Eramet Sa · EURONEXT:ERA
Eramet Sa — Investor Presentation (May 2024)
42 slides from Eramet Sa's investor presentation, May 2024
Slide 1: Investor presentation May 2024
Investor presentation May 2024
Slide 2: Disclaimer
Disclaimer Certain information contained in this presentation including any information on plans or future financial or operating performance and any other statements that express expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a n
Slide 3: Contents
Contents 1 Eramet at a glance 2 Strategic repositioning: a successful turnaround story 3 Sustainably developing critical metals for the energy transition: Zoom on lithium 4 Q1 2024 key trends 5 Outlook & conclusion Appendices 3 Eramet Investor presentation May 2024
Slide 4: Eramet at a glance
Eramet at a glance 01
Slide 5: A global pure-play Metals & Mining Company
A global pure-play Metals & Mining Company Refocused on four activities in M&M FY 2023 performance Manganese Nickel 52% 41% Adjusted of sales 2023 Group of sales EBITDA1 Adj. sales FCF 7% of sales 3.8bn generation2 772m In construction Mineral sands Lithium 78m 2023 adjusted sales by geography Lever
Slide 6: Operating in manganese, nickel, mineral sands & developing battery-grade lithium
Operating in manganese, nickel, mineral sands & developing battery-grade lithium MANGANESE NICKEL MINERAL SANDS LITHIUM In operation In operation In operation Starting summer 2024 ASSETS ASSETS ASSETS ASSETS Ore Moanda (Gabon) Weda Bay (Indonesia) GCO (Senegal) Centenario (Argentina) largest mangane
Slide 7: Large resource, long-life, high-grade, scalable deposits
Large resource, long-life, high-grade, scalable deposits Mining assets positioned on the 1st quartile of their respective industry cost curves Moanda GABON Weda Bay INDONESIA GCO SENEGAL Centenario ARGENTINA 457 2,800 3,056 >15 Mwmt Mwmt Mt Mt RESOURCES1,2 44 % RESOURCES1,3 1.2 % RESOURCES1,4 1.1 %
Slide 8: A strategy tailored to the new era of metals
A strategy tailored to the new era of metals Two strategic axes aligned with global macro-trends, supported by an ambitious CSR roadmap GROW IN METALS supporting SUSTAINABLY DEVELOP CRITICAL global economic development METALS for the energy transition RESILIENT Manganese ore FAST-GROWING Lithium MAR
Slide 9: Responsible mining is part of the solutions to support the energy transition
Responsible mining is part of the solutions to support the energy transition 3 AREAS Care for people Trusted partner Transform our FOR ACTION TRANSLATED for nature value chain INTO 10 AMBITIONS 1 Take care of health 4 Control & optimize 7 Reduce the CO2 FOR 2026 and safety of people water consumptio
Slide 10: A CSR commitment and performance recognized by leading ESG rating agencies
A CSR commitment and performance recognized by leading ESG rating agencies B C CLIMATE WATER B- Prime A CHANGE SECURITY Among the best 2nd decile in the Among the best in in the industry M&M sector the industry 28.41 69/100 1st decile in the +3 pts vs. 2021 diversified M&M Above global sector averag
Slide 11: Strategic repositioning: a successful turnaround story
Strategic repositioning: a 02 successful turnaround story
Slide 12: A major refocus by divesting non-core & non-performing assets, achieved in 2023
A major refocus by divesting non-core & non-performing assets, achieved in 2023 Divest / Close Cash burn 2018-2023 ( Least performing assets ✓ Aubert & Duval ✓ Erasteel ✓ Sandouville ✓ Electromanganese activity (Gabon) c.- 1bn Total cash outflows 12 Eramet Investor presentation May 2024
Slide 13: Agreement with the French State to neutralize SLN's debt and strengthen Eramet's balance sheet
Agreement with the French State to neutralize SLN's debt and strengthen Eramet's balance sheet Signature of an agreement between the Proforma Net debt, Adjusted leverage2 & French State and Eramet in April 2024 to gearing as of 31 December 2023 strengthen the Group's balance sheet Conversion of the
Slide 14: Very robust and well positioned assets: profitable at low commodity prices
Very robust and well positioned assets: profitable at low commodity prices Current manganese ore industry cost curve CIF1 Forecast lithium industry cost curve1 (Simplified) Cash cost2, (2028) High-grade (>40%) Medium-grade (30-40%) Low-grade (<30%) $/kg LCE 30 25 Spot price Cash cost, $/dmtu 20 Cons
Slide 15: A stronger operational profile to navigate challenging environments & low cycle periods
A stronger operational profile to navigate challenging environments & low cycle periods Recurring intrinsic performance ( c. c.- 843 772 Intrinsic External performance impact2 2018 2023 EBITDA Adjusted EBITDA1 1 IFRS5 and including share in PT Weda Bay Nickel EBITDA 15 Eramet Investor presentation M
Slide 16: Significant cash generation of reshaped asset portfolio over the past 5 years
Significant cash generation of reshaped asset portfolio over the past 5 years Bridge from 2018 net debt to 2023 net debt ( Current asset portfolio: c. net cash generation c.35% Average cash conversion over the period -289 (excl. SLN & divested assets) -253 • Reshaped asset portfolio Divested assets:
Slide 17: Disciplined capital management & commitment to strong balance sheet
Disciplined capital management & commitment to strong balance sheet Proforma Debt1 maturity profile End-2023 ( Group financial liquidity ( 2,989 c.3 years 2,596 563 Av. maturity 461 48 15 2,012 1,383 361 78 935 12 71 249 901 184 500 291 55 149 1,661 62 15 1,606 300 1,111 15 179 107 134 15 70 31.12.2
Slide 18: Zoom on lithium
03 Sustainably developing critical metals for the energy transition: Zoom on lithium
Slide 19: Lithium demand forecast & lithium carbonate historical price (5-years)
Lithium demand forecast & lithium carbonate historical price 3 (5-years) Li Lithium demand 10-year forecasts1 Lithium carbonate price (CIF Asia) Kt-LCE2 $/Kt-LCE2 5,000 CAGR 90 2021-40 +12% 80 4,000 70 60 3,000 $13.8k/t-LCE CAGR 50 on 12/04/24 2021-30 +20% 40 2,000 Centenario Phase 1 30 start of pro
Slide 20: Centenario: a sustainable & competitive battery-grade DLE technology project
Centenario: a sustainable & competitive battery-grade DLE 3 technology project coming on-stream shortly Li Phase 1 in operation shortly Phase 2 (1st tranche) H1 April 2024 Summer +12 conditionally Board 2022 2024 months approved Start of construction c.95% Start of production Full ramp-up Production
Slide 21: Building a portfolio of lithium projects
3 Building a portfolio of lithium projects Li Acquisition of exploration & Geothermal lithium in France mining concessions in Chile Partnership of exploration & c.120kHa mining concessions Permits & DLE technology geothermal expertise Lithium extraction from geothermal brine Located in the Atacama r
Slide 22: Q1 2024 key trends
Q1 2024 key trends 04
Slide 23: Sharp decline in prices in Q1 24 vs. Q1 23, but more optimistic outlook from Q2
Sharp decline in prices in Q1 24 vs. Q1 23, but more optimistic outlook from Q2 25 Manganese ore (CIF China 44% - CRU) Nickel ore Var. Q1 Mn vs. Q1 Mn ore -21% Mn FeMn -22% SiMn -5% SLN nickel ore (CIF China 1.8%) WB Nickel ore (HPM 1.8%/35%) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q1 23 Q2 23 Q3 23 Q4 23
Slide 24: Activities vs. Q1 23 unfavourable comparison base
activities vs. Q1 23 unfavourable comparison base MANGANESE NICKEL MINERAL SANDS Production Production1 1.9Mt 6.3Mwmt GCO +76% vs. Q1 2023 Weda +52% vs. Q1 2023 Ore Bay Transportation (ore) External sales2 HMC production 1.6Mt 6.1Mwmt 192kt +21% vs. Q1 2023 -17% vs. Q1 2023 +71% vs. Q1 2023 Ilmenite
Slide 25: Sales penalized by a strong negative price impact; limited volume impact
Sales penalized by a strong negative price impact; limited volume impact due to lower volumes sold by SLN Intrinsic: + 17 Extrinsic: - -24% 944 Price impact Mn ore & GCO volumes increase offset +2% 12 761 by weak SLN 16 Volume impact volumes 733 -229 Mn ore Mn alloys Weda Bay SLN +2% GCO Currency im
Slide 26: Outlook & conclusion
Outlook & conclusion 05
Slide 27: Lacklustre market environment at start of 2024, but more favourable outlook emerging from Q2
Lacklustre market environment at start of 2024, SD but more favourable outlook emerging from Q2 Demand remains sluggish across all Group markets, expecting a rebound, particularly from China; price levels improving at the start of Q2 Mn ore supply expected to decline significantly in 2024, given the
Slide 28: Further growth in mining operations, supported by a controlled capex plan
Further growth in mining operations, supported by a controlled capex plan 2024 volumes guidance 2024 capex guidance 6.6 Mt 7.0-7.7Mt -750m3 25 Mn Financed by Eramet in 2024 Transported manganese ore 2023 2024f 28 33.2Mwmt 40-50Mwmt2 Ni 1/3 limonites 2/3 saprolites Marketable1 nickel (HG+LG) ore at W
Slide 29: Supply side shortages of Mn ore give price upside not yet reflected in consensus
Supply side shortages of Mn ore give price upside not yet reflected in the current average consensus price for 2024 2024 illustrative Adjusted EBITDA FY 2023 Q1 2024 Press Release Press Release Market upside Manganese high-grade ore 750-900M 650-800M Current spot price1 +c.$1.8/dmtu (CIF China 44%)
Slide 30: Eramet perfectly positioned to further unlock value in a new era of metals
Eramet perfectly positioned to further unlock value in a new era of metals Pure-play Highest CSR Mining & Metals standards Well World-class Robust positioned asset base financials on attractive with proven enabling markets track record growth 30 Eramet Investor presentation May 2024
Slide 31: Appendices
EfAMeT Appendices
Slide 32: Q1 2024 turnover breakdown
Q1 2024 turnover breakdown % of Group adj. €M Q1 2024 Q1 2023 Chg. YoY % change YOY turnover Manganese 448 440 +8 +2% 59% Manganese ore 254 209 +45 +22% 33% Manganese alloys 193 231 -38 -16% 25% Nickel adjusted1 259 459 -200 -44% 34% Share in Weda Bay (38.7%, excl. offtake) 106 169 -63 -37% 14% Weda
Slide 33: Lower reductants prices, while sea freight prices under upward pressure
Lower reductants prices, while sea freight prices under upward pressure Reductants spot prices (100 basis) 140 Reductants 120 T1 24 vs. 23 = -20% 100 Sharp drop in spot prices for reductants in Q1 24 vs. 80 Q1 23, with a positive impact on manganese alloy 60 margins 40 T1 24 vs. 23 = -33% 20 Nut cok
Slide 34: Global carbon steel & manganese ore production
25 Global carbon steel & manganese ore production Mn Global manganese ore production Global carbon steel production (Mt) Mn content (Mt) +2% Stable 1,854 1,887 20.6 20.7 5.1 5.0 55% 54% 0.5 0.8 2.8 3.0 4.1 3.9 +1% -7% 476 479 5.2 4.9 45% 46% 1.3 0.2 1.1 0.1 55% 54% 8.2 8.1 0.9 0.7 0.8 0.6 45% 46% 2.
Slide 35: Global stainless steel & primary nickel production
28 Global stainless steel & primary nickel production Ni Global primary nickel production (kt)1 Global stainless steel production (Mt)1 (excl. recycling) +6% +3% 57.2 3,109 3,203 54.2 642 632 59% 62% 1,147 1,279 +6% +6% 408 383 13.4 14.2 765 814 156 168 41% 38% 59% 59% 913 909 285 328 96 82 41% 41%
Slide 36: Highly committed for decarbonization through projects & innovations
Highly committed for decarbonization through projects & innovations
Slide 37: Carbon footprint: 84% related to Scope 3
carbon footprint: 84% related to Scope 3 (MtCO2) 68% Of which • Transformation Customers by customers 58% • PT Weda Bay Nickel1 6% Of which • Purchases 8% • Transports 6% 12.0Mt 19% 16% Suppliers 3.4Mt 3.0Mt Scope 3 Scope 3 Upstream Downstream Scopes 1+2 37 Eramet Investor presentation May 2024 1 90
Slide 38: Scopes 1 & 2 GHG emissions reduction & targets
Scopes 1 & 2 GHG emissions emissions breakdown1 (MtCO2) reduction & targets1 (MtCO2) 0.3Mt -12% -18% Pyrometallurgy 0.2Mt -40% 90% 0.2Mt 3.0 Mt Scopes 1 +2 Mining 8% -90% Transport & 3.3Mt loading 3.0Mt 2.8Mt 2% 500m Additional substantial 2019 2022 2023 2035 2050 2019-2035 direct investments decarb
Slide 39: Decarbonization levers tailored to challenges
Decarbonization levers tailored to challenges Pyrometallurgy (c.90% of energy consumption & GHG emissions) Realized Implementation / industrialization ongoing Mining (c.10% of energy consumption & GHG emissions) Project or under consideration -15% -40% Scopes 1&2 -9% Decarbonization of our processes
Slide 40: Significant decrease in the carbon intensity
Significant decrease in the carbon intensity Carbon intensity1 of Eramet's products (Scopes 1 & 2) 2023 target surpassed (tCO2/t outgoing product) 0.5 -40% achieved vs. -26% initial target CSR roadmap 2018-2023 0.4 Initial target Increase of mining activities, less -26% vs. 2018 New CSR roadmap emis
Slide 41: Supporting value chain in reducing its emissions
Supporting value chain in reducing its emissions Engaging with our value chain on Scope 3 breakdown (MtCO2) 67% Transport 7% 46 31% 33% Energy 5% 15.4Mt Purchases Scope3 10% 2019 2022 2023 2025 target Joint-ventures 8% Sales 67% of its suppliers and customers by 70% emissions to have decarbonization
Slide 42: Contacts
CONTACTS Director of Investor Relations Sandrine NOURRY-DABI sandrine.nourrydabi@eramet.com