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1. Company Snapshot

1.a. Company Description

ERAMET S.A. operates as a mining and metallurgical company worldwide.The company extracts and processes manganese ore, nickel ore, and mineral sands.It also produces ferronickel, high purity nickel metal, nickel salts, nickel and cobalt chlorides, nickel carbonate, nickel ferroalloys, and other metallic salts used in stainless steel, catalysis and pigments, and alloy steel and casting; manganese alloys, such as high-carbon ferromanganese, silicomanganese, low and medium-carbon ferromanganese, and low-carbon silicomanganese for use in batteries, fertilizers, pigments, different reagents, construction, and automotive industries; and mineral sands, such as titanium dioxide, high-purity pig iron, zircon, and ilmenite used in ceramics and pigments.


In addition, it operates Moanda mine in Gabon; nickel mines in New Caledonia and Indonesia; and mineral sand mine in Senegal and Argentina.ERAMET S.A. was incorporated in 1880 and is headquartered in Paris, France.

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1.b. Last Insights on ERA

Breaking News: Eramet SA reported a challenging year with significant financial setbacks in 2025. Despite this, the company outlined strategic plans for recovery and growth in 2026. The company's management discussed their approach to navigating the difficulties and positioning the business for future success. Eramet SA aims to implement measures to improve performance. Analysts from UBS recommend a buy, while those from Goldman Sachs and JPMorgan recommend a hold. Recent developments have led some analysts to reevaluate their stance. Eramet's strategy for 2026 focuses on key areas.

1.c. Company Highlights

2. Eramet's Challenging Year: A Deep Dive into 2025 Earnings

Eramet's financial performance in 2025 was marked by significant challenges, resulting in a 7% decrease in turnover to EUR 3.2 billion and a substantial 54% drop in adjusted EBITDA to EUR 372 million. The company's adjusted free cash flow for the year was minus EUR 481 million, and net debt increased from EUR 1.3 billion to EUR 1.9 billion. The earnings per share (EPS) for the period was not disclosed. The decline in financials was primarily attributed to low commodity prices, a weakening dollar, permit restrictions in Indonesia, and operational challenges in Gabon.

Publication Date: Feb -20

📋 Highlights
  • Adjusted EBITDA Decline:: Eramet's adjusted EBITDA fell 54% to EUR 372 million in 2025 due to low commodity prices, FX headwinds, and operational challenges.
  • Free Cash Flow Deficit:: Adjusted free cash flow turned negative by EUR 481 million, pushing net debt to EUR 1.9 billion (up from EUR 1.3 billion in 2024).
  • Strategic Funding Plan:: A EUR 500 million capital increase is planned for 2026 to reduce net leverage from 5.5x to 1x over the next two years.
  • Lithium Production Ramp-Up:: Lithium output reached 75% capacity by December 2025, with plans for low-capital expansion and potential partnerships in Argentina.
  • Dividend Suspension:: No dividends proposed for 2025 and 2026 to prioritize deleveraging, with CapEx targeting EUR 250-290 million in 2026.

Operational Performance

The company's operational performance was mixed, with manganese ore production being impacted by logistics challenges, while mineral sands production achieved a record level, increasing from 600,000 to nearly 1 million tonnes. Lithium production started with difficulties but ramped up to 75% in December. According to Charles Nouel, COO, the main driver for the difference in manganese performance between 2024 and 2025 was price and exchange rate fluctuations, partly compensated by CO2 quota sales.

Funding Plan and Capital Structure

To address the financial challenges, Eramet is implementing a comprehensive funding plan to strengthen its balance sheet, including a capital increase of around EUR 500 million in 2026. The company is targeting a net leverage of 1x, with a current level of 5.5x. The capital allocation policy has been adapted to prioritize deleveraging, limiting investments, and suspending dividends for the next two years. As Simon Henochsberg, acting CFO, noted, achieving a 1x debt-to-EBITDA ratio within the next year is unlikely due to current market conditions.

Outlook and Valuation

For 2026, Eramet is expecting an uplift in manganese ore transported volumes, a stable production in mineral sands, and a ramp-up to nameplate capacity in lithium. Analysts estimate next year's revenue growth at 9.8%. The company's current valuation metrics, including a P/E Ratio of -2.8, P/B Ratio of 1.28, and EV/EBITDA of -2.63, indicate the market's expectations for the company's future performance. The Net Debt / EBITDA ratio stands at -1.54, reflecting the company's leverage position.

Growth Potential and Risks

Eramet has significant potential for growth, particularly in lithium, with plans for a low-capital-intensity expansion of the existing plant in Argentina. However, the company faces challenges, including geopolitical tensions, particularly with China, and permitting issues in Indonesia. The company's relationship with China is a concern, but it has developed contingency plans, such as growing its presence in India.

3. NewsRoom

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Eramet SA (ERMAF) Full Year 2025 Earnings Call Highlights: Navigating Challenges and Strategic ...

Feb -21

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Eramet: structural measures to strengthen balance sheet and prepare the future, after a challenging year 2025

Feb -18

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Eramet: reaction to the initial production and sales volumes granted by the Indonesian authorities to its joint-venture PT Weda Bay Nickel

Feb -11

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Eramet statement in response to recent press articles

Feb -09

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Assessing ERAMET (ENXTPA:ERA) Valuation After Recent Share Price Momentum And DCF Upside Potential

Feb -08

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Information on the financial terms of the departure of Paulo Castellari

Feb -06

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Eramet's Grande Côte Operation completes first IRMA audit in Senegal

Feb -05

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Eramet Grande Côte demonstrates the Eramet Group's commitment to responsible mining by achieving IRMA 50 performance level

Feb -05

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.86%)

6. Segments

Manganese

Expected Growth: 8%

ERAMET S.A.'s 8% growth in Manganese is driven by increasing demand from the steel industry, particularly in Asia, and growing adoption in battery production for electric vehicles. Additionally, supply constraints and rising prices of other metals have led to increased substitution with Manganese, further boosting demand.

Nickel

Expected Growth: 7%

ERAMET S.A.'s nickel segment growth is driven by increasing demand from electric vehicle batteries, stainless steel production, and alloy manufacturing. Rising adoption of renewable energy sources and energy storage systems also boosts demand. Additionally, supply constraints in Indonesia and the Philippines, coupled with ERAMET's cost-efficient production, contribute to the 7% growth.

Mineral Sands

Expected Growth: 10%

ERAMET S.A.'s Mineral Sands segment growth is driven by increasing demand for titanium dioxide, a key pigment in paint and coatings, as well as rising sales of high-grade ilmenite to the welding rods industry. Additionally, the company's cost-cutting initiatives and operational efficiencies have improved profitability, supporting the 10% growth rate.

Holding and Eliminations

Expected Growth: 6%

ERAMET S.A.'s 6% growth in Holding and Eliminations is driven by strategic diversification, improved operational efficiency, and effective cost management. The company's focus on high-growth markets, such as lithium and nickel, has also contributed to this growth. Additionally, the successful integration of acquired businesses and a strong balance sheet have enabled ERAMET to invest in growth initiatives and drive profitability.

7. Detailed Products

Manganese Alloys

ERAMET S.A. produces a range of manganese alloys used in the production of steel, foundry, and welding applications.

Nickel Alloys

ERAMET S.A. offers a variety of nickel alloys used in high-temperature, corrosion-resistant, and electrical resistance applications.

Stainless Steel

ERAMET S.A. produces a range of stainless steel grades used in various industries, including food processing, construction, and automotive.

Specialty Alloys

ERAMET S.A. offers specialty alloys used in high-performance applications, including aerospace, defense, and energy.

Lithium-Ion Battery Recycling

ERAMET S.A. provides lithium-ion battery recycling services, recovering valuable metals and reducing waste.

Mineral Sands

ERAMET S.A. extracts and processes mineral sands, including ilmenite, rutile, and zircon, used in various industrial applications.

8. ERAMET S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ERAMET S.A. operates in the mining and metallurgy industry, where substitutes are limited. However, the company's products can be replaced by alternative materials or technologies, posing a moderate threat.

Bargaining Power Of Customers

ERAMET S.A.'s customers are primarily industrial companies, which have limited bargaining power due to the specialized nature of the company's products.

Bargaining Power Of Suppliers

ERAMET S.A. relies on a diverse range of suppliers for its mining and metallurgy operations. While some suppliers may have bargaining power, the company's diversified supply chain mitigates this risk.

Threat Of New Entrants

The mining and metallurgy industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with ERAMET S.A.

Intensity Of Rivalry

The mining and metallurgy industry is highly competitive, with several established players competing for market share. ERAMET S.A. faces intense rivalry from companies such as Rio Tinto, BHP, and Glencore.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.47%
Debt Cost 4.92%
Equity Weight 42.53%
Equity Cost 11.36%
WACC 7.66%
Leverage 135.12%

11. Quality Control: ERAMET S.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Norsk Hydro

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Value: 6.5

Growth: 6.3

Quality: 5.6

Yield: 6.2

Momentum: 5.0

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Vallourec

A-Score: 5.4/10

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Yield: 5.0

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BillerudKorsnäs

A-Score: 5.0/10

Value: 7.3

Growth: 4.9

Quality: 4.6

Yield: 5.0

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Akzo Nobel

A-Score: 4.9/10

Value: 4.3

Growth: 4.8

Quality: 3.6

Yield: 5.6

Momentum: 3.5

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Voestalpine

A-Score: 4.8/10

Value: 6.1

Growth: 1.3

Quality: 3.2

Yield: 4.4

Momentum: 9.0

Volatility: 4.7

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ERAMET

A-Score: 4.0/10

Value: 7.7

Growth: 1.9

Quality: 2.4

Yield: 4.4

Momentum: 6.0

Volatility: 1.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

48.98$

Current Price

48.98$

Potential

-0.00%

Expected Cash-Flows