Eramet: 2019 Full-year Results

EBITDA at €630m in 2019, reflecting good operating performance, in a deteriorated manganese price environment.

News

To view the webcast about Eramet’s 2019 full-year results, click on the following link: http://bit.ly/Eramet-2019Results-Webcast

 

  • Sales down 4% in 2019 financial year at €3,671m in a contrasted price environment: sharp decline in manganese ore prices by -21% on average over the year and rise in nickel prices at the LME of +6%
  • New operational records for the Mining and Metals division (manganese, nickel, mineral sands and lithium), above targets set for 2019:

    - Manganese ore production: 4.8 Mt vs. target at 4.5 Mt - Nickel ore exports: 1.6 Mwmt vs. target at 1.5 Mwmt - Mineral Sands production: 735 kt vs. target at 720 kt

  • EBITDA at €630m, in line with guidance, including mainly an unfavourable impact of -€268m due to manganese prices versus 2018

  • Non-recurring items in the High Performance Alloys division (-€114m) and high tax charges in Gabon, resulting in positive income before taxes of €89m and a negative net income, Group share of -€184m

  • Net debt of €1,207m excluding the impact of IFRS 16 (€1,304m published) corresponding to a gearing (net debt-to-equity ratio) of 74% excluding the impact of IFRS 16. Measures launched to preserve the Group’s cash position

  • CSR performance rating up to 112 points, 12 points above targets for 2019

  • Strategic roadmap breakthroughs expected in 2020, despite a less favourable economic environment: - Manganese ore production target of more than 5 Mt - Continued implementation of SLN rescue plan: target to export 2.5 Mwmt in nickel ore - Production start-up at Weda Bay (Indonesia) expected as early as H1

  • New modular approach for the production capacity expansion project of the mine in Moanda, Gabon

  • Lithium development project in Argentina on hold: subject to meeting launch requirements

  • Thanks to expected and major intrinsic progress, and factoring in deteriorated manganese market conditions, EBITDA forecast for 2020 should be close to €400m assuming January 2020 market conditions (in particular, the monthly average January manganese ore price came out at $4.3/dmtu and nickel prices at $6.15/lb ($13,595/t)), and without recognising to date the potential impact related to the Coronavirus (as a reminder, China accounted for approximately 1/3 of Eramet group sales in 2019) epidemic.

Christel BORIES Eramet Chairman and CEO

In 2019, we have made major breakthroughs in implementing our strategic roadmap again and we have improved our intrinsic performance. We achieved production records in all our mines and the strong increase in nickel ore exports in New Caledonia demonstrates the relevance of SLN’s business model.

2020 marks a key milestone in our transformation. This year we will start up our plant in Weda Bay in Indonesia; we will expand mining production in Moanda in Gabon; we will continue implementing the SLN rescue plan and a normal level of activity should resume at Aubert & Duval.

In an uncertain start to the year, particularly for China, which is facing a difficult period, more than ever we stay close to our employees and customers; we would like to express our solidarity with the Chinese people. In light of the volatile and deteriorated global economic environment, we have decided to adopt a cautious and controlled strategy for our cash position. We have thus revised the scope and schedule for our investment projects, specifically in Gabon and Argentina. The Group is also considering initiatives to strengthen its financial structure such as disposals or partnerships.

Initial results are on track and the fundamental pillars of our strategy are robust, in particular our ambition to diversify our assets in order to better balance our risks, with a sustainable and responsible approach that involves all of our stakeholders. Now more than ever, agility, responsiveness and control of our financial equilibrium are key to make progress in our long-term profitability targets.