Imerys Sa · EURONEXT:NK
Imerys Sa — Investor Presentation (January 2015)
56 slides from Imerys Sa's investor presentation, January 2015
Slide 1: Imerys: Mineral solutions for a changing world
Imerys January 2015 Mineral solutions for a changing world 1
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.14-0173 on March 20, 2014 with Autorité des marchés financiers. Imerys draws the attention of investors to the “R
Slide 3: Group Presentation
Imerys January 2015 Group Presentation Results to September 30, 2014 Outlook Imerys and S&B: A strategic combination 3
Slide 4: Imerys
Imerys 15,805 employees in 50 countries Consolidated revenue by geographic destination 250 industrial sites A unique portfolio of 30 minerals Japan/ Australia 5% Over 20 years of mineral reserves Emerging on average countries 26% Western 2013 Revenue Europe 2013 Revenue: €3.7 bn €3,698 M 47% 2013 Re
Slide 5: Imerys minerals are everywhere in our daily life
Imerys minerals are everywhere in our daily life Imerys processes minerals in industrial … which help to create the high-performance specialties… materials the world needs MECHANICAL Wear Strength Density Rheology Resistance THERMAL PROPERTIES Refractoriness Temperature, flux Fire retardancy OPTICAL
Slide 6: Our products provide high-performance and key functionalities
Our products provide high-performance and key functionalities FUNCTIONAL ADDITIVES – 45% MINERAL COMPONENTS – 25% Wide range of applications Ingredient added to our customers’ Important constituent of a mineral product composition so as to formula of our customers’ products, enhance its properties,
Slide 7: Diversity of applications
Diversity of applications No end-market > 15% of sales* Good balance between different economic cycles <2% of sales each Agriculture / horticulture 12-15% of sales 2-5% of sales Environment Pharma, Health & each More each Beauty Others Aerospace Office paper cyclical Electrical & électron. appliance
Slide 8: Imerys, the world leader in mineral-based specialties for industry
Imerys, the world leader in mineral-based specialties for industry A unique range of minerals processed into specialty solutions used in thousands of applications worldwide Our core competitive advantages include know-how, technology and industrial efficiency Leadership positions in each business gr
Slide 9: Accelerate growth by broadening our portfolio of activities
Accelerate growth by broadening our portfolio of activities Revenue from products Increase innovation efforts younger than 5 years (M€) R&D expenses: 1.5% of revenue in 2013 (almost 60 M€) 333 Accelerate time to market for new products introductions: + 65% More than 60 products launched in 2013 200
Slide 10: Combine internal growth projects and external growth
Combine internal growth projects and external growth 2013 Carbon black plant Willebroek, Belgium Pyramax plant (proppants) Wrens, United States Tokai Ceramics Japanese producer of monolithic refractories Indoporlen Lime plant Indonesian refractory Doresópolis, Brazil product specialist Fused alumina
Slide 11: A strategy to create value on the long term
A strategy to create value on the long term Return on capital employed & operating margin 16.1% 14.9% 13.6% 14.5% 15.0% 13.0% 14.0% 13.1% 13.0% 12.6% 14.7% 12.0% 11.9% 14.4% 14.0% 14.2% 13.6% 13.3% 12.6% 12.9% 11.8% 12.0% 9.0% 12.5% 10.8% 7.6% ROCE before tax EBIT Operating margin 2001 2002 2003 200
Slide 12: Priority given to development capex and strong cash flow
Priority given to development capital expenditure and strong cash flow (M€) 300 Booked capital expenditure 200% Increase in development capex 267 250 238 229 250 since 2011 150% 200 123 % 124 % 121 % 169 150 100% Geographic expansion and product 109 % 119 portfolio development, including: 100 79 % 6
Slide 13: Sound financial structure
Sound financial structure (M€) Net financial debt: 878 M€, on a par with December 31, 2013 (885 M€) Net debt / Shareholders’ Payment of 124 M€ in dividends equity (%) 38.7 % 46.1 % 39.0 % 38.0 % Payment of Termorak and part of the additional 1,8 contractual price for PyraMax Ceramics, LLC 2,288 2,31
Slide 14: Dividend: €1.60 per share for fiscal year 2013
Dividend: €1.60 per share for fiscal year 2013 2013 2012 Change Net current income from operations per share (€) 4.03 4.00 + 0.6% Dividend per share (€) 1.60 1.55 + 3.2% Total payout(1) (€ millions) 122.0(1) 116.9 + 4.3% Average weighted number of shares 75,551,408 75,165,743 €1.65 €1.80 €1.90 63.2
Slide 15: Results to September 30, 2014
Imerys January 2015 Group Presentation Results to September 30, 2014 Outlook Imerys and S&B: A strategic combination 15
Slide 16: Continued growth in results
Continued growth in results Organic growth Current operating income Net income from current (M€) in 9-month revenue and operating margin operations 2,970 387 301 304 2,806 368 375 2,782 + 2.4% 13.5% + 4.2% 239 234 239 13.0% 13.1% 9M12 9M13 9M14 9M12 9M13 9M14 2012 2013 2014 Year 9M XX% Organic growt
Slide 17: Economic environment trends in 3rd quarter 2014
Economic environment trends in 3rd quarter 2014 Wider contrasts within Europe and Emerging countries zones New uncertainties in Europe, particularly over industrial activity with recent slowdown in Germany Firm environment in USA Basis of comparison less favorable in Q3 2014 Revenue by geographic de
Slide 18: Further developments in 2014
Further developments in 2014 Booked capital expenditure (M€) 97 89 Innovation: FiberLeanTM, Innovation: ImerPlastTM, Acquisition: Termorak fibrillated micro-cellulose for polymer recycling Specialist in refractory 92% 88% for the paper industry First production line, UK materials for petrochemicals,
Slide 19: Solutions for Energy & Specialties
Solutions for Energy & Specialties (35% of consolidated revenue to September 30, 2014) Organic growth Forex: in 9-month revenue - 40 M€ Positive overall trends, ramp-up of new capacities Group (M€) structure: Monolithic Refractories: good global activity levels in Q3; firm 990 - 35 M€ 940 + 10.4% 96
Slide 20: Filtration & Performance Additives
Filtration & Performance Additives (30% of consolidated revenue to September 30, 2014) Organic growth Forex: in 9-month revenue - 14 M€ Performance & Filtration Minerals: Group (M€) structure: positive momentum on main underlying markets 865 860 849 - 6 M€ Consumer goods + 1.1% 868 840 Construction
Slide 21: Ceramic Materials
Ceramic Materials (18% of consolidated revenue to September 30, 2014) Organic growth in 9-month revenue Minerals for Ceramics: geographic redeployment Group structure: and diversification of offering (M€) 583 - 33 M€ Vibrant demand in emerging zones, improvement in Forex: 539 - 2 M€ Northern Europe
Slide 22: High Resistance Materials
High Resistance Materials (17% of consolidated revenue to September 30, 2014) Organic growth Fused Minerals: impact of slowdown in 9-month revenue in manufacturing activity in Germany (M€) Forex: 574 - 11 M€ and construction in China Chinese activities affected by market trends, 554 497 483 - 0.5% p
Slide 23: Organic growth in 9M revenue: +4.2%
Organic growth in 9M revenue: + 4.2% (M€) - 0.9% - 73.7 on current basis + 45.4 2,806.3 - 68.6 + 72.3 2,781.7 (- 2.6%) (+ 1.6%) ( - 2.5%) ( + 2.6%) Organic growth (LFL): + 4.2% 9M revenue Group structure Forex Volumes Price/Mix 9M revenue 2013 (net) 2014 Group structure effect: mainly divestments (4
Slide 24: Solid operating margin at 13.5%
Solid operating margin at 13.5% (M€) + 35.3 + 2.0% on current + 30.0 - 9.1 basis + 4.8 - 42.3 - 5.9 - 5.6 374.7 367.5 13.1% Operating margin 13.5% 9M COI 2013 Group structure Forex Volumes Price/Mix Variable costs Fixed costs Other 9M COI 2014 (net) & general expenses Contribution of volumes from ne
Slide 25: Current financial expense
Current financial expense € millions 9M 2014 9M 2013 Interest expense, net (29.2) (35.7) Unwinding of long-term provisions (2.2) (3.0) and change in other provisions Net interest expense on pensions (5.9) (7.9) Currency translation, other financial income (0.8) 5.8 and expense and financial instrume
Slide 26: +2.4% growth in net income from current operations
+ 2.4% growth in net income from current operations € millions 9M 2014 9M 2013 Change Current operating income(1) 374.7 367.5 + 2.0% Current financial expense (38.1) (40.8) Current income tax (96.6) (91.2) Minority Interests (0.9) (2.0) Net income from current operations, 239.1 233.5 + 2.4% Group’s
Slide 27: Net income
Net income € millions 9M 2014 9M 2013 Change Net income from current operations, Group’s share (1)(2) 239.1 233.5 + 2.4% Other operating income and expenses, net, and net income of assets held for sale (32.5) (34.0) Net income, Group’s share 206.6 199.5 + 3.5% Other operating income and expenses, ne
Slide 28: Outlook
Imerys January 2015 Group Presentation Results to September 30, 2014 Outlook Imerys and S&B: A strategic combination 28
Slide 29: Outlook: guidance confirmed for 2014
Outlook: guidance confirmed for 2014 Based on the sound performance of the first 9 months, the objective of higher net income from current operations in 2014 than 2013 is maintained In an economic environment characterized by new uncertainties in Europe, in particular over industrial activity Contin
Slide 30: Imerys and S&B: A strategic combination
Imerys January 2015 Group Presentation Results to September 30, 2014 Outlook Imerys and S&B: A strategic combination 30
Slide 31: Imerys and S&B: A strategic combination
Imerys and S&B: A strategic combination Integrate S&B into Imerys High-quality assets and leadership positions Profitable business, well managed Business model closely aligned with ours Strong potential for synergies Complementary end-market and geographic presence Development: geographic expansion,
Slide 32: S&B: A leading global provider of mineral-based specialties
S&B: A leading global provider of mineral-based specialties Revenue (€m) Adjusted EBITDA (€m) (1) + 3.8 % 425 441 + 7.5 % 86 Germany 80 UK Belgium Hungary & Poland Canada Netherlands (JV) Bulgaria France Georgia South Korea USA Spain Greece 20.0% Italy margin CyprusTurkey India Morocco China Mexico
Slide 33: S&B: High-quality value added solutions
S&B: High-quality value added solutions A global player in industrial minerals… … with a wide range of applications… Blast furnace additives Glass and ceramics Bentonite CCF (1) Covering compounds Horticulture (47% of 2013 revenue) (22%) Iron ore pelletizing Core sand additives Metallurgical active
Slide 34: Imerys and S&B combination: strong potential for synergies
Imerys and S&B combination: strong potential for synergies Leveraging geographical presence ~ 30% in North America: enlarged market presence S&B 2013 revenue breakdown by geography(1) ~ 20% in Emerging Markets: complementary footprint ‒ S&B to leverage Imerys network in Asia-Pacific, Brazil, … ‒ Ime
Slide 35: Imerys and S&B combination: value creation
Imerys and S&B combination: value creation Equity value: € 525 m, plus up to € 33 m performance amount Operation partially paid in Imerys’ shares Imerys shares for € 214 m to be issued to the Kyriacopoulos family ‒ 4.4% of Imerys outstanding shares (1), will join Imerys Board of Directors Financed f
Slide 36: Successful financing on the markets on December 3, 2014
Successful financing on the markets on December 3, 2014 Imerys’ financial resources maturity (M€) post new bonds issue Successful bonds issue for 600 M€ under Imerys’ Euro Medium Term Note Program: New bonds issued on Dec. 3, 2014 New 10-year 500 M€ bonds maturing Existing bonds & private placement
Slide 37: Accelerating development, strengthening core business, creating value
Imerys and S&B combination: Accelerating development, strengthening core business, creating value An acquisition fully in line with 2012-2016 strategy to foster development and innovation S&B: a strong leader with a proven record for profitable growth A value creative combination Balance sheet stren
Slide 38: Appendix
Imerys January 2015 Appendix 38
Slide 39: Manufacturing and steel production indexes
Manufacturing and steel production indexes Manufacturing indexes Europe USA China European industrial production (as end sept 2014) US industrial production (as end oct 2014) Chinese industrial production (as end oct. 2014) (base 100: 2007; source : OECD) (base 100: 2007; source : US Federal Reserve
Slide 40: Paper and Construction
Paper and Construction Quarterly production of printing & writing paper Printing & writing paper production 25 000 9M 2014 vs. 9M 2013 20 000 Mature countries: - 2.4% 15 000 Emerging countries: + 1.8% World: - 0.4% MT 10 000 5 000 0 2007 Q1 2007 Q4 2008 Q3 2009 Q2 2010 Q1 2010 Q4 2011 Q3 2012 Q2 201
Slide 41: Global presence
Global presence Consolidated revenue* by geographic area Number of employees by geographic area * 2013 Revenue by destination Emerging Japan / Australia countries 5% 1% 26% 38 % 43 % 2013 revenues 15,805 employees 3,698 M€ as of December 31, 2013 Western Europe 47% 18 % North America 22% 41 Group Pr
Slide 42: A clear positioning on specialty products
A clear positioning on specialty products (M€) + 2.6 % + 3.0 % + 4.0 % + 1.8 % + 4.5 % + 3.9 % + 1.9 % + 4.4 % + 3.3 % + 1.2 % +x% Price/mix impact on revenues 160 159 154 (%) 129 123 109 109 94 91 84 71 64 61 37 34 37 27 15 1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -22 Impact of price/mix
Slide 43: Boosting innovation to play a major role in expansion plan
Boosting innovation to play a major role in expansion plan In 2013, approx. 333 M€ of sales generated from products not in our portfolio 5 years ago (+ 33% vs. 2012) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Graphite Latex Carbonate Astrafil K, Natural DE Carbon for Cynergy, Honey comb New s
Slide 44: Several major initiatives to tap growth markets
Several major initiatives to tap growth markets Confirmation of growth potential: up 700 M€ of revenues to be generated by 2016, based on project portfolio and market outlook Project pipeline monitored Example: new proppant facility on a quarterly basis in Georgia (USA) on stream since end 2012 Incr
Slide 45: Talc sales in polypropylene for cars benefitting from light-weighting trend
Talc sales in polypropylene for cars benefitting from light-weighting trend in automotive Plastic Composition in a Typical Passenger Car Average talc usage(1): 10 kg in 2013 from 4.9 kg in 2006 (+ 100%) Further growth expected (1) in a Medium European Vehicle Talc improves stiffness, impact resistan
Slide 46: Our mobile equipment require more and more minerals
Our mobile equipment require more and more minerals Cover made of resistant, lightweight, fire- Steel reinforcement proofed and recyclable thanks to our Miniature batteries for manufactured in blast carbonates, mica, talc, carbon black high-speed charging and furnaces insulated by our enhanced longe
Slide 47: Operationnal organization
Operationnal organization Revenue breakdown by activity * Alessandro Dazza Olivier Hautin Frédéric Beucher Dan Moncino * On full-year 2013 basis 47 Group Presentation January 2015
Slide 48: Leadership positions in all business groups
Leadership positions in all business groups Market Positions Main Competitors • World #1 in alumino-silicate monolithic refractories (Calderys) • World #1 in graphite for alkaline batteries and conductive additives for Li-ion Energy Solutions batteries Vesuvius, RHI, Nacional de Grafite, & Specialti
Slide 49: Energy Solutions & Specialties
Energy Solutions & Specialties Carbonates (16% of 2013 Group revenue): 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 (14%): Unshaped refractory materials used
Slide 50: Filtration & Performance Additives
Filtration & Performance Additives Performance & Filtration Minerals (17% of 2013 Group revenue): A wide range of minerals with cutting-edge functional properties Performance Minerals (talc and mica, mostly): additives for paints, plastics, polymers, rubbers, adhesives, sealants, pharma & personal c
Slide 51: Ceramic Materials
Ceramic Materials Building Materials (10% of 2013 Group revenue): Clay roof tiles in France Minerals for Ceramics (8%): Raw materials and bodies for tableware, sanitary and floor tiles, quartz, technical ceramics Kiln furniture (1%): Kiln furniture for the tiles and ceramics industries Japan / Austr
Slide 52: High Resistance Minerals
High Resistance Minerals Fused Minerals (10% of 2013 Group revenue): Fused alumina and bauxite for abrasives (cutting, grinding and polishing mills, sand papers), zirconium for refractories, oxygen sensors Refractory Minerals (7%): Production of acidic refractory minerals as andalusite, chamottes Au
Slide 53: Quarterly revenue by business group
Quarterly revenue by business group Energy Solutions & Specialties Filtration & Performance Additives + 12,4% LFL in Q3 14 + 0,8% LFL in Q3 14 339 (M€) 314 320 321 307 308 303 293 286 285 291 281 272 274 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Ceramic Mate
Slide 54: Main financial indicators by business group
Main financial indicators by business group (M€) 2013 2012 2011 ENERGY SOLUTIONS & SPECIALTIES Revenue 1,248.2 1,287.9 1,240.4 Current operating income 129.4 143.5 145.7 Current operating margin 10.4% 11.1% 11.7% FILTRATION & PERFORMANCE ADDITIVES Revenue 1,132.2 1,145.8 932.1 Current operating inco
Slide 55: Notes
Notes 55 Group Presentation January 2015
Slide 56: Imerys contact details
Imerys 154 rue de l’Université F-75007 Paris + 33 (0) 1 49 55 63 00 www.imerys.com Analysts / Investors contact Pascale Arnaud + 33 (0) 1 49 55 64 01 pascale.arnaud@imerys.com 56