Imerys Sa · EURONEXT:NK
Imerys Sa — FY2020 Earnings Presentation
44 slides from Imerys Sa's earnings presentation, Feb 18, 2021
Slide 1: 2020 Annual Results
2020 Annual Results Paris - February 18, 2021 Alessandro Dazza, Chief Executive Officer Sebastien Rouge, Chief Financial Officer 1 February 18, 2021 | Imerys 2020 Annual Results
Slide 2: Disclaimer
Disclaimer More comprehensive information about Imerys may be obtained on its website (www.imerys.com), under Regulated Information, including its Universal Registration Document filed under No. D.20-0165 in March 24, 2020 with Autorité des Marchés Financiers. Imerys draws the attention of investors
Slide 3: Imerys: Highlights, Financial Results, Outlook
Imerys Highlights Financial Results Outlook 3 February 18, 2021 | Imerys 2020 Annual Results
Slide 4: Highlights
Imerys Highlights Financial Results Outlook 4 February 18, 2021 | Imerys 2020 Annual Results
Slide 5: 2020 FY results: resilience to the crisis
2020 FY results: resilience to the crisis ● Recovery in most end markets gaining pace towards the end of the year ● Q4 organic growth of +1.7% vs last year (-11.4% in Q3) ● Significant contribution of fixed costs and overheads savings: €131 million full year Highlights ● Capacity expansions and targ
Slide 6: Revenue recovery continues in Q4
Revenue recovery continues in Q4 Revenue (€m) and like-for-like(1) change vs. 2019 (%) FY 20: €3,799m (-10.7% vs. 2019) End markets recovery in H2 Clear benefits +1.7% of customer-centric -7.5% organization -11.4% -24.1% Outperforming underlying markets Q1-20 Q2-20 Q3-20 Q4-20 (1) See glossary in ap
Slide 7: Improvement in all underlying markets
Improvement in all underlying markets Volumes evolution (vs prior year) Revenue by end market Covid-19 impact 7% Construction Moderate Q1 20 Q2 20 Q3 20 Q4 20 10% Consumer Limited +0.7% 32% Industry High 12% Iron & Steel High -8.5% -11.4% Paper High -11.8% Full Year 13% Automotive High -24.6% 23% Ot
Slide 8: Focus on innovation: new minerals solutions launched in 2020
Focus on innovation: 70 new minerals solutions launched in 2020 Automotive Construction Industrials Consumer ● Increased performance of ● Additives for large ceramic ● Ultra-fine alumina for high- ● Natural mineral solutions lithium-ion batteries for tiles | Lightweight slabs and performance abrasiv
Slide 9: Current EBITDA rebound in Q3 and Q4
Current EBITDA rebound in Q3 and Q4 Current EBITDA(1) (€m) and margin (%) FY 20: €631m (16.6% margin) Volumes recovery 18.1% in H2 18.0% 16.0% 14.3% Effective cost savings measures Price-mix Q1-20 Q2-20 Q3-20 Q4-20 (1) See glossary in appendix for definition of Alternative Performance Measures 9 Feb
Slide 10: Positive price-mix maintained in 2020
Positive price - mix maintained in 2020 Contribution of price-mix and evolution of variable costs (€m, vs prior year) Price-mix impact on revenue Evolution 2018 - 2020 +1.0% +0.5% +0.3% +1.0% 146 34 9 9 8 8 112 100 22 78 34 54 -2 -4 -6 -8 -20 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2018 2019 2020 Price-mix
Slide 11: €131 million fixed costs and overheads savings in 2020
€131 million fixed costs and overheads savings in 2020 Fixed costs and overheads (€m) Variable costs (€m) €71 million additional 1,710 43 1,622 savings on variable costs thanks -45 to Cumulative -86 savings of ● Purchasing centralization €73 m since 2019 (Connect & Shape transformation plan) -131 ●
Slide 12: Significant achievements in ESG/CSR (selected examples)
Significant achievements in ESG/CSR (selected examples) Safety Diversity Climate change Water Product Total recordable and Inclusion Reduction management sustainability injury rate (1) Proportion of women in CO2 emissions / revenue Volume of water consumed Number of products life within the Group’s
Slide 13: Update on the potential resolution of historic US talc-related liabilities
Update on the potential resolution of historic US talc-related liabilities ● Closing on February 17 of the sale of the North American talc business and assets to Magris Resources for USD 223 million ● Draft Plan of Reorganization for the North American talc subsidiaries currently being voted on by t
Slide 14: Financial Results
Imerys Highlights Financial Results Outlook 14 February 18, 2021 | Imerys 2020 Annual Results
Slide 15: Revenue
Revenue (€m) -0.4% +0.4% -2.1% -11.4% +0.7% -12.8% 4,354 4,338 18 Reported -17 -91 31 3,799 -496 Organic change: -10.7% FY 2019 North FY 2019 revenue Perimeter Currencies Volumes Price-mix FY 2020 revenue American after deconsolida revenue (reported) talc -tion of NA talc subsidiaries subsidiaries Q
Slide 16: Performance Minerals: activity rebound in Q4
Performance Minerals: activity rebound in Q4 (€m) Q4 2019 Q4 LFL change vs. Q4 2019 FY 2019 FY LFL change vs. 2019 restated from Kaolin(1) 2020 restated restated from Kaolin(1) 2020 restated Revenue: Americas 241 205 -6.3% 1,007 886 -7.1% Revenue: EMEA 260 264 -0.2% 1,110 1,009 -10.1% Revenue: APAC
Slide 17: High Temperature Materials & Solutions: I&S and automotive improving in Q4
High Temperature Materials & Solutions: I&S and automotive improving in Q4 (€m) LFL change LFL change Q4 2019 Q4 2020 FY 2019 FY 2020 vs. Q4 2019 vs. 2019 Revenue: High Temperature 181 171 -0.2% 795 632 -15.1% Solutions Revenue: Refractory, 270 264 +0.5% 1,222 1,050 -13.6% Abrasives, Construction El
Slide 18: Current EBITDA margin at 18.0% in Q4, above 2019 level
Current EBITDA margin at 18.0% in Q4, above 2019 level (€m) -17.4% 765 763 14 Reported -2 -18 91 631 33 13 -20 -244 Covid-19 Positive price-mix action plan and decreasing and Connect variable costs & Shape program 17.6% 17.6% Current EBITDA margin 16.6% 2019 North Am. 2019 current Perimeter Currenci
Slide 19: Net income
Net income (€m) FY 2019 FY 2020 Change ● Financial expenses in line Current EBITDA 765 631 -17.4% with previous year (excluding the Current operating income 439 299 -32.0% reimbursement of the yen denominated private Current financial expenses (44) (2) (61) - placement in 2019) Current income tax (1
Slide 20: Strong cash flow generation
Strong cash flow generation 765 Net current free operating Current 631 Strong cash generation cash flow (€m) EBITDA despite significant drop in (€m) current EBITDA +7% FY 2019 FY 2020 373 Change 75 Reduction of operating 348 in WCR 52 working capital thanks to (€m) dedicated actions FY 2019 FY 2020
Slide 21: Reduction in net financial debt
Reduction in net financial debt Change in net financial debt (€m, post IFRS 16) Net current Debt Other Acquisitions Net Debt free operating servicing income net of Net Debt Covenant Dec. 31, 2019 cash flow cost and expenses disposals Dividends Other Dec. 31, 2020 2.2 x Net financial debt to current
Slide 22: Strong liquidity position
Strong liquidity position Bond maturity profile (€m) Bilateral credit lines maturity profile (€m) Average maturity Bilateral credit lines Average maturity Bonds €1,700m 4.8 years €1,110m 2.4 years Average maturity Average maturity 600 500 380 360 300 300 220 50 100 2021 2022 2023 2024 2025 2021 2022
Slide 23: Dividend proposal: €1.15 per share, in cash
Dividend proposal: €1.15 per share, in cash Dividend and net earnings per share (€) 5 4.50 Proposal submitted to the annual general 4,5 3.50 57% meeting of shareholders 4 on May 10, 2021 3,5 49% 3 2,5 2.08 2.03 2 1.72 Cash dividend, €97 1,5 48% 1.15 million cash out 1 0,5 0 57% dividend payout 2018
Slide 24: Outlook
Imerys Highlights Financial Results Outlook 24 February 18, 2021 | Imerys 2020 Annual Results
Slide 25: Broadly on track with mid-term targets
Broadly on track with mid-term targets Key targets 2022 (as presented in June 2019) Ambition to gradual ramp up of organic growth to reach Customer-centric organization in place, underlying markets level by 2022 further benefits in 2021 Improved growth and €100 million expected cost savings in full
Slide 26: Investing for future sustainable growth
Investing for future sustainable growth EMEA Acquisition of Cornerstone (USA) in 48% of revenue April, specialty perlite for agriculture Acquisition of a 60% majority (USD 12 m revenue) stake in the Haznedar group in December (Turkey), high- quality refractory monolithics Americas and bricks manufac
Slide 27: Imerys with strong fundamentals for the future
Imerys with strong fundamentals for the future Strong market Profitability Stable shareholding Industry-leading, positions in attractive improvement structure, innovative minerals end-markets, to continue thanks to solid balance sheet, solutions to contribute customer-centric resilient business stro
Slide 28: Appendix
Imerys APPENDIX 28 February 18, 2021 | Imerys 2020 Annual Results
Slide 29: Imerys, a global player...
Imerys, a global player... EMEA 48% of revenue 1 #1 in 75% Over 15,000 of our businesses customers Sales €3.8bn In 142 countries revenue Americas 29% of revenue APAC 23% of revenue 16,400 €631m employees Current EBITDA Based on 2020 consolidated figures. 29 February 18, 2021 | Imerys 2020 Annual Res
Slide 30: ...which offers value-added solutions for diverse markets
...which offers value-added solutions for diverse markets Imerys delivers value-added solutions that are formulated to meet the technical specifications of each customer ● Valorization of mineral resources (clay, bentonite, diatomite, feldspar, kaolin, mica, etc.) ● Formulations (ceramic bodies, con
Slide 31: ...that contribute essential properties and performance to customers' products
…that contribute essential properties and perf. to its customers’ products Whiteness and toughness of Lifespan and fast charging Gloss and opacity Thermal and mechanical sanitaryware, floor and wall tiles of electric vehicle li-ion batteries for paint resistance of abrasives World leader in ceramic
Slide 32: Performance Minerals: restated revenue split by business areas
Performance Minerals: restated revenue split by business areas (€m) Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 ● Quarterly 2019 revenue has been restated to reflect the decision in the first quarter 2020 to recognize Americas 261 253 253 241 1,007 the Kaolin business revenue by product destination, instea
Slide 33: Revenue per business segment
Revenue per business segment (€m) Reported change Q4 2019 FY 2019 Reported change Q4 2019 Q4 vs. FY 2019 restated from restated from FY 2020 vs. FY 2019 reported 2020 Q4 2019 reported Kaolin Kaolin restated restated Revenue: Americas 257 241 205 -15.1% 1,085 1,007 886 -12.1% Revenue: EMEA 230 260 26
Slide 34: Current operating income (COI)
Current operating income (COI) (€m) 439 437 9 -32.0% -2 -7 Reported 85 299 20 -35 34 -244 10.1% 10.1% COI margin 7.9% 2019 COI NA talc 2019 COI after Perimeter Currencies Volumes Price-mix Variable Fixed Change 2020 COI subsidiaries deconsolidation costs costs and in inventories of NA talc overheads
Slide 35: Strong cash flow generation
Strong cash flow generation (€m) FY 2019 FY 2020 Change (€m) Change (%) Current EBITDA 765 631 -133 -17.4% Change in operating Working Capital Requirement 52 75 23 n.a. Notional tax on current operating income (126) (83) 43 - Other 8 36 27 - Net current operating cash flow (before capex) 699 659 -39
Slide 36: Our ambition is to unlock the sustainable potential of minerals
Our ambition is simple: we want to unlock the sustainable potential of minerals As the world’s leading supplier of mineral-based specialty solutions, the technical expertise and innovative mindset of our people enable us to extract and transform minerals responsibly and in a sustainable way over the
Slide 37: Our commitments: our SustainAgility journey
Our commitments: our SustainAgility journey We recognise the need We are scaling up our efforts to deliver new solutions to act rapidly to provide and opportunities to extend the life cycle of our solutions to the minerals, recognizing the need to produce better for environmental and longer In our b
Slide 38: Fostering positive changes: our SustainAgility pillars
Fostering positive changes: our 6 SustainAgility pillars SustainAgility is an integral part of how we do business. Its pillars bring together a number of interconnected themes that are the foundation for concrete initiatives with measurable results Priority themes have been identified through the Gr
Slide 39: Sustainability performance recognized by leading CSR rating agencies
Sustainability performance recognized by leading CSR rating agencies Indices/ Assessment (-D to A) (0 to 100) (CCC to AAA) (D- to A+) (0 to 100) (0 to 100) (100 - 0) 0 = low risk Most recent rating 31.4 2019/2020 B AA C 60 84 Relative to Above industry 99th percentile - 50th percentile 7th out of 45
Slide 40: Looking ahead: CSR mid term objectives (1/3)
Looking ahead: CSR mid term objectives (1/3) SAFETY & HEALTH HUMAN CAPITAL Occupational Safety: % sites at Level 3 Maturity Diversity and Inclusion: % women in senior ● Improve Group Safety Culture Maturity to Level 3 across all management Business Areas by the end of 2022 ● Increase the number of w
Slide 41: Looking ahead: CSR mid term objectives (2/3)
Looking ahead: CSR mid term objectives (2/3) ENVIRONMENTAL STEWARDSHIP CLIMATE CHANGE Environmental Management: % audits conducted Climate Change Strategy: % reduction of CO2 emissions against environmental maturity matrix by revenue ● Reduce environmental impacts through the deployment ● Reduce Gro
Slide 42: Looking ahead: CSR mid term objectives (3/3)
Looking ahead: CSR mid term objectives (3/3) BUSINESS CONDUCT PRODUCT MANAGEMENT Fair Operating Practices & Responsible Purchasing: Product Sustainability: % portfolio evaluated % suppliers evaluated ● Assess Imerys Products in Application Combinations (PAC) ● Improve the external CSR rating of the
Slide 43: Glossary
Glossary Alternative Performance Definitions and reconciliation to IFRS indicators Indicators Growth at constant scope and • Calculated by stripping out the impact of currency fluctuations as well as acquisitions and disposals (scope effect). exchange rates (also called life- • Restatement of the cu
Slide 44: Thank you for your attention
Thank you for your attention Visit www.imerys.com for more information. Or connect with us: Financial Calendar @imerys April 29, 2021 1st quarter 2021 results May 10, 2021 General Meeting of Shareholders www.linkedin.com/company/imerys/ July 27, 2021 1st half 2021 results www.facebook.com/imerysgrou