyrstar is now actively participating with
a number of stakeholders in Talvivaara’s corporate reorganisation
process which commenced in Q4 2013.
Our Metals Processing segment had a strong year, with a new
half-yearly record in zinc metal production in the second half of
2013. As a result, zinc metal production was at the top end of our
2013 guidance (and in line with 2012). Production of other met-
als in Metals Processing (lead, copper, silver, gold and indium)
was broadly in line with the ?rst half of 2013 and above 2012
performance.
STRATEGY
Nyrstar achieved a number of important strategic milestones
during 2013. We continued to progress the proposed redevel-
opment of the Port Pirie smelter into an advanced poly-metal-
lic processing and recovery facility, providing an opportunity to
strengthen and further diversify Group earnings. Following the
in-principle funding and support agreement reached in Decem-
ber 2012 with the Australian Federal and South Australian Gov-
ernments, we signed an implementation agreement with the
Australian Federal Government’s Export Finance and Insurance
Corporation, providing a framework and timetable for this import-
ant component of the funding package. We progressed the ?nal
investment case, including detailed engineering studies and the
completion of the pre-feasibility study. We continue to work with
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the Australian Federal and South Australian Governments and
are now working through the ?nal feasibility study. We expect to
make an announcement in early 2014.
In addition, following the completion of a thorough strategic re-
view of our smelting business during 2013, we have developed and
externally validated a transformation blueprint of approximately
25 projects aimed at capturing non-realised value in Nyrstar-con-
trolled feed material. Nyrstar completed its ?rst investment in the
transformation, and ?rst project within the blueprint, in Q4 2013
with the acquisition of ERAS Metal (now Nyrstar Hoyanger).
In H2 2013, Nyrstar successfully concluded negotiations for
a strategic offtake and marketing partnership with the Noble
Group for 200,000 tonnes per annum of commodity grade zinc
metal. In parallel with the partnership in Europe with Noble,
we have also established a strong Marketing, Sourcing & Sales
group, which will actively position Nyrstar within key markets.
OUR PEOPLE
We have made signi?cant progress in our long term strategic re-
positioning which is supported by a strong and dedicated work-
force of approximately 6,600 people. Our performance remains
the result of their commitment and dedication for the business
which is underpinned by our corporate culture, the Nyrstar Way.
On behalf of the Board of Directors, we would like to sincerely
thank all of our employees worldwide.
The health and safety of our employees, contractors and com-
munities is a core element of our company values. Incident rates
in the Metals Processing segment remain at record low levels
and there have been substantial improvements in the Mining
segment as a result of a strong safety focus at the mines. Our
environmental performance, based on our recordable incidents
rates, improved by more than 34% in 2013.
OUR STAKEHOLDERS
We would like to thank all of our shareholders, customers, sup-
pliers and the communities around our sites for their continued
support and trust in Nyrstar and our ongoing transformation.
Given our strong commitment to support the opportunities
identi?ed by the Company’s growth strategy, our Board of Direc-
tors has decided not to propose to shareholders a distribution
for the full year 2013.
LOOKING FORWARD
Looking ahead, we recognise that 2014 is an important year for
Nyrstar and while there are early signs of improving conditions
across the markets in which we operate, we are conscious of the
need for a prudent and disciplined approach to managing the
business to ensure that it is sustainable for the long term. With
this in mind, we continue to actively progress the Port Pirie re-
development and the initiatives identi?ed following the outcome
of the Smelting Strategic Review, supported by a more advanced
Marketing, Sourcing & Sales strategy and look forward to the re-
sults of the Mining Strategic Review. We continue to execute the
Group’s strategy and remain convinced that our unique industrial
footprint, ownership of raw materials and commercial focus pro-
vide a unique opportunity to generate value to our shareholders.
JULIEN DE WILDE
CHAIRMAN OF THE BOARD OF DIRECTORS
ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
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Nyrstar in 2013
NYRSTAR BOARD OF DIRECTORS
Oyvind Hushovd, Non-Executive Director; Carole Cable, Non-Executive Director; Julien De Wilde, Chairman;
Karel Vinck, Non-Executive Director; Ray Stewart, Non-Executive Director; Roland Junck, Chief Executive Of?cer.
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THE NYRSTAR MANAGEMENT COMMITTEE (‘NMC’)
Michael Morley, Senior Vice President Metals Processing & Chief Development Of?cer; Bob Katsiouleris, Senior Vice
President Marketing, Sourcing & Sales; Heinz Eigner, Chief Financial Of?cer; Roland Junck, Chief Executive Of?cer;
Graham Buttenshaw, Senior Vice President Mining; Russell Murphy, Chief Human Resources, Safety & Environment Of?cer.
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ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
Graham Buttenshaw assumed responsibility for leading the Com-
pany’s global mining operations. Since joining Nyrstar in 2012, he
has built up a strong new mining leadership team, based out of
our mining head of?ce in Ft. Lauderdale, Florida (USA) with the
responsibility of managing our 12 operating mines at eight sites in
six countries across the Americas. Prior to Nyrstar, Mr. Buttenshaw
amassed extensive global mining experience working both within
global mining houses such as BHP Billiton and in global mining
contractors such as Redpath and Henry Walker Eltin. Previously
he was Vice President South America at Redpath Limited, a global
mining contractor.
Bob Katsiouleris assumed responsibility for the Company’s raw
materials strategy, marketing and sales of ?nished products and
trading. Prior to joining Nyrstar in January 2013, Mr. Katsiouleris
was the Chief Commercial Of?cer for Rio Tinto Minerals and brings
more than 20 years of experience in industrial minerals and metals
sales, marketing, operations, processing, ?nance and purchasing.
Senior Vice President
- Mining
Senior Vice President
- Marketing, Sourcing
& Sales
New Members of the NMC
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Senior Vice President
- Marketing, Sourcing
& Sales
STRATEGY
INTO ACTION
NYRSTAR TENNESSEE MINES,
USA
Nyrstar’s industrial footprint of mining and smelting assets pro-
vides a unique opportunity to capture non-realised value and
deliver on our strategic mission to capture the maximum value
inherent in mineral resources. In 2013, we transformed our busi-
ness into three core value-driving segments: Mining, Metals Pro-
cessing, and Marketing, Sourcing & Sales to be better aligned with
the Company’s growing metals and mining business. This new
structure will streamline both mining and metals processing ac-
tivities and allow for increased commercial synergies throughout
our integrated network.
Alongside the organisational changes, several initiatives were
launched in 2013 to position Nyrstar for a long-term sustainable
future. We progressed the ?nal investment case in 2013 for the
redevelopment of Port Pirie into an advanced metals recovery and
re?ning facility which will further diversify Group earnings. Build-
ing on the Port Pirie redevelopment, Nyrstar launched a strategic
review of its zinc smelting (Smelting Strategic Review) operations,
which led to the development of a transformation blueprint of ap-
proximately 25 projects to capture un-realised value from residue
materials.
We also commenced an asset level Mining Strategic Review to
improve the Mining segment’s operational and ?nancial perfor-
mance. This is being undertaken in two phases: ?rstly, a prelimi-
nary turnaround phase to ensure that all assets are delivering to
their full potential; and secondly, a more strategic phase which
will link speci?cally to the Smelting Strategic Review programme
to maximise the advantages that both programmes can deliver.
Finally, in 2013 we created a new Marketing, Sourcing & Sales
team to support the implementation of the offtake and market-
ing agreement with Noble, the European zinc metal plan and the
overall global commercial strategy.
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For further information
please visit:
Looking Forward to 2014
Entering 2014, we will leverage the synergies built by our new organisational structure to stabilise and transform our opera-
tions, to build lasting and sustainable results. We will:
• Provide visible leadership to safety and environmental performance
• Deliver planned increases in mining production
• Continue to actively work with other stakeholders on Talvivaara
• Drive cost and capital discipline across the Group
• Achieve key milestones for Mining Strategic Review, Smelting Strategic Review and Port Pirie Redevelopment to deliver
sustainable shareholder value
• Execute de?ned commercial strategy, aligned to Nyrstar’s integrated business and operating model which develops
and captures maximum value
• Leverage and grow the capabilities of the Nyrstar leadership group to deliver commitments.
Nyrstar Operating Model
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In 2013, Nyrstar continued to execute on Nyrstar2020, a strategic initiative aimed at positioning the
company for a long-term sustainable future as the leading integrated mining and metals business.
To help us deliver on our strategy we introduced Strategy into Action into our business. Strategy into
Action is a disciplined approach to embedding our strategy into every part of the business and is now
in its third year of implementation. Through this process, Nyrstar has built a robust annual planning
process that distributes ownership and responsibility for Group strategy across each segment and
site operation in a transparent and measurable way. Each year we critically review strategic plans and
priorities to ensure we adequately respond to the current operating environment enabling us to deliver
on our strategic mission. Our 2013 strategic priorities addressed four key pillars:
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MICHAEL MORLEY
SVP METALS PROCESSING & CHIEF DEVELOPMENT OFFICER
Keep our Word
Develop and deliver realistic plans that meet stakeholder needs.
The main strategic goals of this pillar are to ensure that our three seg-
ments and corporate centre deliver on their commitments whilst ensur-
ing world class safety and environmental performance.
Transform for Tomorrow
Execute strategic initiatives to develop in the future.
The main strategic goals of this pillar are to ensure we focus on
innovation and technology across our business; develop opportunities
for growth to generate value; build a market oriented business and
lastly, ensure that we build and sustain an organisation that supports
collaboration.
Unleash our Potential
Enhance our capabilities by investing in our people and processes.
Lastly, this pillar is fundamental to ensuring our business can deliver on
pillar one and two. This pillar focuses on developing the potential of
our people, processes and culture, to ensure we have an environment
that fosters growth and transformation.
Responding to the current operating environment our 2014 strategic priorities focus on the
following three new pillars:
Strategy Into Action in 2014
Our 2014 strategic plans place a strong emphasis on our commitment to delivering our plans, to transforming our business and to cre-
ating value for our stakeholders while recognising that our people, processes, and values as de?ned by the Nyrstar Way are key to our
success in 2014 and beyond.
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Nyrstar in 2013
07 may
Keynote speech
Speaking about the way Nyrstar ap-
proached the commercial side of our
business, Bob Katsiouleris, Senior Vice
President for Marketing, Sourcing &
Sales, gave the keynote speech at the
Metal Bulletin Zinc and its Markets Con-
ference in Amsterdam.
23 may
Port Pirie Redevelopment
Nyrstar reached an important milestone
in the funding package for the proposed
transformation of the Port Pirie smelt-
er in Australia into an advanced metals
recovery centre. The Company signed
an implementation agreement with the
Australian Export Finance and Insurance
Corporation that provides a framework
and timetable for this component of the
funding package.
24 june
New organisational
structure
Nyrstar created three distinct business
segments: Mining, Metals Processing and
Marketing, Sourcing & Sales, ensuring
that the organisational structure is better
aligned with the Company’s long-term
strategy de?ned by Nyrstar 2020.
11 july
Balen smelter turnaround
The Balen smelter successfully completed
a massive 11-week roaster turnaround,
required approximately once every 30
years. The project involved work across
operations in Europe to stockpile calcine
in order to minimise disruptions in produc-
tion. Work was completed within budget
and on-time, without any safety or envi-
ronmental incidents, and met all quality
requirements.
Watch the Nyrstar
Balen turnaround
2013 video on
Youtube
16 april
Termination of European
Zinc Offtake Agreement
Nyrstar reached a settlement with
Glencore compensating Nyrstar for
agreeing to end the existing European
Off-take Agreement for the sale and
marketing of commodity grade zinc metal.
24 april
Nyrstar Foundation
2012 Winner
Nyrstar Foundation awarded the 2012-
2013 ‘Education’ grant to ‘MyMachine
1+1=3’ . A project that targets children who
want to develop their own dream machine.
MyMachine aims to leverage its unique
methodology to promote creativity and
entrepreneurship in education in develop-
ing countries.
January - March
Nyrstar enters strategic
hedging arrangements
with respect to zinc, gold
and silver prices
Capitalizing on the volatility of the metal
markets, Nyrstar entered into a number of
short term strategic hedges in 2013. In Q1,
Nyrstar entered into short-term strategic
hedging arrangements for 20kt tonnes
per month of zinc. Strategic hedges with
respect to silver (1.6m toz) and gold (36k
toz) were also carried out through the
year. The total cost for entering into these
hedging arrangements was approximately
USD 7 million resulting in an EBITDA
contribution of EUR 36.4 million.
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23 july
CSR program awarded
Nyrstar El Mochito won, for the ?fth con-
secutive year in a row, a Honduran Nation-
al Award for being a socially responsible
company. The award was granted by FUN-
HDARSE, the Honduran Foundation for
Corporate Social Responsibility, and rec-
ognises outstanding work in the ?elds of
Corporate Social Responsibility and Com-
munity Relations.
31 august
Tailings upgrade
completed
After 15 years and a total investment of
just under USD 30 million, Myra Falls
completed the seismic upgrade of its old
Tailings Disposal Facility (TDF) and is pre-
paring it for closure and reclamation.
1
october
Off-take and marketing
agreement
Nyrstar entered a strategic off-take and
marketing agreement with Noble Group
to market and sell a signi?cant portion
of commodity grade zinc metal produced
at its European smelters. For Nyrstar,
the agreement represents a major step
forward in delivering a new global
commercial strategy.
29 october
Nyrstar strategy update
Nyrstar presented the completed Smelt-
ing Strategic Review and the pre-feasibil-
ity study of the proposed Port Pirie Re-
development. The SSR has identi?ed an
attractive portfolio of investments in mul-
ti-metals recovery and an overall Metals
Processing Transformation blueprint that
provides a unique and compelling busi-
ness case. The pre-feasibility study has
con?rmed the technical and environmen-
tal capability of the lead smelter transfor-
mation into an advanced metals recovery
and re?ning facility.
1 november
Acquisition Eras
Nyrstar acquired ERAS Metal (now
Nyrstar Hoyanger), a fuming plant in
Hoyanger, Norway. The plant operates a
fumer which produces zinc oxides from
processing electric arc furnace dust. The
acquisition of ERAS is the ?rst investment
and project within Nyrstar’s Smelting
Strategic Review blueprint. Nyrstar
intends to upgrade the plant to process
residues from our smelters which are
currently sold to third parties.
17 september
Successful Bond offering
Nyrstar successfully issued EUR 120 million
of convertible bonds with institutional
investors.
19 september
Global Nyrstar
safety campaign
The safety and health of our employees
is of utmost importance to Nyrstar. In
September, Nyrstar launched a safety
communications campaign called Life
Saving Rules, further strengthening our
safety commitment to our employees
worldwide.
www.nyrstar2013.be
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LANGLOIS,
CANADA
MINING
MINING
Following the implementation of structural changes to our
management team in 2013, we appointed Graham Butten-
shaw as Senior Vice President, Mining to lead the newly cre-
ated Mining segment, which consists of 12 operating mines at
eight sites across six countries in the Americas.
Mining segment EBITDA was down 40% on 2012 at EUR 78
million, being adversely impacted by lower commodity pric-
es (principally gold and silver prices), operational challenges
during the ?rst half of 2013 and signi?cantly-reduced deliver-
ies from Talvivaara. Actions were implemented in the second
half to refocus the performance of the segment and deliver
a sustainable and pro?table business result within the wider
footprint of the integrated business base model.
In 2013, the volume of zinc in concentrate produced at Nyrstar’s
own mines (excluding deliveries under the Talvivaara zinc stream)
was 271, 000 tonnes, achieving the 2013 guidance of 265,000 to
280,000 tonnes although down 4% on 2012. The decline in pro-
duction was principally driven by the two-month suspension of
operations at the Campo Morado mine in Mexico due to a licens-
ing issue. Total zinc in concentrate was down 9% on 2012 as a re-
sult of fewer deliveries of zinc concentrate from Talvivaara under
the zinc streaming agreement. Lead in concentrate production
was below guidance and lower than 2012 production largely due
to a deliberate production trade-off at Contonga whereby low-
er lead production was replaced by higher-value copper. Copper
Key ?gures
2013 2012
MINING PRODUCTION
Zinc in concentrate (‘000 tonnes)
2
285 312
Gold (‘000 troy ounces) 75.2 94.6
Silver (‘000 troy ounces)
1
4,746 5,517
Copper in concentrate (‘000 tonnes) 12.9 13.0
1
75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013, Campo
Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes Talvivaara zinc in concentrate production.
OWN MINING PRODUCTION OF
OF ZINC IN
CONCENTRATE
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IN 2013
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in concentrate production was in line with 2013 guidance, only
marginally lower than the prior year production, despite being
affected by the suspension at Campo Morado.
Silver production was in line with management’s guidance of
4.7 to 4.9 million troy ounces; however, it was lower than 2012
production by 14%, with the shortfall coming from the suspen-
sion at Campo Morado and from Coricancha where operations
were placed on care and maintenance in H2 2013.
Gold production of 75,200 troy ounces marginally exceeded
guidance of 65,000 to 75,000 troy ounces. El Toqui contrib-
uted strongly to Nyrstar’s doubling of gold production in H2
2013 compared to H1 2013; however, the suspension at Cam-
po Morado and halted operations at Coricancha reduced 2013
production by 21% compared with 2012.
In the Mining segment, Myra Falls won the British Columbia
John T. Ryan Award in recognition of their 2012 safety perfor-
mance. A ‘back to basics’ plan was initiated across all mines
with an objective of building the foundations of strong health
& safety management systems and cultures.
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GRAHAM BUTTENSHAW
SVP, MINING
3
A Recordable Environmental Incident is de?ned as an environmental event requir-
ing noti?cation to the relevant regulatory authority and that also constitutes a
non-compliance with regulatory requirements.
* Excluding zinc deliveries under the Talvivaara Streaming Agreement.
** 75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby only USD 3.90/oz is payable.
A total of 24 Recordable Environmental Incidents
3
were
reported in 2013 in the Mining segment, representing a
significant decrease relative to the 32 incidents recorded
in 2012.
Production Guidance for 2014
across Nyrstar’s portfolio of mining assets is as follows:
METAL IN CONCENTRATE PRODUCTION GUIDANCE
Zinc (own mines)
*
280,000 – 310,000 tonnes
Lead 15,000 – 18,000 tonnes
Copper 12,000 – 14,000 tonnes
Silver
**
4,750,000 – 5,250,000 troy ounces
Gold 65,000 – 70,000 troy ounces
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COMMUNICATIONS AND TEAMWORK
BOLSTER GERMANIUM VALUE FROM
THE TENNESSEE MINES
In 2013, communication and teamwork between Nyrstar Ten-
nessee Mines and the Clarksville smelter resulted in improved
processing and recovery of germanium and gallium from Middle
Tennessee Mines. With a thorough understanding of the smelt-
er’s needs, Middle Tennessee Mines commissioned a regrind
processing circuit to deliver more ?nely ground concentrates to
the smelter. As a result, Clarksville is now able to produce an up-
graded and more valuable product. with higher germanium and
gallium content.
TENNESSEE MINES DELIVERED
IMPROVED PERFORMANCE PRODUCING
ZINC IN CONCENTRATE
UP 11% ON 2012
Mining Segment Delivers on Project Lean
During 2013, Nyrstar continued to deliver solid progress
against Project Lean, our programme to realise sustainable
cost reductions. In the Mining Segment, we achieved further
employee and contractor headcount reductions via rational-
isation and insourcing of mining contractors and shift sys-
tem optimisation, with the total number to date exceeding
1,500 FTEs.
Capital Expenditure
Sustaining and Compliance EUR 40 – 45 million
Exploration, Development
and Growth
EUR 65 – 75 million
TOTAL EUR 105 – 120 million
For further information
please visit:
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OVERPELT,
BELGIUM
METALS
PROCESSING
Key ?gures
EUR million unless otherwise indicated 2013 2012
Treatment charges 337 338
Free metal contribution 244 242
Premiums 127 115
By-Products 215 221
Other (111) (64)
Production Guidance for 2014
Nyrstar expects to produce 1.0 – 1.1 million tonnes of zinc metal in
2014. This level of production is based on maximising EBITDA and
free cash ?ow generation in the Metals Processing segment by
targeting the optimal balance between production and sustaining
capital expenditure.
The health and safety performance variance across the Metals
Processing segment reduced signi?cantly as a consequence of a
strong health and safety network and exchange of practices be-
tween the sites. Auby operated without a lost time injury for an
18 month period. The number of cases involving restricted works
or lost time injuries (DART) was below 5 at 4.8 at the end of the
year. A corporate health and safety audit was completed across
the smelters as part of our Assurance Program.
METALS PROCESSING
Metals Processing EBITDA was up 10% on 2012 at EUR 149 million. This was driven by higher realised premiums and the recogni-
tion of the EUR 45 million termination fee from Glencore that compensated Nyrstar for agreeing to end the European component
of its commodity grade metal off-take contract, partially offset by lower acid prices. The Metals Processing segment generated
strong cash ?ows driven by effective management of working capital and capital expenditure.
Our operational performance in H1 2013 was impacted by a
number of planned maintenance shuts. Despite this, the metals
processing segment had a very strong operational year, with a
new half-yearly record in zinc metal production in H2 2013. As a
result zinc metal production of 1,088,000 tonnes was at top end of
our guidance (and in line with 2012). Production of other metals
in Metals Processing (lead, copper, silver, gold and indium) was
broadly in line with H1 2013 and above 2012 performance.
Key ?gures
2013 2012
METALS PROCESSING PRODUCTION
1
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
OTHER PRODUCTS
Copper cathode ('000 tonnes) 4 3
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Indium metal (tonnes) 33 13
Sulphuric acid ('000 tonnes) 1,389 1,388
1
Includes production from Metals Processing
segment only. Zinc production at Föhl, Galva
45 & Genesis.
2
A Recordable Environmental Incident is de-
?ned as an environmental event requiring
noti?cation to the relevant regulatory au-
thority and that also constitutes a non-com-
pliance with regulatory requirements.
t
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s
OF ZINC METAL
PRODUCED IN 2013
A total of 10 Recordable Environmental Incidents
2
were reported
in 2013 in the Metals Processing segment, representing a signif-
icant decrease relative to the 22 incidents recorded in 2012. The
improved incident record is attributed to strengthened environ-
mental regulatory compliance processes and to the effectiveness
of improvement actions implemented in response to events expe-
rienced in 2012.
METALS PROCESSING EBITDA
UP 10% ON 2012.
IN 2013
million
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SMELTING STRATEGIC REVIEW
Leveraging the proposed Port Pirie redevelopment and fol-
lowing the completion of a thorough strategic review of
our zinc smelting business, in October 2013, we announced
that Nyrstar had developed and externally validated a
transformation blueprint of approximately 25 projects
aimed at capturing un-realised value in Nyrstar-controlled
feed material. Nyrstar completed its ?rst investment in the
transformation and ?rst project within the blueprint, in
Q4 2013 with the acquisition of ERAS Metal (now Nyrstar
Hoyanger). Nyrstar expects the sequencing of additional
investments to continue in 2014 and the completion of the
full transformation by early 2017.
Where appropriate, Nyrstar may pursue these investments
over a longer period in a manner whereby returns gener-
ated by earlier investments could fund subsequent invest-
ments. Such a timeline could result in investments starting
in 2014 and the completion of the full transformation by
late 2019.
NYRSTAR HOYANGER
Nyrstar’s ?rst investment into the blueprint was the ac-
quisition of ERAS Metal (now Nyrstar Hoyanger) for ap-
proximately EUR 5 million. The plant operates a fumer
which currently produces zinc oxides from processing
electric arc furnace dust, a feed from the steel industry.
Over the course of 2014, invest approximately an ad-
ditional EUR 2 million, to upgrade the plant to process
residues from Nyrstar smelters’ which are currently sold
to third parties.
25
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PORT PIRIE REDEVELOPMENT
In 2013, we continued to actively progress the proposed re-
development of the Port Pirie smelter into an advanced po-
ly-metallic processing and recovery facility. Following the
in-principle agreement reached in December 2012, we signed
an implementation agreement with the Australian Export
Finance and Insurance Corporate in May 2013, providing a
framework and timetable for this important component of the
funding package for the redevelopment. We progressed the
?nal investment case, including detailed engineering studies
and the completion of the pre-feasibility study. Nyrstar is now
working through the ?nal feasibility study and will provide an
update during the course of Q1 2014.
For further information
please visit:
INSIGHTS BEHIND THE SMELTING STRATEGIC REVIEW
The Smelting Strategic Review team started their work in late
2012 in order to identify opportunities to sustainably improve
the pro?tability of our Metals Processing segment. The team
systematically challenged how we view and operate our metals
processing network and explored opportunities to fundamen-
tally transform the segment’s operating and business mod-
el. Led by a dedicated project team of internal and external
multi-disciplinary professionals, thousands of scenarios were
modelled using different technologies, feed mixes, macroeco-
nomic parameters and capacities to arrive at a ?nal transfor-
mation blueprint.
With investments into technical modi?cations and in optimis-
ing our metals processing network, we will be positioned to
capture untapped value in our unique asset footprint of zinc
mines, poly-metallic mines, zinc smelters and a lead smelter.
The blueprint projects are categorised under three main ar-
eas: de-bottlenecking smelters, building fuming capacity and
minor metals extraction. The transformation, and its focus on
these three main areas, will help us build ?exibility within our
system and take advantage of market opportunities.
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OVERPELT,
BELGIUM
MARKETING,
SOURCING AND SALES
MARKETING, SOURCING & SALES
In 2013, we established a Marketing, Sourcing & Sales segment responsible for building a new commercial strategy. The strategy consists
of working with the Mining and Metals Processing segments to create, secure and maintain ?rst mover advantage in obtaining the feed-
stock and inputs to produce products that are marketed using our deep market insight and sold at above industry returns.
In October, we entered into a strategic offtake and marketing
agreement with the Noble Group (“Noble”) representing a major
step in executing our new global commercial strategy. The agree-
ment with Noble is to market and sell 200,000 tonnes per annum
of commodity grade zinc metal (special high grade and continuous
galvanising grade) produced at our European smelters.
The agreement follows a structured process undertaken by Nyrstar
in Q2 and Q3 2013 to determine the most suitable channel(s) to
market and sell commodity grade zinc metal produced at our Eu-
ropean smelters. This was triggered by the end of the European
component of the Commodity Grade Off-take Agreement with
Glencore Xstrata. During the process Nyrstar determined that the
best way to market our European commodity grade zinc metal is
through a multi-channel approach. As a result, the newly formed
Marketing, Sourcing & Sales segment is directly selling, marketing
and ?nancing the remaining 160,000 tonnes (approximately) of
commodity grade zinc metal produced in Europe with a number of
market participants.
For Nyrstar, the agreement represents a ?rst step in executing a
European zinc metal plan aimed at actively marketing Nyrstar’s
products to increase optionality in terms of customers, product
mix and geography. By leveraging Noble’s market-leading supply
chain expertise and trading capabilities, and utilising Nyrstar’s in-
dustrial assets and European zinc market insights, we will be ?exi-
ble and responsive to changing end-user requirements.
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BOB KATSIOULERIS,
SVP MARKETING, SOURCING & SALES
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2013 was a year of transformation for Nyrstar’s commercial
strategy.
To support the implementation of the new commercial strat-
egy, Nyrstar has made a number of senior level appoint-
ments to Marketing, Sourcing & Sales to build its capabilities
and market insight.
Nyrstar introduced a new strategic marketing function to
the organisation to de?ne the commercial strategy and di-
rection. They are also responsible for creating value for the
business based on supply and demand fundamentals, mar-
ket competitive intelligence, segmentation and optionality.
Nyrstar entered into a strategic offtake and marketing
agreement for some of its European commodity grade met-
al with Noble Group starting January 2014.
Discussions on direct sales, marketing and ?nancing oppor-
tunities continue with a number of market participants for
remaining European volumes, as Nyrstar believes the best
way to market its product is through a multi-channel ap-
proach. This could include placing commodity grade zinc
metal and other products in offshore markets, a route which
was tested during Q3 2013.
Nyrstar entered tenders for concentrates for the ?rst time and
held key contract negotiations with a number of suppliers.
Building on progress made in 2013, the new commercial strategy will
deliver innovative and sustainable commercial solutions to Nyrstar,
drawing on the strengths of our market insights and our global reach.
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AND STRATEGIC MARKETING
WITH NOBLE GROUP
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A challenging trading environment driven by tough
macroeconomic headwinds and subdued base metal prices.
Despite improving global growth in 2013, the trading environ-
ment was challenging with subdued base metals prices. With the
exception of brief rallies in early and late 2013, sideways trading
conditions were the main feature for base metals during 2013.
The improving global economic conditions and a strengthening
dollar index accounted for signi?cant depreciations for precious
metals during 2013.
EXCHANGE RATE
The Euro strengthened against the US Dollar by almost 4% al-
though punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this devel-
opment has been negative from an EBITDA perspective this has
had the effect of rebalancing Europe from excessive reliance on
exports towards consumption-led growth which has led to a pick-
up in European industrial demand.
BASE METAL SUMMARY
A recovery of developed world economic growth created head-
winds for base metals as investment ?ows shifted from base met-
als in favour of equities and the dollar index strengthened. Ad-
ditionally, the government transition and slowing growth of the
Chinese economy resulted in lukewarm sentiment towards indus-
trial metals and, as such, price ranges were largely range-bound
throughout most of the year.
ZINC
The average zinc price declined by 2% in 2013 to USD 1,909/t per
tonne compared to USD 1,946/t in 2012. Whilst zinc prices re-
mained range-bound throughout most of the year, key end use
sectors for zinc continued to grow at a healthy pace with global
consumption growth estimated to have grown by 4% in 2013 ac-
cording to Wood Mackenzie. Zinc supply was impacted by a curtail-
ment of smelting production outside of China and strong import
demand into the Chinese market induced by a favourable arbi-
trage throughout most of the year. This translated into increasing
global premiums throughout most of the year. Zinc staged a rally
in December, aided in part by an announcement that the Century
zinc mine would close earlier than previously announced.
Key ?gures
FY FY %
Average prices 2013 2012 Change
Exchange rate (EUR/USD) 1.33 1.28 4%
Zinc price (USD/tonne, cash settlement) 1,909 1,946 (2)%
Lead price (USD/tonne, cash settlement) 2,141 2,061 4%
Copper price (USD/tonne, cash settlement) 7,322 7,950 (8)%
Silver price (USD/t.oz, LBMA AM ?x) 23.79 31.15 (24)%
Gold price (USD/t.oz, LBMA AM ?x) 1,410 1,662 (15)%
Note: Zinc, lead and copper prices are averages of LME daily cash settlement prices.
Silver and gold prices are averages of LBMA AM daily ?xing prices.
31
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LEAD
The average lead price increased modestly during 2013, appreciat-
ing by almost 4%. End-use demand continued to grow at a healthy
pace on a global basis, although softened from 4.9% growth in
2012 to an estimated 3.6% in 2013, according to Wood Macken-
zie. The outlook is more positive with 2014 consumption growth
expected to rise to 4.6%. The medium-term outlook is character-
ised by supply-side shortages, tougher environmental regulation
and re?ned market de?cits which is supportive of higher prices.
COPPER
The average copper price in 2013 was USD 7,322/t an 8% de-
cline compared to USD 7,950/t in 2012. It is estimated by Wood
Mackenzie that global copper consumption, which includes
direct use of scrap, will have increased by 5.6% in 2013, a sig-
ni?cant improvement compared to almost ?at consumption
growth in 2012. This resulted in signi?cant tightness in the
re?ned copper market in 2013. Whilst the copper concentrate
market is understood to be in a surplus, copper mine production
continues to face setbacks and disruptions and this continues to
support prices.
GOLD & SILVER
Increasing con?dence regarding global growth as well as stronger
United States dollar index created downward pressure to precious
metals with the average gold price 15% lower in 2013. Average
silver prices depreciated by approximately 24% in 2013 from 2012
as industrial demand for silver weakened.
SULPHURIC ACID
In 2013, prices achieved by Nyrstar on sales of sulphuric acid,
which are predominantly based on contracts rather than the spot
market, declined signi?cantly from an average of USD 80 per
tonne in H1 2013 to an average of USD 40 per tonne in H2 2013.
The sulphuric acid market suffered as sulphur prices fell, largely
due to constrained fertiliser demand in India and China. Nyrstar
expects that the sulphuric acid market will remain challenged
throughout 2014 with prices expected to be lower than those ex-
perienced in H2 2013.
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PORT PIRIE,
AUSTRALIA
CORPORATE
RESPONSIBILITY
Nyrstar publishes a separate Sustainability Report that
presents our sustainability performance during the past
year. This year marks the sixth year that we report exter-
nally on sustainability matters. The Sustainability Report
can be downloaded from our website:
37
%
COMMUNITY INVESTMENT
2.9
€
At Nyrstar, we are committed to responsible and sustainable business practices and recognise that
this is a prerequisite for the success of our company. The Nyrstar Way encourages us to prevent harm,
create value and maintain open and honest relationships with our stakeholders and this provides the
foundation of our organisational culture.
To succeed in delivering value to our shareholders, we must bal-
ance economic, environmental and social objectives in managing
our business. This balance is evident in the Strategy into Action
(SIA) process which involves the development of annual Balanced
Business Plans (BBPs). All BBPs, whether developed at Group,
Segment or Site level, include targets for safety, health, environ-
ment, community and other sustainability areas. The integrated
and balanced nature of the BBP process ensures that sustainability
objectives and initiatives receive the same attention as other core
business areas and are subject to regular reviews by the Nyrstar
senior leadership team.
In 2013, we continued the development and implementation of
our Group Safety, Health, Environment and Community (SHEC)
Framework across our operations. The Framework is aligned with
industry best practice and is continually updated to stay current
with the needs of the business and with developments in external
standards and requirements. While promoting consistency, the
Framework is designed to give operational management the nec-
essary latitude to adapt their implementation strategies to local
context, requirements and needs. During the past year, we also
launched a new Group Standard for risk management and con-
ducted risk workshops across a majority of our sites.
RUSSELL MURPHY
CHIEF HUMAN RESOURCES, SAFETY & ENVIRONMENT OFFICER
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We aim to provide a work environment where all hazards are effectively identi?ed and controlled, and
where each employee takes responsibility for their safety and that of their colleagues. We believe that
every work-related illness and injury is preventable and our goal is to achieve world class health and
safety performance across all our mines and smelters by 2016.
As our company has transitioned from
a pure smelting operation into an inte-
grated metals and mining business, we
have re?ned our safety management pri-
orities and programmes accordingly. As
our mines typically have less developed
safety cultures than our smelters, the fo-
cus of some of our safety initiatives has
shifted towards the management of key
risks and the day-to-day hazards inherit
in our workplace. As part of this focus, in
2013 we launched the Nyrstar Life Saving
Rules which prescribe non-negotiable re-
quirements in relation to a set of key risks
relevant to our operations.
We also launched a communications
campaign on Mobile Equipment Safety in
order to raise the awareness concerning
the hazards of working in areas with mo-
bile equipment. In the Mining Segment,
mine rescue training was completed at
all mines and new mine rescue equip-
ment was acquired to a standardised lev-
el across the sites.
Tragically, despite our continued safety
efforts, two Nyrstar employees were fatal-
ly injured in March and September 2013
while working at the Campo Morado and
Contonga mines, respectively. Risk scenari-
os were conducted across all mines to pre-
vent the recurrence of similar situations.
Our 2013 Total Recordable Injury Fre-
quency Rate (RIFR) remained relatively
?at at 9.0 compared to 8.3 in 2012. This
con?rmed the signi?cant reduction (37%)
achieved in 2012. After a 50% reduction in
2012, the 2013 Lost Time Injury Frequency
Rate (LTIFR) increased by 20% to 3.4 com-
pared to 2.8 in 2012.
Improving Safety Performance at the Auby Smelter
In 2013, our Auby smelter achieved a 50% reduction in their record-
able injury frequency rate compared to 2012, and operated for 18
months without a single lost time injury.
In August 2012, the Auby smelter faced a turning point. Prior to
August, Auby suffered one lost time injury every two months and
more than one recordable injury a month. At this time, we met for
two days with the full extended Leadership Team and re?ected on
the causes of this high incident rate. We realised that we had pock-
ets of good achievements; however they were neither systematic nor
standardised across the different teams and departments. As a result
of this meeting, we developed an action plan. Unlike previous ones,
this plan was not to introduce more tools or programs. We took a new
approach and implemented a solution to standardise and effectively
integrate safety practices into everything we are doing, at all levels of
the organisation. We institutionalised safety into the way we work.
As a result of this program we have seen a signi?cant decrease in lost
time injuries across the smelter. We are proud of our achievements,
but do not take our efforts for granted. A focus on safety must be sus-
tained and constant in the long run. We worked hard in 2013 to achieve
measurable progress and will continue to strengthen our performance
moving forward.
0
5
10
15
20
2013 2012 2011 2010 2009
3.9
16.4
11.9
13.1
8.3
9.0
3.9
4.2
2.8
3.4
RIFR LTIFR
Injury Rates (Per Million Hours Worked)
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Mining and metals operations unavoidably affect the environment and minimising environmental
impacts represents one of the principal challenges for our industry.
Recognising the importance of environmental performance to
our business success, we take the management of environmen-
tal risks very seriously and responsible environmental steward-
ship is integrated into our business planning, management sys-
tems and day-to-day operational decision making.
In 2013, we continued the implementation of our environmen-
tal performance standards which set out our expectations with
respect to the management of key environmental risks. We also
saw a substantial improvement in the number of Recordable
Environmental Incidents, decreasing from 54 incidents in 2012
to 34 incidents in 2013. Recordable Environmental Incidents is
our key measure for regulatory compliance and is de?ned as a
non-compliance event that requires noti?cation to the environ-
mental authorities.
Our energy and greenhouse gas performance remained relative-
ly unchanged in 2013 compared to the year before. In 2013, we
consumed a total of 24.1 petajoules (PJ) of energy and emitted
2.54 million tonnes of greenhouse gases (measured as carbon
dioxide equivalent tonnes). In both cases, this represented an
increase of 2% compared to 2012. Given the energy intensive
nature of our metals processing business, achieving continuous
improvement in energy ef?ciency is a top priority for our oper-
ations and all smelters have formal energy ef?ciency programs.
0
5
10
15
20
25
30
35
12
13
22
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10
24
2011 2012 2013
SMELTERS MINES
Recordable Environmental
Incidents
1
1
2012 and 2013 data includes all Nyrstar mines and
smelters; 2011 data includes all smelters and Tennes-
see Mines.
0
5
10
15
20
25
5.0 6.0 6.2
17.3 17.7 17.9
22.3
23.7
24.1
2011
*
2012
*
2013
DIRECT ENERGY INDIRECT ENERGY
Energy usage
2
(Petajoules)
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0.50 0.57 0.59
1.90
1.92
1.95
2.40
2.49
2.59
2011 2012 2013
DIRECT ENERGY INDIRECT ENERGY
2
2012 and 2013 data includes all Nyrstar mines and smelters; 2011 data includes all smelters, Tennessee Mines
and Campo Morado.
Greenhouse Gas Emissions
2
(CO
2
-e million tonnes)
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At Nyrstar, we recognise that we cannot operate in isolation and our success is intrinsically linked
to the way we engage with our communities, regulators, suppliers, customers and other key stakeholders.
Our aim is to be a welcome and valued
member of the communities in which we
operate. We accomplish this by engaging
with our stakeholders to understand and
respond to their expectations, building
long-term relationships founded on trust
and honesty, and by respecting fundamen-
tal human rights wherever we operate.
Our mine and smelter sites undertake local
community activities in line with their es-
tablished stakeholder engagement plans.
In 2013, we engaged external specialists
to work closely with our Latin American
sites. The focus of this collaboration was
to strengthen the community engage-
ment capabilities of our site personnel and
to develop regional standards for commu-
nity management. The work also included
the development of 5-year Community
Engagement Plans for each of the Latin
American operations.
Financial contributions for community
support, sponsorships and donations in
2013 totalled €2.9 million, representing a
9% increase over the €2.65 million contrib-
uted in 2012. This included CAD 0.25 mil-
lion in line with our commitment to Invest-
ment Canada as part of the acquisition of
the Myra Falls and Langlois mines in 2011.
Stormwater Recycling at Hobart
The majority of the process water used at the
Hobart smelter is supplied by Tasmania’s water
corporation, TasWater. More than three mil-
lion m
3
of potable water was sourced from the
TasWater supply in 2012, representing almost
10% of the total Derwent River extraction for
potable supply to Southern Tasmania. In order
to lessen Nyrstar’s reliance on this water source
while also reducing impacts on the Derwent
Estuary, several stormwater recycling programs
are underway at the Nyrstar Hobart plant.
The site already captures its own stormwater,
which is treated in the site’s ef?uent treatment
plant before ?owing into the Derwent Estuary.
In order to use this water in the production
process, further stormwater storage, treatment
and distribution installations are being added
on site. This project, which is planned to be ful-
ly implemented in 2014, is expected to replace
up to 32% of the fresh water currently used in
the smelter’s production processes. The project
is jointly funded by Nyrstar and by a AUD 2.64
million grant from the Australian Government’s
Stormwater Harvesting and Reuse program.
In August 2013, Nyrstar also welcomed the
?rst ?ow of recycled stormwater from the
Glenorchy City Council. In its ?rst phase, this
project is expected to deliver the site 1.5 mil-
lion litres of recycled water daily which is used
for the site’s steam boiler and cooling tower
systems. A total of 106 million litres of recycled
stormwater was supplied to the site in 2013,
contributing to a total reduction in fresh water
use of 250 million litres (relative to 2012). The
Council stormwater recycling plant is expected
to be further expanded in coming years with
the hope of increasing the amount of recycled
stormwater supplied to Nyrstar.
The stormwater recycling projects underway in
Hobart help to minimise the amount of drink-
ing water used for industrial purposes and to
reduce stormwater impacts on the Derwent
Estuary.
The Nyrstar Foundation
The Nyrstar Foundation was established in 2010 as part of Nyrstar’s CSR program. In April 2013, the Foundation announced its second annual
social idea competition winner for innovation by a Belgian individual, company or organisation relating to Education. The winner of the €25,000
grant was the MyMachine 1+1=3 project. MyMachine aims to leverage its unique methodology to promote creativity and entrepreneurship in
education in developing countries. The project is a cross-border cooperation between schools and organisations in Flanders, Belgium and in
developing countries bringing together children, students and organisations around the world to learn from and inspire each other. Dreams and
entrepreneurship, creativity and cross-pollination - that’s what it’s all about! More information on the Nyrstar Foundation can be found on the
website www.nyrstarfoundation.org.
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The Nyrstar Excellence Awards were launched in 2010 to promote and reward a culture
of excellence within our business. Each year, Nyrstar presents awards to acknowledge
exceptional performance and achievement of individuals or teams from each of our
operating sites. The Excellence Awards are an important component of the Nyrstar2020
strategy which has a strong emphasis on delivering excellence. The framework and
recognition criterion from the Excellence Awards this year is based on our 2013 Group
Strategy which is underpinned by our values, The Nyrstar Way.
IN NOVEMBER 2013, WE AWARDED FIVE TEAMS IN THE FOLLOWING CATEGORIES:
Living the Nyrstar Way
Building a Strong Safety Culture
Nyrstar Myra Falls achieved over 590 days without a lost-time
injury (LTI) and the complete year of 2012 with no LTI. Due to a
number of ongoing initiatives to strengthen the safety culture and
performance at site, we were recognised by a national Canadian
honour for our excellent safety performance.
Unlocking Untapped Value
Leach Puri?cation Process Improvement
A team of dedicated employees in the leach/puri?cation depart-
ment at Nyrstar Clarksville developed an innovative approach to
improving the process. Through a number of implemented tech-
nical solutions, the team contributed to increased performance of
our Leach puri?cation process.
Achieve Excellence in Everything we do
European Regional Calcine Management
Nyrstar Balen planned a once-in-30 year overhaul of the large
roaster F5 requiring calcine stockpiling to minimise production
disturbances. Working regionally Nyrstar Auby, Balen/Overpelt
and Budel developed a plan together to generate, store and
transport suf?cient calcine to Balen to limit impact to produc-
tion during the overhaul.
Deliver Sustainable Growth
Energy Lobbying Success
Nyrstar Balen has been recognised for successfully working with
local authorities to reduce Nyrstar’s exposure to increasing energy
costs, ensuring our smelter can run as ef?ciently as possible.
Outstanding Achievement Award
Tennessee Turnaround
Nyrstar Tennessee Mines - through a combination of leader-
ship changes, cost awareness efforts and production stability
initiatives– achieved an unprecedented turnaround, marking a
remarkable paradigm shift from underperformance to positive
and sustainable ?nancial contributions for the organisation. The
turnaround drove waste and inef?ciencies out of the business to
unlock the value inherent in our mineral resources.
ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
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www.nyrstar.com
Nyrstar
on the web
www.nyrstar.Annual-Report.be/2013
ON THE WEB
THE NYRSTAR ANNUAL REPORT
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043 Management Report
076 Corporate Governance Statement
094 Remuneration Report
106 Report of the Board of Directors ex article 119 Company Code
122 Statement of Responsibility
124 Consolidated Financial Statements for the year ended 31 December 2013
132 Notes to the Consolidated Financial Statements
202 Statutory auditor’s report on the consolidated ?nancial statements
as at 31 December 2013
205 Nyrstar NV summarised (non consolidated) ?nancial statements
as at 31 December 2013
206 Glossary of key industry terms
FACTS & FIGURES 2013
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Nyrstar is an integrated mining and metals business, with market leading positions in zinc
and lead, and growing positions in other base and precious metals: essential resources
that are fuelling the rapid urbanisation and industrialisation of our changing world.
Nyrstar has nine mining, six smelting, and other operations located in Australia, the
Americas, China and Europe, and employs approximately 6,600 people. Nyrstar is
incorporated in Belgium and has its corporate of?ce in Switzerland. Nyrstar is listed on
NYSE Euronext Brussels under the symbol NYR.
Locations
MANAGEMENT REPORT
043
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Primary products
Zinc
A global leader in zinc: we are one of the world’s largest integrated zinc producers. We produce zinc in concentrate from our
mining operations and we produce special high grade zinc (SHG), zinc galvanizing alloys, and zinc die-casting alloys as an outcome
of our zinc smelting process. Zinc has diverse applications and uses, from construction and infrastructure, to transport, industrial
machinery, communications and electronics, and consumer products. This makes it an essential and highly sought-after resource,
particularly in a changing world.
Lead
We have a market-leading position in lead. We produce lead concentrate and re?ned market lead (99.9%). Lead’s primary usage
is for the production of batteries. In fact, over 80% of world production goes into the lead acid battery. This continues to play an
important part in the starter mechanism for automobiles. The remaining 20% goes towards such end-uses as underwater cable
sheathing, glassware, solder and roof sheeting.
Copper
We produce copper concentrates and copper cathode. Copper is predominantly used in building construction. Other signi?cant
end-use markets include electrical and electronic products, transportation equipment, consumer products and industrial machinery
and equipment.
Gold
Gold is produced in concentrate and as gold dore from our mining operations. We also recover gold in the lead re?ning process.
Silver
Silver is produced in concentrate from our mining operations. We also recover silver from the lead re?ning process as a silver dore
and as a by-product from the zinc re?ning process into various leach products.
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STRATEGY INTO ACTION
Delivering on Strategy into Action
• Reorganisation of the company into three distinct segments: Mining, Metals Processing (formerly the Smelting segment) and
Marketing, Sourcing & Sales
• Commenced asset level Mining Strategic Review, focused on identifying opportunities to make a step change improvement in the
Mining segment’s operational performance; not envisaged to be capital consumptive
• Started implementing recommendations of Smelting Strategic Review and continued to make signi?cant progress on the
proposed Port Pirie Redevelopment
• Established a strong Marketing, Sourcing & Sales team to actively support Nyrstar’s commercial strategy
• Entered into a strategic off-take and marketing agreement with the Noble Group
The Nyrstar2020 vision is to be the leading integrated mining and metals business. Nyrstar’s mission is to capture the maximum
value inherent in mineral resources through deep market insight and unique processing capabilities, generating superior returns
for our shareholders. Our vision and mission de?ne our long term direction and priorities, focusing our efforts on the milestones
and strategic goals that drive success.
Strategy Into Action 2013
In 2013, Nyrstar continued to execute on Nyrstar2020, a strategic initiative aimed at positioning the company for a long-term
sustainable future as the leading integrated mining and metals business. Strategy into Action is a disciplined approach to
embedding our strategy into every part of the business and is now in its third year of implementation. Through this process,
Nyrstar has built a robust annual planning process that distributes ownership and responsibility for Group strategy across each
segment and site operation in a transparent and measurable way. Each year we critically review strategic plans and priorities to
ensure we adequately respond to the current operating environment enabling us to deliver on our strategic mission. Our 2013
strategic priorities addressed four key pillars:
Living the Nyrstar Way
Shaping our unique culture through seven distinctive values that de?ne how we work.
Unlocking Untapped Value
Nyrstar believes that our current processes are not capturing full value. This value can only be unlocked by continually challenging
the way Nyrstar thinks about and works on its products and processes.
Deliver Sustainable Growth
Sustainable growth means that Nyrstar will seek growth by leveraging its existing mining and smelting footprint and through
further value-accretive acquisitions.
Achieve Excellence in Everything We Do
Nyrstar is a market-driven business with an unrelenting focus on continuous improvement across all operations and functions.
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Strategy into Action 2014
Responding to the current operating environment, our 2014 strategic priorities focus on the following three new pillars:
KEEP OUR WORD
Develop and deliver realistic plans that meet stakeholder needs.
The main strategic goals of this pillar are to ensure that our three segments and corporate centre deliver on their commitments
whilst ensuring world class safety and environmental performance.
TRANSFORM FOR TOMORROW
Execute strategic initiatives to develop in the future.
The main strategic goals of this pillar are to ensure we focus on innovation and technology across our business; develop
opportunities for growth to generate value; build a market-oriented business and lastly, ensure that we build and sustain an
organisation that supports collaboration.
UNLEASH OUR POTENTIAL
Enhance our capabilities by investing in our people and processes.
Lastly, this pillar is fundamental to ensuring our business can deliver on pillar one and two. This pillar focuses on developing the
potential of our people, processes and culture, to ensure we have an environment that fosters growth and transformation.
Our 2014 strategic plans place a strong emphasis on our commitment to deliver our plans, to transform our business and to create
value for our stakeholders while recognising that our people, processes, and values as de?ned by the Nyrstar Way are key to our
success in 2014 and beyond.
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NYRSTAR OPERATING MODEL AND STRATEGY
Nyrstar’s industrial footprint of mining and smelting assets provides a unique opportunity to capture non-realised value and
deliver on our strategic mission to capture the maximum value inherent in mineral resources. In 2013, we transformed our
business into three core value-driving segments: Mining, Metals Processing, and Marketing, Sourcing & Sales to be better aligned
with the Company’s growing metals and mining business. This new structure will streamline both mining and metals processing
activities and allow for increased commercial synergies throughout our integrated network.
Alongside the organisational changes, several initiatives were launched in 2013 to position Nyrstar for a long-term sustainable
future. We continued to progress the proposed redevelopment of the Port Pirie smelter into an advanced poly-metallic processing
and recovery facility which will further diversify group earnings.
Port Pirie Redevelopment
As previously disclosed in December 2012, Nyrstar reached an in-principle agreement to redevelop the Port Pirie smelter into
an advanced poly-metallic processing and recovery facility, providing an opportunity to strengthen and further diversify group
earnings. Nyrstar progressed the ?nal investment case in 2013, including detailed engineering studies and the completion of the
pre-feasibility study. Nyrstar is now working through the ?nal feasibility study and will provide an update during the course of Q1
2014.
Building on the Port Pirie redevelopment planning, Nyrstar launched a strategic review of its zinc smelting (Smelting Strategic
Review) operations which led to the development of a transformation blueprint of approximately 25 projects to capture non-
realised value from residue materials.
Smelting Strategic Review
Following the completion of a thorough strategic review of its zinc smelting business during 2013, Nyrstar has developed and
externally validated a transformation blueprint of approximately 25 projects aimed at capturing non-realised value in Nyrstar-
controlled feed material. Nyrstar completed its ?rst investment in the transformation, and ?rst project within the blueprint, in
Q4 2013 with the acquisition of ERAS Metal (now Nyrstar Hoyanger). Nyrstar expects the sequencing of additional investments
to continue in 2014 and the completion of the full transformation by early 2017. Where appropriate, Nyrstar may pursue these
investments over a longer period in a manner whereby returns generated by earlier investments could fund subsequent investments.
Such a timeline could result in investments starting in 2014 and the completion of the full transformation by late 2019.
We also commenced an asset level Mining Strategic Review to improve the Mining segment’s operational and ?nancial
performance. This is being undertaken in two phases: ?rstly, a preliminary turnaround phase to ensure that all assets are delivering
to their full potential; and secondly, a more strategic phase which will link speci?cally to the Smelting Strategic Review programme
to maximise the advantages that both programmes can deliver.
Mining Strategic Review
In the second half of 2013, following the formation of the three business segments, Nyrstar initiated a strategic review of its global
mining assets. The review is being undertaken in two phases: ?rstly, a preliminary turnaround phase to ensure that all assets are
delivering to their full potential; and secondly, a more strategic phase which will link speci?cally to the Smelting Strategic Review
programme to maximise the advantages that both programmes can deliver to the group. The ?rst phase will continue throughout
2014 to ensure that the optimisations are sustainable and embedded, whilst the second phase will commence in the second half of
the year to ensure that the Mining Segment is fully prepared for the smelting strategic programme outcomes. The programmes are
operational in nature and are not envisaged to be capital consumptive.
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Finally, in 2013 we created a new Marketing, Sourcing & Sales team to support the implementation of the offtake and marketing
agreement with Noble, the European zinc metal plan and the overall global commercial strategy.
Marketing, Sourcing & Sales
Nyrstar’s commercial strategy consists of working with the Mining and Metals Processing segments to create, secure and maintain
?rst mover advantage in obtaining the feedstock and inputs to produce products that are marketed using our deep market insight
and sold at above industry returns. Throughout the year a number of senior level appointments have been made to the new
Marketing, Sourcing & Sales segment to support the implementation of the offtake and marketing agreement with Noble, the
European zinc metal plan and the overall global commercial strategy.
The strategy is executed through four interlinked pillars. The raw materials team is responsible for sourcing the Nyrstar smelter
feeds and for actively marketing and trading concentrates. The products team consists of marketing and sales functions. Marketing
makes decisive decisions as to where, when and to whom products are to be sold so as to deliver the greatest impact on returns by
segmenting the metals markets into strategic pro?t pools. The opportunities identi?ed by marketing are then executed by sales.
These two pillars are supported by two cross functional teams. The supply chain team enables Nyrstar to maintain optimal working
capital levels of raw materials and metals allowing continuous production at Nyrstar’s operations whilst minimising inventory
costs. The optionality and hedging team closely follows market trends to exploit optionality in the metals market and to actively
manage metals prices quotation periods to maximise returns. The strategy also involves looking for non-traditional markets to
place Nyrstar-branded products. An example of this is the direct sale of commodity grade zinc into the Chinese market that was
completed by Nyrstar for the ?rst time in Q3 2013.
Looking ahead, we recognise that 2014 is an important year for Nyrstar and while there are early signs of improving conditions
across the markets in which we operate, we are conscious of the need for a prudent and disciplined approach to managing
the business to ensure it is sustainable for the long term. With this in mind, we continue to actively progress the Port Pirie
redevelopment and the initiatives identi?ed following the outcome of the Smelting Strategic Review, supported by a more
advanced Marketing, Sourcing & Sales strategy, and look forward to results of the Mining Strategic Review. We continue to
execute the Group strategy and remain convinced that our unique industrial footprint, ownership of raw materials and commercial
focus provide a unique opportunity to generate value for our shareholders.
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SHARES
Share price development
The Nyrstar share price declined by 50% in 2013, compared to a 14% increase in the MSCI World Metals and Mining Index, over the
same period, and a 2% decline in the average annual zinc price.
The average traded daily volume was approximately 623,509 shares in 2013 compared to 1,036,883 in 2012, a decrease of 40%.
Re?ecting the Board’s con?dence in the Company’s ?nancial strength and the medium to long-term prospects for the markets in
which it operates, it has proposed to the shareholders a gross distribution of EUR 0.16 per share, and to structure the distribution
as a capital reduction.
Share Capital
Nyrstar ordinary shares have been admitted to trading on NYSE Euronext
®
Brussels (symbol NYR BB) since 29 October 2007. As at
31 December 2013, the registered capital amounted to EUR 370,649,145.92 represented by 170,022,544 ordinary shares without
nominal value.
Convertible Bonds
As at 31 December 2013, the Company had on issue EUR 120 million of senior unsecured convertible bonds, due 2014, and EUR
120 million of senior unsecured convertible bonds, due 2018.
The bonds due 2014 were issued in July 2009 at 100 per cent of their principal amount (EUR 50,000 per bond) and have a coupon
of 7% per annum. The conversion price is currently EUR 5.91 per share. There are currently EUR 119.9 million of senior unsecured
2014 convertible bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the above conversion
price, approximately 20,287,648 new ordinary shares would be issued. The bonds are listed on the of?cial list of the Luxembourg
Stock Exchange and admitted to trading on the Luxembourg Stock Exchange’s Euro MTF Market.
The bonds due in 2018 were issued in September 2013 at 100 per cent of their principal amount (EUR 100,000 per bond) and have
a coupon of 4.25% per annum. The conversion price is currently EUR 4.9780 per share. There are currently EUR 120 million of
senior unsecured convertible 2018 bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the
above conversion price, approximately 24,106,066 new ordinary shares would be issued. The bonds are listed on the Open Market
(Freiverkehr) segment of the Frankfurt Stock Exchange and admitted to trading on the Frankfurt Stock Exchange.
Shareholder Structure
Pursuant to applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of association,
any person who acquires at least 3% of the total existing voting rights of the Company must notify both the Company and the
Belgian Financial Services and Markets Authority (the FSMA, which is the successor to the Banking, Finance and Insurance
Commission,the CBFA, since April 1, 2011).
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A noti?cation is also required when a person acquires at least 5%, 7.5%, 10%, 15%, 20% or any further multiple of 5% of the total
existing voting rights of the Company, or when, due to disposals of securities, the number of voting rights falls below one of these
thresholds. A list as well as a copy of such noti?cations can be obtained from the Company’s website (www.nyrstar.com). As at 31
December 2013, on the basis of the noti?cations received by the Company, the major shareholders of the Company (i.e. holding
more than 3% of the total voting rights) were:
As at 31 December 2013 Share %
Nyrstar NV 9.02%
Umicore NV 3.09%
Shareholder pro?le
Nyrstar’s shareholder base primarily consists of institutional investors in the UK, Belgium, France, the US and other European
countries, as well as Belgian retail investors.
Belgian retail shareholders represent approximately 40% of the Nyrstar shareholder base. Of institutional shareholders, the primary
regions are Belgium (33%), United States (18%), and UK (13%). The majority of institutional investors are either long-term growth
investors or value investors
SOURCE: THOMSON REUTERS SHAREHOLDER IDENTIFICATION REPORT COMMISSIONED BY NYRSTAR IN SEPTEMBER 2013
KEY SHARE FACTS
For the year ended 31 December 2013 2012
Number of issued ordinary shares 170,022,544 170,022,544
Number of treasury shares 15,338,431 7,345,826
Market capitalisation (as at 31/12) EUR 392,752,077 EUR 764,081,313
Underlying Earnings per Share (12 months to 31/12) EUR (0.83) EUR (0.55)
Gross Capital Distribution (proposed) EUR 0 EUR 0.16
Share price (closing price as at 31/12) EUR 2.31 EUR 4.49
Year high (intra-day)
EUR 4.72
(14/01/2013) 7.74 (08/02/12)
Year low (intra-day)
EUR 2.03
(19/11/2013) 3.24 (25/07/12)
Average volume traded shares per day (12 months to 31/12) 624,569 1,036,883
Free ?oat (as at 31/12) 85% 85%
Free ?oat Velocity (full year) 112% 185%
SOURCE: EURONEXT
Dividend Policy
The Board reviewed the Company’s dividend policy in 2009 and concluded that, in light of the revised Company strategy, a
dividend policy with a ?xed pay-out ratio was no longer appropriate. The Company’s revised dividend policy aims to maximise total
shareholder return through a combination of share price appreciation and dividends, whilst maintaining adequate cash ?ows for
growth and the successful execution of the Company’s strategy.
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Disclosure Policy
As a Belgian listed company and with a view to ensuring that investors in Nyrstar shares have all information necessary to ensure
the transparency, integrity and good functioning of the market, Nyrstar has established an information disclosure policy.
This policy is aimed at ensuring that material information of which Nyrstar is aware is immediately disclosed to the public. In
addition, the policy is aimed at ensuring that information which is disclosed is fair and accurate, and so will enable the holders of
shares in Nyrstar, and the public, to assess the impactof the information on Nyrstar’s position, business and results.
Presentations to Investors, Analysts and Media
Nyrstar’s reputation is greatly in?uenced by its ability to communicate in a consistent and professional manner with all our
stakeholders.
A core Nyrstar value is to be open and honest and accordingly we strive to provide clear, open and transparent communications to
all our stakeholders. Nyrstar regularly organises presentations to investors, analysts and the media to provide strategic, operational
and ?nancial updates, and to build strong relationships.
To provide ?nancial analysts, investors and media with a greater insight into our business, we organised or participated in several
events during the year.
To engage with its institutional shareholders Nyrstar presented the Company at events organised by Bank of America Merrill Lynch,
BMO Capital Markets, Citi, Deutsche Bank, Exane BNP Paribas, Goldman Sachs, HSBC, ING, KBC Securities, Macquarie, Morgan
Stanley, Petercam, and Royal Bank of Canada (RBC). In addition Nyrstar also participated in numerous investor roadshows in
Europe and North America.
Brokerages
The following brokerages published research on Nyrstar in 2013:
ABN Amro
Bank DeGroof
Bank of America Merrill Lynch
Citi
Deutsche Bank
Exane BNP Paribas
Goldman Sachs
HSBC
ING
KBC Securities
Macquarie
Morgan Stanley
Petercam
Rabobank
RBC
Societe Generale
Proposed Distribution
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
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OPERATIONAL REVIEW
Mining and Metals Processing segments production in line with guidance
• Mining segment achieved full year guidance for all metals (excluding lead); although down on 2012 due to operational
challenges.
• Metals Processing production in H2 2013 set a new half-year record. As a result, zinc metal production of approximately 1,088kt
was at the top end of full year guidance
KEY FIGURES
2013 2012
Mining Production
Zinc in concentrate (‘000 tonnes) 285 312
Gold (‘000 troy ounces) 75.2 94.6
Silver (‘000 troy ounces)
1
4,746 5,517
Copper in concentrate (‘000 tonnes) 12.9 13.0
Metals Processing Production
2
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
OPERATIONS REVIEW: MINING
In 2013, the volume of zinc in concentrate produced at Nyrstar’s own mines (excluding deliveries under the Talvivaara zinc stream)
was approximately 271,000 tonnes, achieving the full-year guidance of 265,000 to 280,000 tonnes, although down 4% on 2012.
The decline in production was primarily due to a two month suspension of mining operations at the Campo Morado mine due to a
licensing issue. Total zinc in concentrate was down 9% on 2012 as a result of fewer deliveries of zinc concentrate from Talvivaara
under the zinc streaming agreement. Lead in concentrate production was below guidance and lower than 2012 production largely
owing to a production trade-off at the Contonga mine with lower lead being compensated by higher copper. Copper in concentrate
production was in line with 2013 guidance and 2012 production, despite being affected by the suspension at Campo Morado.Silver
production was in line with 2013 guidance of 4.7 to 4.9 million troy ounces.; however, it was lower than 2012 production by 14%,
with the shortfall coming from the suspension at Campo Morado and from Coricancha where operations were halted in H2 2013.
Gold production of 75,200 troy ounces marginally exceeded the guidance of 65,000 to 75,000 troy ounces. El Toqui contributed
strongly to Nyrstar’s doubling of gold production in H2 2013 compared to H1 2013; however, the suspension at Campo Morado
and halted operations at Coricancha reduced 2013 production by 21% compared with 2012.
1
75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013,
Campo Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes production from Metals Processing segment only. Zinc production at Föhl, Galva 45 & Genesis.
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MANAGEMENT REPORT
At the Campo Morado mine, 2013 production of all metals was impacted by the temporary suspension of mining activities in the
?rst quarter of the year as a result of the cancellation of the site’s explosives permit due to an administrative issue. The situation
was resolved and extensive mill and mobile ?eet maintenance work during the shutdown allowed for uninterrupted operations in
H2 2013 resulting in higher volumes of all metals in concentrate compared to H1 2013, despite a decline in the head grades for all
metals.
The Contonga mine was temporarily affected by a two week period of industrial action during H1 2013 which resulted in lower
volumes of ore milled. During 2013, the site mined in the lower levels of the deposit which contain higher copper grades but lower
lead and silver. H2 2013 metal production was in line with H1 2013 except for lead which declined and copper which increased,
consistent with management’s redirection of the mine plan to the lower areas of the deposit.
During H2 2013, management at Coricancha reassessed the site’s operating model which had been adapted in H1 2013 to treat
historic failings. As a result of the sustained lower precious metal price environment, the mine’s operations were halted and
management is assessing the options for the site while maintaining a reduced workforce performing maintenance and compliance
activities.
The El Mochito mine delivered a consistent performance in 2013 resulting in a full year 2013 result largely in line with 2012
for all metals. Head grades have declined while the next higher grade resources are developed for future extraction.This was
compensated, however, by a 4% increase in the volume of ore milled during 2013.
El Toqui mine focused on zinc and lead during H1 2013 and recovery of high gold grade pillars during H2 2013, resulting in
substantially higher gold production than in H1 2013. Zinc, lead and silver metal volumes for 2013 exceeded the 2012 production.
Overall 2013 gold metal produced, however, was 21% below 2012 due to a lower head grade.
At Langlois mine, zinc in concentrate production for 2013 was 8% below 2012, due to issues in H1 2013 with transitioning
development areas to production areas and resourcing and training challenges which delayed the ability to mine consistently from
four mining zones. Site management achieved a 13% increase in ore milled volumes in H2 2013 compared to H1 2013. Copper,
silver and gold metal production for 2013 was largely in line with 2012.
In 2013, the Myra Falls mine produced 41% more silver and 31% more gold than in 2012 as a result of increased average mill
head grades. Zinc, lead and copper contained in concentrate were below 2012 as grades have declined while the site develops, as
per the mine plan, into future higher grade ore deposits. Volumes in H2 2013 were higher for all metals (due to higher grades)
compared to H1 2013.
The Tennessee mines delivered 11% more zinc in concentrate in 2013 compared to 2012 through 8% higher ore volumes processed
at both East and Middle Tennessee sites as well as an increase in the average zinc mill head grade and recovery. At East Tennessee,
the 16% increase in production volume was also due to an 8% rise in the zinc mill head grade and in turn a higher average mill
recovery. At Middle Tennessee, there was a 5% deterioration in the average zinc mill head grade from 2012 to 2013.The higher ore
milled volume made up for this, however, to give an overall 4% increase in zinc in concentrate production.
Deliveries of zinc in concentrate from Talvivaara under the zinc streaming agreement were down by more than 50% in 2013
compared to 2012 due to operational and liquidity issues at the Talvivaara mine, as stated in Talvivaara’s communication on 15
November 2013 regarding its application for corporate reorganisation. Talvivaara’s production in 2013 continued to be impacted
by the prolonged effect of excess water on older ore heaps.
053
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MANAGEMENT REPORT
Mining
‘000 tonnes unless otherwise indicated 2013 2012
Total ore milled 6,960 6,924
Total zinc concentrate 511 564
Total lead concentrate 24.3 28.6
Total copper concentrate 68.3 72.5
Zinc in Concentrate
Campo Morado 25 40
Contonga 13 15
Coricancha 1 2
El Mochito 25 26
El Toqui 23 20
Langlois 36 39
Myra Falls 27 32
East Tennessee 71 61
Middle Tennessee 50 48
Tennessee Mines 121 109
Own Mine Total 271 282
Talvivaara Stream 14 30
Total 285 312
Lead in concentrate
Contonga 0.3 1.5
Coricancha 0.2 0.8
El Mochito 11.6 12.4
El Toqui 1.2 0.4
Myra Falls 0.9 1.1
Total 14.2 16.2
Copper in concentrate
Campo Morado 4.9 5.6
Contonga 2.6 1.5
Coricancha 0.1 0.2
Langlois 2.0 2.0
Myra Falls 3.3 3.8
Total 12.9 13.0
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MANAGEMENT REPORT
‘000 tonnes unless otherwise indicated 2013 2012
Gold (‘000 troy oz)
Campo Morado 11.7 15.9
Coricancha 2.6 11.5
El Toqui 41.3 51.6
Langlois 1.8 2.0
Myra Falls 17.8 13.6
Total 75.2 94.6
Silver (‘000 troy oz)
Campo Morado 1,156 1,728
Contonga 306 450
Coricancha 164 491
El Mochito 1,637 1,627
El Toqui 141 113
Langlois 524 528
Myra Falls 818 580
Total 4,746 5,517
Production Guidance
The guidance below re?ects Nyrstar’s current expectation for 2014 production. Importantly, Nyrstar’s strategy is to focus on
maximising value rather than production and, as such, the production mix of these metals may be altered during the course of the
year depending on prevailing market conditions. Revised updates may be issued by Nyrstar in subsequent trading updates during
2014, if it is expected that there will be material changes to the above guidance.
Production guidance for 2014 across Nyrstar’s portfolio of mining assets is as follows:
Metal in concentrate Production Guidance
Zinc (own mines) * 280,000 – 310,000 tonnes
Lead 15,000 – 18,000 tonnes
Copper 12,000 – 14,000 tonnes
Silver ** 4,750,000 – 5,250,000 troy ounces
Gold 65,000 – 70,000 troy ounces
* Excluding zinc deliveries under the Talvivaara Streaming Agreement.
** 75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby only USD 3.90/oz is payable
055
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MANAGEMENT REPORT
OPERATIONS REVIEW: METALS PROCESSING
The Metals Processing segment produced approximately 1,088,000 tonnes of zinc metal in 2013, at the top end of full year
guidance. Whilst production in H1 2013 was impacted by a number of planned maintenance shuts, production in H2 2013 was a
new half-year record with approximately 569,000 tonnes, a 10% increase on H1 2013 (519,000 tonnes).
The Auby smelter carried out two maintenance shuts of its zinc plant in H1 2013, restricting zinc metal production to
approximately 69,000 tonnes compared to 83,000 tonnes in H2 2013. Indium metal production increased substantially to
approximately 33 tonnes in 2013 (13 tonnes in 2012).
The Balen/Overpelt smelter delivered a major planned maintenance shut of its roaster and acid plant and cell-house on time and to
budget during H1 2013. As a result, zinc metal production in H2 2013 of approximately 132,000 was 10% higher than in H1 2013
(120,000 tonnes).
The Budel smelter delivered another strong performance in 2013 producing 275,000 tonnes of zinc metal production, up 7% on
2012. The higher production in H2 2013 was mainly driven by improvements in the electrolysis process.
At Clarksville, zinc metal production in H2 2013 was 16% higher compared to H1 2013, primarily due to the planned maintenance
shut of the smelter’s roaster and acid plant during H1 2013. The site continued to produce a germanium leach product (germanium
is used in ?bre-optics and semi-conductors) by processing germanium contained in Middle Tennessee Mine zinc concentrate,
following ?rst production in 2012.
Operations Review: Metals Processing 2013 2012
Zinc metal (‘000 tonnes)
Auby 152 161
Balen/Overpelt 252 250
Budel 275 257
Clarksville 106 114
Hobart 272 272
Port Pirie 30 31
Total 1,088 1,084
Lead metal (‘000 tonnes)
Port Pirie 179 158
Other products
Copper cathode (‘000 tonnes) 4 3
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Indium metal (tonnes) 33 13
Sulphuric acid (‘000 tonnes) 1,389 1,388
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MANAGEMENT REPORT
Production at the Hobart smelter was 7% higher in H2 2013 compared to H1 2013. The ?rst half of 2013 was impacted by record
regional temperatures in Q1 2013, which constrained electrolysis throughput due to power reductions and a planned maintenance
shutdown of one of the roasters. Zinc metal production was in line with the 2012 result.
Lead metal production at the Port Pirie smelter in 2013 increased to 179,000 tonnes, compared to 158,000 tonnes in 2012 which
was impacted by an unplanned shut of the blast furnace. Similarly the production of other metals was also higher in 2013 with
copper, silver and gold production up 33%, 29% and 18% respectively on 2012. In July 2013, the sinter and blast furnace were
shut for approximately one week to carry out repair work. The shut was successfully executed, with an estimated impact on lead
production of 6,000 tonnes and smaller impacts on zinc, copper, silver and gold production. The Port Pirie smelter’s planned
maintenance shut of its slag fumer, which was originally scheduled for Q4 2013, has been deferred to Q1 2014. The shut is
expected to impact zinc metal production by approximately 600 tonnes.
Production Guidance and Planned Shuts
Nyrstar expects to produce 1.0 – 1.1 million tonnes of zinc metal in 2014. This level of production is based on maximising EBITDA
and free cash ?ow generation in the Metals Processing segment by targeting the optimal balance between production and
sustaining capital expenditure.
During 2014 there are a number of major scheduled and budgeted maintenance shuts at the smelters, which will have an impact
on production. These shuts will enable the smelters to continue to operate within internal safety and environmental standards,
comply with external regulations/standards and improve the reliability and ef?ciency of the production process. In addition,
the scheduled shuts will allow the sites to make improvements to critical production steps. All efforts are made to reduce the
production impact of these shuts by building intermediate stocks prior to the shut and managing the shut in a timely and effective
manner. The estimated impact of these shuts on 2014 production, which has been taken into account when determining zinc metal
guidance for 2014, is listed below:
2014 Metals Processing planned shuts
Smelter & production step impacted Timing and duration Estimated impact
Port Pirie – slag fumer Q1: 3 weeks nil – 1,000 tonnes zinc metal
Balen – roaster F4 Q2: 3 weeks nil
Hobart – roaster 5 Q2: 3 weeks 6,000 tonnes zinc metal
Clarksville - roaster and acid plant Q3: 1 - 2 weeks nil – 1,000 tonnes zinc metal
Balen – roaster F5 Q4: 1 – 2 weeks nil
Auby – roaster Q4: 2 weeks nil
Port Pirie – lead plant Q4: 3 weeks nil – 500 tonnes
057
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MANAGEMENT REPORT
OPERATIONS REVIEW: MARKETING, SOURCING AND SALES
In April 2013, Nyrstar reached a settlement agreement with Glencore to terminate the commodity grade off-take agreement for
European zinc metal produced by Nyrstar. The termination of the agreement is part of the remedy package agreed by the European
Commission in relation to Glencore’s merger with Xstrata Plc which was completed in May 2013. As part of this process, Nyrstar
undertook a structured process to determine the most suitable channel(s) to market and sell commodity grade zinc metal produced
at its European smelters.
On 1 October 2013, Nyrstar announced that it has entered a strategic off-take and marketing agreement with Noble Group to
market and sell a signi?cant portion of commodity grade zinc metal produced at its European smelters. The agreement is valid for
200,000 tonnes per annum of commodity grade zinc metal.
The remaining volume of European zinc metals (approximately 150,000 tonnes) not marketed via the off-take and marketing
agreement with Noble is, as of 1 January 2014, actively marketed and sold by Nyrstar in both traditional and non-traditional
markets.
The sale of commodity grade zinc and lead produced by Nyrstar’s smelters outside of Europe (Clarksville, Hobart and Port Pirie) will
continue, as before, under the off-take agreement with Glencore Xstrata.
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MANAGEMENT REPORT
MARKET REVIEW
A challenging trading environment driven by tough macroeconomic headwinds and subdued base metal prices.
• With the exception of brief rallies in early and late 2013, sideways trading conditions was the main feature for base metals
during 2013
• Improving global economic conditions and a strengthening dollar accounted for signi?cant depreciations for precious metals
during 2013
• Zinc price averaged USD 1,909/t, down 2% on 2012 (USD 1,946/t) and average lead prices for the year increased by just under
4%, whilst precious metals saw more severe price depreciations with 15% and 23% declines in the average gold and silver prices
respectively
• 2013 zinc benchmark treatment charge (TC) signi?cantly above 2012 terms, with the benchmark TC increasing by around 11%
• Smelting cost base improved due to weakness of the Australian Dollar, averaging 0.73 against the Euro (compared to 0.81 in
2012) but overall result mitigated by strengthening Eurodollar which averaged 1.33 compared to 1.28 in 2012.
Average prices
7
2013 2012
Exchange rate (EUR/USD) 1.33 1.28
Zinc price (USD/tonne, cash settlement) 1,909 1,946
Lead price (USD/tonne, cash settlement) 2,141 2,061
Copper price (USD/tonne, cash settlement) 7,322 7,950
Silver price (USD/t.oz, LBMA AM ?x) 23.79 31.15
Gold price (USD/t.oz, LBMA AM ?x) 1,410 1,662
Exchange rate
The Euro strengthened against the US Dollar by almost 4%, although punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this development has been negative from an EBITDA perspective, this has had
the effect of rebalancing Europe from excessive reliance on exports towards consumption-led growth which has led to a pick-up in
European industrial demand.
Base Metal Summary
A recovery of developed world economic growth created headwinds for base metals as investment ?ows shifted from base metals
in favour of equities, and the dollar index strengthened. Additionally, the government transition and slowing growth of the
Chinese economy resulted in lukewarm sentiment towards industrial metals and, as such, price ranges were largely range-bound
throughout most of the year.
7
Zinc, lead and copper prices are averages of LME daily cash settlement prices. Silver and gold prices are averages of LBMA AM daily ?xing prices.
059
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MANAGEMENT REPORT
Zinc
The average zinc price declined by 2% in 2013 to USD 1,909/t compared to USD 1,946/t in 2012. Whilst zinc prices remained
range-bound throughout most of the year, key end-use sectors for zinc continued to grow at a healthy pace with global
consumption growth estimated to have grown by 4% in 2013, according to Wood Mackenzie. Zinc supply was impacted by a
curtailment of smelting production outside of China and strong import demand into the Chinese market induced by favourable
arbitrage throughout most of the year. This translated into increasing global premiums throughout most of the year. Zinc staged a
rally in December, aided in part by an announcement that the Century zinc mine would close earlier than previously announced.
Lead
The average lead price increased modestly during 2013, appreciating by almost 4%. End-use demand continued to grow at a healthy
pace on a global basis, although softened from 4.9% growth in 2012 to an estimated 3.6% in 2013, according to Wood Mackenzie.
The outlook is more positive with 2014 consumption growth expected to rise to 4.6%. The medium-term outlook is characterised by
supply-side shortages, tougher environmental regulation, and re?ned market de?cits which is supportive of higher prices.
Copper
The average copper price in 2013 was USD 7,322/t an 8% decline compared to USD 7,950/t in 2012. It is estimated by Wood
Mackenzie that global copper consumption, which includes direct use of scrap, will have increased by 5.6% in 2013, a signi?cant
improvement compared to almost ?at consumption growth in 2012. This resulted in signi?cant tightness in the re?ned copper
market in 2013. While the copper concentrate market is understood to be in a surplus, copper mine production continues to face
setbacks and disruptions and this continues to support prices.
Gold & Silver
Increasing con?dence regarding global growth as well a stronger United States dollar index created downward pressure to
precious metals with the average gold price 15% lower in 2013. Average silver prices depreciated by approximately 24% in 2013
from 2012 as industrial demand for silver weakened.
Sulphuric Acid
In 2013, prices achieved by Nyrstar on sales of sulphuric acid, which are predominantly based on contracts rather than the spot
market, declined signi?cantly from an average of USD 80 per tonne in H1 2013 to an average of USD 40 per tonne in H2 2013. The
sulphuric acid market suffered from increased competition as sulphur prices fell, largely due to constrained fertiliser demand in
India and China. Nyrstar expects that the sulphuric acid market will remain challenged throughout 2014 with prices expected to be
lower than those experienced in H2 2013.
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060
MANAGEMENT REPORT
FINANCIAL REVIEW
Group underlying EBITDA of EUR 185 million down 16% on 2012 (EUR 221 million)
• Metals Processing EUR 149 million, driven by higher realised premiums and the recognition of the EUR 45 million termination
fee from Glencore, partially offset by lower acid prices
• Mining EBITDA EUR 78 million, adversely impacted by lower copper, silver and gold prices, operational challenges during H1
2013 and signi?cant reduction in deliveries from Talvivaara during H2 2013
• Delivered signi?cant cost savings through Project Lean, EUR 43 million by end of 2013; on track to deliver target of EUR 75
million by end of 2014
• Strategic hedges for zinc, gold and silver partially offset challenging metal price environment
PAT of EUR (195) million impacted by impairments and impairment reversals
• Impairment of EUR 194 million (after tax) related to write-downs at a number of mining operations
• Reversal of EUR 139 million (after tax) historic (2008) impairments of Balen and Port Pirie smelters due to improvements in the
valuation of these two assets driven by a reduction in energy costs and a more favourable metal price outlook compared to
2008
• Signi?cant improvement of PAT in H2 2013 versus H1 2013 prior to impact of impairments and impairment reversals
• No impairment on Talvivaara zinc streaming agreement in 2013: Nyrstar actively involved in Talvivaara’s corporate
reorganisation process
• The Board of Directors has decided not to propose to shareholders a distribution for the full year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans
Solid ?nancial position and signi?cant committed undrawn liquidity headroom
and cash on hand
• Net debt of EUR 670 million (EUR 756 million at the end of H1 2013)
• Committed undrawn liquidity headroom and cash on hand of 721 million at end of 2013
• Successfully re?nanced the EUR 120 million bonds maturing in 2014 with new EUR 120 million convertible bonds due 2018 with
attractive terms
• Signi?cant reduction in capital expenditure through disciplined approach resulting in capital expenditure of EUR 200 million,
19% down on 2012, and at the low end of full year guidance
Group underlying EBITDA in 2013 was EUR 185 million compared to EUR 221 million in 2012. This decline was driven in part
by downward movements in commodity prices, especially silver copper and gold, which declined on an annual average basis by
24%, 8% and 15% respectively. Year over year annual average zinc price also declined by 2% in US dollar terms and by 5% in Euro
terms due to the appreciation of the Euro against the US dollar. In addition, lower production volumes in the Mining segment
contributed to the underlying EBITDA decline.
061
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MANAGEMENT REPORT
Operational events, such as the previously announced two month suspension at Campo Morado during H1, operational challenges
at Myra Falls and Middle Tennessee mines, as well as lower zinc concentrate deliveries from Talvivaara all had an unfavourable
impact on Group earnings for the year. Additionally, the 2012 result bene?ted from a EUR 24 million contribution from the
recovery, processing and sale of silver bearing material at the Port Pirie smelter.
Partially offsetting the challenging price environment and operational events of 2013, was the bene?t from short term strategic
hedging of zinc, gold and silver prices, which resulted in an EBITDA contribution of EUR 36.4 million (see strategic hedging of
metal prices section below) and also recognition of the EUR 45 million termination fee Nyrstar received for ending the European
component of Nyrstar’s commodity grade off-take agreement with Glencore.
Benchmark treatment charges for 2013 settled at USD 212 per dry metric tonne, basis USD 2,000, which was USD 21 above 2012
terms. The 2013 net treatment charge income at Group level of EUR 261 million represents an increase by EUR 23 million over
2012, largely driven by lower treatment charge expense in the Mining segment due to lower production volumes in 2013. In the
Metals Processing segment, treatment charge income remained ?at year over year as a result of higher treatment charge income
from benchmark contracts being offset by purchases of more complex materials, which delivered greater free metal and by-product
value, outside frame contracts.
The loss after tax result in 2013 of EUR (195) million, compared to a loss of EUR (96) million in 2012, was impacted by the lower
Group underlying EBITDA result (down EUR 35 million from 2012), the income tax charge for 2013 of EUR 11 million (up EUR 26
million from the 2012 income tax bene?t of EUR 15 million), as a result of tax affecting impairment reversal gains in the Metals
Processing segment, and net ?nance expenses of EUR 99 million for 2013 (up EUR 6 million from 2012), due to the increase in
other ?nance charges, which include the costs of executing the short term strategic metal price hedging. Depreciation, depletion
and amortisation (D,D&A) charges increased marginally by EUR 2 million for the year. (The 2012 result bene?ted from disposal of
equity-accounted investees of EUR 27 million).
The 2013 result includes a net non-cash impairment charge before tax of EUR 20 million (2012: EUR 18 million), comprising a
charge of EUR 203 million on Nyrstar’s Mining assets, a charge of EUR 25 million on non-core equity- accounted investees and
securities and partial impairment reversals related to Nyrstar’s Metal Processing assets for a gain of EUR 207 million.
The key events which led to the declines in the recoverable values of the mining operations and associated impairment losses were
primarily the introduction of the Mexican mining tax at Campo Morado, suspension of the operations at Corricancha and Puccarajo
in Peru without current plans to fully restart these operations and the impacts of lower precious metal prices. The impairment tests
resulted in the full impairment of Nyrstar’s previously recognised goodwill.
In 2013, Nyrstar prepared recoverable value estimates for all Metals Processing assets. As a result of these recoverable value
estimates, Nyrstar reversed impairment charges previously recognised in the year ended 31 December 2008 in connection with the
Balen Smelter (EUR 148.9 million) and the Port Pirie Smelter (EUR 58.5 million). In each case, the impairment reversal was after
adjusting for accumulated amortisation which would have been recorded had the 2008 impairments not been recorded.
The reversal of impairment at the Balen Smelter was driven by the continuous, sustained improvements in operating results at
the Balen Smelter since 2008 particularly in relation to zinc recovery rates and energy costs which, combined with the favourable
zinc price outlook, provide objective evidence that the recoverable amounts of the assets in Balen exceed their carrying value
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MANAGEMENT REPORT
after reversal of the 2008 impairment charge. The reversal of impairment at the Port Pirie Smelter is due to the planned Port Pirie
Transformation Project, a capital expansion plan which will signi?cantly change the nature of the operating capabilities of the Port
Pirie Smelter from a primary lead smelter to a world class, multi-metals recovery facility increasing the cash generating ability of
Port Pirie. The recoverable value estimate for Port Pirie incorporates all capital expenditure associated with the project and the
discount rate applied includes a premium for construction risks. Based on the results of the impairment testing, the recoverable
amounts of the assets in Port Pirie exceed their carrying value after reversal of the 2008 impairment charge.
KEY FINANCIAL DATA
EUR Million unless otherwise indicated 2013 2012
Revenue 2,824 3,070
EBITDA
4
185 221
Mining EBITDA
4
78 129
Metals Processing EBITDA
4
149 135
Other & Eliminations EBITDA
4
(43) (44)
Results from operating activities before exceptional items 46 6
Loss for the period 195 96
EBITDA/t
3
135 158
Mining EBITDA/t
4
274 413
Metals Processing EBITDA/t
3
118 109
Underlying EPS (EUR)
8
0.83 0.44
Basic EPS (EUR) 1.27 0.57
Capital Expenditure 200 248
Cash Flow and Net Debt
Net operating cash ?ow 299 362
Net debt/(cash), end of period 670 681
Gearing
9
43.5% 36.9%
4
All references to EBITDA in the table above are Underlying EBITDA. Underlying measures exclude exceptional items related to restructuring measures, M&A related
transaction expenses, impairment of assets, material income or expenses arising from embedded derivatives recognised under IAS 39 and other items arising from
events or transactions clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not consider the tax effect on underlying adjustments. 2012 group
underlying EBITDA restated (previously EUR 220 million) due to Nyrstar adopting international accounting standard IAS 19R (see notes to the Interim Condensed
Consolidated Financial Statements for the period ended 31 December 2013)
5
Mining segment underlying EBITDA per tonne of zinc in concentrate produced
6
Metals Processing segment underlying EBITDA per tonne of zinc metal produced
7
Group underlying EBITDA per tonne of zinc in concentrate and zinc metal produced
8
Underlying measures exclude exceptional items related to restructuring measures, impairment of assets, material income or expenses arising from embedded
derivatives recognised under IAS 39 and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not
consider tax effect on underlying adjustments
9
Gearing: net debt to net debt plus equity at end of period
063
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MANAGEMENT REPORT
MINING
The Mining segment’s underlying EBITDA in 2013 was down 40% compared to 2012, adversely affected by the deterioration in
copper, silver and gold metal prices, as well as the unplanned suspension of operations at the Campo Morado mine for two months
in Q1 2013, the halting of operations at the Coricancha mine in H2 2013 (predominantly due to lower precious metals prices) and
a substantial reduction in deliveries under the Talvivaara zinc streaming agreement.
MINING
EUR million unless otherwise indicated 2013 2012
Treatment charges (76) (100)
Payable metal contribution 335 403
By-Products 173 226
Other 13 (20)
Underlying Gross Pro?t 445 509
Employee expenses (140) (135)
Energy expenses (49) (47)
Other expenses (178) (198)
Underlying Operating Costs (367) (380)
Underlying EBITDA 78 129
Underlying EBITDA/t 274 413
Underlying gross pro?t for the Mining segment was EUR 445 million in 2013, 13% below 2012. The Mining treatment charge
expense reduced by 24% to EUR 76 million, driven by the lower volume of zinc concentrate produced. Payable metal contribution
declined 17% in line with the lower volume of zinc in concentrate produced and therefore sold. Contributions to gross pro?t from
by-products, representing around 40% of the total, declined by 23% in 2013 due to the signi?cant downward trend in copper, silver
and gold metal prices, as well as operational events. The two month suspension at Campo Morado impacted copper, silver and
gold volumes, while the halt of operations at Coricancha signi?cantly reduced the contribution to precious metals revenue. Other
Mining gross pro?t was EUR 13 million and included gains from the 2013 strategic metal price hedges.
Revenue was also affected by mark-to-market price adjustments. These accounting adjustments require Nyrstar to revalue open
sales invoices as at 31 December 2013 to the prices at that date. At 31 December 2013, open sales invoices included approximately
9,200 tonnes of payable zinc in concentrate, 160 tonnes of payable lead in concentrate, 2,100 tonnes of payable copper in
concentrate, 300,000 troy ounces of payable silver and 7,000 troy ounces of payable gold.
The average zinc C1 cash cost for Nyrstar’s zinc mines (including the Talvivaara zinc stream) was USD 1,515 per tonne of payable
zinc in 2013, a deterioration of 26% compared to 2012 (USD 1,199). The same factors which adversely impacted mining gross
pro?t, namely lower copper, silver and gold prices which signi?cantly reduced by-product prices and operational events, also
adversely impacted the average zinc C1 cash cost.
10
In addition, negative impacts on payable zinc volumes were in the lower cost
mines (Talvivaara and Campo Morado), therefore increasing the weighting towards the higher cost North American mines such as
Langlois and Tennessee and hence increasing the zinc C1 cash cost.
10
C1 cash costs are de?ned by Brook Hunt as: the costs of mining, milling and concentrating, on-site administration and general expenses, property and production
royalties not related to revenues or pro?ts, metal concentrate treatment charges, and freight and marketing costs less the net value of by-product credits.
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DOC USD/tonne ore milled 2013 2012
Campo Morado 100 81
Contonga 71 85
El Mochito 65 59
El Toqui 83 73
Langlois 133 116
Myra Falls 137 115
Tennessee Mines 38 42
Average DOC/tonne ore milled 67 68
The average Mining segment direct operating cost in USD per tonne of ore milled for 2013 (excluding Talvivaara) was 1% below
2012 despite a signi?cant increase at Campo Morado resulting from the two month suspension of mining operations in H1 2013.
The halt of operations at Coricancha impacted the cost per tonne milled, as ?xed care and maintenance costs continued to be
incurred in H2 2013. (Coricancha ?gures are excluded from the above table due to the lack of ore milled.)
Campo Morado, after bearing ?xed costs for two months during H1 2013 without processing ore, achieved a 38% reduction in
DOC / tonne milled through a focus on productivity and cost reduction.
At the Contonga mine, management reduced operating costs per tonne milled by 16% in 2013 through an aggressive cost
reduction effort. The Tennessee mines DOC / tonne milled improved by 10% from 2012 to 2013 through a combination of higher
productivity and targeted cost reduction.
DOC per tonne milled at El Mochito, El Toqui and Myra Falls increased in H2 2013 as a result of one-off labour payments.
The Langlois mine, after low ore milled volumes in H1 2013 due to previously mentioned operational challenges, increased ore
milled and reduced operating costs in H2 2013 giving an overall improvement of 21% half on half.
Nyrstar will publish its reserves and resources statement for the Mining segment at the same time as the ?rst interim management
statement on 30 April 2014.
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MANAGEMENT REPORT
METALS PROCESSING
The Metals Processing segment delivered an underlying EBITDA result of EUR 149 million in 2013, an increase of 10% compared
to 2012 (EUR 135 million). The increase was primarily due to higher realised premiums compared to 2012 and the recognition of
the EUR 45 million termination fee (included in Other expenses and income) that compensated Nyrstar for agreeing to end the
European component of its commodity grade metal off-take agreement with Glencore, partially offset by lower acid prices.
EUR million unless otherwise indicated 2013 2012
Treatment charges 337 338
Free metal contribution 244 242
Premiums 127 115
By-Products 215 221
Other (111) (64)
Underlying Gross Pro?t 813 852
Employee expenses (207) (218)
Energy expenses
11
(272) (275)
Other expenses and income
12
(185) (224)
Underlying Operating Costs (664) (717)
Underlying EBITDA 149 135
Underlying EBITDA/t
13
118 109
Underlying Cost/t
14
524 577
The 2012 result also bene?ted from the contribution from the identi?cation, recovery and sale of silver-bearing material at the
Port Pirie smelter (contribution to underlying EBITDA in 2012 of EUR 24 million, included in Other).
Underlying gross pro?t decreased 5% to EUR 813 million in 2013, compared to EUR 852 million in 2012. Gross pro?t was negatively
impacted by the stronger EUR which, on a year average basis, appreciated 3.4% against the USD in 2013 compared to 2012.
Treatment charge income from zinc and lead was relatively ?at at EUR 337 million in 2013, compared to EUR 338 million in 2012.
Whilst the 2013 zinc benchmark TC settled at USD 212 per dry metric tonne, basis USD 2,000 (USD 21 above 2012 terms), the
concentrate mix consumed during 2013 included a higher proportion of more complex materials purchased outside frame contracts.
Higher treatment charge income from benchmark contracts was therefore offset by more purchases outside frame contracts. As a
result, total treatment charge income was in line with 2012.
Free metal contribution of EUR 244 million was in line with 2012 as similar production levels of zinc metal and higher lead production
volumes were offset by slightly lower zinc prices.
Despite the depressed macro-economic conditions in 2013, realised premiums on commodity grade and specialty alloy zinc and
lead products increased compared to 2012. This resulted in gross pro?t earned on premiums of EUR 127 million, an increase of 10%
compared to 2012 (EUR 115 million).
11
Energy expenses do not include the net gain / (loss) on the Hobart smelter embedded energy derivatives
12
In H1 2013 includes EUR 45 million termination fee that compensated Nyrstar for agreeing to end the European component of its commodity grade metal off-take
agreement with Glencore.
13
Calculated based on Segmental underlying EBITDA result and total production of Zinc Market Metal and Lead Market Metal.
14
Calculated based on total segmental direct operating costs, income and total production of Zinc Market Metal and Lead Market Metal. N
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MANAGEMENT REPORT
The contribution of by-product gross pro?t in 2013 was EUR 215 million, a decrease of 3% from EUR 221 million in 2012. The decline
was driven by a combination of declining metal prices for copper, gold and silver as well as a decline in acid prices, which were
partially offset by higher production volumes of copper, gold, silver and indium compared to 2012.
Other gross pro?t was EUR (111) million, an increase of 73% compared to 2012. The increase is mainly driven by higher freight costs
and the contribution in 2012 of EUR 24 million of silver-bearing material at the Port Pirie smelter.
The Metals Processing cost per tonne (of zinc and lead metal) of EUR 524 improved by 9% on 2012 (EUR 577). This was largely driven
by the recognition of the EUR 45 million termination (included in Other expenses and income) and a weakening of the AUD against
the EUR during 2013. Approximately 40% of Metals Processing costs are denominated in Australian dollars, therefore the weakening
of the AUD against the Euro in 2013 had some positive impact on total Metals Processing cost performance in Euro terms.
OTHER & ELIMINATIONS
Underlying EBITDA in the Other and Eliminations segment was EUR (43) million in 2013, comprising the elimination of unrealised
inter segment pro?ts (for material consumed internally by the Metals Processing segment), a net gain of EUR 0.8 million from non-
core operations and other group costs. This result is in line with previous years.
CAPITAL EXPENDITURE
Capital expenditure was approximately EUR 200 million in 2013, a decrease of 19% from 2012 (EUR 248 million). Expenditure in
2013 was at the very low end of the full year guidance of EUR 200 – 230 million.
Expenditure in the Mining segment of EUR 97 million in 2013 represents a substantial reduction of 25% from 2012. Sustaining
and compliance spend in 2013 was reduced to approximately EUR 52 million, 7% reduction on 2012, due to improved capital
management across the Mining segment. EUR 42 million was spent on exploration and development, 39% down on the previous
half and EUR 3 million on growth spend.
Capital expenditure in the Metals Processing segment in 2013 of EUR 96 million was down 15% from 2012 (EUR 113 million). This
comprised approximately EUR 75 million of expenditure on sustaining, compliance and shutdowns, which included spend on a
number of successful planned maintenance shuts across the smelters. EUR 17 million was spent on organic growth projects which
include the ?nal investment case for the transformation of Port Pirie, increasing indium metal capacity at Auby and the successful
completion of the electrolysis de-bottlenecking project at Auby.
In addition, approximately EUR 7 million was invested at other operations and corporate of?ces.
Capital expenditure guidance in 2014 is as follows:
Segment Category EUR million
Mining Sustaining and compliance 40 – 45
Exploration and Development
and Growth 65 – 75
Total 105 – 120
Metals Processing Sustaining and compliance 75 – 80
Growth 15 – 40
Port Pirie Redevelopment 75 – 85
Total 160 – 215
Group Total 265 – 335
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MANAGEMENT REPORT
CASH FLOW AND NET DEBT
In 2013, cash ?ows from operating activities generated an in?ow of EUR 299 million, which comprised a EUR 124 million cash
in?ow from operating activities before working capital changes.
Cash out?ows from investing activities in 2013 of EUR 191 million mainly relates to capital expenditure. Following successful
placement of senior, unsecured convertible bonds, due in 2018 for a principal amount of EUR 120 million, cash in?ows from
?nancing activities in 2013 amounted to EUR 9 million, compared to an out?ow of EUR 133 million in 2012. As of 31 December
2013, the full amount of Nyrstar’s revolving structured commodity trade ?nance facility remained undrawn (also fully undrawn as
of 31 December 2012).
Net debt at 31 December 2013 was EUR 670 million (31 December 2012: EUR 681 million), with a gearing level of 43.5%
15
at the
end of December 2013 compared to 36.9% at the end of December 2012.
TAXATION
Nyrstar recognised an income tax expense for the year ended 31 December 2013 of EUR 11.1 million representing an effective
income tax rate of -6.0% (for the year ended 31 December 2012: 13.3%). The tax rate is impacted by non-deductible amounts
related to the impairments incurred by the Group, recognition of previously unrecognised tax losses and temporary differences and
unrecoverable withholding tax.
OTHER SIGNIFICANT EVENTS IN 2013
Capital distribution
On 7 February 2013, the Board of Directors proposed to distribute to the shareholders a (gross) amount of EUR 0.16 per share,
and to structure the distribution as a capital reduction with reimbursement of paid-up capital. The proposal was submitted to
an extraordinary general shareholders’ meeting at the time of the annual general shareholders’ meeting on 24 April 2013. The
quorum requirement for deliberation and voting on the agenda items of the extraordinary general meeting was not met. As such,
a second extraordinary general meeting was held on 23 May 2013 and the proposal was approved. As the distribution is structured
as a capital reduction with reimbursement of paid-up capital, the payment was subject to the special statutory creditor protection
procedure set out in Article 613 of the Belgian Company Code. On 13 June 2013, the approval of the capital distribution was
published in the Belgian Of?cial Gazette. The ex-dividend date was 9 August 2013, with the payment date of 14 August 2013.
Talvivaara
As a result of ongoing ?nancial and operational challenges at the Talvivaara’s Sotkamo mine throughout 2013, deliveries of zinc in
concentrate from Talvivaara during H2 2013 were signi?cantly down on H1 2013 (30kt in H1 2013 to 14kt in H2).
Talvivaara’s liquidity position weakened further in H2 2013 and the company commenced a corporate reorganisation process of
the Talvivaara Mining Company Plc on 29 November 2013, and commenced corporate reorganisation of the Talvivaara Sotkamo
Ltd on 17 December 2013. Nyrstar is now actively participating with a number of interested parties in Talvivaara’s corporate
reorganisation process.
Considerable uncertainties exist as to the outcome of Talvivaara’s reorganisation process.We also have ongoing concern regarding
the performance of Talvivaara under the zinc streaming agreement obligations. It is currently not possible for Nyrstar to estimate
the most likely outcome of the reorganisation and its impact on the carrying value of the agreement.
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Gearing: net debt to net debt plus equity at end of period.
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Settlement with Glencore on Commodity Grade Off-take Agreement and shareholding
On 16 April, Nyrstar announced that it has reached a negotiated settlement with Glencore (now GlencoreXstrata) in relation to
its Commodity Grade Off-take Agreement for the sale and marketing of commodity grade zinc metal produced by Nyrstar within
the European Union, and Glencore’s 7.79% shareholding in Nyrstar. This followed the requirement for Glencore to end these
aspects of its relationship with Nyrstar as part of the remedy package agreed by the European Commission in relation to Glencore’s
merger with Xstrata. Under the settlement, by 31 December 2013 Nyrstar will cease to sell to Glencore commodity grade zinc
metal produced at Nyrstar’s smelters located within the European Union (Auby, Balen/Overpelt and Budel). With respect to the
above, Glencore agreed to pay Nyrstar a termination fee of EUR 44.9 million. The sale of commodity grade zinc and lead produced
from Nyrstar’s smelters outside the European Union (Clarksville, Hobart and Port Pirie) will continue as before under the Off-take
Agreement. Glencore also agreed to sell to Nyrstar Glencore’s entire shareholding of 7.79% of common shares for EUR 3.39 per
share (a discount of approximately 10% to the 5-day volumeweighted average price, and 5% to the closing share price, of Nyrstar
shares on 15 April 2013), for a total cash consideration of EUR 44.9 million. Nyrstar continues to hold the acquired shares as
treasury stock and will look to place the shares with suitable investors over time.
Strategic hedging of metal prices
As announced in our 2013 ?rst Interim Management Statement, during Q1 2013 Nyrstar entered into short-term strategic hedging
arrangements with respect to zinc prices. The hedges, which relate to Q2, Q3 and Q4 2013, are for 20,000 tonnes of zinc metal per
month. The hedges in Q2 2013 guaranteed Nyrstar a zinc price between USD 2,100/t and USD 2,200/t for 60,000 tonnes of metal.
The hedges for Q3 and Q4 2013 guarantee Nyrstar a zinc price between USD 2,100/t and USD 2,200/t for 120,000 tonnes of metal
and, if the price exceeds USD 2,400/t, Nyrstar would have exposure to the upside bene?t.
The total cost for entering into these hedging arrangements was approximately USD 7 million, which is included under ?nance
expenses.
Subsequently, in June, Nyrstar entered into strategic hedges with respect to gold and silver prices for H2 2013. The hedges for Q3
2013 were for approximately 1 million troy ounces of silver and 19,000 troy ounces of gold production and guarantee Nyrstar
a silver and gold price of USD 22.41 per troy ounce and USD 1,383 per troy ounce respectively. The hedges for Q4 2013, for
approximately 0.6 million troy ounces of silver and 17,000 troy ounces of gold production, guarantee the same prices as the Q3
hedge and, in addition, if the silver and gold prices exceed USD 25 per troy ounce and USD 1,500 per troy ounce, respectively,
Nyrstar would have had exposure to the upside bene?t.
The rationale for entering into such short term arrangements was to improve the pro?tability of the business by, for example,
providing targeted ?nancial support for Nyrstar’s assets or to take advantage of price conditions in the market. Nyrstar has
implemented a comprehensive governance structure to ensure hedging arrangements, with respect to zinc and other metal prices,
are compliant with a robust risk-reward framework and all decisions to enter or exit from a hedge position are taken by a Metal
Price Risk Committee.
Successful issue of EUR 120 million of convertible bonds, due 2018
On 17 September 2013, Nyrstar successfully placed senior, unsecured convertible bonds, due 2018, for a principal amount of EUR
120 million. The Bonds were issued at 100% of their principal amount and have a coupon of 4.25% per annum, payable semi-
annually in equal installments in arrears. The conversion price is EUR 4.9780 per share and is set at a premium of 35.0 per cent to
the reference share price of EUR 3.6874, being the volume-weighted average price of the Company’s ordinary shares on Euronext
Brussels from launch to pricing.
The Bonds were placed through an accelerated book-build placement with institutional investors outside the United States in
accordance with Regulation S under the Securities Act only and are listed on the Open Market (Freiverkehr) segment of the
Frankfurt Stock Exchange.
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European strategic marketing agreement for commodity grade zinc metal with Noble and Noble acquires
a 1% shareholding in Nyrstar
On 1 October 2013, Nyrstar entered an off-take and strategic marketing agreement with Noble Group to market and sell 200,000
tonnes per annum of commodity grade zinc metal (special high grade and continuous galvanising grade) produced at its European
smelters. The agreement has a term of four years and commenced on 1 January 2014, under which Nyrstar will receive market
price plus a benchmark premium per tonne of zinc metal, with a pro?t sharing mechanism for any upside. For Nyrstar, the
agreement represents a ?rst step in executing a European zinc metal plan aimed at actively marketing Nyrstar’s product to increase
optionality in terms of customers, product mix and geography which is expected to deliver improved margins.
The agreement follows a structured process undertaken by Nyrstar in Q2 and Q3 2013 to determine the most suitable channel(s)
to market and sell commodity grade zinc metal produced at its European smelters. This was triggered by the termination of the
European component of the Commodity Grade Off-take Agreement with Glencore Xstrata. During the process, Nyrstar determined
that the best way to market its European commodity grade zinc metal is through a multi-channel approach and, therefore, the
newly formed Marketing, Sourcing & Sales segment is directly selling, marketing and ?nancing the remaining 160,000 tonnes
(approximately) of commodity grade zinc metal produced in Europe with a number of market participants.
Noble also agreed to acquire from Nyrstar’s treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total
shares, for a price of EUR 3.76 per share (a premium of 5% to the 3-day volume-weighted average price of Nyrstar shares on 27
September 2013), for a total cash consideration of EUR 6.4 million.
Proposed distribution
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
SENSITIVITIES
Nyrstar’s results continued to be signi?cantly affected during the course of 2013 by changes in metal prices, exchange rates and
treatment charges. Sensitivities to variations in these parameters are depicted in the below table, which sets out the estimated
impact of a change in each of the parameters on Nyrstar’s full year underlying EBITDA based on the actual results and production
pro?le for the year ending 31 December 2013.
12 months ended 31 December 2013
Parameter Variable Annualised estimated EBITDA
impact in EUR million
Zinc Price +/- USD 100/t +28 / -28
Lead Price +/- USD 100/t +2 / -2
Copper Price +/- USD 500/t +6 / -6
Silver Price +/- USD 1/toz +4 / -4
Gold Price +/- USD 100/toz +6 / -6
USD / EUR +/- EUR 0.01 +18 / -18
AUD / EUR -/+ EUR 0.01 -3 / +3
Zinc treatment charge +/- USD 25/dmt
16
+28 / -28
Lead treatment charge +/- USD 25/dmt +5 / -5
16
dmt = dry metric tonne of concentrate
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The above sensitivities were calculated by modelling Nyrstar’s 2013 underlying operating performance. Each parameter is based on
an average value observed during that period and is varied in isolation to determine the annualised EBITDA impact.
Sensitivities are:
• Dependent on production volumes and the economic environment observed during the reference period.
• Not re?ective of simultaneously varying more than one parameter; adding them together may not lead to an accurate estimate
of ?nancial performance.
• Expressed as linear values within a relevant range. Outside the range listed for each variable, the impact of changes may be
signi?cantly different to the results outlined.
These sensitivities should not be applied to Nyrstar’s results for any prior periods and may not be representative of the EBITDA
sensitivity of any of the variations going forward.
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SAFETY, HEALTH, ENVIRONMENT,
WORKFORCE AND SOCIETY
Workforce
At Nyrstar, we believe that people are the foundation of our success. We foster the development and application of programmes
that enable our people to reach their full potential for the mutual bene?t of the individuals and the organisation. Recruiting and
retaining talented people is a top priority for the company.
Global Workforce by Geographical Location
(year-end data)
Location 2013 2012
Australia 1,236 1,233
Europe 1,487 1,453
Americas 3,876 4,284
Total 6,599 6,970
Global Workforce by Age Group
(at 2013 year-end)
0 5 10 15 20 25 30
6.7
%
23.3
%
26.0
%
26.8
%
17.1
%
> 60
50 - 59
40 - 49
30 - 39
< 30
Our approach to people management starts with The Nyrstar Way which establishes the behaviours we expect from all Nyrstar
employees. Through the Nyrstar Way we are committed to open and honest relationships with our employees, and we aim to
be consistent, fair and transparent in our dealings with our employees. We believe that the Nyrstar Way and the behaviours
associated with it will not only support delivery of our key strategies, but also create a culture that attracts and retains talented
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people. Demonstration of the behaviours promoted by The Nyrstar Way is evaluated as part of our annual performance review
process and is a key component of our annual incentive plan.
Having the right people with the right skills is critical to our success. In 2013, we undertook a focused recruitment program in
Spain to attract quali?ed mining professionals for our operations in South America. In addition to our recruitment efforts, we also
have several people development programs to support our staff’s continued education and professional development. Some of
these programs are discussed in further detail below.
Support for fundamental human rights is an integral part of how we operate. We are committed to respecting our employees’
rights in line with the International Labour Organisation’s Declaration of Fundamental Human Rights at Work. In line with this
commitment, we recognise and respect the right of freedom of association by our employees. We have a number of operations
where we have a mix of collective and individually-regulated employment agreements. This does not affect the rights of employees
to choose to belong to trade unions, however. In 2013, approximately 60% of our workforce was covered by Collective Agreements.
Over 98% of our employees are engaged on a full-time basis., however the same standard terms and conditions of employment
apply to both full and part time employees. In terms of industrial action, the Contonga mine experienced a two week strike during
the ?rst half of 2013. No other signi?cant industrial action occurred in 2013.
Safety & Health
Prevent Harm is a core value of Nyrstar and we are committed to maintaining safe operations and to proactively managing risks
including those with respect to our people and the environment. During 2013, Nyrstar’s Recordable Injury Rate (RIR) remained almost
?at at 9.0 compared to 8.3 in 2012, this con?rmed the signi?cant reduction (37%) achieved in 2012. After a 50% reduction in 2012,
the 2013 Lost Time Injury Rate (LTIR) increased by 20% to 3.4 compared to 2.8 in 2012.
Tragically, despite Nyrstar’s strong focus on safety, two Nyrstar employees were fatally injured in March and September 2013 while
working at the Campo Morado and Contonga mines respectively. Risk scenarios were conducted across all mines to prevent the
recurrence of similar situations. We recognise that people are fallible, and even the best will make errors (mistakes, lapses or slips). As
a result, Nyrstar’s Hobart Smelter piloted a Human Performance Programme which integrates new beliefs, thoughts, actions and tools
into our already existing Health & Safety management system. The programme, which has been well-received by the management
team and workforce, focuses on developing competencies and skills to enable our employees to recognise, predict and prevent error-
likely situations.
In the Metals Processing segment, Auby operated without a lost time injury for an 18 month period. The performance variance across
the smelters reduced signi?cantly as a consequence of a strong health and safety network and exchange of practices between the
sites. The number of cases involving restricted works or lost time injuries (DART) was below 5 at 4.8 at the end of the year. A corporate
Health and Safety Audit was completed across the smelters as part of our Assurance Program. In the Mining sector, Myra Falls won the
Ryan Award, which recognizes Safety performance across British Columbia. A back-to-basics plan was initiated across all mines with an
objective of building the foundations of a strong Health & Safety management system and culture.
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Lost Time Injury Frequency Rate
(Per million hours worked)
Location 2013 2012* 2011
Smelters – Australia 3.1 1.9 2.9
Smelters – Americas 1.4 4.7 2.7
Smelters – Europe 2.5 1.8 2.5
Mines – North America 3.5 3.1 7.1
Mines- South America 4.0 3.2 5.0
Total 3.4 2.8 4.2
* Restated data
Recordable Injury Frequency Rate
(Per million hours worked)
Location 2013 2012*
Smelters – Australia 6.3 5.0
Smelters – Americas 14.2 11.0
Smelters – Europe 7.1 6.6
Mines – North America 15.2 19.2
Mines- South America 8.1 6.5
Total 9.0 8.3
Environment
Mining and metals operations unavoidably affect the environment, and minimising environmental impacts represents one of
the principal challenges for our industry. Similar to our peers, the environmental risks demanding our greatest attention relate
to energy and climate change, water, air emissions and waste. Recognising the importance of environmental performance to our
business success, we take the management of these risks very seriously and responsible environmental stewardship is integrated
into our business planning, management systems and day-to-day operational decision making.
All Nyrstar sites are required to implement environmental management systems (EMSs) in alignment with the Nyrstar SHEC
Management Elements.The EMSs help to drive continuous improvement in environmental performance by ensuring environmental
impacts are understood, controlled and subject to regular monitoring and review. The systems implemented at Nyrstar’s smelters
are also certi?ed to the ISO 14001 environmental management system standard.
Our key measure for regulatory compliance is Recordable Environmental Incidents, de?ned as a non-compliance event that
requires noti?cation to the environmental authorities. A total of 34 Recordable Environmental Incidents were documented in
2013, representing a signi?cant (37%) improvement over the 54 incidents recorded in 2012. The improved compliance record
is attributed to strengthened regulatory compliance processes and to the effectiveness of improvement actions implemented in
response to events experienced in 2012.
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0
5
10
15
20
25
30
35
12
13
22
32
10
24
2011 2012 2013
SMELTERS MINES
Recordable Environmental Incidents
1
1
2012 and 2013 data includes all Nyrstar mines and smelters; 2011 data includes all smelters and Tennessee Mines.
Society
The Nyrstar Way establishes the behaviours we must display in our dealings with local communities and other key stakeholders.
By living the Nyrstar Way, we commit to Keeping Our Word, Preventing Harm, Being Open and Honest, and Creating Value. These
commitments re?ect the way we do business and are expected to be embraced by all Nyrstar employees.
Our SHEC Management Framework sets out the processes for stakeholder engagement, communication and consultation that must
be implemented at all Nyrstar sites. Site implementation of these processes focuses on understanding and addressing the social
risks that may affect Nyrstar’s operations and the communities in which we operate. Particular emphasis is placed on identifying
and taking advantage of the opportunities presented to our operations for enhancing local capacity and delivering socio-economic
bene?ts.
As the majority of Nyrstar’s engagement with communities and other stakeholders occur at a site level, considerable attention is
given to making sure our local management teams and community development specialists have the required social awareness
and competence. In 2013, we engaged external specialists to work very closely with our Latin American sites. The focus of this
collaboration was to strengthen the community management capabilities of our personnel and to develop action plans for
improving our community management processes and programs.
Nyrstar Sustainability Report 2013
Nyrstar publishes a separate Sustainability Report that presents our sustainability performance during the past year. 2013 marks
the sixth that we report externally on sustainability matters. The Sustainability Report can be downloaded from our website:http://www.nyrstar.com/sustainability/.
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Nyrstar NV (the ‘Company’) has prepared this corporate governance statement in
accordance with the Belgian Code on Corporate Governance of 12 March 2009. This
corporate governance statement is included in the Company’s report of board of directors
on the statutory accounts for the ?nancial year ended on 31 December 2013 dated 5
February 2014 in accordance with article 96 of the Belgian Company Code.
The Company applies the nine corporate governance principles contained in the Belgian
Code on Corporate Governance. The Company complies with the provisions set forth in
the Belgian Code on Corporate Governance unless explained otherwise in the corporate
governance charter or in this corporate governance statement.
Corporate Governance Charter
The Company has adopted a corporate governance charter in line with the Belgian Code on Corporate Governance of
12 March 2009.
The corporate governance charter describes the main aspects of the corporate governance of the Company including its
governance structure, the terms of reference of the board of directors and its committees and other important topics.
The corporate governance charter is available, together with the articles of association, on the Company’s website, within the
section about Nyrstar (http://www.nyrstar.com/about/Pages/corporategovernance.aspx). The board of directors approved the
initial charter on 5 October 2007. Updated versions were approved on 18 March 2008, 11 December 2009, 24 February 2010,
26 July 2011, and the current version was approved by the board of directors on 5 February 2014.
What constitutes good corporate governance will evolve with the changing circumstances of a company and with the standards
of corporate governance globally and must be tailored to meet those changing circumstances. The board of directors intends to
update the corporate governance charter as often as required to re?ect changes to the Company’s corporate governance.
Code of Business Conduct
While Nyrstar conducts its business within the framework of applicable professional standards, laws, regulations and internal
policies, it also acknowledges that these standards, laws, regulations and policies do not govern all types of behaviour. As a result,
Nyrstar has adopted a code of business conduct for all of Nyrstar’s personnel and sites. The code of business conduct is based
on the Nyrstar Way. The code also provides a frame of reference for Nyrstar sites to establish more speci?c guidelines to address
local and territorial issues. Nyrstar also introduced a code of business conduct development program which supports the code of
business conduct and aims to increase awareness in relation to some key risks to Nyrstar’s business. The development program
includes specially designed training modules for Nyrstar employees. The training modules are conducted by Nyrstar’s Compliance
Of?cer with the assistance of local expertise (where required). If employees have issues or concerns (for example, they are
concerned that others are not complying with the letter and the spirit of the code of business conduct), they may raise the issue
or concern with their supervisor or manager or Nyrstar’s compliance of?cer. The code of business conduct is available on Nyrstar’s
website (www.nyrstar.com).
CORPORATE GOVERNANCE
STATEMENT
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Board of Directors and Management Committee
Board of directors
The table below gives an overview of the members of the Company’s board of directors and their terms of of?ce during 2013:
Name
Principal function
within the Company Nature of directorship Start of Term End of Term
Julien De Wilde
(1)
Chairman Non-Executive, Independent 2007 2014
Roland Junck CEO, Director Executive 2007 (2009 CEO) 2015
Peter Mansell
(2)
Director Non-Executive, Independent 2007 2013
Karel Vinck Director Non-Executive, Independent 2007 2015
Ray Stewart Director Non-Executive, Independent 2007 2014
Oyvind Hushovd Director Non-Executive, Independent 2009 2016
Carole Cable Director Non-Executive, Independent 2013 2017
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2) MANDATE EXPIRED ON 24 APRIL 2013
De Wilde J. Management BVBA, represented by Julien De Wilde, Chairman, was appointed Chairman in August 2007. He is also
Chairman of Agfa-Gevaert NV and a director of several Belgian listed companies, amongst others Telenet Group Holding NV. He is
also former Chief Executive Of?cer of Bekaert NV, a Belgian metals company. Prior to Bekaert, he held senior positions at Alcatel,
where he was a member of the executive committee, and at Texaco, where he was a member of the European management board.
He is Chairman of the nomination and remuneration committee and a member of the safety, health and environment committee.
He obtained an engineering degree from the Catholic University of Leuven, Belgium.
Roland Junck, Chief Executive Of?cer, was appointed Chief Executive Of?cer in February 2009 after 16 months as a Non-Executive
Director on the Company’s board of directors. He is also director of several European companies including Agfa-Gevaert NV. He was
the former Chief Executive Of?cer of Arcelor Mittal. Prior to this role he was a member of the group management board of Arcelor,
Aceralia and Arbed. He graduated from the Federal Polytechnic in Zurich and has a Masters of Business Administration from Sacred
Heart University of Luxembourg.
Karel Vinck, Non-Executive Director, is Coordinator at the European Commission and a director of Tessenderlo Group NV and the
Koninklijke Muntschouwburg. Formerly the Chief Executive Of?cer of Umicore NV and later Chairman, he was also Chief Executive
Of?cer of Eternit NV, Bekaert NV and the Belgian Railways. He is a member of the audit and the nomination and remuneration
committee. He holds a Master’s degree in Electrical and Mechanical Engineering from the Catholic University of Leuven, Belgium
and a Master of Business Administration from Cornell University, United States.
Ray Stewart, Non-Executive Director, is Chief Financial and Administration Of?cer of Belgacom Group NV. Prior to Belgacom,
he was Chief Financial Of?cer of Matav. He has also held senior positions with Ameritech, including Chief Financial Of?cer for
Ameritech International. He is Chairman of the audit committee and a member of the nomination and remuneration committee.
He has a Business Undergraduate degree in Accounting from Indiana University, and a Masters of Business Administration in
Finance from Indiana University.
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Oyvind Hushovd, Non-Executive Director, currently serves on the boards of several mining companies, including, amongst others,
Ivanhoe Mines. Formerly Chief Executive Of?cer of Gabriel Resources Ltd from 2003 to 2005 and, from 1996 to 2002, President
and Chief Executive Of?cer of Falconbridge Limited (and prior to that held a number of senior positions within that company).
He is Chairman of the safety, health and environment committee and is a member of the audit committee. He received a Master
of Economics and Business Administration degree from the Norwegian School of Business and a Master of Law degree from the
University of Oslo.
Carole Cable, Non-Executive Director, is currently a Partner of the Brunswick Group, an international communications ?rm, where
she is the joint head of the energy and resources practice specialising in the metals and mining sector. Prior to her current position,
she worked at Credit Suisse and JPMorgan where she was a mining analyst and then moved into institutional equity sales covering
the global mining sector as well as Asia ex Japan. Previous to that, she worked for an Australian listed mining company. She is a
Member of the safety, health and environment committee. Ms. Cable holds a Bachelors of Science degree from the University of
New South Wales, Australia and is currently on the Board of Women in Mining UK.
The business address of each of the directors is for the purpose of their directors’ mandate, Zinkstraat 1, 2490 Balen, Belgium.
Virginie Lietaer was appointed Company Secretary to the Company effective 10 March 2008.
Management committee
As at 31 December 2013, the Company’s management committee consists of six members (including the CEO), as further set forth
hereinafter:
Name Title
Roland Junck Chief Executive Of?cer
Heinz Eigner Chief Financial Of?cer
Russell Murphy Chief HR & SHE Of?cer
Michael Morley Senior Vice President, Metals Processing and Chief Development Of?cer
Graham Buttenshaw Senior Vice President, Mining
Bob Katsiouleris Senior Vice President, Marketing, Sourcing & Sales
Roland Junck is the Chief Executive Of?cer of the Company. See his biography above under “—Board of directors”.
Heinz Eigner, Chief Financial Of?cer, was appointed in August 2007. Prior to Nyrstar he was at Umicore where he joined in 2002
as Vice-President Business Group Controller, automotive catalysts, and became Vice-President Business Group Controller, zinc
specialties, in 2006. From 1987 until 2002 he worked for Honeywell, where he occupied several positions in Germany, Switzerland
and the United States of America. He holds a degree in Betriebswirtschaftslehre-University degree as Diplom- Kaufmann, Justus
von Liebig Universität, Giessen, Germany.
Russell Murphy, Chief HR & SHE Of?cer, was appointed in August 2007. Before the creation of Nyrstar he was at Zinifex since
1979, where he moved from mining operations to training and on to HR management. He was the Group Human Resources
Manager, Australian operations, from 2002 and Acting General Manager Human Resources since 2006. He holds a Graduate
Diploma in Business Management from Charles Sturt University, Australia.
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Michael Morley, Senior Vice President, Metals Processing and Chief Development Of?cer, was appointed in August 2007.
Prior to joining Nyrstar, he was General Counsel of Smorgon Steel Group Ltd, and before that a Senior Associate in the
corporate/mergers and acquisitions team of Clayton Utz. He has also held a number of positions with Coopers & Lybrand (now
PricewaterhouseCoopers) and Fosters Brewing Group Limited. He holds a Bachelor of Economics and a Bachelor of Laws from
Monash University (Melbourne, Australia) and a Master of Taxation Law from Melbourne University (Melbourne, Australia).
Graham Buttenshaw, Senior Vice President, Mining, is responsible for leading Nyrstar’s global mining operations. He has over 30
years’ experience in the global mining industry working in countries such as Australia, Peru and Ghana in a number of senior roles
with global mining houses such as Billiton and global mining contractors such as Redpath. He holds a B.Sc (Eng) with ?rst class
honours from Royal School of Mines, London and completed the AMP at Harvard Business School.
Bob Katsiouleris, Senior Vice President, Marketing, Sourcing & Sales, is responsible for Nyrstar’s raw materials strategy,
marketing and sales of ?nished products and trading. Prior to joining Nyrstar in January 2013, he was the Chief Commercial
Of?cer for Rio Tinto Minerals with more than 20 years of experience in industrial minerals and metals sales, marketing,
operations, processing, ?nance and purchasing. He holds a Bachelor of Mining and Metallurgical Engineering from McGill
University in Montreal, Canada, and a Masters in Business Administration from Pepperdine University in Los Angeles. He is a
member of the Order of Engineers of Quebec.
The business address of Mr Buttenshaw is 350 East Las Olas Boulevard, Suite 800, Fort Lauderdale, FL 33301, USA. The business
address of the other members of the management committee is Tessinerplatz 7, 8002 Zurich, Switzerland.
General information on directors and management committee
No director or member of the management committee has:
(a) any convictions in relation to fraudulent offences or any offences involving dishonesty;
(b) except in the case of compulsory liquidations, at any time in the previous ?ve years, been associated with any bankruptcy,
receivership or liquidation of any entity in which such person acted in the capacity of a member of an administrative,
management or supervisory body or senior manager nor:
• been declared bankrupt or has entered into an individual voluntary arrangement to surrender his or her estate;
• been a director with an executive function of any company at the time of, or within twelve months preceding, any
receivership, compulsory liquidation, creditors’ voluntary liquidation, administration, company voluntary arrangement or
any composition or arrangement with that company’s creditors generally or with any class of its creditors;
• been a partner in a partnership at a time of, or within twelve months preceding, any compulsory liquidation, administration
or voluntary arrangement of such partnership;
• been a partner in a partnership at the time of, or within twelve months preceding, a receivership of any assets of such
partnership; or
• had any of his or her assets subject to receivership; or
• received any of?cial public incrimination and/or sanctions by any statutory or regulatory authorities (including designated
professional bodies) or ever been disquali?ed by a court from acting as a member of the administrative, management or
supervisory bodies of a company or from acting in the management or conduct of the affairs of any Company.
Other mandates
Other than set out in the table below, no director or member of the management committee has, at any time in the previous ?ve
years, been a member of the administrative, management or supervisory body or partner of any companies or partnerships. Over
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the ?ve years preceding the date of this report, the directors and members of the management committee hold or have held in
addition to their function within Nyrstar, the following main directorships or memberships of administrative, management or
supervisory bodies and/or partnerships:
Name Current Past
Julien De Wilde
(1)
Agfa-Gevaert NV
Telenet Group Holding NV
Arseus NV
Bekaert NV
Metris NV
Van Breda International NV
CTO
KBC Bank NV
Karel Vinck Tessenderlo Group NV
Koninklijke Muntschouwburg NV
Coordinator at the European Commission
Eurostar
Suez-Tractebel
Umicore
Vlaamse Raad voor Wetenschapsbeleid
Beheersmaatschappij Antwerpen Mobiel
NV
Ray Stewart The United Fund for Belgium
Belgacom NV
Oyvind Hushovd Ivanhoe Mines
Sørlaminering
Røo-Invest
Lydia AS
LionOre
Western Oil Sands
Nickel Mountain AB
Cameco Corporation
Inmet Mining Corporation
Libra Group
Carole Cable Brunswick Group
Women in Mining UK
N/A
Roland Junck Agfa-Gevaert NV
Samhwa Steel SA
Arcelor China Holding S.à r.l.
Arcelor Mittal
Aceralia
Arbed
Talvivaara Mining Company plc
Interseroh SE
Heinz Eigner N/A N/A
Russell Murphy N/A N/A
Michael Morley N/A N/A
Graham Buttenshaw N/A N/A
Bob Katsiouleris N/A Rio Tinto Minerals Asia Pte Ltd
Rio Tinto Malaysia Sdn. Bhd.
U.S. Borax Inc.
Talc de Luzenac
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
Role of board of directors
The role of the board of directors is to pursue the long-term success of the Company by providing entrepreneurial leadership and
enabling risks to be assessed and managed. The board decides on the Company’s values and strategy, its risk appetite and key policies.
The Company has opted for a “one-tier” governance structure whereby the board of directors is the ultimate decision-making body,
with the overall responsibility for the management and control of the Company, and is authorized to carry out all actions that are
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considered necessary or useful to achieve the Company’s vision. The board of directors has all powers except those reserved to the
shareholders’ meeting by law or the Company’s articles of association.
The board of directors is assisted by a number of committees to analyze speci?c issues. The committees advise the board of
directors on these issues, but the decision-making remains with the board of directors as a whole (see also “—Committees of the
board of directors” below).
The board of directors appoints and removes the Chief Executive Of?cer. The role of the Chief Executive Of?cer is to implement
the mission, strategy and targets set by the board of directors and to assume responsibility for the day-to-day management of the
Company. The Chief Executive Of?cer reports directly to the board of directors.
In order to provide a group-wide support structure, the Company has corporate of?ces in Balen, Belgium, Zurich, Switzerland
and Fort Lauderdale, USA. These of?ces provide a number of corporate and support functions including ?nance, treasury, human
resources, safety and environment, legal and secretarial, tax, information technology, corporate development, investor relations
and communications.
Pursuant to the Company’s articles of association, the board of directors must consist of at least three directors. The Company’s
corporate governance charter provides that the composition of the board should ensure that decisions are made in the corporate
interest. It should be determined on the basis of diversity, as well as complementary skills, experience and knowledge. Pursuant
to the Belgian Code on Corporate Governance, at least half of the directors must be non-executive and at least three directors
must be independent in accordance with the criteria set out in the Belgian Companies Code and in the Belgian Code on Corporate
Governance.
The necessary efforts are made by the Company to ensure that by 1 January 2017, at least one third of the members of the board
are of the opposite gender. At the special shareholders’ meeting on 23 December 2013, Ms Carole Cable was appointed to the
board of directors.
The directors are appointed for a term of no more than four years by the general shareholders’ meeting. They may be re-elected
for a new term. Proposals by the board of directors for the appointment or re-election of any director must be based on a
recommendation by the nomination and remuneration committee. In the event the of?ce of a director becomes vacant, the
remaining directors can appoint a successor temporarily ?lling the vacancy until the next general shareholders’ meeting. The
shareholders’ meeting can dismiss the directors at any time.
The board of directors elects a chairman from among its non-executive members on the basis of his knowledge, skills, experience
and mediation strength. If the board of directors envisages appointing a former Chief Executive Of?cer as Chairman, it should
carefully consider the positive and negative aspects in favour of such a decision and disclose why such appointment is in the best
interest of the Company. The Chairman is responsible for the leadership and the proper and ef?cient functioning of the board of
directors.
The board of directors meets whenever the interests of the Company so require or at the request of one or more directors. In
principle, the board of directors will meet suf?ciently regularly and at least six times per year. The decisions of the board of
directors are made by a simple majority of the votes cast. The Chairman of the board of directors has a casting vote.
During 2013, eleven board meetings were held.
Committees of the board of directors
The board of directors has set up an audit committee, a nomination and remuneration committee and a safety, health and
environment committee.
Audit committee
The audit committee consists of at least three directors. All members of the audit committee are Non-Executive Directors. According
to the Belgian Companies Code, at least one member of the audit committee must be independent and must have the necessary
competence in accounting and auditing. The current members of the audit committee are Ray Stewart (Chairman), Karel Vinck and
Oyvind Hushovd. In line with the Belgian Code on Corporate Governance which requires that a majority of the members of the
audit committee are independent, the current members are all independent directors.
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The members of the audit committee must have suf?cient expertise in ?nancial matters to discharge their functions. The Chairman
of the audit committee is competent in accounting and auditing as evidenced by his current role as Chief Financial Of?cer of
the Belgacom Group and his previous roles as Chief Financial Of?cer in Matav and Ameritech International. According to the
board of directors, the other members of the audit committee also satisfy this requirement, as evidenced by the different senior
management and director mandates that they have held in the past and currently hold.
The role of the audit committee is to supervise and review the ?nancial reporting process, the internal control and risk
management systems and the internal audit process of the Company. The audit committee monitors the audit of the statutory and
consolidated ?nancial statements, including the follow-up questions and recommendations by the Statutory Auditor. The audit
committee also makes recommendations to the board of directors on the selection, appointment and remuneration of the external
auditor and monitors the independence of the external auditor.
In principle, the audit committee meets as frequently as necessary for the ef?ciency of the operation of the audit committee, but
at least four times a year. The members of the audit committee must have full access to the Chief Financial Of?cer and to any other
employee to whom they may require access in order to carry out their responsibilities.
During 2013, four audit committee meetings were held.
Nomination and remuneration committee
The nomination and remuneration committee consists of at least three directors. All members of the nomination and remuneration
committee are Non-Executive Directors, with a majority of independent directors. The nomination and remuneration committee is
chaired by the Chairman of the board of directors or another Non-Executive Director appointed by the committee. The following
directors are currently members of the nomination and remuneration committee: Julien De Wilde (Chairman), Ray Stewart and
Karel Vinck.
The role of the nomination and remuneration committee is to make recommendations to the board of directors with regard to the
appointment of directors, make proposals to the board of directors on the remuneration policy and individual remuneration for
directors and members of the management committee and to submit a remuneration report to the board of directors. In addition,
starting as from the annual general shareholders’ meeting held in 2012, the nomination and remuneration committee each year
submits the remuneration report to the annual general shareholders’ meeting.
In principle, the nomination and remuneration committee meets as frequently as necessary for the ef?ciency of the operation of
the committee, but at least twice a year.
During 2013, three nomination and remuneration committee meetings were held.
Safety, health and environment committee
The safety, health and environment committee consists of at least three directors. All members of the safety, health and
environment committee are Non-Executive Directors, with at least one independent director. The safety, health and environment
committee is chaired by the Chairman of the board of directors or another Non-Executive Director appointed by the committee.
The current members of the safety, health and environment committee are Oyvind Hushovd (Chairman), Julien De Wilde and Carole
Cable.
The role of the safety, health and environment committee is to assist the board of directors in respect of safety, health and
environmental matters. In particular, its role is to ensure that the Company adopts and maintains appropriate safety, health and
environment policies and procedures, as well as effective safety, health and environment internal control and risk management
systems, and to make appropriate recommendations to the board of directors.
In principle, the safety, health and environment committee meets as frequently as necessary for the ef?ciency of the operation of
the committee, but at least twice a year.
During 2013, three safety, health and environment committee meetings were held.
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Activity report and attendance at board and committee meetings during 2013
Name Board meeting attended Audit Nomination and remuneration Safety, health and environment
Julien De Wilde
(1)
11 of 11 N/A 3 of 3 3 of 3
Roland Junck 11 of 11 N/A N/A N/A
Peter Mansell
(2)
2 of 11 N/A 1 of 3 1 of 3
Karel Vinck 10 of 11 4 of 4 3 of 3 N/A
Ray Stewart 11 of 11 4 of 4 3 of 3 N/A
Oyvind Hushovd 11 of 11 4 of 4 N/A 3 of 3
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2) MANDATE EXPIRED ON 24 APRIL 2013
The topics discussed at the board and committee meetings are in line with the role and responsibilities of the board and its
committees as set out in the corporate governance charter, such as for example, the determination of the Company’s principal
objectives and strategy and the approval of all major investments, divestments, business plans and annual budgets.
Independent directors
A director will only qualify as an independent director if he meets at least the criteria set out in article 526
ter
of the Belgian
Companies Code, which can be summarized as follows:
• Not being an executive member of the board, exercising a function as a member of the executive committee or as a person
entrusted with daily management of the Company or a company or person af?liated with the Company, and not having been in
such a position during the previous ?ve years before his nomination.
• Not having served for more than three terms as a Non-Executive Director of the board, without exceeding a total term of more
than twelve years.
• Not being an employee of the senior management (as de?ned in article 19,2° of the Belgian Act of 20 September 1948
regarding the organization of the business industry) of the Company or a company or person af?liated with the Company and
not having been in such a position for the previous three years before his nomination.
• Not receiving, or having received, any signi?cant remuneration or other signi?cant advantage of a ?nancial nature from the
Company or a company or person af?liated with the Company, other than any bonus or fee (tantièmes) he receives or has
received as a non-executive member of the board.
• Not holding (directly or via one or more company under his control) any shareholder rights representing 10% or more of the
Company’s shares or of a class of the Company’s shares (as the case may be), and not representing a shareholder meeting this
condition.
• If the shareholder rights held by the director (directly or via one or more company under his control) represent less than
10%, the disposal of such shares or the exercise of the rights attached thereto may not be subject to contracts or unilateral
undertakings entered into by the director. The director may also not represent a shareholder meeting this condition.
• Not having, or having had within the previous ?nancial year, a signi?cant business relationship with the Company or a company
or person af?liated with the Company, either directly or as partner, shareholder, member of the board, member of the senior
management (as de?ned in article 19,2° of the aforementioned Belgian Act of 20 September 1948) of a company or person who
maintains such a relationship.
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• Not being or having been within the last three years, a partner or employee of the current or former statutory auditor of the
Company or a company or person af?liated with the Company.
• Not being an executive director of another company in which an executive director of the Company is a non-executive member
of the board, and not having other signi?cant links with executive directors of the Company through involvement in other
companies or bodies.
• Not being a spouse, legal partner or close family member (by marriage or birth) to the second degree of a member of the board,
a member of the executive committee, a person charged with the daily management, or a member of the senior management
(as de?ned in article 19,2° of the aforementioned Belgian Act of 20 September 1948) of the Company or a company or person
af?liated with the Company, or of a person who ?nds him or herself in one or more of the circumstances described in the
previous bullets.
The resolution appointing the director must mention the reasons on the basis of which the capacity of independent director is
granted.
In the absence of guidance in the law or case law, the board of directors has not further quanti?ed or speci?ed the aforementioned
criteria set out in article 526ter of the Belgian Companies Code. Furthermore, in considering a director’s independence, the criteria
set out in the Belgian Code on Corporate Governance will also be taken into consideration. The board of directors is of the view
that the current independent directors comply with each of the relevant criteria of the Belgian Companies Code and Belgian Code
on Corporate Governance. The board of directors will disclose in its annual report which directors it considers to be independent
directors. An independent director who ceases to satisfy the requirements of independence must immediately inform the board of
directors.
According to the Company’s board of directors, De Wilde J. Management BVBA, represented by Julien De Wilde, Karel Vinck, Ray
Stewart, Oyvind Hushovd and Carole Cable are independent directors.
Performance review of the board, its committees and its members
The board evaluates its own size, composition, performance and interaction with executive management and that of its committees
on a continuous basis.
The evaluation assess how the board and its committees operate, check that important issues are effectively prepared and
discussed, evaluate each director’s contribution and constructive involvement, and assess the present composition of the board and
its committees against the desired composition. This evaluation takes into account their general role as director, and speci?c roles
as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment.
Non-executive directors assess their interaction with the executive management on a continuous basis.
Executive management
The Company’s executive management is composed of the Chief Executive Of?cer and the members of the management committee,
as detailed above in “—Board of directors and management committee—Management committee”.
Chief Executive Of?cer
The CEO leads and chairs the management committee and is accountable to the board of directors for the management
committee’s performance.
The role of the Chief Executive Of?cer is to implement the mission, strategy and targets set by the board of directors and to assume
responsibility for the day-to-day management of the Company. The Chief Executive Of?cer reports directly to the board of directors.
Management committee
The board of directors has delegated the day-to-day management of the Company as well as certain management and operational
powers to the Chief Executive Of?cer. The Chief Executive Of?cer is assisted by the management committee.
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CORPORATE GOVERNANCE STATEMENT
The management committee is composed of at least four members and includes the Chief Executive Of?cer. Its members are
appointed by the board of directors on the basis of a recommendation by the nomination and remuneration committee. The
Company’s management committee does not qualify as a “directiecomité”/”comité de direction” within the meaning of article 524bis
of the Belgian Companies Code. The management committee is responsible and accountable to the board of directors for the
discharge of its responsibilities.
The management committee is responsible for assisting the CEO in relation to:
• operating the Company;
• implementing the decisions taken by the board of directors;
• putting in place internal controls and risk management systems (without prejudice to the board of directors’, the audit
committee’s and the safety, health and environment committee’s monitoring roles) based on the framework approved by the
board of directors;
• presenting the board of directors the complete, timely, reliable and accurate preparation of the Company’s ?nancial statements,
in accordance with applicable accounting standards and policies;
• preparing the Company’s required disclosures of the ?nancial statements and other material, ?nancial and non-?nancial information;
• presenting the board of directors with a balanced and understandable assessment of the company’s ?nancial situation; and
• providing the board of directors in due time with all information necessary for the board of directors to carry out its duties.
Con?icts of interest
Directors are expected to arrange their personal and business affairs so as to avoid con?icts of interest with the Company. Any
director with a con?icting ?nancial interest (as contemplated by article 523 of the Belgian Companies Code) on any matter before
the board of directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part in any
deliberations or voting related thereto. Provision 1.4 of the corporate governance charter sets out the procedure for transactions
between Nyrstar and the directors which are not covered by the legal provisions on con?icts of interest. Provision 3.2.4 of the
corporate governance charter contains a similar procedure for transactions between Nyrstar and members of the management
committee (other than the Chief Executive Of?cer). The provisions of the Belgian Companies Code have been complied with
in relation to the changes to the performance criteria of the Long Term Incentive Plan effective 6 February 2013 to the extent
applicable to the CEO.
There are no outstanding loans granted by the Company to any of the persons mentioned in “—Board of directors and
management committee —Board of directors” and in “—Board of directors and management committee—Management committee”,
nor are there any guarantees provided by the Company for the bene?t of any of the persons mentioned in “—Board of directors
and management committee —Board of directors” and in “—Board of directors and management committee—Management
committee”.
None of the persons mentioned in “—Board of directors and management committee—Board of directors” and in “—Board
of directors and management committee —Management committee” has a family relationship with any other of the persons
mentioned in “—Board of directors and management committee— Board of directors” and in “—Board of directors and management
committee—Management committee”.
Dealing code
With a view to preventing market abuse (insider dealing and market manipulation), the board of directors has established a dealing
code. The dealing code describes the declaration and conduct obligations of directors, members of the management committee,
certain other employees and certain other persons with respect to transactions in shares or other ?nancial instruments of the
Company. The dealing code sets limits on carrying out transactions in shares of the Company and allows dealing by the above-
mentioned persons only during certain windows. The dealing code is attached to the Company’s corporate governance charter.
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CORPORATE GOVERNANCE STATEMENT
Disclosure policy
As a Belgian listed company and with a view to ensuring investors in shares of the Company have available all information
necessary to ensure the transparency, integrity and good functioning of the market, the board of directors has established an
information disclosure policy. The information disclosure policy is aimed at ensuring that inside information of which Company is
aware is immediately disclosed to the public. In addition, the information disclosure policy is aimed at ensuring information that is
disclosed is fair, precise and sincere, and will enable the holders of shares in Company and the public to assess the in?uence of the
information on Company’s position, business and results.
Internal Control and Risk Management
General
The Nyrstar board of directors is responsible for the assessment of the effectiveness of the Risk Management Framework and
internal controls. The Group takes a proactive approach to risk management. The board of directors is responsible for ensuring that
nature and extent of risks are identi?ed on a timely basis with alignment to the Group’s strategic objectives and activities.
The audit committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important
medium for bringing risks to the board’s attention. If a critical risk or issue is identi?ed by the board or management, it may be
appropriate for all directors to be a part of the relevant risk management process, and as such the board of directors will convene
a sub-committee comprised of a mix of board members and senior management. Each respective sub-committee further examines
issues identi?ed and reports back to the board of directors.
The Nyrstar Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group’s
risks are being adequately managed. The Risk Management framework is designed to achieving the Group’s objectives. Nyrstar
acknowledges that risk is not just about losses and harm. Risk can have positive consequence too. Effective risk management
enables Nyrstar to achieve an appropriate balance between realising opportunities while minimising adverse impacts.
This section gives an overview of the main features of the Company’s internal control and risk management systems, in accordance
with the Belgian Corporate Governance Code and the Belgian Companies Code.
Components of the Risk Management Framework
The Risk Management Framework is integrated in the management process and focuses on the following key principles.
The key elements of Risk Management Framework are:
1 UNDERSTANDING THE EXTERNAL AND INTERNAL ENVIRONMENT
Understanding the internal and external business environment and the effect this has on our business strategy and plans. This
informs Nyrstar’s overall tolerance to risk.
2 CONSISTENT METHODS FOR RISK IDENTIFICATION AND ANALYSIS OF RISKS, EXISTING CONTROLS AND CONTROL EFFECTIVENESS
Implementing systems and processes for the consistent identi?cation and analysis of risks, existing controls and control
effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit
Committee.
3 RISK TREATMENT
Using innovative and creative thinking in responding to risks and taking action where it is determined that the Group is being
exposed to unacceptable levels of risk.
4 STAKEHOLDER ENGAGEMENT AND COMMUNICATION
Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identi?ed key risks and
controls.
5 MONITORING AND REVIEW
Regularly monitoring and reviewing our risk management framework, our risks and control effectiveness.
The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the
guidline is mandatory within Nyrstar.
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CORPORATE GOVERNANCE STATEMENT
Critical Internal Controls
The following is a summary of Nyrstar’s critical internal controls:
ORGANISATIONAL DESIGN
There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the
support and control functions, such as human resources, legal, ?nance, internal audit, etc.
The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with
industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets
approved by management and the board of directors within set authorization levels.
POLICIES AND PROCEDURES
The Group has established internal policies and procedures to manage various risks across the Group. These policies and
procedures are available on the Nyrstar intranet-site, and distributed for application across the whole Group. Every policy has an
owner, who periodically reviews and updates if necessary.
ETHICS
The board of directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for
ethical decision making. All employees must perform their daily activities and their business objectives according the strictest
ethical standards and principles. The Code of Business Conduct is available on www.nyrstar.com and sets out principles how to
conduct business and behave in respect of:
• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets
The board of directors regularly monitors compliance with applicable policies and procedures of the Nyrstar Group.
WHISTLEBLOWING
Nyrstar also has a whistleblower procedure in place, allowing staff to con?dentially raise concerns about any irregularities in
?nancial reporting, possible fraudulent actions, bribery and other areas.
QUALITY CONTROL
Nyrstar is ISO 9001 certi?ed for the smelting and re?ning of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-
products. All of its major processes and the controls that they encompass are formalized and published on the Company’s intranet.
FINANCIAL REPORTING AND BUDGET CONTROL
Nyrstar applies a comprehensive Group standard for ?nancial reporting. The standard is in accordance with applicable
International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related
interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as
adopted by the European Union. The effectiveness and compliance with the Group standard for ?nancial reporting is consistently
reviewed and monitored by the audit committee.
In order to ensure adequate ?nancial planning and follow up, a ?nancial budgeting procedure describing the planning,
quanti?cation, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts
Group wide budgeting process, which is centrally coordinated and consists of the following steps:
1) Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic
guidelines and objectives for the upcoming ?nancial year.
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CORPORATE GOVERNANCE STATEMENT
2) Key inputs and assumptions for the budgeting process for the upcoming ?nancial year are provided by relevant internal
stakeholders (including expected production, capex, metal prices, foreign exchange and commercial terms) and uploaded into
the centralised budgeting, planning and consolidation system (BPC).
3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal
stakeholders and senior management. The management committee and the board sign off on the ?nal agreed budget.
4) The ?nal budget is communicated to the different Nyrstar business units and departments.
5) Nyrstar will then bi-annually communicate to shareholders the Group’s revenue and cost actual results.
MANAGEMENT COMMITTEES
Various management committees are established as a control to manage various risks Nyrstar is exposed to:
TREASURY COMMITTEE
The treasury committee comprises of the Chief Financial Of?cer, the Group Treasurer and the Group Controller. The role of the
treasury committee is to recommend to the CEO and to the board of directors amendments to the treasury policy. This considers all
treasury transactions being reviewed before they are recommended to the CEO for review and approval by the board of directors.
Explicitly this includes preparations for the following CEO and board of directors approvals:
- to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
- to periodically review treasury operations and activities, approve the use of new ?nancial instrument types and techniques for
managing ?nancial exposures;
- to approve the list of authorized counterparties for foreign exchange and money market transactions;
- to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard
business conditions; and
- to approve the list of bank relationships.
The treasury committee meets at least quarterly.
COMMODITY RISK MANAGEMENT COMMITTEE
Nyrstar’s commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the
commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income
statement from metal price changes and foreign exchange movements.
Information, communication and ?nancial reporting systems
The Group’s performance against plan is monitored internally and relevant action is taken throughout the year. This includes,
weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.
Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an
executive summary from the Chief Financial Of?cer are prepared and circulated to the board of directors by the Company Secretary
on a monthly basis.
Monitoring and review
Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of
risk being accepted is consistent with the level of risk approved by the board of directors. Management takes action where it
is determined that the Group is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to
communicate freely risks and opportunities identi?ed.
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CORPORATE GOVERNANCE STATEMENT
Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework
and internal controls. The internal audits are based on risk based plans, approved by the audit committee. The internal audit
?ndings are presented to the audit committee and management, identifying areas of improvement. Progress of implementation of
the actions is monitored by the audit committee on a regular basis. The Group internal audit function is managed internally. The
audit committee supervises the internal audit function.
The board of directors pays speci?c attention to the oversight of risk and internal controls. On a yearly basis, the board of directors
reviews the effectiveness of the Group’s risk management and internal controls. The audit committee assists the board of directors
in this assessment. The audit committee also reviews the declarations relating to internal supervision and risk management
included in the annual report of the Company. The audit committee reviews the speci?c arrangements to enable staff to express
concerns in con?dence about any irregularities in ?nancial reporting and other areas e.g., whistleblower arrangements.
To support the protocols described above, both internal resources and external contractors are engaged to perform compliance
checks, and reports are provided to the audit committee.
Other
The Group is committed to the ongoing review and improvement of its policies, systems and processes.
Shareholders
The Company has a wide shareholder base, mainly composed of institutional investors outside of Belgium, but also comprising
Belgian retail and institutional investors.
The table below provides an overview of the shareholders that ?led a noti?cation with the Company pursuant to applicable
transparency disclosure rules, up to the date of this report. In addition, the Company holds a number of shares as treasury stock.
Shareholder’s name Shareholder’s address Date of noti?cation Number of voting rights Shareholding
Nyrstar NV Zinkstraat 1, 2490 Balen, Belgium 15 January 2014 15,338,431 9.02%
Umicore NV Broekstraat 31, 1000 Brussels, Belgium 23 March 2011 5,251,856 3.09%
20,590,287 12.11%
Share capital and shares
On the date of this report, the share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented
by 170,022,544 shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s
shares do not have a nominal value.
The Company issued a 7% senior unsecured convertible bonds due 2014 (the “2014 Convertible Bonds”) for an aggregate principal
amount of EUR 120,000,000 on 2 July 2009. The possibility to convert the 2014 Convertible Bonds into new shares of the Company
was approved by the extraordinary general shareholders’ meeting of the Company held on 25 August 2009. In 2011 an aggregate
principal amount of EUR 100,000 of the 2014 Convertible Bonds have been converted.
The Company also issued a 4.25% senior unsecured convertible bonds due 2018 (the “2018 Convertible Bonds”) for an aggregate
principal amount of EUR 120,000,000 on 17 September 2013. The possibility to convert the 2018 Convertible Bonds into new
shares of the Company was approved by the extraordinary general shareholders’ meeting of the Company held on 23 December
2013. To date no 2018 Convertible Bonds have been converted.
As of the date of this report, the Company owns 15,338,431 of its own shares. These shares are held as treasury stock, with
suspended dividend rights, for potential delivery to eligible employees to satisfy the Company’s outstanding obligations under
share based incentive plans for personnel and management under the LTIP and the LESOP.
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Form and transferability of the shares
The shares of the Company can take the form of registered shares or dematerialized shares. All the Company’s shares are fully paid-
up and freely transferable.
Currency
The Company’s shares do not have a nominal value, but re?ect the same fraction of the Company’s share capital, which is
denominated in euro.
Voting rights attached to the shares
Each shareholder of the Company is entitled to one vote per share. Shareholders may vote by proxy, subject to the rules described
in the Company’s articles of association.
Voting rights can be mainly suspended in relation to shares:
• which are not fully paid up, notwithstanding the request thereto of the board of directors of the Company;
• to which more than one person is entitled, except in the event a single representative is appointed for the exercise of the voting
right;
• which entitle their holder to voting rights above the threshold of 3%, 5%, 7.5%, 10%, 15%, 20% and any further multiple of 5% of
the total number of voting rights attached to the outstanding ?nancial instruments of the Company on the date of the relevant
shareholders’ meeting, in the event that the relevant shareholder has not noti?ed the Company and the FSMA at least 20 days
prior to the date of the shareholders’ meeting in accordance with the applicable rules on disclosure of major shareholdings; and
• of which the voting right was suspended by a competent court or the FSMA.
Pursuant to the Belgian Companies Code, the voting rights attached to shares owned by the Company are suspended.
Dividends and Dividend Policy
All shares are entitled to an equal right to participate in the Company’s pro?ts (if any). Pursuant to the Belgian Companies
Code, the shareholders can in principle decide on the distribution of pro?ts with a simple majority vote at the occasion of the
annual shareholders’ meeting, based on the most recent statutory audited ?nancial statements, prepared in accordance with the
generally accepted accounting principles in Belgium and based on a (non-binding) proposal of the Company’s board of directors.
The Company’s articles of association also authorise the board of directors to declare interim dividends subject to the terms and
conditions of the Belgian Companies Code.
Dividends can only be distributed if following the declaration and issuance of the dividends the amount of the Company’s net
assets on the date of the closing of the last ?nancial year as follows from the statutory ?nancial statements (i.e., summarized, the
amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all as summarized in accordance with
Belgian accounting rules), decreased with the non-amortized costs of incorporation and extension and the non-amortized costs for
research and development, does not fall below the amount of the paid-up capital (or, if higher, the issued capital), increased with
the amount of non-distributable reserves. In addition, prior to distributing dividends, 5% of the net pro?ts must be allotted to a
legal reserve, until the legal reserve amounts to 10% of the Company’s share capital.
The Company’s ability to distribute dividends is subject to availability of suf?cient distributable pro?ts as de?ned under Belgian law
on the basis of the Company’s statutory unconsolidated ?nancial statements rather than its consolidated ?nancial statements.
The Board of Directors have taken the prudent decision not to propose to shareholders a distribution for the ?nancial year 2013.
This re?ects the Board’s commitment to maintain a sustainable capital structure.
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CORPORATE GOVERNANCE STATEMENT
Information that have an impact in case of public takeover bids
The Company provides the following information in accordance with article 34 of the Royal Decree dated 14 November 2007:
(i) The share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented by 170,022,544
shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s shares do
not have a nominal value.
(ii) Other than the applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of
association, there are no restrictions on the transfer of shares.
(iii) There are no holders of any shares with special control rights.
(iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan, the Co-Investment Plan and the Leveraged
Employee Stock Ownership Plan will vest upon determination by the nomination and remuneration committee.
(v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the Company’s
articles of association and the applicable laws and articles.
(vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the
transfer of securities and/or the exercise of voting rights.
(vii) The rules governing appointment and replacement of board members and amendment to articles of association are set out
in the Company’s articles of association and the Company’s corporate governance charter.
(viii) The powers of the board of directors, more speci?cally with regard to the power to issue or redeem shares are set out in the
Company’s articles of association. The board of directors was not granted the authorization to purchase its own shares “to
avoid imminent and serious danger to the Company” (i.e., to defend against public takeover bids). The Company’s articles of
association of association do not provide for any other speci?c protective mechanisms against public takeover bids.
(ix) The Company is a party to the following signi?cant agreements which, upon a change of control of the Company or
following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be
terminated by the other parties thereto or give the other parties thereto (or bene?cial holders with respect to bonds) a right
to an accelerated repayment of outstanding debt obligations of the Company under such agreements:
• Nyrstar’s Revolving Structured Commodity Trade Finance Credit Facility;
• 7% senior unsecured convertible bonds due 2014;
• 5.5% senior unsecured ?xed rate non-convertible bonds due 2015;
• 5.3% senior unsecured ?xed rate non-convertible bonds due 2016;
• 4.25% senior unsecured convertible bonds due 2018;
• Nyrstar’s committed EUR 50 million bilateral credit facility with ING Bank;
• Nyrstar’s committed EUR 100 million bilateral credit facility with KBC Bank;
• Nyrstar’s silver prepay with Merrill Lynch International;
• Nyrstar’s silver prepay with JPMorgan Chase Bank;
• Nyrstar’s off-take agreement with the Glencore Group; and
• Nyrstar’s streaming agreement with Talvivaara Sotkamo Limited.
(x) The Chief Executive Of?cer is currently entitled to a 12-month salary payment in case his employment is terminated upon a
change of control of the Company.
No takeover bid has been instigated by third parties in respect of the Company’s equity during the previous ?nancial year and the
current ?nancial year.
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CORPORATE GOVERNANCE STATEMENT
Annual General Meeting – 30 April 2014
The Annual General Meeting of Shareholders will take place in Brussels (Diamond Building, A. Reyerslaan 80, 1030 Brussels) on
the last Wednesday of April, i.e. 30 April 2014 at 10.30 am. At this meeting shareholders will be asked to approve the following
resolutions:
1. Reports on the statutory ?nancial statements
2. Approval of the statutory ?nancial statements
3. Reports on the consolidated ?nancial statements
4. Consolidated ?nancial statements
5. Discharge from liability of the directors
6. Discharge from liability of the statutory auditor
7. Approval of the remuneration report
8. Re-appointment of directors
9. Approval of a Leveraged Employee Stock Ownership Plan (LESOP)
Extraordinary General Meetings
On 30 April 2014, the Annual General Meeting may be shortly suspended in order to be continued as an Extraordinary General
Meeting before a Notary Public. If at such meeting the quorum for the Extraordinary General Meeting is not reached, a second
Extraordinary General Meeting may be convened on 19 May 2014 at 11 am at Diamond Building, A. Reyerslaan 80, 1030 Brussels,
or at such other place as will be indicated at that place at that time.
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CORPORATE GOVERNANCE STATEMENT
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Introduction
The Company prepares a remuneration report relating to the remuneration of directors and the members of the management
committee. The remuneration report will be submitted to the annual general shareholders’ meeting on 30 April 2014 for approval.
Remuneration policy
Nyrstar’s remuneration policy is designed to:
• enable Nyrstar to attract and retain talented employees;
• promote continuous improvement in the business; and
• link remuneration and performance, motivating employees to deliver increased shareholder value through superior business
results.
Nyrstar obtains independent advice from external professionals to ensure the remuneration structure represents industry best
practice, and achieves the twin goals of retaining talented employees and meeting shareholder expectations.
The remuneration policy that has been determined in relation to the directors and members of the management committee is
further described below.
Directors
General
Upon recommendation and proposal of the nomination and remuneration committee, the board of directors determines the
remuneration of the directors to be proposed to the general shareholders’ meeting.
The proposed remuneration that the board submits to the general shareholders’ meeting is in principle benchmarked against
the remuneration of similar positions in companies included in the Bel20
®
Index. The Bel20
®
Index is an index composed of the
20 companies with the highest free ?oat market capitalization having shares trading on the continuous trading segment of the
regulated market of NYSE Euronext Brussels. The remuneration is set to attract, retain and motivate directors who have the pro?le
determined by the nomination and remuneration committee.
The general shareholders’ meeting approves the remuneration of the directors, including inter alia, each time as relevant, (i) in
relation to the remuneration of executive and Non-Executive Directors, the approval of an exemption from the rule that share
based awards can only vest during a period of at least three years as of the grant of the awards, (ii) in relation to the remuneration
of executive directors, the approval of an exemption from the rule that (unless the variable remuneration is less than a quarter of
the annual remuneration) at least one quarter of the variable remuneration must be based on performance criteria that have been
determined in advance and that can be measured objectively over a period of at least two years and that at least another quarter
of the variable remuneration must be based on performance criteria that have been determined in advance and that can be
measured objectively over a period of at least three years, and (iii) in relation to the remuneration of Non-Executive Directors, the
approval of any variable part of the remuneration.
The directors of the Company (excluding the Chief Executive Of?cer) receive a ?xed remuneration in consideration for their
membership of the board of directors. In addition, the directors (excluding the Chairman of the board of directors and the Chief
Executive Of?cer) receive ?xed fees for their membership and/or chairmanship of any board committees. No attendance fees are
paid. The Chief Executive Of?cer is also a member of the board but does not receive any additional remuneration in his capacity of
board member.
Non-executive directors do not receive any performance-related remuneration, stock options or other share based remuneration,
or pension bene?ts. The remuneration of Non-Executive Directors takes into account their general role as director, and speci?c
roles as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment.
REMUNERATION REPORT
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REMUNERATION REPORT
The current remuneration and compensation of Non-Executive Directors has not been increased since 2007.There are currently no
plans to change the remuneration policy or remuneration of Non-Executive Directors, however we will review the remuneration of
Non-Executive Directors over the next two ?nancial years against market practice.
Remuneration and compensation in 2013
During 2013 the following remuneration and compensation was paid to the directors (excluding the CEO):
CHAIRMAN:
• Annual ?xed remuneration of EUR 200,000 per year
• No additional attendance fees
OTHER DIRECTORS (EXCLUDING THE CEO):
• Annual ?xed remuneration of EUR 50,000 per year for membership of the board of directors
• Fixed fee of EUR 10,000 per year per board committee of which they are a member
• Fixed fee of EUR 20,000 per year per board committee of which they are the chairman
• No additional attendance fees
Based on the foregoing, the following gross remuneration was paid to the directors (excluding the CEO) in 2013:
Remuneration (EUR)
Julien De Wilde
(1)
200,000
Peter Mansell
(2)
26,666
Karel Vinck 80,000
Ray Stewart 80,000
Oyvind Hushovd 75,000
(1)
ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2)
MANDATE EXPIRED ON 24 APRIL 2013
Executive management
General
The remuneration of the Chief Executive Of?cer and the members of the management committee is based on recommendations
made by the nomination and remuneration committee. The CEO participates in the meetings of the nomination and remuneration
committee in an advisory capacity each time the remuneration of another executive is being discussed.
The remuneration is determined by the board of directors. As an exception to the foregoing rule, the general shareholders’ meeting
must approve, as relevant, (i) in relation to the remuneration of management committee, the approval of an exemption from the
rule that share based awards can only vest during a period of at least three years as of the grant of the awards, (ii) in relation to
the remuneration of executive directors and members of the management committee, the approval of an exemption from the
rule that (unless the variable remuneration is less than a quarter of the annual remuneration) at least one quarter of the variable
remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively
over a period of at least two years and that at least another quarter of the variable remuneration must be based on performance
criteria that have been determined in advance and that can be measured objectively over a period of at least three years, and
(iii) the approval of provisions of service agreements to be entered into with executive directors, members of the management
committee and other executives providing (as the case may be) for severance payments exceeding twelve months’ remuneration
(or, subject to a motivated opinion by the remuneration committee, eighteen months’ remuneration).
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REMUNERATION REPORT
An appropriate portion of the remuneration is linked to corporate and individual performance. The remuneration is set to attract,
retain and motivate executive management who have the pro?le determined by the nomination and remuneration committee.
The remuneration of the executive management consists of the following main remuneration components:
• Annual base salary (?xed)
• Participation in the Annual Incentive Plan (AIP) (bonus) (variable)
• Participation in the Executive Long Term Incentive Plan (LTIP) (variable)
• Participation in the Leveraged Employee Share Ownership Plan (LESOP)
• Pension bene?ts
For performance year 2013, the target entitlement under the AIP amounts to 75% of the annual base salary for the Chief Executive
Of?cer (150% of the annual base salary at maximum entitlement). For performance year 2013 the target entitlement under the AIP
amounts to 60% for the other members of the management committee (120% of the annual base salary at maximum entitlement).
One third of the maximum AIP entitlement for the Nyrstar Management Committee will be delivered in shares that are deferred for
12 months. The pension bene?ts of each management committee member continue to amount to 20% of ?xed remuneration.
In addition to the foregoing, the board of directors has the discretion to grant spot bonuses to staff members, including members
of the management committee, in exceptional circumstances. In 2013 no spot bonuses were granted.
The remuneration package for the members of the management committee is not subject to a speci?c right of recovery or claw
back in favour of Nyrstar in case variable remuneration has been granted based on incorrect ?nancial data.
In line with our approach to remuneration setting, the base salary and overall remuneration packages for Nyrstar management
committee members are reviewed approximately every 2 years. The last review occurred in 2011.
While there are currently no plans to change the remuneration policy for executives for the two ?nancial years to come, executive
remuneration was independently reviewed by two independent external advisors in December 2013 with any change not
applicable until 2014.
The respective elements of the remuneration package are further described below.
Annual base salary
The annual base salary constitutes a ?xed remuneration. The base salary is determined on the basis of a survey by an external
expert of market trends and base salaries for various job descriptions paid by a group of peer companies of Nyrstar in several
countries. On the basis of this survey, a number of grades are determined. The midpoint for each grade is the 75% percentile: 75%
of the companies within the peer group pay less than the mid point, and 25% of the companies within the peer group pay more.
Nyrstar’s policy is to pay senior staff members at 100% of the midpoint for their grade, subject to continued above average
performance. However, there is discretion to set the ?xed remuneration between 80% and 120% of the midpoint, based on
experience, job, location, industry demand, unique technical skills, performance, etc.
Annual Incentive Plan
The annual incentive is a variable part of the remuneration in function of individual performance below, at or above average
standard during a given year. The terms and conditions are re?ected in the Annual Incentive Plan (AIP), which is subject to revision
on an annual basis.
The aims of the AIP are to attract and retain talented employees, to make a connection between performance and reward, to
reward achievement in line with Nyrstar’s ?nancial success, to reward employees for adhering to the Nyrstar Way, and to reward
employees in a similar manner to the Company’s shareholders.
The AIP is designed around delivering and exceeding the Nyrstar annual plan and budget. The relevant performance year for
eligibility under the AIP is 1 January to 31 December, and payments, if any, are usually made in March of the following year.
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REMUNERATION REPORT
In order to be eligible under the AIP, the bene?ciary must be employed on 31 December of the relevant performance year. The
respective criteria and their relative weight to determine eligibility under the AIP are:
• the achievement by the bene?ciary of personal “stretch targets”, which aim at achieving a performance by the bene?ciary over
and above the normal requirement of his or her function (25%);
• the achievement by Nyrstar of annual ?nancial targets, which are determined by the board of directors (75%).
The maximum incentive under the AIP only becomes available if Nyrstar has an outstanding ?nancial and operational result. In any
event, the payment of the annual incentive is subject to overall acceptable personal behavior, demonstrated commitment to the
Nyrstar Way and personal job performance, as well as the company’s ability to pay.
The eligibility under the AIP is assessed and determined by the nomination and remuneration committee, and any payment of the
annual incentive is subject to ?nal board approval.
For further information on the AIP and other share plans, please see “Description of share plans”.
Pensions
The members of the management committee participate in a de?ned bene?ts pension scheme. The contributions by Nyrstar to the
pension scheme amount to 20% of the annual base salary.
Other
The management committee members participate in a medical bene?t plan that includes amongst other things private hospital and
dental medical care. They also receive a representation allowance, housing assistance, a car allowance, and bene?t from statutory
accident and disease insurance.
Remuneration and compensation in 2013
The following remuneration and compensation was paid to the Chief Executive Of?cer and other members of the management
committee in 2013:
CEO (EUR)
Members of the management
committee other than the CEO
(on an aggregate basis) (EUR)
(4)
Base salary 853,410 2,090,959
AIP
(1)
597,387 996,064
Pension bene?ts
(2)
164,634 485,418
Other components of the remuneration
(3)
372,150 1,631,177
Total 1,987,581 5,203,618
(1) THIS AMOUNT RELATES TO PERFORMANCE PERIOD FROM 1 JANUARY 2012 TO 31 DECEMBER 2012.
(2) THE PENSION INCLUDES 20% OF ANNUAL BASE SALARY AS SAVINGS CONTRIBUTIONS AND ALSO RISKS CONTRIBUTIONS.
(3) INCLUDES REPRESENTATION ALLOWANCE, HOUSING, CAR ALLOWANCE, HEALTH INSURANCE AND A ONE OFF SEVERANCE PAYMENT MADE IN 2013.
(4) INCLUDES 2 ADDITIONAL NMC MEMBERS THAT JOINED 1 JULY 2013 – SVP MINING AND SVP MARKETING, SOURCING AND SALES
Payments upon termination
In 2013 each member of the management committee (including the Chief Executive Of?cer) was entitled to a severance payment
equivalent to twelve months of annual base salary in case of termination of his agreement by Nyrstar. In addition, the agreement
with the Chief Executive Of?cer provides that upon a change of control, his agreement with Nyrstar will be terminated. In that
event, the Chief Executive Of?cer is entitled to a severance payment equivalent to twelve months of annual base salary (inclusive
of any contractual notice period).
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REMUNERATION REPORT
Indemni?cation and insurance of directors and executive management
As permitted by the Company’s articles of association, the Company has entered into indemni?cation arrangements with the
directors and relevant members of the management committee and has implemented directors’ and of?cers’ insurance coverage.
Description of share plans
In 2013 the Company had a Long Term Incentive Plan (LTIP), a Leveraged Employee Stock Ownership Plan (LESOP) and a Co-
Investment Plan with a view to attracting, retaining and motivating the employees and executive management of the Company
and its wholly owned subsidiaries.
The Co-Investment Plan vested in July 2013 without meeting any of the performance conditions. As such, no awards were made
to participants. It is currently not anticipated to implement another Co-Investment Plan. The key terms of the LTIP, LESOP and Co-
Investment Plan (together referred to as the “Plans”) are described below. For further information on the manner in which awards
under the Plans are treated in Nyrstar’s consolidated ?nancial statements, refer to note 33 to the audited consolidated ?nancial
statements for the ?nancial year ended on 31 December 2013.
LTIP
General
Under the LTIP, senior executives of Nyrstar (the “Executives”) selected by the board of directors may be granted conditional awards
to receive ordinary shares in the Company at a future date (“Executive Share Awards”) or their equivalent in cash (“Executive
Phantom Awards”) (Executive Share Awards and Executive Phantom Awards together referred to as “Executive Awards”).
The terms of the LTIP may vary from country to country to take into account local tax and other regulations and requirements in
the jurisdictions where eligible Executives are employed or resident.
The nomination and remuneration committee makes recommendations to the board of directors in relation to the operation and
administration of the LTIP.
Eligibility
The board of directors determines which Executives are eligible to participate in the LTIP (the “Participating Executives”).
The value of the conditional Executive Awards under the LTIP varies, depending on the role, responsibility and seniority of the
relevant Participating Executive. The maximum value of the conditional Executive Awards granted to any Participating Executive in
any ?nancial year of the Company will not exceed 150% of his or her base salary at the time of the grant.
Vesting
Executive Awards will vest over a three-year rolling performance period.
In the event of cessation of employment before the normal vesting due to certain “good leaver reasons”, the board of directors
may determine that a number of Executive Awards will vest, taking into account such factors as the board of directors determines,
including the proportion of the performance period which has elapsed and the extent that performance conditions have been
satis?ed up to the date of leaving.
The board of directors determines the LTIP performance conditions. The board of directors has set two performance conditions,
which are weighted equally at 50%. For an award to vest, Nyrstar’s annual share price performance is measured relative to the
implied change in a notional share price that is based upon the historical performance of the price of zinc (?rst performance
condition) and the MSCI World Metals and Mining Index (second performance condition). An equal number of awards is granted
under each condition. Executive Awards are made to the extent that predetermined scaling thresholds for each of the performance
conditions are met.
For the Awards to vest under the 2013 Grant, the Nyrstar average share price for the 3 year performance period must outperform:
• The zinc price by 5% based on a linear regression analysis
• The MSCI world mining and metals index by 2% based on a linear regression analysis
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REMUNERATION REPORT
A volume weighted average out-performance is calculated for each year. These are averaged over the performance period and
compared to the vesting schedule.
The LTIP rules provide for various circumstances in which unvested Executive Awards lapse, including failure to satisfy performance
conditions.
Awards
Since April 2008, Grants have been made annually in accordance with the rules and conditions of the LTIP. Grants in place during
2013 are shown below:
Grant 3 Grant 4 Grant 5 Grant 6
Grant 3 share awards
were delivered in the
course of 2013
Effective grant date 30 June 2010 30 June 2011 30 June 2012 30 June 2013
Performance period 1 January 2010
to 31 December 2012
1 January 2011
to 31 December 2013
1 January 2012
to 31 December 2014
1 January 2013
to 31 December 2015
Performance criteria —zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2012
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2013
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2014
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2015
Vesting date 31 December 2012 31 December 2013 31 December 2014 31 December 2015
During the period between the satisfaction of the performance condition and when the Participating Employee receives the
relevant payment, the employee will be entitled to a payment equal to the cash equivalent of any dividends paid.
Movement of LTIP shares awarded
The following table sets out the movement in the number of equity instruments granted during the speci?ed periods in relation to
the LTIP:
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
Opening balance
at 1 January 2013 88,871 770,960 1,053,901 2,104,239 – 4,017,971
Initial allocation
at 30 June 2013 – – – 2,270,961 2,270,961
(Forfeitures)/Additions (383,572) (33,971) (200,966) (159,615) (778,124)
Settlements 88,871 (387,388) – – – (476,259)
Closing balance
at 31 December 2013 - - 1,019,930 1,903,273 2,111,346 5,034,549
Grant 2 Grant 3 Grant 4 Grant 5 Total
Opening balance at 1 January 2012 2,764,817 823,243 1,196,168 – 4,784,228
Initial allocation at 30 June 2012 – – – 2,261,628 2,261,628
(Forfeitures)/Additions (52,283) (142,267) (157,389) (351,939)
Settlements 2,675,946 – – – (2,675,946)
Closing balance at 31 December 2012 88,871 770,960 1,053,901 2,104,239 4,017,971
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REMUNERATION REPORT
Co-Investment Plan
General
The annual general shareholders’ meeting of the Company held on 28 April 2010 approved the Co-Investment Plan. Under the
Co-Investment Plan, for each ordinary Share in the Company that a member of the management committee (including the Chief
Executive Of?cer) (the “Participant”) purchased between 30 April 2010 and 28 June 2010 (a “Co-investment Share”), the Company
would grant (for no consideration) the respective Participant on the Vesting Date, a number of additional ordinary shares in
the Company (the “Matching Shares”) provided that (a) the Participant would still be employed by Nyrstar (unless the board of
directors quali?es his departure prior to such date as a “good leaver situation” (ill health resulting in the incapacity to perform
professional activities for a period of more than twelve months, voluntary resignation, retirement or any similar event which
the Nomination and Remuneration Committee may qualify as being a “good leaver situation” on the Vesting Date) and (b) the
Participant would still holds the Co-investment Shares on the Vesting Date.
Eligibility
The persons eligible to participate in the Co-Investment Plan were the members of the management committee (including the Chief
Executive Of?cer) and the Group General Managers.
Vesting
The vesting date of the Co-investment Plan was 15 July 2013.
These were the main features of the Co-investment Plan, as described in the Nyrstar’s annual report 2012:
The Co-Investment Plan has three measurement dates, i.e. 1 July 2011 (“Measurement Date 1”), 1 July 2012 (“Measurement
Date 2”) and 1 July 2013 (“Measurement Date 3”).
The number of Matching Shares is the product of (a) the highest of Multiple A, Multiple B and Multiple C and (b) the total number
of the Co-Investment Shares which the respective Participant has continuously held as of 28 June 2010 up to and including the
vesting date.
The initial thresholds were adjusted to take into account the economic impact of the Company’s rights offering that closed in
March 2011. Reference is also made to note 33 to the audited consolidated ?nancial statements for the ?nancial year ended on 31
December 2012.
“Multiple A” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2010 and 1 July 2011 has been less than EUR 16.70;
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2010 and 1 July 2011 has been equal to or higher than EUR 25.06; or
• a number between two and four, to be determined on a straight line basis, if the highest average closing price of an ordinary
share of the Company during any given period of ?ve consecutive trading days between 1 July 2010 and 1 July 2011 has been
between EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with
the EUR 25.06 threshold.
“Multiple B” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2011 and 1 July 2012 has been less than EUR 16.70;
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REMUNERATION REPORT
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2011 and 1 July 2012 has been equal to or higher than EUR 25.06; or
• a number between two and four, to be determined on a straight line basis, if the highest average closing price of an ordinary
share of the Company during any given period of ?ve consecutive trading days between 1 July 2011 and 1 July 2012 has been
between EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with
the EUR 25.06 threshold.
“Multiple C” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2012 and 1 July 2013 has been less than EUR 16.70,
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2012 and 1 July 2013 has been equal to or higher than EUR 25.06, or
• a number between two and four, to be determined on a straight line basis, if the average closing price of an ordinary share of
the Company during any given period of ?ve consecutive trading days between 1 July 2012 and 1 July 2013 has been between
EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with the EUR
25.06 threshold.
The Matching Shares will consist of ordinary shares of the Company which the Company intends to redeem in accordance with the
respective statutory powers granted to the board of directors. If the Company is unable to deliver the respective Matching Shares
to a Participant, the Company will be able to settle its respective obligations by granting such Participant a cash amount equal to
the product of the number of Matching Shares to be delivered to such Participant and the average closing price of the ordinary
shares of the Company during the twenty trading days preceding the vesting date.
The underlying philosophy of the vesting is to provide a long-term component to the remuneration package of the management
committee members, while at the same time aligning their interests with those of the Company and its shareholders, by requiring a
personal investment by the members of the management committee and at the same time linking this remuneration component to
the long-term evolution of price of the Company’s shares.
Awards
Subject to the vesting conditions, the number of Co-investment Shares of a Participant was capped as follows:
• with respect to the Chief Executive Of?cer, the maximum number of Co-investment Shares is equal to 50,000; and
• with respect to the each of the four current members of the management committee, the maximum number of Co-investment
Shares is equal to 35,000.
The members of the management committee purchased a total number of 190,000 shares as participation in the Co-Investment
Plan.
In line with the above general principles, the board of directors further determined and elaborated the rules of the Co-Investment
Plan. The board of directors also administers the Co-Investment Plan.
In the context of the Co-Investment Plan, in addition to this conditional right to receive shares, Nyrstar granted each Participant
an unconditional cash bonus, the net amount of which – to be calculated for each respective Participant separately – will be equal
to the product of (a) the number of Co-investment Shares of the Participant and (b) the difference between the average purchase
price paid by the Participant for his respective Co-investment Shares and EUR 10.00.
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REMUNERATION REPORT
Adjustments to the Plans
The annual general shareholders’ meeting of the Company held on 27 April 2011 granted the board of directors of the Company
the power to amend and restate the Co-Investment Plan in order to re?ect the consequences and amendments that may be
required in the context of certain corporate actions engaged by the Company. In the context of the Company’s rights offering that
closed in March 2011, the following amendments to the Co-Investment Plan were made:
• the shares of the Company subscribed by the Participants in the Co-Investment Plan in the Company’s rights offering that
closed in March 2011 on the basis of the preference rights of their existing Co-investment Shares are also considered as Co-
Investment Shares for purposes of the Co-Investment Plan. As a consequence, an additional 133,000 shares subscribed for by the
participants in the Co-Investment Plan are considered “Co-investment Shares” for purposes of the Co-Investment Plan;
• the list of Participants in the Co-Investment Plan can be extended beyond the Chief Executive Of?cer and the four other
members of the Company’s management committee to include other managers of the Company and its subsidiaries;
• the objective performance based targets (determined by the board of directors and relating to the stock exchange price of the
Shares of the Company during the term of the Co-Investment Plan) that need to be achieved in order for the Matching Shares
to vest can be adjusted in order to take into account the economic impact of the Company’s rights offering that closed in
March 2011. Reference is made to note 31 to the audited consolidated ?nancial statements for the ?nancial year ended on 31
December 2011; and
• the general vesting date under the Co-Investment Plan can be shorter than three years.
In addition, the annual general shareholders’ meeting of the Company held on 27 April 2011 approved and rati?ed, as far as
needed and applicable, in accordance with article 556 of the Belgian Company Code, any clauses or features included in the Plans
that (automatically or not) result in, or permit the board of directors (or a committee or certain members of the board of directors)
to approve or allow an accelerated or immediate vesting or acquisition of awards made under such Plans in the event of a public
takeover bid or change of control over the Company, and any other clause or feature which in accordance with article 556 of
the Belgian Company Code entail rights to third parties that have an impact on the Company’s equity or give rise to a liability or
obligation of the Company, whereby the exercise of such rights is dependent upon a public takeover bid on the Company’s shares
or a change of the control over the Company.
Vesting of the Plan
The Co-Investment Plan vested on 15 July 2013. None of the performance conditions were met. Accordingly, no awards were made
to any of the participants.
Leveraged Employee Stock Ownership Plan (LESOP)
In 2013, the Board submitted to the general shareholder`s meeting a proposal to provide a new remuneration component to
certain senior managers, including the management committee, called a LESOP. The LESOP would enable participants to purchase
shares of the Company at a discount of 20%, following which the shares would be subject to a holding period of three years. For
each share purchased by a participant with their personal contribution, a ?nancial institution would provide the participant with
additional ?nancing enabling them to purchase nine additional shares at such discount. The number of shares that a participant
could purchase with their personal contribution under the 2013 LESOP is capped. With respect to the members of the Nyrstar
Management Committee, the cap is set at 50,000 shares for each member. At the end of the holding period, the participant will be
required to transfer all shares purchased to the ?nancial institution and will receive in return a cash amount or a number of shares
of the Company, the value of which equals their personal contribution in the 2013 LESOP and a certain percentage of any increase
in value of the shares over the lifetime of the 2013 LESOP. The 2013 LESOP was approved by the general shareholder`s meeting in
April 2013. The ?rst stage of the 2013 LESOP was implemented in December 2013.
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REMUNERATION REPORT
In 2014, the Board of Directors considers providing a LESOP, with the same terms and conditions as the 2013 LESOP, on an
annually recurring basis. The Board of Directors intends to submit the recurring LESOP to the general shareholder`s meeting
of the Company in accordance with the requirements as set forth in the Belgian Company Code and the Company`s corporate
governance charter.
Directors’ and other interests
Shares and Share awards - LTIP
During 2013 the following share awards had been granted or delivered under the LTIP to the members of the management
committee:
LTIP
Name Title
Share Awards delivered in 2013
under the LTIP in which
the performance conditions
have been met
Share Awards granted in 2013
or in prior years under the LTIP
of which the performance
conditions have not been met
(1)
Roland Junck Chief Executive Of?cer 36,108 564,099
Greg McMillan
(2)
Chief Operating Of?cer 23,144 114,876
Heinz Eigner Chief Financial Of?cer 18,936 235,737
Russell Murphy Chief HR & SHE Of?cer 17,523 213,495
Michael Morley
SVP Metals Processing and
Chief Development Of?cer 16,751 213,495
Bob Katsiouleris
(3)
SVP Marketing, Sourcing
& Sales 154,289
Graham Buttenshaw
(4)
SVP Mining 6,779 168,131
Erling Sorensen
(5)
3,048
Notes:
(1) Vesting is subject to performance conditions.
(2) The employment of Greg McMillan ended 31 December 2013
(3) Bob Katsiouleris was employed by Nyrstar in January 2013 and joined the Nyrstar Management Committee in June 2013
(4) Graham Buttenshaw was employed by Nyrstar in March 2012 and joined the Nyrstar Management Committee in June 2013
(5) Erling Sorensen was in 2010 part of the management committee, and left as a “good leaver” under the rules of the LTIP. Share awards have been pro-rated based on
a departure date of 30 June 2010. Effective 31 December 2013, there are no further awards due
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REMUNERATION REPORT
Shares and Share awards – AIP
During 2013 the following share awards had been granted under the AIP to the members of the management committee:
AIP
Name Title
Share Awards delivered in 2013
under the AIP in which the vesting
conditions have been met
Share Awards granted in
in prior years under the AIP
of which the performance
conditions have been met but
shares not yet delivered
(1)
Roland Junck Chief Executive Of?cer 48,812
Greg McMillan
(2)
Chief Operating Of?cer 23,841
Heinz Eigner Chief Financial Of?cer 20,553
Russell Murphy Chief HR & SHE Of?cer 18,497
Michael Morley
SVP Metals Processing and
Chief Development Of?cer 18,497
Bob Katsiouleris
(3)
SVP Marketing, Sourcing
& Sales
Graham Buttenshaw
(4)
SVP Mining 7,955
Notes:
(1) Relates to the 2012 AIP deferred share component. Vesting is subject to the employee remaining employed until 31 December 2013. All NMC members have meet
the vesting condition. Shares to be delivered in March 2014.
(2) The employment of Greg McMillan ended 31 December 2013.
(3) Bob Katsiouleris was employed by Nyrstar in January 2013 and joined the Nyrstar Management Committee in June 2013 and as such did not participate in the 2012
AIP.
(4) Graham Buttenshaw was employed by Nyrstar in March 2012 and joined the Nyrstar Management Committee in June 2013.
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REMUNERATION REPORT
Shares and Share awards – LESOP
During 2013 the following share awards had been purchased by participants under the LESOP by members of the management
committee:
LESOP
Name Title 2013
Executive personal contribution
Additional shares provided by
external ?nancing arrangement
Roland Junck Chief Executive Of?cer 50,000 450,000
Heinz Eigner Chief Financial Of?cer 50,000 450,000
Russell Murphy Chief HR & SHE Of?cer 50,000 450,000
Michael Morley
SVP Metals Processing
and Chief Development Of?cer 50,000 450,000
Bob Katsiouleris SVP Marketing, Sourcing & Sales 50,000 450,000
The following number of shares were held by members of the management committee as at 31 December 2013:
Name Title Shares held
(1)
Roland Junck Chief Executive Of?cer 632,710
Heinz Eigner Chief Financial Of?cer 843,085
Russell Murphy Chief HR & SHE Of?cer 686,766
Michael Morley SVP Metals Processing and Chief Development Of?cer 755,346
Bob Katsiouleris SVP Marketing, Sourcing & Sales 500,000
Graham Buttenshaw SVP Mining
(1)
Includes the 450,000 shares obtained as part of and held under the 2013 LESOP.
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Pursuant to article 119 of the Company Code, the board of directors reports on the operations
of the Nyrstar Group with respect to the ?nancial year ended on 31 December 2013.
The information provided in this report is regulated information in accordance with article
36 of the Royal Decree of 14 November 2007.
A free copy of the annual report of the board of directors on the statutory accounts of
Nyrstar NV in accordance with article 96 of the Belgian Company Code can be requested at
the Company’s registered of?ce.
1. Comments to the ?nancial statements
Nyrstar’s consolidated ?nancial statements as at and for the year ended 31 December 2013 comprise Nyrstar NV (the “Company”)
and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates
and jointly controlled entities.
The consolidated ?nancial statements of Nyrstar were prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations
issued by the International Accounting Standards Board (IASB), the Standard Interpretations Committee (SIC) and the IFRS
Interpretations Committee (IFRIC), effective at the reporting date and adopted by the European Union. The consolidated ?nancial
statements have been prepared on a going concern basis.
The consolidated ?nancial statements are presented in Euros which is the Company’s functional and presentation currency. All
?nancial information has been rounded to the nearest hundred thousand.
Please refer to the relevant pages in this report for the consolidated ?nancial statements.
1.1 Overview of activities and ?nance overview
In 2013 the volume of zinc in concentrate produced at Nyrstar’s own mines (excluding deliveries under the Talvivaara zinc stream)
was approximately 271,000 tonnes, achieving the revised guidance of 265,000 to 280,000 tonnes and representing a 4% decline
compared to 2012. The decline in production was primarily due to a two month suspension of mining operations at the Campo
Morado mine.
Production of all other metals in the mining segment, with the exception of lead, was in line with revised guidance. The Metals
Processing segment produced approximately 1,088,000 tonnes of zinc metal in 2013. Production in H2 2013 was a new half yearly
record with approximately 569,000 tonnes, a 10% increase on H1 2013 (519,000 tonnes). Production in H1 2013 was impacted
by a number of planned maintenance shuts across the smelters, all of which were announced in Nyrstar’s Full Year 2012 results
release. Production was at the top end of the full year guidance for 2013 of 1 to 1.1 million tonnes of zinc metal.
Due to declines in the metal price and reduced production levels the Company delivered a result from operational activities before
exceptional items in 2013 of EUR (45.6) million (compared to EUR (5.5) million in 2012). The Group generated revenue for the
year 2013 amounting to EUR 2,823.5million, a decrease of 8% compared to 2012, and recorded a net loss after tax of EUR 195.4
million in 2013 (2012: net loss after tax of EUR 96.5 million).
REPORT OF THE
BOARD OF DIRECTORS
EX ARTICLE 119
COMPANY CODE
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Despite the Group’s continued focus on improving safety and health two Nyrstar employees were fatally injured in March and
September 2013 while working at the Campo Morado and Contonga mines respectively. The Lost Time Injury Rate (LTR) increased
by approximately 20% and the Recordable Injury Rate (RIR) remained relatively ?at. (LTR and RIR are 12 month rolling averages
of the number of lost time injuries and recordable injuries (respectively) per million hours worked, and include all employees and
contractors at all operations).
1.2 Non-?nancial key-performance indicators
Production
Financial year
2013
Financial year
2012
Mining production
Zinc in concentrate (‘000 tonnes) 285 312
Gold in concentrate (‘000 troy ounces) 75.2 94.6
Silver in concentrate (‘000 troy ounces) 4,746 5,517
Lead in concentrate (‘000 tonnes) 14.2 16.2
Copper in concentrate (‘000 tonnes) 12.9 13.0
Smelting production
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
Sulphuric acid (‘000 tonnes, gross) 1,389 1,388
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Mining segment production was impacted by lower volumes delivered under the Talvivaara zinc streaming agreement and the
suspension of operations at the Campo Morado mine in H1 2013. Zinc in concentrate production of 285kt in 2013, was 9% lower
than in 2012, with own mine production (excluding deliveries under the Talvivaara zinc stream) down 4%, while lead (12%), copper
(1%), silver (14%) and gold (21%) were also down on 2012. Revised production guidance was achieved for all metals, except for
lead which was below guidance and lower than 2012 production largely owing to a production trade off at the Contonga mine
with lower lead being compensated by higher copper.
The smelting segment produced approximately 1,088,000 tonnes of zinc metal in 2013, at the top end of the stated guidance of
approximately 1.0 to 1.1 million tonnes. Production in H2 2013 was a new half yearly record with approximately 569,000 tonnes, a
10% increase on H1 2013 (519,000 tonnes).
Markets
Nyrstar’s earnings are highly sensitive to changes in the zinc price, and as the Mining segment’s production of other metals has
increased, the sensitivity to changes in the lead, copper and silver price has also increased. The average zinc price was 2% lower in
2013 compared to 2012, averaging USD 1,909/t in 2013 compared to USD 1,946/t in 2012, while the average copper, silver and
gold price declined by 8%, 24% and 15% respectively. Nyrstar’s earnings also remain materially sensitive to changes in the zinc
treatment charge. The 2013 zinc benchmark treatment charge settled above the 2012 terms, resulting in a benchmark TC of USD
212 per dry metric tonne (dmt) in 2013, a USD 21 increase on 2012, which had a positive impact on group EBITDA.
The Euro strengthened against the US Dollar by almost 4% although punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this development has been negative from an EBITDA perspective this has had
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the effect of rebalancing Europe from excessive reliance on exports towards consumption-led growth which has led to a pick-up in
European industrial demand.
Safety, health and environment
Nyrstar’s Recordable Injury Rate (RIR) remained almost ?at at 9.0 compared to 8.2 in 2012, this con?rmed the signi?cant reduction
(37%) achieved in 2012. After a 50% reduction in 2012, the 2013 Lost Time Injury Rate (LTIR) increased by 20% to 3.4 compared to
2.5 in 2012.
Tragically, despite Nyrstar’s strong focus on safety, two Nyrstar employees were fatally injured in March and September 2013 while
working at the Campo Morado and Contonga mines respectively. Risk scenarios were conducted across all mines to prevent the
recurrence of similar situations.
In the Metals Processing sector, Auby operated without a lost time injury for an 18 month period. The performance variance across
the smelters reduced signi?cantly as a consequence of a strong health and safety network and exchange of practices between the
sites. The number of cases involving restricted works or lost time injuries (DART) was below 5 at 4.8 at the end of the year. As part
of our Assurance Program, a Corporate Health and Safety Audit was completed across the smelters. In the Mining sector, Myra Falls
won the Ryan Award, which recognizes Safety performance across British Columbia. A back to basics plan was initiated across all
mines with an objective of building the foundations of a strong Health & Safety management system and culture.
A total of 34 Recordable Environmental Incidents were reported in 2013, representing a signi?cant decrease relative to the 54
incidents recorded in 2012. The improved incident record is attributed to strengthened environmental regulatory compliance
processes and to the effectiveness of improvement actions implemented in response to events experienced in 2012.
1.3 Operating results, ?nancial position and cash ?ows
The Group recorded a net loss after tax of EUR 195.4 million for the year 2013. The Group generated revenue for the year 2013
amounting to EUR 2,823.5 million, a decrease of 8% compared to 2012 due primarily to lower commodity prices and lower
production in the Mining segment. Gross pro?t decreased by 8% to EUR 1,251.2 million in 2013 due to decreasing pro?tability in
the mining segment following reduced levels of production in H1 2013.
Compared to 2012, employee bene?ts expense reduced by 5% to EUR 391.3 million, energy expenses remained ?at at EUR 329.8
million. Approximately 40% of Metals Processing costs are denominated in Australian dollars, therefore the weakening of the AUD
against the Euro in 2013 had some positive impact on total Metals Processing cost performance in Euro terms and consequently
Group operating costs.
The 2013 result includes a net non-cash impairment charge of EUR 20.1 million (2012: EUR 18.2 million). This includes a non-cash
impairment charge of EUR 227.5 million and a non-cash impairment reversal of EUR 207.4 million both recognised based on a
detailed impairment assessment undertaken by the Group. EUR 118.2 million of the impairment charge relates to the impairment
of goodwill recognised on the previous acquisitions of mining assets. The impairment reversal relates to the impairment charges
recognised on the group’s Port Pirie and Balen smelting assets in 2008.
The Group recorded a net ?nancial expense of EUR 99.2 million in 2013, compared to EUR 93.4 million in 2012. This increase was
mainly in?uenced by higher interest charges on external debt ?nancing (EUR 67.4 million in 2013 compared to EUR 65.6 million
in 2012), a lower level of unwind of discount in provisions (EUR 11.0 million in 2013 compared to EUR 15.7 million in 2012),
increased other ?nance charges (EUR 21.1 million in 2013 compared to EUR 12.4 million in 2012) and a net foreign exchange loss
in 2013 (EUR 0.6 million loss in 2013 compared to a EUR 0.9 million loss in 2012).
Nyrstar recognised an income tax expense of EUR 11.1 million in 2013 compared to a tax bene?t of EUR 14.8 million in 2012. The
effective tax rate was approximately (6)% in 2013 compared to 13% in 2012.
The Company capital expenditure in 2013 decreased by approximately 19% to EUR 199.4 million.
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1.4 Liquidity position and capital resources
In 2013 cash ?ows from operating activities generated an in?ow of EUR 298.9 million, which comprised a EUR 124.4 million cash
in?ow from operating activities before working capital changes.
Cash out?ows from investing activities in 2013 of EUR 191.1 million mainly relates to capital expenditure. Following successful
placement of senior, unsecured convertible bonds, due 2018 for a principal amount of EUR 120 million, cash in?ows from
?nancing activities in 2013 amounted to EUR 8.7 million, compared to an out?ow of EUR 133.4 million in 2012. As of 31
December 2013, the full amount of Nyrstar’s revolving structured commodity trade ?nance facility remained undrawn (also fully
undrawn as of 31 December 2012).
Net debt at 31 December 2013 was EUR 670 million (31 December 2012: EUR 681 million), with a gearing level of 43.5% at the
end of December 2013 compared to 37% at the end of December 2012.
2. Internal Control and Enterprise Risk Management
General
The Nyrstar board of directors is responsible for the assessment of the effectiveness of the Risk Management Framework and
internal controls. The Group takes a proactive approach to risk management. The board of directors is responsible for ensuring that
nature and extent of risks are identi?ed on a timely basis with alignment to the Group’s strategic objectives and activities.
The audit committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important
medium for bringing risks to the board’s attention. If a critical risk or issue is identi?ed by the board or management, it may be
appropriate for all directors to be a part of the relevant risk management process, and as such the board of directors will convene
a sub-committee comprised of a mix of board members and senior management. Each respective sub-committee further examines
issues identi?ed and reports back to the board of directors.
The Nyrstar Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group’s
risks are being adequately managed. The Risk Management framework is designed to achieving the Group’s objectives. Nyrstar
acknowledges that risk is not just about losses and harm. Risk can have positive consequence too. Effective risk management
enables Nyrstar to achieve an appropriate balance between realising opportunities while minimising adverse impacts.
This section gives an overview of the main features of the Company’s internal control and risk management systems, in accordance
with the Belgian Corporate Governance Code and the Belgian Companies Code.
Components of the Risk Management Framework
The Risk Management Framework is integrated in the management process and focuses on the following key principles.
The key elements of Risk Management Framework are:
1 UNDERSTANDING THE EXTERNAL AND INTERNAL ENVIRONMENT
Understanding the internal and external business environment and the effect this has on our business strategy and plans. This
informs Nyrstar’s overall tolerance to risk.
2 CONSISTENT METHODS FOR RISK IDENTIFICATION AND ANALYSIS OF RISKS, EXISTING CONTROLS AND CONTROL EFFECTIVENESS
Implementing systems and processes for the consistent identi?cation and analysis of risks, existing controls and control
effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit
Committee.
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3 RISK TREATMENT
Using innovative and creative thinking in responding to risks and taking action where it is determined that the Group is being
exposed to unacceptable levels of risk.
4 STAKEHOLDER ENGAGEMENT AND COMMUNICATION
Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identi?ed key risks and controls.
5 MONITORING AND REVIEW
Regularly monitoring and reviewing our risk management framework, our risks and control effectiveness.
The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the
guideline is mandatory within Nyrstar.
Critical internal controls
The following is a summary of Nyrstar’s critical internal controls:
ORGANISATIONAL DESIGN
There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the
support and control functions, such as human resources, legal, ?nance, internal audit, etc.
The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with
industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets
approved by management and the board of directors within set authorization levels.
POLICIES AND PROCEDURES
The Group has established internal policies and procedures to manage various risks across the Group. These policies and
procedures are available on the Nyrstar intranet-site, and distributed for application across the whole Group. Every policy has an
owner, who periodically reviews and updates if necessary.
ETHICS
The board of directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for
ethical decision making. All employees must perform their daily activities and their business objectives according the strictest
ethical standards and principles. The Code of Business Conduct is available on www.nyrstar.com and sets out principles how to
conduct business and behave in respect of:
• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets
The board of directors regularly monitors compliance with applicable policies and procedures of the Nyrstar Group.
WHISTLEBLOWING
Nyrstar also has a whistleblower procedure in place, allowing staff to con?dentially raise concerns about any irregularities in
?nancial reporting, possible fraudulent actions, bribery and other areas.
QUALITY CONTROL
Nyrstar is ISO 9001 certi?ed for the smelting and re?ning of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-
products. All of its major processes and the controls that they encompass are formalized and published on the Company’s intranet.
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FINANCIAL REPORTING AND BUDGET CONTROL
Nyrstar applies a comprehensive Group standard for ?nancial reporting. The standard is in accordance with applicable
International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related
interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as
adopted by the European Union. The effectiveness and compliance with the Group standard for ?nancial reporting is consistently
reviewed and monitored by the audit committee.
In order to ensure adequate ?nancial planning and follow up, a ?nancial budgeting procedure describing the planning,
quanti?cation, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts
Group wide budgeting process, which is centrally coordinated and consists of the following steps:
1) Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic
guidelines and objectives for the upcoming ?nancial year.
2) Key inputs and assumptions for the budgeting process for the upcoming ?nancial year are provided by relevant internal
stakeholders (including expected production, capex, metal prices, foreign exchange and commercial terms) and uploaded into
the centralised budgeting, planning and consolidation system (BPC).
3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal
stakeholders and senior management. The management committee and the board sign off on the ?nal agreed budget.
4) The ?nal budget is communicated to the different Nyrstar business units and departments.
5) Nyrstar will then bi-annually communicate to shareholders the Group’s revenue and cost actual results.
MANAGEMENT COMMITTEES
Various management committees are established as a control to manage various risks Nyrstar is exposed to:
TREASURY COMMITTEE
The treasury committee comprises of the Chief Financial Of?cer, the Group Treasurer and the Group Controller. The role of the
treasury committee is to recommend to the CEO and to the board of directors amendments to the treasury policy. This considers all
treasury transactions being reviewed before they are recommended to the CEO for review and approval by the board of directors.
Explicitly this includes preparations for the following CEO and board of directors approvals:
- to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
- to periodically review treasury operations and activities, approve the use of new ?nancial instrument types and techniques for
managing ?nancial exposures;
- to approve the list of authorized counterparties for foreign exchange and money market transactions;
- to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard
business conditions; and
- to approve the list of bank relationships.
The treasury committee meets at least quarterly.
COMMODITY RISK MANAGEMENT COMMITTEE
Nyrstar’s commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the
commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income
statement from metal price changes and foreign exchange movements.
Information, communication and ?nancial reporting systems
The Group’s performance against plan is monitored internally and relevant action is taken throughout the year. This includes,
weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.
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Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an
executive summary from the Chief Financial Of?cer are prepared and circulated to the board of directors by the Company Secretary
on a monthly basis.
MONITORING AND REVIEW
Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of
risk being accepted is consistent with the level of risk approved by the board of directors. Management takes action where it
is determined that the Group is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to
communicate freely risks and opportunities identi?ed.
Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework
and internal controls. The internal audits are based on risk based plans, approved by the audit committee. The internal audit
?ndings are presented to the audit committee and management, identifying areas of improvement. Progress of implementation of
the actions is monitored by the audit committee on a regular basis. The Group internal audit function is managed internally. The
audit committee supervises the internal audit function.
The board of directors pays speci?c attention to the oversight of risk and internal controls. On a yearly basis, the board of directors
reviews the effectiveness of the Group’s risk management and internal controls. The audit committee assists the board of directors
in this assessment. The audit committee also reviews the declarations relating to internal supervision and risk management
included in the annual report of the Company. The audit committee reviews the speci?c arrangements to enable staff to express
concerns in con?dence about any irregularities in ?nancial reporting and other areas e.g., whistleblower arrangements.
To support the protocols described above, both internal resources and external contractors are engaged to perform compliance
checks, and reports are provided to the audit committee.
Other
The Group is committed to the ongoing review and improvement of its policies, systems and processes.
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Financial and Operational Risks
The principal risks and uncertainties, which Nyrstar faces, along with the impact and the procedures implemented to mitigate the
risks, are detailed in the tables below:
FINANCIAL RISKS
Description Impact Mitigation
Commodity price risk
Nyrstar’s results are largely dependent
on the market prices of commodities
and raw materials, which are cyclical and
volatile.
Pro?tability will vary with the volatility
of metals prices.
Nyrstar engages in transactional hedging
which means that it will undertake
short-term hedging transactions to cover
the timing risk between raw material
purchases and sales of metal and to
cover its exposure on ?xed-price forward
sales of metal to customers.
From time to time, Nyrstar may also
decide to enter into certain strategic
metal price hedges to lock prices that are
considered as favorable and providing
price certainty to the Company’s
operations that may otherwise face
dif?culties related to their liquidity and
pro?tability in a reasonably possible
pricing decline.
Forward price risk
Nyrstar is exposed to the shape of the
forward price curve for underlying metal
prices.
The volatility in the London Metal
Exchange price creates differences
between the average price we pay for the
contained metal and the price we receive
for it.
Nyrstar engages in transactional hedging
which means that it will undertake
short-term hedging transactions to cover
the timing risk between raw material
purchases and sales of metal and to
cover its exposure on ?xed-price forward
sales of metal to customers.
From time to time, Nyrstar may also
decide to enter into certain strategic
metal price hedges to lock prices that are
considered as favorable and providing
price certainty to the Company’s
operations that may otherwise face
dif?culties related to their liquidity and
pro?tability in a reasonably possible
pricing decline.
Foreign Currency Exchange rate risk
Nyrstar is exposed to the effects of
exchange rate ?uctuations.
Movement of the U.S. Dollar, the
Australian Dollar, Canadian Dollar, Swiss
Franc, the Peruvian Sol, the Mexican
Peso or other currencies in which
Nyrstar’s costs are denominated against
the Euro could adversely affect Nyrstar’s
pro?tability and ?nancial position.
Nyrstar has not entered and does
not currently intend to enter into
transactions that seek to hedge or
mitigate its exposure to exchange rate
?uctuations, other than short-term
hedging transactions to cover the timing
risk between concentrate purchases and
sales of metal and to cover its exposure
on ?xed-price forward sales of metal to
customers.
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Description Impact Mitigation
Interest rate risk & leverage risk
Nyrstar is exposed to interest rate risk
primarily on loans and borrowings.
Nyrstar is exposed to risks inherent with
higher leverage and compliance with
debt covenants.
Changes in interest rates may impact
primary loans and borrowings by
changing the levels of required interest
payments.
Nyrstar’s indebtedness increased
signi?cantly in 2011 in order to ?nance
its expansion into mining and is now
subject to risks inherent with higher
leverage and compliance with debt
covenants. Breaches in debt covenants
will jeopardize the ?nancing structure of
Nyrstar.
Nyrstar’s interest rate risk management
policy is to limit the impact of adverse
interest rate movements through the use
of interest rate management tools.
Debt covenants and required head room
are monitored by Nyrstar on an on-going
basis.
Credit risk
Nyrstar is exposed to the risk of non-
payment from any counterparty in
relation to sales of goods and other
transactions.
Group cash ?ows and income may be
impacted by non-payment.
Nyrstar has determined a credit policy
with credit limit requests, use of credit
enhancements such as letters of credit,
approval procedures, continuous
monitoring of the credit exposure and
dunning procedure in case of delays.
Liquidity risk
Nyrstar requires a signi?cant amount
of cash to ?nance its debt, and fund its
acquisitions, its capital investments and
its growth strategy. Liquidity risk arises
from the possibility that Nyrstar will not
be able to meet its ?nancial obligations
as they fall due.
Liquidity is negatively impacted and
this may have a material adverse effect
on the funding of operations, capital
investments, the growth strategy and the
?nancial condition of the Company.
Liquidity risk is addressed by maintaining
a suf?cient degree of diversi?cation
of funding sources as determined by
management, detailed, periodic cash
?ow forecasting and conservatively
set limits on permanently to be
available headroom liquidity as well as
maintaining ongoing readiness to access
?nancial markets within a short period
of time.
Treatment charge (TC) risk
Despite its further integration into
mining, Nyrstar’s results remain
correlated to the levels of TCs that it
charges zinc miners to re?ne their zinc
concentrates and lead miners to re?ne
their lead concentrates. TCs are cyclical
in nature.
A decrease in TCs can be expected
to have a material adverse effect on
Nyrstar’s business, results of operations
and ?nancial condition.
TCs are negotiated on an annual basis.
The impact of TC levels is expected to
further decrease in the future in line with
Nyrstar’s implementation of its strategy
of selectively integrating its smelting
business by expanding into mining.
Energy price risk
Nyrstar’s operating sites, particularly
its smelters, are energy intensive, with
energy costs accounting for a signi?cant
part of its operating costs. Electricity in
particular represents a very signi?cant
part of its production costs.
Increases in energy, particularly
electricity, prices would signi?cantly
increase Nyrstar’s costs and reduce its
margins.
Nyrstar attempts to limit its exposure
to short term energy price ?uctuations
through forward purchases, long term
contracts and participation in energy
purchasing consortia.
Liquidity risk
Nyrstar requires a signi?cant amount
of cash to ?nance its debt, and fund its
acquisitions, its capital investments and
its growth strategy. Liquidity risk arises
from the possibility that Nyrstar will not
be able to meet its ?nancial obligations
as they fall due.
Liquidity is negatively impacted and
this may have a material adverse effect
on the funding of operations, capital
investments, the growth strategy and the
?nancial condition of the Company.
Liquidity risk is addressed by maintaining
a suf?cient degree of diversi?cation
of funding sources as determined by
management, detailed, periodic cash
?ow forecasting and conservatively
set limits on permanently to be
available headroom liquidity as well as
maintaining ongoing readiness to access
?nancial markets within a short period
of time.
FINANCIAL RISKS CONTINUED
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OPERATIONAL RISKS
Description Impact Mitigation
Operational risks
In operating mines, smelters and other
production facilities, Nyrstar is required
to obtain and comply with licenses to
operate.
In addition Nyrstar is subject to many
risks and hazards, some of which are
out of its control, including: unusual or
unexpected geological or climatic events;
natural catastrophes, interruptions
to power supplies; congestion at
commodities transport terminals;
industrial action or disputes; civil unrest,
strikes, workforce limitations, technical
failures, ?res, explosions and other
accidents; delays and other problems in
major investment projects (such as the
ramping-up of mining assets).
Nyrstar’s business could be adversely
affected if Nyrstar fails to obtain,
maintain or renew necessary licenses and
permits, or fails to comply with the terms
of its licenses or permits.
The impact of these risks could result in
damage to, or destruction of, properties
or processing or production facilities,
may reduce or cause production to
cease at those properties or production
facilities. The risks may further result in
personal injury or death, environmental
damage, business interruption, monetary
losses and possible legal litigation and
liability. Negative publicity, including that
generated by non- governmental bodies,
may further harm Nyrstar’s operations.
Nyrstar may become subject to liability
against which Nyrstar has not insured or
cannot insure, including those in respect
of past activities. Should Nyrstar suffer
a major uninsured loss, future earnings
could be materially adversely affected.
Nyrstar’s process risk management
system incorporating assessment
of safety, environment, production
and quality risks, which includes the
identi?cation of risk control measures,
such as preventative maintenance,
critical spares inventory and operational
procedures.
Corporate Social Responsibility and
the Nyrstar Foundation projects
enable Nyrstar to work closely with
local communities to maintain a good
relationship.
Nyrstar currently has insurance coverage
for its operating risks associated with
its zinc and lead smelters and mining
operations which includes all risk
property damage (including certain
aspects of business interruption),
operational and product liability, marine
stock and transit and directors’ and
of?cers’ liability.
Supply risk
Nyrstar is dependent on a limited
number of suppliers for zinc and
lead concentrate. Nyrstar is partially
dependent on the supply of zinc and lead
secondary feed materials. In addition
Nyrstar’s mining and smelting operations
in developing or emerging countries are
dependent on reliable energy supply.
A disruption in supply could have a
material adverse effect on Nyrstar’s
production levels and ?nancial results.
Unreliable energy supply at any of the
mining and smelting operations requires
appropriate emergency supply or will
result in signi?cant ramp up costs after a
major power outage.
Nyrstar management is taking steps to
secure raw materials from other sources.
These steps include Nyrstar’s vertical
integration into mining, its entry into off-
take agreements with new mines that are
due to commence production over the
next several years, and its continuation
of existing supply contracts.
Nyrstar is continuously monitoring the
energy market worldwide. This includes
also considering alternate energy supply,
e.g. wind power at mine sites.
Environmental, health & safety risks
Nyrstar operations are subject to
stringent environmental and health
laws and regulations, which are subject
to change from time to time. Nyrstar’s
operations are also subject to climate
change legislation.
If Nyrstar breaches such laws and
regulations, it may incur ?nes or
penalties, be required to curtail or cease
operations, or be subject to signi?cantly
increased compliance costs or signi?cant
costs for rehabilitation or recti?cation
works.
Safety is one of the core values of
Nyrstar, and currently it is implementing
common safety policies across all sites
along with corresponding health and
safety audits. Nyrstar pro-actively
monitors changes to environmental,
health and safety laws and regulations.
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Description Impact Mitigation
International operations risk
Nyrstar’s mining and smelting operations
are located in jurisdictions, including
developing countries and emerging
markets that have varying political,
economic, security and other risks.
In addition Nyrstar is exposed to
nationalism and tax risks by virtue of the
international nature of its activities.
These risks include, amongst others,
the destruction of property, injury
to personnel and the cessation or
curtailment of operations, war, terrorism,
kidnappings, civil disturbances and
activities of governments which limit
or disrupt markets and restrict the
movement of funds or suppliers. Political
of?cials may be prone to corruption or
bribery, which violates Company policy
and adversely affects operations.
Nyrstar performs a thorough risk
assessment on a country-by-country
basis when considering its investment
activities. In addition Nyrstar attempts
to conduct its business and ?nancial
affairs focusing to minimize to the extent
reasonably practicable the political, legal,
regulatory and economic risks applicable
to operations in the countries where
Nyrstar operates.
Reserves and resource risk
Nyrstar’s future pro?tability and
operating margins depend partly
upon Nyrstar’s ability to access
mineral reserves that have geological
characteristics enabling mining at
competitive costs. This is done by either
conducting successful exploration and
development activities or by acquiring
properties containing economically
recoverable reserves.
Replacement reserves may not be
available when required or, if available,
may not be of a quality capable of being
mined at costs comparable to existing
mines.
Nyrstar utilises the services of
appropriately quali?ed experts to
ascertain and verify the quantum
of reserves and resources including
ore grade and other geological
characteristics under relevant global
standards for measurement of mineral
resources.
Strategic risk
Nyrstar’s growth strategy relies in part
on acquisitions, mergers and strategic
alliances, which involve risks.
Recent and future acquisitions, mergers
or strategic alliances may affect Nyrstar’s
?nancial condition. In addition, the
integration of acquired businesses
involves several risks.
Nyrstar focuses on selectively pursuing
opportunities in mining, favouring
mines that support its smelting assets
and where it has expertise and proven
capabilities. Nyrstar carries out a
due diligence review prior to doing
acquisition as well as post acquisition
reviews after or during integration of the
acquired assets.
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3. Important events which occurred after the end of the ?nancial year
Please refer to note 42 (subsequent events) in the IFRS Financial Statements.
4. Information regarding the circumstances that could signi?cantly affect the
development of the Group
No information regarding the circumstances that could signi?cantly affect the development of the Company are to be
mentioned, except for the circumstances described in Note 20 of the Consolidated Financial Statements for the year ended 31
December 2013.
The principal risks and uncertainties facing the Group are covered in section 2 of this report.
5. Research and development
The Group undertakes research and development through a number of activities at various production sites of the Group.
6. Financial risks and information regarding the use by the Company of ?nancial
instruments to the extent relevant for the evaluation of its assets, liabilities,
?nancial position and results
Please refer to note 3 (Signi?cant accounting policies), note 5 (Financial risk management) and note 35 (Financial
instruments) in the IFRS Financial Statements.
7. Information provided in accordance with article 624
of the Belgian Company Code
The treasury shares reserve comprises the par value of the Company’s share held by the Group. As at 31 December 2013 the
Group held a total of 15,338,431 of the Company’s shares (31 December 2012: 7,345,826).
At 16 April 2013, the Group acquired off-market, Glencore International AG’s (“Glencore”) entire 7.79% shareholding
(13,245,757 shares) in Nyrstar for EUR 3.39 per share, for a total consideration of EUR 44.9 million. Furthermore Glencore
agreed to compensate Nyrstar with a termination fee of EUR 44.9 million in relation to ending its Commodity Grade Off-take
agreement by 31 December 2013 for the sale and marketing of commodity grade zinc metal produced by Nyrstar, within the
European Union. The termination fee has been recognised in other income in the consolidation.
At 1 October 2013 Nyrstar Sales & Marketing AG entered a strategic offtake and marketing agreement with Noble Group
Limited (“Noble”) to market and sell a signi?cant portion of commodity grade zinc metal produced at its European smelters.
Noble agreed to acquire from Nyrstar’s treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total
shares for a price of EUR 3.76 per share, for a total cash consideration of EUR 6.4 million.
In 2013 Nyrstar sold 3,065,000 shares to a ?nancial institution and the participants in relation with the LESOP (note 33), for a
cash consideration of EUR 5.3 million.
During 2013 the Group settled its LTIP Grant 2 and 3. A total of 487,927 shares (2012: 2,067,312) were allocated to the
employees as a part of this settlement.
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REPORT OF THE BOARD OF DIRECTORS
Issued shares 2013 2012
Shares outstanding 154,684,113 162,676,718
Treasury shares 15,338,431 7,345,826
As at 31 Dec 170,022,544 170,022,544
Movement in shares outstanding 2013 2012
As at 1 Jan 162,676,718 160,609,406
Purchases of treasury shares (13,245,757) -
Sales of treasury shares 4,765,225 -
Employee shared based payment plan 487,927 2,067,312
As at 31 Dec 154,684,113 162,676,718
Movement in treasury shares 2013 2012
As at 1 Jan 7,345,826 9,413,138
Purchases 13,245,757 -
Sales (4,765,225)
Employee shared based payment plan (487,927) (2,067,312)
As at 31 Dec 15,338,431 7,345,826
8. Information provided in accordance with articles 523 and 524 of the Belgian
Company Code
Directors are expected to arrange their personal and business affairs so as to avoid con?icts of interest with the Company.
Any director with a con?icting ?nancial interest (as contemplated by article 523 of the Belgian Company Code) on any matter
before the board of directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part
in any deliberations or voting related thereto. Provision 1.4 of the corporate governance charter sets out the procedure for
transactions between Nyrstar and the directors which are not covered by the legal provisions on con?icts of interest. Provision
3.2.4 of the corporate governance charter contains a similar procedure for transactions between Nyrstar and members of the
management committee (other than the Chief Executive Of?cer).
The provisions of Article 523 of the Belgian Companies Code have been complied with in relation to the changes made to
the performance conditions under the LTIP applicable to Mr Junck effective 6 February 2013 at the board meeting dated 5
February 2014 as set out below:
Prior to the deliberation and approval of the changes to LTIP performance conditions, i.e., for LTIP Grant 3, the exclusion of the
2012 performance year from the regression when determining the average LTIP achievement due the signi?cant disconnect
between the correlation of the zinc price and the share price in 2012 and, for the current and future grants, the change to
the hurdle rates from 1 January 2013 from 5% to 2% with regard to the MSCI Metals & Mining Index (together the “LTIP
Performance Condition Changes”), Mr Junck explained that pursuant to the LTIP Performance Condition Changes effective 6
February 2013 he has an interest of a ?nancial nature that could be in con?ict with the proposed approval by the Board of the
LTIP Performance Condition Changes under Article 523 of the Belgian Company Code. Mr Junck explained that following the
changes to the performance conditions for LTIP Grant 3 he was awarded 36,107 shares instead of zero shares and such shares
were delivered in March 2013. Mr Junck further stated that the impact to successive grants is not known.
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REPORT OF THE BOARD OF DIRECTORS
Mr Junck further stated that he believed that the proposed LTIP Performance Condition Changes are not unusual or
uncustomary, especially within the context of listed companies in the global resource market. Mr Junck also stated that the
Company’s Statutory Auditor were advised of the potential con?ict of interest.
Subsequently, Mr Junck left the meeting of the Board so as not to take part in the further deliberation and decision relating to
the LTIP Performance Condition Changes to be entered into with him.
The remaining directors of the Board noted Mr Junck’s declaration and subsequently, in accordance with Article 523 of
the Belgian Company Code, proceeded with the deliberations on this declaration. The Board noted that the purpose of the
LTIP Performance Condition Changes is to ensure the LTIP remains attractive to executives with an aim to ensure continued
competitiveness within the global resources market. In order to attract and retain quali?ed individuals, the Board believed
it is reasonable and necessary for the Company to reward and retain executive talent and therefore approve the LTIP
Performance Condition Changes to avoid negative impact on the average LTIP achievement for LTIP Grant 3 following a
signi?cant disconnect between the correlation of the zinc price and the share price in 2012 and to align the hurdle rates as of
1 January 2013 for current and future grants from 5% to 2% with regard to the MSCI Metals & Mining Index. In addition, the
Board noted the LTIP Performance Condition Changes are consistent with market practice as evidenced by the objective data.
Accordingly the Board deemed the LTIP Performance Condition Changes to be therefore in the interest of the Company.
Following discussion, the Board (with the exclusion of Mr Junck) RESOLVED that the LTIP Performance Condition Changes be
APPROVED.
There is no information regarding a con?ict of interest in accordance with Article 524 of the Belgian Company Code.
9. Audit committee
The audit committee consists of three non-executive members of the board, all of which are independent members. The
members of the audit committee have suf?cient expertise in ?nancial matters to discharge their functions. The Chairman of
the audit committee is competent in accounting and auditing as evidenced by his current role as Chief Financial Of?cer of the
Belgacom Group and his previous roles as Chief Financial Of?cer in Matav and Ameritech International.
10. Information that have an impact in the event of public takeovers bids
The Company provides the following information in accordance with article 34 of the Royal Decree dated 14 November 2007:
(i) The share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented by 170,022,544
shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s shares
do not have a nominal value.
(ii) Other than the applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of
association, there are no restrictions on the transfer of shares.
(iii) There are no holders of any shares with special control rights.
(iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan (LTIP), the Co-Investment Plan and
the Leveraged Employee Stock Ownership Plan will vest upon determination by the nomination and remuneration
committee.
(v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the
Company’s articles of association and the applicable laws and articles.
(vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the
transfer of securities and/or the exercise of voting rights.
(vii) The rules governing appointment and replacement of board members and amendment to articles of association are set
out in the Company’s articles of association and the Company’s corporate governance charter.
(viii) The powers of the board of directors, more speci?cally with regard to the power to issue or redeem shares are set
out in the Company’s articles of association. The board of directors was not granted the authorization to purchase its
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REPORT OF THE BOARD OF DIRECTORS
own shares “to avoid imminent and serious danger to the Company” (i.e., to defend against public takeover bids). The
Company’s articles of association of association do not provide for any other speci?c protective mechanisms against
public takeover bids.
(ix) The Company is a party to the following signi?cant agreements which, upon a change of control of the Company or
following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be
terminated by the other parties thereto or give the other parties thereto (or bene?cial holders with respect to bonds) a
right to an accelerated repayment of outstanding debt obligations of the Company under such agreements:
• Nyrstar’s Revolving Structured Commodity Trade Finance Credit Facility;
• 7% senior unsecured convertible bonds due 2014;
• 5.5% senior unsecured ?xed rate non-convertible bonds due 2015;
• 5.3% senior unsecured ?xed rate non-convertible bonds due 2016;
• 4.25% senior unsecured convertible bonds due 2018;
• Nyrstar’s committed EUR 50 million bilateral credit facility with ING Bank;
• Nyrstar’s committed EUR 100 million bilateral credit facility with KBC Bank;
• Nyrstar’s silver prepay with Merrill Lynch International;
• Nyrstar’s silver prepay with JPMorgan Chase Bank;
• Nyrstar’s off-take agreement with the Glencore Group; and
• Nyrstar’s streaming agreement with Talvivaara Sotkamo Limited.
(x) The Chief Executive Of?cer is currently entitled to a 12-month salary payment in case his employment is terminated upon
a change of control of the Company.
No takeover bid has been instigated by third parties in respect of the Company’s equity during the previous ?nancial year and the
current ?nancial year.
Done at Brussels on 5 February 2014.
On behalf of the board of directors,
___________________________ ___________________________
De Wilde J. Management bvba
represented by its permanent
representative Mr Julien De Wilde
Director
Roland Junck
Director
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REPORT OF THE BOARD OF DIRECTORS
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STATEMENT OF RESPONSIBILITY
The undersigned, Roland Junck, Chief Executive Of?cer and Heinz Eigner, Chief Financial Of?cer, declare that, to the best of their
knowledge, the consolidated ?nancial statements for the year ended 31 December 2013, which has been prepared in accordance
with the International Financial Reporting Standards as adopted by the European Union and with the legal requirements
applicable in Belgium, give a true and fair view of the assets, liabilities, ?nancial position and pro?t or loss of Nyrstar NV and
the entities included in the consolidation, and that the consolidated management report includes a true and fair overview of the
development and the performance of the business and of the position of Nyrstar NV, and the entities included in the consolidation,
together with a description of the principal risks and uncertainties which they are exposed to.
Brussels, 5 February 2014
STATEMENT OF
RESPONSIBILITY
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CONSOLIDATED INCOME STATEMENT
EUR million Note 2013 2012
*
Revenue 7 2,823.5 3,069.8
Raw materials used (1,486.6) (1,627.3)
Freight expense (85.7) (86.2)
Gross pro?t 1,251.2 1,356.3
Other income 27 53.1 25.3
Employee bene?ts expense 11 (391.3) (408.7)
Energy expenses (329.8) (332.1)
Stores and consumables used (179.7) (194.8)
Contracting and consulting expense (165.7) (170.8)
Other expense 14 (63.3) (62.3)
Depreciation, amortisation and depletion 15,16,20 (220.1) (218.4)
Result from operating activities before exceptional items (45.6) (5.5)
M&A related transaction expense 10 (1.7) (2.6)
Restructuring expense 29 (18.5) (16.9)
Impairment loss 17 (227.5) (18.2)
Impairment reversal 17 207.4 -
Loss on the disposal of subsidiaries 9 - (0.1)
Result from operating activities (85.9) (43.3)
Finance income 12 0.9 1.2
Finance expense 12 (99.5) (93.7)
Net foreign exchange loss 12 (0.6) (0.9)
Net ?nance expense (99.2) (93.4)
Share of pro?t / (loss) of equity accounted investees 18 0.8 (1.3)
Gain on the disposal of equity accounted investees 18 - 26.7
Loss before income tax (184.3) (111.3)
Income tax (expense) / bene?t 13 (11.1) 14.8
Loss for the year (195.4) (96.5)
ATTRIBUTABLE TO:
Equity holders of the parent (195.4) (93.6)
Non-controlling interest - (2.9)
Loss per share for loss attributable to the equity holders of the Company during the period (expressed in EUR per share)
basic 34 (1.27) (0.58)
diluted 34 (1.27) (0.58)
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 31 December 2013
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
EUR million Note 2013 2012
*
Loss for the year (195.4) (96.5)
Other comprehensive income
Items that may be reclassi?ed to pro?t:
Foreign currency translation differences (90.0) (11.2)
Transfers to the income statement - (13.2)
Gains / (losses) on cash ?ow hedges 21 16.2 (10.9)
Transfers to the income statement 7.5 3.7
Income tax expense 13 (4.3) -
Change in fair value of investments in equity securities 19 (8.8) (4.9)
Transfers to the income statement 12.9 -
Reclassi?cation of reverse acquisition reserve - 7.6
Items that will not be reclassi?ed to pro?t:
Remeasurements of de?ned bene?t plans 30 9.2 (12.7)
Income tax (expense) / bene?t 13 (3.1) 4.2
Other comprehensive loss for the year, net of tax (60.4) (37.4)
Total comprehensive loss for the year (255.8) (133.9)
ATTRIBUTABLE TO:
Equity holders of the parent (255.8) (131.0)
Non-controlling interest - (2.9)
Total comprehensive loss for the year (255.8) (133.9)
*Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at as at
EUR million Note 31 Dec 2013 31 Dec 2012*
Property, plant and equipment 15 1,771.5 1,730.2
Intangible assets 16 10.3 133.4
Investments in equity accounted investees 18 18.6 29.0
Investments in equity securities 19 27.5 37.9
Zinc purchase interest 20 224.3 237.2
Deferred income tax assets 13 120.6 77.0
Other ?nancial assets 21 10.4 25.1
Other assets 23 3.2 3.9
Total non-current assets 2,186.4 2,273.7
Inventories 22 515.6 747.1
Trade and other receivables 24 174.9 221.1
Prepayments 17.5 14.4
Current income tax assets 6.5 6.2
Other ?nancial assets 21 26.6 47.0
Other assets 23 - 4.0
Cash and cash equivalents 25 292.3 188.1
Total current assets 1,033.4 1,227.9
Total assets 3,219.8 3,501.6
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at as at
EUR million Note 31 Dec 2013 31 Dec 2012*
Share capital and share premium 26 1,649.7 1,676.9
Reserves 27 (274.5) (207.5)
Accumulated losses (505.6) (307.6)
Total equity attributable to equity holders of the parent 869.6 1,161.8
Total equity 869.6 1,161.8
Loans and borrowings 28 839.9 867.2
Deferred income tax liabilities 13 174.2 142.5
Provisions 29 208.6 210.5
Employee bene?ts 30 71.0 84.4
Other ?nancial liabilities 21 3.9 2.1
Other liabilities 23 55.6 59.3
Total non-current liabilities 1,353.2 1,366.0
Trade and other payables 31 486.0 641.2
Current income tax liabilities 17.1 16.8
Loans and borrowings 28 121.9 1.3
Provisions 29 17.1 24.3
Employee bene?ts 30 33.1 53.5
Other ?nancial liabilities 21 20.8 11.3
Deferred income 32 294.7 218.6
Other liabilities 23 6.3 6.8
Total current liabilities 997.0 973.8
Total liabilities 2,350.2 2,339.8
Total equity and liabilities 3,219.8 3,501.6
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million Note
Share
capital
Share
premium Reserves
Accumulated
losses
Total amount
attributable to
shareholders
Non-
controlling
interest
Total
equity
As at 1 Jan 2013
*
1,324.8 352.1 (207.5) (307.6) 1,161.8 - 1,161.8
Loss for the year - - - (195.4) (195.4) - (195.4)
Other
comprehensive
(loss) /income - - (66.5) 6.1 (60.4) - (60.4)
Total
comprehensive
loss - - (66.5) (189.3) (255.8) - (255.8)
Change in par
value 26 - - 3.2 (3.2) - - -
Treasury shares - - (19.4) (10.2) (29.6) - (29.6)
Issuance of
convertible bond 28 - - 15.7 - 15.7 - 15.7
Distribution to
shareholders
(capital decrease) 26 (27.2) - - - (27.2) - (27.2)
Share-based
payments - - - 4.7 4.7 - 4.7
As at 31 Dec 2013 1,297.6 352.1 (274.5) (505.6) 869.6 - 869.6
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CONSOLIDATED FINANCIAL STATEMENTS
EUR million Note
Share
capital
Share
premium Reserves
Accumulated
losses
Total amount
attributable to
shareholders
Non-
controlling
interest
Total
equity
As at 1 Jan 2012* 1,352.0 352.1 (184.9) (204.2) 1,315.0 4.3 1,319.3
Loss for the year - - - (93.6) (93.6) (2.9) (96.5)
Other
comprehensive
loss - - (28.9) (8.5) (37.4) - (37.4)
Total
comprehensive
loss - - (28.9) (102.1) (131.0) (2.9) (133.9)
Change in par
value 26 - - 1.2 (1.2) - - -
Treasury shares - - 5.1 (3.9) 1.2 - 1.2
Net movement in
non-controlling
interests as result
of disposal of
subsidiaries 9 - - - - - (1.4) (1.4)
Distribution to
shareholders
(capital decrease) 26 (27.2) - - - (27.2) - (27.2)
Share-based
payments - - - 3.8 3.8 - 3.8
As at 31 Dec 2012* 1,324.8 352.1 (207.5) (307.6) 1,161.8 - 1,161.8
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Note 2013 2012*
Loss for the year (195.4) (96.5)
ADJUSTMENT FOR:
Depreciation, amortisation and depletion 15,16,20 220.1 218.4
Income tax expense / (bene?t) 13 11.1 (14.8)
Net ?nance expense 12 99.2 93.4
Share of (pro?t) / loss in equity accounted investees 18 (0.8) 1.3
Impairment loss (net) 17 20.1 18.2
Equity settled share based payment transactions 5.3 6.1
Other non-monetary items (33.1) 6.7
Loss on the disposal of subsidiaries 9 - 0.1
Gain on disposal of equity accounted investees 18 - (26.7)
Gain on sale of property, plant and equipment 15 (2.1) (6.4)
Cash ?ow from operating activities before working capital changes 124.4 199.8
Change in inventories 198.5 (199.0)
Change in trade and other receivables 38.5 80.6
Change in prepayments (5.5) 8.2
Change in deferred income 88.8 98.8
Change in trade and other payables (151.6) 238.2
Change in other assets and liabilities 65.6 3.0
Change in provisions and employee bene?ts (28.5) (21.3)
Income tax paid (31.3) (46.9)
Cash ?ow from operating activities 298.9 361.4
Acquisition of property, plant and equipment 15 (192.2) (246.1)
Acquisition of intangible assets 16 (1.1) (1.7)
Proceeds from sale of property, plant and equipment 3.6 8.3
Proceeds from sale of intangible assets 0.1 1.3
Acquisition of subsidiary, net of cash acquired 8 (2.8) -
Acquisition of investment in equity securities (0.2) (9.9)
Payments of loans to equity accounted investees 21 - (2.7)
Distribution from equity accounted investees 0.5 0.7
Proceeds from sale of subsidiary 9 - 2.2
Proceeds from sale of equity accounted investees 18 - 32.4
Interest received 1.0 1.5
Cash ?ow used in investing activities (191.1) (214.0)
Sale of own shares 26 11.7 -
Proceeds from borrowings 122.1 8.2
Repayment of borrowings (17.1) (42.4)
Interest paid (84.0) (73.1)
Distribution to shareholders 26 (24.0) (26.1)
Cash ?ow from / (used in) ?nancing activities 8.7 (133.4)
Net increase in cash held 116.5 14.0
Cash at the beginning of the year 25 188.1 177.4
Exchange ?uctuations (12.2) (3.3)
Cash at the end of the year 25 292.3 188.1
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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FINANCIAL STATEMENTS
TABLE OF CONTENTS
1. Reporting entity 133
2. Basis of preparation 133
3. Signi?cant accounting policies 135
4. Critical accounting estimates
and judgements 146
5. Financial risk management 147
6. Exchange rates 150
7. Segment reporting 150
8. Acquisition of business 153
9. Disposal of subsidiaries 154
10. M&A related transaction expense 154
11. Employee bene?ts expense 155
12. Finance income and expense 155
13. Income tax 155
14. Other expense 159
15. Property, plant and equipment 159
16. Intangible assets 161
17. Impairment 162
18. Investments in equity accounted investees 165
19. Investments in equity securities 166
20. Zinc purchase interest 166
21. Other ?nancial assets and liabilities 167
22. Inventories 168
23. Other assets and liabilities 169
24. Trade and other receivables 170
25. Cash and cash equivalents 170
26. Capital 171
27. Reserves 172
28. Loans and borrowings 174
29. Provisions 176
30. Employee bene?ts 177
31. Trade and other payables 184
32. Deferred income 185
33. Share-based payments 185
34. Loss per share 190
35. Financial instruments 190
36. Capital commitments 199
37. Operating leases 199
38. Contingencies 199
39. Related parties 200
40. Audit and non-audit services
by the Company’s statutory auditor 200
41. Group entities 201
42. Subsequent events 201
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
Nyrstar NV (the “Company”) is an integrated mining and metals business, with market leading positions in zinc and lead, and
growing positions in other base and precious metals. Nyrstar has mining, smelting, and other operations located in Europe,
Australia, China, Canada, the United States and Latin America. Nyrstar is incorporated and domiciled in Belgium and has its
corporate of?ce in Switzerland. The address of the Company’s registered of?ce is Zinkstraat 1, 2490 Balen, Nyrstar is listed on NYSE
Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com.
The consolidated ?nancial statements of the Company as at and for the year ended 31 December 2013 comprise the Company and
its subsidiaries (together referred to as “Nyrstar” or the “Group” and individually as “Group entities”) and the Group’s interest in
associates and jointly controlled entities. The consolidated ?nancial statements were authorised for issue by the board of directors
of Nyrstar NV on 5 February 2014.
2. Basis of preparation
(a) Statement of compliance
The consolidated ?nancial statements of Nyrstar are prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations
issued by the International Accounting Standards Board (IASB), and the IFRS Interpretations Committee (IFRIC), effective at the
reporting date and adopted by the European Union. The consolidated ?nancial statements have been prepared on a going concern
basis.
(b) Basis of measurement
The consolidated ?nancial statements have been prepared under the historical cost basis except for derivative ?nancial instruments
(note 21), ?nancial instruments at fair value through pro?t or loss (note 21), and available-for-sale ?nancial assets (note 19).
(c) Functional and presentational currency
Items included in the ?nancial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional’ currency). The consolidated ?nancial statements are presented in EUR
which is the Company’s functional and presentation currency. All ?nancial information has been rounded to the nearest hundred
thousand EUR.
(d) Use of estimates and judgements
The preparation of ?nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgements in the process of applying Nyrstar’s accounting policies. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods. Critical accounting estimates and judgements are disclosed in note 4.
(e) Standards, amendments and interpretations
The following new and revised standards and interpretations, effective as of 1 January 2013, have been adopted in the preparation
of the consolidated ?nancial statements:
IAS 1 Presentation of Items of Other Comprehensive Income (Amendment)
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities (Amendment)
IFRS 13 Fair Value Measurement
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IAS 32 Tax effects of distributions to holders of equity instruments (Amendment)
IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (Amendment)
The adoption of the amendment to IAS 1 Presentation of Financial Statements and revised standard IAS 19 (2011) Employee
Bene?ts require restatement of previous ?nancial statements. The nature and impact is described below:
IAS 1 Presentation of Items of Other Comprehensive Income – Amendment to IAS 1
The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that may be
reclassi?ed to pro?t or loss at a future point in time now have to be presented separately from items that will never be reclassi?ed.
The amendment has been applied retrospectively and affected presentation only with no impact on the Group’s reported ?nancial
position or performance.
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
IAS 19R includes a number of amendments to the accounting for de?ned bene?t plans, including expected returns on plan
assets are no longer recognised in pro?t or loss, instead there is a requirement to recognise interest expense on the net de?ned
bene?t liability in pro?t or loss, calculated using the market based discount rate used to measure the de?ned bene?t obligation
and; unvested past service costs are now recognised in pro?t or loss at the earlier of when the plan amendment occurs or when
the related restructuring or termination costs are recognised. Other amendments include new disclosures, such as, quantitative
sensitivity disclosures, will be included in the annual consolidated ?nancial statements.
In case of the Group, the transition to IAS 19R had an impact on the net de?ned bene?t plan obligations due to the difference in
accounting for interest on plan assets and unvested past service costs. The effect of the adoption of IAS 19R is explained in note 30.
IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities- Amendment to IFRS 7
The amendments to IFRS 7 impact the disclosure requirements in IFRS 7 Financial Instruments. The amendment requires
additional information about all recognised ?nancial instruments that are set off in accordance with IAS 32 Financial Instruments:
Presentation. Furthermore it also require disclosure of information about recognised ?nancial instruments subject to enforceable
master netting arrangements and similar agreements even if they are not set off under IAS 32. Refer to note 35 for these
disclosures.
IFRS 13 Fair Value Measurement
The new standard IFRS 13 Fair Values Measurement establishes a single source of guidance under IFRS for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or permitted. IFRS 13 also requires enhanced disclosures on fair values.
Adoption of IFRS 13 did not have a material impact on the fair value measurements carried out by the Group but resulted in
additional disclosures in note 35.
IAS 32 Financial Instruments: Presentation
The adoption of the amendment to IAS 32 Financial Instruments: Presentation did not impact the Group.
IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (Amendment)
The amendments to IAS 36 clarify the circumstances in which the recoverable amount of assets or cash-generating units are
required to be disclosed, clarify the disclosures required and introduce a requirement to disclose the discount rate used in
determining impairment (or reversals) where recoverable amount (based on fair value less cost to sell) is determined using a
present value technique. Other than the additional disclosures, the application of amendments to IFRS 36 did not impact the
amounts recognised in the consolidated ?nancial statements (see note 17).
The following new standards, amendments of standards and interpretations have been issued but are not effective for the ?nancial
year beginning 1 January 2013 and have not been early adopted:
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New or revised standards
• IAS 27 Separate Financial Statements
• IAS 28 Investments in Associates and Joint Ventures
• IFRS 9 Financial Instruments
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
• IFRS 12 Disclosure of Interests in Other Entities
Amendments to existing standards and interpretations
• Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
• De?ned Bene?t Plans: Employee Contributions (Amendments to IAS 19)
• Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
• IFRIC 21 Levies
Based on the Group’s current structure, the adoption of IAS 27and 28 and IFRS 10, 11 and 12 are not anticipated to have a
material impact on the Group. The Group is currently assessing the impact of IFRS 9 on the consolidated ?nancial statements and
related disclosures.
3. Signi?cant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated ?nancial
statements and have been applied consistently by the Group entities.
(a) Basis of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the ?nancial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group until the date that the control ceases.
Business Combinations
The purchase method of accounting is used to account for the acquisition of subsidiaries in these consolidated ?nancial
statements. The assets, liabilities and contingent liabilities of the acquired entity are measured at their fair values at the date of
acquisition. Provisional fair values allocated at a reporting date are ?nalised within twelve months of the acquisition date. The
cost of acquisition is measured as the fair value of assets transferred to, shares issued to or liabilities undertaken on behalf of the
previous owners at the date of acquisition. Acquisition-related costs are expensed in the period in which the costs are incurred and
the services received.
The excess of the cost of acquisition over Nyrstar’s share of the fair value of the net assets of the entity acquired is recorded as
goodwill. If Nyrstar’s share in the fair value of the net assets exceeds the cost of acquisition, the excess is recognised immediately in
the income statement.
Investments in associates and jointly controlled entities
Associates are those entities in which the Group has signi?cant in?uence but not control over the ?nancial and operational
policies. Signi?cant in?uence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of
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another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual
agreement and requiring unanimous consent for strategic ?nancial and operating decisions. Associates and jointly controlled
entities are accounted for using the equity method (equity accounted investees) and are initially recorded at cost. The Group’s
investment includes goodwill identi?ed on acquisition, net of any accumulated impairment losses.
The consolidated ?nancial statements include the Group’s share of the income and expense and equity movements of equity
accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that signi?cant
in?uence or joint control commences until the date that signi?cant in?uence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest
(including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent
that the Group has an obligation to or has made payments on behalf of the investee.
Non-controlling interests
Non-controlling interests (NCI) in the net assets (excluding goodwill) of consolidated subsidiaries are identi?ed separately from the
Group’s equity therein. NCI consist of the amount of those interests at the date of the original business combination (see below)
and the NCI’s share of changes in equity since the date of the combination.
Transactions eliminated on consolidation
The consolidated ?nancial statements include the consolidated ?nancial information of the Nyrstar Group entities. All
intercompany balances and transactions with consolidated businesses have been eliminated. Unrealised gains and losses arising
from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investee. The Group accounts for the elimination of the unrealised pro?ts resulting from intercompany transactions between the
mining and smelting businesses. These transactions relate to the sales from the mining to the smelting segment which have not
been realised externally.
(b) Foreign currency
Foreign currency transactions
Foreign currency transactions are recognised during the period in the functional currency of each entity at exchange rates
prevailing at the date of transaction. The date of a transaction is the date at which the transaction ?rst quali?es for recognition.
For practical reasons a rate that approximates the actual rate at the date of the transaction is used at some Group entities, for
example, an average rate for the week or the month in which the transactions occur.
Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet date.
Gains and losses resulting from the settlement of foreign currency transactions, and from the translation of monetary assets and
liabilities denominated in foreign currencies, are recognised in the income statement.
Foreign operations
The income statement and statement of ?nancial position of each Nyrstar operation that has a functional currency different to EUR
is translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing exchange rate at the end of the ?nancial period;
• Income and expense are translated at rates approximating the exchange rates ruling at the dates of the transactions; and
• All resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising from the translation of the net investment in foreign operations are released into the income
statement upon disposal.
(c) Financial instruments
Commodity hedging, via the use of metal futures, is undertaken to reduce the Group’s exposure to ?uctuations in commodity prices
in relation to its unrecognised ?rm commitments arising from ?xed price forward sales contracts.
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Derivatives are initially recognised at their fair value on the date Nyrstar becomes a party to the contractual conditions of the
instrument . The method of recognising the changes in fair value subsequent to initial recognition is dependent upon whether the
derivative is designated as a hedging instrument, the nature of the underlying item being hedged and whether the arrangement
quali?es for hedge accounting.
Hedge accounting requires the relationship between the hedging instrument and the underlying hedged item, as well as the risk
management objective and strategy for undertaking the hedging transaction to be documented at the inception of the hedge.
Furthermore, throughout the life of the hedge, the derivative is tested (with results documented) to determine if the hedge has
been or will continue to be highly effective in offsetting changes in the fair value or cash ?ows associated with the underlying
hedged item.
Fair value hedges
A hedge of the fair value of a recognised asset or liability or of a ?rm commitment is referred to as a fair value hedge. Changes in
the fair value of derivatives that are designated and qualify as fair value hedges, are recorded in the income statement, together
with changes in the fair value of the underlying hedged item attributable to the risk being hedged.
Cash ?ow hedges
A hedge of the cash ?ows to be received or paid relating to a recognised asset or liability or a highly probable forecast transaction
is referred to as a cash ?ow hedge. The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash ?ow hedges is recognised outside of the income statement, directly in other comprehensive income in the hedging reserve.
Changes in the fair value of cash ?ow hedges relating to the ineffective portion are recorded in the income statement. Amounts
accumulated in the hedging reserve are recycled through the income statement in the same period that the underlying hedged
item is recorded in the income statement. When a hedge no longer meets the criteria for hedge accounting, and the underlying
hedged transaction is no longer expected to occur, any cumulative gain or loss recognised in the hedging reserve is transferred to
the income statement. When a hedge is sold or terminated, any gain or loss made on termination is only deferred in the hedging
reserve where the underlying hedged transaction is still expected to occur.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that
does not qualify for hedge accounting are recognised immediately in the income statement. Where an embedded derivative is
identi?ed and the derivative’s risks and characteristics are not considered to be closely related to the underlying host contract, the
fair value of the derivative is recognised on the consolidated statement of ?nancial position and changes in the fair value of the
embedded derivative are recognised in the consolidated income statement.
Investments in equity securities
The classi?cation of investments depends on the purpose for which the investments have been acquired. Management determines
the classi?cation of investments at initial recognition. These investments are classi?ed as available-for-sale ?nancial assets and are
included in non-current assets unless the Group intends to dispose of the investment within 12 months of the balance sheet date.
The fair value of investments in equity securities is determined by reference to their quoted closing bid price at the reporting date.
Any impairment charges are recognised in pro?t or loss, while other changes in fair value are recognised in other comprehensive
income. When investments are sold, the accumulated fair value adjustments recognised in other comprehensive income are
included in the income statement within ‘gain/loss on sale of investments in equity securities’.
(d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment. The cost of self-
constructed assets includes the cost of materials, direct labour, and an appropriate proportion of production overheads.
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The cost of self-constructed assets and acquired assets include estimates of the costs of closure, dismantling and removing the
assets and restoring the site on which they are located and the area disturbed. All items of property, plant and equipment, are
depreciated on a straight-line and/or unit of production basis. Freehold land is not depreciated.
Once a mining project has been established as commercially viable, expenditure other than that on land, buildings, plant and
equipment is capitalised under ‘Mining properties and development’ together with any previously capitalised expenditures
reclassi?ed from ‘Exploration and evaluation (see note 3e).
Useful lives are based on the shorter of the useful life of the asset and the remaining life of the operation, in which the asset is
being utilised. Depreciation rates, useful lives and residual values are reviewed regularly and reassessed in light of commercial and
technological developments. Changes to the estimated residual values or useful lives are accounted for prospectively in the period
in which they are identi?ed.
Depreciation
STRAIGHT-LINE BASIS
The expected useful lives are the lesser of the life of the assets or as follows:
• Buildings: 40 years
• Plant and equipment: 3 - 25 years
UNIT OF PRODUCTION BASIS
• For mining properties and development assets and certain mining equipment, the economic bene?ts from the asset are
consumed in a pattern which is linked to the production level. Such assets are depreciated on a unit of production basis.
However, assets within mining operations for which production is not expected to ?uctuate signi?cantly from one year to
another or which have a physical life shorter than the related mine are depreciated on a straight line basis as noted above.
• In applying the unit of production method, depreciation is normally calculated using the quantity of material extracted from
the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based
on proved and probable reserves and, for some mines, other mineral resources. Such non reserve material may be included in
depreciation calculations in circumstances where there is a high degree of con?dence in its economic extraction.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Critical spare parts purchased for particular items of plant, are capitalised and depreciated on the same basis as the plant to which
they relate.
Assets under construction
During the construction phase, assets under construction are classi?ed as construction in progress within property, plant and
equipment. Once commissioned these assets are reclassi?ed to property, plant and equipment at which time they will commence
being depreciated over their useful life.
Mineral properties and mine development costs
The costs of acquiring mineral reserves and mineral resources are capitalised on the statement of ?nancial position as incurred.
Capitalised costs representing mine development costs include costs incurred to bring the mining assets to a condition of being
capable of operating as intended by management. Mineral reserves and in some instances mineral resources and capitalised mine
development costs are depreciated from the commencement of production using generally the unit of production basis They are
written off if the property is abandoned.
Major cyclical maintenance expenditure
Group entities recognise, in the carrying amount of an item of plant and equipment, the incremental cost of replacing a
component part of such an item when that cost is incurred if it is probable that the future economic bene?ts embodied within the
item will ?ow to the Group entity, the cost incurred is signi?cant in relation to the asset and the cost of the item can be measured
reliably. Accordingly, major overhaul expenditure is capitalised and depreciated over the period in which bene?ts are expected to
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arise (typically three to four years). All other repairs and maintenance are charged to the consolidated income statement during
the ?nancial period in which the costs are incurred.
Exploration and evaluation assets
Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential mineral reserves
and resources and includes costs such as exploratory drilling and sample testing and the costs of pre-feasibility studies. Exploration
and evaluation expenditure for each area of interest, other than that acquired from the purchase of another mining company, is
capitalised as an asset provided that one of the following conditions is met:
• such costs are expected to be recouped in full through successful development and exploration of the area of interest or
alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment
of the existence or otherwise of economically recoverable reserves, and active and signi?cant operations in relation to the area
are continuing, or are planned for the future.
Acquired mineral rights comprise identi?able exploration and evaluation assets including mineral reserves and mineral resources,
which are acquired as part of a business combination and are recognized at fair value at date of acquisition. The acquired mineral
rights are reclassi?ed as “mine property and development” from commencement of development and amortised on a unit of
production basis, when commercial production commences.
Capitalised exploration and evaluation assets are transferred to mine development assets once the work completed to date
supports the future development of the property and such development receives appropriate approvals.
(e) Intangible assets
Goodwill
Goodwill is recognised in business combinations and is measured as the excess of the aggregate consideration paid, the acquired
non-controlling interest and the fair value of any pre-existing ownership interest in the acquiree less the acquisition-date fair
values of the identi?able assets acquired and the liabilities assumed. Identi?able assets include those acquired mineral reserves
and resources that can be reliably measured.
Goodwill is carried at cost less any accumulated impairment losses. Goodwill in respect of associates and joint ventures is presented
in the statement of ?nancial position on the line “Investments in equity accounted investees”, together with the investment itself
and tested for impairment as part of the overall balance.
Goodwill is allocated to the cash-generating unit (CGU) to which it belongs. CGU is the smallest group of assets that includes the
asset and generates cash in?ows that are largely independent of the cash in?ows from other assets or groups of assets. Based
on Nyrstar’s operating model each mining complex and each smelting site has been identi?ed as a separate CGU as there is an
active market for zinc and other metal concentrates produced by each mining complex as well as zinc and other metal products
manufactured at Nyrstar’s smelting sites.
Other intangible assets
Software and related internal development costs are carried at historical cost, less accumulated amortisation and impairment
losses. They are typically amortised over a period of ?ve years.
CO
2
emission rights/Carbon permits are carried at historical cost, less impairment losses: These intangibles are not amortised.
(f) Leased assets
Leases under which the Group assumes substantially all of the risks and bene?ts of ownership, are classi?ed as ?nance leases,
while other leases are classi?ed as operating leases. Finance leases are capitalised with a lease asset and liability equal to the
present value of the minimum lease payments or fair value, if lower, being recorded at the inception of the lease. Capitalised lease
assets are amortised on a straight-line basis over the shorter of the useful life of the asset or the lease term. Each ?nance lease
repayment is allocated between the liability and ?nance charges based on the effective interest rate implied in the lease contract.
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Lease payments made under operating leases are recognised in the income statement over the accounting periods covered by the
lease term.
(g) Inventories
Inventories of ?nished metals, concentrates and work in progress are valued at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expense. By-products inventory obtained as a result of the production process are valued at the lower of cost and net realisable
value. Cost includes expenditure incurred in acquiring and bringing the stock to its existing condition and location and includes
an appropriate allocation of ?xed and variable overhead expense, including depreciation and amortisation. Stores of consumables
and spares are valued at cost with allowance for obsolescence. Cost of purchase of all inventories is determined on a FIFO basis. In
addition to purchase price, conversion costs are allocated to work-in-progress and ?nished goods. These conversion costs are based
on the actual costs related to the completed production steps.
As the Company applies hedge accounting as referred in note 3c the hedged items of inventory are adjusted by the fair value
movement with respect to the effective portion of the hedge. The fair value adjustment remains part of the carrying value of
inventory and enters into the determination of earnings when the inventory is sold. This impact is compensated by the hedge
derivatives which are also adjusted for fair value changes.
(h) Impairment
Financial assets
A ?nancial asset that is not measured at fair value through pro?t or loss is assessed at each reporting date to determine whether
there is any objective evidence that it is impaired. A ?nancial asset is considered to be impaired if objective evidence indicates that
one or more events have had a negative effect on the estimated future cash ?ows of that asset.
An impairment loss in respect of a ?nancial asset measured at amortised cost, is calculated as the difference between its carrying
amount and the present value of the estimated future cash ?ows discounted at the original effective interest rate. An impairment
loss in respect of an available-for-sale ?nancial asset is calculated by reference to its fair value.
Signi?cant ?nancial assets are tested for impairment on an individual basis. The remaining ?nancial assets are assessed collectively
in groups that share similar credit risk characteristics.
All impairment losses are recognised in the income statement. An impairment loss is reversed if the reversal can be related
objectively to an event occurring after the impairment loss was recognised. Impairment losses on available for sale equity
investments are not reversed.
Non-?nancial assets
The carrying amounts of the Group’s non-?nancial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have inde?nite lives or that are not yet available for use,
the recoverable amount is estimated annually.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash ?ows are discounted to their present value using a pre-tax discount rate that
re?ects current market assessments of the time value of money and the risks speci?c to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash in?ows from continuing use that are
largely independent of the cash in?ows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in
a business combination, for the purpose of impairment testing, is allocated to cash-generating units or groups of cash generating
units that are expected to bene?t from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating
units are allocated ?rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
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An impairment loss recognised in respect of goodwill cannot be reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(i) Employee bene?ts
Short term bene?ts
Liabilities for wages and salaries, including non-monetary bene?ts and annual leave are recognised in respect of employees’
services up to the reporting date, calculated as undiscounted amounts based on remuneration wage and salary rates that the entity
expects to pay at the reporting date including related on-costs, such as payroll tax.
Long-term employee bene?ts other than pension plans
A liability for long-term employee bene?ts is recognised in the provision for employee bene?ts and measured as the present value
of expected future payments to be made in respect of service provided by employees up to the balance sheet date. Consideration
is given to expected future wage and salary levels including related on-costs, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on national high quality corporate
bonds with terms to maturity and currency that match the estimated future cash ?ows.
De?ned contribution plans
Payments to de?ned contribution retirement plans are recognized as an expense when employees have rendered service entitling
them to the contributions.
De?ned bene?t plans
The Group recognizes a net liability in respect of de?ned bene?t superannuation or medical plans in the statement of ?nancial
position. The net liability is measured as the present value of the de?ned bene?t obligation at the balance sheet date less the fair
value of the plan assets belonging to the plans and represents the actual de?cit or surplus in the Group’s de?ned bene?t plans.
Any surplus resulting from this calculation is limited to the present value of any economic bene?ts available in the form of refunds
from the plans or reductions in future contributions to the plans (“asset ceiling”).
The present value of the de?ned bene?t obligations is based on expected future payments that arise from membership of the fund
to the balance sheet date. This obligation is calculated annually by independent actuaries using the projected unit credit method.
Expected future payments are discounted using market yields at the balance sheet date on high quality corporate bonds with terms
to maturity and currency that match the estimated future cash ?ows. Any future taxes that are funded by the entity and are part of
the provision of the de?ned bene?t obligation are taken into account when measuring the net asset or liability.
De?ned bene?t costs are split into three categories:
• Service costs, past-service costs, gains and losses on curtailments and settlements,
• Net-interest cost or income,
• Remeasurement.
The Group presents the ?rst component of de?ned bene?t costs in the line item ‘employee bene?ts expenses’ and the second
component in the line item ‘?nance expenses’ in its consolidated income statement. Curtailments gains and losses are accounted
for as past-service cost.
Remeasurement comprises of actuarial gains and losses on the de?ned bene?t obligations, the effect of the asset ceiling (if
applicable) and the return on plan assets (excluding interest income). These are recognized immediately in the statement of
?nancial position with a charge or credit to Other Comprehensive Income (OCI) in the period in which they occur. Remeasurement
recorded in other comprehensive income is not recycled. Those amounts recognized in other comprehensive income may be
reclassi?ed within equity. Past service costs are immediately recognized in pro?t or loss in the period of plan amendment and are
not deferred anymore. Net-interest is calculated by applying the discount rate to the net de?ned bene?t liability or asset.
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Share-based payment compensation
The Group operates a leveraged employee stock ownership plan, an executive long-term incentive plan and a co-investment plan,
which, at the Group’s discretion, are equity-settled or cash-settled share-based compensation plans.
The fair value of equity instruments granted under the equity-settled plans are recognised as an employee bene?t expense with a
corresponding increase recognised in equity. The fair value is measured at the grant date and recognised over the period during
which the eligible employees become entitled to the shares. The amount recognised as an employee bene?t expense is the fair
value multiplied by the number of equity instruments granted. At each balance sheet date, the amount recognised as an expense
is adjusted to re?ect the estimate of the number of equity instruments expected to vest, except where forfeiture is only due to the
Company’s share price not achieving the required target.
For cash-settled share-based payment transactions, the services received and the liability incurred are measured at the fair value
of the liability at grant date. The initial measurement of the liability is recognised over the period that services are rendered. At
each reporting date, and ultimately at settlement date, the fair value of the liability is remeasured with any changes in fair value
recognised in the income statement for the period.
(j) Provisions
A provision is recognised if, as a result of a past event, when the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an out?ow of economic bene?ts will be required to settle the obligation.
Restoration, rehabilitation and decommissioning provision
Provision is recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the
dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the ?nancial year
when the related environmental disturbance occurs. They are based on the estimated future costs using information available at
each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the
discount is recognised as interest expense. When the provision is established, a corresponding asset is recognised, where it gives
rise to a future bene?t, and depreciated over future production from the operations to which it relates.
The provision is reviewed on an annual basis for changes to costs, legislation, discount rates or other changes that impact
estimated costs or lives of the operations. The carrying value of the related asset (or the income statement when no related asset
exists) is adjusted for changes in the provision resulting from changes in the estimated cash ?ows or discount rate. The adjusted
carrying value of the asset is depreciated prospectively.
Restructuring provision
A constructive obligation for a restructuring arises only when two conditions are ful?lled: a) there is a formal business plan for
the restructuring specifying the business or part of a business concerned, the principal locations affected, the location, function
and approximate number of employees whose services will be terminated, the expenditure to be incurred and when the plan will
be implemented, b) the entity has raised a valid expectation in those affected that it will carry out the plan either by starting to
implement the plan or announcing its main feature to those affected by it. Restructuring provisions include only incremental costs
associated directly with the restructuring.
Other provisions
Other provisions are recognised when the Group has a present obligation (legal or constructive), as a result of past events, and it
is probable that an out?ow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is
material, the provision is discounted to net present value using an appropriate current market-based pre-tax discount rate and the
unwinding of the discount is included in ?nance costs.
(k) Compound ?nancial instruments
Compound ?nancial instruments issued by the Company comprise convertible bonds that can be converted to share capital at the
option of the holder, and the number of shares to be issued is ?xed.
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The liability component of a compound ?nancial instrument is recognized initially at the fair value of a similar liability that does
not have an equity conversion option. The equity component is recognized initially as the difference between the fair value of the
compound ?nancial instrument as a whole and the fair value of the liability component, and is included in shareholders’ equity, net
of income tax effects. Any directly attributable transaction costs are allocated to the liability and equity components in proportion
to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound ?nancial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound ?nancial instrument is not remeasured subsequent to initial
recognition.
(l) Revenue
Revenue associated with the sale of commodities is recognised when all signi?cant risks and rewards of ownership of the asset sold
are transferred to the customer, usually when insurance risk has passed to the customer and the commodity has been delivered
to the shipping agent or the location designated by the customer. At this point Nyrstar retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the commodities and the costs incurred, or
to be incurred, in respect of the sale can be reliably measured. Revenue is recognised, at fair value of the consideration receivable,
to the extent that it is probable that economic bene?ts will ?ow to Nyrstar and the revenue can be reliably measured. Revenue
is generally recognised based on incoterms ex-works (EXW) or carriage, insurance and freight (CIF). Revenues from the sale of
by-products are also included in sales revenue. Revenue is stated on a gross basis, with freight and realisation expense included in
gross pro?t as a deduction.
For certain commodities the sales price is determined provisionally at the date of sale, with the ?nal price determined within
mutually agreed quotation period and the quoted market price at that time. As a result, the invoice price on these sales are
marked-to-market at balance sheet date based on the prevailing forward market prices for the relevant quotation period. This
ensures that revenue is recorded at the fair value of consideration to be received. Such mark-to-market adjustments are recorded
in sales revenue.
When Nyrstar’s goods are swapped for goods that are of a similar nature and value, the swap is not regarded as a transaction that
generates revenue. If any settlement in cash or cash equivalents occurs for value equalisation of such transactions, this settlement
amount is recognised in cost of goods sold. When the goods swapped however are of a dissimilar nature or value from each other,
the swap is regarded as a transaction that generates revenue.
(m) Finance income and expense
Finance income includes:
• Interest income on funds invested; and
• Dividend income.
Interest income is recognised as it accrues in the income statement using the effective interest rate method. Dividend income is
recognised in the income statement on the date that the Group’s right to receive payment is established.
Finance costs include:
• Interest on short-term and long-term borrowings;
• Amortisation of discounts or premiums relating to borrowings;
• Amortisation of ancillary costs incurred in connection with the arrangement of borrowings;
• Finance lease charges; and
• The impact of the unwind of discount on long-term provisions for restoration, rehabilitation and decommissioning provision and
workers’ compensation.
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Finance costs are calculated using the effective interest rate method. Finance costs incurred for the construction of any qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other
?nance costs are expensed as incurred.
Net ?nance costs represent ?nance costs net of any interest received on funds invested. Interest income is recognised as it accrues
using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
Income tax
Income tax expense comprises current and deferred income tax. Income tax expense is recognised in pro?t or loss except to the
extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in other
comprehensive income or equity.
Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for ?nancial reporting purposes and the amounts used for taxation purposes. Deferred income tax
is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable pro?t, and differences relating to investments in subsidiaries
and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition a
deferred income tax liability is not recognised for taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred income
tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to
settle current income tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred income tax asset is recognised for all deductible temporary differences, carry forward of unused tax assets and unused
tax losses to the extent that it is probable that future taxable pro?ts will be available against which the temporary difference
can be utilised. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax bene?t will be realised.
Additional income taxes that arise from the distribution of dividends are recognised when the distribution is expected.
Mining taxes and royalties that have the characteristics of an income tax are treated and disclosed as current and deferred income
taxes.
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank
overdrafts are repayable on demand and are shown within borrowings in current liabilities on the consolidated statement of
?nancial position. For the purposes of the consolidated statement of cash ?ows, cash includes cash on hand and deposits at call
which are readily convertible to cash and are subject to an insigni?cant risk of changes in value, net of any outstanding bank
overdrafts which are recognised at their principal amounts.
(p) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group entities prior to the end of the ?nancial year
which are unpaid. The amounts are unsecured and are typically paid within 30 days of recognition. These amounts are initially
recognized at fair value and are subsequently carried at amortised cost.
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(q) Deferred income
Deferred income consists of payments received by the Company in consideration for future physical deliveries of metal inventories
and future physical deliveries of metals contained in concentrate at contracted prices. As deliveries are made, the Company
recognises sales and decreases the deferred income on the basis of actual physical deliveries of the products.
(r) Trade receivables
Trade receivables represent amounts owing for goods and services supplied by the Group entities prior to the end of the ?nancial
period which remain unpaid. They arise from transactions in the normal operating activities of the Group.
Trade receivables are carried at amortised cost, less any impairment losses for doubtful debts. An impairment loss is recognised for
trade receivables when collection of the full nominal amount is no longer certain.
(s) Share capital
Ordinary shares are classi?ed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effect(s).
(t) Earnings per share
Nyrstar presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the pro?t for
the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the pro?t for the period attributable to ordinary shareholders of the
Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
(u) Segment reporting
Operating segments are components of the Group for which discrete ?nancial information is available and is evaluated regularly
by Nyrstar’s Management Committee (NMC) in deciding how to allocate resources and assess performance. The NMC has been
identi?ed as the chief operating decision maker.
The segment information reported to the NMC is prepared in conformity with the accounting policies consistent with those
described in these ?nancial statements and presented in the format outlined in note 7.
Revenues, expenses and assets are allocated to the operating segments to the extent that items of revenue, expense and assets can
be directly attributed or reasonably allocated to the operating segments. The interrelated segment costs have been allocated on a
reasonable pro rata basis to the operating segments.
(v) Treasury shares
When Nyrstar reacquires its own equity instruments, the par value of treasury shares purchased is deducted from reserves. The
difference between the par value of the treasury shares purchased and the amount of consideration paid, which includes directly
attributable costs, is recognised as a deduction from accumulated losses. Reacquired shares are classi?ed as treasury shares and
may be acquired and held by the entity or by other members of the consolidated group. When treasury shares are sold or reissued
subsequently, the amount received is recognised as an increase in equity, and the resulting gain or loss on the transaction is
recognised in accumulated losses.
(w) Zinc purchase interests
Streaming agreements for the acquisition of zinc concentrates are presented on the statement of ?nancial position as zinc
purchase interests. The useful life is determined with reference to the number of metric tonnes to be delivered under the contract.
The asset is depleted through the income statement using the unit-of-production method, as the asset is recovered with each
metric ton of zinc delivered under the contract.
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(x) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Exceptional items
Exceptional items are those relating to restructuring expense, M&A related transaction expense and impairment of assets which the
Group believes should be disclosed separately on the face of the consolidated income statement to assist in the understanding of
the ?nancial performance achieved by the Group.
4. Critical accounting estimates and judgements
Estimates and judgements used in developing and applying the accounting policies are continually evaluated and are based on
historical experience and other factors, including expectations of future events that may have a ?nancial impact on the entity
and that are believed to be reasonable under the circumstances. Nyrstar makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by de?nition, seldom equal the related actual results. The estimates and underlying
assumptions are reviewed on an ongoing basis.
The critical estimates and judgements that have a signi?cant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next ?nancial year are listed below.
Fair value
The Group has applied estimates and judgments in accounting for business combinations (note 8), revenue recognition,
inventories (note 22), share-based payments (note 33) and for its ?nancial assets and liabilities (note 21). Fair value measurements
are estimated based on the amounts for which the assets and liabilities could be exchanged at the relevant transaction date
or reporting period end, and are therefore not necessarily re?ective of the likely cash ?ow upon actual settlements. Where fair
value measurements cannot be derived from publicly available information, they are estimated using models and other valuation
methods. To the extent possible, the assumptions and inputs used take into account externally veri?able inputs. However such
information is by nature subject to uncertainty, particularly where comparable market based transactions rarely exist.
Determination of ore reserves and resources estimates
Estimated recoverable reserves and resources are used to determine the depreciation of mine production assets (note 15), in
accounting for deferred costs (note 15) and in performing impairment testing (note 17). Estimates are prepared by appropriately
quali?ed persons, but will be impacted by forecast commodity prices, exchange rates, production costs and recoveries amongst
other factors. Changes in assumptions may impact the carrying value of assets and depreciation and impairment charges recorded
in the income statement.
Restoration, rehabilitation and decommissioning provision (note 29)
Provision is recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the
dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the ?nancial year
when the related environmental disturbance occurs. They are based on the estimated future costs using information available at
each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the
discount is recognised as interest expense. The calculation of these provision estimates requires assumptions such as application
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of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the
assumptions used may have a material impact on the carrying value of restoration provisions.
Retirement bene?ts (note 30)
The expected costs of providing pensions and post employment bene?ts under de?ned bene?t arrangements relating to employee
service during the period are determined based on ?nancial and actuarial assumptions. Nyrstar makes these assumptions in respect
to the expected costs in consultation with quali?ed actuaries. When actual experience differs to these estimates, actuarial gains
and losses are recognized in other comprehensive income. Refer to note 30 for details on the key assumptions.
Impairment of assets (note 15,16,17)
The recoverable amount of each cash-generating unit is determined as the higher of the asset’s fair value less costs to sell and its
value in use. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity
prices, future capital requirements and future operating performance. For cash-generating units that comprise mining related
assets, the estimates and assumptions also relate to the ore reserves and resources estimates (see above). For further information
refer to note 17.
Recovery of deferred tax assets (note 13)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable pro?ts are available to utilise those temporary differences and losses, and the tax losses continue to be available having
regard to the nature and timing of their origination and compliance with the relevant tax legislation associated with their recovery.
In evaluating whether it is probable that taxable pro?ts will be earned in future accounting periods, all available information is
considered. The forecasts used in this evaluation are consistent with those prepared and used internally for business planning and
impairment testing purposes.
Recovery of zinc purchase interest (note 20)
Due to recent developments regarding the ?nancial situation of Talvivaara Mining Company plc, Nyrstar’s counterparty in respect
of its zinc purchase interest, critical judgments are required in assessing the recoverability of the zinc purchase interest. These
judgments are outlined in note 20.
5. Financial risk management
(a) Overview
In the normal course of business, Nyrstar is exposed to credit risk, liquidity risk and market risk, i.e. ?uctuations in commodity
prices, exchange rates as well as interest rates, arising from its ?nancial instruments. Listed below is information relating to
Nyrstar’s exposure to each of these risks and the Group’s objectives, policies and processes for measuring and managing risk and
measuring capital.
The board of directors has overall responsibility for the establishment and oversight of Nyrstar’s risk management framework.
Nyrstar’s risk management policies are established to identify and analyse the risks faced by Nyrstar, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits.
The audit committee is responsible for overseeing how management monitors compliance with Nyrstar’s risk management policies
and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by Nyrstar. The audit
committee is supported in its oversight role by the Group’s internal audit function.
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(b) Credit risk
Credit risk is the risk of non-payment from any counterparty in relation to sales of goods. In order to manage the credit exposure,
Nyrstar has determined a credit policy with credit limit requests, approval procedures, continuous monitoring of the credit
exposure and dunning procedure in case of delays.
Trade and other receivables
Nyrstar’s exposure to credit risk is in?uenced mainly by the individual characteristics of each customer. Each new customer is
analysed individually for creditworthiness before the standard terms and conditions are offered. Customers that fail to meet
Nyrstar’s benchmark creditworthiness may transact with Nyrstar only on a prepayment basis.
Nyrstar provides an allowance for trade and other receivables that represents its estimate of incurred losses in respect of trade and
other receivables and investments.
Guarantees
Nyrstar’s policy is to provide ?nancial guarantees only on behalf of wholly-owned subsidiaries. At 31 December 2013, no
guarantees were outstanding to external customers (31 December 2012 : nil).
(c) Liquidity risk
Liquidity risk arises from the possibility that Nyrstar will not be able to meet its ?nancial obligations as they fall due. Liquidity risk
is being addressed by maintaining, what management considers to be, a suf?cient degree of diversi?cation of funding sources.
These include committed and uncommitted short and medium term bank facilities as well as bonds (e.g. convertible bonds and
?xed rate bonds).
Nyrstar is actively managing the liquidity risk in order to ensure that at all times it has access to suf?cient cash resources at a cost
in line with market conditions for companies with a similar credit standing. Liquidity risk is measured by comparing projected net
debt levels against total amount of available committed facilities. These forecasts are being produced on a rolling basis and include
cash ?ow forecasts of all operational subsidiaries. Also the average remaining life of the committed funding facilities is monitored,
at least on a quarterly basis.
The ?nancial covenants of the existing loan agreements are monitored as appropriate in order to ensure compliance. No breach of
covenants has occurred during the year.
(d) Market risk
Market risk is the risk that changes in market prices will affect Nyrstar’s income or the value of its investments in ?nancial
instruments. The objective of market risk management is to manage and control market exposures within acceptable parameters
while optimising the return.
Commodity price risk
In the normal course of its business, Nyrstar is exposed to risk resulting from ?uctuations in the market prices of commodities.
Nyrstar currently engages primarily in transactional hedging which means that it undertakes short-term hedging transactions to
cover the timing risk between raw material purchases and sales of metal and to cover its exposure on ?xed-price forward sales of
metal to customers. Transactional hedging arrangements are accounted for in the “Other Financial Assets” and the “Other Financial
Liabilities” line items of the statement of ?nancial position. Any gains or losses realised from hedging arrangements are recorded
within operating result. Nyrstar generally does not undertake any structural or strategic hedging which means that its results are
largely exposed to ?uctuations in zinc, lead and other metal prices. Nyrstar reviews its hedging policy on a regular basis.
Foreign Currency Exchange Risk
Nyrstar’s assets, earnings and cash ?ows are in?uenced by movements in exchange rates of several currencies, particularly the U.S.
Dollar, the Euro, the Australian Dollar, the Canadian Dollar, the Peruvian Sol, the Chilean Peso, the Mexican Peso, the Honduran
Lempira and the Swiss Franc. Nyrstar’s reporting currency is the Euro, zinc, lead and other metals are sold throughout the world
principally in U.S. Dollars, while Nyrstar’s costs are primarily in Euros, Australian Dollars, Canadian Dollars, U.S. Dollars, Peruvian
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148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sols, Chilean Pesos, Mexican Pesos, Honduran Lempiras and Swiss Francs. As a result, movement of the U.S. Dollar, the Australian
Dollar, the Canadian Dollar, Peruvian Sol, Chilean Peso, Mexican Peso, Honduran Lempira, Swiss Franc or other currencies in which
Nyrstar’s costs are denominated against the Euro could adversely affect Nyrstar’s pro?tability and ?nancial position.
Nyrstar has not entered and does not currently intend to enter into transactions that seek to hedge or mitigate its exposure to
exchange rate ?uctuations, other than short-term hedging transactions to cover the timing risk between concentrate purchases
and sales of metal and to cover its exposure on ?xed-price forward sales of metal to customers.
(e) Interest rate risk
Nyrstar incurs interest rate risk primarily on loans and borrowings. This risk is limited as a result of the interest rate on borrowings
such as convertible bond and ?xed rate bond being ?xed. Nyrstar’s current borrowings are split between ?xed rate and ?oating
rate basis. All variable interest rate loans and borrowings have EURIBOR or LIBOR based interest rates. The interest rate and terms
of repayment of Nyrstar’s loans are disclosed in note 35f. Changes in interest rates may impact primary loans and borrowings by
changing the levels of required interest payments.
Nyrstar’s interest rate risk management policy is to limit the impact of adverse interest rate movements through the use of interest
rate management tools. Interest rate risk is measured by maintaining a schedule of all ?nancial assets, ?nancial liabilities and
interest rate hedging instruments. At current Nyrstar’s interest rate exposure resulting from interest bearing borrowings is minimal
due to the fact that the majority of its long term debt commitments are with ?xed interest rate. Nyrstar has not entered into
interest rate derivatives.
(f) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market con?dence and so to sustain
future development of the business. The board of directors monitors the return on capital, which Nyrstar de?nes as pro?t after tax
divided by total shareholders’ equity, excluding non-controlling interests.
The board of directors also monitors the level of dividends to ordinary shareholders. Nyrstar’s dividend policy is to ensure that
whilst maintaining adequate cash ?ows for growth and the successful execution of its strategy, Nyrstar aims to maximize total
shareholder return through a combination of share price appreciation and dividends. Pursuant to Belgian law, the calculation of
amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company’s
non-consolidated Belgian GAAP ?nancial statements. In accordance with Belgian company law, the Company’s articles of
association also require that the Company allocate each year at least 5% of its annual net pro?ts to its legal reserve, until the legal
reserve equals at least 10% of the Company’s share capital. As a consequence of these factors, there can be no assurance as to
whether dividends or similar payments will be paid out in the future or, if they are paid, their amount.
The Company has established an Executive Long Term Incentive Plan (LTIP) with a view to attracting, retaining and motivating the
employees and senior management of the Company and its wholly owned subsidiaries. The key terms of the LTIP are set out below
in note 33, with vesting terms aligned to the Company’s capital management policy.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
149
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Exchange rates
The principal exchange rates used in the preparation of 2013 ?nancial statements are (in EUR):
Annual average Year end
2013 2012 2013 2012
United States dollar 1.3281 1.2848 1.3791 1.3194
Australian dollar 1.3777 1.2407 1.5423 1.2712
Canadian dollar 1.3684 1.2842 1.4671 1.3137
Swiss franc 1.2311 1.2053 1.2276 1.2072
7. Segment reporting
The Group’s operating segments (Metals Processing and Mining) re?ect the approach of the Nyrstar Management Committee
(NMC) towards evaluating the ?nancial performance and allocating resources to the Group’s operations. The NMC has been
identi?ed as the chief operating decision making group. The NMC assesses the performance of the operating segments based on a
measure of ‘Underlying EBITDA’.
‘Underlying EBITDA’ is a non-IFRS measure of earnings, which is used internally by management to access the underlying
performance of Group’s operations and is reported by Nyrstar to provide greater understanding of the underlying business
performance of its operations. Underlying EBITDA excludes items related to restructuring expense, M&A related transaction
expense, material income or expense arising from embedded derivatives recognized under IAS 39: ‘Financial Instruments:
Recognition and Measurement’ and other items arising from events or transactions that management considers to be clearly
distinct from the ordinary activities of Nyrstar.
The components of gross pro?t are non-IFRS measures which are used internally by management and are the following:
Mining‘s Payable/ free metal contribution is the metal price received for the payable component of the primary metal
contained in concentrate before it is further processed by a smelter.
Smelting’s Payable/free metal contribution is the value of the difference received between the amount of metal that is paid for
in a concentrate and the total zinc recovered from the sale by a smelter.
Treatment charges are the fees charged for the processing of primary (concentrates) and secondary raw materials for the
production of metal which is a positive gross pro?t element for the smelters and a deduction in the gross pro?t for mines.
Smelters’ premiums Contribution is the premium charged on top of the base LME price for the sales of re?ned zinc and lead metals.
By-products are secondary products obtained in the course of producing zinc or lead and include primarily sulphuric acid, silver,
gold, indium, copper and cadmium.
Other are other costs and revenues associated with smelting or mining operations that do not relate to the above categories.
The ‘Metals processing’ segment comprises of the Group’s smelting operations. The ‘Mining’ segment comprises of the Group’s
mining operations and the zinc streaming agreement with the Talvivaara mine (Finland). ‘Other & Eliminations’ contains Galva 45
(France), corporate activities as well as the eliminations of the intra-group transactions including any unrealised pro?ts resulting
from intercompany transactions.
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150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the twelve months ended 31 Dec 2013, EUR million Mining
Metals
Processing
Other and
eliminations Total
Revenue from external customers 83.0 2,740.5 - 2,823.5
Inter-segment revenue 387.9 (49.1) (338.8) -
Total segment revenue 470.9 2,691.4 (338.8) 2,823.5
Payable metal / free metal contribution 335.3 244.3 1.1 580.7
Treatment charges (76.1) 337.0 - 260.9
Premiums - 127.2 0.1 127.3
By-products 172.6 215.3 - 387.9
Other 13.1 (110.8) (7.9) (105.6)
Gross Pro?t 444.9 813.0 (6.7) 1,251.2
Employee expenses (139.8) (207.1) (44.4) (391.3)
Energy expenses (48.7) (271.6) (0.2) (320.5)
Other expenses / income (169.4) (197.2) (34.5) (401.1)
Direct operating costs (357.9) (675.9) (79.1) (1,112.9)
Non-operating and other (8.7) 11.8 43.2 46.3
Underlying EBITDA 78.3 148.9 (42.6) 184.6
Depreciation, amortisation and depletion (220.1)
M&A related transaction expense (1.7)
Restructuring expense (18.5)
Impairment loss (net) (20.1)
Embedded derivatives (9.3)
Net ?nance expense (99.2)
Income tax expense (11.1)
Loss for the period (195.4)
Capital expenditure (96.6) (95.7) (7.1) (199.4)
151
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1
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the twelve months ended 31 Dec 2012, EUR million Mining
Metals
Processing
Other and
eliminations Total
Revenue from external customers 400.3 2,683.7 (14.2) 3,069.8
Inter-segment revenue 80.9 - (80.9) -
Total segment revenue 481.2 2,683.7 (95.1) 3,069.8
Payable metal / free metal contribution 403.0 242.1 - 645.1
Treatment charges (100.2) 338.5 - 238.3
Premiums - 115.2 - 115.2
By-products 226.1 220.9 - 447.0
Other (20.2) (64.3) (4.8) (89.3)
Gross Pro?t 508.7 852.4 (4.8) 1,356.3
Employee expenses (134.3) (217.4) (57.0) (408.7)
Energy expenses (47.5) (274.8) (0.9) (323.2)
Other expenses / income (198.6) (191.6) (35.5) (425.7)
Direct operating costs (380.4) (683.8) (93.4) (1,157.6)
Non-operating and other 0.6 (32.6) 53.8 21.8
Underlying EBITDA 128.9 136.0 (44.4) 220.5
Depreciation, amortisation and depletion (218.4)
M&A related transaction expense (2.6)
Restructuring expense (16.9)
Impairment loss (18.2)
Embedded derivatives (8.9)
Loss on disposal of subsidiaries (0.1)
Gain on the disposal of equity accounted investees 26.7
Net ?nance expense (93.4)
Income tax bene?t 14.8
Loss for the period (96.5)
Capital expenditure (129.9) (112.5) (5.4) (247.8)
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152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Geographical information
(a) Revenues from external customers
EUR million 2013 2012
Belgium 183.0 297.4
Rest of Europe 1,072.5 1,260.7
Americas 370.0 291.1
Australia 799.5 916.7
Asia 373.3 287.7
Other 25.2 16.2
Total 2,823.5 3,069.8
The revenue information above is based on the location (shipping address) of the customer.
Sales to each individual customer (group of customers under the common control) of the Group did not exceed 10% with the
exception of sales to Glencore International plc and Umicore NV/SA, which accounted for 38.1% (2012: 44.4%) and 9.3% (2012:
11.5%) respectively, of the total Group’s sales, reported in the Metals Processing segment.
(b) Non-current assets
EUR million 31 Dec 2013 31 Dec 2012
Belgium 239.6 84.4
Rest of Europe 492.4 505.9
North America 417.8 479.8
Central America (incl. Mexico) 428.5 543.2
South America 167.8 257.7
Australia 260.0 229.8
Total 2,006.1 2,100.8
Non-current assets for this purpose consist of property, plant and equipment, intangible assets and the zinc purchase interests.
8. Acquisition of business
2013
Acquisition of subsidiary: ERAS Metal AS
On 4 December 2013, Nyrstar acquired 100% interest in ERAS Metal AS (“Eras”), the owner of a fuming plant in Hoyanger, Norway.
In line with Nyrstar’s strategy, the acquisition of Eras provides the opportunity to process alternate valuable feed materials such as
Nyrstar smelters’ residues and ponds.
153
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2013, the accounting for the acquisition was done on a provisional basis due to the timing of the acquistion.
The acquisiton had the following effect on the Group’s assets and liabilities on acquisition date:
EUR million Provisional fair values on acquisition
Property, plant and equipment 7.3
Inventories 1.0
Trade receivables 0.6
Cash and cash equivalents 0.1
Provisions (1.5)
Loans and borrowings (1.8)
Trade and other payables (2.8)
Net identi?able assets and liabilities 2.9
Consideration paid, satis?ed in cash 2.9
Cash acquired 0.1
Net cash out?ow 2.8
The amounts of revenue and pro?t since the acquisition date included in the consolidated income statement for the reporting
period ended 31 December 2013 was EUR 0.2 million and EUR (0.2) million respectively. If the acquisition had occurred on 1
January 2013, management estimates that consolidated revenue and the consolidated pro?t for the year ended 31 Dec 2013
would have been EUR 9.2 million higher respectively EUR 3.2 million lower.
9. Disposal of subsidiaries
On 9 October 2012 Nyrstar sold its entire 66% share in Galva 45 SA, a French company specialising in galvanizing manufactured
steel parts for cash proceeds of EUR 2.2 million resulting in a loss of EUR 0.1 million.
10. M&A related transaction expense
Merger and acquisition (M&A) related expense include the acquisition and disposal related direct transaction costs (e.g. advisory,
accounting, tax, legal or valuation fees paid to external parties). The M&A related transaction expense in the 2013 income
statement amounts to EUR 1.7 million (2012: EUR 2.6 million). In 2013, EUR 0.5 million related to successfully completed
acquisitions, see Note 8 (2012: nil).
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154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Employee bene?ts expense
EUR million 2013 2012
Wages and salaries (349.9) (363.4)
Compulsory social security contributions (23.9) (26.4)
Contributions to de?ned contribution plans (4.6) (4.6)
Expenses related to de?ned bene?t plans (7.7) (8.1)
Equity and cash settled share based payment transactions, incl. social security (5.2) (6.2)
Total employee bene?ts expense (391.3) (408.7)
12. Finance income and expense
EUR million 2013 2012
Interest income 0.9 1.2
Total ?nance income 0.9 1.2
Interest expense (67.4) (65.6)
Unwind of discount in provisions (11.0) (15.7)
Other ?nance charges (21.1) (12.4)
Total ?nance expense (99.5) (93.7)
Net foreign exchange loss (0.6) (0.9)
Net ?nance expense (99.2) (93.4)
13. Income tax
(a) Income tax recognised in the income statement
EUR million 2013 2012
Current income tax expense (18.7) (35.0)
Deferred income tax bene?t 7.6 49.8
Total income tax (expense) / bene?t (11.1) 14.8
155
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b) Reconciliation of effective tax rate
The tax on the Group’s pro?t before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to pro?ts of the consolidated entities as follows:
EUR million 2013 2012
Loss before income tax (184.3) (111.3)
Tax at aggregated weighted average tax rate 46.1 25.9
Aggregated weighted average income tax rate 25.0% 23.3%
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Non-deductible amounts (48.5) (4.2)
Recognition / (non-recognition) of tax losses and temporary differences 6.2 (10.0)
Overprovision for previous years 0.9 9.4
Unrecoverable withholding tax (6.1) (5.7)
Net adjustment to deferred tax balances due to tax rate change in foreign
jurisdiction (3.4) (0.5)
Share of income tax of equity accounted investees - 0.1
Foreign exchange differences (2.1) 1.0
Other (4.2) (1.2)
Total income tax (expense) / bene?t (11.1) 14.8
Effective income tax rate -6.0% 13.3%
The change in the aggregate weighted average income tax rate compared to the year ended 31 December 2012 is due to the
variation in the weight of subsidiaries’ pro?ts.
Nyrstar recognised an income tax expense for the year ended 31 December 2013 of EUR 11.1 million representing an effective
income tax rate of -6.0% (for the year ended 31 December 2012: 13.3%). The tax rate is impacted by non deductible amounts
related to the impairments incurred by the Group, recognition of previously unrecognised tax losses and temporary differences and
unrecoverable withholding tax.
(c) Income tax recognised directly in other comprehensive income
EUR million 2013 2012
Income tax (expense) recognised on cash ?ow hedges (4.3) -
Income tax (expense) / bene?t recognised on de?ned bene?ts pension schemes (3.1) 4.2
Total income tax recognised directly in other comprehensive income (7.4) 4.2
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156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Recognised deferred income tax assets and liabilities
Deferred tax assets and liabilities consist of temporary differences attributable to:
EUR million 31 Dec 2013 31 Dec 2012
ASSETS:
Employee bene?ts 19.6 31.3
Provisions 39.7 33.4
Property, plant and equipment 6.0 36.1
Payables / receivables 7.5 10.6
Tax losses carried forward 135.3 68.4
Other 8.6 4.6
Total 216.7 184.4
Set off of tax (96.1) (107.4)
Deferred tax assets 120.6 77.0
LIABILITIES:
Embedded derivatives (6.8) (5.3)
Property, plant and equipment (258.0) (224.5)
Payables / receivables (3.7) (18.0)
Other (1.8) (2.1)
Total (270.3) (249.9)
Set off of tax 96.1 107.4
Deferred tax liabilities (174.2) (142.5)
Deferred tax - net (53.6) (65.5)
INCOME STATEMENT:
Employee bene?ts (8.4) (2.3)
Provisions 6.5 (6.5)
Property, plant and equipment (62.1) 19.3
Payables / receivables (4.4) (0.7)
Tax losses carried forward 68.6 34.1
Embedded derivatives 2.9 3.6
Other 4.5 2.3
Total 7.6 49.8
Reconciliation of deferred tax - net:
As at 1 Jan (65.5) (127.4)
Deferred income tax bene?t 7.6 49.8
Recognised in OCI (7.4) 4.2
Change in consolidation scope - 1.6
Provision for unrealized fx result 15.7 (0.3)
Currency translation effects (4.0) 6.6
As at 31 Dec (53.6) (65.5)
157
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR 66.0 million (31 December 2012: EUR 36.2 million) of the net deferred tax assets on tax losses carried forward arise in entities
that have been loss making in 2013 and 2012. In evaluating whether it is probable that taxable pro?ts will be earned in future
accounting periods, all available evidence was considered. These forecasts are consistent with those prepared and used internally
for business planning and impairment testing purposes. Following this evaluation, it was determined there would be suf?cient
taxable income generated to realise the bene?t of the deferred tax assets.
(e) Unrecognised deductible temporary differences and tax losses
EUR million
Net deductible
temporary
differences
Tax loss carry
forward
Total
Dec 31, 2013
Net deductible
temporary
differences
Tax loss carry
forward
Total
Dec 31, 2012
No expiration date 164.0 281.9 445.9 185.3 247.1 432.4
Expiration date
within 4 years - - - - - -
Expiration date 4
to 7 years - - - - 179.2 179.2
Expiration date
over 7 years - - - - - -
Total 164.0 281.9 445.9 185.3 426.3 611.6
(f) Unremitted earnings
As at 31 December 2013, unremitted earnings of EUR 540.0 million (31 December 2012: EUR 393.0 million) have been retained by
subsidiaries and associates for reinvestment. No provision is made for income taxes that would be payable upon the distribution of
such earnings.
(g) Tax audit
Nyrstar periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information
available. For those matters where it is probable that an adjustment will be made, the Group recorded its best estimate of these tax
liabilities, including related interest charges. The ?nal outcome of tax examinations may result in a materially different outcome
compared to the recorded tax liabilities and contingencies.
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158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Other expense
EUR million 2013 2012
Stock movement conversion costs 3.9 8.0
Other tax expense (8.5) (9.9)
Travel expense (9.8) (12.1)
Operating lease (14.0) (12.3)
Insurance expense (8.2) (8.2)
Royalties (7.0) (7.0)
Communication expenses (4.5) (4.2)
IT costs (1.3) (1.9)
Memberships/subscriptions (1.7) (2.3)
Training (1.7) (2.1)
Other (10.5) (10.3)
Total other expenses (63.3) (62.3)
15. Property, plant and equipment
EUR million Note
Land and
buildings
Plant and
equipment
Mining
properties and
development
Under
construction
Cyclical
maintenance
and other Total
Cost 152.4 1,525.9 916.2 95.9 162.2 2,852.6
Accumulated depreciation and
impairment (17.9) (718.0) (250.1) - (95.1) (1,081.1)
Carrying amounts 134.5 807.9 666.1 95.9 67.1 1,771.5
As at 1 Jan 2013 151.7 707.9 727.4 82.2 61.0 1,730.2
Acquired in business combination - 7.3 - - - 7.3
Additions 2.2 46.0 16.0 115.2 18.7 198.1
Restoration provision adjustments 29 - - 21.7 - - 21.7
Transfers (20.4) 34.5 58.6 (96.7) 18.1 (5.9)
Disposals (0.3) (1.2) - - - (1.5)
Depreciation expense (12.0) (112.3) (60.1) - (27.6) (212.0)
Impairment 17 20.8 166.1 (57.4) 4.6 (0.3) 133.8
Currency translation effects (7.5) (40.4) (40.1) (9.4) (2.8) (100.2)
As at 31 Dec 2013 134.5 807.9 666.1 95.9 67.1 1,771.5
159
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR million Note
Land and
buildings
Plant and
equipment
Mining
properties and
development
Under
construction
Cyclical
maintenance
and other Total
Cost 207.8 1,763.1 1,055.2 82.2 173.2 3,281.5
Accumulated
depreciation and
impairment (56.1) (1,055.2) (327.8) - (112.2) (1,551.3)
Carrying amounts 151.7 707.9 727.4 82.2 61.0 1,730.2
As at 1 Jan 2012 124.1 707.6 689.4 145.3 59.3 1,725.7
Disposal of subsidiaries - (3.9) - (0.1) (0.1) (4.1)
Additions 14.7 72.0 50.2 78.9 30.3 246.1
Restoration provision
adjustments 29 - - (5.0) - - (5.0)
Transfers 37.4 44.1 63.7 (141.0) (4.2) (0.0)
Disposals (1.1) (0.6) (0.1) - (0.1) (1.9)
Depreciation expense (14.7) (106.1) (62.8) - (23.7) (207.3)
Impairment 17 (7.2) (1.1) - - - (8.3)
Currency translation
effects (1.5) (4.1) (8.0) (0.9) (0.5) (15.0)
As at 31 Dec 2012 151.7 707.9 727.4 82.2 61.0 1,730.2
The carrying amount of property, plant and equipment accounted for as ?nance lease assets at 31 December 2013 is EUR 1.9
million and is classi?ed as plant and equipment (2012: EUR 3.2 million). The carrying amount of exploration and evaluation
expenditure at 31 December 2013 is EUR 22.2 million and is included in mining properties and development (2012: EUR 14.3
million). The additions to the carrying amount of the exploration and evaluation expenditure during 2013 were EUR 8.4 million
(2012: EUR 9.9 million).
The total gains on sales of property, plant and equipment in the 2013 income statement amount to EUR 2.1 million
(2012: EUR 6.4 million).
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1
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160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Intangible assets
EUR million Note Goodwill
Emission and
carbon rights
Software
and other Total
Cost - 2.5 26.5 29.0
Accumulated amortisation and impairment - (0.4) (18.3) (18.7)
Carrying amounts - 2.1 8.2 10.3
As at 1 Jan 2013 124.9 1.1 7.4 133.4
Additions
*
- 23.3 0.8 24.1
Transfers - - 5.9 5.9
Disposals - (21.7) - (21.7)
Amortisation expense - - (5.3) (5.3)
Impairment 17 (118.2) - (0.4) (118.6)
Currency translation effects (6.7) (0.6) (0.2) (7.5)
As at 31 Dec 2013 - 2.1 8.2 10.3
* EUR 22.8 million relate to non-cash recognition of emission and carbon rights.
EUR million Note Goodwill
Emission and
carbon rights
Software
and other Total
Cost 124.9 4.0 20.2 149.1
Accumulated amortisation and impairment - (2.9) (12.8) (15.7)
Carrying amounts 124.9 1.1 7.4 133.4
As at 1 Jan 2012 127.6 0.6 10.4 138.6
Additions
*
- 26.7 1.4 28.1
Disposals - (26.5) - (26.5)
Amortisation expense - (0.3) (4.7) (5.0)
Currency translation effects (2.7) 0.6 0.3 (1.8)
As at 31 Dec 2012 124.9 1.1 7.4 133.4
* EUR 26.4 million relate to non-cash recognition of emission and carbon rights.
161
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N
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Goodwill was allocated to the following cash generating units. As outlined in Note 17, Nyrstar impaired EUR 118.2 million (100%)
of its goodwill during the year ended 31 December 2013 (2012: EUR Nil).
EUR million 31 Dec 2013 31 Dec 2012
Peruvian mines - 12.1
Campo Morado - 71.1
El Toqui - 6.8
El Mochito - 5.0
Myra Falls - 8.5
Langlois - 21.4
Total Goodwill - 124.9
17. Impairment
Impairment loss
In 2013 Nyrstar recognised pre-tax impairment charges on Nyrstar’s Mining assets of EUR 202.6 million (2012: EUR Nil),
impairment reversals related to Nyrstar’s Metals Processing assets of EUR 207.4 million (2012: EUR Nil) and impairment charges
on non-core operations of the Group of EUR 24.9 million (2012: EUR18.2 million) resulting in a net impairment loss of EUR 20.1
million (2012: EUR: 18.2 million).
The allocation of the impairment charges for the period to individual assets, cash generating units and operating segments is
outlined below:
in EUR million whereof
Impairment
(loss) / reversal
Property, plant
and equipment Goodwill Investments Other
Peruvian mines (74.7) (51.8) (12.1) - (10.8)
Campo Morado (89.8) (21.8) (68.0) - -
Langlois (19.2) - (19.2) - -
Myra Falls (7.6) - (7.6) - -
El Toqui (6.5) - (6.5) - -
El Mochito (4.8) - (4.8) - -
Mining (202.6) (73.6) (118.2) - (10.8)
Port Pirie 58.5 58.5 - - -
Balen 148.9 148.9 - - -
Metals processing 207.4 207.4 - - -
Investments in equity accounted
investees (12.0) - - (10.6) (1.4)
Investments in equity securities (12.9) - - (12.9) -
Other non-core assets of the Group
1
(24.9) - - (23.5) (1.4)
Total (20.1) 133.8 (118.2) (23.5) (12.2)
(note 15) (note 16) (note 18, 19)
1
Other non-core assets of the Group are not allocated to operating segments and are included in Other and eliminations in Note 7
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Impairment testing for mining and metals processing operations
Recoverable values were determined on the basis of fair value less cost to sell (FVLCS) for each operation. The FVLCS recoverable
values for Mining and Metals Processing operations were determined as the present value of the estimated future cash ?ows
(expressed in real terms) expected to arise from the continued use of the assets (life of asset), including reasonable forecast
expansion prospects and using assumptions that an independent market participant would take into account. These cash ?ows
were discounted using a real after-tax discount rate that re?ected current market assessments of the time value of money and the
risks speci?c to the operation.
The key assumptions underlying the FVLCS were forecast commodity prices, foreign exchange rates and treatment charges,
discount rates, production levels and capital and operating costs.
Commodity price and foreign exchange rate forecasts were developed based on externally available forecasts by market
commentators. The prices used in the impairment assessment varied in accordance with the year the sale was expected to occur
with long term prices starting in 2020. The ranges of prices used are outlined in the table below:
Low High Long term
Commodity prices (USD)
Zinc (per tonne) 2,100 2,960 2,640
Lead (per tonne) 2,180 2,390 2,180
Copper (per tonne) 6,500 6,970 6,970
Gold (per ounce) 1,330 1,400 1,400
Silver (per ounce) 22.50 24.20 24.20
Foreign exchange rates (versus Euro)
United States dollar 1.23 1.30 1.26
Australian dollar 1.46 1.58 1.58
Treatment charge assumptions are determined by reference to benchmark treatment charges and historical treatment charge rates
as a proportion of the associated metal price and range from 7% to 13% of the underlying metal price.
Discount rates are determined using a weighted average cost of capital methodology on an operation speci?c basis. The discount
rates applied for operations with allocated goodwill and/or impairment charges/reversals are outlined in the table below:
Discount rate
Peruvian mines 9.30%
Campo Morado 8.50%
El Toqui 8.00%
El Mochito 11.20%
Myra Falls 7.80%
Langlois 7.80%
Port Pirie 10.00%
Balen 5.30%
163
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Production levels and capital and operating costs are determined based on approved budgets and forecasts with greater weight
given to historical results unless de?nitive plans are in place for capital projects which are expected to have a signi?cant,
favourable effect on the operation. In such circumstances, expenditures associated with the capital project are incorporated into
the FVLCS model.
Impairment charges related to mining operations
Based on the results of its impairment testing at 31 December 2013, the Group has recorded impairment losses related to its
mining operations totalling EUR 202.6 million. The key events which led to the declines in the recoverable values of the mining
operations and associated impairment losses were primarily the introduction of the Mexican mining tax at Campo Morado,
suspension of the operations at Corricancha and Puccarajo in Peru without current plans to fully restart these operations and the
impacts of lower precious metal prices. The impairment tests resulted in the full impairment of Nyrstar’s previously recognised
goodwill.
Reversal of impairment at Balen and Port Pirie
In 2013 Nyrstar prepared recoverable value estimates for all Metals Processing assets. As a result of these recoverable value
estimates, Nyrstar reversed impairment charges previously recognised in the year ended 31 December 2008 in connection with the
Balen Smelter (EUR 148.9 million) and the Port Pirie Smelter (EUR 58.5 million). In each case, the impairment reversal was after
adjusting for accumulated amortisation which would have been recorded had the 2008 impairments not been recorded.
The reversal of impairment at the Balen Smelter was driven by the continuous, sustained improvements in operating results at
the Balen Smelter since 2008 particularly in relation to zinc recovery rates and energy costs which combined with the favourable
zinc price outlook provide objective evidence that the recoverable amounts of the assets in Balen exceed their carrying value
after reversal of the 2008 impairment charge. The reversal of impairment at the Port Pirie Smelter is due to the planned Port Pirie
Transformation Project, a capital expansion plan which will signi?cantly change the nature of the operating capabilities of the Port
Pirie Smelter from a primary lead smelter to a world class, multi-metals recovery facility increasing the cash generating ability of
Port Pirie. The recoverable value estimate for Port Pirie incorporates all capital expenditure associated with the project and the
discount rate applied includes a premium for construction risks. Based on the results of the impairment testing the recoverable
amounts of the assets in Port Pirie exceed their carrying value after reversal of the 2008 impairment charge.
Other non-core assets of the Group
In 2013 Nyrstar recognised impairment losses of EUR 24.9 million on Group’s non-core assets. The majority of these impairment
losses relate to investments in equity securities that has been valued at fair value with mark to market movements recognised
in other comprehensive income (“OCI”) for which market prices which indicated a signi?cant decline in the market value of the
investment (EUR 12.9 million) and investments in equity accounted investees estimated under FVLCS using discounted cash ?ow
models (EUR 10.6 million).
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164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Investments in equity accounted investees
EUR million Ownership 31 Dec 2013 31 Dec 2012
Genesis Alloys (Ningbo) Ltd
1
50.00% - 1.1
Foehl China Co. Ltd
1
50.00% 2.0 11.0
Ironbark Zinc Ltd 26.50% 16.5 16.8
Other 49.00% 0.1 0.1
Total 18.6 29.0
1
Impairment losses totaling EUR 10.6 million were recorded in connection with Genesis Alloys (Ningbo) Ltd. and Foehl China Co. Ltd during the year ended 31 December
2013 (2012: EUR Nil), refer to note 17.
Summary ?nancial information for equity accounted investees, adjusted for the percentage ownership held by the Group, is as
follows:
EUR million Current assets
Non-current
assets
Current
liabilities
Non-current
liabilities Revenues Pro?t / (loss)
As at 31 Dec 2013 6.4 65.3 (0.9) (0.2) 17.6 0.8
As at 31 Dec 2012 10.5 102.9 (2.4) (0.2) 22.7 (1.3)
In 2012, the joint venture between Nyrstar and SimsMM (ARA joint venture) sold Australian Re?ned Alloys’ secondary lead
producing facility in Sydney, Australia (ARA Sydney) to companies associated with Renewed Metal Technologies Pty Ltd for a total
sale price of EUR 60 million (AUD 80 million) plus working capital. Nyrstar’s share of the sales proceeds was EUR 32.4 million,
including a working capital adjustment, with a gain on the sale of EUR 26.7 million. Nyrstar continues to operate the former ARA’s
production facility in Melbourne under the name of Simstar Joint Venture with Sims Metal Management Limited.
The fair value (based on the quoted bid prices in an active market, a Level 1 measurement) of Nyrstar’s share of Ironbark Zinc Ltd
as of 31 December 2013 is EUR 3.8 million (2012: 10.8 million).
In 2012 the Group has provided a guarantee of CNY 20 million (EUR 2.4 million) in favour of KBC in China, who provided a credit
facility to Genesis Alloys (Ningbo) Ltd. There is no outstanding guarantee at 31 December 2013.
165
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Investments in equity securities
EUR million 31 Dec 2013 31 Dec 2012
Herencia Resources Ltd
1
1.2 1.4
Quali?ed Environmental Trust 16.3 18.1
Exeltium SAS 4.2 4.2
Other
1
5.8 14.2
Total 27.5 37.9
1
Impairment losses totaling EUR 12.9 million were recorded in connection with Henencia Resources Ltd. and other investments in equity securities during the year
ended 31 December 2013 (2012: EUR Nil), refer to note 17.
All investments in equity securities are measured at level 1 under the fair value measurements using quoted bid prices in an active
market (refer to note 35g for further explanation), with the exception of Exeltium SAS, which is a private company and carried at
cost.
20. Zinc purchase interest
In February 2010, Nyrstar acquired 1.25 million tonnes of zinc in concentrate for USD 335 million (EUR 242.6 million) from Talvivaara
Sotkamo Limited (a member of the Talvivaara Mining Company Plc group “Talvivaara”) to be delivered over a number of years (the
“Agreement”). As at 31 December 2013, 1.03 million tonnes (2012 – 1.17 million tonnes) remain to be delivered to Nyrstar.
The asset is depleted through the income statement on the unit of production basis as the underlying tonnes are delivered to Nyrstar.
EUR million 2013 2012
As at 1 Jan 237.2 249.2
Depletion (2.8) (6.1)
Currency translation effects (10.1) (5.9)
As at 31 Dec 224.3 237.2
During November 2013 Talvivaara applied for the commencement of corporate reorganisation proceedings under Finland’s
Restructuring of Enterprises Act (the “Reorganisation”). During December 2013, the responsible Court approved commencement
of the Reorganisation and appointed a reorganisation administrator (the “Administrator”) to submit a reorganisation plan for the
approval by the creditors and the Court. The objective of the process is to reorganise Talvivaara’s ?nancial position to facilitate its
long term viability. The Administrator is due to ?le with the Court reports on the ?nancial status of Talvivaara in March 2014 and
proposals for the reorganisation program in May 2014.
Nyrstar is not a creditor of Talvivaara and its contractual rights under the Agreement are not directly the subject of the
Reorganisation. However, Nyrstar is engaged in discussions with the Administrator as the ongoing viability of Talvivaara’s
operations will impact on Talvivaara’s ability to perform its obligations under the Agreement.
In the event of the reorganisation process being unsuccessful, Talvivaara may have to ?le for bankruptcy. In bankruptcy, the
bankruptcy administrator has the option to void the Agreement. Should the Agreement be voided, Nyrstar would become a
creditor to Talvivaara for the amounts outstanding under the Agreement. Collectability of any such amounts would be uncertain.
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1
3
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nyrstar has assessed the recoverability of the Agreement on the basis of Talvivaara continuing as a going concern and delivering
into the Agreement. This assessment takes into account the enhanced performance risk due to Talvivaara’s current ?nancial
situation and concludes the EUR 224.4 million carrying value of the Agreement is recoverable.
Considerable uncertainties exist as to the outcome of the Reorganisation, Talvivaara continuing as a going concern and the
performance of its obligations under the Agreement. It is currently not possible for Nyrstar to estimate the most likely outcome of
the Reorganisation and its impact on the carrying value of the Agreement.
It is possible, though in Nyrstar’s view not probable, that the outcome of the Reorganisation will result in the carrying value of the
Agreement being impaired. If such an impairment was recognised in the 31 December 2013 ?nancial results, the reported loss for
the year of EUR 195.4 million would increase by a range of EUR Nil to EUR 176.9 million (being the tax effected carrying value of
the zinc purchase interest of EUR 224.4 million). The reported loss for the year would then be in a range of EUR 195.4 million to
EUR 372.3 million and total equity would be in a range of EUR 869.6 million to EUR 692.7 million. Such impairments would not
impact Nyrstar’s compliance with ?nancial covenants on existing loan agreements as at 31 December 2013.
21. Other ?nancial assets and liabilities
EUR million 31 Dec 2013 31 Dec 2012
Embedded derivatives
(b)
- 11.6
Restricted cash
(c)
7.6 8.2
Held to maturity
(d)
2.8 2.6
Loans to equity accounted investees
(e)
- 2.7
Total non-current ?nancial assets 10.4 25.1
Commodity contracts - fair value hedges
(a)
9.1 33.8
Commodity contracts - cash ?ow hedges
(f)
4.8 -
Foreign exchange contracts - held for trading 11.5 7.7
Embedded derivatives
(b)
1.2 5.5
Total current ?nancial assets 26.6 47.0
Embedded derivatives
(b)
3.9 2.1
Total non-current ?nancial liabilities 3.9 2.1
Commodity contracts - fair value hedges
(a)
14.4 10.6
Foreign exchange contracts - held for trading 6.0 0.5
Embedded derivatives
(b)
0.4 0.2
Total current ?nancial liabilities 20.8 11.3
(a) Instruments used by Nyrstar to manage exposure to currency and commodity price risk exposures
The fair value of derivatives (commodity contracts) hedging inventories and ?xed forward sales contracts resulted in a net liability
of EUR 5.3 million (31 December 2012: net asset of EUR 23.2 million) being recognised on the statement of ?nancial position.
Carrying amounts of the hedged items of inventory as well as the ?rm commitments for ?xed forward sales contracts are disclosed
in note 22 and 23, respectively.
167
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The fair value of foreign exchange derivatives that are commercially effective hedges but do not meet the strict IFRS hedge
effectiveness criteria, are classi?ed as held for trading and resulted in a net asset of EUR 5.5 million (31 December 2012 net asset:
EUR 7.2 million).
The Group’s exposure to currency and commodity risk related to other ?nancial assets and liabilities is disclosed in note 35.
(b) Embedded derivatives
The change in fair value on the effective portion of the Group’s embedded derivatives during the year ended 31 December 2013
with a negative impact of EUR 9.0 million (31 December 2012: negative impact of EUR 7.2 million) was recognised in the cash ?ow
hedge reserve whilst changes in fair value on the ineffective portion and amortisation of the swap’s fair value at inception of EUR
9.3 million (31 December 2012: EUR 8.7 million) were recognised in the income statement within energy expense.
(c) Restricted cash
The restricted cash balance of EUR 7.6 million as at 31 December 2013 (31 December 2012: EUR 8.2 million) represents amounts
placed on deposit to cover certain reclamation costs.
(d) Held to maturity
The held to maturity instrument is a government bond that is required to be maintained as a security deposit.
(e) Loans to equity accounted investees
During 2012, the Group provided an interest free loan of USD 3.5 million (31 December 2013: EUR 0.0 million, 31 December 2012:
EUR 2.7 million) to Genesis, its equity accounted investee. The initial term of the loan is 3 years, however is automatically extended
for consecutive periods of 3 years unless a written repayment notice is served to Genesis Alloys (Ningbo) Ltd. During 2013 Nyrstar
fully impaired the loan.
(f) Commodity contracts – cash ?ow hedges
The amount of EUR 4.8 million represents a remaining balance of the commodity contracts – cash ?ow hedges that were not
settled at 31 December 2013. The fair value of the effective portion of commodity contracts - cash ?ow hedges at 31 December
2013 is a gain of EUR 32.7 million (31 December 2012: nil). As the commodity contracts - cash-?ow hedges have been 100% hedge
effective, the gain of EUR 32.7 million has been recognised in the cash ?ow hedge reserve.
22. Inventories
EUR million 31 Dec 2013 31 Dec 2012
Raw materials 183.4 308.6
Work in progress 219.8 322.0
Finished goods 38.5 39.3
Stores and consumables 73.9 81.6
Fair value adjustment* - (4.4)
Total inventories 515.6 747.1
* As the Group applies hedge accounting as described in note 3g, the hedged items of inventories are valued at fair value.
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1
3
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
During the year ended 31 December 2012 Nyrstar identi?ed, processed and sold silver bearing inventory had previously not
been recognised on the balance sheet. This inventory related to historical silver losses in the Port Pirie smelter identi?ed as being
recoverable during 2012. The pre-tax bene?t from the identi?cation, recovery and sale of the silver bearing material recognised in
the income statement for the period ended 31 December 2012 was EUR 23.6 million. During the year ended 31 December 2013,
Nyrstar did not identify further silver inventory.
23. Other assets and liabilities
EUR million 31 Dec 2013 31 Dec 2012
Deferred debt issuance cost - non-current (b) 2.6 3.4
Other - non-current 0.6 0.5
Total other non-current assets 3.2 3.9
Fair value of underlying hedged risk - current (a) - 4.0
Total other current assets - 4.0
Commodity delivery obligation - non-current (c) 55.6 59.3
Total other non-current liabilities 55.6 59.3
Fair value of underlying hedged risk - current (a) 3.9 2.7
Commodity delivery obligation - current (c) 2.4 4.1
Total other current liabilities 6.3 6.8
(a) Fair value of underlying hedged risk
The fair value of ?xed forward sales contracts (the underlying hedged items) resulted in a net liability of EUR 3.9 million (2012:
net asset of EUR 1.3 million), being offset by an amount of EUR 1.0 million (2012: EUR 2.0 million) representing the fair value of
hedging derivatives on these ?xed forward sales contracts and included in note 21 other ?nancial assets and liabilities.
(b) Deferred debt issuance cost
Transaction cost of the SCTF credit facility (see note 28) not yet amortised of EUR 2.6 million (2012: EUR 3.4 million).
(c) Other liabilities
In 2011 Nyrstar acquired Farallon Mining Ltd., the owner of the Campo Morado mining operation in Mexico. In May 2008, Farallon
entered into a contractual agreement with Silver Wheaton Corp. (“Silver Wheaton”) to sell 75% of its silver production from the
Campo Morado operation over the life of mine for an upfront payment of USD 80.0 million. Upon physical delivery of the silver,
Silver Wheaton will also pay Nyrstar a ?xed price payment per ounce of silver produced equal to the lesser of USD 3.90 and the
spot price at the time of sale (subject to a 1% annual adjustment starting in the third year of silver production)
169
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As a part of the purchase price allocation accounting for the Campo Morado acquisition, the obligation to deliver silver to Silver
Wheaton was fair valued based on the present value of the forgone revenue resulting from the Silver Wheaton obligation as of
the acquisition date. The obligation is depleted through the income statement using the unit-of-production method, as the mineral
reserves related to the Silver Wheaton liability are mined and delivered under the contract. The amortisation of the Silver Wheaton
liability in 2013 amounts to EUR 2.6 million (2012: EUR 2.5 million).
24. Trade and other receivables
EUR million 31 Dec 2013 31 Dec 2012
Trade receivables 163.6 207.3
Less provision for receivables (2.1) (2.5)
Net trade receivables 161.5 204.8
Other receivables 13.4 16.3
Total trade and other receivables 174.9 221.1
The movement in the provision for receivables is detailed in the table below:
EUR million 2013 2012
As at 1 Jan 2.5 3.3
Disposal of subsidiaries - (0.2)
Payments (0.1) -
Additions / (reversals) (0.3) (0.6)
As at 31 Dec 2.1 2.5
The Group’s exposure to currency and liquidity risk related to trade and other receivables is disclosed in note 35.
25. Cash and cash equivalents
EUR million 31 Dec 2013 31 Dec 2012
Cash at bank and on hand 101.6 74.0
Short-term bank deposits 190.7 114.1
Total cash and cash equivalents 292.3 188.1
EUR 2.5 million of the cash and cash equivalents balance was restricted at 31 December 2013. This cash was released to Nyrstar on
21 January 2014.
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A
N
N
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0
1
3
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cash at bank and on hand and short-term deposits earned a combined weighted average interest rate of 0.1% for calendar year
2013 (2012: 0.2% per annum).
The Group’s exposure to interest rate risk and a sensitivity analysis for ?nancial assets and liabilities are disclosed in note 35.
26. Capital
Share capital and share premium
As at 31 December 2013 the number of issued ordinary shares is 170,022,544 (31 December 2012: 170,022,544) with a par value
of EUR 2.18 (2012: EUR 2.34). The reduction in par value is due to decisions taken at the extraordinary shareholders’ meeting on
23 May 2013 to reduce the Company’s share capital through the distribution to the shareholders of an amount of EUR 0.16 per
outstanding share, EUR 27.2 million (for further detail see below). The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with
regard to the Company’s residual assets.
Apart from the issued share capital, Nyrstar NV has outstanding convertible bonds issued in 2009 and 2013 in an aggregate
principal amount of EUR 119.9 million and EUR 120.0 million respectively. Based on a conversion price of EUR 5.63 per share for
the bonds issued in 2009, if all convertible bonds are converted, a maximum of 21,296,625 new shares are to be issued. Based
on a conversion price of EUR 4.978 per share for the bonds issued in 2013, if all convertible bonds are converted, a maximum of
24,106,066 new shares are to be issued.
Distribution to shareholders (capital decrease)
The extraordinary shareholders’ meeting on 23 May 2013 approved a distribution of EUR 0.16 per share, amounting to a total
distribution of EUR 27.2 million (net of treasury shares EUR 24.0 million) The distribution was structured as a capital reduction
with reimbursement of paid-up capital.
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
Issued shares 2013 2012
Shares outstanding 154,684,113 162,676,718
Treasury shares 15,338,431 7,345,826
As at 31 Dec 170,022,544 170,022,544
Movement in shares outstanding 2013 2012
As at 1 Jan 162,676,718 160,609,406
Purchases of treasury shares (13,245,757) -
Sales of treasury shares 4,765,225 -
Employee shared based payment plan 487,927 2,067,312
As at 31 Dec 154,684,113 162,676,718
171
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N
U
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Movement in treasury shares Note 2013 2012
As at 1 Jan 7,345,826 9,413,138
Purchases 27 13,245,757 -
Sales 27 (4,765,225)
Employee shared based payment plan 33 (487,927) (2,067,312)
As at 31 Dec 15,338,431 7,345,826
Disclosure of the shareholders’ structure
The Group’s major shareholders (holding greater than 3% of the Group’s outstanding shares) based on noti?cations of signi?cant
shareholdings available as at 31 December 2013 were:
Shareholder’s name Shareholder’s address
Date of
noti?cation
Number of
voting rights in %
BlackRock Group 33 King William Street, London EC4R 9AS, UK 13 Dec 2012 6,505,459.0 3.83%
Umicore S.A. / N.V. Broekstraat 31, 1000 Brussels, Belgium 23 Mar 2011 5,251,856.0 3.09%
Total 11,757,315.0 6.92%
27. Reserves
Reconciliation of movement in reserves
EUR million
Treasury
shares
Translation
reserves
Reverse
acquisition
reserve
Cash ?ow
hedge
reserve
Convertible
bond
Investments
reserve Total
As at 1 Jan 2013 (17.2) 69.5 (265.4) (0.3) 8.8 (2.9) (207.5)
Gains on cash ?ow hedges - - - 19.4 - - 19.4
Foreign currency
translation differences - (90.0) - - - - (90.0)
Change in fair value of
investments in equity securities - - - - - 4.1 4.1
Change in par value 3.2 - - - - - 3.2
(Acquisition) / distribution
of treasury shares (19.4) - - - - - (19.4)
Convertible bond - - - - 15.7 - 15.7
As at 31 Dec 2013 (33.4) (20.5) (265.4) 19.1 24.5 1.2 (274.5)
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T
2
0
1
3
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR million
Treasury
shares
Translation
reserves
Reverse
acquisition
reserve
Cash ?ow
hedge
reserve
Convertible
bond
Investments
reserve Total
As at 1 Jan 2012 (23.5) 93.9 (273.0) 6.9 8.8 2.0 (184.9)
Losses on cash ?ow hedges - - - (7.2) - - (7.2)
Foreign currency translation differences - (24.4) - - - - (24.4)
Change in fair value of investments in
equity securities - - - - - (4.9) (4.9)
Reclassi?cation of reversed acquisition
reserve - - 7.6 - - - 7.6
Change in par value 1.2 - - - - - 1.2
(Acquisition) / distribution of treasury
shares 5.1 - - - - - 5.1
As at 31 Dec 2012 (17.2) 69.5 (265.4) (0.3) 8.8 (2.9) (207.5)
Treasury shares
The treasury shares reserve comprises the par value of the Company’s share held by the Group. As at 31 December 2013, the Group
held a total of 15,338,431 of the Company’s shares (31 December 2012: 7,345,826).
At 16 April 2013, the Group acquired off-market, Glencore International AG’s (“Glencore”) entire 7.79% shareholding (13,245,757
shares) in Nyrstar for EUR 3.39 per share, for a total consideration of EUR 44.9 million. Furthermore Glencore agreed to
compensate Nyrstar with a termination fee of EUR 44.9 million in relation to ending its Commodity Grade Off-take agreement by
31 December 2013 for the sale and marketing of commodity grade zinc metal produced by Nyrstar, within the European Union.
The termination fee has been recognised in other income.
At 1 October 2013 Nyrstar entered a strategic offtake and marketing agreement with Noble Group Limited (“Noble”) to market and
sell a signi?cant portion of commodity grade zinc metal produced at its European smelters. Noble agreed to acquire from Nyrstar’s
treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total shares for a price of EUR 3.76 per share, for a
total cash consideration of EUR 6.4 million.
In 2013 Nyrstar sold 3,065,000 shares to a ?nancial institution and the participants in relation with the LESOP (note 33), for a cash
consideration of EUR 5.3 million.
During 2013 the Group settled its LTIP Grant 2 and 3. A total of 487,927 shares (2012: 2,067,312) were allocated to the employees
as a part of this settlement.
173
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A
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A
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N
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. Loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are
measured at amortised cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risks
see note 35.
as at as at
EUR million 31 Dec 2013 31 Dec 2012
Convertible bonds 102.9 115.9
Fixed rate bonds 734.2 748.8
SCTF Credit Facility - -
Other loans - 0.3
Unsecured bank loans 1.8 -
Finance lease liabilities 1.0 2.2
Total non-current loans and borrowings 839.9 867.2
Convertible bonds 118.5 -
Unsecured bank loans 2.5 0.3
Finance lease liabilities 0.9 1.0
Total current loans and borrowings 121.9 1.3
Total loans and borrowings 961.8 868.5
Convertible bonds
EUR 120 million 7% convertible bonds listed on the Luxembourg Stock Exchange’s Euro MTF market, due July 2014.
The bonds are convertible at the option of the holder, at any time from 1 September 2009 until 1 July 2014 (ten days prior to ?nal
maturity date being 10 July 2014), or if the bonds are called by the Group for redemption prior to the ?nal maturity date, until
the seventh day before the date ?xed for redemption. The conversion price as at 31 December 2013 is EUR 5.63 per share (31
December 2012: EUR 5.91 per share).
The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 108.7 million)
and the equity component (EUR 8.8 million) were determined, using the residual method, at issuance of the bonds. The liability
component is measured at amortised cost at an effective interest rate of 9.09% per annum.
The bonds have been issued at 100% of their principal amount and have a coupon of 7% per annum, payable semi-annually in arrears.
EUR 120 million 4.25% convertible bonds listed on the Frankfurt Open Market (Freiverkehr), due September 2018.
The bonds are convertible at the option of the holder, at any time from 31 December 2013 until 15 September 2018 (ten days prior to
?nal maturity date being 25 September 2018), or if the bonds are called by the Group for redemption prior to the ?nal maturity date,
until the seventh day before the date ?xed for redemption. The conversion price as at 31 December 2013 is EUR 4.978 per share.
The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 102.3 million)
and the equity component (EUR 15.7 million) were determined, using the residual method, at issuance of the bonds. The liability
component is measured at amortised cost at an effective interest rate of 8.03% per annum.
The bonds have been issued at 100% of their principal amount and have a coupon of 4.25% per annum, payable semi-annually in arrears.
In 2013 and 2012 no convertible bonds were converted in ordinary shares of the company.
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174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SCTF credit facility
SCTF credit facility is a secured multi-currency revolving structured commodity trade ?nance credit facility with a limit of EUR 400
million. The facility was re?nanced mid of November 2012 and has a maturity of four years (with run-off period during the fourth
year leading to a maturity of 16 November 2016). The facility includes an accordion to increase its size to EUR 750 million on a
pre-approved but uncommitted basis
Funds drawn under the facility bear interest at EURIBOR plus a margin of 1.85%.
Directly attributable transaction costs have been deducted at initial recognition and are amortized over the term of the credit
facility. Transaction cost not yet amortized at the balance sheet date amount to EUR 2.6 million (31 December 2012: EUR 3.4
million). These costs are disclosed under other assets (see note 23). In 2012 the costs of the previous SCTF credit facility were
written off at the time of renewal, leading to ?nance charges of EUR 3.0 million.
Borrowings under this facility are secured by Nyrstar’s inventories and receivables. In addition to standard representations,
warranties and undertakings, including restrictions on mergers and disposals of assets, the facility provides for ?nancial covenants
which are linked to certain balance sheet ratios.
Fixed rate bonds
At 31 December 2013, the Company has two outstanding ?xed rate bonds; 5.5% ?xed rate bond with an original face value of
EUR 225 million (maturity: April 2015) and 5.375% ?xed rate bond with an original face value of EUR 525 million (maturity: April
2016). In 2013, Nyrstar bought back own bonds with a face value of EUR 5 million for the 5.5% bond and EUR 10 million for the
5.375% bond for total cash consideration of EUR 14.6 million. Directly attributable transaction costs have been deducted at initial
recognition and are amortised over the term of the bonds.
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
31 Dec 2013 31 Dec 2012
EUR million Currency
Nominal
interest rate
Year of
maturity Face value
Carrying
amount Face value
Carrying
amount
Convertible bonds* EUR 7.00% 2014 119.9 118.5 119.9 115.9
Fixed rate bonds EUR 5.50% 2015 220.0 219.9 225.0 224.8
Fixed rate bonds EUR 5.40% 2016 515.0 514.3 525.0 524.0
Convertible bonds** EUR 4.25% 2018 120.0 102.9
Other - - - - - 3.9 3.8
Total interest bearing liabilities 974.9 955.6 873.8 868.5
* The Company may, at any time on or after 10 July 2012, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30 days
consecutive dealing days, the volume weighted average price of the shares exceeds 150% of the conversion price.
** The Company may, at any time on or after 16 October 2016, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30
days consecutive dealing days, the volume weighted average price of the shares exceeds 130% of the conversion price.
175
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Finance leases
EUR million 31 Dec 2013 31 Dec 2012
Within 1 year 0.9 1.0
Between 2 and 5 years 1.1 2.3
Total undiscounted minimum lease payments 2.0 3.3
Less: amounts representing ?nance lease charges 0.1 0.1
Present value of minimum lease payments 1.9 3.2
29. Provisions
EUR million Note
Restoration,
rehabilitation and
decommissioning Restructuring Other Total
As at 1 Jan 2013 179.5 5.1 50.2 234.8
Acquired in business combination 1.5 - - 1.5
Payments (13.0) (7.2) (5.2) (25.4)
Additions / (reversals) 0.9 7.6 (10.6) (2.1)
PPE asset adjustment 15 21.7 - - 21.7
Transfers (0.2) - 0.1 (0.1)
Unwind of discount 12 10.8 - 0.2 11.0
Currency translation effects (13.0) (0.3) (2.4) (15.7)
As at 31 Dec 2013 188.2 5.2 32.3 225.7
Whereof current 7.7 5.2 4.2 17.1
Whereof non-current 180.5 - 28.1 208.6
EUR million Note
Restoration,
rehabilitation and
decommissioning Restructuring Other Total
As at 1 Jan 2012 183.0 2.6 44.1 229.7
Disposal of subsidiaries - - (0.2) (0.2)
Payments (10.9) (3.7) (7.6) (22.2)
Additions / (reversals) (4.2) 6.2 17.8 19.8
PPE asset adjustment 15 (5.0) - - (5.0)
Transfers - - (4.2) (4.2)
Unwind of discount 12 15.4 - 0.3 15.7
Currency translation effects 1.2 - - 1.2
As at 31 Dec 2012 179.5 5.1 50.2 234.8
Whereof current 11.5 5.1 7.7 24.3
Whereof non-current 168.0 - 42.5 210.5
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176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning work on the projects provided for is estimated to occur progressively over the
next 117 years, of which the majority will be used within the next 21 years. The provision is discounted using a current market
based pre-tax discount rate and the unwinding of the discount is included in interest expense. Refer to note 4 for a discussion of
the signi?cant estimations and assumptions applied in the measurement of this provision.
Restructuring
During 2012 Nyrstar commenced a detailed and comprehensive group wide review of its corporate of?ces, mining operations and
smelting operations to identify opportunities to sustainably reduce operating costs. This included benchmarking the sites against
one another, and against external indices, on an activity based level to assess the optimal level of resources required to perform
core operating and support tasks. In 2013 Nyrstar incurred restructuring costs of EUR 18.5 million (2012: EUR 16.9 million).
The remaining provision of EUR 5.2 million (31 December 2012: EUR 5.1 million) is mainly related to the implementation of the
restructuring measure that are expected to be ?nalised during 2014.
Other
Other provisions primarily relate to workers compensation bene?ts, legal claims and other liabilities. The current portion of these
costs is expected to be utilised in the next 12 months and the non-current portion of these costs is expected to be utilised over a
weighted average life of 2 years (2012: 2 years). The estimates may vary as a result of changes in cost estimates and timing of the
costs to be incurred.
30. Employee bene?ts
EUR million 31 Dec 2013 31 Dec 2012
Long service leave 2.3 4.1
Retirement plans 58.8 72.8
Other 9.9 7.5
Total non-current employee provisions 71.0 84.4
Annual leave and long service leave 29.3 31.3
Other 3.8 22.2
Total current employee provisions 33.1 53.5
Total employee provisions 104.1 137.9
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
The application of IAS 19R changes the accounting for de?ned bene?t plans and termination bene?ts and has been applied
retrospectively from 1 January 2012 (as the earliest comparative period). As a result, the expected returns on plan assets of de?ned
bene?t plans are not recognised in the pro?t or loss. Instead interest on net de?ned bene?t obligation is recognised in pro?t or
loss, calculated based on the net pension obligation.
Also, unvested past service costs can no longer be deferred and recognised over the future vesting period. Instead, all past
service costs are recognised at the earlier of when the amendment occurs and when the group recognised related restructuring
or termination costs. Until 2012, the Group’s unvested past service costs were recognised as expense on a straight-line basis over
177
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the average period until the bene?ts become vested. Upon transition to IAS 19R, past service costs are recognised immediately
following the introduction of, or changes to, a pension plan, regardless whether the past service costs are vested or unvested.
IAS 19R introduces certain changes in the presentation of the de?ned bene?t costs including more extensive disclosures.
Impact of transition to IAS 19R
These 31 December 2013 consolidated ?nancial statements are the ?rst ?nancial statements in which the Group has adopted IAS
19R. IAS 19R has been adopted retrospectively in accordance with IAS 8. Consequently, the Group has adjusted opening equity as
of 1 January 2012 and the amounts for 2012 have been restated as if IAS 19R had always been applied.
EUR million
Non Current
Employee Bene?ts Deferred Tax assets Accumulated Losses
Balance as reported at 1 January 2012 75.1 75.4 (204.8)
Effect of application of IAS 19R (1.0) (0.4) 0.6
Restated balance at 1 January 2012 74.1 75.0 (204.2)
EUR million
Non Current
Employee Bene?ts Deferred Tax assets Accumulated Losses
Balance as reported at 31 December 2012 85.4 77.4 (308.2)
Effect of application of IAS 19R (1.0) (0.4) 0.6
Effect on total comprehensive loss for the period - - -
Restated balance at 31 December 2012 84.4 77.0 (307.6)
The effect on the consolidated income statement was as follows:
EUR million 2013 2012
Decrease of employee bene?t expenses 0.2 0.9
Increase of ?nance expenses (2.3) (2.5)
Decrease of income tax expense 0.7 0.4
Increase of loss for the year (1.4) (1.2)
EUR million 2013 2012
Increase of loss for the year (1.4) (1.2)
Remeasurement of de?ned bene?t obligation 3.1 1.6
(Increase) of income tax relating to components of other comprehensive income (1.0) (0.4)
Decrease of other comprehensive loss 2.1 1.2
Decrease of total comprehensive loss for the year 0.7 -
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1
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178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The change in accounting policy had no effect on the basic and diluted earnings per share and an immaterial impact on the
Group’s consolidated statement of cash ?ows for the current and comparative periods.
Retirement and post-retirement plans
Nyrstar participates in a number of superannuation and retirement bene?t plans. The plans provide bene?ts on retirement,
disablement, death, retrenchment or withdrawal from service, the principal types of bene?ts being lump sum de?ned bene?ts and
lump sum de?ned contribution bene?ts.
De?ned contribution plans
The Group is required to contribute a speci?ed percentage of payroll costs to the retirement bene?t schemes to fund the bene?ts.
The only responsibility of the Group is to make the speci?ed contributions, with the exception of Belgium where the legislation
requires a minimum interest to be guaranteed by the employer on these contributions. Since 2013 this interest guarantee is no
longer 100% covered by the insurance carrier resulting in a ?nancial exposure for the Belgian companies, which is immaterial.
Employees of Nyrstar Budel BV are members of a multi-employer Metal and Electricity industry de?ned bene?t pension plan
(PME). PME are unable to provide the necessary information for de?ned bene?t accounting to be applied and consequently
the PME plan has been accounted for as a de?ned contribution plan. The entity’s obligations are limited to the payment of the
contributions required according to the funding plan of the PME and cannot held liable for any de?cits or contributions from other
participating companies.
The total expense for de?ned contribution plans recognised in the consolidated income statement is EUR 4.6 million.
De?ned bene?t plans
The Group sponsors de?ned bene?t plans as described below. All de?ned bene?t plans are externally funded, either through a
collective insurance contract or through a self-administered pension fund legally separated from the entity. All plans comply with
local regulatory frameworks and minimum funding requirements and have been reviewed as at 31 December 2013. Furthermore
the Group is responsible for the administration and governance of the de?ned bene?t plans in Belgium, Switzerland, the US and
Canada. The plan assets do not include direct investments in the Group’s own ?nancial instruments nor in property occupied by or
used by the companies of the Group.
The de?ned bene?t plans also include the so-called cash balance plans. The cash balance plans, sponsored by the Belgian and
Swiss entities, account for about 13% of the total de?ned bene?t obligation value as at 31 December 2013 and are valued on the
basis of the Projected Unit Credit Method.
The de?ned bene?t plans expose the sponsoring company to actuarial risks such as investment risk, interest rate risk, salary risk,
in?ation risk and longevity risk. The medical bene?t plans are further exposed to medical cost in?ation risk. The possible impact of
changes in these risks has been illustrated by a sensitivity analysis which is further detailed below.
Death in service and disability risks are in most countries insured with an external (re)insurance company.
179
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3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Based on geographical location of the sponsoring entities, the recognised retirement bene?t obligations as at 31 December 2013
can be split as follows:
EUR million 31 Dec 2013 Average duration
EURO ZONE: (22.8) 12.7 years
Nyrstar Budel BV Excedent Pension Plan
Nyrstar Belgium SA/NV: Staff Old De?ned Bene?t plan funded through pension
fund, Staff Cash Balance Plan, Staff Complementary Savings Plan, Staff Insured
Old De?ned Bene?t plan, Staff “appointements continués”, Salaried Employees
Old De?ned Bene?t Plan, Salaried Employees “appointements continués”
Nyrstar NV: Staff Cash Balance Plan, Staff Complementary Savings Plan
Nyrstar France Régime d’Indemnités de Fin de Carrière and Régime du Mutuelle
Nyrstar France Mutuelle (medical bene?t plan)
USA: (16.8) 13.5 years
Nyrstar Clarksville Inc: Hourly Employees’ Pension Plan, Salaried Employees’
Retirement Plan, Pension Plan for Bargaining Unit Employees, NCI/JCZ Pension
Plan for Bargaining Unit Employees, Supplemental Executive Retirement Plan
Nyrstar Clarksville Inc. Post Retirement Medical Bene?t and Life Insurance Plan
(medical bene?t plan)
CANADA: (15.2) 11.3 years
Nyrstar Myra Falls Ltd.: Hourly-Paid Employees’ Pension Plan, Thirty-Year Retirement
Supplement and Voluntary Early retirement Allowance
Nyrstar Myra Falls Ltd.: Non-Pension post-retirement bene?ts plan
(medical bene?t plan)
SWITERLAND: (4.0) 17.8 years
Nyrstar Sales & Marketing AG: Pension Plan Staff and Pension Plan Staff NMC
funded through the Helvetia Group Foundation
Nyrstar Finance International AG: Pension Plan funded through the Helvetia
Group Foundation
Total (58.8) 12.9 years
The total value of the medical bene?t plans, included in the retirement bene?t obligations is EUR 24.8 million.
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1
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180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The amounts recognised on the statement of ?nancial position have been determined as follows:
Restated Restated
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Present value of funded obligations 117.3 123.5 106.6
Present value of unfunded obligations 38.2 40.5 36.1
Total present value of obligations 155.5 164.0 142.7
Fair value of plan assets (97.1) (91.4) (82.4)
Total de?cit 58.4 72.6 60.3
Limitiation on recognition of surplus due to asset ceiling 0.4 0.2 0.3
Total recognised retirement bene?t obligations 58.8 72.8 60.6
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Cash 2.9 0.3 0.9
Equity instruments 38.7 36.1 34.4
Debt instruments 30.5 29.0 25.4
Other assets 25.0 26.0 21.7
Total plan assets 97.1 91.4 82.4
Further to the IAS 19R requirements, the above plan assets as on December 2013 can be further broken down as follows:
EUR million 31 Dec 2013
Cash and cash equivalents 2.9
Equity instruments 0.2
Debt instruments 2.0
Mutual Funds 67.0
Insurance contracts 25.0
Total 97.1
Mutual funds consist of equity funds, ?xed-income funds and mixed investments funds including both equity and debt
instruments. All assets, except for the insurance contracts have quoted prices in active markets. The fair value of the insurance
contracts corresponds either to the present value at the discount rate of the secured future bene?ts (Netherlands) or to the
capitalized value of the paid contributions at the contractually guaranteed insurance rate (other countries).
181
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The changes in the present value of the de?ned bene?t obligations are as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
De?ned bene?t obligations at start of period 164.0 142.7
Current service cost 6.9 7.9
Interest cost 5.4 6.2
Remeasurement (gains)/losses:
Actuarial (gains)/losses arising from changes in demographic assumptions 3.3 4.3
Actuarial (gains)/losses arising from changes in ?nancial assumptions (8.0) 15.4
Actuarial (gains)/losses arising from changes in experience (1.0) (1.0)
Actuarial (gains)/losses due to exchange rate movements (7.9) (0.7)
Contributions paid into the plans by participants 1.2 1.1
Bene?ts paid by the plans (8.7) (11.2)
Past service cost (including plan amendment or curtailment) 0.8 0.2
Admin expenses, taxes and social securities (0.5) (0.5)
Other - (0.4)
De?ned bene?t obligations at end of period 155.5 164.0
During 2013 there were no curtailments nor settlements. The reported past service cost is mainly the result of an increase of the
pension amount under the Hourly-Paid Employees’ Pension Plan in Canada due to a plan amendment in 2013.
The changes in the present value of plan assets are as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
Fair value of plan assets at start of period 91.4 82.4
Interest Income 3.1 3.7
Remeasurement (gains)/losses:
Return on plan assets excluding interest income recognised in net interest expense 3.0 5.5
Actuarial (gains)/losses due to exchange rate movements (5.0) (0.3)
Contribution paid into the plans by employer 10.4 7.6
Contribution paid into the plans by participants 1.2 1.1
Bene?ts paid by the plans (6.5) (7.9)
Admin expenses, taxes and social securities (0.5) (0.5)
Other - (0.2)
Fair value of plan assets at end of period 97.1 91.4
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182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The expense recognised in the income statement is as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
Service cost:
Current service cost, including admin fees, taxes and social securities (6.9) (7.9)
Past service cost (0.8) (0.2)
Net interest expense (2.3) (2.5)
Components of de?ned bene?t costs included in income statement (10.0) (10.6)
Remeasurement on the net de?ned bene?t liability:
The return on plan assets (excluding amounts included in net interest expense) 3.0 5.5
Actuarial gains and losses arising from changes in demographic assumptions (3.3) (4.3)
Actuarial gains and losses arising from changes in ?nancial assumptions 8.0 (15.4)
Actuarial gains and losses arising from experience adjustments 1.0 1.0
Adjustments for restrictions on the de?ned bene?t asset (0.2) 0.1
Actuarial (gains)/losses due to exchange rate movements 0.7 0.4
Components of de?ned bene?t costs recorded in OCI 9.2 (12.7)
Total of components of de?ned bene?t cost (0.8) (23.3)
Principal actuarial assumptions
The principal actuarial assumptions used at the reporting date are as follows:
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Discount rate (range; weighted average in %) 1.3 - 4.7; 3.8 1.4 - 4.0; 3.4 2.3 - 4.8; 4.4
Expected future salary increases
(range; weighted average in %) 1.5 - 2.5; 2.3 1.5 - 2.5; 2.3 1.5 - 3.0; 2.7
Expected in?ation rate (range; weighted average in %) 2.0 - 2.3; 2.1 2.0 - 2.3; 2.1 2.0 - 2.3; 2.1
Initial trend rate (range; weighted average in %) 2.0 - 8.0; 5.5 2.0 - 8.5; 6.0 2.8 - 9.0; 5.9
Ultimate trend rate (range; weighted average in %) 2.0 - 5.0; 3.8 2.0 - 5.0; 4.2 2.8 - 5.0; 4.1
Years until ultimate is reached 0 - 6; 3.3 0 - 7; 3.7 0 - 8; 3.6
Multiple discount rates have been used in accordance with the regions as indicated in the table above. The discount rates have
been determined by reference to high quality corporate bonds with a similar duration as the weighted average duration of
the concerned plans for the EURO zone, USA and Canada. As there is no deep market for AA-bonds with the required term in
Switzerland, discount rates have been determined by reference to government bond rates.
Future salary increase assumptions re?ect the Groups’ expectations and HR policy for the next few years.
183
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A single in?ation rate assumption has been used for the EURO zone (2%) corresponding to the target in?ation rate of the
European Central Bank.
The medical cost trend rate assumptions have been determined based on industry standards and survey data with consideration
for actual plan experience.
Mortality assumptions are based on the latest available standard mortality tables for the individual countries concerned. These
tables imply expected future lifetimes (in years) for employees aged 65 as at the 31 December 2013 of 18 to 24 for males (2012:
18 to 24) and 21 to 28 (2012: 21 to 28) for females. The assumption for each country are reviewed each year and are adjusted
where necessary to re?ect changes in fund experience and actuarial recommendations. If applicable, the longevity risk is covered
by using appropriate prospective mortality rates.
Sensitivity analysis
The signi?cant actuarial assumptions for the determination of the de?ned bene?t obligation have been discussed earlier in this
note. The table below shows the sensitivity analysis on the effect on the de?ned bene?t obligation of reasonable positive changes
in the most signi?cant actuarial assumptions used. Note that the sensitivity analysis is done per assumption (where the other
signi?cant assumptions were held constant):
EUR million 31 Dec 2013
Discount rate -0.5% 10.1
Discount rate +0.5% (8.9)
Expected future salary increase - 0.5% (0.4)
Expected future salary increase + 0.5% 0.4
Expected in?ation rate - 0.5% (0.4)
Expected in?ation rate + 0.5% 0.4
Medical cost trend rate -1.0% (3.2)
Medical cost trend rate +1.0% 4.0
Life expectancy - 1 year 3.6
Life expectancy + 1 year (3.6)
Expected contributions 2014
The Group expects to make EUR 10.0 million contributions to post-employment de?ned bene?t plans for the year ending 31
December 2014.
31. Trade and other payables
EUR million 31 Dec 2013 31 Dec 2012
Trade payables 435.6 591.1
Other payables 50.4 50.1
Total trade and other payables 486.0 641.2
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 35.
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2
0
1
3
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32. Deferred income
EUR million 31 Dec 2013 31 Dec 2012
Current 294.7 218.6
Total deferred income 294.7 218.6
Deferred income consists of payments received by the Company from customers for future physical deliveries of metal production
that are expected to be settled in normal course of business.
In June 2013, Nyrstar entered into a silver prepay agreement, under which Nyrstar received a USD 195.8 million (EUR 148.1
million) prepayment and agreed to physically deliver 8.75 million oz of silver in equal instalments over a ten month period ending
March 2014. The silver prepayment is amortised into revenue as the underlying silver is physically delivered. As at 31 December
2013, 6.1 million oz of silver have been delivered.
In December 2013, Nyrstar entered into another silver prepay agreement, under which Nyrstar received a USD 50 million (EUR 36.3
million) prepayment and agreed to physically deliver 3.3 million oz of silver in equal instalments over a six month period ending
June 2014. The silver prepayment is amortised into revenue as the underlying silver is physically delivered. As at 31 December
2013, no silver has been delivered.
In connection with these silver prepay agreements Nyrstar entered into forward purchase contracts with equivalent delivery dates
to hedge the silver price exposure related to delivery commitments. These contracts are accounted for as an effective fair value
hedges of the ?rm sales commitments in the silver prepay agreements. The change in fair value of the forward purchase contracts
(EUR 5.9 million at 31 December 2013, included in other ?nancial liabilities) and the portion of deferred income related to the
silver prepay agreement (EUR 5.9 million) effectively offset in the income statement.
33. Share-based payments
EUR million 2013 2012
Share based payment expenses, including social security (5.2) (6.2)
The Company has established an Executive Long Term Incentive Plan (LTIP), a Co-Investment Plan and a Leveraged Employee Stock
Ownership Plan (LESOP) (together referred to as the “Plans”) with a view to attracting, retaining and motivating the employees and
senior management of the Company and its wholly owned subsidiaries. The key terms of each Plan are disclosed below:
Long Term Incentive Plan
LTIP Grants 2 to 6 were granted between 2009 and 2013 in accordance with the rules and conditions of the Executive Long Term
Incentive Plan (LTIP). The table below summarises the details of the grants.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6
Number of instruments granted at the grant date 2,003,351 604,407 1,149,398 2,261,628 2,270,961
Effective grant date 30 Jun 2009 30 Jun 2010 30 Jun 2011 30 Jun 2012 30 Jun 2013
Performance period
1 Jan 2009 to
31 Dec 2011
1 Jan 2010 to
31 Dec 2012
1 Jan 2011 to
31 Dec 2013
1 Jan 2012 to
31 Dec 2014
1 Jan 2013 to
31 Dec 2015
Vesting date 31 Dec 2011 31 Dec 2012 31 Dec 2013 31 Dec 2014 31 Dec 2015
Settlement (b) Share Share Share Share Share
Fair value at grant date (EUR per share) * 2.78 4.25 6.23 1.01 1.37
* the fair value is the weighted average fair value for both performance measures: price of Zinc and MSCI as explained below
(a) Performance criteria
To ensure that the LTIP is aligned with maximizing shareholder returns, the board has set two performance conditions, which are
weighted equally. For both performance conditions an equal number of awards has been granted. For an award to vest, Nyrstar’s
annual share price performance is measured relative to the implied change in a notional share price that is based upon the
historical performance of the price of zinc and the MSCI World Metals and Mining Index
Shares are awarded to eligible employees to the extent that predetermined scaling thresholds for each of the performance
conditions are met and that the employee remains in service to vesting date of the respective grant.
(b) Settlement
The board has the discretion to settle LTIP Grant 2, Grant 3, Grant 4, Grant 5 and Grant 6 award in shares or cash. However it
intends to settle all plans in shares. As such, all LTIP plans are treated as equity settled share based payments.
The signi?cant inputs into the valuation model for the LTIP plans granted in 2013 and 2012 are:
2013 2012
Dividend yield 3.0% 3.0%
Expected volatility - Nyrstar share price 47.0% 46.0%
Expected volatility - zinc price 24.0% 30.0%
Expected volatility - MSCI metals and mining index 22.0% 23.0%
Risk free interest rate 1.3% 2.2%
Share price at grant date (in EUR) 3.30 4.48
Expected forfeiture rate 0.0% 0.0%
Valuation model used Monte Carlo Monte Carlo
The expected volatilities are based on the historic volatility during the period prior to the grant date (that is equivalent to the
expected life of the award, subject to historical data remaining relevant). The performance conditions are both market-related and
were accounted for in calculating the fair value of the awards.
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1
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186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table sets out the movements in the number of equity instruments granted during the period in relation to the LTIP
plans:
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
As at 1 Jan 2013 88,871 770,960 1,053,901 2,104,239 - 4,017,971
Initial allocation 30 Jun 2013 2,270,961 2,270,961
Forfeitures (148,144) (525,715) (229,174) (903,033)
Additions 11,668 4,448 114,173 324,749 69,559 524,597
Expired (388,020) (388,020)
Settlements (100,539) (387,388) (487,927)
As at 31 Dec 2013 - - 1,019,930 1,903,273 2,111,346 5,034,549
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
As at 1 Jan 2012 2,764,817 823,243 1,196,168 - - 4,784,228
Initial allocation 30 Jun 2012 - - - 2,261,628 - 2,261,628
Forfeitures - (114,325) (245,655) (157,389) - (517,369)
Additions - 62,042 103,388 - - 165,430
Settlements (2,675,946) - - - - (2,675,946)
As at 31 Dec 2012 88,871 770,960 1,053,901 2,104,239 - 4,017,971
In 2013 and 2012, certain employees who joined Nyrstar during the year received LTIP awards under Grants 4 and 5. The fair
value of these rights amounted to EUR 0.6 million for 2013 (2012: EUR 0.2 million). There have been no changes to the terms and
conditions of the grants.
Modi?cations to LTIP Grants 3, 4 and 5
As at 6 February 2013 modi?cations were made to the performance conditions of Grants 3, 4 and 5. The modi?cations resulted in
the exclusion of the 2012 zinc price performance from the performance hurdle for all three grants, when determining the average
LTIP achievement and lowering of the MSCI performance hurdles for future years for Grants 4 and 5.
The modi?ed awards have been valued, using a consistent valuation methodology to that disclosed in the notes to the
consolidated ?nancial statements as at 31 December 2012. The incremental increase in the fair value of the awards amounted to
EUR 1.8 million and will be recognised over the remaining vesting period of the awards, starting from the modi?cation date. The
total incremental fair value recognised in 2013 amounted to EUR 1.8 million. The modi?cations did not change the number of
outstanding awards as disclosed in the notes to the consolidated ?nancial statements as at 31 December 2012, however it resulted
in the vesting of 389,928 Grant 3 awards.
Management Committee Co-Investment Plan
A co-investment plan for the members of the NMC was approved by the annual general shareholders’ meeting held on 28 April
2010. The effective accounting grant date is 5 May 2010 and the conditions are assessed from the grant date till 15 July 2013,
which is the vesting date. For each Nyrstar share that a member of the NMC purchased between 30 April 2010 and 28 June
2010, Nyrstar will grant the respective participant on the vesting date, a number of additional Nyrstar shares provided that (a)
the participant is still employed by Nyrstar on the vesting date and (b) the participant still holds the co-investment shares on
187
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the vesting date. During the period between 30 April 2010 and 28 June 2010 the members of the NMC purchased 190,000 co-
investment shares.
In line with the resolution of the annual general shareholders meeting held at 27 April 2011 the Co-investment Plan has re?ected
the impact of the March 2011 rights issue by the Company. It was also agreed that additional 95,510 shares of the Company
subscribed for by the respective participants in the Co-Investment Plan are considered “Co-investment Shares” for purposes of the
Co-Investment Plan. At 30 June 2011 an additional participant has purchased 25,000 shares as participation in the Co-investment
plan. The terms and conditions of this participation are consistent with the terms and conditions of the previous Co-investment
Plan participations.
The number of matching shares is determined at three measurement dates, i.e. (a) 1 July 2011 (Measurement Date 1), (b) 1 July
2012 (Measurement Date 2) and (c) 1 July 2013 (Measurement Date 3). The number of Matching Shares is the product of the
total number of the Co-Investment Shares of the respective Participant and the multiplier determined at the measurement dates.
The multiplier is set between zero (lowest multiplier) and four (the highest multiplier) in conjunction with pre-set price points, i.e.
pre-set average closing prices of Nyrstar shares during any given full calendar week in the measurement periods (refer to Corporate
Governance statement for further details).
The weighted average fair value at the grant dates per share was EUR 14.52.
Movement of Co-Investment Shares:
2013 2012
As at 1 Jan 348,000 348,000
Additions -
Expired (261,992)
Forfeitures (86,008)
As at 31 Dec - 348,000
No further Co-Investment shares have been granted in 2013 and 2012. None of these Co-investment shares vested at the vesting
date 15 July 2013, as the performance conditions were not met. No shares out of this plan have therefore been delivered to
participants. The fair value of services received in return for the shares qualifying under the co-investment plan is based on the fair
value of the awards granted which for ?nancial year 2013 amounts to EUR nil (2012: EUR nil).
Leveraged Employee Stock Ownership Plan (LESOP)
In 2013, the Board submitted to the general shareholder`s meeting a proposal to provide a new remuneration component to
certain senior managers, including the management committee, called a LESOP. The LESOP would enable participants to purchase
shares of the Company at a discount of 20%, following which the shares would be subject to a holding period of three years. For
each share purchased by a participant with their personal contribution, a ?nancial institution would provide the participant with
additional ?nancing enabling them to purchase nine additional shares at such discount. The number of shares that a participant
could purchase with their personal contribution under the 2013 LESOP is capped. With respect to the members of the Nyrstar
Management Committee, the cap is set at 50,000 shares for each member. At the end of the holding period, the participant will be
required to transfer all shares purchased to the ?nancial institution and will receive in return a cash amount or a number of shares
of the Company, the value of which equals their personal contribution in the 2013 LESOP and a certain percentage of any increase
in value of the shares over the lifetime of the 2013 LESOP. The 2013 LESOP was approved by the general shareholder`s meeting in
April 2013. The ?rst stage of the 2013 LESOP was implemented in December 2013.
3,065,000 shares were granted, with an effective accounting grant date of 21 December 2013. The shares vested immediately
at grant date. The fair value at the grant date per share was EUR 0.10, resulting in the total fair value of EUR 0.3 million fully
recognized in the ?nancial year ended 31 December 2013.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The signi?cant inputs into the valuation model for the LESOP plan granted in 2013 are:
2013
Dividend yield 3.0%
Risk free interest rate 0.5%
Credit spread for a private individual 5.0%
Interest rate for borrowing securities 0.5%
Share price at grant date (in EUR) 2.15
Valuation model used Monte Carlo
The following table sets out the movements in the number of equity instruments granted during the period in relation to the
LESOP plans:
2013
As at 1 Jan -
Initial allocation 21 Dec 2013 3,065,000
Settlements (3,065,000)
As at 31 Dec -
Deferred Share Awards or Phantom Awards - annual incentive plan (AIP)
For 2012, the NMC and certain other senior managers are entitled to a target opportunity under the AIP of:
• 75% of the annual base salary for the chief executive of?cer (150% at maximum)
• 60% of the annual base salary for the other members of NMC (120% at maximum)
• 50% of the annual base salary for certain other senior managers (100% at maximum)
Any award made under the AIP in relation to the details above, will be delivered as a combination of cash and Nyrstar shares
(Share Awards) or their equivalent in cash (Phantom Awards), with any delivery of these Awards deferred for 12 months. The
award will be delivered as follows:
• CEO – 100% cash and 50% Share Awards or Phantom Shares (at maximum opportunity)
• Other members of the NMC – 80% cash and 40% Share Awards or Phantom Shares (at maximum opportunity)
• Other senior managers – 70% cash and 30% Share Awards or Phantom Shares (at maximum opportunity)
The delivery of any AIP award to management is at all times subject to the performance of the Company (for further details on
the performance criteria refer to the Remuneration Report included in the Corporate Governance Statement) and the employee
remaining employed with the Company at the end of the vesting period. The maximum number of the Share Awards granted is
equal to the value of the maximum opportunity multiplied by EUR base salary and divided by the applicable share price at the start
of the performance period (generally the ?scal year).
The fair value of the service received in return for these Awards for ?nancial year 2013 amounts to EUR 0.6 million (2012: EUR 0.4
million).
189
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34. Loss per share
(a) Basic loss per share
The basic loss per share is calculated as follows:
EUR million 2013 2012
Loss attributable to ordinary shareholders (basic) (195.4) (93.6)
Weighted average number of ordinary shares (basic, in million) 154.4 162.1
Loss per share (basic, in EUR) (1.27) (0.58)
(b) Diluted loss per share
As the Group incurred a loss for the twelve months ended 31 December 2013, the diluted loss per share EUR 1.27 equals the basic
loss per share (EUR 0.58 for the twelve months ended 31 December 2012).
35. Financial instruments
In the normal course of business, Nyrstar is exposed to ?uctuations in commodity prices and exchange rates, interest rate risk,
credit risk and liquidity risk. In accordance with Nyrstar’s risk management policies, derivative ?nancial instruments are used to
hedge exposures to commodity prices and exchange ?uctuations, but may not be entered into for speculative purposes.
(a) Credit risk
(i) Exposure to credit risk
Credit risk represents the loss that would be recognised if the counterparties to ?nancial instruments fail to perform as contracted.
The carrying amount of ?nancial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
EUR million 31 Dec 2013 31 Dec 2012
Trade and other receivables 174.9 221.1
Cash and cash equivalents 292.3 188.1
Commodity contracts used for hedging: assets 13.9 33.8
Embedded derivatives: assets 1.2 17.1
Foreign exchange contracts used for trading: assets 11.5 7.7
Restricted cash 7.6 8.2
Held to maturity 2.8 2.6
Loans to equity accounted investees - 2.7
Total 504.2 481.3
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190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
EUR million 31 Dec 2013 31 Dec 2012
Euro-zone countries 58.6 77.9
Asia 38.5 25.2
United States 9.4 25.1
Other European countries 23.3 43.2
Other regions 45.1 49.7
Total 174.9 221.1
The maximum exposure to credit risk for trade and other receivables at the reporting date by type of customer was:
EUR million 31 Dec 2013 31 Dec 2012
Wholesale customers 159.3 190.3
End-user customers 15.6 30.8
Total 174.9 221.1
(ii) Ageing analysis
Trade and other receivables including ageing of trade and other receivables which are past due but not impaired at the reporting
date was:
EUR million 31 Dec 2013 31 Dec 2012
Not past due 144.6 192.5
Past due 0-30 days 18.8 19.3
Past due 31-120 days 8.3 7.5
Past due 121 days – one year 2.5 0.4
More than one year 0.7 1.4
Total 174.9 221.1
Credit risk in trade receivables is also managed in the following ways:
• The Company has a duty to exercise reasonable care and prudence in granting credit to and withholding credit from existing and
potential customers. The Company takes all reasonable steps and uses its best endeavours to minimize any losses arising from
bad debts. The Company’s Credit Risk Management Policy describes the structure and systems put in place in order to ef?ciently
and effectively manage the risks related to the credit granted to business partners.
• Payment terms can vary from 0 to 90 days, after the month of delivery. Payment terms are dependent on whether the sale is a
cash sale or a sale with an attached letter of credit stating the payment terms.
• A risk assessment is undertaken before granting customers a credit limit. Where no credit limit is granted sales have to be
covered by other securities (i.e. bank guarantee, parent guarantee) and/or by documentary collection.
• If sales are covered by a letter of credit, this will in principle be irrevocable, con?rmed with approved ?nancial institutions.
191
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Banks and ?nancial institutions
For banks and ?nancial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.
(b) Liquidity risk management
The following are the contractual maturities of ?nancial liabilities, including estimated interest payments and excluding the impact
of netting agreements:
EUR million
Carrying
amount
Contractual
cash ?ows
6 months
or less
6 - 12
months
1 - 2
years
2 - 5
years
5 years
or more
Finance lease liabilities (1.9) (1.9) (0.4) (0.5) (0.8) (0.2) -
Loans and borrowings (959.9) (1,122.4) (49.8) (126.6) (267.5) (678.5) -
Trade and other
payables (486.0) (485.9) (480.4) (3.4) (1.1) (1.0) -
Commodity contracts –
fair value hedges (14.4) (14.4) (14.4) - - - -
Foreign exchange
contracts – held for
trading (6.0) (6.0) (6.0) - - - -
Embedded derivatives (4.3) (4.3) (0.2) (0.2) (1.7) (2.2) -
Total, 31 Dec 2013 (1,472.5) (1,634.9) (551.2) (130.7) (271.1) (681.9) -
EUR million
Carrying
amount
Contractual
cash ?ows
6 months
or less
6 - 12
months
1 - 2
years
2 - 5
years
5 years
or more
Finance lease liabilities (3.2) (3.3) (0.5) (0.5) (1.1) (1.2) -
Loans and borrowings (865.3) (1,037.3) (45.1) (4.2) (168.9) (818.8) (0.3)
Trade and other
payables (641.2) (641.2) (631.7) (4.0) (6.0) 0.5 -
Commodity contracts –
fair value hedges (10.6) (10.6) (10.6) - - - -
Foreign exchange
contracts – held for
trading (0.5) (0.5) (0.5) - - - -
Embedded derivatives (2.3) (2.3) (0.1) (0.1) (2.1) - -
Total, 31 Dec 2012 (1,523.1) (1,695.2) (688.5) (8.8) (178.1) (819.5) (0.3)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
EUR million EUR USD AUD CAD Other Total
Trade and other receivables 62.7 85.6 5.6 1.3 19.7 174.9
Loans and borrowings (956.2) (2.6) (1.2) - (1.8) (961.8)
Trade and other payables (157.8) (172.9) (64.6) (11.1) (79.6) (486.0)
Gross balance sheet exposure (1,051.3) (89.9) (60.2) (9.8) (61.7) (1,272.9)
Foreign exchange contracts 412.3 (302.8) 110.7 (213.5) (1.2) 5.5
Commodity contracts - (0.5) - - - (0.5)
Net exposure, 31 Dec 2013 (639.0) (393.2) 50.5 (223.3) (62.9) (1,267.9)
EUR million EUR USD AUD CAD Other Total
Trade and other receivables 94.6 98.0 6.4 2.9 19.2 221.1
Loans and borrowings (865.4) (0.5) (2.2) (0.4) - (868.5)
Trade and other payables (166.0) (292.8) (77.1) (19.3) (86.0) (641.2)
Gross balance sheet exposure (936.8) (195.3) (72.9) (16.8) (66.8) (1,288.6)
Foreign exchange contracts 227.2 (129.9) 70.2 (160.5) 0.2 7.2
Commodity contracts - 23.2 - - - 23.2
Net exposure, 31 Dec 2012 (709.6) (302.0) (2.7) (177.3) (66.6) (1,258.2)
Sensitivity analysis
Nyrstar’s results are signi?cantly affected by changes in foreign exchange rates. Sensitivities to variations in foreign exchange rates
are depicted in the following table, which sets out the estimated impact on Nyrstar’s full year results and equity (in EUR million).
Parameter Variable 2013 2012
USD / EUR + / - EUR 0.01 + / - 17.7 + / - 17.9
AUD / EUR + / - EUR 0.01 - / + 2.6 - / + 2.6
The above sensitivities were calculated by modelling Nyrstar’s 2013 and 2012 underlying operating performance. Exchange rates
are based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar’s full
year results and equity.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Commodity price risk management
Nyrstar is exposed to commodity price volatility on commodity sales and raw materials purchased. Nyrstar may enter into zinc, lead
and silver futures and swap contracts to hedge certain forward ?xed price sales to customers in order to achieve the relevant metal
price at the date that the transaction is settled. Nyrstar may enter into zinc, lead and silver futures and swap contracts to more
closely align the time at which the price for externally sourced concentrate purchases is set to the time at which the price for the
sale of metal produced from that concentrate is set. These instruments are referred to as ‘metal at risk’ hedges and the terms of
these contracts are normally between one and three months.
The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December
2013.
EUR million
Average price
in USD
6 months
or less
6 - 12
months
12 - 18
months
more than
18 months Total
Zinc per tonne
Contracts purchased 1,962 (81.7) (9.0) - - (90.7)
Contracts sold 1,916 76.5 0.6 - - 77.1
Net position (5.2) (8.4) - - (13.6)
Lead per tonne
Contracts purchased 2,252 (0.3) - - - (0.3)
Contracts sold 2,110 65.4 - - - 65.4
Net position 65.1 - - - 65.1
Silver per ounce
Contracts purchased 19.6 (8.0) - - - (8.0)
Contracts sold 20.6 96.7 - - - 96.7
Net position 88.7 - - - 88.7
Gold per ounce
Contracts purchased 1,204.6 (0.8) - - - (0.8)
Contracts sold 1,252.3 4.9 - - - 4.9
Net position 4.1 - - - 4.1
Copper per tonne
Contracts purchased - - - - - -
Contracts sold 7,208 2.9 - - - 2.9
Net position 2.9 - - - 2.9
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194
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December
2012.
EUR million
Average price
in USD
6 months
or less
6 - 12
months
12 - 18
months
more than
18 months Total
Zinc per tonne
Contracts purchased 1,945 (38.1) (7.5) - - (45.6)
Contracts sold 1,998 149.6 0.3 - - 149.9
Net position 111.5 (7.2) - - 104.3
Lead per tonne
Contracts purchased 2,249 (2.0) - - - (2.0)
Contracts sold 2,187 79.2 - - - 79.2
Net position 77.2 - - - 77.2
Silver per ounce
Contracts purchased 31.3 (29.6) - - - (29.6)
Contracts sold 32.6 353.0 - - - 353.0
Net position 323.4 - - - 323.4
Gold per ounce
Contracts purchased 1,689.0 (2.3) - - - (2.3)
Contracts sold 1,711.0 91.4 - - - 91.4
Net position 89.1 - - - 89.1
Copper per tonne
Contracts purchased - - - - - -
Contracts sold 7,902 18.4 - - - 18.4
Net position 18.4 - - - 18.4
Sensitivity analysis
Nyrstar’s results are signi?cantly affected by changes in metal prices and treatment charges (TC). Sensitivities to variations in metal
prices and treatment charges are depicted in the following table, which sets out the estimated impact on Nyrstar’s full year results
and equity (in EUR million).
Parameter Variable 2013 2012
Zinc price + / - USD 100 / tonne + / - 27.9 + / - 35.2
Lead price + / - USD 100 / tonne + / - 1.8 + / - 1.7
Zinc TC + / - USD 25 / tonne + / - 27.8 + / - 25.1
Lead TC + / - USD 25 / tonne + / - 4.9 + / - 4.4
195
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The above sensitivities were calculated by modelling Nyrstar’s 2013 and 2012 underlying operating performance. Metal prices are
based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar’s full year
results and equity.
(e) Financial Instruments by category
EUR million
Loans and
receivables
Fair value
through pro?t
and loss
Held
to maturity
Available
for sale
Derivatives
used for
hedging
At
amortised
costs Total
Derivative ?nancial
instruments - 20.6 - - 6.0 - 26.6
Trade and other receivables
excl prepayments 174.9 - - - - - 174.9
Cash and cash equivalents 292.3 - - - - - 292.3
Restricted cash 7.6 - - - - - 7.6
Held to maturity - - 2.8 - - - 2.8
Loans to equity accounted
investees - - - - - - -
Investments in equity
securities - - - 27.5 - - 27.5
Borrowings excl. ?nance
lease liabilities - - - - - (959.9) (959.9)
Finance lease liabilities - - - - - (1.9) (1.9)
Derivative ?nancial
instruments - (20.4) - - (4.3) - (24.7)
Trade and other payables - - - - (486.0) (486.0)
Net position, 31 Dec 2013 474.8 0.2 2.8 27.5 1.7 (1,447.8) (940.8)
EUR million
Loans and
receivables
Fair value
through pro?t
and loss
Held to
maturity
Available
for sale
Derivatives
used for
hedging
At
amortised
costs Total
Derivative ?nancial instruments - 41.5 - - 17.1 - 58.6
Trade and other receivables excl.
prepayments 221.1 - - - - - 221.1
Cash and cash equivalents 188.1 - - - - - 188.1
Restricted cash 8.2 - - - - - 8.2
Held to maturity - - 2.6 - - - 2.6
Loans to equity accounted investees 2.7 - - - - - 2.7
Investments in equity securities - - - 37.9 - - 37.9
Borrowings excl. ?nance lease liabilities - - - - - (865.3) (865.3)
Finance lease liabilities - - - - - (3.2) (3.2)
Derivative ?nancial instruments - (11.1) - - (2.3) - (13.4)
Trade and other payables - - - - - (641.2) (641.2)
Net position, 31 Dec 2012 420.1 30.4 2.6 37.9 14.8 (1,509.7) (1,003.9) N
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nyrstar Hobart has entered into two electricity ?xed price contracts, in the form of swaps, to reduce its exposure to the electricity
price risk to which it is exposed. The contracts end in 2014 and 2017 respectively. The swaps have been designated as qualifying
cash ?ow hedges.
(f) Interest rate risk management
Nyrstar’s exposure to interest rate risk and along with sensitivity analysis on a change of 100 basis points in interest rates at
balance date on interest bearing assets and liabilities is set out below:
31 Dec 2013 Sensitivity analysis, in 100 BP
Interest rate Income Statement Equity
EUR million Floating Fixed Total increase decrease increase decrease
Financial assets:
Cash and cash equivalents 292.3 - 292.3 2.9 (0.3) 2.9 (0.3)
Restricted cash - 7.6 7.6 - - - -
Held to maturity - 2.8 2.8 - - - -
Loan associates - - - - - - -
Financial liabilities:
Loan facility - (4.3) (4.3) - - - -
Borrowings - ?xed rate bonds - (734.2) (734.2) - - - -
Borrowings - convertible bonds - (221.4) (221.4) - - - -
Finance lease liabilities - (1.9) (1.9) - - - -
Net interest bearing ?nancial assets / (liabilities) 292.3 (951.4) (659.1) 2.9 (0.3) 2.9 (0.3)
31 Dec 2012 Sensitivity analysis, in 100 BP
Interest rate Income Statement Equity
EUR million Floating Fixed Total increase decrease increase decrease
Financial assets:
Cash and cash equivalents 188.1 - 188.1 1.9 (0.3) 1.9 (0.3)
Restricted cash - 8.2 8.2 - - - -
Held to maturity - 2.6 2.6 - - - -
Loan associates - 2.7 2.7 - - - -
Financial liabilities:
Loan facility - (0.6) (0.6) - - - -
Borrowings - ?xed rate bonds - (748.8) (748.8) - - - -
Borrowings - convertible bonds - (115.9) (115.9) - - - -
Finance lease liabilities - (3.2) (3.2) - - - -
Net interest bearing ?nancial assets / (liabilities) 188.1 (855.0) (666.9) 1.9 (0.3) 1.9 (0.3)
197
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(g) Fair value of ?nancial assets and ?nancial liabilities
The carrying amount of all ?nancial assets and liabilities recognised at amortised cost on the consolidated statement of ?nancial
position approximate their fair value, with the exception of the ?xed rate bonds of EUR 734.2 million (2012: EUR 748.8 million)
and the convertible bonds of EUR 221.4 million (2012: EUR 115.9 million), with fair values based on quoted prices in active
markets (Level 1 measurement), of EUR 672.6 million (2012: EUR 788.0 million), and EUR 211.4 million (2012: EUR 130.0 million)
respectively.
The following table presents the fair value measurements by level of the following fair value measurement hierarchy for
derivatives:
• quoted prices in active markets for identical assets or liabilities (level 1);
• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly
(level 2); and
• input for the asset or liability that are not based on observable market data (level 3).
Total as at
EUR million
Valuation technique
(s) and key input (s) Level 1 Level 2 Level 3 31 Dec 2013
Commodity contracts – fair value hedges a - 9.1 - 9.1
Commodity contracts – cash ?ow hedges a - 4.8 - 4.8
Foreign exchange contracts – held for trading b - 11.5 - 11.5
Embedded derivative c - 1.2 - 1.2
Total - 26.6 - 26.6
Commodity contracts – fair value hedges a - (14.4) - (14.4)
Foreign exchange contracts – held for trading b - (6.0) - (6.0)
Embedded derivative c - (4.3) - (4.3)
Total - (24.7) - (24.7)
Total as at
EUR million
Valuation technique
(s) and key input (s) Level 1 Level 2 Level 3 31 Dec 2012
Commodity contracts – fair value hedges a - 33.8 - 33.8
Foreign exchange contracts – held for trading b - 7.7 - 7.7
Embedded derivative c - 17.1 - 17.1
Total - 58.6 - 58.6
Commodity contracts – fair value hedges a - (10.6) - (10.6)
Foreign exchange contracts – held for trading b - (0.5) - (0.5)
Embedded derivative c - (2.3) - (2.3)
Total - (13.4) - (13.4)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For level 2 fair value measurements, fair values are determined based on the underlying notional amount and the associated observable
forward prices/rates in active markets. The key inputs in these valuations are as follows (with reference to the tables above):
a) forward commodity prices in active market
b) forward exchange rates in active market
c) forward electricity prices in active market
36. Capital commitments
The value of commitments for acquisition of plant and equipment contracted for but not recognised as liabilities at the reporting
date are set out in the table below.
EUR million 31 Dec 2013 31 Dec 2012
Within one year 14.2 20.2
Between one and ?ve years - -
More than ?ve years - -
Total 14.2 20.2
37. Operating leases
The value of commitments in relation to operating leases contracted for but not recognised as liabilities at the reporting date are
set out in the table below.
EUR million 31 Dec 2013 31 Dec 2012
Within one year 4.7 4.5
Between one and ?ve years 12.1 12.1
More than ?ve years 2.6 3.0
Total 19.4 19.6
38. Contingencies
Guarantees
In 2012 the Group has provided a guarantee of CNY 20 million (EUR 2.4 million) in favour of KBC in China, who provided a credit
facility to Genesis Alloys (Ningbo) Ltd. There is no outstanding guarantee at 31 December 2013. Refer to note 18 for further detail
on the Group’s investment in Genesis Alloys (Ningbo) Ltd.
Legal actions
Nyrstar is the subject of a number of claims and legal proceedings incidental to the normal conduct of its business. Management
does not believe that such claims and proceedings are likely, on aggregate, to have a material adverse effect on the ?nancial
condition of Nyrstar.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
39. Related parties
(a) Transactions with related parties
No transactions with related parties occurred in the years ended 31 December 2013 and 2012 with the exception of the loan to
Genesis Alloys (Ningbo) Ltd (note 21e).
(b) Key management compensation
Board of directors
EUR million 2013 2012
Salaries and other compensation 0.5 0.5
Nyrstar Management Committee
EUR million 2013 2012
Salaries and other compensation 4.8 4.1
Long term bene?ts 2.4 2.1
Share based payments 2.6 2.8
Long term bene?ts include housing allowances and pension contributions. Share based payments re?ect the cost to the Group
related to share based awards granted to the members of the NMC. These costs do not represent actual monetary or non-monetary
bene?ts received by the members of the NMC.
40. Audit and non-audit services by the Company’s statutory auditor
During the period, the auditor received fees for audit and audit related services provided to the Group as follows:
EUR thousand 2013 2012
Audit services 102.0 102.0
Audit related services 35.6 1.2
Tax services 61.5 113.5
Total Deloitte Bedrijfsrevisoren 199.1 216.7
Audit services 824.4 795.7
Audit related services 35.1 2.4
Tax services 69.2 28.2
Non-audit services 38.0
Total other of?ces in the Deloitte network 928.7 864.3
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
41. Group entities
The holding company and major subsidiaries included in the Group’s consolidated ?nancial statements are:
Entity
Belgian
company number
Country of
incorporation
Ownership
31 Dec 2013
Ownership
31 Dec 2012
Nyrstar NV RPR 0888.728.945 Belgium Holding entity Holding entity
Nyrstar Australia Pty Ltd Australia 100% 100%
Nyrstar Hobart Pty Ltd Australia 100% 100%
Nyrstar Port Pirie Pty Ltd Australia 100% 100%
Nyrstar Trading GmbH Austria 100% 100%
Nyrstar Resources (Barbados) Ltd Barbados 100% 100%
Nyrstar Belgium NV RPR 0865.131.221 Belgium 100% 100%
Nyrstar Finance International NV RPR 0889.716.167 Belgium 100% 100%
Nyrstar Sales & Marketing NV RPR 0811.219.314 Belgium 100% 100%
Breakwater Resources Ltd Canada 100% 100%
Canzinco Ltd Canada 100% 100%
Nyrstar Mining Ltd Canada 100% 100%
Nyrstar Canada (Holdings) Ltd Canada 100% 100%
Nyrstar Myra Falls Ltd Canada 100% 100%
Sociedad Contractual Minera El Toqui Chile 100% 100%
GM-Metal SAS France 100% 100%
Nyrstar France SAS France 100% 100%
Nyrstar France Trading SAS France 100% 100%
Nyrstar Germany GmbH Germany 100% 100%
Nyrstar Hoyanger AS Norway 100% -
American Paci?c Honduras SA de CV Honduras 100% 100%
Servicios de Logistica de Centroamerica SA de CV Honduras 100% 100%
Nyrstar Campo Morado SA de CV Mexico 100% 100%
Nyrstar Budel BV The Netherlands 100% 100%
Nyrstar International BV The Netherlands 100% 100%
Nyrstar Netherlands (Holdings) BV The Netherlands 100% 100%
Nyrstar Coricancha S.A. Peru 100% 100%
Nyrstar Ancash S.A. Peru 100% 100%
Nyrstar Peru S.A. Peru 100% 100%
Nyrstar Spain & Portugal S.L. Spain 100% 100%
Nyrstar Finance International AG Switzerland 100% 100%
Nyrstar Sales & Marketing AG Switzerland 100% 100%
Breakwater Tunisia SA Tunisia 100% 100%
Nyrstar Clarksville Inc United States 100% 100%
Nyrstar Holdings Inc United States 100% 100%
Nyrstar IDB LLC United States 100% 100%
Nyrstar Tennessee Mines - Gordonsville LLC United States 100% 100%
Nyrstar Tennessee Mines - Strawberry Plains LLC United States 100% 100%
Nyrstar US Inc United States 100% 100%
Nyrstar US Trading Inc United States 100% 100%
42. Subsequent events
There have been no material reportable events subsequent to 31 December 2013.
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STATUTORY AUDITOR’S REPORT
ON THE CONSOLIDATED
FINANCIAL STATEMENTS
As at 31 December 2013
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STATUTORY AUDITOR’ S REPORT ON THE CONSOLIDATED FINANCIAL
STATEMENTS
203
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STATUTORY AUDITOR’ S REPORT ON THE CONSOLIDATED FINANCIAL
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NYRSTAR NV SUMMARIZED (NON-CONSOLIDATED)
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2013
The annual accounts prepared under Belgian GAAP are presented below in summarized form. In accordance with the Belgian
Company Code, the annual accounts of Nyrstar NV together with the management report and the statutory auditor’s report will be
deposited with the National Bank of Belgium.
These documents may also be obtained on request from: Nyrstar NV, Zinkstraat 1, B- 2490 Balen (Belgium).
The statutory auditor, Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA, represented by Gert Vanhees has expressed an unquali?ed
opinion on the annual statutory accounts of Nyrstar NV.
Balance sheet
As at As at
EUR ,000 31 December 2013 31 December 2012
ASSETS
Non-current assets 2,182,107 2,201,364
Formation expenses 3,435 6,698
Intangible assets - -
Property, plant and equipment 5 81
Financial assets 2,178,667 2,194,585
Current assets 1,088,696 866,848
Total assets 3,270,803 3,068,212
LIABILITIES
Shareholders’ equity 2,182,838 2,152,417
Issued share capital 370,649 397,853
Share premium 1,555,133 1,539,183
Legal reserve 16,257 14,173
Undistributable reserves 35,432 32,983
Retained earnings 205,367 168,225
Provisions for risks and charges 3,302 5,704
Liabilities 1,084,663 910,091
Non-current Liabilities 838,982 864,731
Current Liabilities 245,681 45,360
Total equity and liabilities 3,270,803 3,068,212
Income Statement
As at As at
€ thousands 31 December 2013 31 December 2012
Operating income 9,341 10,869
Operating charges (14,718) (15,187)
Operating result (5,377) (4,318)
Financial income 135,954 121,069
Financial charges (85,542) (71,816)
Ordinary result before taxes 5,035 44,935
Income taxes (3,360) (3,611)
Net result 41,675 41,324
Result allocation
Retained earnings from prior year 168,224 104,529
Addition to the legal reserves 2,083 2,066
Addition to the other reserves 2,449 -
Transfer from the undistributable reserves - 24,437
Pro?t/loss to be carried forward 205,367 168,224
205
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Alloy Metal containing several
components.
Backwardation Market condition
where price of a forward or futures
contract is trading below the expected
spot price
Base Metal Non precious metal, usually
refers to copper, lead, and zinc.
Blast furnace A tall shaft furnace used
to smelt sinter and produce crude lead
bullion and a slag.
Bullion Crude metal that contains
impurities; needs to be re?ned to make
market quality metal.
Cadmium A soft bluish white ductile
malleable toxic bivalent metallic
element; occurs in association with zinc
ores.
C1 cash costs The costs of mining,
milling and concentrating, onsite
administration and general expenses,
property and production royalties not
related to revenues or pro?ts, metal
concentrate treatment charges, and
freight and marketing costs less the net
value of the by-product credits.
CAGR Compound Annual Growth Rate.
Calcine Product of roasting zinc
sulphide concentrates; mainly zinc oxide,
also with silica and iron compounds,
lead compounds, minor elements and
residual combined sulphur.
Casting Manufacturing method in
which a molten metal is poured into
a mould to form an object of the
desired shape; typically ingots or blocks
(jumbos)
Cathode Negatively charged electrode
in electrolysis; in zinc and cadmium
electrolysis, the cathode is a ?at sheet of
aluminum.
Cell house The location in the
production process where zinc metal is
electrolytically plated onto aluminum
cathodes.
CGG Continuous Galvanizing Grade
zinc; contains alloying agents such as
aluminum. lead and selenium in speci?c
qualities desired by customers; used in
continuous strip galvanizing plants.
Cobalt A hard, lustrous, silver-grey
metal.
Coke Product made by devolatilization
of coal in the absence of air at high
temperature.
Commodity grade metal Nyrstar
produces two types of commodity grade
metal, see CGG and SHG
Concentrate Material produced from
metalliferous ore by mineral processing
or bene?ciation; commonly based on
sulphides of zinc, lead and copper; in a
concentrate, the abundance of a speci?c
mineral is higher than in the ore.
Contango Market condition where
price of a forward or futures contract is
trading above the expected spot price
Continuous galvanizing A system
for providing a continuous supply of
material to be galvanized.
Conversion Price Operating cost for a
smelter to produce market quality metal,
not including the cost of raw materials.
Copper cementate Metallic copper
obtained by cementation.
Copper sulphate A copper salt made
by the action of sulphuric acid on copper
oxide.
Die casting A process for producing parts
in large quantities, by injecting molten
metal under pressure into a steel die.
dmt Dry metric tonne.
doré Unre?ned gold and silver bullion
bars, usually consisting of approximately
90% precious metals, which are to be
further re?ned to almost pure metal.
Electrolysis The process by which
metals (here zinc, cadmium, and copper)
are ‘ won’ or deposited from solution
onto a cathode by the passage of an
electric current through the solution
between anode and cathode.
Electrolyte Solution containing metals
(here zinc, cadmium, copper and silver)
circulating in an electrolysis cell.
Electrolytic smelting Smelting that
roasts and then leaches concentrates
to produce a zinc bearing solution. Zinc
is subsequently recovered from the
solution using electro winning and then
melted and cast into slabs.
Electrowinning The process of
removing metal from a metal bearing
solution by passing an electric current
through the solution.
EPA Environment Protection Authority
of a state, provincial or federal
government.
Flotation A method of mineral
concentration, usually of sulphide ores,
by which valuable mineral particles
adhere to froth bubbles for collection
as a concentrate; waste particles remain
in the slurry for eventual disposal as a
tailing.
Fuming, fume A process for recovering
of zinc and lead from molten lead blast
furnace slag by injecting coal; the metals
are removed as vapors in the gas stream,
and are deoxidized to form a fume that
is collected.
glt Grams per tonne
Galvanizing Process of coating steel
sheet or fabricated products with a thin
layer of zinc for corrosion protection.
GLOSSARY OF KEY INDUSTRY TERMS
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Germanium A brittle grey crystalline
element that is a semiconducting
metalloid (resembling silicon).
Grade Quantity of metal per unit weight
of host rock.
Greenhouse gases Gaseous
components of the atmosphere that
contribute to the greenhouse effect.
Grinding Size reduction to relatively
?ne particles.
Gypsum Calcium sulphate, hydrated.
Indium A rare, soft silvery metallic
element.
JORC Code The 2004 Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore Reserves
as published by the Joint Ore Reserves
Committee of the Australasian Institute
of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals
Council of Australia.
kt Thousand tonnes.
lb Pound.
LBMA London Billion Market
Association
Leaching A process using a chemical
solution to dissolve solid matters.
Life-of-mine Number of years that an
operation is planning to mine and treat
ore, taken from the current mine plan.
LME London Metal Exchange.
Lost time injury rate (LTR) Twelve
month rolling averages of the number
of lost time injuries per million hours
worked, and include all employees and
contractors across all operations.
NI 43-101 The Canadian Securities
Administrators National Instrument 43-
101 Standards of Disclosure for Mineral
Projects.
Ore Mineral bearing rock.
Oxidation The process by which
minerals are altered by the addition of
oxygen in the crystal structures.
Oxide washing Process to remove
halides from zinc secondaries.
Recordable environmental incident
An event at any operation (including
Nyrstar’s joint ventures) requiring
reporting to a relevant environmental
authority relating to non-compliance
with license conditions. Statistics are
correct as of the date an accident
is reported, but may be subject to
adjustment based on subsequent
internal audit or regulatory review.
Recordable injuries Any injury
requiring medical treatment beyond ?rst
aid.
Recordable injury rate (RIR) Twelve
month rolling averages of the number
of recordable injuries per million hours
worked, and include all employees and
contractors across all operations.
Re?ning Charge or RC An annually
negotiated fee that may be linked to
metal prices, paid by the miner or seller
of precious metals to a smelter as a
concession on the cost of the metal
concentrate or secondary feed materials
that the smelter purchases.
RLE process Roast Leach Electrowin;
technology used for the production of
zinc and which combines the roasting,
leaching and electrowinning processes.
See also de?nition of each individual
process.
Roaster In zinc production, a ?uid-bed
furnace used to oxidize zinc sulphide
concentrates; operates typically at
930-970°C; air injected through the
furnace bottom ‘?uidizes’ the bed of ?ne
combusting solids.
Roasting The process of burning
concentrates in a furnace to convert the
contained metals into a more readily
recovered form.
Secondaries See: Secondary feed
materials.
Secondary feed materials Byproducts
of industrial processes such as smelting
and re?ning that are then available
for further treatment/recycling. It also
includes scrap from metal machining
processes and from end-of-life materials.
SHFE Shanghai Futures Exchange
SHG Special High Grade Zinc; minimum
99.995% zinc; premium quality, used by
die casters; traded on the LME; attracts a
price margin over lower grades.
Slag Mixture of oxides produced
in molten form in a furnace at high
temperature. Smelting Chemical
reduction of a metal from its ore by
fusion.
Sulphides Minerals consisting of a
chemical combination of sulphur with
metals.
t Metric tonne.
t oz Troy ounce
Tailings Material rejected from a
treatment plant after the recoverable
valuable minerals have been extracted.
Treatment Charge or TC An annually
negotiated fee that may be linked to
metal prices, paid by the miner or seller
to a smelter as a concession on the cost
of the metal concentrate or secondary
materials that the smelter purchases.
207
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NOTES
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REGISTERED OFFICE
Nyrstar NV
Zinkstraat 1
B-2490 Balen
Phone: +32 (0) 14 44 95 00
Email: [email protected]
Company Number:
RPR Turnhout 0888.728.945
VAT No: BE 0888.728.945
www.nyrstar.com
CONTACT
INVESTOR RELATIONS
Amy Rajendran
Group Manager Investor Relations
Phone: +41 (0)44 745 8103
Email: [email protected]
MEDIA
Sheela Pawar
Group Manager Corporate Affairs
Phone: +41 (0)44 745 8154
Email: [email protected]
CONCEPT AND PRODUCTION
Com?
EDITOR
Nyrstar Corporate Affairs
[email protected]
IMAGES
Nyrstar.
ANNUAL REPORT
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RESOURCES FOR A CHANGING WORLD NYRSTAR.COM
doc_872102004.pdf
Nyrstar is an integrated mining and metals business with market-leading positions in zinc and lead and growing positions in other base and precious metals: essential resources that are fuelling the rapid urbanisation and industrialisation of our changing world.
Annual Report 2013
FOR TOMORROW
TRANSFORMING
Nyrstar is an integrated mining and metals business with
market-leading positions in zinc and lead and growing
positions in other base and precious metals: essential resources
that are fuelling the rapid urbanisation and industrialisation
of our changing world.
Nyrstar has mining, smelting and other operations located
in the Americas, Australia, China and Europe, and employs
approximately 6,600 people. ROLAND JUNCK, CEO
Discover the 2013
production and
?nancial details on:
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MINING PRODUCTION 2013 2012 2011
Zinc in concentrate (‘000 tonnes)
*
285 312 207
Gold (‘000 troy ounces) 75.2 94.6 49.9
Silver (‘000 troy ounces)
1
4,746 5,517 3,673
Copper in concentrate (‘000 tonnes) 12.9 13.0 7.7
METALS PROCESSING PRODUCTION
2
Zinc metal (‘000 tonnes) 1,088 1,084 1,125
Lead metal (‘000 tonnes) 179 158 195
MARKET
Average LME zinc price (USD/t) 1,909 1,946 2,191
Average exchange rate (EUR/USD) 1.33 1.28 1.39
KEY FINANCIAL DATA (EUR million)
Group Revenues 2,824 3,070 3,348
EBITDA
3
185 221 265
Mining EBITDA 78 129 72
Metals Processing EBITDA
3
149 135 235
Other & Eliminations EBITDA
3
(43) (43) (42)
KEY FINANCIAL DATA 2013 2012 2011
Results from operating activities before
exceptional items
(46) (6) 122
Loss for the period (195) (96) 36
EBITDA/t
6
135 158 199
Mining EBITDA/t
4
274 413 348
Metals Processing EBITDA/t
5
118 109 209
Underlying EPS (EUR)
7
(0.83) (0.44) 0.38
Basic EPS (EUR) (1.27) (0.57) 0.24
Capital Expenditure (CAPEX) 200 248 229
CASH FLOW AND NET DEBT
Net operating cash ?ow 299 362 121
Net debt/(cash), end of period 670 681 718
Gearing
8
43.5% 37.0% 35%
Key ?gures 04
2013 Highlights 04
Nyrstar in 2013 06
Strategy into action 09
Year in review 14
Mining 17
Metals Processing 21
Marketing, Sourcing & Sales 25
Market Overview 29
Corporate responsibility 31
The Nyrstar Excellence Awards 36
Contact 39
*
Numbers include Talvivaara zinc in concentrate production ?gures.
million
cost savings with a total target
of EUR 75 million through Group
wide review of operating costs.
€
million
200
€
DISCIPLINED CAPEX
CONTROL, AT THE LOW
END OF GUIDANCE
(DOWN 19% ON 2012)
million
€
NET OPERATING
CASH FLOW
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FINANCIAL CALENDAR
KEY SHARE FACTS
FOR THE YEAR ENDED 31 DECEMBER 2013 2012 2011
Market capitalisation EUR 392,752,077 EUR 764,081,313 EUR 1,037,137,518
Ordinary shares 170,022,544 170,022,544 170,022,544
Treasury shares 15,338,429 7,345,826 9,413,138
Free ?oat 85% 85% 85%
Gross capital distribution EUR 0 EUR 0.16 EUR 0.16
Underlying EPS (12 months to 31/12) EUR (0.83) EUR (0.55) EUR 0.38
Closing share price EUR 2.31 EUR 4.49 EUR 6.10
Intra day high EUR 4.72
(14/01/2013)
EUR 7.74
(08/02/12)
EUR 10.62
(13/01/11)
Intra day low EUR 2.03
(19/11/2013)
EUR 3.24
(26/07/12)
EUR 5.51
(23/11/11 and
25/11/11)
Average daily number of shares 2013 624, 569 1,036,883 993,666
30 April 2014 Annual General Meeting
30 April 2014 2014 First Interim Management Statement
24 July 2014 2014 Half Year Results
23 October 2014 2014 Second Interim Management Statement
5 February 2015 2014 Full Year Results
29 April 2015 Annual General Meeting
29 April 2015 2015 First Interim Management Statement
Dates are subject to change.
Please check the Nyrstar website for ?nancial calendar updates.
1
75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013, Campo
Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes production from Metals Processing segment only. Zinc production at Föhl,
Galva 45 & Genesis.
3
All references to EBITDA in the table above are Underlying EBITDA. Underlying
measures exclude exceptional items related to restructuring measures, M&A relat-
ed transaction expenses, impairment of assets, material income or expenses arising
from embedded derivatives recognised under IAS 39 and other items arising from
events or transactions clearly distinct from the ordinary activities of Nyrstar. Under-
lying EPS does not consider the tax effect on underlying adjustments. 2012 group
underlying EBITDA restated (previously EUR 220 million) due to Nyrstar adopting
international accounting standard IAS 19R (see notes to the Interim Condensed Con-
solidated Financial Statements for the period ended 31 December 2013).
4
Mining segment underlying EBITDA per tonne of zinc in concentrate produced.
5
Metals Processing segment underlying EBITDA per tonne of zinc metal produced.
6
Group underlying EBITDA per tonne of zinc in concentrate and zinc metal produced
7
Underlying measures exclude exceptional items related to restructuring measures,
impairment of assets, material income or expenses arising from embedded deriva-
tives recognised under IAS 39 and other items arising from events or transactions
clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not con-
sider tax effect on underlying adjustments.
8
Gearing: net debt to net debt plus equity at end of period.
Net debt
UNDERLYING EBITDA
(2012: -16%)
185
€
million
million 670
€
AT THE END OF 2013
DOWN 2% ON 2012
1,909 USD/t
average Zinc price
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Nyrstar in 2013
During 2013, despite a challenging year, we continued our transforma-
tion into an integrated mining and metals business to meet the chal-
lenges of tomorrow. Our Group underlying EBITDA of EUR 185 million
decreased 16% from 2012. This decline was partly driven by tough mac-
roeconomic headwinds and markedly weaker commodity prices, par-
ticularly copper, gold and silver prices, and also company-speci?c chal-
lenges. However, particularly from the second half of the year onwards,
we note solid underlying performance, especially in cash generation,
cost control and management of capital expenditure.
FINANCIAL OVERVIEW
Mining segment EBITDA was down 40% on 2012 at EUR 78 mil-
lion, adversely impacted by lower commodity prices, operational
challenges during the ?rst half and signi?cantly reduced deliveries
from Talvivaara. We remain keenly focused on improving the per-
formance of our Mining segment. During the second half of 2013,
we commenced an asset level Mining Strategic Review aimed at
identifying opportunities to make a step-change improvement in
the Mining segment’s operational and ?nancial performance.
Metals Processing EBITDA was up 10% on 2012 at EUR 149
million. This was driven by higher realised premiums and the
recognition of a EUR 45 million termination fee received from
Glencore that compensated Nyrstar for agreeing to end the Eu-
ropean component of its commodity grade metal off-take con-
tract, partially offset by lower average acid prices.
We continue to seek sustainable cost reductions across our entire
business through Project Lean. We achieved costs savings at the end
of 2013 of EUR 43 million and are con?dent of achieving our targeted
cost savings of EUR 75 million by the end of 2014. Net debt at the end
of 2013 was EUR 670 million, down 11% on the ?rst half of 2013 and
we have committed undrawn liquidity headroom and cash on hand of
EUR 721 million at the end of 2013. The Metals Processing segment
generated strong cash ?ows at the end of 2013 driven by our effec-
tive management of working capital and capital expenditure. During
2013 we successfully re?nanced the EUR 120 million bond maturing
in 2014 with new EUR 120 million convertible bonds due 2018.
As a result of our disciplined approach, capital expenditure in
2013 was signi?cantly down on the prior year at EUR 200 million
and at the bottom end of our 2013 guidance.
SEGMENT OPERATIONAL PERFORMANCE
Our operational performance was impacted by a number of
planned maintenance shuts across our Metals Processing segment
and, disappointingly, operational events across our Mining seg-
ment. Most notably, the Mining segment was affected by a two-
month suspension of mining operations at Campo Morado due to
a licensing issue. Whilst own mine zinc in concentrate production
in the second half of 2013 was down marginally on the ?rst half
of 2013, this largely re?ected the focus on gold at El Toqui. Full
year own zinc in concentrate production was 271,000 tonnes (in
line with our 2013 guidance, although down 4% on 2012). Lead
in concentrate production was marginally down on our guidance
whilst the production of other metals (copper, gold and silver)
was in line with guidance. Deliveries of zinc in concentrate from
Talvivaara of 14,000 tonnes in 2013 were signi?cantly down on
2012 (30, 000 tonnes). Talvivaara’s liquidity position weakened
further in H2 2013 and Nyrstar is now actively participating with
a number of stakeholders in Talvivaara’s corporate reorganisation
process which commenced in Q4 2013.
Our Metals Processing segment had a strong year, with a new
half-yearly record in zinc metal production in the second half of
2013. As a result, zinc metal production was at the top end of our
2013 guidance (and in line with 2012). Production of other met-
als in Metals Processing (lead, copper, silver, gold and indium)
was broadly in line with the ?rst half of 2013 and above 2012
performance.
STRATEGY
Nyrstar achieved a number of important strategic milestones
during 2013. We continued to progress the proposed redevel-
opment of the Port Pirie smelter into an advanced poly-metal-
lic processing and recovery facility, providing an opportunity to
strengthen and further diversify Group earnings. Following the
in-principle funding and support agreement reached in Decem-
ber 2012 with the Australian Federal and South Australian Gov-
ernments, we signed an implementation agreement with the
Australian Federal Government’s Export Finance and Insurance
Corporation, providing a framework and timetable for this import-
ant component of the funding package. We progressed the ?nal
investment case, including detailed engineering studies and the
completion of the pre-feasibility study. We continue to work with
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the Australian Federal and South Australian Governments and
are now working through the ?nal feasibility study. We expect to
make an announcement in early 2014.
In addition, following the completion of a thorough strategic re-
view of our smelting business during 2013, we have developed and
externally validated a transformation blueprint of approximately
25 projects aimed at capturing non-realised value in Nyrstar-con-
trolled feed material. Nyrstar completed its ?rst investment in the
transformation, and ?rst project within the blueprint, in Q4 2013
with the acquisition of ERAS Metal (now Nyrstar Hoyanger).
In H2 2013, Nyrstar successfully concluded negotiations for
a strategic offtake and marketing partnership with the Noble
Group for 200,000 tonnes per annum of commodity grade zinc
metal. In parallel with the partnership in Europe with Noble,
we have also established a strong Marketing, Sourcing & Sales
group, which will actively position Nyrstar within key markets.
OUR PEOPLE
We have made signi?cant progress in our long term strategic re-
positioning which is supported by a strong and dedicated work-
force of approximately 6,600 people. Our performance remains
the result of their commitment and dedication for the business
which is underpinned by our corporate culture, the Nyrstar Way.
On behalf of the Board of Directors, we would like to sincerely
thank all of our employees worldwide.
The health and safety of our employees, contractors and com-
munities is a core element of our company values. Incident rates
in the Metals Processing segment remain at record low levels
and there have been substantial improvements in the Mining
segment as a result of a strong safety focus at the mines. Our
environmental performance, based on our recordable incidents
rates, improved by more than 34% in 2013.
OUR STAKEHOLDERS
We would like to thank all of our shareholders, customers, sup-
pliers and the communities around our sites for their continued
support and trust in Nyrstar and our ongoing transformation.
Given our strong commitment to support the opportunities
identi?ed by the Company’s growth strategy, our Board of Direc-
tors has decided not to propose to shareholders a distribution
for the full year 2013.
LOOKING FORWARD
Looking ahead, we recognise that 2014 is an important year for
Nyrstar and while there are early signs of improving conditions
across the markets in which we operate, we are conscious of the
need for a prudent and disciplined approach to managing the
business to ensure that it is sustainable for the long term. With
this in mind, we continue to actively progress the Port Pirie re-
development and the initiatives identi?ed following the outcome
of the Smelting Strategic Review, supported by a more advanced
Marketing, Sourcing & Sales strategy and look forward to the re-
sults of the Mining Strategic Review. We continue to execute the
Group’s strategy and remain convinced that our unique industrial
footprint, ownership of raw materials and commercial focus pro-
vide a unique opportunity to generate value to our shareholders.
JULIEN DE WILDE
CHAIRMAN OF THE BOARD OF DIRECTORS
ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
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Nyrstar in 2013
NYRSTAR BOARD OF DIRECTORS
Oyvind Hushovd, Non-Executive Director; Carole Cable, Non-Executive Director; Julien De Wilde, Chairman;
Karel Vinck, Non-Executive Director; Ray Stewart, Non-Executive Director; Roland Junck, Chief Executive Of?cer.
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THE NYRSTAR MANAGEMENT COMMITTEE (‘NMC’)
Michael Morley, Senior Vice President Metals Processing & Chief Development Of?cer; Bob Katsiouleris, Senior Vice
President Marketing, Sourcing & Sales; Heinz Eigner, Chief Financial Of?cer; Roland Junck, Chief Executive Of?cer;
Graham Buttenshaw, Senior Vice President Mining; Russell Murphy, Chief Human Resources, Safety & Environment Of?cer.
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ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
Graham Buttenshaw assumed responsibility for leading the Com-
pany’s global mining operations. Since joining Nyrstar in 2012, he
has built up a strong new mining leadership team, based out of
our mining head of?ce in Ft. Lauderdale, Florida (USA) with the
responsibility of managing our 12 operating mines at eight sites in
six countries across the Americas. Prior to Nyrstar, Mr. Buttenshaw
amassed extensive global mining experience working both within
global mining houses such as BHP Billiton and in global mining
contractors such as Redpath and Henry Walker Eltin. Previously
he was Vice President South America at Redpath Limited, a global
mining contractor.
Bob Katsiouleris assumed responsibility for the Company’s raw
materials strategy, marketing and sales of ?nished products and
trading. Prior to joining Nyrstar in January 2013, Mr. Katsiouleris
was the Chief Commercial Of?cer for Rio Tinto Minerals and brings
more than 20 years of experience in industrial minerals and metals
sales, marketing, operations, processing, ?nance and purchasing.
Senior Vice President
- Mining
Senior Vice President
- Marketing, Sourcing
& Sales
New Members of the NMC
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Senior Vice President
- Marketing, Sourcing
& Sales
STRATEGY
INTO ACTION
NYRSTAR TENNESSEE MINES,
USA
Nyrstar’s industrial footprint of mining and smelting assets pro-
vides a unique opportunity to capture non-realised value and
deliver on our strategic mission to capture the maximum value
inherent in mineral resources. In 2013, we transformed our busi-
ness into three core value-driving segments: Mining, Metals Pro-
cessing, and Marketing, Sourcing & Sales to be better aligned with
the Company’s growing metals and mining business. This new
structure will streamline both mining and metals processing ac-
tivities and allow for increased commercial synergies throughout
our integrated network.
Alongside the organisational changes, several initiatives were
launched in 2013 to position Nyrstar for a long-term sustainable
future. We progressed the ?nal investment case in 2013 for the
redevelopment of Port Pirie into an advanced metals recovery and
re?ning facility which will further diversify Group earnings. Build-
ing on the Port Pirie redevelopment, Nyrstar launched a strategic
review of its zinc smelting (Smelting Strategic Review) operations,
which led to the development of a transformation blueprint of ap-
proximately 25 projects to capture un-realised value from residue
materials.
We also commenced an asset level Mining Strategic Review to
improve the Mining segment’s operational and ?nancial perfor-
mance. This is being undertaken in two phases: ?rstly, a prelimi-
nary turnaround phase to ensure that all assets are delivering to
their full potential; and secondly, a more strategic phase which
will link speci?cally to the Smelting Strategic Review programme
to maximise the advantages that both programmes can deliver.
Finally, in 2013 we created a new Marketing, Sourcing & Sales
team to support the implementation of the offtake and market-
ing agreement with Noble, the European zinc metal plan and the
overall global commercial strategy.
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For further information
please visit:
Looking Forward to 2014
Entering 2014, we will leverage the synergies built by our new organisational structure to stabilise and transform our opera-
tions, to build lasting and sustainable results. We will:
• Provide visible leadership to safety and environmental performance
• Deliver planned increases in mining production
• Continue to actively work with other stakeholders on Talvivaara
• Drive cost and capital discipline across the Group
• Achieve key milestones for Mining Strategic Review, Smelting Strategic Review and Port Pirie Redevelopment to deliver
sustainable shareholder value
• Execute de?ned commercial strategy, aligned to Nyrstar’s integrated business and operating model which develops
and captures maximum value
• Leverage and grow the capabilities of the Nyrstar leadership group to deliver commitments.
Nyrstar Operating Model
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In 2013, Nyrstar continued to execute on Nyrstar2020, a strategic initiative aimed at positioning the
company for a long-term sustainable future as the leading integrated mining and metals business.
To help us deliver on our strategy we introduced Strategy into Action into our business. Strategy into
Action is a disciplined approach to embedding our strategy into every part of the business and is now
in its third year of implementation. Through this process, Nyrstar has built a robust annual planning
process that distributes ownership and responsibility for Group strategy across each segment and
site operation in a transparent and measurable way. Each year we critically review strategic plans and
priorities to ensure we adequately respond to the current operating environment enabling us to deliver
on our strategic mission. Our 2013 strategic priorities addressed four key pillars:
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MICHAEL MORLEY
SVP METALS PROCESSING & CHIEF DEVELOPMENT OFFICER
Keep our Word
Develop and deliver realistic plans that meet stakeholder needs.
The main strategic goals of this pillar are to ensure that our three seg-
ments and corporate centre deliver on their commitments whilst ensur-
ing world class safety and environmental performance.
Transform for Tomorrow
Execute strategic initiatives to develop in the future.
The main strategic goals of this pillar are to ensure we focus on
innovation and technology across our business; develop opportunities
for growth to generate value; build a market oriented business and
lastly, ensure that we build and sustain an organisation that supports
collaboration.
Unleash our Potential
Enhance our capabilities by investing in our people and processes.
Lastly, this pillar is fundamental to ensuring our business can deliver on
pillar one and two. This pillar focuses on developing the potential of
our people, processes and culture, to ensure we have an environment
that fosters growth and transformation.
Responding to the current operating environment our 2014 strategic priorities focus on the
following three new pillars:
Strategy Into Action in 2014
Our 2014 strategic plans place a strong emphasis on our commitment to delivering our plans, to transforming our business and to cre-
ating value for our stakeholders while recognising that our people, processes, and values as de?ned by the Nyrstar Way are key to our
success in 2014 and beyond.
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Nyrstar in 2013
07 may
Keynote speech
Speaking about the way Nyrstar ap-
proached the commercial side of our
business, Bob Katsiouleris, Senior Vice
President for Marketing, Sourcing &
Sales, gave the keynote speech at the
Metal Bulletin Zinc and its Markets Con-
ference in Amsterdam.
23 may
Port Pirie Redevelopment
Nyrstar reached an important milestone
in the funding package for the proposed
transformation of the Port Pirie smelt-
er in Australia into an advanced metals
recovery centre. The Company signed
an implementation agreement with the
Australian Export Finance and Insurance
Corporation that provides a framework
and timetable for this component of the
funding package.
24 june
New organisational
structure
Nyrstar created three distinct business
segments: Mining, Metals Processing and
Marketing, Sourcing & Sales, ensuring
that the organisational structure is better
aligned with the Company’s long-term
strategy de?ned by Nyrstar 2020.
11 july
Balen smelter turnaround
The Balen smelter successfully completed
a massive 11-week roaster turnaround,
required approximately once every 30
years. The project involved work across
operations in Europe to stockpile calcine
in order to minimise disruptions in produc-
tion. Work was completed within budget
and on-time, without any safety or envi-
ronmental incidents, and met all quality
requirements.
Watch the Nyrstar
Balen turnaround
2013 video on
Youtube
16 april
Termination of European
Zinc Offtake Agreement
Nyrstar reached a settlement with
Glencore compensating Nyrstar for
agreeing to end the existing European
Off-take Agreement for the sale and
marketing of commodity grade zinc metal.
24 april
Nyrstar Foundation
2012 Winner
Nyrstar Foundation awarded the 2012-
2013 ‘Education’ grant to ‘MyMachine
1+1=3’ . A project that targets children who
want to develop their own dream machine.
MyMachine aims to leverage its unique
methodology to promote creativity and
entrepreneurship in education in develop-
ing countries.
January - March
Nyrstar enters strategic
hedging arrangements
with respect to zinc, gold
and silver prices
Capitalizing on the volatility of the metal
markets, Nyrstar entered into a number of
short term strategic hedges in 2013. In Q1,
Nyrstar entered into short-term strategic
hedging arrangements for 20kt tonnes
per month of zinc. Strategic hedges with
respect to silver (1.6m toz) and gold (36k
toz) were also carried out through the
year. The total cost for entering into these
hedging arrangements was approximately
USD 7 million resulting in an EBITDA
contribution of EUR 36.4 million.
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23 july
CSR program awarded
Nyrstar El Mochito won, for the ?fth con-
secutive year in a row, a Honduran Nation-
al Award for being a socially responsible
company. The award was granted by FUN-
HDARSE, the Honduran Foundation for
Corporate Social Responsibility, and rec-
ognises outstanding work in the ?elds of
Corporate Social Responsibility and Com-
munity Relations.
31 august
Tailings upgrade
completed
After 15 years and a total investment of
just under USD 30 million, Myra Falls
completed the seismic upgrade of its old
Tailings Disposal Facility (TDF) and is pre-
paring it for closure and reclamation.
1
october
Off-take and marketing
agreement
Nyrstar entered a strategic off-take and
marketing agreement with Noble Group
to market and sell a signi?cant portion
of commodity grade zinc metal produced
at its European smelters. For Nyrstar,
the agreement represents a major step
forward in delivering a new global
commercial strategy.
29 october
Nyrstar strategy update
Nyrstar presented the completed Smelt-
ing Strategic Review and the pre-feasibil-
ity study of the proposed Port Pirie Re-
development. The SSR has identi?ed an
attractive portfolio of investments in mul-
ti-metals recovery and an overall Metals
Processing Transformation blueprint that
provides a unique and compelling busi-
ness case. The pre-feasibility study has
con?rmed the technical and environmen-
tal capability of the lead smelter transfor-
mation into an advanced metals recovery
and re?ning facility.
1 november
Acquisition Eras
Nyrstar acquired ERAS Metal (now
Nyrstar Hoyanger), a fuming plant in
Hoyanger, Norway. The plant operates a
fumer which produces zinc oxides from
processing electric arc furnace dust. The
acquisition of ERAS is the ?rst investment
and project within Nyrstar’s Smelting
Strategic Review blueprint. Nyrstar
intends to upgrade the plant to process
residues from our smelters which are
currently sold to third parties.
17 september
Successful Bond offering
Nyrstar successfully issued EUR 120 million
of convertible bonds with institutional
investors.
19 september
Global Nyrstar
safety campaign
The safety and health of our employees
is of utmost importance to Nyrstar. In
September, Nyrstar launched a safety
communications campaign called Life
Saving Rules, further strengthening our
safety commitment to our employees
worldwide.
www.nyrstar2013.be
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LANGLOIS,
CANADA
MINING
MINING
Following the implementation of structural changes to our
management team in 2013, we appointed Graham Butten-
shaw as Senior Vice President, Mining to lead the newly cre-
ated Mining segment, which consists of 12 operating mines at
eight sites across six countries in the Americas.
Mining segment EBITDA was down 40% on 2012 at EUR 78
million, being adversely impacted by lower commodity pric-
es (principally gold and silver prices), operational challenges
during the ?rst half of 2013 and signi?cantly-reduced deliver-
ies from Talvivaara. Actions were implemented in the second
half to refocus the performance of the segment and deliver
a sustainable and pro?table business result within the wider
footprint of the integrated business base model.
In 2013, the volume of zinc in concentrate produced at Nyrstar’s
own mines (excluding deliveries under the Talvivaara zinc stream)
was 271, 000 tonnes, achieving the 2013 guidance of 265,000 to
280,000 tonnes although down 4% on 2012. The decline in pro-
duction was principally driven by the two-month suspension of
operations at the Campo Morado mine in Mexico due to a licens-
ing issue. Total zinc in concentrate was down 9% on 2012 as a re-
sult of fewer deliveries of zinc concentrate from Talvivaara under
the zinc streaming agreement. Lead in concentrate production
was below guidance and lower than 2012 production largely due
to a deliberate production trade-off at Contonga whereby low-
er lead production was replaced by higher-value copper. Copper
Key ?gures
2013 2012
MINING PRODUCTION
Zinc in concentrate (‘000 tonnes)
2
285 312
Gold (‘000 troy ounces) 75.2 94.6
Silver (‘000 troy ounces)
1
4,746 5,517
Copper in concentrate (‘000 tonnes) 12.9 13.0
1
75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013, Campo
Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes Talvivaara zinc in concentrate production.
OWN MINING PRODUCTION OF
OF ZINC IN
CONCENTRATE
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in concentrate production was in line with 2013 guidance, only
marginally lower than the prior year production, despite being
affected by the suspension at Campo Morado.
Silver production was in line with management’s guidance of
4.7 to 4.9 million troy ounces; however, it was lower than 2012
production by 14%, with the shortfall coming from the suspen-
sion at Campo Morado and from Coricancha where operations
were placed on care and maintenance in H2 2013.
Gold production of 75,200 troy ounces marginally exceeded
guidance of 65,000 to 75,000 troy ounces. El Toqui contrib-
uted strongly to Nyrstar’s doubling of gold production in H2
2013 compared to H1 2013; however, the suspension at Cam-
po Morado and halted operations at Coricancha reduced 2013
production by 21% compared with 2012.
In the Mining segment, Myra Falls won the British Columbia
John T. Ryan Award in recognition of their 2012 safety perfor-
mance. A ‘back to basics’ plan was initiated across all mines
with an objective of building the foundations of strong health
& safety management systems and cultures.
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GRAHAM BUTTENSHAW
SVP, MINING
3
A Recordable Environmental Incident is de?ned as an environmental event requir-
ing noti?cation to the relevant regulatory authority and that also constitutes a
non-compliance with regulatory requirements.
* Excluding zinc deliveries under the Talvivaara Streaming Agreement.
** 75% of the silver produced by Campo Morado is subject to a streaming agreement
with Silver Wheaton Corporation whereby only USD 3.90/oz is payable.
A total of 24 Recordable Environmental Incidents
3
were
reported in 2013 in the Mining segment, representing a
significant decrease relative to the 32 incidents recorded
in 2012.
Production Guidance for 2014
across Nyrstar’s portfolio of mining assets is as follows:
METAL IN CONCENTRATE PRODUCTION GUIDANCE
Zinc (own mines)
*
280,000 – 310,000 tonnes
Lead 15,000 – 18,000 tonnes
Copper 12,000 – 14,000 tonnes
Silver
**
4,750,000 – 5,250,000 troy ounces
Gold 65,000 – 70,000 troy ounces
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COMMUNICATIONS AND TEAMWORK
BOLSTER GERMANIUM VALUE FROM
THE TENNESSEE MINES
In 2013, communication and teamwork between Nyrstar Ten-
nessee Mines and the Clarksville smelter resulted in improved
processing and recovery of germanium and gallium from Middle
Tennessee Mines. With a thorough understanding of the smelt-
er’s needs, Middle Tennessee Mines commissioned a regrind
processing circuit to deliver more ?nely ground concentrates to
the smelter. As a result, Clarksville is now able to produce an up-
graded and more valuable product. with higher germanium and
gallium content.
TENNESSEE MINES DELIVERED
IMPROVED PERFORMANCE PRODUCING
ZINC IN CONCENTRATE
UP 11% ON 2012
Mining Segment Delivers on Project Lean
During 2013, Nyrstar continued to deliver solid progress
against Project Lean, our programme to realise sustainable
cost reductions. In the Mining Segment, we achieved further
employee and contractor headcount reductions via rational-
isation and insourcing of mining contractors and shift sys-
tem optimisation, with the total number to date exceeding
1,500 FTEs.
Capital Expenditure
Sustaining and Compliance EUR 40 – 45 million
Exploration, Development
and Growth
EUR 65 – 75 million
TOTAL EUR 105 – 120 million
For further information
please visit:
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OVERPELT,
BELGIUM
METALS
PROCESSING
Key ?gures
EUR million unless otherwise indicated 2013 2012
Treatment charges 337 338
Free metal contribution 244 242
Premiums 127 115
By-Products 215 221
Other (111) (64)
Production Guidance for 2014
Nyrstar expects to produce 1.0 – 1.1 million tonnes of zinc metal in
2014. This level of production is based on maximising EBITDA and
free cash ?ow generation in the Metals Processing segment by
targeting the optimal balance between production and sustaining
capital expenditure.
The health and safety performance variance across the Metals
Processing segment reduced signi?cantly as a consequence of a
strong health and safety network and exchange of practices be-
tween the sites. Auby operated without a lost time injury for an
18 month period. The number of cases involving restricted works
or lost time injuries (DART) was below 5 at 4.8 at the end of the
year. A corporate health and safety audit was completed across
the smelters as part of our Assurance Program.
METALS PROCESSING
Metals Processing EBITDA was up 10% on 2012 at EUR 149 million. This was driven by higher realised premiums and the recogni-
tion of the EUR 45 million termination fee from Glencore that compensated Nyrstar for agreeing to end the European component
of its commodity grade metal off-take contract, partially offset by lower acid prices. The Metals Processing segment generated
strong cash ?ows driven by effective management of working capital and capital expenditure.
Our operational performance in H1 2013 was impacted by a
number of planned maintenance shuts. Despite this, the metals
processing segment had a very strong operational year, with a
new half-yearly record in zinc metal production in H2 2013. As a
result zinc metal production of 1,088,000 tonnes was at top end of
our guidance (and in line with 2012). Production of other metals
in Metals Processing (lead, copper, silver, gold and indium) was
broadly in line with H1 2013 and above 2012 performance.
Key ?gures
2013 2012
METALS PROCESSING PRODUCTION
1
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
OTHER PRODUCTS
Copper cathode ('000 tonnes) 4 3
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Indium metal (tonnes) 33 13
Sulphuric acid ('000 tonnes) 1,389 1,388
1
Includes production from Metals Processing
segment only. Zinc production at Föhl, Galva
45 & Genesis.
2
A Recordable Environmental Incident is de-
?ned as an environmental event requiring
noti?cation to the relevant regulatory au-
thority and that also constitutes a non-com-
pliance with regulatory requirements.
t
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s
OF ZINC METAL
PRODUCED IN 2013
A total of 10 Recordable Environmental Incidents
2
were reported
in 2013 in the Metals Processing segment, representing a signif-
icant decrease relative to the 22 incidents recorded in 2012. The
improved incident record is attributed to strengthened environ-
mental regulatory compliance processes and to the effectiveness
of improvement actions implemented in response to events expe-
rienced in 2012.
METALS PROCESSING EBITDA
UP 10% ON 2012.
IN 2013
million
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SMELTING STRATEGIC REVIEW
Leveraging the proposed Port Pirie redevelopment and fol-
lowing the completion of a thorough strategic review of
our zinc smelting business, in October 2013, we announced
that Nyrstar had developed and externally validated a
transformation blueprint of approximately 25 projects
aimed at capturing un-realised value in Nyrstar-controlled
feed material. Nyrstar completed its ?rst investment in the
transformation and ?rst project within the blueprint, in
Q4 2013 with the acquisition of ERAS Metal (now Nyrstar
Hoyanger). Nyrstar expects the sequencing of additional
investments to continue in 2014 and the completion of the
full transformation by early 2017.
Where appropriate, Nyrstar may pursue these investments
over a longer period in a manner whereby returns gener-
ated by earlier investments could fund subsequent invest-
ments. Such a timeline could result in investments starting
in 2014 and the completion of the full transformation by
late 2019.
NYRSTAR HOYANGER
Nyrstar’s ?rst investment into the blueprint was the ac-
quisition of ERAS Metal (now Nyrstar Hoyanger) for ap-
proximately EUR 5 million. The plant operates a fumer
which currently produces zinc oxides from processing
electric arc furnace dust, a feed from the steel industry.
Over the course of 2014, invest approximately an ad-
ditional EUR 2 million, to upgrade the plant to process
residues from Nyrstar smelters’ which are currently sold
to third parties.
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PORT PIRIE REDEVELOPMENT
In 2013, we continued to actively progress the proposed re-
development of the Port Pirie smelter into an advanced po-
ly-metallic processing and recovery facility. Following the
in-principle agreement reached in December 2012, we signed
an implementation agreement with the Australian Export
Finance and Insurance Corporate in May 2013, providing a
framework and timetable for this important component of the
funding package for the redevelopment. We progressed the
?nal investment case, including detailed engineering studies
and the completion of the pre-feasibility study. Nyrstar is now
working through the ?nal feasibility study and will provide an
update during the course of Q1 2014.
For further information
please visit:
INSIGHTS BEHIND THE SMELTING STRATEGIC REVIEW
The Smelting Strategic Review team started their work in late
2012 in order to identify opportunities to sustainably improve
the pro?tability of our Metals Processing segment. The team
systematically challenged how we view and operate our metals
processing network and explored opportunities to fundamen-
tally transform the segment’s operating and business mod-
el. Led by a dedicated project team of internal and external
multi-disciplinary professionals, thousands of scenarios were
modelled using different technologies, feed mixes, macroeco-
nomic parameters and capacities to arrive at a ?nal transfor-
mation blueprint.
With investments into technical modi?cations and in optimis-
ing our metals processing network, we will be positioned to
capture untapped value in our unique asset footprint of zinc
mines, poly-metallic mines, zinc smelters and a lead smelter.
The blueprint projects are categorised under three main ar-
eas: de-bottlenecking smelters, building fuming capacity and
minor metals extraction. The transformation, and its focus on
these three main areas, will help us build ?exibility within our
system and take advantage of market opportunities.
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OVERPELT,
BELGIUM
MARKETING,
SOURCING AND SALES
MARKETING, SOURCING & SALES
In 2013, we established a Marketing, Sourcing & Sales segment responsible for building a new commercial strategy. The strategy consists
of working with the Mining and Metals Processing segments to create, secure and maintain ?rst mover advantage in obtaining the feed-
stock and inputs to produce products that are marketed using our deep market insight and sold at above industry returns.
In October, we entered into a strategic offtake and marketing
agreement with the Noble Group (“Noble”) representing a major
step in executing our new global commercial strategy. The agree-
ment with Noble is to market and sell 200,000 tonnes per annum
of commodity grade zinc metal (special high grade and continuous
galvanising grade) produced at our European smelters.
The agreement follows a structured process undertaken by Nyrstar
in Q2 and Q3 2013 to determine the most suitable channel(s) to
market and sell commodity grade zinc metal produced at our Eu-
ropean smelters. This was triggered by the end of the European
component of the Commodity Grade Off-take Agreement with
Glencore Xstrata. During the process Nyrstar determined that the
best way to market our European commodity grade zinc metal is
through a multi-channel approach. As a result, the newly formed
Marketing, Sourcing & Sales segment is directly selling, marketing
and ?nancing the remaining 160,000 tonnes (approximately) of
commodity grade zinc metal produced in Europe with a number of
market participants.
For Nyrstar, the agreement represents a ?rst step in executing a
European zinc metal plan aimed at actively marketing Nyrstar’s
products to increase optionality in terms of customers, product
mix and geography. By leveraging Noble’s market-leading supply
chain expertise and trading capabilities, and utilising Nyrstar’s in-
dustrial assets and European zinc market insights, we will be ?exi-
ble and responsive to changing end-user requirements.
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BOB KATSIOULERIS,
SVP MARKETING, SOURCING & SALES
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2013 was a year of transformation for Nyrstar’s commercial
strategy.
To support the implementation of the new commercial strat-
egy, Nyrstar has made a number of senior level appoint-
ments to Marketing, Sourcing & Sales to build its capabilities
and market insight.
Nyrstar introduced a new strategic marketing function to
the organisation to de?ne the commercial strategy and di-
rection. They are also responsible for creating value for the
business based on supply and demand fundamentals, mar-
ket competitive intelligence, segmentation and optionality.
Nyrstar entered into a strategic offtake and marketing
agreement for some of its European commodity grade met-
al with Noble Group starting January 2014.
Discussions on direct sales, marketing and ?nancing oppor-
tunities continue with a number of market participants for
remaining European volumes, as Nyrstar believes the best
way to market its product is through a multi-channel ap-
proach. This could include placing commodity grade zinc
metal and other products in offshore markets, a route which
was tested during Q3 2013.
Nyrstar entered tenders for concentrates for the ?rst time and
held key contract negotiations with a number of suppliers.
Building on progress made in 2013, the new commercial strategy will
deliver innovative and sustainable commercial solutions to Nyrstar,
drawing on the strengths of our market insights and our global reach.
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WITH NOBLE GROUP
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A challenging trading environment driven by tough
macroeconomic headwinds and subdued base metal prices.
Despite improving global growth in 2013, the trading environ-
ment was challenging with subdued base metals prices. With the
exception of brief rallies in early and late 2013, sideways trading
conditions were the main feature for base metals during 2013.
The improving global economic conditions and a strengthening
dollar index accounted for signi?cant depreciations for precious
metals during 2013.
EXCHANGE RATE
The Euro strengthened against the US Dollar by almost 4% al-
though punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this devel-
opment has been negative from an EBITDA perspective this has
had the effect of rebalancing Europe from excessive reliance on
exports towards consumption-led growth which has led to a pick-
up in European industrial demand.
BASE METAL SUMMARY
A recovery of developed world economic growth created head-
winds for base metals as investment ?ows shifted from base met-
als in favour of equities and the dollar index strengthened. Ad-
ditionally, the government transition and slowing growth of the
Chinese economy resulted in lukewarm sentiment towards indus-
trial metals and, as such, price ranges were largely range-bound
throughout most of the year.
ZINC
The average zinc price declined by 2% in 2013 to USD 1,909/t per
tonne compared to USD 1,946/t in 2012. Whilst zinc prices re-
mained range-bound throughout most of the year, key end use
sectors for zinc continued to grow at a healthy pace with global
consumption growth estimated to have grown by 4% in 2013 ac-
cording to Wood Mackenzie. Zinc supply was impacted by a curtail-
ment of smelting production outside of China and strong import
demand into the Chinese market induced by a favourable arbi-
trage throughout most of the year. This translated into increasing
global premiums throughout most of the year. Zinc staged a rally
in December, aided in part by an announcement that the Century
zinc mine would close earlier than previously announced.
Key ?gures
FY FY %
Average prices 2013 2012 Change
Exchange rate (EUR/USD) 1.33 1.28 4%
Zinc price (USD/tonne, cash settlement) 1,909 1,946 (2)%
Lead price (USD/tonne, cash settlement) 2,141 2,061 4%
Copper price (USD/tonne, cash settlement) 7,322 7,950 (8)%
Silver price (USD/t.oz, LBMA AM ?x) 23.79 31.15 (24)%
Gold price (USD/t.oz, LBMA AM ?x) 1,410 1,662 (15)%
Note: Zinc, lead and copper prices are averages of LME daily cash settlement prices.
Silver and gold prices are averages of LBMA AM daily ?xing prices.
31
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LEAD
The average lead price increased modestly during 2013, appreciat-
ing by almost 4%. End-use demand continued to grow at a healthy
pace on a global basis, although softened from 4.9% growth in
2012 to an estimated 3.6% in 2013, according to Wood Macken-
zie. The outlook is more positive with 2014 consumption growth
expected to rise to 4.6%. The medium-term outlook is character-
ised by supply-side shortages, tougher environmental regulation
and re?ned market de?cits which is supportive of higher prices.
COPPER
The average copper price in 2013 was USD 7,322/t an 8% de-
cline compared to USD 7,950/t in 2012. It is estimated by Wood
Mackenzie that global copper consumption, which includes
direct use of scrap, will have increased by 5.6% in 2013, a sig-
ni?cant improvement compared to almost ?at consumption
growth in 2012. This resulted in signi?cant tightness in the
re?ned copper market in 2013. Whilst the copper concentrate
market is understood to be in a surplus, copper mine production
continues to face setbacks and disruptions and this continues to
support prices.
GOLD & SILVER
Increasing con?dence regarding global growth as well as stronger
United States dollar index created downward pressure to precious
metals with the average gold price 15% lower in 2013. Average
silver prices depreciated by approximately 24% in 2013 from 2012
as industrial demand for silver weakened.
SULPHURIC ACID
In 2013, prices achieved by Nyrstar on sales of sulphuric acid,
which are predominantly based on contracts rather than the spot
market, declined signi?cantly from an average of USD 80 per
tonne in H1 2013 to an average of USD 40 per tonne in H2 2013.
The sulphuric acid market suffered as sulphur prices fell, largely
due to constrained fertiliser demand in India and China. Nyrstar
expects that the sulphuric acid market will remain challenged
throughout 2014 with prices expected to be lower than those ex-
perienced in H2 2013.
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PORT PIRIE,
AUSTRALIA
CORPORATE
RESPONSIBILITY
Nyrstar publishes a separate Sustainability Report that
presents our sustainability performance during the past
year. This year marks the sixth year that we report exter-
nally on sustainability matters. The Sustainability Report
can be downloaded from our website:
37
%
COMMUNITY INVESTMENT
2.9
€
At Nyrstar, we are committed to responsible and sustainable business practices and recognise that
this is a prerequisite for the success of our company. The Nyrstar Way encourages us to prevent harm,
create value and maintain open and honest relationships with our stakeholders and this provides the
foundation of our organisational culture.
To succeed in delivering value to our shareholders, we must bal-
ance economic, environmental and social objectives in managing
our business. This balance is evident in the Strategy into Action
(SIA) process which involves the development of annual Balanced
Business Plans (BBPs). All BBPs, whether developed at Group,
Segment or Site level, include targets for safety, health, environ-
ment, community and other sustainability areas. The integrated
and balanced nature of the BBP process ensures that sustainability
objectives and initiatives receive the same attention as other core
business areas and are subject to regular reviews by the Nyrstar
senior leadership team.
In 2013, we continued the development and implementation of
our Group Safety, Health, Environment and Community (SHEC)
Framework across our operations. The Framework is aligned with
industry best practice and is continually updated to stay current
with the needs of the business and with developments in external
standards and requirements. While promoting consistency, the
Framework is designed to give operational management the nec-
essary latitude to adapt their implementation strategies to local
context, requirements and needs. During the past year, we also
launched a new Group Standard for risk management and con-
ducted risk workshops across a majority of our sites.
RUSSELL MURPHY
CHIEF HUMAN RESOURCES, SAFETY & ENVIRONMENT OFFICER
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We aim to provide a work environment where all hazards are effectively identi?ed and controlled, and
where each employee takes responsibility for their safety and that of their colleagues. We believe that
every work-related illness and injury is preventable and our goal is to achieve world class health and
safety performance across all our mines and smelters by 2016.
As our company has transitioned from
a pure smelting operation into an inte-
grated metals and mining business, we
have re?ned our safety management pri-
orities and programmes accordingly. As
our mines typically have less developed
safety cultures than our smelters, the fo-
cus of some of our safety initiatives has
shifted towards the management of key
risks and the day-to-day hazards inherit
in our workplace. As part of this focus, in
2013 we launched the Nyrstar Life Saving
Rules which prescribe non-negotiable re-
quirements in relation to a set of key risks
relevant to our operations.
We also launched a communications
campaign on Mobile Equipment Safety in
order to raise the awareness concerning
the hazards of working in areas with mo-
bile equipment. In the Mining Segment,
mine rescue training was completed at
all mines and new mine rescue equip-
ment was acquired to a standardised lev-
el across the sites.
Tragically, despite our continued safety
efforts, two Nyrstar employees were fatal-
ly injured in March and September 2013
while working at the Campo Morado and
Contonga mines, respectively. Risk scenari-
os were conducted across all mines to pre-
vent the recurrence of similar situations.
Our 2013 Total Recordable Injury Fre-
quency Rate (RIFR) remained relatively
?at at 9.0 compared to 8.3 in 2012. This
con?rmed the signi?cant reduction (37%)
achieved in 2012. After a 50% reduction in
2012, the 2013 Lost Time Injury Frequency
Rate (LTIFR) increased by 20% to 3.4 com-
pared to 2.8 in 2012.
Improving Safety Performance at the Auby Smelter
In 2013, our Auby smelter achieved a 50% reduction in their record-
able injury frequency rate compared to 2012, and operated for 18
months without a single lost time injury.
In August 2012, the Auby smelter faced a turning point. Prior to
August, Auby suffered one lost time injury every two months and
more than one recordable injury a month. At this time, we met for
two days with the full extended Leadership Team and re?ected on
the causes of this high incident rate. We realised that we had pock-
ets of good achievements; however they were neither systematic nor
standardised across the different teams and departments. As a result
of this meeting, we developed an action plan. Unlike previous ones,
this plan was not to introduce more tools or programs. We took a new
approach and implemented a solution to standardise and effectively
integrate safety practices into everything we are doing, at all levels of
the organisation. We institutionalised safety into the way we work.
As a result of this program we have seen a signi?cant decrease in lost
time injuries across the smelter. We are proud of our achievements,
but do not take our efforts for granted. A focus on safety must be sus-
tained and constant in the long run. We worked hard in 2013 to achieve
measurable progress and will continue to strengthen our performance
moving forward.
0
5
10
15
20
2013 2012 2011 2010 2009
3.9
16.4
11.9
13.1
8.3
9.0
3.9
4.2
2.8
3.4
RIFR LTIFR
Injury Rates (Per Million Hours Worked)
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Mining and metals operations unavoidably affect the environment and minimising environmental
impacts represents one of the principal challenges for our industry.
Recognising the importance of environmental performance to
our business success, we take the management of environmen-
tal risks very seriously and responsible environmental steward-
ship is integrated into our business planning, management sys-
tems and day-to-day operational decision making.
In 2013, we continued the implementation of our environmen-
tal performance standards which set out our expectations with
respect to the management of key environmental risks. We also
saw a substantial improvement in the number of Recordable
Environmental Incidents, decreasing from 54 incidents in 2012
to 34 incidents in 2013. Recordable Environmental Incidents is
our key measure for regulatory compliance and is de?ned as a
non-compliance event that requires noti?cation to the environ-
mental authorities.
Our energy and greenhouse gas performance remained relative-
ly unchanged in 2013 compared to the year before. In 2013, we
consumed a total of 24.1 petajoules (PJ) of energy and emitted
2.54 million tonnes of greenhouse gases (measured as carbon
dioxide equivalent tonnes). In both cases, this represented an
increase of 2% compared to 2012. Given the energy intensive
nature of our metals processing business, achieving continuous
improvement in energy ef?ciency is a top priority for our oper-
ations and all smelters have formal energy ef?ciency programs.
0
5
10
15
20
25
30
35
12
13
22
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10
24
2011 2012 2013
SMELTERS MINES
Recordable Environmental
Incidents
1
1
2012 and 2013 data includes all Nyrstar mines and
smelters; 2011 data includes all smelters and Tennes-
see Mines.
0
5
10
15
20
25
5.0 6.0 6.2
17.3 17.7 17.9
22.3
23.7
24.1
2011
*
2012
*
2013
DIRECT ENERGY INDIRECT ENERGY
Energy usage
2
(Petajoules)
0,0
0,5
1,0
1,5
2,0
2,5
3,0
0.50 0.57 0.59
1.90
1.92
1.95
2.40
2.49
2.59
2011 2012 2013
DIRECT ENERGY INDIRECT ENERGY
2
2012 and 2013 data includes all Nyrstar mines and smelters; 2011 data includes all smelters, Tennessee Mines
and Campo Morado.
Greenhouse Gas Emissions
2
(CO
2
-e million tonnes)
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At Nyrstar, we recognise that we cannot operate in isolation and our success is intrinsically linked
to the way we engage with our communities, regulators, suppliers, customers and other key stakeholders.
Our aim is to be a welcome and valued
member of the communities in which we
operate. We accomplish this by engaging
with our stakeholders to understand and
respond to their expectations, building
long-term relationships founded on trust
and honesty, and by respecting fundamen-
tal human rights wherever we operate.
Our mine and smelter sites undertake local
community activities in line with their es-
tablished stakeholder engagement plans.
In 2013, we engaged external specialists
to work closely with our Latin American
sites. The focus of this collaboration was
to strengthen the community engage-
ment capabilities of our site personnel and
to develop regional standards for commu-
nity management. The work also included
the development of 5-year Community
Engagement Plans for each of the Latin
American operations.
Financial contributions for community
support, sponsorships and donations in
2013 totalled €2.9 million, representing a
9% increase over the €2.65 million contrib-
uted in 2012. This included CAD 0.25 mil-
lion in line with our commitment to Invest-
ment Canada as part of the acquisition of
the Myra Falls and Langlois mines in 2011.
Stormwater Recycling at Hobart
The majority of the process water used at the
Hobart smelter is supplied by Tasmania’s water
corporation, TasWater. More than three mil-
lion m
3
of potable water was sourced from the
TasWater supply in 2012, representing almost
10% of the total Derwent River extraction for
potable supply to Southern Tasmania. In order
to lessen Nyrstar’s reliance on this water source
while also reducing impacts on the Derwent
Estuary, several stormwater recycling programs
are underway at the Nyrstar Hobart plant.
The site already captures its own stormwater,
which is treated in the site’s ef?uent treatment
plant before ?owing into the Derwent Estuary.
In order to use this water in the production
process, further stormwater storage, treatment
and distribution installations are being added
on site. This project, which is planned to be ful-
ly implemented in 2014, is expected to replace
up to 32% of the fresh water currently used in
the smelter’s production processes. The project
is jointly funded by Nyrstar and by a AUD 2.64
million grant from the Australian Government’s
Stormwater Harvesting and Reuse program.
In August 2013, Nyrstar also welcomed the
?rst ?ow of recycled stormwater from the
Glenorchy City Council. In its ?rst phase, this
project is expected to deliver the site 1.5 mil-
lion litres of recycled water daily which is used
for the site’s steam boiler and cooling tower
systems. A total of 106 million litres of recycled
stormwater was supplied to the site in 2013,
contributing to a total reduction in fresh water
use of 250 million litres (relative to 2012). The
Council stormwater recycling plant is expected
to be further expanded in coming years with
the hope of increasing the amount of recycled
stormwater supplied to Nyrstar.
The stormwater recycling projects underway in
Hobart help to minimise the amount of drink-
ing water used for industrial purposes and to
reduce stormwater impacts on the Derwent
Estuary.
The Nyrstar Foundation
The Nyrstar Foundation was established in 2010 as part of Nyrstar’s CSR program. In April 2013, the Foundation announced its second annual
social idea competition winner for innovation by a Belgian individual, company or organisation relating to Education. The winner of the €25,000
grant was the MyMachine 1+1=3 project. MyMachine aims to leverage its unique methodology to promote creativity and entrepreneurship in
education in developing countries. The project is a cross-border cooperation between schools and organisations in Flanders, Belgium and in
developing countries bringing together children, students and organisations around the world to learn from and inspire each other. Dreams and
entrepreneurship, creativity and cross-pollination - that’s what it’s all about! More information on the Nyrstar Foundation can be found on the
website www.nyrstarfoundation.org.
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The Nyrstar Excellence Awards were launched in 2010 to promote and reward a culture
of excellence within our business. Each year, Nyrstar presents awards to acknowledge
exceptional performance and achievement of individuals or teams from each of our
operating sites. The Excellence Awards are an important component of the Nyrstar2020
strategy which has a strong emphasis on delivering excellence. The framework and
recognition criterion from the Excellence Awards this year is based on our 2013 Group
Strategy which is underpinned by our values, The Nyrstar Way.
IN NOVEMBER 2013, WE AWARDED FIVE TEAMS IN THE FOLLOWING CATEGORIES:
Living the Nyrstar Way
Building a Strong Safety Culture
Nyrstar Myra Falls achieved over 590 days without a lost-time
injury (LTI) and the complete year of 2012 with no LTI. Due to a
number of ongoing initiatives to strengthen the safety culture and
performance at site, we were recognised by a national Canadian
honour for our excellent safety performance.
Unlocking Untapped Value
Leach Puri?cation Process Improvement
A team of dedicated employees in the leach/puri?cation depart-
ment at Nyrstar Clarksville developed an innovative approach to
improving the process. Through a number of implemented tech-
nical solutions, the team contributed to increased performance of
our Leach puri?cation process.
Achieve Excellence in Everything we do
European Regional Calcine Management
Nyrstar Balen planned a once-in-30 year overhaul of the large
roaster F5 requiring calcine stockpiling to minimise production
disturbances. Working regionally Nyrstar Auby, Balen/Overpelt
and Budel developed a plan together to generate, store and
transport suf?cient calcine to Balen to limit impact to produc-
tion during the overhaul.
Deliver Sustainable Growth
Energy Lobbying Success
Nyrstar Balen has been recognised for successfully working with
local authorities to reduce Nyrstar’s exposure to increasing energy
costs, ensuring our smelter can run as ef?ciently as possible.
Outstanding Achievement Award
Tennessee Turnaround
Nyrstar Tennessee Mines - through a combination of leader-
ship changes, cost awareness efforts and production stability
initiatives– achieved an unprecedented turnaround, marking a
remarkable paradigm shift from underperformance to positive
and sustainable ?nancial contributions for the organisation. The
turnaround drove waste and inef?ciencies out of the business to
unlock the value inherent in our mineral resources.
ROLAND JUNCK
CHIEF EXECUTIVE OFFICER
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www.nyrstar.com
Nyrstar
on the web
www.nyrstar.Annual-Report.be/2013
ON THE WEB
THE NYRSTAR ANNUAL REPORT
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043 Management Report
076 Corporate Governance Statement
094 Remuneration Report
106 Report of the Board of Directors ex article 119 Company Code
122 Statement of Responsibility
124 Consolidated Financial Statements for the year ended 31 December 2013
132 Notes to the Consolidated Financial Statements
202 Statutory auditor’s report on the consolidated ?nancial statements
as at 31 December 2013
205 Nyrstar NV summarised (non consolidated) ?nancial statements
as at 31 December 2013
206 Glossary of key industry terms
FACTS & FIGURES 2013
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Nyrstar is an integrated mining and metals business, with market leading positions in zinc
and lead, and growing positions in other base and precious metals: essential resources
that are fuelling the rapid urbanisation and industrialisation of our changing world.
Nyrstar has nine mining, six smelting, and other operations located in Australia, the
Americas, China and Europe, and employs approximately 6,600 people. Nyrstar is
incorporated in Belgium and has its corporate of?ce in Switzerland. Nyrstar is listed on
NYSE Euronext Brussels under the symbol NYR.
Locations
MANAGEMENT REPORT
043
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Primary products
Zinc
A global leader in zinc: we are one of the world’s largest integrated zinc producers. We produce zinc in concentrate from our
mining operations and we produce special high grade zinc (SHG), zinc galvanizing alloys, and zinc die-casting alloys as an outcome
of our zinc smelting process. Zinc has diverse applications and uses, from construction and infrastructure, to transport, industrial
machinery, communications and electronics, and consumer products. This makes it an essential and highly sought-after resource,
particularly in a changing world.
Lead
We have a market-leading position in lead. We produce lead concentrate and re?ned market lead (99.9%). Lead’s primary usage
is for the production of batteries. In fact, over 80% of world production goes into the lead acid battery. This continues to play an
important part in the starter mechanism for automobiles. The remaining 20% goes towards such end-uses as underwater cable
sheathing, glassware, solder and roof sheeting.
Copper
We produce copper concentrates and copper cathode. Copper is predominantly used in building construction. Other signi?cant
end-use markets include electrical and electronic products, transportation equipment, consumer products and industrial machinery
and equipment.
Gold
Gold is produced in concentrate and as gold dore from our mining operations. We also recover gold in the lead re?ning process.
Silver
Silver is produced in concentrate from our mining operations. We also recover silver from the lead re?ning process as a silver dore
and as a by-product from the zinc re?ning process into various leach products.
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MANAGEMENT REPORT
STRATEGY INTO ACTION
Delivering on Strategy into Action
• Reorganisation of the company into three distinct segments: Mining, Metals Processing (formerly the Smelting segment) and
Marketing, Sourcing & Sales
• Commenced asset level Mining Strategic Review, focused on identifying opportunities to make a step change improvement in the
Mining segment’s operational performance; not envisaged to be capital consumptive
• Started implementing recommendations of Smelting Strategic Review and continued to make signi?cant progress on the
proposed Port Pirie Redevelopment
• Established a strong Marketing, Sourcing & Sales team to actively support Nyrstar’s commercial strategy
• Entered into a strategic off-take and marketing agreement with the Noble Group
The Nyrstar2020 vision is to be the leading integrated mining and metals business. Nyrstar’s mission is to capture the maximum
value inherent in mineral resources through deep market insight and unique processing capabilities, generating superior returns
for our shareholders. Our vision and mission de?ne our long term direction and priorities, focusing our efforts on the milestones
and strategic goals that drive success.
Strategy Into Action 2013
In 2013, Nyrstar continued to execute on Nyrstar2020, a strategic initiative aimed at positioning the company for a long-term
sustainable future as the leading integrated mining and metals business. Strategy into Action is a disciplined approach to
embedding our strategy into every part of the business and is now in its third year of implementation. Through this process,
Nyrstar has built a robust annual planning process that distributes ownership and responsibility for Group strategy across each
segment and site operation in a transparent and measurable way. Each year we critically review strategic plans and priorities to
ensure we adequately respond to the current operating environment enabling us to deliver on our strategic mission. Our 2013
strategic priorities addressed four key pillars:
Living the Nyrstar Way
Shaping our unique culture through seven distinctive values that de?ne how we work.
Unlocking Untapped Value
Nyrstar believes that our current processes are not capturing full value. This value can only be unlocked by continually challenging
the way Nyrstar thinks about and works on its products and processes.
Deliver Sustainable Growth
Sustainable growth means that Nyrstar will seek growth by leveraging its existing mining and smelting footprint and through
further value-accretive acquisitions.
Achieve Excellence in Everything We Do
Nyrstar is a market-driven business with an unrelenting focus on continuous improvement across all operations and functions.
045
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Strategy into Action 2014
Responding to the current operating environment, our 2014 strategic priorities focus on the following three new pillars:
KEEP OUR WORD
Develop and deliver realistic plans that meet stakeholder needs.
The main strategic goals of this pillar are to ensure that our three segments and corporate centre deliver on their commitments
whilst ensuring world class safety and environmental performance.
TRANSFORM FOR TOMORROW
Execute strategic initiatives to develop in the future.
The main strategic goals of this pillar are to ensure we focus on innovation and technology across our business; develop
opportunities for growth to generate value; build a market-oriented business and lastly, ensure that we build and sustain an
organisation that supports collaboration.
UNLEASH OUR POTENTIAL
Enhance our capabilities by investing in our people and processes.
Lastly, this pillar is fundamental to ensuring our business can deliver on pillar one and two. This pillar focuses on developing the
potential of our people, processes and culture, to ensure we have an environment that fosters growth and transformation.
Our 2014 strategic plans place a strong emphasis on our commitment to deliver our plans, to transform our business and to create
value for our stakeholders while recognising that our people, processes, and values as de?ned by the Nyrstar Way are key to our
success in 2014 and beyond.
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NYRSTAR OPERATING MODEL AND STRATEGY
Nyrstar’s industrial footprint of mining and smelting assets provides a unique opportunity to capture non-realised value and
deliver on our strategic mission to capture the maximum value inherent in mineral resources. In 2013, we transformed our
business into three core value-driving segments: Mining, Metals Processing, and Marketing, Sourcing & Sales to be better aligned
with the Company’s growing metals and mining business. This new structure will streamline both mining and metals processing
activities and allow for increased commercial synergies throughout our integrated network.
Alongside the organisational changes, several initiatives were launched in 2013 to position Nyrstar for a long-term sustainable
future. We continued to progress the proposed redevelopment of the Port Pirie smelter into an advanced poly-metallic processing
and recovery facility which will further diversify group earnings.
Port Pirie Redevelopment
As previously disclosed in December 2012, Nyrstar reached an in-principle agreement to redevelop the Port Pirie smelter into
an advanced poly-metallic processing and recovery facility, providing an opportunity to strengthen and further diversify group
earnings. Nyrstar progressed the ?nal investment case in 2013, including detailed engineering studies and the completion of the
pre-feasibility study. Nyrstar is now working through the ?nal feasibility study and will provide an update during the course of Q1
2014.
Building on the Port Pirie redevelopment planning, Nyrstar launched a strategic review of its zinc smelting (Smelting Strategic
Review) operations which led to the development of a transformation blueprint of approximately 25 projects to capture non-
realised value from residue materials.
Smelting Strategic Review
Following the completion of a thorough strategic review of its zinc smelting business during 2013, Nyrstar has developed and
externally validated a transformation blueprint of approximately 25 projects aimed at capturing non-realised value in Nyrstar-
controlled feed material. Nyrstar completed its ?rst investment in the transformation, and ?rst project within the blueprint, in
Q4 2013 with the acquisition of ERAS Metal (now Nyrstar Hoyanger). Nyrstar expects the sequencing of additional investments
to continue in 2014 and the completion of the full transformation by early 2017. Where appropriate, Nyrstar may pursue these
investments over a longer period in a manner whereby returns generated by earlier investments could fund subsequent investments.
Such a timeline could result in investments starting in 2014 and the completion of the full transformation by late 2019.
We also commenced an asset level Mining Strategic Review to improve the Mining segment’s operational and ?nancial
performance. This is being undertaken in two phases: ?rstly, a preliminary turnaround phase to ensure that all assets are delivering
to their full potential; and secondly, a more strategic phase which will link speci?cally to the Smelting Strategic Review programme
to maximise the advantages that both programmes can deliver.
Mining Strategic Review
In the second half of 2013, following the formation of the three business segments, Nyrstar initiated a strategic review of its global
mining assets. The review is being undertaken in two phases: ?rstly, a preliminary turnaround phase to ensure that all assets are
delivering to their full potential; and secondly, a more strategic phase which will link speci?cally to the Smelting Strategic Review
programme to maximise the advantages that both programmes can deliver to the group. The ?rst phase will continue throughout
2014 to ensure that the optimisations are sustainable and embedded, whilst the second phase will commence in the second half of
the year to ensure that the Mining Segment is fully prepared for the smelting strategic programme outcomes. The programmes are
operational in nature and are not envisaged to be capital consumptive.
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Finally, in 2013 we created a new Marketing, Sourcing & Sales team to support the implementation of the offtake and marketing
agreement with Noble, the European zinc metal plan and the overall global commercial strategy.
Marketing, Sourcing & Sales
Nyrstar’s commercial strategy consists of working with the Mining and Metals Processing segments to create, secure and maintain
?rst mover advantage in obtaining the feedstock and inputs to produce products that are marketed using our deep market insight
and sold at above industry returns. Throughout the year a number of senior level appointments have been made to the new
Marketing, Sourcing & Sales segment to support the implementation of the offtake and marketing agreement with Noble, the
European zinc metal plan and the overall global commercial strategy.
The strategy is executed through four interlinked pillars. The raw materials team is responsible for sourcing the Nyrstar smelter
feeds and for actively marketing and trading concentrates. The products team consists of marketing and sales functions. Marketing
makes decisive decisions as to where, when and to whom products are to be sold so as to deliver the greatest impact on returns by
segmenting the metals markets into strategic pro?t pools. The opportunities identi?ed by marketing are then executed by sales.
These two pillars are supported by two cross functional teams. The supply chain team enables Nyrstar to maintain optimal working
capital levels of raw materials and metals allowing continuous production at Nyrstar’s operations whilst minimising inventory
costs. The optionality and hedging team closely follows market trends to exploit optionality in the metals market and to actively
manage metals prices quotation periods to maximise returns. The strategy also involves looking for non-traditional markets to
place Nyrstar-branded products. An example of this is the direct sale of commodity grade zinc into the Chinese market that was
completed by Nyrstar for the ?rst time in Q3 2013.
Looking ahead, we recognise that 2014 is an important year for Nyrstar and while there are early signs of improving conditions
across the markets in which we operate, we are conscious of the need for a prudent and disciplined approach to managing
the business to ensure it is sustainable for the long term. With this in mind, we continue to actively progress the Port Pirie
redevelopment and the initiatives identi?ed following the outcome of the Smelting Strategic Review, supported by a more
advanced Marketing, Sourcing & Sales strategy, and look forward to results of the Mining Strategic Review. We continue to
execute the Group strategy and remain convinced that our unique industrial footprint, ownership of raw materials and commercial
focus provide a unique opportunity to generate value for our shareholders.
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MANAGEMENT REPORT
SHARES
Share price development
The Nyrstar share price declined by 50% in 2013, compared to a 14% increase in the MSCI World Metals and Mining Index, over the
same period, and a 2% decline in the average annual zinc price.
The average traded daily volume was approximately 623,509 shares in 2013 compared to 1,036,883 in 2012, a decrease of 40%.
Re?ecting the Board’s con?dence in the Company’s ?nancial strength and the medium to long-term prospects for the markets in
which it operates, it has proposed to the shareholders a gross distribution of EUR 0.16 per share, and to structure the distribution
as a capital reduction.
Share Capital
Nyrstar ordinary shares have been admitted to trading on NYSE Euronext
®
Brussels (symbol NYR BB) since 29 October 2007. As at
31 December 2013, the registered capital amounted to EUR 370,649,145.92 represented by 170,022,544 ordinary shares without
nominal value.
Convertible Bonds
As at 31 December 2013, the Company had on issue EUR 120 million of senior unsecured convertible bonds, due 2014, and EUR
120 million of senior unsecured convertible bonds, due 2018.
The bonds due 2014 were issued in July 2009 at 100 per cent of their principal amount (EUR 50,000 per bond) and have a coupon
of 7% per annum. The conversion price is currently EUR 5.91 per share. There are currently EUR 119.9 million of senior unsecured
2014 convertible bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the above conversion
price, approximately 20,287,648 new ordinary shares would be issued. The bonds are listed on the of?cial list of the Luxembourg
Stock Exchange and admitted to trading on the Luxembourg Stock Exchange’s Euro MTF Market.
The bonds due in 2018 were issued in September 2013 at 100 per cent of their principal amount (EUR 100,000 per bond) and have
a coupon of 4.25% per annum. The conversion price is currently EUR 4.9780 per share. There are currently EUR 120 million of
senior unsecured convertible 2018 bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the
above conversion price, approximately 24,106,066 new ordinary shares would be issued. The bonds are listed on the Open Market
(Freiverkehr) segment of the Frankfurt Stock Exchange and admitted to trading on the Frankfurt Stock Exchange.
Shareholder Structure
Pursuant to applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of association,
any person who acquires at least 3% of the total existing voting rights of the Company must notify both the Company and the
Belgian Financial Services and Markets Authority (the FSMA, which is the successor to the Banking, Finance and Insurance
Commission,the CBFA, since April 1, 2011).
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A noti?cation is also required when a person acquires at least 5%, 7.5%, 10%, 15%, 20% or any further multiple of 5% of the total
existing voting rights of the Company, or when, due to disposals of securities, the number of voting rights falls below one of these
thresholds. A list as well as a copy of such noti?cations can be obtained from the Company’s website (www.nyrstar.com). As at 31
December 2013, on the basis of the noti?cations received by the Company, the major shareholders of the Company (i.e. holding
more than 3% of the total voting rights) were:
As at 31 December 2013 Share %
Nyrstar NV 9.02%
Umicore NV 3.09%
Shareholder pro?le
Nyrstar’s shareholder base primarily consists of institutional investors in the UK, Belgium, France, the US and other European
countries, as well as Belgian retail investors.
Belgian retail shareholders represent approximately 40% of the Nyrstar shareholder base. Of institutional shareholders, the primary
regions are Belgium (33%), United States (18%), and UK (13%). The majority of institutional investors are either long-term growth
investors or value investors
SOURCE: THOMSON REUTERS SHAREHOLDER IDENTIFICATION REPORT COMMISSIONED BY NYRSTAR IN SEPTEMBER 2013
KEY SHARE FACTS
For the year ended 31 December 2013 2012
Number of issued ordinary shares 170,022,544 170,022,544
Number of treasury shares 15,338,431 7,345,826
Market capitalisation (as at 31/12) EUR 392,752,077 EUR 764,081,313
Underlying Earnings per Share (12 months to 31/12) EUR (0.83) EUR (0.55)
Gross Capital Distribution (proposed) EUR 0 EUR 0.16
Share price (closing price as at 31/12) EUR 2.31 EUR 4.49
Year high (intra-day)
EUR 4.72
(14/01/2013) 7.74 (08/02/12)
Year low (intra-day)
EUR 2.03
(19/11/2013) 3.24 (25/07/12)
Average volume traded shares per day (12 months to 31/12) 624,569 1,036,883
Free ?oat (as at 31/12) 85% 85%
Free ?oat Velocity (full year) 112% 185%
SOURCE: EURONEXT
Dividend Policy
The Board reviewed the Company’s dividend policy in 2009 and concluded that, in light of the revised Company strategy, a
dividend policy with a ?xed pay-out ratio was no longer appropriate. The Company’s revised dividend policy aims to maximise total
shareholder return through a combination of share price appreciation and dividends, whilst maintaining adequate cash ?ows for
growth and the successful execution of the Company’s strategy.
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Disclosure Policy
As a Belgian listed company and with a view to ensuring that investors in Nyrstar shares have all information necessary to ensure
the transparency, integrity and good functioning of the market, Nyrstar has established an information disclosure policy.
This policy is aimed at ensuring that material information of which Nyrstar is aware is immediately disclosed to the public. In
addition, the policy is aimed at ensuring that information which is disclosed is fair and accurate, and so will enable the holders of
shares in Nyrstar, and the public, to assess the impactof the information on Nyrstar’s position, business and results.
Presentations to Investors, Analysts and Media
Nyrstar’s reputation is greatly in?uenced by its ability to communicate in a consistent and professional manner with all our
stakeholders.
A core Nyrstar value is to be open and honest and accordingly we strive to provide clear, open and transparent communications to
all our stakeholders. Nyrstar regularly organises presentations to investors, analysts and the media to provide strategic, operational
and ?nancial updates, and to build strong relationships.
To provide ?nancial analysts, investors and media with a greater insight into our business, we organised or participated in several
events during the year.
To engage with its institutional shareholders Nyrstar presented the Company at events organised by Bank of America Merrill Lynch,
BMO Capital Markets, Citi, Deutsche Bank, Exane BNP Paribas, Goldman Sachs, HSBC, ING, KBC Securities, Macquarie, Morgan
Stanley, Petercam, and Royal Bank of Canada (RBC). In addition Nyrstar also participated in numerous investor roadshows in
Europe and North America.
Brokerages
The following brokerages published research on Nyrstar in 2013:
ABN Amro
Bank DeGroof
Bank of America Merrill Lynch
Citi
Deutsche Bank
Exane BNP Paribas
Goldman Sachs
HSBC
ING
KBC Securities
Macquarie
Morgan Stanley
Petercam
Rabobank
RBC
Societe Generale
Proposed Distribution
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
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OPERATIONAL REVIEW
Mining and Metals Processing segments production in line with guidance
• Mining segment achieved full year guidance for all metals (excluding lead); although down on 2012 due to operational
challenges.
• Metals Processing production in H2 2013 set a new half-year record. As a result, zinc metal production of approximately 1,088kt
was at the top end of full year guidance
KEY FIGURES
2013 2012
Mining Production
Zinc in concentrate (‘000 tonnes) 285 312
Gold (‘000 troy ounces) 75.2 94.6
Silver (‘000 troy ounces)
1
4,746 5,517
Copper in concentrate (‘000 tonnes) 12.9 13.0
Metals Processing Production
2
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
OPERATIONS REVIEW: MINING
In 2013, the volume of zinc in concentrate produced at Nyrstar’s own mines (excluding deliveries under the Talvivaara zinc stream)
was approximately 271,000 tonnes, achieving the full-year guidance of 265,000 to 280,000 tonnes, although down 4% on 2012.
The decline in production was primarily due to a two month suspension of mining operations at the Campo Morado mine due to a
licensing issue. Total zinc in concentrate was down 9% on 2012 as a result of fewer deliveries of zinc concentrate from Talvivaara
under the zinc streaming agreement. Lead in concentrate production was below guidance and lower than 2012 production largely
owing to a production trade-off at the Contonga mine with lower lead being compensated by higher copper. Copper in concentrate
production was in line with 2013 guidance and 2012 production, despite being affected by the suspension at Campo Morado.Silver
production was in line with 2013 guidance of 4.7 to 4.9 million troy ounces.; however, it was lower than 2012 production by 14%,
with the shortfall coming from the suspension at Campo Morado and from Coricancha where operations were halted in H2 2013.
Gold production of 75,200 troy ounces marginally exceeded the guidance of 65,000 to 75,000 troy ounces. El Toqui contributed
strongly to Nyrstar’s doubling of gold production in H2 2013 compared to H1 2013; however, the suspension at Campo Morado
and halted operations at Coricancha reduced 2013 production by 21% compared with 2012.
1
75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby USD 3.90/oz is payable. In 2013,
Campo Morado produced approximately 1,156,000 troy ounces of silver.
2
Includes production from Metals Processing segment only. Zinc production at Föhl, Galva 45 & Genesis.
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052
MANAGEMENT REPORT
At the Campo Morado mine, 2013 production of all metals was impacted by the temporary suspension of mining activities in the
?rst quarter of the year as a result of the cancellation of the site’s explosives permit due to an administrative issue. The situation
was resolved and extensive mill and mobile ?eet maintenance work during the shutdown allowed for uninterrupted operations in
H2 2013 resulting in higher volumes of all metals in concentrate compared to H1 2013, despite a decline in the head grades for all
metals.
The Contonga mine was temporarily affected by a two week period of industrial action during H1 2013 which resulted in lower
volumes of ore milled. During 2013, the site mined in the lower levels of the deposit which contain higher copper grades but lower
lead and silver. H2 2013 metal production was in line with H1 2013 except for lead which declined and copper which increased,
consistent with management’s redirection of the mine plan to the lower areas of the deposit.
During H2 2013, management at Coricancha reassessed the site’s operating model which had been adapted in H1 2013 to treat
historic failings. As a result of the sustained lower precious metal price environment, the mine’s operations were halted and
management is assessing the options for the site while maintaining a reduced workforce performing maintenance and compliance
activities.
The El Mochito mine delivered a consistent performance in 2013 resulting in a full year 2013 result largely in line with 2012
for all metals. Head grades have declined while the next higher grade resources are developed for future extraction.This was
compensated, however, by a 4% increase in the volume of ore milled during 2013.
El Toqui mine focused on zinc and lead during H1 2013 and recovery of high gold grade pillars during H2 2013, resulting in
substantially higher gold production than in H1 2013. Zinc, lead and silver metal volumes for 2013 exceeded the 2012 production.
Overall 2013 gold metal produced, however, was 21% below 2012 due to a lower head grade.
At Langlois mine, zinc in concentrate production for 2013 was 8% below 2012, due to issues in H1 2013 with transitioning
development areas to production areas and resourcing and training challenges which delayed the ability to mine consistently from
four mining zones. Site management achieved a 13% increase in ore milled volumes in H2 2013 compared to H1 2013. Copper,
silver and gold metal production for 2013 was largely in line with 2012.
In 2013, the Myra Falls mine produced 41% more silver and 31% more gold than in 2012 as a result of increased average mill
head grades. Zinc, lead and copper contained in concentrate were below 2012 as grades have declined while the site develops, as
per the mine plan, into future higher grade ore deposits. Volumes in H2 2013 were higher for all metals (due to higher grades)
compared to H1 2013.
The Tennessee mines delivered 11% more zinc in concentrate in 2013 compared to 2012 through 8% higher ore volumes processed
at both East and Middle Tennessee sites as well as an increase in the average zinc mill head grade and recovery. At East Tennessee,
the 16% increase in production volume was also due to an 8% rise in the zinc mill head grade and in turn a higher average mill
recovery. At Middle Tennessee, there was a 5% deterioration in the average zinc mill head grade from 2012 to 2013.The higher ore
milled volume made up for this, however, to give an overall 4% increase in zinc in concentrate production.
Deliveries of zinc in concentrate from Talvivaara under the zinc streaming agreement were down by more than 50% in 2013
compared to 2012 due to operational and liquidity issues at the Talvivaara mine, as stated in Talvivaara’s communication on 15
November 2013 regarding its application for corporate reorganisation. Talvivaara’s production in 2013 continued to be impacted
by the prolonged effect of excess water on older ore heaps.
053
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MANAGEMENT REPORT
Mining
‘000 tonnes unless otherwise indicated 2013 2012
Total ore milled 6,960 6,924
Total zinc concentrate 511 564
Total lead concentrate 24.3 28.6
Total copper concentrate 68.3 72.5
Zinc in Concentrate
Campo Morado 25 40
Contonga 13 15
Coricancha 1 2
El Mochito 25 26
El Toqui 23 20
Langlois 36 39
Myra Falls 27 32
East Tennessee 71 61
Middle Tennessee 50 48
Tennessee Mines 121 109
Own Mine Total 271 282
Talvivaara Stream 14 30
Total 285 312
Lead in concentrate
Contonga 0.3 1.5
Coricancha 0.2 0.8
El Mochito 11.6 12.4
El Toqui 1.2 0.4
Myra Falls 0.9 1.1
Total 14.2 16.2
Copper in concentrate
Campo Morado 4.9 5.6
Contonga 2.6 1.5
Coricancha 0.1 0.2
Langlois 2.0 2.0
Myra Falls 3.3 3.8
Total 12.9 13.0
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MANAGEMENT REPORT
‘000 tonnes unless otherwise indicated 2013 2012
Gold (‘000 troy oz)
Campo Morado 11.7 15.9
Coricancha 2.6 11.5
El Toqui 41.3 51.6
Langlois 1.8 2.0
Myra Falls 17.8 13.6
Total 75.2 94.6
Silver (‘000 troy oz)
Campo Morado 1,156 1,728
Contonga 306 450
Coricancha 164 491
El Mochito 1,637 1,627
El Toqui 141 113
Langlois 524 528
Myra Falls 818 580
Total 4,746 5,517
Production Guidance
The guidance below re?ects Nyrstar’s current expectation for 2014 production. Importantly, Nyrstar’s strategy is to focus on
maximising value rather than production and, as such, the production mix of these metals may be altered during the course of the
year depending on prevailing market conditions. Revised updates may be issued by Nyrstar in subsequent trading updates during
2014, if it is expected that there will be material changes to the above guidance.
Production guidance for 2014 across Nyrstar’s portfolio of mining assets is as follows:
Metal in concentrate Production Guidance
Zinc (own mines) * 280,000 – 310,000 tonnes
Lead 15,000 – 18,000 tonnes
Copper 12,000 – 14,000 tonnes
Silver ** 4,750,000 – 5,250,000 troy ounces
Gold 65,000 – 70,000 troy ounces
* Excluding zinc deliveries under the Talvivaara Streaming Agreement.
** 75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby only USD 3.90/oz is payable
055
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MANAGEMENT REPORT
OPERATIONS REVIEW: METALS PROCESSING
The Metals Processing segment produced approximately 1,088,000 tonnes of zinc metal in 2013, at the top end of full year
guidance. Whilst production in H1 2013 was impacted by a number of planned maintenance shuts, production in H2 2013 was a
new half-year record with approximately 569,000 tonnes, a 10% increase on H1 2013 (519,000 tonnes).
The Auby smelter carried out two maintenance shuts of its zinc plant in H1 2013, restricting zinc metal production to
approximately 69,000 tonnes compared to 83,000 tonnes in H2 2013. Indium metal production increased substantially to
approximately 33 tonnes in 2013 (13 tonnes in 2012).
The Balen/Overpelt smelter delivered a major planned maintenance shut of its roaster and acid plant and cell-house on time and to
budget during H1 2013. As a result, zinc metal production in H2 2013 of approximately 132,000 was 10% higher than in H1 2013
(120,000 tonnes).
The Budel smelter delivered another strong performance in 2013 producing 275,000 tonnes of zinc metal production, up 7% on
2012. The higher production in H2 2013 was mainly driven by improvements in the electrolysis process.
At Clarksville, zinc metal production in H2 2013 was 16% higher compared to H1 2013, primarily due to the planned maintenance
shut of the smelter’s roaster and acid plant during H1 2013. The site continued to produce a germanium leach product (germanium
is used in ?bre-optics and semi-conductors) by processing germanium contained in Middle Tennessee Mine zinc concentrate,
following ?rst production in 2012.
Operations Review: Metals Processing 2013 2012
Zinc metal (‘000 tonnes)
Auby 152 161
Balen/Overpelt 252 250
Budel 275 257
Clarksville 106 114
Hobart 272 272
Port Pirie 30 31
Total 1,088 1,084
Lead metal (‘000 tonnes)
Port Pirie 179 158
Other products
Copper cathode (‘000 tonnes) 4 3
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Indium metal (tonnes) 33 13
Sulphuric acid (‘000 tonnes) 1,389 1,388
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MANAGEMENT REPORT
Production at the Hobart smelter was 7% higher in H2 2013 compared to H1 2013. The ?rst half of 2013 was impacted by record
regional temperatures in Q1 2013, which constrained electrolysis throughput due to power reductions and a planned maintenance
shutdown of one of the roasters. Zinc metal production was in line with the 2012 result.
Lead metal production at the Port Pirie smelter in 2013 increased to 179,000 tonnes, compared to 158,000 tonnes in 2012 which
was impacted by an unplanned shut of the blast furnace. Similarly the production of other metals was also higher in 2013 with
copper, silver and gold production up 33%, 29% and 18% respectively on 2012. In July 2013, the sinter and blast furnace were
shut for approximately one week to carry out repair work. The shut was successfully executed, with an estimated impact on lead
production of 6,000 tonnes and smaller impacts on zinc, copper, silver and gold production. The Port Pirie smelter’s planned
maintenance shut of its slag fumer, which was originally scheduled for Q4 2013, has been deferred to Q1 2014. The shut is
expected to impact zinc metal production by approximately 600 tonnes.
Production Guidance and Planned Shuts
Nyrstar expects to produce 1.0 – 1.1 million tonnes of zinc metal in 2014. This level of production is based on maximising EBITDA
and free cash ?ow generation in the Metals Processing segment by targeting the optimal balance between production and
sustaining capital expenditure.
During 2014 there are a number of major scheduled and budgeted maintenance shuts at the smelters, which will have an impact
on production. These shuts will enable the smelters to continue to operate within internal safety and environmental standards,
comply with external regulations/standards and improve the reliability and ef?ciency of the production process. In addition,
the scheduled shuts will allow the sites to make improvements to critical production steps. All efforts are made to reduce the
production impact of these shuts by building intermediate stocks prior to the shut and managing the shut in a timely and effective
manner. The estimated impact of these shuts on 2014 production, which has been taken into account when determining zinc metal
guidance for 2014, is listed below:
2014 Metals Processing planned shuts
Smelter & production step impacted Timing and duration Estimated impact
Port Pirie – slag fumer Q1: 3 weeks nil – 1,000 tonnes zinc metal
Balen – roaster F4 Q2: 3 weeks nil
Hobart – roaster 5 Q2: 3 weeks 6,000 tonnes zinc metal
Clarksville - roaster and acid plant Q3: 1 - 2 weeks nil – 1,000 tonnes zinc metal
Balen – roaster F5 Q4: 1 – 2 weeks nil
Auby – roaster Q4: 2 weeks nil
Port Pirie – lead plant Q4: 3 weeks nil – 500 tonnes
057
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MANAGEMENT REPORT
OPERATIONS REVIEW: MARKETING, SOURCING AND SALES
In April 2013, Nyrstar reached a settlement agreement with Glencore to terminate the commodity grade off-take agreement for
European zinc metal produced by Nyrstar. The termination of the agreement is part of the remedy package agreed by the European
Commission in relation to Glencore’s merger with Xstrata Plc which was completed in May 2013. As part of this process, Nyrstar
undertook a structured process to determine the most suitable channel(s) to market and sell commodity grade zinc metal produced
at its European smelters.
On 1 October 2013, Nyrstar announced that it has entered a strategic off-take and marketing agreement with Noble Group to
market and sell a signi?cant portion of commodity grade zinc metal produced at its European smelters. The agreement is valid for
200,000 tonnes per annum of commodity grade zinc metal.
The remaining volume of European zinc metals (approximately 150,000 tonnes) not marketed via the off-take and marketing
agreement with Noble is, as of 1 January 2014, actively marketed and sold by Nyrstar in both traditional and non-traditional
markets.
The sale of commodity grade zinc and lead produced by Nyrstar’s smelters outside of Europe (Clarksville, Hobart and Port Pirie) will
continue, as before, under the off-take agreement with Glencore Xstrata.
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MANAGEMENT REPORT
MARKET REVIEW
A challenging trading environment driven by tough macroeconomic headwinds and subdued base metal prices.
• With the exception of brief rallies in early and late 2013, sideways trading conditions was the main feature for base metals
during 2013
• Improving global economic conditions and a strengthening dollar accounted for signi?cant depreciations for precious metals
during 2013
• Zinc price averaged USD 1,909/t, down 2% on 2012 (USD 1,946/t) and average lead prices for the year increased by just under
4%, whilst precious metals saw more severe price depreciations with 15% and 23% declines in the average gold and silver prices
respectively
• 2013 zinc benchmark treatment charge (TC) signi?cantly above 2012 terms, with the benchmark TC increasing by around 11%
• Smelting cost base improved due to weakness of the Australian Dollar, averaging 0.73 against the Euro (compared to 0.81 in
2012) but overall result mitigated by strengthening Eurodollar which averaged 1.33 compared to 1.28 in 2012.
Average prices
7
2013 2012
Exchange rate (EUR/USD) 1.33 1.28
Zinc price (USD/tonne, cash settlement) 1,909 1,946
Lead price (USD/tonne, cash settlement) 2,141 2,061
Copper price (USD/tonne, cash settlement) 7,322 7,950
Silver price (USD/t.oz, LBMA AM ?x) 23.79 31.15
Gold price (USD/t.oz, LBMA AM ?x) 1,410 1,662
Exchange rate
The Euro strengthened against the US Dollar by almost 4%, although punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this development has been negative from an EBITDA perspective, this has had
the effect of rebalancing Europe from excessive reliance on exports towards consumption-led growth which has led to a pick-up in
European industrial demand.
Base Metal Summary
A recovery of developed world economic growth created headwinds for base metals as investment ?ows shifted from base metals
in favour of equities, and the dollar index strengthened. Additionally, the government transition and slowing growth of the
Chinese economy resulted in lukewarm sentiment towards industrial metals and, as such, price ranges were largely range-bound
throughout most of the year.
7
Zinc, lead and copper prices are averages of LME daily cash settlement prices. Silver and gold prices are averages of LBMA AM daily ?xing prices.
059
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MANAGEMENT REPORT
Zinc
The average zinc price declined by 2% in 2013 to USD 1,909/t compared to USD 1,946/t in 2012. Whilst zinc prices remained
range-bound throughout most of the year, key end-use sectors for zinc continued to grow at a healthy pace with global
consumption growth estimated to have grown by 4% in 2013, according to Wood Mackenzie. Zinc supply was impacted by a
curtailment of smelting production outside of China and strong import demand into the Chinese market induced by favourable
arbitrage throughout most of the year. This translated into increasing global premiums throughout most of the year. Zinc staged a
rally in December, aided in part by an announcement that the Century zinc mine would close earlier than previously announced.
Lead
The average lead price increased modestly during 2013, appreciating by almost 4%. End-use demand continued to grow at a healthy
pace on a global basis, although softened from 4.9% growth in 2012 to an estimated 3.6% in 2013, according to Wood Mackenzie.
The outlook is more positive with 2014 consumption growth expected to rise to 4.6%. The medium-term outlook is characterised by
supply-side shortages, tougher environmental regulation, and re?ned market de?cits which is supportive of higher prices.
Copper
The average copper price in 2013 was USD 7,322/t an 8% decline compared to USD 7,950/t in 2012. It is estimated by Wood
Mackenzie that global copper consumption, which includes direct use of scrap, will have increased by 5.6% in 2013, a signi?cant
improvement compared to almost ?at consumption growth in 2012. This resulted in signi?cant tightness in the re?ned copper
market in 2013. While the copper concentrate market is understood to be in a surplus, copper mine production continues to face
setbacks and disruptions and this continues to support prices.
Gold & Silver
Increasing con?dence regarding global growth as well a stronger United States dollar index created downward pressure to
precious metals with the average gold price 15% lower in 2013. Average silver prices depreciated by approximately 24% in 2013
from 2012 as industrial demand for silver weakened.
Sulphuric Acid
In 2013, prices achieved by Nyrstar on sales of sulphuric acid, which are predominantly based on contracts rather than the spot
market, declined signi?cantly from an average of USD 80 per tonne in H1 2013 to an average of USD 40 per tonne in H2 2013. The
sulphuric acid market suffered from increased competition as sulphur prices fell, largely due to constrained fertiliser demand in
India and China. Nyrstar expects that the sulphuric acid market will remain challenged throughout 2014 with prices expected to be
lower than those experienced in H2 2013.
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MANAGEMENT REPORT
FINANCIAL REVIEW
Group underlying EBITDA of EUR 185 million down 16% on 2012 (EUR 221 million)
• Metals Processing EUR 149 million, driven by higher realised premiums and the recognition of the EUR 45 million termination
fee from Glencore, partially offset by lower acid prices
• Mining EBITDA EUR 78 million, adversely impacted by lower copper, silver and gold prices, operational challenges during H1
2013 and signi?cant reduction in deliveries from Talvivaara during H2 2013
• Delivered signi?cant cost savings through Project Lean, EUR 43 million by end of 2013; on track to deliver target of EUR 75
million by end of 2014
• Strategic hedges for zinc, gold and silver partially offset challenging metal price environment
PAT of EUR (195) million impacted by impairments and impairment reversals
• Impairment of EUR 194 million (after tax) related to write-downs at a number of mining operations
• Reversal of EUR 139 million (after tax) historic (2008) impairments of Balen and Port Pirie smelters due to improvements in the
valuation of these two assets driven by a reduction in energy costs and a more favourable metal price outlook compared to
2008
• Signi?cant improvement of PAT in H2 2013 versus H1 2013 prior to impact of impairments and impairment reversals
• No impairment on Talvivaara zinc streaming agreement in 2013: Nyrstar actively involved in Talvivaara’s corporate
reorganisation process
• The Board of Directors has decided not to propose to shareholders a distribution for the full year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans
Solid ?nancial position and signi?cant committed undrawn liquidity headroom
and cash on hand
• Net debt of EUR 670 million (EUR 756 million at the end of H1 2013)
• Committed undrawn liquidity headroom and cash on hand of 721 million at end of 2013
• Successfully re?nanced the EUR 120 million bonds maturing in 2014 with new EUR 120 million convertible bonds due 2018 with
attractive terms
• Signi?cant reduction in capital expenditure through disciplined approach resulting in capital expenditure of EUR 200 million,
19% down on 2012, and at the low end of full year guidance
Group underlying EBITDA in 2013 was EUR 185 million compared to EUR 221 million in 2012. This decline was driven in part
by downward movements in commodity prices, especially silver copper and gold, which declined on an annual average basis by
24%, 8% and 15% respectively. Year over year annual average zinc price also declined by 2% in US dollar terms and by 5% in Euro
terms due to the appreciation of the Euro against the US dollar. In addition, lower production volumes in the Mining segment
contributed to the underlying EBITDA decline.
061
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MANAGEMENT REPORT
Operational events, such as the previously announced two month suspension at Campo Morado during H1, operational challenges
at Myra Falls and Middle Tennessee mines, as well as lower zinc concentrate deliveries from Talvivaara all had an unfavourable
impact on Group earnings for the year. Additionally, the 2012 result bene?ted from a EUR 24 million contribution from the
recovery, processing and sale of silver bearing material at the Port Pirie smelter.
Partially offsetting the challenging price environment and operational events of 2013, was the bene?t from short term strategic
hedging of zinc, gold and silver prices, which resulted in an EBITDA contribution of EUR 36.4 million (see strategic hedging of
metal prices section below) and also recognition of the EUR 45 million termination fee Nyrstar received for ending the European
component of Nyrstar’s commodity grade off-take agreement with Glencore.
Benchmark treatment charges for 2013 settled at USD 212 per dry metric tonne, basis USD 2,000, which was USD 21 above 2012
terms. The 2013 net treatment charge income at Group level of EUR 261 million represents an increase by EUR 23 million over
2012, largely driven by lower treatment charge expense in the Mining segment due to lower production volumes in 2013. In the
Metals Processing segment, treatment charge income remained ?at year over year as a result of higher treatment charge income
from benchmark contracts being offset by purchases of more complex materials, which delivered greater free metal and by-product
value, outside frame contracts.
The loss after tax result in 2013 of EUR (195) million, compared to a loss of EUR (96) million in 2012, was impacted by the lower
Group underlying EBITDA result (down EUR 35 million from 2012), the income tax charge for 2013 of EUR 11 million (up EUR 26
million from the 2012 income tax bene?t of EUR 15 million), as a result of tax affecting impairment reversal gains in the Metals
Processing segment, and net ?nance expenses of EUR 99 million for 2013 (up EUR 6 million from 2012), due to the increase in
other ?nance charges, which include the costs of executing the short term strategic metal price hedging. Depreciation, depletion
and amortisation (D,D&A) charges increased marginally by EUR 2 million for the year. (The 2012 result bene?ted from disposal of
equity-accounted investees of EUR 27 million).
The 2013 result includes a net non-cash impairment charge before tax of EUR 20 million (2012: EUR 18 million), comprising a
charge of EUR 203 million on Nyrstar’s Mining assets, a charge of EUR 25 million on non-core equity- accounted investees and
securities and partial impairment reversals related to Nyrstar’s Metal Processing assets for a gain of EUR 207 million.
The key events which led to the declines in the recoverable values of the mining operations and associated impairment losses were
primarily the introduction of the Mexican mining tax at Campo Morado, suspension of the operations at Corricancha and Puccarajo
in Peru without current plans to fully restart these operations and the impacts of lower precious metal prices. The impairment tests
resulted in the full impairment of Nyrstar’s previously recognised goodwill.
In 2013, Nyrstar prepared recoverable value estimates for all Metals Processing assets. As a result of these recoverable value
estimates, Nyrstar reversed impairment charges previously recognised in the year ended 31 December 2008 in connection with the
Balen Smelter (EUR 148.9 million) and the Port Pirie Smelter (EUR 58.5 million). In each case, the impairment reversal was after
adjusting for accumulated amortisation which would have been recorded had the 2008 impairments not been recorded.
The reversal of impairment at the Balen Smelter was driven by the continuous, sustained improvements in operating results at
the Balen Smelter since 2008 particularly in relation to zinc recovery rates and energy costs which, combined with the favourable
zinc price outlook, provide objective evidence that the recoverable amounts of the assets in Balen exceed their carrying value
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MANAGEMENT REPORT
after reversal of the 2008 impairment charge. The reversal of impairment at the Port Pirie Smelter is due to the planned Port Pirie
Transformation Project, a capital expansion plan which will signi?cantly change the nature of the operating capabilities of the Port
Pirie Smelter from a primary lead smelter to a world class, multi-metals recovery facility increasing the cash generating ability of
Port Pirie. The recoverable value estimate for Port Pirie incorporates all capital expenditure associated with the project and the
discount rate applied includes a premium for construction risks. Based on the results of the impairment testing, the recoverable
amounts of the assets in Port Pirie exceed their carrying value after reversal of the 2008 impairment charge.
KEY FINANCIAL DATA
EUR Million unless otherwise indicated 2013 2012
Revenue 2,824 3,070
EBITDA
4
185 221
Mining EBITDA
4
78 129
Metals Processing EBITDA
4
149 135
Other & Eliminations EBITDA
4
(43) (44)
Results from operating activities before exceptional items 46 6
Loss for the period 195 96
EBITDA/t
3
135 158
Mining EBITDA/t
4
274 413
Metals Processing EBITDA/t
3
118 109
Underlying EPS (EUR)
8
0.83 0.44
Basic EPS (EUR) 1.27 0.57
Capital Expenditure 200 248
Cash Flow and Net Debt
Net operating cash ?ow 299 362
Net debt/(cash), end of period 670 681
Gearing
9
43.5% 36.9%
4
All references to EBITDA in the table above are Underlying EBITDA. Underlying measures exclude exceptional items related to restructuring measures, M&A related
transaction expenses, impairment of assets, material income or expenses arising from embedded derivatives recognised under IAS 39 and other items arising from
events or transactions clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not consider the tax effect on underlying adjustments. 2012 group
underlying EBITDA restated (previously EUR 220 million) due to Nyrstar adopting international accounting standard IAS 19R (see notes to the Interim Condensed
Consolidated Financial Statements for the period ended 31 December 2013)
5
Mining segment underlying EBITDA per tonne of zinc in concentrate produced
6
Metals Processing segment underlying EBITDA per tonne of zinc metal produced
7
Group underlying EBITDA per tonne of zinc in concentrate and zinc metal produced
8
Underlying measures exclude exceptional items related to restructuring measures, impairment of assets, material income or expenses arising from embedded
derivatives recognised under IAS 39 and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar. Underlying EPS does not
consider tax effect on underlying adjustments
9
Gearing: net debt to net debt plus equity at end of period
063
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MANAGEMENT REPORT
MINING
The Mining segment’s underlying EBITDA in 2013 was down 40% compared to 2012, adversely affected by the deterioration in
copper, silver and gold metal prices, as well as the unplanned suspension of operations at the Campo Morado mine for two months
in Q1 2013, the halting of operations at the Coricancha mine in H2 2013 (predominantly due to lower precious metals prices) and
a substantial reduction in deliveries under the Talvivaara zinc streaming agreement.
MINING
EUR million unless otherwise indicated 2013 2012
Treatment charges (76) (100)
Payable metal contribution 335 403
By-Products 173 226
Other 13 (20)
Underlying Gross Pro?t 445 509
Employee expenses (140) (135)
Energy expenses (49) (47)
Other expenses (178) (198)
Underlying Operating Costs (367) (380)
Underlying EBITDA 78 129
Underlying EBITDA/t 274 413
Underlying gross pro?t for the Mining segment was EUR 445 million in 2013, 13% below 2012. The Mining treatment charge
expense reduced by 24% to EUR 76 million, driven by the lower volume of zinc concentrate produced. Payable metal contribution
declined 17% in line with the lower volume of zinc in concentrate produced and therefore sold. Contributions to gross pro?t from
by-products, representing around 40% of the total, declined by 23% in 2013 due to the signi?cant downward trend in copper, silver
and gold metal prices, as well as operational events. The two month suspension at Campo Morado impacted copper, silver and
gold volumes, while the halt of operations at Coricancha signi?cantly reduced the contribution to precious metals revenue. Other
Mining gross pro?t was EUR 13 million and included gains from the 2013 strategic metal price hedges.
Revenue was also affected by mark-to-market price adjustments. These accounting adjustments require Nyrstar to revalue open
sales invoices as at 31 December 2013 to the prices at that date. At 31 December 2013, open sales invoices included approximately
9,200 tonnes of payable zinc in concentrate, 160 tonnes of payable lead in concentrate, 2,100 tonnes of payable copper in
concentrate, 300,000 troy ounces of payable silver and 7,000 troy ounces of payable gold.
The average zinc C1 cash cost for Nyrstar’s zinc mines (including the Talvivaara zinc stream) was USD 1,515 per tonne of payable
zinc in 2013, a deterioration of 26% compared to 2012 (USD 1,199). The same factors which adversely impacted mining gross
pro?t, namely lower copper, silver and gold prices which signi?cantly reduced by-product prices and operational events, also
adversely impacted the average zinc C1 cash cost.
10
In addition, negative impacts on payable zinc volumes were in the lower cost
mines (Talvivaara and Campo Morado), therefore increasing the weighting towards the higher cost North American mines such as
Langlois and Tennessee and hence increasing the zinc C1 cash cost.
10
C1 cash costs are de?ned by Brook Hunt as: the costs of mining, milling and concentrating, on-site administration and general expenses, property and production
royalties not related to revenues or pro?ts, metal concentrate treatment charges, and freight and marketing costs less the net value of by-product credits.
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DOC USD/tonne ore milled 2013 2012
Campo Morado 100 81
Contonga 71 85
El Mochito 65 59
El Toqui 83 73
Langlois 133 116
Myra Falls 137 115
Tennessee Mines 38 42
Average DOC/tonne ore milled 67 68
The average Mining segment direct operating cost in USD per tonne of ore milled for 2013 (excluding Talvivaara) was 1% below
2012 despite a signi?cant increase at Campo Morado resulting from the two month suspension of mining operations in H1 2013.
The halt of operations at Coricancha impacted the cost per tonne milled, as ?xed care and maintenance costs continued to be
incurred in H2 2013. (Coricancha ?gures are excluded from the above table due to the lack of ore milled.)
Campo Morado, after bearing ?xed costs for two months during H1 2013 without processing ore, achieved a 38% reduction in
DOC / tonne milled through a focus on productivity and cost reduction.
At the Contonga mine, management reduced operating costs per tonne milled by 16% in 2013 through an aggressive cost
reduction effort. The Tennessee mines DOC / tonne milled improved by 10% from 2012 to 2013 through a combination of higher
productivity and targeted cost reduction.
DOC per tonne milled at El Mochito, El Toqui and Myra Falls increased in H2 2013 as a result of one-off labour payments.
The Langlois mine, after low ore milled volumes in H1 2013 due to previously mentioned operational challenges, increased ore
milled and reduced operating costs in H2 2013 giving an overall improvement of 21% half on half.
Nyrstar will publish its reserves and resources statement for the Mining segment at the same time as the ?rst interim management
statement on 30 April 2014.
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MANAGEMENT REPORT
METALS PROCESSING
The Metals Processing segment delivered an underlying EBITDA result of EUR 149 million in 2013, an increase of 10% compared
to 2012 (EUR 135 million). The increase was primarily due to higher realised premiums compared to 2012 and the recognition of
the EUR 45 million termination fee (included in Other expenses and income) that compensated Nyrstar for agreeing to end the
European component of its commodity grade metal off-take agreement with Glencore, partially offset by lower acid prices.
EUR million unless otherwise indicated 2013 2012
Treatment charges 337 338
Free metal contribution 244 242
Premiums 127 115
By-Products 215 221
Other (111) (64)
Underlying Gross Pro?t 813 852
Employee expenses (207) (218)
Energy expenses
11
(272) (275)
Other expenses and income
12
(185) (224)
Underlying Operating Costs (664) (717)
Underlying EBITDA 149 135
Underlying EBITDA/t
13
118 109
Underlying Cost/t
14
524 577
The 2012 result also bene?ted from the contribution from the identi?cation, recovery and sale of silver-bearing material at the
Port Pirie smelter (contribution to underlying EBITDA in 2012 of EUR 24 million, included in Other).
Underlying gross pro?t decreased 5% to EUR 813 million in 2013, compared to EUR 852 million in 2012. Gross pro?t was negatively
impacted by the stronger EUR which, on a year average basis, appreciated 3.4% against the USD in 2013 compared to 2012.
Treatment charge income from zinc and lead was relatively ?at at EUR 337 million in 2013, compared to EUR 338 million in 2012.
Whilst the 2013 zinc benchmark TC settled at USD 212 per dry metric tonne, basis USD 2,000 (USD 21 above 2012 terms), the
concentrate mix consumed during 2013 included a higher proportion of more complex materials purchased outside frame contracts.
Higher treatment charge income from benchmark contracts was therefore offset by more purchases outside frame contracts. As a
result, total treatment charge income was in line with 2012.
Free metal contribution of EUR 244 million was in line with 2012 as similar production levels of zinc metal and higher lead production
volumes were offset by slightly lower zinc prices.
Despite the depressed macro-economic conditions in 2013, realised premiums on commodity grade and specialty alloy zinc and
lead products increased compared to 2012. This resulted in gross pro?t earned on premiums of EUR 127 million, an increase of 10%
compared to 2012 (EUR 115 million).
11
Energy expenses do not include the net gain / (loss) on the Hobart smelter embedded energy derivatives
12
In H1 2013 includes EUR 45 million termination fee that compensated Nyrstar for agreeing to end the European component of its commodity grade metal off-take
agreement with Glencore.
13
Calculated based on Segmental underlying EBITDA result and total production of Zinc Market Metal and Lead Market Metal.
14
Calculated based on total segmental direct operating costs, income and total production of Zinc Market Metal and Lead Market Metal. N
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MANAGEMENT REPORT
The contribution of by-product gross pro?t in 2013 was EUR 215 million, a decrease of 3% from EUR 221 million in 2012. The decline
was driven by a combination of declining metal prices for copper, gold and silver as well as a decline in acid prices, which were
partially offset by higher production volumes of copper, gold, silver and indium compared to 2012.
Other gross pro?t was EUR (111) million, an increase of 73% compared to 2012. The increase is mainly driven by higher freight costs
and the contribution in 2012 of EUR 24 million of silver-bearing material at the Port Pirie smelter.
The Metals Processing cost per tonne (of zinc and lead metal) of EUR 524 improved by 9% on 2012 (EUR 577). This was largely driven
by the recognition of the EUR 45 million termination (included in Other expenses and income) and a weakening of the AUD against
the EUR during 2013. Approximately 40% of Metals Processing costs are denominated in Australian dollars, therefore the weakening
of the AUD against the Euro in 2013 had some positive impact on total Metals Processing cost performance in Euro terms.
OTHER & ELIMINATIONS
Underlying EBITDA in the Other and Eliminations segment was EUR (43) million in 2013, comprising the elimination of unrealised
inter segment pro?ts (for material consumed internally by the Metals Processing segment), a net gain of EUR 0.8 million from non-
core operations and other group costs. This result is in line with previous years.
CAPITAL EXPENDITURE
Capital expenditure was approximately EUR 200 million in 2013, a decrease of 19% from 2012 (EUR 248 million). Expenditure in
2013 was at the very low end of the full year guidance of EUR 200 – 230 million.
Expenditure in the Mining segment of EUR 97 million in 2013 represents a substantial reduction of 25% from 2012. Sustaining
and compliance spend in 2013 was reduced to approximately EUR 52 million, 7% reduction on 2012, due to improved capital
management across the Mining segment. EUR 42 million was spent on exploration and development, 39% down on the previous
half and EUR 3 million on growth spend.
Capital expenditure in the Metals Processing segment in 2013 of EUR 96 million was down 15% from 2012 (EUR 113 million). This
comprised approximately EUR 75 million of expenditure on sustaining, compliance and shutdowns, which included spend on a
number of successful planned maintenance shuts across the smelters. EUR 17 million was spent on organic growth projects which
include the ?nal investment case for the transformation of Port Pirie, increasing indium metal capacity at Auby and the successful
completion of the electrolysis de-bottlenecking project at Auby.
In addition, approximately EUR 7 million was invested at other operations and corporate of?ces.
Capital expenditure guidance in 2014 is as follows:
Segment Category EUR million
Mining Sustaining and compliance 40 – 45
Exploration and Development
and Growth 65 – 75
Total 105 – 120
Metals Processing Sustaining and compliance 75 – 80
Growth 15 – 40
Port Pirie Redevelopment 75 – 85
Total 160 – 215
Group Total 265 – 335
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MANAGEMENT REPORT
CASH FLOW AND NET DEBT
In 2013, cash ?ows from operating activities generated an in?ow of EUR 299 million, which comprised a EUR 124 million cash
in?ow from operating activities before working capital changes.
Cash out?ows from investing activities in 2013 of EUR 191 million mainly relates to capital expenditure. Following successful
placement of senior, unsecured convertible bonds, due in 2018 for a principal amount of EUR 120 million, cash in?ows from
?nancing activities in 2013 amounted to EUR 9 million, compared to an out?ow of EUR 133 million in 2012. As of 31 December
2013, the full amount of Nyrstar’s revolving structured commodity trade ?nance facility remained undrawn (also fully undrawn as
of 31 December 2012).
Net debt at 31 December 2013 was EUR 670 million (31 December 2012: EUR 681 million), with a gearing level of 43.5%
15
at the
end of December 2013 compared to 36.9% at the end of December 2012.
TAXATION
Nyrstar recognised an income tax expense for the year ended 31 December 2013 of EUR 11.1 million representing an effective
income tax rate of -6.0% (for the year ended 31 December 2012: 13.3%). The tax rate is impacted by non-deductible amounts
related to the impairments incurred by the Group, recognition of previously unrecognised tax losses and temporary differences and
unrecoverable withholding tax.
OTHER SIGNIFICANT EVENTS IN 2013
Capital distribution
On 7 February 2013, the Board of Directors proposed to distribute to the shareholders a (gross) amount of EUR 0.16 per share,
and to structure the distribution as a capital reduction with reimbursement of paid-up capital. The proposal was submitted to
an extraordinary general shareholders’ meeting at the time of the annual general shareholders’ meeting on 24 April 2013. The
quorum requirement for deliberation and voting on the agenda items of the extraordinary general meeting was not met. As such,
a second extraordinary general meeting was held on 23 May 2013 and the proposal was approved. As the distribution is structured
as a capital reduction with reimbursement of paid-up capital, the payment was subject to the special statutory creditor protection
procedure set out in Article 613 of the Belgian Company Code. On 13 June 2013, the approval of the capital distribution was
published in the Belgian Of?cial Gazette. The ex-dividend date was 9 August 2013, with the payment date of 14 August 2013.
Talvivaara
As a result of ongoing ?nancial and operational challenges at the Talvivaara’s Sotkamo mine throughout 2013, deliveries of zinc in
concentrate from Talvivaara during H2 2013 were signi?cantly down on H1 2013 (30kt in H1 2013 to 14kt in H2).
Talvivaara’s liquidity position weakened further in H2 2013 and the company commenced a corporate reorganisation process of
the Talvivaara Mining Company Plc on 29 November 2013, and commenced corporate reorganisation of the Talvivaara Sotkamo
Ltd on 17 December 2013. Nyrstar is now actively participating with a number of interested parties in Talvivaara’s corporate
reorganisation process.
Considerable uncertainties exist as to the outcome of Talvivaara’s reorganisation process.We also have ongoing concern regarding
the performance of Talvivaara under the zinc streaming agreement obligations. It is currently not possible for Nyrstar to estimate
the most likely outcome of the reorganisation and its impact on the carrying value of the agreement.
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Gearing: net debt to net debt plus equity at end of period.
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Settlement with Glencore on Commodity Grade Off-take Agreement and shareholding
On 16 April, Nyrstar announced that it has reached a negotiated settlement with Glencore (now GlencoreXstrata) in relation to
its Commodity Grade Off-take Agreement for the sale and marketing of commodity grade zinc metal produced by Nyrstar within
the European Union, and Glencore’s 7.79% shareholding in Nyrstar. This followed the requirement for Glencore to end these
aspects of its relationship with Nyrstar as part of the remedy package agreed by the European Commission in relation to Glencore’s
merger with Xstrata. Under the settlement, by 31 December 2013 Nyrstar will cease to sell to Glencore commodity grade zinc
metal produced at Nyrstar’s smelters located within the European Union (Auby, Balen/Overpelt and Budel). With respect to the
above, Glencore agreed to pay Nyrstar a termination fee of EUR 44.9 million. The sale of commodity grade zinc and lead produced
from Nyrstar’s smelters outside the European Union (Clarksville, Hobart and Port Pirie) will continue as before under the Off-take
Agreement. Glencore also agreed to sell to Nyrstar Glencore’s entire shareholding of 7.79% of common shares for EUR 3.39 per
share (a discount of approximately 10% to the 5-day volumeweighted average price, and 5% to the closing share price, of Nyrstar
shares on 15 April 2013), for a total cash consideration of EUR 44.9 million. Nyrstar continues to hold the acquired shares as
treasury stock and will look to place the shares with suitable investors over time.
Strategic hedging of metal prices
As announced in our 2013 ?rst Interim Management Statement, during Q1 2013 Nyrstar entered into short-term strategic hedging
arrangements with respect to zinc prices. The hedges, which relate to Q2, Q3 and Q4 2013, are for 20,000 tonnes of zinc metal per
month. The hedges in Q2 2013 guaranteed Nyrstar a zinc price between USD 2,100/t and USD 2,200/t for 60,000 tonnes of metal.
The hedges for Q3 and Q4 2013 guarantee Nyrstar a zinc price between USD 2,100/t and USD 2,200/t for 120,000 tonnes of metal
and, if the price exceeds USD 2,400/t, Nyrstar would have exposure to the upside bene?t.
The total cost for entering into these hedging arrangements was approximately USD 7 million, which is included under ?nance
expenses.
Subsequently, in June, Nyrstar entered into strategic hedges with respect to gold and silver prices for H2 2013. The hedges for Q3
2013 were for approximately 1 million troy ounces of silver and 19,000 troy ounces of gold production and guarantee Nyrstar
a silver and gold price of USD 22.41 per troy ounce and USD 1,383 per troy ounce respectively. The hedges for Q4 2013, for
approximately 0.6 million troy ounces of silver and 17,000 troy ounces of gold production, guarantee the same prices as the Q3
hedge and, in addition, if the silver and gold prices exceed USD 25 per troy ounce and USD 1,500 per troy ounce, respectively,
Nyrstar would have had exposure to the upside bene?t.
The rationale for entering into such short term arrangements was to improve the pro?tability of the business by, for example,
providing targeted ?nancial support for Nyrstar’s assets or to take advantage of price conditions in the market. Nyrstar has
implemented a comprehensive governance structure to ensure hedging arrangements, with respect to zinc and other metal prices,
are compliant with a robust risk-reward framework and all decisions to enter or exit from a hedge position are taken by a Metal
Price Risk Committee.
Successful issue of EUR 120 million of convertible bonds, due 2018
On 17 September 2013, Nyrstar successfully placed senior, unsecured convertible bonds, due 2018, for a principal amount of EUR
120 million. The Bonds were issued at 100% of their principal amount and have a coupon of 4.25% per annum, payable semi-
annually in equal installments in arrears. The conversion price is EUR 4.9780 per share and is set at a premium of 35.0 per cent to
the reference share price of EUR 3.6874, being the volume-weighted average price of the Company’s ordinary shares on Euronext
Brussels from launch to pricing.
The Bonds were placed through an accelerated book-build placement with institutional investors outside the United States in
accordance with Regulation S under the Securities Act only and are listed on the Open Market (Freiverkehr) segment of the
Frankfurt Stock Exchange.
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European strategic marketing agreement for commodity grade zinc metal with Noble and Noble acquires
a 1% shareholding in Nyrstar
On 1 October 2013, Nyrstar entered an off-take and strategic marketing agreement with Noble Group to market and sell 200,000
tonnes per annum of commodity grade zinc metal (special high grade and continuous galvanising grade) produced at its European
smelters. The agreement has a term of four years and commenced on 1 January 2014, under which Nyrstar will receive market
price plus a benchmark premium per tonne of zinc metal, with a pro?t sharing mechanism for any upside. For Nyrstar, the
agreement represents a ?rst step in executing a European zinc metal plan aimed at actively marketing Nyrstar’s product to increase
optionality in terms of customers, product mix and geography which is expected to deliver improved margins.
The agreement follows a structured process undertaken by Nyrstar in Q2 and Q3 2013 to determine the most suitable channel(s)
to market and sell commodity grade zinc metal produced at its European smelters. This was triggered by the termination of the
European component of the Commodity Grade Off-take Agreement with Glencore Xstrata. During the process, Nyrstar determined
that the best way to market its European commodity grade zinc metal is through a multi-channel approach and, therefore, the
newly formed Marketing, Sourcing & Sales segment is directly selling, marketing and ?nancing the remaining 160,000 tonnes
(approximately) of commodity grade zinc metal produced in Europe with a number of market participants.
Noble also agreed to acquire from Nyrstar’s treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total
shares, for a price of EUR 3.76 per share (a premium of 5% to the 3-day volume-weighted average price of Nyrstar shares on 27
September 2013), for a total cash consideration of EUR 6.4 million.
Proposed distribution
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
SENSITIVITIES
Nyrstar’s results continued to be signi?cantly affected during the course of 2013 by changes in metal prices, exchange rates and
treatment charges. Sensitivities to variations in these parameters are depicted in the below table, which sets out the estimated
impact of a change in each of the parameters on Nyrstar’s full year underlying EBITDA based on the actual results and production
pro?le for the year ending 31 December 2013.
12 months ended 31 December 2013
Parameter Variable Annualised estimated EBITDA
impact in EUR million
Zinc Price +/- USD 100/t +28 / -28
Lead Price +/- USD 100/t +2 / -2
Copper Price +/- USD 500/t +6 / -6
Silver Price +/- USD 1/toz +4 / -4
Gold Price +/- USD 100/toz +6 / -6
USD / EUR +/- EUR 0.01 +18 / -18
AUD / EUR -/+ EUR 0.01 -3 / +3
Zinc treatment charge +/- USD 25/dmt
16
+28 / -28
Lead treatment charge +/- USD 25/dmt +5 / -5
16
dmt = dry metric tonne of concentrate
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The above sensitivities were calculated by modelling Nyrstar’s 2013 underlying operating performance. Each parameter is based on
an average value observed during that period and is varied in isolation to determine the annualised EBITDA impact.
Sensitivities are:
• Dependent on production volumes and the economic environment observed during the reference period.
• Not re?ective of simultaneously varying more than one parameter; adding them together may not lead to an accurate estimate
of ?nancial performance.
• Expressed as linear values within a relevant range. Outside the range listed for each variable, the impact of changes may be
signi?cantly different to the results outlined.
These sensitivities should not be applied to Nyrstar’s results for any prior periods and may not be representative of the EBITDA
sensitivity of any of the variations going forward.
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SAFETY, HEALTH, ENVIRONMENT,
WORKFORCE AND SOCIETY
Workforce
At Nyrstar, we believe that people are the foundation of our success. We foster the development and application of programmes
that enable our people to reach their full potential for the mutual bene?t of the individuals and the organisation. Recruiting and
retaining talented people is a top priority for the company.
Global Workforce by Geographical Location
(year-end data)
Location 2013 2012
Australia 1,236 1,233
Europe 1,487 1,453
Americas 3,876 4,284
Total 6,599 6,970
Global Workforce by Age Group
(at 2013 year-end)
0 5 10 15 20 25 30
6.7
%
23.3
%
26.0
%
26.8
%
17.1
%
> 60
50 - 59
40 - 49
30 - 39
< 30
Our approach to people management starts with The Nyrstar Way which establishes the behaviours we expect from all Nyrstar
employees. Through the Nyrstar Way we are committed to open and honest relationships with our employees, and we aim to
be consistent, fair and transparent in our dealings with our employees. We believe that the Nyrstar Way and the behaviours
associated with it will not only support delivery of our key strategies, but also create a culture that attracts and retains talented
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people. Demonstration of the behaviours promoted by The Nyrstar Way is evaluated as part of our annual performance review
process and is a key component of our annual incentive plan.
Having the right people with the right skills is critical to our success. In 2013, we undertook a focused recruitment program in
Spain to attract quali?ed mining professionals for our operations in South America. In addition to our recruitment efforts, we also
have several people development programs to support our staff’s continued education and professional development. Some of
these programs are discussed in further detail below.
Support for fundamental human rights is an integral part of how we operate. We are committed to respecting our employees’
rights in line with the International Labour Organisation’s Declaration of Fundamental Human Rights at Work. In line with this
commitment, we recognise and respect the right of freedom of association by our employees. We have a number of operations
where we have a mix of collective and individually-regulated employment agreements. This does not affect the rights of employees
to choose to belong to trade unions, however. In 2013, approximately 60% of our workforce was covered by Collective Agreements.
Over 98% of our employees are engaged on a full-time basis., however the same standard terms and conditions of employment
apply to both full and part time employees. In terms of industrial action, the Contonga mine experienced a two week strike during
the ?rst half of 2013. No other signi?cant industrial action occurred in 2013.
Safety & Health
Prevent Harm is a core value of Nyrstar and we are committed to maintaining safe operations and to proactively managing risks
including those with respect to our people and the environment. During 2013, Nyrstar’s Recordable Injury Rate (RIR) remained almost
?at at 9.0 compared to 8.3 in 2012, this con?rmed the signi?cant reduction (37%) achieved in 2012. After a 50% reduction in 2012,
the 2013 Lost Time Injury Rate (LTIR) increased by 20% to 3.4 compared to 2.8 in 2012.
Tragically, despite Nyrstar’s strong focus on safety, two Nyrstar employees were fatally injured in March and September 2013 while
working at the Campo Morado and Contonga mines respectively. Risk scenarios were conducted across all mines to prevent the
recurrence of similar situations. We recognise that people are fallible, and even the best will make errors (mistakes, lapses or slips). As
a result, Nyrstar’s Hobart Smelter piloted a Human Performance Programme which integrates new beliefs, thoughts, actions and tools
into our already existing Health & Safety management system. The programme, which has been well-received by the management
team and workforce, focuses on developing competencies and skills to enable our employees to recognise, predict and prevent error-
likely situations.
In the Metals Processing segment, Auby operated without a lost time injury for an 18 month period. The performance variance across
the smelters reduced signi?cantly as a consequence of a strong health and safety network and exchange of practices between the
sites. The number of cases involving restricted works or lost time injuries (DART) was below 5 at 4.8 at the end of the year. A corporate
Health and Safety Audit was completed across the smelters as part of our Assurance Program. In the Mining sector, Myra Falls won the
Ryan Award, which recognizes Safety performance across British Columbia. A back-to-basics plan was initiated across all mines with an
objective of building the foundations of a strong Health & Safety management system and culture.
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Lost Time Injury Frequency Rate
(Per million hours worked)
Location 2013 2012* 2011
Smelters – Australia 3.1 1.9 2.9
Smelters – Americas 1.4 4.7 2.7
Smelters – Europe 2.5 1.8 2.5
Mines – North America 3.5 3.1 7.1
Mines- South America 4.0 3.2 5.0
Total 3.4 2.8 4.2
* Restated data
Recordable Injury Frequency Rate
(Per million hours worked)
Location 2013 2012*
Smelters – Australia 6.3 5.0
Smelters – Americas 14.2 11.0
Smelters – Europe 7.1 6.6
Mines – North America 15.2 19.2
Mines- South America 8.1 6.5
Total 9.0 8.3
Environment
Mining and metals operations unavoidably affect the environment, and minimising environmental impacts represents one of
the principal challenges for our industry. Similar to our peers, the environmental risks demanding our greatest attention relate
to energy and climate change, water, air emissions and waste. Recognising the importance of environmental performance to our
business success, we take the management of these risks very seriously and responsible environmental stewardship is integrated
into our business planning, management systems and day-to-day operational decision making.
All Nyrstar sites are required to implement environmental management systems (EMSs) in alignment with the Nyrstar SHEC
Management Elements.The EMSs help to drive continuous improvement in environmental performance by ensuring environmental
impacts are understood, controlled and subject to regular monitoring and review. The systems implemented at Nyrstar’s smelters
are also certi?ed to the ISO 14001 environmental management system standard.
Our key measure for regulatory compliance is Recordable Environmental Incidents, de?ned as a non-compliance event that
requires noti?cation to the environmental authorities. A total of 34 Recordable Environmental Incidents were documented in
2013, representing a signi?cant (37%) improvement over the 54 incidents recorded in 2012. The improved compliance record
is attributed to strengthened regulatory compliance processes and to the effectiveness of improvement actions implemented in
response to events experienced in 2012.
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0
5
10
15
20
25
30
35
12
13
22
32
10
24
2011 2012 2013
SMELTERS MINES
Recordable Environmental Incidents
1
1
2012 and 2013 data includes all Nyrstar mines and smelters; 2011 data includes all smelters and Tennessee Mines.
Society
The Nyrstar Way establishes the behaviours we must display in our dealings with local communities and other key stakeholders.
By living the Nyrstar Way, we commit to Keeping Our Word, Preventing Harm, Being Open and Honest, and Creating Value. These
commitments re?ect the way we do business and are expected to be embraced by all Nyrstar employees.
Our SHEC Management Framework sets out the processes for stakeholder engagement, communication and consultation that must
be implemented at all Nyrstar sites. Site implementation of these processes focuses on understanding and addressing the social
risks that may affect Nyrstar’s operations and the communities in which we operate. Particular emphasis is placed on identifying
and taking advantage of the opportunities presented to our operations for enhancing local capacity and delivering socio-economic
bene?ts.
As the majority of Nyrstar’s engagement with communities and other stakeholders occur at a site level, considerable attention is
given to making sure our local management teams and community development specialists have the required social awareness
and competence. In 2013, we engaged external specialists to work very closely with our Latin American sites. The focus of this
collaboration was to strengthen the community management capabilities of our personnel and to develop action plans for
improving our community management processes and programs.
Nyrstar Sustainability Report 2013
Nyrstar publishes a separate Sustainability Report that presents our sustainability performance during the past year. 2013 marks
the sixth that we report externally on sustainability matters. The Sustainability Report can be downloaded from our website:http://www.nyrstar.com/sustainability/.
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Nyrstar NV (the ‘Company’) has prepared this corporate governance statement in
accordance with the Belgian Code on Corporate Governance of 12 March 2009. This
corporate governance statement is included in the Company’s report of board of directors
on the statutory accounts for the ?nancial year ended on 31 December 2013 dated 5
February 2014 in accordance with article 96 of the Belgian Company Code.
The Company applies the nine corporate governance principles contained in the Belgian
Code on Corporate Governance. The Company complies with the provisions set forth in
the Belgian Code on Corporate Governance unless explained otherwise in the corporate
governance charter or in this corporate governance statement.
Corporate Governance Charter
The Company has adopted a corporate governance charter in line with the Belgian Code on Corporate Governance of
12 March 2009.
The corporate governance charter describes the main aspects of the corporate governance of the Company including its
governance structure, the terms of reference of the board of directors and its committees and other important topics.
The corporate governance charter is available, together with the articles of association, on the Company’s website, within the
section about Nyrstar (http://www.nyrstar.com/about/Pages/corporategovernance.aspx). The board of directors approved the
initial charter on 5 October 2007. Updated versions were approved on 18 March 2008, 11 December 2009, 24 February 2010,
26 July 2011, and the current version was approved by the board of directors on 5 February 2014.
What constitutes good corporate governance will evolve with the changing circumstances of a company and with the standards
of corporate governance globally and must be tailored to meet those changing circumstances. The board of directors intends to
update the corporate governance charter as often as required to re?ect changes to the Company’s corporate governance.
Code of Business Conduct
While Nyrstar conducts its business within the framework of applicable professional standards, laws, regulations and internal
policies, it also acknowledges that these standards, laws, regulations and policies do not govern all types of behaviour. As a result,
Nyrstar has adopted a code of business conduct for all of Nyrstar’s personnel and sites. The code of business conduct is based
on the Nyrstar Way. The code also provides a frame of reference for Nyrstar sites to establish more speci?c guidelines to address
local and territorial issues. Nyrstar also introduced a code of business conduct development program which supports the code of
business conduct and aims to increase awareness in relation to some key risks to Nyrstar’s business. The development program
includes specially designed training modules for Nyrstar employees. The training modules are conducted by Nyrstar’s Compliance
Of?cer with the assistance of local expertise (where required). If employees have issues or concerns (for example, they are
concerned that others are not complying with the letter and the spirit of the code of business conduct), they may raise the issue
or concern with their supervisor or manager or Nyrstar’s compliance of?cer. The code of business conduct is available on Nyrstar’s
website (www.nyrstar.com).
CORPORATE GOVERNANCE
STATEMENT
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Board of Directors and Management Committee
Board of directors
The table below gives an overview of the members of the Company’s board of directors and their terms of of?ce during 2013:
Name
Principal function
within the Company Nature of directorship Start of Term End of Term
Julien De Wilde
(1)
Chairman Non-Executive, Independent 2007 2014
Roland Junck CEO, Director Executive 2007 (2009 CEO) 2015
Peter Mansell
(2)
Director Non-Executive, Independent 2007 2013
Karel Vinck Director Non-Executive, Independent 2007 2015
Ray Stewart Director Non-Executive, Independent 2007 2014
Oyvind Hushovd Director Non-Executive, Independent 2009 2016
Carole Cable Director Non-Executive, Independent 2013 2017
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2) MANDATE EXPIRED ON 24 APRIL 2013
De Wilde J. Management BVBA, represented by Julien De Wilde, Chairman, was appointed Chairman in August 2007. He is also
Chairman of Agfa-Gevaert NV and a director of several Belgian listed companies, amongst others Telenet Group Holding NV. He is
also former Chief Executive Of?cer of Bekaert NV, a Belgian metals company. Prior to Bekaert, he held senior positions at Alcatel,
where he was a member of the executive committee, and at Texaco, where he was a member of the European management board.
He is Chairman of the nomination and remuneration committee and a member of the safety, health and environment committee.
He obtained an engineering degree from the Catholic University of Leuven, Belgium.
Roland Junck, Chief Executive Of?cer, was appointed Chief Executive Of?cer in February 2009 after 16 months as a Non-Executive
Director on the Company’s board of directors. He is also director of several European companies including Agfa-Gevaert NV. He was
the former Chief Executive Of?cer of Arcelor Mittal. Prior to this role he was a member of the group management board of Arcelor,
Aceralia and Arbed. He graduated from the Federal Polytechnic in Zurich and has a Masters of Business Administration from Sacred
Heart University of Luxembourg.
Karel Vinck, Non-Executive Director, is Coordinator at the European Commission and a director of Tessenderlo Group NV and the
Koninklijke Muntschouwburg. Formerly the Chief Executive Of?cer of Umicore NV and later Chairman, he was also Chief Executive
Of?cer of Eternit NV, Bekaert NV and the Belgian Railways. He is a member of the audit and the nomination and remuneration
committee. He holds a Master’s degree in Electrical and Mechanical Engineering from the Catholic University of Leuven, Belgium
and a Master of Business Administration from Cornell University, United States.
Ray Stewart, Non-Executive Director, is Chief Financial and Administration Of?cer of Belgacom Group NV. Prior to Belgacom,
he was Chief Financial Of?cer of Matav. He has also held senior positions with Ameritech, including Chief Financial Of?cer for
Ameritech International. He is Chairman of the audit committee and a member of the nomination and remuneration committee.
He has a Business Undergraduate degree in Accounting from Indiana University, and a Masters of Business Administration in
Finance from Indiana University.
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Oyvind Hushovd, Non-Executive Director, currently serves on the boards of several mining companies, including, amongst others,
Ivanhoe Mines. Formerly Chief Executive Of?cer of Gabriel Resources Ltd from 2003 to 2005 and, from 1996 to 2002, President
and Chief Executive Of?cer of Falconbridge Limited (and prior to that held a number of senior positions within that company).
He is Chairman of the safety, health and environment committee and is a member of the audit committee. He received a Master
of Economics and Business Administration degree from the Norwegian School of Business and a Master of Law degree from the
University of Oslo.
Carole Cable, Non-Executive Director, is currently a Partner of the Brunswick Group, an international communications ?rm, where
she is the joint head of the energy and resources practice specialising in the metals and mining sector. Prior to her current position,
she worked at Credit Suisse and JPMorgan where she was a mining analyst and then moved into institutional equity sales covering
the global mining sector as well as Asia ex Japan. Previous to that, she worked for an Australian listed mining company. She is a
Member of the safety, health and environment committee. Ms. Cable holds a Bachelors of Science degree from the University of
New South Wales, Australia and is currently on the Board of Women in Mining UK.
The business address of each of the directors is for the purpose of their directors’ mandate, Zinkstraat 1, 2490 Balen, Belgium.
Virginie Lietaer was appointed Company Secretary to the Company effective 10 March 2008.
Management committee
As at 31 December 2013, the Company’s management committee consists of six members (including the CEO), as further set forth
hereinafter:
Name Title
Roland Junck Chief Executive Of?cer
Heinz Eigner Chief Financial Of?cer
Russell Murphy Chief HR & SHE Of?cer
Michael Morley Senior Vice President, Metals Processing and Chief Development Of?cer
Graham Buttenshaw Senior Vice President, Mining
Bob Katsiouleris Senior Vice President, Marketing, Sourcing & Sales
Roland Junck is the Chief Executive Of?cer of the Company. See his biography above under “—Board of directors”.
Heinz Eigner, Chief Financial Of?cer, was appointed in August 2007. Prior to Nyrstar he was at Umicore where he joined in 2002
as Vice-President Business Group Controller, automotive catalysts, and became Vice-President Business Group Controller, zinc
specialties, in 2006. From 1987 until 2002 he worked for Honeywell, where he occupied several positions in Germany, Switzerland
and the United States of America. He holds a degree in Betriebswirtschaftslehre-University degree as Diplom- Kaufmann, Justus
von Liebig Universität, Giessen, Germany.
Russell Murphy, Chief HR & SHE Of?cer, was appointed in August 2007. Before the creation of Nyrstar he was at Zinifex since
1979, where he moved from mining operations to training and on to HR management. He was the Group Human Resources
Manager, Australian operations, from 2002 and Acting General Manager Human Resources since 2006. He holds a Graduate
Diploma in Business Management from Charles Sturt University, Australia.
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Michael Morley, Senior Vice President, Metals Processing and Chief Development Of?cer, was appointed in August 2007.
Prior to joining Nyrstar, he was General Counsel of Smorgon Steel Group Ltd, and before that a Senior Associate in the
corporate/mergers and acquisitions team of Clayton Utz. He has also held a number of positions with Coopers & Lybrand (now
PricewaterhouseCoopers) and Fosters Brewing Group Limited. He holds a Bachelor of Economics and a Bachelor of Laws from
Monash University (Melbourne, Australia) and a Master of Taxation Law from Melbourne University (Melbourne, Australia).
Graham Buttenshaw, Senior Vice President, Mining, is responsible for leading Nyrstar’s global mining operations. He has over 30
years’ experience in the global mining industry working in countries such as Australia, Peru and Ghana in a number of senior roles
with global mining houses such as Billiton and global mining contractors such as Redpath. He holds a B.Sc (Eng) with ?rst class
honours from Royal School of Mines, London and completed the AMP at Harvard Business School.
Bob Katsiouleris, Senior Vice President, Marketing, Sourcing & Sales, is responsible for Nyrstar’s raw materials strategy,
marketing and sales of ?nished products and trading. Prior to joining Nyrstar in January 2013, he was the Chief Commercial
Of?cer for Rio Tinto Minerals with more than 20 years of experience in industrial minerals and metals sales, marketing,
operations, processing, ?nance and purchasing. He holds a Bachelor of Mining and Metallurgical Engineering from McGill
University in Montreal, Canada, and a Masters in Business Administration from Pepperdine University in Los Angeles. He is a
member of the Order of Engineers of Quebec.
The business address of Mr Buttenshaw is 350 East Las Olas Boulevard, Suite 800, Fort Lauderdale, FL 33301, USA. The business
address of the other members of the management committee is Tessinerplatz 7, 8002 Zurich, Switzerland.
General information on directors and management committee
No director or member of the management committee has:
(a) any convictions in relation to fraudulent offences or any offences involving dishonesty;
(b) except in the case of compulsory liquidations, at any time in the previous ?ve years, been associated with any bankruptcy,
receivership or liquidation of any entity in which such person acted in the capacity of a member of an administrative,
management or supervisory body or senior manager nor:
• been declared bankrupt or has entered into an individual voluntary arrangement to surrender his or her estate;
• been a director with an executive function of any company at the time of, or within twelve months preceding, any
receivership, compulsory liquidation, creditors’ voluntary liquidation, administration, company voluntary arrangement or
any composition or arrangement with that company’s creditors generally or with any class of its creditors;
• been a partner in a partnership at a time of, or within twelve months preceding, any compulsory liquidation, administration
or voluntary arrangement of such partnership;
• been a partner in a partnership at the time of, or within twelve months preceding, a receivership of any assets of such
partnership; or
• had any of his or her assets subject to receivership; or
• received any of?cial public incrimination and/or sanctions by any statutory or regulatory authorities (including designated
professional bodies) or ever been disquali?ed by a court from acting as a member of the administrative, management or
supervisory bodies of a company or from acting in the management or conduct of the affairs of any Company.
Other mandates
Other than set out in the table below, no director or member of the management committee has, at any time in the previous ?ve
years, been a member of the administrative, management or supervisory body or partner of any companies or partnerships. Over
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the ?ve years preceding the date of this report, the directors and members of the management committee hold or have held in
addition to their function within Nyrstar, the following main directorships or memberships of administrative, management or
supervisory bodies and/or partnerships:
Name Current Past
Julien De Wilde
(1)
Agfa-Gevaert NV
Telenet Group Holding NV
Arseus NV
Bekaert NV
Metris NV
Van Breda International NV
CTO
KBC Bank NV
Karel Vinck Tessenderlo Group NV
Koninklijke Muntschouwburg NV
Coordinator at the European Commission
Eurostar
Suez-Tractebel
Umicore
Vlaamse Raad voor Wetenschapsbeleid
Beheersmaatschappij Antwerpen Mobiel
NV
Ray Stewart The United Fund for Belgium
Belgacom NV
Oyvind Hushovd Ivanhoe Mines
Sørlaminering
Røo-Invest
Lydia AS
LionOre
Western Oil Sands
Nickel Mountain AB
Cameco Corporation
Inmet Mining Corporation
Libra Group
Carole Cable Brunswick Group
Women in Mining UK
N/A
Roland Junck Agfa-Gevaert NV
Samhwa Steel SA
Arcelor China Holding S.à r.l.
Arcelor Mittal
Aceralia
Arbed
Talvivaara Mining Company plc
Interseroh SE
Heinz Eigner N/A N/A
Russell Murphy N/A N/A
Michael Morley N/A N/A
Graham Buttenshaw N/A N/A
Bob Katsiouleris N/A Rio Tinto Minerals Asia Pte Ltd
Rio Tinto Malaysia Sdn. Bhd.
U.S. Borax Inc.
Talc de Luzenac
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
Role of board of directors
The role of the board of directors is to pursue the long-term success of the Company by providing entrepreneurial leadership and
enabling risks to be assessed and managed. The board decides on the Company’s values and strategy, its risk appetite and key policies.
The Company has opted for a “one-tier” governance structure whereby the board of directors is the ultimate decision-making body,
with the overall responsibility for the management and control of the Company, and is authorized to carry out all actions that are
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considered necessary or useful to achieve the Company’s vision. The board of directors has all powers except those reserved to the
shareholders’ meeting by law or the Company’s articles of association.
The board of directors is assisted by a number of committees to analyze speci?c issues. The committees advise the board of
directors on these issues, but the decision-making remains with the board of directors as a whole (see also “—Committees of the
board of directors” below).
The board of directors appoints and removes the Chief Executive Of?cer. The role of the Chief Executive Of?cer is to implement
the mission, strategy and targets set by the board of directors and to assume responsibility for the day-to-day management of the
Company. The Chief Executive Of?cer reports directly to the board of directors.
In order to provide a group-wide support structure, the Company has corporate of?ces in Balen, Belgium, Zurich, Switzerland
and Fort Lauderdale, USA. These of?ces provide a number of corporate and support functions including ?nance, treasury, human
resources, safety and environment, legal and secretarial, tax, information technology, corporate development, investor relations
and communications.
Pursuant to the Company’s articles of association, the board of directors must consist of at least three directors. The Company’s
corporate governance charter provides that the composition of the board should ensure that decisions are made in the corporate
interest. It should be determined on the basis of diversity, as well as complementary skills, experience and knowledge. Pursuant
to the Belgian Code on Corporate Governance, at least half of the directors must be non-executive and at least three directors
must be independent in accordance with the criteria set out in the Belgian Companies Code and in the Belgian Code on Corporate
Governance.
The necessary efforts are made by the Company to ensure that by 1 January 2017, at least one third of the members of the board
are of the opposite gender. At the special shareholders’ meeting on 23 December 2013, Ms Carole Cable was appointed to the
board of directors.
The directors are appointed for a term of no more than four years by the general shareholders’ meeting. They may be re-elected
for a new term. Proposals by the board of directors for the appointment or re-election of any director must be based on a
recommendation by the nomination and remuneration committee. In the event the of?ce of a director becomes vacant, the
remaining directors can appoint a successor temporarily ?lling the vacancy until the next general shareholders’ meeting. The
shareholders’ meeting can dismiss the directors at any time.
The board of directors elects a chairman from among its non-executive members on the basis of his knowledge, skills, experience
and mediation strength. If the board of directors envisages appointing a former Chief Executive Of?cer as Chairman, it should
carefully consider the positive and negative aspects in favour of such a decision and disclose why such appointment is in the best
interest of the Company. The Chairman is responsible for the leadership and the proper and ef?cient functioning of the board of
directors.
The board of directors meets whenever the interests of the Company so require or at the request of one or more directors. In
principle, the board of directors will meet suf?ciently regularly and at least six times per year. The decisions of the board of
directors are made by a simple majority of the votes cast. The Chairman of the board of directors has a casting vote.
During 2013, eleven board meetings were held.
Committees of the board of directors
The board of directors has set up an audit committee, a nomination and remuneration committee and a safety, health and
environment committee.
Audit committee
The audit committee consists of at least three directors. All members of the audit committee are Non-Executive Directors. According
to the Belgian Companies Code, at least one member of the audit committee must be independent and must have the necessary
competence in accounting and auditing. The current members of the audit committee are Ray Stewart (Chairman), Karel Vinck and
Oyvind Hushovd. In line with the Belgian Code on Corporate Governance which requires that a majority of the members of the
audit committee are independent, the current members are all independent directors.
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The members of the audit committee must have suf?cient expertise in ?nancial matters to discharge their functions. The Chairman
of the audit committee is competent in accounting and auditing as evidenced by his current role as Chief Financial Of?cer of
the Belgacom Group and his previous roles as Chief Financial Of?cer in Matav and Ameritech International. According to the
board of directors, the other members of the audit committee also satisfy this requirement, as evidenced by the different senior
management and director mandates that they have held in the past and currently hold.
The role of the audit committee is to supervise and review the ?nancial reporting process, the internal control and risk
management systems and the internal audit process of the Company. The audit committee monitors the audit of the statutory and
consolidated ?nancial statements, including the follow-up questions and recommendations by the Statutory Auditor. The audit
committee also makes recommendations to the board of directors on the selection, appointment and remuneration of the external
auditor and monitors the independence of the external auditor.
In principle, the audit committee meets as frequently as necessary for the ef?ciency of the operation of the audit committee, but
at least four times a year. The members of the audit committee must have full access to the Chief Financial Of?cer and to any other
employee to whom they may require access in order to carry out their responsibilities.
During 2013, four audit committee meetings were held.
Nomination and remuneration committee
The nomination and remuneration committee consists of at least three directors. All members of the nomination and remuneration
committee are Non-Executive Directors, with a majority of independent directors. The nomination and remuneration committee is
chaired by the Chairman of the board of directors or another Non-Executive Director appointed by the committee. The following
directors are currently members of the nomination and remuneration committee: Julien De Wilde (Chairman), Ray Stewart and
Karel Vinck.
The role of the nomination and remuneration committee is to make recommendations to the board of directors with regard to the
appointment of directors, make proposals to the board of directors on the remuneration policy and individual remuneration for
directors and members of the management committee and to submit a remuneration report to the board of directors. In addition,
starting as from the annual general shareholders’ meeting held in 2012, the nomination and remuneration committee each year
submits the remuneration report to the annual general shareholders’ meeting.
In principle, the nomination and remuneration committee meets as frequently as necessary for the ef?ciency of the operation of
the committee, but at least twice a year.
During 2013, three nomination and remuneration committee meetings were held.
Safety, health and environment committee
The safety, health and environment committee consists of at least three directors. All members of the safety, health and
environment committee are Non-Executive Directors, with at least one independent director. The safety, health and environment
committee is chaired by the Chairman of the board of directors or another Non-Executive Director appointed by the committee.
The current members of the safety, health and environment committee are Oyvind Hushovd (Chairman), Julien De Wilde and Carole
Cable.
The role of the safety, health and environment committee is to assist the board of directors in respect of safety, health and
environmental matters. In particular, its role is to ensure that the Company adopts and maintains appropriate safety, health and
environment policies and procedures, as well as effective safety, health and environment internal control and risk management
systems, and to make appropriate recommendations to the board of directors.
In principle, the safety, health and environment committee meets as frequently as necessary for the ef?ciency of the operation of
the committee, but at least twice a year.
During 2013, three safety, health and environment committee meetings were held.
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Activity report and attendance at board and committee meetings during 2013
Name Board meeting attended Audit Nomination and remuneration Safety, health and environment
Julien De Wilde
(1)
11 of 11 N/A 3 of 3 3 of 3
Roland Junck 11 of 11 N/A N/A N/A
Peter Mansell
(2)
2 of 11 N/A 1 of 3 1 of 3
Karel Vinck 10 of 11 4 of 4 3 of 3 N/A
Ray Stewart 11 of 11 4 of 4 3 of 3 N/A
Oyvind Hushovd 11 of 11 4 of 4 N/A 3 of 3
(1) ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2) MANDATE EXPIRED ON 24 APRIL 2013
The topics discussed at the board and committee meetings are in line with the role and responsibilities of the board and its
committees as set out in the corporate governance charter, such as for example, the determination of the Company’s principal
objectives and strategy and the approval of all major investments, divestments, business plans and annual budgets.
Independent directors
A director will only qualify as an independent director if he meets at least the criteria set out in article 526
ter
of the Belgian
Companies Code, which can be summarized as follows:
• Not being an executive member of the board, exercising a function as a member of the executive committee or as a person
entrusted with daily management of the Company or a company or person af?liated with the Company, and not having been in
such a position during the previous ?ve years before his nomination.
• Not having served for more than three terms as a Non-Executive Director of the board, without exceeding a total term of more
than twelve years.
• Not being an employee of the senior management (as de?ned in article 19,2° of the Belgian Act of 20 September 1948
regarding the organization of the business industry) of the Company or a company or person af?liated with the Company and
not having been in such a position for the previous three years before his nomination.
• Not receiving, or having received, any signi?cant remuneration or other signi?cant advantage of a ?nancial nature from the
Company or a company or person af?liated with the Company, other than any bonus or fee (tantièmes) he receives or has
received as a non-executive member of the board.
• Not holding (directly or via one or more company under his control) any shareholder rights representing 10% or more of the
Company’s shares or of a class of the Company’s shares (as the case may be), and not representing a shareholder meeting this
condition.
• If the shareholder rights held by the director (directly or via one or more company under his control) represent less than
10%, the disposal of such shares or the exercise of the rights attached thereto may not be subject to contracts or unilateral
undertakings entered into by the director. The director may also not represent a shareholder meeting this condition.
• Not having, or having had within the previous ?nancial year, a signi?cant business relationship with the Company or a company
or person af?liated with the Company, either directly or as partner, shareholder, member of the board, member of the senior
management (as de?ned in article 19,2° of the aforementioned Belgian Act of 20 September 1948) of a company or person who
maintains such a relationship.
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• Not being or having been within the last three years, a partner or employee of the current or former statutory auditor of the
Company or a company or person af?liated with the Company.
• Not being an executive director of another company in which an executive director of the Company is a non-executive member
of the board, and not having other signi?cant links with executive directors of the Company through involvement in other
companies or bodies.
• Not being a spouse, legal partner or close family member (by marriage or birth) to the second degree of a member of the board,
a member of the executive committee, a person charged with the daily management, or a member of the senior management
(as de?ned in article 19,2° of the aforementioned Belgian Act of 20 September 1948) of the Company or a company or person
af?liated with the Company, or of a person who ?nds him or herself in one or more of the circumstances described in the
previous bullets.
The resolution appointing the director must mention the reasons on the basis of which the capacity of independent director is
granted.
In the absence of guidance in the law or case law, the board of directors has not further quanti?ed or speci?ed the aforementioned
criteria set out in article 526ter of the Belgian Companies Code. Furthermore, in considering a director’s independence, the criteria
set out in the Belgian Code on Corporate Governance will also be taken into consideration. The board of directors is of the view
that the current independent directors comply with each of the relevant criteria of the Belgian Companies Code and Belgian Code
on Corporate Governance. The board of directors will disclose in its annual report which directors it considers to be independent
directors. An independent director who ceases to satisfy the requirements of independence must immediately inform the board of
directors.
According to the Company’s board of directors, De Wilde J. Management BVBA, represented by Julien De Wilde, Karel Vinck, Ray
Stewart, Oyvind Hushovd and Carole Cable are independent directors.
Performance review of the board, its committees and its members
The board evaluates its own size, composition, performance and interaction with executive management and that of its committees
on a continuous basis.
The evaluation assess how the board and its committees operate, check that important issues are effectively prepared and
discussed, evaluate each director’s contribution and constructive involvement, and assess the present composition of the board and
its committees against the desired composition. This evaluation takes into account their general role as director, and speci?c roles
as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment.
Non-executive directors assess their interaction with the executive management on a continuous basis.
Executive management
The Company’s executive management is composed of the Chief Executive Of?cer and the members of the management committee,
as detailed above in “—Board of directors and management committee—Management committee”.
Chief Executive Of?cer
The CEO leads and chairs the management committee and is accountable to the board of directors for the management
committee’s performance.
The role of the Chief Executive Of?cer is to implement the mission, strategy and targets set by the board of directors and to assume
responsibility for the day-to-day management of the Company. The Chief Executive Of?cer reports directly to the board of directors.
Management committee
The board of directors has delegated the day-to-day management of the Company as well as certain management and operational
powers to the Chief Executive Of?cer. The Chief Executive Of?cer is assisted by the management committee.
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CORPORATE GOVERNANCE STATEMENT
The management committee is composed of at least four members and includes the Chief Executive Of?cer. Its members are
appointed by the board of directors on the basis of a recommendation by the nomination and remuneration committee. The
Company’s management committee does not qualify as a “directiecomité”/”comité de direction” within the meaning of article 524bis
of the Belgian Companies Code. The management committee is responsible and accountable to the board of directors for the
discharge of its responsibilities.
The management committee is responsible for assisting the CEO in relation to:
• operating the Company;
• implementing the decisions taken by the board of directors;
• putting in place internal controls and risk management systems (without prejudice to the board of directors’, the audit
committee’s and the safety, health and environment committee’s monitoring roles) based on the framework approved by the
board of directors;
• presenting the board of directors the complete, timely, reliable and accurate preparation of the Company’s ?nancial statements,
in accordance with applicable accounting standards and policies;
• preparing the Company’s required disclosures of the ?nancial statements and other material, ?nancial and non-?nancial information;
• presenting the board of directors with a balanced and understandable assessment of the company’s ?nancial situation; and
• providing the board of directors in due time with all information necessary for the board of directors to carry out its duties.
Con?icts of interest
Directors are expected to arrange their personal and business affairs so as to avoid con?icts of interest with the Company. Any
director with a con?icting ?nancial interest (as contemplated by article 523 of the Belgian Companies Code) on any matter before
the board of directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part in any
deliberations or voting related thereto. Provision 1.4 of the corporate governance charter sets out the procedure for transactions
between Nyrstar and the directors which are not covered by the legal provisions on con?icts of interest. Provision 3.2.4 of the
corporate governance charter contains a similar procedure for transactions between Nyrstar and members of the management
committee (other than the Chief Executive Of?cer). The provisions of the Belgian Companies Code have been complied with
in relation to the changes to the performance criteria of the Long Term Incentive Plan effective 6 February 2013 to the extent
applicable to the CEO.
There are no outstanding loans granted by the Company to any of the persons mentioned in “—Board of directors and
management committee —Board of directors” and in “—Board of directors and management committee—Management committee”,
nor are there any guarantees provided by the Company for the bene?t of any of the persons mentioned in “—Board of directors
and management committee —Board of directors” and in “—Board of directors and management committee—Management
committee”.
None of the persons mentioned in “—Board of directors and management committee—Board of directors” and in “—Board
of directors and management committee —Management committee” has a family relationship with any other of the persons
mentioned in “—Board of directors and management committee— Board of directors” and in “—Board of directors and management
committee—Management committee”.
Dealing code
With a view to preventing market abuse (insider dealing and market manipulation), the board of directors has established a dealing
code. The dealing code describes the declaration and conduct obligations of directors, members of the management committee,
certain other employees and certain other persons with respect to transactions in shares or other ?nancial instruments of the
Company. The dealing code sets limits on carrying out transactions in shares of the Company and allows dealing by the above-
mentioned persons only during certain windows. The dealing code is attached to the Company’s corporate governance charter.
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CORPORATE GOVERNANCE STATEMENT
Disclosure policy
As a Belgian listed company and with a view to ensuring investors in shares of the Company have available all information
necessary to ensure the transparency, integrity and good functioning of the market, the board of directors has established an
information disclosure policy. The information disclosure policy is aimed at ensuring that inside information of which Company is
aware is immediately disclosed to the public. In addition, the information disclosure policy is aimed at ensuring information that is
disclosed is fair, precise and sincere, and will enable the holders of shares in Company and the public to assess the in?uence of the
information on Company’s position, business and results.
Internal Control and Risk Management
General
The Nyrstar board of directors is responsible for the assessment of the effectiveness of the Risk Management Framework and
internal controls. The Group takes a proactive approach to risk management. The board of directors is responsible for ensuring that
nature and extent of risks are identi?ed on a timely basis with alignment to the Group’s strategic objectives and activities.
The audit committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important
medium for bringing risks to the board’s attention. If a critical risk or issue is identi?ed by the board or management, it may be
appropriate for all directors to be a part of the relevant risk management process, and as such the board of directors will convene
a sub-committee comprised of a mix of board members and senior management. Each respective sub-committee further examines
issues identi?ed and reports back to the board of directors.
The Nyrstar Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group’s
risks are being adequately managed. The Risk Management framework is designed to achieving the Group’s objectives. Nyrstar
acknowledges that risk is not just about losses and harm. Risk can have positive consequence too. Effective risk management
enables Nyrstar to achieve an appropriate balance between realising opportunities while minimising adverse impacts.
This section gives an overview of the main features of the Company’s internal control and risk management systems, in accordance
with the Belgian Corporate Governance Code and the Belgian Companies Code.
Components of the Risk Management Framework
The Risk Management Framework is integrated in the management process and focuses on the following key principles.
The key elements of Risk Management Framework are:
1 UNDERSTANDING THE EXTERNAL AND INTERNAL ENVIRONMENT
Understanding the internal and external business environment and the effect this has on our business strategy and plans. This
informs Nyrstar’s overall tolerance to risk.
2 CONSISTENT METHODS FOR RISK IDENTIFICATION AND ANALYSIS OF RISKS, EXISTING CONTROLS AND CONTROL EFFECTIVENESS
Implementing systems and processes for the consistent identi?cation and analysis of risks, existing controls and control
effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit
Committee.
3 RISK TREATMENT
Using innovative and creative thinking in responding to risks and taking action where it is determined that the Group is being
exposed to unacceptable levels of risk.
4 STAKEHOLDER ENGAGEMENT AND COMMUNICATION
Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identi?ed key risks and
controls.
5 MONITORING AND REVIEW
Regularly monitoring and reviewing our risk management framework, our risks and control effectiveness.
The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the
guidline is mandatory within Nyrstar.
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CORPORATE GOVERNANCE STATEMENT
Critical Internal Controls
The following is a summary of Nyrstar’s critical internal controls:
ORGANISATIONAL DESIGN
There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the
support and control functions, such as human resources, legal, ?nance, internal audit, etc.
The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with
industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets
approved by management and the board of directors within set authorization levels.
POLICIES AND PROCEDURES
The Group has established internal policies and procedures to manage various risks across the Group. These policies and
procedures are available on the Nyrstar intranet-site, and distributed for application across the whole Group. Every policy has an
owner, who periodically reviews and updates if necessary.
ETHICS
The board of directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for
ethical decision making. All employees must perform their daily activities and their business objectives according the strictest
ethical standards and principles. The Code of Business Conduct is available on www.nyrstar.com and sets out principles how to
conduct business and behave in respect of:
• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets
The board of directors regularly monitors compliance with applicable policies and procedures of the Nyrstar Group.
WHISTLEBLOWING
Nyrstar also has a whistleblower procedure in place, allowing staff to con?dentially raise concerns about any irregularities in
?nancial reporting, possible fraudulent actions, bribery and other areas.
QUALITY CONTROL
Nyrstar is ISO 9001 certi?ed for the smelting and re?ning of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-
products. All of its major processes and the controls that they encompass are formalized and published on the Company’s intranet.
FINANCIAL REPORTING AND BUDGET CONTROL
Nyrstar applies a comprehensive Group standard for ?nancial reporting. The standard is in accordance with applicable
International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related
interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as
adopted by the European Union. The effectiveness and compliance with the Group standard for ?nancial reporting is consistently
reviewed and monitored by the audit committee.
In order to ensure adequate ?nancial planning and follow up, a ?nancial budgeting procedure describing the planning,
quanti?cation, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts
Group wide budgeting process, which is centrally coordinated and consists of the following steps:
1) Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic
guidelines and objectives for the upcoming ?nancial year.
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CORPORATE GOVERNANCE STATEMENT
2) Key inputs and assumptions for the budgeting process for the upcoming ?nancial year are provided by relevant internal
stakeholders (including expected production, capex, metal prices, foreign exchange and commercial terms) and uploaded into
the centralised budgeting, planning and consolidation system (BPC).
3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal
stakeholders and senior management. The management committee and the board sign off on the ?nal agreed budget.
4) The ?nal budget is communicated to the different Nyrstar business units and departments.
5) Nyrstar will then bi-annually communicate to shareholders the Group’s revenue and cost actual results.
MANAGEMENT COMMITTEES
Various management committees are established as a control to manage various risks Nyrstar is exposed to:
TREASURY COMMITTEE
The treasury committee comprises of the Chief Financial Of?cer, the Group Treasurer and the Group Controller. The role of the
treasury committee is to recommend to the CEO and to the board of directors amendments to the treasury policy. This considers all
treasury transactions being reviewed before they are recommended to the CEO for review and approval by the board of directors.
Explicitly this includes preparations for the following CEO and board of directors approvals:
- to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
- to periodically review treasury operations and activities, approve the use of new ?nancial instrument types and techniques for
managing ?nancial exposures;
- to approve the list of authorized counterparties for foreign exchange and money market transactions;
- to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard
business conditions; and
- to approve the list of bank relationships.
The treasury committee meets at least quarterly.
COMMODITY RISK MANAGEMENT COMMITTEE
Nyrstar’s commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the
commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income
statement from metal price changes and foreign exchange movements.
Information, communication and ?nancial reporting systems
The Group’s performance against plan is monitored internally and relevant action is taken throughout the year. This includes,
weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.
Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an
executive summary from the Chief Financial Of?cer are prepared and circulated to the board of directors by the Company Secretary
on a monthly basis.
Monitoring and review
Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of
risk being accepted is consistent with the level of risk approved by the board of directors. Management takes action where it
is determined that the Group is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to
communicate freely risks and opportunities identi?ed.
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CORPORATE GOVERNANCE STATEMENT
Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework
and internal controls. The internal audits are based on risk based plans, approved by the audit committee. The internal audit
?ndings are presented to the audit committee and management, identifying areas of improvement. Progress of implementation of
the actions is monitored by the audit committee on a regular basis. The Group internal audit function is managed internally. The
audit committee supervises the internal audit function.
The board of directors pays speci?c attention to the oversight of risk and internal controls. On a yearly basis, the board of directors
reviews the effectiveness of the Group’s risk management and internal controls. The audit committee assists the board of directors
in this assessment. The audit committee also reviews the declarations relating to internal supervision and risk management
included in the annual report of the Company. The audit committee reviews the speci?c arrangements to enable staff to express
concerns in con?dence about any irregularities in ?nancial reporting and other areas e.g., whistleblower arrangements.
To support the protocols described above, both internal resources and external contractors are engaged to perform compliance
checks, and reports are provided to the audit committee.
Other
The Group is committed to the ongoing review and improvement of its policies, systems and processes.
Shareholders
The Company has a wide shareholder base, mainly composed of institutional investors outside of Belgium, but also comprising
Belgian retail and institutional investors.
The table below provides an overview of the shareholders that ?led a noti?cation with the Company pursuant to applicable
transparency disclosure rules, up to the date of this report. In addition, the Company holds a number of shares as treasury stock.
Shareholder’s name Shareholder’s address Date of noti?cation Number of voting rights Shareholding
Nyrstar NV Zinkstraat 1, 2490 Balen, Belgium 15 January 2014 15,338,431 9.02%
Umicore NV Broekstraat 31, 1000 Brussels, Belgium 23 March 2011 5,251,856 3.09%
20,590,287 12.11%
Share capital and shares
On the date of this report, the share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented
by 170,022,544 shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s
shares do not have a nominal value.
The Company issued a 7% senior unsecured convertible bonds due 2014 (the “2014 Convertible Bonds”) for an aggregate principal
amount of EUR 120,000,000 on 2 July 2009. The possibility to convert the 2014 Convertible Bonds into new shares of the Company
was approved by the extraordinary general shareholders’ meeting of the Company held on 25 August 2009. In 2011 an aggregate
principal amount of EUR 100,000 of the 2014 Convertible Bonds have been converted.
The Company also issued a 4.25% senior unsecured convertible bonds due 2018 (the “2018 Convertible Bonds”) for an aggregate
principal amount of EUR 120,000,000 on 17 September 2013. The possibility to convert the 2018 Convertible Bonds into new
shares of the Company was approved by the extraordinary general shareholders’ meeting of the Company held on 23 December
2013. To date no 2018 Convertible Bonds have been converted.
As of the date of this report, the Company owns 15,338,431 of its own shares. These shares are held as treasury stock, with
suspended dividend rights, for potential delivery to eligible employees to satisfy the Company’s outstanding obligations under
share based incentive plans for personnel and management under the LTIP and the LESOP.
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Form and transferability of the shares
The shares of the Company can take the form of registered shares or dematerialized shares. All the Company’s shares are fully paid-
up and freely transferable.
Currency
The Company’s shares do not have a nominal value, but re?ect the same fraction of the Company’s share capital, which is
denominated in euro.
Voting rights attached to the shares
Each shareholder of the Company is entitled to one vote per share. Shareholders may vote by proxy, subject to the rules described
in the Company’s articles of association.
Voting rights can be mainly suspended in relation to shares:
• which are not fully paid up, notwithstanding the request thereto of the board of directors of the Company;
• to which more than one person is entitled, except in the event a single representative is appointed for the exercise of the voting
right;
• which entitle their holder to voting rights above the threshold of 3%, 5%, 7.5%, 10%, 15%, 20% and any further multiple of 5% of
the total number of voting rights attached to the outstanding ?nancial instruments of the Company on the date of the relevant
shareholders’ meeting, in the event that the relevant shareholder has not noti?ed the Company and the FSMA at least 20 days
prior to the date of the shareholders’ meeting in accordance with the applicable rules on disclosure of major shareholdings; and
• of which the voting right was suspended by a competent court or the FSMA.
Pursuant to the Belgian Companies Code, the voting rights attached to shares owned by the Company are suspended.
Dividends and Dividend Policy
All shares are entitled to an equal right to participate in the Company’s pro?ts (if any). Pursuant to the Belgian Companies
Code, the shareholders can in principle decide on the distribution of pro?ts with a simple majority vote at the occasion of the
annual shareholders’ meeting, based on the most recent statutory audited ?nancial statements, prepared in accordance with the
generally accepted accounting principles in Belgium and based on a (non-binding) proposal of the Company’s board of directors.
The Company’s articles of association also authorise the board of directors to declare interim dividends subject to the terms and
conditions of the Belgian Companies Code.
Dividends can only be distributed if following the declaration and issuance of the dividends the amount of the Company’s net
assets on the date of the closing of the last ?nancial year as follows from the statutory ?nancial statements (i.e., summarized, the
amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all as summarized in accordance with
Belgian accounting rules), decreased with the non-amortized costs of incorporation and extension and the non-amortized costs for
research and development, does not fall below the amount of the paid-up capital (or, if higher, the issued capital), increased with
the amount of non-distributable reserves. In addition, prior to distributing dividends, 5% of the net pro?ts must be allotted to a
legal reserve, until the legal reserve amounts to 10% of the Company’s share capital.
The Company’s ability to distribute dividends is subject to availability of suf?cient distributable pro?ts as de?ned under Belgian law
on the basis of the Company’s statutory unconsolidated ?nancial statements rather than its consolidated ?nancial statements.
The Board of Directors have taken the prudent decision not to propose to shareholders a distribution for the ?nancial year 2013.
This re?ects the Board’s commitment to maintain a sustainable capital structure.
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CORPORATE GOVERNANCE STATEMENT
Information that have an impact in case of public takeover bids
The Company provides the following information in accordance with article 34 of the Royal Decree dated 14 November 2007:
(i) The share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented by 170,022,544
shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s shares do
not have a nominal value.
(ii) Other than the applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of
association, there are no restrictions on the transfer of shares.
(iii) There are no holders of any shares with special control rights.
(iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan, the Co-Investment Plan and the Leveraged
Employee Stock Ownership Plan will vest upon determination by the nomination and remuneration committee.
(v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the Company’s
articles of association and the applicable laws and articles.
(vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the
transfer of securities and/or the exercise of voting rights.
(vii) The rules governing appointment and replacement of board members and amendment to articles of association are set out
in the Company’s articles of association and the Company’s corporate governance charter.
(viii) The powers of the board of directors, more speci?cally with regard to the power to issue or redeem shares are set out in the
Company’s articles of association. The board of directors was not granted the authorization to purchase its own shares “to
avoid imminent and serious danger to the Company” (i.e., to defend against public takeover bids). The Company’s articles of
association of association do not provide for any other speci?c protective mechanisms against public takeover bids.
(ix) The Company is a party to the following signi?cant agreements which, upon a change of control of the Company or
following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be
terminated by the other parties thereto or give the other parties thereto (or bene?cial holders with respect to bonds) a right
to an accelerated repayment of outstanding debt obligations of the Company under such agreements:
• Nyrstar’s Revolving Structured Commodity Trade Finance Credit Facility;
• 7% senior unsecured convertible bonds due 2014;
• 5.5% senior unsecured ?xed rate non-convertible bonds due 2015;
• 5.3% senior unsecured ?xed rate non-convertible bonds due 2016;
• 4.25% senior unsecured convertible bonds due 2018;
• Nyrstar’s committed EUR 50 million bilateral credit facility with ING Bank;
• Nyrstar’s committed EUR 100 million bilateral credit facility with KBC Bank;
• Nyrstar’s silver prepay with Merrill Lynch International;
• Nyrstar’s silver prepay with JPMorgan Chase Bank;
• Nyrstar’s off-take agreement with the Glencore Group; and
• Nyrstar’s streaming agreement with Talvivaara Sotkamo Limited.
(x) The Chief Executive Of?cer is currently entitled to a 12-month salary payment in case his employment is terminated upon a
change of control of the Company.
No takeover bid has been instigated by third parties in respect of the Company’s equity during the previous ?nancial year and the
current ?nancial year.
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CORPORATE GOVERNANCE STATEMENT
Annual General Meeting – 30 April 2014
The Annual General Meeting of Shareholders will take place in Brussels (Diamond Building, A. Reyerslaan 80, 1030 Brussels) on
the last Wednesday of April, i.e. 30 April 2014 at 10.30 am. At this meeting shareholders will be asked to approve the following
resolutions:
1. Reports on the statutory ?nancial statements
2. Approval of the statutory ?nancial statements
3. Reports on the consolidated ?nancial statements
4. Consolidated ?nancial statements
5. Discharge from liability of the directors
6. Discharge from liability of the statutory auditor
7. Approval of the remuneration report
8. Re-appointment of directors
9. Approval of a Leveraged Employee Stock Ownership Plan (LESOP)
Extraordinary General Meetings
On 30 April 2014, the Annual General Meeting may be shortly suspended in order to be continued as an Extraordinary General
Meeting before a Notary Public. If at such meeting the quorum for the Extraordinary General Meeting is not reached, a second
Extraordinary General Meeting may be convened on 19 May 2014 at 11 am at Diamond Building, A. Reyerslaan 80, 1030 Brussels,
or at such other place as will be indicated at that place at that time.
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CORPORATE GOVERNANCE STATEMENT
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Introduction
The Company prepares a remuneration report relating to the remuneration of directors and the members of the management
committee. The remuneration report will be submitted to the annual general shareholders’ meeting on 30 April 2014 for approval.
Remuneration policy
Nyrstar’s remuneration policy is designed to:
• enable Nyrstar to attract and retain talented employees;
• promote continuous improvement in the business; and
• link remuneration and performance, motivating employees to deliver increased shareholder value through superior business
results.
Nyrstar obtains independent advice from external professionals to ensure the remuneration structure represents industry best
practice, and achieves the twin goals of retaining talented employees and meeting shareholder expectations.
The remuneration policy that has been determined in relation to the directors and members of the management committee is
further described below.
Directors
General
Upon recommendation and proposal of the nomination and remuneration committee, the board of directors determines the
remuneration of the directors to be proposed to the general shareholders’ meeting.
The proposed remuneration that the board submits to the general shareholders’ meeting is in principle benchmarked against
the remuneration of similar positions in companies included in the Bel20
®
Index. The Bel20
®
Index is an index composed of the
20 companies with the highest free ?oat market capitalization having shares trading on the continuous trading segment of the
regulated market of NYSE Euronext Brussels. The remuneration is set to attract, retain and motivate directors who have the pro?le
determined by the nomination and remuneration committee.
The general shareholders’ meeting approves the remuneration of the directors, including inter alia, each time as relevant, (i) in
relation to the remuneration of executive and Non-Executive Directors, the approval of an exemption from the rule that share
based awards can only vest during a period of at least three years as of the grant of the awards, (ii) in relation to the remuneration
of executive directors, the approval of an exemption from the rule that (unless the variable remuneration is less than a quarter of
the annual remuneration) at least one quarter of the variable remuneration must be based on performance criteria that have been
determined in advance and that can be measured objectively over a period of at least two years and that at least another quarter
of the variable remuneration must be based on performance criteria that have been determined in advance and that can be
measured objectively over a period of at least three years, and (iii) in relation to the remuneration of Non-Executive Directors, the
approval of any variable part of the remuneration.
The directors of the Company (excluding the Chief Executive Of?cer) receive a ?xed remuneration in consideration for their
membership of the board of directors. In addition, the directors (excluding the Chairman of the board of directors and the Chief
Executive Of?cer) receive ?xed fees for their membership and/or chairmanship of any board committees. No attendance fees are
paid. The Chief Executive Of?cer is also a member of the board but does not receive any additional remuneration in his capacity of
board member.
Non-executive directors do not receive any performance-related remuneration, stock options or other share based remuneration,
or pension bene?ts. The remuneration of Non-Executive Directors takes into account their general role as director, and speci?c
roles as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment.
REMUNERATION REPORT
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REMUNERATION REPORT
The current remuneration and compensation of Non-Executive Directors has not been increased since 2007.There are currently no
plans to change the remuneration policy or remuneration of Non-Executive Directors, however we will review the remuneration of
Non-Executive Directors over the next two ?nancial years against market practice.
Remuneration and compensation in 2013
During 2013 the following remuneration and compensation was paid to the directors (excluding the CEO):
CHAIRMAN:
• Annual ?xed remuneration of EUR 200,000 per year
• No additional attendance fees
OTHER DIRECTORS (EXCLUDING THE CEO):
• Annual ?xed remuneration of EUR 50,000 per year for membership of the board of directors
• Fixed fee of EUR 10,000 per year per board committee of which they are a member
• Fixed fee of EUR 20,000 per year per board committee of which they are the chairman
• No additional attendance fees
Based on the foregoing, the following gross remuneration was paid to the directors (excluding the CEO) in 2013:
Remuneration (EUR)
Julien De Wilde
(1)
200,000
Peter Mansell
(2)
26,666
Karel Vinck 80,000
Ray Stewart 80,000
Oyvind Hushovd 75,000
(1)
ACTING THROUGH DE WILDE J. MANAGEMENT BVBA
(2)
MANDATE EXPIRED ON 24 APRIL 2013
Executive management
General
The remuneration of the Chief Executive Of?cer and the members of the management committee is based on recommendations
made by the nomination and remuneration committee. The CEO participates in the meetings of the nomination and remuneration
committee in an advisory capacity each time the remuneration of another executive is being discussed.
The remuneration is determined by the board of directors. As an exception to the foregoing rule, the general shareholders’ meeting
must approve, as relevant, (i) in relation to the remuneration of management committee, the approval of an exemption from the
rule that share based awards can only vest during a period of at least three years as of the grant of the awards, (ii) in relation to
the remuneration of executive directors and members of the management committee, the approval of an exemption from the
rule that (unless the variable remuneration is less than a quarter of the annual remuneration) at least one quarter of the variable
remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively
over a period of at least two years and that at least another quarter of the variable remuneration must be based on performance
criteria that have been determined in advance and that can be measured objectively over a period of at least three years, and
(iii) the approval of provisions of service agreements to be entered into with executive directors, members of the management
committee and other executives providing (as the case may be) for severance payments exceeding twelve months’ remuneration
(or, subject to a motivated opinion by the remuneration committee, eighteen months’ remuneration).
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REMUNERATION REPORT
An appropriate portion of the remuneration is linked to corporate and individual performance. The remuneration is set to attract,
retain and motivate executive management who have the pro?le determined by the nomination and remuneration committee.
The remuneration of the executive management consists of the following main remuneration components:
• Annual base salary (?xed)
• Participation in the Annual Incentive Plan (AIP) (bonus) (variable)
• Participation in the Executive Long Term Incentive Plan (LTIP) (variable)
• Participation in the Leveraged Employee Share Ownership Plan (LESOP)
• Pension bene?ts
For performance year 2013, the target entitlement under the AIP amounts to 75% of the annual base salary for the Chief Executive
Of?cer (150% of the annual base salary at maximum entitlement). For performance year 2013 the target entitlement under the AIP
amounts to 60% for the other members of the management committee (120% of the annual base salary at maximum entitlement).
One third of the maximum AIP entitlement for the Nyrstar Management Committee will be delivered in shares that are deferred for
12 months. The pension bene?ts of each management committee member continue to amount to 20% of ?xed remuneration.
In addition to the foregoing, the board of directors has the discretion to grant spot bonuses to staff members, including members
of the management committee, in exceptional circumstances. In 2013 no spot bonuses were granted.
The remuneration package for the members of the management committee is not subject to a speci?c right of recovery or claw
back in favour of Nyrstar in case variable remuneration has been granted based on incorrect ?nancial data.
In line with our approach to remuneration setting, the base salary and overall remuneration packages for Nyrstar management
committee members are reviewed approximately every 2 years. The last review occurred in 2011.
While there are currently no plans to change the remuneration policy for executives for the two ?nancial years to come, executive
remuneration was independently reviewed by two independent external advisors in December 2013 with any change not
applicable until 2014.
The respective elements of the remuneration package are further described below.
Annual base salary
The annual base salary constitutes a ?xed remuneration. The base salary is determined on the basis of a survey by an external
expert of market trends and base salaries for various job descriptions paid by a group of peer companies of Nyrstar in several
countries. On the basis of this survey, a number of grades are determined. The midpoint for each grade is the 75% percentile: 75%
of the companies within the peer group pay less than the mid point, and 25% of the companies within the peer group pay more.
Nyrstar’s policy is to pay senior staff members at 100% of the midpoint for their grade, subject to continued above average
performance. However, there is discretion to set the ?xed remuneration between 80% and 120% of the midpoint, based on
experience, job, location, industry demand, unique technical skills, performance, etc.
Annual Incentive Plan
The annual incentive is a variable part of the remuneration in function of individual performance below, at or above average
standard during a given year. The terms and conditions are re?ected in the Annual Incentive Plan (AIP), which is subject to revision
on an annual basis.
The aims of the AIP are to attract and retain talented employees, to make a connection between performance and reward, to
reward achievement in line with Nyrstar’s ?nancial success, to reward employees for adhering to the Nyrstar Way, and to reward
employees in a similar manner to the Company’s shareholders.
The AIP is designed around delivering and exceeding the Nyrstar annual plan and budget. The relevant performance year for
eligibility under the AIP is 1 January to 31 December, and payments, if any, are usually made in March of the following year.
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REMUNERATION REPORT
In order to be eligible under the AIP, the bene?ciary must be employed on 31 December of the relevant performance year. The
respective criteria and their relative weight to determine eligibility under the AIP are:
• the achievement by the bene?ciary of personal “stretch targets”, which aim at achieving a performance by the bene?ciary over
and above the normal requirement of his or her function (25%);
• the achievement by Nyrstar of annual ?nancial targets, which are determined by the board of directors (75%).
The maximum incentive under the AIP only becomes available if Nyrstar has an outstanding ?nancial and operational result. In any
event, the payment of the annual incentive is subject to overall acceptable personal behavior, demonstrated commitment to the
Nyrstar Way and personal job performance, as well as the company’s ability to pay.
The eligibility under the AIP is assessed and determined by the nomination and remuneration committee, and any payment of the
annual incentive is subject to ?nal board approval.
For further information on the AIP and other share plans, please see “Description of share plans”.
Pensions
The members of the management committee participate in a de?ned bene?ts pension scheme. The contributions by Nyrstar to the
pension scheme amount to 20% of the annual base salary.
Other
The management committee members participate in a medical bene?t plan that includes amongst other things private hospital and
dental medical care. They also receive a representation allowance, housing assistance, a car allowance, and bene?t from statutory
accident and disease insurance.
Remuneration and compensation in 2013
The following remuneration and compensation was paid to the Chief Executive Of?cer and other members of the management
committee in 2013:
CEO (EUR)
Members of the management
committee other than the CEO
(on an aggregate basis) (EUR)
(4)
Base salary 853,410 2,090,959
AIP
(1)
597,387 996,064
Pension bene?ts
(2)
164,634 485,418
Other components of the remuneration
(3)
372,150 1,631,177
Total 1,987,581 5,203,618
(1) THIS AMOUNT RELATES TO PERFORMANCE PERIOD FROM 1 JANUARY 2012 TO 31 DECEMBER 2012.
(2) THE PENSION INCLUDES 20% OF ANNUAL BASE SALARY AS SAVINGS CONTRIBUTIONS AND ALSO RISKS CONTRIBUTIONS.
(3) INCLUDES REPRESENTATION ALLOWANCE, HOUSING, CAR ALLOWANCE, HEALTH INSURANCE AND A ONE OFF SEVERANCE PAYMENT MADE IN 2013.
(4) INCLUDES 2 ADDITIONAL NMC MEMBERS THAT JOINED 1 JULY 2013 – SVP MINING AND SVP MARKETING, SOURCING AND SALES
Payments upon termination
In 2013 each member of the management committee (including the Chief Executive Of?cer) was entitled to a severance payment
equivalent to twelve months of annual base salary in case of termination of his agreement by Nyrstar. In addition, the agreement
with the Chief Executive Of?cer provides that upon a change of control, his agreement with Nyrstar will be terminated. In that
event, the Chief Executive Of?cer is entitled to a severance payment equivalent to twelve months of annual base salary (inclusive
of any contractual notice period).
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REMUNERATION REPORT
Indemni?cation and insurance of directors and executive management
As permitted by the Company’s articles of association, the Company has entered into indemni?cation arrangements with the
directors and relevant members of the management committee and has implemented directors’ and of?cers’ insurance coverage.
Description of share plans
In 2013 the Company had a Long Term Incentive Plan (LTIP), a Leveraged Employee Stock Ownership Plan (LESOP) and a Co-
Investment Plan with a view to attracting, retaining and motivating the employees and executive management of the Company
and its wholly owned subsidiaries.
The Co-Investment Plan vested in July 2013 without meeting any of the performance conditions. As such, no awards were made
to participants. It is currently not anticipated to implement another Co-Investment Plan. The key terms of the LTIP, LESOP and Co-
Investment Plan (together referred to as the “Plans”) are described below. For further information on the manner in which awards
under the Plans are treated in Nyrstar’s consolidated ?nancial statements, refer to note 33 to the audited consolidated ?nancial
statements for the ?nancial year ended on 31 December 2013.
LTIP
General
Under the LTIP, senior executives of Nyrstar (the “Executives”) selected by the board of directors may be granted conditional awards
to receive ordinary shares in the Company at a future date (“Executive Share Awards”) or their equivalent in cash (“Executive
Phantom Awards”) (Executive Share Awards and Executive Phantom Awards together referred to as “Executive Awards”).
The terms of the LTIP may vary from country to country to take into account local tax and other regulations and requirements in
the jurisdictions where eligible Executives are employed or resident.
The nomination and remuneration committee makes recommendations to the board of directors in relation to the operation and
administration of the LTIP.
Eligibility
The board of directors determines which Executives are eligible to participate in the LTIP (the “Participating Executives”).
The value of the conditional Executive Awards under the LTIP varies, depending on the role, responsibility and seniority of the
relevant Participating Executive. The maximum value of the conditional Executive Awards granted to any Participating Executive in
any ?nancial year of the Company will not exceed 150% of his or her base salary at the time of the grant.
Vesting
Executive Awards will vest over a three-year rolling performance period.
In the event of cessation of employment before the normal vesting due to certain “good leaver reasons”, the board of directors
may determine that a number of Executive Awards will vest, taking into account such factors as the board of directors determines,
including the proportion of the performance period which has elapsed and the extent that performance conditions have been
satis?ed up to the date of leaving.
The board of directors determines the LTIP performance conditions. The board of directors has set two performance conditions,
which are weighted equally at 50%. For an award to vest, Nyrstar’s annual share price performance is measured relative to the
implied change in a notional share price that is based upon the historical performance of the price of zinc (?rst performance
condition) and the MSCI World Metals and Mining Index (second performance condition). An equal number of awards is granted
under each condition. Executive Awards are made to the extent that predetermined scaling thresholds for each of the performance
conditions are met.
For the Awards to vest under the 2013 Grant, the Nyrstar average share price for the 3 year performance period must outperform:
• The zinc price by 5% based on a linear regression analysis
• The MSCI world mining and metals index by 2% based on a linear regression analysis
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REMUNERATION REPORT
A volume weighted average out-performance is calculated for each year. These are averaged over the performance period and
compared to the vesting schedule.
The LTIP rules provide for various circumstances in which unvested Executive Awards lapse, including failure to satisfy performance
conditions.
Awards
Since April 2008, Grants have been made annually in accordance with the rules and conditions of the LTIP. Grants in place during
2013 are shown below:
Grant 3 Grant 4 Grant 5 Grant 6
Grant 3 share awards
were delivered in the
course of 2013
Effective grant date 30 June 2010 30 June 2011 30 June 2012 30 June 2013
Performance period 1 January 2010
to 31 December 2012
1 January 2011
to 31 December 2013
1 January 2012
to 31 December 2014
1 January 2013
to 31 December 2015
Performance criteria —zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2012
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2013
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2014
—zinc price 50%
—MSCI 50%
Executive remains in
service to
31 December 2015
Vesting date 31 December 2012 31 December 2013 31 December 2014 31 December 2015
During the period between the satisfaction of the performance condition and when the Participating Employee receives the
relevant payment, the employee will be entitled to a payment equal to the cash equivalent of any dividends paid.
Movement of LTIP shares awarded
The following table sets out the movement in the number of equity instruments granted during the speci?ed periods in relation to
the LTIP:
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
Opening balance
at 1 January 2013 88,871 770,960 1,053,901 2,104,239 – 4,017,971
Initial allocation
at 30 June 2013 – – – 2,270,961 2,270,961
(Forfeitures)/Additions (383,572) (33,971) (200,966) (159,615) (778,124)
Settlements 88,871 (387,388) – – – (476,259)
Closing balance
at 31 December 2013 - - 1,019,930 1,903,273 2,111,346 5,034,549
Grant 2 Grant 3 Grant 4 Grant 5 Total
Opening balance at 1 January 2012 2,764,817 823,243 1,196,168 – 4,784,228
Initial allocation at 30 June 2012 – – – 2,261,628 2,261,628
(Forfeitures)/Additions (52,283) (142,267) (157,389) (351,939)
Settlements 2,675,946 – – – (2,675,946)
Closing balance at 31 December 2012 88,871 770,960 1,053,901 2,104,239 4,017,971
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REMUNERATION REPORT
Co-Investment Plan
General
The annual general shareholders’ meeting of the Company held on 28 April 2010 approved the Co-Investment Plan. Under the
Co-Investment Plan, for each ordinary Share in the Company that a member of the management committee (including the Chief
Executive Of?cer) (the “Participant”) purchased between 30 April 2010 and 28 June 2010 (a “Co-investment Share”), the Company
would grant (for no consideration) the respective Participant on the Vesting Date, a number of additional ordinary shares in
the Company (the “Matching Shares”) provided that (a) the Participant would still be employed by Nyrstar (unless the board of
directors quali?es his departure prior to such date as a “good leaver situation” (ill health resulting in the incapacity to perform
professional activities for a period of more than twelve months, voluntary resignation, retirement or any similar event which
the Nomination and Remuneration Committee may qualify as being a “good leaver situation” on the Vesting Date) and (b) the
Participant would still holds the Co-investment Shares on the Vesting Date.
Eligibility
The persons eligible to participate in the Co-Investment Plan were the members of the management committee (including the Chief
Executive Of?cer) and the Group General Managers.
Vesting
The vesting date of the Co-investment Plan was 15 July 2013.
These were the main features of the Co-investment Plan, as described in the Nyrstar’s annual report 2012:
The Co-Investment Plan has three measurement dates, i.e. 1 July 2011 (“Measurement Date 1”), 1 July 2012 (“Measurement
Date 2”) and 1 July 2013 (“Measurement Date 3”).
The number of Matching Shares is the product of (a) the highest of Multiple A, Multiple B and Multiple C and (b) the total number
of the Co-Investment Shares which the respective Participant has continuously held as of 28 June 2010 up to and including the
vesting date.
The initial thresholds were adjusted to take into account the economic impact of the Company’s rights offering that closed in
March 2011. Reference is also made to note 33 to the audited consolidated ?nancial statements for the ?nancial year ended on 31
December 2012.
“Multiple A” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2010 and 1 July 2011 has been less than EUR 16.70;
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2010 and 1 July 2011 has been equal to or higher than EUR 25.06; or
• a number between two and four, to be determined on a straight line basis, if the highest average closing price of an ordinary
share of the Company during any given period of ?ve consecutive trading days between 1 July 2010 and 1 July 2011 has been
between EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with
the EUR 25.06 threshold.
“Multiple B” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2011 and 1 July 2012 has been less than EUR 16.70;
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REMUNERATION REPORT
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2011 and 1 July 2012 has been equal to or higher than EUR 25.06; or
• a number between two and four, to be determined on a straight line basis, if the highest average closing price of an ordinary
share of the Company during any given period of ?ve consecutive trading days between 1 July 2011 and 1 July 2012 has been
between EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with
the EUR 25.06 threshold.
“Multiple C” will be equal to:
• zero, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2012 and 1 July 2013 has been less than EUR 16.70,
• four, if the highest average closing price of an ordinary share of the Company during any given period of ?ve consecutive
trading days between 1 July 2012 and 1 July 2013 has been equal to or higher than EUR 25.06, or
• a number between two and four, to be determined on a straight line basis, if the average closing price of an ordinary share of
the Company during any given period of ?ve consecutive trading days between 1 July 2012 and 1 July 2013 has been between
EUR 16.70 and EUR 25.06, whereby factor two coincides with the EUR 16.70 threshold and factor four coincides with the EUR
25.06 threshold.
The Matching Shares will consist of ordinary shares of the Company which the Company intends to redeem in accordance with the
respective statutory powers granted to the board of directors. If the Company is unable to deliver the respective Matching Shares
to a Participant, the Company will be able to settle its respective obligations by granting such Participant a cash amount equal to
the product of the number of Matching Shares to be delivered to such Participant and the average closing price of the ordinary
shares of the Company during the twenty trading days preceding the vesting date.
The underlying philosophy of the vesting is to provide a long-term component to the remuneration package of the management
committee members, while at the same time aligning their interests with those of the Company and its shareholders, by requiring a
personal investment by the members of the management committee and at the same time linking this remuneration component to
the long-term evolution of price of the Company’s shares.
Awards
Subject to the vesting conditions, the number of Co-investment Shares of a Participant was capped as follows:
• with respect to the Chief Executive Of?cer, the maximum number of Co-investment Shares is equal to 50,000; and
• with respect to the each of the four current members of the management committee, the maximum number of Co-investment
Shares is equal to 35,000.
The members of the management committee purchased a total number of 190,000 shares as participation in the Co-Investment
Plan.
In line with the above general principles, the board of directors further determined and elaborated the rules of the Co-Investment
Plan. The board of directors also administers the Co-Investment Plan.
In the context of the Co-Investment Plan, in addition to this conditional right to receive shares, Nyrstar granted each Participant
an unconditional cash bonus, the net amount of which – to be calculated for each respective Participant separately – will be equal
to the product of (a) the number of Co-investment Shares of the Participant and (b) the difference between the average purchase
price paid by the Participant for his respective Co-investment Shares and EUR 10.00.
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REMUNERATION REPORT
Adjustments to the Plans
The annual general shareholders’ meeting of the Company held on 27 April 2011 granted the board of directors of the Company
the power to amend and restate the Co-Investment Plan in order to re?ect the consequences and amendments that may be
required in the context of certain corporate actions engaged by the Company. In the context of the Company’s rights offering that
closed in March 2011, the following amendments to the Co-Investment Plan were made:
• the shares of the Company subscribed by the Participants in the Co-Investment Plan in the Company’s rights offering that
closed in March 2011 on the basis of the preference rights of their existing Co-investment Shares are also considered as Co-
Investment Shares for purposes of the Co-Investment Plan. As a consequence, an additional 133,000 shares subscribed for by the
participants in the Co-Investment Plan are considered “Co-investment Shares” for purposes of the Co-Investment Plan;
• the list of Participants in the Co-Investment Plan can be extended beyond the Chief Executive Of?cer and the four other
members of the Company’s management committee to include other managers of the Company and its subsidiaries;
• the objective performance based targets (determined by the board of directors and relating to the stock exchange price of the
Shares of the Company during the term of the Co-Investment Plan) that need to be achieved in order for the Matching Shares
to vest can be adjusted in order to take into account the economic impact of the Company’s rights offering that closed in
March 2011. Reference is made to note 31 to the audited consolidated ?nancial statements for the ?nancial year ended on 31
December 2011; and
• the general vesting date under the Co-Investment Plan can be shorter than three years.
In addition, the annual general shareholders’ meeting of the Company held on 27 April 2011 approved and rati?ed, as far as
needed and applicable, in accordance with article 556 of the Belgian Company Code, any clauses or features included in the Plans
that (automatically or not) result in, or permit the board of directors (or a committee or certain members of the board of directors)
to approve or allow an accelerated or immediate vesting or acquisition of awards made under such Plans in the event of a public
takeover bid or change of control over the Company, and any other clause or feature which in accordance with article 556 of
the Belgian Company Code entail rights to third parties that have an impact on the Company’s equity or give rise to a liability or
obligation of the Company, whereby the exercise of such rights is dependent upon a public takeover bid on the Company’s shares
or a change of the control over the Company.
Vesting of the Plan
The Co-Investment Plan vested on 15 July 2013. None of the performance conditions were met. Accordingly, no awards were made
to any of the participants.
Leveraged Employee Stock Ownership Plan (LESOP)
In 2013, the Board submitted to the general shareholder`s meeting a proposal to provide a new remuneration component to
certain senior managers, including the management committee, called a LESOP. The LESOP would enable participants to purchase
shares of the Company at a discount of 20%, following which the shares would be subject to a holding period of three years. For
each share purchased by a participant with their personal contribution, a ?nancial institution would provide the participant with
additional ?nancing enabling them to purchase nine additional shares at such discount. The number of shares that a participant
could purchase with their personal contribution under the 2013 LESOP is capped. With respect to the members of the Nyrstar
Management Committee, the cap is set at 50,000 shares for each member. At the end of the holding period, the participant will be
required to transfer all shares purchased to the ?nancial institution and will receive in return a cash amount or a number of shares
of the Company, the value of which equals their personal contribution in the 2013 LESOP and a certain percentage of any increase
in value of the shares over the lifetime of the 2013 LESOP. The 2013 LESOP was approved by the general shareholder`s meeting in
April 2013. The ?rst stage of the 2013 LESOP was implemented in December 2013.
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REMUNERATION REPORT
In 2014, the Board of Directors considers providing a LESOP, with the same terms and conditions as the 2013 LESOP, on an
annually recurring basis. The Board of Directors intends to submit the recurring LESOP to the general shareholder`s meeting
of the Company in accordance with the requirements as set forth in the Belgian Company Code and the Company`s corporate
governance charter.
Directors’ and other interests
Shares and Share awards - LTIP
During 2013 the following share awards had been granted or delivered under the LTIP to the members of the management
committee:
LTIP
Name Title
Share Awards delivered in 2013
under the LTIP in which
the performance conditions
have been met
Share Awards granted in 2013
or in prior years under the LTIP
of which the performance
conditions have not been met
(1)
Roland Junck Chief Executive Of?cer 36,108 564,099
Greg McMillan
(2)
Chief Operating Of?cer 23,144 114,876
Heinz Eigner Chief Financial Of?cer 18,936 235,737
Russell Murphy Chief HR & SHE Of?cer 17,523 213,495
Michael Morley
SVP Metals Processing and
Chief Development Of?cer 16,751 213,495
Bob Katsiouleris
(3)
SVP Marketing, Sourcing
& Sales 154,289
Graham Buttenshaw
(4)
SVP Mining 6,779 168,131
Erling Sorensen
(5)
3,048
Notes:
(1) Vesting is subject to performance conditions.
(2) The employment of Greg McMillan ended 31 December 2013
(3) Bob Katsiouleris was employed by Nyrstar in January 2013 and joined the Nyrstar Management Committee in June 2013
(4) Graham Buttenshaw was employed by Nyrstar in March 2012 and joined the Nyrstar Management Committee in June 2013
(5) Erling Sorensen was in 2010 part of the management committee, and left as a “good leaver” under the rules of the LTIP. Share awards have been pro-rated based on
a departure date of 30 June 2010. Effective 31 December 2013, there are no further awards due
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REMUNERATION REPORT
Shares and Share awards – AIP
During 2013 the following share awards had been granted under the AIP to the members of the management committee:
AIP
Name Title
Share Awards delivered in 2013
under the AIP in which the vesting
conditions have been met
Share Awards granted in
in prior years under the AIP
of which the performance
conditions have been met but
shares not yet delivered
(1)
Roland Junck Chief Executive Of?cer 48,812
Greg McMillan
(2)
Chief Operating Of?cer 23,841
Heinz Eigner Chief Financial Of?cer 20,553
Russell Murphy Chief HR & SHE Of?cer 18,497
Michael Morley
SVP Metals Processing and
Chief Development Of?cer 18,497
Bob Katsiouleris
(3)
SVP Marketing, Sourcing
& Sales
Graham Buttenshaw
(4)
SVP Mining 7,955
Notes:
(1) Relates to the 2012 AIP deferred share component. Vesting is subject to the employee remaining employed until 31 December 2013. All NMC members have meet
the vesting condition. Shares to be delivered in March 2014.
(2) The employment of Greg McMillan ended 31 December 2013.
(3) Bob Katsiouleris was employed by Nyrstar in January 2013 and joined the Nyrstar Management Committee in June 2013 and as such did not participate in the 2012
AIP.
(4) Graham Buttenshaw was employed by Nyrstar in March 2012 and joined the Nyrstar Management Committee in June 2013.
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REMUNERATION REPORT
Shares and Share awards – LESOP
During 2013 the following share awards had been purchased by participants under the LESOP by members of the management
committee:
LESOP
Name Title 2013
Executive personal contribution
Additional shares provided by
external ?nancing arrangement
Roland Junck Chief Executive Of?cer 50,000 450,000
Heinz Eigner Chief Financial Of?cer 50,000 450,000
Russell Murphy Chief HR & SHE Of?cer 50,000 450,000
Michael Morley
SVP Metals Processing
and Chief Development Of?cer 50,000 450,000
Bob Katsiouleris SVP Marketing, Sourcing & Sales 50,000 450,000
The following number of shares were held by members of the management committee as at 31 December 2013:
Name Title Shares held
(1)
Roland Junck Chief Executive Of?cer 632,710
Heinz Eigner Chief Financial Of?cer 843,085
Russell Murphy Chief HR & SHE Of?cer 686,766
Michael Morley SVP Metals Processing and Chief Development Of?cer 755,346
Bob Katsiouleris SVP Marketing, Sourcing & Sales 500,000
Graham Buttenshaw SVP Mining
(1)
Includes the 450,000 shares obtained as part of and held under the 2013 LESOP.
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Pursuant to article 119 of the Company Code, the board of directors reports on the operations
of the Nyrstar Group with respect to the ?nancial year ended on 31 December 2013.
The information provided in this report is regulated information in accordance with article
36 of the Royal Decree of 14 November 2007.
A free copy of the annual report of the board of directors on the statutory accounts of
Nyrstar NV in accordance with article 96 of the Belgian Company Code can be requested at
the Company’s registered of?ce.
1. Comments to the ?nancial statements
Nyrstar’s consolidated ?nancial statements as at and for the year ended 31 December 2013 comprise Nyrstar NV (the “Company”)
and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in associates
and jointly controlled entities.
The consolidated ?nancial statements of Nyrstar were prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations
issued by the International Accounting Standards Board (IASB), the Standard Interpretations Committee (SIC) and the IFRS
Interpretations Committee (IFRIC), effective at the reporting date and adopted by the European Union. The consolidated ?nancial
statements have been prepared on a going concern basis.
The consolidated ?nancial statements are presented in Euros which is the Company’s functional and presentation currency. All
?nancial information has been rounded to the nearest hundred thousand.
Please refer to the relevant pages in this report for the consolidated ?nancial statements.
1.1 Overview of activities and ?nance overview
In 2013 the volume of zinc in concentrate produced at Nyrstar’s own mines (excluding deliveries under the Talvivaara zinc stream)
was approximately 271,000 tonnes, achieving the revised guidance of 265,000 to 280,000 tonnes and representing a 4% decline
compared to 2012. The decline in production was primarily due to a two month suspension of mining operations at the Campo
Morado mine.
Production of all other metals in the mining segment, with the exception of lead, was in line with revised guidance. The Metals
Processing segment produced approximately 1,088,000 tonnes of zinc metal in 2013. Production in H2 2013 was a new half yearly
record with approximately 569,000 tonnes, a 10% increase on H1 2013 (519,000 tonnes). Production in H1 2013 was impacted
by a number of planned maintenance shuts across the smelters, all of which were announced in Nyrstar’s Full Year 2012 results
release. Production was at the top end of the full year guidance for 2013 of 1 to 1.1 million tonnes of zinc metal.
Due to declines in the metal price and reduced production levels the Company delivered a result from operational activities before
exceptional items in 2013 of EUR (45.6) million (compared to EUR (5.5) million in 2012). The Group generated revenue for the
year 2013 amounting to EUR 2,823.5million, a decrease of 8% compared to 2012, and recorded a net loss after tax of EUR 195.4
million in 2013 (2012: net loss after tax of EUR 96.5 million).
REPORT OF THE
BOARD OF DIRECTORS
EX ARTICLE 119
COMPANY CODE
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Despite the Group’s continued focus on improving safety and health two Nyrstar employees were fatally injured in March and
September 2013 while working at the Campo Morado and Contonga mines respectively. The Lost Time Injury Rate (LTR) increased
by approximately 20% and the Recordable Injury Rate (RIR) remained relatively ?at. (LTR and RIR are 12 month rolling averages
of the number of lost time injuries and recordable injuries (respectively) per million hours worked, and include all employees and
contractors at all operations).
1.2 Non-?nancial key-performance indicators
Production
Financial year
2013
Financial year
2012
Mining production
Zinc in concentrate (‘000 tonnes) 285 312
Gold in concentrate (‘000 troy ounces) 75.2 94.6
Silver in concentrate (‘000 troy ounces) 4,746 5,517
Lead in concentrate (‘000 tonnes) 14.2 16.2
Copper in concentrate (‘000 tonnes) 12.9 13.0
Smelting production
Zinc metal (‘000 tonnes) 1,088 1,084
Lead metal (‘000 tonnes) 179 158
Sulphuric acid (‘000 tonnes, gross) 1,389 1,388
Silver (million troy ounces) 17.9 13.8
Gold (‘000 troy ounces) 66 56
Mining segment production was impacted by lower volumes delivered under the Talvivaara zinc streaming agreement and the
suspension of operations at the Campo Morado mine in H1 2013. Zinc in concentrate production of 285kt in 2013, was 9% lower
than in 2012, with own mine production (excluding deliveries under the Talvivaara zinc stream) down 4%, while lead (12%), copper
(1%), silver (14%) and gold (21%) were also down on 2012. Revised production guidance was achieved for all metals, except for
lead which was below guidance and lower than 2012 production largely owing to a production trade off at the Contonga mine
with lower lead being compensated by higher copper.
The smelting segment produced approximately 1,088,000 tonnes of zinc metal in 2013, at the top end of the stated guidance of
approximately 1.0 to 1.1 million tonnes. Production in H2 2013 was a new half yearly record with approximately 569,000 tonnes, a
10% increase on H1 2013 (519,000 tonnes).
Markets
Nyrstar’s earnings are highly sensitive to changes in the zinc price, and as the Mining segment’s production of other metals has
increased, the sensitivity to changes in the lead, copper and silver price has also increased. The average zinc price was 2% lower in
2013 compared to 2012, averaging USD 1,909/t in 2013 compared to USD 1,946/t in 2012, while the average copper, silver and
gold price declined by 8%, 24% and 15% respectively. Nyrstar’s earnings also remain materially sensitive to changes in the zinc
treatment charge. The 2013 zinc benchmark treatment charge settled above the 2012 terms, resulting in a benchmark TC of USD
212 per dry metric tonne (dmt) in 2013, a USD 21 increase on 2012, which had a positive impact on group EBITDA.
The Euro strengthened against the US Dollar by almost 4% although punctuated by brief periods of weakness when concerns
regarding European Sovereign debt emerged. Whilst this development has been negative from an EBITDA perspective this has had
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the effect of rebalancing Europe from excessive reliance on exports towards consumption-led growth which has led to a pick-up in
European industrial demand.
Safety, health and environment
Nyrstar’s Recordable Injury Rate (RIR) remained almost ?at at 9.0 compared to 8.2 in 2012, this con?rmed the signi?cant reduction
(37%) achieved in 2012. After a 50% reduction in 2012, the 2013 Lost Time Injury Rate (LTIR) increased by 20% to 3.4 compared to
2.5 in 2012.
Tragically, despite Nyrstar’s strong focus on safety, two Nyrstar employees were fatally injured in March and September 2013 while
working at the Campo Morado and Contonga mines respectively. Risk scenarios were conducted across all mines to prevent the
recurrence of similar situations.
In the Metals Processing sector, Auby operated without a lost time injury for an 18 month period. The performance variance across
the smelters reduced signi?cantly as a consequence of a strong health and safety network and exchange of practices between the
sites. The number of cases involving restricted works or lost time injuries (DART) was below 5 at 4.8 at the end of the year. As part
of our Assurance Program, a Corporate Health and Safety Audit was completed across the smelters. In the Mining sector, Myra Falls
won the Ryan Award, which recognizes Safety performance across British Columbia. A back to basics plan was initiated across all
mines with an objective of building the foundations of a strong Health & Safety management system and culture.
A total of 34 Recordable Environmental Incidents were reported in 2013, representing a signi?cant decrease relative to the 54
incidents recorded in 2012. The improved incident record is attributed to strengthened environmental regulatory compliance
processes and to the effectiveness of improvement actions implemented in response to events experienced in 2012.
1.3 Operating results, ?nancial position and cash ?ows
The Group recorded a net loss after tax of EUR 195.4 million for the year 2013. The Group generated revenue for the year 2013
amounting to EUR 2,823.5 million, a decrease of 8% compared to 2012 due primarily to lower commodity prices and lower
production in the Mining segment. Gross pro?t decreased by 8% to EUR 1,251.2 million in 2013 due to decreasing pro?tability in
the mining segment following reduced levels of production in H1 2013.
Compared to 2012, employee bene?ts expense reduced by 5% to EUR 391.3 million, energy expenses remained ?at at EUR 329.8
million. Approximately 40% of Metals Processing costs are denominated in Australian dollars, therefore the weakening of the AUD
against the Euro in 2013 had some positive impact on total Metals Processing cost performance in Euro terms and consequently
Group operating costs.
The 2013 result includes a net non-cash impairment charge of EUR 20.1 million (2012: EUR 18.2 million). This includes a non-cash
impairment charge of EUR 227.5 million and a non-cash impairment reversal of EUR 207.4 million both recognised based on a
detailed impairment assessment undertaken by the Group. EUR 118.2 million of the impairment charge relates to the impairment
of goodwill recognised on the previous acquisitions of mining assets. The impairment reversal relates to the impairment charges
recognised on the group’s Port Pirie and Balen smelting assets in 2008.
The Group recorded a net ?nancial expense of EUR 99.2 million in 2013, compared to EUR 93.4 million in 2012. This increase was
mainly in?uenced by higher interest charges on external debt ?nancing (EUR 67.4 million in 2013 compared to EUR 65.6 million
in 2012), a lower level of unwind of discount in provisions (EUR 11.0 million in 2013 compared to EUR 15.7 million in 2012),
increased other ?nance charges (EUR 21.1 million in 2013 compared to EUR 12.4 million in 2012) and a net foreign exchange loss
in 2013 (EUR 0.6 million loss in 2013 compared to a EUR 0.9 million loss in 2012).
Nyrstar recognised an income tax expense of EUR 11.1 million in 2013 compared to a tax bene?t of EUR 14.8 million in 2012. The
effective tax rate was approximately (6)% in 2013 compared to 13% in 2012.
The Company capital expenditure in 2013 decreased by approximately 19% to EUR 199.4 million.
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1.4 Liquidity position and capital resources
In 2013 cash ?ows from operating activities generated an in?ow of EUR 298.9 million, which comprised a EUR 124.4 million cash
in?ow from operating activities before working capital changes.
Cash out?ows from investing activities in 2013 of EUR 191.1 million mainly relates to capital expenditure. Following successful
placement of senior, unsecured convertible bonds, due 2018 for a principal amount of EUR 120 million, cash in?ows from
?nancing activities in 2013 amounted to EUR 8.7 million, compared to an out?ow of EUR 133.4 million in 2012. As of 31
December 2013, the full amount of Nyrstar’s revolving structured commodity trade ?nance facility remained undrawn (also fully
undrawn as of 31 December 2012).
Net debt at 31 December 2013 was EUR 670 million (31 December 2012: EUR 681 million), with a gearing level of 43.5% at the
end of December 2013 compared to 37% at the end of December 2012.
2. Internal Control and Enterprise Risk Management
General
The Nyrstar board of directors is responsible for the assessment of the effectiveness of the Risk Management Framework and
internal controls. The Group takes a proactive approach to risk management. The board of directors is responsible for ensuring that
nature and extent of risks are identi?ed on a timely basis with alignment to the Group’s strategic objectives and activities.
The audit committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important
medium for bringing risks to the board’s attention. If a critical risk or issue is identi?ed by the board or management, it may be
appropriate for all directors to be a part of the relevant risk management process, and as such the board of directors will convene
a sub-committee comprised of a mix of board members and senior management. Each respective sub-committee further examines
issues identi?ed and reports back to the board of directors.
The Nyrstar Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group’s
risks are being adequately managed. The Risk Management framework is designed to achieving the Group’s objectives. Nyrstar
acknowledges that risk is not just about losses and harm. Risk can have positive consequence too. Effective risk management
enables Nyrstar to achieve an appropriate balance between realising opportunities while minimising adverse impacts.
This section gives an overview of the main features of the Company’s internal control and risk management systems, in accordance
with the Belgian Corporate Governance Code and the Belgian Companies Code.
Components of the Risk Management Framework
The Risk Management Framework is integrated in the management process and focuses on the following key principles.
The key elements of Risk Management Framework are:
1 UNDERSTANDING THE EXTERNAL AND INTERNAL ENVIRONMENT
Understanding the internal and external business environment and the effect this has on our business strategy and plans. This
informs Nyrstar’s overall tolerance to risk.
2 CONSISTENT METHODS FOR RISK IDENTIFICATION AND ANALYSIS OF RISKS, EXISTING CONTROLS AND CONTROL EFFECTIVENESS
Implementing systems and processes for the consistent identi?cation and analysis of risks, existing controls and control
effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit
Committee.
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3 RISK TREATMENT
Using innovative and creative thinking in responding to risks and taking action where it is determined that the Group is being
exposed to unacceptable levels of risk.
4 STAKEHOLDER ENGAGEMENT AND COMMUNICATION
Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identi?ed key risks and controls.
5 MONITORING AND REVIEW
Regularly monitoring and reviewing our risk management framework, our risks and control effectiveness.
The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the
guideline is mandatory within Nyrstar.
Critical internal controls
The following is a summary of Nyrstar’s critical internal controls:
ORGANISATIONAL DESIGN
There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the
support and control functions, such as human resources, legal, ?nance, internal audit, etc.
The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with
industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets
approved by management and the board of directors within set authorization levels.
POLICIES AND PROCEDURES
The Group has established internal policies and procedures to manage various risks across the Group. These policies and
procedures are available on the Nyrstar intranet-site, and distributed for application across the whole Group. Every policy has an
owner, who periodically reviews and updates if necessary.
ETHICS
The board of directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for
ethical decision making. All employees must perform their daily activities and their business objectives according the strictest
ethical standards and principles. The Code of Business Conduct is available on www.nyrstar.com and sets out principles how to
conduct business and behave in respect of:
• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets
The board of directors regularly monitors compliance with applicable policies and procedures of the Nyrstar Group.
WHISTLEBLOWING
Nyrstar also has a whistleblower procedure in place, allowing staff to con?dentially raise concerns about any irregularities in
?nancial reporting, possible fraudulent actions, bribery and other areas.
QUALITY CONTROL
Nyrstar is ISO 9001 certi?ed for the smelting and re?ning of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-
products. All of its major processes and the controls that they encompass are formalized and published on the Company’s intranet.
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FINANCIAL REPORTING AND BUDGET CONTROL
Nyrstar applies a comprehensive Group standard for ?nancial reporting. The standard is in accordance with applicable
International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related
interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as
adopted by the European Union. The effectiveness and compliance with the Group standard for ?nancial reporting is consistently
reviewed and monitored by the audit committee.
In order to ensure adequate ?nancial planning and follow up, a ?nancial budgeting procedure describing the planning,
quanti?cation, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts
Group wide budgeting process, which is centrally coordinated and consists of the following steps:
1) Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic
guidelines and objectives for the upcoming ?nancial year.
2) Key inputs and assumptions for the budgeting process for the upcoming ?nancial year are provided by relevant internal
stakeholders (including expected production, capex, metal prices, foreign exchange and commercial terms) and uploaded into
the centralised budgeting, planning and consolidation system (BPC).
3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal
stakeholders and senior management. The management committee and the board sign off on the ?nal agreed budget.
4) The ?nal budget is communicated to the different Nyrstar business units and departments.
5) Nyrstar will then bi-annually communicate to shareholders the Group’s revenue and cost actual results.
MANAGEMENT COMMITTEES
Various management committees are established as a control to manage various risks Nyrstar is exposed to:
TREASURY COMMITTEE
The treasury committee comprises of the Chief Financial Of?cer, the Group Treasurer and the Group Controller. The role of the
treasury committee is to recommend to the CEO and to the board of directors amendments to the treasury policy. This considers all
treasury transactions being reviewed before they are recommended to the CEO for review and approval by the board of directors.
Explicitly this includes preparations for the following CEO and board of directors approvals:
- to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
- to periodically review treasury operations and activities, approve the use of new ?nancial instrument types and techniques for
managing ?nancial exposures;
- to approve the list of authorized counterparties for foreign exchange and money market transactions;
- to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard
business conditions; and
- to approve the list of bank relationships.
The treasury committee meets at least quarterly.
COMMODITY RISK MANAGEMENT COMMITTEE
Nyrstar’s commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the
commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income
statement from metal price changes and foreign exchange movements.
Information, communication and ?nancial reporting systems
The Group’s performance against plan is monitored internally and relevant action is taken throughout the year. This includes,
weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.
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Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an
executive summary from the Chief Financial Of?cer are prepared and circulated to the board of directors by the Company Secretary
on a monthly basis.
MONITORING AND REVIEW
Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of
risk being accepted is consistent with the level of risk approved by the board of directors. Management takes action where it
is determined that the Group is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to
communicate freely risks and opportunities identi?ed.
Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework
and internal controls. The internal audits are based on risk based plans, approved by the audit committee. The internal audit
?ndings are presented to the audit committee and management, identifying areas of improvement. Progress of implementation of
the actions is monitored by the audit committee on a regular basis. The Group internal audit function is managed internally. The
audit committee supervises the internal audit function.
The board of directors pays speci?c attention to the oversight of risk and internal controls. On a yearly basis, the board of directors
reviews the effectiveness of the Group’s risk management and internal controls. The audit committee assists the board of directors
in this assessment. The audit committee also reviews the declarations relating to internal supervision and risk management
included in the annual report of the Company. The audit committee reviews the speci?c arrangements to enable staff to express
concerns in con?dence about any irregularities in ?nancial reporting and other areas e.g., whistleblower arrangements.
To support the protocols described above, both internal resources and external contractors are engaged to perform compliance
checks, and reports are provided to the audit committee.
Other
The Group is committed to the ongoing review and improvement of its policies, systems and processes.
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Financial and Operational Risks
The principal risks and uncertainties, which Nyrstar faces, along with the impact and the procedures implemented to mitigate the
risks, are detailed in the tables below:
FINANCIAL RISKS
Description Impact Mitigation
Commodity price risk
Nyrstar’s results are largely dependent
on the market prices of commodities
and raw materials, which are cyclical and
volatile.
Pro?tability will vary with the volatility
of metals prices.
Nyrstar engages in transactional hedging
which means that it will undertake
short-term hedging transactions to cover
the timing risk between raw material
purchases and sales of metal and to
cover its exposure on ?xed-price forward
sales of metal to customers.
From time to time, Nyrstar may also
decide to enter into certain strategic
metal price hedges to lock prices that are
considered as favorable and providing
price certainty to the Company’s
operations that may otherwise face
dif?culties related to their liquidity and
pro?tability in a reasonably possible
pricing decline.
Forward price risk
Nyrstar is exposed to the shape of the
forward price curve for underlying metal
prices.
The volatility in the London Metal
Exchange price creates differences
between the average price we pay for the
contained metal and the price we receive
for it.
Nyrstar engages in transactional hedging
which means that it will undertake
short-term hedging transactions to cover
the timing risk between raw material
purchases and sales of metal and to
cover its exposure on ?xed-price forward
sales of metal to customers.
From time to time, Nyrstar may also
decide to enter into certain strategic
metal price hedges to lock prices that are
considered as favorable and providing
price certainty to the Company’s
operations that may otherwise face
dif?culties related to their liquidity and
pro?tability in a reasonably possible
pricing decline.
Foreign Currency Exchange rate risk
Nyrstar is exposed to the effects of
exchange rate ?uctuations.
Movement of the U.S. Dollar, the
Australian Dollar, Canadian Dollar, Swiss
Franc, the Peruvian Sol, the Mexican
Peso or other currencies in which
Nyrstar’s costs are denominated against
the Euro could adversely affect Nyrstar’s
pro?tability and ?nancial position.
Nyrstar has not entered and does
not currently intend to enter into
transactions that seek to hedge or
mitigate its exposure to exchange rate
?uctuations, other than short-term
hedging transactions to cover the timing
risk between concentrate purchases and
sales of metal and to cover its exposure
on ?xed-price forward sales of metal to
customers.
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Description Impact Mitigation
Interest rate risk & leverage risk
Nyrstar is exposed to interest rate risk
primarily on loans and borrowings.
Nyrstar is exposed to risks inherent with
higher leverage and compliance with
debt covenants.
Changes in interest rates may impact
primary loans and borrowings by
changing the levels of required interest
payments.
Nyrstar’s indebtedness increased
signi?cantly in 2011 in order to ?nance
its expansion into mining and is now
subject to risks inherent with higher
leverage and compliance with debt
covenants. Breaches in debt covenants
will jeopardize the ?nancing structure of
Nyrstar.
Nyrstar’s interest rate risk management
policy is to limit the impact of adverse
interest rate movements through the use
of interest rate management tools.
Debt covenants and required head room
are monitored by Nyrstar on an on-going
basis.
Credit risk
Nyrstar is exposed to the risk of non-
payment from any counterparty in
relation to sales of goods and other
transactions.
Group cash ?ows and income may be
impacted by non-payment.
Nyrstar has determined a credit policy
with credit limit requests, use of credit
enhancements such as letters of credit,
approval procedures, continuous
monitoring of the credit exposure and
dunning procedure in case of delays.
Liquidity risk
Nyrstar requires a signi?cant amount
of cash to ?nance its debt, and fund its
acquisitions, its capital investments and
its growth strategy. Liquidity risk arises
from the possibility that Nyrstar will not
be able to meet its ?nancial obligations
as they fall due.
Liquidity is negatively impacted and
this may have a material adverse effect
on the funding of operations, capital
investments, the growth strategy and the
?nancial condition of the Company.
Liquidity risk is addressed by maintaining
a suf?cient degree of diversi?cation
of funding sources as determined by
management, detailed, periodic cash
?ow forecasting and conservatively
set limits on permanently to be
available headroom liquidity as well as
maintaining ongoing readiness to access
?nancial markets within a short period
of time.
Treatment charge (TC) risk
Despite its further integration into
mining, Nyrstar’s results remain
correlated to the levels of TCs that it
charges zinc miners to re?ne their zinc
concentrates and lead miners to re?ne
their lead concentrates. TCs are cyclical
in nature.
A decrease in TCs can be expected
to have a material adverse effect on
Nyrstar’s business, results of operations
and ?nancial condition.
TCs are negotiated on an annual basis.
The impact of TC levels is expected to
further decrease in the future in line with
Nyrstar’s implementation of its strategy
of selectively integrating its smelting
business by expanding into mining.
Energy price risk
Nyrstar’s operating sites, particularly
its smelters, are energy intensive, with
energy costs accounting for a signi?cant
part of its operating costs. Electricity in
particular represents a very signi?cant
part of its production costs.
Increases in energy, particularly
electricity, prices would signi?cantly
increase Nyrstar’s costs and reduce its
margins.
Nyrstar attempts to limit its exposure
to short term energy price ?uctuations
through forward purchases, long term
contracts and participation in energy
purchasing consortia.
Liquidity risk
Nyrstar requires a signi?cant amount
of cash to ?nance its debt, and fund its
acquisitions, its capital investments and
its growth strategy. Liquidity risk arises
from the possibility that Nyrstar will not
be able to meet its ?nancial obligations
as they fall due.
Liquidity is negatively impacted and
this may have a material adverse effect
on the funding of operations, capital
investments, the growth strategy and the
?nancial condition of the Company.
Liquidity risk is addressed by maintaining
a suf?cient degree of diversi?cation
of funding sources as determined by
management, detailed, periodic cash
?ow forecasting and conservatively
set limits on permanently to be
available headroom liquidity as well as
maintaining ongoing readiness to access
?nancial markets within a short period
of time.
FINANCIAL RISKS CONTINUED
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OPERATIONAL RISKS
Description Impact Mitigation
Operational risks
In operating mines, smelters and other
production facilities, Nyrstar is required
to obtain and comply with licenses to
operate.
In addition Nyrstar is subject to many
risks and hazards, some of which are
out of its control, including: unusual or
unexpected geological or climatic events;
natural catastrophes, interruptions
to power supplies; congestion at
commodities transport terminals;
industrial action or disputes; civil unrest,
strikes, workforce limitations, technical
failures, ?res, explosions and other
accidents; delays and other problems in
major investment projects (such as the
ramping-up of mining assets).
Nyrstar’s business could be adversely
affected if Nyrstar fails to obtain,
maintain or renew necessary licenses and
permits, or fails to comply with the terms
of its licenses or permits.
The impact of these risks could result in
damage to, or destruction of, properties
or processing or production facilities,
may reduce or cause production to
cease at those properties or production
facilities. The risks may further result in
personal injury or death, environmental
damage, business interruption, monetary
losses and possible legal litigation and
liability. Negative publicity, including that
generated by non- governmental bodies,
may further harm Nyrstar’s operations.
Nyrstar may become subject to liability
against which Nyrstar has not insured or
cannot insure, including those in respect
of past activities. Should Nyrstar suffer
a major uninsured loss, future earnings
could be materially adversely affected.
Nyrstar’s process risk management
system incorporating assessment
of safety, environment, production
and quality risks, which includes the
identi?cation of risk control measures,
such as preventative maintenance,
critical spares inventory and operational
procedures.
Corporate Social Responsibility and
the Nyrstar Foundation projects
enable Nyrstar to work closely with
local communities to maintain a good
relationship.
Nyrstar currently has insurance coverage
for its operating risks associated with
its zinc and lead smelters and mining
operations which includes all risk
property damage (including certain
aspects of business interruption),
operational and product liability, marine
stock and transit and directors’ and
of?cers’ liability.
Supply risk
Nyrstar is dependent on a limited
number of suppliers for zinc and
lead concentrate. Nyrstar is partially
dependent on the supply of zinc and lead
secondary feed materials. In addition
Nyrstar’s mining and smelting operations
in developing or emerging countries are
dependent on reliable energy supply.
A disruption in supply could have a
material adverse effect on Nyrstar’s
production levels and ?nancial results.
Unreliable energy supply at any of the
mining and smelting operations requires
appropriate emergency supply or will
result in signi?cant ramp up costs after a
major power outage.
Nyrstar management is taking steps to
secure raw materials from other sources.
These steps include Nyrstar’s vertical
integration into mining, its entry into off-
take agreements with new mines that are
due to commence production over the
next several years, and its continuation
of existing supply contracts.
Nyrstar is continuously monitoring the
energy market worldwide. This includes
also considering alternate energy supply,
e.g. wind power at mine sites.
Environmental, health & safety risks
Nyrstar operations are subject to
stringent environmental and health
laws and regulations, which are subject
to change from time to time. Nyrstar’s
operations are also subject to climate
change legislation.
If Nyrstar breaches such laws and
regulations, it may incur ?nes or
penalties, be required to curtail or cease
operations, or be subject to signi?cantly
increased compliance costs or signi?cant
costs for rehabilitation or recti?cation
works.
Safety is one of the core values of
Nyrstar, and currently it is implementing
common safety policies across all sites
along with corresponding health and
safety audits. Nyrstar pro-actively
monitors changes to environmental,
health and safety laws and regulations.
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Description Impact Mitigation
International operations risk
Nyrstar’s mining and smelting operations
are located in jurisdictions, including
developing countries and emerging
markets that have varying political,
economic, security and other risks.
In addition Nyrstar is exposed to
nationalism and tax risks by virtue of the
international nature of its activities.
These risks include, amongst others,
the destruction of property, injury
to personnel and the cessation or
curtailment of operations, war, terrorism,
kidnappings, civil disturbances and
activities of governments which limit
or disrupt markets and restrict the
movement of funds or suppliers. Political
of?cials may be prone to corruption or
bribery, which violates Company policy
and adversely affects operations.
Nyrstar performs a thorough risk
assessment on a country-by-country
basis when considering its investment
activities. In addition Nyrstar attempts
to conduct its business and ?nancial
affairs focusing to minimize to the extent
reasonably practicable the political, legal,
regulatory and economic risks applicable
to operations in the countries where
Nyrstar operates.
Reserves and resource risk
Nyrstar’s future pro?tability and
operating margins depend partly
upon Nyrstar’s ability to access
mineral reserves that have geological
characteristics enabling mining at
competitive costs. This is done by either
conducting successful exploration and
development activities or by acquiring
properties containing economically
recoverable reserves.
Replacement reserves may not be
available when required or, if available,
may not be of a quality capable of being
mined at costs comparable to existing
mines.
Nyrstar utilises the services of
appropriately quali?ed experts to
ascertain and verify the quantum
of reserves and resources including
ore grade and other geological
characteristics under relevant global
standards for measurement of mineral
resources.
Strategic risk
Nyrstar’s growth strategy relies in part
on acquisitions, mergers and strategic
alliances, which involve risks.
Recent and future acquisitions, mergers
or strategic alliances may affect Nyrstar’s
?nancial condition. In addition, the
integration of acquired businesses
involves several risks.
Nyrstar focuses on selectively pursuing
opportunities in mining, favouring
mines that support its smelting assets
and where it has expertise and proven
capabilities. Nyrstar carries out a
due diligence review prior to doing
acquisition as well as post acquisition
reviews after or during integration of the
acquired assets.
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3. Important events which occurred after the end of the ?nancial year
Please refer to note 42 (subsequent events) in the IFRS Financial Statements.
4. Information regarding the circumstances that could signi?cantly affect the
development of the Group
No information regarding the circumstances that could signi?cantly affect the development of the Company are to be
mentioned, except for the circumstances described in Note 20 of the Consolidated Financial Statements for the year ended 31
December 2013.
The principal risks and uncertainties facing the Group are covered in section 2 of this report.
5. Research and development
The Group undertakes research and development through a number of activities at various production sites of the Group.
6. Financial risks and information regarding the use by the Company of ?nancial
instruments to the extent relevant for the evaluation of its assets, liabilities,
?nancial position and results
Please refer to note 3 (Signi?cant accounting policies), note 5 (Financial risk management) and note 35 (Financial
instruments) in the IFRS Financial Statements.
7. Information provided in accordance with article 624
of the Belgian Company Code
The treasury shares reserve comprises the par value of the Company’s share held by the Group. As at 31 December 2013 the
Group held a total of 15,338,431 of the Company’s shares (31 December 2012: 7,345,826).
At 16 April 2013, the Group acquired off-market, Glencore International AG’s (“Glencore”) entire 7.79% shareholding
(13,245,757 shares) in Nyrstar for EUR 3.39 per share, for a total consideration of EUR 44.9 million. Furthermore Glencore
agreed to compensate Nyrstar with a termination fee of EUR 44.9 million in relation to ending its Commodity Grade Off-take
agreement by 31 December 2013 for the sale and marketing of commodity grade zinc metal produced by Nyrstar, within the
European Union. The termination fee has been recognised in other income in the consolidation.
At 1 October 2013 Nyrstar Sales & Marketing AG entered a strategic offtake and marketing agreement with Noble Group
Limited (“Noble”) to market and sell a signi?cant portion of commodity grade zinc metal produced at its European smelters.
Noble agreed to acquire from Nyrstar’s treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total
shares for a price of EUR 3.76 per share, for a total cash consideration of EUR 6.4 million.
In 2013 Nyrstar sold 3,065,000 shares to a ?nancial institution and the participants in relation with the LESOP (note 33), for a
cash consideration of EUR 5.3 million.
During 2013 the Group settled its LTIP Grant 2 and 3. A total of 487,927 shares (2012: 2,067,312) were allocated to the
employees as a part of this settlement.
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REPORT OF THE BOARD OF DIRECTORS
Issued shares 2013 2012
Shares outstanding 154,684,113 162,676,718
Treasury shares 15,338,431 7,345,826
As at 31 Dec 170,022,544 170,022,544
Movement in shares outstanding 2013 2012
As at 1 Jan 162,676,718 160,609,406
Purchases of treasury shares (13,245,757) -
Sales of treasury shares 4,765,225 -
Employee shared based payment plan 487,927 2,067,312
As at 31 Dec 154,684,113 162,676,718
Movement in treasury shares 2013 2012
As at 1 Jan 7,345,826 9,413,138
Purchases 13,245,757 -
Sales (4,765,225)
Employee shared based payment plan (487,927) (2,067,312)
As at 31 Dec 15,338,431 7,345,826
8. Information provided in accordance with articles 523 and 524 of the Belgian
Company Code
Directors are expected to arrange their personal and business affairs so as to avoid con?icts of interest with the Company.
Any director with a con?icting ?nancial interest (as contemplated by article 523 of the Belgian Company Code) on any matter
before the board of directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part
in any deliberations or voting related thereto. Provision 1.4 of the corporate governance charter sets out the procedure for
transactions between Nyrstar and the directors which are not covered by the legal provisions on con?icts of interest. Provision
3.2.4 of the corporate governance charter contains a similar procedure for transactions between Nyrstar and members of the
management committee (other than the Chief Executive Of?cer).
The provisions of Article 523 of the Belgian Companies Code have been complied with in relation to the changes made to
the performance conditions under the LTIP applicable to Mr Junck effective 6 February 2013 at the board meeting dated 5
February 2014 as set out below:
Prior to the deliberation and approval of the changes to LTIP performance conditions, i.e., for LTIP Grant 3, the exclusion of the
2012 performance year from the regression when determining the average LTIP achievement due the signi?cant disconnect
between the correlation of the zinc price and the share price in 2012 and, for the current and future grants, the change to
the hurdle rates from 1 January 2013 from 5% to 2% with regard to the MSCI Metals & Mining Index (together the “LTIP
Performance Condition Changes”), Mr Junck explained that pursuant to the LTIP Performance Condition Changes effective 6
February 2013 he has an interest of a ?nancial nature that could be in con?ict with the proposed approval by the Board of the
LTIP Performance Condition Changes under Article 523 of the Belgian Company Code. Mr Junck explained that following the
changes to the performance conditions for LTIP Grant 3 he was awarded 36,107 shares instead of zero shares and such shares
were delivered in March 2013. Mr Junck further stated that the impact to successive grants is not known.
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REPORT OF THE BOARD OF DIRECTORS
Mr Junck further stated that he believed that the proposed LTIP Performance Condition Changes are not unusual or
uncustomary, especially within the context of listed companies in the global resource market. Mr Junck also stated that the
Company’s Statutory Auditor were advised of the potential con?ict of interest.
Subsequently, Mr Junck left the meeting of the Board so as not to take part in the further deliberation and decision relating to
the LTIP Performance Condition Changes to be entered into with him.
The remaining directors of the Board noted Mr Junck’s declaration and subsequently, in accordance with Article 523 of
the Belgian Company Code, proceeded with the deliberations on this declaration. The Board noted that the purpose of the
LTIP Performance Condition Changes is to ensure the LTIP remains attractive to executives with an aim to ensure continued
competitiveness within the global resources market. In order to attract and retain quali?ed individuals, the Board believed
it is reasonable and necessary for the Company to reward and retain executive talent and therefore approve the LTIP
Performance Condition Changes to avoid negative impact on the average LTIP achievement for LTIP Grant 3 following a
signi?cant disconnect between the correlation of the zinc price and the share price in 2012 and to align the hurdle rates as of
1 January 2013 for current and future grants from 5% to 2% with regard to the MSCI Metals & Mining Index. In addition, the
Board noted the LTIP Performance Condition Changes are consistent with market practice as evidenced by the objective data.
Accordingly the Board deemed the LTIP Performance Condition Changes to be therefore in the interest of the Company.
Following discussion, the Board (with the exclusion of Mr Junck) RESOLVED that the LTIP Performance Condition Changes be
APPROVED.
There is no information regarding a con?ict of interest in accordance with Article 524 of the Belgian Company Code.
9. Audit committee
The audit committee consists of three non-executive members of the board, all of which are independent members. The
members of the audit committee have suf?cient expertise in ?nancial matters to discharge their functions. The Chairman of
the audit committee is competent in accounting and auditing as evidenced by his current role as Chief Financial Of?cer of the
Belgacom Group and his previous roles as Chief Financial Of?cer in Matav and Ameritech International.
10. Information that have an impact in the event of public takeovers bids
The Company provides the following information in accordance with article 34 of the Royal Decree dated 14 November 2007:
(i) The share capital of the Company amounts to EUR 370,649,145.92 and is fully paid-up. It is represented by 170,022,544
shares, each representing a fractional value of EUR 2.18 or one 170,022,544th of the share capital. The Company’s shares
do not have a nominal value.
(ii) Other than the applicable Belgian legislation on the disclosure of signi?cant shareholdings and the Company’s articles of
association, there are no restrictions on the transfer of shares.
(iii) There are no holders of any shares with special control rights.
(iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan (LTIP), the Co-Investment Plan and
the Leveraged Employee Stock Ownership Plan will vest upon determination by the nomination and remuneration
committee.
(v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the
Company’s articles of association and the applicable laws and articles.
(vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the
transfer of securities and/or the exercise of voting rights.
(vii) The rules governing appointment and replacement of board members and amendment to articles of association are set
out in the Company’s articles of association and the Company’s corporate governance charter.
(viii) The powers of the board of directors, more speci?cally with regard to the power to issue or redeem shares are set
out in the Company’s articles of association. The board of directors was not granted the authorization to purchase its
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REPORT OF THE BOARD OF DIRECTORS
own shares “to avoid imminent and serious danger to the Company” (i.e., to defend against public takeover bids). The
Company’s articles of association of association do not provide for any other speci?c protective mechanisms against
public takeover bids.
(ix) The Company is a party to the following signi?cant agreements which, upon a change of control of the Company or
following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be
terminated by the other parties thereto or give the other parties thereto (or bene?cial holders with respect to bonds) a
right to an accelerated repayment of outstanding debt obligations of the Company under such agreements:
• Nyrstar’s Revolving Structured Commodity Trade Finance Credit Facility;
• 7% senior unsecured convertible bonds due 2014;
• 5.5% senior unsecured ?xed rate non-convertible bonds due 2015;
• 5.3% senior unsecured ?xed rate non-convertible bonds due 2016;
• 4.25% senior unsecured convertible bonds due 2018;
• Nyrstar’s committed EUR 50 million bilateral credit facility with ING Bank;
• Nyrstar’s committed EUR 100 million bilateral credit facility with KBC Bank;
• Nyrstar’s silver prepay with Merrill Lynch International;
• Nyrstar’s silver prepay with JPMorgan Chase Bank;
• Nyrstar’s off-take agreement with the Glencore Group; and
• Nyrstar’s streaming agreement with Talvivaara Sotkamo Limited.
(x) The Chief Executive Of?cer is currently entitled to a 12-month salary payment in case his employment is terminated upon
a change of control of the Company.
No takeover bid has been instigated by third parties in respect of the Company’s equity during the previous ?nancial year and the
current ?nancial year.
Done at Brussels on 5 February 2014.
On behalf of the board of directors,
___________________________ ___________________________
De Wilde J. Management bvba
represented by its permanent
representative Mr Julien De Wilde
Director
Roland Junck
Director
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REPORT OF THE BOARD OF DIRECTORS
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STATEMENT OF RESPONSIBILITY
The undersigned, Roland Junck, Chief Executive Of?cer and Heinz Eigner, Chief Financial Of?cer, declare that, to the best of their
knowledge, the consolidated ?nancial statements for the year ended 31 December 2013, which has been prepared in accordance
with the International Financial Reporting Standards as adopted by the European Union and with the legal requirements
applicable in Belgium, give a true and fair view of the assets, liabilities, ?nancial position and pro?t or loss of Nyrstar NV and
the entities included in the consolidation, and that the consolidated management report includes a true and fair overview of the
development and the performance of the business and of the position of Nyrstar NV, and the entities included in the consolidation,
together with a description of the principal risks and uncertainties which they are exposed to.
Brussels, 5 February 2014
STATEMENT OF
RESPONSIBILITY
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CONSOLIDATED INCOME STATEMENT
EUR million Note 2013 2012
*
Revenue 7 2,823.5 3,069.8
Raw materials used (1,486.6) (1,627.3)
Freight expense (85.7) (86.2)
Gross pro?t 1,251.2 1,356.3
Other income 27 53.1 25.3
Employee bene?ts expense 11 (391.3) (408.7)
Energy expenses (329.8) (332.1)
Stores and consumables used (179.7) (194.8)
Contracting and consulting expense (165.7) (170.8)
Other expense 14 (63.3) (62.3)
Depreciation, amortisation and depletion 15,16,20 (220.1) (218.4)
Result from operating activities before exceptional items (45.6) (5.5)
M&A related transaction expense 10 (1.7) (2.6)
Restructuring expense 29 (18.5) (16.9)
Impairment loss 17 (227.5) (18.2)
Impairment reversal 17 207.4 -
Loss on the disposal of subsidiaries 9 - (0.1)
Result from operating activities (85.9) (43.3)
Finance income 12 0.9 1.2
Finance expense 12 (99.5) (93.7)
Net foreign exchange loss 12 (0.6) (0.9)
Net ?nance expense (99.2) (93.4)
Share of pro?t / (loss) of equity accounted investees 18 0.8 (1.3)
Gain on the disposal of equity accounted investees 18 - 26.7
Loss before income tax (184.3) (111.3)
Income tax (expense) / bene?t 13 (11.1) 14.8
Loss for the year (195.4) (96.5)
ATTRIBUTABLE TO:
Equity holders of the parent (195.4) (93.6)
Non-controlling interest - (2.9)
Loss per share for loss attributable to the equity holders of the Company during the period (expressed in EUR per share)
basic 34 (1.27) (0.58)
diluted 34 (1.27) (0.58)
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 31 December 2013
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
EUR million Note 2013 2012
*
Loss for the year (195.4) (96.5)
Other comprehensive income
Items that may be reclassi?ed to pro?t:
Foreign currency translation differences (90.0) (11.2)
Transfers to the income statement - (13.2)
Gains / (losses) on cash ?ow hedges 21 16.2 (10.9)
Transfers to the income statement 7.5 3.7
Income tax expense 13 (4.3) -
Change in fair value of investments in equity securities 19 (8.8) (4.9)
Transfers to the income statement 12.9 -
Reclassi?cation of reverse acquisition reserve - 7.6
Items that will not be reclassi?ed to pro?t:
Remeasurements of de?ned bene?t plans 30 9.2 (12.7)
Income tax (expense) / bene?t 13 (3.1) 4.2
Other comprehensive loss for the year, net of tax (60.4) (37.4)
Total comprehensive loss for the year (255.8) (133.9)
ATTRIBUTABLE TO:
Equity holders of the parent (255.8) (131.0)
Non-controlling interest - (2.9)
Total comprehensive loss for the year (255.8) (133.9)
*Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at as at
EUR million Note 31 Dec 2013 31 Dec 2012*
Property, plant and equipment 15 1,771.5 1,730.2
Intangible assets 16 10.3 133.4
Investments in equity accounted investees 18 18.6 29.0
Investments in equity securities 19 27.5 37.9
Zinc purchase interest 20 224.3 237.2
Deferred income tax assets 13 120.6 77.0
Other ?nancial assets 21 10.4 25.1
Other assets 23 3.2 3.9
Total non-current assets 2,186.4 2,273.7
Inventories 22 515.6 747.1
Trade and other receivables 24 174.9 221.1
Prepayments 17.5 14.4
Current income tax assets 6.5 6.2
Other ?nancial assets 21 26.6 47.0
Other assets 23 - 4.0
Cash and cash equivalents 25 292.3 188.1
Total current assets 1,033.4 1,227.9
Total assets 3,219.8 3,501.6
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at as at
EUR million Note 31 Dec 2013 31 Dec 2012*
Share capital and share premium 26 1,649.7 1,676.9
Reserves 27 (274.5) (207.5)
Accumulated losses (505.6) (307.6)
Total equity attributable to equity holders of the parent 869.6 1,161.8
Total equity 869.6 1,161.8
Loans and borrowings 28 839.9 867.2
Deferred income tax liabilities 13 174.2 142.5
Provisions 29 208.6 210.5
Employee bene?ts 30 71.0 84.4
Other ?nancial liabilities 21 3.9 2.1
Other liabilities 23 55.6 59.3
Total non-current liabilities 1,353.2 1,366.0
Trade and other payables 31 486.0 641.2
Current income tax liabilities 17.1 16.8
Loans and borrowings 28 121.9 1.3
Provisions 29 17.1 24.3
Employee bene?ts 30 33.1 53.5
Other ?nancial liabilities 21 20.8 11.3
Deferred income 32 294.7 218.6
Other liabilities 23 6.3 6.8
Total current liabilities 997.0 973.8
Total liabilities 2,350.2 2,339.8
Total equity and liabilities 3,219.8 3,501.6
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million Note
Share
capital
Share
premium Reserves
Accumulated
losses
Total amount
attributable to
shareholders
Non-
controlling
interest
Total
equity
As at 1 Jan 2013
*
1,324.8 352.1 (207.5) (307.6) 1,161.8 - 1,161.8
Loss for the year - - - (195.4) (195.4) - (195.4)
Other
comprehensive
(loss) /income - - (66.5) 6.1 (60.4) - (60.4)
Total
comprehensive
loss - - (66.5) (189.3) (255.8) - (255.8)
Change in par
value 26 - - 3.2 (3.2) - - -
Treasury shares - - (19.4) (10.2) (29.6) - (29.6)
Issuance of
convertible bond 28 - - 15.7 - 15.7 - 15.7
Distribution to
shareholders
(capital decrease) 26 (27.2) - - - (27.2) - (27.2)
Share-based
payments - - - 4.7 4.7 - 4.7
As at 31 Dec 2013 1,297.6 352.1 (274.5) (505.6) 869.6 - 869.6
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CONSOLIDATED FINANCIAL STATEMENTS
EUR million Note
Share
capital
Share
premium Reserves
Accumulated
losses
Total amount
attributable to
shareholders
Non-
controlling
interest
Total
equity
As at 1 Jan 2012* 1,352.0 352.1 (184.9) (204.2) 1,315.0 4.3 1,319.3
Loss for the year - - - (93.6) (93.6) (2.9) (96.5)
Other
comprehensive
loss - - (28.9) (8.5) (37.4) - (37.4)
Total
comprehensive
loss - - (28.9) (102.1) (131.0) (2.9) (133.9)
Change in par
value 26 - - 1.2 (1.2) - - -
Treasury shares - - 5.1 (3.9) 1.2 - 1.2
Net movement in
non-controlling
interests as result
of disposal of
subsidiaries 9 - - - - - (1.4) (1.4)
Distribution to
shareholders
(capital decrease) 26 (27.2) - - - (27.2) - (27.2)
Share-based
payments - - - 3.8 3.8 - 3.8
As at 31 Dec 2012* 1,324.8 352.1 (207.5) (307.6) 1,161.8 - 1,161.8
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Note 2013 2012*
Loss for the year (195.4) (96.5)
ADJUSTMENT FOR:
Depreciation, amortisation and depletion 15,16,20 220.1 218.4
Income tax expense / (bene?t) 13 11.1 (14.8)
Net ?nance expense 12 99.2 93.4
Share of (pro?t) / loss in equity accounted investees 18 (0.8) 1.3
Impairment loss (net) 17 20.1 18.2
Equity settled share based payment transactions 5.3 6.1
Other non-monetary items (33.1) 6.7
Loss on the disposal of subsidiaries 9 - 0.1
Gain on disposal of equity accounted investees 18 - (26.7)
Gain on sale of property, plant and equipment 15 (2.1) (6.4)
Cash ?ow from operating activities before working capital changes 124.4 199.8
Change in inventories 198.5 (199.0)
Change in trade and other receivables 38.5 80.6
Change in prepayments (5.5) 8.2
Change in deferred income 88.8 98.8
Change in trade and other payables (151.6) 238.2
Change in other assets and liabilities 65.6 3.0
Change in provisions and employee bene?ts (28.5) (21.3)
Income tax paid (31.3) (46.9)
Cash ?ow from operating activities 298.9 361.4
Acquisition of property, plant and equipment 15 (192.2) (246.1)
Acquisition of intangible assets 16 (1.1) (1.7)
Proceeds from sale of property, plant and equipment 3.6 8.3
Proceeds from sale of intangible assets 0.1 1.3
Acquisition of subsidiary, net of cash acquired 8 (2.8) -
Acquisition of investment in equity securities (0.2) (9.9)
Payments of loans to equity accounted investees 21 - (2.7)
Distribution from equity accounted investees 0.5 0.7
Proceeds from sale of subsidiary 9 - 2.2
Proceeds from sale of equity accounted investees 18 - 32.4
Interest received 1.0 1.5
Cash ?ow used in investing activities (191.1) (214.0)
Sale of own shares 26 11.7 -
Proceeds from borrowings 122.1 8.2
Repayment of borrowings (17.1) (42.4)
Interest paid (84.0) (73.1)
Distribution to shareholders 26 (24.0) (26.1)
Cash ?ow from / (used in) ?nancing activities 8.7 (133.4)
Net increase in cash held 116.5 14.0
Cash at the beginning of the year 25 188.1 177.4
Exchange ?uctuations (12.2) (3.3)
Cash at the end of the year 25 292.3 188.1
* Certain amounts shown here do not correspond to the annual consolidated ?nancial statements as at 31 December 2012 and re?ect the adoption of new and revised
standards as detailed in Note 2.
The accompanying notes are an integral part of these consolidated ?nancial statements.
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FINANCIAL STATEMENTS
TABLE OF CONTENTS
1. Reporting entity 133
2. Basis of preparation 133
3. Signi?cant accounting policies 135
4. Critical accounting estimates
and judgements 146
5. Financial risk management 147
6. Exchange rates 150
7. Segment reporting 150
8. Acquisition of business 153
9. Disposal of subsidiaries 154
10. M&A related transaction expense 154
11. Employee bene?ts expense 155
12. Finance income and expense 155
13. Income tax 155
14. Other expense 159
15. Property, plant and equipment 159
16. Intangible assets 161
17. Impairment 162
18. Investments in equity accounted investees 165
19. Investments in equity securities 166
20. Zinc purchase interest 166
21. Other ?nancial assets and liabilities 167
22. Inventories 168
23. Other assets and liabilities 169
24. Trade and other receivables 170
25. Cash and cash equivalents 170
26. Capital 171
27. Reserves 172
28. Loans and borrowings 174
29. Provisions 176
30. Employee bene?ts 177
31. Trade and other payables 184
32. Deferred income 185
33. Share-based payments 185
34. Loss per share 190
35. Financial instruments 190
36. Capital commitments 199
37. Operating leases 199
38. Contingencies 199
39. Related parties 200
40. Audit and non-audit services
by the Company’s statutory auditor 200
41. Group entities 201
42. Subsequent events 201
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Reporting entity
Nyrstar NV (the “Company”) is an integrated mining and metals business, with market leading positions in zinc and lead, and
growing positions in other base and precious metals. Nyrstar has mining, smelting, and other operations located in Europe,
Australia, China, Canada, the United States and Latin America. Nyrstar is incorporated and domiciled in Belgium and has its
corporate of?ce in Switzerland. The address of the Company’s registered of?ce is Zinkstraat 1, 2490 Balen, Nyrstar is listed on NYSE
Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com.
The consolidated ?nancial statements of the Company as at and for the year ended 31 December 2013 comprise the Company and
its subsidiaries (together referred to as “Nyrstar” or the “Group” and individually as “Group entities”) and the Group’s interest in
associates and jointly controlled entities. The consolidated ?nancial statements were authorised for issue by the board of directors
of Nyrstar NV on 5 February 2014.
2. Basis of preparation
(a) Statement of compliance
The consolidated ?nancial statements of Nyrstar are prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations
issued by the International Accounting Standards Board (IASB), and the IFRS Interpretations Committee (IFRIC), effective at the
reporting date and adopted by the European Union. The consolidated ?nancial statements have been prepared on a going concern
basis.
(b) Basis of measurement
The consolidated ?nancial statements have been prepared under the historical cost basis except for derivative ?nancial instruments
(note 21), ?nancial instruments at fair value through pro?t or loss (note 21), and available-for-sale ?nancial assets (note 19).
(c) Functional and presentational currency
Items included in the ?nancial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional’ currency). The consolidated ?nancial statements are presented in EUR
which is the Company’s functional and presentation currency. All ?nancial information has been rounded to the nearest hundred
thousand EUR.
(d) Use of estimates and judgements
The preparation of ?nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgements in the process of applying Nyrstar’s accounting policies. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods. Critical accounting estimates and judgements are disclosed in note 4.
(e) Standards, amendments and interpretations
The following new and revised standards and interpretations, effective as of 1 January 2013, have been adopted in the preparation
of the consolidated ?nancial statements:
IAS 1 Presentation of Items of Other Comprehensive Income (Amendment)
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities (Amendment)
IFRS 13 Fair Value Measurement
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IAS 32 Tax effects of distributions to holders of equity instruments (Amendment)
IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (Amendment)
The adoption of the amendment to IAS 1 Presentation of Financial Statements and revised standard IAS 19 (2011) Employee
Bene?ts require restatement of previous ?nancial statements. The nature and impact is described below:
IAS 1 Presentation of Items of Other Comprehensive Income – Amendment to IAS 1
The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that may be
reclassi?ed to pro?t or loss at a future point in time now have to be presented separately from items that will never be reclassi?ed.
The amendment has been applied retrospectively and affected presentation only with no impact on the Group’s reported ?nancial
position or performance.
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
IAS 19R includes a number of amendments to the accounting for de?ned bene?t plans, including expected returns on plan
assets are no longer recognised in pro?t or loss, instead there is a requirement to recognise interest expense on the net de?ned
bene?t liability in pro?t or loss, calculated using the market based discount rate used to measure the de?ned bene?t obligation
and; unvested past service costs are now recognised in pro?t or loss at the earlier of when the plan amendment occurs or when
the related restructuring or termination costs are recognised. Other amendments include new disclosures, such as, quantitative
sensitivity disclosures, will be included in the annual consolidated ?nancial statements.
In case of the Group, the transition to IAS 19R had an impact on the net de?ned bene?t plan obligations due to the difference in
accounting for interest on plan assets and unvested past service costs. The effect of the adoption of IAS 19R is explained in note 30.
IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities- Amendment to IFRS 7
The amendments to IFRS 7 impact the disclosure requirements in IFRS 7 Financial Instruments. The amendment requires
additional information about all recognised ?nancial instruments that are set off in accordance with IAS 32 Financial Instruments:
Presentation. Furthermore it also require disclosure of information about recognised ?nancial instruments subject to enforceable
master netting arrangements and similar agreements even if they are not set off under IAS 32. Refer to note 35 for these
disclosures.
IFRS 13 Fair Value Measurement
The new standard IFRS 13 Fair Values Measurement establishes a single source of guidance under IFRS for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or permitted. IFRS 13 also requires enhanced disclosures on fair values.
Adoption of IFRS 13 did not have a material impact on the fair value measurements carried out by the Group but resulted in
additional disclosures in note 35.
IAS 32 Financial Instruments: Presentation
The adoption of the amendment to IAS 32 Financial Instruments: Presentation did not impact the Group.
IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (Amendment)
The amendments to IAS 36 clarify the circumstances in which the recoverable amount of assets or cash-generating units are
required to be disclosed, clarify the disclosures required and introduce a requirement to disclose the discount rate used in
determining impairment (or reversals) where recoverable amount (based on fair value less cost to sell) is determined using a
present value technique. Other than the additional disclosures, the application of amendments to IFRS 36 did not impact the
amounts recognised in the consolidated ?nancial statements (see note 17).
The following new standards, amendments of standards and interpretations have been issued but are not effective for the ?nancial
year beginning 1 January 2013 and have not been early adopted:
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New or revised standards
• IAS 27 Separate Financial Statements
• IAS 28 Investments in Associates and Joint Ventures
• IFRS 9 Financial Instruments
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
• IFRS 12 Disclosure of Interests in Other Entities
Amendments to existing standards and interpretations
• Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
• De?ned Bene?t Plans: Employee Contributions (Amendments to IAS 19)
• Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
• IFRIC 21 Levies
Based on the Group’s current structure, the adoption of IAS 27and 28 and IFRS 10, 11 and 12 are not anticipated to have a
material impact on the Group. The Group is currently assessing the impact of IFRS 9 on the consolidated ?nancial statements and
related disclosures.
3. Signi?cant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated ?nancial
statements and have been applied consistently by the Group entities.
(a) Basis of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the ?nancial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are
fully consolidated from the date on which control is transferred to the Group until the date that the control ceases.
Business Combinations
The purchase method of accounting is used to account for the acquisition of subsidiaries in these consolidated ?nancial
statements. The assets, liabilities and contingent liabilities of the acquired entity are measured at their fair values at the date of
acquisition. Provisional fair values allocated at a reporting date are ?nalised within twelve months of the acquisition date. The
cost of acquisition is measured as the fair value of assets transferred to, shares issued to or liabilities undertaken on behalf of the
previous owners at the date of acquisition. Acquisition-related costs are expensed in the period in which the costs are incurred and
the services received.
The excess of the cost of acquisition over Nyrstar’s share of the fair value of the net assets of the entity acquired is recorded as
goodwill. If Nyrstar’s share in the fair value of the net assets exceeds the cost of acquisition, the excess is recognised immediately in
the income statement.
Investments in associates and jointly controlled entities
Associates are those entities in which the Group has signi?cant in?uence but not control over the ?nancial and operational
policies. Signi?cant in?uence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of
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another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual
agreement and requiring unanimous consent for strategic ?nancial and operating decisions. Associates and jointly controlled
entities are accounted for using the equity method (equity accounted investees) and are initially recorded at cost. The Group’s
investment includes goodwill identi?ed on acquisition, net of any accumulated impairment losses.
The consolidated ?nancial statements include the Group’s share of the income and expense and equity movements of equity
accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that signi?cant
in?uence or joint control commences until the date that signi?cant in?uence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest
(including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent
that the Group has an obligation to or has made payments on behalf of the investee.
Non-controlling interests
Non-controlling interests (NCI) in the net assets (excluding goodwill) of consolidated subsidiaries are identi?ed separately from the
Group’s equity therein. NCI consist of the amount of those interests at the date of the original business combination (see below)
and the NCI’s share of changes in equity since the date of the combination.
Transactions eliminated on consolidation
The consolidated ?nancial statements include the consolidated ?nancial information of the Nyrstar Group entities. All
intercompany balances and transactions with consolidated businesses have been eliminated. Unrealised gains and losses arising
from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investee. The Group accounts for the elimination of the unrealised pro?ts resulting from intercompany transactions between the
mining and smelting businesses. These transactions relate to the sales from the mining to the smelting segment which have not
been realised externally.
(b) Foreign currency
Foreign currency transactions
Foreign currency transactions are recognised during the period in the functional currency of each entity at exchange rates
prevailing at the date of transaction. The date of a transaction is the date at which the transaction ?rst quali?es for recognition.
For practical reasons a rate that approximates the actual rate at the date of the transaction is used at some Group entities, for
example, an average rate for the week or the month in which the transactions occur.
Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet date.
Gains and losses resulting from the settlement of foreign currency transactions, and from the translation of monetary assets and
liabilities denominated in foreign currencies, are recognised in the income statement.
Foreign operations
The income statement and statement of ?nancial position of each Nyrstar operation that has a functional currency different to EUR
is translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing exchange rate at the end of the ?nancial period;
• Income and expense are translated at rates approximating the exchange rates ruling at the dates of the transactions; and
• All resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising from the translation of the net investment in foreign operations are released into the income
statement upon disposal.
(c) Financial instruments
Commodity hedging, via the use of metal futures, is undertaken to reduce the Group’s exposure to ?uctuations in commodity prices
in relation to its unrecognised ?rm commitments arising from ?xed price forward sales contracts.
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Derivatives are initially recognised at their fair value on the date Nyrstar becomes a party to the contractual conditions of the
instrument . The method of recognising the changes in fair value subsequent to initial recognition is dependent upon whether the
derivative is designated as a hedging instrument, the nature of the underlying item being hedged and whether the arrangement
quali?es for hedge accounting.
Hedge accounting requires the relationship between the hedging instrument and the underlying hedged item, as well as the risk
management objective and strategy for undertaking the hedging transaction to be documented at the inception of the hedge.
Furthermore, throughout the life of the hedge, the derivative is tested (with results documented) to determine if the hedge has
been or will continue to be highly effective in offsetting changes in the fair value or cash ?ows associated with the underlying
hedged item.
Fair value hedges
A hedge of the fair value of a recognised asset or liability or of a ?rm commitment is referred to as a fair value hedge. Changes in
the fair value of derivatives that are designated and qualify as fair value hedges, are recorded in the income statement, together
with changes in the fair value of the underlying hedged item attributable to the risk being hedged.
Cash ?ow hedges
A hedge of the cash ?ows to be received or paid relating to a recognised asset or liability or a highly probable forecast transaction
is referred to as a cash ?ow hedge. The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash ?ow hedges is recognised outside of the income statement, directly in other comprehensive income in the hedging reserve.
Changes in the fair value of cash ?ow hedges relating to the ineffective portion are recorded in the income statement. Amounts
accumulated in the hedging reserve are recycled through the income statement in the same period that the underlying hedged
item is recorded in the income statement. When a hedge no longer meets the criteria for hedge accounting, and the underlying
hedged transaction is no longer expected to occur, any cumulative gain or loss recognised in the hedging reserve is transferred to
the income statement. When a hedge is sold or terminated, any gain or loss made on termination is only deferred in the hedging
reserve where the underlying hedged transaction is still expected to occur.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that
does not qualify for hedge accounting are recognised immediately in the income statement. Where an embedded derivative is
identi?ed and the derivative’s risks and characteristics are not considered to be closely related to the underlying host contract, the
fair value of the derivative is recognised on the consolidated statement of ?nancial position and changes in the fair value of the
embedded derivative are recognised in the consolidated income statement.
Investments in equity securities
The classi?cation of investments depends on the purpose for which the investments have been acquired. Management determines
the classi?cation of investments at initial recognition. These investments are classi?ed as available-for-sale ?nancial assets and are
included in non-current assets unless the Group intends to dispose of the investment within 12 months of the balance sheet date.
The fair value of investments in equity securities is determined by reference to their quoted closing bid price at the reporting date.
Any impairment charges are recognised in pro?t or loss, while other changes in fair value are recognised in other comprehensive
income. When investments are sold, the accumulated fair value adjustments recognised in other comprehensive income are
included in the income statement within ‘gain/loss on sale of investments in equity securities’.
(d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment. The cost of self-
constructed assets includes the cost of materials, direct labour, and an appropriate proportion of production overheads.
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The cost of self-constructed assets and acquired assets include estimates of the costs of closure, dismantling and removing the
assets and restoring the site on which they are located and the area disturbed. All items of property, plant and equipment, are
depreciated on a straight-line and/or unit of production basis. Freehold land is not depreciated.
Once a mining project has been established as commercially viable, expenditure other than that on land, buildings, plant and
equipment is capitalised under ‘Mining properties and development’ together with any previously capitalised expenditures
reclassi?ed from ‘Exploration and evaluation (see note 3e).
Useful lives are based on the shorter of the useful life of the asset and the remaining life of the operation, in which the asset is
being utilised. Depreciation rates, useful lives and residual values are reviewed regularly and reassessed in light of commercial and
technological developments. Changes to the estimated residual values or useful lives are accounted for prospectively in the period
in which they are identi?ed.
Depreciation
STRAIGHT-LINE BASIS
The expected useful lives are the lesser of the life of the assets or as follows:
• Buildings: 40 years
• Plant and equipment: 3 - 25 years
UNIT OF PRODUCTION BASIS
• For mining properties and development assets and certain mining equipment, the economic bene?ts from the asset are
consumed in a pattern which is linked to the production level. Such assets are depreciated on a unit of production basis.
However, assets within mining operations for which production is not expected to ?uctuate signi?cantly from one year to
another or which have a physical life shorter than the related mine are depreciated on a straight line basis as noted above.
• In applying the unit of production method, depreciation is normally calculated using the quantity of material extracted from
the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based
on proved and probable reserves and, for some mines, other mineral resources. Such non reserve material may be included in
depreciation calculations in circumstances where there is a high degree of con?dence in its economic extraction.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Critical spare parts purchased for particular items of plant, are capitalised and depreciated on the same basis as the plant to which
they relate.
Assets under construction
During the construction phase, assets under construction are classi?ed as construction in progress within property, plant and
equipment. Once commissioned these assets are reclassi?ed to property, plant and equipment at which time they will commence
being depreciated over their useful life.
Mineral properties and mine development costs
The costs of acquiring mineral reserves and mineral resources are capitalised on the statement of ?nancial position as incurred.
Capitalised costs representing mine development costs include costs incurred to bring the mining assets to a condition of being
capable of operating as intended by management. Mineral reserves and in some instances mineral resources and capitalised mine
development costs are depreciated from the commencement of production using generally the unit of production basis They are
written off if the property is abandoned.
Major cyclical maintenance expenditure
Group entities recognise, in the carrying amount of an item of plant and equipment, the incremental cost of replacing a
component part of such an item when that cost is incurred if it is probable that the future economic bene?ts embodied within the
item will ?ow to the Group entity, the cost incurred is signi?cant in relation to the asset and the cost of the item can be measured
reliably. Accordingly, major overhaul expenditure is capitalised and depreciated over the period in which bene?ts are expected to
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arise (typically three to four years). All other repairs and maintenance are charged to the consolidated income statement during
the ?nancial period in which the costs are incurred.
Exploration and evaluation assets
Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential mineral reserves
and resources and includes costs such as exploratory drilling and sample testing and the costs of pre-feasibility studies. Exploration
and evaluation expenditure for each area of interest, other than that acquired from the purchase of another mining company, is
capitalised as an asset provided that one of the following conditions is met:
• such costs are expected to be recouped in full through successful development and exploration of the area of interest or
alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment
of the existence or otherwise of economically recoverable reserves, and active and signi?cant operations in relation to the area
are continuing, or are planned for the future.
Acquired mineral rights comprise identi?able exploration and evaluation assets including mineral reserves and mineral resources,
which are acquired as part of a business combination and are recognized at fair value at date of acquisition. The acquired mineral
rights are reclassi?ed as “mine property and development” from commencement of development and amortised on a unit of
production basis, when commercial production commences.
Capitalised exploration and evaluation assets are transferred to mine development assets once the work completed to date
supports the future development of the property and such development receives appropriate approvals.
(e) Intangible assets
Goodwill
Goodwill is recognised in business combinations and is measured as the excess of the aggregate consideration paid, the acquired
non-controlling interest and the fair value of any pre-existing ownership interest in the acquiree less the acquisition-date fair
values of the identi?able assets acquired and the liabilities assumed. Identi?able assets include those acquired mineral reserves
and resources that can be reliably measured.
Goodwill is carried at cost less any accumulated impairment losses. Goodwill in respect of associates and joint ventures is presented
in the statement of ?nancial position on the line “Investments in equity accounted investees”, together with the investment itself
and tested for impairment as part of the overall balance.
Goodwill is allocated to the cash-generating unit (CGU) to which it belongs. CGU is the smallest group of assets that includes the
asset and generates cash in?ows that are largely independent of the cash in?ows from other assets or groups of assets. Based
on Nyrstar’s operating model each mining complex and each smelting site has been identi?ed as a separate CGU as there is an
active market for zinc and other metal concentrates produced by each mining complex as well as zinc and other metal products
manufactured at Nyrstar’s smelting sites.
Other intangible assets
Software and related internal development costs are carried at historical cost, less accumulated amortisation and impairment
losses. They are typically amortised over a period of ?ve years.
CO
2
emission rights/Carbon permits are carried at historical cost, less impairment losses: These intangibles are not amortised.
(f) Leased assets
Leases under which the Group assumes substantially all of the risks and bene?ts of ownership, are classi?ed as ?nance leases,
while other leases are classi?ed as operating leases. Finance leases are capitalised with a lease asset and liability equal to the
present value of the minimum lease payments or fair value, if lower, being recorded at the inception of the lease. Capitalised lease
assets are amortised on a straight-line basis over the shorter of the useful life of the asset or the lease term. Each ?nance lease
repayment is allocated between the liability and ?nance charges based on the effective interest rate implied in the lease contract.
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Lease payments made under operating leases are recognised in the income statement over the accounting periods covered by the
lease term.
(g) Inventories
Inventories of ?nished metals, concentrates and work in progress are valued at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expense. By-products inventory obtained as a result of the production process are valued at the lower of cost and net realisable
value. Cost includes expenditure incurred in acquiring and bringing the stock to its existing condition and location and includes
an appropriate allocation of ?xed and variable overhead expense, including depreciation and amortisation. Stores of consumables
and spares are valued at cost with allowance for obsolescence. Cost of purchase of all inventories is determined on a FIFO basis. In
addition to purchase price, conversion costs are allocated to work-in-progress and ?nished goods. These conversion costs are based
on the actual costs related to the completed production steps.
As the Company applies hedge accounting as referred in note 3c the hedged items of inventory are adjusted by the fair value
movement with respect to the effective portion of the hedge. The fair value adjustment remains part of the carrying value of
inventory and enters into the determination of earnings when the inventory is sold. This impact is compensated by the hedge
derivatives which are also adjusted for fair value changes.
(h) Impairment
Financial assets
A ?nancial asset that is not measured at fair value through pro?t or loss is assessed at each reporting date to determine whether
there is any objective evidence that it is impaired. A ?nancial asset is considered to be impaired if objective evidence indicates that
one or more events have had a negative effect on the estimated future cash ?ows of that asset.
An impairment loss in respect of a ?nancial asset measured at amortised cost, is calculated as the difference between its carrying
amount and the present value of the estimated future cash ?ows discounted at the original effective interest rate. An impairment
loss in respect of an available-for-sale ?nancial asset is calculated by reference to its fair value.
Signi?cant ?nancial assets are tested for impairment on an individual basis. The remaining ?nancial assets are assessed collectively
in groups that share similar credit risk characteristics.
All impairment losses are recognised in the income statement. An impairment loss is reversed if the reversal can be related
objectively to an event occurring after the impairment loss was recognised. Impairment losses on available for sale equity
investments are not reversed.
Non-?nancial assets
The carrying amounts of the Group’s non-?nancial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have inde?nite lives or that are not yet available for use,
the recoverable amount is estimated annually.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash ?ows are discounted to their present value using a pre-tax discount rate that
re?ects current market assessments of the time value of money and the risks speci?c to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash in?ows from continuing use that are
largely independent of the cash in?ows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in
a business combination, for the purpose of impairment testing, is allocated to cash-generating units or groups of cash generating
units that are expected to bene?t from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating
units are allocated ?rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
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An impairment loss recognised in respect of goodwill cannot be reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(i) Employee bene?ts
Short term bene?ts
Liabilities for wages and salaries, including non-monetary bene?ts and annual leave are recognised in respect of employees’
services up to the reporting date, calculated as undiscounted amounts based on remuneration wage and salary rates that the entity
expects to pay at the reporting date including related on-costs, such as payroll tax.
Long-term employee bene?ts other than pension plans
A liability for long-term employee bene?ts is recognised in the provision for employee bene?ts and measured as the present value
of expected future payments to be made in respect of service provided by employees up to the balance sheet date. Consideration
is given to expected future wage and salary levels including related on-costs, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on national high quality corporate
bonds with terms to maturity and currency that match the estimated future cash ?ows.
De?ned contribution plans
Payments to de?ned contribution retirement plans are recognized as an expense when employees have rendered service entitling
them to the contributions.
De?ned bene?t plans
The Group recognizes a net liability in respect of de?ned bene?t superannuation or medical plans in the statement of ?nancial
position. The net liability is measured as the present value of the de?ned bene?t obligation at the balance sheet date less the fair
value of the plan assets belonging to the plans and represents the actual de?cit or surplus in the Group’s de?ned bene?t plans.
Any surplus resulting from this calculation is limited to the present value of any economic bene?ts available in the form of refunds
from the plans or reductions in future contributions to the plans (“asset ceiling”).
The present value of the de?ned bene?t obligations is based on expected future payments that arise from membership of the fund
to the balance sheet date. This obligation is calculated annually by independent actuaries using the projected unit credit method.
Expected future payments are discounted using market yields at the balance sheet date on high quality corporate bonds with terms
to maturity and currency that match the estimated future cash ?ows. Any future taxes that are funded by the entity and are part of
the provision of the de?ned bene?t obligation are taken into account when measuring the net asset or liability.
De?ned bene?t costs are split into three categories:
• Service costs, past-service costs, gains and losses on curtailments and settlements,
• Net-interest cost or income,
• Remeasurement.
The Group presents the ?rst component of de?ned bene?t costs in the line item ‘employee bene?ts expenses’ and the second
component in the line item ‘?nance expenses’ in its consolidated income statement. Curtailments gains and losses are accounted
for as past-service cost.
Remeasurement comprises of actuarial gains and losses on the de?ned bene?t obligations, the effect of the asset ceiling (if
applicable) and the return on plan assets (excluding interest income). These are recognized immediately in the statement of
?nancial position with a charge or credit to Other Comprehensive Income (OCI) in the period in which they occur. Remeasurement
recorded in other comprehensive income is not recycled. Those amounts recognized in other comprehensive income may be
reclassi?ed within equity. Past service costs are immediately recognized in pro?t or loss in the period of plan amendment and are
not deferred anymore. Net-interest is calculated by applying the discount rate to the net de?ned bene?t liability or asset.
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Share-based payment compensation
The Group operates a leveraged employee stock ownership plan, an executive long-term incentive plan and a co-investment plan,
which, at the Group’s discretion, are equity-settled or cash-settled share-based compensation plans.
The fair value of equity instruments granted under the equity-settled plans are recognised as an employee bene?t expense with a
corresponding increase recognised in equity. The fair value is measured at the grant date and recognised over the period during
which the eligible employees become entitled to the shares. The amount recognised as an employee bene?t expense is the fair
value multiplied by the number of equity instruments granted. At each balance sheet date, the amount recognised as an expense
is adjusted to re?ect the estimate of the number of equity instruments expected to vest, except where forfeiture is only due to the
Company’s share price not achieving the required target.
For cash-settled share-based payment transactions, the services received and the liability incurred are measured at the fair value
of the liability at grant date. The initial measurement of the liability is recognised over the period that services are rendered. At
each reporting date, and ultimately at settlement date, the fair value of the liability is remeasured with any changes in fair value
recognised in the income statement for the period.
(j) Provisions
A provision is recognised if, as a result of a past event, when the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an out?ow of economic bene?ts will be required to settle the obligation.
Restoration, rehabilitation and decommissioning provision
Provision is recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the
dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the ?nancial year
when the related environmental disturbance occurs. They are based on the estimated future costs using information available at
each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the
discount is recognised as interest expense. When the provision is established, a corresponding asset is recognised, where it gives
rise to a future bene?t, and depreciated over future production from the operations to which it relates.
The provision is reviewed on an annual basis for changes to costs, legislation, discount rates or other changes that impact
estimated costs or lives of the operations. The carrying value of the related asset (or the income statement when no related asset
exists) is adjusted for changes in the provision resulting from changes in the estimated cash ?ows or discount rate. The adjusted
carrying value of the asset is depreciated prospectively.
Restructuring provision
A constructive obligation for a restructuring arises only when two conditions are ful?lled: a) there is a formal business plan for
the restructuring specifying the business or part of a business concerned, the principal locations affected, the location, function
and approximate number of employees whose services will be terminated, the expenditure to be incurred and when the plan will
be implemented, b) the entity has raised a valid expectation in those affected that it will carry out the plan either by starting to
implement the plan or announcing its main feature to those affected by it. Restructuring provisions include only incremental costs
associated directly with the restructuring.
Other provisions
Other provisions are recognised when the Group has a present obligation (legal or constructive), as a result of past events, and it
is probable that an out?ow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is
material, the provision is discounted to net present value using an appropriate current market-based pre-tax discount rate and the
unwinding of the discount is included in ?nance costs.
(k) Compound ?nancial instruments
Compound ?nancial instruments issued by the Company comprise convertible bonds that can be converted to share capital at the
option of the holder, and the number of shares to be issued is ?xed.
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The liability component of a compound ?nancial instrument is recognized initially at the fair value of a similar liability that does
not have an equity conversion option. The equity component is recognized initially as the difference between the fair value of the
compound ?nancial instrument as a whole and the fair value of the liability component, and is included in shareholders’ equity, net
of income tax effects. Any directly attributable transaction costs are allocated to the liability and equity components in proportion
to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound ?nancial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound ?nancial instrument is not remeasured subsequent to initial
recognition.
(l) Revenue
Revenue associated with the sale of commodities is recognised when all signi?cant risks and rewards of ownership of the asset sold
are transferred to the customer, usually when insurance risk has passed to the customer and the commodity has been delivered
to the shipping agent or the location designated by the customer. At this point Nyrstar retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the commodities and the costs incurred, or
to be incurred, in respect of the sale can be reliably measured. Revenue is recognised, at fair value of the consideration receivable,
to the extent that it is probable that economic bene?ts will ?ow to Nyrstar and the revenue can be reliably measured. Revenue
is generally recognised based on incoterms ex-works (EXW) or carriage, insurance and freight (CIF). Revenues from the sale of
by-products are also included in sales revenue. Revenue is stated on a gross basis, with freight and realisation expense included in
gross pro?t as a deduction.
For certain commodities the sales price is determined provisionally at the date of sale, with the ?nal price determined within
mutually agreed quotation period and the quoted market price at that time. As a result, the invoice price on these sales are
marked-to-market at balance sheet date based on the prevailing forward market prices for the relevant quotation period. This
ensures that revenue is recorded at the fair value of consideration to be received. Such mark-to-market adjustments are recorded
in sales revenue.
When Nyrstar’s goods are swapped for goods that are of a similar nature and value, the swap is not regarded as a transaction that
generates revenue. If any settlement in cash or cash equivalents occurs for value equalisation of such transactions, this settlement
amount is recognised in cost of goods sold. When the goods swapped however are of a dissimilar nature or value from each other,
the swap is regarded as a transaction that generates revenue.
(m) Finance income and expense
Finance income includes:
• Interest income on funds invested; and
• Dividend income.
Interest income is recognised as it accrues in the income statement using the effective interest rate method. Dividend income is
recognised in the income statement on the date that the Group’s right to receive payment is established.
Finance costs include:
• Interest on short-term and long-term borrowings;
• Amortisation of discounts or premiums relating to borrowings;
• Amortisation of ancillary costs incurred in connection with the arrangement of borrowings;
• Finance lease charges; and
• The impact of the unwind of discount on long-term provisions for restoration, rehabilitation and decommissioning provision and
workers’ compensation.
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Finance costs are calculated using the effective interest rate method. Finance costs incurred for the construction of any qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other
?nance costs are expensed as incurred.
Net ?nance costs represent ?nance costs net of any interest received on funds invested. Interest income is recognised as it accrues
using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
Income taxIncome tax expense comprises current and deferred income tax. Income tax expense is recognised in pro?t or loss except to the
extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in other
comprehensive income or equity.
Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for ?nancial reporting purposes and the amounts used for taxation purposes. Deferred income tax
is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable pro?t, and differences relating to investments in subsidiaries
and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition a
deferred income tax liability is not recognised for taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred income
tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to
settle current income tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred income tax asset is recognised for all deductible temporary differences, carry forward of unused tax assets and unused
tax losses to the extent that it is probable that future taxable pro?ts will be available against which the temporary difference
can be utilised. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax bene?t will be realised.
Additional income taxes that arise from the distribution of dividends are recognised when the distribution is expected.
Mining taxes and royalties that have the characteristics of an income tax are treated and disclosed as current and deferred income
taxes.
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank
overdrafts are repayable on demand and are shown within borrowings in current liabilities on the consolidated statement of
?nancial position. For the purposes of the consolidated statement of cash ?ows, cash includes cash on hand and deposits at call
which are readily convertible to cash and are subject to an insigni?cant risk of changes in value, net of any outstanding bank
overdrafts which are recognised at their principal amounts.
(p) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group entities prior to the end of the ?nancial year
which are unpaid. The amounts are unsecured and are typically paid within 30 days of recognition. These amounts are initially
recognized at fair value and are subsequently carried at amortised cost.
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(q) Deferred income
Deferred income consists of payments received by the Company in consideration for future physical deliveries of metal inventories
and future physical deliveries of metals contained in concentrate at contracted prices. As deliveries are made, the Company
recognises sales and decreases the deferred income on the basis of actual physical deliveries of the products.
(r) Trade receivables
Trade receivables represent amounts owing for goods and services supplied by the Group entities prior to the end of the ?nancial
period which remain unpaid. They arise from transactions in the normal operating activities of the Group.
Trade receivables are carried at amortised cost, less any impairment losses for doubtful debts. An impairment loss is recognised for
trade receivables when collection of the full nominal amount is no longer certain.
(s) Share capital
Ordinary shares are classi?ed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effect(s).
(t) Earnings per share
Nyrstar presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the pro?t for
the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the pro?t for the period attributable to ordinary shareholders of the
Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
(u) Segment reporting
Operating segments are components of the Group for which discrete ?nancial information is available and is evaluated regularly
by Nyrstar’s Management Committee (NMC) in deciding how to allocate resources and assess performance. The NMC has been
identi?ed as the chief operating decision maker.
The segment information reported to the NMC is prepared in conformity with the accounting policies consistent with those
described in these ?nancial statements and presented in the format outlined in note 7.
Revenues, expenses and assets are allocated to the operating segments to the extent that items of revenue, expense and assets can
be directly attributed or reasonably allocated to the operating segments. The interrelated segment costs have been allocated on a
reasonable pro rata basis to the operating segments.
(v) Treasury shares
When Nyrstar reacquires its own equity instruments, the par value of treasury shares purchased is deducted from reserves. The
difference between the par value of the treasury shares purchased and the amount of consideration paid, which includes directly
attributable costs, is recognised as a deduction from accumulated losses. Reacquired shares are classi?ed as treasury shares and
may be acquired and held by the entity or by other members of the consolidated group. When treasury shares are sold or reissued
subsequently, the amount received is recognised as an increase in equity, and the resulting gain or loss on the transaction is
recognised in accumulated losses.
(w) Zinc purchase interests
Streaming agreements for the acquisition of zinc concentrates are presented on the statement of ?nancial position as zinc
purchase interests. The useful life is determined with reference to the number of metric tonnes to be delivered under the contract.
The asset is depleted through the income statement using the unit-of-production method, as the asset is recovered with each
metric ton of zinc delivered under the contract.
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(x) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down occurs.
To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Exceptional itemsExceptional items are those relating to restructuring expense, M&A related transaction expense and impairment of assets which the
Group believes should be disclosed separately on the face of the consolidated income statement to assist in the understanding of
the ?nancial performance achieved by the Group.
4. Critical accounting estimates and judgements
Estimates and judgements used in developing and applying the accounting policies are continually evaluated and are based on
historical experience and other factors, including expectations of future events that may have a ?nancial impact on the entity
and that are believed to be reasonable under the circumstances. Nyrstar makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by de?nition, seldom equal the related actual results. The estimates and underlying
assumptions are reviewed on an ongoing basis.
The critical estimates and judgements that have a signi?cant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next ?nancial year are listed below.
Fair value
The Group has applied estimates and judgments in accounting for business combinations (note 8), revenue recognition,
inventories (note 22), share-based payments (note 33) and for its ?nancial assets and liabilities (note 21). Fair value measurements
are estimated based on the amounts for which the assets and liabilities could be exchanged at the relevant transaction date
or reporting period end, and are therefore not necessarily re?ective of the likely cash ?ow upon actual settlements. Where fair
value measurements cannot be derived from publicly available information, they are estimated using models and other valuation
methods. To the extent possible, the assumptions and inputs used take into account externally veri?able inputs. However such
information is by nature subject to uncertainty, particularly where comparable market based transactions rarely exist.
Determination of ore reserves and resources estimates
Estimated recoverable reserves and resources are used to determine the depreciation of mine production assets (note 15), in
accounting for deferred costs (note 15) and in performing impairment testing (note 17). Estimates are prepared by appropriately
quali?ed persons, but will be impacted by forecast commodity prices, exchange rates, production costs and recoveries amongst
other factors. Changes in assumptions may impact the carrying value of assets and depreciation and impairment charges recorded
in the income statement.
Restoration, rehabilitation and decommissioning provision (note 29)
Provision is recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the
dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the ?nancial year
when the related environmental disturbance occurs. They are based on the estimated future costs using information available at
each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the
discount is recognised as interest expense. The calculation of these provision estimates requires assumptions such as application
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of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the
assumptions used may have a material impact on the carrying value of restoration provisions.
Retirement bene?ts (note 30)
The expected costs of providing pensions and post employment bene?ts under de?ned bene?t arrangements relating to employee
service during the period are determined based on ?nancial and actuarial assumptions. Nyrstar makes these assumptions in respect
to the expected costs in consultation with quali?ed actuaries. When actual experience differs to these estimates, actuarial gains
and losses are recognized in other comprehensive income. Refer to note 30 for details on the key assumptions.
Impairment of assets (note 15,16,17)
The recoverable amount of each cash-generating unit is determined as the higher of the asset’s fair value less costs to sell and its
value in use. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity
prices, future capital requirements and future operating performance. For cash-generating units that comprise mining related
assets, the estimates and assumptions also relate to the ore reserves and resources estimates (see above). For further information
refer to note 17.
Recovery of deferred tax assets (note 13)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable pro?ts are available to utilise those temporary differences and losses, and the tax losses continue to be available having
regard to the nature and timing of their origination and compliance with the relevant tax legislation associated with their recovery.
In evaluating whether it is probable that taxable pro?ts will be earned in future accounting periods, all available information is
considered. The forecasts used in this evaluation are consistent with those prepared and used internally for business planning and
impairment testing purposes.
Recovery of zinc purchase interest (note 20)
Due to recent developments regarding the ?nancial situation of Talvivaara Mining Company plc, Nyrstar’s counterparty in respect
of its zinc purchase interest, critical judgments are required in assessing the recoverability of the zinc purchase interest. These
judgments are outlined in note 20.
5. Financial risk management
(a) Overview
In the normal course of business, Nyrstar is exposed to credit risk, liquidity risk and market risk, i.e. ?uctuations in commodity
prices, exchange rates as well as interest rates, arising from its ?nancial instruments. Listed below is information relating to
Nyrstar’s exposure to each of these risks and the Group’s objectives, policies and processes for measuring and managing risk and
measuring capital.
The board of directors has overall responsibility for the establishment and oversight of Nyrstar’s risk management framework.
Nyrstar’s risk management policies are established to identify and analyse the risks faced by Nyrstar, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits.
The audit committee is responsible for overseeing how management monitors compliance with Nyrstar’s risk management policies
and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by Nyrstar. The audit
committee is supported in its oversight role by the Group’s internal audit function.
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(b) Credit risk
Credit risk is the risk of non-payment from any counterparty in relation to sales of goods. In order to manage the credit exposure,
Nyrstar has determined a credit policy with credit limit requests, approval procedures, continuous monitoring of the credit
exposure and dunning procedure in case of delays.
Trade and other receivables
Nyrstar’s exposure to credit risk is in?uenced mainly by the individual characteristics of each customer. Each new customer is
analysed individually for creditworthiness before the standard terms and conditions are offered. Customers that fail to meet
Nyrstar’s benchmark creditworthiness may transact with Nyrstar only on a prepayment basis.
Nyrstar provides an allowance for trade and other receivables that represents its estimate of incurred losses in respect of trade and
other receivables and investments.
Guarantees
Nyrstar’s policy is to provide ?nancial guarantees only on behalf of wholly-owned subsidiaries. At 31 December 2013, no
guarantees were outstanding to external customers (31 December 2012 : nil).
(c) Liquidity risk
Liquidity risk arises from the possibility that Nyrstar will not be able to meet its ?nancial obligations as they fall due. Liquidity risk
is being addressed by maintaining, what management considers to be, a suf?cient degree of diversi?cation of funding sources.
These include committed and uncommitted short and medium term bank facilities as well as bonds (e.g. convertible bonds and
?xed rate bonds).
Nyrstar is actively managing the liquidity risk in order to ensure that at all times it has access to suf?cient cash resources at a cost
in line with market conditions for companies with a similar credit standing. Liquidity risk is measured by comparing projected net
debt levels against total amount of available committed facilities. These forecasts are being produced on a rolling basis and include
cash ?ow forecasts of all operational subsidiaries. Also the average remaining life of the committed funding facilities is monitored,
at least on a quarterly basis.
The ?nancial covenants of the existing loan agreements are monitored as appropriate in order to ensure compliance. No breach of
covenants has occurred during the year.
(d) Market risk
Market risk is the risk that changes in market prices will affect Nyrstar’s income or the value of its investments in ?nancial
instruments. The objective of market risk management is to manage and control market exposures within acceptable parameters
while optimising the return.
Commodity price risk
In the normal course of its business, Nyrstar is exposed to risk resulting from ?uctuations in the market prices of commodities.
Nyrstar currently engages primarily in transactional hedging which means that it undertakes short-term hedging transactions to
cover the timing risk between raw material purchases and sales of metal and to cover its exposure on ?xed-price forward sales of
metal to customers. Transactional hedging arrangements are accounted for in the “Other Financial Assets” and the “Other Financial
Liabilities” line items of the statement of ?nancial position. Any gains or losses realised from hedging arrangements are recorded
within operating result. Nyrstar generally does not undertake any structural or strategic hedging which means that its results are
largely exposed to ?uctuations in zinc, lead and other metal prices. Nyrstar reviews its hedging policy on a regular basis.
Foreign Currency Exchange Risk
Nyrstar’s assets, earnings and cash ?ows are in?uenced by movements in exchange rates of several currencies, particularly the U.S.
Dollar, the Euro, the Australian Dollar, the Canadian Dollar, the Peruvian Sol, the Chilean Peso, the Mexican Peso, the Honduran
Lempira and the Swiss Franc. Nyrstar’s reporting currency is the Euro, zinc, lead and other metals are sold throughout the world
principally in U.S. Dollars, while Nyrstar’s costs are primarily in Euros, Australian Dollars, Canadian Dollars, U.S. Dollars, Peruvian
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148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Sols, Chilean Pesos, Mexican Pesos, Honduran Lempiras and Swiss Francs. As a result, movement of the U.S. Dollar, the Australian
Dollar, the Canadian Dollar, Peruvian Sol, Chilean Peso, Mexican Peso, Honduran Lempira, Swiss Franc or other currencies in which
Nyrstar’s costs are denominated against the Euro could adversely affect Nyrstar’s pro?tability and ?nancial position.
Nyrstar has not entered and does not currently intend to enter into transactions that seek to hedge or mitigate its exposure to
exchange rate ?uctuations, other than short-term hedging transactions to cover the timing risk between concentrate purchases
and sales of metal and to cover its exposure on ?xed-price forward sales of metal to customers.
(e) Interest rate risk
Nyrstar incurs interest rate risk primarily on loans and borrowings. This risk is limited as a result of the interest rate on borrowings
such as convertible bond and ?xed rate bond being ?xed. Nyrstar’s current borrowings are split between ?xed rate and ?oating
rate basis. All variable interest rate loans and borrowings have EURIBOR or LIBOR based interest rates. The interest rate and terms
of repayment of Nyrstar’s loans are disclosed in note 35f. Changes in interest rates may impact primary loans and borrowings by
changing the levels of required interest payments.
Nyrstar’s interest rate risk management policy is to limit the impact of adverse interest rate movements through the use of interest
rate management tools. Interest rate risk is measured by maintaining a schedule of all ?nancial assets, ?nancial liabilities and
interest rate hedging instruments. At current Nyrstar’s interest rate exposure resulting from interest bearing borrowings is minimal
due to the fact that the majority of its long term debt commitments are with ?xed interest rate. Nyrstar has not entered into
interest rate derivatives.
(f) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market con?dence and so to sustain
future development of the business. The board of directors monitors the return on capital, which Nyrstar de?nes as pro?t after tax
divided by total shareholders’ equity, excluding non-controlling interests.
The board of directors also monitors the level of dividends to ordinary shareholders. Nyrstar’s dividend policy is to ensure that
whilst maintaining adequate cash ?ows for growth and the successful execution of its strategy, Nyrstar aims to maximize total
shareholder return through a combination of share price appreciation and dividends. Pursuant to Belgian law, the calculation of
amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company’s
non-consolidated Belgian GAAP ?nancial statements. In accordance with Belgian company law, the Company’s articles of
association also require that the Company allocate each year at least 5% of its annual net pro?ts to its legal reserve, until the legal
reserve equals at least 10% of the Company’s share capital. As a consequence of these factors, there can be no assurance as to
whether dividends or similar payments will be paid out in the future or, if they are paid, their amount.
The Company has established an Executive Long Term Incentive Plan (LTIP) with a view to attracting, retaining and motivating the
employees and senior management of the Company and its wholly owned subsidiaries. The key terms of the LTIP are set out below
in note 33, with vesting terms aligned to the Company’s capital management policy.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
149
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Exchange rates
The principal exchange rates used in the preparation of 2013 ?nancial statements are (in EUR):
Annual average Year end
2013 2012 2013 2012
United States dollar 1.3281 1.2848 1.3791 1.3194
Australian dollar 1.3777 1.2407 1.5423 1.2712
Canadian dollar 1.3684 1.2842 1.4671 1.3137
Swiss franc 1.2311 1.2053 1.2276 1.2072
7. Segment reporting
The Group’s operating segments (Metals Processing and Mining) re?ect the approach of the Nyrstar Management Committee
(NMC) towards evaluating the ?nancial performance and allocating resources to the Group’s operations. The NMC has been
identi?ed as the chief operating decision making group. The NMC assesses the performance of the operating segments based on a
measure of ‘Underlying EBITDA’.
‘Underlying EBITDA’ is a non-IFRS measure of earnings, which is used internally by management to access the underlying
performance of Group’s operations and is reported by Nyrstar to provide greater understanding of the underlying business
performance of its operations. Underlying EBITDA excludes items related to restructuring expense, M&A related transaction
expense, material income or expense arising from embedded derivatives recognized under IAS 39: ‘Financial Instruments:
Recognition and Measurement’ and other items arising from events or transactions that management considers to be clearly
distinct from the ordinary activities of Nyrstar.
The components of gross pro?t are non-IFRS measures which are used internally by management and are the following:
Mining‘s Payable/ free metal contribution is the metal price received for the payable component of the primary metal
contained in concentrate before it is further processed by a smelter.
Smelting’s Payable/free metal contribution is the value of the difference received between the amount of metal that is paid for
in a concentrate and the total zinc recovered from the sale by a smelter.
Treatment charges are the fees charged for the processing of primary (concentrates) and secondary raw materials for the
production of metal which is a positive gross pro?t element for the smelters and a deduction in the gross pro?t for mines.
Smelters’ premiums Contribution is the premium charged on top of the base LME price for the sales of re?ned zinc and lead metals.
By-products are secondary products obtained in the course of producing zinc or lead and include primarily sulphuric acid, silver,
gold, indium, copper and cadmium.
Other are other costs and revenues associated with smelting or mining operations that do not relate to the above categories.
The ‘Metals processing’ segment comprises of the Group’s smelting operations. The ‘Mining’ segment comprises of the Group’s
mining operations and the zinc streaming agreement with the Talvivaara mine (Finland). ‘Other & Eliminations’ contains Galva 45
(France), corporate activities as well as the eliminations of the intra-group transactions including any unrealised pro?ts resulting
from intercompany transactions.
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150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the twelve months ended 31 Dec 2013, EUR million Mining
Metals
Processing
Other and
eliminations Total
Revenue from external customers 83.0 2,740.5 - 2,823.5
Inter-segment revenue 387.9 (49.1) (338.8) -
Total segment revenue 470.9 2,691.4 (338.8) 2,823.5
Payable metal / free metal contribution 335.3 244.3 1.1 580.7
Treatment charges (76.1) 337.0 - 260.9
Premiums - 127.2 0.1 127.3
By-products 172.6 215.3 - 387.9
Other 13.1 (110.8) (7.9) (105.6)
Gross Pro?t 444.9 813.0 (6.7) 1,251.2
Employee expenses (139.8) (207.1) (44.4) (391.3)
Energy expenses (48.7) (271.6) (0.2) (320.5)
Other expenses / income (169.4) (197.2) (34.5) (401.1)
Direct operating costs (357.9) (675.9) (79.1) (1,112.9)
Non-operating and other (8.7) 11.8 43.2 46.3
Underlying EBITDA 78.3 148.9 (42.6) 184.6
Depreciation, amortisation and depletion (220.1)
M&A related transaction expense (1.7)
Restructuring expense (18.5)
Impairment loss (net) (20.1)
Embedded derivatives (9.3)
Net ?nance expense (99.2)
Income tax expense (11.1)
Loss for the period (195.4)
Capital expenditure (96.6) (95.7) (7.1) (199.4)
151
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1
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the twelve months ended 31 Dec 2012, EUR million Mining
Metals
Processing
Other and
eliminations Total
Revenue from external customers 400.3 2,683.7 (14.2) 3,069.8
Inter-segment revenue 80.9 - (80.9) -
Total segment revenue 481.2 2,683.7 (95.1) 3,069.8
Payable metal / free metal contribution 403.0 242.1 - 645.1
Treatment charges (100.2) 338.5 - 238.3
Premiums - 115.2 - 115.2
By-products 226.1 220.9 - 447.0
Other (20.2) (64.3) (4.8) (89.3)
Gross Pro?t 508.7 852.4 (4.8) 1,356.3
Employee expenses (134.3) (217.4) (57.0) (408.7)
Energy expenses (47.5) (274.8) (0.9) (323.2)
Other expenses / income (198.6) (191.6) (35.5) (425.7)
Direct operating costs (380.4) (683.8) (93.4) (1,157.6)
Non-operating and other 0.6 (32.6) 53.8 21.8
Underlying EBITDA 128.9 136.0 (44.4) 220.5
Depreciation, amortisation and depletion (218.4)
M&A related transaction expense (2.6)
Restructuring expense (16.9)
Impairment loss (18.2)
Embedded derivatives (8.9)
Loss on disposal of subsidiaries (0.1)
Gain on the disposal of equity accounted investees 26.7
Net ?nance expense (93.4)
Income tax bene?t 14.8
Loss for the period (96.5)
Capital expenditure (129.9) (112.5) (5.4) (247.8)
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152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Geographical information
(a) Revenues from external customers
EUR million 2013 2012
Belgium 183.0 297.4
Rest of Europe 1,072.5 1,260.7
Americas 370.0 291.1
Australia 799.5 916.7
Asia 373.3 287.7
Other 25.2 16.2
Total 2,823.5 3,069.8
The revenue information above is based on the location (shipping address) of the customer.
Sales to each individual customer (group of customers under the common control) of the Group did not exceed 10% with the
exception of sales to Glencore International plc and Umicore NV/SA, which accounted for 38.1% (2012: 44.4%) and 9.3% (2012:
11.5%) respectively, of the total Group’s sales, reported in the Metals Processing segment.
(b) Non-current assets
EUR million 31 Dec 2013 31 Dec 2012
Belgium 239.6 84.4
Rest of Europe 492.4 505.9
North America 417.8 479.8
Central America (incl. Mexico) 428.5 543.2
South America 167.8 257.7
Australia 260.0 229.8
Total 2,006.1 2,100.8
Non-current assets for this purpose consist of property, plant and equipment, intangible assets and the zinc purchase interests.
8. Acquisition of business
2013
Acquisition of subsidiary: ERAS Metal AS
On 4 December 2013, Nyrstar acquired 100% interest in ERAS Metal AS (“Eras”), the owner of a fuming plant in Hoyanger, Norway.
In line with Nyrstar’s strategy, the acquisition of Eras provides the opportunity to process alternate valuable feed materials such as
Nyrstar smelters’ residues and ponds.
153
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2013, the accounting for the acquisition was done on a provisional basis due to the timing of the acquistion.
The acquisiton had the following effect on the Group’s assets and liabilities on acquisition date:
EUR million Provisional fair values on acquisition
Property, plant and equipment 7.3
Inventories 1.0
Trade receivables 0.6
Cash and cash equivalents 0.1
Provisions (1.5)
Loans and borrowings (1.8)
Trade and other payables (2.8)
Net identi?able assets and liabilities 2.9
Consideration paid, satis?ed in cash 2.9
Cash acquired 0.1
Net cash out?ow 2.8
The amounts of revenue and pro?t since the acquisition date included in the consolidated income statement for the reporting
period ended 31 December 2013 was EUR 0.2 million and EUR (0.2) million respectively. If the acquisition had occurred on 1
January 2013, management estimates that consolidated revenue and the consolidated pro?t for the year ended 31 Dec 2013
would have been EUR 9.2 million higher respectively EUR 3.2 million lower.
9. Disposal of subsidiaries
On 9 October 2012 Nyrstar sold its entire 66% share in Galva 45 SA, a French company specialising in galvanizing manufactured
steel parts for cash proceeds of EUR 2.2 million resulting in a loss of EUR 0.1 million.
10. M&A related transaction expense
Merger and acquisition (M&A) related expense include the acquisition and disposal related direct transaction costs (e.g. advisory,
accounting, tax, legal or valuation fees paid to external parties). The M&A related transaction expense in the 2013 income
statement amounts to EUR 1.7 million (2012: EUR 2.6 million). In 2013, EUR 0.5 million related to successfully completed
acquisitions, see Note 8 (2012: nil).
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154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Employee bene?ts expense
EUR million 2013 2012
Wages and salaries (349.9) (363.4)
Compulsory social security contributions (23.9) (26.4)
Contributions to de?ned contribution plans (4.6) (4.6)
Expenses related to de?ned bene?t plans (7.7) (8.1)
Equity and cash settled share based payment transactions, incl. social security (5.2) (6.2)
Total employee bene?ts expense (391.3) (408.7)
12. Finance income and expense
EUR million 2013 2012
Interest income 0.9 1.2
Total ?nance income 0.9 1.2
Interest expense (67.4) (65.6)
Unwind of discount in provisions (11.0) (15.7)
Other ?nance charges (21.1) (12.4)
Total ?nance expense (99.5) (93.7)
Net foreign exchange loss (0.6) (0.9)
Net ?nance expense (99.2) (93.4)
13. Income tax
(a) Income tax recognised in the income statement
EUR million 2013 2012
Current income tax expense (18.7) (35.0)
Deferred income tax bene?t 7.6 49.8
Total income tax (expense) / bene?t (11.1) 14.8
155
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b) Reconciliation of effective tax rate
The tax on the Group’s pro?t before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to pro?ts of the consolidated entities as follows:
EUR million 2013 2012
Loss before income tax (184.3) (111.3)
Tax at aggregated weighted average tax rate 46.1 25.9
Aggregated weighted average income tax rate 25.0% 23.3%
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Non-deductible amounts (48.5) (4.2)
Recognition / (non-recognition) of tax losses and temporary differences 6.2 (10.0)
Overprovision for previous years 0.9 9.4
Unrecoverable withholding tax (6.1) (5.7)
Net adjustment to deferred tax balances due to tax rate change in foreign
jurisdiction (3.4) (0.5)
Share of income tax of equity accounted investees - 0.1
Foreign exchange differences (2.1) 1.0
Other (4.2) (1.2)
Total income tax (expense) / bene?t (11.1) 14.8
Effective income tax rate -6.0% 13.3%
The change in the aggregate weighted average income tax rate compared to the year ended 31 December 2012 is due to the
variation in the weight of subsidiaries’ pro?ts.
Nyrstar recognised an income tax expense for the year ended 31 December 2013 of EUR 11.1 million representing an effective
income tax rate of -6.0% (for the year ended 31 December 2012: 13.3%). The tax rate is impacted by non deductible amounts
related to the impairments incurred by the Group, recognition of previously unrecognised tax losses and temporary differences and
unrecoverable withholding tax.
(c) Income tax recognised directly in other comprehensive income
EUR million 2013 2012
Income tax (expense) recognised on cash ?ow hedges (4.3) -
Income tax (expense) / bene?t recognised on de?ned bene?ts pension schemes (3.1) 4.2
Total income tax recognised directly in other comprehensive income (7.4) 4.2
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156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Recognised deferred income tax assets and liabilities
Deferred tax assets and liabilities consist of temporary differences attributable to:
EUR million 31 Dec 2013 31 Dec 2012
ASSETS:
Employee bene?ts 19.6 31.3
Provisions 39.7 33.4
Property, plant and equipment 6.0 36.1
Payables / receivables 7.5 10.6
Tax losses carried forward 135.3 68.4
Other 8.6 4.6
Total 216.7 184.4
Set off of tax (96.1) (107.4)
Deferred tax assets 120.6 77.0
LIABILITIES:
Embedded derivatives (6.8) (5.3)
Property, plant and equipment (258.0) (224.5)
Payables / receivables (3.7) (18.0)
Other (1.8) (2.1)
Total (270.3) (249.9)
Set off of tax 96.1 107.4
Deferred tax liabilities (174.2) (142.5)
Deferred tax - net (53.6) (65.5)
INCOME STATEMENT:
Employee bene?ts (8.4) (2.3)
Provisions 6.5 (6.5)
Property, plant and equipment (62.1) 19.3
Payables / receivables (4.4) (0.7)
Tax losses carried forward 68.6 34.1
Embedded derivatives 2.9 3.6
Other 4.5 2.3
Total 7.6 49.8
Reconciliation of deferred tax - net:
As at 1 Jan (65.5) (127.4)
Deferred income tax bene?t 7.6 49.8
Recognised in OCI (7.4) 4.2
Change in consolidation scope - 1.6
Provision for unrealized fx result 15.7 (0.3)
Currency translation effects (4.0) 6.6
As at 31 Dec (53.6) (65.5)
157
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR 66.0 million (31 December 2012: EUR 36.2 million) of the net deferred tax assets on tax losses carried forward arise in entities
that have been loss making in 2013 and 2012. In evaluating whether it is probable that taxable pro?ts will be earned in future
accounting periods, all available evidence was considered. These forecasts are consistent with those prepared and used internally
for business planning and impairment testing purposes. Following this evaluation, it was determined there would be suf?cient
taxable income generated to realise the bene?t of the deferred tax assets.
(e) Unrecognised deductible temporary differences and tax losses
EUR million
Net deductible
temporary
differences
Tax loss carry
forward
Total
Dec 31, 2013
Net deductible
temporary
differences
Tax loss carry
forward
Total
Dec 31, 2012
No expiration date 164.0 281.9 445.9 185.3 247.1 432.4
Expiration date
within 4 years - - - - - -
Expiration date 4
to 7 years - - - - 179.2 179.2
Expiration date
over 7 years - - - - - -
Total 164.0 281.9 445.9 185.3 426.3 611.6
(f) Unremitted earnings
As at 31 December 2013, unremitted earnings of EUR 540.0 million (31 December 2012: EUR 393.0 million) have been retained by
subsidiaries and associates for reinvestment. No provision is made for income taxes that would be payable upon the distribution of
such earnings.
(g) Tax audit
Nyrstar periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information
available. For those matters where it is probable that an adjustment will be made, the Group recorded its best estimate of these tax
liabilities, including related interest charges. The ?nal outcome of tax examinations may result in a materially different outcome
compared to the recorded tax liabilities and contingencies.
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158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Other expense
EUR million 2013 2012
Stock movement conversion costs 3.9 8.0
Other tax expense (8.5) (9.9)
Travel expense (9.8) (12.1)
Operating lease (14.0) (12.3)
Insurance expense (8.2) (8.2)
Royalties (7.0) (7.0)
Communication expenses (4.5) (4.2)
IT costs (1.3) (1.9)
Memberships/subscriptions (1.7) (2.3)
Training (1.7) (2.1)
Other (10.5) (10.3)
Total other expenses (63.3) (62.3)
15. Property, plant and equipment
EUR million Note
Land and
buildings
Plant and
equipment
Mining
properties and
development
Under
construction
Cyclical
maintenance
and other Total
Cost 152.4 1,525.9 916.2 95.9 162.2 2,852.6
Accumulated depreciation and
impairment (17.9) (718.0) (250.1) - (95.1) (1,081.1)
Carrying amounts 134.5 807.9 666.1 95.9 67.1 1,771.5
As at 1 Jan 2013 151.7 707.9 727.4 82.2 61.0 1,730.2
Acquired in business combination - 7.3 - - - 7.3
Additions 2.2 46.0 16.0 115.2 18.7 198.1
Restoration provision adjustments 29 - - 21.7 - - 21.7
Transfers (20.4) 34.5 58.6 (96.7) 18.1 (5.9)
Disposals (0.3) (1.2) - - - (1.5)
Depreciation expense (12.0) (112.3) (60.1) - (27.6) (212.0)
Impairment 17 20.8 166.1 (57.4) 4.6 (0.3) 133.8
Currency translation effects (7.5) (40.4) (40.1) (9.4) (2.8) (100.2)
As at 31 Dec 2013 134.5 807.9 666.1 95.9 67.1 1,771.5
159
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR million Note
Land and
buildings
Plant and
equipment
Mining
properties and
development
Under
construction
Cyclical
maintenance
and other Total
Cost 207.8 1,763.1 1,055.2 82.2 173.2 3,281.5
Accumulated
depreciation and
impairment (56.1) (1,055.2) (327.8) - (112.2) (1,551.3)
Carrying amounts 151.7 707.9 727.4 82.2 61.0 1,730.2
As at 1 Jan 2012 124.1 707.6 689.4 145.3 59.3 1,725.7
Disposal of subsidiaries - (3.9) - (0.1) (0.1) (4.1)
Additions 14.7 72.0 50.2 78.9 30.3 246.1
Restoration provision
adjustments 29 - - (5.0) - - (5.0)
Transfers 37.4 44.1 63.7 (141.0) (4.2) (0.0)
Disposals (1.1) (0.6) (0.1) - (0.1) (1.9)
Depreciation expense (14.7) (106.1) (62.8) - (23.7) (207.3)
Impairment 17 (7.2) (1.1) - - - (8.3)
Currency translation
effects (1.5) (4.1) (8.0) (0.9) (0.5) (15.0)
As at 31 Dec 2012 151.7 707.9 727.4 82.2 61.0 1,730.2
The carrying amount of property, plant and equipment accounted for as ?nance lease assets at 31 December 2013 is EUR 1.9
million and is classi?ed as plant and equipment (2012: EUR 3.2 million). The carrying amount of exploration and evaluation
expenditure at 31 December 2013 is EUR 22.2 million and is included in mining properties and development (2012: EUR 14.3
million). The additions to the carrying amount of the exploration and evaluation expenditure during 2013 were EUR 8.4 million
(2012: EUR 9.9 million).
The total gains on sales of property, plant and equipment in the 2013 income statement amount to EUR 2.1 million
(2012: EUR 6.4 million).
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1
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160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Intangible assets
EUR million Note Goodwill
Emission and
carbon rights
Software
and other Total
Cost - 2.5 26.5 29.0
Accumulated amortisation and impairment - (0.4) (18.3) (18.7)
Carrying amounts - 2.1 8.2 10.3
As at 1 Jan 2013 124.9 1.1 7.4 133.4
Additions
*
- 23.3 0.8 24.1
Transfers - - 5.9 5.9
Disposals - (21.7) - (21.7)
Amortisation expense - - (5.3) (5.3)
Impairment 17 (118.2) - (0.4) (118.6)
Currency translation effects (6.7) (0.6) (0.2) (7.5)
As at 31 Dec 2013 - 2.1 8.2 10.3
* EUR 22.8 million relate to non-cash recognition of emission and carbon rights.
EUR million Note Goodwill
Emission and
carbon rights
Software
and other Total
Cost 124.9 4.0 20.2 149.1
Accumulated amortisation and impairment - (2.9) (12.8) (15.7)
Carrying amounts 124.9 1.1 7.4 133.4
As at 1 Jan 2012 127.6 0.6 10.4 138.6
Additions
*
- 26.7 1.4 28.1
Disposals - (26.5) - (26.5)
Amortisation expense - (0.3) (4.7) (5.0)
Currency translation effects (2.7) 0.6 0.3 (1.8)
As at 31 Dec 2012 124.9 1.1 7.4 133.4
* EUR 26.4 million relate to non-cash recognition of emission and carbon rights.
161
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N
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Goodwill was allocated to the following cash generating units. As outlined in Note 17, Nyrstar impaired EUR 118.2 million (100%)
of its goodwill during the year ended 31 December 2013 (2012: EUR Nil).
EUR million 31 Dec 2013 31 Dec 2012
Peruvian mines - 12.1
Campo Morado - 71.1
El Toqui - 6.8
El Mochito - 5.0
Myra Falls - 8.5
Langlois - 21.4
Total Goodwill - 124.9
17. Impairment
Impairment loss
In 2013 Nyrstar recognised pre-tax impairment charges on Nyrstar’s Mining assets of EUR 202.6 million (2012: EUR Nil),
impairment reversals related to Nyrstar’s Metals Processing assets of EUR 207.4 million (2012: EUR Nil) and impairment charges
on non-core operations of the Group of EUR 24.9 million (2012: EUR18.2 million) resulting in a net impairment loss of EUR 20.1
million (2012: EUR: 18.2 million).
The allocation of the impairment charges for the period to individual assets, cash generating units and operating segments is
outlined below:
in EUR million whereof
Impairment
(loss) / reversal
Property, plant
and equipment Goodwill Investments Other
Peruvian mines (74.7) (51.8) (12.1) - (10.8)
Campo Morado (89.8) (21.8) (68.0) - -
Langlois (19.2) - (19.2) - -
Myra Falls (7.6) - (7.6) - -
El Toqui (6.5) - (6.5) - -
El Mochito (4.8) - (4.8) - -
Mining (202.6) (73.6) (118.2) - (10.8)
Port Pirie 58.5 58.5 - - -
Balen 148.9 148.9 - - -
Metals processing 207.4 207.4 - - -
Investments in equity accounted
investees (12.0) - - (10.6) (1.4)
Investments in equity securities (12.9) - - (12.9) -
Other non-core assets of the Group
1
(24.9) - - (23.5) (1.4)
Total (20.1) 133.8 (118.2) (23.5) (12.2)
(note 15) (note 16) (note 18, 19)
1
Other non-core assets of the Group are not allocated to operating segments and are included in Other and eliminations in Note 7
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Impairment testing for mining and metals processing operations
Recoverable values were determined on the basis of fair value less cost to sell (FVLCS) for each operation. The FVLCS recoverable
values for Mining and Metals Processing operations were determined as the present value of the estimated future cash ?ows
(expressed in real terms) expected to arise from the continued use of the assets (life of asset), including reasonable forecast
expansion prospects and using assumptions that an independent market participant would take into account. These cash ?ows
were discounted using a real after-tax discount rate that re?ected current market assessments of the time value of money and the
risks speci?c to the operation.
The key assumptions underlying the FVLCS were forecast commodity prices, foreign exchange rates and treatment charges,
discount rates, production levels and capital and operating costs.
Commodity price and foreign exchange rate forecasts were developed based on externally available forecasts by market
commentators. The prices used in the impairment assessment varied in accordance with the year the sale was expected to occur
with long term prices starting in 2020. The ranges of prices used are outlined in the table below:
Low High Long term
Commodity prices (USD)
Zinc (per tonne) 2,100 2,960 2,640
Lead (per tonne) 2,180 2,390 2,180
Copper (per tonne) 6,500 6,970 6,970
Gold (per ounce) 1,330 1,400 1,400
Silver (per ounce) 22.50 24.20 24.20
Foreign exchange rates (versus Euro)
United States dollar 1.23 1.30 1.26
Australian dollar 1.46 1.58 1.58
Treatment charge assumptions are determined by reference to benchmark treatment charges and historical treatment charge rates
as a proportion of the associated metal price and range from 7% to 13% of the underlying metal price.
Discount rates are determined using a weighted average cost of capital methodology on an operation speci?c basis. The discount
rates applied for operations with allocated goodwill and/or impairment charges/reversals are outlined in the table below:
Discount rate
Peruvian mines 9.30%
Campo Morado 8.50%
El Toqui 8.00%
El Mochito 11.20%
Myra Falls 7.80%
Langlois 7.80%
Port Pirie 10.00%
Balen 5.30%
163
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Production levels and capital and operating costs are determined based on approved budgets and forecasts with greater weight
given to historical results unless de?nitive plans are in place for capital projects which are expected to have a signi?cant,
favourable effect on the operation. In such circumstances, expenditures associated with the capital project are incorporated into
the FVLCS model.
Impairment charges related to mining operations
Based on the results of its impairment testing at 31 December 2013, the Group has recorded impairment losses related to its
mining operations totalling EUR 202.6 million. The key events which led to the declines in the recoverable values of the mining
operations and associated impairment losses were primarily the introduction of the Mexican mining tax at Campo Morado,
suspension of the operations at Corricancha and Puccarajo in Peru without current plans to fully restart these operations and the
impacts of lower precious metal prices. The impairment tests resulted in the full impairment of Nyrstar’s previously recognised
goodwill.
Reversal of impairment at Balen and Port Pirie
In 2013 Nyrstar prepared recoverable value estimates for all Metals Processing assets. As a result of these recoverable value
estimates, Nyrstar reversed impairment charges previously recognised in the year ended 31 December 2008 in connection with the
Balen Smelter (EUR 148.9 million) and the Port Pirie Smelter (EUR 58.5 million). In each case, the impairment reversal was after
adjusting for accumulated amortisation which would have been recorded had the 2008 impairments not been recorded.
The reversal of impairment at the Balen Smelter was driven by the continuous, sustained improvements in operating results at
the Balen Smelter since 2008 particularly in relation to zinc recovery rates and energy costs which combined with the favourable
zinc price outlook provide objective evidence that the recoverable amounts of the assets in Balen exceed their carrying value
after reversal of the 2008 impairment charge. The reversal of impairment at the Port Pirie Smelter is due to the planned Port Pirie
Transformation Project, a capital expansion plan which will signi?cantly change the nature of the operating capabilities of the Port
Pirie Smelter from a primary lead smelter to a world class, multi-metals recovery facility increasing the cash generating ability of
Port Pirie. The recoverable value estimate for Port Pirie incorporates all capital expenditure associated with the project and the
discount rate applied includes a premium for construction risks. Based on the results of the impairment testing the recoverable
amounts of the assets in Port Pirie exceed their carrying value after reversal of the 2008 impairment charge.
Other non-core assets of the Group
In 2013 Nyrstar recognised impairment losses of EUR 24.9 million on Group’s non-core assets. The majority of these impairment
losses relate to investments in equity securities that has been valued at fair value with mark to market movements recognised
in other comprehensive income (“OCI”) for which market prices which indicated a signi?cant decline in the market value of the
investment (EUR 12.9 million) and investments in equity accounted investees estimated under FVLCS using discounted cash ?ow
models (EUR 10.6 million).
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164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. Investments in equity accounted investees
EUR million Ownership 31 Dec 2013 31 Dec 2012
Genesis Alloys (Ningbo) Ltd
1
50.00% - 1.1
Foehl China Co. Ltd
1
50.00% 2.0 11.0
Ironbark Zinc Ltd 26.50% 16.5 16.8
Other 49.00% 0.1 0.1
Total 18.6 29.0
1
Impairment losses totaling EUR 10.6 million were recorded in connection with Genesis Alloys (Ningbo) Ltd. and Foehl China Co. Ltd during the year ended 31 December
2013 (2012: EUR Nil), refer to note 17.
Summary ?nancial information for equity accounted investees, adjusted for the percentage ownership held by the Group, is as
follows:
EUR million Current assets
Non-current
assets
Current
liabilities
Non-current
liabilities Revenues Pro?t / (loss)
As at 31 Dec 2013 6.4 65.3 (0.9) (0.2) 17.6 0.8
As at 31 Dec 2012 10.5 102.9 (2.4) (0.2) 22.7 (1.3)
In 2012, the joint venture between Nyrstar and SimsMM (ARA joint venture) sold Australian Re?ned Alloys’ secondary lead
producing facility in Sydney, Australia (ARA Sydney) to companies associated with Renewed Metal Technologies Pty Ltd for a total
sale price of EUR 60 million (AUD 80 million) plus working capital. Nyrstar’s share of the sales proceeds was EUR 32.4 million,
including a working capital adjustment, with a gain on the sale of EUR 26.7 million. Nyrstar continues to operate the former ARA’s
production facility in Melbourne under the name of Simstar Joint Venture with Sims Metal Management Limited.
The fair value (based on the quoted bid prices in an active market, a Level 1 measurement) of Nyrstar’s share of Ironbark Zinc Ltd
as of 31 December 2013 is EUR 3.8 million (2012: 10.8 million).
In 2012 the Group has provided a guarantee of CNY 20 million (EUR 2.4 million) in favour of KBC in China, who provided a credit
facility to Genesis Alloys (Ningbo) Ltd. There is no outstanding guarantee at 31 December 2013.
165
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19. Investments in equity securities
EUR million 31 Dec 2013 31 Dec 2012
Herencia Resources Ltd
1
1.2 1.4
Quali?ed Environmental Trust 16.3 18.1
Exeltium SAS 4.2 4.2
Other
1
5.8 14.2
Total 27.5 37.9
1
Impairment losses totaling EUR 12.9 million were recorded in connection with Henencia Resources Ltd. and other investments in equity securities during the year
ended 31 December 2013 (2012: EUR Nil), refer to note 17.
All investments in equity securities are measured at level 1 under the fair value measurements using quoted bid prices in an active
market (refer to note 35g for further explanation), with the exception of Exeltium SAS, which is a private company and carried at
cost.
20. Zinc purchase interest
In February 2010, Nyrstar acquired 1.25 million tonnes of zinc in concentrate for USD 335 million (EUR 242.6 million) from Talvivaara
Sotkamo Limited (a member of the Talvivaara Mining Company Plc group “Talvivaara”) to be delivered over a number of years (the
“Agreement”). As at 31 December 2013, 1.03 million tonnes (2012 – 1.17 million tonnes) remain to be delivered to Nyrstar.
The asset is depleted through the income statement on the unit of production basis as the underlying tonnes are delivered to Nyrstar.
EUR million 2013 2012
As at 1 Jan 237.2 249.2
Depletion (2.8) (6.1)
Currency translation effects (10.1) (5.9)
As at 31 Dec 224.3 237.2
During November 2013 Talvivaara applied for the commencement of corporate reorganisation proceedings under Finland’s
Restructuring of Enterprises Act (the “Reorganisation”). During December 2013, the responsible Court approved commencement
of the Reorganisation and appointed a reorganisation administrator (the “Administrator”) to submit a reorganisation plan for the
approval by the creditors and the Court. The objective of the process is to reorganise Talvivaara’s ?nancial position to facilitate its
long term viability. The Administrator is due to ?le with the Court reports on the ?nancial status of Talvivaara in March 2014 and
proposals for the reorganisation program in May 2014.
Nyrstar is not a creditor of Talvivaara and its contractual rights under the Agreement are not directly the subject of the
Reorganisation. However, Nyrstar is engaged in discussions with the Administrator as the ongoing viability of Talvivaara’s
operations will impact on Talvivaara’s ability to perform its obligations under the Agreement.
In the event of the reorganisation process being unsuccessful, Talvivaara may have to ?le for bankruptcy. In bankruptcy, the
bankruptcy administrator has the option to void the Agreement. Should the Agreement be voided, Nyrstar would become a
creditor to Talvivaara for the amounts outstanding under the Agreement. Collectability of any such amounts would be uncertain.
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1
3
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nyrstar has assessed the recoverability of the Agreement on the basis of Talvivaara continuing as a going concern and delivering
into the Agreement. This assessment takes into account the enhanced performance risk due to Talvivaara’s current ?nancial
situation and concludes the EUR 224.4 million carrying value of the Agreement is recoverable.
Considerable uncertainties exist as to the outcome of the Reorganisation, Talvivaara continuing as a going concern and the
performance of its obligations under the Agreement. It is currently not possible for Nyrstar to estimate the most likely outcome of
the Reorganisation and its impact on the carrying value of the Agreement.
It is possible, though in Nyrstar’s view not probable, that the outcome of the Reorganisation will result in the carrying value of the
Agreement being impaired. If such an impairment was recognised in the 31 December 2013 ?nancial results, the reported loss for
the year of EUR 195.4 million would increase by a range of EUR Nil to EUR 176.9 million (being the tax effected carrying value of
the zinc purchase interest of EUR 224.4 million). The reported loss for the year would then be in a range of EUR 195.4 million to
EUR 372.3 million and total equity would be in a range of EUR 869.6 million to EUR 692.7 million. Such impairments would not
impact Nyrstar’s compliance with ?nancial covenants on existing loan agreements as at 31 December 2013.
21. Other ?nancial assets and liabilities
EUR million 31 Dec 2013 31 Dec 2012
Embedded derivatives
(b)
- 11.6
Restricted cash
(c)
7.6 8.2
Held to maturity
(d)
2.8 2.6
Loans to equity accounted investees
(e)
- 2.7
Total non-current ?nancial assets 10.4 25.1
Commodity contracts - fair value hedges
(a)
9.1 33.8
Commodity contracts - cash ?ow hedges
(f)
4.8 -
Foreign exchange contracts - held for trading 11.5 7.7
Embedded derivatives
(b)
1.2 5.5
Total current ?nancial assets 26.6 47.0
Embedded derivatives
(b)
3.9 2.1
Total non-current ?nancial liabilities 3.9 2.1
Commodity contracts - fair value hedges
(a)
14.4 10.6
Foreign exchange contracts - held for trading 6.0 0.5
Embedded derivatives
(b)
0.4 0.2
Total current ?nancial liabilities 20.8 11.3
(a) Instruments used by Nyrstar to manage exposure to currency and commodity price risk exposures
The fair value of derivatives (commodity contracts) hedging inventories and ?xed forward sales contracts resulted in a net liability
of EUR 5.3 million (31 December 2012: net asset of EUR 23.2 million) being recognised on the statement of ?nancial position.
Carrying amounts of the hedged items of inventory as well as the ?rm commitments for ?xed forward sales contracts are disclosed
in note 22 and 23, respectively.
167
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The fair value of foreign exchange derivatives that are commercially effective hedges but do not meet the strict IFRS hedge
effectiveness criteria, are classi?ed as held for trading and resulted in a net asset of EUR 5.5 million (31 December 2012 net asset:
EUR 7.2 million).
The Group’s exposure to currency and commodity risk related to other ?nancial assets and liabilities is disclosed in note 35.
(b) Embedded derivatives
The change in fair value on the effective portion of the Group’s embedded derivatives during the year ended 31 December 2013
with a negative impact of EUR 9.0 million (31 December 2012: negative impact of EUR 7.2 million) was recognised in the cash ?ow
hedge reserve whilst changes in fair value on the ineffective portion and amortisation of the swap’s fair value at inception of EUR
9.3 million (31 December 2012: EUR 8.7 million) were recognised in the income statement within energy expense.
(c) Restricted cash
The restricted cash balance of EUR 7.6 million as at 31 December 2013 (31 December 2012: EUR 8.2 million) represents amounts
placed on deposit to cover certain reclamation costs.
(d) Held to maturity
The held to maturity instrument is a government bond that is required to be maintained as a security deposit.
(e) Loans to equity accounted investees
During 2012, the Group provided an interest free loan of USD 3.5 million (31 December 2013: EUR 0.0 million, 31 December 2012:
EUR 2.7 million) to Genesis, its equity accounted investee. The initial term of the loan is 3 years, however is automatically extended
for consecutive periods of 3 years unless a written repayment notice is served to Genesis Alloys (Ningbo) Ltd. During 2013 Nyrstar
fully impaired the loan.
(f) Commodity contracts – cash ?ow hedges
The amount of EUR 4.8 million represents a remaining balance of the commodity contracts – cash ?ow hedges that were not
settled at 31 December 2013. The fair value of the effective portion of commodity contracts - cash ?ow hedges at 31 December
2013 is a gain of EUR 32.7 million (31 December 2012: nil). As the commodity contracts - cash-?ow hedges have been 100% hedge
effective, the gain of EUR 32.7 million has been recognised in the cash ?ow hedge reserve.
22. Inventories
EUR million 31 Dec 2013 31 Dec 2012
Raw materials 183.4 308.6
Work in progress 219.8 322.0
Finished goods 38.5 39.3
Stores and consumables 73.9 81.6
Fair value adjustment* - (4.4)
Total inventories 515.6 747.1
* As the Group applies hedge accounting as described in note 3g, the hedged items of inventories are valued at fair value.
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1
3
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
During the year ended 31 December 2012 Nyrstar identi?ed, processed and sold silver bearing inventory had previously not
been recognised on the balance sheet. This inventory related to historical silver losses in the Port Pirie smelter identi?ed as being
recoverable during 2012. The pre-tax bene?t from the identi?cation, recovery and sale of the silver bearing material recognised in
the income statement for the period ended 31 December 2012 was EUR 23.6 million. During the year ended 31 December 2013,
Nyrstar did not identify further silver inventory.
23. Other assets and liabilities
EUR million 31 Dec 2013 31 Dec 2012
Deferred debt issuance cost - non-current (b) 2.6 3.4
Other - non-current 0.6 0.5
Total other non-current assets 3.2 3.9
Fair value of underlying hedged risk - current (a) - 4.0
Total other current assets - 4.0
Commodity delivery obligation - non-current (c) 55.6 59.3
Total other non-current liabilities 55.6 59.3
Fair value of underlying hedged risk - current (a) 3.9 2.7
Commodity delivery obligation - current (c) 2.4 4.1
Total other current liabilities 6.3 6.8
(a) Fair value of underlying hedged risk
The fair value of ?xed forward sales contracts (the underlying hedged items) resulted in a net liability of EUR 3.9 million (2012:
net asset of EUR 1.3 million), being offset by an amount of EUR 1.0 million (2012: EUR 2.0 million) representing the fair value of
hedging derivatives on these ?xed forward sales contracts and included in note 21 other ?nancial assets and liabilities.
(b) Deferred debt issuance cost
Transaction cost of the SCTF credit facility (see note 28) not yet amortised of EUR 2.6 million (2012: EUR 3.4 million).
(c) Other liabilities
In 2011 Nyrstar acquired Farallon Mining Ltd., the owner of the Campo Morado mining operation in Mexico. In May 2008, Farallon
entered into a contractual agreement with Silver Wheaton Corp. (“Silver Wheaton”) to sell 75% of its silver production from the
Campo Morado operation over the life of mine for an upfront payment of USD 80.0 million. Upon physical delivery of the silver,
Silver Wheaton will also pay Nyrstar a ?xed price payment per ounce of silver produced equal to the lesser of USD 3.90 and the
spot price at the time of sale (subject to a 1% annual adjustment starting in the third year of silver production)
169
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As a part of the purchase price allocation accounting for the Campo Morado acquisition, the obligation to deliver silver to Silver
Wheaton was fair valued based on the present value of the forgone revenue resulting from the Silver Wheaton obligation as of
the acquisition date. The obligation is depleted through the income statement using the unit-of-production method, as the mineral
reserves related to the Silver Wheaton liability are mined and delivered under the contract. The amortisation of the Silver Wheaton
liability in 2013 amounts to EUR 2.6 million (2012: EUR 2.5 million).
24. Trade and other receivables
EUR million 31 Dec 2013 31 Dec 2012
Trade receivables 163.6 207.3
Less provision for receivables (2.1) (2.5)
Net trade receivables 161.5 204.8
Other receivables 13.4 16.3
Total trade and other receivables 174.9 221.1
The movement in the provision for receivables is detailed in the table below:
EUR million 2013 2012
As at 1 Jan 2.5 3.3
Disposal of subsidiaries - (0.2)
Payments (0.1) -
Additions / (reversals) (0.3) (0.6)
As at 31 Dec 2.1 2.5
The Group’s exposure to currency and liquidity risk related to trade and other receivables is disclosed in note 35.
25. Cash and cash equivalents
EUR million 31 Dec 2013 31 Dec 2012
Cash at bank and on hand 101.6 74.0
Short-term bank deposits 190.7 114.1
Total cash and cash equivalents 292.3 188.1
EUR 2.5 million of the cash and cash equivalents balance was restricted at 31 December 2013. This cash was released to Nyrstar on
21 January 2014.
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A
N
N
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0
1
3
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Cash at bank and on hand and short-term deposits earned a combined weighted average interest rate of 0.1% for calendar year
2013 (2012: 0.2% per annum).
The Group’s exposure to interest rate risk and a sensitivity analysis for ?nancial assets and liabilities are disclosed in note 35.
26. Capital
Share capital and share premium
As at 31 December 2013 the number of issued ordinary shares is 170,022,544 (31 December 2012: 170,022,544) with a par value
of EUR 2.18 (2012: EUR 2.34). The reduction in par value is due to decisions taken at the extraordinary shareholders’ meeting on
23 May 2013 to reduce the Company’s share capital through the distribution to the shareholders of an amount of EUR 0.16 per
outstanding share, EUR 27.2 million (for further detail see below). The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with
regard to the Company’s residual assets.
Apart from the issued share capital, Nyrstar NV has outstanding convertible bonds issued in 2009 and 2013 in an aggregate
principal amount of EUR 119.9 million and EUR 120.0 million respectively. Based on a conversion price of EUR 5.63 per share for
the bonds issued in 2009, if all convertible bonds are converted, a maximum of 21,296,625 new shares are to be issued. Based
on a conversion price of EUR 4.978 per share for the bonds issued in 2013, if all convertible bonds are converted, a maximum of
24,106,066 new shares are to be issued.
Distribution to shareholders (capital decrease)
The extraordinary shareholders’ meeting on 23 May 2013 approved a distribution of EUR 0.16 per share, amounting to a total
distribution of EUR 27.2 million (net of treasury shares EUR 24.0 million) The distribution was structured as a capital reduction
with reimbursement of paid-up capital.
The Board of Directors has decided not to propose to shareholders a distribution for the ?nancial year 2013, re?ecting its
commitment to support the opportunities identi?ed by the company’s growth plans.
Issued shares 2013 2012
Shares outstanding 154,684,113 162,676,718
Treasury shares 15,338,431 7,345,826
As at 31 Dec 170,022,544 170,022,544
Movement in shares outstanding 2013 2012
As at 1 Jan 162,676,718 160,609,406
Purchases of treasury shares (13,245,757) -
Sales of treasury shares 4,765,225 -
Employee shared based payment plan 487,927 2,067,312
As at 31 Dec 154,684,113 162,676,718
171
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N
U
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Movement in treasury shares Note 2013 2012
As at 1 Jan 7,345,826 9,413,138
Purchases 27 13,245,757 -
Sales 27 (4,765,225)
Employee shared based payment plan 33 (487,927) (2,067,312)
As at 31 Dec 15,338,431 7,345,826
Disclosure of the shareholders’ structure
The Group’s major shareholders (holding greater than 3% of the Group’s outstanding shares) based on noti?cations of signi?cant
shareholdings available as at 31 December 2013 were:
Shareholder’s name Shareholder’s address
Date of
noti?cation
Number of
voting rights in %
BlackRock Group 33 King William Street, London EC4R 9AS, UK 13 Dec 2012 6,505,459.0 3.83%
Umicore S.A. / N.V. Broekstraat 31, 1000 Brussels, Belgium 23 Mar 2011 5,251,856.0 3.09%
Total 11,757,315.0 6.92%
27. Reserves
Reconciliation of movement in reserves
EUR million
Treasury
shares
Translation
reserves
Reverse
acquisition
reserve
Cash ?ow
hedge
reserve
Convertible
bond
Investments
reserve Total
As at 1 Jan 2013 (17.2) 69.5 (265.4) (0.3) 8.8 (2.9) (207.5)
Gains on cash ?ow hedges - - - 19.4 - - 19.4
Foreign currency
translation differences - (90.0) - - - - (90.0)
Change in fair value of
investments in equity securities - - - - - 4.1 4.1
Change in par value 3.2 - - - - - 3.2
(Acquisition) / distribution
of treasury shares (19.4) - - - - - (19.4)
Convertible bond - - - - 15.7 - 15.7
As at 31 Dec 2013 (33.4) (20.5) (265.4) 19.1 24.5 1.2 (274.5)
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T
2
0
1
3
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
EUR million
Treasury
shares
Translation
reserves
Reverse
acquisition
reserve
Cash ?ow
hedge
reserve
Convertible
bond
Investments
reserve Total
As at 1 Jan 2012 (23.5) 93.9 (273.0) 6.9 8.8 2.0 (184.9)
Losses on cash ?ow hedges - - - (7.2) - - (7.2)
Foreign currency translation differences - (24.4) - - - - (24.4)
Change in fair value of investments in
equity securities - - - - - (4.9) (4.9)
Reclassi?cation of reversed acquisition
reserve - - 7.6 - - - 7.6
Change in par value 1.2 - - - - - 1.2
(Acquisition) / distribution of treasury
shares 5.1 - - - - - 5.1
As at 31 Dec 2012 (17.2) 69.5 (265.4) (0.3) 8.8 (2.9) (207.5)
Treasury shares
The treasury shares reserve comprises the par value of the Company’s share held by the Group. As at 31 December 2013, the Group
held a total of 15,338,431 of the Company’s shares (31 December 2012: 7,345,826).
At 16 April 2013, the Group acquired off-market, Glencore International AG’s (“Glencore”) entire 7.79% shareholding (13,245,757
shares) in Nyrstar for EUR 3.39 per share, for a total consideration of EUR 44.9 million. Furthermore Glencore agreed to
compensate Nyrstar with a termination fee of EUR 44.9 million in relation to ending its Commodity Grade Off-take agreement by
31 December 2013 for the sale and marketing of commodity grade zinc metal produced by Nyrstar, within the European Union.
The termination fee has been recognised in other income.
At 1 October 2013 Nyrstar entered a strategic offtake and marketing agreement with Noble Group Limited (“Noble”) to market and
sell a signi?cant portion of commodity grade zinc metal produced at its European smelters. Noble agreed to acquire from Nyrstar’s
treasury shareholding 1,700,225 common shares in Nyrstar, representing 1% of total shares for a price of EUR 3.76 per share, for a
total cash consideration of EUR 6.4 million.
In 2013 Nyrstar sold 3,065,000 shares to a ?nancial institution and the participants in relation with the LESOP (note 33), for a cash
consideration of EUR 5.3 million.
During 2013 the Group settled its LTIP Grant 2 and 3. A total of 487,927 shares (2012: 2,067,312) were allocated to the employees
as a part of this settlement.
173
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A
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A
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N
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2
0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. Loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings, which are
measured at amortised cost. For more information about the Group’s exposure to interest rate, foreign currency and liquidity risks
see note 35.
as at as at
EUR million 31 Dec 2013 31 Dec 2012
Convertible bonds 102.9 115.9
Fixed rate bonds 734.2 748.8
SCTF Credit Facility - -
Other loans - 0.3
Unsecured bank loans 1.8 -
Finance lease liabilities 1.0 2.2
Total non-current loans and borrowings 839.9 867.2
Convertible bonds 118.5 -
Unsecured bank loans 2.5 0.3
Finance lease liabilities 0.9 1.0
Total current loans and borrowings 121.9 1.3
Total loans and borrowings 961.8 868.5
Convertible bonds
EUR 120 million 7% convertible bonds listed on the Luxembourg Stock Exchange’s Euro MTF market, due July 2014.
The bonds are convertible at the option of the holder, at any time from 1 September 2009 until 1 July 2014 (ten days prior to ?nal
maturity date being 10 July 2014), or if the bonds are called by the Group for redemption prior to the ?nal maturity date, until
the seventh day before the date ?xed for redemption. The conversion price as at 31 December 2013 is EUR 5.63 per share (31
December 2012: EUR 5.91 per share).
The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 108.7 million)
and the equity component (EUR 8.8 million) were determined, using the residual method, at issuance of the bonds. The liability
component is measured at amortised cost at an effective interest rate of 9.09% per annum.
The bonds have been issued at 100% of their principal amount and have a coupon of 7% per annum, payable semi-annually in arrears.
EUR 120 million 4.25% convertible bonds listed on the Frankfurt Open Market (Freiverkehr), due September 2018.
The bonds are convertible at the option of the holder, at any time from 31 December 2013 until 15 September 2018 (ten days prior to
?nal maturity date being 25 September 2018), or if the bonds are called by the Group for redemption prior to the ?nal maturity date,
until the seventh day before the date ?xed for redemption. The conversion price as at 31 December 2013 is EUR 4.978 per share.
The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 102.3 million)
and the equity component (EUR 15.7 million) were determined, using the residual method, at issuance of the bonds. The liability
component is measured at amortised cost at an effective interest rate of 8.03% per annum.
The bonds have been issued at 100% of their principal amount and have a coupon of 4.25% per annum, payable semi-annually in arrears.
In 2013 and 2012 no convertible bonds were converted in ordinary shares of the company.
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174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SCTF credit facility
SCTF credit facility is a secured multi-currency revolving structured commodity trade ?nance credit facility with a limit of EUR 400
million. The facility was re?nanced mid of November 2012 and has a maturity of four years (with run-off period during the fourth
year leading to a maturity of 16 November 2016). The facility includes an accordion to increase its size to EUR 750 million on a
pre-approved but uncommitted basis
Funds drawn under the facility bear interest at EURIBOR plus a margin of 1.85%.
Directly attributable transaction costs have been deducted at initial recognition and are amortized over the term of the credit
facility. Transaction cost not yet amortized at the balance sheet date amount to EUR 2.6 million (31 December 2012: EUR 3.4
million). These costs are disclosed under other assets (see note 23). In 2012 the costs of the previous SCTF credit facility were
written off at the time of renewal, leading to ?nance charges of EUR 3.0 million.
Borrowings under this facility are secured by Nyrstar’s inventories and receivables. In addition to standard representations,
warranties and undertakings, including restrictions on mergers and disposals of assets, the facility provides for ?nancial covenants
which are linked to certain balance sheet ratios.
Fixed rate bonds
At 31 December 2013, the Company has two outstanding ?xed rate bonds; 5.5% ?xed rate bond with an original face value of
EUR 225 million (maturity: April 2015) and 5.375% ?xed rate bond with an original face value of EUR 525 million (maturity: April
2016). In 2013, Nyrstar bought back own bonds with a face value of EUR 5 million for the 5.5% bond and EUR 10 million for the
5.375% bond for total cash consideration of EUR 14.6 million. Directly attributable transaction costs have been deducted at initial
recognition and are amortised over the term of the bonds.
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
31 Dec 2013 31 Dec 2012
EUR million Currency
Nominal
interest rate
Year of
maturity Face value
Carrying
amount Face value
Carrying
amount
Convertible bonds* EUR 7.00% 2014 119.9 118.5 119.9 115.9
Fixed rate bonds EUR 5.50% 2015 220.0 219.9 225.0 224.8
Fixed rate bonds EUR 5.40% 2016 515.0 514.3 525.0 524.0
Convertible bonds** EUR 4.25% 2018 120.0 102.9
Other - - - - - 3.9 3.8
Total interest bearing liabilities 974.9 955.6 873.8 868.5
* The Company may, at any time on or after 10 July 2012, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30 days
consecutive dealing days, the volume weighted average price of the shares exceeds 150% of the conversion price.
** The Company may, at any time on or after 16 October 2016, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30
days consecutive dealing days, the volume weighted average price of the shares exceeds 130% of the conversion price.
175
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Finance leases
EUR million 31 Dec 2013 31 Dec 2012
Within 1 year 0.9 1.0
Between 2 and 5 years 1.1 2.3
Total undiscounted minimum lease payments 2.0 3.3
Less: amounts representing ?nance lease charges 0.1 0.1
Present value of minimum lease payments 1.9 3.2
29. Provisions
EUR million Note
Restoration,
rehabilitation and
decommissioning Restructuring Other Total
As at 1 Jan 2013 179.5 5.1 50.2 234.8
Acquired in business combination 1.5 - - 1.5
Payments (13.0) (7.2) (5.2) (25.4)
Additions / (reversals) 0.9 7.6 (10.6) (2.1)
PPE asset adjustment 15 21.7 - - 21.7
Transfers (0.2) - 0.1 (0.1)
Unwind of discount 12 10.8 - 0.2 11.0
Currency translation effects (13.0) (0.3) (2.4) (15.7)
As at 31 Dec 2013 188.2 5.2 32.3 225.7
Whereof current 7.7 5.2 4.2 17.1
Whereof non-current 180.5 - 28.1 208.6
EUR million Note
Restoration,
rehabilitation and
decommissioning Restructuring Other Total
As at 1 Jan 2012 183.0 2.6 44.1 229.7
Disposal of subsidiaries - - (0.2) (0.2)
Payments (10.9) (3.7) (7.6) (22.2)
Additions / (reversals) (4.2) 6.2 17.8 19.8
PPE asset adjustment 15 (5.0) - - (5.0)
Transfers - - (4.2) (4.2)
Unwind of discount 12 15.4 - 0.3 15.7
Currency translation effects 1.2 - - 1.2
As at 31 Dec 2012 179.5 5.1 50.2 234.8
Whereof current 11.5 5.1 7.7 24.3
Whereof non-current 168.0 - 42.5 210.5
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176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning work on the projects provided for is estimated to occur progressively over the
next 117 years, of which the majority will be used within the next 21 years. The provision is discounted using a current market
based pre-tax discount rate and the unwinding of the discount is included in interest expense. Refer to note 4 for a discussion of
the signi?cant estimations and assumptions applied in the measurement of this provision.
Restructuring
During 2012 Nyrstar commenced a detailed and comprehensive group wide review of its corporate of?ces, mining operations and
smelting operations to identify opportunities to sustainably reduce operating costs. This included benchmarking the sites against
one another, and against external indices, on an activity based level to assess the optimal level of resources required to perform
core operating and support tasks. In 2013 Nyrstar incurred restructuring costs of EUR 18.5 million (2012: EUR 16.9 million).
The remaining provision of EUR 5.2 million (31 December 2012: EUR 5.1 million) is mainly related to the implementation of the
restructuring measure that are expected to be ?nalised during 2014.
Other
Other provisions primarily relate to workers compensation bene?ts, legal claims and other liabilities. The current portion of these
costs is expected to be utilised in the next 12 months and the non-current portion of these costs is expected to be utilised over a
weighted average life of 2 years (2012: 2 years). The estimates may vary as a result of changes in cost estimates and timing of the
costs to be incurred.
30. Employee bene?ts
EUR million 31 Dec 2013 31 Dec 2012
Long service leave 2.3 4.1
Retirement plans 58.8 72.8
Other 9.9 7.5
Total non-current employee provisions 71.0 84.4
Annual leave and long service leave 29.3 31.3
Other 3.8 22.2
Total current employee provisions 33.1 53.5
Total employee provisions 104.1 137.9
IAS 19 Employee Bene?ts (Revised 2011) (IAS 19R)
The application of IAS 19R changes the accounting for de?ned bene?t plans and termination bene?ts and has been applied
retrospectively from 1 January 2012 (as the earliest comparative period). As a result, the expected returns on plan assets of de?ned
bene?t plans are not recognised in the pro?t or loss. Instead interest on net de?ned bene?t obligation is recognised in pro?t or
loss, calculated based on the net pension obligation.
Also, unvested past service costs can no longer be deferred and recognised over the future vesting period. Instead, all past
service costs are recognised at the earlier of when the amendment occurs and when the group recognised related restructuring
or termination costs. Until 2012, the Group’s unvested past service costs were recognised as expense on a straight-line basis over
177
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the average period until the bene?ts become vested. Upon transition to IAS 19R, past service costs are recognised immediately
following the introduction of, or changes to, a pension plan, regardless whether the past service costs are vested or unvested.
IAS 19R introduces certain changes in the presentation of the de?ned bene?t costs including more extensive disclosures.
Impact of transition to IAS 19R
These 31 December 2013 consolidated ?nancial statements are the ?rst ?nancial statements in which the Group has adopted IAS
19R. IAS 19R has been adopted retrospectively in accordance with IAS 8. Consequently, the Group has adjusted opening equity as
of 1 January 2012 and the amounts for 2012 have been restated as if IAS 19R had always been applied.
EUR million
Non Current
Employee Bene?ts Deferred Tax assets Accumulated Losses
Balance as reported at 1 January 2012 75.1 75.4 (204.8)
Effect of application of IAS 19R (1.0) (0.4) 0.6
Restated balance at 1 January 2012 74.1 75.0 (204.2)
EUR million
Non Current
Employee Bene?ts Deferred Tax assets Accumulated Losses
Balance as reported at 31 December 2012 85.4 77.4 (308.2)
Effect of application of IAS 19R (1.0) (0.4) 0.6
Effect on total comprehensive loss for the period - - -
Restated balance at 31 December 2012 84.4 77.0 (307.6)
The effect on the consolidated income statement was as follows:
EUR million 2013 2012
Decrease of employee bene?t expenses 0.2 0.9
Increase of ?nance expenses (2.3) (2.5)
Decrease of income tax expense 0.7 0.4
Increase of loss for the year (1.4) (1.2)
EUR million 2013 2012
Increase of loss for the year (1.4) (1.2)
Remeasurement of de?ned bene?t obligation 3.1 1.6
(Increase) of income tax relating to components of other comprehensive income (1.0) (0.4)
Decrease of other comprehensive loss 2.1 1.2
Decrease of total comprehensive loss for the year 0.7 -
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1
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178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The change in accounting policy had no effect on the basic and diluted earnings per share and an immaterial impact on the
Group’s consolidated statement of cash ?ows for the current and comparative periods.
Retirement and post-retirement plans
Nyrstar participates in a number of superannuation and retirement bene?t plans. The plans provide bene?ts on retirement,
disablement, death, retrenchment or withdrawal from service, the principal types of bene?ts being lump sum de?ned bene?ts and
lump sum de?ned contribution bene?ts.
De?ned contribution plans
The Group is required to contribute a speci?ed percentage of payroll costs to the retirement bene?t schemes to fund the bene?ts.
The only responsibility of the Group is to make the speci?ed contributions, with the exception of Belgium where the legislation
requires a minimum interest to be guaranteed by the employer on these contributions. Since 2013 this interest guarantee is no
longer 100% covered by the insurance carrier resulting in a ?nancial exposure for the Belgian companies, which is immaterial.
Employees of Nyrstar Budel BV are members of a multi-employer Metal and Electricity industry de?ned bene?t pension plan
(PME). PME are unable to provide the necessary information for de?ned bene?t accounting to be applied and consequently
the PME plan has been accounted for as a de?ned contribution plan. The entity’s obligations are limited to the payment of the
contributions required according to the funding plan of the PME and cannot held liable for any de?cits or contributions from other
participating companies.
The total expense for de?ned contribution plans recognised in the consolidated income statement is EUR 4.6 million.
De?ned bene?t plans
The Group sponsors de?ned bene?t plans as described below. All de?ned bene?t plans are externally funded, either through a
collective insurance contract or through a self-administered pension fund legally separated from the entity. All plans comply with
local regulatory frameworks and minimum funding requirements and have been reviewed as at 31 December 2013. Furthermore
the Group is responsible for the administration and governance of the de?ned bene?t plans in Belgium, Switzerland, the US and
Canada. The plan assets do not include direct investments in the Group’s own ?nancial instruments nor in property occupied by or
used by the companies of the Group.
The de?ned bene?t plans also include the so-called cash balance plans. The cash balance plans, sponsored by the Belgian and
Swiss entities, account for about 13% of the total de?ned bene?t obligation value as at 31 December 2013 and are valued on the
basis of the Projected Unit Credit Method.
The de?ned bene?t plans expose the sponsoring company to actuarial risks such as investment risk, interest rate risk, salary risk,
in?ation risk and longevity risk. The medical bene?t plans are further exposed to medical cost in?ation risk. The possible impact of
changes in these risks has been illustrated by a sensitivity analysis which is further detailed below.
Death in service and disability risks are in most countries insured with an external (re)insurance company.
179
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3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Based on geographical location of the sponsoring entities, the recognised retirement bene?t obligations as at 31 December 2013
can be split as follows:
EUR million 31 Dec 2013 Average duration
EURO ZONE: (22.8) 12.7 years
Nyrstar Budel BV Excedent Pension Plan
Nyrstar Belgium SA/NV: Staff Old De?ned Bene?t plan funded through pension
fund, Staff Cash Balance Plan, Staff Complementary Savings Plan, Staff Insured
Old De?ned Bene?t plan, Staff “appointements continués”, Salaried Employees
Old De?ned Bene?t Plan, Salaried Employees “appointements continués”
Nyrstar NV: Staff Cash Balance Plan, Staff Complementary Savings Plan
Nyrstar France Régime d’Indemnités de Fin de Carrière and Régime du Mutuelle
Nyrstar France Mutuelle (medical bene?t plan)
USA: (16.8) 13.5 years
Nyrstar Clarksville Inc: Hourly Employees’ Pension Plan, Salaried Employees’
Retirement Plan, Pension Plan for Bargaining Unit Employees, NCI/JCZ Pension
Plan for Bargaining Unit Employees, Supplemental Executive Retirement Plan
Nyrstar Clarksville Inc. Post Retirement Medical Bene?t and Life Insurance Plan
(medical bene?t plan)
CANADA: (15.2) 11.3 years
Nyrstar Myra Falls Ltd.: Hourly-Paid Employees’ Pension Plan, Thirty-Year Retirement
Supplement and Voluntary Early retirement Allowance
Nyrstar Myra Falls Ltd.: Non-Pension post-retirement bene?ts plan
(medical bene?t plan)
SWITERLAND: (4.0) 17.8 years
Nyrstar Sales & Marketing AG: Pension Plan Staff and Pension Plan Staff NMC
funded through the Helvetia Group Foundation
Nyrstar Finance International AG: Pension Plan funded through the Helvetia
Group Foundation
Total (58.8) 12.9 years
The total value of the medical bene?t plans, included in the retirement bene?t obligations is EUR 24.8 million.
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1
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180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The amounts recognised on the statement of ?nancial position have been determined as follows:
Restated Restated
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Present value of funded obligations 117.3 123.5 106.6
Present value of unfunded obligations 38.2 40.5 36.1
Total present value of obligations 155.5 164.0 142.7
Fair value of plan assets (97.1) (91.4) (82.4)
Total de?cit 58.4 72.6 60.3
Limitiation on recognition of surplus due to asset ceiling 0.4 0.2 0.3
Total recognised retirement bene?t obligations 58.8 72.8 60.6
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Cash 2.9 0.3 0.9
Equity instruments 38.7 36.1 34.4
Debt instruments 30.5 29.0 25.4
Other assets 25.0 26.0 21.7
Total plan assets 97.1 91.4 82.4
Further to the IAS 19R requirements, the above plan assets as on December 2013 can be further broken down as follows:
EUR million 31 Dec 2013
Cash and cash equivalents 2.9
Equity instruments 0.2
Debt instruments 2.0
Mutual Funds 67.0
Insurance contracts 25.0
Total 97.1
Mutual funds consist of equity funds, ?xed-income funds and mixed investments funds including both equity and debt
instruments. All assets, except for the insurance contracts have quoted prices in active markets. The fair value of the insurance
contracts corresponds either to the present value at the discount rate of the secured future bene?ts (Netherlands) or to the
capitalized value of the paid contributions at the contractually guaranteed insurance rate (other countries).
181
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0
1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The changes in the present value of the de?ned bene?t obligations are as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
De?ned bene?t obligations at start of period 164.0 142.7
Current service cost 6.9 7.9
Interest cost 5.4 6.2
Remeasurement (gains)/losses:
Actuarial (gains)/losses arising from changes in demographic assumptions 3.3 4.3
Actuarial (gains)/losses arising from changes in ?nancial assumptions (8.0) 15.4
Actuarial (gains)/losses arising from changes in experience (1.0) (1.0)
Actuarial (gains)/losses due to exchange rate movements (7.9) (0.7)
Contributions paid into the plans by participants 1.2 1.1
Bene?ts paid by the plans (8.7) (11.2)
Past service cost (including plan amendment or curtailment) 0.8 0.2
Admin expenses, taxes and social securities (0.5) (0.5)
Other - (0.4)
De?ned bene?t obligations at end of period 155.5 164.0
During 2013 there were no curtailments nor settlements. The reported past service cost is mainly the result of an increase of the
pension amount under the Hourly-Paid Employees’ Pension Plan in Canada due to a plan amendment in 2013.
The changes in the present value of plan assets are as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
Fair value of plan assets at start of period 91.4 82.4
Interest Income 3.1 3.7
Remeasurement (gains)/losses:
Return on plan assets excluding interest income recognised in net interest expense 3.0 5.5
Actuarial (gains)/losses due to exchange rate movements (5.0) (0.3)
Contribution paid into the plans by employer 10.4 7.6
Contribution paid into the plans by participants 1.2 1.1
Bene?ts paid by the plans (6.5) (7.9)
Admin expenses, taxes and social securities (0.5) (0.5)
Other - (0.2)
Fair value of plan assets at end of period 97.1 91.4
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182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The expense recognised in the income statement is as follows:
Restated
EUR million 31 Dec 2013 31 Dec 2012
Service cost:
Current service cost, including admin fees, taxes and social securities (6.9) (7.9)
Past service cost (0.8) (0.2)
Net interest expense (2.3) (2.5)
Components of de?ned bene?t costs included in income statement (10.0) (10.6)
Remeasurement on the net de?ned bene?t liability:
The return on plan assets (excluding amounts included in net interest expense) 3.0 5.5
Actuarial gains and losses arising from changes in demographic assumptions (3.3) (4.3)
Actuarial gains and losses arising from changes in ?nancial assumptions 8.0 (15.4)
Actuarial gains and losses arising from experience adjustments 1.0 1.0
Adjustments for restrictions on the de?ned bene?t asset (0.2) 0.1
Actuarial (gains)/losses due to exchange rate movements 0.7 0.4
Components of de?ned bene?t costs recorded in OCI 9.2 (12.7)
Total of components of de?ned bene?t cost (0.8) (23.3)
Principal actuarial assumptions
The principal actuarial assumptions used at the reporting date are as follows:
EUR million 31 Dec 2013 31 Dec 2012 1 Jan 2012
Discount rate (range; weighted average in %) 1.3 - 4.7; 3.8 1.4 - 4.0; 3.4 2.3 - 4.8; 4.4
Expected future salary increases
(range; weighted average in %) 1.5 - 2.5; 2.3 1.5 - 2.5; 2.3 1.5 - 3.0; 2.7
Expected in?ation rate (range; weighted average in %) 2.0 - 2.3; 2.1 2.0 - 2.3; 2.1 2.0 - 2.3; 2.1
Initial trend rate (range; weighted average in %) 2.0 - 8.0; 5.5 2.0 - 8.5; 6.0 2.8 - 9.0; 5.9
Ultimate trend rate (range; weighted average in %) 2.0 - 5.0; 3.8 2.0 - 5.0; 4.2 2.8 - 5.0; 4.1
Years until ultimate is reached 0 - 6; 3.3 0 - 7; 3.7 0 - 8; 3.6
Multiple discount rates have been used in accordance with the regions as indicated in the table above. The discount rates have
been determined by reference to high quality corporate bonds with a similar duration as the weighted average duration of
the concerned plans for the EURO zone, USA and Canada. As there is no deep market for AA-bonds with the required term in
Switzerland, discount rates have been determined by reference to government bond rates.
Future salary increase assumptions re?ect the Groups’ expectations and HR policy for the next few years.
183
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A single in?ation rate assumption has been used for the EURO zone (2%) corresponding to the target in?ation rate of the
European Central Bank.
The medical cost trend rate assumptions have been determined based on industry standards and survey data with consideration
for actual plan experience.
Mortality assumptions are based on the latest available standard mortality tables for the individual countries concerned. These
tables imply expected future lifetimes (in years) for employees aged 65 as at the 31 December 2013 of 18 to 24 for males (2012:
18 to 24) and 21 to 28 (2012: 21 to 28) for females. The assumption for each country are reviewed each year and are adjusted
where necessary to re?ect changes in fund experience and actuarial recommendations. If applicable, the longevity risk is covered
by using appropriate prospective mortality rates.
Sensitivity analysis
The signi?cant actuarial assumptions for the determination of the de?ned bene?t obligation have been discussed earlier in this
note. The table below shows the sensitivity analysis on the effect on the de?ned bene?t obligation of reasonable positive changes
in the most signi?cant actuarial assumptions used. Note that the sensitivity analysis is done per assumption (where the other
signi?cant assumptions were held constant):
EUR million 31 Dec 2013
Discount rate -0.5% 10.1
Discount rate +0.5% (8.9)
Expected future salary increase - 0.5% (0.4)
Expected future salary increase + 0.5% 0.4
Expected in?ation rate - 0.5% (0.4)
Expected in?ation rate + 0.5% 0.4
Medical cost trend rate -1.0% (3.2)
Medical cost trend rate +1.0% 4.0
Life expectancy - 1 year 3.6
Life expectancy + 1 year (3.6)
Expected contributions 2014
The Group expects to make EUR 10.0 million contributions to post-employment de?ned bene?t plans for the year ending 31
December 2014.
31. Trade and other payables
EUR million 31 Dec 2013 31 Dec 2012
Trade payables 435.6 591.1
Other payables 50.4 50.1
Total trade and other payables 486.0 641.2
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 35.
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2
0
1
3
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32. Deferred income
EUR million 31 Dec 2013 31 Dec 2012
Current 294.7 218.6
Total deferred income 294.7 218.6
Deferred income consists of payments received by the Company from customers for future physical deliveries of metal production
that are expected to be settled in normal course of business.
In June 2013, Nyrstar entered into a silver prepay agreement, under which Nyrstar received a USD 195.8 million (EUR 148.1
million) prepayment and agreed to physically deliver 8.75 million oz of silver in equal instalments over a ten month period ending
March 2014. The silver prepayment is amortised into revenue as the underlying silver is physically delivered. As at 31 December
2013, 6.1 million oz of silver have been delivered.
In December 2013, Nyrstar entered into another silver prepay agreement, under which Nyrstar received a USD 50 million (EUR 36.3
million) prepayment and agreed to physically deliver 3.3 million oz of silver in equal instalments over a six month period ending
June 2014. The silver prepayment is amortised into revenue as the underlying silver is physically delivered. As at 31 December
2013, no silver has been delivered.
In connection with these silver prepay agreements Nyrstar entered into forward purchase contracts with equivalent delivery dates
to hedge the silver price exposure related to delivery commitments. These contracts are accounted for as an effective fair value
hedges of the ?rm sales commitments in the silver prepay agreements. The change in fair value of the forward purchase contracts
(EUR 5.9 million at 31 December 2013, included in other ?nancial liabilities) and the portion of deferred income related to the
silver prepay agreement (EUR 5.9 million) effectively offset in the income statement.
33. Share-based payments
EUR million 2013 2012
Share based payment expenses, including social security (5.2) (6.2)
The Company has established an Executive Long Term Incentive Plan (LTIP), a Co-Investment Plan and a Leveraged Employee Stock
Ownership Plan (LESOP) (together referred to as the “Plans”) with a view to attracting, retaining and motivating the employees and
senior management of the Company and its wholly owned subsidiaries. The key terms of each Plan are disclosed below:
Long Term Incentive Plan
LTIP Grants 2 to 6 were granted between 2009 and 2013 in accordance with the rules and conditions of the Executive Long Term
Incentive Plan (LTIP). The table below summarises the details of the grants.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6
Number of instruments granted at the grant date 2,003,351 604,407 1,149,398 2,261,628 2,270,961
Effective grant date 30 Jun 2009 30 Jun 2010 30 Jun 2011 30 Jun 2012 30 Jun 2013
Performance period
1 Jan 2009 to
31 Dec 2011
1 Jan 2010 to
31 Dec 2012
1 Jan 2011 to
31 Dec 2013
1 Jan 2012 to
31 Dec 2014
1 Jan 2013 to
31 Dec 2015
Vesting date 31 Dec 2011 31 Dec 2012 31 Dec 2013 31 Dec 2014 31 Dec 2015
Settlement (b) Share Share Share Share Share
Fair value at grant date (EUR per share) * 2.78 4.25 6.23 1.01 1.37
* the fair value is the weighted average fair value for both performance measures: price of Zinc and MSCI as explained below
(a) Performance criteria
To ensure that the LTIP is aligned with maximizing shareholder returns, the board has set two performance conditions, which are
weighted equally. For both performance conditions an equal number of awards has been granted. For an award to vest, Nyrstar’s
annual share price performance is measured relative to the implied change in a notional share price that is based upon the
historical performance of the price of zinc and the MSCI World Metals and Mining Index
Shares are awarded to eligible employees to the extent that predetermined scaling thresholds for each of the performance
conditions are met and that the employee remains in service to vesting date of the respective grant.
(b) Settlement
The board has the discretion to settle LTIP Grant 2, Grant 3, Grant 4, Grant 5 and Grant 6 award in shares or cash. However it
intends to settle all plans in shares. As such, all LTIP plans are treated as equity settled share based payments.
The signi?cant inputs into the valuation model for the LTIP plans granted in 2013 and 2012 are:
2013 2012
Dividend yield 3.0% 3.0%
Expected volatility - Nyrstar share price 47.0% 46.0%
Expected volatility - zinc price 24.0% 30.0%
Expected volatility - MSCI metals and mining index 22.0% 23.0%
Risk free interest rate 1.3% 2.2%
Share price at grant date (in EUR) 3.30 4.48
Expected forfeiture rate 0.0% 0.0%
Valuation model used Monte Carlo Monte Carlo
The expected volatilities are based on the historic volatility during the period prior to the grant date (that is equivalent to the
expected life of the award, subject to historical data remaining relevant). The performance conditions are both market-related and
were accounted for in calculating the fair value of the awards.
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1
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186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table sets out the movements in the number of equity instruments granted during the period in relation to the LTIP
plans:
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
As at 1 Jan 2013 88,871 770,960 1,053,901 2,104,239 - 4,017,971
Initial allocation 30 Jun 2013 2,270,961 2,270,961
Forfeitures (148,144) (525,715) (229,174) (903,033)
Additions 11,668 4,448 114,173 324,749 69,559 524,597
Expired (388,020) (388,020)
Settlements (100,539) (387,388) (487,927)
As at 31 Dec 2013 - - 1,019,930 1,903,273 2,111,346 5,034,549
Grant 2 Grant 3 Grant 4 Grant 5 Grant 6 Total
As at 1 Jan 2012 2,764,817 823,243 1,196,168 - - 4,784,228
Initial allocation 30 Jun 2012 - - - 2,261,628 - 2,261,628
Forfeitures - (114,325) (245,655) (157,389) - (517,369)
Additions - 62,042 103,388 - - 165,430
Settlements (2,675,946) - - - - (2,675,946)
As at 31 Dec 2012 88,871 770,960 1,053,901 2,104,239 - 4,017,971
In 2013 and 2012, certain employees who joined Nyrstar during the year received LTIP awards under Grants 4 and 5. The fair
value of these rights amounted to EUR 0.6 million for 2013 (2012: EUR 0.2 million). There have been no changes to the terms and
conditions of the grants.
Modi?cations to LTIP Grants 3, 4 and 5
As at 6 February 2013 modi?cations were made to the performance conditions of Grants 3, 4 and 5. The modi?cations resulted in
the exclusion of the 2012 zinc price performance from the performance hurdle for all three grants, when determining the average
LTIP achievement and lowering of the MSCI performance hurdles for future years for Grants 4 and 5.
The modi?ed awards have been valued, using a consistent valuation methodology to that disclosed in the notes to the
consolidated ?nancial statements as at 31 December 2012. The incremental increase in the fair value of the awards amounted to
EUR 1.8 million and will be recognised over the remaining vesting period of the awards, starting from the modi?cation date. The
total incremental fair value recognised in 2013 amounted to EUR 1.8 million. The modi?cations did not change the number of
outstanding awards as disclosed in the notes to the consolidated ?nancial statements as at 31 December 2012, however it resulted
in the vesting of 389,928 Grant 3 awards.
Management Committee Co-Investment Plan
A co-investment plan for the members of the NMC was approved by the annual general shareholders’ meeting held on 28 April
2010. The effective accounting grant date is 5 May 2010 and the conditions are assessed from the grant date till 15 July 2013,
which is the vesting date. For each Nyrstar share that a member of the NMC purchased between 30 April 2010 and 28 June
2010, Nyrstar will grant the respective participant on the vesting date, a number of additional Nyrstar shares provided that (a)
the participant is still employed by Nyrstar on the vesting date and (b) the participant still holds the co-investment shares on
187
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the vesting date. During the period between 30 April 2010 and 28 June 2010 the members of the NMC purchased 190,000 co-
investment shares.
In line with the resolution of the annual general shareholders meeting held at 27 April 2011 the Co-investment Plan has re?ected
the impact of the March 2011 rights issue by the Company. It was also agreed that additional 95,510 shares of the Company
subscribed for by the respective participants in the Co-Investment Plan are considered “Co-investment Shares” for purposes of the
Co-Investment Plan. At 30 June 2011 an additional participant has purchased 25,000 shares as participation in the Co-investment
plan. The terms and conditions of this participation are consistent with the terms and conditions of the previous Co-investment
Plan participations.
The number of matching shares is determined at three measurement dates, i.e. (a) 1 July 2011 (Measurement Date 1), (b) 1 July
2012 (Measurement Date 2) and (c) 1 July 2013 (Measurement Date 3). The number of Matching Shares is the product of the
total number of the Co-Investment Shares of the respective Participant and the multiplier determined at the measurement dates.
The multiplier is set between zero (lowest multiplier) and four (the highest multiplier) in conjunction with pre-set price points, i.e.
pre-set average closing prices of Nyrstar shares during any given full calendar week in the measurement periods (refer to Corporate
Governance statement for further details).
The weighted average fair value at the grant dates per share was EUR 14.52.
Movement of Co-Investment Shares:
2013 2012
As at 1 Jan 348,000 348,000
Additions -
Expired (261,992)
Forfeitures (86,008)
As at 31 Dec - 348,000
No further Co-Investment shares have been granted in 2013 and 2012. None of these Co-investment shares vested at the vesting
date 15 July 2013, as the performance conditions were not met. No shares out of this plan have therefore been delivered to
participants. The fair value of services received in return for the shares qualifying under the co-investment plan is based on the fair
value of the awards granted which for ?nancial year 2013 amounts to EUR nil (2012: EUR nil).
Leveraged Employee Stock Ownership Plan (LESOP)
In 2013, the Board submitted to the general shareholder`s meeting a proposal to provide a new remuneration component to
certain senior managers, including the management committee, called a LESOP. The LESOP would enable participants to purchase
shares of the Company at a discount of 20%, following which the shares would be subject to a holding period of three years. For
each share purchased by a participant with their personal contribution, a ?nancial institution would provide the participant with
additional ?nancing enabling them to purchase nine additional shares at such discount. The number of shares that a participant
could purchase with their personal contribution under the 2013 LESOP is capped. With respect to the members of the Nyrstar
Management Committee, the cap is set at 50,000 shares for each member. At the end of the holding period, the participant will be
required to transfer all shares purchased to the ?nancial institution and will receive in return a cash amount or a number of shares
of the Company, the value of which equals their personal contribution in the 2013 LESOP and a certain percentage of any increase
in value of the shares over the lifetime of the 2013 LESOP. The 2013 LESOP was approved by the general shareholder`s meeting in
April 2013. The ?rst stage of the 2013 LESOP was implemented in December 2013.
3,065,000 shares were granted, with an effective accounting grant date of 21 December 2013. The shares vested immediately
at grant date. The fair value at the grant date per share was EUR 0.10, resulting in the total fair value of EUR 0.3 million fully
recognized in the ?nancial year ended 31 December 2013.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The signi?cant inputs into the valuation model for the LESOP plan granted in 2013 are:
2013
Dividend yield 3.0%
Risk free interest rate 0.5%
Credit spread for a private individual 5.0%
Interest rate for borrowing securities 0.5%
Share price at grant date (in EUR) 2.15
Valuation model used Monte Carlo
The following table sets out the movements in the number of equity instruments granted during the period in relation to the
LESOP plans:
2013
As at 1 Jan -
Initial allocation 21 Dec 2013 3,065,000
Settlements (3,065,000)
As at 31 Dec -
Deferred Share Awards or Phantom Awards - annual incentive plan (AIP)
For 2012, the NMC and certain other senior managers are entitled to a target opportunity under the AIP of:
• 75% of the annual base salary for the chief executive of?cer (150% at maximum)
• 60% of the annual base salary for the other members of NMC (120% at maximum)
• 50% of the annual base salary for certain other senior managers (100% at maximum)
Any award made under the AIP in relation to the details above, will be delivered as a combination of cash and Nyrstar shares
(Share Awards) or their equivalent in cash (Phantom Awards), with any delivery of these Awards deferred for 12 months. The
award will be delivered as follows:
• CEO – 100% cash and 50% Share Awards or Phantom Shares (at maximum opportunity)
• Other members of the NMC – 80% cash and 40% Share Awards or Phantom Shares (at maximum opportunity)
• Other senior managers – 70% cash and 30% Share Awards or Phantom Shares (at maximum opportunity)
The delivery of any AIP award to management is at all times subject to the performance of the Company (for further details on
the performance criteria refer to the Remuneration Report included in the Corporate Governance Statement) and the employee
remaining employed with the Company at the end of the vesting period. The maximum number of the Share Awards granted is
equal to the value of the maximum opportunity multiplied by EUR base salary and divided by the applicable share price at the start
of the performance period (generally the ?scal year).
The fair value of the service received in return for these Awards for ?nancial year 2013 amounts to EUR 0.6 million (2012: EUR 0.4
million).
189
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34. Loss per share
(a) Basic loss per share
The basic loss per share is calculated as follows:
EUR million 2013 2012
Loss attributable to ordinary shareholders (basic) (195.4) (93.6)
Weighted average number of ordinary shares (basic, in million) 154.4 162.1
Loss per share (basic, in EUR) (1.27) (0.58)
(b) Diluted loss per share
As the Group incurred a loss for the twelve months ended 31 December 2013, the diluted loss per share EUR 1.27 equals the basic
loss per share (EUR 0.58 for the twelve months ended 31 December 2012).
35. Financial instruments
In the normal course of business, Nyrstar is exposed to ?uctuations in commodity prices and exchange rates, interest rate risk,
credit risk and liquidity risk. In accordance with Nyrstar’s risk management policies, derivative ?nancial instruments are used to
hedge exposures to commodity prices and exchange ?uctuations, but may not be entered into for speculative purposes.
(a) Credit risk
(i) Exposure to credit risk
Credit risk represents the loss that would be recognised if the counterparties to ?nancial instruments fail to perform as contracted.
The carrying amount of ?nancial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
EUR million 31 Dec 2013 31 Dec 2012
Trade and other receivables 174.9 221.1
Cash and cash equivalents 292.3 188.1
Commodity contracts used for hedging: assets 13.9 33.8
Embedded derivatives: assets 1.2 17.1
Foreign exchange contracts used for trading: assets 11.5 7.7
Restricted cash 7.6 8.2
Held to maturity 2.8 2.6
Loans to equity accounted investees - 2.7
Total 504.2 481.3
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190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
EUR million 31 Dec 2013 31 Dec 2012
Euro-zone countries 58.6 77.9
Asia 38.5 25.2
United States 9.4 25.1
Other European countries 23.3 43.2
Other regions 45.1 49.7
Total 174.9 221.1
The maximum exposure to credit risk for trade and other receivables at the reporting date by type of customer was:
EUR million 31 Dec 2013 31 Dec 2012
Wholesale customers 159.3 190.3
End-user customers 15.6 30.8
Total 174.9 221.1
(ii) Ageing analysis
Trade and other receivables including ageing of trade and other receivables which are past due but not impaired at the reporting
date was:
EUR million 31 Dec 2013 31 Dec 2012
Not past due 144.6 192.5
Past due 0-30 days 18.8 19.3
Past due 31-120 days 8.3 7.5
Past due 121 days – one year 2.5 0.4
More than one year 0.7 1.4
Total 174.9 221.1
Credit risk in trade receivables is also managed in the following ways:
• The Company has a duty to exercise reasonable care and prudence in granting credit to and withholding credit from existing and
potential customers. The Company takes all reasonable steps and uses its best endeavours to minimize any losses arising from
bad debts. The Company’s Credit Risk Management Policy describes the structure and systems put in place in order to ef?ciently
and effectively manage the risks related to the credit granted to business partners.
• Payment terms can vary from 0 to 90 days, after the month of delivery. Payment terms are dependent on whether the sale is a
cash sale or a sale with an attached letter of credit stating the payment terms.
• A risk assessment is undertaken before granting customers a credit limit. Where no credit limit is granted sales have to be
covered by other securities (i.e. bank guarantee, parent guarantee) and/or by documentary collection.
• If sales are covered by a letter of credit, this will in principle be irrevocable, con?rmed with approved ?nancial institutions.
191
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1
3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Banks and ?nancial institutions
For banks and ?nancial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.
(b) Liquidity risk management
The following are the contractual maturities of ?nancial liabilities, including estimated interest payments and excluding the impact
of netting agreements:
EUR million
Carrying
amount
Contractual
cash ?ows
6 months
or less
6 - 12
months
1 - 2
years
2 - 5
years
5 years
or more
Finance lease liabilities (1.9) (1.9) (0.4) (0.5) (0.8) (0.2) -
Loans and borrowings (959.9) (1,122.4) (49.8) (126.6) (267.5) (678.5) -
Trade and other
payables (486.0) (485.9) (480.4) (3.4) (1.1) (1.0) -
Commodity contracts –
fair value hedges (14.4) (14.4) (14.4) - - - -
Foreign exchange
contracts – held for
trading (6.0) (6.0) (6.0) - - - -
Embedded derivatives (4.3) (4.3) (0.2) (0.2) (1.7) (2.2) -
Total, 31 Dec 2013 (1,472.5) (1,634.9) (551.2) (130.7) (271.1) (681.9) -
EUR million
Carrying
amount
Contractual
cash ?ows
6 months
or less
6 - 12
months
1 - 2
years
2 - 5
years
5 years
or more
Finance lease liabilities (3.2) (3.3) (0.5) (0.5) (1.1) (1.2) -
Loans and borrowings (865.3) (1,037.3) (45.1) (4.2) (168.9) (818.8) (0.3)
Trade and other
payables (641.2) (641.2) (631.7) (4.0) (6.0) 0.5 -
Commodity contracts –
fair value hedges (10.6) (10.6) (10.6) - - - -
Foreign exchange
contracts – held for
trading (0.5) (0.5) (0.5) - - - -
Embedded derivatives (2.3) (2.3) (0.1) (0.1) (2.1) - -
Total, 31 Dec 2012 (1,523.1) (1,695.2) (688.5) (8.8) (178.1) (819.5) (0.3)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c) Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
EUR million EUR USD AUD CAD Other Total
Trade and other receivables 62.7 85.6 5.6 1.3 19.7 174.9
Loans and borrowings (956.2) (2.6) (1.2) - (1.8) (961.8)
Trade and other payables (157.8) (172.9) (64.6) (11.1) (79.6) (486.0)
Gross balance sheet exposure (1,051.3) (89.9) (60.2) (9.8) (61.7) (1,272.9)
Foreign exchange contracts 412.3 (302.8) 110.7 (213.5) (1.2) 5.5
Commodity contracts - (0.5) - - - (0.5)
Net exposure, 31 Dec 2013 (639.0) (393.2) 50.5 (223.3) (62.9) (1,267.9)
EUR million EUR USD AUD CAD Other Total
Trade and other receivables 94.6 98.0 6.4 2.9 19.2 221.1
Loans and borrowings (865.4) (0.5) (2.2) (0.4) - (868.5)
Trade and other payables (166.0) (292.8) (77.1) (19.3) (86.0) (641.2)
Gross balance sheet exposure (936.8) (195.3) (72.9) (16.8) (66.8) (1,288.6)
Foreign exchange contracts 227.2 (129.9) 70.2 (160.5) 0.2 7.2
Commodity contracts - 23.2 - - - 23.2
Net exposure, 31 Dec 2012 (709.6) (302.0) (2.7) (177.3) (66.6) (1,258.2)
Sensitivity analysis
Nyrstar’s results are signi?cantly affected by changes in foreign exchange rates. Sensitivities to variations in foreign exchange rates
are depicted in the following table, which sets out the estimated impact on Nyrstar’s full year results and equity (in EUR million).
Parameter Variable 2013 2012
USD / EUR + / - EUR 0.01 + / - 17.7 + / - 17.9
AUD / EUR + / - EUR 0.01 - / + 2.6 - / + 2.6
The above sensitivities were calculated by modelling Nyrstar’s 2013 and 2012 underlying operating performance. Exchange rates
are based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar’s full
year results and equity.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Commodity price risk management
Nyrstar is exposed to commodity price volatility on commodity sales and raw materials purchased. Nyrstar may enter into zinc, lead
and silver futures and swap contracts to hedge certain forward ?xed price sales to customers in order to achieve the relevant metal
price at the date that the transaction is settled. Nyrstar may enter into zinc, lead and silver futures and swap contracts to more
closely align the time at which the price for externally sourced concentrate purchases is set to the time at which the price for the
sale of metal produced from that concentrate is set. These instruments are referred to as ‘metal at risk’ hedges and the terms of
these contracts are normally between one and three months.
The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December
2013.
EUR million
Average price
in USD
6 months
or less
6 - 12
months
12 - 18
months
more than
18 months Total
Zinc per tonne
Contracts purchased 1,962 (81.7) (9.0) - - (90.7)
Contracts sold 1,916 76.5 0.6 - - 77.1
Net position (5.2) (8.4) - - (13.6)
Lead per tonne
Contracts purchased 2,252 (0.3) - - - (0.3)
Contracts sold 2,110 65.4 - - - 65.4
Net position 65.1 - - - 65.1
Silver per ounce
Contracts purchased 19.6 (8.0) - - - (8.0)
Contracts sold 20.6 96.7 - - - 96.7
Net position 88.7 - - - 88.7
Gold per ounce
Contracts purchased 1,204.6 (0.8) - - - (0.8)
Contracts sold 1,252.3 4.9 - - - 4.9
Net position 4.1 - - - 4.1
Copper per tonne
Contracts purchased - - - - - -
Contracts sold 7,208 2.9 - - - 2.9
Net position 2.9 - - - 2.9
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194
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December
2012.
EUR million
Average price
in USD
6 months
or less
6 - 12
months
12 - 18
months
more than
18 months Total
Zinc per tonne
Contracts purchased 1,945 (38.1) (7.5) - - (45.6)
Contracts sold 1,998 149.6 0.3 - - 149.9
Net position 111.5 (7.2) - - 104.3
Lead per tonne
Contracts purchased 2,249 (2.0) - - - (2.0)
Contracts sold 2,187 79.2 - - - 79.2
Net position 77.2 - - - 77.2
Silver per ounce
Contracts purchased 31.3 (29.6) - - - (29.6)
Contracts sold 32.6 353.0 - - - 353.0
Net position 323.4 - - - 323.4
Gold per ounce
Contracts purchased 1,689.0 (2.3) - - - (2.3)
Contracts sold 1,711.0 91.4 - - - 91.4
Net position 89.1 - - - 89.1
Copper per tonne
Contracts purchased - - - - - -
Contracts sold 7,902 18.4 - - - 18.4
Net position 18.4 - - - 18.4
Sensitivity analysis
Nyrstar’s results are signi?cantly affected by changes in metal prices and treatment charges (TC). Sensitivities to variations in metal
prices and treatment charges are depicted in the following table, which sets out the estimated impact on Nyrstar’s full year results
and equity (in EUR million).
Parameter Variable 2013 2012
Zinc price + / - USD 100 / tonne + / - 27.9 + / - 35.2
Lead price + / - USD 100 / tonne + / - 1.8 + / - 1.7
Zinc TC + / - USD 25 / tonne + / - 27.8 + / - 25.1
Lead TC + / - USD 25 / tonne + / - 4.9 + / - 4.4
195
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The above sensitivities were calculated by modelling Nyrstar’s 2013 and 2012 underlying operating performance. Metal prices are
based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar’s full year
results and equity.
(e) Financial Instruments by category
EUR million
Loans and
receivables
Fair value
through pro?t
and loss
Held
to maturity
Available
for sale
Derivatives
used for
hedging
At
amortised
costs Total
Derivative ?nancial
instruments - 20.6 - - 6.0 - 26.6
Trade and other receivables
excl prepayments 174.9 - - - - - 174.9
Cash and cash equivalents 292.3 - - - - - 292.3
Restricted cash 7.6 - - - - - 7.6
Held to maturity - - 2.8 - - - 2.8
Loans to equity accounted
investees - - - - - - -
Investments in equity
securities - - - 27.5 - - 27.5
Borrowings excl. ?nance
lease liabilities - - - - - (959.9) (959.9)
Finance lease liabilities - - - - - (1.9) (1.9)
Derivative ?nancial
instruments - (20.4) - - (4.3) - (24.7)
Trade and other payables - - - - (486.0) (486.0)
Net position, 31 Dec 2013 474.8 0.2 2.8 27.5 1.7 (1,447.8) (940.8)
EUR million
Loans and
receivables
Fair value
through pro?t
and loss
Held to
maturity
Available
for sale
Derivatives
used for
hedging
At
amortised
costs Total
Derivative ?nancial instruments - 41.5 - - 17.1 - 58.6
Trade and other receivables excl.
prepayments 221.1 - - - - - 221.1
Cash and cash equivalents 188.1 - - - - - 188.1
Restricted cash 8.2 - - - - - 8.2
Held to maturity - - 2.6 - - - 2.6
Loans to equity accounted investees 2.7 - - - - - 2.7
Investments in equity securities - - - 37.9 - - 37.9
Borrowings excl. ?nance lease liabilities - - - - - (865.3) (865.3)
Finance lease liabilities - - - - - (3.2) (3.2)
Derivative ?nancial instruments - (11.1) - - (2.3) - (13.4)
Trade and other payables - - - - - (641.2) (641.2)
Net position, 31 Dec 2012 420.1 30.4 2.6 37.9 14.8 (1,509.7) (1,003.9) N
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nyrstar Hobart has entered into two electricity ?xed price contracts, in the form of swaps, to reduce its exposure to the electricity
price risk to which it is exposed. The contracts end in 2014 and 2017 respectively. The swaps have been designated as qualifying
cash ?ow hedges.
(f) Interest rate risk management
Nyrstar’s exposure to interest rate risk and along with sensitivity analysis on a change of 100 basis points in interest rates at
balance date on interest bearing assets and liabilities is set out below:
31 Dec 2013 Sensitivity analysis, in 100 BP
Interest rate Income Statement Equity
EUR million Floating Fixed Total increase decrease increase decrease
Financial assets:
Cash and cash equivalents 292.3 - 292.3 2.9 (0.3) 2.9 (0.3)
Restricted cash - 7.6 7.6 - - - -
Held to maturity - 2.8 2.8 - - - -
Loan associates - - - - - - -
Financial liabilities:
Loan facility - (4.3) (4.3) - - - -
Borrowings - ?xed rate bonds - (734.2) (734.2) - - - -
Borrowings - convertible bonds - (221.4) (221.4) - - - -
Finance lease liabilities - (1.9) (1.9) - - - -
Net interest bearing ?nancial assets / (liabilities) 292.3 (951.4) (659.1) 2.9 (0.3) 2.9 (0.3)
31 Dec 2012 Sensitivity analysis, in 100 BP
Interest rate Income Statement Equity
EUR million Floating Fixed Total increase decrease increase decrease
Financial assets:
Cash and cash equivalents 188.1 - 188.1 1.9 (0.3) 1.9 (0.3)
Restricted cash - 8.2 8.2 - - - -
Held to maturity - 2.6 2.6 - - - -
Loan associates - 2.7 2.7 - - - -
Financial liabilities:
Loan facility - (0.6) (0.6) - - - -
Borrowings - ?xed rate bonds - (748.8) (748.8) - - - -
Borrowings - convertible bonds - (115.9) (115.9) - - - -
Finance lease liabilities - (3.2) (3.2) - - - -
Net interest bearing ?nancial assets / (liabilities) 188.1 (855.0) (666.9) 1.9 (0.3) 1.9 (0.3)
197
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(g) Fair value of ?nancial assets and ?nancial liabilities
The carrying amount of all ?nancial assets and liabilities recognised at amortised cost on the consolidated statement of ?nancial
position approximate their fair value, with the exception of the ?xed rate bonds of EUR 734.2 million (2012: EUR 748.8 million)
and the convertible bonds of EUR 221.4 million (2012: EUR 115.9 million), with fair values based on quoted prices in active
markets (Level 1 measurement), of EUR 672.6 million (2012: EUR 788.0 million), and EUR 211.4 million (2012: EUR 130.0 million)
respectively.
The following table presents the fair value measurements by level of the following fair value measurement hierarchy for
derivatives:
• quoted prices in active markets for identical assets or liabilities (level 1);
• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly
(level 2); and
• input for the asset or liability that are not based on observable market data (level 3).
Total as at
EUR million
Valuation technique
(s) and key input (s) Level 1 Level 2 Level 3 31 Dec 2013
Commodity contracts – fair value hedges a - 9.1 - 9.1
Commodity contracts – cash ?ow hedges a - 4.8 - 4.8
Foreign exchange contracts – held for trading b - 11.5 - 11.5
Embedded derivative c - 1.2 - 1.2
Total - 26.6 - 26.6
Commodity contracts – fair value hedges a - (14.4) - (14.4)
Foreign exchange contracts – held for trading b - (6.0) - (6.0)
Embedded derivative c - (4.3) - (4.3)
Total - (24.7) - (24.7)
Total as at
EUR million
Valuation technique
(s) and key input (s) Level 1 Level 2 Level 3 31 Dec 2012
Commodity contracts – fair value hedges a - 33.8 - 33.8
Foreign exchange contracts – held for trading b - 7.7 - 7.7
Embedded derivative c - 17.1 - 17.1
Total - 58.6 - 58.6
Commodity contracts – fair value hedges a - (10.6) - (10.6)
Foreign exchange contracts – held for trading b - (0.5) - (0.5)
Embedded derivative c - (2.3) - (2.3)
Total - (13.4) - (13.4)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For level 2 fair value measurements, fair values are determined based on the underlying notional amount and the associated observable
forward prices/rates in active markets. The key inputs in these valuations are as follows (with reference to the tables above):
a) forward commodity prices in active market
b) forward exchange rates in active market
c) forward electricity prices in active market
36. Capital commitments
The value of commitments for acquisition of plant and equipment contracted for but not recognised as liabilities at the reporting
date are set out in the table below.
EUR million 31 Dec 2013 31 Dec 2012
Within one year 14.2 20.2
Between one and ?ve years - -
More than ?ve years - -
Total 14.2 20.2
37. Operating leases
The value of commitments in relation to operating leases contracted for but not recognised as liabilities at the reporting date are
set out in the table below.
EUR million 31 Dec 2013 31 Dec 2012
Within one year 4.7 4.5
Between one and ?ve years 12.1 12.1
More than ?ve years 2.6 3.0
Total 19.4 19.6
38. Contingencies
Guarantees
In 2012 the Group has provided a guarantee of CNY 20 million (EUR 2.4 million) in favour of KBC in China, who provided a credit
facility to Genesis Alloys (Ningbo) Ltd. There is no outstanding guarantee at 31 December 2013. Refer to note 18 for further detail
on the Group’s investment in Genesis Alloys (Ningbo) Ltd.
Legal actions
Nyrstar is the subject of a number of claims and legal proceedings incidental to the normal conduct of its business. Management
does not believe that such claims and proceedings are likely, on aggregate, to have a material adverse effect on the ?nancial
condition of Nyrstar.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
39. Related parties
(a) Transactions with related parties
No transactions with related parties occurred in the years ended 31 December 2013 and 2012 with the exception of the loan to
Genesis Alloys (Ningbo) Ltd (note 21e).
(b) Key management compensation
Board of directors
EUR million 2013 2012
Salaries and other compensation 0.5 0.5
Nyrstar Management Committee
EUR million 2013 2012
Salaries and other compensation 4.8 4.1
Long term bene?ts 2.4 2.1
Share based payments 2.6 2.8
Long term bene?ts include housing allowances and pension contributions. Share based payments re?ect the cost to the Group
related to share based awards granted to the members of the NMC. These costs do not represent actual monetary or non-monetary
bene?ts received by the members of the NMC.
40. Audit and non-audit services by the Company’s statutory auditor
During the period, the auditor received fees for audit and audit related services provided to the Group as follows:
EUR thousand 2013 2012
Audit services 102.0 102.0
Audit related services 35.6 1.2
Tax services 61.5 113.5
Total Deloitte Bedrijfsrevisoren 199.1 216.7
Audit services 824.4 795.7
Audit related services 35.1 2.4
Tax services 69.2 28.2
Non-audit services 38.0
Total other of?ces in the Deloitte network 928.7 864.3
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
41. Group entities
The holding company and major subsidiaries included in the Group’s consolidated ?nancial statements are:
Entity
Belgian
company number
Country of
incorporation
Ownership
31 Dec 2013
Ownership
31 Dec 2012
Nyrstar NV RPR 0888.728.945 Belgium Holding entity Holding entity
Nyrstar Australia Pty Ltd Australia 100% 100%
Nyrstar Hobart Pty Ltd Australia 100% 100%
Nyrstar Port Pirie Pty Ltd Australia 100% 100%
Nyrstar Trading GmbH Austria 100% 100%
Nyrstar Resources (Barbados) Ltd Barbados 100% 100%
Nyrstar Belgium NV RPR 0865.131.221 Belgium 100% 100%
Nyrstar Finance International NV RPR 0889.716.167 Belgium 100% 100%
Nyrstar Sales & Marketing NV RPR 0811.219.314 Belgium 100% 100%
Breakwater Resources Ltd Canada 100% 100%
Canzinco Ltd Canada 100% 100%
Nyrstar Mining Ltd Canada 100% 100%
Nyrstar Canada (Holdings) Ltd Canada 100% 100%
Nyrstar Myra Falls Ltd Canada 100% 100%
Sociedad Contractual Minera El Toqui Chile 100% 100%
GM-Metal SAS France 100% 100%
Nyrstar France SAS France 100% 100%
Nyrstar France Trading SAS France 100% 100%
Nyrstar Germany GmbH Germany 100% 100%
Nyrstar Hoyanger AS Norway 100% -
American Paci?c Honduras SA de CV Honduras 100% 100%
Servicios de Logistica de Centroamerica SA de CV Honduras 100% 100%
Nyrstar Campo Morado SA de CV Mexico 100% 100%
Nyrstar Budel BV The Netherlands 100% 100%
Nyrstar International BV The Netherlands 100% 100%
Nyrstar Netherlands (Holdings) BV The Netherlands 100% 100%
Nyrstar Coricancha S.A. Peru 100% 100%
Nyrstar Ancash S.A. Peru 100% 100%
Nyrstar Peru S.A. Peru 100% 100%
Nyrstar Spain & Portugal S.L. Spain 100% 100%
Nyrstar Finance International AG Switzerland 100% 100%
Nyrstar Sales & Marketing AG Switzerland 100% 100%
Breakwater Tunisia SA Tunisia 100% 100%
Nyrstar Clarksville Inc United States 100% 100%
Nyrstar Holdings Inc United States 100% 100%
Nyrstar IDB LLC United States 100% 100%
Nyrstar Tennessee Mines - Gordonsville LLC United States 100% 100%
Nyrstar Tennessee Mines - Strawberry Plains LLC United States 100% 100%
Nyrstar US Inc United States 100% 100%
Nyrstar US Trading Inc United States 100% 100%
42. Subsequent events
There have been no material reportable events subsequent to 31 December 2013.
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STATUTORY AUDITOR’S REPORT
ON THE CONSOLIDATED
FINANCIAL STATEMENTS
As at 31 December 2013
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STATUTORY AUDITOR’ S REPORT ON THE CONSOLIDATED FINANCIAL
STATEMENTS
203
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STATUTORY AUDITOR’ S REPORT ON THE CONSOLIDATED FINANCIAL
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NYRSTAR NV SUMMARIZED (NON-CONSOLIDATED)
FINANCIAL STATEMENTS AS AT 31 DECEMBER 2013
The annual accounts prepared under Belgian GAAP are presented below in summarized form. In accordance with the Belgian
Company Code, the annual accounts of Nyrstar NV together with the management report and the statutory auditor’s report will be
deposited with the National Bank of Belgium.
These documents may also be obtained on request from: Nyrstar NV, Zinkstraat 1, B- 2490 Balen (Belgium).
The statutory auditor, Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA, represented by Gert Vanhees has expressed an unquali?ed
opinion on the annual statutory accounts of Nyrstar NV.
Balance sheet
As at As at
EUR ,000 31 December 2013 31 December 2012
ASSETS
Non-current assets 2,182,107 2,201,364
Formation expenses 3,435 6,698
Intangible assets - -
Property, plant and equipment 5 81
Financial assets 2,178,667 2,194,585
Current assets 1,088,696 866,848
Total assets 3,270,803 3,068,212
LIABILITIES
Shareholders’ equity 2,182,838 2,152,417
Issued share capital 370,649 397,853
Share premium 1,555,133 1,539,183
Legal reserve 16,257 14,173
Undistributable reserves 35,432 32,983
Retained earnings 205,367 168,225
Provisions for risks and charges 3,302 5,704
Liabilities 1,084,663 910,091
Non-current Liabilities 838,982 864,731
Current Liabilities 245,681 45,360
Total equity and liabilities 3,270,803 3,068,212
Income Statement
As at As at
€ thousands 31 December 2013 31 December 2012
Operating income 9,341 10,869
Operating charges (14,718) (15,187)
Operating result (5,377) (4,318)
Financial income 135,954 121,069
Financial charges (85,542) (71,816)
Ordinary result before taxes 5,035 44,935
Income taxes (3,360) (3,611)
Net result 41,675 41,324
Result allocation
Retained earnings from prior year 168,224 104,529
Addition to the legal reserves 2,083 2,066
Addition to the other reserves 2,449 -
Transfer from the undistributable reserves - 24,437
Pro?t/loss to be carried forward 205,367 168,224
205
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Alloy Metal containing several
components.
Backwardation Market condition
where price of a forward or futures
contract is trading below the expected
spot price
Base Metal Non precious metal, usually
refers to copper, lead, and zinc.
Blast furnace A tall shaft furnace used
to smelt sinter and produce crude lead
bullion and a slag.
Bullion Crude metal that contains
impurities; needs to be re?ned to make
market quality metal.
Cadmium A soft bluish white ductile
malleable toxic bivalent metallic
element; occurs in association with zinc
ores.
C1 cash costs The costs of mining,
milling and concentrating, onsite
administration and general expenses,
property and production royalties not
related to revenues or pro?ts, metal
concentrate treatment charges, and
freight and marketing costs less the net
value of the by-product credits.
CAGR Compound Annual Growth Rate.
Calcine Product of roasting zinc
sulphide concentrates; mainly zinc oxide,
also with silica and iron compounds,
lead compounds, minor elements and
residual combined sulphur.
Casting Manufacturing method in
which a molten metal is poured into
a mould to form an object of the
desired shape; typically ingots or blocks
(jumbos)
Cathode Negatively charged electrode
in electrolysis; in zinc and cadmium
electrolysis, the cathode is a ?at sheet of
aluminum.
Cell house The location in the
production process where zinc metal is
electrolytically plated onto aluminum
cathodes.
CGG Continuous Galvanizing Grade
zinc; contains alloying agents such as
aluminum. lead and selenium in speci?c
qualities desired by customers; used in
continuous strip galvanizing plants.
Cobalt A hard, lustrous, silver-grey
metal.
Coke Product made by devolatilization
of coal in the absence of air at high
temperature.
Commodity grade metal Nyrstar
produces two types of commodity grade
metal, see CGG and SHG
Concentrate Material produced from
metalliferous ore by mineral processing
or bene?ciation; commonly based on
sulphides of zinc, lead and copper; in a
concentrate, the abundance of a speci?c
mineral is higher than in the ore.
Contango Market condition where
price of a forward or futures contract is
trading above the expected spot price
Continuous galvanizing A system
for providing a continuous supply of
material to be galvanized.
Conversion Price Operating cost for a
smelter to produce market quality metal,
not including the cost of raw materials.
Copper cementate Metallic copper
obtained by cementation.
Copper sulphate A copper salt made
by the action of sulphuric acid on copper
oxide.
Die casting A process for producing parts
in large quantities, by injecting molten
metal under pressure into a steel die.
dmt Dry metric tonne.
doré Unre?ned gold and silver bullion
bars, usually consisting of approximately
90% precious metals, which are to be
further re?ned to almost pure metal.
Electrolysis The process by which
metals (here zinc, cadmium, and copper)
are ‘ won’ or deposited from solution
onto a cathode by the passage of an
electric current through the solution
between anode and cathode.
Electrolyte Solution containing metals
(here zinc, cadmium, copper and silver)
circulating in an electrolysis cell.
Electrolytic smelting Smelting that
roasts and then leaches concentrates
to produce a zinc bearing solution. Zinc
is subsequently recovered from the
solution using electro winning and then
melted and cast into slabs.
Electrowinning The process of
removing metal from a metal bearing
solution by passing an electric current
through the solution.
EPA Environment Protection Authority
of a state, provincial or federal
government.
Flotation A method of mineral
concentration, usually of sulphide ores,
by which valuable mineral particles
adhere to froth bubbles for collection
as a concentrate; waste particles remain
in the slurry for eventual disposal as a
tailing.
Fuming, fume A process for recovering
of zinc and lead from molten lead blast
furnace slag by injecting coal; the metals
are removed as vapors in the gas stream,
and are deoxidized to form a fume that
is collected.
glt Grams per tonne
Galvanizing Process of coating steel
sheet or fabricated products with a thin
layer of zinc for corrosion protection.
GLOSSARY OF KEY INDUSTRY TERMS
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Germanium A brittle grey crystalline
element that is a semiconducting
metalloid (resembling silicon).
Grade Quantity of metal per unit weight
of host rock.
Greenhouse gases Gaseous
components of the atmosphere that
contribute to the greenhouse effect.
Grinding Size reduction to relatively
?ne particles.
Gypsum Calcium sulphate, hydrated.
Indium A rare, soft silvery metallic
element.
JORC Code The 2004 Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore Reserves
as published by the Joint Ore Reserves
Committee of the Australasian Institute
of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals
Council of Australia.
kt Thousand tonnes.
lb Pound.
LBMA London Billion Market
Association
Leaching A process using a chemical
solution to dissolve solid matters.
Life-of-mine Number of years that an
operation is planning to mine and treat
ore, taken from the current mine plan.
LME London Metal Exchange.
Lost time injury rate (LTR) Twelve
month rolling averages of the number
of lost time injuries per million hours
worked, and include all employees and
contractors across all operations.
NI 43-101 The Canadian Securities
Administrators National Instrument 43-
101 Standards of Disclosure for Mineral
Projects.
Ore Mineral bearing rock.
Oxidation The process by which
minerals are altered by the addition of
oxygen in the crystal structures.
Oxide washing Process to remove
halides from zinc secondaries.
Recordable environmental incident
An event at any operation (including
Nyrstar’s joint ventures) requiring
reporting to a relevant environmental
authority relating to non-compliance
with license conditions. Statistics are
correct as of the date an accident
is reported, but may be subject to
adjustment based on subsequent
internal audit or regulatory review.
Recordable injuries Any injury
requiring medical treatment beyond ?rst
aid.
Recordable injury rate (RIR) Twelve
month rolling averages of the number
of recordable injuries per million hours
worked, and include all employees and
contractors across all operations.
Re?ning Charge or RC An annually
negotiated fee that may be linked to
metal prices, paid by the miner or seller
of precious metals to a smelter as a
concession on the cost of the metal
concentrate or secondary feed materials
that the smelter purchases.
RLE process Roast Leach Electrowin;
technology used for the production of
zinc and which combines the roasting,
leaching and electrowinning processes.
See also de?nition of each individual
process.
Roaster In zinc production, a ?uid-bed
furnace used to oxidize zinc sulphide
concentrates; operates typically at
930-970°C; air injected through the
furnace bottom ‘?uidizes’ the bed of ?ne
combusting solids.
Roasting The process of burning
concentrates in a furnace to convert the
contained metals into a more readily
recovered form.
Secondaries See: Secondary feed
materials.
Secondary feed materials Byproducts
of industrial processes such as smelting
and re?ning that are then available
for further treatment/recycling. It also
includes scrap from metal machining
processes and from end-of-life materials.
SHFE Shanghai Futures Exchange
SHG Special High Grade Zinc; minimum
99.995% zinc; premium quality, used by
die casters; traded on the LME; attracts a
price margin over lower grades.
Slag Mixture of oxides produced
in molten form in a furnace at high
temperature. Smelting Chemical
reduction of a metal from its ore by
fusion.
Sulphides Minerals consisting of a
chemical combination of sulphur with
metals.
t Metric tonne.
t oz Troy ounce
Tailings Material rejected from a
treatment plant after the recoverable
valuable minerals have been extracted.
Treatment Charge or TC An annually
negotiated fee that may be linked to
metal prices, paid by the miner or seller
to a smelter as a concession on the cost
of the metal concentrate or secondary
materials that the smelter purchases.
207
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NOTES
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REGISTERED OFFICE
Nyrstar NV
Zinkstraat 1
B-2490 Balen
Phone: +32 (0) 14 44 95 00
Email: [email protected]
Company Number:
RPR Turnhout 0888.728.945
VAT No: BE 0888.728.945
www.nyrstar.com
CONTACT
INVESTOR RELATIONS
Amy Rajendran
Group Manager Investor Relations
Phone: +41 (0)44 745 8103
Email: [email protected]
MEDIA
Sheela Pawar
Group Manager Corporate Affairs
Phone: +41 (0)44 745 8154
Email: [email protected]
CONCEPT AND PRODUCTION
Com?
EDITOR
Nyrstar Corporate Affairs
[email protected]
IMAGES
Nyrstar.
ANNUAL REPORT
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