Eramet Sa Unsp/Adr

Good morning, everyone, and welcome to Eramet's annual result presentation. I know most of you from my past as chair and CEO of Eramet in the last eight years. And as you know, I have resumed the role of CEO on an interim basis at the request of the board. It was not part of my personal plan. One year ago, I decided not to seek a third mandate for personal reasons, and I have not changed my mind. However, when the board asked me to step in, I felt the responsibility towards the group, towards its stakeholders, and above all, towards its teams. I know this company extremely well. I know its strengths. And I know what it takes to navigate a difficult cycle. And I want to see the group succeed. So this is a temporary mission. A search for a new CEO is underway. but I will stay as long as needed to ensure continuity and stability for the group, and I will hand over once a successor will be appointed. In the meantime, I'm fully engaged and fully accountable, and as you will see today, I have a strong team with me, so operational and financial continuity is fully ensured at Eramet. So the agenda of today is the following. I will do an introduction. Then we will go through our 2025 financial results. And it will be presented by our acting CFO. Simon Nuxberg has been in Eramet for a few years now. He is our head of strategy. He's coming with a strong financial background and experience in banking. And he's today in charge of treasury financing and investor relation. Then we will focus on our operating and financial performance by activity and on the group performance improvement plan. And this will be presented by Charles Noël. Charles Noël is our COO. He has been in Eramet for 20 years. He has been in the COO position for three years now. And Charles is also in charge of the implementation of the resolution program. And then we will move to our funding plan. And you have seen in the communiqué that we have announced today a comprehensive funding plan. And so Simon will present it. And I will come back for the conclusion. So let's start with the introduction. Clearly, 2025 was a very difficult year that stretched our balance sheet. We faced strong external headwinds with cyclical lows almost across most of our commodities. combined with a weakening dollar, which is a rare and particularly adverse combination in our industry. We also encountered permit restrictions in Indonesia and operational challenges in our manganese logistics in Gabon. We emerged from this period with stretched balance sheets, And these required decisive actions that we have decided, with the full support of our board, to restore a sustainable capital structure and provide solid foundations for the future. We will obviously come back to that in a minute in the presentation. At the same time, we have also achieved major milestones in our strategic roadmap. And we are particularly proud of the ramp-up of our Centenario plant in Argentina, which progressed successfully and which is really a great achievement and position us very favorably for the future. And in Grand Côte in Senegal, we are also very proud to have achieved the IRMA 50 certification. As you know, IRMA is a very demanding international standard in terms of sustainable mining. And we are one of the few mines in the world being able to achieve this level of certification. So despite the big difficulties of the cycle, we progress strategically on our roadmap, and I think it is a very important point. So let's start now with safety. As you know, safety remains an unconditional priority at Eramet. Our incident rate stands at 0.8, which is a good standard in the world, and it is below our target of 1%. As you remember, nine years ago, when I joined the group, the safety performance was at a totally different level, and I think that the progress that we achieved over the past years is something that we can collectively be proud of. However, the situation at Ueda Benikel is deeply concerning. We recorded three fatal contractor accidents in 2025, and we had an additional one in January, also with contractors. This is totally unacceptable. and immediate corrective measures have been implemented. The contractor management has been strengthened. We have taken measures on road safety and operational controls have been reinforced, and we are also taking measures on lighting prevention and protection measures because we have had issues with lighting strikes. Safety is a fundamental priority of Eramet, and this is the first pillar of our resolution plan. And our target is clear. It's zero injuries and zero high potential incidents. So let me now come to the broader macroeconomic environment. 2025 was marked by historically low commodity prices and unfavorable ethics evolution. The macroeconomic environment, and particularly the slowdown in China, has weighted heavily on industrial demand. For our basket of commodities, and it is what you see on the right side, the pricing environment was comparable to 2015, which is the lowest level in the decade. And that has been compound with a strong adverse dollar effect, which, as I said, is a particularly rare combination in the industry. So these sharp declines had a significant negative impact on our results, which amounted to nearly 300 million euros in 2025. These external headwinds combined with the permit restriction in Indonesia led to a very deteriorated adjusted EBITDA, which reached 372 million in 2025. It is down 54% year over year. You remember that we were over 800 million in 2024. The intrinsic performance is also below expectation, notably in manganese logistics and because of the cost of the lithium ramp-up phase. So you see that basically out of the huge decrease of the adjusted EBITDA, 80%, roughly speaking, was coming from the external factors, and 20% from disappointing operating performance within Eramet. As a result of this much lower EBITDA and tails of CAPEX, notably in lithium and Gabon, the adjusted free cash flow was negative at 481 million. and the net debt reached 1.9 billion, and the adjusted leverage stood at 5.5 times. The gearing reached 125% under the covenant definition, but we obtained a waiver for the December 25 covenant test date. So given the context, no dividend will be proposed for this year, and you will see also for next year. So clearly, the balance sheet is stretched, but liquidity has been preserved, and as we will see, remains solid at the end of December, and access to financing remains secure. So in response to this difficult situation, we have implemented a comprehensive funding and performance plan approved by the board. It relies on three pillars that you can see here on the slide. The first one is, of course, the performance improvement and cash generation at the level of Eramet, driven by the resolution program. It covers more than 50 initiatives already underway, and Charles will detail these initiatives later on. The second pillar is a strategic asset review exploring partial monetization options with the objectives of generating cash in 2026. The third pillar is equity strengthening. with a planned capital increase of around 500 million euros in 2026, the principle of which has been agreed with our reference shareholders. The priority of this plan is clearly deleveraging in order to secure a stronger and more sustainable future for the group. Simon will give you more details later on, but I think it's a very important step going forward to reinforce the balance sheet of the group. With the strengthened balance sheets, we will be in a position in the future to fully leverage the quality of our asset base. Just two examples here. We operate the largest and one of the highest grade manganese ore mine in the world, as you know. The debottlenecking of the logistic and the rail infrastructure in Gabon is starting to deliver results. And so this is positioning us very well for the future. In lithium, Centenario, as I said, is successfully ramping up. We are several years ahead of most competitors in direct lithium extraction at industrial scale. The asset is first quartile, scalable, and long-life in a structurally attractive industry. We think that our first quartile low-cost asset base will secure profitability and support cash generation as commodity prices emerge from the low points of the cycle. Let me now zoom one minute on this first-class lithium asset. The plant, as you know, has started beginning of 2025. In fact, very end of 2024. Our plant has reached close to 75% of nameplate capacity in December last year. After overcoming the problem caused by faulty equipment, the forced evaporator, that was delivered by one of our suppliers in the first half that has delayed the start of the plant for about four months. But the ramp-up trajectory in the second half was very good, was steep, benchmark in the industry, and in line with our revised plan. Our proprietary direct lithium extraction technology is now operating at industrial scale, and we have demonstrated that it's working. In 2026, as you have seen in our guidance, we target a production between 17,000 and 20,000 tons of lithium carbonate, reaching close to 100% capacity by year-end. And at the same time, we are focusing on cash cost optimization, particularly through improved reagent consumption and process efficiency. Longer term, the salar, as you know, has a great potential, exceeding 75,000 tons of lithium carbonate per year, with options for low capital intensity expansion short term. But we will do this expansion in a very disciplined manner and involving partnership. And just to finish this introduction, I would like to talk about CSR. As you know, I put CSR as a central pillar of our strategy now eight years ago. CSR remains central to our model, and our Act for Positive Mining roadmap continues to structure all our actions, and we progress on it as planned. Achieving the IRMA 50 at Grand Côte in Senegal is a significant milestone. It positions us among the most advanced mining group globally in terms of responsible mining and transparency. And we continue to see top-tier recognition of our commitment from different CSR rating agencies. And we put here the example of our CDP rate on water that moved from B to A-, which is a very, very good level in our industry. And the recognition of this continuous improvement journey towards excellence in CSR. So now I will hand over to Simon for the financial results.

Good morning to everyone. Thank you, Christelle, for the introduction. I will start by commenting our 2025 financial results, and I will comment later on the funding plan that was announced yesterday. So regarding our financial results, first, as Christelle mentioned, we need to come back to the market situation that we experienced in 2025. Across all of our commodities, we had lower prices combined with US weakening, which is quite rare for us, which had a double impact on our financials. Regarding prices, the impact on the manganese ore was minus 18% in 2025 compared to 2024. This is due to excess supply coming from South Africa, and it's also due to an Australian high-grade oil producer that came back on the market during the year. Regarding demand, steel production remains stable. On nickel, we also experienced a downgrade, a decrease in prices by 10%. We managed to keep the prices of nickel ore stable in Indonesia, thanks to the premium we were able to get because of the permitting tension that we saw during 2025. But overall, on a global scale, we were in an oversupply situation, both on class 1 and class 2 nickel. In mineral sands, we've seen a structurally oversupplied situation emerging. This has been putting pressure on prices, and I will come back to that. This explains the impairment that we had to pass on our assets in Senegal. On lithium, the prices were low in 2025. We've seen the prices recover recently in the past few weeks. We had indeed a temporarily oversupplied market in 2025, despite the very sustained demand that comes from both EV and ESS. But again, we are starting to see a rebalancing on that market in recent weeks. Coming to our financials, our turnover for the year decreased to 3.2 billion euros. So this is 7% below what we had in 2024. So this is mainly the price impact, and we did have some extra volumes with the start of our production of lithium in Argentina. Regarding adjusted EBITDA, as you know, we adjust our EBITDA with the share of WDB Nickel. We also retreat the losses of SLN as this operation is fully funded by the French state and does not impact economically Eramet. So on adjusted EBITDA, it decreased from 814 last year in 2024 to 372 million euros in 2025. This is a decrease of minus 54%. This decrease in EBITDA translated into a lower net income for the year at minus 370 million euros. This is also due to the impairment that we had to pass on our assets in Senegal, an impairment of 171 million euros. This is the reflection of this persistent oversupply that we are seeing in this market and the downward pressure on prices. The adjusted free cash flow for the year landed at minus 481 million euros, so lower than what we had in 2024. The impact on free cash flow is less important than what we see on EBITDA, first of all because we were able to reduce CAPEX in 2025 and because we implemented a cash boost plan during the year. Due to this cash consumption, we saw our net debt increase from 1.3 billion to 1.9 billion euros. Our shareholder equity decreased as well. I'd like to mention on shareholder equity that there is the impact of the net income, but there is also the impact of the FX rate, which is very adverse as we have a lot of assets that are denominated in dollars. As a result, our credit ratios landed at 5.5 for the net leverage and a gearing at 125%. As Christelle mentioned, we asked for a waiver from our banks for the test date of December 2025 that was granted unanimously. Regarding the usual EBITDA bridge, I think the picture is quite clear. The external impact on our EBITDA was substantial in 2025 by minus 359 million euros. This is 80% of the decrease in EBITDA came from external factors. In those factors, the three main drivers, again, are quite clear on this graph. The price impact was nearly 200 million euros. The FX impact was nearly 100. Taken together, you have nearly 300 that are linked to price and FX. And we had a permitting situation in Ouedabe with a new permitting constraint during the year that forced us to revise our mining plan with a higher cash cost, lower grades, and a product mixed with more limonite on which we have lower margins. We also had CO2 quota sales on manganese alloys that brought 46 million euros. And on the intrinsic, we had some positive impact on grade, mainly in Senegal, and we had in 2025 the cost linked to the ramp-up of lithium. Regarding capex, we were able to reduce capex in 2025 compared to 2024, in line with the guidance we had provided to the market. Sustaining capex remained constant year over year. But with now the new addition of sustaining capex from Centenario, as now we have this plant is in operation, which led to a sustaining capex of 26 million euros. On non-sustaining capex, we kept investing in Comilog. This is to de-bottleneck the loading in Monda and the ship loading at the port. We kept investing in CETRAG to revamp the railway to allow for organic growth. And we kept investing in Senegal where we are de-bottlenecking our plant and where we are also investing into a decarbonization project. We had some remaining greenfield capex linked to our plant in Argentina with the end of the construction. This amounted to 96 million euros for the year. leading to a total capex of 412 million euros. Regarding net debts, this is the result of what we described. The net debt increased from 1.4 billion euros to 2 billion euros. This is the result of a low EBITDA, still high capex as we were still investing. Taxes paid, we have 137 million euros of taxes paid, of which 80 in Gabon, which includes a settlement of a tax audit, which is a one-off payment. We distributed some dividends, including 56 million euros to minorities, which is mainly in Gabon. Regarding our liquidity position, our group financial liquidity stands at 1.5 billion euros at year end 2025. This includes our RCF. In January this year, this RCF was fully drawn for precautionary reasons. It provides the group with ample liquidity, especially as we have very manageable debt maturities in 26 and 28. The decision to draw this RCF in full was made by the previous management. We are currently evaluating the adequate level of cash we want to maintain going forward. Regarding our debt maturity profile, the bulk of our maturities are in 28 and 29 with the two bonds that are due that year. With that, we have an average maturity of our debt that stands at 2.8 years. With that, I will hand over to Charles to describe the operations.

Thank you, Simon. Hello, everyone. So 2025 operating performance and financials. In terms of operating performance, we've had mixed results. Disappointing in manganese ore. We had a low base in 2024 and we didn't manage to do more. I'll come back to that. Basically, it's around the logistics challenge, being on the railway but also on the terminal operations. In terms of manganese alloys, we were constrained by the market, by the ability to sell our products. We have a production capacity that is a lot higher than... what you see there and what we actually produced. On the positive side, 42 million at Weta Bay when we received in July the additional RKAB, when we managed in the last part of the year to produce so much, is a very positive operational performance. Again, I'll come back to that because it has some negative impacts as well. Mineral sands, it's record production. Mineral sands used to be around 600,000 or 700,000 tonnes. We gradually increased to 800,000 and now nearly a million tonnes. And the lithium started with difficulties with the forced evaporator. But in the second part of the year, the ramp-up that we achieved, going to 75% in December, and it's continuing currently to increase, is extremely positive and is a real success. Now, commenting the manganese performance, the main driver to explain the difference between 24 and 25 is around the price and the exchange rate. That's for the manganese oil. On manganese alloys, it's about the prices, yet we have been able to compensate that through CO2 quota sales. Regarding the free cash flow, we have, of course, the EBITDA, but on top of that, we continue to invest in Gabon on the train line, but also on the infrastructure of the mine. This is coming to an end, that part, and we paid heavy taxes, as Simon has mentioned. On the positive side, it's the free cash flow of the manganese alloys that is much higher than the previous years. And again, this business delivered some significant free cash flow. In Weta Bay, the main difference is about the grade and the quality of the material that we sold compared to the previous years. This was heavily impacted by the permitting. Permitting is about the famous RKAB permit, which is the permit to produce and to sell, but also the forestry permit. And both these permits were delivered extremely late, and we had to redo our mine plan continuously. continuously through the year, and in the end we had a very unoptimized mining plant. This is why the grade went down, because we had to sell some low-grade saprolite. We had to sell a lot of limonite as well, because the second part of the RKAB that we received was exclusively limonite. and that had a very big impact on our operation and our sales. The second part also is that when you have a suboptimal mining plan, you have increased haulage distances as well as increased trip ratio, and that impacts our productivity. Regarding mineral sands, it's record production, as I explained, yet the prices dropped to very low levels, and that impacted our EBITDA. And on the free cash flow side, we still have... CAPEX of expansion, CAPEX of decarbonisation, and those will finish in Q1 with start-up in early Q2 this year. So expect some smaller amount of CAPEX last year and finishing end of Q1, beginning of Q2. Lithium, we started the first semester issues with the forced evaporator impacted our cost. Our cost of ramp-up were higher than anticipated. We also had the end of the capex for the construction and also some VAT losses due to foreign exchange. So that's it for our operations. The teams have fought hard through the year. to compensate all the difficulties that we had. I'm actually quite proud of the teams, especially in lithium, and I'll come back to it also on the railway. GCO in Senegal delivered excellent production. So... Although it's mixed results, we are seeing some real improvements in terms of operational performance. And this is what we will build on on the operational performance plan. We have three... The first one was explained by Christelle largely. Our goal is to get to zero injuries and zero high potential incidents. We are launching some coaching of our first line managers on site. We have reviewed all our production system to embed safety deeper into the routines of our personnel. In terms of operational and commercial improvement, we are targeting 130 to 170 million EBITDA. I'll come back to that. This improvement is the uplift that we must deliver within two years. CapEx... Simon showed you the amount of capex that we've spent in previous years, 496 in 2024, 412 in 2025. We are now going to spend between 250 and 290. That's a very significant drop. This drop is due to some gross losses. CAPEX that are now finalised, but also a much more disciplined approach regarding sustaining CAPEX. Overall, this is a 30% to 40% reduction in the amount of CAPEX that we'll spend. The operational improvement plan is... spanning on all our businesses, manganese ore, manganese alloys, mineral sands, lithium, weather bay as well, and also commercial. We're looking at volumes, and the volume part is the majority part of this EBITDA uplift, but we're also looking at productivity. especially in mature businesses like manganese alloys, as well as costs in manganese alloys and mineral sands. We're also, of course, looking at cost in lithium to reduce our specific reagent consumption that is the number one driver for our cash cost. looking into more details regarding manganese ore. As I said, we've had disappointing results in 2025, not managing to produce more than the previous year. But in late 2024, we started a comprehensive plan to work on the basics, on the fundamentals in Gabon. We started early 2025 with a mindset and behavior plan on both operations in Comilog and in CEDRAG, and we are seeing the improvements. We are seeing, for example, a sharp drop in the number of accidents, showing more discipline, more drive of the managers. The second part that is absolutely key over there is asset management. We've had issues in all parts of our assets in terms of maintenance and reliability. We've launched programs and we talk usually a lot about the track maintenance, the track renewal. But what we are seeing... Late Q3, early Q4 is an inflection in some of the leading indicators. We had less rail breaks. We had better reliability of our rolling stock. And last year, we did a record replacement of the track, 84 kilometers for sleepers, 58 kilometers for rail. So these are the leading indicators that we follow. The lagging indicators have started to improve late Q4 last year and are continuing to improve. This is the running distance of all our trains that is slowly but surely improving. These are all the things that we're working on, the track renewal, the track maintenance, traffic management, the rolling stock reliability, the reliability also of our terminal operations. This is what we're working on. This is why we are confident because we have this inflection on the leading indicators and this improvement of the lagging indicators. We are confident that we will deliver 6.4 to 6.8 million tonnes this year. Regarding lithium, we've talked about it several times already. 75% is what we delivered in December. We are continuing to improve. And with this improvement, that should lead to 100% capacity, close to 100% capacity by the end of the year. We are reducing our cash costs mechanically, but on top of that, we are reducing our specific reagent consumption. And the target for our cash cost is now at 5.4 to 5.8 in 2025 terms. Remember that the 5,000 was in 2024 terms. PT WIDA Bay Nickel, this is a bit of a complicated slide. Basically, the message is EWIP has 73 RKAF production lines and 12 MHP production lines. The percentage of all that was delivered by Weta Bay Nickel Mine to the Iwip Industrial Park was around 40%. With the current permit, we only have 10%. Remember that last year we got an improvement in our RKAB, and we will request an increase as soon as possible. Longer term, our MDAL and feasibility study is still valid. It's still at 60 million tonnes, and this is our target to deliver 60 million tonnes. And now I will leave the floor back to Simon for the funding plan. Thank you very much.