Eighty-Three Days

The record

Twenty-two per cent. That is how far Eramet's shares fell on 19 February 2026, the day it published its 2025 results, its worst session since December 2018.12 Eleven days earlier they had fallen 6 per cent, the worst performer on the SBF 120, when the market learned the chief financial officer had been suspended.13 AlphaValue's Varun Sikka needed one word: "Disastrous."2

The arithmetic behind the word. Adjusted EBITDA fell 54 per cent in 2025, to €372m from €814m. Adjusted free cash flow was minus €481m. The attributable loss was €477m. Net debt rose €638m, leverage from 1.8x to 5.5x and gearing from 61 to 129 per cent. The dividend was suspended for two years. Comilog's minority holders, chiefly the Gabonese State, were paid €12m at the end of July.456 The first half of 2026 added a further €195m of attributable loss, a loss per share of €6.81, and a return on capital employed of minus 1 per cent.76

Set the two together. Eramet has reported €672m of attributable losses in six quarters against €441m of equity attributable to its shareholders at 30 June: half again the book value of what its owners still hold.47 Two agencies have cut the rating three times in six months.89

The first half was genuinely better, and that should be said plainly. Adjusted EBITDA rose 45 per cent to €276m, adjusted free cash flow crossed zero at plus €7m, leverage fell to 4.5x, and manganese ore produced €140m of free cash flow against a €27m outflow across 2025.65 Prices did much of it: the manganese index rose 13 per cent.6 But a rebound off 2025 is not a recovery. Unadjusted, the half produced EBITDA of €179m, free cash flow of minus €50m and a loss.7

Execution, as practised

Three of Eramet's four divisions spent the half constrained by something other than price.

In Indonesia, Weda Bay's 2026 licence was cut to 12 Mwmt from 42 Mwmt. Of the 9 Mwmt permitted for external sale, 9.4 Mwmt had shipped by June, and the mine has been in care and maintenance since May. The guidance line nonetheless reads "Confirmed".6710 Nickel's adjusted EBITDA is up 10 per cent at €56m, the whole of Eramet's 38.7 per cent share of a venture that took a €34m forestry-permit provision, closed the half in loss and paid no dividend.67

In Senegal, February's fire at the wet concentration plant put mineral sands under force majeure, withdrew 2026 guidance and reset it to 300-400 kt of concentrate against 983 kt in 2025. Full capacity is not expected before the first quarter of 2027.65

In Argentina, the asset that works took eighteen months to reach 90 per cent of nameplate: first production December 2024, roughly 10 per cent by June 2025, 75 per cent by December.5 And in New Caledonia, SLN's losses are funded in full by the French State, without which the group's headline free cash flow would not have a plus sign.67

A portfolio marketed on cost curves is governed in practice by a permit, a fire, a commissioning curve and a sovereign subsidy. Gabon, which supplies the manganese that carries the group, will ban raw ore exports from 1 January 2029.11

What shareholders are being asked to fund

The 2025 cash figures explain the balance sheet. Manganese ore turned €271m of EBITDA into minus €27m of free cash flow, mineral sands €78m into minus €69m, lithium consumed €226m, and holding and eliminations removed €270m from a headcount of 743.5 The half-year reversed much of it: this portfolio converts when the price deck cooperates, each dollar per dmtu on the manganese index moving adjusted EBITDA by about €215m.6 And the $2.4/dmtu FOB cash cost anchoring the first-quartile claim runs on a definition, introduced with the 2025 results, that excludes Gabonese mining taxes and royalties worth 6 per cent of FOB turnover. The excluded line grew 9 per cent while the retained one grew 5. European regulators expect an issuer redefining a measure to explain why it yields more relevant information.412

So to the ask. Shareholders are invited to subscribe up to €500m in the fourth quarter against €441m of equity attributable to them.137 The deck records the plan as "approved by Board & reference shareholders" in February, but approval is not subscription: no underwriting, backstop or pro-rata commitment from the French State or the Duval holdings has been disclosed.56 Gearing of 129 per cent flatters the position, because €1,006m of the €1,447m of consolidated equity belongs to minorities, and adjusted leverage of 4.5x compares with 8.0x on reported EBITDA. The €1.3bn of liquidity includes a €935m revolver drawn in full in January, and both 2026 gearing covenants required waivers.76 February promised "sizeable asset(s) monetization in 2026"; by July that was minority stakes that "could" be sold by year end, and "around €500m" had become "a maximum amount of €500m".45613 Around and at most are different words, and only one is a floor.

The document that could not survive a quarter

If the performance is the indictment, the May Group Presentation shows how it happens.

Slide 41 calls Centenario's ramp-up "a proven playbook for Eramet's project execution capability", and slide 6 lists "Demonstrated E2E execution strength". Slide 42 lists, under Execution, a "Non-demonstrated track record in brine production, ramp-up & project delivery".5 The neighbouring entries are capabilities, so this is a word left in rather than a confession, which is worse.

The same deck records a 24 per cent fall in carbon intensity against a 35 per cent bond covenant target, and in a footnote the consequence: 25 basis points on the 2027 and 2028 coupons. Thirty-four slides earlier, four of five ESG ratings carry upward arrows.5

The case study

Eramet is not a disclosure failure. Its bad news is in the documents, if not always on the page a wire service reads first. It is a strategy and execution failure, and February priced it twice.

Nine years is long enough to judge. Christel Bories became chief executive in May 2017 and has held that office, the chair, or both ever since.14

Look first at what was built. In 2023 the group sold its High-Performance Alloys division and its Norwegian ETI plant, the assets that diversified it away from ore. In 2024 it bought out Tsingshan's minority in Eramine, raising exposure to the most capital-hungry project it owned, which absorbed about $950m of construction capex.5 The result, on its own slide: lithium was 1 per cent of 2025 sales and manganese and nickel 91 per cent, one facing a Gabonese export ban from 2029, the other a 38.7 per cent holding in a venture Eramet does not control and whose licence was cut by more than 70 per cent.5116 A decade of energy-transition strategy has produced a group more concentrated, more leveraged and less in control of its own volumes.

Look next at what was pre-sold. Roughly half of Centenario's volumes are committed to Glencore under a joint marketing agreement covering 50 kt-LCE over about five years, against a $400m advance the deck records as "available to Eramet & fully-drawn".515 It amortises against deliveries priced off the battery-grade index at what the deck calls a "limited discount", so Eramet keeps the price exposure and loses only the timing: the cash from half the output of the one asset that works has already been taken. Shareholders are asked for €500m on top.13

Then the governance. The Duval family, her largest shareholder, opposed renewing her mandate in 2021 before backing her with the French State's support.14 In January 2025 she agreed to give up the executive role and the board resolved to separate the two seats.16 It appointed Paulo Castellari that May, dismissed him on 1 February 2026 over "divergences on operating methods", and returned her to the office she had agreed to leave.1718 Six months on there is no permanent successor, and beneath her three finance directors in nine months, one suspended during an investigation into his own department.1920

This is not simply a bad cycle; peers felt that too. What is specific to Eramet is the sequence: a portfolio narrowed by choice into two sovereign-dependent commodities, a flagship project part-financed by selling its output forward, a licence lapsing into care and maintenance while the deck still showed 60 Mwmt of ambition, and a board that twice concluded the leadership arrangement had to change and twice ended up with the same person in both chairs.

That is the case for a change at the top, and it rests on nine years, not one quarter. The board reached this conclusion once already, in January 2025, and unwound it. An interim chief executive cannot bind the company to a multi-year deleveraging plan, and the executive selling the equity story is the one whose strategy created the need for it. Naming a permanent chief executive, and separating the roles as promised, is the cheapest credibility Eramet can buy before the fourth quarter, and the only item on the funding plan that costs nothing.

This is the terrain ZMK Advisory works. We read strategy documents against the accounts, price the gap, and tell boards which of their own slides will not survive the next reporting date.

1. 1 Euronext Paris, Eramet (ISIN FR0000131757), quote and daily price history: https://live.euronext.com/en/product/equities/FR0000131757-XPAR Source for the 22 per cent fall on 19 February 2026 and the 6 per cent fall on 9 February 2026.
2. 2 Reuters, "Struggling miner Eramet slumps after 'disastrous' 2025 triggers capital increase," 19 February 2026. https://www.reuters.com/business/struggling-miner-eramet-slumps-after-disastrous-2025-triggers-capital-increase-2026-02-19/ Source for the characterisation of 19 February as the worst session since December 2018 and for the one-word verdict quoted from AlphaValue analyst Varun Sikka.
3. 3 Reuters, "Eramet shares drop as CFO's suspension deepens management crisis," 9 February 2026 (subscription). Source for Eramet being the largest faller on the SBF 120 that day.
4. 4 Eramet S.A., "Structural measures to strengthen balance sheet and prepare the future, after a challenging year 2025," FY2025 results press release, 18 February 2026. FY2025 adjusted EBITDA and adjusted free cash flow, the three-pillar funding plan, and the narrowed FOB cash cost definition with mining royalties disclosed separately. https://www.eramet.com/wp-content/uploads/2026/02/2026-18-02-Eramet-PR-2025-FY-results-EN.pdf
5. 5 Eramet S.A., Group Presentation, 7 May 2026. Slides cited: 4 (2025 sales split), 7 (portfolio and 2028 growth potential), 8 (manganese cost curve), 10 and 44 (ESG ratings and the sustainability-linked bond penalty), 23 (Weda Bay 2026 licensing and the 12 Mwmt RKAB), 26 (2025 mineral sands production), 29 (Centenario construction capex), 32 (the joint marketing agreement and the $400m advance), 41 and 42 (Centenario ramp-up and growth optionality), 45 (Scope 3 methodology), 52 (Comilog and PT Weda Bay shareholdings), 53 (FY2025 KPIs and headcount by activity). https://www.eramet.com/wp-content/uploads/2026/05/2026-05-07-Eramet-Group-Presentation-May-2026.pdf
6. 6 Eramet S.A., "EBITDA rebound in H1 2026; execution of the funding plan underway, essential for the Group in H2," half-year results press release, 29 July 2026. Divisional commentary, unit costs, guidance, sensitivities, balance-sheet paragraphs and outlook, including the €12m paid to Comilog minority shareholders at end-July and the c.€215m adjusted EBITDA sensitivity to $1/dmtu on the manganese index. https://www.eramet.com/wp-content/uploads/2026/07/2026-07-29-Eramet-PR-H1-2026-EN.pdf
7. 7 Eramet S.A., 2026 Interim Financial Report, 29 July 2026. Consolidated income statement, balance sheet, cash flow statement, segment note and quarterly production and sales tables. https://www.eramet.com/wp-content/uploads/2026/07/2026-07-29-Eramet-2026-Interim-financial-report-EN.pdf
8. 8 Moody's Ratings, rating action downgrading Eramet to B1 from Ba3, outlook negative, 17 September 2025, and to B2 in March 2026. Published on moodys.com; rating actions are behind registration and are cited to the agency by action and date rather than via a third-party republication.
9. 9 Fitch Ratings, rating action downgrading Eramet's Long-Term Issuer Default Rating to B from BB-, outlook negative, 11 February 2026. Published on fitchratings.com; rating actions are behind registration and are cited to the agency by action and date rather than via a third-party republication.
10. 10 Eramet S.A., "Strong turnover momentum in Q1 2026 driven by a solid operational performance," Q1 2026 press release, 23 April 2026. 2026 guidance as it stood in April, including the nickel ore volume cap of 9 Mwmt on the initial 12 Mwmt licence. https://www.eramet.com/en/news/strong-turnover-momentum-in-q1-2026-driven-by-a-solid-operational-performance/
11. 11 Eramet S.A., "Eramet's response to the Gabonese government's announcement on crude manganese export ban starting in 2029," press release, 2 June 2025. The ban takes effect on 1 January 2029. https://www.eramet.com/en/news/eramets-response-to-the-gabonese-governments-an-nouncement-on-crude-manganese-export-ban-starting-in-2029/
12. 12 European Securities and Markets Authority, Guidelines on Alternative Performance Measures, ESMA/2015/1415en, 5 October 2015. Guideline 41 on redefining a measure; Guideline 35 on prominence. https://www.esma.europa.eu/sites/default/files/library/2015/10/2015-esma-1415en.pdf
13. 13 Eramet S.A., "General Meeting on 27 May 2026: approval of the resolutions," press release, 27 May 2026. Delegation to the Board to increase share capital by a maximum of €500m with pre-emptive subscription rights maintained. https://www.eramet.com/wp-content/uploads/2026/05/2026-05-27-Eramet-PR-Post-AG-EN.pdf
14. 14 Reuters, "Eramet's Bories to step down as CEO, stay on as chair," 21 January 2025 (subscription). Source for her tenure as chief executive since 2017 and for the Duval family's opposition to renewing her mandate in 2021 before backing her with French State support. Retrievable from the Reuters archive; the board decision itself is at note 16.
15. 15 Reuters, "Eramet says it secured $400 mln lithium deal with Glencore," 26 July 2023. Eramet's then chief financial officer, Nicolas Carre, identified Glencore as the counterparty on the record and confirmed the $400m would be pre-paid in 2023 against some 50,000 tonnes of lithium sold over five years at market price. Eramet's own disclosures describe the contract only as a "joint marketing agreement" and do not name the buyer. Reuters is paywalled; the agency report is carried in full by Mining Weekly (Creamer Media), 27 July 2023: https://www.miningweekly.com/article/eramet-says-it-secured-400m-lithium-deal-with-glencore-2023-07-27
16. 16 Eramet S.A., "Evolution of governance at Eramet after the General Shareholders' Meeting on 27 May 2025," press release, 21 January 2025. Announcement that the chair and chief executive roles would be separated. https://www.eramet.com/en/news/evolution-of-governance-at-eramet-after-the-general-shareholders-meeting-on-27-may-2025/
17. 17 Eramet S.A., "Governance: Appointment of Paulo Castellari as Chief Executive Officer," press release, 13 February 2025, the appointment taking effect at the May 2025 Annual General Meeting. https://www.eramet.com/en/news/governance-appointment-of-paulo-castellari-as-chief-executive-officer/
18. 18 Eramet S.A., "Announcement from the Board of Directors regarding the management of the Group," press release, 1 February 2026. Termination of Paulo Castellari's mandate for "divergences on operating methods" and Christel Bories' appointment as interim Chief Executive Officer. https://www.eramet.com/en/news/eramet-announcement-from-the-board-of-directors-regarding-the-management-of-the-group/
19. 19 Eramet S.A., "Statement in response to recent press articles," regulated information, 9 February 2026. Confirms the chief financial officer was "temporarily suspended from his duties" to allow "the proper conduct of the independent investigation" following "a warning from several employees of the finance department". https://www.eramet.com/en/news/eramet-statement-in-response-to-recent-press-articles/
20. 20 Eramet S.A., "Appointment of Simon Henochsberg as Chief Financial Officer of the Eramet Group, member of the Executive Committee," press release, 26 May 2026. https://www.eramet.com/en/news/appointment-of-simon-henochsberg-as-chief-financial-officer-of-the-eramet-group-member-of-the-executive-committee/

Note on sources. Each footnote cites one document. All operating and financial figures are Eramet's own, taken from its Group Presentation of 7 May 2026, its half-year results release and 2026 Interim Financial Report of 29 July 2026, its FY2025 results release of 18 February 2026, and its post-Annual General Meeting release of 27 May 2026. Governance facts come from Eramet's own announcements, including its statement of 9 February 2026. Share-price moves are cited to Euronext Paris. Analyst comment and the lithium offtake counterparty are cited to Reuters, and rating actions to Moody's Ratings and Fitch Ratings, by title or action and date. Footnote 2 links to Reuters directly; footnote 15 links to the agency report as carried in full, with credit, by Mining Weekly. Footnotes 3, 8, 9 and 14 carry no hyperlink, because those items sit behind subscription or registration walls and no third-party republication has been substituted for them. The regulatory standard on redefining a performance measure is cited to ESMA directly.

One figure in the text is ZMK's own arithmetic. The €672m of attributable losses over six quarters is the sum of the €477m attributable loss for 2025 and the €195m attributable loss for the first half of 2026, each as reported by Eramet; the comparison with €441m of equity attributable to shareholders at 30 June 2026 follows from it. Every other number is taken directly from the documents cited.

Exhibits. The four exhibits reproduce slides from Eramet's Group Presentation of 7 May 2026 for the purpose of analysis and comment, each attributed on its face: Exhibit 1, slide 23; Exhibit 2, slide 53; Exhibit 3, slide 42; Exhibit 4, slide 4. The highlights and commentary are ZMK's.