ERAMET : 1st half 2013 results

Paris, July 29th, 2013

PRESS RELEASE The ERAMET group's 1st half results 2013

ERAMET's Board of Directors, meeting on July 26th, 2013 under the Chairmanship of

Patrick Buffet, prepared the financial statements for the 1st half of 2013.

Patrick Buffet, Chairman & CEO of the ERAMET group, stated: "The ERAMET Group, while benefiting from the 20% increase in current operating income achieved by ERAMET Manganese, a division that accounts for almost 50% of the Group's turnover, is heavily impacted by nickel prices' fall to very low levels. This situation, which has lasted for several months, is likely to continue in the short term. Our results reflect that very difficult context, even if the Group can call many strengths into play against the crisis. ERAMET's management has therefore decided to step up its cost reduction and competitiveness improvement plan for the 2013-2015 period in each of its businesses in order to increase its profitability and its cash generation. The aim is to ensure the Group is in the best possible shape to take advantage of the upturn when it occurs, in order to continue its development."

(€ millions) H1 2012 H1 2013

Turnover 1,735 1,613

ERAMET Manganese 753 777

ERAMET Nickel 460 368

ERAMET Alloys 526 473

Holding company & eliminations (4) (5)

EBITDA 204 129

Current operating income 85 (9) Net income, Group share 21 (32)

• Trends in the economic environment and the Group's results

The international economic environment remained difficult and contrasted in the 1st half of

2013. Economic growth was still negative in Europe, while China's GDP growth decreased but was still high at 7.5 - 8%. Global economic growth slowed down overall in the 1st half of 2013, at a time when, to varying extents according to the Group's markets, the new capacities launched in recent years are ramping up.

Global supply is heavily in surplus for nickel, the price of which fell to approximately

6 USD/lb., i.e. below the production cash cost for a large part of the nickel industry. This

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crisis situation results from excess growth in nickel ore production in Indonesia and the Philippines in recent years. This ore is exported to China to be converted into nickel pig iron to supply Chinese stainless steel producers. In 2012 the Indonesian government announced its decision to ban raw nickel ore exports from 2014 in order to foster their local processing. Without a restrictive framework during the transition period, the announcement increased the pace of Indonesian and Filipino ore exports to China and the build-up of substantial inventory in Chinese ports in anticipation. This sharp rise has destabilised the nickel market for the short term and can only be an obstacle for industrial operators seeking to obtain the funding needed to build processing plants, even if the Indonesian government is determined that this will happen in a short timeframe.

In this global economic and market environment, the ERAMET group's turnover decreased

7% in the 1st half of 2013 compared with the 1st half of 2012 to total 1,613 M€.

As expected, the fall in nickel prices was reflected in lower current operating income for the Group in the 1st half of 2013 than in the 1st half of 2012, at - 9 M€, while the Group's net income totalled - 32 M€.

• Net cash

Capital expenditure was held back compared with initial forecasts and totalled 276 M€ in the 1st half of 2013.

Net cash totalled 127 M€ as of June 30th, 2013. Given the continuation of Group subsidiaries' dividend payout policy, as decided in 2010 to strengthen ERAMET SA's shareholders' equity, 161 M€ will be paid to SLN and COMILOG's minority shareholders in the 2nd half of 2013.

Furthermore, in the 1st half of 2013 ERAMET SA successfully renegotiated its syndicated credit facility, increasing it to 981 M€ and extending its maturity for the most part from January 2017 to January 2018. As of June 30th, 2013, this facility has not been drawn upon. ERAMET began diversifying its financing sources by issuing a "Schuldschein"* for

60 M€ and maturity at 7 years. Over the next few months, the ERAMET group intends to continue this policy of diversifying its financial resources as opportunities arise.

• ERAMET Manganese: the upturn in manganese ore production and prices led to a 20% rise in current operating income in the 1st half of 2013 compared with the 1st half of 2012, despite a situation that remains difficult for manganese alloys

ERAMET Manganese's turnover, at 777 M€, rose 3% in the 1st half of 2013 compared with the 1st half of 2012, thanks to continued recovery in manganese ore prices and an increase in ore shipment volumes.

ERAMET Manganese's current operating income totalled 109 M€ in the 1st half of 2013, a

20% increase from the 1st half of 2012.

Global production of carbon steel rose 2% in the 1st half of 2013, mainly driven by Chinese growth (+7%).

Manganese ore prices (CRU spot, CIF China) recovered significantly in the 1st half of 2013 (+ 16% vs. 1st half 2012, at 5.6 USD/dmtu), reaching 5.7 USD/dmtu at the end of June, compared with 5.0 USD/dmtu in December 2012.

*Loan contract under German law taken out with international investors

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As expected, ERAMET Manganese's production of manganese ore recovered sharply in the

1st half of 2013 (+35%) compared with the 1st half of 2012, setting a 1st half record at

1,767,000 tons. ERAMET Manganese continues to prepare for an increase in rail capital expenditure through SETRAG, in liaison with Gabonese authorities, in order to help

develop the Transgabonais train's activity.

Prices for standard manganese alloys continued to fall in the 1st half of 2013 because of excess overall capacity. The price of high-carbon ferromanganese (CRU spot Europe) dropped 9% in the 1st half of 2013 compared with the 1st half of 2012. Conditions on the manganese alloy market also deteriorated in China in the 1st half of 2013. Production on the Guilin site (China) slowed down considerably as a result.

TIZIR's turnover, which at this stage is generated solely by the Tyssedal, Norway plant (titanium dioxide for white pigments, high purity cast iron for foundries), decreased 10% in the 1st half of 2013 compared with the 1st half of 2012 to 37 M€ (for the 50% held by ERAMET), mainly because of lower prices.

• ERAMET Nickel: very low nickel prices due to ore production surpluses in

Indonesia and the Philippines intended for Chinese nickel pig iron production

LME nickel prices continued to fall in the 1st half of 2013 and were 13% lower on average than in the 1st half of 2012, at 7.3 USD/lb. In the past few weeks they have been around

6 USD/lb.

This decrease reflects excess global supply of nickel production, primarily as a result of the growth of nickel pig iron production in China. This was made possible by the substantial growth in nickel ore exports from Indonesia and Philippines, which are far in excess of market needs.

LME nickel inventory increased by 46,000 tons in the 1st half of 2013 to total almost

188,000 tons at the end of June.

Given extremely low prices, ERAMET Nickel's turnover totalled 368 M€ in the 1st half of

2013, a 20% decrease compared with the 1st half of 2012, while current operating expense for the period was -94 M€.

Metallurgical nickel production in Doniambo (New Caledonia) decreased 8% in the 1st half of 2013 compared with the 1st half of 2012, in line with market trends, making a reduction in working capital possible.

• ERAMET Alloys: firm aerospace market, but high impact of crisis on other activities

ERAMET Alloys' turnover with the aerospace sector rose 5% in the 1st half of 2013 compared with the 1st half of 2012. However, the Division's non-aerospace activities were heavily affected by the economic and market environment over the same period. Turnover decreased 35% with the tooling market, mainly high speed steels, and 19% with the energy market.

In total, ERAMET Alloys' turnover decreased 10% in the 1st half of 2013 compared with the

1st half of 2012.

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In the 1st half of 2013, ERAMET Alloys is in line with the 2013 stages in its goals for 2015, in terms of both reducing general expenses and increasing productivity. Consequently, despite lower turnover, ERAMET Alloys' current operating income was on a par with the

1st half of 2012 at 3 M€, reflecting a gradual improvement in current operating margin

despite the sharp slump on some markets.

Restructuring operations will be carried out on the Firminy site from the 2nd half of 2013 with the aim of reducing costs by 25%.

After the launch and ongoing ramp-up of four strategic capital projects, mainly in France with Aubert & Duval, the pace of capital expenditure at ERAMET Alloys slowed by 20% in the 1st half of 2013 compared with the same period in 2012.

• Outlook - short term

ERAMET Manganese's ore and sinter production will be higher in 2013 than in 2012, with production in the 2nd half of 2013 at least equal to the 1st half of 2013.

ERAMET Alloys will continue to implement its operating improvement programmes in the coming years in order to reach the goals set for 2015, while ramping up the capital projects already completed.

Nickel prices deteriorated further in the 2nd half of 2013, due to significant oversupply in relation to demand, and excessive global nickel inventory, particularly ore stocks built up in China.

Given current nickel market conditions, the ERAMET group's current operating income for the 2nd half of 2013 should be significantly lower than in the 1st half of 2013.

The Group will step up the measures intended to reduce its costs, lower its capital spending, adjust its production in line with its market and reduce its working capital requirement.

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WEBCAST OF FIRST-HALF RESULTS PRESENTATION

The presentation of results for the 1st half of 2013 will be webcast today at 10 am (Paris time) with English interpreting.

To register please click on the link shown in the Group's website www.eramet.com

ABOUT ERAMET

ERAMET is a leading global producer of:

- alloying metals, particularly manganese and nickel, used to improve the properties of steel,

- high-performance special steels and alloys used in industries such as aerospace, power

generation and tooling.

ERAMET is also studying or developing major projects in new activities with high growth potential, such as mineral sands (titanium dioxide and zirconium), lithium, niobium and rare earths, as well as in recycling.

The Group employs approximately 14,000 people in 20 countries. ERAMET is part of Euronext Paris

Compartment A.

CONTACT

Head of Financial Communications and Economic Studies

Philippe Joly

Tel: [phone]

Investor Relations and Economic Analyst

David Fortin

Tel: [phone]

For more information: www.eramet.com

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APPENDIX

Turnover

(€ millions) Q1 2012 Q2 2012 Q1 2013 Q2 2013

ERAMET Manganese 374 379 388 389

ERAMET Nickel 236 224 181 187

ERAMET Alloys 271 255 231 242

Holding company &

eliminations (4) 0 (3) (2)

ERAMET Group 877 858 797 816

Production and shipments

(metric tons) H1 2012 H2 2012 H1 2013

Manganese ore and sinter production 1,311,800 1,725,000 1,767,300

Manganese alloy production 354,200 375,900 385,400

Manganese alloy sales 366,300 378,400 393,800

Nickel production* 27,684 28,762 25,480

Nickel sales** 28,323 28,358 25,280

* Ferronickel and matte

** Finished products

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S tatement of comprehens ive income

(millions of euros )	Half year 2013	Half year Full year 2012 2012 Res tated Res tated
Sales Other income Cos t of products s old Adminis trative & s elling cos ts Res earch & development expenditure	1,613 26 (1,378) (110) (22)	1,735 3,447 9 34 (1,413) (2,823) (104) (200) (23) (51)
EBITDA	129	204 407
Depreciation, amortis ation & impairment of non-current as s ets Impairment los s es and provis ions	(130) (8)	(115) (245) (4) (9)
Current operating income	(9)	85 153
Other operating income and expens es	(26)	(16) (74)
Operating income	(35)	69 79
Net cos t of debt Other finance income and expens es Share in earnings of affiliates Income tax	1 (15) 1 20	10 8 (8) (15) - - (29) (29)
Net income	(28)	42 43
- Minority interes ts - Equity holders of the parent	4 (32)	21 34 21 9
Bas ic earnings per s hare (EUR) Diluted earnings per s hare (EUR)	(1.23) (1.23)	0.79 0.34 0.79 0.34
Net income	(28)	42 43
Exchange differences on trans lation of foreign operations Net (los s ) / gain on cas h flow hedges Net (los s ) / gain on available for s ale financial as s ets Income tax	(23) 5 (4) (1)	25 2 2 37 4 6 (4) (12)
Items will be reclas s ified s ubs equently to profit & los s	(23)	27 33
Remeas urement of net defined benefit obligation Income tax	- -	(19) (4) 6 5
Items will not be reclas s ified s ubs equently to profit & los s	-	(13) 1
Other comprehens ive income (los s )	(23)	14 34
- Minority interes ts - Equity holders of the parent	1 (24)	- (5) 14 39
Total comprehens ive income	(51)	56 77
- Minority interes ts - Equity holders of the parent	5 (56)	21 29 35 48

The financial s tatements of the half year 2012 and the full year 2012 have been res tated for the retros pective application of the revis ed IAS

19 s tandard.

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S tatement of financial pos ition

Ass ets

(millions of euros )	06/30/2013	06/30/2012 12/31/2012 Rets tated Res tated
Goodwill Intangible as s ets Property, plant & equipment Companies accounted for us ing the equity method Other financial non-current as s ets Deferred tax Other non-current as s ets	172 751 2,560 33 100 29 4	173 173 705 717 2,235 2,454 33 33 99 88 36 31 5 7
Non-current as s ets	3,649	3,286 3,503
Inventories Trade receivables and other current as s ets Tax receivables Financial derivatives Other financial current as s ets Cas h and cas h equivalents	1,068 677 34 52 232 629	1,134 1,038 732 690 31 38 77 51 490 368 648 621
Current as s ets	2,692	3,112 2,806

Total as s ets 6,341 6,398 6,309

Shareholders ' equity and liabilities

(millions of euros )	06/30/2013	06/30/2012 12/31/2012 Rets tated Res tated
Share capital Share premiums Available for s ale res erve Cas h flow hedge res erve Net defined benefit obligation res erve Foreign currency trans lation res erve Other res erves Shareholders ' equity of the parent M inority interests	81 373 2 7 (40) 8 2,474	81 81 372 373 3 5 (23) 4 (54) (40) 50 32 2,548 2,539
Share capital Share premiums Available for s ale res erve Cas h flow hedge res erve Net defined benefit obligation res erve Foreign currency trans lation res erve Other res erves Shareholders ' equity of the parent M inority interests	2,905 618	2,977 2,994 806 815
Shareholders ' equity	3,523	3,783 3,809
Employee benefits Provis ions Deferred tax Borrowings - due in more than one year Other non-current liabilities	190 434 304 368 28	217 188 386 428 367 355 223 311 29 28
Non-current liabilities	1,324	1,222 1,310
Provis ions - due in les s than one year Borrowings - due in les s than one year Trade payables and other current liabilities Tax payables Financial derivatives	35 366 986 62 45	27 30 90 230 1,083 805 59 72 134 53
Current liabilities	1,494	1,393 1,190

Total s hareholders ' equity and liabilities 6,341 6,398 6,309

The financial s tatements of the half year 2012 and the full year 2012 have been res tated for the retros pective application of the revis ed IAS 19 s tandard.

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S tatement of changes in net cas h / borrowing pos ition

(millions of euros )	Half year 2013	Half year Full year 2012 2012 Res tated Res tated
Opertating activities EBITDA Elimination of non-cas h or non-bus ines s items : Operating cas h flow before changes in working capital Changes in operating working capital requirement	129 (73)	204 407 (73) (149)
Opertating activities EBITDA Elimination of non-cas h or non-bus ines s items : Operating cas h flow before changes in working capital Changes in operating working capital requirement	56 9	131 258 (80) (41)
Net cas h flows from operating activities	65	51 217
Inves ting activities Capital expenditure Non-current financial as s ets Dis pos als of non-current as s ets Net change in non-current as s et receivables / liabilities Changes in s cope of cons olidation and loans Dividends from equity accounted affiliates	(276) (21) 3 6 1 -	(265) (641) (18) (19) 1 4 (27) 7 5 13 - -
Net cas h flows from inves ting activities	(287)	(304) (636)
Financing activities Dividends paid Share capital increas es Changes in working capital requirement related to financing activities	(221) - 129	(319) (319) - 2 249 32
Net cas h flows from financing activities	(92)	(70) (285)
Impact of trans lation adjus tments	(7)	(5) (1)
Decreas e (increas e) in net cas h (borrowing) pos ition	(321)	(328) (705)
Opening net cas h (borrowing) pos ition Clos ing net cas h (borrowing) pos ition	448 127	1,153 1,153 825 448

The financial s tatements of the half year 2012 and the full year 2012 have been res tated for the retros pective application of the revis ed IAS 19 s tandard.

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S egment reporting

By di vi si on

(millions of euros ) Nickel Manganèse Alloys Holding & Total eliminations

Half year 2013

Non-Group sales 365 775 471 2 1 613

Intra-Group sales 3 2 2 (7) -
Sales 368 777 473 (5) 1 613
Cash flows from op erating activities (65) 124 18 (21) 56
EBITDA (49) 172 30 (24) 129
Current op erating income (94) 109 3 (27) (9) Other op erating income and exp enses - - - - (27) Op erating income - - - - (36) Cost of borrowed cap ital - - - - 1
Other finance income and exp enses - - - - (15)
Share of income from equity accounted comp anies - - - - 1
Income tax - - - - 20
M inority interests - - - - (4)
Group net income (loss) - - - - (33)
Non-cash exp enses 8 (46) (29) (17) (84)
- dep reciation & amortisation (44) (60) (26) (2) (132)
- p rovisions (7) 2 (6) (1) (12)
- imp airment losses - - - - -
Cap ital exp enditure (intangibles and p rop erty , p lant & equip ment) 63 176 35 2 276
Total balance sheet assets (current and non-current) 2 410 2 885 1 223 (177) 6 341

Total balance sheet liabilities (current and non-current excluding sareholders) 1 210 1 365 859 (615) 2 819

Half year 2012

Non-Group sales 457 751 525 2 1 735

Intra-Group sales 3 2 1 (6) -
Sales 460 753 526 (4) 1 735
Cash flows from op erating activities 30 93 18 (10) 131
EBITDA 54 142 30 (22) 204
Current op erating income 12 91 5 (23) 85
Other op erating income and exp enses - - - - (16)
Op erating income - - - - 69
Cost of borrowed cap ital - - - - 10
Other finance income and exp enses - - - - (8) Share of income from equity accounted comp anies - - - - - Income tax - - - - (29) M inority interests - - - - (21)
Group net income (loss) - - - - 21
Non-cash exp enses (41) (20) - (28) (89)
- dep reciation & amortisation (42) (47) (23) (1) (113)
- p rovisions (5) 2 (2) (1) (6)
- imp airment losses - - - -
Cap ital exp enditure (intangibles and p rop erty , p lant & equip ment) 58 157 44 6 265
Total balance sheet assets (current and non-current) 2 876 2 712 1 260 (450) 6 398

Total balance sheet liabilities (current and non-current excluding sareholders) 1 236 1 192 859 (672) 2 615

Full year 2012

Non-Group sales 893 1 557 994 3 3 447

Intra-Group sales 5 3 3 (11) -
Sales 898 1 560 997 (8) 3 447
Cash flows from op erating activities 45 246 11 (44) 258
EBITDA 53 357 40 (43) 407
Current op erating income (38) 240 (5) (44) 153
Other op erating income and exp enses - - - - (74)
Op erating income - - - - 79
Cost of borrowed cap ital - - - - 8
Other finance income and exp enses - - - - (15) Share of income from equity accounted comp anies - - - - - Income tax - - - - (29) M inority interests - - - - (34)
Group net income (loss) - - - - 9
Non-cash exp enses (79) (106) (37) 7 (215)
- dep reciation & amortisation (88) (111) (47) (1) (247)
- p rovisions (14) (8) 2 12 (8)
- imp airment losses (1) (8) - - (9)
Cap ital exp enditure (intangibles and p rop erty , p lant & equip ment) 146 399 84 12 641
Total balance sheet assets (current and non-current) 2 385 2 904 1 182 (162) 6 309

Total balance sheet liabilities (current and non-current excluding sareholders) 996 1 294 808 (598) 2 500

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S egment reporting

By geographic region

(millions of euros ) France Europe North As ia Oceania Africa South Total

America America

Sales (des tination of s ales )

Half year 2013 256 510 328 443 13 40 23 1,613

Half year 2012 204 623 349 480 16 42 21 1,735

Full year 2012 455 1,143 686 992 29 84 58 3,447

Capital expenditure (intangibles and property, plant & equipment)

Half year 2013 44 11 9 38 20 154 - 276

Half year 2012 54 14 22 44 25 106 - 265

Full year 2012 104 36 48 118 69 265 1 641

Total balance s heet as s ets (current and non-current)

Half year 2013 2,408 759 356 911 888 1,018 1 6,341

Half year 2012 2,710 786 391 824 903 782 2 6,398

Full year 2012 2,502 778 363 869 904 892 1 6,309

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