Eramet Sa · EURONEXT:ERA
Eramet Sa — Non-Deal Roadshow (September 2023)
58 slides from Eramet Sa's roadshow presentation, Sep 12, 2023
Slide 1: 2023 North American Roadshow
2023 North American Roadshow Christel BORIES, Chair & CEO Nicolas CARRÉ, CFO September 12th - 13th, 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– H1 2023 Key highlights 3– Progressing on our energy transition projects 4– Progressing on our CSR roadmap Conclusion & outlook 3 Eramet – North American Roadshow, Sept. 2023
Slide 4: Eramet at a glance
1 Eramet at a glance
Slide 5: A global pure player focused on the upstream of the metals value chain
A global pure player focused on the upstream of the metals value chain Refocused on 4 activities in Mining & Metals Record financial results in 2022 Manganese Nickel 59% 33% Adjusted of sales €5.4bn of sales EBITDA1 2022 Group Mineral sands adjusted turnover Lithium €1.9bn 9% FCF of sales In develop
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 man
Slide 7: Eramet biggest strength: a first-class deposit portfolio
Eramet biggest strength: a first-class deposit portfolio Long-life world-class deposits positioned in the 1st quartile of their commodity sector cost curves Moanda – Gabon Weda Bay – Indonesia Cameroon 25 28 High grade ore Weda Bay Libreville Gabon 44% Moanda 116 Mt resources1 15.2 Mt resources1 64
Slide 8: Committed, contributive and recognized corporate citizen
A committed, contributive and recognized corporate citizen OUR PURPOSE, OUR REASON FOR ACTING Main ESG rating agencies recognize “ Become a reference for the responsible transformation of the Earth’s mineral Eramet as a leader in the sector A- resources for ‘living well’ together ” Climate change Am
Slide 9: A major and successful repositioning since 2018
A major and successful repositioning since 2018… 1 2 3 FIX / REPOSITION GROW EXPAND our portfolio in metals for energy our least performing assets in our attractive businesses transition Ore production organic Sandouville divested Lithium growth • Argentina - Centenario +215% in 2022 since 20181,2 •
Slide 10: Increased diversification by country strengthening the business profile
…resulting in an increased diversification by country strengthening the business profile and the sources of cash flows 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 Ex
Slide 11: A strategic roadmap based on 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 MI
Slide 12: Metals for the Energy Transition becoming the main driver for growth
…with metals for the Energy Transition becoming the main driver for growth, diversifying further Eramet’s portfolio Share of metals for the Energy Transition >35% of adjusted EBITDA by 20271 Nickel 2 Nickel 2 Lithium 3 Metals for the energy transition Metals for global economic growth 2022 2027 Text
Slide 13: Disciplined capital allocation remains Eramet's priority
Disciplined capital allocation remains Eramet’s priority 1 2 3 Deleveraging Growth capex Dividends Target leverage1 of < 1x on Disciplined investment Rewarding our average through the cycle policy shareholders for their long- term commitment Primary focus on Organic Maintain strong balance growth an
Slide 14: H1 2023 Key highlights
2 H1 2023 Key highlights
Slide 15: A very challenging environment in H1: strong decline in selling prices
A very challenging environment in H1: strong decline in selling prices and still high input costs H1 price down External impact of vs. H1 2022 record levels -€749m4 on Group adjusted EBITDA -23% Manganese ore price index1 -€724m -€48m Adjustment of Mn alloys Price production (to adapt to market cond
Slide 16: Operational performance impacted by logistics incidents in Gabon
Operational performance adversely impacted by major logistics incidents in Gabon, now fully resolved A mixed operational performance amongst activities Manganese ore Manganese alloys Production down due to non- Production adapting to market recurring incidents conditions -27% -18% Manganese ore prod
Slide 17: H1 2023 performance driven by declining prices and one-off challenges
H1 2023 performance driven by declining prices and one-off operational challenges, but a strong contribution from Weda Bay’s mining activity Action plan to adjust to economic Adjusted FCF Net environment: EBITDA generation debt €339m -€120m €712m Cost reduction & Incl. Weda Bay Incl. Weda Bay cash s
Slide 18: H1 2023 further key milestones in Eramet's CSR journey
H1 2023 further key milestones in Eramet’s CSR journey Safety as #1 priority €3.3bn in 2022 Economic contributions in Launch of the the main regions in which FR2 at Top 3 independent assessment Eramet operates performer 1.0 According to at GCO >127k benefited from the 2023 target: <4 (Senegal) ICMM1
Slide 19: Staying the course and progressing on our strategic roadmap
Staying the course and progressing on our strategic roadmap Progressing on energy Shaping our portfolio for the transition projects future Phase 1: start of production Stepping up lithium brine Lithium (24kt p.a. LCE) confirmed for Lithium exploration & business Q2 2024; $400m secured brines develop
Slide 20: H1 2023 financial performance
H1 2023 financial performance Unless otherwise specified, financial figures are presented in accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations - in line with Eramet’s new scope
Slide 21: H1 2023 significantly lower compared to a record-high H1 2022
H1 2023 significantly lower compared to a record-high H1 2022 €m H1 2023 H1 2022 Adjusted sales1 1,901 2,816 Sales 1,604 2,635 Adjusted EBITDA1 339 1,170 EBITDA 93 982 Current operating income -10 853 Net income – Continuing operations 52 783 Net income – Discontinued operations 14 -13 Net income –
Slide 22: Continued proactive management of Eramet's debt profile
Continued proactive management of Eramet’s debt profile; very high liquidity to address future maturities Debt maturity at 30 June 2023 (€m) Group financial liquidity (€m) Undrawn line: RCF & term loan Commercial papers, banks French govt. loan to SLN 551 Available cash & operating debts 2,596 37 2,
Slide 23: Extending the debt maturity while securing major projects' financing
Extending the debt maturity of the Group, while securing its major projects’ financing Successful inaugural issue of Joint marketing agreement of lithium sustainability-linked bonds (SLB) carbonate from Centenario2 €500m 2028 7.0% $400m 50kt LCE c.5yrs (5 years) Amount Advance Contractual Commercial
Slide 24: H1 2023 Operational performance
H1 2023 Operational performance
Slide 25: Operations impacted by non-recurring incidents & maintenance shutdowns
Operations impacted by non-recurring incidents & maintenance shutdowns; continued ramp-up of the Weda Bay mine 25 28 22 40 Organic growth constrained Exceptional growth by non-recurring logistics Mineral performance incidents sands Manganese Weda 16.4 Mwmt1 GCO & ETI 2.6 Mt Bay ore sold Ore ore prod
Slide 26: Steep decline for manganese and nickel market prices in H1 23
Steep decline for manganese and nickel market prices in H1 23 Manganese ore (CIF China 44%) Nickel ore H1 H2 = -14% H1 H1 = -26% H1 H2 = +2% H1 H1 = -23% SLN nickel ore (CIF China 1.8%) Weda Bay nickel ore (HPM – Indonesia) H1 H2 = +10% H1 H1 = +2% H1 2022 H2 2022 H1 2023 H2 2023 H1 2022 H2
Slide 27: Trend reversal in input cost prices, not yet fully reflected in cost base
Trend reversal in input cost prices, not yet fully reflected in Eramet’s cost base 100 basis Reductants consumption prices €/t Lower energy and reductant purchase prices in H1 2023; 300 550 not fully reflected in the Group’s cost base due to lag 250 H1 H2 = -20% between purchase and consumption 500
Slide 28: Freight costs normalization in H1
Freight costs normalization in H1, after historically high levels reached over 2021-2022 Freight costs ($/t)1 H1 H1 = -38% Freight costs include: H1 H1 = -49% chartering costs, based on Routes time charter rate2 60 transportation fuel costs3 50 Routes rate decrease offset by fuel costs sharp increas
Slide 29: Progressing on our energy transition projects
3 Progressing on our energy transition projects
Slide 30: Lithium, cobalt and nickel are the critical metals used in batteries
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 31: 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 31 Eramet – North American Roadshow, Sept. 2023 2 CAM: Cathode Active Material
Slide 32: 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 demand1 (in kt LCE2) Li2CO3 CIF Asia (in US$/kg LCE2) 2,800 90 2,600 80 2,400 2,200 70 2,000 60 01/092023: 1,800 c.$30k/t 1,600 50 1,400 40 1,200 1 30 1 1,000 800 20 $15-20k/t 2 600 10 400 200 0
Slide 33: Centenario: a sustainable & competitive battery-grade DLE technology project
Centenario: a sustainable & competitive battery-grade DLE 3 technology project; progressing on schedule on Phase 1… Phase 11 CSR H1 End-June Q1 Q2 By 2022 2023 2024 2024 mid-2025 60% Process water Start of c.60% Plant Start of Full ramp-up at recycling rate construction commissioning production Cons
Slide 34: Centenario: unlocking Phase 2 & signing a joint marketing agreement
Centenario: …while unlocking Phase 2 & signing a joint 3 marketing agreement of 50kt lithium carbonate from Phase 1 Phase 21 Additional Advance payment c.$90m FID c.30kt LCE 2023 early Expected by of $400m2 per yr, capex, of which 2023 year- battery-grade 49.9% supported end for 1st Joint marketing
Slide 35: Sonic Bay: partnering with BASF to consolidate our position
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/year3 c.6 kt/year3 Timing could be limonitic deposit in Halmahera Expected start Battery-grade Battery-grade postponed to island (Indonesia) of production2 n
Slide 36: 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 37: ReLieVe: partnering with SUEZ in battery recycling
ReLieVe: partnering with SUEZ to become a player in the battery recycling value chain in Europe PFS completed c.€80m Up to 50k/year Subsidies awarded to of battery modules DFS starting Eramet1 recycled Innovative closed-loop process fully piloted in 2020-2021 within Eramet Research & Innovation Cent
Slide 38: Progressing on our CSR roadmap
4 Progressing on our CSR roadmap
Slide 39: 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 40: 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 41: Significantly reduced the carbon intensity of 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 42: 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 43: 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 44: Conclusion & outlook
Conclusion & outlook
Slide 45: Sluggish market outlook, but better operational performance expected in H2
Sluggish market outlook, but better operational performance expected in H2 H1 challenging market environment to continue weighing 2023 prices forecast on all the Group’s activities in H2 unless a rebound in demand materialises, particularly from China Manganese Mn alloys selling prices Back to norma
Slide 46: Close to €900m of Adjusted EBITDA forecast in 2023
The Group forecasts to deliver close to €900m of Adjusted EBITDA in 2023, supported by a strong intrinsic performance in H2 2023 Key operational metrics 2023 Key financial metrics Close to Adjusted >7.0 Mt Manganese ore €900m EBITDA transported Capex1 c.€550m revised down c.35 Mwmt1 Nickel marketabl
Slide 47: The start of a new ERA
The start of a new ERA WELL POSITIONED TO REPOSITIONED IN M&M ADDRESS FAST-GROWING CASH GENERATING MARKETS IN YEARS ACTIVITIES AHEAD 1 2 3 4 ROBUST BALANCE DEVELOPING PROJECTS SHEET & STRONG TO ADDRESS ENERGY FUNDAMENTALS TRANSITION 47 Eramet – North American Roadshow, Sept. 2023
Slide 48: Eramet – North American Roadshow, Sept. 2023
48 Eramet – North American Roadshow, Sept. 2023
Slide 49: Appendices
a A EfraMeT Appendices
Slide 50: Shareholding at 30 June 2023
Shareholding at 30 June 2023 STCPI* Sorame + CEIR (Duval Family) 4% 37.1% Number of shares issued1 APE 27.1% 28,755,047 Other float 31.8% *STCPI (Société Territoriale Calédonienne de Participation Industrielle): entity owned by the New Caledonian provinces 50 Eramet – North American Roadshow, Sept.
Slide 51: 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 52: 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 53: Continuing activities (IFRS 5) – Key figures
Continuing activities (IFRS 5) – Key figures H1 2023 Holding company, Total from eliminations, operations In €m Manganese Nickel Mineral sands Lithium restatements continuing and other entities (IFRS 5) Sales 946 518 136 - 4 1,604 EBITDA 193 -72 49 -9 -68 93 Current Operating Income 138 -92 26 -9 -7
Slide 54: Group Adjusted EBITDA sensitivity to market prices
Group Adjusted EBITDA sensitivity to market prices Annual impact Sensitivities Change on Adjusted EBITDA Manganese ore prices (CIF China 44%) +$1/dmtu c.€245m1 Manganese alloy prices +$100/t c.€60m1 Ferronickel selling prices – SLN +$1/lb c.€90m1 Nickel ore prices (CIF China 1.8%) SLN exports +$10/w
Slide 55: Ongoing cost reduction & cash savings plan
Ongoing cost reduction & cash savings plan to adjust to the challenging economic environment Cost reduction Productivity and and cash savings optimisation of production Fixed cost reduction & operational Volumes, mix, grades, shipments cost savings and OEE maximisation Tight capex monitoring Continu
Slide 56: 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 57: 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 58: Contacts
CONTACTS Director of Investor Relations Sandrine NOURRY-DABI sandrine.nourrydabi@eramet.com Investor Relations analyst Fabien PONT fabien.pont@eramet.com