Mersen Sa · EURONEXT:MRN
Mersen Sa — Investor Day (November 2018)
110 slides from Mersen Sa's investor day presentation, Nov 29, 2018
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY NOVEMBER 29, 2018 Changer la photo
Slide 2: Agenda
AGENDA 9:00 – 9:25 Mersen: Creating value for our stakeholders Luc Themelin Philippe Chemin 9:25 – 10:10 Mersen’s contribution to Solar Energy Laurent Marcenac 10:10 – 10:40 Batteries for Energy Storage Systems Philippe Roussel Break 11:10 – 12:00 Energy Efficiency at Mersen Christophe Bommier 12:00
Slide 3: Mersen: Creating value for our stakeholders
MERSEN: CREATING VALUE FOR OUR STAKEHOLDERS CAPITAL MARKETS DAY – NOVEMBER 29, 2018 LUC THEMELIN, CHIEF EXECUTIVE OFFICER Changer la photo
Slide 4: Mersen: Our mission, technological progress
MERSEN: OUR MISSION, TECHNOLOGICAL PROGRESS WE PROVIDE INDUSTRIAL COMPANIES WE ARE DEVELOPING WORLDWIDE WITH INNOVATIVE SOLUTIONS THE BEST TECHNOLOGIES ENHANCING THE PERFORMANCE OF THEIR FOR THE INDUSTRIES OF THE FUTURE PRODUCTS AND SERVICES 4 CMD Mersen – November 2018
Slide 5: Creating the value that drives our stakeholders
CREATING THE VALUE THAT DRIVES OUR STAKEHOLDERS OUR OUR OUR OUR PARTNERS EMPLOYEES CUSTOMERS SHAREHOLDERS 5 CMD Mersen – November 2018
Slide 6: The Group's foundation: human capital
OUR THE GROUP’S FOUNDATION: HUMAN CAPITAL EMPLOYEES WORK TO KEEP EVERYONE DEVELOP DEVELOP A SENSE OF BELONGING SAFE SKILLS Strengthen the Company’s attractiveness Training, prevention and Golden Rules Management Academy Anchor our values Health and safety weeks OpenExpert Program Promote collaborati
Slide 7: Prestigious and exacting customers
OUR PRESTIGIOUS AND EXACTING CUSTOMERS... CUSTOMERS 35% 11% 17% 18% 19% PROCESS as a % of sales in 2017 INDUSTRIES CHEMICALS TRANSPORTATION ELECTRONICS ENERGY > 65% customized products Replacement market 65% of sales Largest client ~3% of sales Longstanding ties 7 CMD Mersen – November 2018
Slide 8: Who benefit from our expertise
...WHO BENEFIT FROM OUR EXPERTISE OUR CUSTOMERS FOR GREATER PERFORMANCE AND EFFICIENCY ELECTRICAL POWER ADVANCED MATERIALS NO. 1-2 NO. 1-2 NO. 1-2 NO. 2 WORLDWIDE NO. 2 WORLDWIDE WORLDWIDE Components WORLDWIDE WORLDWIDE Industrial fuses Graphite for power electronics High-temperature Brushes for ind
Slide 9: As well as from our global operations
OUR ...AS WELL AS FROM OUR GLOBAL OPERATIONS CUSTOMERS NORTH Employees: 2,012 AMERICA Production facilities: 13 EUROPE Employees: 2,062 Production facilities: 19 SOUTH Employees: 587 AMERICA - AFRICA Production facilities: 5 ASIA-PACIFIC Employees: 1,723 Production facilities: 13 2017 6,384 employee
Slide 10: Long-term relationships with our shareholders
LONG-TERM RELATIONSHIPS WITH OUR SHAREHOLDERS THAT OUR SHAREHOLDERS ARE BASED ON TRUST DIVIDEND POLICY: INDIVIDUAL & EMPLOYEE PAYOUT RATIO OF BPI & CDC 15% SHAREHOLDERS AND TREASURY SHARES 10% ARDIAN 10% 30%-40% SHAREHOLDER STRUCTURE AT JUNE 30, 2018 RIGOROUS FINANCIAL OTHER MANAGEMENT: INSTITUTIONA
Slide 11: Partners that are critical to our development
OUR PARTNERS THAT ARE CRITICAL TO OUR DEVELOPMENT PARTNERS FINANCIAL PARTNERS SUPPLIERS REGIONS Long-term relationships Inclusion of environmental/ethics criteria Extensive delegation of responsibilities across each entity Diversified sources of financing Focus on quality and reliability Respect for
Slide 12: Balanced governance
BALANCED GOVERNANCE U S D Compliance with Separation of control 3 Specialized Board An 11-member Compliance: the AFEP-MEDEF and management Committees Board Chief Compliance corporate governance functions (Audit and Accounts, 2 representatives from Ardian Officer code (Chairman of the Board, Strategy
Slide 13: From product design to recycling
INSIDE MERSEN: A REDUCED ENVIRONMENTAL FOOTPRINT ...FROM PRODUCT DESIGN TO RECYCLING ECO-FRIENDLY CLEAN PROACTIVE ONGOING RECYCLING PRODUCTS PROCESSES WASTE MANAGEMENT Graphite manufacturing: a “best 100% of graphite powder recycled Percentage of waste recycled: during the process No Mersen product
Slide 14: More than half of Mersen solutions are for sustainable development markets
MERSEN INSIDE: MORE THAN HALF OF MERSEN SOLUTIONS ARE FOR SUSTAINABLE DEVELOPMENT MARKETS PROCESS INDUSTRIES 34% SUSTAINABLE DEVELOPMENT CHEMICALS MARKETS 9% TRANSPORTATION 17% ELECTRONICS 19% ENERGY 21% Solar Wind Hydro- power 2013 Breakdown of 2017 sales 2018 (estimate) 14 CMD Mersen – November 20
Slide 15: Markets with major growth potential in the medium term
MARKETS WITH MAJOR GROWTH POTENTIAL IN THE MEDIUM TERM Sales in €m 1000 900 800 SOLAR PHOTOVOLTAICS ENERGY STORAGE 700 50%+ 50%+ 600 40% 40% SUSTAINABLE Sustainable development markets DEVELOPMENT MARKETS 500 400 SIC LASER MIRRORS SIC SEMICONDUCTEURS 300 CAGR 2018-2023 200 [+10-15%]* 100 0 2013 2014
Slide 16: Mersen's contribution to solar photovoltaic energy
MERSEN’S CONTRIBUTION TO SOLAR PHOTOVOLTAIC ENERGY CAPITAL MARKETS DAY NOVEMBER 29, 2018
Slide 17: Mersen in the upstream phase of the solar value chain
PHILIPPE CHEMIN VP SALES & MARKETING, GRAPHITE SPECIALTIES BUSINESS UNIT MERSEN IN THE UPSTREAM PHASE OF THE SOLAR PHOTOVOLTAICS VALUE CHAIN
Slide 18: Solar: an energy source seeing strong growth
SOLAR: AN ENERGY SOURCE SEEING STRONG GROWTH NUMBER OF PANEL INSTALLATIONS GROWING SHARPLY EACH YEAR CONSISTENTLY OUTPACING FORECASTS 2018-2022 CAGR est Annual (GW) 140 +5-7% 2018 Forecasts 120 2011-2017 CAGR 100 +23% 80 60 40 2016 Forecasts 20 2012 Forecasts 0 2011 2012 2013 2014 2015 2016 2017 201
Slide 19: Solar: a competitive cost
SOLAR: A COMPETITIVE COST DECREASE IN COST THE LOWEST* ENERGY OF SOLAR CELLS PRODUCTION COST US$/MWh US$ 101.00 Price of solar cells in US$ per watt 300 250 120 200 150 Nuclear 100 Coal 100 Gas turbines 2,5 50 2 -80% 0 2010 2011 2012 2013 2014 2015 2016 2017 PV solar farms 80 1,5 1 60 -20% 3x 0,5 0
Slide 20: Solar: strong potential thanks to easy installation
SOLAR: A STRONG POTENTIAL THANKS TO ITS EASY INSTALLATION 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 Mar
Slide 21: Mersen at the heart of solar photovoltaics
MERSEN AT THE HEART OF SOLAR PHOTOVOLTAICS 21 CMD Mersen – November 2018
Slide 22: Mersen, the world's No. 1 supplier for the polysilicon industry
MERSEN, THE WORLD’S NO. 1 SUPPLIER FOR THE POLYSILICON INDUSTRY SOLUTIONS A ROBUST GLOBAL THAT ENHANCE OUR WIDE-RANGING EXPERTISE NETWORK CUSTOMERS’ PERFORMANCE Longstanding supplier Joint development programs to help Synthesis units, for all leading global companies polysilicon makers stay competit
Slide 23: Ingot manufacturing: major existing technologies
INGOT MANUFACTURING: 2 MAJOR EXISTING TECHNOLOGIES DSS MULTICRYSTALLINE DSS and CZ production GW/year Larger block 140 Silicon consumption: 4-5 g/watt 120 Cell efficiency: 18%-19% 100 Historically lower production cost 80 CZ MONOCRYSTALLINE 60 40 20 0 Uses less energy: -20% 2014 2015 2016 2017 2018
Slide 24: Mersen has the advantage thanks to the emergence of CZ technology
MERSEN HAS THE ADVANTAGE THANKS TO THE EMERGENCE OF CZ TECHNOLOGY VS. DSS... Required graphite/GW: 30 tons DSS Less sophisticated graphite MULTICRYSTALLINE More competitive market Required graphite/GW: 120 tons Large parts customized grades, extremely CZ fine-grained graphite, high-level of expert
Slide 25: Strong presence in Asia
...AND THANKS TO ITS STRONG PRESENCE IN ASIA MERSEN’S FOOTPRINT IN ASIA TO SERVE THIS MARKET 85% YANTAI KUNSHAN Machining Purification of cell producers are CHINESE companies CHONGQING Graphite blocks Others: primarily Japan, Taiwan and SOUTH KOREA Machining South Korea Exawatt estimate for 2017 25
Slide 26: New CZ ingot production solutions thanks to Mersen Galaxy JV
A NEW, MORE COMPREHENSIVE RANGE OF CZ INGOT PRODUCTION SOLUTIONS TO COME THANKS TO THE MERSEN GALAXY JV Furnace internal parts in graphite (150 total), ENHANCED including: OFFER Graphite resistance Flexible felt insulation solutions COMPLEMENTARY OFFER Crucible support in C/C composite 26 CMD Mersen
Slide 27: Mersen Galaxy JV: a comprehensive CZ offer
MERSEN GALAXY JV: FOR A COMPREHENSIVE CZ OFFER JV (60% OWNED BY MERSEN) COVERS THE MANUFACTURING AND SALE OF CARBON/CARBON COMPOSITES AND FLEXIBLE FELT INSULATION SOLUTIONS FOR THE CZ PV MARKET IN CHINA MERSEN’S LONG-STANDING PARTNER IN ISOSTATIC GRAPHITE (YANTAI JV) MERSEN’S CONTRIBUTION: CNY60
Slide 28: Production capacities meeting market demand
PRODUCTION CAPACITIES MEETING MARKET DEMAND ADJUSTING GRAPHITE PRODUCTION CAPACITIES IN LINE WITH CURRENT DEMAND Production capacities/utilization rate in % 100% 95% 2018: Resuming of furnace production in Chongqing 75% 85% 6,000 t 2018 Average: 10,500 t Chongqing, China Nominal capacities avai
Slide 29: Mersen in the downstream phase of the solar value chain
LAURENT MARCENAC VP GLOBAL SALES, ELECTRICAL POWER SEGMENT MERSEN IN THE DOWNSTREAM PHASE OF THE SOLAR PHOTOVOLTAICS VALUE CHAIN
Slide 30: Capability to be active in several markets
MERSEN: THE CAPABILITY TO BE ACTIVE IN SEVERAL MARKETS AVERAGE SOLAR FARM SALES €1m-€2m/GW ENERGY STORAGE INVERTERS SOLAR PANEL PROTECTION 30 CMD Mersen – November 2018
Slide 31: Solar: strong potential thanks to easy installation
SOLAR: A STRONG POTENTIAL THANKS TO ITS EASY INSTALLATION 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 Mar
Slide 32: Electrical protection of solar panels: a local market
ELECTRICAL PROTECTION OF SOLAR PANELS: A LOCAL MARKET THAT IS WELL SUITED TO MERSEN’S GLOBAL OPERATIONS Key Mersen EP segment operations 32 CMD Mersen – November 2018
Slide 33: Mersen's strengths in solar panel protection
MERSEN’S STRENGTHS IN SOLAR PANEL PROTECTION A COMPREHENSIVE RANGE GLOBAL OPERATIONS UNIQUE TESTING CAPACITIES Recognized expertise in high voltage (1500V DC) Allow Mersen to efficiently serve 3 test sites: St Bonnet (France), the panel builder market Terrassa (Spain), Newburyport (United HelioProte
Slide 34: Power conversion: a segmented market
POWER CONVERSION: A SEGMENTED MARKET HIGH VOLTAGE MEDIUM VOLTAGE A market associated with solar farms A market associated with rooftop solar panels Significant technical constraints Less powerful converters increasingly associated with energy storage systems CAGR 2018-2022* 4-6% * Sources: Yole, Mer
Slide 35: Mersen's strengths in power conversion
MERSEN’S STRENGTHS IN POWER CONVERSION LONG-STANDING RELATIONSHIPS A SOLID GLOBAL OPERATIONS BASE A UNIQUE INTEGRATED OFFER WITH MAJOR WESTERN OEMs Busbars/High-speed fuses for Allows Mersen to keep up with A sales structure dedicated to semiconductor the design and production key accounts, includin
Slide 36: Breakdown of Mersen solar sales
BREAKDOWN OF MERSEN SOLAR SALES PROTECTION 18% CONVERSION 11% POLYSILICON 24% €45m INGOTS 47% 2017 solar sales 36 CMD Mersen – November 2018
Slide 37: Mersen solar sales outlook
MERSEN SOLAR SALES OUTLOOK CAGR 2018-2023 est 8-12% 90-100 55-60 45 40 2016 2017 2018 est 2023 est 37 CMD Mersen – November 2018
Slide 38: Solar market strategy
SOLAR MARKET STRATEGY Increase the pace of growth by developing the Mersen Galaxy JV Examine opportunities to expand graphite production capacity in the medium term Bring the production of the electrical protection and capacitors offers to Asia Cultivate relations with China’s major market players i
Slide 39: Energy storage, a booster for solar!
ENERGY STORAGE, A BOOSTER FOR SOLAR! 39 CMD Mersen – November 2018
Slide 40: Questions?
QUESTIONS ? 40 CMD Mersen – November 2018
Slide 41: Batteries for energy storage systems
BATTERIES FOR ENERGY STORAGE SYSTEMS CAPITAL MARKETS DAY – NOVEMBER 29, 2018 DR. PHILIPPE ROUSSEL, VP GLOBAL STRATEGIC MARKETING, SPM
Slide 42: Battery energy storage is everywhere
BATTERY ENERGY STORAGE IS EVERYWHERE STATIONARY (EES) OR MOBILE (EVS/HEVS) 42 CMD Mersen – November 2018
Slide 43: Factors that will drive growth in this market
WHAT ARE THE FACTORS THAT WILL DRIVE GROWTH IN THIS MARKET? STATIONARY BATTERIES MOBILE BATTERIES RENEWABLE ENERGIES GREEN MOBILITY Improvement in the management and regulation of these diverse and intermittent energy sources (solar, wind) Emergence of electric vehicles and electric Improvement in t
Slide 44: Understanding battery energy storage
UNDERSTANDING BATTERY ENERGY STORAGE Up to approx. 10 MWh 10,000 kWh 1,000 kWh ENERGY STORAGE Stationary 250 kWh batteries 200 kWh e-Truck Capacity 100 kWh e-Bus 30 kWh 20 kWh ELECTRIC VEHICLE Mobile 10 kWh batteries 5 kWh Mersen 1 kWh 12V 24V 60V 96V 200V 300V 400V 500V 600V 750V 1,000V 1,200V 1,50
Slide 45: Stationary battery market driven by renewable energies and DC grids
STATIONARY BATTERIES A STATIONARY BATTERY MARKET DRIVEN BY RENEWABLE ENERGIES IN THE MEDIUM TERM AND DC GRIDS IN THE LONG TERM ANNUAL INSTALLED CAPACITY OF STATIONARY BATTERIES IN MWH 35 000 2018-2023 CAGR +50% 30 000 Direct current grids (industrial buildings, utilities) 25 000 20 000 15 000 Renewa
Slide 46: Mersen solutions for stationary storage batteries
STATIONARY 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 46 CMD Mersen – November 2018
Slide 47: Mersen has the advantage thanks to its global footprint
STATIONARY BATTERIES MERSEN HAS THE ADVANTAGE ON THIS MARKET THANKS TO ITS GLOBAL FOOTPRINT POWER CONVERSION BATTERY MODULE CONTAINER Area of origin FOR ELECTRICAL ENERGY MANUFACTURERS MANUFACTURERS STORAGE EUROPE AMERICA ASIA Non-exhaustive list 47 CMD Mersen – November 2018
Slide 48: Electric vehicles: a market for energy storage
MOBILE BATTERIES ELECTRIC VEHICLES: A MARKET FOR ENERGY STORAGE EVs and HEVs 400 000 2018-2027 CAGR Photo Exagon Motors 350 000 300 000 +17% 250 000 200 000 150 000 100 000 50 000 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 PASSENGER VEHICLES BUSES, TRUCKS AND OTHER COMMERCIAL VEHICLES
Slide 49: Mersen solutions for EV Li-ion batteries
MOBILE BATTERIES MERSEN SOLUTIONS FOR EV LI-ION BATTERIES Cooling plate Fuses Hybrids SPD Fuse Cooling Busbar Battery pack Charging station Monitoring busbar Cooling Module fuse Battery module Busbar €100-€1000 per vehicle Capacitor Inverter Illustration courtesy of Renault™ 49 CMD Mersen – November
Slide 50: An evolving market
MOBILE BATTERIES AN EVOLVING MARKET SPORTS CARS EVALUATING Segment 1 Segment 2 Segment 3 Segment 4 400V 400V 800V > 1,000V up to 40 kWh up to 80 kWh up to 80 kWh up to 100 kWh 50 CMD Mersen – November 2018
Slide 51: Our offer is changing
MOBILE BATTERIES OUR OFFER IS CHANGING HYBRID PROTECTION FUSES BUSBARS End to technical development Strong demand for battery Clear increase in demand for partnership with the VW Group protection solutions and battery connection solutions following changes in specifications auxiliary circuits (inclu
Slide 52: Key success factors for Mersen on battery energy storage systems
KEY SUCCESS FACTORS FOR MERSEN ON BATTERY FOR ENERGY STORAGE SYSTEMS POWERFUL WIDE-RANGING EXPERTISE INNOVATION PRODUCTION BASE Specialist in electrical Global protection for several decades production footprint Introduction of disruptive Asia | Europe | United States Recognized expertise new techno
Slide 53: Andros Sport 01 100% electric
RECOGNIZED EXPERTISE ANDROS SPORT 01 100% ELECTRIC Our solutions are tested under extreme driving and temperature conditions Powered by Battery cell connection components and protection EXAGON fuses from Mersen 53 CMD Mersen – November 2018
Slide 54: Energy storage market strategy
ENERGY STORAGE MARKET STRATEGY Continue discussions with carmakers about hybrid fuses Cultivate relations with electric platform customers (besides EV: rail, naval, aerospace, etc.) Examine opportunities in high-power charging stations Harness market growth in stationary batteries by capitalizing on
Slide 55: Growth potential for Mersen in energy storage
GROWTH POTENTIAL FOR MERSEN IN ENERGY STORAGE 2018-2023 CAGR est 25-30% 40-60M€ ~15M€ STATIONARY BATTERIES €3m MOBILE BATTERIES €12m 2018 est. 2023 est 55 CMD Mersen – November 2018
Slide 56: Beyond Li-ion batteries
BEYOND LI-ION BATTERIES... REDOX FLOW BATTERIES NA-ION BATTERIES Storage for renewable energies Storage for transportation CHALLENGES FOR MERSEN (ADVANCED MATERIAL SEGMENT) Development Investment to be anticipated in the of a range of flexible felt medium term if the market grows solutions 56 CMD Me
Slide 57: Questions?
QUESTIONS ? 57 CMD Mersen – November 2018
Slide 58: Energy efficiency at the heart of our processes
ENERGY EFFICIENCY AT THE HEART OF OUR PROCESSES CAPITAL MARKETS DAY – NOVEMBER 29, 2018 CHRISTOPHE BOMMIER, CTO
Slide 59: Customers that benefit from our expertise
CUSTOMERS THAT BENEFIT FROM OUR EXPERTISE FOR GREATER PERFORMANCE AND EFFICIENCY ELECTRICAL POWER ADVANCED MATERIALS NO. 1-2 NO. 1-2 NO. 1-2 NO. 2 WORLDWIDE NO. 2 WORLDWIDE WORLDWIDE Components WORLDWIDE WORLDWIDE Industrial fuses Graphite for power electronics High-temperature Brushes for industria
Slide 60: From product design to recycling
INSIDE MERSEN: A REDUCED ENVIRONMENTAL FOOTPRINT ...FROM PRODUCT DESIGN TO RECYCLING CLEAN ECO-FRIENDLY PROACTIVE ONGOING RECYCLING PROCESSES PRODUCTS WASTE MANAGEMENT Graphite manufacturing: 100% of graphite powder recycled Percentage of waste recycled: during the process a “best available technolo
Slide 61: Graphite manufacturing: best available technologies
GRAPHITE MANUFACTURING: A PROCESS THAT CLOSELY MATCHES TODAY’S “BEST AVAILABLE TECHNOLOGIES” GRAPHITE POWDER MANUFACTURING PHASES RECYCLING OF GRAPHITE WASTE FINISHED OR SEMI-FINISHED PRODUCTS MACHINING COOKING AND GRAPHITIZATION 61 CMD Mersen – November 2018
Slide 62: Optimizing energy consumption: the example of Holytown
HOW TO OPTIMIZE ENERGY CONSUMPTION IN OUR PROCESSES: THE EXAMPLE OF HOLYTOWN Burned hydrocarbons Batch process 550 g of hydrocarbons 250 g of water 1 kg of viscose RECYCLING 200 g of fibers Savings 300 MWh/year Continuous process 62 CMD Mersen – November 2018
Slide 63: Manufacturing of fuses: importance of raw materials
MANUFACTURING OF FUSES: THE IMPORTANCE OF RAW MATERIALS OPTIMIZATION OF RAW MATERIALS RAW MATERIALS FUSE RECYCLING CHANNELS ASSEMBLY FILLING SILICA SANDBLASTING DRYING FINISHED PRODUCTS 63 CMD Mersen – November 2018
Slide 64: Optimizing raw materials: the example of Modulostar
HOW TO OPTIMIZE THE USE OF RAW MATERIALS: THE EXAMPLE OF MODULOSTAR CONTEXT CHALLENGES STAKES Make it easier to Stand out from the access competition and change fuses Reduction in the quantity on the fuse holder market of plastic materials Reduce the use of raw Propose a solution that materials by m
Slide 65: Questions?
QUESTIONS ? 65 CMD Mersen – November 2018
Slide 66: Energy efficiency at the heart of our strategy
ENERGY EFFICIENCY AT THE HEART OF OUR STRATEGY CAPITAL MARKETS DAY – NOVEMBER 29, 2018 CHRISTOPHE BOMMIER, CTO
Slide 67: Mersen: Our mission, technological progress
MERSEN: OUR MISSION, TECHNOLOGICAL PROGRESS WE PROVIDE INDUSTRIAL COMPANIES WE ARE DEVELOPING WORLDWIDE WITH INNOVATIVE SOLUTIONS THE BEST TECHNOLOGIES ENHANCING THE PERFORMANCE OF THEIR FOR THE INDUSTRIES OF THE FUTURE PRODUCTS AND SERVICES 67 CMD Mersen – November 2018
Slide 68: The chemicals market
CUSTOMERS THAT BENEFIT FROM OUR EXPERTISE FOR GREATER PERFORMANCE AND EFFICIENCY Example: THE CHEMICALS MARKET 68 CMD Mersen – November 2018
Slide 69: The corrosive chemicals market
THE CORROSIVE CHEMICALS MARKET HCL SYNTHESIS UNITS ARE NEEDED IN DEVELOPMENT ACROSS A VAST NUMBER OF MARKETS 69 CMD Mersen – November 2018
Slide 70: Mersen supplies HCL synthesis units
MERSEN SUPPLIES HCL SYNTHESIS UNITS Combustion at ~ 2,500°C • Chlorine • Hydrogen Water required for cooling + exothermic reaction Hydrochloric acid production (HCL) • PVC HCL SYNTHESIS UNIT: • Polysilicon • Viscose, etc. Equipment for the combustion, absorption and cooling of hydrochloric acid 70 C
Slide 71: Benefits for our customers
BENEFITS FOR OUR CUSTOMERS Concentration of caustic soda • Caustic soda • Chlorine Energy required • Hydrogen in the form of water or steam Cooling water from Steam synthesis units Production of steam and hot water IS REUSED FOR HEAT Electrolysis RECOVERY of brine PVC Hot water Sintaclor® HCL synthe
Slide 72: Solution to the water challenge in India
SOLUTION TO THE WATER CHALLENGE IN INDIA CUSTOMERS CONTEXT SOLUTION STAKES Adaptation and Viscose and aluminum Long-term customer optimization markets relationships of an existing product are seeing strong growth Limited water Difficult consumption (-65%) climate conditions Production Need for a in
Slide 73: Mersen strengths
MERSEN STRENGTHS PRODUCT EXPERTISE SYSTEM EXPERTISE GLOBAL NETWORK Local manufacturing Special grade of graphite System that recovers energy for high temperatures produced in the form of steam for (>2,000°C) customer needs Synthesis units for production facilities are manufactured locally System for
Slide 74: Industrial applications for lasers
CUSTOMERS THAT BENEFIT FROM OUR EXPERTISE FOR GREATER PERFORMANCE AND EFFICIENCY Example: INDUSTRIAL APPLICATIONS FOR LASERS 74 CMD Mersen – November 2018
Slide 75: Understanding laser scanners
UNDERSTANDING LASER SCANNERS Laser galvo scanning Laser source mirrors High-precision laser beam positioning 75 CMD Mersen – November 2018
Slide 76: A growing market
A GROWING MARKET En MUSD ANNUAL MARKET * « Macro Material » 4000 2014-2020 CAGR +15-20% Cutting 3000 Welding Sintering 2000 Surface treatment 3D printing 1000 Geometric measurement 0 2014 2015 2016 2017 2018 2019 2020 * Source: “Industrial Laser Solutions” - Macro Material - March 2016 – and Mersen
Slide 77: Significant market opportunities, limited exposure to cyclical change
SIGNIFICANT MARKET OPPORTUNITIES MEAN LIMITED EXPOSURE TO CYCLICAL CHANGE LASER MACHINE GALVANOMETER END-CUSTOMERS MANUFACTURERS MANUFACTURERS MERSEN CUSTOMERS Non-exhaustive list 77 CMD Mersen – November 2018
Slide 78: Growth drivers
GROWTH DRIVERS Technical advancements in laser sources Wavelengths, pulse lengths, lower energy requirements, etc. GREATER PRODUCTIVITY AND ENERGY EFFICIENCY Increase in the size of mirrors Broader spectral range, large surface processing LOWER ELECTRICITY CONSUMPTION Higher quality mirrors High ang
Slide 79: SiC is the ideal material
SiC IS THE IDEAL MATERIAL Figure of merit: quality of materials for mirror applications SiC Mersen Traditional solutions Glass Toxic and rare Stiffness SiC Mersen 79 CMD Mersen – November 2018
Slide 80: Automotive industry example
AUTOMOTIVE INDUSTRY EXAMPLE WEIGHT SAVINGS TIME SAVINGS SPACE SAVINGS - LOWER CAPEX Traditional welding Laser welding 40 kg less metal Time savings Half Half per car of 50% the manufacturing space the number of robots Source: VW Group 80 CMD Mersen – November 2018
Slide 81: Automotive market example
AUTOMOTIVE MARKET EXAMPLE 81 CMD Mersen – November 2018
Slide 82: Mersen strengths in SiC mirrors for laser processes
MERSEN STRENGTHS IN SiC MIRRORS FOR LASER PROCESSES TAILORED UNIQUE EXPERTISE GLOBAL NETWORK MANUFACTURING Recognized expertise in silicon carbide, Integrated mirror polishing process Strong partnerships a material with the ideal properties for this application with OEMs Clear technical understandin
Slide 83: Growth sales potential for Mersen in lasers
GROWTH SALES POTENTIAL FOR MERSEN IN LASERS 2018-2023 CAGR est +20-30% €8m-€10m €3m ~0 2015 2018 est 2023 est 83 CMD Mersen – November 2018
Slide 84: SiC mirrors for lasers strategy
SiC MIRRORS FOR LASERS STRATEGY Develop SiC optical polishing expertise (10mm to 30mm) Increase production capacities in line with current demand (capex: €3m to €5m in 2 years) Next steps: laser com satellite constellation projects that could impact the size of the market over time (1 constellation
Slide 85: SiC semiconductors
CUSTOMERS THAT BENEFIT FROM OUR EXPERTISE FOR GREATER PERFORMANCE AND EFFICIENCY Example: SiC SEMICONDUCTORS 85 CMD Mersen – November 2018
Slide 86: What makes SiC semiconductors so successful?
WHAT MAKES SiC SEMICONDUCTORS SO SUCCESSFUL? 86 CMD Mersen – November 2018
Slide 87: Developments in the semiconductors market
DEVELOPMENTS IN THE SEMICONDUCTORS MARKET MATURE MATURING EMERGING MARKET MARKET TECHNOLOGIES RAW MATERIAL/ GaN Silicon SiC GaN GaAs InP SUBSTRATE /Sapphire COMPONENTS Power component RF Opto LED Microprocessor Memory chip (IGBT, MOSFET, JFET) component electronic END-MARKET Networks and Speed Energ
Slide 88: Growth of the SiC semiconductors market set to accelerate
THE GROWTH OF THE SiC SEMICONDUCTORS MARKET IS SET TO ACCELERATE AFTER 2020-2022 IN LINE WITH THE GROWTH OF THE EV MARKET SiC COMPONENTS MARKET IN USD MILLIONS 1200 2020-2022 CAGR 1000 +30-40% Other Speed drives 800 EV 600 2016-2019 CAGR +18% Renewables 400 200 Rail Power supply 0 2016 2017 2018 201
Slide 89: A global market for wafers and components
A GLOBAL MARKET FOR WAFERS AND COMPONENTS Designers/manufacturers of SiC components Designers/manufacturers of wafers 89 CMD Mersen – November 2018
Slide 90: Mersen solutions
MERSEN SOLUTIONS GRAPHITE COMPONENTS Crucible Induction coil 2,400°C +/- 2°C Quartz tubing RIGID FELT SiC INSULATION (Patent pending) INSULATION GRAPHITE CRUCIBLE Reservoir of SiC powder SiC ingot 90 CMD Mersen – November 2018
Slide 91: Mersen strengths on the SiC semiconductors market
MERSEN STRENGTHS ON THE SiC SEMICONDUCTORS MARKET UNIQUE EXPERTISE CUSTOMER RELATIONS STRONG ORGANIZATION Ability to meet Global organization technical challenges Long-standing relationships with designers Asia, Europe and the United States Graphite: very high grade (wafers + components) that place
Slide 92: Growth potential for Mersen in SiC semiconductors
GROWTH POTENTIAL FOR MERSEN IN SiC SEMICONDUCTORS 2018-2023 CAGR est 120 +15-20% €50m-€60m 100 80 60 €20m-€25m 40 20 0 2018 est 2023 est 92 CMD Mersen – November 2018
Slide 93: Mersen strategy for the SiC semiconductors market
MERSEN STRATEGY FOR THE SiC SEMICONDUCTORS MARKET Accelerate our positioning on the SiC semiconductors market which is less cyclical than other semiconductor markets Keep pace with the accelerated growth of the market by increasing investment in rigid felt (€25m-€30m for the next 3 years) in prepara
Slide 94: Conclusion for Mersen
CONCLUSION FOR MERSEN MATERIALS EXPERTISE INSULATION GRAPHITE ELECTRICAL EXPERTISE SiC SEMICONDUCTORS NEED TO BE PROTECTED COMPONENTS FOR POWER A BROAD VARIETY OF CONVERSION HIGH-POTENTIAL OPPORTUNITIES 94 CMD Mersen – November 2018
Slide 95: Questions?
QUESTIONS ? 95 CMD Mersen – November 2018
Slide 96: Mersen: Our mission…
MERSEN: OUR MISSION… TECHNOLOGICAL PROGRESS CAPITAL MARKETS DAY – NOVEMBER 29, 2018 THOMAS BAUMGARTNER, CFO
Slide 97: Measures to improve the Group's competitiveness
A SERIES OF MEASURES TO IMPROVE THE GROUP’S COMPETITIVENESS ADAPTATION MEASURES TRANSFORM PLAN REORGANIZATION LAUNCH LAUNCH Simplification of the Group’s industrial of the 2 business segments to of the Operational of Mersen Excellence organization and processes and strengthen synergies, Excellence p
Slide 98: Conclusive results
CONCLUSIVE RESULTS OPERATING MARGIN SALES ROCE* BEFORE NON-RECURRING ITEMS ~+20% ~+200 pts ~+400 pts Sales Operating income Capital employed in €m before non-recurring items in €m in €m ~11.5% ~10.4% 8.1% 7.4% > 850 739 60 805 2013 2018 est. 2013 2018 est 2013 2018 est * Operating income before non-
Slide 99: Mersen's guidance for 2018
THAT ARE REFLECTED IN MERSEN’S GUIDANCE FOR 2018 Announced Adjusted Press release in March 2018 in July 2018 in October 2018 ORGANIC GROWTH* IN SALES VERSUS 2017 BETWEEN Between 3% and 6% AROUND 9% 2018 7% AND 9% +2% linked to acquisitions At constant exchange rates Between 9.6% and BETWEEN 10.1% 10
Slide 100: Diversified customer portfolio and markets
MERSEN’S STRENGTHS FOR THE FUTURE: DIVERSIFIED CUSTOMER PORTFOLIO AND MARKETS PROCESS INDUSTRIES ENERGY 21% 34% ELECTRONICS Breakdown of H1 2018 sales 19% 9% CHEMICALS 17% TRANSPORTATION 100 CMD Mersen – November 2018
Slide 101: Leadership positions that are a source of profitability
LEADERSHIP POSITIONS THAT ARE A SOURCE OF PROFITABILITY MERSEN’S STRENGTHS Leadership position: > 65% Expertise: #1 or #2 worldwide of products are high barriers in niche markets built for purpose to entry GROSS MARGIN PRICE EFFECT 34% 2011-2016 2017 2018 32% -0.6% on average/year Stable +1.6%* * 9
Slide 102: Balanced geographic footprint
A BALANCED GEOGRAPHIC FOOTPRINT FOR MORE OPPORTUNITIES AND GREATER DIVERSIFICATION REST OF THE WORLD 33% NORTH AMERICA 36% 29% ASIA-PACIFIC 21% 38% 34% EUROPE 2013 2018 est Based on geographical breakdown at September 30, 2018 102 CMD Mersen – November 2018
Slide 103: Markets with major growth potential in the medium term
MARKETS WITH MAJOR GROWTH POTENTIAL IN THE MEDIUM TERM 1000 900 RENEWABLE ENERGIES 800 ENERGY STORAGE SEMICONDUCTORS 700 POWER CONVERSION 600 CAGR > 6% RAIL ELECTRIC VEHICLES 500 WATER TREATMENT ENERGY EFFICIENT PROCESSES 400 300 AERONAUTICS 200 CAGR ~1%* CONVENTIONAL ENERGY CHEMICALS 100 OTHER PROC
Slide 104: Strategic investment in 2018 to drive future growth
UNDERPINNED BY STRATEGIC INVESTMENT IN 2018 TO DRIVE FUTURE GROWTH ENVIRONMENT CAPEX GROWTH CAPEX €5m €25m MAINTENANCE CAPEX SOLAR €20m-€25m ELECTRONICS (semiconductors and power electronics) EV OTHER ACQUISITIONS €35m 104 CMD Mersen – November 2018
Slide 105: A group focused on cash generation
A GROUP THAT REMAINS FOCUSED ON CASH GENERATION FCF in €m 60 MERSEN GROWTH DRIVERS 50 Operational excellence plan (lean inventory management, optimization) 40 Cash incentives for 30 managers 20 AVERAGE FCF/SALES OVER FIVE YEARS ~5% 10 0 2013 2014 2015 2016 2017 2018 est FCF: Free cash flow before re
Slide 106: Robust financial structure and significant investment in 2018
A ROBUST FINANCIAL STRUCTURE AND SIGNIFICANT INVESTMENT AND ACQUISITIONS IN 2018 Net debt in €m Leverage 250 3 2,5 200 2 150 1,5 100 1 50 0,5 0 0 2013 2014 2015 2016 2017 2018 est. MATERIAL IMPACTS IN 2018 (estimated) Acquisitions: €35m Capex: €55m Competitiveness plan: €15m 106 CMD Mersen – N
Slide 107: A solid balance sheet with diversified financing
A SOLID BALANCE SHEET WITH DIVERSIFIED FINANCING SOURCES OF FINANCING UNDRAWN CONFIRMED MATURITY PROFILE OF 4.7 YEARS* (including commercial paper) CREDIT LINES €218m €148m €m CHINA CREDIT LINE 7% OTHER 200 1% COMMERCIAL (taking into account the PAPER 160 28% back-up line available in the USPP comme
Slide 108: Mersen: Our mission…
MERSEN: OUR MISSION… TECHNOLOGICAL PROGRESS CAPITAL MARKETS DAY – NOVEMBER 29, 2018 Changer la photo
Slide 109: Conclusion
CONCLUSION Mersen is committed to sustainable development Inside Mersen, a continuous improvement process Mersen Inside, growth markets Mersen has increased its competitiveness and consolidated its growth drivers Expanding markets A customer, global and competitive positioning that delivers high mar
Slide 110: Questions?
QUESTIONS ? 110 CMD Mersen – November 2018