Eramet Sa · EURONEXT:ERA
Eramet Sa — 2021 BofA Global Metals, Mining & Steel Conference
38 slides from Eramet Sa's conference presentation, May 18, 2021
Slide 1: Investor Presentation
Investor Presentation 2021 BofA Global Metals, Mining & Steel Conference 18-20 MAY 2021
Slide 2: Disclaimer
Disclaimer Certain information contained in this presentation including any information on Eramet’s plans or future financial or operating performance and any other statements that express management’s expectations or estimates of future performance, constitute forward-looking statements. Such state
Slide 3: Contents
Contents Eramet at a glance 1– Q1 2021 Key trends 2– 2020 Financial results 3– Strategic transformation Conclusion and outlook 3 Eramet – Investor presentation, May 2021
Slide 4: Eramet at a glance
Eramet at a glance eramMer,t
Slide 5: A global leading mining and metallurgical Group
A global leading mining and metallurgical Group 2 divisions with global leading positions 2020 KPIs High-Performance Mining and Metals Alloys Division Erasteel 4% Division 19% 81% Aubert & Duval Sales 15% €3.6bn €3,553m Mineral Sands BU Manganese BU 8% 48% EBITDA €398m Nickel BU 25% 13,129 Long term
Slide 6: A diversified Mining and Metals Division with significant resources
A diversified Mining and Metals Division with significant resources and highly competitive mines Manganese BU Nickel BU Mineral Sands BU Gabon: 107 Mt resources of New Caledonia: 19.4 Mt resources of Senegal (Zircon & Ilmenite): 32.1 Mt manganese content nickel content resources (HMC) Resources Reso
Slide 7: High seasonality in mining operations, strengthened by organic growth
High seasonality in mining operations, strengthened by organic growth High seasonality of key mining operations... 3-yrs average ore production (Mwmt) …and increasing share of mining business in Eramet’s portfolio +17% +35% Ore production volumes (100 basis) 2.70 2.70 150 149 140 2.30 130 +3% 127 2.
Slide 8: A committed, contributive and recognized corporate citizen
A committed, contributive and recognized corporate citizen 1 Societal engagement aligned with strategic vision A 2018-2023 CSR roadmap to structure and set the pace for our action plans Aligned with the United Nations’ Sustainable Development Goals 2 Contributing to the communities in which sites ar
Slide 9: Q1 2021 Key trends
1 Q1 2021 Key trends
Slide 10: Mining & Metals division: positive momentum in all markets
Mining & Metals division: positive momentum in all markets at the start of the year as recovery from pandemic continues Manganese BU Nickel BU Mineral Sands BU Demand for ore well oriented, Strong demand in Q1 2021 Zircon production up in Q1 supported by the positive driven by Chinese and 2021, but
Slide 11: High-Performance alloys division: aerospace still deeply affected
High-Performance alloys division: aerospace sector still deeply affected by pandemic, recovery in the automotive sector in China Aubert Erasteel & Duval After a brutal drop in 2020 due to the Global automotive sales up by 16% in Q1 2021 pandemic, aerospace sector, A&D major end- in China, signs of a
Slide 12: Very good operating performance in Q1, driven by mining
Very good operating performance in Q1, driven by the mining activities, in a quarter with traditionally unfavourable seasonality Mining and Metals division Strong growth momentum in Q1 2021 versus Q1 2020 > 1.5 Mt in manganese ore produced (+17%) > 1.1 Mwmt in nickel ore produced (+14%) in New-Caled
Slide 13: Significant rise in manganese alloys market prices
Significant rise in manganese alloys market prices which should reflect on selling prices in Q2 1 2 Mn ore CIF China 44% at c.$5.1/dmtu in Q1 2021, up 17%1 (+7% in €), thanks to strong demand from Average Mn alloys prices up substantially due to a China supply shortage in Q1 2021: MC FeMn at €1,713/
Slide 14: Q1 2021 Group turnover up 8%
Q1 2021 Group turnover up 8%, driven by strong growth of Mining & Metals division (+18%) Positive volume and price effect (in €) of +9% each in M&M division Manganese ore prices (CIF China 44%) up in Q1 2021 Significant rise in manganese alloys prices to reflect on selling prices in Q2; very pos
Slide 15: Delivering on our strategic roadmap (1/2)
Delivering on our strategic roadmap, in a favourable price environment partially mitigated by input costs (1/2) Strong progression in mining operational performance Continued organic growth in manganese ore production in Gabon > +22% in 2020 (5.8 Mt); +17% in Q1 2021 (1.5 Mt) Ongoing increase in nic
Slide 16: Delivering on our strategic roadmap (2/2)
Delivering on our strategic roadmap, in a favourable price environment partially mitigated by input costs (2/2) Progress on the CSR roadmap Significant safety progress: CSR > -24% in accident frequency rate in 2020 (TRIR1 at 4.1 year-on-year at end- December 2020) achievements - 25.4% reduction in t
Slide 17: 2020 Financial results
2020 Financial results” —————— —_
Slide 18: Significant increase in EBITDA in H2, reduction in net debt
Significant increase in EBITDA in H2, together with a reduction in net debt vs H1 Sales €3,553m -3% vs 2019 FCF - €36m +11% in H2 vs H1 vs - €358m in 2019 +€174m in H2 (vs - €210m EBITDA €398m in H1) -37% vs 2019 €278m in H2 (vs €120m in H1) Net debt €1,333m COI €106m ➔ stable vs 2019 (v
Slide 19: Outstanding operational achievements in 2020
Outstanding operational achievements in 2020, in a major global crisis environment Eramet's end-markets hard hit by pandemic in 2020, with a drop in metal prices, mainly manganese ore (-19% vs. 2019), and A&D penalised by aerospace crisis c.- €540m EBITDA impact In such a disrupted and difficult env
Slide 20: High cash position at €1.9bn
High cash position at €1.9bn Incl. reimbursement of €233m of 2020 Eramet bond Drawdown lines as of 31 December 2020: Group financial liquidity (€m) Revolving credit facility ("RCF") 2,468 > €981m RCF maturing 2024 2,500 2,299 Term loan 1,941 2,000 1,856 > €350m loan granted in December with a 2- 848
Slide 21: No major debt maturity until 2024
No major debt maturity until 2024 Group gross debt including IFRS16 equal to €3,189m at 31 December 2020 €278m maturing in 2021 out of which: > €106m of bond repayment > €124m of WC financing debt, commercial paper and overdrafts to be rolled over Average maturity of Group’s 3-year debt More than 80
Slide 22: Strategic transformation
3 Strategic transformation
Slide 23: Our vision
Our vision Build a sustainable and recognised global player, a reference in responsible mining and metallurgy, and in the energy transition Develop a selective portfolio of value-accretive mining and metallurgical activities Be among the best in each of our businesses, in terms of performance, profi
Slide 24: Major milestones achieved in 2020; strategic repositioning continues in 2021
Major milestones achieved in 2020; the Group continues its strategic repositioning in 2021 2021 critical outcome Strong cash-generating growth No cash outflows in the short term 1 2 3 EXPAND our portfolio in FIX / REPOSITION our GROW in our attractive metals for the energy least performing assets bu
Slide 25: Success of exceptional ramp-up at Weda Bay in Indonesia
Success of exceptional ramp-up at Weda Bay in Indonesia: c.€60m contribution to Group FCF in H2 2020 Weda Bay Nickel balanced business Mining production > 10.0 (Mwmt) model: mining and metallurgy First mining production started in October ~ x3 2019 to supply several metallurgical plants on Halmahera
Slide 26: CSR commitment in 2020: responsible crisis management
CSR commitment in 2020: responsible crisis management Moving forward on the 2018-2023 CSR Roadmap High CSR Performance in 2020: > 13 medium-term objectives monitored with results published on annual basis > Index 102 (target 100) with a positive momentum since 2018 Key CSR figures 85% of industrial
Slide 27: Conclusion and outlook
Conclusion and outlook or eramMertr
Slide 28: Confirming our path to transformation for profitable growth
Confirming our path to transformation for profitable growth Further organic growth of the Mining & Metals activities in 2021, with Comilog and Weda Bay mining production expansion delivering strong cash generation Strong focus on SLN rescue plan for which the commitment of all stakeholders and norma
Slide 29: 2021 outlook
2021 outlook Markets of the Mining & Metals division well oriented in Q2 thanks to the momentum of the Chinese economy and an improved short-term outlook in Europe and the United States High-Performance Alloys division should continue to be strongly affected in its major market by the aerospace cris
Slide 30: Appendices
Appendices
Slide 31: Q1 2021 appendices
Q1 2021 appendices
Slide 32: Uneven recovery in global carbon steel market
Uneven recovery in global carbon steel market 1 2 Global carbon steel production up 7.2% in Q1 2021, thanks to a good momentum in Chinese Global manganese ore production up 18% at 5.2 economy supporting production (+13%) Mt in Q1 2021, supported by growth volumes in Slight decrease in Europe (-0.4%)
Slide 33: Global stainless steel production up significantly in Q1 2021
Global stainless steel production up significantly in Q1 2021; Indonesian NPI keeps on rising 1 2 Strong increase for global stainless steel Global primary nickel production up 12.3% in Q1 production in Q1 2021 (+24.2%) driven by 2021 as Indonesian NPI continues to break records growth in China (+41
Slide 34: Strong rise in LME prices in Q1 2021
Strong rise in LME prices in Q1 2021, discounts in FeNi selling price 1 Q1 2021 average LME prices at $8.0/lb, up 38% vs Q1 2020. High prices driven by Chinese demand and batteries perspectives Ferronickel prices up 40% (+30% in euros) in Q1, but still post a strong discount vs LME prices 2 LME and
Slide 35: Strong price levels for ore exports as supply is limited
Strong price levels for ore exports as supply is limited 1 1.8% nickel ore prices remained at high levels in Q1 2021 as availability of high-grade nickel ore is limited, with New-Caledonia its main source Prices rose +48% vs Q1 2020 to nearly $100/wmt 2 Ore stocks in Chinese ports still at a low lev
Slide 36: Zircon prices down 6% in 2020 despite rise in demand
Zircon prices down 6% in 2020 despite rise in demand Average price of zircon at $1,300/t in Q1 2021, down -6% vs Q1 2020 (-14% in euros), based on quarterly negotiations led at end-2020 Global demand for zircon rebounded strongly thanks to the recovery in ceramics market; supply progressed in Q1 wit
Slide 37: Robust high-grade feedstock demand in an undersupplied market
Robust high-grade feedstock demand in an undersupplied market not yet reflected on prices Global demand for TiO2 pigments is up in Q1 2021, driven by the global economic recovery Global production rose as well, meaning that the supply deficit remained relatively stable Tight demand for CP1 grade tit
Slide 38: Contacts
CONTACTS Director of Investor Relations Sandrine NOURRY-DABI [email protected]
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