Eramet: 2022 half-year results presentation

Paris, 27 July 2022, 6:30 p.m.

PRESS RELEASE

Eramet: EBITDA at €982m1, continued Group deleveraging in first- half 2022

• High price levels for all of the Group's markets, in particular for manganese alloys (from +45% to +70% in Europe vs. H1 2021) and high-grade manganese ore (+34%), combined with a favourable €/$ currency effect.
• Strong growth in volumes, continued development plans:
  o +16% of manganese ore produced and transported in Gabon (vs. H1 2021) o +31% of exported volumes of nickel ore from New Caledonia
  o +33% of nickel ore produced in Weda Bay
• In the new Eramet scope, excluding operations sold or in the process of being sold1: o Group half-year EBITDA more than tripled to €982m
  o Very strong increase in Free Cash-Flow (FCF) to €429m, including €86m linked to the sale of Sandouville in February
• Continued Group debt reduction with leverage of 0.4x
• Net income, Group share at €677m
• Construction of the lithium plant in Argentina started, in line with the initial schedule
• Continued studies as part of the partnership with BASF for the production of battery-grade nickel and cobalt
• Signing of the Share Purchase Agreement for Aubert & Duval in June; completion expected by the end of the year, marking the refocusing on Mining and Metals activities
• 2022 Outlook:

• Production volume targets confirmed, except SLN
• Favourable seasonality in H2, leading to a positive intrinsic performance over the year
• Prices expected to decline in H2:
• • Significant trend reversal in H2 for manganese alloys invoiced selling prices, as expected
  • Consensus2 for average manganese ore prices at $6.4/dmtu for the year ($6/dmtu in H2) and LME nickel prices at $25,600/t ($24,500/t in H2); ferronickel price at a level well below the LME nickel price
• Input costs to remain at high levels
• Strongly negative impact of all external factors in H2
• In an inflationary context which remains uncertain, and based on the consensus of the above- mentioned prices, forecast EBITDA revised up to around €1.6bn3 in 2022

• In accordance with the IFRS 5 standard - "Non-current assets held for sale and discontinued operations". See reconciliation tables in Ap- pendix 1
  2 Consensus of main market analysts
  3 Based on an effective exchange rate at $/€1.09

Head office - 10, Boulevard de Grenelle - CS 63205 - 75015 Paris, France - www.eramet.com

Christel Bories, Eramet group Chair and CEO:

We achieved a very good first half-year, characterised by an increase in our production volumes in a particularly favourable price environment.

We enter the second semester by strengthening our mobilisation on operational excellence and cash optimisation, in a more uncertain macroeconomic context.

Eramet continues to refocus itself on a portfolio of competitive and cash-generating mining and metallurgical assets and now has a more solid financial structure.

This strengthened position enables us to support our future growth, supported by an increasingly exemplary approach to social responsibility.

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• CSR commitments

The Group continued to successfully implement its CSR roadmap.

Safety is constantly and regularly improving. The accident frequency rate declined 19% in H1 2022 vs. end-2021 (Group TRIR4 at 1.8), with no serious accidents recorded since April 2021.

With the certification of Gabon's mining and industrial sites in June, all of Eramet's mining and metallurgical sites are now ISO 50001 certified, attesting to the implementation of effective energy manage- ment.

The Group has also developed contributive programmes with local communities located near its oper- ations:

• In Senegal, the first half-year was marked by the commissioning of an 8 km pipeline extension, now enabling access to water for 7 districts of the town of Mékhé,
• In Argentina, a programme to improve farming conditions at high altitudes was started with local farmers, as well as the installation of solar heaters on top of houses to provide access to water in winter for nearly 25 families in the village of Santa Rosa de los Pastos Grandes,
• In Gabon, works to improve infrastructures and support education continue in the neighbouring towns of the Moanda mine. The first half-year achievements notably include the completion of works to renovate public lighting in Bakoumba and to build drilling sites and standpipes in five neighbouring towns, as well as the launch of a new training programme for digital professions in the new FabLab in Moanda, inaugurated in the spring. These works address the priorities identified with all local stakeholders and are financed by the two CSR funds created in 2021 with the Gabonese state,
• In New Caledonia, an agreement signed by SLN in February 2022 with the government provides that CSR efforts are increased and regularly shared site by site with all institutions. Through its partnerships with municipal authorities and provinces, SLN aims for positive impacts contributing to the territorial rebalancing, particularly between the municipalities on the East and West coasts.

In addition, the Group pays particular attention to the rehabilitation of sites and the preservation of biodiversity, with a commitment to a ratio above 1 between rehabilitated areas and cleared areas for the 2019-2023 period. It amounted to 0.98 in H1 2022, a significant improvement on H1 2021 (0.71), and to 1.09 for the 2019-H1 2022 period. To help nature regenerate by preserving biodiversity, local plant nurseries have been developed at each mining location, accompanied by the implementation of effective revegetation methods.

In terms of extra-financial performance, the Group was awarded a score of 73/100 by EcoVadis in respect of 2022. Eramet thus retains the Gold level and remains ranked among the top 3% of companies in the sector.

Lastly, in preparation for its adhesion to the Initiative for Responsible Mining Assurance (IRMA), the international standard for responsible mining, a self-assessment mission was conducted in June at the Lithium project site in Argentina. The results of this mission confirmed the teams' appropriation of the process, as well as a current level of performance with regard to the 400 criteria of the reference system which validates progress towards the next stage of an external audit, necessary for obtaining IRMA certification.

• TRIR (total recordable injury rate) = number of lost time and recordable injury accidents for 1 million hours worked (employees and sub- contractors)

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• Eramet2 group key figures

	H1 20222	H1 2021		Chg.	Chg.3
(Millions of euros)1	Restated2		(€m)	(%)

Turnover	2,635	1,471
EBITDA	982	301
Current operating income (COI)	853	175
Net income from continuing operations	783	123
Net income from discontinued operations	(13)	(53)
Net income, Group share	677	53
Group Free Cash-Flow	429	166

1,164 +79%

681 +226%

677 +386%

660 +537%

39 n.a.

1. n.a.

1. +159%

30/06/222 31/12/212 Chg. Chg.3

(€m) (%)

Net debt	(748)	(936)
Shareholders' equity	2,155	1,335
Leverage (Net debt-to-EBITDA ratio)4	0.4	0.9
Gearing (Net debt-to-equity ratio)	35%	70%
Gearing within the meaning of bank cove-	21%	51%
nants5
ROCE (COI/capital employed6 for previous year)	57%	30%

188 -20%

820 +61%

-0.5pts n.a.

-35pts n.a.

-30pts n.a.

+27pts n.a.

• Data rounded to the nearest million.

• Excluding Aubert & Duval, Sandouville and Erasteel which, in accordance with the IFRS 5 standard - "Non-current assets held for sale and discontinued operations", are presented as operations in the process of being sold in 2022 and 2021. See reconciliation tables in Appendix 1. 3 Data rounded to higher or lower %.
  4 Calculated on a 12-month rolling basis at 30 June.
  5 Net debt-to-equity ratio, excluding IFRS 16 impact and French state loan to SLN.

• Total shareholders' equity, net debt, site restoration provisions, restructuring and other social risks, less long-term investments, excluding Weda Bay Nickel capital employed. At 30 June 2022, ROCE is calculated on a 12-month rolling basis.

N.B. 1: all the commented changes in H1 2022 are calculated with respect to H1 2021, unless otherwise specified.

N.B. 2: all the commented figures for H1 2022 and H1 2021 correspond to figures in accordance with the IFRS 5 standard as presented in the Group's consolidated financial statements, unless otherwise specified.

N.B. 3: mentions of Q1, Q2, Q3 and Q4 refer to the four quarters of the financial year

The Group's turnover amounted to €2,635m in H1 2022, up very significantly by 79% (+67% at constant scope and exchange rates5, and +12% currency effect). This growth was driven by a particularly favourable price environment (notably for manganese alloys activity) as well as growth in volumes sold (particularly for manganese ore activity and nickel ore exports from New Caledonia).

Group EBITDA totalled €982m, very strongly increasing (more than tripling), in a context of slowdown in activity in China, mainly linked to the lockdowns.

• See Financial glossary in Appendix 8

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This increase notably reflects a positive net impact of external factors (€729m):

• A favourable price effect (+€844m), including +€439m for manganese alloys, +€187m for manga- nese ore and +€160m for nickel,
• A positive currency effect (+€85m), factoring in a more favourable €/$ exchange rate (effective ex- change rate at 1.13 vs. 1.23 in H1 2021),
• Partly offset by a strong increase in input costs of (-€201m), mainly energy, reducing agents and freight.

Energy costs (notably electricity and fuel oil) continued to increase in H1, against the backdrop of the war in Ukraine. Sea freight prices, which had reached historically high levels in 2021 in a context of post-Covid logistics congestion, eased during the period versus H2 2021. However, they remained at historically high levels (spot price x 4 for containers and x 2.5 for bulk compared to the average of recent years).

Intrinsic performance benefitted from a favourable volume effect. Conversely, in order to support growth and factoring in inflation, the Group saw its operating costs increase. Overall, intrinsic performance was slightly negative at €37m.

Current operating income came to €853m, after booking a depreciation expense on fixed assets of - €130m.

Net loss for discontinued operations amounted to -€13m.

As a result, net income, Group share for H1 2022 was €677m, including the share of income in Weda Bay (+€147m).

Free Cash-Flow ("FCF") amounted to €429m in the new scope of the Group. It included a €121m contribution from Weda Bay in addition to net proceeds from the sale of the Sandouville plant (€86m). The increase in prices and activity led to an increase in working capital requirement (WCR) of €324m over the period.

Capex disbursements accounted for €250m, excluding operations in the process of being sold (€21m in H1 2022). They include €118m in growth capex, notably in Gabon to support organic development in mining production and rail transport capacity (€101m), as well as €33m in investment linked to the lithium project, entirely financed by Tsingshan via a capital increase of the Argentine subsidiary. Current capex increased, amounting to €100m in H1 2022.

Net debt stood at €748m6 at 30 June 2022, a reduction of nearly €190m7 due to the Group's strong cash generation, and factoring in a negative FCF of -€136m in discontinued operations (A&D and Erasteel), strongly affected by the increase in energy and raw material prices. The change in net debt also includes dividends paid to Eramet shareholders (-€72m) and Comilog minority shareholders (- €32m) in respect of the 2021 financial year.

The leverage ratio was 0.4x, the lowest level achieved by the Group for the last five years.

The Group's liquidity increased to €2.2bn at 30 June 2022. Eramet refinanced the Revolving Credit Facility ("RCF") in June. The maturity is five years with two successive 1-year upfront extension options (June 2023 and June 2024), potentially leading to June 2029. The agreement also includes an incentive scheme for achieving two of the Group's main CSR indicators.

• Includes €89m linked to the application of IFRS 16

• Reduction in net debt of €213m, before application of the IFRS 5 standard

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