Imerys Sa · EURONEXT:NK
Imerys Sa — Q1 2017 Earnings Presentation
36 slides from Imerys Sa's earnings presentation, Apr 28, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results Conference Call April 28, 2017 Gilles MICHEL - Chairman & CEO Olivier PIROTTE - CFO
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 D.17-0190. Imerys draws the attention of investors to the “Risk factors and Internal control” set forth in section 4 of
Slide 3: First Quarter 2017 Results
First Quarter 2017 Results Results 4 Conclusions 14 Appendix 16
Slide 4: Results
Results IMERYS TRANSFORM TO PERFORM
Slide 5: First Quarter 2017 Highlights
First Quarter 2017 Highlights Improved economic environment Revenue (€m) Current EBITDA (€m) + 7.2% + 6.3% Organic growth(1) + 2.4 %: 202 confirmation of upward trend since Q4 2016 1 113 190 1 038 173 974 Good operating performance Current operating income up + 8.7 % (2) Operating margin at 13.2 % (
Slide 6: Market environment
Market environment Weight in the Group* Construction Sustained growth of individual and collective housing starts Quarterly organic growth up ~20% in the US (+ 8.1% Q1 2017 (1) vs Q1 2016) and renovation Broad-based growth in Europe + 2.4% in Q1 2017 Continued turnaround in certain markets and regio
Slide 7: + 7.2% revenue increase
+ 7.2% revenue increase (€m) + 2.3% + 2.4% + 7.2% + 2.5% 25 24 26 1,113 1,038 Q1 16 Perimeter FX Organic growth Q1 17 Contribution from the acquisitions completed in 2016 and early 2017 Q1 2017 organic growth: + 2.4 % Improving trends since Q4 2016 (+ 1.4 %) Growth coming from volumes, neutral price
Slide 8: Current Operating Income up + 8.7%
Current Operating Income up + 8.7% (€m) +3 +2 + 8.7% + 13 - 10 -3 - +6 147 135 Operating margin: 13.0% 13.2% + 20 basis points Q1 16 Perimeter FX Volumes Price-mix Variable Costs Fixed Costs & Change in Q1 17 Overheads inventories and other More supportive environment: positive contribution from sal
Slide 9: Energy Solutions and Specialties (29% of revenue)
Energy Solutions and Specialties (29% of revenue) Revenue (€m) Q1 2017 revenue: + 6.9% (reported), + 1.0% (LFL) 313 301 322 Carbonates: slight increase driven by industrial and construction markets, in the US in particular Q1 15 Q1 16 Q1 17 Monolithic refractories: activity stabilizing, Revenue by d
Slide 10: Filtration & Performance Additives (28% of revenue)
Filtration & Performance Additives (28% of revenue) Revenue (€m) Q1 2017 revenue: + 12.3% (reported), 278 312 + 6.5% (LFL) 219 Good sales momentum of Performance Additives Q1 15 Q1 16 Q1 17 Sustained business activity across all segments (polymers for the automotive Revenue by division industry in p
Slide 11: Ceramic Materials (27% of revenue)
Ceramic Materials (27% of revenue) Revenue (€m) Q1 2017 revenue down - 3.8% (reported), - 4.7% (LFL) 291 323 311 Roofing: further decline in clay tile market (- 3.4% in Q1 17 yoy (1)) Q1 15 Q1 16 Q1 17 New housing continues to gain traction, but renovation market still down Kaolin Revenue by divisio
Slide 12: High Resistance Minerals (16% of revenue)
High Resistance Minerals (16% of revenue) Revenue (€M) Q1 2017 revenue: + 24.2% (reported), 165 184 + 14.6% (LFL) 148 Fused and Refractory Minerals Q1 15 Q1 16 Q1 17 Ongoing market recovery and marked restocking effect Revenue by division Revenue by market* * 2016 data 12 April 28, 2017 First Quarte
Slide 13: Increase in net income from current operations: + 3.1%
Increase in net income from current operations: + 3.1% (€m) Q1 2016 Q1 2017 Change Current operating income 135.4 147.2 + 8.7 % Current financial expense -17.3 -25.8 + 49.1 % of which: Interest expense, net -11.9 -16.5 + 38.7 % Average net financial debt for the period 1541.7 1478.3 - 4.1 % Average
Slide 14: Conclusions
Conclusions IMERYS TRANSFORM TO PERFORM
Slide 15: Outlook for 2017
Outlook for 2017 Progressive contribution from synergies related to recent acquisitions Unrelenting focus on operational performance (innovation, industrial excellence, cost control, cash flow generation) Continuation of development strategy, with the completion of the acquisition of Kerneos in part
Slide 16: Appendix
Appendix IMERYS TRANSFORM TO PERFORM
Slide 17: Market indicators for construction, printing & writing paper
Market indicators for construction, printing & writing paper 17 April 28, 2017 First Quarter 2017 Results
Slide 18: Indicators for steel production and passenger car registrations
Indicators for steel production and passenger car registrations 18 April 28, 2017 First Quarter 2017 Results
Slide 19: Industrial production indicator: industrial equipment
Industrial production indicator: industrial equipment European Union (28) April 28, 2017 First Quarter 2017 Results
Slide 20: Breakdown of revenue by geography in Q1 2017
Breakdown of revenue by geography in Q1 2017 20 April 28, 2017 First Quarter 2017 Results
Slide 21: 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 Energy Solutions & Specialties 312.5 323.5 314.1 303.0 300.8 316.2 319.6 314.0 321.6 Filtration & Performance Additives 218.9 306.2 284.5 271.9 278.2 292.1 282.0 292.2
Slide 22: Current financial expense
Current financial expense M€ Q1 2016 Q1 2017 Interest expense, net -11.9 -16.5 Unwinding of long-term provisions and change in other provisions -0.8 0.5 Net interest expense on pensions -2.2 -2.1 Currency translation, other financial income and expense and -2.4 -7.7 financial instruments Current fin
Slide 23: Energy Solutions & Specialties
Energy Solutions & Specialties Carbonates Q1 2017 revenue by geography 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 Unshaped refractory materials used to prot
Slide 24: Filtration & Performance Additives
Filtration & Performance Additives Performance Minerals Q1 2017 revenue by geography Additives for paints, plastics, polymers, rubbers, adhesives, sealants, pharma & personal care (mainly talc, mica and wollastonite, etc.) Minerals for Filtration Filtration minerals providing filter aid for edible l
Slide 25: Ceramic Materials
Ceramic Materials Roofing Q1 revenue by geography Clay roof tiles in France Ceramics Raw materials and bodies for tableware, sanitary and floor tiles, quartz, technical ceramics Kaolin Kaolin for applications in the paper, paints, plastics, ceramics and refractories markets, etc. 25 April 28, 2017 F
Slide 26: High resistance minerals
High resistance minerals Fused Minerals Q1 2017 revenue by geography Fused alumina and bauxite for abrasives (cutting, grinding and polishing mills, sandpapers), zirconium for refractories, oxygen sensor Refractory Minerals Production of acidic refractory minerals including andalusite, chamottes 26
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 performance wi
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: 415 Proven track-record of growth and 368 CAGR: + 3.3% + 8.0% 99 resilient profitability at high level 137 157 74 Revenue: + 3.3% CAGR 2012-2016(1), 2
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 (including owne
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 quick d
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 Selling almost
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 applicati
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 optimization Proc
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 Available cash a
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 capabilities
Slide 36: Contacts
Contacts Imerys Analysts / Investors 154 rue de l’Université Vincent Gouley 75007 PARIS + 33 (0) 1 49 55 64 69 + 33 (0) 1 49 55 63 00 [email protected] www.imerys.com