Good resilience of the Group in 2020, due to wonderful operational efficiency and robust money era within the second half Paris Inventory Alternate:ERA

Paris, 16 February 2021, 6:30 p.m.

PRESS RELEASE

Eramet: Good resilience of the Group in 2020, due to wonderful operational efficiency and robust money era within the second half

• Accountable disaster administration
• 2020 targets achieved for the Mining and Metals division:
  • 5.Eight Mt of manganese ore produced (+22% vs 2019), greater than 6 Mt of transported ore (+30%) in Gabon
  • 2.5 Mwmt of nickel ore exports in New Caledonia (+55%)
  • 3.Four Mwmt of nickel ore and 23.5 kt-Ni of ferroalloys produced in Indonesia
• Prices management within the Excessive-Efficiency Alloys division in H2¹ in very deteriorated aerospace and automotive markets (A&D prices down -24% vs Q1 2020)
• EBITDA of €398m in 2020, with very sturdy development in H2 (€278m) in comparison with H1¹ (€120m):
  • Almost +€250m in intrinsic features over the yr, primarily due to the rise in manganese gross sales volumes and nickel ore exports
  • Almost -€480m in destructive affect of exterior elements, notably with a lower in manganese ore (almost -19%) and ferronickel (roughly -10%) costs in addition to a profound and lasting aerospace disaster
• Free Money-Circulation (“FCF”) near break-even in 2020 due to sturdy money era in H2 (+€174m), reflecting structural progress, notably on WCR:
  • Beneficial seasonality in mining exercise in H2, marked by continued development in volumes
  • First contribution of Weda Bay Nickel exercise of as much as almost €60m in FCF in H2
  • Return to FCF break-even for the Excessive-Efficiency Alloys division in H2 (vs -€165m in H1), with a major discount in working capital requirement (“WCR”)
• Internet revenue, Group share of -€675m, of which -€623m in H1, primarily impacted by asset impairments (-€498m)
• Internet debt of €1.3bn, secure versus end-2019, considerably down in comparison with 30 June
• Excessive CSR efficiency index, above goal

• 2021 Outlook:
  • Development in manufacturing to 7 Mt of manganese ore as quickly as 2021, due to the opening of the brand new mining plateau in Gabon at end-2020 (greater than +20% vs 2020)
  • Development in nickel ore exports to greater than 3.5 Mwmt
  • Based mostly on a consensus of common manganese ore costs at $4.5/dmtu and LME nickel costs at $7.5/lb for 2021, forecast EBITDA of roughly €600m² in 2021 considerably greater than in 2020, with a significantly extra beneficial seasonality in H2
  • This outlook is consistent with the momentum of the start of this yr, with none financial setback associated to the pandemic

Christel Bories, Eramet group Chair and CEO:

” In 2020, the pandemic brutally disrupted our ecosystem. Particularly it resulted in a serious financial disaster within the aerospace sector, the primary end-market for our Aubert & Duval subsidiary.

Due to our demanding roadmap, the mobilisation and agility of our groups, in addition to a accountable disaster administration, we’ve got recorded outstanding successes in our mining actions and succeeded in seizing alternatives, regardless of the disruptions. We had been additionally capable of management money consumption, significantly in our Excessive-Efficiency Alloys division whose responsiveness was distinctive within the second half of the yr, and our debt was considerably diminished at end-2020 in comparison with end-June.

2021 begins off with good momentum within the uncooked materials sector. We are going to proceed to develop our manganese manufacturing in Gabon, develop our nickel ore manufacturing in Indonesia, and optimise our mineral sands exercise in Senegal. We’re additionally paying shut consideration to the set-up of all circumstances essential to correctly implement SLN’s rescue plan in an effort to guarantee a future to this subsidiary.

Within the Excessive-Efficiency Alloys division, our precedence stays to adapt prices to manufacturing ranges inside a depressed aerospace market. In parallel, we’re engaged on the phrases for a doable divestment of Aubert & Duval, to convey out a passable supply and guarantee the way forward for this strategic exercise for the sector.

Eramet’s transformation began nearly 4 years in the past is demonstrating its relevance, with a brand new agile and sustainable enterprise mannequin, thereby strengthening the Group to create worth and take full benefit of the post-crisis interval.”

Eramet’s Board of Administrators met on 16 February 2021, underneath the chairmanship of Christel Bories, and accredited the monetary statements for the 2020 monetary yr³ which shall be submitted for approval on the Shareholders’ Basic Assembly on 28 Could 2021.

Security and preventive measures towards the pandemic

In 2020, the Group demonstrated accountable disaster administration towards the pandemic.

It remained absolutely targeted on lowering accidents within the office in 2020, with a major decline within the variety of extreme accidents. The overall recordable damage charge (TRIR⁴) stood at 4.1 year-on-year at finish December 2020 and posted a substantial enchancment for the fourth consecutive yr (divided by Three in comparison with 2016).

The well being protocol adopted throughout all Group websites since March has ensured the safety of worker well being. On this respect, common evaluations had been carried out all year long consistent with developments within the pandemic and suggestions of native authorities.

Eramet group key figures

(Thousands and thousands of euros)1	2020	2019	Chg. (€m)	Chg.2 (%)
Turnover	3,553	3,671	(118)	-3%
EBITDA	398	630	(232)	-37%
Present working revenue (COI)	106	341	(235)	-69%
Internet revenue, Group share	(675)	(184)	(491)	n/a
Free Money-Circulation	(36)	(358)	322	+90%
	31/12/20	31/12/19	Chg. (€m)	Chg.2 (%)
Internet debt	(1,333)	(1,304)	(29)	+2%
Shareholders’ fairness	997	1,639	(642)	-39%
Gearing (Internet debt-to-equity ratio)	134%	80%	+54 pts	n/a
Gearing throughout the that means of financial institution covenants3	106%	63%	+43 pts	n/a
ROCE (COI/capital employed4 for earlier yr)	3%	12%	-9 pts	n/a

¹ Knowledge rounded to the closest million.
² Knowledge rounded to greater or decrease %.
³ Internet debt-to-equity ratio, excluding IFRS 16 affect and French state mortgage to SLN.
⁴ Complete shareholders’ fairness, internet debt, web site restoration provisions, restructuring and different social dangers, much less long-term investments, excluding Weda Bay Nickel capital employed.

N.B.: all feedback on modifications in FY 2020 are with respect to FY 2019, until in any other case specified. “H1” corresponds to the primary half of the yr, “H2” to the second half.

2020 was marked by a well being disaster of an unprecedented scale linked to the Covid-19 pandemic, which triggered a worldwide financial recession impacting uncooked materials costs, significantly manganese, and leading to a profound disaster within the aerospace sector, the primary end-market of the Excessive-Efficiency Alloys division.

On this context, the Group was capable of adapt rapidly and with agility. Mining exercise posted new manufacturing data and benefitted from the rebound within the metal market in China from Q2. The Excessive-Efficiency Alloys division accelerated its measures to cut back prices and management WCR, which paid off in H2.

The Group’s turnover amounted to €3,553m in 2020, down barely by -3% (-2% at fixed scope and trade charges⁵). The sturdy development in manganese ore gross sales volumes (+37%) and nickel ore exports (+55%) offset the numerous decline in manganese ore costs (-19%), in addition to the decline in aerospace gross sales at Aubert & Duval.

Group EBITDA totalled €398m. The Group made main intrinsic progress, significantly in H2, strengthened by the beneficial seasonality. Nevertheless, exterior elements weighed very closely on efficiency, owing to the affect of the pandemic.

Present working revenue got here to €106m, primarily after reserving a depreciation expense on fastened belongings of -€281m.

Internet revenue, Group share recovered sharply in H2 (-€52m). It ended at -€675m for the yr, reflecting asset impairments linked to the disaster (-€498m), notably A&D (-€197m), the mothballing of the lithium mission (-€113m) and the closure of the steel manganese enterprise in Gabon (-€83m, booked in H2). The share of revenue within the Weda Bay Nickel three way partnership in Indonesia contributed €79m to internet revenue, Group share in 2020.

Free Money-Circulation (“FCF”) amounted to -€36m at end-December 2020, with sturdy money era in H2 (+€174m, of which +€229m from enhancements in WCR). For the yr, the Mining and Metals division, excluding the lithium mission, generated FCF of almost €330m, of which €265m in H2, reflecting the wonderful operational efficiency, the numerous discount in WCR and optimised capex. The Excessive-Efficiency Alloys division posted FCF near break-even in H2 (-€10m) due to important progress in prices and inventories, after a H1 adversely affected by the affect of the pandemic on its markets (FCF of -€165m).

General, the Group’s sturdy FCF era in H2 displays the wonderful operational efficiency and the success of the money management plan began from Q1. The latter led to a major enchancment in WCR by roughly 30 days of turnover in comparison with end-2019, primarily as a result of decline in inventories. The money management efficiency additionally led to a discount in present capex (-26%).

Development capex, together with the plan to modernise the Transgabonese railway, totalled €104m in 2020 in Gabon, in an effort to assist natural improvement in manganese ore manufacturing, which is extremely value-accretive with a fast payback.

Internet debt stood at €1,333m at 31 December 2020, secure versus 2019.

As a reminder, the Group was granted a waiver for the calculation of covenants (“Covenant holidays”) for June and December 2020.

Eramet’s money ranges remained excessive at €1,856m.

Measures to protect money, corresponding to strict management of commercial capex and WCR, which had been taken as a part of the Group’s money management plan and which demonstrated success in H2 2020, are maintained for 2021.

Furthermore, a proposal to not pay out any dividend in respect of the 2020 monetary yr shall be made on the Shareholders’ Basic Assembly on 28 Could 2021.

Key figures by exercise

(Thousands and thousands of euros)1		2020		2019	Change (€m)	Change2 (%)
MINING AND METALS DIVISION
Manganese BU	Turnover	1,699		1,765	(66)	-4%
	EBITDA	442		560	(118)	-21%
Nickel BU	Turnover	905		778	127	+16%
	EBITDA	21		38	(17)	-46%
Mineral Sands BU	Turnover	276		286	(10)	-3%
	EBITDA	91		106	(14)	-13%
Complete Division3	Turnover	2,880		2,829	51	+2%
	EBITDA	554		704	(150)	-21%
HIGH-PERFORMANCE ALLOYS DIVISION
A&D and Erasteel	Turnover	680		847	(167)	-20%
	EBITDA	(119)		(26)	(93)	n/a

¹ Knowledge rounded to the closest million.
² Knowledge rounded to greater or decrease %.
³ Excluding lithium Undertaking.

Mining & Metals Division

Manganese BU

Manganese ore manufacturing reached 5.Eight Mt in 2020, up by +22% on 2019, with an annual tempo of greater than 6 Mt achieved in H2 2020. Volumes offered additionally grew considerably. The downturn within the metal sector led to a decline within the manufacturing and sale of manganese alloys, which was, nonetheless, restricted due to the seizing of promoting alternatives.

In a market which declined by -15%⁶ in worth, the Manganese BU was very resilient with turnover down barely by -4% to €1,699m. The Manganese BU stays the biggest contributor to Group EBITDA (€442m).

Market tendencies & costs

In 2020, international manufacturing of carbon metal, the primary end-market for manganese, was down -1.5%⁷ ending at 1,847 Mt⁷. Nevertheless, this determine masks appreciable regional and seasonal variations. Manufacturing in China, which represents c.57%⁷ of worldwide manufacturing, rebounded strongly from Q2, pushed by the Chinese language stimulus plan (+17.2%⁷ vs Q1 2020). On a full-year foundation, manufacturing grew by +5.4%⁷ in China, with stock ranges returning to regular at year-end. Conversely, metal manufacturing declined considerably in the remainder of the world (-9.3%⁷ vs 2019) and notably in Europe (-14.4%⁷) and North America (-18.1%⁷) regardless of the sound restoration that materialised in This autumn.

World manganese ore provide was down -2.7%⁷ in 2020 given the decline in manufacturing in H1 following the non permanent closure of South African mines. H2 was marked by a pointy rebound when all the mines had been capable of function usually once more. The availability/demand steadiness was very barely in surplus on a full-year foundation. The re-routing of flows to China elevated ore inventories in Chinese language ports to greater than 7 Mt⁸ at end-2020 (similar to roughly 12 weeks’ consumption).

The typical CIF China 44% manganese ore value stood at roughly $4.6/dmtu⁹ in 2020, down c.19%⁹ from 2019 ($5.6/dmtu⁹). The typical value in H2 2020 fell by almost 16%⁹ in contrast with H1, significantly as a consequence of international overproduction. The sturdy degree of exercise in China in early 2021 has resulted in considerably firmer costs, at almost $5/dmtu for manganese ore presently.

For the yr, the general change in manganese alloy costs in Europe stays destructive with a decline within the value of refined alloys^9,10 but in addition for traditional alloys^9,10. The restoration noticed in This autumn continues in early 2021.

Actions

In Gabon, the manganese ore manufacturing goal was reached with 5.Eight Mt produced in 2020 (+22%). The mine growth programme, mixed with steady operational enchancment, elevated manufacturing by +10% in H2 2020 in contrast with H1.

The opening of the brand new Okouma plateau befell as deliberate in October, with capital expenditure of €72m to assist development in 2020, providing a really fast payback.

The excellent logistics efficiency by Setrag elevated transported volumes of Comilog ore by +30% to six Mt in 2020, whereas additionally offering excellent service ranges to different prospects. Comilog exterior gross sales had been up +37% to five.Three Mt.

Regardless of the weak point of carbon metal manufacturing in Europe and the USA, manganese alloys manufacturing solely declined by 6% in 2020 to 698 kt. Gross sales volumes had been down by solely 2% to 716 kt, reflecting excessive flexibility within the manufacturing set-up (merchandise and volumes), which enabled new market share features and an expanded geographic footprint in goal markets.

Electrolysis exercise used to provide steel manganese in Gabon, largely loss-making, was definitively stopped in Q3 and silicomanganese manufacturing exercise continues.

Outlook

Carbon metal demand is predicted to extend once more in 2021, bolstered by China and the restoration that’s gaining floor in Europe and the USA. The beginning of 2021 noticed improved momentum within the sector, though manufacturing ranges in Europe and the USA are nonetheless under these of 2019.

As a part of the modular and optimised development programme of the Moanda mine, the manufacturing goal is ready at 7 Mt for 2021, representing greater than 20% versus 2020, with capex to assist development – together with the tranche of the plan to modernise the Transgabonese railway – of roughly €150m for the yr and a really fast payback.

Nickel BU

Nickel BU markets had been arduous hit by the sharp fallback of the stainless-steel sector in 2020, regardless of a powerful restoration in China in H2.

In consequence, ferronickel costs had been at a powerful low cost versus the LME for the yr, which impacted the monetary efficiency of SLN. Nevertheless, sturdy development in nickel ore costs and exports, mixed with a rise in LME costs in This autumn enabled SLN¹¹ to submit a turnover of €727m (+9% vs 2019), and EBITDA at €48m, in an unstable native context.

The Sandouville refinery recorded a lack of EBITDA of -€31m, in sharply declining markets as a result of results of the pandemic.

The Nickel BU posted a turnover rising by 16% in 2020 to €905m, together with €75m linked to the offtake settlement at Weda Bay Nickel, the place metallurgical manufacturing began efficiently within the spring.

The BU’s EBITDA totalled €21m, down 45%.

Market tendencies & costs

World stainless-steel manufacturing down -3.8%¹² to 49.7 Mt¹² in 2020. Following a historic shock in H1 (-11.4%¹² vs H1 2019), the stainless-steel sector rose sharply in H2 (+19.2%¹² vs H1). This rebound was pushed by China, which elevated its manufacturing by almost 30%¹² in H2 ending at 30.Four Mt¹² in 2020, accounting for c.60%¹² of worldwide manufacturing. This momentum in China displays the federal government’s stimulus plan specializing in infrastructure, transport and development. Indonesia, one other main producer, elevated its volumes in 2020 by +23.6%¹² (almost +50%¹² in H2 vs H1). In the remainder of the world, the restoration has nonetheless not materialised and manufacturing was down -17.2%¹² in 2020.

World demand for main nickel thus declined by -3.6%¹² in 2020 to 2.Three Mt¹², with a pointy distinction between the primary and second half (+17.5%¹² in H2 vs H1).

In parallel, international main nickel manufacturing grew by +5.2%¹² in 2020, reaching 2.5 Mt¹². The decline in volumes from conventional producers and the autumn in Chinese language NPI¹³ volumes had been greater than offset by the sturdy development in NPI provide in Indonesia (+68.7%¹²). NPI thus represented 44%¹² of worldwide main nickel manufacturing in 2020.

The nickel provide/demand steadiness was thus in surplus by roughly +183 kt in 2020. Nickel inventories on the LME¹⁴ and SHFE¹⁴ elevated by greater than +40% in comparison with end-2019 (representing a low degree) to succeed in 266 kt at end-2020, equal to roughly 9 weeks’ consumption¹⁵.

In 2020, LME value common was $6.25/lb ($13,783/t), down by solely -1% vs 2019. At year-end, nonetheless, LME costs elevated ($7.24/lb on common in This autumn, representing $15,961/t), pushed by sturdy demand from China and development prospects linked to batteries for electrical automobiles.

Owing to NPI competitors, ferronickel costs had been, nonetheless, at a powerful low cost versus the LME and posted a decline of -10% for the yr.

Nickel ore costs remained sturdy, ensuing from the efficient ban on nickel ore exports from Indonesia since January 2020, and the shortage of high-quality ore available on the market. New Caledonia nickel ore is now the primary supply when it comes to high quality for the worldwide market. As such, the typical nickel ore value (1.8% CIF China) rose to $91.0/wmt¹⁶ in H2 2020 (+32% vs H1 2020), and on common at $79.9/wmt¹⁶ in 2020, very strongly up (+36.2%) in comparison with $58.6/wmt¹⁶ in 2019.

Actions

In New Caledonia, SLN mining manufacturing reported sturdy development in 2020 to succeed in 5.Four Mwmt¹⁷ (+16% vs 2019), a rise of +45% in H2 versus H1. This rise displays each beneficial seasonality in H2 in addition to the consequences of the rescue plan. Nickel ore exports elevated by +55% to 2.5 Mwmt, consistent with the 2020 goal, with an annual tempo of Four Mwmt achieved in the course of the September to November interval.

This main progress was made regardless of the societal disruptions at the beginning of the yr and the blockades in December. These shutdowns resulted within the disorganisation of manufacturing actions and prevented correct feed to the Doniambo furnaces on the one hand, in addition to a number of ore deliveries to export prospects on the opposite.

Nevertheless, ferronickel gross sales had been up +7% in 2020 to 50 kt, with manufacturing of 48 kt, secure versus an already low degree in 2019.

The rise in nickel ore export gross sales volumes, mixed with a rise in ore costs, resulted in a 10% enchancment in SLN’s money value¹⁸ to $5.35/lb on common in 2020. In H2, and regardless of disruptions in December, the money value decreased to c.$5.0/lb on common.

This lower in manufacturing prices demonstrates that the corporate rescue plan is absolutely efficient underneath regular working circumstances. Certainly, regardless of the end-of-year disruptions and though the goal export degree has not but been met, SLN posted a constructive FCF of €34m¹⁹  in H2. At end-December, SLN’s monetary liquidity amounted to €110m.

As a reminder, SLN’s rescue plan focuses on three levers: the efficient implementation of a enterprise mannequin based mostly on ferronickel manufacturing on the plant and low-grade ore exports, the discount of vitality value and the development of productiveness. At the moment, SLN has the authorisation to export Four Mwmt of ore per yr; the success of the rescue plan requires a rise of this quantity to six Mwmt.

Initially of this yr, in gentle of the disruptions at its mining centres, SLN has been compelled to regulate its mining and metallurgy actions in addition to the loading of ore ships on a day-to-day foundation. While the blockades are lifted thus far, the scenario stays tense relating to ore availability, which severely hampers the progress of the rescue plan.

On this context, SLN, filed a request for the opening of conciliation proceedings earlier than the president of the Nouméa Blended Business Courtroom. The target of this process is to assemble as rapidly as doable the commitments of all stakeholders concerned to make sure the great implementation of the rescue plan, which goals to make sure the sustainable restoration of the Group’s New Caledonian subsidiary.

In Normandy, the Sandouville plant has managed to take care of its manufacturing (+6%) and gross sales (+10%) ranges for the yr. Nevertheless, exercise was disrupted in 2020 by a very depressed market atmosphere for top value-added nickel salts, particularly owing to the decline within the Asian electronics market. The positioning’s restoration plan, which is topic to a strategic evaluation, relies upon specifically on considerably greater manufacturing volumes (nickel metals and salts).

 In Indonesia, the beginning of Weda Bay is successful, with a quick ramp-up in mining operations and the manufacturing of low-grade nickel ferroalloy. Following its begin at end-2019, the mine produced almost 3.Four Mwmt of ore in 2020, with a present tempo of 6 Mwmt per yr. The primary tapping of nickel ferroalloy befell at end-April. The plant reached nominal capability from August (35 kt-Ni per yr), forward of the forecast schedule, and produced 23.5 kt-Ni in 2020.

Outlook

Chrome steel manufacturing ought to develop considerably in 2021, each in China and Indonesia in addition to in the remainder of the world. The growth of the batteries’ marketplace for electrical automobiles must be the opposite foremost development driver for main nickel demand in 2021, particularly for sophistication 1 nickel.

Within the class 2 nickel market, the ferronickel value low cost versus the LME ought to stay important.

Topic to regular working circumstances, SLN’s nickel ore export quantity goal quantities to greater than 3.5 Mwmt in 2021 and ferronickel manufacturing for the Doniambo plant is predicted to be roughly 50 kt.

At Weda Bay, mine manufacturing is predicted to succeed in greater than 6 Mwmt in 2021. As well as, as a part of its improvement technique in direction of metals for the vitality transition, Eramet signed in December an settlement with BASF to collectively assess the event of a nickel and cobalt hydrometallurgical refining advanced. The mission targets a begin of amenities within the mid-2020s and would domestically valorise Weda Bay’s ore. The feasibility examine has began in early 2021.

Mineral Sands BU

In a context of degraded markets as a result of well being disaster, the Mineral Sands BU reported turnover declining barely to €276m (-3% vs 2019) and EBITDA down by -13% to €91m.

Market tendencies & costs

World demand for various zircon purposes fell by c.-17% in 2020. Particularly, using zircon in ceramics, which represents almost 50% of the end-product, was arduous hit by the disaster and declined by c.-16% in 2020. Industrial demand for zircon was low general in all sectors and geographies.

In parallel, the provision of zircon declined by c.-11% in 2020. Regardless of this, the market remained in surplus in 2020, leading to a lower in costs of -15% to $1,333/t²⁰ on common for the yr.

World demand for TiO₂²¹ pigments, the primary end-market for titanium-based merchandise²², remained secure general in 2020 versus 2019, regardless of a pointy decline of demand in H1 as a result of affect of the pandemic on its foremost end-products (decline within the development business and automotive sector). Equally, titanium-based product provide has hardly modified (-1%) and the provision/demand steadiness remained barely in surplus in 2020, as in 2019.

Regardless of this surplus scenario, the typical value of CP titanium dioxide slag, a excessive added worth product, progressed by +4.6% to $786/t in 2020, primarily as a result of improve in demand for TiO₂ pigments in China in H2.

Actions

In Senegal, mineral sands manufacturing continued to develop in 2020 reaching 762 kt (+4%), due to the optimisation of operational efficiency and regardless of a barely decrease grade within the deposit space being mined.

Zircon manufacturing was up +2% to 59 kt, and gross sales volumes grew by +7%, reaching 62 kt.

In Norway, titanium slag manufacturing got here out at 199 kt in 2020, up +5%. This displays one of the best annual manufacturing efficiency for the plant since its begin. Gross sales volumes grew by +8% to
195 kt.

Outlook

Mineral sands markets are strongly correlated to the worldwide financial system, as using pigments and ceramics is linked to dynamics of urbanisation and modernisation of economies. Initially of this yr, zircon demand appears properly oriented, due specifically to a restocking throughout all the provide chain and a marked restoration within the ceramics business. Equally, demand for high-quality titanium-based uncooked supplies is predicted to be sturdy. This could have a very beneficial affect on high-quality chloride titanium slag produced on the Mineral Sands BU’s Norwegian plant.

The settlement for the sale of TiZir’s Norwegian plant signed in Could 2020 between Eramet and Tronox didn’t get hold of the required regulatory authorisations by the British competitors authorities. As such, Tronox determined in January 2021 to unilaterally withdraw from the sale course of. In consequence, Eramet will proceed to function and optimise the TiZir plant, which is delivering good operational efficiency.

In 2021, the annual manufacturing quantity for mineral sands is predicted to be on par with that achieved in 2020.

Excessive-Efficiency Alloys division

The unprecedented collapse of the aerospace sector, coupled with a steep downturn within the automotive sector strongly affected the performances of the Excessive-Efficiency Alloys division from Q2 2020. Turnover for the division was down -20% to €680m, with EBITDA of -€119m.

Aubert & Duval’s (A&D) turnover²³ decreased by -16% to €539m, with EBITDA of -€87m and destructive FCF at -€153m for the interval, in clear restoration in H2 (+€3m).

Erasteel noticed its gross sales fall by -31% to €142m in 2020, and recorded EBITDA of -€32m.

Market tendencies & costs

The aerospace sector, which represents roughly 70% of A&D’s turnover (78% in 2019) skilled a brutal drop in 2020 brought on by the pandemic and the collapse of air site visitors (-80%²⁴ since mid-March 2020). The disaster has a profound affect on all the aerospace provide chain, with many postponed and cancelled orders affecting suppliers and subcontractors within the sector.

Plane deliveries reached an traditionally low degree in 2020, with solely 723 plane delivered by Airbus and Boeing for the complete yr, down 42% from 2019. Along with the worldwide disaster within the sector, Boeing has suffered from technical difficulties with the 737 MAX single-aisle plane, most of whose plane and manufacturing traces had been shut down in 2020.

Nationwide sovereignty markets (defence and nuclear) in addition to vitality markets have withstood the disaster, notably due to large-scale public funding programmes that may maintain demand.

The automotive business, which represents almost half of Erasteel’s gross sales, was additionally affected by the disaster. Regardless of a rebound in gross sales in Asia in H2 2020, light-duty car gross sales declined by -13%²⁵ in 2020.

Actions

On this significantly degraded market atmosphere, A&D’s aerospace turnover fell to €367m in 2020 (-24% vs 2019), after 2019 already impacted by the implications of dysfunction within the high quality administration system. During the last two years, the decline quantities to -37%. Nevertheless, main progress was made on the industrial entrance with contract renewals and new market share features with main gamers: Airbus, Boeing and GE.

Power and Defence turnover grew strongly to €103m (+47%), notably due to elevated gross sales of disks for land-based generators (vitality market). 2020 additionally noticed the strengthening of the order e-book for the nationwide sovereignty sector.

As of Q2, in an effort to face the disaster and adapt to the significantly degraded market context, A&D adjusted the extent of manufacturing web site by web site due to measures in drive. Thus, the extent of exercise was revised in response to the order e-book for every product line, workshop by workshop.

The long-term part-time work settlement (Activité Partielle Longue Durée “APLD”), which advantages A&D, has allowed to considerably scale back working hours within the brief time period. Within the medium time period, an employment adjustment and organisation plan is presently being negotiated with worker consultant our bodies. It targets job cuts by means of a voluntary redundancy plan.

The numerous actions to adapt prices to the extent of exercise and management money consumption put in place by A&D as of H1 have been profitable in H2 with free cash-flow at break-even (+€3m vs -€156m in H1). Uncooked materials purchases have been nearly halved, normal purchases diminished by c.30% and payroll expenditure by c.25% in comparison with Q1 2020. A&D’s WCR returned to the degrees of end-2019 in numbers of days of turnover, primarily due to the lower in inventories.

 For Erasteel, the tough context of the automotive market considerably impacted manufacturing and gross sales in 2020. An adjustment of the manufacturing system was put in place in an effort to higher meet prospects’ wants. Good management of bills and WCR allowed to restrict money consumption to
-€21m.

As well as, an vital work of simplification of the organisations was carried out in 2020 for the division, resulting in the efficient shutdown of some subsidiaries’ actions in the USA, the UK, China and France at end-2020.

Outlook

Passenger site visitors within the air sector ought to solely return to its pre-crisis degree in 2024 on the earliest in response to business forecasts. The primary plane producers have already durably adjusted their manufacturing charges downwards, significantly for wide-body plane.

As for the automotive market, which continues to be very unsure, international manufacturing is predicted to extend in 2021.

In 2021, in parallel to the strategic evaluation of the division’s actions, the precedence stays to proceed adapting prices to manufacturing ranges in a degraded market, significantly within the aerospace sector.

Concerning a doable divestment of A&D, the Group is reviewing one of the best options to convey out a passable supply and guarantee the way forward for this strategic aerospace sector exercise.

CSR roadmap

In 2020, Eramet absolutely demonstrated its dedication as a contributive company citizen:

• ESG efficiency is more and more recognised: after Vigeo-Eiris in 2019, Eramet’s CSR strategy was valued by ISS ESG this yr, which awarded the Group ‘Prime’ standing for the primary time, with an general rating of B- (in contrast with C in 2017)²⁶. Eramet additionally obtained a B grade, a transparent enchancment, within the Local weather Change survey of the 2020 rating of the Carbon Disclosure Undertaking (CDP).
• In opposition to a backdrop of elevated manufacturing, the Group’s environmental ambitions have been maintained and are considerably forward of schedule, significantly relating to targets on the round financial system and the discount of merchandise CO₂ depth (-25.4%, considerably forward of our goal of -26% in 2023).
• Lastly, by means of its solidarity actions in all of the nations the place it operates, Eramet has helped to struggle the implications of the pandemic by making medical gear and primary requirements obtainable to nations and native populations. In 2020, group funding and sponsorship bills totalled €16.8m, of which €10m was mobilized in response to the struggle towards Covid-19.

 Outlook

The markets of the Mining and Metals division stay well-oriented at the beginning of 2021, primarily due to the momentum of the Chinese language financial system, with an improved short-term outlook in Europe and the USA. Nevertheless, the general financial context for uncooked supplies stays unsure for the yr.

The Excessive-Efficiency Alloys division is struggling in its foremost market from the disaster within the aerospace sector, which is predicted to take a number of years to resolve. Nevertheless, it advantages from a strong outlook within the nationwide sovereignty and vitality markets in addition to the anticipated restoration within the automotive sector.

In 2021, the Group continues to implement its strategic roadmap with additional important intrinsic progress anticipated, notably due to the achievement of the next targets:

• 7 Mt of manganese ore manufacturing;
• Nickel ore exports of greater than 3.5 Mwmt as a part of the continued execution of SLN’s rescue plan,
• Manufacturing of greater than 6 Mwmt of nickel ore at Weda Bay.

This natural development momentum ought to assist to amplify the standard seasonality of mining actions.

In 2021, Group capital expenditure might whole c.€300m in present capex and c.€200m in development capex to assist natural improvement, primarily in manganese.

Based mostly on a consensus of common manganese ore costs at $4.5/dmtu and LME nickel costs at $7.5/lb for 2021, forecast EBITDA of roughly €600m²⁷ is predicted in 2021, considerably greater than in 2020, with a significantly extra beneficial seasonality in H2.

This outlook is consistent with the momentum of the beginning of this yr, with out an financial setback linked to the pandemic. It’s consistent with our strategic roadmap, and intention to make Eramet’s enterprise mannequin much more strong, in an effort to strengthen the Group and take full benefit of the post-crisis interval.

2020 annual outcomes presentation

A stay Web webcast of the 2020 annual outcomes presentation will happen on Wednesday 17 February 2021 at 10:30 am CET, on our web site: www.eramet.com. Presentation documentation shall be obtainable on the time of the webcast.

To hitch the webcast, click on on the hyperlink on the Group’s web site (www.eramet.com).

Calendar

26/04/2021: Publication of 2021 first-quarter turnover

28/05/2021: Shareholders’ Basic Assembly

28/07/2021: Publication of 2021 half-year outcomes

ABOUT ERAMET

Eramet, a worldwide mining and metallurgical group, is a key participant within the extraction and valorisation of metals (manganese, nickel, mineral sands) and the elaboration and processing of alloys with a excessive added worth (high-speed steels, high-performance steels, superalloys, aluminium and titanium alloys).

The Group helps the vitality transition with excessive development potential actions, together with lithium and recycling.

Eramet positions itself because the privileged companion of its prospects in sectors that embrace carbon and stainless-steel, aerospace, pigments, vitality, and new battery generations.

Constructing on its working excellence, the standard of its investments and the experience of its staff, the Group leverages an industrial, managerial and societal mannequin that’s virtuous and value-accretive. As a contributive company citizen, Eramet strives for a sustainable and accountable business.

Eramet employs greater than 13,000 folks in 20 nations, with turnover of greater than €3.5 billion.

For additional data, go to www.eramet.com

INVESTOR CONTACT Government VP Technique and Innovation – Investor Relations Philippe Gundermann T. +33 1 45 38 42 78 Investor Relations Supervisor Sandrine Nourry-Dabi T. +33 1 45 38 37 02

PRESS CONTACT Communications Director Pauline Briand T. +33 1 45 38 31 76 [email protected]   Picture 7 Marie Artzner T. +33 1 53 70 74 31 | M. +33 6 75 74 31 73 [email protected]

APPENDICES

Appendix 1: Turnover

€ million1	This autumn 2020	Q3 2020	Q2 2020	Q1 2020	FY 2020	FY 2019
MINING AND METALS DIVISION
Manganese BU	440	420	480	359	1,699	1,765
Nickel BU	323	216	215	151	905	778
Mineral Sands BU	74	63	69	70	276	286
HIGH-PERFORMANCE ALLOYS DIVISION
A&D and Erasteel	181	154	149	196	680	847
GROUP
Holding firm & eliminations	(2)	(3)	0	(2)	(7)	(5)
Eramet group revealed IFRS monetary statements2	1,016	850	913	774	3,553	3,671

¹ Knowledge rounded as much as the closest million.
² Utility of IFRS commonplace 11 “Joint Preparations”.

 Appendix 2: Manufacturing and gross sales

In 1000’s of tonnes			H2 2020	This autumn 2020	Q3 2020	H1 2020	Q2 2020	Q1 2020	FY 2020		FY 2019
MANGANESE BU
Manganese ore and sinter manufacturing			3,040	1,503	1,537	2,763	1,475	1,288	5,803		4,765
Manganese ore and sinter transportation1			3,150	1,535	1,615	2,862	1,620	1,242	6,013		4,627
Exterior manganese ore gross sales			2,884	1,393	1,492	2,418	1,418	1,000	5,303		3,870
Manganese alloys manufacturing			356	186	170	342	146	196	698		740
Manganese alloys gross sales			370	208	162	346	165	181	716		733
NICKEL BU
Nickel ore manufacturing (in 1000’s of moist tonnes)
SLN			3,201	1,599	1,603	2,204	1,286	918	5,405		4,655
Weda Bay Nickel (100%)2			2,145	1,572	573	1,264	751	513	3,409		470
Ferronickel manufacturing – SLN			24.0	11.3	12.8	23.8	11.7	12.1	47.8		47.4
Low grade nickel ferroalloys manufacturing – Weda Bay Nickel (kt of Ni content material – 100%)			19.0	10.6	8.4	4.5	4.5	–	23.5		–
Nickel ore gross sales (in 1000’s of moist tonnes)
SLN			1,421	832	589	1,091	760	331	2,512		1,623
Ferronickel gross sales – SLN			24.2	11.7	12.8	26.0	14.3	11.6	50.2		47.0
Low grade nickel ferroalloys gross sales – Weda Bay Nickel/Off-take Eramet (kt of Ni content material)			6.2	5.4	0.8	–	–	–	6.2		–
Nickel salts and excessive purity nickel manufacturing			3.6	2.1	1.6	3.7	2.2	1.5	7.3		6.9
Nickel salts and excessive purity nickel gross sales			3.7	2.4	1.3	3.7	2.1	1.6	7.4		6.7
MINERAL SANDS BU
Mineral Sands manufacturing			391	208	183	371	183	188	762		735
Zircon manufacturing			30	16	14	29	15	14	59		58
Titanium dioxide slag manufacturing			101	49	52	98	50	48	199		189
Zircon gross sales			29	16	13	33	16	17	62		58
Titanium dioxide slag gross sales			95	45	51	100	48	52	195		180

¹ Produced and transported.
² 9m 2020 figures revised at year-end (+34 kwmt vs figures offered in Appendix 2 of the press launch of 28/10/2020).

Appendix 3: Costs and index

	This autumn 2020	H2 2020	H1 2020	FY 2020	This autumn 2019	H2 2019	H1 2019	FY 2019	Chg. H2 2020 – H1 20206	Chg. 2020 – 20196
MANGANESE BU
Mn CIF China 44% (USD/dmtu)1	4.18	4.19	4.98	4.58	4.04	4.85	6.42	5.63	-15.9%	-18.7%
Ferromanganese MC – Europe (EUR/t) 1	1,316	1,311	1,422	1,366	1,355	1,417	1,551	1,484	-7.8%	-8.0%
Silicomanganese – Europe (EUR/t) 1	877	870	949	910	888	921	976	949	-8.3%	-4.1%
NICKEL BU
Ni LME (USD/lb)2	7.24	6.85	5.65	6,25	6.97	7.03	5.59	6.31	21.2%	-1.0%
Ni LME (USD/t) 2	15,961	15,092	12,455	13,783	15,450	15,489	12,325	13,907	21.2%	-1.0%
Ni ore CIF China 1.8% (USD/wmt)3	100.9	91.0	68.5	79.9	73.0	66.6	50.7	58.6	32.4%	36.2%
MINERAL SANDS BU
Zircon (USD/t) 4	1,300	1,310	1,355	1,333	1,545	1,565	1,585	1,575	-3.3%	-15.4%
CP grade titanium dioxide (USD/t) 5	780	775	798	786	756	758	746	752	-2.8%	4.6%

¹ Quarterly common for market costs, Eramet calculations and evaluation.
² LME (London Metallic Alternate) costs.
³ CNFEOL (China FerroAlloy On-line), “Different mining nations” in H2 2020 and SMM (Shanghai Metals Market) “Philippines” in 2019 and H1 2020.
⁴ TZMI, Eramet evaluation (premium zircon).
⁵ Market evaluation, Eramet evaluation.
⁶ Eramet calculation (based mostly on CRU month-to-month value index for manganese ore and alloys solely), rounded to the closest decimal.

Appendix 4: Half-year efficiency indicators by exercise

 

€ million1		H2 2020	H1 2020	FY 2020		FY 2019	Change 2020/2019 (€m)	Change2 (%)
MINING AND METALS DIVISION
Manganese BU	Turnover	860	839	1,699		1,765	-66	-4%
	EBITDA	208	234	442		560	-118	-21%
	COI3	160	179	339		459	-120	-26%
	FCF	166	119	285		-8	293	n/a
Nickel BU	Turnover	539	366	905		778	127	+16%
	EBITDA	91	-70	21		38	-17	-45%
	COI	35	-114	-79		-58	-21	N/A
	FCF	89	-88	1		-70	71	n/a
Mineral Sands BU	Turnover	137	139	276		286	-10	-3%
	EBITDA	47	44	91		106	-15	-14%
	COI	22	22	44		64	-16	-25%
	FCF	9	34	43		45	-2	-4%
HIGH-PERFORMANCE ALLOYS DIVISION
A&D and Erasteel	Turnover	335	345	680		847	-167	-20%
	EBITDA	-53	-66	-119		-26	93	n/a
	COI	-60	-93	-153		-68	-85	n/a
	FCF	-10	-164	-174		-144	-30	n/a
Holding, elim. and Lithium BU (mothballed mission)	Turnover	-5	-2	-7		-5	-2	n/a
	EBITDA	-15	-22	-37		-47	-10	-21%
	COI	-21	-25	-46		-58	12	n/a
	FCF	-81	-111	-192		-182	-210	n/a
GROUP whole	Turnover	1,866	1,687	3,553		3,671	-118	-3%
	EBITDA	278	120	398		630	232	-37%
	COI	137	-31	106		341	-235	-68%
	FCF	174	-210	-36		-359	323	n/a

¹ Knowledge rounded as much as nearest million.
² Knowledge rounded as much as greater or decrease %.
³ Present working revenue (COI).

Appendix 5: Sensitivities of Group EBITDA

Sensitivities	Change	Impression on EBITDA
Manganese ore costs (CIF China 44%)	+$1/dmtu	c.€210m1
Manganese alloy costs	+$100/t	c.€60m1
Nickel costs (LME)	+$1/lb	c.€95m1
Nickel ore costs (CIF China 1.8%)	+$10/wmt	c.€30m1
Alternate charges	-$/€0.1	c.€135m
Oil value per barrel (Brent)	+$10/bbl	c.€(20)m1

¹ For an trade charge of $/€1.22.

Appendix 6: Efficiency indicators

Working efficiency by division

	MINING AND METALS				HIGH
(€ hundreds of thousands)	Manganese	Nickel	Mineral	Lithium	PERFORMANCE	Holding and	Complete
			Sands		ALLOYS	Eliminations
Monetary yr 2020
Gross sales	1 699	905	276	–	680	(7)	3 553
EBITDA	442	21	91	(5)	(119)	(32)	398
Present working revenue	339	(79)	44	(5)	(153)	(41)	106
Internet money generated by working actions	472	17	60	(52)	(116)	(73)	308
Industrial investments (intangible belongings and property plan and gear)	195	44	16	34	38	15	342
Monetary yr 2019
Gross sales	1 765	778	286	–	847	(5)	3 671
EBITDA	560	38	106	–	(26)	(48)	630
Present working revenue	459	(58)	64	–	(68)	(56)	341
Internet money generated by working actions	206	(17)	55	(13)	(84)	(61)	86
Industrial investments (intangible belongings and property plan and gear)	234	35	12	101	53	20	455

Turnover and investments by area

(€ hundreds of thousands)	France	Europe	North	Asia	Oceania	Africa	South	Complete
			America				America
Gross sales (gross sales vacation spot)
Monetary yr 2020	253	845	669	1 622	24	103	36	3 553
Monetary yr 2019	320	1 274	599	1 309	37	86	46	3 671
Industrial investments (intangible belongings and property plan and gear)
Monetary yr 2020	56	29	2	1	39	180	34	342
Monetary yr 2019	76	42	8	–	30	198	101	455

Consolidated efficiency indicators – Revenue assertion

(€ hundreds of thousands)	Monetary yr	Monetary yr
	2020	2019
Gross sales	3 553	3 671
EBITDA	398	630
Amortisation and depreciation of non-current belongings	(281)	(284)
Provision for danger and bills	(12)	(5)
Present working revenue	106	341
Impairment of belongings	(498)	(25)
Different working revenue and bills	(63)	(93)
Working revenue	(455)	223
Monetary revenue	(186)	(134)
Share of revenue from associates	86	(7)
Revenue taxes	(121)	(227)
Internet revenue for the interval	(676)	(145)
– Attributable to non-controlling pursuits	(1)	39
– Attributable to the Groupe	(675)	(184)
Primary incomes per share (€)	(25,46)	(6,93)

Consolidated efficiency indicators – Internet monetary debt movement desk

(€ hundreds of thousands)	Monetary yr	Monetary yr
	2020	2019
Working actions
EBITDA	398	630
Money affect ot objects in EBITDA	(383)	(420)
Money movement from operations	15	210
Change in WCR	294	(124)
Internet money generated by working actions (1)	309	86
Investing actions
Industrial investments	(342)	(455)
Different investments flows	(3)	11
Internet money utilized in investing actions (2)	(345)	(444)
Internet money utilized in financing actions	(15)	(117)
Impression of fluctuation in trade charge and different	35	(6)
Proper of use regarding lease contracts acquisition (IFRS16)	(12)	(12)
(Enhance) / Lower in internet monetary debt	(29)	(493)
(Internet monetary debt)  opening restated *	(1 304)	(811)
(Internet monetary debt)  closing	(1 333)	(1 304)
Free Money Circulation (1) + (2)	(36)	(358)
* Restated for the first-time software of IFRS 16 as of January 1, 2019

Consolidated efficiency indicators – Stability sheet

(€ hundreds of thousands)	31/12/2020	31/12/2019
Non-curent belongings	3 003	3 294
Inventories	906	1 098
Commerce receivables	348	362
Commerce payables	(541)	(458)
Simplified Working Capital	713	1 002
Different Working Capital objects	(238)	(242)
Complete Working Capital Necessities (WCR)	475	760
Derivatives	7	–
TOTAL	3 485	4 054
(€ hundreds of thousands)	31/12/2020	31/12/2019
Fairness attributable to homeowners of the mum or dad	764	1 398
Non-controlling pursuits	233	241
Shareholders’ fairness	997	1 639
Money and money equivalents and present f inancial belongings	(1 856)	(920)
Borrowings	3 189	2 224
Internet monetary debt	1 333	1 304
Internet monetary debt/shareholders’ fairness (Gearing)	134%	80%
Provisions and employee-related liabilities	936	877
Internet deferred tax	219	214
Derivatives	–	20
TOTAL	3 485	4 054

Appendix 7: Monetary glossary

Consolidated efficiency indicators

The consolidated efficiency indicators used for the monetary communication of the Group’s outcomes and financial efficiency and offered on this doc are restated knowledge from the Group’s reporting and are monitored by the Government Committee.

Turnover at fixed scope and trade charges

Turnover at fixed scope and trade charges corresponds to turnover adjusted for the affect of the modifications in scope and the fluctuations within the trade charge from one monetary yr to the following.

The scope impact is calculated as follows: for the businesses acquired in the course of the monetary yr, by eliminating the turnover for the present interval and for the businesses acquired in the course of the earlier interval by integrating, within the earlier interval, the full-year turnover; for the businesses offered, by eliminating the turnover in the course of the interval thought-about and in the course of the earlier comparable interval.

The trade charge impact is calculated by making use of the trade charges of the earlier monetary yr to the turnover for the monetary yr underneath evaluation.

EBITDA (“Earnings earlier than curiosity, taxes, depreciation and amortisation”)

Earnings earlier than monetary income and different working bills and revenue, revenue tax, contingencies and loss provision, and amortisation and impairment of property, plant and gear and tangible and intangible belongings.

SLN’s cash-cost

SLN’s cash-cost is outlined as all manufacturing and stuck prices (R&D together with exploration geology, administrative bills, logistical and industrial bills), internet of by-products credit and native companies, which cowl all of the phases of commercial improvement of the completed product till supply to the top buyer and which affect the EBITDA within the firm’s monetary statements, over tonnage offered.

SLN break-even value

The break-even value of SLN is outlined as SLN’s cash-cost as outlined above, plus capex (realised capex of the yr versus realised tonnage for the annual monetary statements, forecast capex for the present yr versus the forecast tonnage in the course of the  yr), non-recurring revenue and fees and monetary bills (recognised in SLN’s company monetary statements).

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¹ “H1: First-half, “H2: Second-half, “Q1 to This autumn”: First to Fourth Quarter
² Based mostly on an trade charge at $/€1.22.

³ Audit procedures for the 2020 consolidated monetary statements have been accomplished. The certification report shall be launched after the Board of Administrators’ assembly held on 11 March 2021, which is able to set the draft shareholders‘ resolutions.
⁴ TRIR (whole recordable damage charge) = variety of misplaced time and recordable damage accidents for 1 million hours labored (staff and subcontractors).
⁵ See Monetary glossary in Appendix 7.
⁶ Mixed impact of volumes and costs: based mostly on manganese ore consumption and CIF China 44% costs.
⁷ Eramet forecasts based mostly on World Metal Affiliation (WSA) manufacturing knowledge.
⁸ Supply: CNFEOL (China FerroAlloy On-line).
⁹Common market costs, Eramet calculations and evaluation; manganese ore: CRU CIF China 44% spot value; Manganese alloys: CRU Western Europe spot value.
¹⁰Medium carbon ferromanganese common at roughly €1,366/t, representing -8%; silicomanganese at roughly €910/t, representing -4%.
¹¹SLN, ENI and others.
¹² Eramet forecasts.
¹³ Nickel Pig Iron (NPI).
¹⁴ LME: London Metallic Alternate; SHFE: Shanghai Futures Alternate.
¹⁵ Together with producers’ inventories.
¹⁶ CIF China value 1.8% “Different mining nations” in H2 2020 (CNFEOL) and “Philippines” in 2019 and H1 2020 (SMM).
¹⁷ Mwmt: hundreds of thousands of moist metric tonnes; kwmt: 1000’s of moist metric tonnes.
¹⁸ See Monetary glossary in Appendix 7.
¹⁹ Based mostly on SLN particular person monetary statements.
²⁰ Supply Zircon premium: FerroAlloyNet.com, Eramet evaluation.
²¹ c.90% of titanium-based end-products.
²² Titanium dioxide slag, ilmenite, leucoxene and rutile.
²³ Aubert & Duval, EHA and others.
²⁴ Based mostly on income generated per passenger-kilometre (“RPK”); supply: Worldwide Air Transport Affiliation (“IATA”).
²⁵ Supply: Eramet, VDA (German Affiliation of the Automotive Trade) and IHS Markit, estimated knowledge for 2020 at end-January 2021.
²⁶ “Company score” evaluation.
²⁷ Based mostly on an trade charge at $/€1.22.

• Eramet CP FY2020 VF EN clear