Eramet Sa · EURONEXT:ERA
Eramet Sa — Shareholder Meeting (May 2020)
27 slides from Eramet Sa's shareholder meeting presentation, May 26, 2020
Slide 1: Combined General Shareholders' Meeting
Combined General Shareholders’ Meeting Christel BORIES Chairman and CEO 26 MAY 2020
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 state
Slide 3: Summary
Summary Introduction 1– 2019 Financial results 2– Q1 2020 – Point to date 3– Strategic transformation Conclusion and outlook 3 Combined General Shareholders’ Meeting - 26 May 2020
Slide 4: Despite the environment, Eramet is delivering on its strategic roadmap
Despite the environment, Eramet is delivering on its strategic roadmap Mining operational records in 2019 Continuing record production in Manganese ore > +15% over 2 yrs (4.8 Mt in 2019 vs 4.1 Mt in 2017) Operational Ongoing increase in nickel ore exports performance > +80% over 2 yrs (1.6 Mwmt vs 0
Slide 5: Shareholding
Shareholding
Slide 6: Historic and stable shareholders
Historic and stable shareholders Shareholding at 31/12/2019 32,1% Duval Family : SORAME + CEIR US institutional 36.9% 6,4% shareholders Other float UK institutional 1,0% 32.1% shareholders Other institutional 7,4% shareholders Number of French institutional 4,0% shares issued shareholders 26,636,000
Slide 7: 2019 Financial results
2019 Financial results 1
Slide 8: EBITDA showing solid operating performance, in a depressed price environment in 2019
EBITDA showing solid operating performance, in a depressed price environment in 2019 High Performance Erasteel Mining and Metals Alloys Division 6% Division Sales €3,671m 23% 77% -4% vs 2018 Aubert & Duval 17% Mineral Sands €3,671m BU Manganese BU 8% 48% Nickel BU 21% EBITDA €630m -25% vs 2018 C
Slide 9: A financial performance adversely impacted by manganese prices and non-recurring items
A financial performance adversely impacted by manganese prices and non-recurring items Deteriorated manganese price environment -21% on average for manganese ore1 prices -€268m EBITDA impact -7% on average for refined manganese alloys’1 prices vs 2018 -5% on average for standard manganese alloys’1 p
Slide 10: Key financial figures
Key financial figures €m 2019 2018 Sales 3,671 3,825 EBITDA 630 843 % Sales 17% 22% Current operating income 341 581 % Sales 9% 15% Net income – Group share (184) 53 Net debt 1,304 717 Net debt, excl. IFRS 16 non cash impact 1,207 717 Gearing (Net debt-to-equity ratio), excl. IFRS 16 non cash impact
Slide 11: Net income-Group share at €(184)m, penalised by non-recurring items
Net income-Group share at €(184)m, penalised by €(114)m of non- recurring items at High Performance Alloys Division and exceptionally high level of taxes €m 2019 2018 Sales 3,671 3,825 Current operating income 1 341 581 Other operating income and expenses 1 (118) (116) Financial result (134) (95) Pr
Slide 12: Continued high liquidity at €2.3bn at 2019 end-year
Continued high liquidity at €2.3bn at 2019 end-year Group financial liquidity (€m) Credit lines fully withdrawn as a precaution as of 31st March 2020 3,000 2,806 2,500 2,468 Revolving credit facility ("RCF") 2,299 > €981m RCF maturing 2024 2,000 1,825 848 1,367 Term loan: > €350m loan granted in Dec
Slide 13: No major debt maturity within the next 3 years
No major debt maturity within the next 3 years Group gross debt at €2,055m at 31 December 2019 (excl. IFRS 16 non cash items) Extension of debt maturity in November 2019: repurchase of 2020 bonds for €227m and issuance of new bonds for €300m due May 2025 Average maturity of Group’s 3-year debt; c. 9
Slide 14: Strengthened and accelerated cash control measures in 2020
Strenghtened and accelerated cash control measures in 2020 Optimising cash flow and closely monitoring net debt level High level of cash maintained, all credit lines drawn down as a precaution in Q1 2020 63%1 gearing (as calculated for covenant purposes) at 2019 year-end (74%, excl. IFRS 16 only) 20
Slide 15: Q1 2020 - Point to date
2 Q1 2020 - Point to date
Slide 16: Eramet fully committed to face the Covid-19 health crisis
Eramet fully committed to face the Covid-19 health crisis Safety and security: the Group’s top priority Daily mobilization of ExCom from the beginning of the crisis to take all the required sanitary and operational measures Strict health protocols rolled out on all sites; stringent guidelines applie
Slide 17: Covid-19: Implementation of an exceptional solidarity plan
Covid-19: Implementation of an exceptional solidarity plan Exceptional allocation: €1.5m Group treasury 2/3 1/3 Donations in kind Financial support of Contributions of Group executives: and equipment to actors mobilized for the CEO, Comex, Board members communities communities Community investment e
Slide 18: Q1 2020 sales down 11%, affected by the sharp decline in material prices…
Q1 2020 sales down 11%, affected by the sharp decline in material prices… High Performance Erasteel Mining and Metals Alloys Division 5% Division 25% 75% Aubert & Duval 20% Mineral Sands €774 m Manganese BU BU 46% 9% Nickel BU 20% Unfavourable price environment hitting the Metals & Mining division’s
Slide 19: …but supported by new operational records for the Mining & Metals division
…but supported by new operational records for the Mining & Metals division Mining and Metals division New Q1 operational records in Q1 2020 > 1.3 Mt in produced manganese ore volumes (+28% vs. Q1 2019) > 918 kwmt in produced nickel ore volumes (+5%) > 331 kwmt in nickel ore exports (+41%) > OEE1 up
Slide 20: Strategic transformation
3 Strategic transformation 1st metal tapping at Weda Bay Nickel’s NPI plant
Slide 21: Continuing Group strategic transformation: increasing cash generation and portfolio diversification
Continuing Group strategic transformation : increasing cash generation and portfolio diversification 3 EXPAND our portfolio in 2 metals for the energy GROW transition 1 in our attractive businesses Lithium: FIX / REPOSITION Manganese ore > Project in Argentina currently our least performing assets >
Slide 22: Agreement for the sale of TiZir's Norwegian plant, announced on May 14th
Agreement for the sale of TiZir’s Norwegian plant, announced on May 14th STRENGTHENING OF ERAMET’S BALANCE SHEET CONTINUED DEVELOPMENT OF THE UPSTREAM BUSINESS IN MINERAL SANDS Sale agreement signed on mid-May with Control of GCO by Eramet maintained2 Tronox, one of the main producers of pigments an
Slide 23: Lithium project in Argentina: currently mothballed
Lithium project in Argentina: currently mothballed HIGHLY VALUE-ACCRETIVE PROJECT STATUS STATUSUPDATE: UPDATE:PROJECT PROJECTMOTHBALLED ON HOLD Long life low cost and scalable project, c.10 Mt April 2020: decision not to engage the LCE1 drainable resources, c.50 years of resources construction of th
Slide 24: A leap in corporate social responsibility (CSR) in 2019
A leap in corporate social responsibility (CSR) in 2019 Increase in the CSR Performance index* Improvement of non-financial rating 112 representing +12 points compared with Vigeo Eiris rating’s progression in 2019 target assessed ESG domains 80% of industrial sites ISO14001 certified 87% of purchase
Slide 25: Conclusion and outlook
Conclusion and outlook
Slide 26: Committed to delivering our roadmap in 2020, despite the uncertainties related to the pandemic
Committed to delivering our roadmap in 2020, despite the uncertainties related to the pandemic Very low visibility for quarters ahead Very tight operational management to face the crisis Limited impact in Q1 2020 but extent and length of the pandemic still unknown Decrease in demand and one-off rest
Slide 27: Weda Bay Nickel mines, island of Halmahera, Indonesia
Weda Bay Nickel mines, island of Halmahera, Indonesia