Aperam : November 4, 2020 – Roadshow Presentation – Third quarter 2020 results

Q3 2020 results

4 November 2020

ESG leader with a sustainable dividend yield

1

Disclaimer

Forward-Looking Statements

This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although Aperam's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Aperam's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of Aperam, in particular, the length and severity of the recent COVID-19 (coronavirus) outbreak, including its impacts in the sector, macroeconomic conditions and in Aperam's principal local markets, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in Aperam's filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier). Aperam undertakes no obligation to publicly update its forward-looking statements or information, whether as a result of new information, future events, or otherwise.

2

Content

1.	Q3 2020 highlights	page	4
2.	Financial results	page	11
3.	Value Strategy	page	16
4.	ESG		page	25
5.	Business Overview	page	38
	• Group Segments & corporate structure	page	39
	• Stainless & Electrical Steel Europe	page	45
	• Stainless & Electrical Steel South America	page	50
	•	Services & Solution	page	56
	•	Alloys & Specialties	page	59
	•	Appendix	page	63
				Musée des Confluences in Lyon, France. Architect: Coop Himmelb(l)au ©

Sergio Pirrone. Stainles steel used: Aperam 316L/1.4404 with Uginox Met

3

Q3 2020 Operational highlights

Solid results driven by rebounding volumes and tight cost control

Q3 2020 key developments

Strong volumes supported by our flexible multi-product business in Brazil and the recovery in Europe

Intense pricing pressure in Europe

Solid EBITDA and FCF via tight cost control & working capital management

Good Leadership Journey© progress. EUR13m gains* in

Q3 (cum. total EUR184m) - Phase 4 has been outlined

EU launched anti-dumping investigation on cold-rolled imports from Indonesia & India (25% of Q3 CR imports)

2020 SBB revoked due to prolonged COVID recession

3.7m shares from 2019 SBB were cancelled in September

Aperam delivers a solid performance in a challenging market environment

* Annualized gains

4

Q3 2020 Financial highlights

Economic recovery outweighs the usual seasonal headwind

Solid EBITDA, positive net income & positive FCF

	EURm	Q3 20	Q2 20	qoq	Q3 19	yoy
	Sales	841	818	3%	972	-13%
	adj. EBITDA	65	49	33%	79	-18%
	EBITDA	65	49	33%	79	-18%
	Basic EPS (EUR)	0.30	0.27	13%	0.47	-36%
	Steel shipments (000t)	432	376	15%	418	3%
	adj EBITDA/tonne (EUR)	150	130	15%	189	-20%
	adj EBITDA margin	7.7%	6.0%	29%	8.1%	-5%
	Operating cash flow	77	57	35%	70	10%
	CAPEX	-22	-23	-4%	-26	-15%
	Free cash flow*	55	34	62%	45	22%
	Dividends paid	-35	-37	-5%	-35	0%
	Net financial debt	111	123	-10%	172	-35%

Q3 key comments

• Shipments were driven by our multi product business in Brazil and the recovery in Europe
• Adj EBITDA benefits from higher volumes and strict cost control despite high pricing pressure in Europe
• EPS increased qoq despite a normalized fin. result and a normalized tax rate
• Strong operating CF with 118% EBITDA to cash conversion. FCF more than covers the dividend
• Balance sheet is strong with 0.4x NFD/EBITDA. Liquidity position improved further to EUR810m
  (41% cash / 59% undrawn lines)
• Remaining PIS/Cofins EBITDA contribution will be booked pursuant to supreme court decision

Tight cost control and working capital management form the basis for improving results

*before dividend and share buyback

5

Market update

Demand has recovered during Q3 but high price pressure prevails in Europe

Automotive & Transport

Consumer Goods

Construction

Food, Health & Catering

Industry, Energy,

Chemical

End markets continue to show clearly diverging trends

• Production gradually resumed both in Europe and Brazil but remains below pre COVID level.
• Demand back to its normal level in Q3 with a stable outlook into Q4
• Normal level of activity but pipeline of new projects is still weak
• Normal demand except for catering due to COVID effect on tourism & restaurants
• Few projects due to low oil price. Pulp & paper is strong in Brazil

Inventory (in t) is down yoy - inventory days remain elevated due to demand drop

CR imports remain high due to generous safeguard quotas Anti-dumping duties successfully limit HR imports

90,000	100
85,000	90
80,000	80
75,000
70
70,000
65,000	60
60,000	50

16 Q1

16 Q2

16 Q3

16 Q4

17 Q1

17 Q2

17 Q3

17 Q4

18 Q1

18 Q2

18 Q3

18 Q4

19 Q1

19 Q2

19 Q3

19 Q4

20 Q1

20 Q2

20 Q3

German distributors inventory (t)

Days

Weak

Normal

Strong

40%

	400,000
										20%
tonnes	300,000
									0%
	200,000
										-20%
	100,000											-40%
	0											-60%
		Q1-16	Q3-16	Q1-17	Q3-17	Q1-18	Q3-18	Q1-19	Q3-19	Q1-20	Q3-20
	Indonesia		All other		YoY %		Market share %

6

Leadership Journey® Phase 4 (2021-2023)

Combining growth, mix and cost improvements to restore a normal level of profitability

Aperam foundation

Progressive dividend policy

High cash generation

distribution Own business-e &

mill stainless Only America .S in

cost & Performance Europe in leader

stable Differntiated, business Alloys

leading Industry position ESG

Value added

Cost improvement

Growth

De-commoditization

distribution

Solid balance sheet

LJ 4 adds new dimensions to a proven cost improving track record

7

Leadership Journey® Phase 4 (2021-2023)

Footprint improvement unlocks structural cost advantages and enables future organic growth options

Addressing the three pillars of value added growth

Structural cost		Differentiation		Growth
• Cost leadership in Europe		• ESG leadership		• De-commoditization(accelerates)
• Leadership journey (Phase 4)		• Strong balance sheet		• Distribution growth (accelerates)
• Genk downstream ramp up		• Financial discipline		• New: Alloys growth plan
• New: Footprint specialization		• Value oriented M&A approach		• New: Brazil growth
• New: SG&A improvement

Footprint enables	Cost improvement & growth
2020	2021	2022	2023	2024	2025
		Earnings increase

Prel. target gains €150m	Total cash out ~€90m
2021-23	(capex & restr.costs)

Aperam adds mix improvement and growth to a solid foundation of cost leadership

Capex / implementation

Earnings contribution not included in prel. Phase 4 target gains

8

Outlook

Q4 2020 guidance & other forward looking items

Q4 2020 outlook (assuming no second wave of COVID related disruptions):

• Q4 2020 shipments are expected at a slightly higher level qoq
• Adj. EBITDA is expected at a higher level versus a strong Q3 2020 base
• • Seasonally stronger quarter in Europe
  • Robust demand in Brazil and a mix improvement
• Net financial debt is expected to decrease

Other items:

• 2020 group capex is confirmed at ~EUR100m (incl. Leadership Journey© and Genk downstream)
• 2020 P&L effective tax rate expected at 10 - 15%

Aperam looks with confidence into Q4

²

9

Corporate Access

Post Q3 2020 schedule

•	11.	Nov	Global Natural Resources Conference	Goldman Sachs
•	12.	Nov	Digital Sustainability Forum	Oddo
•	16.	Nov	Midcap CEO Conference	Exane BNPP
•	18.	Nov	Investor calls	Deutsche Bank
•	19.	Nov	Investor calls	Deutsche Bank
•	1.	Dec	CEO Fire side chat	Morgan Stanley
•	7./8. Jan	Oddo BHF Forum 2021	Oddo BHF

We are looking forward to keep up the dialogue with you

10

Financial Results

Middle East Training Center, Beirut Rafic Hariri International Airport, Lebanon - Khatib & Alami Executed using grade316L with Uginox Méca 8ND fini

11

Financial results

Q3 2020: The volume recovery and strict cost control move

Aperam post the trough

Volumes increase qoq and yoy due to EU recovery and		Q3 adj. EBITDA reflects higher volumes and intense
our multi product business model in Brazil		EU pricing pressure

11.0%

501

	480				8.7%	8.5%
467	465		123	8.0%	8.1%
						7.7%
		438		6.9%		6.7%
		432
			95	6.0%
		418	90
				85
			81	79
		402

70	65
376
49

Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20	Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20
Shipments (thousand metric tonnes)	Adj. EBITDA (m€)	Adj. EBITDA as % of Sales

Volumes at the high end of guidance and strict cost discipline enable solid EBITDA

12

Financial results

Q3 2020: Brazil and A&S add stability amid pricing headwind in upstream Europe. Volumes benefit S&S

Stainless & Electrical Steel		Services & Solutions		Alloys & Specialties

142
	118
		101
			adj EBITDA*
			(EURm)
57			adj EBITDA/t
	43
	42	(€)
Q3 19	Q2 20	Q3 20

• Shipments increased 4% qoq, 15% yoy due to recovery in Europe and strong demand in Brazil
• QoQ: Europe adj EBITDA reflects higher volumes paired with pricing pressure. Brazil was seasonally strong
• YoY: adj EBITDA declines as stable volumes and lower costs were more than compensated by a deteriorating mix and a price/cost squeeze

54		61
	38
			adj EBITDA*
			(EURm)
9		10	adj EBITDA/t
			(€)
	5
Q3 19	Q2 20	Q3 20

• Shipments increased by 25% qoq but declined 1% yoy
• QoQ higher adj EBITDA mainly reflects the strong increase in volumes
• YoY: slightly higher adj EBITDA as stable volumes and neg inventory valuations were compensated by better pricing and fixed cost management

1,558		1,515
	1,264
			adj EBITDA*
			(EURm)
12			adj EBITDA/t
11	10	(€)
Q3 19	Q2 20	Q3 20

• Shipments decline by 24% qoq and 14% yoy
• QoQ: slightly lower adj. EBITDA was driven by lower volumes. A better mix, strict cost management and a less negative inventory valuation loss partly compensated for this
• YoY: lower adj EBITDA was driven by lower volumes that outweighs better mix, margins and cost improvements

Adj. EBITDA of 150 EUR/t in Q3 2020: up EUR20/t qoq but still down EUR39/t yoy

* Difference with total Aperam's quarterly adj EBITDA due to Others & Eliminations line

13

Financial results

Q3 2020: Brazil is balancing Europe. A&S is stable and S&S has a volume benefit resulting in a solidly positive EPS

Stable upstream, stable alloys, recovering S&S		EPS increase despite normalized financial result
	and higher tax rate

141 150

123

90	95	85
81	79

70 65

49

18 Q1

18 Q2

18 Q3

18 Q4

19 Q1

19 Q2

19 Q3

19 Q4

20 Q1

20 Q2

20 Q3

S&E A&S S&S Other

0.87
		0.69
	0.59
		0.47
72		0.36	0.36
0.30				0.30
			0.27
		57
	49
		37
	25	29	29	21	24

Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20

Net result (m€)

EPS (€)

Positive net income line even in challenging times

*Q4 2018: Financial results includes a EUR18m gain related to the convertible bond due to the expiry of put option by bondholders *Q1 2019: Financial results includes a	14
EUR11m charge related to the convertible bond due to accelerated amortization of the premium (reversal of the Q4-18 gain) *Q4 2019: Income tax expense contains a
EUR26m impairment of the deferred tax asset *Q2 20 Financial result contains a EUR15m interest payment on Brazil PIS/COFINS position

Financial results

Q3 2020: Solid cash generation with 118% cash conversion due to tight working capital management. NFD drops

Lower working capital despite higher volumes		NFD decreases qoq but slight increase YTD
FCF more than covers dividend		due to dividend payment

EURm

200

140

100

			72		55
	35	24	45	18	34
0
15

-100

-200
18 Q3	18 Q4	19 Q1	19 Q2	19 Q3	19 Q4	20 Q1	20 Q2	20 Q3
Change in working capital	Capex	Free Cash Flow

Aperam's dividend rests on a solid balance sheet and a structurally high FCF generation

* Includes interest, taxes and other items

15

Value Strategy

Adobe stock

16

Investment case & value strategy

Guiding principle: Being a sustainable safe and profitable company

Aperam foundation

				Lowest cost footprint
Industry leading	in Europe
cash flow &		& sole producer
financial discipline	in S. America

Strong balance sheet

& highest dividend Self help strategy

yield

(Leadership Journey©)

Solid cash generation with strong shareholders' return.

New projects and Leadership Journey© will further improve Aperam's profitability

17

Investment case & value strategy

Financial policy: Strong balance sheet, investment in long term growth & sustainability and solid cash returns to shareholders

Financial Policy		2020

Company Sustainability, Upgrade and Transformation

Value accretive growth & M&A

min IRR 15%

~EUR50m maintenance

~EUR15m Leadership Journey©

~EUR35m capex in Genk

new CRM & APL

Sequence

Dividend

Dividend of EUR 1.75

=ෝ EUR140m

base dividend, anticipated to progressively increase over time*

Maintain a strong balance sheet consistent with Investment Grade ratios

Target NFD/EBITDA ratio of <1x (through the cycle)

Utilize remaining excess cash in most optimal way



Share buyback or special dividend

Well positioned for value accretive opportunities while maintaining a solid financial policy

with attractive cash payout to shareholders

*Base dividend review in the (unlikely) event that NFD/EBITDA exceeds 1x.

18

Investment case & value strategy
Leadership Journey© Self help has turned Aperam into	a
resilient, profitable and cash generative company
Phase 1 (USD350m):	Phase 2 (USD225m):
		Phase 3 (EUR200m):
2011-13 Restructuring	2014-17 Asset upgrade			2018-20 Transformation
Realized cost savings		Number of production lines		Headcount

1000 EURm

-26%800

600 400 200 0

2011	2012	2013	2014	2015	2016	2017	2018	2019	2020e	2021e	2022e	2023e		2011			2019
			Base price									Adj EBITDA

EURm

-32%

368340

-9%

2011

2019

Free cash flow

EURm

165%

281

106

2014

2019

2014

2019

2014

2019

Source: CRU (base price), Aperam accounting data

19

Investment case & value strategy

Track record: Aperam a solid performer even in challenging times

Solid operating performance despite market headwind		Transformation yields a positive net income even
		in a recessionary market environment
				11.8%	12.7%								2.47	4.00	3.39
			10.6%		10.8%					1.99			1.82
								0.91
		8.9%			567		8.0%
												320
	5.7%				504								286
			455				-1.08	-0.96			193
		451					155		148
4.1%		368					71
					340
								-86	-74
168	220
								2012	2013	2014	2015	2016	2017	2018	2019
2012	2013	2014	2015	2016	2017	2018	2019
	Adj. EBITDA (m€)		adj. EBITDA margin			Net result (m€)		EPS (€)

A strong balance sheet is corporate policy

26%	23%
	20%
		14%
			6%		2%	3%
619				-2%
501	442
		290	147	-63	48	75

2012 2013 2014 2015 2016 2017 2018 2019

Net debt (m€)

Gearing (%)

2019 volumes reflect soft real demand in both EU and Brazil

and trade war induced imports

1,683

1,728

1,813

1,886

1,917

1,936

1,972

1,786

2012 2013 2014 2015 2016 2017 2018 2019

Aperam shipments (kt)

20

Investment case & value strategy

Resilience: Strong balance sheet, high liquidity and low maintenance capex

A strong balance sheet forms a solid base		Low maintenance capex + solid investment
in a volatile industry*		in growth improvement

3.7
	2.3
		1.1
619		0.6	0.3		0.1	0.2	0.4
		-0.1
501	442
		290	147	-63	48	75	111
	Net debt (m€)		Net debt /	LTM EBITDA

200
175
150			47	84
125				61
100		34
44
75			117	108		~50
50	75	84	90
25			~50
0
	2015	2016	2017	2018	2019	2020e
	Replacement capex (EURm)	Growth / Improvement

		Balanced maturity profile & ample liquidity		Flexible mix and broad range of financing instruments2
	800
	700								Schuldschein
	600	No credit arrangement contains				Leasing &
	500
	any earnings related covenant					other
	400
	300
	200
	100
	0	2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
	EIB loan	Leasing & other	Schuldschein					EIB loan
	Com. Paper & other	Cash & equiv.	RCF

*Aperam intends to maintain a strong balance sheet that is consistent with investment grade ratios	2Financing documentation is in line with investment grade standards and
contains no pledges of assets or earnings covenants	21

Investment case & value strategy

Shareholder focus: We care about investors and can support it due to a high & stable FCF

Solid cash generation through the cycle

High profitability

Low cash taxes*

Low cash interest

126%				85%			112%
	69%		78%	67%
			59%
		45%
			354	377	374		400
					295
212	152	184
2012	2013	2014	2015	2016	2017	2018	2019
Cash-flow from operations (m€)	Cash flow conversion

Solid average 8% free cash flow yield*

	500	10%	9%	8%		12%
	400
	6%	6%	6%	5%
	300
					281
	200
EURm	85	241	260	211
100
58	106		108
	0
	-100
	-200
	-300
	-400
		2012 2013 2014 2015 2016 2017 2018 2019
		Capex	∆ WC		FCF		FCF yield

Best in class cash distribution to shareholders

(EURm)

		70	93
	90
87	106	130	142	140
2016	2017	2018	2019	2020e**
	Dividends	Share buy backs

*at year end 2019 the recognized deferred tax asset on tax losses amounted to EUR144m and the unrecognized deferred tax asset	amounted to EUR438m
**The EUR100m 2020 SBB was cancelled due to the uncertainty related to the prolonged COVID crisis	22

Investment case & value strategy

Portfolio improvement: Top line strategy

Constant innovation to shift portfolio into attractive growth / margin segments

Growth

	New products in sales
	Niches
	2015=100Index
	Margin management /
	demand driven
New Asian
competition
Margin	2015	2016	2017	2018	2019

Guiding principle: strengthen product & service differentiation

• Increase competitiveness against other materials by improving existing solutions
• Innovate and apply existing solutions to new target markets
• Develop innovative new products
• Optimize product & customer mix
• Redefine distribution channels

Aperam product areas (size indicates volumes)

23

Investment case & value strategy

ESG excellence: Take a look at Aperam from an ESG perspective

Our mission is to produce reliable, 100% recyclable, green stainless steel

Products	Non toxic, long lifespan and 100% infinitely recyclable without loss of quality
Climate change	We have the lowest CO2 footprint in the stainless industry globally
Environment	We are recycling champion and 33% of our energy intake is renewable
Process	We have ambitious ESG targets and a convincing track record
Social	We value our diverse workforce, invest in training & 86% rate us a good employer
Governance	The majority of our board is independent
Compliance	We have a robust compliance framework and a zero tolerance policy

Please find our complete ESG presentation & report at: www.aperam.com/sustainability

24

ESG

Silène luminaris sive Muflier de Borges, Miguel Chevalier Fondation Clément, Le François, Martinique - France Fabrication : Serrurerie La Parette, Roquefort-la Bédoule

Aperam stainless steel used : Aperam 316 Hot Rolled

Aperam produces the greenest stainless steel globally

25

ESG summary

ESG is core at Aperam and starts at the top

Governance & Stakeholders

• Our high ethical standards are reflected in our robust corporate governance and structured compliance program with a zero tolerance policy for non compliant behavior
• our Board of directors is composed of a majority of independent directors
• Board Committees are independent members only
• We aim to be a partner of choice for our customers and suppliers
• Our Corporate Responsibility is reflected by local programs and stakeholder engagement

We take E, S and G seriously

Social

• Our people are colleagues with whom we share values and a common future
• • Their safety is our non-negotiable priority
  • Their motivation and creativity is our greatest asset
  • Their development is a key to our success.
• We actively promote diversity
• We believe in a positive dialogue and have collective labour agreements in place throughout Aperam

Environment

• As an energy-intensive company, we consider environmental consciousness as a necessary prerequisite to our sustainable profitability
• Recycle: Our products are infinitely recyclable and our main input in Europe is recycled scrap
• We have an industry leading CO2 footprint with the greenest" stainless steel globally due to our FSC-certified forest in Brazil
• We have clear targets in place to improve our environmental performance and are a member of Responsible Steel®

26

Recyco unit recycles dust, sludges & residues for us and third parties

ESG summary

Product & process: Aperam produces a superior product in a sustainable and responsible way

Our mission is to produce reliable, 100% recyclable, green stainless steel

Superior product

Renewable energy

Recycling

Very long useful life		100% recyclable		Non toxic
Corrosion resistant		Stainless Steel		Abrasion resistant
Withstands fire & acid		Mechanically strong		Aesthethically pleasing

Renewable energy

Our blast furnace in Brazil uses only charcoal as fuel - produced from our sustainably cultivated

FSC-certified forests

Recycling

Aperam's main input in Europe is recycled scrap (>80%)

Our

Best practice forest management, recognized by the Forest Stewardship Council's (FSC®) certification, which standards and principles conciliate ecological protection (flora and fauna, but also water reserves) with social benefits and economic feasibility. Our forests are made of selected cloned saplings which are considered among the best on the market 27 and they are separated by firewalls and strips of natural vegetation to take into account both fire-prevention, biodiversity preservation and local development (beekeeping).

ESG summary

Recycling & scrap: Aperam is at the heart of the European circular economy

Scrap is a closed loop in Europe

Customers

(Fabrication & Manufacturing)

scrap New months ~6 25%-5	Stainless steel
	Revert scrap
	~11%, <1 month

Steel Hot Cold

making rolling rolling

APERAM

		Automotive	Construction	Other
				Transport
		14 years	50 years	30 years
End product		85%	95%	85%
	Machinery	Appliances,	Metal Goods
			Electronics
Life cycle 	25 years	15 years	15 years
Recycling rate 	95%	95%	80%

Old scrap

~70% Ø 27 years

Recyco

Recycles metal from dust, mud etc. *

• Aperam uses more than 85% scrap in its austenitic grades
• Scrap is sourced regionally in Europe
• Aperam's location at the heart of Europe minimizes transportation costs & environmental impact

Finishing line

Steel making

Outokumpu

Aperam

Acerinox Terni

• Aperam's Recyco unit recovers metal content from waste material*

Scrap is the primary input in our European operations

Source: Aperam, SMR, ISSF	28
* see2019 sustainability reportp. 39 for detail

ESG summary

Aperam supports the United Nations' Sustainable

Development Goals

We take broad responsibility: our Products and Environmental and Social action

Health & Safety is Aperam's primary concern and the priority in all our proceedings

More than 30% of Aperam's energy comes from renewables, mainly as

biomass (charcoal) and, via pilot projects, wind and solar

Aperam is a recycling champion: We use the maximum amount of

recycled material (not only scrap) in our production and also take good care to leverage wastes and byproducts in line with our zero-waste target

Gender balance ranks highly on our priority list since 2017 and has a

special commitment from management. Aperam established specific objectives for creating more gender balance in our workforce

Research & Development and innovation are top priorities for Aperam. We

also help our customers to adapt their own processes (welding, stamping, etc.) to make the most of their tools

Our BioEnergia cultivated forest produces charcoal which we use instead of met

coal & coke. The forest also acts as a FSC certified carbon sink. Aperam plants are constantly reducing their energy consumption and participate in our climate action plan

In our forestry, located on hydric-stressed areas like our other plants, lowering

water consumption and improving the quality of discharge are key elements of our environmental strategy

Aperam is committed to a sustainable cohabitation with our neighboring

communities, allowing host cities to

thrive and addressing inhabitants' legitimate requests

Ethics are a key component

to Aperam's values. We

comply with all applicable regulations, interact transparently with authorities and support the fight against corruption, money laundering and anti-competitive practices - among others

Environment

Social

Governance

29

ESG summary

Health & safety performance

Health & Safety frequency rate of 0.6 in Q3 2020

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

07 1Q

07 3Q

08 1Q

08 3Q

09 1Q

09 3Q

10 1Q

10 3Q

11 1Q

11 3Q

12 1Q

12 3Q

13 1Q

13 3Q

14 1Q

14 3Q

15 1Q

15 3Q

16 1Q

16 3Q

17 1Q

17 3Q

18 1Q

18 3Q

19 1Q

19 Q3

20 1Q

20 Q3

Health & Safety of our people is our prime objective

30

ESG summary

Social: Our people are our asset

Criteria		2020 Target
Lost-time injury		<1
frequency rate
Employee satisfaction1		N/A
Diversity		Increase
Training hours/FTE		Increase
Absenteeism		2.0

Aperam 2019 statusSteel industry 2017*

1.7

!

2.93

86%

 78%

Women 12% of staff 20% of exempts

35.5

3.1

Safety always comes first at Aperam. We rely on our people to transform our company from a

traditional industry into a connected, agile and innovative organization

* Heavy manufacturing, Worldsteel	1 For the seventh consecutive year, Aperam S America was selected as one of the best companies to work for by Guia Você S/A, in	31
recognition of our work on employee health and wellbeing

ESG summary

Environment: A best in class footprint²

CriteriaTarget 2030Aperam 2019 statusSteel industry 2017

Energy intensity*		12.1 GJ/t -5% vs 2015		13.3 GJ/t +4% !

CO2 intensity**		0.45 t/t	-15% vs 2015		0.48 t/t	-11%		0.95 t/t²

Water consumption		5.9 m3 /t -40% vs 2015		11.8 m3 /t +16% !

Dust intensity		70 g/t	-70% vs 2015		84 g/t	-65%

Zero Waste target		>97% reused / recycled		94.3%	+0.8pp 

Lower production volumes hurt some KPI's in 2019

We aim to exceed environmental legislation and are committed to continuous improvement

*amounts to -11% on electricity & natural gas	**Scope 1+2. An internal CO2	price of €30/t is applied to all investments. We review and adjust this if necessary to maintain
the incentive for CO2 savings	²per ton of slab		32

ESG summary

Environment: Aperam has a convincing environmental track

record and clear improvement targets. Low volumes impacted 2019

CO2 emissions (t/t crude steel)*

0.78

0.70 0.72

0.61

										0.58
				0.50	0.48			0.54		0.49 0.49 0.48
				0.48			0.45
2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2030

Energy consumption (GJ/t crude steel)

	14.7
14.0		13.8 14.0 13.6 13.6	13.0 12.8				13.3
						12.8
						12.4	12.5
										12.1
2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2030

Dust emissions (g/t crude steel)		Water intake (m3/t)

211	213	240	242			11.5 10.7 10.2 10.1 10.1	9.9	11.8
			153						5.9
			89	84	70
2013 2014 2015 2016 2017 2018 2019	2030	2013 2014 2015 2016 2017 2018 2019	2030
target	Actual	*scope 1 & 2						33

ESG summary

Aperam's CO2 footprint: Aperam Europe fulfils the EU Taxonomy = environmentally sustainable economic activity

CO2 t 47.0	Europe
/t*

Aperam has a industry leading CO2 footprint and produces the greenest stainless steel globally

Raw materials	Electricity	EU Taxonomy**
Threshold 0.352 t/t	EU ETS (= scope 1)
Stainless scrap
		APAM 0.27 t Co2 / t
Ferronickel	Consumables:									Electricity
Ferrochrome	Graphite Electrode		Nat. gas		Electricity		Electricity
Other alloys	Natural gas									Nat. gas
Electric Arc	Molten	Slab	Slab	Furnace	Slab	Hot	HR	Cold	CR	Annealing &
Furnace	metal	Caster	rolling	band	rolling	band	Pickling

FSC certified		Raw materials		Raw materials
	Iron ore		SS scrap		Consumables
forest
		Limestone		Ferronickel		Graphite Electrode
Wood
		Ferrochrome
			Electricity
		Other alloys

Brazil CO2t 40.0

Charcoal Charcoal burning

Co2 neutral

Blast

Furnace

iron Pig

Electric Arc
Furnace
Molten metal	Nat. gas

Electricity

Electricity

Nat. gas

Electricity

Nat. gas

Electricity

/t*

Stainless

Raw materials

Other alloys

Ferronickel

Second

Molten

Slab

Slab

Furnace

Slab

Hot

HR

Cold

CR

Annealing

Ferrochrome

Metallurgy

metal

Caster

rolling

band

rolling

band

& Pickling

Electrical

Raw materials

Silicon

Second

Molten

Slab

Slab

Furnace

Slab

Hot

HR

Cold

CR

Decarb.

Metallurgy

metal

Caster

rolling

band

rolling

band

Annealing

High temp. Annealing

Scope 1		Scope 2		Scope 3	Product	Process /	Scope 1 - All Direct Emissions from the activities of an organisation or under their control. Scope 2 - Indirect Emissions from electricity purchased and used by the
		organisation. Scope 3 - All Other Indirect Emissions from activities of the organisation, occurring from sources that they do not own or control*per tonne of slab, scope 1 + 2	34
emissions		emissions		emissions	equipment
			based on ISO14404 **EU Taxonomy* requires 0.352 t CO2/t scope 1+2 or 90% scrap

ESG summary

Environment: Bio Energia & recycling give Aperam a best in class climate change footprint

Aperam energy mix 2019

2%

29%37%

1%

31%

	Charcoal		Natural Gas		Coke
	Electricity		Other

Aperam's has the smallest CO2 footprint in the industry*

CO2 t/t scope 1+2

1.0

0.5

Aperam

Stainless Industry

CO2 t/t **

Factor

>4x

>8

~2

EU industry

NPI based producers

Our sustainably cultivated forest in Brazil is a unique asset

Source: Aperam estimates & calculation, ISSF data, CRU	*Data is for austenitic HR steel, scope 1+2
**scope 1+ 2 + total raw material emissions and transport	35

ESG summary

Governance: Our leadership team

Key facts & compensation		A diverse & experienced team

• Entrusted with day-to-day management of the Company
• Appointed by the Board of Directors
• Experience and industry know how
• Average age: 49 / 6 Nationalities
• CEO: responsible for Aperam's sustainability performance and compliance
• CTO, is also Head of Health, Safety & Environment
• Compensation aligned with long term interest of the Company and its stakeholders
• • Multiplier for performance related bonus includes H&S factors (1 year plan)
  • Long term incentive plans based on EPS and TSR evolution (3 year plan) vs relevant peers and index

Aperam benefits from the experience and industry know-how of its Leadership Team

*also responsible for environmental & industrial risk on a group wide basis

36

ESG summary

Governance: Board of directors and shareholder structure

Principles of our board		Shareholder structure

• Responsible for strategic direction and oversight of the business, as well as for appointing senior management
• Election subject to shareholder approval. Directors are elected for 3 year terms
• Chairman: Mr. Lakshmi N. Mittal
• 7 members with a majority of independent directors (4 independent directors out of 7)
• 2 Board Committees composed of 100% of independent directors and reporting to the Board of Directors:
• • Audit and Risk Management Committee covering also ESG matters; Chair: Ms. Bernadette Baudier
  • Remuneration, Nomination and Corporate Governance Committee; Chair: Mr. Alain Kinsch

8%

24%6%

8%

3%

3%

7%

41%

N America	France	UK	Benelux
Spain	Other Europe	Mittal Family	No ID

Diverse skills, backgrounds, knowledge, experience, geographic locations, nationalities and

gender are reflected on our board and ensure effective governance

Source: IPREO, Bloomberg October 2020

37

Business overview

Musée des Confluences in Lyon, France. Architect: Coop Himmelb(l)au © Sergio Pirrone. Stainless steel used: Aperam 316L/1.4404 with Uginox Me

38

Group segments & corporate structure

Business overview

Group: Segments & corporate structure*

Stainless & Electrical Steel

2.5mt production capacity

1.7mt of gross shipments

73% of group adj EBITDA

One of the largest global producers of stainless steel**

Europe:

2 Electric Arc Furnaces use scrap as major input material

Stainless steel flat product output South America:

2 blast furnace use iron ore and charcoal produced from own forests

2 EAF use recycled scrap

Stainless flat products & electrical steel

Services & Solutions

706kt of gross shipments

13% of group adj EBITDA

Aperam sells and distributes its products through the S&S segment, which provides value added and customized steel solutions through further processing to meet specific customer requirements. S&S core activities:

• direct sale of Aperam products to end users
• distribution of Aperam and third party material
• transformation services, according to specific customer requirements

Alloys & Specialties

40 kt production capacity 36kt of gross shipments 14% of group adj EBITDA

Fourth largest producer of nickel alloys globally

Aperam specializes in nickel alloys and specific stainless steels

Our products take the form of bars, semis, cold-rolled strips, wire and wire rods, and plates, and are offered in a wide range of grades

High value items that are often sold on a kg basis

Aperam covers the complete stainless value chain with industry leading assets

in Europe and Brazil

*gross shipments and adj EBITDA are before eliminations	40
** By production capacity

Business overview

Group: Segments & corporate structure II

Production assets in Europe and South America

Châtelet, Belgium

Genk, Belgium

Location & facts	Location & facts
Melt shop	Melt shop
Hot rolling mill	Cold-rolling mill
	Finishing

Capacity		Capacity
Slabs	1,000 kt Slabs	1,000 kt
HSM	2,800 kt	2 m wide capacity
		316 and duplex
		grades
		Cold-rolling	700 kt

Gueugnon, France

Location & facts Cold-rollingmill Finishing

Capacity
Finished	400 kt

Specialized in Bright Annealing (BA) products and stabilized ferritics.

Isbergues, France

Location & facts Cold-rollingmill Finishing

Capacity
Finished	350 kt

LC2i: integrated line

Timóteo, Brazil

Imphy, France

Location & facts	Location & facts
Melt shop	Melt shop
Cold-rolling mill	Cold-rolling mill
Finishing	Finishing

Capacity*			Capacity
Slabs			900kt	EAF	60kt
Stainless finished	1 VIM, 2 VAR,
			350kt	Rotary continuous
Electrical CR:		Caster for long
Grain oriented	60kt	products
Non GO		170kt	Wire hot rolling mill:
SP Carbon		200kt
	40kt
*some	lines	are	flexibly	6 Cold rolling mills
used	for	different

products

41

Business overview

Group: Segments & corporate structure III

				Aperam's value chain
Slabs		Hot rolling		Cold rolling / Finishing
				Isbergues
Châtelet				0.35Mt
1.0Mt
		Châtelet				Stainless
			Genk
		2.8Mt		0.7Mt		flat
Genk
1.0Mt				Gueugnon
				0.4Mt
				Electrical
Timoteo		Timoteo		0.18Mt		Electrical flat
0.9Mt		0.88Mt		Stainless		Stainless flat
				0.35Mt
Imphy		Chatelet				Ni alloys &
			Imphy
0.06Mt					specialties

Imphy

	Service
Direct
Sale
Service
Center
Direct
Sale
Service	Steel service
Center	centers
	Transformation
Direct
Sale
Service
Center
Direct
Sale
Service
Center

customers End

Stainless & Electrical Steel Europe		Alloys & Specialties
Stainless & Electrical Steel South America}Stainless & Electrical Steel		Services & Solutions	42

Business overview

Group: A balanced risk profile and customer structure

Shipment split by segment 2019*	Adj EBITDA contribution by segment 2019*

							13%
	29%		S&E Europe					S&E Europe
		45%	S&E S. America			14%	42%	S&E S. America
	1%		A&S					A&S
			S&S					S&S
	25%						31%

Revenue by region 2019

Asia &		Brazil

7%	Africa	US
Europe		Other Americas
66%		Germany
27%		Italy
	Americas	France

Other Europe

Revenue by customer industry 2019

	5%		Building & Construction
	12%	24%	Catering & Appliances
			General Industry
	16%		Automotive
		22%	Energy & Chemicals
	21%		Transport

* Calculated on segmental data before eliminations

43

Business overview

Group: Self help has transformed the group. Higher cash generation and profitability even in adverse market conditions

Adj EBITDA by segment (EURm)		Shipment by segment (kt)

600						559	504
			451	455
500
		368
400							340
300	168	220
200
100
-
	2012	2013	2014	2015	2016	2017	2018	2019
	S&E		A&S	S&S	Group Adj. EBITDA

			1,886	1,917	1,936	1,972
		1,813					1,786
1,683	1,728
2012	2013	2014	2015	2016	2017	2018	2019
	S&E	A&S		S&S	Group Net Shipments

Adj EBITDA/t (EUR)

1,500
1,000						289
				237		256
			203	239
					190
500		127
	100
-
2012	2013	2014	2015	2016	2017	2018	2019
S&E		A&S	S&S	Group Adj. EBITDA/t

Adj EBITDA margin

				11.8%	12.5%
			10.6%		10.8%
		8.9%					8.0%
	5.7%
4.1%
2012	2013	2014	2015	2016	2017	2018	2019
	S&E	A&S	S&S		Group adj EBITDA margin

44

Stainless & Electrical Steel

Europe

Business overview

S&E Steel Europe: Self-help measures yield a robust operational performance despite a price and volume squeeze

Major adj EBITDA contributor 2019		Robust profitability capitalizing on restructuring

	13%
		S&E Europe
14%	42%	S&E S. America
		A&S
		S&S
	31%

	11.1%	12.8%
		9.1%
	8.8%	352
	6.7%	6.0%
2.7%	258		260
0.5%	220
	153		150

12 57

2012	2013	2014	2015	2016	2017	2018	2019
	Adj. EBITDA (m€)		Adj. EBITDA margin (%)

European shipments reflect import pressure, destocking

and weak real demand

European stainless steel demand came under cyclical pressure in 2019

6.0

4.0

Pre-crisis level (2007)

994 1,004 1,082

1,190 1,241 1,253 1,267 1,113

2.0

0.0

2012 2013 2014 2015 2016 2017 2018 2019

EU S&E Shipments (kt)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Stainless European ap. consumption (mt - slab equivalent)

46

Business overview

S&E Steel Europe: Leverage Aperam's unique position

European stainless steel industrial footprint		Aperam key competitive advantage

Finishing line

Steel making

Sourcing

Outokumpu

• The only integrated upstream
	operations in the heart of Europe
•	Superior access to scrap supply
•	Best location to serve the biggest
	consumption areas of Europe

Aperam

AcerinoxTerni

Logistics

Production

• Efficient logistics between sites

results in industry leading working

capital management

• Full range of products with flexible

capacity

• Increase scrap recycling to minimize

environmental impact

• Aim to become cost leader in the key

products

Located in the heart of European scrap generation and stainless consumption

47

Business overview

EU trade action: Further actions against unfair trade have been initiated

Aim
Countries	affected
Measure
New	initiatives

Safeguard

• Maintain traditional trade flows
• Volume focused
• All countries globally (if not explicitly exempt)
• Effective since February 2019 till July 2021 (Indonesia included from 1 Oct. 2019)
• HR quota 364kt pa* CR quota 861kt pa*
• Largest importers have a country quota. A residual quota for all others
• 25% duty for shipments > quota

Anti-dumping (AD)

• Duty on imports that are priced below fair market value
• Price focused
• Hot rolled: China, Indonesia, Taiwan since 8 October 2020 for 5 years
• Cold rolled: China , Taiwan since 2015
• HR: China 9.2% - 19.5%, Indonesia 17.3%,

Taiwan 4.1% - 7.5%

• CR: China 25.3%, Taiwan 6.8%
• Renewal: of cold rolled duty against China & Taiwan
• Initiation: of cold rolled duty against Indonesia & India market share YTD 7.3%

WTO dispute has been lodged officially

Safeguard quotas are excessively generous. AD is effective in levelling the playing field

*Effective quota from 1 July 2020 to 30 June 2021. Quotas are quarterly from 07/20. There is one global SS Hot Rolled quotas since July 2020	48
SS CR: country quotas S. Korea, Taiwan, India, USA, Turkey, Malaysia, Vietnam **could be difference between domestic market price and export price or cost based

Business overview

EU stainless steel imports: Anti dumping is effective in HR products. Safeguard with minimal effect only in CR products

Hot rolled imports, yoy & market share		Total stainless imports, yoy & market share

150,000

50%

(t)

25%

rolled

100,000

0%

50,000

-25%

Hot

-50%

-75%

0

-100%

16-Q1

16-Q3

17-Q1

17-Q3

18-Q1

18-Q3

19-Q1

19-Q3

20-Q1

20-Q3

Indonesia

Other countries

YoY %

Market share %

Cold rolled imports, yoy & market share

(t)

300,000

40%

20%

rolled

200,000

0%

Cold

100,000

-20%

-40%

0

-60%

16-Q1

16-Q3

17-Q1

17-Q3

18-Q1

18-Q3

19-Q1

19-Q3

20-Q1

20-Q3

Indonesia

Other ocuntries

YoY %

Market share %

tonnes

450,000									40%
400,000									30%
350,000									20%
300,000									10%
									0%
250,000
									-10%
200,000
									-20%
150,000									-30%
100,000									-40%
50,000									-50%
0									-60%
16-Q1	16-Q3	17-Q1	17-Q3	18-Q1	18-Q3	19-Q1	19-Q3	20-Q1	20-Q3
Indonesia		All other		YoY %		Market share %

SS Hot Rolled products have one global	quota. Countries with a SS CR quota: S. Korea, Taiwan, India, USA, Turkey, Malaysia, Vietnam. All other countries if not exempt fall
under the residual quota	49

Stainless & Electrical Steel

South America

Business overview

S&E Steel South America: A flexible, agile and highly profitable asset

A significant adj EBITDA contributor 2019 despite		Earnings reflect weak domestic economic environment
demanding conditions

	13%
		S&E Europe
14%	42%	S&E S. America
		A&S
		S&S
	31%

		17%	19%	14%		17%
	13%		176	13%		13%
	167
				162
8%
	120			113	118		109
82
2012	2013	2014	2015	2016	2017	2018	2019
	Adj. EBITDA (m€)	Adj. EBITDA margin (%)

Stable shipments due to mix of domestic and exports

Weak economic growth continues to weigh on stainless steel consumption in Brazil

617	649	654	652	656	638	656	610

0.5

0.4

0.4

0.3

0.3

0.2

Pre-crisis level (2014)

2012 2013 2014 2015 2016 2017 2018 2019

Brazil A&S shipments (kt)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Stainless BRA ap. consumption (mt - slab equivalent)

51

Business overview

S&E Steel South America: Our Brazil asset is unique - the only stainless steel producer in South America

Aperam South America footprint

Caracas (Venezuela)

Colombia

Ecuador

Peru

Timoteo

Sumaré

Campinas

Ribeirão Pires

Caxias do Sul

Montevideo (Uruguay)

Buenos Aires (Argentina)

Melt shop, Hot/Cold rolling

Service Centers

Tubes mills and Cutting centers

Rep offices, sales agencies

Upstream integration

Cost competitive & environmentally

friendly charcoal from own

Bio Energia cultivated forests is used to heat the blast furnace

Range of products

A complete range of stainless steel Stainless Steel grades (austenitic, ferritic, duplex,

martensitic)

Grain oriented	Grain oriented electric steel* for
use eg in stationary machines eg
electrical steel
transformers

Non grain	Non-grain oriented electric steel**
oriented	for use in electric motors and
electrical steel	generators
Special	Alloyed, high, medium & other
special carbon steel are completing
carbon steel
product portfolio

The sole flat stainless steel producer in South America

with a complete range of products, and a flexible production set-up

*Grain oriented steel (GO & HGO) has the magnetic properties optimized in one direction during hot rolling.	52
**Non-grain oriented steel (NGO) has identical magnetic properties in all directions

Business overview

S&E Steel South America: Brazil can switch flexibly between products and markets to maximize profitability

Key pillars		Aperam's asset optimization in South America

Portfolio management

Domestic share gains

Cost competitive

• A wide range of products and geographical sales enables further optimization of capacity utilization and product mix
• Upgrade product portfolio: Develop new grades with higher value added (stainless substitution, HGO)
• Preferred supplier plan with best in class deliveries
• Performant logistics with integrated service centers
• Support stainless steel usage in S. America
• Sustain the cost benchmark in its main markets
• Leadership Journey® on-going to improve productivity
• Continuous improvement to at least compensate the inflation

			Flexible product mix		Flexible regional mix
					Exports
meltTimoteoshop	capacity900kt		•Stainless steel		(incl S America)
	•Electrical steel
			• Non grain oriented		Brazilian
			• Grain oriented
			• High grain oriented		share gains
			•Special Carbon

• Running Brazilian asset at optimal utilizationrate
• On-goingdebottleneckingof the cold rolling operations
• UpgradeGrain Oriented products via the development of HGO
• Continuous margin optimization between product mixand deliveries in South America

Sustained solid double digit adj EBITDA margin proves the flexibility & agility

of our operations in Brazil

53

Business overview

S&E Steel South America: Brazil offers ample opportunity for both cyclical and structural growth

Brazil consumes substantially below the global trend line

	10			China
(kg)
per capita	8
					Poland
consumption	6					EU
Vi etnam
		Asia
			Thailand	World
4			Turkey	N America
CR
				Malaysia
Stainless	2	S. Africa
India	S.E Asia	Mexico
		S. Asia	Indonesia	Brazil	Russia
		Egypt	L America	Romania
		UkraineIran		Middle East
	0	Africa	Argentina
	1,000		6,000	11,000	16,000
			GDP per capita (USD)

Brazil opportunities

• Short term: reviving the normal investment cycle in the economy. Large scale infrastructure & energy projects have been missing
• Medium term: Tax reform that put our customers in a position to compete on a global level will drive volume and yield a positive mix effect
• Long term: Higher standard of living will drive stainless steel consumption. Currently Brazil at 1.4kg / capita vs China >9kg/capita and a GDP implied consumption of >3.5kg/capita

Examples of stainless steel solutions in the Agrobusiness:

	Equipment for the	Equipment for	Slats of metallic
	transport and		washing gases	conveyor belt for
sterilization of Palm	from biomass	the transport of
	fruits		burning		sugarcane
Largest global producer of:		Largest global exporter of:
•	Coffee	Orange			•	Meat	Poultry
•	Sugarcane and sugar			•	Sugar	Ethanol

Brazil has tremendous potential for volume & mix improvement

Source: IMF, CRU, Aperam

54

Business overview

S&E Steel South America: 3 pillars of trade protection against unfair market behavior

Import duty		Logistics		Anti dumping duty

General import duty:

• 14% import duty on all stainless steel imports irrespective of origin

	Brazil		EU 28
Area (mn m2)	8.51		-45%	4.66
Consumption (kt)	270		x12	3,355

• Costly & time consuming transportation by truck only
• Aperam has the most comprehensive network of service centers and agents in South America

Anti dumping duties:

Stainless flat products:

• China: up to USD629/t, Taiwan up to USD705/t since 4.10.19 for 5 years

Stainless steel welded tubes:

• China & Taiwan: up to USD911/t since 29.07.13 for 5 years. Renewal investigation launched 16.07.18
• Malaysia, Thailand and Vietnam: USD367/t up to USD888/t since 13.06.18, for 5 years

Electrical steel (non grain oriented):

• China, South Korea, Taiwan, Germany: USD90/t - USD166.3/t
  since 15.07.19 for 5 years

Tariff measures to support fair market environment in Brazil

Sources: SBB/Platts, Steelfirst

55

Services & Solutions

Business overview

Services & Solutions: stronger partnership with customers enhances margins

A significant adj EBITDA contributor 2019 despite trough		A profitable Services & Solutions thanks to its focus on
		conditions						service oriented customers
						100									19,000
		13%				80									17,000
									83
													15,000
			S&E Europe						65
					60					70
												13,000
	14%
	42%	S&E S. America			40
												43	45	11,000
			A&S							38
					20								9,000
						16
			S&S
					0	7							7,000
		31%
							2012	2013	2014	2015	2016	2017	2018	2019
								EBITDA €m		Nickel LME price (RHS)

Increasing focus on downstream value added services

and solutions

A majority of "in house" exposure to end users to best serve their needs and provide best services & solutions

				799	818	819
		721	746				706			Aperam
	679							Stainless		Aperam
661
										End-
								&
											Services &
													users
												Solutions
										Electrical
2012	2013	2014	2015	2016	2017	2018	2019			Steel
				Independent
			S&S shipments (kt)							distributors
									and other

57

Business overview

Services & Solutions: Adding value downstream

		Services & Solutions value chain
Input	- - - - - - Service Centers - - - - - -
Hot rolled coil /	Cutting/	Polishing	Packaging
Cold rolled coil	Slitting	Brushing

	&	Slit	Slit /	Machined	Square
	deburred	deburred
	- - - - - - - Tube making - - - - - - -
	Forming	Expanding
Hot rolled coil /	Welding
Cutting	Packaging
Cold rolled coil	Pickling
Bending
	Annealing

Logistics Customer

Round

Logistics Customer

58

Alloys & Specialties

Business overview

Alloys & Specialties: attractive niche market with high margins

Aperam's high value-added segment 2019

	13%
		S&E Europe
14%	42%	S&E S. America
		A&S
		S&S
	31%

High profitability due to end products & end user

orientation

1,191	1,219	1,264	1,147		1,407	1,278	1,385
43	44	44		864	46	46	50
39
				26
2012	2013	2014	2015	2016	2017	2018	2019
	Adj. EBITDA (m€)		Adj. EBITDA/t

Stable shipments but markedly improved mix

36	36	35	34	30	33	36	36

A&S shipments (kt)

Nickel Alloys a growing and premium niche market

	400
	350					CAGR 2.7% pa
	300
	250
kt	200
	150
	100
	50
	0
	1990	1992	1994	1996	1998	2000	2002	2004	2006	2008	2010	2012	2014	2016	2018

Source: SMR, Aperam

60

Business overview

Alloys & Specialties: attractive niche market with high margins

Aperam is global top player in nickel alloys and strong in

long products (kt)

Aperam Alloys & Specialties geographical footprint

Rescal	Amilly
		Imhua
Wire	The magnetic parts
company
drawing
n
n
n
	n	n
Imphy	ICS (JV)

Melt shop, wire rod mill,	Diversification into
cold rolling,bars, R&D	industrial clads

Alloys & Specialties sales by industry 2019

			Marine
6%	18%		Oil & Gas
16%			Chemical industry /
			welding / environment
			Aerospace

6%
	33%		E&E
19%			Automotive /
			Transportation
			Others

Major products

Downstream Upstream

Source: SMR, Aperam	61
*PCC (Special Metals) NYK (Nippon Yakin Kogyo)

Business overview

Alloys & Specialties: Specialty alloys add stability and profitable growth element

	Innovation is key for premium			…to cater for highly sophisticated		…yielding growth opportunities and
	specialties…			and evolving needs…		margin stability
	R&D intensive industry			High growth end market applications		Less exposed to commodity cycles
	Substantial market entry barriers			"Kilogram" market: unique products		 Cost of raw materials passed through to
	Benchmark customers in advanced			designed to enable precision and high-		customers
	industries require tailored, certified and			tech solutions globally		 Long-standing client relationships
	highly sophisticated solutions			Highly diversified end-markets		 Good visibility on volumes with high
						proportion of recurring revenue

Key R&D figures (based on 2019)

Cooperation contracts	26
Total registered patents	341
Sales of new products	14%

Key end-markets / application types

Heating		LNG tankers,
resistance,
special welding
watches
Gearbox,
fasteners,			Gas turbines,
turbo
		heat
chargers
		exchangers
Smart			Fasteners,
phones,
		landing gears,
LED TV,	Electrical
turbine
seals
safety,
engines
	sensors

EBITDA margins by Aperam division

14% 12% 10% 8% 6% 4% 2% 0%

2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
	S&S		A&S		S&E

A very profitable, growing and stable niche market

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Appendix

Résidence Hôtelière du Rail, Montparnasse station, Paris - France - aasb_agence d'architecture suzelbrout - Executed using grade 304L, with Uginox Mat finish

Appendix

Key stainless product categories by alloy content

Martensitic		Ferritic (400 series)
<0.1%	<0.1%

17%	10.5-
	30%

<1.5%

<4.5%

		Car exhausts, conveyor chains, cooking utensils,
Cutlery, cutting tools, construction tools…		boilers, electrical appliances, trim, dishware,
		heating, tanks, tubes…

Austenitic (300 series)

<0.1%

16-21%

6-26%

<7%

Boiler, aeronautics, electronic components, railway equipment, tubes, chemical tanks, food vats, marine applications, furnace, heating…

Austenitic with Manganese (200 series)

4-16%<1%

15-19%

1-6%

<2%

Asphalt tankers, tubes, food containers, silos,

conveyor chains, safety soles…

Austeno-ferritics (Duplex)

<1%

21-26%

1-7% <4%

Oil & gas equipment, papermaking, pulp,

desalination sector, chemical plants…

By weight Iron Molybdenum, Al, Cu Nickel

Chromium

Manganese Carbon

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