Mersen Sa · EURONEXT:MRN
Mersen Sa — Shareholder Meeting (May 2022)
43 slides from Mersen Sa's shareholder meeting presentation, May 19, 2022
Slide 1: Annual General Meeting
Annual General Meeting M AY 1 9 , 2 0 2 2
Slide 2: Agenda
AGENDA ▪ Introduction ▪ Management report and 2021 results ▪ 2022 outlook and mid-term vision ▪ Report by the statutory Auditors ▪ Corporate Governance report ▪ Answers to shareholder’s questions ▪ Vote of resolutions 2 Annual General Meeting – May 19, 2022
Slide 3: 2021 Results
2021 Results Thomas Baumgartner, CFO 3 Annual General Meeting – May 19, 2022
Slide 4: 2021: Remarkable performance
2021: REMARKABLE PERFORMANCE... INDUSTRIAL SALES OPERATING MARGIN BEFORE CAPEX NON-RECURRING ITEMS €923m 10% of sales €79m +8.6% vs. 2020 +190 bps SHAREHOLDER PROFIT SHARED RETURN WITH EMPLOYEES Dividend of €25m €1.00/share Bonuses, incentives, i.e., a €21m payout profit-sharing 4 Annual General Mee
Slide 5: Fueling a return to levels close to 2019
... FUELING A RETURN TO LEVELS CLOSE TO 2019 OPERATING MARGIN BEFORE SALES (€m) EBITDA MARGIN (% sales) NON-RECURRING ITEMS (% sales) 950 923 16.3% 16.1% 10.8% 10% 8.1% 847 14.5% 2019 2020 2021 2019 2020 2021 2019 2020 2021 Continuation of operational excellence plans, volume effect Growth driven by
Slide 6: Major achievements in the 2018-2021 roadmap
MAJOR ACHIEVEMENTS IN THE 2018-2021 ROADMAP STRONG COMMITMENT TO THE PLANET THROUGH THE POLAR POD PROJECT Sales Health & Safety 56% 4,927 in sustainable management development markets safety visits Pride in belonging 91% of employees proud to belong to the Group Diversity Recycling 24.4% 63% of wome
Slide 7: 2021 sales: sharp growth in all geographies
2021 SALES: SHARP GROWTH IN ALL GEOGRAPHIES 1 Europe +8% vs. 2020 North America 1 2 +8% vs. 2020 2 South America – 4 3 Africa +23% vs. 2020 4 Asia-Pacific +8% vs. 2020 3 €923m +8.6% like-for-like Like-for-like growth (%) 7 Annual General Meeting – May 19, 2022
Slide 8: Major growth in all main end markets but transportation
MAJOR GROWTH IN ALL MAIN END MARKETS BUT TRANSPORTATION, WHICH WAS DRAGGED DOWN BY AERONAUTICS AND RAIL Energies Electronics Transportation 20% of sales 23% of sales 14% of sales Sales Solar Si and SiC semiconductors Rail in sustainable Wind Power electronics Aeronautics development markets Hydro El
Slide 9: Return to double-digit operating margin
RETURN TO DOUBLE-DIGIT OPERATING MARGIN 2020 operating margin 8.1% before non-recurring items 10.0% Volume/mix effects +3.1 bps 93 Price effect +0.4 8.1% Raw material inflation -0.8 69 Wage and cost inflation -1.2 Covid impact* -0.6 Productivity gains and adaptation plan +2.5 Bonuses/incentives -0.8
Slide 10: Net income up sharply
NET INCOME UP SHARPLY in €m 2020 2021 Operating income before non-recurring items 68.6 92.6 Non-recurring expenses: Non-recurring income and expenses (51.4) (4.9) mainly Columbia and end of the adaptation plan Net financial expense: Net financial expense (12.0) (10.7) Charge down thanks to a decline
Slide 11: Strong operating cash flow generation to fund the investment program
STRONG OPERATING CASH FLOW GENERATION TO FUND THE INVESTMENT PROGRAM OPERATING CASH FLOW BEFORE INVESTMENTS (€M) CASH FLOW CONVERSION (%) FCF in €m 133 Cash flow 123 117 conversion* 79% 108% 92 79% 79% 64 71% 56% WCR 19.4% of sales (20.5% in 2020) 2017* 2018* 2019 2020 2021 * Before IFRS 16 * Operat
Slide 12: Industrial capex to build the future
INDUSTRIAL CAPEX TO BUILD THE FUTURE Columbia (USA) Growth Solar: capacity extension (China) Semiconductors: extensions in India, China Environment SiC semiconductors: UK and safety Energy storage (Redox batteries): UK Buildings in line 2021 with environmental standards Process improvements €79m Sol
Slide 13: Maintaining a solid financial structure
MAINTAINING A SOLID FINANCIAL STRUCTURE NET DEBT (€m) Net debt/ EBITDA (14) (1) 193 180 117 (14) 1.42 (10) (7) (84) Net debt/ Equity 30% Not including Lease liabilities: €53m Provisions for pension obligations: Dec. 2020 Operating cash flow Capex including IT Acquisitions Interest Dividends Lease Ot
Slide 14: Proposed dividend at €1 per share
A PROPOSED DIVIDEND AT 1€ PER SHARE REFLECTING THE YEAR’S ROBUST PERFORMANCES AND THE STRONG BALANCE SHEET 38% DIVIDEND 1.00 +54% POLICY 39% Payout of 30% to 40% of Group net income restated 0.65 for non-recurring items Payout for 2020: €14m Estimated payout for 2021: €21m 2020 2021 Dividend in € in
Slide 15: 2022 Outlook & Medium-Term Vision
2022 Outlook & Medium-Term Vision Luc Themelin, CEO 15 Annual General Meeting – May 19, 2022
Slide 16: 2022 priorities
2022 PRIORITIES 01 02 03 Strengthen EV market Continue to invest Successfully start team and intensify our efforts operations in Columbia to harness with Soitec to serve surging for extruded graphite. the strong growth expected demand in the Invest in isostatic graphite in 2023-2024 SiC semiconducto
Slide 17: 2022 targets
2022 TARGETS excluding potential indirect impacts resulting from the current situation, which are difficult to measure at this stage SALES OPERATING MARGIN INDUSTRIAL EBITDA BEFORE NON- CAPEX MARGIN RECURRING ITEMS Like-for-like growth of Around Around 3%-6% 10% €80m-€85m +20-30 bps While implementi
Slide 18: A very good start to the year 2022
A VERY GOOD START TO THE YEAR 2022 Q1 2022 €255m €88m +12% Organic Growth +13% €84m +15% €74m Advanced +8% Materials €141m +11% Electrical €9m Power +14% €114m +13% Like-for-like growth (as a %) 18 Annual General Meeting – May 19, 2022
Slide 19: Promising trends through 2025
PROMISING TRENDS THROUGH 2025 Additional Strong growth available drivers industrial capacity at the heart of major lifestyle changes A proven A recognized policy of commitment excellence to CSR issues 19 2021 Results – March 16, 2022
Slide 20: Columbia, a strategic semi-finished product plant to drive growth
COLUMBIA, A STRATEGIC SEMI-FINISHED PRODUCT PLANT TO DRIVE GROWTH 2023 2019 2020 2021 2022 and beyond Acquisition Recommissioning of the facility First batch Production launch Manufacturing Manufacturing extruded graphite extruded graphite extruded graphite extruded graphite (2,000t) (4,000t) Transf
Slide 21: Strong growth drivers
STRONG GROWTH DRIVERS Sales growth 2025 target Market trend Market trend 2019-2021 (€m) 2022 2023-2025 SOLAR POWER +30% 100 SI SEMICONDUCTOR +4% 60 MANUFACTURING SIC SEMICONDUCTOR MANUFACTURING +16% 110 ELECTRIC VEHICLES +14% 40-70 21 Annual General Meeting – May 19, 2022
Slide 22: Solar: a major supplier across the value chain
SOLAR: A MAJOR SUPPLIER ACROSS THE VALUE CHAIN Electricity generation PROCESS STAGE Silicon ingot Cell Electrical panel Storage Power manufacturing manufacturing protection conversion MERSEN EXPERTISE 2021 SALES CUSTOMERS €71m 2025 EST. SALES €100m 22 Annual General Meeting – May 19, 2022
Slide 23: Essential materials expertise in the Si semiconductor manufacturing process
ESSENTIAL MATERIALS EXPERTISE IN THE SI SEMICONDUCTOR MANUFACTURING PROCESS PROCESS STAGE Ingot pulling Wafer epitaxy Deposition Photolithography Etching Ion & wafer cutting implantation MERSEN EXPERTISE 2021 SALES CUSTOMERS €47m 2025 EST. SALES €60m 23 Annual General Meeting – May 19, 2022
Slide 24: Unique position in the SiC manufacturing process
UNIQUE POSITION IN THE SOPHISTICATED AND INTRICATE SIC MANUFACTURING PROCESS Monocrystalline Wafer Ion Power SiC ingot epitaxy implantation semiconductors SiC wafer PVT 2,400°C +/- 1°C PROCESS MERSEN EXPERTISE SiC powder 2021 SALES CUSTOMERS €36m 2025 EST. SALES €80m 24 Annual General Meeting – May
Slide 25: Soitec partnership: new substrates for the EV market
SOITEC PARTNERSHIP: DEVELOPING A NEW RANGE OF SUBSTRATES FOR THE EV MARKET 2021 SALES €0m 2025 EST. SALES SiC ingot Monocrystalline SiC wafer P-SiC wafer €30m Monocrystalline SiC Monocrystalline SiC Polycrystalline Ultra prime SiC (p-SiC) PVT process SiC power Soitec SmartSiCTM semiconductor process
Slide 26: Mersen's offering for EV/HEV applications
MERSEN’S OFFERING FOR EV/HEV APPLICATIONS Inverter 2021 SALES €16m Electrical circuit Battery MERSEN protection Courtesy: Exagon EXPERTISE Courtesy: Würth Electronic 2025 EST. SALES €40-70m 26 Annual General Meeting – May 19, 2022
Slide 27: A diversified accessible market for Mersen
A DIVERSIFIED ACCESSIBLE MARKET FOR MERSEN Car Tier-1 Battery module New entrants manufacturers suppliers manufacturers 27 Annual General Meeting – May 19, 2022
Slide 28: Ambitious mid-term plan
AMBITIOUS MID-TERM PLAN SALES €1,200m OPERATING MARGIN BEFORE NEW CSR ROADMAP NON-RECURRING ITEMS ≥ 11% EV SiC semicon CAGR €923m Si semicon +18% Responsible Solar EBITDA MARGIN partner ≥ 17.5% EV SiC semicon Si semicon Solar Limiting our environmental impact CAGR +4% Developing incl. human capital
Slide 29: Reports by the auditors
Reports by the auditors Anne Demerlé, Deloitte & Associés 29 Annual General Meeting – May 19, 2022
Slide 30: Corporate Governance report
Corporate Governance report Olivier Legrain, Chairman of the Board of Directors 30 Annual General Meeting – May 19, 2022
Slide 31: Board members
BOARD MEMBERS 1 – Olivier Legrain (independant) 2 – Isabelle Azemard 3 – Pierre Creusy (rep. employees) 4 – Michel Crochon (independant) 5 – Carolle Foissaud (independant) 6 – Magali Joëssel 7 – Ulrike Steinhorst (independant) 8 – Denis Thiery (independant) 9 – Luc Themelin 31 Annual General Meeting
Slide 32: Governance: replacement of a director
GOVERNANCE: REPLACEMENT OF A DIRECTOR The term of office of Isabelle Azemard, elected on the recommendation of Bpifrance, is due to expire. Election of a new Director: Bpifrance Participations whose permanent representative at the Board would be Emmanuel Blot. Emmanuel Blot, 36, Investment Director
Slide 33: Compensation policy - summary
COMPENSATION POLICY - SUMMARY 2020 No change in variable compensation criteria, even in a crisis situation Voluntary reduction of fixed remuneration (CEO and Board of Directors) due to the situation Competitiveness study carried out, highlighting that i) CEO remuneration is relatively low compared t
Slide 34: Compensation for 2021
COMPENSATION FOR 2021 Luc Themelin, CEO 2021 Comments Fixed compensation 440,000 Unchanged since 2015 Annual variable compensation 589,600 83% objective on operating margin before non-recurring items 100% objective on cash-flow 100% objective on EBITDA 80% objectives on non-financial criteria Perfor
Slide 35: Proposed compensation policy for 2022
PROPOSED COMPENSATION POLICY FOR 2022 CEO Fixed remuneration (€440,000), unchanged since 2015 revised as a result of the competitiveness survey: €500,000 Annual variable compensation unchanged vs 2021 Multi-annual variable compensation: performance bonus shares Chairman Fixed remuneration (€80,000),
Slide 36: Work performed by the Board of Directors in 2021
WORK PERFORMED BY THE BOARD OF DIRECTORS IN 2021 Strategy Strategic plans, budget, acquisitions 9 meetings in 2021 Main markets, in particular EV and SiC semicon Attendance 100% Columbia plant (United States) CSR policy CSR performance and road-map Gender policy Financial results: approval of accoun
Slide 37: Main work performed by the Audit and Accounts Committee in 2021
MAIN WORK PERFORMED BY THE AUDIT AND ACCOUNTS COMMITTEE IN 2021 5 meetings in 2021 Results: review of the accounts and the process Attendance 85% Universal Registration Document Accounting and regulatory changes Risk mapping, including CSR Financing: approval of a refinancing through a private place
Slide 38: Main work performed by the Appointments and Remuneration Committee in 2021
MAIN WORK PERFORMED BY THE APPOINTMENTS AND REMUNERATION COMMITTEE IN 2021 Compensation 6 meetings in 2021 Compensation 2021 and proposals for 2022 Attendance 100% Competitiveness survey on the compensation of the Chairman of the Board and the members of the Board Governance Evaluation of the Board
Slide 39: Ceilings for the financial delegations
CEILINGS FOR THE FINANCIAL DELEGATIONS Resolution 20 With preferential ~45% of capital Issue of ordinary Capital increase for subscription rights €18 million shares employees share Resolutions 27 et 28 program € 500,000 ~20% of capital 5-day priority €8 million subscription period Contribution in ki
Slide 40: Attribution of shares
ATTRIBUTION OF SHARES 3 plans proposed for 3 types of beneficiaries 1. Executives (including CEO) - 84,000 shares for 14 beneficiaries 2. Managers - 100,800 shares for approximately 190 beneficiaries 3. Experts and Talents - 12,000 shares for approximately 50 beneficiaries Common principles Duration
Slide 41: New head office
NEW HEAD OFFICE Tour Trinity Postal address 1bis place de la Défense 92400 Courbevoie FRANCE 41 Annual General Meeting – May 19, 2022
Slide 42: Q&A session
Q&A session 42 Annual General Meeting – May 19, 2022
Slide 43: Vote of the resolutions
Vote of the resolutions 43 Annual General Meeting – May 19, 2022