Imerys Sa · EURONEXT:NK
Imerys Sa — H1 2009 Earnings Presentation
23 slides from Imerys Sa's earnings presentation, Jul 30, 2009
Slide 1: First-Half 2009 Results
1 First-Half 2009 Results Conference call, July 30, 2009 d Gérard Buffière Chief Executive Officer d Christophe Daulmerie Chief Financial Officer & Vice-President Strategy
Slide 2: Agenda
2 d Ongoing slackness of markets, collapse of volumes d Faster pace of cost reduction d Substantial cash flow generation, improved financial structure d Outlook
Slide 3: Ongoing slackness on the Group's markets
Ongoing slackness on the Group’s markets 3 d Continuation in the 2nd quarter of 2009 of the unprecedented downturn in the Group’s markets since November 2008 d Downturn amplified by widespread inventory reduction d All geographic zones affected z No upturn on markets served in Europe and North Ameri
Slide 4: Collapse of volumes on Group's main markets
Collapse of volumes on Group’s main markets 4 Steel production in Europe Global production of printing & writing & North America paper 20% 29,000 3 10% 28,000 1 0% 27,000 -1 -10% janv- avr- juil- oct- janv- avr- juil- oct- janv- avr- 26,000 -3 000's tonnes 07 07 07 07 08 08 08 08 09 09 25,000 -20% -
Slide 5: Ongoing heavy negative impact of sales volumes
Ongoing heavy negative impact of sales volumes 5 Impact of volumes on sales 2.8% 2.0% 1.9% 1.4% 1.8% 0.6% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 - 0.4 % - 17.1% d Q2 2009 resembles Q1 2009 - 23%(1) - 28.2 % - 30.2% H1 2009: - 29.2% (1) Decrease recorded in November/December 2008
Slide 6: Resilient price/mix component
Resilient price/mix component 6 + 37.6 (- 29.2%) + 4.4 (+ 0.2%) (+ 2.1%) 1,774.1 - 22.6% on current basis + 75.8 - 517.9 (+ 4.3%) 1,374.0 (M€) - 24.9% at comparable Group structure and exchange rates H1 2008 Group Foreign Volumes Price/Mix H1 2009 sales structure exchange sales d Positive exchange r
Slide 7: Agenda
7 d Ongoing slackness of markets, collapse of volumes d Faster pace of cost reduction d Substantial cash flow generation, improved financial structure d Outlook
Slide 8: Results of operating measures
Results of operating measures 8 d Results of plans in 1st half 2009 z Inventory reduced by - 129.4 M€ Æ decrease in every kind of inventory (raw materials, finished products, packaging, etc.) z Faster pace in fixed costs reduction: - 85.6 M€ i.e. a -13% decrease in the total fixed cost base Æ improv
Slide 9: Substantial decrease in fixed costs
Substantial decrease in fixed costs 9 Total 636 M€(1) d Structural measures - 86 M€ z Decrease in industrial capacities - 14% 550 M€(1) and workforce Other 191.1 d Temporary measures - 32.8 M€ - 17.2% 158.3 z No overtime z Part-time working Amortization 89.4 & depreciation z Significant reduction in
Slide 10: Change in current operating income (COI)
Change in current operating income (COI) 10 - 57.2% at comparable - 54.4% + 7.1 Group structure and exchange rates on current basis 241.5 - 0.4 - 231.0 13.6% Operating margin 8.0% + 85.6 + 71.9 - 30.7 (M€) 110.0 - 34.0 H1 2008 Group Foreign Volumes Price/Mix Variable Fixed costs Other H1 2009 COI st
Slide 11: Fall in volumes affecting every business group
Fall in volumes affecting every business group 11 Comparable (€ millions) H1 2009 H1 2008(3) change(2) Minerals for Ceramics, Refractories, Abrasives & Foundry 383.2 595.5 - 38.2% Performance & Filtration Minerals 246.3 291.4 - 21.5% Pigments for Paper 309.5 365.5 - 19.6% Materials & Monolithics 443
Slide 12: Profit posted by all business groups
Profit posted by all business groups 12 (€ millions) H1 2009 H1 2008(2)(3) Minerals for Ceramics, Refractories, Abrasives & Foundry 3.6% 12.7% Performance & Filtration Minerals 3.7% 9.9% Pigments for Paper 4.9% 9.4% Materials & Monolithics 19.0% 23.1% Imerys group operating margins(1) 8.0% 13.6% (1)
Slide 13: Financial income (expense)
Financial income (expense) 13 (€ millions) H1 2009 H1 2008(1) Cost of debt (34.0) (38.5) Impact of derivatives & hedging (1.4) 10.5 Net cost of financing (35.4) (28.0) Foreign exchange (4.1) 7.7 Financial expenses related to pensions (3.4) (0.4) Other income and expenses (2.0) 0.1 Financial expense
Slide 14: Net income from current operations
Net income from current operations 14 (€ millions) H1 2009 H1 2008(3) Change Current operating income(1) 110.0 241.5 - 54.4% Financial income (expense) (44.9) (20.6) Current income tax (18.7) (60.2) Net income from current 46.7 159.8 - 70.8% operations, Group share(2) (1) Including share in income (
Slide 15: Net income affected by restructuring programs launched
Net income affected by restructuring programs launched 15 (€ millions) H1 2009 H1 2008 Change Net income from current operations, 46.7 159.8 - 70.8% Group share(1) Other revenue and expenses, net (35.0) (15.4) of which: • Income of assets disposals 11.1 - • Cash expenses (39.0) (21.2) (restructuring
Slide 16: Agenda
16 d Ongoing slackness of markets, collapse of volumes d Faster pace of cost reduction d Substantial cash flow generation, improved financial structure d Outlook
Slide 17: Substantial generation of free cash flow
Substantial generation of free cash flow 17 (€ millions) H1 2009 H1 2008 EBITDA 204.1 322.2 z Change in operating working capital 93.4 (83.0) z Paid capital expenditure (79.0) (141.6) Current free operating cash flow(1) 187.7 40.3 z Financial expense (net of tax) (32.0) (15.0) z Other working capita
Slide 18: Change in operating working capital
Change in operating working capital 800 700 18 (€ millions) 600 (€ millions) Receivables 500 950 35% 400 300 900 30% 200 850 25% 100 800 0 750 20% 700 700 15% 600 650 Inventories 10% Q2 2009 Q1 2009 Q2 2007 Q4 2007 Q2 2008 Q4 2008 500 600 5% 400 550 300 500 0% 200 100 0 d Sharp improvement in workin
Slide 19: Organic reduction in the Group's debt
Organic reduction in the Group’s debt 19 (June 2008 – June 2009) pex (1) d ities nerate ge g n t ca han orki e Net debt e m en & ot ign exc ons cap ge in w by a flow g cap tenanc pay asset after ti elop s financing e k ex (1) c t iv uisi her able incr tal eas bac Net debt Net debt buy e d ital h of
Slide 20: Financial structure
Financial structure 20 101.9 % 101.3 % 63.5 % Net debt / equity ratio (%) d Stronger financial 1,808 structure 1,616 1,566 1,586 1,546 z €251 million capital Shareholders’ equity increase in 1st half (€ millions) z Organic reduction in the Group’s 1,148 Net debt debt d Total financial resources Æ €2
Slide 21: Agenda
21 d Ongoing slackness of markets, collapse of volumes d Faster pace of cost reduction d Substantial cash flow generation, improved financial structure d Outlook
Slide 22: Outlook
Outlook 22 d High uncertainty over activity levels for the coming quarters d Continuation of actions to reduce fixed costs and overheads d Cash flow generation still the priority z Continuation of inventory reduction actions z Selective capital expenditure z Improvement in financial structure with f
Slide 23: First-Half 2009 Results
23 First-Half 2009 Results Conference call, July 30, 2009 d Gérard Buffière Chief Executive Officer d Christophe Daulmerie Chief Financial Officer & Vice-President Strategy