Eramet: Excellent year with EBITDA above €1bn and an acceleration of repositioning into activities which are driving growth

Paris, 23 February 2022, 6:30 p.m.

PRESS RELEASE

Eramet: Excellent year with EBITDA above €1bn1 and an acceleration of repositioning into activities which are driving growth

• New milestone for the Group which is refocusing on Mining and Metals activities, following the announcement of the signature of a Memorandum of Understanding for the divestment of Aubert
• • Duval2
• Confirmed positioning as a responsible and contributive company. 2021 commitments met or exceeded, particularly regarding climate and safety, with one of the lowest accident rates in the industry
• Excellent operational performance in manganese, nickel and mineral sands, and resilience in mining activity in New Caledonia:
  o Strong organic growth in ore production in Gabon at 7 Mt (+21% versus 2020)
  o Increase in manganese alloys production (747 kt, +7%), with an improvement in the mix and record price levels
  o Increase in nickel ore exports in New Caledonia to nearly 3 Mwmt (+17%)
  o Strong growth in nickel ore production in Weda Bay, with a fourfold increase to 14 Mwmt
• Construction of the lithium plant in Argentina restarted in response to the acceleration in demand for metals for the energy transition
• In the new Eramet scope, excluding operations sold or in the process of being sold1:
  o Group EBITDA doubled to €1,051m in 2021, with a very significant contribution from man- ganese alloys, in a very favourable price environment partly offset by the strong increase in freight and energy costs
  o Free Cash-Flow (FCF) of €526m, including a contribution from Nickel activity in Weda Bay of €146m
• Including operations sold or in the process of being sold: o Net income, Group share at €298m
  o Strong reduction in net debt to €388m, with leverage3 below 1
• Proposal of a dividend of €2.5 per share
• Over the last two years, 64% increase in Group EBITDA mainly resulting from intrinsic gains of nearly €450m4

• 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 2021 and 2020. See reconciliation tables in Appendix 1
  2 The transaction is subject to consultation with employee representative bodies and all necessary regulatory approvals 3 Net debt-to-EBITDA ratio
  4 Operations sold or in the process of being sold included

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

• 2022 Outlook:

• Production targets up, including 7.5 Mt of manganese ore in Gabon, approximately 15 Mwmt in nickel ore in Indonesia5 and more than 4 Mwmt of nickel ore exports in New Caledonia
• Invoiced selling prices for manganese alloys should remain slightly above 2021 on aver- age for the year; consensus for average manganese ore prices at $5.2/dmtu and LME nickel prices at $19,800/t
• Energy and freight prices are expected to continue to weigh on Eramet's costs, similarly to those of coke
• Based on the consensus of the abovementioned price forecasts, Group EBITDA would be approximately €1.2bn6 in 2022.

Christel BORIES, Eramet group Chair and CEO:

We achieved excellent results in 2021. They reflect the commitment and agility of our teams who have been able to seize opportunities in a changing environment. These very good performances demonstrate the relevance of our operating model, which strongly generates intrinsic improvements and cash-flow over time.

We accelerated the deployment of our strategy to refocus on our mining and metallurgical activities which are driving growth. The restart of the Lithium project as well as the signature of the Memorandum of Understanding for the divestment of Aubert & Duval are significant milestones.

Furthermore, recent developments in the market, marked by the very strong growth in demand for critical metals for the energy transition and the strengthening of environmental and societal requirements, fully confirm the relevance of our strategic decisions.

We therefore enter this new phase of the Group's history stronger, with the ambition to become a reference for the responsible transformation of the Earth's mineral resources for living well together.

• Pending administrative approval

• Based on an exchange rate at $/€1.18

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Eramet's Board of Directors met on 23 February 2022, chaired by Christel Bories, and approved the financial statements for the 2021 financial year7 which will be submitted for approval at the Share- holders' General Meeting on 31 May 2022.

• CSR commitments

Corporate social responsibility is at the heart of the Eramet project. This ambition is now reflected in its Corporate Purpose, as stated in its 2021 articles of association since May 2021: To become a reference for the responsible transformation of the Earth's mineral resources for living well together.

Since 2018, the Group's CSR roadmap has posted constant and regular progress towards its targets, which overall performance reached 104% over the year. The 2021 Group's CSR performance was notably illustrated by:

• The exceptional safety improvement with a 46% decline in the number of accidents versus 2020 (TRIR8 at 2.2 in 2021)
• The -39% reduction in the Group's carbon intensity since 2018, and the validation of the 2035 and 2050 Group's climate trajectory by the Science Based Targets initiative (SBTi)
• The recognition of Eramet's voluntary commitments to biodiversity by act4nature international through avoidance actions, impacts reduction, as well as raising awareness and promoting its preservation.

In addition to its internal performance targets, the Group continued its work in 2021 on ESG performance management by conducting two self-assessments of mining sites in New Caledonia based on the Initiative for Responsible Mining Assurance (IRMA) international standard.

The extra-financial performance ratings were also maintained, notably the ratings awarded by the Carbon Disclosure Project (climate 2021, B rating), VigeoEiris (Advanced). The ESG risks assessment rating awarded by Sustainalytics improved from 38.8 in 2020 to 26.2 in 2021.

• Audit procedures for the 2021 consolidated financial statements have been completed. The certification report will be released after the Board of Directors' meeting held on 10 March 2022, which will set the draft shareholders'resolutions
  8 TRIR (total recordable injury rate) = number of lost time and recordable injury accidents for 1 million hours worked (employees and subcontractors)

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• Eramet group key figures (in accordance with the IFRS 5 standard, ex- cluding operations sold or in the process of being sold)

	(Millions of euros)1	20213		2020		Chg.	Chg.2
		Restated3	(€m)	(%)
	Turnover	3,668		2,792		+876		+31%
	EBITDA	1,051		516		+535		+104%
	Current operating income (COI)	784		257		+527		+205%
	Net income from continuing operations	791		(160)		+951		n.a.
	Net income from discontinued operations	(426)		(516)		+90		n.a.
	Net income, Group share	298		(675)		+972		n.a.
	Group Free Cash-Flow	526		116		+410		+353%
			31/12/213		31/12/206		Chg.	Chg.2
					(€m)	(%)
	Net debt	(936)		(1,378)		-442		-32%
	Shareholders' equity	1,335		958		+377		+39%
	Leverage (Net debt-to-EBITDA ratio)	0.9		2.7		-1.8 pts	n.a.
	Gearing (Net debt-to-equity ratio)	70%		144%		-74pts	n.a.
	Gearing within the meaning of bank covenants4	51%		115%		-64pts	n.a.
	ROCE (COI/capital employed5 for previous year)		30%		8%		+22pts		n.a.

• Data rounded to the nearest million
  2 Data rounded to higher or lower %

• 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 2021 and 2020. See reconciliation tables in Appendix 1. The balance sheet impacts are only restated to 2021.
  4 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.

• In accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", the consolidated financial statements were restated on 1 January 2020 for the impact of financial fraud at the Group's head office. The impacts, notably on net debt and shareholders' equity, are presented in the table in Appendix 7.

N.B. 1: all the commented figures for FY 2021 and FY 2020 correspond to figures in accordance with the IFRS 5 standard as presented in the Group's consolidated financial statements, unless otherwise specified.

N.B. 2: all the commented changes in FY 2021 are with respect to FY 2020, unless otherwise spec- ified. "H1" corresponds to the first half of the year, "H2" to the second half.

The Group's turnover amounted to €3,668m in 2021, up significantly by 31% (+35% at constant scope and exchange rates9). This growth was mainly driven by Manganese alloys activity (very favourable price environment combined with an improved product mix), as well as excellent operational performances in the manganese ore business (+21% in volumes produced, +9% in volumes sold) and trading activity for nickel ferroalloys produced in Weda Bay.

• See Financial glossary in Appendix 8

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Group EBITDA totalled €1,051m, up very significantly (x2) versus 2020, notably reflecting:

• An impact of external factors of +€437m, including positive price effects of +€394m for manga- nese alloys and +€227m for nickel, partially offset by -€278m in cost increases, notably linked to freight,
• Intrinsic performance of +€164m for activities of the new scope, including +€111m linked to the growth in external manganese ore sales,
• A negative impact of -€66m linked to SLN, whose performance was impacted by exceptional external disruptions in New Caledonia.

Current operating income came to €784m, mainly after booking a depreciation expense on fixed assets of -€259m.

Net loss for discontinued operations amounted to -€426m and mainly reflects the negative impact of the announced divestment of Aubert & Duval (-€340m), with no impact on Group net debt at 31 December 2021.

As a result, net income, Group share for the year was €298m. It also includes the share of income in Weda Bay (+€121m) as well as the impairment reversal on the lithium project (+€117m).

Free Cash-Flow ("FCF") amounted to €526m in the new scope of the Group. Excluding holding costs, the Mining and Metals division generated FCF of nearly €700m, including a contribution from Weda Bay of up to €146m, reflecting the excellent operational performances of the activities.

Capex disbursements remained stable at €312m. They include growth capex totalling €151m in Gabon, including the plan to modernise the Transgabonese railway, in order to support organic development in manganese ore production, which is highly value-accretive with a quick payback. Current capex was kept under control, notably at SLN pending the release of authorisations on nickel ore exports, obtained in February 2022.

Net debt stood at €936m at 31 December 2021, a reduction of more than €440m10 due to the Group's strong cash generation, despite negative FCF of -€125m in discontinued operations. The change in net debt also includes the contribution of Meridiam following its acquired equity interest in the capital of Setrag in November (+€31m).

Moreover, a proposal to pay out a dividend of €2.5 per share in respect of the 2021 financial year will be made at the Shareholders' General Meeting on 31 May 2022.

Financial fraud was identified at end-2021 within the Group's central treasury management, as announced in a press release issued on 21 December 2021. The findings of the immediate investigations established that the fraud had been initiated by an employee of the Group. The purpose of the fraud was to falsify the true characteristics of a realised investment, and then to conceal the financial loss suffered in 2019 from the decline in value of the investment in question. The employee was dismissed for gross misconduct with legal proceedings initiated.

It is confirmed that the financial impact was limited to €45m. It has been booked in the Group's shareholders' equity and cash in the opening balance sheet at 1 January 2020.

10 Reduction in net debt of €388m, before application of the IFRS 5 standard

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