Mersen Sa · EURONEXT:MRN
Mersen Sa — ODDO BHF Forum January 2022
40 slides from Mersen Sa's conference presentation, January 2022
Slide 1: Mersen - ODDO BHF Forum January 2022
MeRS Expertise, our source of energy 2 ih | A ODDO BHF Forum a FROM 6™TO 117 JANUARY 2022 <
Slide 2: A global player at the heart of technologies
A global player at the heart of technologies who drives the industry forward and shapes a more sustainable society Key figures Commitments for sustainability Sustainable Waste Safety Human capital Diversity development recycling at work richness € 847m 2020 sales € 123m 2020 EBITDA 14.5% of sales 56
Slide 3: What makes Mersen unique?
What makes Mersen unique? Competitive Positioned on Excellence to Expertise differentiation attractive markets drive cash-flow Solid balance sheet High barriers Sustainable and cash generation of entry (graphite development Advanced formulation, electrical Materials markets (Renewable High gross mar
Slide 4: Advanced Materials: customized solutions and 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° 1-2 Worldwide N° 1-2 Worldwide Engineering systems Columns, reactors and Laser galvo scanning Wafers carrier
Slide 5: 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 6: A global footprint to maximize customer intimacy
A global footprint to maximize customer intimacy 24 sites 34% of sales 14 sites 33% of sales 13 sites 30% of sales Present in all large industrial countries with dedicated plant per business unit 5 sites 3% of sales Multi-activities plants in other countries (20% of total sales) Situation as of Dece
Slide 7: Prestigious and exacting customers
Prestigious and exacting customers PROCESS INDUSTRIES CHEMICALS TRANSPORTATION ELECTRONICS ENERGY > 65% customized products Replacement market 65% of sales Largest client ~3% of sales Longstanding ties 7 Oddo BHF Forum – January 2022
Slide 8: A longstanding sustainability strategy
A longstanding sustainability strategy 2010 2018 2021 2022 Set-up of a Sustainability Materiality matrix sustainability report New non financial Update of Sustainability roadmap and mid-term objectives on: Sustainability targets on: - Climate change materiality matrix - Ecological transition - Diver
Slide 9: A recognized commitment and improvement for all stakeholders
A recognized commitment and improvement for all stakeholders from BBB in October 2019 2020: first year to disclose on Climate Change to A in 2021 and Water Security 2021: C rating on Climate Change from Bronze in Feb. 2020 to Silver in Aug. 2020 Signatory since 2009 And Gold in July 2021 Advanced sc
Slide 10: 2021 guidance revised upwards
2021 guidance revised upwards Original guidance Organic sales growth of between 2% and 6% Revision 1 Organic sales growth of between 6% and 8% 1st guidance revised in early July based on trends Revision 2 Organic sales growth at the upper end of the guidance range observed in H1 Original guidance: O
Slide 11: Our growth markets
01 Our growth markets
Slide 12: Strong First-Half performance, trends confirmed over 9 months
Strong First-Half performance, trends confirmed over 9 months 2021 2021 9 months Original forecasts New forecasts Solar power Energy Wind power Conventional energy Manufacture of SiC semi-conductors Electronics Manufacture of Si semi-conductors Power electronics Rail Transportation Aeronautics Elect
Slide 13: Sustainable development markets are propelling growth
Sustainable development markets are propelling growth Sales linked to sustainable development markets +10.5%* vs 9m 2020 Transportation Energies Solar power Rail Wind power Electric vehicles 13% 21% 11% Chemicals €684m +8% 23% Electronics Manufacture of SiC semi-conductors Processes 32% Manufacture
Slide 14: Semiconductors: A growing share of Mersen's business
Semiconductors: A growing share of Mersen’s business INCREASING SALES CONTRIBUTION DRIVEN BY TARGETED CAPEX Sales in €m (2017-2021) ~€85m 90 10% +18-20% 80 9% 8% 70 7% 60 €45 6% 50 5% 40 4% million 30 3% 20 2% 10 1% 0 0% 2017 2018 2019 2020 2021 est Si SiC % total sales Europe North America Asia 14
Slide 15: The semiconductor market will see significant growth through 2030
The semiconductor market will see significant growth through 2030 SEMICONDUCTOR MARKET ($BN) SIC COMPONENT MARKET ($M) CAGR 2021-2030 CAGR 2021-2030 +6% +23% 6000 1000 900 5000 Other 800 700 4000 Industrials 600 3000 Renewables 500 400 2000 300 200 1000 EV 100 0 0 2019 2020 2021 2022 2023 2024 2025
Slide 16: Strategic partnership with Soitec
Strategic partnership with Soitec VERY LOW ELECTRIC RESISTIVITY POLYSIC SUBSTRATES Strategic partnership to develop a new range of PolySiC WILL ENABLE HIGHER ENERGY substrates for the EV market EFFICIENCY, FOSTERING THE DEVELOPMENT Soitec and Mersen teams OF MORE ENERGY-EFFICIENT leverage CEA-Leti S
Slide 17: Traditional SiC vs SmartSiC
Traditional SiC vs SmartSiCTM Mersen in the process Mersen now in the device TRADITIONAL PVT FINAL SIC SOITEC SMARTSICTM PROCESS (SIC monocrystalline) POWER DEVICE ON POLY-SIC PRODUCT COST High Low (CVD + SmartCut) Limited High DOPING by technology to reduce resistivity 17 Oddo BHF Forum – January 2
Slide 18: Mersen's medium-term potential in semiconductors
Mersen’s medium-term potential in semiconductors Sales in €m 300 €230m-280m 250 ~25-30% SmartSIC Components EBITDA margin 200 (potential) €140m-170m Capex €8m-12m/ 150 year €85m SiC PVT (excl. SmartSIC) 100 €60m Components 50 Si SmartSIC Capex Components under review 0 2018 2021 est 2025 est 2030 po
Slide 19: EV: major steps forward
EV: major steps forward RELATIONS PARTNER OF THE 2021 WITH AUTOMOTIVE INDUSTRY MID-TERM ANNUAL ▪ Traditional car ▪ Contract with REVENUE manufacturers ▪ 9 months sales Marquardt, production ▪ New players €12m to start-up in 2022 €40-70M ▪ Tier-one suppliers for manufacturers ▪ Strong growth ▪ Strate
Slide 20: Solar power: significant potential by focusing on premium quality
Solar power: significant potential for Mersen by focusing on premium quality TRUSTED A GROWING RELATIONS WITH CONTINUED CUSTOMERS TECHNICAL 2021 MARKET across the whole value INNOVATIONS MID-TERM chain ANNUAL ▪ Solar cell ▪ Increasing the size REVENUE ▪ Expected ▪ 9m sales: manufacturers: of cells f
Slide 21: Continued optimization of the manufacturing base
Continued optimization of the manufacturing base to prepare for the future Semiconductor Electric vehicle Columbia (USA) market market ▪ Project for a new extended plant in ▪ Strengthened dedicated team ▪ Start-up of the GRI insulation line South Korea (Americarb) ▪ Large-scale production of EV fuse
Slide 22: First-half 2021 results
02 First-half 2021 results
Slide 23: Return to growth in H1 2021, with an acceleration in Q2
Return to growth in H1 2021, with an acceleration in the 2nd quarter €451m +7% North +6% Q1 Q2 America vs. H1 2020 +0% +15% Europe +6% vs. H1 2020 Like-for-like growth (as a %) Asia-Pacific +7% vs. H1 2020 South America/ +33% Africa vs. H1 2020 23 Oddo BHF Forum – January 2022
Slide 24: Significant increase in profitability
Significant increase in profitability Operating margin before non-recurring items (% of sales) Operating income before non-recurring items (€m) 9.6% H1 2020 operating margin before 8.1% non-recurring items 8.1% Volume/mix effects +2.1 H1 2021 EBITDA 43 Structural savings (adaptation plan) +1.1 €71m
Slide 25: Structural and temporary impacts
Structural and temporary impacts Structural savings (Adaptation plan) Temporary Impacts (Covid crisis) millions d’€ 2020 H1 FY 2022 Total H1 2021 vs H1 2020 2021 2021 Restructuring cost (P&L) 17 2 5 22 - Reduction in travel expenses, Trade shows, … - Non-renewal of Covid-related financial aids Expec
Slide 26: Both of the Group's segments contributed to profitability growth
Both of the Group’s segments contributed to profitability growth Operating margin before non-recurring items (% of sales) Operating income before non-recurring items (€m) Advanced Materials Electrical Power 13.6% 12.8% AM segment Slight positive volume effect 9.3% Positive effect of adaptation
Slide 27: Net income up by more than 50%
Net income up by more than 50% In €m H1 2020 H1 2021 Operating income before non-recurring 34.7 43.3 items Non-recurring expenses Mainly Columbia (USA), Non-recurring income and expenses (4.9) (1.6) restructuring costs partly offset by favorable dispute settlements Net financial expense (6.1) (5.6)
Slide 28: Higher operating cash flow generation
Higher operating cash flow generation Cash flow conversion* 65% 46 35 Operating cash Funding for capex flow BEFORE capex (€m) €28m Capex in €m 28 WCR 20% of sales 24 (28% in H1 2020) S1 2020 S1 2021 * Operating cash flow before capex/EBITDA 28 Oddo BHF Forum – January 2022
Slide 29: Stable net debt, enabling the Group to finance its future growth
Stable net debt, enabling the Group to finance its future growth Not including Lease liabilities: €46m 180 184 Provisions for pension obligations: €60m 46 (6) (4) (3) (9) Included (28) Net debt/EBITDA Adaptation plan 1.4 Net debt/Equity 31% Dec. 2020 Operating cash Industrial capex IT Acquisitions I
Slide 30: A solid balance sheet with average debt maturity raised to 6 years
A solid balance sheet with average debt maturity raised to 6 years* after the new USPP LARGE REFINANCING IN 2021 INCLUDING A NEW USPP (IN €M) AT NOVEMBER 30, 2021 MATURITY SCHEDULE OF CONFIRMED FACILITIES DRAWN DOWN 130 AT DECEMBER 31, 2020 (IN €M) 130 New USPP and NEU MTN refinancing 60 60 50 30 41
Slide 31: Road-map, Governance and KPI on sustainability
Road-map Governance and KPI on sustainability
Slide 32: A strong commitment to social responsibility
A strong commitment to social responsibility Target 2021 (defined in 2018) Estimated for 2021 ECOLOGICAL TRANSITION 55% % of sales to sustainable dvpt CLIMATE CHANGE - 20% by 2025 compared with 2018 N/M. Target set up early 2021 PLANET Intensity of GHG emissions (scopes 1 & 2) WASTE +15-points Indus
Slide 33: CSR Governance
CSR Governance Magali Joessel, permanent BOARD OF DIRECTORS CSR Strategy review representative of Bpi, designated responsible for AUDIT & ACCOUNT COMMITTEE monitoring CSR issues OF THE BOARD CSR Risk analysis review EXECUTIVE COMMITTEE Promotes the Group's CSR strategy and implements it. Compliance
Slide 34: Values & Ethics shared by all employees
Values & Ethics shared by all employees Governance Chief Compliance Officer reporting to the Audit & Account committee Quarterly Ethics & Compliance committee chaired by the CEO Whistleblowing system (global and local – France, China, USA) Training programs Ethics: for all employees An
Slide 35: High quality board of directors
High quality board of directors Executive Listed Mersen Industrial Innovation Strategy International Finance CSR Management Company businesses expertise M&A Isabelle Azemard Pierre Creusy (employee representative) 62% independent Michel Crochon Carolle Foissaud 50% women Magali Joessel Olivier Legra
Slide 36: Diversified shareholding base
Diversified shareholding base BpiFrance + CdC Individuals (incl. employees) 13% 16% European investors 21% as of June 2021 27% French investors 23% North American investors 36 Oddo BHF Forum – January 2022
Slide 37: Key KPI on Environment (2020 results)
Key KPI on Environment (2020 results*) 40% 289k 60% Recycled wastes Ratio of certified Tons CO2 equivalent Target 61% in 2020 (53% in 2019) plants in 2020 in 2020 in 2021 (39% in 2019) (370k in 2019) 16k Tons of wastes in 2020 (19k in 2019) ISO 14001 Certification Greenhouse Gas Emissions Wastes +1%
Slide 38: Greenhouse gas emissions, the carbon footprint of the Group
Greenhouse gas emissions, The carbon footprint of the Group 289,000 tCO2e emitted in 2020* 52,581 Top 5 5 Sources of tons emissions 93,915 142,687 tons Scope 11 SCOPE tons Direct Scope 22 SCOPE Scope 33 SCOPE Indirect Indirect 4 Employees 2 Travels & Fuel Purchase of Commute Combustion products Phys
Slide 39: Key KPI on Human Capital (2020 results)
Key KPI on Human Capital (2020 results) 91% 92% Site managers with 24.2% of employees proud to Women engineers and be part of the Group local nationality professionals Target 25 to 30% by 2022 Sense of belonging Cultural Diversity Gender Diversity +3 pts vs 2018 +3 pts vs 2019 +1.2 pts vs 2019 87% 1
Slide 40: Safety: Mersen among the best in class
Safety: Mersen among the best in class Benchmark with the best practices Strengthen our safety culture Our training and From a managed safety to prevention effort place us a behavioral safety in the first ranks 40 Oddo BHF Forum – January 2022