Slide 1: At the heart of energy transition
At the heart of energy transition May, 2024
Slide 2: Mersen at the heart of the energy transition
Mersen at the heart of the energy transition SUPPORTING CONTRIBUTING IMPROVING PARTICIPATING the transition to to power conversion power conversion in the development renewable energies & transmission efficiency with of electric vehicles silicon carbide semi-conductors Green Taxonomy Sustainable dev
Slide 3: Our medium-term plan is based on energy transition growth markets
Our medium-term plan is based on energy transition growth markets 2027 plan (announced in March 2023) ~€1,700m Sales €1,211m Renewable energies 2022-2027 €1,115m Si Semiconductors ~45% CAGR > 20% SiC Semiconductors EV 2022-2023 28% 27% +20% 2022-2023 CAGR +3% +5% 2022 2023 2027 3 Mersen - May 2024
Slide 4: The 2027 plan goes hand-in-hand with a climate plan
The 2027 plan goes hand-in-hand with a climate plan In our value chain Developing in sectors that help Emitting fewer tons of Preserving water resources Limiting waste and limit global warming CO2 equivalent per €m of sales increasing recycling 851 80% 803 73% 653 80% 197 70% 56% 173 583 53% 63% of
Slide 5: And a global CSR road-map
And a global CSR road-map PRIORITY COMMITMENTS AMBITION 2027 TARGETS (VS 2022) Responsible partner Improve social and environmental – Ensure that less than 5% of suppliers have a CSR score of less than 25 practices throughout our value chain – Maintain a minimum of 85% of external purchases with loc
Slide 6: Recent changes at the Board of Directors
Recent changes at the Board of Directors 63% independent 100% attendance rate in 2023 (on scheduled meetings) At the AGM (May 16, 2024) : Jocelyne Vassoille: nomination subject to AGM approval. After the AGM, Michel Crochon will resign * Independent members 6 Mersen - May 2024
Slide 7: A strong CSR governance
A strong CSR governance BOARD OF DIRECTORS CSR Strategy review Emmanuel Blot, designated as director responsible for CSR issues AUDIT & ACCOUNT CSR risk analysis review COMMITTEE OF THE BOARD EXECUTIVE COMMITTEE Promotes the Group's CSR strategy and implements it Compliance HSE committee CSR committ
Slide 8: Values and engagement at Mersen
Va l u e s a n d e n g a g e m e n t a t M e r s e n * A strong culture based on common values ▪ People first ▪ One step ahead ▪ Cross collaboration ▪ Innovate for our customers Engagement : 89 % motivated by their jobs 95 % aware of the Group’s actions and objectives in favor of the environment 92
Slide 9: A global company
A global company 51 sites with Customer intimacy 100% local management 37% of women 33 countries 26% of women engineers & managers 85% external purchases from local suppliers >8 years average length of service 7,500 employees 9 Mersen - May 2024
Slide 10: 2023, another year of profitable growth
2023, another year of profitable growth Sales (€m) Operating income before ROCE (%) non-recurring items (€m) 137 1,211 122 12.5 13.0 1,115 10.8 93 923 69 7.8 847 2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023 10 Mersen - May 2024
Slide 11: Dynamic growth in all markets, particularly SiC semiconductors
Dynamic growth in all markets, particularly SiC semiconductors ORGANIC GROWTH 2023 vs. 2022 9% > +50% CHEMICALS +20% - +50% 33% +10% - +20% 13% PROCESS INDUSTRIES +0% - +10% TRANSPORTATION Railway Aeronautics Electric Vehicles €1,211m +13%* 21% ENERGIES 24% Solar power ELECTRONICS Wind power SiC sem
Slide 12: Strong growth in profitability
Strong growth in profitability (€m) 2022 2023 EBITDA before non-recurring items 186.4 202.7 +9% (+14% excluding currency effects) Recurring EBITDA margin 16.7% 16.7% Commissioning of certain investments scheduled Depreciation and amortization (64.8) (65.4) in the coming half-years Operating income b
Slide 13: Pricing power making it possible to pass on inflation
Pricing power making it possible to pass on inflation In % points 2022 operating margin before non-recurring items 10.9% Volume/mix effect +2.1 Price effect +4.4 High-tech customized products with limited cost versus total cost Raw material/energy inflation -3.5 +0.3 pts Productivity gains +1.1 Oper
Slide 14: Net income up by a sharp 16%
Net income up by a sharp 16% (€m) 2022 2023 Operating income before non-recurring items 121.6 137.3 Non-recurring income and expenses (11.4) (5.9) Increase in interest rates Net financial expense (12.9) (19.3) Interest on pensions & lease liabilities : €5m Income tax (23.0) (26.2) Effective tax rate
Slide 15: Significant increase in operating cash flow, to finance the capital expenditure plan
Significant increase in operating cash flow, to finance the capital expenditure plan (€m) 2022 2023 Operating cash flow before change in WCR 180.8 201.0 WCR ratio of 19.1% (vs. 20.7% in 2022) Change in WCR (63.2) 3.2 driven by prepayments on contracts o/w change in inventories (69.7) (24.5) Increase
Slide 16: Key capital expenditure in 2023
Key capital expenditure in 2023 54% 21% Recurring capital expenditure €176m Investments related to the 2027 growth plan +€11m in intangible assets Other growth 16% projects Safety and 9% Environment €95m 6.6% of sales 16 Mersen - May 2024
Slide 17: A robust leverage ratio, reinforced by the capital increase
A robust leverage ratio, reinforced by the capital increase Net debt (€m) LEVERAGE: 1.09x (1.36x in 2022) Does not include lease liabilities €54m (vs. €55m at Dec. 31, 2022) and pension obligations €40m (vs. €39m at Dec. 31, 2022) Operating cash flow Capital expenditure Intangible Capital Interest O
Slide 18: Major progress in terms of corporate social responsibility
Major progress in terms of corporate social responsibility MAIN ACHIEVEMENTS IN 2023 Being a responsible partner audits carried out of suppliers with a CSR – Self-assessment of strategic suppliers 56% score <25 – Audits based on CSR ratings Limiting our environmental impact GHG emissions intensity v
Slide 19: Mersen 2027 roadmap well underway
MERSEN 2027 ROADMAP WELL UNDERWAY 19 Mersen - May 2024
Slide 20: An investment plan focused on growth markets
An investment plan focused on growth markets 2023 2024 2025 SIC SEMICONDUCTORS ISOSTATIQUE GRAPHITE Capacity increased from 12,000t to 16,000t (USA) INSULATION FELT Capacity more than doubled (USA, UK) FINISHING PLANTS Significant expansion of 4 plants (France, USA) EV EV PLATFORMS Expansion of 3 de
Slide 21: Power semiconductors: multiple, fast-growing applications
Power semiconductors: multiple, fast-growing applications MATERIALS EXPERTISE SiC wafer SiC power semiconductor 21 Mersen - May 2024
Slide 22: Why is Mersen indispensable in the SiC semiconductor value chain?
Why is Mersen indispensable in the SiC semiconductor value chain? MATERIALS PRODUCTION EXPERTISE CAPACITY • Unique capacity expansion plan for • Ultra-fine graphite grades adapted for +4000t in iso graphite essential for high- processes at 2,400°C and for complex temperature processes (graphite and
Slide 23: Mersen's expertise in the SiC semiconductor industry
Mersen's expertise in the SiC semiconductor industry PVT MONOCRYSTALLINE SIC POLYCRYSTALLINE SIC (P-SIC) SIC-COATED GRAPHITE OUR EXPERTISE FOR EPITAXY GRAPHITE AND INSULATING FELTS FOR SIC SUBLIMATION FURNACES EPITAXY AND ION IMPLANTATION OUR PRODUCTS end-users GRAPHITE FOR ION IMPLANTATION CUSTOMER
Slide 24: Our manufacturing facilities to serve the SiC market
Our manufacturing facilities to serve the SiC market ST MARYS, PA HOLYTOWN CHEONAN (South Korea) Isostatic graphite Insulation Purification, SiC coating Purification GREENVILLE, MI KUNSHAN (China) Purification GENNEVILLIERS (France) Purification, SiC coating, p-SiC MALONNO (Italy) BAY CITY, MI Purif
Slide 25: A promising technology alternative to the PVT for the SiC semiconductor market
A promising technology alternative to the PVT for the SiC semiconductor market A UNIQUE INVESTMENTS POTENTIAL p-SiC® HIGH-TECH PRODUCT IN GENNEVILLIERS, FRANCE MANUFACTURING CAPACITY (included in the 2027 Plan) High-quality, monocrystalline SiC layers of a few µ €75m (net) 2023-2025 400,000 wafers (
Slide 26: Significant contribution from SiC to the 2027 Plan
Significant contribution from SiC to the 2027 Plan 2027 plan (announced in March 2023) ~€1,700m Sales €1,211m €1,115m >250 90 SiC semiconductor 50 sales (in €m) 2022 2023 2027 26 Mersen - May 2024
Slide 27: Mersen: key expertise in electric vehicles
Mersen: key expertise in electric vehicles ELECTRICAL EXPERTISE Electric vehicles 2 million EV fuses to be delivered in 2024 Busbars for EV dedicated fuse batteries range (400-800V) Around 30 different customers in all geographies Top 5 for fuse quotes: > €30m over several years Ford F-150 Hyundai M
Slide 28: ACC, a major contract with a battery manufacturer
ACC, a major contract with a battery manufacturer Developments in the contract with new functionalities and larger volumes Potential sales over 7 years ~€250m-€300m Deliveries Douvrain plant (France) from 2024 Termoli plant (Italy) from 2026 Investments for a dedicated plant in TARGETED MODELS St Bo
Slide 29: Our facilities for the EV market
Our facilities for the EV market Saint-Bonnet-de-Mure, Angers, France France BUSBAR R&D CENTER EV R&D CENTER BUSBAR PRODUCTION ACC Shanghai, China Juarez, Mexico FUSES R&D CENTER EV FUSE PRODUCTION EV FUSE PRODUCTION 29 Mersen - May 2024
Slide 30: Strong EV growth expected after 2027
Strong EV growth expected after 2027 2027 plan (announced in March 2023) ~€1,700m Sales €1,211m€ €1,115m 100 -120 24 EV sales 20 (in €m) 2022 2023 2027 30 Mersen - May 2024
Slide 31: Energy storage and conversion: a key challenge in renewable energies
Energy storage and conversion: a key challenge in renewable energies OUR PRODUCTS CHALLENGES ▪ Key customers selected in China ▪ Monitoring of ongoing projects in Solar power India (2 players), the US and Europe €155m in 2023 ▪ Support for installed wind farms Wind power >€200m in 2027 ▪ Significant
Slide 32: 2024 guidance
2024 guidance ORGANIC SALES OPERATING MARGIN BEFORE CAPITAL EXPENDITURE GROWTH NON-RECURRING ITEMS Between Around 5 % Around 11 % of sales €200m and €240m – Strong growth in the SiC – Positive volume effect, – Includes €110m-150m of semiconductors market negative mix effect capital expenditure as pa
Slide 33: 2027 targets confirmed
2027 targets confirmed OPERATING MARGIN BEFORE NON-RECURRING ITEMS 12 % +- 50 bps of sales SALES CURRENT EBITDA MARGIN 19 % +- 50 bps ~ €1,700m of sales ROCE 13 % +-50 bps of sales 33 Mersen - May 2024
Slide 34: Other opportunities after 2027
Other opportunities after 2027 Alternative Electric and Green energies digital transportation – New nuclear projects – Strong future demand for – Strong growth in electric fuses with the development vehicles expected around – Solar projects in India, the of direct current 2030 US, Europe and more –
Slide 35: Appendices
APPENDICES 35 Mersen - May 2024
Slide 36: Competitors
Advanced Materials: High value-added customized solutions relying on a unique materials expertise Anticorrosion Equipment Graphite Specialties Power Transfer Technologies N° 1-2 Worldwide N° 1 Worldwide N° 1-2 Worldwide Laser galvo scanning mirrors in Sintered SiC Wafers carrier in ultra pure graphi
Slide 37: Electrical Power: A unique portfolio serving two key applications
Electrical Power: A unique portfolio serving two key applications Electrical Protection N° 2 Worldwide in industrial fuses Coverage of all standards worldwide: UL, IEC, DIN, etc. Competitors: Eaton(US), Littelfuse (US) Fuses and fuse holders Surge protection devices Power Conversion N° 2 Worldwide (
Slide 38: High-tech manufacturing processes (1)
High-tech manufacturing processes (1) Graphite grades adapted to SiC manufacturing processes Raw materials Blending Isostatic Baking Graphitization manufacturing sites Upstream graphite (natural graphite, coke, pitch, compression ≃1,000°C ≃2,800°C recycled graphite) > 150 MPa finishing plants Graphi
Slide 39: High-tech manufacturing processes (2)
High-tech manufacturing processes (2) Insulation felts adapted to SiC manufacturing processes Raw materials Mix Molding Carbonization/ (rayon) (rayon + resin) baking Insulation felt Coating Purification Machining Graphitization (resin, pyro and SiC) ≃2,300°C (up to 2,300°C) 39 Mersen - May 2024