ERAMET 2008 RESULTS. February 19 th 2009 DES ALLIAGES, DES MINERAIS ET DES HOMMES.

Transcription

1 ERAMET 2008 RESULTS February 19 th 2009 DES ALLIAGES, DES MINERAIS ET DES HOMMES.

2 GROUPE CONTENTS THE GROUP 3 ERAMET MANGANESE 16 ERAMET NICKEL 27 ERAMET ALLOYS 39 OUTLOOK 48 APPENDICES 55 DES ALLIAGES, DES MINERAIS ET DES HOMMES. DES ALLIAGES, DES MINERAIS ET DES HOMMES.

3 INTRODUCTION EXCELLENT RESULTS IN 2008 DESPITE A SHARP DECLINE IN THE 4 TH QUARTER Very strong and improved results in the year 2008 compared with 2007, despite a sharp decline in the 2 nd half-year compared with the 2 nd half 2007 The economic crisis hit the group s markets very hard in the 4 th quarter 2008 and these effects are continuing in early 2009 The financial situation was stronger still at end-2008 ERAMET 2008 RESULTS - 3

4 KEY FIGURES 2008 EXCELLENT RESULTS, DESPITE A VERY SHARP DECLINE IN THE 4 TH QUARTER 2008* vs 08 Turnover (EUR M) 4,346 3,792 15% Current operating income (EUR M) 1,321 1,196 10% Operating margin (%) 30 % 32 % - ROCE before corporate income tax** (%) 58 % 60 % - ROCE after corporate income tax at standard rate of 35%** (%) 41 % 39 % - Net income group share (EUR M) % Group net income per share (EUR M) % Net cash and cash equivalents (EUR M) 1, % Dividend per share*** (EUR) % * Figures include Tinfos except for Trading activities, recorded as assets to be divested ** Excluding Weda Bay effect *** A dividend of EUR 5.25 per share will be proposed to the General Meeting of Eramet shareholders on May 13th 2009 ERAMET 2008 RESULTS - 4

5 CHANGE IN TURNOVER GROWTH OF 15% WITH TINFOS AND 10% EXCLUDING TINFOS COMPARED WITH 2007 M 3,792 ** 4,346** Of which Tinfos EUR 159 M * Eramet Nickel Eramet Manganese Eramet Alloys * Figures include Tinfos except for Trading activities, recorded as assets to be divested ** Including eliminations ERAMET 2008 RESULTS - 5

6 CURRENT OPERATING INCOME ND 2008 HALF DOWN COMPARED WITH 2 ND HALF 2007 M Group Manganese Manganese ex. Tinfos (62 EUR M in H2 2008) Alloys Nickel H H H H H H H H H H * H2 2008* * COI including eliminations * Figures include Tinfos except for Trading activities, recorded as assets to be divested ERAMET 2008 RESULTS - 6

7 CHANGE IN CURRENT OPERATING INCOME INCREASE IN COI OF 10% WITH TINFOS AND 5% EXCLUDING TINFOS M 2, ,800 1,600 1,400 1, , COI 2007 PRICE VOLUME ACTIVITY PRODUCT- IVITY COSTS EXCHAN GE RATES AMORT / PROV TINFOS OTHER COI 2008 ERAMET 2008 RESULTS - 7

8 CONSOLIDATED INCOME STATEMENT 2008 M 2007 H1 H2 Of which 2008* * Tinfos** Turnover 3,792 2,321 2,025 4, EBITDA 1, , % turnover 36% 37% 31% 35% 43% Current operating income 1, , % turnover 32% 33% 27% 30% 39% Other operating income and expenses (57) 0 (78) (78) (12) Operating income 1, , Net cost of debt Other finance income and expenses 6 7 (82) (75) 1 Pre-tax income 1, , Share of earnings of affiliates Tax (350) (245) (102) (347) (14) % tax 30% 31% 25% 29% 27% Net income Minorities (232) (124) (37) (161) (16) % minorities 29% 23% 12% 19% 43% Net income group share * Figures include Tinfos over 5 months except for Trading activities, recorded as assets to be divested ** Contribution of Tinfos over 5 months, consolidated excluding Trading activities, recorded as assets to be divested ERAMET 2008 RESULTS - 8

9 CHANGE IN NET CASH INCREASE IN NET CASH M NET CASH DEC 07 OPERA- TING CASH FLOW OPERAT- ING WCR CAPITAL EXPENDITURE NET EFFECT OF TINFOS OHER FINANCIAL INVESTMENTS DIVID- ENDS OTHER NET CASH DEC 08 ERAMET 2008 RESULTS - 9

10 BALANCE SHEET AS AT 31/12/2008 A SOUND FINANCIAL SITUATION AT END-2008 ASSETS LIABILITIES Fixed assets * en M Shareholders equity WCR Net cash Financial instruments ** Minority interests Provisions and net deferred tax Financial instruments * Including Tinfos Goodwill EUR 229m and asset to be sold (trading activities) EUR 33m ** Including EUR 388m in financial investments as net cash ERAMET 2008 RESULTS - 10

11 INVESTMENTS IN 2008 CAPITAL EXPENDITURE INCREASED BUT WAS CUT SUBSTANTIALLY IN THE 2 ND HALF IN RESPONSE TO THE CRISIS M Nickel Manganese Alloys Group total ERAMET 2008 RESULTS - 11

12 SUSTAINABLE DEVELOPMENT ERAMET IS COMMITED TO SUSTAINABLE DEVELOPMENT Continued efforts to promote sustainable development Vigorous initiatives in the areas of security, health and safety at work and the environment Successful completion of REACH* pre-registration process within deadline * Registration, Evaluation, Authorization and restriction of CHemicals ERAMET 2008 RESULTS - 12

13 IMPACT DE LA CRISE FIN 2008 ET DÉBUT 2009 EFFECTS OF THE CRISIS AT END-2008 AND IN EARLY 2009 DES DES ALLIAGES, DES DES MINERAIS MINERAIS ET ET DES DES HOMMES. HOMMES. ERAMET 2008 RESULTS - 13

14 TURNOVER IN THE 4 TH QUARTER 2008 EFFECTS OF THE CRISIS IN THE 4 TH QUARTER EUR millions Q4 2008* Q vs 08 Group 963 1,069-10% Manganese % Of which Tinfos** Nickel % Alloys % A drop in turnover of 25% excluding Tinfos and 10% taking into account Tinfos contribution over 5 months * Figures include Tinfos except for Trading activities, recorded as assets to be divested ** 4 th quarter Tinfos: consolidation over five months except for Trading activities, recorded as assets to be divested ERAMET 2008 RESULTS - 14

15 STEPS TAKEN THE GROUP REACTED RAPIDLY TO THE CRISIS FROM THE 4 TH QUARTER 2008 Production adjusted to decline in demand Reduction in operating costs A major reduction in, and strict control of, investment spending ERAMET 2008 RESULTS - 15

16 ERAMET MANGANESE World number two producer of high-grade manganese ore Markets: manganese alloys, chemicals World number one in manganese based chemical products Markets: electronics, other World number two in manganese alloys Market: steel industry World number one in refined manganese alloys Market: steel industry The world leader in spent oil catalyst recycling Markets: oil refining, steel industry AN EXCELLENT YEAR DESPITE A SHARP DROP IN VOLUMES IN THE FINAL QUARTER DES ALLIAGES, DES MINERAIS ET DES HOMMES.

17 STEEL INDUSTRY DEMAND FOR MANGANESE CARBON STEEL PRODUCTION DROPPED SHARPLY IN THE 4 TH QUARTER Annual production Quarterly production Million tonnes Million tonnes % % Others % E. China Q Q Q Q Q Q World production of carbon steel (crude steel equivalent) - 18% ERAMET 2008 RESULTS- 17

18 MANGANESE ALLOY PRICES A VERY SHARP RISE IN SPOT PRICES FOLLOWED BY A SHARP DROP 3500 / t Ferromanganèse haut carbone Ferromanganèse moyen carbone Silicomanganèse MCFeMn HCFeMn SiMn Jan.1996 Jan.1997 Jan.1998 Jan.1999 Jan.2000 Jan.2001 Jan.2002 Jan.2003 Jan.2004 Jan.2005 Jan.2006 Jan.2007 Jan.2008 Jan.2009 Source : CRU EUROPEAN SPOT PRICES ERAMET 2008 RESULTS- 18

19 MANGANESE ORE PRICES A VERY SHARP RISE IN MANGANESE ORE SPOT PRICES, FOLLOWED BY A SHARP DROP $/dmtu 22,0 20,0 18,0 16,0 China Spot CIF Quarterly Price CIF China 14,0 12,0 10,0 8,0 6,0 Benchmark FOB 4,0 2,0 0, Feb.07 Apr.07 June 07 Aug.07 Oct.07 Dec.07 Feb.08 Ap.08 June 08 Aug.08 Oct.08 Dec.08 Fev.09 Avr.09 Juin.09 Contract price of manganese ore exported to Japan for metallurgical use - USD for 1% of manganese content - Australian FOB CIF spot price of 45% manganese ore imported to China* Quarterly contract price of manganese ore for regular sales to the main Chinese alloy producers* Source : CRU and Tex Report* 1 dmtu = 10 kg Mn content ERAMET 2008 RESULTS- 19

20 MANGANESE ORE PRODUCTION MAJOR CUTS TO ORE PRODUCTION WORLD- WIDE AT END-2008 AND IN EARLY 2009 KWMT % - 49% Q Q Q Q Est Q Est World manganese ore production ERAMET 2008 RESULTS- 20

21 OPERATIONS PRODUCTION OF MANGANESE ORE AND ALLOYS IN 2008 Manganese ore Production in 2008: 3.25 Mt, - 3% vs 2007 Production in Q4 2008: 690 Kt, -23% vs Q Manganese alloys (excluding Tinfos) Production in 2008: 708 Kt, - 7% vs 2007 Production in Q4 2008: 150 Kt, -23% vs Q Chemicals and recycling Chemicals: increase in volumes and prices Recycling: slight decrease in turnover due to drop in molybdenum and vanadium prices in the 2 nd half-year ERAMET 2008 RESULTS- 21

22 TINFOS ACQUISITION SUCCESS OF TINFOS ACQUISITION 56% CONTROL AT END July 2008: Eramet controlled 56% of Tinfos alongside the company H.H.H.* (37%) and other minority shareholders 1 er August 2008: Consolidation of Tinfos in Eramet s accounts Total value of the acquisition: EUR 398m, 70% in cash and 30% in shares, amounting to 241,491 new shares Phase 2 of the operation was to be the acquisition of minority stakes following the retrocession of part of the Notodden power plant, with Eramet retaining 40% After a halt in discussions with H.H.H.*, negotiations were resumed. They could eventually lead to an increase of Eramet s shareholding in Tinfos Eramet continues to implement synergies with Tinfos: EUR 10m-15m before tax in 2 years * HHH: Halvor Holta Holding ERAMET 2008 RESULTS- 22

23 DEVELOPMENT PROJECT PARTNERSHIP TO STUDY THE OTJOZONDU PROJECT IN NAMIBIA Partnership agreement signed on July 29 with Otjozondu Holding (Pty) Ltd and Oreport, the shareholders of Otjozondu Mining (Pty) Ltd NAMIBIA Feasibility study for development of Otjozondu deposit in Namibia over 18 months Since 15 th October 2008, Eramet has held a call option for the majority of the capital of Otjozondu Mining (Pty) Ltd This ore would complement that of Comilog very well Otjozondu ERAMET 2008 RESULTS- 23

24 KEY FIGURES 2008 EXCELLENT RESULTS FOR ERAMET MANGANESE EUR m H H2 2008* 2008* Of which Tinfos** 07 vs Turnover (EUR M) 1,173 1,175 2, % 1,473 Current operating income (EUR M) , % 440 Current operating margin (%) ROCE before corporate income tax (%) ROCE after corporate income tax at standard rate of 35 % (%) Capital expenditure (EUR M) % 129 * Figures include Tinfos except for Trading activities, recorded as assets to be divested ** Tinfos pro forma, 5 months, except for Trading activities, recorded as assets to be divested ERAMET 2008 RESULTS- 24

25 ERAMET MANGANESE EFFECTS OF THE CRISIS AT END AND IN EARLY 2009 DES ALLIAGES, DES MINERAIS ET DES HOMMES.

26 OPERATIONAL MEASURES MAIN MEASURES TAKEN IN RESPONSE TO THE CRISIS Reduced production Manganese ore: Q1 2009: - 60% (- 560 Kt) compared with capacity Manganese alloys: Q1 2009: - 65% (- 155 Kt) compared with capacity Eramet will continue to make rapid output adjustments to take into account demand variations and remains able to respond to an eventual market recovery Cost reduction General initiatives to reduce temporary employment and overtime Part-time unemployment at manganese alloy production sites in Norway and China Suspension of operations at the North Plant at Marietta => 110 job cuts Limits on capital expenditure: - 65 % compared with pre-crisis target ERAMET 2008 RESULTS- 26

27 ERAMET NICKEL World number two producer of ferronickel Market: stainless steel World number one producer of nickel chloride Markets: plating, chemicals, electronics One of the three producers of high purity nickel in the world Markets: alloys (aeronautics, power generation) One of the three biggest producers of nickel carbonate Markets: catalysts, plating A SHARP DROP IN THE NICKEL MARKET, EVEN MORE MARKED AT THE END OF THE YEAR DES ALLIAGES, DES MINERAIS ET DES HOMMES.

28 STAINLESS STEEL PRODUCTION SUBSTANTIAL DECLINE IN AUSTENITIC STAINLESS STEEL PRODUCTION SINCE THE 3RD QUARTER 000 t 000 t % World % % China Q Q Q Q Q Q4 Est, Global production of austenitic stainless steel* * Stainless steel containing nickel (about 8 to 10%); 65% of nickel demand ERAMET 2008 RESULTS - 28

29 SUPPLY-DEMAND BALANCE IN 2008 A VERY SUBSTANTIAL SURPLUS IN SUPPLY BY COMPARISON WITH DEMAND, DESPITE CUTS IN PRODUCTION AND STOPPAGES WORLD ( 000 t.) vs 08 Stainless steel production 27,951 28,095 26,377-6% Apparent nickel consumption 1,381 1,370 1,271-7% Nickel production 1,354 1,433 1,380-4% Supply/demand balance Nickel stocks in weeks of consumption * * Nickel stocks at end of 4 th quarter 2008 ERAMET 2008 RESULTS - 29

30 NICKEL PRICES PLUNGE IN NICKEL PRICES ON THE LME 2007 average : USD/lb 2008 average: 9.58 USD/lb LME** USD/pound st half 2008: USD/lb 2 nd half 2008: 6.76 USD/lb LME* USD/tonne Average January * London Metal Exchange ** Quarterly average price at settlement ERAMET 2008 RESULTS - 30

31 OPERATIONS ERAMET NICKEL S OPERATIONS IN 2008 Nickel production 2008 production: 51,000 tonnes, - 14% vs 2007 Nickel deliveries 2008 deliveries: 51,700 tonnes, -6% vs 2007 ERAMET 2008 RESULTS - 31

32 CAPITAL EXPENDITURE MAJOR CAPITAL EXPENDITURE IN RECENT YEARS: BETWEEN 2003 AND 2008, SLN INVESTED EUR 708M SLN has been extensively modernised in recent years Rebuilding of 2 electric furnaces and 2 rotary furnaces Renewal of more than half of the mining equipment fleet Ore beneficiation plant at Tiébaghi Plant inaugurated in November 2008 At Sandouville, capital expenditure for the development of new products with high added value (nickel carbonate, etc.) ERAMET 2008 RESULTS - 32

33 WEDA BAY - INDONESIA A WORLD-CLASS DEPOSIT: RESOURCES REVISED UPWARDS March 06 Acquisition Dry tonnes (Mt) Nickel content (%) Ni (Kt) January 09 Current Dry tonnes (Mt) Nickel content (%) Ni (Kt) Measured Measured ,281 Indicated ,043 Indicated ,107 Inferred ,882 Inferred ,699 Total ,128 Total ,087 March 2006 January % 46% 49% Measured Indicated Inferred 33% 25% 42% Breakdown of Weda Bay resources by category ERAMET 2008 RESULTS - 33

34 WEDA BAY - PARTNERSHIP AN IMPORTANT STEP FORWARD FOR THE WEDA BAY PROJECT: PARTNERSHIP WITH MITSUBISHI CORP. A new partnership Sale to MITSUBISHI CORP. of 33.4% of Strand Minerals which controls 90% of the Weda Bay Nickel project The remainder is controlled by our partner Antam Payment by Mitsubishi to Eramet of USD 145m, including the contribution to expenditure already made by Eramet Mitsubishi Corp.: A very complementary partnership that adds value to the project One of Indonesia s biggest economic partners through industrial and commercial activities A major player in mining and metallurgy through participation in large-scale projects and existing sites New shareholding structure of Weda Bay 66.6% 90% PT Weda Bay Nickel (Indonesia) 33.4% Strand Minerals Pte. Ltd. (Singapore) 29 November 1997 agreement between Strand Minerals and PT Antam Tbk 10% Indonesian Government 65% PT Antam Tbk (Indonesia) PT Weda Bay Nickel is the owner of the Contract of Work (CoW) on the deposit Weda Bay Project 100% ERAMET 2008 RESULTS - 34

35 DEVELOPMENT PROJECTS PRONY AND CREEK PERNOD IN NEW CALEDONIA Signing of a convention between SLN* and the South Province on January 20 th, with a view to developing the Prony and Creek Pernod deposits. These deposits represent one of the biggest nickel oxide resources in the world Plant project using the hydrometallurgical technology developed by Eramet s research centre in Trappes As well as ore from Prony and Creek Pernod, the project will use low-grade garnierites from the Thio and Kouaoua mines, which will extend the exploitation period The project is aiming for production capacity of about 60,000 tonnes of nickel a year Creation of a joint venture, 50% controlled by SLN and 50% controlled by the South Province, to conduct exploration of the deposit and research into the project Licence commitment: 3 times 3 years and spending of EUR 12m in the first 3 years as well as EUR 70m in subsequent years (including the prefeasibility study) Valuation of the deposits brought by the South Province according to exploration results (quantities of nickel content, long-term nickel prices) and financial feasibility of the operation * SLN is 56% owned by the Eramet Group, 34% owned by Société Territoriale de Participation Industrielle and 10% owned by the Nisshin group ERAMET 2008 RESULTS - 35

36 KEY FIGURES 2008 MAJOR DECLINE IN 2008 EUR m H H vs Turnover (EUR M) % 1,290 Current operating income (EUR M) 208 (39) % 693 Current operating margin (%) 37 (11) ROCE* before corporate income tax (%) 59 (13) ROCE* after corporate income tax at standard rate of 35 % (%) 38 (9) Capital expenditure (EUR M) % 135 * Ratio excluding Weda Bay impact ERAMET 2008 RESULTS - 36

37 ERAMET NICKEL EFFECTS OF THE CRISIS AT END AND IN EARLY 2009 DES ALLIAGES, DES MINERAIS ET DES HOMMES.

38 OPERATIONAL MEASURES MAIN STEPS TAKEN IN RESPONSE TO THE CRISIS Reduced production Q1 2009: production at a rate compatible with output of 50,000 tonnes or 80% of the capacity Eramet will continue to make rapid output adjustments to take into account demand variations and remains able to respond to an eventual market recovery Cost reduction Reduction of general expenses Reduction of outsourcing costs Purchasing action plan Employment measures planned, will be discussed soon with SLN works council: technical unemployment, headcount freezes and non-replacement of departures, limitation of overtime Launch of a study aiming for a long-term reduction in production costs at SLN Limitation of capital expenditure: - 47 % compared with pre-crisis target ERAMET 2008 RESULTS - 38

39 ERAMET ALLOYS World number one in high-speed steels Market: cutting tools World number two in closed-die forged parts Markets: aeronautics, power generation One of the world leaders in special high-performance steels and superalloys Markets: aeronautics, power generation, tooling, medical, specialities, etc. PROGRESS MADE IN 2008 DESPITE A MARKED DECLINE IN ACTIVITY AT THE END OF THE YEAR DES ALLIAGES, DES MINERAIS ET DES HOMMES.

40 TURNOVER BREAKDOWN 2008 Cutting tools and tooling 27 % Aeronautics, space and defence 40 % Power generation 17 % Other 4 % Specialities 12 % (medical, transport, construction, engineering, etc.) TURNOVER BY MARKET ERAMET 2008 RESULTS - 40

41 AERONAUTICS MARKET SLIGHT DECREASE IN 2008 (STRIKE AT BOEING) AND UNCERTAINTY OVER THE COMING YEARS Boeing Airbus Total Number of aircrafts delivered Source : Airbus - Boeing ERAMET 2008 RESULTS - 41

42 ALLOYS DIVISION MARKETS SLOWING MARKETS Aeronautics market Decline in production rates of A320, B777 aircraft Postponements of B787, A400 M Energy market Downwards revision in gas turbines in 2009 But progress in nuclear High-speed steels market Slight decline in volumes over the year but very sharp drop in the final quarter ERAMET 2008 RESULTS - 42

43 OPERATIONS 2008 TURNOVER UP 7% ON 2007 (EUR M) Total Alloys Aeronautics Cutting tools and tooling Energy Specialties Other M ERAMET 2008 RESULTS - 43

44 CAPITAL EXPENDITURE UKAD TITANIUM PARTNERSHIP Creation of a joint venture, 50% owned by Aubert & Duval and 50% owned by Ardor Holding, a partner of UKTMP (Kazakhstan) Objectives: Strengthening the position held by Aubert & Duval in the titanium market Creating an integrated business line (UKTMP sponges and ingots, UKAD bars and billets, Aubert & Duval parts), unique in the western world and able to compete against VSMPO A rapidly developing market In aeronautics, where titanium is replacing aluminium and steel, because of its characteristics (corrosion resistance), density and its workability In other growth markets, such as defence, energy and medical Investment of EUR 40m (including 50% for AD) Launch of certification tests planned for end of 2011 ERAMET 2008 RESULTS - 44

45 KEY FIGURES 2008 INCREASE IN COI OF 10% IN 2008, DESPITE A 21% DROP IN THE 2 ND HALF 2008 COMPARED WITH THE 1 ST HALF EUR m H H vs Turnover (EUR M) % Current operating income (EUR M) % 78 Current operating margin (%) ROCE* before corporate income tax (%) ROCE* after corporate income tax at standard rate of 35 % (%) Capital expenditure (EUR M) % 54 * Excluding effects of securitisation from H ERAMET 2008 RESULTS - 45

46 ERAMET ALLOYS EFFECTS OF THE CRISIS AT END AND IN EARLY 2009 DES ALLIAGES, DES MINERAIS ET DES HOMMES.

47 OPERATIONAL MEASURES MAIN STEPS TAKEN IN RESPONSE TO THE CRISIS Reduced production Stoppages of steel plants at Commentry and Söderfors for 3 weeks at the end of 2008 Eramet will continue to make rapid output adjustments to take into account demand variations and remains able to respond to an eventual market recovery Cost reduction Continuing restructuring initiatives: relocation of laboratories and production Repatriation of machining subcontracting Redundancy plan at Söderfors in Sweden Non-replacement of departures and cancelling of interim contracts Part-time unemployment plan under study (Champagnole 7 weeks, ) Limitation of capital expenditure: - 44 % compared with pre-crisis target ERAMET 2008 RESULTS - 47

48 PERSPECTIVES Décalage de certains investissements => on va les payer moins cher OUTLOOK DES ALLIAGES, DES MINERAIS ET DES HOMMES. RÉSULTATS ERAMET

49 OUTLOOK SHORT TERM Market conditions will remain difficult in the short term but positive effects will follow due to the end of destocking and stimulus plans ERAMET 2008 RESULTS - 49

50 CHINESE STIMULUS PLAN CHINA HAS LAUNCHED A MAJOR STIMULUS PLAN THAT WILL BENEFIT THE STEEL INDUSTRY 100% = $ 586bn Other* Motorways 27% 20% 8% Roads Energy networks 9% 18% 18% Infrastructure Railways * Reforms of VAT, Culture, Education and Health ERAMET 2008 RESULTS - 50

51 THE INCREASING WEIGHT OF CHINA CHINA REPRESENTS 38% OF GLOBAL CRUDE STEEL PRODUCTION COMPARED WITH ONLY16% OF GDP (PPP) World GDP (PPP) in % = USD 72 trillion Crude Steel Production in % = 1.33 bn tonnes China OECD 43% 16% 41% Rest of world OECD 34% 38% China 28% Rest of World As at December 2008, China represents 46% of crude steel production, and Asia 66% Source : World Bank, WorldSteel, Laplace Conseil analyses ERAMET 2008 RESULTS - 51

52 OUTLOOK MEDIUM AND LONG TERM ERAMET S VARIOUS BUSINESS LINES ARE STILL LONG-TERM GROWTH BUSINESSES In the medium term: Supply limited by closures and output reductions Reduced investments Decrease in supply favouring a rebalancing of the market In the long term: Industrialisation and urbanisation in emerging markets, particularly China and India Economic recovery in developed countries Possible supply deficit ERAMET 2008 RESULTS - 52

53 CONCLUSION GROUP STRATEGY Eramet will continue to take steps to adapt to changes in its markets by: Adjusting output Limiting investment spending Cutting costs In order to preserve its room for financial manoeuvre and so that it can benefit fully from market recovery when this comes Medium- and long-term targets will be maintained, with major development projects beyond the current crisis ERAMET 2008 RESULTS - 53

54 ERAMET ERAMET 2008 RESULTS - 54

55 APPENDICES RÉSULTATS ERAMET

56 BREAKDOWN OF TURNOVER IN 2008 Steel industry : 66 % Carbon Steel 50 % Stainless steel & alloys 16 % Aéronautics 10 % Tooling Other 12 % Energy 4 % 8% TURNOVER BY MARKET ERAMET 2008 RESULTS - 56

57 RETURN ON CAPITAL EMPLOYED ROCE REMAINED HIGH IN 2008 M Nickel Manganese Alloys Total Group % 145 % 13 % 58 % % 76 % 11 % 60 % Ratios excluding Weda Bay impact and Tinfos 2008 results ERAMET 2008 RESULTS - 57

58 ROCE BEFORE INCOME TAX AND EVA FROM 1997 TO 2008 ROCE SLIGHTLY DECREASING COMPARED TO % 60% 50% 40% 30% 20% 10% 0% -10% -20% % 58% 52% 39% 36% 29% 28% 15% 21% 25% 7% 7% 9% 16% 1% 4% 5% 3% 13% -4% -4% -3% -6% -7% ROCE in % before IS EVA in % = (ROCE x 0,65) - 10%* Excluding impact of Tinfos, Weda Bay and securitization * EVA in % = (ROCE x 0,65) - 9% before 2008 ERAMET 2008 RESULTS - 58

59 DISTRIBUTION OF TURNOVER IN 2008 Alloys 25 % Manganese 54 % Europe 51 % Asia 27 % Nickel 21 % North America 19 % Other 3 % Compared to 2007 Alloys + 7 % Manganese + 59 % Nickel - 30 % TURNOVER BY DIVISION TURNOVER BY GEOGRAPHICAL AREA ERAMET 2008 RESULTS - 59

60 SHAREHOLDERS AT 31 DECEMBER 2008 Other Treasury shares 30,65 % Sorame + CEIR 36,64 % 1,49% BRGM 1,36 % STCPI 4,08 % Areva 25,78 % Number of shares: ERAMET 2008 RESULTS - 60

61 WORKFORCE 2008 WORKFORCE AT THE END OF THE YEAR MANGANESE 45% EUROPE 43% NORTH AMERICA 5% ASIA 17% OCEANIA 16% NICKEL 20% ALLOYS 33% HOLDING 2% AFRICA 19% Total workforce: around ERAMET 2008 RESULTS - 61

62 2008 TURNOVER INCREASE OF 59% IN 2008, TO EUR 2,348M, DUE TO MANGANESE ORE AND ALLOY PRICES Steel industry (Mn ore & alloys) Recycling, (Mo, V), tio 2 and other 16% 76 % TURNOVER BY MAIN MARKET Figures including Tinfos * +49% excluding Tinfos Chemicals (Ore & Mn Products) 8 % M S S S S S S HALF YEAR TURNOVER S S S S S S S S ERAMET 2008 RESULTS- 62

63 MANGANESE ROCE BEFORE INCOME TAX % * ** 2004** *** * 1999 : calculated with the proforma operating income and the year end capital ** Excluding provisions for restructuring *** Figures including Tinfos, except for trading activities recorded as assets to be divested ERAMET 2008 RESULTS- 63

64 MANGANESE ALLOYS Kt Mn M ANGANESE ALLOY PRODUCT ION OF ERAMET MANGANESE HC FeMn S imn FeMn refined ERAMET 2008 RESULTS- 64

65 MANGANESE ORE PRODUCTION x 1000 t ERAMET 2008 RESULTS- 65

66 VANADIUM AND MOLYBDENUM PRICES VANADIUM V2O5 as v MOLYBDENE RN WORLDWIDE OXIDE MEAN $ $ Vanadium contained - $/lb Molybdène contained - $/lb ERAMET 2008 RESULTS- 66

67 2008 TURNOVER DECLINE OF 30% TO EUR 897M IN 2008, MAINLY DUE TO THE CHANGE IN NICKEL PRICES Stainless steel & alloys 78 % 800 M 700 Tooling (Eurotungstène) % 300 Chemicals, Plating, Electronics 16 % TURNOVER BY MAIN MARKET S S S S S S HALF YEAR TURNOVER S S S S S S S S ERAMET 2008 RESULTS - 67

68 NICKEL ROCE BEFORE INCOME TAX 140 % * ** 2008** * 1999 : calculated with the proforma operating income and the year end capital ** excluding Weda Bay acquisition cost ERAMET 2008 RESULTS - 68

69 2008 TURNOVER INCREASE OF 7% IN 2008, TO EUR 1,102M, DESPITE A MARKED DECLINE IN ACTIVITY IN THE 2ND HALF-YEAR Aeronautics, space and defense 40% Cutting tools and tooling 27% Energy production 17% Other 4 % M Specialty 12% (medical, transport, mechanical engineering,.) 0 S S S S S S S S S S S S S S S S TURNOVER BY MAIN MARKET HALF YEAR TURNOVER ERAMET 2008 RESULTS - 69

70 ALLOYS ROCE BEFORE INCOME TAX 20 % * ** 2004** *** * 1999 : calculated with the proforma operating income and the year end capital ** excluding provisions for restructuring *** excluding effect of securitization since the second half of 2007 ERAMET 2008 RESULTS - 70

71 DESTOCKING EFFECTS THE DROP OF ALLOYS DELIVERIES IN NOVEMBER AND DECEMBER CAN BE MAINLY EXPLAINED BY DESTOCKING Breakdown of the drop in alloys consumption by reason* Average Steel Consumption January to October 100 % Final consumption drop November December Destocking at constructors And conveyors Destocking at distributors And services center 6 % 4 % 5 % Destocking at steelmakers Production of steelmaker in november and december 75% 10 % Destocking of raw materials by steelmakers 15 % Expeditions metal alloys in November and December 60 % * World average, the breakdown by region is vary widely Source : Publication des entreprises, Steel Business Briefing, Estimation Laplace Conseil ERAMET 2008 RESULTS - 71

72 STEEL DEMAND STEEL DEMAND WILL MAINLY DEPEND ON THE REBOUND OF THE CONSTRUCTION SECTOR World Steel Consumption 100% = Mt en 2007 Utilities Other* Packaging 6% 2% 7% Pipes and Tubes 5% Automotive 7% 21% 52% Construction The major urbanisation expected in developing countries should recover and should draw a rebound of the steel demand growth Mechanical eng * Other: Defence: 1%, Appliances: 1%, Railway track & vehicles 2%, Shipbuilding: 2% Source : MBR, WorldSteel, analyses Laplace Conseil ERAMET 2008 RESULTS - 72