Slide 1: Annual Results
ANNUAL RESULTS MARCH 13, 2019
Slide 2: 2018: An excellent year...
2018: AN EXCELLENT YEAR... OPERATING MARGIN SALES ROCE* BEFORE NON-RECURRING ITEMS Like-for-like growth +10% vs. 2017 +120 points vs. 2017 +200 points vs. 2017 879 809 92 800 759 759 775 75 57 11.8% 9.8% 10.4% 9.2% 7.3% 7.5% 2016 2017 2018 2016 2017 2018 2016 2017 2018 Sales (€m) Operating income be
Slide 3: ...Busy in terms of external growth
... BUSY IN TERMS OF EXTERNAL GROWTH FTCAP CALY MERSEN GALAXY TECHNOLOGIES LGI CIRPROTEC IDEALEC 100% Acquisition Joint venture Partnership 100% Acquisition Minority stake 60% Mersen To develop Mersen’s To step up global To look to the future To capture the solar To drive innovation services for the
Slide 4: Growth across all regions leading to a balanced breakdown
GROWTH ACROSS ALL REGIONS LEADING TO A BALANCED BREAKDOWN… NORTH AMERICA +8% EUROPE +8% 33%* vs. 2017 34%* vs. 2017 SOUTH AMERICA - +17% AFRICA vs. 4%* 2017 ASIA-PACIFIC +13% 29%* vs. 2017 * % of total sales Like-for-like growth in 2018 (as a %) 4 Mersen 2018 Results
Slide 5: Thanks to a brisk momentum in all markets, particularly our growing markets
... THANKS TO A BRISK MOMENTUM IN ALL MARKETS, PARTICULARLY OUR GROWING MARKETS GROWING MARKETS ~40% 34% 19% ENERGY PROCESS INDUSTRIES +12%* VS. IN 2017 +7%* VS. 2017 RENEWABLE ENERGIES 19% ELECTRONICS 2018 SALES +13%* VS. 2017 SEMICONDUCTORS POWER ELECTRONICS 11% 17% CHEMICALS TRANSPORTATION +6%* V
Slide 6: Focus on certain growing markets
FOCUS ON CERTAIN GROWING MARKETS
Slide 7: Solar: an energy seeing strong growth
SOLAR: AN ENERGY SEING STRONG GROWTH NUMBER OF PANEL INSTALLATIONS GROWING SHARPLY 2018-2022 CAGR (est.) Annual (GW) +5-7% 140 2018 Forecasts [115-125]* 120 2011-2017 CAGR 109 100 +23% 80 60 2016 Forecasts 40 20 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 est. 2020 est. 2021 est. 2022 est. Source
Slide 8: Solar: a strong potential due to easy installation of panels
SOLAR: A STRONG POTENTIAL DUE TO EASY INSTALLATION OF PANELS MAIN COUNTRIES WITH UPCOMING SOLAR PANEL INSTALLATION PROGRAMS SPAIN UK FRANCE NETHERLANDS GERMANY ITALY CHINA SOUTH KOREA UNITED JAPAN STATES TAIWAN MEXICO THAILAND BRAZIL AUSTRALIA TURKEY EGYPT SAUDI ARABIA PAKISTAN INDIA Source: Global
Slide 9: High growth potential in the solar sector particularly for protection and conversion solutions
HIGH GROWTH POTENTIAL IN THE SOLAR SECTOR PARTICULARLY FOR PROTECTION AND CONVERSION SOLUTIONS PROTECTION 19% CONVERSION 12% €90m-€100m 2023 (est) Solar sales POLYSILICON 19% 2018 INGOTS 50% €58m 2018 9 Mersen 2018 Results
Slide 10: Mersen exhaustive offer in high-yield CZ technology for solar
MERSEN EXHAUSTIVE OFFER IN HIGH-YIELD CZ TECHNOLOGY FOR SOLAR CELL PRODUCTION INITIAL OFFER Furnace internal parts in ISOSTATIC GRAPHITE JV Galaxy ISOSTATIC GRAPHITE resistance Flexible FELT INSULATION SOLUTIONS JV Galaxy Crucible support in C/C COMPOSITE CZ MONOCRYSTALLINE 10 Mersen 2018 Results
Slide 11: Energy storage, a booster for solar
ENERGY STORAGE, A BOOSTER FOR SOLAR 10,000 kWh Up to approx. 10 MWh 1,000 kWh Stationary energy storage 250 kWh 200 kWh Capacity e-Trucks, e-Buses 100 kWh Mersen and other commercial EVs 30 kWh 20 kWh 10 kWh Passenger electric vehicles 5 kWh 1 kWh 12V 24V 60V 96V 200V 300V 400V 500V 600V 750V 1,000V
Slide 12: A stationary battery market driven by solar and wind power in the medium term
A STATIONARY BATTERY MARKET DRIVEN BY SOLAR AND WIND POWER IN THE MEDIUM TERM ANNUAL INSTALLED CAPACITY OF STATIONARY BATTERIES IN MWH 35000 2018-2023 CAGR +50% 30000 Direct current grids (industrial buildings, utilities) 25000 20000 15000 Solar, wind 10000 5000 Power quality 0 2017 2018 2019 2020 2
Slide 13: Mersen solutions for stationary storage batteries
MERSEN SOLUTIONS FOR STATIONARY STORAGE BATTERIES Protection Connection Protection Protection Mersen solutions Li-ion Battery Battery Battery Battery Power battery module rack pack container conversion cell DC AC 2.6W 10-100W 1000W 10-100kW 1 to 100MW 13 Mersen 2018 Results
Slide 14: Change in our offer for e-vehicles
CHANGE IN OUR OFFER FOR E-VEHICLES BUSBARS – CAPACITOR- COOLING HYBRID PROTECTION FUSES DEVICES End to technical development partnership Strong demand for battery Clear increase in demand for with the VW Group protection solutions and battery connection solutions following changes in specifications
Slide 15: Strong potential in energy storage
STRONG POTENTIAL IN ENERGY STORAGE E-VEHICLES STATIONARY 80% BATTERIES 20% €40m-€60m 2023 (est.) €15m 2018 15 Mersen 2018 Results
Slide 16: Strong position on the fast-growing SiC semiconductors market
STRONG POSITION ON THE FAST-GROWING SIC SEMICONDUCTORS MARKET COMPOUND SEMICONDUCTORS MATURE MATURING OTHER MARKET MARKET TECHNOLOGIES RAW MATERIAL/ GaN/ Silicon SiC GaN GaAs InP Sapphire SUBSTRATE COMPONENTS Microprocessor Memory Power component RF Opto LED chip (IGBT, MOSFET, JFET) component elect
Slide 17: SiC semiconductors market set to accelerate after 2020-2022 in line with EV market growth
SIC SEMICONDUCTORS MARKET SET TO ACCELERATE AFTER 2020-2022 IN LINE WITH EV MARKET GROWTH SIC COMPONENTS MARKET IN USD MILLIONS 1200 2020-2022 CAGR 1000 +30%-40% Other Speed drivers 800 EV 600 2016-2019 CAGR +18% 400 Renewables 200 Rail Power supply 0 2016 2017 2018 2019 2020 2021 2022 Source: Yole
Slide 18: Mersen monocrystalline SiC solutions
MERSEN MONOCRYSTALLINE SIC SOLUTIONS Induction coil 2,400°C +/- 2°C €50m-€60m Quartz tubing 2023 (est.) SiC INSULATION GRAPHITE CRUCIBLE Reservoir of SiC powder €20m 2018 18 Mersen 2018 Results
Slide 19: 2019 Objectives
2019 OBJECTIVES Like-for-like growth* Operating margin before in sales versus 2018 non-recurring items Between 2% and 5% Between 10.5 and 10.7% (vs. 10.4% in 2018) 2019 Contribution from 2018 Capex acquisitions ~2% Between €60m and €70m * At constant exchange rates and scope of consolidation 19 Mers
Slide 20: Program of investments to underpin growth in 2020-2022
PROGRAM OF INVESTMENTS TO UNDERPIN GROWTH IN 2020-2022 2019 €60m-€70m SiC semiconductors Solar power Growing markets EV 45% SiC laser mirrors Digital Information systems 5% transformation Reduced environmental Environment, Safety, Compliance 10% footprint Other Maintenance, Productivity 40% 20 Merse
Slide 21: Continued confidence in the Group's medium-term potential
CONTINUED CONFIDENCE IN THE GROUP’S MEDIUM-TERM POTENTIAL GROWING MARKETS STRENGTHS EV and Leader: > 65% Expertise: Renewables Electronics Aeronautics #1 or #2 customized high barriers in our markets products to entry EXCELLENCE PROGRAM GLOBAL OPERATIONS Commercial efficiency Customer proximity Comp
Slide 22: 2018 Results
2018 RESULTS
Slide 23: Sharp rise in profitability
SHARP RISE IN PROFITABILITY +120 bp 10.4% As a % 2017 operating margin before 9.2% Higher prices to 9.2% non-recurring items offset the increase in Volume/mix effects +1.7% the cost of raw Price effect +1.2% materials: net positive Raw material impact -0.8% 92 75 Impact of the competitiveness plan*
Slide 24: Contrasted performances by segment
CONTRASTED PERFORMANCES BY SEGMENT ELECTRICAL POWER ADVANCED MATERIALS Operating income before Operating income before 69 non-recurring items (m€) 40 39 non-recurring items (m€) 50 Operating margin before Operating margin before non-recurring items (%) 11.0% 10.0% non-recurring items (%) 11.1% 14.1%
Slide 25: Strong growth in net income
STRONG GROWTH IN NET INCOME In €m 2017 2018 Operating income before non-recurring items 74.6 91.6 Non-recurring income and expenses (10.3) (3.8) Non-recurring expenses contained Net financial income/(costs) (10.0) (10.3) (end of the competitiveness plan) Income tax (15.1) (18.3) Sharp drop in effect
Slide 26: Improved free cash flow even with increase in investments
IMPROVED FREE CASH FLOW EVEN WITH INCREASE IN INVESTMENTS FCF in €m Free cash flow Positive volume effect before financial interest and acquisitions 33.3 Drop in tax paid 27.5 Drop in exceptional* costs (€7m vs. €14m in 2017) Slight increase in WCR (21% of sales vs. 20% in 2017) Capex increase (€58m
Slide 27: Major investment in 2018 (capex, acquisitions and share repurchases)
MAJOR INVESTMENT IN 2018 (CAPEX, ACQUISITIONS AND SHARE REPURCHASES) 24 1 216 8 In €m 178 (91) 38 58 o/w solar energy and semiconductors €33m in free cash flow before interest Dec. 2017 Operating cash flow Capex Acquisitions Share repurchases Dividend and interest Other Dec. 2018 27 Résultats 2018 M
Slide 28: Strong financial structure
STRONG FINANCIAL STRUCTURE NET DEBT/EBITDA 1.6 Net debt in €m 250 NET DEBT/EQUITY 39% 3 2,5 200 Net debt/EBITDA 2 150 1,5 100 1 50 0,5 0 0 2015 2016 2017 2018 28 Mersen 2018 Results
Slide 29: Return to shareholder: dividend up by +27%
RETURN TO SHAREHOLDER: DIVIDEND UP BY +27% 0.95 Dividend policy: 1 30%-40% of 0.75 attributable net profit 0,8 0,6 0,4 2018 PAY-OUT 0,2 35% 0 2015 2016 2017 2018 29 Mersen 2018 Results
Slide 30: Questions
QUESTIONS MeRS Expertise, our source of energy