DERICHEBOURG - Universal registration document 2018-2019

1

CSR report (serving as statement of extra-financial performance) Overview of businesses and business model

NFM are found primarily in buildings, packaging, automobiles and industrial equipment. User industries are essentially foundries, refineries and other heavy industries. Recycling of end-of-life products will become increasingly essential since it is the only source of secondary non-ferrous metal, whereas primary resources are shrinking. Several other factors also favor the development of non-ferrous metal recycling. First, the production of primary ore is nonexistent in many areas of the world. Recycled products are thus the only “surface mine” available and are also a renewable source; in all cases, the reutilization of recovered products leads to savings in raw materials. In addition, the production of secondary, recycled products is much cheaper than manufacturing primary products from ore. Investments required are, on average, three to four times lower than for refining ore. Energy savings compared to the production of primary metal are about 60% to 80% for copper and 90% to 98% for aluminum – a clear-cut competitive advantage in a context of soaring energy costs and increasingly severe restrictions on greenhouse gas emissions in Europe. Even so, production cost savings are partially offset by the costs of collection and by environmental restrictions in industrialized nations. These limitations are less restrictive in emerging countries, which increasingly use this type of production and import recuperated products. The recovering of end-of-life products alone accounts for approximately 35% of global non-ferrous metal production (source: Bureau of International Recycling). The global demand for non-ferrous metals correlates strongly with changes in the global industrial production index. A major shift occurred in 2018, with China’s decision to publish very strict specifications for impurity levels in 19 classes of products (including non-ferrous metals) in order to import them into China. These maximum rates are in practice very difficult to achieve, and the volume of Chinese imports has decreased significantly since the spring of 2018. Consequently, the volumes previously consumed by China have shifted to other markets, resulting in downward pressure on the prices of various non-ferrous metals. The charts opposite summarize the price changes for various metals.

$2,400

$2,100

$2,000

$2,200

$1,900

$1,800

$2,000

$1,700

$1,600

$1,800

$1,500

$1,400

$1,600

$1,300

$1,200

$1,400

jul. 18

jul. 17

jul. 16

oct.18

oct.17

oct.16

oct.15

feb.19

feb.18

feb.17

feb.16

dec.18

dec.17

dec.16

dec.16

apr. 19

apr. 18

apr. 17

apr. 16

sept 19

2016

2017

2018

2019

Aluminium LME Settlement Aluminium average Metal Bulletin

$7,900

$7,400

$6,900

$6,400

$5,900

$5,400

$4,900

$4,400

jul.16

jul.17

jul.18

jan.16

jan.17

jan.18

jan.19

oct.15

oct.16

oct.17

oct.18

apr.16

apr.17

apr.18

apr.19

sept.19

Copper LME Settlement

DERICHEBOURG p 2018/2019 Universal Registration Document 19