With a 22% turnover growth and a 7-fold increase in current operating income from 2016, Eramet 2017 posted a sharp improvement in results, mainly driven by the highly favourable rise in manganese prices, but also by 99 M€ in productivity gains.
The favourable environment in 2017 enabled the Group to reduce its debt significantly and improve its financial liquidity. This result was largely made possible by the successful 500 M€ bond issue, maturing in February 2024, which was taken up by a diverse set of international and French institutional investors, reflecting their confidence in the Group’s growth and prospects. These operations further strengthen Eramet’s robust liquidity and enable the Group to benefit from favourable terms on the credit market, continue to diversify its financing sources and extend the average maturity of its debt.
Turnover since 2011 (in € millions)
Eramet recorded strong results for full-year 2017, driven in particular by sales growth of 22% versus 2016.
Turnover distribution by Division
The Manganese division’s sales, which accounted for 53% of consolidated sales, were up sharply (+33%) in 2017 at €1,919m, driven by strong carbon steel production, particularly in China, and an historic production level for COMILOG.
The Nickel division’s full-year 2017 sales totalled €644m, up 8% versus 2016 in a context of continuing low nickel prices in 2017.
The Alloys division recorded sales up 15% to €1,087m in 2017, particularly reflecting the sales increase in the aerospace, energy and high speed steels sectors.
Current operating income (in € millions)
Group current operating income was up sharply at €608m, mainly driven by very favourable price development in manganese, but also by productivity gains of €99m (i.e. a total of €405m over the 2014-2017 period, in line with the raised target).
Industrial Capex (in € millions)
Industrial capex ended at €230m, up by c. 6% versus the low level recorded in 2016.
Net income (Group share) (in € millions)
Net income Group share was positive at €203m whereas a loss of €179m was reported for 2016.
Consolidated net cash position (in € millions)
Net debt stood at €376m at 31 December 2017, versus €836m at end-2016. Free Cash-Flow, which has been positive over the past three semesters, amounted to €476m in 2017. It includes a non-recurring effect of €25m linked to disposal of the Group’s headquarters situated in the Tour Montparnasse.
Cost reduction and productivity improvement plan
The cost reduction and productivity improvement actions were stepped up considerably in 2016 with the engagement of all Group teams. As a result, the Group is in a position to give a new and very positive outlook.
The initial target cumulative impact of these plans in the period from 2014 to 2017 was an annual impact on current operating income of €360 million at the end of the plan period, amounting to a 13% reduction in the Group's total costs, compared with 2013. In 2017, productivity gains totaled 99 M€, which means cumulative productivity gains of 405 M€ during the period (versus a target raised to 400 M€).
NB: Consolidated data for the Group and by Division is adjusted data resulting from the Group’s reporting, with joint ventures accounted for on a proportional consolidation basis.