Investor Presentation
2020 BofA Global Metals, Mining & Steel Conference
12-14 MAY 2020
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 |
statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. Eramet cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Eramet to be materially different from the company's estimated future results, performance or achievements expressed or implied by those forward-looking statements.
Past performance information given in this presentation is solely provided for illustrative purposes and is not necessarily a guide to future performance. No representation or warranty is made by any person as to the likelihood of achievement or reasonableness of any forward-looking statements, forecast financial information or other forecast. Nothing contained in this presentation is, or shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or future performance of Eramet.
Nothing in this presentation should be construed as either an offer to sell or a solicitation to buy or sell securities nor shall there be any offer or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction.
2 Eramet - Investor presentation, May 2020
Contents
Eramet at a glance
1 - Q1 2020 Key trends
2 - 2019 Financial results
3 - Operational performance
4 - Strategic transformation Conclusion and outlook
3 Eramet - Investor presentation, May 2020
Eramet at a glance
A global leader and a diversified mining and metallurgical Group
2 divisions, 5 BUs with global leading positions | €3,671m | ||
€3,825m sales | |||
High Performance | Erasteel | Mining and Metals | €630m |
Alloys Division | 6% | Division | |
23% | 77% | €843m EBITDA | |
Aubert & Duval | €341m | ||
17% | |||
€581m current operating | |||
€3,671m | |||
income (COI) | |||
Mineral Sands BU | |||
Manganese BU | |||
8% | |||
48% | €423m | ||
Nickel BU | |||
€281m of capital | |||
21% | expenditure (cash) | ||
Historic and stable shareholders | 74% |
Other float
32.1%
1.3% BRGM1 4.0%
STCPI2
25.6%
APE
5 Eramet - Investor presentation, May 2020
38% gearing3 | ||
SORAME | 12% | |
36.9% | 22% ROCE4 | |
+ CEIR (Duval | ||
Family)
13,100
Employees in 20 countries
In 2019 / In 2018
1 BRGM (Bureau de Recherches Géologiques et Minières): the French Geological Survey Office
2 STCPI (Société Territoriale Calédonienne de Participation Industrielle): entity owned by the New Caledonian provinces
3 Excl. IFRS16 impact
4 COI / Capital employed of year n-1
A Mining and Metals Division with significant resources for several decades and highly competitive mines
Manganese BU | Nickel BU | Mineral Sands BU |
Resources
Gabon: 110 Mt resources of manganese content
Resources lifetime > 40 years
Operated for 50 years
New Caledonia: 19.4 Mt resources of nickel content
Indonesia - Weda Bay Nickel: 9.4 Mt resources of nickel content
Resources lifetime ~ 50 years Operated for ~130 years (NC)
Senegal (Zircon & Ilmenite): 35 Mt resources (HMC)
Resources lifetime > 30 years
Operated since 2014
Lithium BU (project in Argentina)
10 Mt drainable resources (LCE2) - currently mothballed
2019 Key Industrial set-up 1 figures
A highly competitive manganese mine in Gabon:
4.8 Mt manganese ore produced
6 pyro metallurgical plants in Europe, USA, Gabon: 740 kt manganese alloys produced
Sales: €1,765m
Headcount: c.4,000
6 Eramet - Investor presentation, May 2020
Highly competitive mines and 1 pyro metallurgical plant in New Caledonia :
47 kt ferronickel produced / 1.6 Mt nickel ore exported
1 high purity nickel refinery in France
1 NPI3 plant in Indonesia (ongoing start- up)
Sales: €778m
Headcount: c.2,200
- 2019 figures
- Lithium Carbonate Equivalent
- Nickel Pig Iron (low-grade nickel ferroalloys)
- Heavy Minerals Concentrate (HM sands content)
The world largest single dredge mineral sands operation in Senegal: 735 kt of HMC4 produced
1 metallurgical plant in Norway:
189 kt of titanium dioxide slag
Sales: €286m
Headcount: c.1,000
Main Market
Steel (carbon and stainless) accounting for c. 60% of Eramet's end-markets
Manganese BU | Nickel BU | Mineral Sands BU | ||||||||||||||||||||||||
Carbon steel | Others | TiO2 pigment | ||||||||||||||||||||||||
89% | ||||||||||||||||||||||||||
Batteries | 15% | Others | ||||||||||||||||||||||||
28% | ||||||||||||||||||||||||||
7% | ||||||||||||||||||||||||||
90% | ||||||||||||||||||||||||||
Nickel | Zircon | 52% | CP Slag | |||||||||||||||||||||||
10% | ||||||||||||||||||||||||||
10% | base | |||||||||||||||||||||||||
68% | ||||||||||||||||||||||||||
Chemistry | alloys | |||||||||||||||||||||||||
5% | ||||||||||||||||||||||||||
Stainless | 20% | |||||||||||||||||||||||||
and other | ||||||||||||||||||||||||||
6% | ||||||||||||||||||||||||||
steel | ||||||||||||||||||||||||||
application | Chemicals | Ceramics | Others Titanium metal | |||||||||||||||||||||||
Market share
#2 global producer of high-grade manganese ore
#2 global producer of manganese alloys
#1 global producer of refined manganese alloys
#1 high grade Ferronickel producer worldwide
One of the high purity nickel salts producer worldwide
#4 global producer of zircon
#5 global producer of titanium feedstock
7 Eramet - Investor presentation, May 2020
A High Performance Alloys Division with
unique know-how dedicated to strategic industries
#2 high-powerclosed-die forged parts producer worldwide
A world leader in:
- high performance steels, superalloys and titanium
- large closed-die forgings
A strategic supplier for aerospace, defense and
#1 in powder metallurgy high speed steel (cutting and cold tools)
A world player in conventional high speed steels A European leader in :
- aerospace long products and in forgings for defense and nuclear markets
- recycling
nuclear markets HPA Workforce: c.5,200
Aubert & Duval | Erasteel | ||||||||||||
92% | |||||||||||||
Aerospace | 14% | High-speed steels, | |||||||||||
Energy & Defense | |||||||||||||
11% | Tooling & Specialities | ||||||||||||
Other | 2019 Sales | Recycling | 2019 Sales | ||||||||||
€642m | €205m | ||||||||||||
75% | |||||||||||||
8% | |||||||||||||
Long products | Forged products | ||||||||||||
Closed-die | High-speed | Recycling1 | |||||||||||
forged parts | steels |
8 Eramet - Investor presentation, May 2020
1 Catalysts, metal oxides and batteries
Integrated innovation centres across the entire value chain, open innovation approach
Expertise | Open innovation approach |
Extractive metallurgy (mineralogy, mineral processing, geometallury, hydrometallurgy & pyrometallurgy)
Metallurgical processing of alloys and high performance steels (including powder metallurgy)
Thermomechanical processing of alloys by forging and closed die-forging
Benchmark
Leadership/partner in European projects
Partnerships with universities, grandes écoles, industry, start-ups, SMEs
2019 key figures
~300 experts and technicians | 25 ongoing European collaborative |
(in-house R&D) | projects |
€60m dedicated to innovation, | First microscope in Europe |
or 1,5% of sales | equipped with QEMSCAN |
mineralogy software |
9 Eramet - Investor presentation, May 2020
An increasingly more 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 | |
Compliant with the United Nations' Sustainable Development Goals | |
2 | Contribute to the communities in which sites are implemented |
First risk of the Mining and Metals sector: license to operate. Eramet's DNA has always been to associate the main countries and territories where it operates
Beyond mining operation, contribute to the local development and preserve the environment
3 | Ranked 3rd out of 43 mining and metals corporates for its CSR performance by Vigeo-Eiris |
"Advanced" performance level
Eramet's best performance since first participating in 2011
score evolution | of 100) |
overall | (out |
ESG |
66
44 | 45 | 48 |
2013 | 2015 | 2017 | 2019 |
10 Eramet - Investor presentation, May 2020
1
Q1 2020 Key trends
Eramet fully committed to face the Covid-19 health crisis
Safety: the Group's top priority
Daily crisis meeting held by ExCom to take all the required sanitary and operational measures
Strict health protocols rolled out on all sites; stringent guidelines applied to comply with health regulations
Further strong decline in accident frequency rate at 4.11 in Q1 2020: -24%vs FY 2019, already down 35% in 2019 yoy
Limited impact of Covid-19 pandemic in Q1 2020
Mining and Metals Division
- Operations at nominal rate for all mines and plants with production volumes in line with expectations
- Still very difficult to plan ahead for developments of the health crisis and customers' business levels
High-Performance Alloys Division
- A&D's plants running at an operating rate of c. 65% to date
- Erasteel's plants' operations contrasted depending on activity
- Worsening outlook for the aeronautic sector
12 Eramet - Investor presentation, May 2020
1 TRIR (total recordable injury rate) = number of lost time and recordable injury accidents for 1 million hours worked (employees and subcontractors)
Covid-19: Group's special solidarity plan
Exceptional allocation: €1.5m | 2/3 | 1/3 | |
Group treasury | |||
Contributions of Group executives: | Donations in kind | Financial support of | |
and equipment to | actors mobilized in the | ||
CEO, Comex, Board members | communities | communities | |
Community investment expenditure: €8.5m | |||
Strengthening actions in the health sector | |||
Economic and social support initiatives for | |||
communities strengthened | |||
Numerous solidarity actions already carried | |||
out (medical equipment, food and basic necessities |
donations…)
Prevent the spread and support the communities:
€10m to support projects in 2020
13 Eramet - Investor presentation, May 2020
Strenghtened and accelerated cash control measures in 2020
Optimising cash flow and closely monitoring net debt level
High level of cash maintained:
- High liquidity of €2.3bn at end-December, including credit lines not drawn down at that date for €1.5bn
- In Q1 2020, all credit lines drawn down as a precaution
63%1 gearing (as calculated for covenant purposes) at 2019 year-end (74%, excl. IFRS 16 only)
2020 strict cash control plan
Cut in capex: modularity and flexibility; lithium project in Argentina currently mothballed
Tight control of opex and working capital: dedicated committee strictly and regularly monitoring all operating expenses
Partial unemployment arrangements for several sites in France in the context of the pandemic
No dividend to be paid in 2020
Subject to Shareholders' approval on 26 May
14 Eramet - Investor presentation, May 2020 | 1 Excl. IFRS 16 impact, excl. French state loan to SLN |
Mining & Metals division: unstable market equilibrium due to pandemic, reduced demand and limitations in supply to date
New operational records in Q1 2020 in Gabon
Lower demand in the context of the pandemic: significant
production cuts announced by western steel producers
Lower supply, but length of actual limitations in South Africa (40% of global ore production1) on both ore and alloys production remains
unknown
New operational records in Q1 2020 in New-Caledonia
Reduction in both demand and supply of nickel
Some ore -and metal- producing countries' activities adversely affected by pandemic including among others Canada and the
Philippines
New operating performance record in Q1 2020 in Senegal
Global supply heavily affected by the spread of
COVID-19, particularly in South Africa (30% of the world's zircon supply and c. 50% of global titanium slag production)
Significant decrease in global demand likely to occur in the coming quarters, in the aftermath of the downturn observed in China in Q1
15 Eramet - Investor presentation, May 2020 | 1 Seaborne |
High-Performance division: aerospace and automotive sectors deeply affected by pandemic
A&D
As of mid-March, slowdown or temporary suspension of
some operations in France, following roll-out of health protocols To date, production level of c. 65 % of nominal capacity
Significant slowdown expected for the months ahead in the aerospace sector (more than 70% of A&D's sales) owing to reduced delivery rates at Airbus and Boeing, the sector's largest
players
Reduced production rates by approx. one-thirdvs. their pre- crisis levels announced by Airbus for the months ahead1
Aerospace sector's entire supply chain impacted
Erasteel
Continuing significant slowdown of automotive sector, weighing on cold work and cutting tools demand, therefore on high-speedsteel activity, more than 90% of Erasteel's sales
Global automotive sales expected to drop by c.25% in 2020, in the context of the pandemic
Good performance, specifically in Asia, of the market of high-qualitypowder metallurgy high speed steels
16 Eramet - Investor presentation, May 2020 | 1 Excl. military programmes |
Q1 2020 sales down 11% yoy only, affected by the sharp decline in material prices…
High Performance | Erasteel |
Alloys Division | 5% |
25% |
Mining and Metals
Division
75%
Aubert & Duval 20%
Mineral Sands | €774 m | Manganese BU |
BU | 46% |
9% | |
Nickel BU | |
20% |
Unfavourable price environment hitting the Metals & Mining division's activity
-34% in manganese ore market prices (CIF China 44%) in Q1 2020 yoy; steeper price decline for Eramet (-41%), as January & February sales were signed based on lower spot prices in Dec. 2019
Sharp decline in ferronickel prices, at a large discount to the LME reflecting the fall in demand for stainless steel, despite LME prices up +3% yoy
Conversely, average price of nickel seaborne ore (CIF China 1.8%) up +32% yoy to USD 67.7/wmt, following the Indonesian ban, effective as of 1st January 2020
Strong decline in Erasteel sales
Erasteel's sales down 34% to €40m, due to steeper slowdown in the automotive sector, worsened by the health crisis and declining raw material prices
17 Eramet - Investor presentation, May 2020
…supported by new operational records for the Mining & Metals division
Mining and Metals division
New Q1 operational records in Q1 2020
- 1.3 Mt in produced manganese ore volumes (+28% vs. Q1 2019)
- 918 kwmt in produced nickel ore volumes (+5%)
- 331 kwmt in nickel ore exports (+41%)
- OEE1 up +12% for mineral sands production
Q1 2020 production volumes sold in full
- c.1 Mt (+29%) of manganese ore ; 17 kt of zircon (+32%) and 52 kt (+33%) of TiO2
High Performance Alloys division
Q1 aeronautical sales up 3% to €115m, despite lower volumes of some aerospace programs ; sales up in land- based turbine, energy and defence sectors
Contrasted production at Erasteel: Swedish sites' effective
operations, thanks to high-speed steels made using powder metallurgy techniques
18 Eramet - Investor presentation, May 2020
1 OEE: Overall Equipment Efficiency, reflects the intensity of mining production (real production/maximum theoretical production)
Delivering on our strategic roadmap, in an adverse environment
Operational performance
Mining operational records in both 2019 and Q1 2020
Continuing record production in Manganese ore
- +15% over 2 yrs (4.8 Mt in 2019 vs 4.1 Mt in 2017) Ongoing increase in nickel ore exports
- +80% over 2 yrs (1.6 Mwmt vs 0.9 Mwmt)
Constant progress in operating performance in Mineral Sands
Relevance of SLN Business model
Cash-costreduction in both H2 2019 (-5% vs H1), and Q1 2020 (-8% vs Q4 2019)
CSR
achievements
Strategic roadmap
Progress on the CSR roadmap
2019 high performance index at 112 pts, i.e. 12 pts > 2019 target 50% decrease in accident frequency over 2018-2019
New strategic milestones
Weda Bay Nickel: start of NPI production in April 2020
Continuing manganese ore organic growth in Gabon
Lithium project currently mothballed: performance yield leading to 1st quartile cash cost
19 Eramet - Investor presentation, May 2020
2
2019 Financial results
EBITDA showing solid operating performance, in a depressed price environment in 2019
Sales €3,671m
- -4%vs 2018
EBITDA €630m
- -25%vs 2018
COI €341m
(Current operating income)
Net debt €1,207m (excluding IFRS 16 impact)
High Performance | Erasteel | Mining and Metals |
Alloys Division | 6% | Division |
23% | 77% |
Aubert & Duval 17%
Mineral Sands | €3,671m |
Manganese BU | |
BU | |
48% | |
8% | |
Nickel BU | |
21% |
Net income - Group share
€(184)m
Gearing174%
ROCE212%
21 Eramet - Investor presentation, May 2020
- Net debt-to-equity ratio, excluding IFRS 16 impact
- COI divided by capital employed for year N-1
Financial performance adversely impacted by manganese prices and non-recurring items
Deteriorated manganese price environment
-21% on average for manganese ore1 prices
-7% on average for refined manganese alloys'1 prices
-5% on average for standard manganese alloys'1 prices
A&D one-offs
Delivery and sales hampered by logistics issue, following quality review including in-depthrestructuring of former production and management routines
Exceptional payments to the Gabonese state
Advance payment of 2019 income tax and tax adjustment
-€268m
EBITDA impact
vs 2018
-€49m
EBITDA impact
-€160m
Net debt cash-outflows
-€114m
Net debt cash-outflows
22 Eramet - Investor presentation, May 2020
1 CRU index: manganese ore CIF China 44% ; MC FeMn (Europe) ; SiMn (Europe)
Key financial figures
€m | 2019 | 2018 | |
Sales | 3,671 | 3,825 | |
EBITDA | 630 | 843 | |
% Sales | 17% | 22% | |
Current operating income | 341 | 581 | |
% Sales | 9% | 15% | |
Net income - Group share | (184) | 53 | |
Net debt (Net cash) | 1,304 | 717 | |
Net debt (Net cash), excl. IFRS 16 non cash impact | 1,207 | 717 | |
Gearing (Net debt-to-equity ratio), excl. IFRS 16 non cash impact | 74% | 38% | |
ROCE (COI / capital employed1 for previous financial year) | 12% | 22% | |
The data presented and commented on is adjusted data from Group Reporting, in which joint | ventures | are accounted for using |
proportionate consolidation until end-2018. The reconciliation with the published financial statements is presented in the appendices.
23 Eramet - Investor presentation, May 2020
1 Sum of shareholders' equity, net debt, provisions for site rehabilitation, restructuring and other social risks, less financial fixed assets, excluding Weda Bay Nickel capital employed
Net income-Group share at €(184)m, penalised by
€(114)m of non-recurring items at High Performance Alloys Division and exceptionally high level of taxes
€m | 2019 | 2018 |
Sales | 3,671 | 3,825 |
Current operating income | 1 | 341 | 581 |
Other operating income and expenses | (118) | (116) |
o/w: | Non-current provisions (A&D quality review) | 1 | |
Provisions on asset impairment tests - (Erasteel in 2019, A&D in 2018) | 1 | ||
Reversal of asset impairment tests - GCO / EMI | |||
Capital gain on disposal - Guilin / Weda Bay Nickel |
- (65)
- (200)
0 | 97 |
0 | 158 |
Lithium project | (25) | (24) |
Financial result | (134) | (95) |
Pre-tax result | 89 | 371 |
Share in income from associated companies | (7) | (3) |
Income tax | 2 |
Net income
o/w Minority interests' share
Net income - Group share
- (241)
-
126
39 73
- 53
1 |
HP Alloys Division: €(114)m impact of non- recurring items, o/w €(49)m EBITDA, €(64)m of other operating expenses
2
Income tax includes €(147)m of taxes due to Gabon, o/w Comilog 2019 Income tax (€90m)
24 Eramet - Investor presentation, May 2020
All Mining & Metals Division's activities EBITDA positive
Continued solid EBITDA contribution from Manganese BU (89% of Group EBITDA), despite lacklustre pricing momentum
Nickel BU back to positive EBITDA contribution for the first time since 2014 Mineral Sands BU driven by strong operational performance and higher prices
High Performance Alloys Division contribution hampered by logistics issue and strong market decline at Erasteel
EBITDA In €m | 2019 | 20181 | Change2 |
Mining and Metals Division | |||
Manganese BU | 560 | 784 | -29% |
Nickel BU | 38 | (18) | n.a. |
Mineral Sands BU1 | 106 | 62 | +70% |
High Performance Alloys Division | (26) | 46 | n.a. |
Holding & eliminations | (48) | (31) | +55% |
Group | 630 | 843 | -25% |
25 Eramet - Investor presentation, May 2020
- TiZir 50% until 30 June 2018, 100% from 1st July 2018 onwards
- Data rounded up to higher or lower %
Income highly sensitive to metal prices
SENSITIVITIES | Change | Annual impact on EBITDA |
(+/-) | ||
Manganese ore prices (CIF China 44%) | +$1/dmtu | c.€150m1 |
Manganese alloys' prices | +$100/t | c.€70m1 |
Nickel prices (LME) | +$1/lb | c.€110m1 |
Nickel ore prices (CIF China 1.8%) | +$10/wmt | c.€20m1 |
Exchange rates | +$/€0.1 | c.€135m |
Oil price per barrel | +$10/bbl | c.€(20)m1 |
26 Eramet - Investor presentation, May 2020 | 1 For an exchange rate of $/€1.13 |
Continued high liquidity at €2.3bn at 2019 end-year
Credit lines fully withdrawn as a precaution as of 31st March 2020
Revolving credit facility ("RCF")
- €981m RCF maturing 2024
Term loan:
- €350m loan granted in December with a 2- year maturity and an option to extend to January 2024 at Eramet hand
- Intended for general purposes and investment
European Investment Bank ("EIB") financing:
- €120m loan maturing in 2030
- Intended to support R&D expenditure, modernisation and digital transformation
Group financial liquidity (€m)
3,000 | 2,806 | ||
2,500 | 2,468 | 2,299 | |
2,000 | 1,825 | 848 | |
1,367 | |||
1,500 | |||
1,000 | 981 | ||
500 | 981 | 981 | |
350 | |||
0 | 120 | 120 | |
31/12/2017 | 31/12/2018 | 31/12/2019 | |
pro forma* |
Available cash
Undrawn line: Revolving Credit Facility ("RCF")
Undrawn line: Term Loan
Undrawn line: European Investment Bank ("EIB") financing
27 Eramet - Investor presentation, May 2020
- Pro forma of the repayment of the €250m RCF drawdown on 18 January 2018 and post-extension to 2023 of the RCF signed on 13 February 2018
Issuance of 2025 bond allowing for repurchase of part of 2020 bond; no major debt maturity within the next 3 years
Group gross debt at €2,055m at 31 December 2019 (excl. IFRS 16 non cash items)
Extension of debt maturity in November 2019: repurchase of 2020 bonds for €227m and
issuance of new bonds for €300m due May 2025
Average maturity of Group's 3-year debt; c. 90% at a fixed rate
685
15
Debt maturity at 31 December 2019 (€m)
Commercial papers, banks & operating debts
497 | Eramet bonds | |
TiZir bond
500
French State Loan to SLN
231 | 317 | ||||||||
280 | |||||||||
17 | |||||||||
78 | |||||||||
169 | |||||||||
233 | 37 | 300 | |||||||
100 | 202 | 170 | 68 | ||||||
17 | 6 | 6 | 10 | ||||||
33 | 32 | 68 | |||||||
17 | 6 | 6 | 10 | ||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | >2028 |
28 Eramet - Investor presentation, May 2020
3
Operational performance
Mining and Metals Division
Manganese BU
Pandemic leading to uncertainty in global carbon steel market
2019 global carbon steel production up +3.6%, almost exclusively driven by China (+8.3%); rest of world receding overall (-1.3%).Q1 2020 down -1.8% yoy, with production declining in China (-0.5%) due to the pandemic, down in the rest of the world (-3.1%)
Still a slight surplus in supply/demand balance in Q1 2020
Stocks at Chinese ports at 5.8 Mt1 end-March (+0.5 Mt since end-2019) : about 10 weeks of yearly consumption in China
Global carbon steel production | Global manganese ore production |
(manganese content) | |
-1.8% | -4.1% | |||||||
+5.9% | ||||||||
Mt | +3.6% | Mt | ||||||
2,100 | 1,867 | 22 | 19.2 | 20.3 | ||||
1,802 | 20 | |||||||
1,800 | 18 | |||||||
1,500 | 53% | 16 | ||||||
52% | 14 | |||||||
1,200 | 12 | |||||||
900 | 10 | |||||||
8 | ||||||||
451 | 443 | 5.0 | 4.8 | |||||
600 | 47% | 6 | ||||||
48% | 51% | 52% | 4 | |||||
300 | 2 | |||||||
49% | 48% | |||||||
0 | 0 | |||||||
2018 | Q1 2019 | 2019 | Q1 2020 | 2018 | Q1 2019 | 2019 | Q1 2020 | |
China | Rest of the world | Source: Worldsteel Association, except for February 2020 China data (National | ||||||
Bureau of Statistics in China) / Eramet estimates |
32 Eramet - Investor presentation, May 2020
1 Incl. 1.1 Mt of ore in Bonded warehouses, not accounted before (0.5 Mt end-2019)
Price recovery in Q1 2020 after 2019 significant decrease; price up at USD 5.5/dmtu mid-April
Average manganese ore prices significantly down at USD 5.6 /dmtu in 2019 (-21%), particularly in Q4; prices down -34% in Q1 2020 yoy at USD 4.4 /dmtu but bounced back vs Q4 2019 (+8%)
Likewise, decline in manganese alloys' prices (-7% for refined ferromanganese in Europe) in 2019,
reflecting global market slowdown (particularly for automotive industry) ; rebound in Q1 2020 (average ferromanganese price at €1,399, +3% vs Q4 2019), despite strong uncertainty for the coming months, notably in Europe
$/dmtu | Monthly change in manganese ore and medium-carbon ferromanganese (refined) prices1 | €/t | ||||||||||
9 | FY= -7.3% | 1,900 | ||||||||||
8 | 1,800 | |||||||||||
1,700 | ||||||||||||
Q = -9.6% | ||||||||||||
7 | 1,600 | |||||||||||
6 | 1,500 | |||||||||||
5 | 1,400 | |||||||||||
1,300 | ||||||||||||
4 | FY= -21.4% | 1,200 | ||||||||||
3 | 1,100 | |||||||||||
2 | Q = | -33.8% | 1,000 | |||||||||
900 | ||||||||||||
1 | 800 | |||||||||||
Jan-15 | Jul-15 | Jan-16 | Jul-16 | Jan-17 | Jul-17 | Jan-18 | Jul-18 | Jan-19 | Jul-19 | Jan-20 | Jul-20 | |
Q | Q Q1 2020 vs Q1 2019 price variation | Manganese ore | Medium-carbon Ferromanganese |
FY FYFY 2019 vs FY 2018 price variation
33 Eramet - Investor presentation, May 2020
1 Manganese ore: CRU CIF China 44%
Medium-carbon FerroMn: CRU Western Europe spot price
Continuing record manganese ore production at Comilog: 4.8 Mt in 2019 (+10% yoy), 1.3 Mt in Q1 2020 (+28% yoy)
Record manganese ore production driven by new dry mining process
Ore volumes transported up +25% in Q1 2020 at 1.2 Mt (after +17% in 2019 at 4.6 Mt) thanks to railway logistics improvement (+70% transport capacity since 2016)
Thus external sales up +29% in Q1 2020 to 1 Mt (+15% to 3.9 Mt in 2019)
Manganese alloys' production up +3% both in Q1 2020 and in 2019 (reflecting the nominal production level of the Group's plants)
Sales volume rising by +3% in Q1 2020 (at 181 Kt) after +4% in 2019 (at 733 kt), driven by the sale of standard products
Manganese ore production and agglomerates
kt | +10.0% | +28.2% | kt | ||||||||||
5,000 | 800 | ||||||||||||
4,000 | |||||||||||||
3,000 | |||||||||||||
2,000 | 4,330 | 4,765 | 400 | ||||||||||
1,000 | |||||||||||||
1,288 | |||||||||||||
1,005 | |||||||||||||
0 | 0 | ||||||||||||
2018 | Q1 2019 | 2019 | Q1 2020 |
Manganese alloys' production
+2.6%
+2.8%
720740
397386
191 | 354 | 196 | |
323 | 108 | 106 | |
83 | 90 | ||
2018 | Q1 2019 | 2019 | Q1 2020 |
Commodities (HC FeMn et SiMn) | |
34 Eramet - Investor presentation, May 2020 | Refined alloys |
(incl. Mn Metal) |
Nickel BU
Global stainless steel production up significantly in 2019, sharply down in Q1 2020 due to automotive sector and pandemic
2019 global stainless steel production up +4.3% in 2019, driven by growth in China (+12.2%); sharply
down -12.1% in Q1 2020 due to global economic downturn
Global primary nickel demand was up +3.1% in 2019, notably supported by battery development (+31%); but down -13.5% in Q1 2020 yoy following contraction of stainless steel production worldwide
Increase in global primary nickel production (+9.4% and +4.6% in 2019 and Q1 2020 yoy, respectively), driven by continued growth in NPI in Indonesia and China
Global stainless steel production
China | Rest of world |
-12.1% | ||||
Kt | +4.3% | |||
60,000 | 51,766 | |||
49,636 | ||||
50,000 | ||||
40,000 | 53% | 57% | ||
30,000 | ||||
20,000 | 12,397 | 10,901 | ||
10,000 | 47% | 43% | ||
52% | 56% | |||
0 | 48% | 44% | ||
2018 | Q1 2019 | 2019 | Q1 2020e |
Global primary nickel production (excl. recycling)
Ni Class I* | Ni Class II - NPI Indonesia | |
Ni Class II - NPI China | NI Class II - High-grade Ferronickel & others | |
+4.6% | |||||||
Kt | +9.4% | ||||||
2,343 | |||||||
2,500 | 2,142 | ||||||
2,000 | 951 | ||||||
1,500 | 940 | ||||||
1,000 | 468 | 590 | NPI | ||||
578 | |||||||
248 | 553 | 344 | 239 kt | ||||
42% | |||||||
500 | 234 | 233 | |||||
132 | 124 | ||||||
485 | 459 | 115 | |||||
112 | 75 | 107 | |||||
0 | |||||||
2018 | Q1 2019 | 2019 | Q1 2020e |
36 Eramet - Investor presentation, May 2020
* Class I: product with nickel content of 99% or more
Source: Eramet estimates
Nickel prices showed high volatility in 2019, mainly fuelled by the announcement of the Indonesian ban
Indonesian ban announcement in September 2019 introduced strong market volatility with speculative effect both on prices and inventory, against a background of international tensions
Supply/demand balance was in slight deficit in 2019 (-24kt); in surplus in Q1 2020 (+70 kt) due to decreasing demand since H2 2019
Hence overall increase in nickel metal stocks at LME and SHFE by +35% vs end-2019 (257 kt at end-March 2020), after throughing in November 2019
LME prices down in Q1 2020 vs. Q4 2019 at USD 5.77/lb (-17%) but up (+3%) yoy
LME Nickel price
USD / lb USD/tonne
9.1 20 000
8.2 18 000
7.3 16 000
Nickel Stocks | ||||||||
LME Stocks | SHFE Stocks | Ni price | (tonnes) | |||||
600 000 | ||||||||
FY=+6.1% | 570 000 | |||||||
540 000 | ||||||||
510 000 | ||||||||
480 000 | ||||||||
450 000 | ||||||||
420 000 | ||||||||
390 000 | ||||||||
360 000 |
6.4
14 000
330 000 |
300 000 |
5.4 12 000
10 000 | ||
4.5 | ||
8 000 | ||
3.6 | ||
6 000 | Jul-15 | Jan-16 |
2.7 | ||
Jan15- |
37 Eramet - Investor presentation, May 2020
270 000 | |||||||||||||||||
240 000 | |||||||||||||||||
210 000 | |||||||||||||||||
180 000 | |||||||||||||||||
Q = +2.7% | 150 000 | ||||||||||||||||
120 000 | |||||||||||||||||
90 000 | |||||||||||||||||
60 000 | |||||||||||||||||
30 000 | |||||||||||||||||
- | |||||||||||||||||
Jul-16 | Jan-17 | Jul-17 | Jan-18 | Jul-18 | Jan-19 | Jul-19 | Jan-20 | ||||||||||
- Q1 2020 vs Q1 2019 price variation
FYFY 2019 vs FY 2018 price variation
SLN rescue plan: decisive breakthroughs achieved in 2019 for major enablers
New business model for SLN: metallurgy and exports
- 4 Mwmt/year licence for low grade ore exports, granted by New Caledonian government (4 Mwmt/year to be achieved in 2021)
- Additional 2 Mwt/year low-gradeore exports request submitted for authorization to New- Caledonian authorities in April 2020, to offset insufficient economy on the energy lever
Enablers for productivity gains and fixed cost reduction in mines and plants
- Doniambo plant reorganisation: majority agreement signed with unions on April 2019 regarding the transition from 5 to 4 shifts
- 147 hrs agreement implemented at mining sites1, creating conditions for 7/7 days and 21/24 hours operations
Reduction in energy price
- 1/3rd of target achieved, subject to conditions starting 1st January 2020:
- €8.5m / year, max. reduction if Ni LME price < USD 6.5/lb
- €8.5m / year, max. profit return to Enercal, if Ni LME price > USD 10.0/lb
Priority objective to reach a sustainable positive cash generation
Target to reduce cash-cost by USD 1.30/lb2 in 2021
38 Eramet - Investor presentation, May 2020
- Signed in November 2018
- Versus 2018
Record Ni ore export; FeNi production down following disrupted mining operations at East Coast centres
Ore production up +15% in 2019 yoy (at 4.7 Mwmt), +5% in Q1 2020 yoy (at 0.9 Mwmt)
Volumes of low grade (1.5%-1.8%) exported
ore up +32% in 2019 and +41% in Q1 2020 yoy
Seaborne nickel ore prices up +31% in H2 2019 vs H1, +32% in Q1 2020 yoy, supported by Indonesian ban announcement
Ferronickel production down 1% in Q1 2020 yoy (-13% in 2019), still due to lower-gradeore loaded into the furnaces, as a result of past social and societal disruptions in the East Coast mining centres
Ferronickel sales volumes down -15% in 2019 (at 47 kt) and -3% in Q1 2020 yoy (at 11.6 kt),
Ferronickel sold at a large discount applied to the LME in Q1 2020
Nickel ore exports | Ferronickel production |
In ktH | +40.9% | In kt of Ni | -0.8% | ||||||
-12.7% | |||||||||
+31.5% | 4,000 | ||||||||
54.3 | |||||||||
4,000 | 60 | ||||||||
47.4 | |||||||||
1,623 | |||||||||
1,500 | 1,234 | ||||||||
1,000 | |||||||||
500 | 235 | 331 | 12.2 | 12.1 | |||||
0 | 0 | ||||||||
2018 | Q1 2019 | 2019 | Q1 2020 | 2021 | 2018 | Q1 2019 | 2019 | Q1 2020 | |
target |
39 Eramet - Investor presentation, May 2020
Relevance of the new business model: continued cash cost reduction at 5.25 USD/lb in Q1 2020
Decrease of cash cost in H2 vs H1 2019 (-5%) and in Q1 2020 vs Q4 2019 (-8%)
Significant positive impact from ore exports, first lever of SLN rescue plan
Favourable external factors, mainly €/$ FX rate, as well as Q1 2020 lower energy costs
SLN cash-costhampered by lower ferronickel production, as a result of lower-grade ore loaded into the furnaces due to past mines disruption
Lower ferronickel | |||||||||||||||||||
(USD/lb) | production | External factors | Capex, non-operating costs | ||||||||||||||||
Ore exports | |||||||||||||||||||
and financial expenses1 | |||||||||||||||||||
USD -0.16/lb | USD +0.44/lb | USD -0.19lb | |||||||||||||||||
+USD 0.71lb | |||||||||||||||||||
5.82 | 6.05 | 5.91 | 6.62 | ||||||||||||||||
5.74 | -5% | ||||||||||||||||||
2018 | H1 2019 | H2 2019 | 2019 | 2019 |
cash-cost | cash-cost | break-even cost |
40 Eramet - Investor presentation, May 2020
1 2019 capex related to 2019 tonnage; non-operating costs and financial costs booked in SLN's company financial statements
Sandouville plant: significant progress towards recovery in 2019, lower Q1 2020
Improved operating rate in 2019 thanks to support of experts' task force
Nickel salt and High purity nickel production (6.9 kt) and sales volume (6.7 kt) almost doubled in 2019
Improved key financial indicators at end-2019
EBITDA loss halved to €21m in 2019
Significant reduction of cash consumption (free cash-flow of -€32m vs -€54m)
Slowdown in production down 17% yoy in Q1 2020
Technical operations below expectations, in addition to a 2-weekshutdown at end-March attributable to the health crisis
Sales volumes stable at 1.6 kt in Q1 2020
High purity nickel production
(nickel metal and salts)
In kt of Ni | -17% |
+86% | |
9.0 | |
6.9
4.5 3.7
1.81.5
0.0
2018 | Q1 2019 | 2019 | Q1 2020 |
41 Eramet - Investor presentation, May 2020
Mineral sands BU
Still strong demand for CP slag products despite pandemic affecting pigment end-markets
Pigment market (90% of titanium-basedend-products1)
Decreasing global demand in TiO2 pigments in Q1 2020, driven by spreading pandemic in China, whereas supply stabilised
Demand from high value-added raw materials producers continued to bolster demand in CP grade titanium slag2, as produced by Eramet in Norway
Average CP slag reaching USD 800/t in Q1 2020 (rising by 11% vs Q1 2019) as global supply sustained. In 2019, average price was USD 752/t (+10% vs 2018)
Monthly change in CP grade titanium dioxide slag prices3
840 | Q | = +10.8% |
770
700 | FY = +9.8% |
630 | |
560 | |
Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19Jul-19Jan-20Jul-20 |
- Q1 2020 vs Q1 2019 price variation
FYFY 2019 vs FY 2018 price variation
43 Eramet - Investor presentation, May 2020
- Titanium dioxide slag, ilmenite, leucoxene and rutile
- For the production of pigments through chloride process
- Source CP slag: Market consulting, Eramet analysis
Downturn in Zircon product end-markets due to pandemic: prices still at high level after a slight erosion in Q4 2019
Ceramics and Chemicals markets (~50% and 20% respectively of zircon's end-uses)
Global demand for zircon down -4% at least in Q1 2020 yoy after being down -10% in 2019, due to ceramics market contraction (particularly with the real estate sector fallback in China)
Supply/demand balance for zircon is still slightly in surplus in Q1 2020; sustained demand for TiZir
products, which seems to reflect zircon consumers' build-up of safety stocks, especially in Europe
Average zircon price thus fell to price of premium zircon in 2019
USD 1,385/t in Q1 2020 (shrinking by 13% vs Q1 2019). Average was USD 1,575/t, up 7% vs 2018
$/t | Monthly premium zircon prices1 | |||||
1,600 | ||||||
1,500 | ||||||
1,400 | FY | = +7.4% | ||||
1,300 | Q | = -12.6% | ||||
1,200 | ||||||
1,100 | ||||||
1,000 | ||||||
500 | ||||||
Jan-16 | Jul-16 | Jan-17Jul-17 | Jan-18Jul-18 | Jan-19 | Jul-19 | Jan-20Juil.-20 |
- Q1 2020 vs Q1 2019 price variation
FYFY 2019 vs FY 2018 price variation
44 Eramet - Investor presentation, May 2020
1 Source Zircon premium: FerroAlloyNet.com, Eramet analysis
TiZir: high level of production in Senegal and Norway
HMC1 production (titanium ore and zircon): | Norwegian plant functioning close to nominal | ||
> -5% in 2019, +10% in Q1 2020 yoy, thanks | capacity, except for taping incident last summer | ||
to high operational performance (record | Titanium dioxide slag production down -10% | ||
high OEE) | |||
> lower grade mined from 2019 onwards | in Q1 2020 yoy, stable in 2019 | ||
according to mining plan | CP slag sales' volumes up +33% in Q1 2020 | ||
Zircon sales down -11% (at 58 kt), up +32% to | (at 52 kt), due to unfavourable market conditions | ||
17 kt in Q1 2020 | in Q1 2019; down -10% in 2019 yoy (at 180 kt) | ||
HMC production1 | OEE rate2 | Titanium dioxide production | |
(GCO, Senegal) | (GCO, Senegal) | (TTI, Norway) |
+9.9% | +12% | -9.4% | |||||||||||||
in kt | -5.0% | +5.2% | in kt | 0.0% | |||||||||||
in t/hour | |||||||||||||||
800 | 774 | 735 | +6% | 200 | 189 | 189 | |||||||||
+107% | |||||||||||||||
5 000 | 4 867 | ||||||||||||||
4 134 4 347 4 333 4 590 | |||||||||||||||
4 000 | |||||||||||||||
400 | 3 500 | 100 | |||||||||||||
3 000 | |||||||||||||||
171 | 188 | 2 500 | 1 995 | 53 | 48 | ||||||||||
2 000 | |||||||||||||||
0 | 2018 | Q1 2019 | 2019 | Q1 2020 | 0 | 0 | 2018 | Q1 2019 | 2019 | Q1 2020 | |||||
2014 | 2017 | 2018 | Q1 | 2019 | Q1 | ||||||||||
2019 | 2020 |
45 Eramet - Investor presentation, May 2020
- HMC: Heavy Mineral Concentrates
- Overall Equipment Efficiency of the mine
High Performance Alloys division
An aerospace market deeply impacted by the Covid-19 pandemic
Global aerospace market suffering from the Covid-19 pandemic
Global air traffic should fall by 23% in 20201: first drop in 10 years. It would take at least 3 years to recover its former level
The whole aerospace industry is "now in the midst of the gravest crisis [it] has ever known" (Airbus)
Defence sector should stay stable as military expenses are a key support to national economies and Security programmes
Severe slowdown expected, owing to reduced delivery rates at Airbus and Boeing, the sector's largest players
Global activity to be reduced -30%to -50% depending on aircraft programmes, affecting narrow-body as well as wide-body models
47 Eramet - Investor presentation, May 2020 | 1 Source: Brokers notes, Airbus and Boeing websites |
Q1 2020 sales impacted by a slowdown in production starting mid-March and still depressed automotive market
Sales by segment
-16.9%
1,020
558 | -9.7% | ||||||||||||||||||||||
847 | |||||||||||||||||||||||
104 | 484 | ||||||||||||||||||||||
130 | 70 | ||||||||||||||||||||||
217 | 88 | 196 | |||||||||||||||||||||
113 | 114 | ||||||||||||||||||||||
213 | 189 | ||||||||||||||||||||||
19 | |||||||||||||||||||||||
24 | 21 | ||||||||||||||||||||||
58 | 21 | ||||||||||||||||||||||
36 | |||||||||||||||||||||||
14 | 16 | ||||||||||||||||||||||
3 | 4 | ||||||||||||||||||||||
2018 | Q1 2019 | 2019 | Q1 2020 | ||||||||||||||||||||
A&D1: | Erasteel: | ||||||||||||||||||||||
€156m / €642m | €40m / €205m | ||||||||||||||||||||||
Aerospace | High-speed steels, | ||||||||||||||||||||||
Tooling & Specialties |
Energy & Defense Recycling
Others
Q1 2020/ 2019
48 Eramet - Investor presentation, May 2020
A&D1 sales (flat in Q1 2020, -19% in 2019 yoy)
-13% decrease in 2019 in aerospace segment (more than 70% of A&D sales) due to delays impacting sales in a stable market environment
Several agreements signed with aerospace and energy top-tier customers in 2019
To date, production level at A&D sites of c. 65 % of nominal capacity, following roll-out of health protocols
Significant slowdown expected for the months ahead in
the aerospace sector
Erasteel sales (-34% in Q1 2020, -10% in 2019 yoy)
Continuing significant slowdown of automotive sector,
weighing on high-speed steel activity (more than 90% of
Erasteel's sales)
Good performance, specifically in Asia, of the market of high-qualityhigh-speed steels made out of powder
metallurgy
1 Aubert & Duval, EHA and other
High Performance Alloys' 2019 results impacted by overall
sales decline and margin squeeze at Erasteel
A&D1 EBITDA at €1m, including logistics one-offs
Significant slowdown in shipments, linked to delivery delays resulting from quality processes' conformity review: -€49m EBITDA impact in 2019, vs -€13m in 2018
-€160m cash impact
€27m loss incurred by Erasteel
Shrinking sales in automotive market
Negative squeeze impact on high-speed steels margin (-€19m)
FCF close to break-even at year-end thanks to tight WCR management
High Performance Alloys Division EBITDA | EBITDA by entity | |||||||||||
84 | -€72m | 86 | -€37m | A&D | ||||||||
-€35m | ||||||||||||
46 | Erasteel | |||||||||||
36 | ||||||||||||
10 | 1 | ||||
-2 | |||||
-26 | -27 | ||||
2017 | 2018 | 2019 | 2017 | 2018 | 2019 |
49 Eramet - Investor presentation, May 2020
1 Aubert & Duval, EHA and other
4
Strategic transformation
1st metal tapping at Weda Bay Nickel's NPI plant
Our vision
Our ambition
Develop a selective portfolio of value-accretive mining and metallurgical activities
Be among the best in each of our businesses, in terms of performance,
profitability and innovation
Be admired for our strategic model, our management system and our societal commitment
OUR STRATEGIC VISION IN 5 YEARS | ||||
Sustainable | Business | Committed & | Home for best | Entrepreneur |
value creator | partner | contributive | talents | |
of choice | corporate | |||
citizen |
Strategic Transformation | Managerial Transformation | |
Digital Transformation
51 Eramet - Investor presentation, May 2020
Continuing Group strategic transformation:
increasing cash generation and portfolio diversification
1
FIX / REPOSITION
our least performing assets
Nickel
- SLN new business model: decisive breakthroughs achieved
- Sandouville: recovery
High Performance Alloys
- Restructuring to be redefined given the scale of the crisis in the aeronautics sector following the pandemic
2 GROW
in our attractive businesses
Manganese ore
- Growth in volumes in Moanda (Gabon) based on a modular approach, supported by dry processing
Weda Bay Nickel (Indonesia)
- Start of mining operations in Q4 2019
- Ongoing NPI plant ramp -up
Mineral sands
- Tizir (Senegal): continuous improvement of operational performance ; debottlenecking under review
- Cameroon: exploration permits granted in rutile
3
EXPAND our portfolio in metals for the energy transition
Lithium:
- Project in Argentina currently mothballed
- Pilot plant on site confirming highest industry yield in real conditions
Nickel and cobalt salts
- Study of Weda Bay diversification towards products for EV batteries
Li-ion batteries' recycling
- R&D programme
52 Eramet - Investor presentation, May 2020
New modular approach for brownfield expansion of Moanda manganese ore operations
A HIGHLY COMPETITIVE MINE IN GABON
Operated by Comilog for 50 years
Strong quality high-grade oxide commercial ore 46%
Deep reserves of 269 Mt representing several decades, allowing a long term target of 7Mt production
A NEW MODULAR EXPANSION
Enhance production of the Bangombé plateau
through dry processing
- €51m of early works cashed out in 2019
New modular approach with progressive and flexible development
1st phase: opening of the new Okouma
Strong cash flow generation
Manganese ore capacity
(in Mt)
c.6 | ||
4.3 | 4.8 | +40% |
2018 2019 1st phase of new modular
approach
53 Eramet - Investor presentation, May 2020
plateau, supported by dry processing
- production capacity up c.25% to c.6 Mt
- €150m capex over 2 years
- roll-outschedule to be finalized with Gabonese partner
Continuing railway line renovation: already +70% transport capacity achieved since end- 2016
Strong commitment to E&S: employment,
biodiversity, water
Weda Bay nickel: highly competitive NPI production in Indonesia, effective start-up in April 2020
MINING & METALS BUSINESS MODEL
Weda Bay Nickel business model balanced in 2 activities: mining and metallurgy
One of the largest nickel oxidised deposits in the world
First mining production started in October 2019 to supply several NPI plants on Halmahera island, o/w JV plant
0.5 Mwmt of nickel ore produced at end-2019, ready for smelting at JV plant
Ongoing NPI JV plant ramp-up, ahead of schedule
Key milestone: 1st metal tapping in April
Gradual ramp-up: towards 80% nominal capacity in December 2020
No capex for plant construction for Eramet
54 Eramet - Investor presentation, May 2020
ATTRACTIVE METRICS
Production | Production | ||
target - Ore | |||
target - NPI | |||
6 Mwmt1/year | |||
2 | /year | ||
35 kt | |||
Eramet | |||
43%5 | |||
Nickel | Tsingshan4 | Eramet | |
resources | 57%5 | ||
off-take |
600 Mt3 ore | 15 kt2/year |
9 Mt Ni | |
HIGHLY COMPETITIVE NPI PRODUCTION IN INDONESIA
- Mwmt: million of wet metric tons (production)
- In nickel content in NPI
- Mt: million of dry metric tons (resources)
- #1 global stainless steel producer
- % held in Strand MineralsPte Ltd, which owns 90% of PT Weda Bay Nickel (see 2019 URD)
Lithium project in Argentina: currently mothballed
HIGHLY VALUE-ACCRETIVE PROJECT
Long life low cost and scalable project, c.10 Mt
LCE1 drainable resources, c.50 years of resources
Battery grade lithium carbonate production (24 kt LCE1)
1st quartile cash-cost ($3.5k/t) amongst the best in the industry
Pilot plant on site (operating in real conditions since December 2019) to continue its activity in order to finish collecting the process results
Eramet lithium yield vs competition
90%
70-75% | |
Evaporation process | |
50-55%50-55%
Comp. 1 | Comp. 2 | Comp. 3 | Eramet |
STATUS UPDATE: PROJECT MOTHBALLED
April 2020: decision not to engage the construction of the lithium production plant
- Considerable uncertainty in the global economy due to current sanitary crisis
- In such context, cash preservation measures to be strengthened and accelerated
As a result, in 2020:
- Expense of c. €150m, including an asset impairment charge
- Cash outflows of c. €90m
All measures taken to allow a restart in the best conditions when possible
(Comp: competitor)
Direct extraction process
55 Eramet - Investor presentation, May 2020
1 LCE = Lithium Carbonate Equivalent
A leap in corporate social responsibility (CSR) in 2019
Launch of 2018-2023 CSR Roadmap | Improvement of non-financial rating |
3 components to meet Eramet's challenges | Vigeo Eiris rating's progression in |
assessed ESG domains |
13 objectives set for 2023 with an annual measurement
56 Eramet - Investor presentation, May 2020
Strong CSR Performance in 2019
Increase in the CSR Performance index*
112 representing +12 points compared with 2019 target
80%
of industrial sites ISO14001 certified
1.2
Ratio of rehabilitated / cleared areas
-35%
accidents
(employees, temps and subcontractors' FR2)
87%
of purchased electricity produced with carbon- free footprint
€20m
Invested in the communities' benefit **
* | The CSR Performance index measures the annual progress of Eramet's 2018-2023 |
57 Eramet - Investor presentation, May 2020 ** | CSR programme |
Expenditures for local populations and sponsorship, including this year's exceptional | |
contribution of Comilog to the financing of road rehabilitation in Moanda (€5m) |
Conclusion and outlook
Committed to delivering our roadmap in 2020, despite the uncertainties related to the pandemic
Very low visibility for quarters ahead
Very tight operational management to face the crisis
Limited impact in Q1 2020 but extent and length of the pandemic still unknown
Decrease in demand and one-off restricted supply resulting in considerable unstable market equilibriums
Reduction in production rates recently announced in the aerospace sector as well as in the
automotive's to have a deep impact on the High Performances Alloys division over the long term
Strict cash control
Implementation of 2020 cash control plan and strict control over net debt
Lithium project mothballed
New milestones for the Group's strategic roadmap
Ramp-upof Weda Bay's mining and metallurgical operations in 2020 Strengthening on our leadership market positions: sustained growth in Manganese
Suspension of the 2020 production and EBITDA guidance,
given the lack of visibility over the coming months
59 Eramet - Investor presentation, May 2020
Appendices
Eramet detailed presentation
Key partnerships with host countries and territories
Eramet associates the main countries and territories where it operates
New-Caledonia
- STCPI holds 34% of SLN's share capital
- STCPI holds around 4% of Eramet's share capital
Gabon
- Around 29% of Comilog's share capital is owned by the Gabonese Republic
Senegal
- 10% of Grande Côte Opérations's3 share capital is owned by the Republic of Senegal
Long-term relationship reinforced by the significant contribution to the local economies
#2 private employer in Gabon and main private employer in New Caledonia
Sensitive & responsible for social and environmental related matters
Nippon Steel | French | |||||
State2 | ||||||
France | ||||||
10% | ||||||
1 | 34% | |||||
STCPI | 56% | Eramet | ||||
Others
7%
Gabonese
State 29%
64%
Eramet
62 Eramet - Investor presentation, May 2020
- STCPI (Société Territoriale Calédonienne de Participation Industrielle): entity owned by the New Caledonian provinces
- 1 share
- TiZir's operations in Senegal
A long term player
100% of TiZir owned by Eramet (OPA on MDL)
Shareholding structure
Société Le Nickel was incorporated to operate nickel mines in New Caledonia
Le Nickel became SLN, with Elf Aquitaine (French State) as a 50% shareholder
The stake held by the French state in SLN increased to 70%
Creation of Eramet-
SLN (Sandouville)
The Duval family becomes shareholder of Eramet, through the contribution of Aubert & Duval
Launch of EcoTitanium
Sale of Erachem and Bear Metallurgical Corporation
Sale of Eurotungstene
Weda Bay Nickel partnership in
Indonesia
Inauguration of Moanda
Metallurgical Complex (2014)
Creation of MKAD for the
closed-die forging of parts for aeronautics (2015)
Diversification into the production of ilmenite and zircon through TiZir in
Senegal
diversification Activities'
Listing of
Eramet
Acquisition of Weda Bay Nickel (nickel project) in Indonesia
Diversification into forged and closed-die forged parts, following the contribution of Aubert & Duval to Eramet
Diversification into manganese with the acquisition of 61% of COMILOG in Gabon
Acquisition of Erasteel (diversification into production of high-speed steel)
1880 | 1974 | 1983 | 1985 | 1989 | 1994 | 1995 | 1999 | 2006 | 2008 | 2011 | 2012 | 2014 | 2016 | 2018 |
1991 | 1997 | 2009 | 2015 | 2017 | 2019 | |||||||||
Group | Manganese | |||||||||||||
63 | Eramet - Investor presentation, May 2020 | Nickel | Mineral Sands | |||||||||||
LithiumAlloys
Steels represent c.60% of Eramet sales
Recycling | Other (Chemical | |||
and Foundry) | ||||
High-speed steels, Toolings & Specialities | ||||
0% | ||||
Others | 5% | 8% | Stainless Steel | |
Energy & Defense | 2% | |||
2% | ||||
2% |
Aérospace | Steels: 58% | ||||||||
13% | |||||||||
6% | |||||||||
17% | |||||||||
6% | |||||||||
Other Mineral Sands 3% | 21% | 48% | |||||||
8% | 48% | ||||||||
6% | |||||||||
Pigment 4% | 19% | ||||||||
21% | 38% Carbon Steel | ||||||||
Ceramics 2% | |||||||||
3% | |||||||||
Other Nickel |
18%
Stainless Steel
64 Eramet - Investor presentation, May 2020
A global geographic footprint
PROJECTS
MINING SITES PROCESSING
Manganese
Nickel
Mineral sands
Lithium
Erasteel Aubert & Duval
UNITED
STATES
1 site 1 site
2019 Group turnover (by sales destination)
Others
France 9%
NORWAY | SWEDEN |
3 sites 1 site | 3 sites |
UNITED | |
KINGDOM | |
1 site | FRANCE |
12 sites | |
2 sites | |
SPAIN | 1 site |
1 site | |
1 site |
SENEGAL
Diogo region
GABON
Moanda
CHINA
1 site
INDIA
1 site
INDONESIA (Halmahera Island)
Weda Bay
NEW CALEDONIA
Kouaoua, Népoui,
Poum, Thio,
Thiébaghi
USA 16%
5% 36%Asia
ARGENTINA
Salar de Centenario-Ratones
35%
Europe
65 Eramet - Investor presentation, May 2020
Manganese main growth drivers: carbon steel (90% of global production) and China
1
Manganese Ore
Average 0.4 t of Mn content
per tonne of ore
2
Manganese Alloys
Average 1.8 t of Mn ore per
tonne of alloy
Manganese key features
3 types of manganese ore
- "Low-gradelocal" ore: < 30% of manganese content
- "Medium-grade"ore: > 30% but < 43%
- "Rich" / "High-grade" ore: > 43%
Two manganese alloys families
- Standard
- High carbon ferromanganese (6 to 8% carbon)
- Standard silicomanganese (< 1.5 to 2% carbon)
- Refined
- Of which medium carbon ferromanganese (< 1.5 to 2% carbon)
No market trade: Spot prices
Carbon steel
Manganese makes steel harder, more elastic and more wear-resistant. Widely used in the construction and automotive sectors.
3
90%Carbon steel
Average 10 kg of alloy per
tonne of steel
(7 kg of Mn content per
tonne of steel)
- CRU index: monthly
- Metal Bulletin index: weekly
China: 54 % of global carbon steel production | |
10% | Others |
chemistry batteries, fertiliser and paint pigments and other metallurgical applications
66 Eramet - Investor presentation, May 2020
Manganese BU: a first class competitiveness thanks to excellent mining operation
Manganese BU key features
A highly competitive manganese mine in Gabon (Moanda), operated by Comilog
- High-gradeoxyde ore 44%
- First quartile cash cost
Two units of local transformation in
Gabon, CIM and CMM, for high grade manganese production and manganese alloys
5 pyrometallurgical industrial plants in the USA and in Europe (1 in France, 3 in Norway)
Ore transportation in Gabon operated by a 100% owned railway company (600 km of track)
Main customers | Main competitors |
67 Eramet - Investor presentation, May 2020
Nickel main growth drivers: stainless steel and batteries
1 | Nickel key features |
Extraction of ore in
order to…
2
…be transformed in | |
nickel ferroalloys1… | 2 |
Ferronickel | |
…or in pure nickel | |
23% Ni | |
NPI | salt2… |
10 / 15% Ni |
Two main types of nickel ore
- Sulfide-typeore (nickel combined with several other valuable metals) as in Canada, Russia to be transformed in Nickel concentrate
- Laterite-typeore as in New-Caledonia and Indonesia to be transformed into ferronickel, NPI ("Nickel Pig Iron") or nickel metal
1 tonne of serie 300 (inox) contents 80 kg of nickel
Stainless steel
Mass & surface resistance to oxidation; ductility; high melting point; electrical resistance; catalytic properties Widely used in transport, construction, hygiene and
health
68%
3
…to satisfy mainly the
stainless market
demand 10%Nickel
base | ||
7% | alloys | |
15% | Batteries | |
Others |
Nickel is traded on the LME index (pure metal)
China : 56 % of global stainless steel production
68 Eramet - Investor presentation, May 2020
- Ferronickel and NPI through pyrometallurgical process
- Nickel salt and nickel metal through hydrometallurgical process
Nickel BU: a key transformation underway
Nickel BU key features
Successful implementation of new business model in New Caledonia
- 4 main operated mines and one pyrometallurgical plant
- High-gradeferronickel (23% Ni) and nickel ore exported (1.7 to 1.9 % Ni)
Ramp-up of Weda Bay nickel project
- One of the world's largest undeveloped nickel deposits with huge mining potential
- Project being developed in partnership with Tsingshan, #1 global stainless steel producer
- NPI production start in H1 2020 in parallel to mining development.13 kt off-take for Eramet
First-tier mine and NPI production position
Ramp-up of the high purity nickel refinery in Sandouville, France
- Production of nickel salts and high-purity nickel (Total capacity of 15,000 t)
Main customers | Main competitors |
69 Eramet - Investor presentation, May 2020
Nickel BU: SLN mineral resources x4 thanks to new business model
SLN amongst Tier one nickel industry | ||||
players, thanks to significant mineral | Poum | SLN 2021 targeted mining | ||
resources, | ||||
production | ||||
SLN mineral resources of 1,050 Mt1 on | Spur R | |||
average (1.85% grade), equivalent to | Tiebaghi | Kouaoua | ||
c.19.4 Mt nickel content, o/w: | Poro | |||
Boualoudjelima | ||||
Kaala | ||||
> c.600 Mt1 nickel exports (1.5%-1.8% | Bonini | |||
grade on average), i.e. c.11.3 Mt nickel | ||||
Bouadjoulema | Dothio | |||
content | ||||
Népoui
Thio
> c.200 Mt1 suitable for local metallurgy at | Tontouta |
Doniambo plant (2.4% on average), i.e. | |
5.5 Mt nickel content |
Resources are JORC compliant2
Global annual production of > 7 Mwmt3 by 2021 (> +50% vs 2019) to support ferronickel production as well as 4 Mwmt3 ore exports target
70 Eramet - Investor presentation, May 2020
- Mt: million of dry metric tons (resources)
- Resources JORC compliant (Australasian Joint Ore Reserves Committee)
- Mwmt: million of wet metric tons (production)
Mineral Sands growth drivers: ceramics and pigments market
Zircon key features | Titanium dioxide slag key features |
Long Term pricing agreement1 (spot prices in China only)
Dredge mining
followed by
1 mineral separation
2
Midstream :
micronisation or
chemistry
Foundry Others 2%
11%
Refractory 15%Finished
products 52%
Ceramics
20%
Chemicals
71 Eramet - Investor presentation, May 2020
1 | Dredge or | |||
open pit | ||||
mining followed | ||||
by mineral | ||||
Titanium | separation | |||
minerals (rutile, | ||||
2 | ilmenite, | |||
leucoxene) | ||||
Midstream | 3 | |||
(optional): | ||||
titanium slag | ||||
/ synthetic | ||||
rutile | 89% | |||
Downstream: | ||||
pigments and | ||||
titanium metal | TiO2 pigment |
5% 6%Titanium
Others metal
1 LT agreements between buyers and sellers, on a yearly or half-year basis mainly; not exchange traded , no published price index
Mineral Sands BU: operations integrated from the mine in Senegal to the conversion plant in Norway
Mineral Sands BU key features
TiZir Senegal (GCO):
- Extraction of heavy mineral (mineral raw materials which contain heavy minerals concentrated).
- Production of ilmenite (titanium-iron oxide), leucoxene, rutile and zircon
Ore rail transportation from the mine to the port of Dakar operated by TiZir
TiZir Norway (TTI): Transformation of ilmenite (metallurgical valorization) into titanium slag and pig iron
Main competitors
72 Eramet - Investor presentation, May 2020
High Performance Alloys
Division
Key Features
A comprehensive industrial set up with unique tools
Located in:
Europe (France, Sweden, Spain, UK)
Asia (China, India)
US
14 industrial sites in France
Main competitors
Main customers
74 Eramet - Investor presentation, May 2020
Lithium project
Lithium main growth drivers: energy storage, including Li-on EV battery; +13% pa growth
1
Extraction from
salar brines or from lithiniferous minerals (spodumene) in order to…
2 | 3 |
…be | |
transformed into | |
Lithium | |
Carbonate1… |
Energy storage
in the form of
lithium-ion59%demand
batteries for | 16% |
portable electronics, | |
electric vehicles and the | |
storage of electricity | |
on transport networks |
…or into
Lithium
Hydroxide…
Energy storage market: mainly driven by environmental regulations, EV sales and mobility development
Lithium carbonate and lithium hydroxide enter the composition of the Li-ion batteries' cathodes
Forecast Li-ion battery market in 2025: c. 80%1 of total demand for lithium, vs c. 60% in 2019
Lithium market's estimated annual growth rate: at a minimum of 13% over the 2019-2025e period
76 Eramet - Investor presentation, May 2020 | 1 Source: Market studies, Eramet |
A booming lithium market over the next years
Forecast lithium demand1 (in kt LCE)
603
22%
291 | 30% | Others | ||||||
Others Batteries | ||||||||
41% | ||||||||
102 | EV Batteries | |||||||
29% | 48% | |||||||
57% | 30% | |||||||
43% | ||||||||
2010 | 2019 | 2025e |
20191 | 20251 | |||||||||||||||||||
Glass & Ceramics | ||||||||||||||||||||
Glass & Ceramics | 11% | Greases | ||||||||||||||||||
20% | ||||||||||||||||||||
Electric vehicles | ||||||||||||||||||||
3% | ||||||||||||||||||||
30% | ||||||||||||||||||||
Others | 8% Others | |||||||||||||||||||
Energy | ||||||||||||||||||||
Greases | ||||||||||||||||||||
storage | 5% | |||||||||||||||||||
48% | 22% | |||||||||||||||||||
41% | ||||||||||||||||||||
59% | Others | 78% | Consumer & Electronics | |||||||||||||||||
Energy | 11% | |||||||||||||||||||
storage | ||||||||||||||||||||
7% | 16% | |||||||||||||||||||
Others | ||||||||||||||||||||
Electric buses | Electric vehicles | |||||||||||||||||||
2% | 8% | |||||||||||||||||||
E-bike | 3% | Mass energy Storage | ||||||||||||||||||
8% | 2% | |||||||||||||||||||
Mass energy Storage | 18% | |||||||||||||||||||
Consumer & Electronics | Electric buses E-bike |
77 Eramet - Investor presentation, May 2020
1 2019 Registration Document
Source: Eramet and Market consulting estimates
Lithium Extraction process
78 Eramet - Investor presentation, May 2020
2019 detailed figures
Positive operating performance offset by external factors and one-off items
(€m)
8 | -46 | 35 | -23 | -18 | |||
843 | 107 | -46 | |||||
1 | 2 | ||||||
3 |
+€39m
Operating performance
22-36
-268
A&D one-
off items
4 |
-€216m | ||||
External factors | ||||
17 | -19 | 630 | ||
35 | 21 | |||
-62 | 60 | |||
4 | 5 |
2018 | Mn | SLN Ni | SLN FeNi | Sand- | TiZir | HP Alloys' | Fixed | Others | A&D | Mn price* Ni price TiZir price Erasteel | Input | Currency Scope | 2019 |
EBITDA volumes | ore | volumes | ouville | volumes | volumes | costs | Logistics | margin | costs* | and Other EBITDA | |||
volumes | issue | squeeze |
1 | Ferronickel sales penalised by lower production |
on the back of disrupted mining operations | |
2 | Volumes impacted by lower global feed grade, |
as planned, due to geological conditions | |
3 | Fixed costs penalised by higher freight costs in |
Gabon |
4 | Negative squeeze impact on manganese |
alloys' margin: -€65m* |
5 |
Input costs mainly related to wage inflation, purchase of South African manganese ore, cost of fuel, metallurgical reducing agents (coke) and freight
80 Eramet - Investor presentation, May 2020
- Manganese alloys' margin squeeze: -€52m included in Mn price impact, -€13m in Input costs
€423m industrial cash capex in 2019,
o/w €192m growth capex and projects early works
€231m related to safety & environment (10%), productivity (21%) and maintenance (69%) of industrial equipment
€60m growth capex including Transgabonese railway renovation programme
€132m early works for the expansion of manganese ore production in Gabon (€51m) and for the lithium development project in Argentina (€81m)
Industrial cash capex (€m)
525 | +51% | |||
423 | ||||
350 | 132 | |||
267 | 281 | €192m | ||
230 | 60 | |||
59 | 217 | 57 | ||
175 | 38 | 47 | ||
208 | 179 | 183 | 224 | 231 |
0 | ||||
2015 | 2016 | 2017 | 2018 | 2019 |
Early capex (CLG & Li) | Growth | EHS /Productivity /Renovation |
Manganese ore dry processing in Gabon: crushing and screening equipment
81 Eramet - Investor presentation, May 2020
Net debt impacted by €(274)m non-recurring cash outflows
1 |
2 |
2019 early capex for Comilog expansion (€51m) and lithium project (€81m)
A&D logistics issue one-off items: mainly negative
impact on 2019 EBITDA (€49m) and higher level of inventory (€80m) due to delays in shipments
3 | Exceptional payments to the Gabonese state: |
advance payment of 2019 income tax (€71m), tax | |
adjustment (€43m) | |
4 | Dividends paid to Eramet shareholders (€20m) |
and Comilog minority shareholders (€86m) |
(€m) | ||
31 | ||
-291 | ||
679 | -132 | -68 |
1 | ||
A&D one-off
items
Exceptional
-160payments
-717 |
Operating CF
excl. A&D logistics issue one-offs
2 | -110 |
-113
-114 | -68 |
3 | |
-106 | -38 | |
4 | -97 | |
€287m
-1,207 |
-1,304
2018 Net EBITDA | Change | Capex excl. Early Capex | Other | A&D | Financial | Comilog | Other | Other | Dividends Other 2019 Net | IFRS 16 | 2019 Net | |
Debt | excl. A&D | in WCR | early capex (Comilog, | income & | logistics | cost | 2018 | taxes paid | Taxes | Debt, | (non- | Debt |
logistics | excl.A&D | Lithium) | expense | issue | Income tax | to Gabon | ||||||
excl. | cash) | |||||||||||
issue | logistics | |||||||||||
IFRS 16 | ||||||||||||
one-offs | issue |
impact
82 Eramet - Investor presentation, May 2020
Eramet in China
ERAMET SALES IN CHINA
Mining and Metals
Division
94%
HPA Division | ||
Mineral | 6% | |
Sands BU | ||
5% | 2019 | |
Manganese | ||
$980m | ||
BU 51% | ||
Nickel BU | ||
38% |
High Performance Alloys
Division
6%
ERAMET IN CHINA
3 Locations | 135 | |||
headcount | ||||
1 Sales office | ||||
Eramet Trading Ltd. | 31 | |||
(Shanghai) | ||||
1 Distribution center | ||||
Aubert & Duval Moulds and | 31 | |||
Die Technology co. Ltd. | ||||
(Wuxi) | ||||
1 High-speed steel drawing shop | ||||
Erasteel Innovation | ||||
Materials Ltd. | 73 | |||
(Tianjin) | ||||
83 Eramet - Investor presentation, May 2020
Manganese BU - Key figures
In €m | 2019 | 2018 |
Sales | 1,765 | 1,857 |
EBITDA | 560 | 784 |
COI | 459 | 699 |
CAPEX cash | (214) | (171) |
Operating cash flow(1) | 317 | 529 |
84 Eramet - Investor presentation, May 2020
(1) EBITDA + Δ(simplified WCR) - cash CAPEX
Nickel BU - Key figures
In €m | 2019 | 2018 |
Sales | 778 | 738 |
EBITDA | 38 | (18) |
COI | (58) | (111) |
CAPEX cash | (39) | (57) |
Operating cash flow(1) | 0 | (51) |
85 Eramet - Investor presentation, May 2020
(1) EBITDA + Δ(simplified WCR) - cash CAPEX
Mineral sands BU - Key figures
In €m | 2019 | 2018(2) |
Sales | 286 | 212 |
EBITDA | 106 | 62 |
COI | 64 | 35 |
CAPEX cash | (13) | (12) |
Operating cash flow(1) | 84 | 53 |
(1) EBITDA + Δ(simplified WCR) - cash CAPEX
(2) TiZir 50% until 30 June 2018, 100% from 1st July 2018 onwards
86 Eramet - Investor presentation, May 2020
High Performance Alloys Division -
Key figures
In €m | 2019 | 2018 |
Sales | 847 | 1,020 |
EBITDA | (26) | 46 |
COI | (68) | (8) |
CAPEX cash | (56) | (61) |
Operating cash flow(1) | (87) | (41) |
87 Eramet - Investor presentation, May 2020
(1) EBITDA + Δ(simplified WCR) - cash CAPEX
CRU price trends in manganese alloys (refined and standard) in Europe
CRU price trends for manganese alloys in Europe
€/t
between January 2015 and April 2020
2,000 | ||||||||||
1,500 | ||||||||||
FY= -7.3% | Q = -9.6% | |||||||||
1,000 | ||||||||||
FY= -4.2% | Q = -11.0% | |||||||||
500 | Q = -6.4% | |||||||||
FY= -5.5% | ||||||||||
0 | ||||||||||
Janv.-15 | Jan-16 | Janv.-17 | Jan-18 | Janv.-19 | Jan-20 | Janv.-21 | ||||
Medium-carbon ferromanganese | High-carbon ferromanganese | Silicomanganese | ||||||||
Q | Q | Q | Q1 2020 vs Q1 2019 price variation | |||||||
FY | FY | FY | FY 2019 vs FY 2018 price variation |
88 Eramet - Investor presentation, May 2020
Source: CRU spot Prices Western Europe
Reconciliation Group reporting and published accounts
€m | Full Year | Joint-venture | Full year | Full Year | Joint-venture | Full year |
2019 | 2019 | 2018 | 2018 | |||
contribution | contribution | |||||
Published1 | Reporting2 | Published1 | Reporting2 | |||
Sales | 3,671 | 0 | 3,671 | 3,725 | 100 | 3,825 |
EBITDA | 630 | 0 | 630 | 828 | 16 | 843 |
Current operating income | 341 | 0 | 341 | 574 | 7 | 581 |
Operating income | 223 | 0 | 223 | 398 | 68 | 465 |
Net income for the period - Group share | (184) | 0 | (184) | 53 | (0) | 53 |
Net cash generated by operating activities | 86 | 0 | 86 | 437 | 12 | 449 |
Industrial investments | 455 | 0 | 455 | 278 | 3 | 281 |
(Net financial debt) | (1,304) | 0 | (1,304) | (717) | 0 | (717) |
Shareholders' equity | 1,639 | 0 | 1,639 | 1,909 | (1) | 1,908 |
Shareholders' equity - Group share | 1,398 | 0 | 1,398 | 1,606 | (1) | 1,605 |
89 Eramet - Investor presentation, May 2020
- Financial statements prepared under applicable IFRS, which joint ventures are accounted for using equity method.
- Group reporting, in which joint ventures are accounted for using proportionate consolidation.
Group income statement
€m | 2019 | 2018 |
Sales | 3,671 | 3,825 |
EBITDA | 630 | 843 |
% Sales | 17% | 22% |
Current operating income | 341 | 581 |
% Sales | 9% | 15% |
Other operating income and expense | (118) | (116) |
Operating income | 223 | 465 |
Financial result | (134) | (95) |
Pre-tax income | 89 | 371 |
Share of income of equity affiliates | (7) | (3) |
Income tax | (227) | (241) |
Net income | (145) | 126 |
Minority interests | 39 | 73 |
Net income - Group share | (184) | 53 |
The data presented and commented on is adjusted data from Group Reporting, in which joint ventures are accounted for using proportionate consolidation until end-2018. The reconciliation with the published financial statements is presented in the previous page
90 Eramet - Investor presentation, May 2020
Cash-flow table
€m | 2019 | 2018 | ||
Operating activities | ||||
EBITDA | 630 | 843 | ||
Cash impact on items under EBITDA | (420) | (345) | ||
Cash from operating activities | 210 | 498 | ||
Change in WCR | (124) | (49) | ||
Net cash generated by operating activities (1) | 86 | 449 | ||
Investment activities | ||||
Industrial investments | (455) | (281) | ||
Other investment flows | 11 | (379) | ||
Net cash from investment activities (2) | (444) | (660) | ||
Free Cash Flow (1) + (2) | (358) | (211) | ||
Cash from equity operations | (117) | (123) | ||
Impact of fluctuation in exchange rate and other | (6) | (7) | ||
Right of use relating to lease contracts acquisition (IFRS16) | (12) | - | ||
(Increase) / Reduction in net debt | (493) | (341) | ||
(Net debt) at start of period (1) | (811) | (376) | ||
(Net debt) at close of period | (1,304) | (717) |
91 Eramet - Investor presentation, May 2020 | (1) Restated for the first-time application of IFRS 16 as of January 1, 2019 |
Group Balance Sheet at 31 December, 2019
4,054 | |
3,646 | 3,646 |
1,605
3,294
3,030
303 | ||||
995 | ||||
26 | ||||
616 | 760 | 717 |
4,054
1,398
241
1,091
20
1,304
2018 | 2019 | 2018 | 2019 | |||
Fixed assets | Equity-Group share | Provisions and net deferred tax | Net debt | |||
WCR | Minority interests | Financial instruments | ||||
92 Eramet - Investor presentation, May 2020
Bond maturities
€m | Amount at | Maturity | |||
Currency | Initial amount | 31/12/19 | Interest rate | ||
date | |||||
(in m) | |||||
2013 bond issue | € | 525 | 234 | Nov-2020 | 4.50% |
2016 ODIRNAN bond issue | € | 100 | 97 | perpetual | 4.00% |
TiZir bond renewal - July 2017 | USD | 300 | 285 | July-2022 | 9.50% |
September 2017 bond issue | € | 500 | 500 | Feb-2024 | 4.20% |
November 2019 bond issue | € | 300 | 300 | May-2025 | 5.875% |
93 Eramet - Investor presentation, May 2020
Shareholding at 31 December, 2019
Number of shares issued: 26,636,000
Other float
32.1%
BRGM** 1.3%
4.0%
STCPI*
94 Eramet - Investor presentation, May 2020
Duval Family:
36.9% SORAME + CEIR
25.6%
APE
- STCPI (Société Territoriale Calédonienne de Participation Industrielle): entity owned by the New Caledonian provinces
- BRGM (Bureau de Recherches Géologiques et Minières): the French Geological Survey Office
CONTACTS
Executive VP Strategy & Innovation - Investor Relations
Philippe GUNDERMANN
philippe.gundermann@eramet.com
Investor Relations Manager
Sandrine NOURRY-DABI
sandrine.nourrydabi@eramet.com
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Disclaimer
Eramet SA published this content on 11 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2020 16:08:05 UTC