2011 RESULTS. SFAF meeting, Paris February 16 th, 2012 ALLOYS, ORES & PEOPLE.

Transcription

1 2011 RESULTS SFAF meeting, Paris February 16 th, 2012 ALLOYS, ORES & PEOPLE.

2 CONTENTS TARGETED STRATEGIC POSITIONING RESULTS 6 DIVISIONS ACTIVITY 14 ERAMET GROUP S STRATEGIC PROJECT 35 ORGANIC DEVELOPMENTS 38 TRANSFORMATIVE PROJECTS 41 CONCLUSION 47 2

3 ERAMET: TARGETED STRATEGIC POSITIONING

4 ERAMET: A SPECIALIST IN ALLOYING METALS ON THE LEADING EDGE OF MINING AND CONVERSION TECHNOLOGIES A specialist in alloying metals used for uprange metallurgy and steelmaking. An integrated Group from ore through to finished parts and recycling, with key strengths: World-class deposits High-tech metallurgical production capacities Strategy centred on world-class R&D. Developments in progress or under study in new, high-potential metals, e.g. zircon, titanium dioxide, lithium, niobium, rare earths Businesses and skills that position the Group as the mining and metallurgical partner for strategic industries and new business sectors. 4

5 WORLD LEADERSHIP POSITIONS Ore mining and metallurgical processing: World #2 in manganese high-grade ore and manganese alloys, #1 in refined manganese alloys. World #6 in nickel, #1 in ferronickel, a top three world producer of high-purity nickel. World #3 in titanium dioxide*. Production and processing of high-performance alloys and steels: World #2 in high-speed steels and high-power closed die-forged parts. A major producer of high-performance special steels. World #1 in alloyed powder metallurgy. Specialty metal derivatives: several world leadership positions in manganese and nickel derivatives. *titanium dioxide slag 5

6 2011 RESULTS GROUP

7 INTRODUCTION Downturn in global economy and significant drop in nickel and manganese prices in 2 nd half of With current operating income of 554 M in 2011, ERAMET proved resilient thanks to its business model and targeted positioning in attractive markets, in a difficult context. After 492 M in self-financed capital expenditure in 2011, the Group s net cash totalled more than 1.1 billion at the end of the year. ERAMET maintains its development strategy, given favourable medium and long-term outlooks: Strengthening our positions in current metals. Further diversification into new, high-potential metals, new technologies and new geographic zones. 7

8 KEY FIGURES M Turnover 2,689 3,576 3,603 EBITDA Current Operating Income Net Income Group Share ROCE before income tax ** -8% 31% 21% Earnings per share ( /share) Dividends( /share) ,25* *Dividend to be proposed at General Meeting on May 15 th, 2012 ** ratio excluding Weda Bay impact 8

9 INCOME STATEMENT 2011 M H1 H Turnover 3,576 1,931 1,672 3,603 EBITDA % turnover 27% 25% 18% 22% Current Operating Income % turnover 21% 19% 11% 15% Other operating income and expenses Operating Income Cost of net debt Other financial income and expenses Income before tax Share in earnings of affiliates Income tax % taxation 36% 44% 38% 42% Net Income Minority Interest % minority interest 28% 35% 38% 36% Net Income (Group Share)

10 CURRENT OPERATING INCOME (COI) M Firm current operating income Group Nickel Manganese Alloys Group Alloys Manganese Nickel 10

11 CHANGE IN COI COI 2010 Prices Currency Cost factors Volumes Activity /Costs Other COI 2011 External factors = -225 Internal factors =

12 CHANGE IN CASH Robust cash maintained after high capital expenditure ,295 1,153 Net cash 2010 Cash flow Change in working capital Capital expenditure Dividends* Tizir operation Other Net cash 2011 *Of which ERAMET -92M and minority interests -94M 12

13 SHARP INCREASE IN GROUP S CAPITAL EXPENDITURE IN 2011, UP 51% FROM 2010 Capex in M % Nickel Manganese Alloys

14 DIVISIONS ACTIVITY ERAMETMANGANESE

15 GLOBAL STEEL PRODUCTION UP 6% VS DESPITE 2 ND HALF SLOWDOWN Mt (26%) (31%) (34%) (36%) (38%) (47%) (44%) (45%) China (74%) (69%) (66%) (64%) (62%) (53%) (56%) (55%) Other Global carbon steel production Source: World Steel Association 15

16 MANGANESE ORE PRICES DOWN 26% IN 2011 TO 5.4 USD/DMTU vs. 7.3 USD/DMTUIN 2010 $/dmtu Source: CRU CIF spot price for 45% manganese ore imported into China 2012 monthly average 16

17 INCREASE IN MANGANESE DIVISION OUTPUT Kt Manganese ore and sinter production % Continued ramp-up of manganese ore and sinter production Manganese alloy production 800 Kt +1% Slight rise in manganese alloy production vs

18 NEW GUILIN PLANT (CHINA) Start-up in ,000-ton capacity, of which 60,000 tons of refined alloys; the plant will bolster our world leadership in refined manganese alloys (more than 20% market share). 18

19 MOANDA METALLURGICAL COMPLEX (GABON) Construction of a silicomanganeseplant ( t/yr.) and a manganese metal plant ( t/yr.) in Moanda. Start-up late 2013 / early 2014 Recruitment and training in progress 19

20 MANGANESE DIVISION: CHANGE IN COMILOG S CAPITAL Planned transfer of 1.37% of COMILOG to Gabonese Republic completed in June This is in addition to the initial transfer of 2.17% completed in 2010, and achieves the 3.54% goal for 2010/2011 announced in October The Gabonese Republic s stake in COMILOG now totals 28.94%. The plan is for additional transfers in several stages to increase the Gabonese Republic s stake in COMILOG to 35.4% in time. 20

21 MANGANESE DIVISION: KEY FIGURES 2011 M Turnover 1,289 1,858 1,713 EBITDA Current operating income Capital expenditure

22 DIVISIONS ACTIVITY ERAMETNICKEL

23 GLOBAL STAINLESS STEEL PRODUCTION UP 5% COMPARED WITH kt +5% (19%) (26%) (36%) (40%) China (9%) (14%) (27%) (36%) (91%) (86%) (81%) (74%) (73%) (64%) (64%) (60%) Excluding China Global stainless steel production 23

24 NICKEL SUPPLY/DEMAND BALANCE Slight market oversupply in 2011, with firmer demand in 1 st half 2011 WORLD ( 000 t.) Stainless steel production Apparent nickel consumption Nickel production % % % % Supply/demand balance Nickel inventory in weeks consumption (*)

25 NICKEL PRICES UP 5% TO 10.4 $/lb.in 2011 vs Source: LME LME nickel prices by quarterly average 2012 monthly averages 25

26 ERAMET NICKEL: CONTINUED ROLLOUT OF SLN S STRATEGIC PROJECT 54,350 tons produced. A year of consolidation and reliability improvement at SLN. Further modernisation capital expenditure, taking environmental protection into consideration. The goal for year-end 2012 is maintained: reduce cash cost by 1$/lb. vs. 2008, at equivalent economic conditions. Continuation of study prior to decision to invest in Doniambo electricity plant. 26

27 STRONGER DIALOGUE WITH NEW CALEDONIA Dialogue strengthened under SLN s new governance, involving STCPI (Société Territoriale Calédonienne de Participation Industrielle) and Nisshin Steel more closely, including new technical assistance and marketing agreements between ERAMET and SLN. Agreement with STCPI in December 2011 extending the SLN shareholders' agreement in order to make the necessary adaptations by the end of 2012 for the long-term renewal of the partnership. Definition of a long-term plan for SLN, optimising value creation in New Caledonia. 27

28 NICKEL DIVISION: KEY FIGURES 2011 M Turnover EBITDA Current operating income Capital expenditure

29 DIVISIONS ACTIVITY ERAMETALLOYS

30 ALLOYS DIVISION: TURNOVER BY MARKET 19% rise in turnover M % 40% % % Aerospace 17% 42% 39% 30% 24% 19% 16% 25% 13% 25% Power High speed steels & tooling 13% 15% 20% 18% Specialties

31 ALLOYS DIVISION: UPTURN IN AEROSPACE Sharp rise in orders placed with Boeing and Airbus in 2011 Number of aircraft Actual Forecasts orders deliveries AIRBUS & BOEING new orders AIRBUS & BOEING aircraft deliveries 31

32 ALLOYS DIVISION: A YEAR WHICH PREPARES THE FUTURE In response to the need to step up production quickly to meet demand, particularly in aerospace, ERAMET Alloys took measures, some of which impacted performance in Substantial increase in raw and in-process material purchases Recruitment and training of new personnel Teams have been heavily involved into long-term projects : New partnerships in China and India Several major industrial projects 32

33 ALLOYS DIVISION: SATISFACTORY START-UP OF CAPITAL PROJECTS These capital projects enable the division to respond to market growth in aerospace and alloyed powder metallurgy. On budget and schedule. Ramp-up and customer qualifications will continue in Market Country Process M Aerospace France Titanium forging 47 Aerospace France Aluminium forging 23 Aerospace Power France Vacuum superalloy production 40 Specialties Sweden Atomisation tower (powder metallurgy) 16 Total

34 ALLOYS DIVISION: KEY FIGURES 2011 M Turnover EBITDA Current operating income Capital expenditure

35 THE ERAMET GROUP S STRATEGIC PROJECT

36 THE ERAMET GROUP S STRATEGIC PROJECT A profitable growth strategy to strengthen and diversify the Group s positions. Broaden our world leadership positions in alloying metals (current and new metals). Strengthen our positions as an upscale metallurgist. Diversify our portfolio into special metals with high growth potential (e.g. zircon, titanium dioxide, rare earths, niobium, lithium ). Increase the Group s geographic diversification. Continue growth in metal recycling. ERAMET has already built up an extensive portfolio of growth projects with high value creation prospects. 36

37 R & D: KEY TO THE GROUP S DEVELOPMENT An integrated mining and metallurgical cluster + 139% Hydrometallurgy and pyrometallurgy New, complementary metals, new materials High value-added metallurgical solutions for the Group s customers ERAMET: Change in R&D expenditure 2012 More than 300 people dedicated to R&D 37

38 ORGANIC DEVELOPMENTS

39 MODERNISATION AND ORGANIC DEVELOPMENTS RAMP-UP OF CAPITAL PROJECTS Développement Refined au manganese Gabon alloys in China Alliages affinés Development de manganèse in Gabon Développement de la SLN en Nouvelle-Calédonie Development of SLN in New Caledonia ERAMET Alloys: New high-tech facilities 39

40 ORGANIC GROWTH GOALS +18% ,4 4, % Manganese ore: Production in millions of tons Manganese alloys: production in thousands of tons % % Nickel: production in thousands of tons Alloys: turnover in millions 40

41 TRANSFORMATIVE PROJECTS

42 TRANSFORMATIVE PROJECTS Titanium dioxide & zircon in Senegal Nickel in Indonesia Rare earths, niobium & tantalum in Gabon Lithium in Latin America 42

43 TIZIR(SENEGAL AND NORWAY): STRATEGIC INVESTMENT IN ZIRCON AND TITANIUM DIOXIDE ERAMET carried out a strategic investment in zircon and titanium dioxide in 2011 by entering into a 50/50 joint venture with the Australian group Mineral Deposits Limited. A world-class project in mineral sands located in Senegal (Grande Côte). Moreover, ERAMET s contribution of its Tyssedal, Norway unit, one of the three specialists worldwide in titanium dioxide slag, to the joint venture creates an integrated player with new growth options. 43

44 THE GRANDE CÔTE MINERAL SANDS PROJECT The construction of Grande Côte is in progress, with start-up planned for late ERAMET MDL Expected average production : 85 Ktzircon per year, 575 Kt ilmenite (titanium ore). Tizir Forecast capital expenditure around 520 M USD. Tyssedal plant Grande Côte Sables Minéralisés Republic of Senegal 10% 44

45 THE WEDA BAY NICKEL PROJECT, HALMAHERA, INDONESIA A world-class deposit. Mines and an industrial complex based on a new hydrometallurgical process developed by ERAMET. 35 Kt nickel / year capacity for phase 1. Total capacity 65 Kt nickel / year with phase 2. A partnership between ERAMET (60%), Mitsubishi Corp (27%), PT Antam (10%) and, since December 2011, PamCo(3%). Weda Bay Nickel Investment decision on phase 1 early

46 MABOUNIÉ: SPECIFIC PROCESS DEVELOPED TO BENEFICIATE NIOBIUM AND RARE EARTHS IN GABON Process development: Start-up of a pilot facility in Continued laboratory studies. Sustainable development: Examination of regulatory framework. Launch of initial state study early Logistics: Continuation of studies on the two logistic options under consideration (Owendo Port and rail transport or Port Gentil and river transport). Objective: Develop a relevant hydrometallurgical process for this type of polymetallic deposit with the aim of creating a pilot plant on the site in 2014 /

47 CONCLUSION 47

48 A GOOD 2011 The transformative projects under study or in progress were continued in line with our goals. ERAMET s capital expenditure in 2011 was high at 492 M, up 51% from 2010 and 70% from Results were sound in 2011 and substantial net cash maintained at year-end, enabling the Group to consider selective acquisitions. Sharp increase in R&D compared with previous years, allowing the Group to prepare for new developments, particularly in hydrometallurgy. 48

49 SHORT-TERM OUTLOOK In 2012, the global economic outlook should weigh on markets in developed countries and, indirectly, on emerging economies. 1 st half 2012: Current nickel and manganese prices are lower than average 2011 prices. Low visibility in an uncertain economic context. A capital expenditure programme that will remain high, as in 2011, at around 500 M, if the economic climate does not deteriorate sharply. 49

50 FAVOURABLE MEDIUM AND LONG-TERM OUTLOOK CONCLUSION Favourable markets over the medium and long terms for the Group s metals and alloys, due to durable growth in emerging countries in particular. A world leader in alloying metals with the resources needed to carry out its ambitious development project. Greater diversification (new metals and new locations). A strategic mining and metallurgical partner for the sustainable development of new industrial sectors. A value-creating project for all of the Group s long-term partners. 50

51 APPENDIX

52 CHANGE IN TURNOVER % % 21% 25% % Alloys Manganese 30% 42% 38% 39% 54% 28% 48% 52% 48% Nickel 28% 33% 34% 21% 24% 27% 27%

53 THE GROUP S BALANCE SHEET AS ON DECEMBER 31 st, 2011 Assets Liabilities 31/12/ /12/ /12/ /12/ M PROPERTY, PLANT & EQUIPMENT WORKING CAPITAL NET CASH FINANCIAL INSTRUMENTS 0 43 SHAREHOLDERS EQUITY, GROUP SHARE MINORITY INTERESTS PROVISIONS AND OTHER DEBTS FINANCIAL RESULTS 53

54 BREAKDOWN OF WORKFORCE AS IN DECEMBER 31 st, 2011 Asia 15% Holding and others* 3% North America 4% Others 36% Nickel division 21% Manganese division 43% Europe 45% Alloys division 33% By geographic region By activity *ERAMET Holding 0,9%, others: ERAMET Research, ERAMET Engineering and ERAMET International 54

55 SHAREHOLDING AS ON DECEMBER 31 st, 2011 Treasury shares 0,98% Number of issued shares: 26,519,116 Areva, Sorame and CEIR shareholders agreement 55

56 MANGANESE DIVISION: KEY FIGURES M Turnover Manganese 1,614 1,501 Recycling Tizir* TOTAL 1,858 1,713 Current Operating Income Manganese Recycling -2-6 Tizir* 3 11 TOTAL Industrial Capital Expenditure Manganese Recycling Tizir* 1 8 TOTAL *:Tizir: untilseptember30 th 2011 ERAMET Titan and Iron-100 % (full consolidation); SinceOctober1 st 2011 Tizirjoint venture (ERAMET Titan and Iron/ Grande Côte) -50% (proportionateconsolidation) 56

57 MANGANESE ALLOY PRICES /t Source: CRU Western Europe spot price Medium carbon ferromanganese Silicon-manganese High carbon ferromanganese 57

58 ERAMET NICKEL: 2011 TURNOVER BREAKDOWN Tooling (Eurotungstène) 6% Chemicals, Nickel-plating, Electronics 14% Stainless steels, alloys 80% M By sector 58

59 ERAMET MANGANESE: 2011 TURNOVER BREAKDOWN Chemicals/ Recycling 17% Titanium dioxide, high purity cast iron 5% M Ore/ Alloys 78% 200 By sector 0 H H H H H H H H

60 ERAMET ALLOYS: 2011 TURNOVER BREAKDOWN ERAMET ALLIAGES: CHIFFRE D AFFAIRES AU 31/12/2010 Specialties 18% Aerospace 44% M High speed steels + Tooling 25% Power 13% By sector 0 H H H H H H H H