Eramet: 2020 half-year results presentation

2020 half-year results

Christel BORIES

Chairman and CEO

30 July 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 - 2020 half-year results

Contents

	Introduction
1 -	Safety
2 -	Financial results
3 -	Operational performance
4 -	Strategic transformation
	Conclusion and outlook

3 Eramet - 2020 half-year results

Strong impact of the crisis on the Group's end markets: drop in metal prices and aerospace crisis (~€350m EBITDA impact)

Deteriorated price environment, o/w:

-22% on average for manganese ore1 prices

-10% on average for ferronickel'2 prices, due to significant discount to LME in H1 2020 (zero in H1 2020)

~-€280m

EBITDA impact

vs H1 2019

-8% and -3% on average for refined and standard manganese alloys'1 prices, respectively

A&D hard hit by aerospace crisis

		in the aerospace business	~-€50m
	Cancellation of 33% orders
	FCF of -€156m in H1 2020	EBITDA impact
	vs H1 2019
European and US steel decline	-€25m
	Swift adjustment of manganese alloys plants production (-20% to
	30% in May-June)	EBITDA impact
			vs H1 2019

4 Eramet - 2020 half-year results

1. CRU index: manganese ore CIF China 44% ; MC FeMn (Europe) ; SiMn (Europe)
2. Eramet calculation based on average LME prices

Excellent operating performance of the mining activities in H1 2020, confirming the success of the organic growth strategy

c.€120m of intrinsic progress in H1 2020 vs H1 2019, despite the sanitary crisis

1. Mt of manganese ore produced in Gabon, +31% vs H1 2019
2. Mt of ore transported, +42%

2.2 Mwmt of nickel ore produced in New Caledonia, +12%

1.1 Mwmt of ore exports, +120%

371 kt of mineral sands produced in Senegal, despite lower grade of deposit

OEE1 at a high level

Start-upof the 4 production lines at Weda Bay in May

1.6 Mwmt of nickel ore produced since Oct. 2019

4.2 kt2 of nickel ferroalloys produced

5 Eramet - 2020 half-year results

1. Overall Equipment Efficiency of the mine
2. In nickel content

EBITDA drop ; net income further penalised by impairment charge

due to crisis (€284m) & lithium project mothballed (€142m)

Sales €1,687m

• -7%vs H1 2019

EBITDA €120m

• vs H1 2019 (€307m)

Net income - Group share

-€623m

• vs H1 2019 (-€37m)

High Performance	Erasteel	Mining and Metals
Alloys Division	Division
20%	5%	80%
Aubert & Duval
15%

€1,687m

Mineral Sands BU	Manganese BU
8%
50%
Nickel BU
22%

FCF -€210m

Net debt €1,536m

Gearing1 before impairment

113%

Covenant holidays for H1

and H2 2020

6 Eramet - 2020 half-year results

1 Net debt-to-equity ratio, incl. IFRS 16 impact

Covid-19: swift adaptation to ensure business' continuity at mines and plants

Eramet fully mobilised to face the Covid-19 situation

Protecting employees and their families as well as local communities: Group's top priority Strict application of sanitary protocols,

Specific sanitary expenses in Gabon, Senegal and France

Eramet solidarity plan

c.€10m to fund combat against the spread and pandemic consequences in all Eramet locations Consistent with Eramet's strategy for local communities (€13m/yr spent on average) Transgabonese railway pivotal in supporting local communities in Gabon

Solidarity action towards local populations, Setrag, Gabon

7 Eramet - 2020 half-year results

1

Safety

Further strong decline in accident frequency rate in H1 2020, but still too many severe accidents

Eramet accident frequency rate (FR21,2)

22
20	20.0
18	17.3	16.8
16
14			13.6	13.4
12
				10.9
10								~-50%
						8.3
8								vs 2018
6								5.4
4								4.3
2										-20%
									vs 2019
0
2012	2013	2014	2015	2016	2017	2018	2019	H1 2020

Continued push of management in daily operations for safety routines:

Focus on risk analysis, prior to any

action

1 fatal accident at subcontractors in H1 2020:

Continued roll-outof Essential Safety Requirements to avoid severe accidents, particularly at subcontractors

9 Eramet - 2020 half-year results

1. FR2 = number of lost time and recordable injury accidents for 1 million hours worked
2. Including employees and subcontractors since 2016

2

Financial results

Robust contribution of Manganese and Mineral Sands activities in H1 2020

Group EBITDA

€307m -61%

€316m

-26%

€120m

€234m	1

1

Despite price drop, continued solid EBITDA contribution from Manganese BU

2

Mineral Sands BU driven by robust

					M&M
€52m	-15%	€44m	2	Division1
				∑	€208m
-€25m	-180%
-€5m	-€70m
-€31m		3
	SDV
H1 2019	-€61m	(-€21m)
		-€66m	4
		Erasteel
		(-€15m)

-€22m

operational performance

3

Nickel BU impacted by a depressed

stainless-steeland Sandouville's markets

4

High Performance Alloys Division contribution hard hit by aerospace and automotive crisis

	H1 2020
Manganese BU	High Performance Alloys division
Mineral Sands BU	Holding & other
Nickel BU
11 Eramet - 2020 half-year results	1 Excl. Lithium project (-€2m) included in Holding & other

EBITDA strongly affected by decline in metal prices and aerospace crisis, despite significant operating progress in mining activities

€m	H1 2020	H1 2019
Sales	1,687	1,809
EBITDA	120	307
% Sales	7%	17%
Current operating income	(32)	169
% Sales	n.a.	9%
Net income - Group share	(623)	(37)

€m	30/06/2020	31/12/2019
Net debt (Net cash)	1,536	1,304
Shareholders' equity	982		1,639
Gearing before impairment (Net debt-to-equity ratio, incl. IFRS 16	113%	78%
impact)
ROCE (COI / capital employed1 for previous 12 rolling months)				12%
	n.a.

12 Eramet - 2020 half-year results

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. ROCE at 30 June is calculated based on 12 rolling months

Net income further penalised by the accounting of a non- recurring expense of €459m

€m	H1 2020	H1 2019
Sales	1,687	1,809
Current operating income	(32)	169
Other operating income and expenses	(459)	(25)

o/w	Provisions on asset impairment tests	1	(381)	(0)
	Lithium project	2		(45)	(11)
Financial result	3			(82)	(54)
Share in income from associated companies		7	(4)
Pre-tax result				(566)	90

Income tax

4

Net income

(73)(101)

(639)(16)

o/w Minority interests' share	(16)	21
Net income - Group share	(623)	(37)

1

Sandouville

€53m

2

3

In addition to €97m of impairment, non-recurring expenses (€45m) related to costs to terminate contracts and mothball project

Lithium €97m

€197m A&D

-€28m vs H1 2019, of which -€12m increase in interest charges

€34m

4

Erasteel

-€28m decrease, mainly related to taxes in Gabon and Norway

13 Eramet - 2020 half-year results

Income highly sensitive to metal prices

SENSITIVITIES	Change	Annual impact on EBITDA
(+/-)
Manganese ore prices (CIF China 44%)	+$1/dmtu	c.€175m1
Manganese alloys' prices	+$100/t	c.€60m1
Nickel prices (LME)		+$1/lb	c.€100m1
Nickel ore prices (CIF China 1.8%)	+$10/wmt	c.€15m1
Exchange rates		-$/€0.1		c.€140m
Oil price per barrel	+$10/bbl	c.€(20)m1

14

Eramet - 2020 half-year results

1 For an exchange rate of $/€1.13

Positive intrinsic operating performance more than offset by lower prices and Covid impact on operations

(€m)		9	2	-21	-8
	145	1		2	3
307
			+€127m
	Intrinsic operating performance

				-€231m
			Other external factors
-48
-25	-10
4
~-€80m	-236
Covid					16	-20	120
impact on		-44		57
5
operations	-4
		5	6

H1 2019	Mn	Ni volumes TiZir	HPA	Other Aerospace	EU &	Other Mn price*	Ni price Other price	Input	Currency	Other H1 2020
EBITDA	volumes	volumes	volumes	crisis	US steel	Covid costs	impact	costs*		EBITDA
					decline

1	o/w additionnal nickel ore exports contribution
	(+€8m)
2	A&D volumes decrease vs H1 2019, not related
	to aero crisis (slowdown of 737 Max and GE9X
	programs' production rate)
3	o/w increase in fixed costs due to higher
	transportation cost in Gabon (-€6m)

4	Swift adaptation of production at manganese
	alloys' plants: reduction of ~20-30% in May/June
5	o/w squeeze impact on manganese alloys margin
	(-€13m)
6	o/w decrease in cost of coke & fuel oil (+€22m),
	decrease in manganese ore purchased externally
	(+€15m)

15 Eramet - 2020 half-year results

• Manganese alloys' margin squeeze: -€52m included in Mn price impact, +€39m in Input costs

Decrease in current capex by -15% in H1 2020

Industrial cash capex (€m)

450				427
400				81
350
				51
300	281
250	57
					199
						1
		156			58	2
150			14	295
		27
				43	-15%
100	224
50		115			98
0	2018	H1 2019		2019	H1 2020
	Lithium project		Growth	Current

Strict control over capex as part of 2020 cash control plan

Current Capex down -15% at €98m

o Safety & environment (19%), Productivity (28%)

1. Maintenance (59%) of industrial equipment

1

Q1 early capex related to Lithium project mothballed in April (€58m)

2

H1 growth Capex to support fast pace cash contributive organic growth, o/w:

€25m related to manganese ore volume growth at Comilog

€14m related to Setrag Renovation 2016- 2023 programme

16 Eramet - 2020 half-year results

Stable operating1 WCR (in days) at Group level thanks to efficient cash control plan, balancing aerospace crisis impact

Operating1 WCR

(M€)

Cash control plan

-11%

596

530

Aerospace crisis

	+10%
399	440

-4%

1,003 964

	M&M division				HPA division	Eramet
				H1 2020 Operating1 WCR:	H1 2020 Operating1
	H1 2020 Operating1				~+100 days of sales	WCR:
	WCR:
				o/w ~+135 days at	-4 days of sales
	~-15 days of sales
				A&D
	Operating1 FY 2019			Operating1 FY 2020
17 Eramet - 2020 half-year results				1 Sum of accounts receivables, Inventories and accounts payable

H1 2020 M&M FCF break-even, including lithium FCF impact

GCO1	28	SLN2
TTI	19	-68
			SDV		One-off
			-20	€78m
119
					-80
							Eramet FCF
						-€165m	H1 2020
FCF	FCF Mineral	FCF	FCF M&M	FCF lithium	-9	- €210m3
FCF
Manganese	Sands BU	Nickel BU	excl.
	Erasteel
BU				lithium
						-156

Group strategic transformation key to cash-flow
generation	FCF A&D FCF AHP

18 Eramet - 2020 half-year results

1. Incl. BU Holding FCF, excl.TiZir bond interest charge)
2. Incl. BU Holding FCF
3. Incl. -€31m of Group Holding FCF and -€13m of Tizir Bond interest charge

Increase in net debt, reflecting A&D's negative FCF despite significant cash generation efforts

1	2020 early capex (€58m) and cash expenses	3
	Proceeds from sale of TTI plant estimated at
	related to lithium project (€23m)
	$250m1, still subject to regulatory approvals ; not
2
	included in Net Debt as of 30 June 2020
	o/w €23m drawdown of Eramet shareholder's loan to
	holding company of PT Weda Bay Nickel

(€m)
46	-63		Lithium
	-43
		one-offs
202
-128		-€81m
-1,304	-6	-12	-29
			-81

M&M 2 operating CF HPA 3operating CF	1	-60
€142m	-€134m		-25	21

2019	EBITDA Change in	Current	Growth	Op. CF	Op. CF	Op. CF	Other inc.	Li	Financial Taxes	Change
Net	op. WCR	capex	Capex	A&D	Erasteel	Holding	& exp.,	mothballing	cost	in non-
Debt							excl Li	impact		op. WCR
						impact

-47	-7
2	-1,536

Other IFRS 16	H1 2020
(non-	Net
cash)	Debt

3

19 Eramet - 2020 half-year results

1. After deconsolidation of cash on TTI's balance sheet at the end of 2020
2. Mining & Metals division
3. High Performance Alloys division

High cash position at €1.9bn

Drawn down lines as of 30th June 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

Gearing "Covenant holidays":

June and December 2020

	Group financial liquidity (€m)
2,500		2,299
	2,245
2,000			1,941
		848
	1,144
1,500		120
		350
1,000	120
	981	981
500	30 Jun. 2019	31 Dec. 2019	30 Jun. 2020

Available cash

Drawndown line in H1 2020: BEI

Drawndown line in H1 2020: Term Loan Drawndown line in H1 2020: RCF

20 Eramet - 2020 half-year results

No major debt maturity within the next 3 years

Group gross debt at €3,477m at 30 June 2020

Average maturity of Group's debt : 3 years; c. 80% at a fixed rate

Tizir Bond maturity anticipated in 2020 (subject to transaction completed by year-end) vs initial maturity in 20221

€1,1Md€ in 2024 include repayment of credit lines draw down in H1 2020

1,830

1,141

626

121

500

258

	241	140		164		170
		41																				180
									152						161
					85
							14							12								9							9
		6
	2020	2021		2022		2023		2024

Debt maturity at 30 June 2020 (€m)

Commercial papers, banks & operating debts

Eramet bonds

TiZir bond

French State Loan to SLN

IFRS 16

341

32

300																					123
					30		27		26
									108
										21
																21					21
		9						9															15
												6				5
2025		2026		2027		2028		>2028

21

Eramet - 2020 half-year results

1 Tizir bond is callable upon closing of TTI disposal and cashed-in

3

Operational performance

Mining and Metals division

Manganese BU

Pandemic strongly affecting global carbon steel market, and consequently manganese ore and alloys demand

1

Global carbon steel production sharply down in H1 2020, resulting from lower global demand, Europe and US particularly affected (-17% and -16%, respectively) ; China +1%

2

Significant decrease in global manganese ore production, owing to temporary closure of South African mines, in particular

Global carbon steel production

1

		-6.1%
Mt	3.6%
2,100		1,867
1,802
1,800
1,500		53%
51%
1,200	938
900		881
600	53%		57%
49%		47%
300	47%		43%
0
2018	H1 2019	2019	H1 2020
China	Rest of the world

Global manganese ore production	2
(manganese content)

			-9.5%
	Mt		+5.9%
		20.3
22		19.2
20

18

16

14

12	9.9		9.0
10
8
6
4
2
0
2018	H1 2019	2019	H1 2020

25 Eramet - 2020 half-year results

Source: Worldsteel Association, Eramet estimates)

Mn ore prices temporarily supported by mines' lockdown at key industry players in Q2; prices down to ~USD 4/dmtu in July

1	Average price of manganese ore CIF China 44% at	2
	c.5.0 $/dmtu in H1 2020	Average manganese alloys prices down in H1:

Inventories at Chinese ports ~9 weeks of	MC FeMn at 1,420 €/t ; SiMn at c.950 €/t
consumption

$/dmtu	Monthly change in manganese ore and medium-carbon ferromanganese (refined) prices1 1	2	€/t
Mwmt
9			1,900
8			1,800
		1,700
	H = -8.3%
7	1,600
6			1,500
5			1,400
		1,300
4			1,200
3	H = -22.3%	1,100
	1,000
2
		900
1			800

Janv.-2015Juil.-2015Janv.-2016Juil.-2016Janv.-2017Juil.-2017Janv.-2018Juil.-2018Janv.-2019Juil.-2019Janv.-2020Juil.-2020

H	H H1 2020 vs H1 2019 price variation		Manganese ore		HY Manganese ore price average
	Medium-carbon Ferromanganese (Europe)		Ore inventories in China

26 Eramet - 2020 half-year results

1 Manganese ore: CRU CIF China 44%

Medium-carbon FerroMn: CRU Western Europe spot price

Manganese ore volumes produced in Gabon up +31% to 2.8 Mt in H1

Setrag's outstanding performance

Boosted by significant operating performance milestones

Volumes transported up +42% to 2.9 Mt, at a pace of 5.7 Mt/yr

External sales volumes up ~+50% to 2.4 Mt

Comilog & Setrag : fast cash value-creation growth dynamic

Limited additionnal Capex to support further growth options (€85m estimated for 2020, o/w €25m in H1)

+€120m of FCF over the past 18 months, thanks to increasing manganese ore volumes

					7.0
Production volumes (Mt)			+15%
	+12%		>5.5	5.7
		4.8
4.1	4.3		>+0.7
+0.2	+0.5
2017	2018	2019	2020e	H1 2020 pace	LT target

27 Eramet - 2020 half-year results

Decrease in Eramet manganese alloys production limited in H1, thanks to new market share gains

Manganese alloys production down in a declining steel market, particularly Europe and the US (lower demand -17%and -16%,respectively)

Limited decrease in sold volume (-6%) thanks to new market share gains outside Europe

Swift response in production adjustment at plants (Norway, USA, Gabon and France)

Manganese alloys' production

	kt		-9%
800
	720
		698

		397				386
400			376
			230
		264				229
			109
						83
		59
0			37

342

183 Refined alloys (incl. Mn Metal)

Sillicomanganese standard

115 High-carbon

44 Ferromanganese

2018

H1 2019

2019

H1 2020

28 Eramet - 2020 half-year results

Nickel BU

Historical decline of global stainless steel production resulting from the pandemic

1

Historical shock to global stainless-steel Production sharply down in H1 2020 (-11.8%) incl. -6.0% in China

Primary nickel demand down -13.1%

Global stainless steel production1	1
China	Rest of world

			-11.8%
	Kt	+4.2%
60,000			51,717
	49,636
50,000
40,000	53%		57%
30,000		25,578		22,569
20,000		55%		59%
	47%		43%
10,000	45%
0			41%
	2018	H1 2019	2019	H1 2020e

30 Eramet - 2020 half-year results

2

World primary nickel production slightly up, supported by continued development of nickel ferroalloy production in Indonesia (~+60%1 ), which more than offset the decline in traditional production

Global primary nickel production1 (excl. recycling)

2

Ni Class I*		Ni Class II - NPI Indonesia
Ni Class II - NPI China		NI Class II - High-grade Ferronickel & others

	Kt		+9.5%			+2.2%
				2,345
2,500
		2,142
2,000
							952
1,500				941
					1,123				1,147
1,000								590
			468											442
					464
													344										NPI
500				248	281													253
								153		241								494 kt
0				485	225				459					211	43%
2018			H1 2019	2019		H1 2020e

* Class I: product with nickel content of 99% or more

1: Eramet estimates

Current LME prices do not reflect market fundamentals, hence discount in FeNi selling price

Lower demand and stable production resulting in oversupply of around 110kt of

nickel in H1 2020

1

LME and SHFE inventories up vs. low levels at end-2019to reach 260 kt at end-June(~9 weeks of consumption)

2

H1 2020 average LME prices at $5.65/lb ($12,455/t), up ~+1%

Ferronickel prices down -10% in H1, reflecting a discount to

LME (zero in H1 2019)

LME Nickel price	2
USD / lb	USD/tonne

			1	Nickel Stocks
LME Stocks	SHFE Stocks	Ni price	(tonnes)

9.1

8.2

7.3

6.4

5.4

4.5

3.6

2.7

	20 000																																					600 000
																											FY=+6.1%									570 000
	18 000																																		540 000
																																					510 000
																																						480 000
	16 000																																					450 000
																																					420 000
																																						390 000
	14 000																																					360 000
																																					330 000
																																						300 000
	12 000																																					270 000
																																					240 000
																																						210 000
	10 000																																					180 000
																														H = +1.1%
																																150 000
																																						120 000
	8 000																																					90 000
																																						60 000
																																						30 000
	6 000																																					-
	Jan-15	Jul-15	Jan-16	Jul-16	Jan-17	Jul-17	Jan-18	Jul-18	Jan-19	Jul-19	Jan-20	Jul-20
31 Eramet - 2020 half-year results			H	H1 2020 vs H1 2019 price variation FY	FY 2019 vs FY 2018 price variation

SLN rescue plan being challenged, but achievable if all conditions are met

SLN rescue plan based on 3 requirements to reduce cash cost

1

4Mwmt/year	✔ Government authorisations on
of nickel ore exports:	4Mwmt/year
Societal acceptance is key as
	✔ well as support of the Provinces

2	Agreements signed with
✔
	unions1
Improving productivity:	Societal disruption strongly
✔ impacting FeNi production

	Nickel exports (Mwmt)			6.0
6
5				4.0
4
3			2.5
2	1.2	1.6
1
0
2018	2019	2020e	2021e	Target

3

Reducing energy costs:

least competitive cost in nickel industry

• 1/3 of target reached

Additional +2Mwmt/yr of export needed

o Critical to achieve cash cost reduction of $1.3/lb

o Application submitted to local authorities for approval

+1Mwmt = -$0,2/lb

cash cost decrease

32

Eramet - 2020 half-year results

1 In particular mining activity 7/7 and 21/24h

Average cash-cost down 7% in H1 2020, commitment of all stakeholders still critical

		SLN's cash-cost (USD/lb)
6.05		0.05
	-0.27	-0.27		Impact of ore
			exports
		0.38
		-0.12	-0.17	5.65
	Exports volume
	Societal disruptions		5.39
		impact & other one-offs
		at mines

H1 2019	Ni ore	Productivity	FeNi vol. & other Other	Fuel oil,	€/$ FX	H1 2020	June exit
cash-cost	exports	(mines & plant)	one-offs at mines	coke, others	rate impact	cash-cost	rate

Cash-cost :USD 5.65 /lb on average in H1 2020 ; breakeven cost at USD 6.19/lb

At end-June,only €74m remaining undrawn out of the €525m in loans granted by Eramet and the French govt. in 2015 and 2016

Speed-up of SLN rescue plan critical, together with commitment of all stakeholders

33 Eramet - 2020 half-year results

1 Incl. CAPEX & financial expenses ; H1 2020 CAPEX related to 2020 tonnage; financial costs booked in SLN's company financial statements

Mineral sands BU

Zircon prices down 15 % in H1 2020

1

Average price of zircon reached USD 1,355/t in H1 2020, down -15%

Global demand for zircon down reflecting trends in ceramics market, strongly impacted by pandemic

Strong decrease in production resulting in supply/demand balance in oversupply

Monthly premium zircon prices1

1

1,600

$

/t

1,500

FY

= +7.4%

1,400

1,300

1,200

H

= -14.5%

1,100

1,000

500

Janv.-16

Juil.-16Janv.-17Juil.-17

Janv.-18Juil.-18Janv.-19

Juil.-19Janv.-20

Juil.-20

H

H1 2020 vs H1 2019 price variation

FY

FY 2019 vs FY 2018 price variation

35

Eramet - 2020 half-year results

1 Source Zircon premium: FerroAlloyNet.com, Eramet analysis

Robust CP slag prices in H1, despite pandemic affecting pigment end-markets

1
Average price of CP1 grade titanium slag up +7% at USD 798/t in H1 2020
Nevertheless, global demand for Tio2 pigments, the main end-market for titanium products2,
also contracted sharply, impacted by the pandemic
As global production remained strong in H1, oversupply is expected in 2020
Monthly change in CP grade titanium dioxide slag prices3	1

840			H = +6.9%

770

700

FY = +9.8%

630

560

Janv.-16Juil.-16Janv.-17Juil.-17Janv.-18Juil.-18Janv.-19Juil.-19Janv.-20Juil.-20

1. Q1 2020 vs Q1 2019 price variation

FYFY 2019 vs FY 2018 price variation

36 Eramet - 2020 half-year results

1. For the production of pigments through chloride process
2. Titanium dioxide slag, ilmenite, leucoxene and rutile
3. Source CP slag: Market consulting, Eramet analysis

Strong operational performance of mineral sands activity

1

Strong operational performance at GCO in Senegal, confirmed over the past 3-yr(OEE rate + 11%)

Production level still impacted by lower grade of the deposit area currently mined

Sales volume up +13% at 33 kt reflecting robust demand for GCO products

HMC production1	1	OEE2
(GCO, Senegal)		(GCO, Senegal)

2

Titanium slag production level at TTI in Norway in line with plant nominal capacity

Sales volume slightly up +3% at 100 kt

Titanium dioxide production	2
(TTI, Norway)

in kt

-3%

in kt	-2%
800		735
400	378		371
0	H1 2019	2019	H1 2020

in t/hour				+11%
5 000						4 590	4 602
				4 134 4 347
4 000			3 568
		3 160
3 000
2 000	1 995
0	2014	2015	2016	2017	2018	2019	H1
							2020

200189

101		98
100
0
H1 2019	2019	H1 2020

37 Eramet - 2020 half-year results

1. HMC: Heavy Mineral Concentrates
2. Overall Equipment Efficiency of the mine

High Performance Alloys division

After brutal market impact in H1, current consensus for aerospace forecasts a return to 2019 volumes by 2025 only

Aerospace: ~70% of A&D sales

Others

29%

71%

Aerospace

Global aerospace market down ~50% in 2020,

incl. pre-Covid Boeing 737 production cuts

				181	186	187	187	187	187
			169				169	171
159 159	-48%			157	162
	152			148
			143
	131
		126
		104
	83
2019	20	21	22	23	24	25	26	27	2028

Average monthly aircraft production rate1 per year, including single aisles, wide-bodies and regional jets

Pre-CovidPost-Covid

39

Eramet - 2020 half-year results

1 Source: Eramet analysis based on aerospace sector analysts consensus

Huge impact of the crisis on A&D financials, already weakened by quality non-conformities

A&D Sales by segment

792							-13%
							642
558
							484
	307		268
104	223			70	189
						35
130			88		42		37
	49

Q2 aero sales down -50% on 2018 quarterly average before impact of quality non-conformities

A&D quarterly aero sales

147
	121	114	-50%
			75
2018 Q average	2019 Q average	Q1 2020	Q2 2020

2018 H1 2019 2019 H1 2020

Aerospace Energy & Defense Others

36 A&D EBITDA

-4				-€48m
-27
* o/w -€48m aero crisis impact	-52*

2018 H1 2019 2019 H1 2020

EBITDA significantly down at -€52m,reflecting cost structure (~60% of fixed costs)

FCF at -€156m (affected by brutal slowdown of aerospace supply chain leading to higher operating WC)

Specific action plan to limit cash burn: substantially reduce raw material supplies, cut temporary workers (-50% already achieved), obtain partial unemployment compensation (€9m), deliver more effective collection of overdue trade receivables….

~-20% decrease in A&D sales expected in 2020

Significant overstaffing at A&D that needs to be addressed

40 Eramet - 2020 half-year results

Erasteel: crisis impact mitigated in H1 thanks to specific action plan on cash

Erasteel sales by segment

Sales down -34% affected by downturn in automotive

227

-34%

205

market, accounting for ~ 50 % of sales:

Resilience of order intake of high-end products made out of powder metallurgy, Erasteel being market leader

	213	116
						189
										76
					109
											70
										16
			14
					7					6
	2018	H1 2019	2019	H1 2020
		High-speed steels,			Recycling
		Tooling & Specialties

EBITDA significantly down at -€15m,despite swift action

plan to mitigate crisis effect:

Specific commercial action to limit order cancellation or postponement

Most costs flexed to lower volumes including staff and maintenance costs

Lower raw materials consumption, following adjustment of melting activity

10 EBITDA

	1
-2	-€13m

Shutdown of recycling business until mid-May

FCF at -€9m,reflecting operating WC improvement (-29days in terms of number of sales).

-15

2018 H1 2019 2019 H1 2020

41 Eramet - 2020 half-year results

4

Strategic transformation

1st metal tapping at Weda Bay's

nickel ferroalloys plant

Acceleration of recovery or repositioning of least performing assets critical in light of current crisis: ongoing strategic review including A&D possible divestment

				No cash outflows in the
	To be accelerated		Significant cash return	short term
			3
		2
1
			EXPAND our portfolio in
		GROW in our attractive
FIX / REPOSITION our least	metals for the energy
businesses
performing assets	transition
A&D	Manganese ore	Lithium
>	Ongoing strategic review,	> +15% production target in 2020	>	Project mothballed
	including A&D possible	Weda Bay Nickel (Indonesia)	Nickel and cobalt salts
	divestment
SLN	> Mine start-up in Q4 2019	>	Weda Bay diversification
			towards battery products
> New business model based on	>	1st tonnes melted in April 2020
	ore exports and metallurgy	Mineral sands	Li-ion battery recycling
		>	R&D programme
>	New Caledonia support	> Focus on mine with high
	needed		potential
Sandouville	> Agreement signed in May to sell
> At cross-roads		TTI
Erasteel
> Cash and customer-focused
>	Ongoing strategic review
43	Eramet - 2020 half-year results

CSR commitment: ongoing improvement of performance

CSR strategy: moving forward on the 2018-2023 Roadmap

13 medium-termobjectives monitoring with results published on annual basis

Significant progress recognised by Global Compact 'Advanced-level Communication on Progress'

Improved non-financial ratings in FY19, confirmed by new 2020 ISS ESG Rating

ISS ESG Corporate rating - June 2020

Awarded Prime status for first time

First decile in the ISS ESG Mining and Metals industry group

Overall rating of B- compared with 2017 rating of C

44 Eramet - CEE 2020

Conclusion & outlook

Acceleration of strategic transformation more essential than ever to go through the crisis

Still a highly volatile and uncertain environment, all sectors of activity combined

In order for the Group to bounce back as soon as the global economic situation becomes more favourable:

Strict cash control

Options of organic growth with short term payback in mining activities Strategic review of least performing assets, including possible A&D divestment

EBITDA guidance for 2020 still suspended

46 Eramet - 2020 half-year results

Q&A

Weda Bay's nickel mines, island of

Halmahera, Indonesia

Appendices

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

Strong cash flow generation

Manganese ore capacity

(in Mt)

7.0

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

Upcoming opening of new Okouma plateau, boosted by dry processing

• production capacity up c.25% to c.6 Mt
• €85m cash capex estimated in 2020, o/w €25m already expensed in H1

		>5.5	6.0			Continuing railway line renovation: already
	4.8		+25%	+70% transport capacity achieved since end-
4.3
					2016
						Strong commitment to E&S: employment,
						biodiversity, water
2018	2019	2020e > 2020	LT

49 Eramet - 2020 half-year results

Weda Bay: highly competitive nickel ferroalloys production in Indonesia, 4 production line operational since May

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 metallurgical plants on Halmahera island, o/w JV plant

1.6 Mwmt of nickel ore produced since Oct. 2019

Ongoing nickel ferroalloys JV plant ramp- up, ahead of schedule

Key milestone: 1st metal tapping in April

Gradual ramp-up: target to reach nominal capacity in H2

No capex for plant construction for Eramet

ATTRACTIVE METRICS

Production		Production
target - Ore
	target
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 NICKEL FERROALLOYS PRODUCTION IN INDONESIA

50 Eramet - 2020 half-year results

1 Mwmt: million of wet metric tons	3 Mt: million of dry metric tons	5 % held in Strand MineralsPte Ltd,
(production)	(resources)	which owns 90% of PT Weda Bay
2 In nickel content in nickel	4 #1 global stainless steel producer	Nickel (see 2019 URD)
ferroalloys

Agreement for the sale of TiZir's Norwegian plant, announced on May 14th, regulatory approvals still ongoing

STRENGTHENING OF ERAMET'S BALANCE SHEET		CONTINUED DEVELOPMENT OF THE UPSTREAM BUSINESS
		IN MINERAL SANDS

Sale agreement signed on mid-May with Tronox, one of the main producers of pigments and titanium dioxide

Realization of the full value of TiZir's

Norwegian plant

100%	EBITDA
of TTI shares	multiple
sold	~ 8x1
Sale price	LT supply
contract to
300 M$	TTI
	(ilmenite)

Operation subject to the satisfaction of certain conditions including regulatory approvals

Strengthening of the Group's balance sheet with significant debt reduction: approx. $250m

Control of GCO by Eramet maintained2

A world-class deposit, located in Senegal, a very stable country:

• More than 50 years of resources (35 Mt of mineral sands)
• 735 kt of mineral sands produced in 2019 : principally zircon and ilmenite

Integrated processing and logistics facilities

CSR : a model in terms of relationship with host communities

Development opportunities in the mining business, in line with the Group's strategy:

• Continued improvement of operational performance
• Debottlenecking options under review

51 Eramet - 2020 half-year results

1. TTI's EBITDA calculated on the basis of exchange rates of May 12th 2020
2. At 90%, 10% being hold by the Senegalese State

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 crisis
• In such context, cash preservation measures to be strengthened and accelerated

As a result, in 2020:

• Expense of c. €142m, incl. an asset impairment charge (€97m)
• Cash outflows of c. €80m, incl. cash capex (€58m)

All measures taken to allow a restart in the best conditions when possible

(Comp: competitor)

Direct extraction process

52 Eramet - 2020 half-year results

1 LCE = Lithium Carbonate Equivalent

Manganese BU - Key figures

In €m	H1 2020	H1 2019
Sales	839	904
EBITDA	234	316
COI	179	271
Cash Capex	82	91
Operating cash flow	137	154
FCF	119	40

53 Eramet - 2020 half-year results

Nickel BU - Key figures

In €m	H1 2020	H1 2019
Sales	366	346
EBITDA	(70)	(25)
COI	(114)	(70)
Cash Capex	18	10
Operating cash flow	(45)	(48)
FCF	(88)	(77)

54 Eramet - 2020 half-year results

Mineral sands BU - Key figures

In €m1	H1 2020	H1 2019
Sales	139	139
EBITDA	44	51
COI	23	30
Cash Capex	6	4
Operating cash flow	51	41
FCF	34	22

55 Eramet - 2020 half-year results

1 Full consolidation of Mineral Sands activity as of 1st July 2018, following the acquisition of shares in Mineral Deposits Limited, an Australian company that held a 50% stake in TiZir.

High Performance Alloys Division - Key figures

A&D and Erasteel

In €m	H1 2020	H1 2019
Sales	345	423
EBITDA	(66)	(5)
COI	(93)	(27)
Cash Capex	26	29
Operating cash flow	(134)	(85)
FCF	(164)	(76)

56 Eramet - 2020 half-year results

CRU price trends in manganese alloys (refined and standard) in Europe

CRU price trends for manganese alloys in Europe

€/t

between January 2015 and June 2020

2,000
1,500
			FY= -7.3%	H = -8.3%
1,000
			FY= -4.2%	H	= -8.0%
500				H	= -2.8%
			FY= -5.5%
0
42000	42500	43000	43500		44000

H				Medium-carbon ferromanganese		High-carbon ferromanganese		Silicomanganese
H	H H1 2020 vs H1 2019 price variation
FY	FY	FY FY 2019 vs FY 2018 price variation

88

Eramet - 2020 half-year results

Source: CRU spot Prices Western Europe

Cash-flow table

€m	H1 2020	H1 2019	FY 2019
Operating activities
EBITDA	120	307	630
Cash impact on items under EBITDA	(178)	(142)	(420)
Cash from operating activities	(57)	165	210
Change in WCR	67	(172)	(124)
Net cash generated by operating activities (1)	10	(7)	86
Investment activities
CAPEX	(162)	(131)	(455)
Other investment flows	(56)	(27)	11
Net cash from investment activities (2)	(220)	(158)	(444)
Free Cash Flow (1) + (2)*	(210)	(165)	(358)
Cash from equity operations	(3)	(45)	(117)
Impact of changes in exchange rates and in accounting methods	(17)	(1)	(6)
(Increase) / Reduction in net debt	(230)	(211)	(493)
(Adjusted net debt) at start of period1	(1,304)	(811)	(811)
(Net debt) at close of period	(1,533)	(1,022)	(1,304)

58

Eramet - 2020 half-year results

1 Restated for the 1st application of IFRS 16 as of January 1st, 2019

Group Balance Sheet at 30 June 2020

4,054		4,054
	3,691		3,691
		1,398	757
			225
3,294		241
2,870
		1,132
		1,091
			14
		20
		1,304	1,536
	687
760
	134		27
31/12/2019	30/06/2020	31/12/2019	30/06/2020

Fixed assets		Equity-Group share		Financial instruments
WCR		Minority interest		Net debt
Asset held for sale		Provisions and net deferred tax		Liabilities associated with assets held for sale

59 Eramet - 2020 half-year results

Bond maturities

€m			Amount at	Initial
Currency	Initial amount	30/06/2020	Maturity	Coupon
			(in m)	date
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	270	July-2022	9.50%
September 2017 bond issue	€	500	500	February	4.20%
2024
November 2019 bond issue	€	300	300	May-2025	5.88%

60 Eramet - 2020 half-year results

Shareholding at 30 June 2020

Other float	SORAME + CEIR
32.1%
(Duval Family)
36.9%
Number of shares issued

26,635,887

BRGM** 1.3%

4.0%

STCPI*

25.6%

APE

61 Eramet - 2020 half-year results

• 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

[e-mail]

Investor Relations Manager

Sandrine NOURRY-DABI

[e-mail]