Eramet: 2020 full-year results

Good resilience of the Group in 2020, thanks to excellent operational performance and strong cash generation in the second half.

News

To view the webcast about Eramet’s 2020 full-year results, click on this link.

  • Responsible crisis management
  • 2020 targets achieved for the Mining and Metals division:
    - 5.8 Mt of manganese ore produced (+22% vs 2019), more than 6 Mt of transported ore (+30%) in Gabon
    - 2.5 Mwmt of nickel ore exports in New Caledonia (+55%)
    - 3.4 Mwmt of nickel ore and 23.5 kt-Ni of ferroalloys produced in Indonesia
  • Costs control in the High-Performance Alloys division in H21 in very deteriorated aerospace and automotive markets (A&D costs down -24% vs Q1 2020)
  • EBITDA of €398m in 2020, with very strong growth in H2 (€278m) compared to H11 (€120m):
    - Nearly +€250m in intrinsic gains over the year, mainly thanks to the increase in manganese sales volumes and nickel ore exports
    - Nearly -€480m in negative impact of external factors, notably with a decrease in manganese ore (nearly -19%) and ferronickel (approximately -10%) prices as well as a profound and lasting aerospace crisis
  • Free Cash-Flow (“FCF”) close to break-even in 2020 thanks to strong cash generation in H2 (+€174m), reflecting structural progress, notably on WCR:
    - Favourable seasonality in mining activity in H2, marked by continued growth in volumes
    - First contribution of Weda Bay Nickel activity of up to nearly €60m in FCF in H2
    - Return to FCF break-even for the High-Performance Alloys division in H2 (vs -€165m in H1), with a significant reduction in working capital requirement (“WCR”)
  • Net income, Group share of -€675m, of which -€623m in H1, mainly impacted by asset impairments (-€498m)
  • Net debt of €1.3bn, stable versus end-2019, significantly down compared to 30 June
  • High CSR performance index, above target
  • 2021 Outlook:
    - Growth in production to 7 Mt of manganese ore as soon as 2021, thanks to the opening of the new mining plateau in Gabon at end-2020 (more than +20% vs 2020)
    - Growth in nickel ore exports to more than 3.5 Mwmt
    - Based on a consensus of average manganese ore prices at $4.5/dmtu and LME nickel prices at $7.5/lb for 2021, forecast EBITDA of approximately €600m2 in 2021 significantly higher than in 2020, with a considerably more favourable seasonality in H2
    - This outlook is in line with the momentum of the beginning of this year, without any economic setback related to the pandemic

 

Christel BORIES

Eramet group Chair and Chief Executive Officer

In 2020, the pandemic brutally disrupted our ecosystem. In particular it resulted in a major economic crisis in the aerospace sector, the main end-market for our Aubert & Duval subsidiary.

Thanks to our demanding roadmap, the mobilisation and agility of our teams, as well as a responsible crisis management, we have recorded remarkable successes in our mining activities and succeeded in seizing opportunities, despite the disruptions. We were also able to control cash consumption, particularly in our High-Performance Alloys division whose responsiveness was exceptional in the second half of the year, and our debt was substantially reduced at end-2020 compared to end-June.

2021 starts off with good momentum in the raw material sector. We will continue to develop our manganese production in Gabon, grow our nickel ore production in Indonesia, and optimise our mineral sands activity in Senegal. We are also paying close attention to the set-up of all conditions necessary to properly implement SLN’s rescue plan in order to ensure a future to this subsidiary.

In the High-Performance Alloys division, our priority remains to adapt costs to production levels within a depressed aerospace market. In parallel, we are working on the terms for a possible divestment of Aubert & Duval, to bring out a satisfactory offer and ensure the future of this strategic activity for the sector.

Eramet’s transformation started almost four years ago is demonstrating its relevance, with a new agile and sustainable business model, thereby strengthening the Group to create value and take full advantage of the post-crisis period.