Eramet Sa · EURONEXT:ERA
Eramet Sa — 2023 BofA Global Metals, Mining & Steel Conference
54 slides from Eramet Sa's conference presentation, May 16, 2023
Slide 1: Investor Presentation
Investor Presentation 2023 BofA Global Metals, Mining & Steel Conference 16-18 May 2023
Slide 2: Disclaimer
Disclaimer Certain information contained in this presentation including any information on Eramet’s plans or future financial or operating performance and any other statements that express management’s expectations or estimates of future performance, constitute forward- looking statements. Such stat
Slide 3: Contents
Contents 1– Eramet at a glance 2– Strategic positioning 3– Decarbonation roadmap 4– Q1 2023 Key trends Conclusion and outlook 3 Eramet – Investor presentation, May 2023
Slide 4: Eramet at a glance
1 Eramet at a glance Unless otherwise specified, financial figures are presented in accordance with IFRS 5 - Non-currents Assets Held for Sale and Discontinued Operations -, in line with Eramet’s new scope focused on the Mining & Metals division
Slide 5: A global pure player in Mining & Metals
A global pure player in Mining & Metals Refocused on 4 activities1 Record financial results in 2022 Manganese Nickel 63% 28% of sales of sales Adjusted €5.0bn EBITDA1 Group sales Mineral sands 2022 Lithium €1.9bn 9% In development FCF of sales generation Breakdown of sales by geography €824m 46% Lev
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 In construction Assets Assets Assets Asset Ore – Moanda (Gabon) Weda Bay (Indonesia) GCO (Senegal) Centenario (Argentina) World’s largest manga
Slide 7: Eramet biggest strength: its first-class deposit portfolio
Eramet biggest strength: its first-class deposit portfolio Long-life world-class deposits positioned on the first quartile of the mining industry cost curve Moanda – Gabon Weda Bay – Indonesia Centenario – Argentina Cameroon 25 28 Bolivia 3 Weda Bay Libreville Gabon Indonesia Moanda 116 Mt resources
Slide 8: An increased diversification by country strengthening the business profile
An increased diversification by country strengthening the business profile 2018 EBITDA geographic breakdown1 2022 adj. EBITDA2 geographic breakdown1 30% 38% €1.9bn 5% 9% 3 18% Gabon Senegal New Caledonia OECD Gabon Senegal OECD Indonesia New Caledonia 1 Excluding discontinued activities, for illustr
Slide 9: A committed, contributive and recognized corporate citizen
A committed, contributive and recognized corporate citizen 1 2 3 OUR PURPOSE, OUR Committed to Committed to economic Committed to the REASON FOR ACTING people responsibility planet “ Become a reference for the responsible transformation of the Earth’s mineral Ensuring the Health & Contributing to en
Slide 10: A CSR commitment and performance recognized by rating agencies
A CSR commitment and performance recognized by rating agencies A- Climate change B- 73/100 B- Prime Water security Gold medal Among the best in Among the best in Top 3% in the M&M sector the industry the industry 26.11 66/100 Advanced 2nd decile 9/144 3/44 in the M&M sector in the M&M sector in the
Slide 11: A long-term strategy supported by a sustainable financial structure
A long-term strategy supported by a sustainable financial structure 2022 2021 Significant deleveraging achieved in 2021 and 2022 0.2x 0.9x 1 Target leverage1 of < 1x on average through the cycle Leverage Leverage Maintain strong balance sheet to secure financial sustainability and €616m €387m Deleve
Slide 12: Credit rating awarded in April by two leading agencies
Credit rating awarded in April by two leading agencies, enhances the Group in securing and diversifying its financing plan Rating agencies’ highlights Moody’s “Strong market positions” “Best in class cost position in all mining Ba2 BB+ activities and large reserve base” Outlook stable Outlook stable
Slide 13: Successful inaugural issue of €500m sustainability-linked bonds
Successful inaugural issue of €500m sustainability-linked bonds st bond issuance as 1 rated company Sustainability-linked features SPT 1 SLB Financing directly linked to our -35% Scope 1 and 2 GHG emission intensity reduction (vs. 2019 baseline) decarbonation roadmap by 2025 SPT 2 €500m 2028 of supp
Slide 14: Strategic positioning
2 Strategic positioning
Slide 15: Successful strategic repositioning: focused on the upstream of the metals value chain
Successful strategic repositioning: Eramet becomes a player focused on the upstream of the metals value chain 1 2 3 FIX / REPOSITION GROW EXPAND our portfolio in metals for the our least performing assets in our attractive businesses energy transition Ore production organic A&D divested Lithium grow
Slide 16: Our purpose, our reason for acting
Our purpose, our reason for acting “ Become a reference for the responsible SUSTAINABLE VALUE CREATOR transformation of the Earth’s mineral resources for ‘living well’ together ” BUSINESS PARTNER ENTREPRENEUR OF CHOICE Develop a selective portfolio of value- Strategic transformation 1 accretive mini
Slide 17: The world will need new metals, and more metals
The world will need new metals, and more metals 1200 BC 1700 1800 1900 2000 C Cu Fe C Cu Fe C Ca Co Al C Ca Ce Co Cr Al Ag C Ca Cd Ce Cu Fe Mn Cu Fe Mg Mn Mo Ni Co Cr Cu Fe Ga Ge Pb Sn W Pb Pt Si Sn Th Ti In K Li Mg Mn Mo C W Zr Nb Ni P Pb Pt Re ree Rh Ru Si Sn Ta Th Ti U V W Zr A pivotal mission fo
Slide 18: A strategic roadmap based on 2 pillars, supported by strong CSR commitments
A strategic roadmap based on 2 pillars, supported by strong CSR commitments Grow in metals supporting Sustainably develop critical global economic development metals for the energy transition Resilient markets Fast-growing markets MANGANESE ORE & ALLOYS LITHIUM NICKEL NICKEL/COBALT FOR BATTERIES MIN
Slide 19: Eramet positioned to be a key player in the battery value chain
Eramet positioned to be a key player in the battery value chain Eramet provides a unique solution to sustainably secure the metal supply for the battery industry Upstream Downstream 1 HPAL: High Pressure Acid Leach 19 Eramet – Investor presentation, May 2023 2 CAM: Cathode Active Material
Slide 20: Eramet is accelerating in the energy transition
Eramet is accelerating in the energy transition Solid fundamentals to speed up the Group’s ambitious, promising projects in metals for the energy transition Plant construction Centenario in progress Sonic Bay Good progress (Argentina) 24kt per year LCE (Indonesia) with BASF Phase 1 Battery-grade Lit
Slide 21: Eramet's two main projects for EV battery metals
Eramet’s two main projects for EV battery metals
Slide 22: Centenario: a world-class asset poised to enter the market at the right time
Centenario: a world-class asset poised to enter the market 3 at the right time Forecasted lithium market demand3 (in kt LCE2) Plant construction in progress 3,000 Lithium demand – Update February 2023 Lithium demand – Previous update 2,500 1 Eramet project commissioning By mid-2025 Full ramp-up at 2
Slide 23: Centenario (phase 1): key metrics of a Tier 1 project
3 Centenario (phase 1): key metrics of a Tier 1 project Key financial metrics – Phase 1 Key operational metrics – Phase 1 c.$300m At full ramp-up1 24,000 Yearly production at full ramp-up EBITDA Based on a $17,800/t LCE Tons of LCE4 LT consensus CIF price Battery-grade LCE at 100% Eq. 500k vehicles
Slide 24: Phase 2: unlocking the great potential of Centenario deposit
Phase 2: unlocking the great 3 potential of Centenario deposit Feasibility study ongoing FID expected by for Phase 2 2023 year-end In 2 development for next stage stages Phase 2 c.50kt/yr in 2 development stages Battery-grade Expansion under study LCE1 Total Centenario c.75kt/yr annual production Ba
Slide 25: Sonic Bay: partnering with BASF
Sonic Bay: partnering with BASF to consolidate 28 27 our position on the battery value chain FID pending 2026 Project bound on a large c.60 kt/year2 c.6 kt/year2 limonitic deposit in Halmahera Expected in Expected start Battery-grade Battery-grade island (Indonesia) H2 2023 of production1 nickel pro
Slide 26: Decarbonation roadmap
3 Decarbonation roadmap
Slide 27: The Group has significantly reduced the carbon intensity of its products since 2018
The Group has significantly reduced the carbon intensity of its products since 2018 Carbon intensity1 of Eramet's products (tCO2/t outgoing product) 0.5 CSR roadmap 2018-2023 Target -26% SLB2 financing 0.4 vs. 2018 framework Achieved -40% vs. 2018 Target -35% Target -40% 0.3 vs. 2019 vs. 2019 0.2 0.
Slide 28: Eramet has a strong commitment to fight climate change
Eramet has a strong commitment to fight climate change Validation of the Group's CO2 absolute emissions reduction target “well below 2°C” 2023-2035 decarbonation capex by SBTi 0.4Mt -13% 0.3Mt -40% €500m Eramet’s direct investments Contribute to carbon 3.7Mt neutrality 3.3Mt Additional substantial i
Slide 29: Decarbonation projects on pyrometallurgical operations
Decarbonation projects on pyrometallurgical operations c.90% of Eramet’s energy consumption & GHG emissions1 Sourcing of Energy efficiency Replacement of CCS2 CO2 free power improvement carbon reductants development ✓ Dunkirk (France) CO2 free power sourced ✓ SLN (New Caledonia) Temporary Offshore M
Slide 30: Decarbonation of mining operations
Decarbonation of mining operations Eramet’s energy consumption & c.10% of GHG emissions1 Solar farm project Electrification at GCO (Senegal) of mining trucks Off-grid solar plant to be With solutions already commissioned in 2024 available on the market CO2 emissions reduction Energy recovery during
Slide 31: Engaging with value chain is key to decarbonize our activities
Engaging with value chain is key to decarbonize our activities Eramet’s 2022 global CO2 footprint Engaging with our value chain on Scope 3 14.97 MtCO2 Eramet’s commitment 3.55 MtCO2 3.54 MtCO2 of its suppliers and customers by 67% emissions to have decarbonation targets consistent with the well-belo
Slide 32: Q1 2023 Key trends
4 Q1 2023 Key trends Unless otherwise specified, financial figures are presented in accordance with IFRS 5 - Non-currents Assets Held for Sale and Discontinued Operations -, in line with Eramet’s new scope focused on the Mining & Metals division
Slide 33: Sharp decline in prices in Q1 2023 compared to exceptionally high levels in Q1 2022
Sharp decline in prices in Q1 2023 compared to exceptionnaly high levels in Q1 2022, particularly for manganese alloys and Class II nickel Manganese ore (CIF China 44%) Nickel ore Q = -13% Q = -9% SLN nickel ore (CIF China 1.8%) Weda Bay nickel ore (HPM – Indonesia) Q= +29% Q1 22 Q2 22 Q3 22 Q
Slide 34: Input costs still high, albeit declining in Q1 2023 vs. 2022 average
Input costs still high, albeit declining in Q1 2023 vs. 2022 average 100 basis Reductant prices Q = -36% 250 Q = -32% Reductants 200 150 Q1 2023 prices down (vs. Q1 2022) but still at historically high levels 100 50 Still weighing on the performance of the metallurgical activities 0 Q1 22 Q2 22 Q3 2
Slide 35: Q1 2023 Group adjusted turnover down 24%
Q1 2023 Group adjusted turnover down 24%, mostly driven by a very unfavourable price effect as expected Slight decrease in overall volumes despite strong Weda Bay performance, reflecting: ✓ Exceptionnal operational difficulties in Gabon (production & transport halted over nearly 1 month after end-20
Slide 36: Q1 2023 Manganese operational performance
25 Q1 2023 Manganese operational performance Production Production loss of 0.4 Mt in 1.1 Mt Q1 2023 due to end-December 2022 Carbon steel production -38% vs. Q1 2022 landslide Manganese Transport 463 Mt in Q1 2023, stable YoY ore 1.4 Mt FOB cash cost at $2.8/dmtu, up 16% +5% China -13% Europe, -5% N
Slide 37: Q1 2023 Nickel operational performance
28 Q1 2023 Nickel operational performance Ore volumes sales1 Continued ramp-up of the mine, mainly driven by low-grade ore Stainless steel production 7.9 Mwmt (3.8 Mwmt sold) Weda Bay +67% vs. Q1 2022 13 Mt in Q1 2023, -4% YoY Nickel Ferroalloys +3% China -13% Rest of the World production1 Power pla
Slide 38: Q1 2023 Mineral sands operational performance
22 40 Q1 2023 Mineral sands operational performance HMC1 production HMC production impacted by Ceramic & pigments Grande Côte 112 kt lower grade (as expected) and -43% vs. Q1 2022 markets operational difficulties in January Opérations Zircon Current macroeconomic (GCO) production Zircon production i
Slide 39: Conclusion & outlook
Conclusion & outlook
Slide 40: Robust mining production expected in 2023, in a more challenging environment
Robust mining production expected in 2023, in a more challenging environment Geopolitical and macroeconomic uncertainties, as well as inflationary context expected to continue weighing on all the Group's markets in 2023, with a downturn in demand and prices in Q1 Uncertainty persists regarding freig
Slide 41: The start of a new ERA
The start of a new ERA 1 2 3 4 Repositioning in Developing Well positioned to Robust balance M&M cash projects to address fast- sheet & strong generating address Energy growing markets fundamentals activities Transition in years ahead 41 Eramet – Investor presentation, May 2023
Slide 42: Appendices
Appendices cs -erameT™ >.
Slide 43: Group's repositioning over the past 5 years
Group’s repositioning over the past 5 years Aug. Oct. Dec. 2018 2018 2018 2019 2019 Moanda Weda Bay TiZir Weda Bay Centenario Sale of poorly Feasability study to Relaunch of the Acquisition of MDL1 Start of mining Start of on-site Training performing develop the Okouma Weda Bay nickel 50% share in t
Slide 44: Eramet industrial footprint
Eramet industrial footprint Europe France Norway mining & Dunkirk Paris Kvinesdal, Porsgrunn, Sauda 17 industrial sites Tyssedal Eramet Ideas Trappes Project Mining site Asia Indonesia Processing Weda Bay Headquarters Americas R&D center USA Africa Marietta Gabon Manganese Moanda Nickel Argentina Sa
Slide 45: Sustain and further develop organic growth in our legacy operations
Sustain and further develop organic growth in our legacy operations World’s leading manganese mine Taking the lead on green Mn alloys Mn ore production Maintenance and Moanda High grade Eramet’s alloys renovation of Setrag’s Mn ore (Gabon) 8.0 Mt railway to support CO2 intensity4 Annualised producti
Slide 46: Lithium, cobalt and nickel are the critical metals used in batteries for e-mobility
Lithium, cobalt and nickel are the critical metals used in batteries for e-mobility Half of the cars sold globally in 2030 should Energy Transition metals be fully or partially electric1… demand booming 3 70% 50% 8% 2020 2025 2030 2035 2040 27 Electric Cars Internal Combustion Engine …with batteries
Slide 47: Lithium project in Alsace: partnering with Électricité de Strasbourg
Lithium project in Alsace: partnering with Électricité de 3 Strasbourg to sustainably develop lithium in Alsace Equivalent to PFS End-of-decade c.10kt/year 15-20%2 starting Expected start of LCE1 production of French needs in 3 production Li Two geothermal power plants Partnership with Électricité d
Slide 48: ReLieVe: partnering with SUEZ in battery recycling
ReLieVe: partnering with SUEZ to become a player in the battery recycling value chain in Europe Ongoing c.€80m Up to 50k/year Subsidies awarded to of battery modules PFS Eramet1 recycled Innovative closed-loop process fully piloted in 2020-2021 within Eramet Research & Innovation Centre Partnership
Slide 49: A 2018-2023 CSR roadmap combining operational performance and corporate commitment
A 2018-2023 CSR roadmap combining operational performance and corporate commitment… …answering our challenges and the UN Sustainable development goals Commitment to economic Commitment to people responsibility For each of the 13 goals: Ensure the Health and Safety of Be an energy transition leader i
Slide 50: Aligning with the highest standard in responsible mining
Aligning with the highest standard in responsible mining Planning for Business integrity positive legacies 100% of our mining sites engaged in an independent audit Social Environmental process by 2027 responsibility responsibility A standard encompassing Promoted by our 2021-22: 4 sites completed se
Slide 51: Global carbon steel and manganese ore production
25 Global carbon steel and manganese ore production Global carbon steel production Global manganese ore production (manganese content) +2% Mt -4% Mt 2,100 22 20.6 21.1 1,935 1,855 20 1,800 5.0 18 5.1 1,500 16 53% 2.9 54% 14 3.1 1,200 12 4.2 3.7 10 900 0.5 -5% -1% 8 0.7 600 467 463 6 5.3 5.0 47% 46%
Slide 52: Global stainless steel and primary nickel production
28 Global stainless steel and primary nickel production Global stainless steel production1 Global primary nickel production1 (excl. recycling) -4% +15% Kt Kt 60,000 57,696 3,200 3,081 55,250 2,800 2,677 50,000 880 2,400 57% 900 40,000 58% 2,000 407 30,000 1,600 430 -4% 1,200 1,147 +6% 20,000 13,714
Slide 53: Primary nickel demand from all applications
28 Primary nickel demand from all applications Half of total demand Mt Ni comes from batteries 6.9 7.0 CAGR 2022-2027 — 2027-2032 Batteries demand +6% — +5% 6.5 surpasses STS 6.1 6.0 STS +3% — +1% 5.7 Batteries +22% — +13% 2.4 5.5 Others +2% — +2% 5.2 5.0 4.9 2.3 4.5 Batteries main 4.0 4.0 growth dr
Slide 54: Contacts
CONTACTS Director of Investor Relations Sandrine NOURRY-DABI sandrine.nourrydabi@eramet.com
Eramet — 2023 BofA Global Metals, Mining & Steel Conference on 6ix