Imerys Sa · EURONEXT:NK
Imerys Sa — 9M 2017 Earnings Presentation
36 slides from Imerys Sa's earnings presentation, Oct 31, 2017
Slide 1: Results to September 30, 2017
Results to September 30, 2017 Conference call October 31, 2017 Gilles MICHEL - Chairman & Chief Executive Officer Olivier PIROTTE - Chief Financial Officer
Slide 2: Disclaimer
Disclaimer More comprehensive information about Imerys may be obtained on its website (www.imerys.com). under Regulated Information, including its Registration Document filed under No. D.17-0190 on March 21, 2017 with Autorité des marchés financiers. Imerys draws the attention of investors to the “R
Slide 3: Results to September 30, 2017
Results to September 30, 2017 Highlights 4 Conclusion 14 Appendix 16
Slide 4: Highlights
Highlights TRANSFORM TO PERFORM
Slide 5: Key figures as at September 30, 2017
Key figures as at September 30, 2017 Revenue (€m) Quarterly organic growth (2) + 8.5 % Quarterly organic growth 3,394 Rolling 12 months organic growth + 3.6 % 3,084 3,127 + 3.2 % + 2.4 % + 1.4 % + 1.2 % + 2.1 % + 0.1 % + 0.9 % + 0.6 % - 0.4 % T4-14 T1-15 T2-15 T3-15 T4-15 T1-16 T2-16 T3-16 T4-16- 1.
Slide 6: Better overall market environment
Better overall market environment % of Group revenue* Further increase in housing starts (single family and collective) in the US (+ 3.1 % 9M 2017 vs 9M 2016), Construction ~20 % building permits (+ 5.0 % 9M 2017 vs 9M 2016) (1). and renovation Good momentum in Europe, overall Current ~15 % Fi
Slide 7: + 8.5 % revenue increase
+ 8.5 % revenue increase Evolution of revenue for the first nine months of 2017 (€m) + 2.4 % + 8.5 % + 5.8 % + 0.3 % 76 9 Kerneos 91 Misc. 91 182 3,394 3,127 9M 2016 Scope Currencies Volumes & price-mix 9M 2017 Organic growth of + 2.4 % for the first nine months of 2017, of which + 3.6% in Q3 Vo
Slide 8: Energy Solutions & Specialties (29 % of consolidated revenue)
Energy Solutions & Specialties (29 % of consolidated revenue) Revenue (€m) + 5.9% Broad-based improvement of activity 937 992 + 6.0% Graphite & Carbon: dynamic markets for mobile 320 339 energy and conducting polymers Carbonates: positive trends in Asia-Pacific and in packaging applications 9M
Slide 9: Filtration & Performance Additives (27 % of consolidated revenue)
Filtration & Performance Additives (27 % of consolidated revenue) Revenue (€m) + 9.3% 852 932 + 7.1% Revenue benefiting from robust sales 302 momentum in supportive markets 282 9M 16 9M 17 Q3 16 Q3 17 New developments in health & beauty, construction, agriculture and plastics Revenue by division
Slide 10: Ceramic Materials (26 % of consolidated revenue)
Ceramic Materials (26 % of consolidated revenue) Revenue (€m) 928 - 3.3% 898 Sequential improvement - 1.8% 294 286 LFL: - 3.2% Weak paper markets LFL: - 2.7% 9M 16 9M 17 Q3 16 Q3 17 Clay roof tiles sales down - 2.3% in Q3** Revenue by division due to slack renovation segment 41% 26% Roofing
Slide 11: High Resistance Minerals (18 % of consolidated revenue)
High Resistance Minerals (18 % of consolidated revenue) Revenue (€m) Good sales and innovation dynamics in very + 38.6% 619 + 79.5% 446 91 Kerneos 263 supportive markets 147 91 Kerneos Very strong organic growth in Q3 with relatively favorable comparison basis 9M 16 9M 17 Q3 16 Q3 17 Revenue by
Slide 12: Current operating income up + 8.6 %
Current operating income up + 8.6 % Evolution of Current Operating Income for the first nine months of 2017 (€m) Price mix 18 (1) (36) + 8.6 % Volumes 37 1 16 2 56 480 442 14.1 % Operating margin 14.1 % 9M 2016 Scope Currencies Volumes and Variable costs Fixed costs and Miscellaneous 9M 2017 price m
Slide 13: Net income from current operations up by + 6.8%
Net income from current operations up by + 6.8% M€ 9M 2016 9M 2017 Change Current operating income 441.5 479.5 + 8.6% Current financial expense (47.5) (63.1) Average cost of debt 2.3 % 1.8 % Current income tax (117.2) (122.8) Average tax rate 29.7 % 29.5 % Minority interests (2.3) (0.4) Net income f
Slide 14: Conclusion
Conclusion ~~ rn '>6g fers TRANSFORM TO PERFORM
Slide 15: Conclusion
Conclusion Recent acquisitions, especially Kerneos, expected to contribute gradually Objective of 2017 net income from current operations growth to exceed + 7 % confirmed 15 October 31, 2017 Results to September 30, 2017
Slide 16: Appendix
Appendix ~~ rn '>6g fers TRANSFORM TO PERFORM
Slide 17: Revenue and current operating income by quarter
Revenue and current operating income by quarter Revenue (€m) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Energy Solutions & Specialties 312.5 323.5 314.1 303.0 300.8 316.2 319.6 314.0 321.6 332.0 338.7 Filtration & Performance Additives 218.9 306.2 284.5 2
Slide 18: Current operating income and operating margin by semester
Current operating income and operating margin by semester Current Operating Income (€m) H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 Energy Solutions & Specialties 77.5 65.7 67.9 60.2 72.1 77.5 64.4 55.3 67.0 62.9 68.8 Filtration & Performance Additives 45.
Slide 19: Revenue by region as at September 30, 2017
Revenue by region as at September 30, 2017 4% 28% 43% Western Europe USA/ Canada Emerging markets 25% Other (Japan/ Australia) 19 October 31, 2017 Results to September 30, 2017
Slide 20: Energy Solutions & Specialties
Energy Solutions & Specialties Carbonates 9M 2017 revenue by region Natural (GCC) and Precipitated (PCC) Calcium Carbonates used as filling or coating pigment for paper production and functional additives for paints, plastics etc.. Monolithic Refractories 8% Unshaped refractory materials use
Slide 21: Filtration & Performance Additives
Filtration & Performance Additives Performance Additives 9M 2017 revenue by region Additives for paints, plastics, polymers, rubbers, adhesives, sealants, pharma & personal care (mainly talc, mica and wollastonite, etc.) 3% Filtration 25% 39% Filtration minerals providing filter aid for edib
Slide 22: Ceramic Materials
Ceramic Materials 9M 2017 revenue by region Roofing Clay roof tiles in France Ceramics 3% Raw materials and bodies for tableware, sanitary and 21% floor tiles, quartz, technical ceramics 17% 59% Kaolin Kaolin for applications in the paper, paints, plastics, ceramics and refractories mark
Slide 23: High Resistance Minerals
High Resistance Minerals Fused Minerals 9M 2017 revenue by region Fused alumina and bauxite for abrasives (cutting, grinding and polishing mills, sandpapers), zirconium for refractories, oxygen sensor Refractory Minerals 5% Production of acidic refractory minerals including 29% 41% andalusit
Slide 24: Market indicators for construction, printing & writing paper
Market indicators for construction, printing & writing paper New housing starts (in thousands) Printing & writing paper (in millions of tons) 25,0 20,0 15,0 Printing & writing paper MT 10,0 (in millions of tons) 5,0 0,0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Mature markets Emerging markets Sou
Slide 25: Indicators for steel production and passenger car registrations
Indicators for steel production and passenger car registrations Steel production (in thousands of tons) Light vehicle registrations (basis 100 in Q4 2007) 25 October 31, 2017 Results to September 30, 2017
Slide 26: Industrial production indicator: industrial equipment
Industrial production indicator: industrial equipment New orders index (machine and industrial equipment manufacturing in EU-28 (adjusted for seasonal effect and working days) New orders index (machine and industrial equipment manufactuing in the U.S.A. (adjusted for seasonal effect ) 26 October 31,
Slide 27: Kerneos: a new platform to grow Imerys’ minerals-based specialties
Kerneos: a new platform to grow Imerys’ minerals-based specialties Main strategic rationale for Imerys A world class technology platform Entering into a new and growing market segment Leveraging growing adoption rate of aluminate technologies in construction Enhancing Imerys financial perfor
Slide 28: Kerneos: global leadership positions with proven track record of growth and profitability
Kerneos: global leadership positions with proven track record of growth and profitability Sustained revenue growth (€m) High profitability (€m) CAGR: 417 Proven track-record of growth and CAGR: 368 + 3.3% + 8.0% 99 resilient profitability at high level 137 74 157 Revenue: + 3.3% CAGR 2012-2016,
Slide 29: With Kerneos, Imerys would complement its global footprint…
With Kerneos, Imerys would complement its global footprint… Global presence: 1,500 employees in Sole CAC player with global footprint 9 industrial facilities and 17 sales offices Competitive industrial base located in key markets Secured access to required minerals Istanbul Stockholm (includin
Slide 30: … and enhance its profile with 2/3 of Kerneos activities offering growth potential
… and enhance its profile with 2/3 of Kerneos activities offering growth potential Construction technologies and specialty Leveraging growing adoption rate of aluminate applications: long-term growth outperforming technologies in construction +4-5% p.a. construction markets Self leveling and qui
Slide 31: Refractory technologies: high value offering
Refractory technologies: high value offering Serving primarily as binders for refractory products (monolithics) Performance binders are critical to the performance of client products Represents a small share of client input cost in refractories Benefiting from a resilient performance Selli
Slide 32: Innovation leadership supported by strong R&D capabilities
Innovation leadership supported by strong R&D capabilities New products sales evolution over last 10 years High quality R&D strengthening Imerys’ €m and % of Net Sales innovation capabilities 8.2% 2 R&D centers dedicated to Construction technologies (France) and Refractories (China) 6.6% 5 app
Slide 33: €23 m run-rate annual synergies identified
€23 m run-rate annual synergies identified Leveraging geographical coverage Kerneos stronger presence in some geographies Pre-tax synergies phasing (€m) 23 Enhancing innovation potential 18 New technologies/ applications Cross fertilization opportunities 9 Year 1 Year 2 Year 3 Cost optim
Slide 34: Imerys and Kerneos: a value creative transaction
Imerys and Kerneos: a value creative transaction Estimated enterprise value of c.€880 million €23m annual run rate synergies from third full year of consolidation 8.9x 2016 LTM EBITDA1 and 7.2x post run-rate annual synergies Financed from Imerys’ available resources 7.2x 2016 EBITDA Availa
Slide 35: Kerneos, a further step in Imerys’ development strategy
Kerneos, a further step in Imerys’ development strategy that matches all our value-creation criteria World class technology platform Entry into a new growing market segment Enhancement of Imerys growth and profitability profile Excellent fit with Imerys business model Strong innovation cap
Slide 36: Imerys
Imerys www.imerys.com 154 rue de l’Université Investor Relations 75007 PARIS Vincent GOULEY + 33 (0)1 49 55 63 00 + 33 (0)1 49 55 64 69 www.imerys.com [email protected]