Mersen Sa · EURONEXT:MRN
Mersen Sa — FY2022 Earnings Presentation
36 slides from Mersen Sa's earnings presentation, Mar 15, 2023
Slide 1: 2022 Full-Year Results
2022 Full-Year Results M A R C H 1 5 , 2 0 2 3
Slide 2: 2022, a record year for the Group
2 0 2 2 , a r e c o r d ye a r f o r t h e G r o u p Sales (€m) Operating income before non-recurring items (€m) ROCE (%) 122 1,115 102 12.5 92 93 11.8 11.3 950 923 10.8 879 847 69 7.8 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 AND A GROWING COMMITMENT TO CSR THAT HAS
Slide 3: Judicious strategic choices driving the entire Group forward
Judicious strategic choices driving the entire Group forward 1,115 879 2018 2022 Sales (€m) GEOGRAPHIES MARKETS +€236m +€106m +€60m +€70m +€105m +€131m North America Europe Asia-Pacific 4 buoyant markets* Other markets CAGR18-22: +8% CAGR18-22: +5% CAGR 18-22: +6% CAGR 18-22: +12% CAGR 18-22: +4% *
Slide 4: Solid foundations for a new dimension
Solid foundations for a new dimension Smart MAJOR CONTRACTS NEW AMBITIONS STRATEGIC to accelerate Mersen’s for 2023 and POSITIONING positioning in energy beyond in buoyant markets transition markets 4 Mersen – 2022 Full-Year Results
Slide 5: 2022 Financial Results
2022 FINANCIAL RESULTS THOMAS BAUMGARTNER 5 Mersen – 2022 Full-Year Results
Slide 6: Dynamic growth in all markets, particularly semiconductors, electric vehicles and solar
Dynamic growth in all markets, particularly semiconductors, electric vehicles and solar Chemicals + 10% Energies 21% Solar +++ Wind ++ Process €1,115m industries 33% +15.2%* ++ 22% Electronics SiC semiconductors +++ 13% Si semiconductors ++ Transportation Rail + Organic growth – 2022 vs. 2021 Aerona
Slide 7: Balanced sales growth
Balanced sales growth Price/volume change Change by geographical area Change by segment 1,115 1,115 1,115 +14% +20% +11% +17% +17% +13% Organic growth Organic growth Sales (€m) 7 Mersen – 2022 Full-Year Results
Slide 8: Strong growth in profitability
Strong growth in profitability (€m) 2021 2022 EBITDA before non-recurring items 148.8 186.4 +25% Recurring EBITDA margin 16.1% 16.7% Depreciation and amortization (56.2) (64.8) Operating income before non-recurring items 92.6 121.6 +31% Operating margin before 10.0% 10.9% non-recurring items • Incre
Slide 9: Strong pricing power and ability to pass on inflation
Strong pricing power and ability to pass on inflation (% points) 2021 operating margin before non-recurring items 10.0% Volume/mix effect +3.1 Price effect +3.7 High-tech customized products with limited cost versus total cost Raw material/energy inflation -2.3 +0.1 Productivity gains +0.9 Operation
Slide 10: Net income up by a sharp 27%
Net income up by a sharp 27% (€m) 2021 2022 Operating income before non-recurring • Non-recurring income and expenses: items 92.6 121.6 mainly non-cash ACE goodwill impairment (chemicals market) due to Non-recurring income and expenses (4.9) (11.4) the increase in WACC to 8.3% Net financial expense
Slide 11: Operating cash flow impacted by a higher working capital requirement
Operating cash flow impacted by a higher working capital requirement (€m) 2021 2022 Operating cash flow before change in WCR 138.4 180.8 • Rise in inventories due to demand, industrial projects (Columbia) and Change in WCR (5.9) (63.2) increased buffer inventory • WCR ratio: 20.7% (vs 19.4% in 2021)
Slide 12: ROCE up despite increased capex to anticipate future growth
ROCE up despite increased capex to anticipate future growth Reported ROCE 12.5% 11.8% (%) 11.3% 10.8% 97 9.8% 79 7.8% 8.7% Capital 8.5% expenditure (% of sales) 6.6% 6.6% 6.7% 4.5% 2017 2018 2019 2020 2021 2022 Capital expenditure (€m) 12 Mersen – 2022 Full-Year Results
Slide 13: Key investments in 2022
Key investments in 2022 South Korea plant 34% Growth €97m 30% Columbia Columbia New Thermal Treatment project in Amiens 31% Maintenance Columbia plant (USA) Safety and 5% Environment 13 Mersen – 2022 Full-Year Results
Slide 14: Columbia, a strategic plant for our markets, especially SiC semiconductors
Columbia, a strategic plant for our markets, especially SiC semiconductors 2019-2020 2021 2022 2023 End-markets Production launch Manufacturing Manufacturing extruded graphite extruded graphite extruded graphite (2,000t) (4,000t) Transfer and startup Manufacturing Manufacturing GRI insulation line G
Slide 15: Solid, well-controlled leverage
Solid, well-controlled leverage Net debt (€m) Leverage: 1.36x (1.42x in 2021) Does not include lease liabilities €55m (vs. €53m at Dec. 31, 2021) and pension obligations €39m (vs. €49m at Dec. 31, 2021) 15 Mersen – 2022 Full-Year Results
Slide 16: No significant refinancing before 2026
No significant refinancing before 2026 UNDRAWN COMMITTED 4 CREDIT LINES Drawn credit lines (€m) (€m) DECEMBER 31, 2022 115 ~€265m 56 ~€60m Available cash 30 4 4 20 15 Maturity 4 4 10 ~5 years* 2023 2024 2025 2026 2027 2028 2029 2030 2031 * Calculated based on the use of committed credit lines. USPP
Slide 17: Corporate social responsibility in all areas
Corporate social responsibility in all areas Roadmap Responsible partner: ensure responsible purchasing, by obtaining a self-assessment of our 100% of CSR self-assessments completed suppliers and then monitoring improvement plans Limiting our environmental impact: reduce CO2 emissions intensity, rec
Slide 18: 25% increase in shareholder return
25% increase in shareholder return Dividend (€) 1.25 1,25 1 Payout* 33% 0.65 0,65 In line with the Group’s dividend policy (30% to 40% payout) 2020 2021 2022 * Dividend per share / Attributable net income adjusted for goodwill impairment 18 Mersen – 2022 Full-Year Results
Slide 19: 2023 objectives
2023 objectives SALES OPERATING MARGIN BEFORE CAPITAL NON-RECURRING ITEMS EXPENDITURE Organic growth Between of between Between 10.5% and 11% 5% and 10% €150m and €200m of sales • Strong growth in SiC semiconductors market • Wage and energy inflation partially • As part of the 2027 medium-term plan:
Slide 20: A New Dimension
A NEW DIMENSION LUC THEMELIN 20 Mersen – 2022 Full-Year Results
Slide 21: Why "a new dimension"?
Why “a new dimension”? New Ahead of objectives for plan on our 2022-2025 2027 56% of sales generated in roadmap sustainable development markets 2022 good results thanks to Sharp acceleration in judicious strategic 4 buoyant markets* choices representing 27% of 2022 sales * Renewable energies, Si and
Slide 22: Mersen is ideally positioned to capture growth in the EV market
Mersen is ideally positioned to capture growth in the EV market, both upstream and downstream MATERIALS EXPERTISE ELECTRICAL EXPERTISE SiC wafer SiC power Electric vehicles semiconductors 22 Mersen – 2022 Full-Year Results
Slide 23: SiC power semiconductors: ramp-up thanks to electric vehicles
SiC power semiconductors: ramp -up thanks to electric vehicles 30 4,000 Number of EVs sold with SiC converter 2022-27 CAGR >30% 3,000 2022-27 CAGR >20% 20 2,000 2022-27 CAGR >30% 10 (in millions) 1,000 2022 2023 2024 2025 2026 2027 2028 2029 2030 EV Solar Industries Transportation Telecom Other 23 M
Slide 24: Mersen's unique position in the complex manufacturing process for SiC
M e r s e n ’s u n i q u e p o s i t i o n i n t h e c o m p l e x manufacturing process for SiC – PVT process SILICON INGOT SUBLIMATION POWER SEMICONDUCTORS 2022 sales INSULATION FELT €52m (flexible or rigid) PURIFIED ISOSTATIC (crucibles, guides, etc.) 24 Mersen – 2022 Full-Year Results
Slide 25: A major contract with Wolfspeed to accelerate the energy transition
A m a j o r c o n t r a c t w i t h Wo l f s p e e d t o a c c e l e r a t e the energy transition Sales potential over 5 years USD400m Capital expenditure (2023-2025) Leader in SiC Major investments in Agreements with EV USD120m technologies, a progress (USA, players: BorgWarner, longstanding partn
Slide 26: Partnership with Soitec: another technology serving the SiC market
Partnership with Soitec: another technology serving the SiC power semiconductor market PROTOTYPES PRE-PRODUCTION 2025 sales QUALIFICATION €30m-€40m R&D with grant program 2022 2023 2024 2025 2026 2027 Capex €40m-€50m PRODUCTION START-UP IN GENNEVILLIERS DECISION IN 2024 FOR A PLANT EXTENSION Lookout
Slide 27: Mersen's electric vehicle offering
M e r s e n ’s e l e c t r i c v e h i c l e o f f e r i n g Mersen sales Mersen potential 2022 sales per car €15-€300 €20m 2 PRODUCT LINES Busbars Fuses 27 Mersen – 2022 Full-Year Results
Slide 28: Mersen focused on the high-tech EV market
Mersen focused on the high-tech EV market Market €2,100m TARGET MARKET PRODUCTION FACILITIES CUSTOMERS targeted by Mersen ▪ About 20% ▪ 3 fuse production units of the world qualified (or in market progress): Mexico, China, Hungary €350m ▪ Selection by country and ▪ 2 busbars production vehicle type
Slide 29: ACC contract: first major contract with a battery manufacturer
ACC contract: first major contract with a battery manufacturer Sales potential over 7 years €200m Investments for a dedicated workshop in St Bonnet (France) 2023-2024 Location of the future Gigafactory in Douvrain (France) Smart laminated busbars for ACC modules €15m-€20m 29 Mersen – 2022 Full-Year
Slide 30: Two other growth markets
Tw o o t h e r g r o w t h m a r k e t s Silicon semiconductors 2022 sales €60m Investments ongoing (e.g., TSMC, Samsung, Intel, SMIC, SKhynix) Mersen positioned on the most sophisticated stages of the manufacturing process (ALD, Ion implant) Solar 2022 sales Voluntarily limited production capacity
Slide 31: Medium-Term Outlook
MEDIUM-TERM OUTLOOK LUC THEMELIN 31 Mersen – 2022 Full-Year Results
Slide 32: An investment plan to support this strong growth
An investment plan to support this strong growth ISOSTATIC Capacity increased GRAPHITE from 12,000t to 16,000t (USA) SiC semicon Capacity increased CAPEX INSULATION FELT by more than 2 times (USA, UK) +€300m* €400m c. mainly in 2023/2024 in sales in 2027 Significant expansion Return to standard MATE
Slide 33: 2027: a new dimension
2027: a new dimension Sales (€m) By 2027 ~€1,700m OPERATING MARGIN BEFORE approx. NON-RECURRING ITEMS CAGR 2022-2027 45% 12% +-50pts Renewable energies €1,115m Si semiconductors > 20% SiC semiconductors EV 27% RECURRING EBITDA MARGIN 19% +-50pts CAGR +3% ROCE 13% +-50pts 2022 2027 33 Mersen – 2022 F
Slide 34: A controlled acceleration...
A new dimension A controlled acceleration... + In high tech segments + To serve energy transition markets ... by drawing on the Group’s strengths: international presence, leadership, expertise, close relationships with customers 34 Mersen – 2022 Full-Year Results
Slide 35: Appendix
APPENDIX 35 Mersen – 2022 Full-Year Results
Slide 36: Mersen's markets
M e r s e n ’s m a r k e t s SUSTAINABLE DEVELOPMENT END MARKETS MARKETS GROWING MARKETS Energy Renewables energies Renewables energies Renewables energies (solar, wind, hydro), (solar, wind, hydro), (solar, wind, hydro), Conventional énergies, Energy storage Energy storage Electronics SiC Semicondu