Solid Operational Performances in H1 2024 and a Favourable Outlook forManganese Ore Prices

Solid operational performances in H1 2024 and a favourable
outlook for manganese ore prices

• Good operational performance of the Group’s main mining activities in H1 2024 (vs. H1 2023):
  • +33% in manganese ore volumes produced (vs. H1 2023), with a return to normal operating conditions
  • +40% in nickel ore volumes produced in Indonesia; albeit with -20% in volumes sold, reflecting the absence of low-grade saprolite sales’ permit
  • +33% in volumes of mineral sands produced

• Strong decline in nickel selling prices and lower manganese ore selling prices (index rebound not yet fully materialised in Q2)
• Negative contribution from SLN, with no impact on Eramet’s balance sheet thanks to new financing from the French State 
• Adjusted EBITDA¹ at €247m (including -€109m² for SLN), down 27% in H1 2024 (vs. H1 2023) factoring in a strongly negative price effect over the period (-€304m); positive intrinsic performance (+€216m)

• Net income, Group share negative at –€41m (including -€72m for SLN)
  • Negative Free Cash-Flow owing to continued growth capex. Slight increase in net debt to €711m and adjusted leverage³ of 1x; maturity extended by 1 year
• Inauguration of the Group’s first direct lithium extraction plant in Argentina
  • Implementation of the new CSR roadmap, “Act for positive mining”, with further delivery progress, particularly in terms of employee social protection solutions
• Outlook set against a favourable price environment for manganese ore: to date, market consensus is $8.9/dmtu in H2, (+66% vs. H1), leading to $7.3/dmtu over the year
  • Range adjusted for volume growth targets over the year:
    • Manganese ore transported in Gabon: between 7.0 and 7.5 Mt
    • Marketable nickel ore at Weda Bay: between 40 and 42 Mwmt⁴, given that the permit was not granted for low-grade saprolite sales

• Lithium carbonate produced at Centenario: around 1 kt-LCE, with production scheduled to start in November

• Financial performance in H2 expected to be significantly above that of H1, owing to favourable seasonality for mining activities and the price scenario. Calculated based on the Group’s volume target range and based on the indicative price consensus to date for the year, adjusted EBITDA would be positioned, for illustrative purposes, between €1.2bn and €1.3bn in 2024

• 2024 capex plan revised downwards: between €550m and €600m⁵ financed by the Group

Christel Bories, Group Chair and CEO:

“We achieved a good operational performance in the first half of the year, with normal operating conditions in Gabon and strong growth in production in Indonesia.

Our intrinsic progress enabled us to cope with a difficult pricing environment, and to continue to invest in the Group’s future growth, with limited impact on net debt.

We approach the second half of the year in a context of favourable seasonality for our activities, combined with a strong increase in manganese ore prices. This makes us particularly confident that our financial performance will improve very strongly between now and the end of the year.

We also just reached a milestone in our development of metals for the energy transition with the commissioning of our first lithium plant in Argentina. Production will start in November and this growth driver will fully contribute to the Group’s performances from 2025. “

• CSR commitments

Safety

In H1 2024, the Group’s safety performance continued to improve. As a result, the TRIR⁶ was 0.8 at the Group level (-24% vs. H1 2023), significantly better than the target set in the new CSR roadmap (<1.0).

Say on Climate

During its Shareholders’ General Meeting held at the end of May, for the first time, Eramet organised a consultative vote among shareholders on its climate strategy under a Say on Climate resolution. More than 99% of shareholders voted in favour of this resolution, after acknowledging – on the one hand – the progress made in implementing the Group’s ambition in terms of sustainable development and the energy transition, and – on the other – the 2024-2026 CSR roadmap, “Act for positive mining”.

Social protection for employees

As the first mining group to establish a transnational employee representation body in 2023 – Eramet Global Forum – Eramet signed an initial agreement in June to set up with all its social partners a Group-wide social protection solution for employees over the world: Eramet Global Care⁷. Thanks to this agreement, which represents a major milestone in achieving a key objective of the new CSR roadmap, all Group employees worldwide will now benefit from new provisions with respect to maternity leave and working conditions for women. New measures concerning death insurance as well as healthcare and prevention will take effect by 2026 year-end.

Biodiversity

In early July, Act4nature international validated the new biodiversity targets in the Group’s 2024-2026 CSR roadmap, particularly regarding the Group’s commitment not to conduct any deep-sea exploration or mining activities. Act4nature international is an initiative led by business networks with scientific partners, environmental NGOs and public bodies. Its objective is to develop the mobilisation of companies in favour of biodiversity through pragmatic commitments supported by their CEOs.

Extra-financial rating

In May, the Sustainalytics agency updated its ESG risk rating for Eramet, with an improved score at 27.6 (vs. 28.4 previously – the lower the score, the better).

• Financial rating and financing

In Q2 2024, Moody’s and Fitch revised the Group’s long-term credit ratings to Ba2 and BB respectively, with a stable outlook.

In May, Eramet completed the successful second issue of sustainability-linked bonds, for an amount of €500m, with the order book more than 3 times subscribed. With a 5.5-year maturity and an annual coupon of 6.5%, these bonds are linked to two sustainability performance targets. These targets will be assessed on 31 December 2026 compared to baseline performances in 2019:

(i)    37% reduction in the annual Scope 1 and Scope 2 greenhouse gas emissions intensity of the Group, and,

(ii)    increase to 67% in the share of its suppliers and customers (by emissions) with decarbonation targets that are consistent with the well-below 2° Celsius scenario of the Paris Agreement.

Parallel to this, Eramet repurchased the entire bond issue due in May 2025 (for an amount of €300m, effective 4 July), and extended the term loan maturity by 1 year (€500m in January 2028), as well as that of the RCF (€915m maturing in 2029 and €20m maturing in 2028).

Therefore, the Group is pursuing its strategy of proactively managing its debt profile, and extending the average maturity of its debt to around 4 years (compared with nearly 3 years at December 31, 2023).