Eramet: Third-quarter 2020 turnover stable, the sales of the Mining and Metals division offset the impact of the profound aerospace crisis

Paris, 28 October 2020, 7:30 a.m.

PRESS RELEASE

Eramet: Third-quarter 2020 turnover stable, the sales of the Mining and Metals division offset the impact of the profound aerospace crisis

• Sales of €850m (-5% on third-quarter 2019)
• Significant decline in Aubert & Duval sales: -18%from 2019, -34%over two years
• Excellent production and sales performance from mining activities, driven by the rebound in Chinese steel production in a disrupted market environment:

1. Increase in Q3 20 manganese ore volumes produced (+15%) and sold (+65%)

1. Increase in nickel ore volumes produced (+20%) and exported (+6%), leading to a significant improvement in SLN cash cost to $5.24/lb in the third quarter

1. Swift ramp-up in nickel ferroalloys production at Weda Bay, with 13 kt Ni since its launch in May

• 1. Increase in mineral sands production (+13%), at a pace of 730 kt per year
• Raw material sales prices sharply down overall: -26%for manganese ore and -17%for ferronickel; conversely, very strong growth in the price of nickel ore (+35%)
• 2020 Outlook:
• 1. Manganese ore production target raised to 5.8 Mt (+22% vs 2019)

1. Opening of new mining plateau in Gabon in October, enabling gradual ramp-up in production towards a capacity of 7 Mt in manganese ore by 2022

• 1. Nickel ore exports confirmed at 2.5 Mwmt (+54% vs 2019)
• Factoring in the operational improvements, in particular the increased mining production, forecast EBITDA is expected to strongly improve in the second half of 2020 compared to the first half. Nevertheless, it will be significantly lower on a full-year basis.

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

Christel Bories, Eramet Group Chairman and CEO:

We achieved a remarkable third-quarter performance in terms of mining production in a still very volatile economic environment.

Our mining activities pursue their successful growth momentum, specifically in Gabon, which reported a manganese ore production at a pace of more than 6 Mt per year. In New Caledonia, growth in nickel ore exports took on a new dimension, up by nearly 60%. However, SLN remains fragile and the success of its rescue plan is now more crucial than ever; we are counting on the commitment of all stakeholders.

The High-Performance Alloys division was adversely affected by the collapse of air transport and its impact across the aerospace supply chain. Drastic cost adjustment measures have been taken. Moreover, with respect to its strategic review, the Group is seeking for the best solutions for Aubert & Duval's activity, a strategic company for the sector; all options being considered.

All the Group's teams manage business as closely as possible to their markets and customers and remain fully focused on preserving cash.

2

• Safety and preventive measures to face the pandemic

The Group remains fully committed to ensuring safety in the workplace. At end-September 2020, the total recordable injury rate (TRIR1) was 4.1 year to date, steadily down -24% from 2019.

Regular reviews are conducted regarding the health protocol, implemented on all of the Group's sites, in an effort to anticipate pandemic developments and to comply with the recommendations of local authorities. Under these circumstances, all our activities operated without any disruptions in Q3 2020.

• Eramet group's sales by activity

	(Millions of euros)1	Q3		Q3		Change2
	2020			2019		(%)
	MINING & METALS DIVISION
	Manganese BU	420			427		-2%
	Nickel BU	216			216		-
	Mineral Sands BU	63			62		+2%
	Division total	699			705		-1%
	HIGH-PERFORMANCE ALLOYS DIVISION
	A&D and Erasteel	154			192		-20%
	HOLDING COMPANY &	(3)			(2)			n/a
	ELIMINATIONS
	ERAMET GROUP	850			895			-5%

9m	9m	Change2
2020	2019	(%)
1,259	1,331	-5%
582	562	+4%
202	201	+0%
2,043	2,094	-2%
499	615	-19%
(5)	(6)	n/a
2,537	2,703	-6%

1. Data rounded up to nearest million.
2. Data rounded up to higher or lower %.

N.B.: all changes in third-quarter 2020 ("Q3 2020") performance are calculated in relation to third- quarter 2019 ("Q3 2019"), unless otherwise indicated. Similarly, year-to-date changes relating to the first nine months of the year ("9m 2020") are calculated in relation to the previous year ("9m 2019").

The Group's Q3 2020 sales totalled €850m, down -5%. Currency effects came to -3%, owing to the weakening of the US dollar against the euro. At constant scope and exchange rates2, sales were down by -2%, mainly due to the impact of the aerospace crisis on activity at Aubert & Duval.

At 30 September 2020, the Group's cash position remains high.

A dividend of €8m was paid out in October to Comilog's minority shareholders for the 2019 financial year.

1. TRIR (total recordable injury rate) = number of lost time and recordable injury accidents for 1 million hours worked (employees and subcontractors)
2. See Financial glossary in Appendix 4

3

• Mining & Metals Division Manganese BU

Ore production in Gabon achieved a pace of more than 6Mt per year in Q3 2020, with ore volume sales up nearly +65%. Alloys volumes produced and sold were down, reflecting the downturn in the steel sector. Despite a decline versus both Q3 2019 and H1 2020, ore prices levelled off at $4.2/dmtu on average over the quarter.

Manganese BU sales, which accounted for slightly over 49% of the Group's total consolidated sales, came to €420m, down very slightly (-1.6%) versus Q3 2020. Growth in ore sale volumes offset price declines and the contraction in alloys sales.

Market trends & prices

In Q3 2020, global production of carbon steel, the main end-market for manganese, was up +0.9%3 ending at 475Mt. Production in China, which represents c.57% of global production, grew significantly (+9.6%3), mainly driven by the construction of infrastructure to kick-start the economy. Record-breaking highs were set in Q3. As for the rest of the world, production slowed considerably (-9.6%3), owing to the decline in demand in Europe (-20.8%3) and North America (- 22.5%3), which were hard hit by the health crisis.

During the first nine months of the year, carbon steel production reached 1.36 bn tonnes, down - 3.8%3 on the same period in 2019.

Despite the contraction in demand, global manganese ore production increased by +8.3% in Q3, boosted by solid Q2 price levels and the increased contribution from South Africa, following mine closures in Q2. The supply/demand balance thus remained in surplus with Chinese port ore inventories totalling 6.6Mt4 at end-September 2020 (equivalent to approximately 11.5 weeks' consumption versus 9 weeks' consumption at end-June 2020).

The average CIF China 44% manganese ore price stood at approximately $4.2/dmtu5 in Q3 2020, down c.-26%6,7 from Q3 2019 ($5.7/dmtu6).

In Q3 2020, manganese alloy prices in Europe recorded a marked decline, particularly for refined alloys (medium-carbon ferromanganese at approximately €1,306/t6, representing -12% from Q3 2019) but also for standard alloys (silicomanganese at approximately €863/t6, i.e. -10%).

Activities

In Gabon, Comilog's manganese ore production was up +15% to 1.5Mt in Q3 2020 (4.3Mt year to date at end-September). Transported ore volumes also increased (+24%), in line with the record level delivered in Q2 2020. The mine's and logistics' good performance reflects operational improvement achieved. The latter, together with lower internal sales (to the Group's manganese alloys plants), led to an increase in external ore sales volumes of nearly 65%, ending at 1.5Mt in Q3 20 (3.9Mt year to date at end-September).

Quarterly production at manganese alloys plants continued to adapt to demand in a market affected by the sharp slowdown in steel production in Europe and the United States. This drove

1. Eramet forecasts based on World Steel Association (WSA) production data
2. Source: CNFEOL (China FerroAlloy Online)
3. Quarterly average market prices, Eramet calculations and analysis
4. Manganese ore: CRU CIF China 44% spot price; Manganese alloys: CRU Western Europe spot price
5. Adjusted for unfavourable currency effects (appreciation of the euro versus the US dollar), the decline in price in euros was -29% on a comparable quarterly basis

4