Imerys Sa · EURONEXT:NK
Imerys Sa — Investor Day (June 2019)
97 slides from Imerys Sa's investor day presentation, Jun 13, 2019
Slide 1: Positioning Imerys for Profitable Growth
Capital Markets Day 13th June 2019 POSITIONING IMERYS FOR PROFITABLE GROWTH
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.19-0175 March 20, 2019 with Autorité des Marchés Financiers. Imerys draws the attention of investors to the “Risk
Slide 3: Capital Markets Day agenda
Capital Markets Day agenda TIME PRESENTATION SPEAKER 9:00am Welcome coffee 9:30am Imerys’ strengths and ambition Conrad KEIJZER – CEO 10:15am Imerys strategy for profitable growth Olivier HAUTIN – CSO 11:00am Break 11:30am Business areas presentations Conrad KEIJZER and SVPs 12:30pm Lunch break 13:3
Slide 4: Imerys' strengths and ambition
Imerys’ strengths and ambition Conrad KEIJZER – Chief Executive Officer Capital Markets Day June 13, 2019 4
Slide 5: A new senior leadership team
A new senior leadership team Who you will hear from today Conrad Keijzer Chief Executive Officer Joined Imerys: 2018 Olivier Hautin Olivier Pirotte Guillaume Delacroix Jim Murberger Cyril Giraud Philippe Bourg Michel Cornelissen Chief Strategy Officer Chief Financial Officer SVP Performance SVP Perf
Slide 6: A growth story driven by repositioning as a pure player in specialty mineral solutions
A growth story driven by repositioning as a pure player in specialty mineral solutions 4.6 Specialty mineral solutions Other activities (building materials, metal processing) 0.9 0.2 Revenue (in €bn) 1992 1998 2000 2010 2018 Capital Markets Day June 13, 2019 6
Slide 7: The leader of specialty mineral solutions to the industry
The leader of specialty mineral solutions to the industry Countries where Imerys has sales >15,000 17,800 customers employees1 Sales in 142 countries €793m EBITDA 1 17.3% margin Americas EMEA APAC 30% of revenue 49% of revenue 21% of revenue €4.6bn revenue #1 in 75% of our businesses 1 2018 figures
Slide 8: Functional additives which provide unique properties to our customers
Functional additives which provide unique properties to our customers PERFORMANCE MINERALS Plastics, rubber, Paper Filtration Mobile paints & ACS1 & board Ceramics & life science energy Gloss and opacity in paints, Whiteness, Whiteness Purification of liquids, Lifespan conductivity and lightweightin
Slide 9: Processing aids which are used in extreme work conditions
Processing aids which are used in extreme work conditions HIGH TEMPERATURE MATERIALS AND SOLUTIONS Refractory Building Iron & steel Foundry Thermal producers Abrasives & infrastructure Purity and flow Flow enhancement Thermal protection Thermal resistance Thermal and mechanical Self levelling enhanc
Slide 10: A differentiated value proposition to customers
A differentiated value proposition to customers built on unique industrial capabilities and application knowledge Unique Strong Markets access processing & customers to resources & formulation capabilities Highly differentiated as our value proposition innovation to our customers driving force In-de
Slide 11: Price-mix consistently allowed Imerys to absorb increases in variable costs
Price-mix consistently allowed Imerys to absorb increases in variable costs PRICE MIX – VARIABLE COSTS BALANCE (€m) Price-mix 200 4.5% 3.8% 1.9% 4.4% 3.3% 1.2% 1.5% 1.3% 0.7% 1.1% 3.7% 16% impact Inflationary Deflationary Inflationary on revenue environment environment environment 150 11% 100 6% 50
Slide 12: Strong commitment on CSR
Strong commitment on CSR EMPOWERING CARING BUILDING our people for our planet for the future Highly engaged CO2 emission reduction target2 62 community development employees1 (in tCO2/€) of 41% by 2030 projects in 2018 Notes: 1 KornFerry survey; 2 Aligned to COP21 2°C trajectory Capital Markets Day
Slide 13: A priority on safety, reflected in reduction in LTA
A priority on safety, which is reflected in a gradual reduction in LTA1 LOST-TIME ACCIDENTS (LTA)1 16 14.7 14 Group EHS2 team formed 12 2018 IMA3 benchmark 1st EHS2 charter 2017 IMA3 LTA rate 10 benchmark LTA rate 8.7 8 Rules for fatality 7.2 prevention (#1) 6 Rules for fatality Structured preventio
Slide 14: The largest specialty mineral solutions player
The largest specialty mineral solutions player IMERYS PEERS 2018 SALES1 (€bn) 4.6 3.5 3 3.1 3.0 2.7 2.0 1.5 1.3 1.3 1.2 1.1 0.7 2 2 Note: 1 Reported figures; 2 Non-listed companies; 3 Estimates Source: Companies financial reports Capital Markets Day June 13, 2019 14
Slide 15: An ambition to step-up organic growth and increase operating profitability
An ambition to step-up our organic growth and further increase our operating profitability STEADY TOPLINE GROWTH MOSTLY STEMMING FROM M&A o/w o/w Total M&A organic IMERYS AMBITION: Sales CAGR STEP-UP 14–181 +5.6%2 +5.1% +0.4% our ORGANIC GROWTH NO IMPROVEMENT IN EBITDA MARGIN 2014 2018 EBITDA margin
Slide 16: Our action plan to step-up organic growth
Our action plan to step-up organic growth Customer-centric Differentiated Focus Portfolio organization business on high-growth management mandates geographies (M&A) Capital Markets Day June 13, 2019 16
Slide 17: Our action plan to increase operating profitability
Our action plan to increase operating profitability Leaner, more Functional efficient excellence organization Capital Markets Day June 13, 2019 17
Slide 18: Our organic growth ambition and profitability targets
Our organic growth ambition and profitability targets STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Ambition to gradually Target of 2022 ramp-up organic current EBITDA growth margin to reach underlying up by +200bp markets level vs. 20182 by 20221 Underlying market growth €100m cost estima
Slide 19: Imerys strategy for profitable growth
Imerys strategy for profitable growth Olivier HAUTIN – Chief Strategy Officer Capital Markets Day June 13, 2019 19
Slide 20: Imerys has become a pure player in specialty mineral solutions
Imerys has become a pure player in specialty mineral solutions IMERYS REVENUE (€bn) €3.3bn €2.8bn €1.9bn €2.9bn €4.6bn €2.2bn €0.8bn €0.9bn €0.2bn 1992 1998 2000 2010 2018 (excl. roof tiles) Specialty mineral solutions Building materials Metal processing Non-ferrous metal ores1 Metal processing2 Bui
Slide 21: Focusing on specialty niches to bring high value to customers
…focusing on specialty niches to bring high value to customers Imerys focuses on selected tailor-made-to-customer specialty mineral solutions where it can develop: Value-added to customer Specialty ▪ Sustained growth potential mineral ▪ Sustained competitive advantage solutions2 ▪ Sustained profitab
Slide 22: We are the partner of choice to the industries we serve
We are the partner of choice to the industries we serve MARKET SHARE OF IMERYS MARKET POSITION REVENUE1 EXAMPLES ▪ Calcium aluminate cements for building chemistry ▪ Conductive additives for Li-ion batteries #1 75% ▪ High-end talc for automotive plastics / thermosets ▪ Acidic monolithic refractories
Slide 23: We have outperformed specialty mineral solutions market growth with M&A
We have outperformed specialty mineral solutions market growth with M&A c. x2 5% 2% M&A 2014–2018 CAGR Organic Specialty Imerys revenue mineral solutions market (excl. roof tiles in 2018; (in value, Imerys estimates) at constant FX) Sources: USGS, Industrial Minerals Capital Markets Day June 13, 201
Slide 24: Our action plan to step-up organic growth and increase operating profitability
Our action plan to step-up organic growth and increase operating profitability AMBITION TO STEP-UP ORGANIC GROWTH … 1 2 3 4 Customer-centric Differentiated Focus on high-growth Portfolio organization business geographies management mandates (M&A) … AND INCREASE OPERATING PROFITABILITY 5 6 Leaner, mo
Slide 25: Our action plan to step-up organic growth and increase operating profitability
Our action plan to step-up organic growth and increase operating profitability AMBITION TO STEP-UP ORGANIC GROWTH … 1 2 3 4 Customer-centric Differentiated Focus on high-growth Portfolio organization business geographies management mandates (M&A) … AND INCREASE OPERATING PROFITABILITY 5 6 Leaner, mo
Slide 26: Driving organic growth through customer-centric organization and innovation
1 Driving organic growth through our customer-centric organization and market driven innovation FROM A FRAGMENTED PRODUCT PORTFOLIO TO A FULL PORTFOLIO BROUGHT TO THE CUSTOMER Former organization New organization: (by Divisions) Markets BA segments Markets Performance Additives Plastics, Rubber, Pai
Slide 27: We have defined differentiated mandates for our diverse portfolio
2 We have defined differentiated mandates for our diverse portfolio Market Competitive Strategic Business attractiveness1 advantage mandate examples ▪ Building chemistry additives for dry-mix mortars ▪ Conductive (heat, electricity) additives for plastics >2% p.a. Step-change and lithium-ion batteri
Slide 28: Potential for market share gains in high-growth geographies
3 Imerys has strong potential for market share gains in high-growth geographies IMERYS REVENUE BY GEOGRAPHY (2018) High-growth geographies Mature geographies €3.2bn €1.4bn (~70% of revenue) 2018 revenue (~30% of Imerys revenue) GDP growth (volume, 2018-2022) +4-5% p.a. +1-3% p.a. x2 x2 Market share1
Slide 29: Redeploying our capital in high growth markets
4 Redeploying our capital in high growth markets Acquisition Roof tiles business divestment (July 2017) (October 2018) Global Building Chemistry French roof tiles market decreasing additives market growing at -4% p.a. in volume at >4% p.a. in volume (2012-2017) Sources: Fédération Française des Tuil
Slide 30: We will leverage our M&A track-record and capabilities
4 We will leverage our M&A track-record and capabilities … CALCIUM ALUMINATE # of acquisitions CEMENT: New specialty Bolt-on in KERNEOS mineral solutions mature markets Worldwide leader 36% 36% of aluminate based performance BENTONITE: binders S&B World class Damolin positions in NG Johnson, 28% Bol
Slide 31: …to grow further in specialty solutions
4 …to grow further in specialty solutions SPECIALTY MINERAL SOLUTIONS ~€150bn Activated Carbon Basic monolithic Imerys Lime and brick refractories served markets Calcined alumina Colloidal silica Fumed silica Silicon Carbide ~€20bn High-purity alumina Boehmite Other specialty mineral solutions (>50
Slide 32: Complementing organic growth with synergistic M&A
Complementing organic growth with synergistic M&A Ambition to step-up organic growth + Seek synergistic M&A Gradual ramp up of organic growth to reach Continue to consolidate our foothold our underlying markets level and expand our market Higher customer intimacy New geographies, notably APAC Differ
Slide 33: Our action plan to increase operating profitability
Our action plan to increase operating profitability AMBITION TO STEP-UP ORGANIC GROWTH … 1 2 3 4 Customer-centric Differentiated Focus on high-growth Portfolio organization business geographies management mandates (M&A) … AND INCREASE OPERATING PROFITABILITY 5 6 Leaner, more efficient Functional org
Slide 34: Our new market-focused organization closer to customers and shop floor
5 Our new market-focused organization brings our managers closer to our customers and our shop floor FROM A SUB-OPTIMAL ORGANIZATION STRUCTURE … … TO SIMPLIFIED, MORE EFFICIENT ORGANIZATION CEO CEO 5 Business 4 Business Groups Areas 11 hierarchical 10 divisions 6-7 hierarchical layers layers Span of
Slide 35: We will leverage our size to maximize functions efficiency
6 We will leverage our size to maximize our functions efficiency and excellence FROM HETEROGENEOUS MANAGEMENT STRUCTURE … … TO FUNCTIONALLY SPECIALIZED ORGANIZATION Illustrative Illustrative CEO CEO Executive VP BA SVP CFO CHRO Division GM Purcha- sing VP Purcha- Industrial Division Division Ops Fin
Slide 36: Functional excellence: zoom on purchasing
6 Functional excellence: zoom on purchasing FROM KEY LEVERS TO A specialized, A generalist, Management by category one-face to-the-supplier scattered organization organization Purchasing Excellence >36,000 ~20,000 suppliers Reduction of number of suppliers suppliers 60% 90% of spend covered Increase
Slide 37: Our strategy for profitable growth
Our strategy for profitable growth GROUP STRENGTHS ▪ Unique mineral assets and processes ▪ Application knowledge ▪ Strong positions in high value niche markets A new + operating model ACTION PLAN ▪ Customers at the center of organization and market driven innovation ▪ Focus on high-growth geographie
Slide 38: Our strategic priorities
Our strategic priorities Ambition to step-up organic growth … and increase operating profitability Continue M&A effort with a better integration model Capital Markets Day June 13, 2019 38
Slide 39: Capital Markets Day agenda
Capital Markets Day agenda TIME PRESENTATION SPEAKER 9:00am Welcome coffee 9:30am Imerys’ strengths and ambition Conrad KEIJZER – CEO 10:15am Imerys strategy for profitable growth Olivier HAUTIN – CSO 11:00am Break 11:30am Business areas presentations Conrad KEIJZER and SVPs 12:30pm Lunch break 13:3
Slide 40: Business areas presentation
Business areas presentation Conrad KEIJZER – Chief Executive Officer Guillaume DELACROIX – Performance Minerals EMEA Jim MURBERGER – Performance Minerals Americas Cyril GIRAUD – Performance Minerals APAC Philippe BOURG – Refractories, Abrasives & Construction Michel CORNELISSEN – High-Temperature So
Slide 41: The new market-focused organization with 5 business areas
The new market-focused organization replaces 4 business groups and 10 divisions with just 5 business areas PERFORMANCE MINERALS HIGH TEMPERATURE MATERIALS & SOLUTIONS Guillaume Jim Cyril Philippe Michel Delacroix Murberger Giraud Bourg Cornelissen PERFORMANCE MINERALS PERFORMANCE MINERALS PERFORMANC
Slide 42: New organization to step up organic growth and leverage our scale
New organization to step up organic growth and leverage our scale STEP-UP ORGANIC GROWTH … Customer-centric Differentiated Focus Portfolio organization business on high-growth management mandates geographies (M&A) … AND INCREASE OPERATING PROFITABILITY Leaner, more Functional efficient excellence or
Slide 43: Performance Minerals EMEA
Performance Minerals EMEA Guillaume DELACROIX – Senior Vice President Capital Markets Day June 13, 2019 43
Slide 44: Performance Minerals EMEA at a glance
Performance Minerals EMEA at a glance BUSINESS AREA FOOTPRINT MAIN APPLICATIONS & CUSTOMERS SERVED €1.0bn revenue in 2018 Plastics, rubber, paints & ACS (c.35% of BA revenue) W. Europe: 80% Ceramics (c.25%) Paper & board (c.25%) CEE and Filtration & life science MEA: 20% (c.15%) Capital Markets Day
Slide 45: One-stop shop offer will unleash growth in EMEA
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY One-stop shop offer will unleash growth in EMEA ▪ 18 of our top 20 customers use multiple minerals EXAMPLE OF PAINTS from our portfolio, but do not buy all of them from us ▪ Share of wallet at a given customer may vary from 1 to 10x between min
Slide 46: Customer-based innovation will boost organic growth
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Customer-based innovation will boost organic growth Our customers ask us how to deal with... EVOLVING REGULATIONS AUTO LIGHTWEIGHTING MORE SUSTAINABLE AND TASTE CHALLENGE FOOTPRINT Marketing and R&D alignment by Lever One-stop shop Key Account
Slide 47: Performing in challenging markets: Paper segment
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Performing in challenging markets: Paper segment DECREASE EXPOSURE TO PAPER INCREASE COMPETITIVENESS OF INDUSTRIAL FOOTPRINT Lever ▪ Differentiated business mandates ▪ Functional excellence in industry ▪ One-stop-shop supports sales beyond ▪ In
Slide 48: Social license to operate – Milos case study
Social license to operate – Milos case study Operating model in Milos relies on the long-term co-existence of mineral and tourism businesses Mine Biodiversity: rehabilitation: Local species Vineyard re-introduction development Support to tourism: Guided treks Capital Markets Day June 13, 2019 48
Slide 49: Performance Minerals Americas
Performance Minerals Americas Jim MURBERGER – Senior Vice President Capital Markets Day June 13, 2019 49
Slide 50: Performance Minerals Americas at a glance
Performance Minerals Americas at a glance BUSINESS AREA FOOTPRINT MAIN APPLICATIONS & CUSTOMERS SERVED €1.2bn revenue in 2018 Plastics, rubber, paints & ACS (c.40% of BA revenue) Ceramics (c.15%) 80%1 Paper & board (c.25%) 20%1 Filtration & life science (c.20%) Note: 1 Excluding talc Capital Markets
Slide 51: Step-up organic growth: filtration & life science
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Step-up organic growth: filtration & life science SALES SPLIT IN VALUE ▪ Mix and COI margin improvement since the acquisition in 2005 ▪ Ambition to accelerate organic growth by 2 percentage points 100% sales EXAMPLES OF TARGET SEGMENTS Traditio
Slide 52: Step up organic growth: Brazil
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Step up organic growth: Brazil REVENUE SPLIT IN VALUE ▪ Repositioning initiated with acquisitions and new solutions for Paints & Coating 100% sales Paper1 EXAMPLES OF TARGET SEGMENTS Engineered Mineral Solutions bringing scrub resistance and co
Slide 53: Imerys structure embedded within communities in North Brazil
Sustaining full potential: example of Imerys structure well embedded within the communities in North Brazil NUMBERS OF PEOPLE SUPPORTED ▪ Since 2012, Imerys has built IN THE 3 ‘CASA IMERYS’ 3 ‘Casas Imerys’ in North Brazil ▪ These physical structures: 5,590 ▪ Demonstrate Imerys’ commitment to the lo
Slide 54: Performance Minerals APAC
Performance Minerals APAC Cyril GIRAUD – Senior Vice President Capital Markets Day June 13, 2019 54
Slide 55: Performance Minerals APAC at a glance
Performance Minerals APAC at a glance BUSINESS AREA FOOTPRINT MAIN APPLICATIONS & CUSTOMERS SERVED €0.4bn revenue in 2018 Plastics, rubber, paints & ACS (c.25% of BA revenue) Graphite & Carbon Ceramics as a global business (c.20%) Filtration & life science (c.10%) Paper & board (c.30%) Mobile energy
Slide 56: Well positioned to take advantage of opportunities in a dynamic region
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY We are well positioned to take advantage of market opportunities in a dynamic region PROVEN TRACK RECORD OF ADDRESSING ASIAN …TO BE LEVERAGED FOR FUTURE MARKETS’ PREMIUMIZATION TREND… DEVELOPMENTS ▪ FilmLink™: a proven technology of Ground Calc
Slide 57: Opportunities in the dynamic Li-ion batteries market
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY We are well positioned to take advantage of market opportunities in a the dynamic Li-ion batteries market GRAPHITE AND CARBON BLACK CONDUCTIVE ADDITIVES DEMAND FOR LI-ION BATTERIES (base 100 in 2016) 18-22 CAGR: x1.8 244 +16% 210 ▪ Leadership p
Slide 58: A new setup and focus on growing in China and India
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY A new setup and an aggressive focus on growing in China and India Strong growth +6% p.a. +8% p.a. potential Real GDP growth 2018-2022 Real GDP growth 2018-2022 A focused new Dedicated country chairmen organizational setup Performance Minerals +
Slide 59: Refractory, Abrasives and Construction
Refractory, Abrasives and Construction Philippe BOURG – Senior Vice President Capital Markets Day June 13, 2019 59
Slide 60: Refractory, Abrasives & Construction at a glance
Refractory, Abrasives & Construction at a glance BUSINESS AREA FOOTPRINT MAIN APPLICATIONS & CUSTOMERS SERVED €1.3bn revenue in 2018 Refractory producers (~50% of BA revenue) Abrasives (~20%) 25% 50% 25% Building & infrastructure (~30%) Capital Markets Day June 13, 2019 60
Slide 61: Successful track record in acquisition: ex. Kerneos
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Successful track record in acquisition: ex. Kerneos DEVELOPMENT SYNERGIES COST SYNERGIES Complementary regional Kerneos integration increased Imerys transformation accelerates presence the share of wallet integration of Kerneos per customer IME
Slide 62: CSR: growing differentiation factor vs. competition
CSR: growing differentiation factor vs. competition Increase lifetime of waste water Model for Chinese plants Energy diversification as main sewage treatment facilities on environmental management target in big cities by 3 times vs. Zhengzhou plant identified as being Conversion of 90% of refractory
Slide 63: High Temperature Solutions
High Temperature Solutions Michel CORNELISSEN – Senior Vice President Capital Markets Day June 13, 2019 63
Slide 64: High Temperature Solutions at a glance
High Temperature Solutions at a glance BUSINESS AREA FOOTPRINT MAIN APPLICATIONS & CUSTOMERS SERVED €0.8bn revenue in 2018 Iron & steel (~40%) 15% 60% 25% Americas EMEA APAC Foundry (~30%) Thermal (~30%) Capital Markets Day June 13, 2019 64
Slide 65: We bring value to customers along a full-service value chain
We bring value to customers along a full-service value chain HIGH-TEMPERATURE SOLUTIONS VALUE CHAIN (Raw) material selection Product formulation ▪ Based on in-depth understanding of customer applications Engineering & design ▪ Formulation expertise Manufacturing Logistics & delivery ▪ Strong service
Slide 66: New customer-centric organization to increase market shares in Iron & steel in India
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY New customer-centric organization to increase market shares in Iron & steel in India INDIA IRON & STEEL SITUATION IMERYS GROWTH INITIATIVES Ex-Calderys plants On-going investments to enhance product portfolio Ex-SCF plants and increase penetrat
Slide 67: Foundry topline opportunities
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Foundry topline opportunities METAL MELTING MOULDING POURING AND CASTING Offered solutions FURNACE REFRACTORIES GREEN MOULD SANDS COATINGS AND FLUXES Previously addressed by: A one-stop-shop to the foundry market Capital Markets Day June 13, 20
Slide 68: Sustainability and cost reduction via raw material recycling
STEP-UP ORGANIC GROWTH INCREASE OPERATING PROFITABILITY Advancing on sustainability and cost reduction via raw material recycling OPPORTUNITIES SOLUTIONS ACHIEVEMENTS & OBJECTIVES RECYCLED RAW MATERIALS REDUCE (2019 YTD, as a% of total raw materials) ▪ Reduced availability of Chinese the use of raw
Slide 69: Capital Markets Day agenda
Capital Markets Day agenda TIME PRESENTATION SPEAKER 9:00am Welcome coffee 9:30am Imerys’ strengths and ambition Conrad KEIJZER – CEO 10:15am Imerys strategy for profitable growth Olivier HAUTIN – CSO 11:00am Break 11:30am Business areas presentations Conrad KEIJZER and SVPs 12:30pm Lunch break 13:3
Slide 70: Capital allocation to ensure long-term value creation
Capital allocation to ensure long-term value creation Olivier PIROTTE – Chief Financial Officer Capital Markets Day June 13, 2019 70
Slide 71: Financial framework: guiding principles
Financial framework: guiding principles 1 Resilient and strong operating free cash flow Increasing operational efficiencies and economies of scale 4 2 Delivering attractive Sticking to a disciplined capital Total Shareholder Return allocation strategy Sustainable Increasing and attractive value crea
Slide 72: Resilient profitability through the cycles
1A Resilient profitability through the cycles LONG TERM FINANCIAL PERFORMANCE SUMMARY (€m) Current EBITDA CAGR 08-17: +3.3% Crisis Deflationary Inflationary environment environment environment 1,000 1 000 Including 900 Roofing 19.7% 19.3% 18.1% 800 18.6% 18.6% 18.3% 18.2% 17.0% 17.6% 16.6% 700 15.0%
Slide 73: Strong and consistent operating free cash flow while maintaining Capex
1B Strong and consistent operating free cash flow while maintaining Capex efforts HIGH CASH CONVERSION1 THROUGH THE CYCLE SUSTAINED CAPEX IN RECENT YEARS Average cash conversion: 63% Data excluding Roofing in 2016 and 2017 Kerneos 75% acquired in July 2017 67% Roofing 67% 61% 61% 64% 64% 62% disposa
Slide 74: Disciplined capital allocation strategy
2 Disciplined capital allocation strategy A ▪ Differentiated business steering approach, geared toward attractive markets and geographies Capital ▪ Strict return criteria: 15% target IRR for development expenditures capex B ▪ Strategic fit Create value to deliver Cash from ▪ Strict return criteria:
Slide 75: Focused capital expenditures for future growth
2A Focused capital expenditures for future growth STRICT SELECTION OF PROJECTS TO ENSURE OPTIMAL ALLOCATION DEVELOPMENT & MAINTENANCE CAPEX3 (€m) Pre-screened Capex project requests 6.8% 7.4% 7.3% 30% 103 Development 110 72 shortlisted projects CapEx 98 Financial value creation criteria and strategi
Slide 76: Strategic M&A with strict criteria
2B Strategic M&A with strict criteria A CLEAR M&A ROADMAP WITH STRINGENT CRITERIA … CONFIRMED BY A SOLID TRACK RECORD (€m) 25 acquisitions, €2.6 billion of Enterprise Value STRATEGIC FIT ▪ Business with solid fundamentals +20% synergies vs. plan on year 1 Initial 3-year ▪ New attractive market and/o
Slide 77: Return to shareholders: high priority for the Group
2C Return to shareholders: high priority for the Group CONTINUOUS INCREASE IN DIVIDENDS PAID STABLE NUMBER OF OUTSTANDING SHARES 180 8% share repurchased over the last 10 years 160 79.6 79.6 79.6 79.5 140 75.4 75.5 75.1 75.4 76.2 75.9 Roofing 120 disposal 62.8 60% 100 80 48% 1.5% 1.5% 41% 41% 41% 1.
Slide 78: Sustained ROCE ensuring value creation
2D Sustained ROCE1 ensuring value creation2 SUSTAINED ROCE WITH HIGHER CAPITAL EMPLOYED HIGH ROCE OF HISTORICAL ACTIVITIES Kerneos Roofing S&B acquisition disposal 2018 acquisition 5,861 Talc Luzenac 5,506 acquisition 4,728 4,869 Including 11% Roofing 3,924 Group: 9.8% 3,772 3,605 3,605 3,468 3,353
Slide 79: Maintaining a sound balance sheet with investment grade rating
Maintaining a sound balance sheet 3 with a solid investment grade credit rating Moderate gearing Solid High financial A and net financial leverage ratios investment flexibility B grade rating Strong credit profile Capital Markets Day June 13, 2019 C 79
Slide 80: Moderate gearing and net leverage
3A Moderate gearing and net leverage NET FINANCIAL DEBT (€m) AND LEVERAGE (AS OF 12/31) BREAKDOWN OF NET FINANCIAL DEBT EVOLUTION (€m) Kerneos 22,500 500 2.7 Acquisition (€915m) 2.5 Roofing disposal (€823m) 2.3 (358) 22,000 000 1,237 2.0 2,246 (663) 11,500 500 1.7 1.6 1.5 1.4 1.4 (286) 1.3 1.3 1,367
Slide 81: Financial flexibility
3B Financial flexibility BONDS’ COUPONS AND MATURITIES AS OF 12/31/2018 (€m) AVAILABLE CUMULATED CREDIT LINES AS OF 12/31/2018 (€m) €1.982 million (6.5 years average maturity) €1.330 million (2.8 years average maturity) 2.5% 0.9% 2.0% 1.5% 1.9% 3.4% 1,270 600 500 1,060 300 300 600 224 56* 100 0 2020
Slide 82: Strong credit profile
3C Strong credit profile SUPPORTIVE PERCEPTION FROM RATING AGENCIES… Business diversification providing Wide geographical footprint resilience and well-diversified customer base Predictable cash flow generation Very good product mix, supported by the group’s ongoing innovation Disciplined financial
Slide 83: Conclusion: optimal capital allocation to ensure long term value creation
Conclusion: an optimal capital allocation to ensure long term value creation 1 Resilient and strong operating free cash flow Increasing operational efficiencies and economies of scale 2 Delivering Sticking to a disciplined capital allocation strategy attractive Total Shareholder Increasing value cre
Slide 84: Conclusion and closing remarks
Conclusion and closing remarks Conrad KEIJZER – Chief Executive Officer Capital Markets Day June 13, 2019 84
Slide 85: We will leverage our solid business fundamentals
We will leverage our solid business fundamentals Market driven Strong CSR innovation commitment and application knowledge Strong business, Highly Strong cash differentiated generation which we industrial to fuel growth can further capabilities leverage Resilient Unique reach and and profitable stron
Slide 86: 6 pillars to execute our strategy
6 pillars to execute our strategy AMBITION TO STEP-UP ORGANIC GROWTH … Customer-centric Differentiated Focus Portfolio organization business on high-growth management mandates geographies (M&A) … AND INCREASE OPERATING PROFITABILITY Leaner, more Functional efficient excellence organization Capital M
Slide 87: Key financial targets
Key financial targets Ambition to improve Disciplined Sound Commitment to attractive growth and profitability capital balance shareholder profile allocation sheet returns ▪ Gradual ramp-up ▪ €300-350m annual total ▪ Solid investment grade ▪ Consistent dividend growth of organic growth Capex rating i
Slide 88: Our ambition
Our ambition To be the trusted specialty mineral partner shaping the world with sustainable solutions Capital Markets Day June 13, 2019 88
Slide 89: Q&A
Q&A Capital Markets Day June 13, 2019 89
Slide 90: Appendices
APPENDICES Capital Markets Day June 13, 2019 90
Slide 91: Shareholding
Shareholding SHARE CAPITAL VOTING RIGHTS Free float Free float (including employees, (including employees, treasury shares treasury shares and investors) and investors) 41.2% 26.3% Belgian Blue Belgian 53.9% Securities 6.0% Securities Crest (GBL) Holding 67.7% (GBL) Blue 4.9% Crest Holding As at Dec
Slide 92: Composition of the Board of Directors
Composition of the Board of Directors DATE OF FIRST YEAR OF RENEWAL INDEPENDENT NAME (AGE) POSITION APPOINTMENT OF TERM OF OFFICE MEMBER Gilles MICHEL (63) Chairman 03/11/2010 2021 Paul DESMARAIS III (37) Vice-Chairman 29/04/2014 2020 Aldo CARDOSO (63) Director 03/05/2005 2020 ✓ Odile DESFORGES (69)
Slide 93: Composition of the committees
Composition of the committees DATE OF FIRST INDEPENDENT DATE OF FIRST INDEPENDENT NAME APPOINTMENT MEMBER NAME APPOINTMENT MEMBER Strategic Committee Appointment Committee Ian GALLIENNE, Chairman 29/04/2010 Paul DESMARAIS III, Chairman 04/05/2016 Aldo CARDOSO 02/05/2007 ✓ Ian GALLIENNE 26/04/2012 Od
Slide 94: Components of variable pay for the executive committee
Components of variable pay for the executive committee PERFORMANCE-BASED COMPONENTS OF COMPENSATION Short-term variable component Long-term variable component ▪ Current Net Income Quantitative ▪ Net Income from Current ▪ Operating Free Cash Flow Operations per share (economic) Performance Quantitati
Slide 95: Historical Performance
Historical Performance Revenue (€m) FY 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Performance Minerals 2,575 668 661 632 641 2,602 632 650 641 636 2,559 623 Americas 1,283 324 319 301 325 1,269 295 307 314 310 1,227 282 Asia Pacific 416 106 106 103 1
Slide 96: Imerys has become a pure player in specialty mineral solutions
Imerys has become a pure player in specialty mineral solutions IMERYS REVENUE (€bn) €3.3bn €2.8bn €1.9bn €2.9bn €4.6bn €2.2bn €0.8bn €0.9bn €0.2bn 1992 1998 2000 2010 2018 (excl. roof tiles) Specialty mineral solutions Building materials Metal processing Non-ferrous metal ores1 1994: Eramet IPO Meta
Slide 97: Positioning Imerys for Profitable Growth
Capital Markets Day 13th June 2019 POSITIONING IMERYS FOR PROFITABLE GROWTH