IMERYS (EPA:NK) - Imerys delivers strong organic growth and current EBITDA in Q1 2021
Transparency directive : regulatory news
29/04/2021 17:45
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PRESS RELEASEPARIS, APRIL 29, 2021
Imerys delivers strong organic growth and current EBITDA in Q1 2021
* Strong organic growth driven by good commercial performance and continued
recovery in end markets: +6.3% vs. Q1 2020
* Revenue up 2.9% vs Q1 2020 at EUR1,058 million
* Current(1) EBITDA up 10,9%; current EBITDA margin at 17.3% (vs. 16.0% in Q1
2020), supported by positive price mix and strong operational execution
* Net income from current operations of EUR73.3 million, up 49% vs Q1 2020
Alessandro Dazza, Chief Executive O?cer, said:
"Imerys made a strong start to 2021 with positive organic growth momentum,
improved EBITDA and higher margins, well above pre-pandemic levels. We are
encouraged by these results which underscore our commitment to disciplined cost
management and commercial excellence. As the recovery gathers pace, albeit at
varying levels across sectors and geographies, we will strive to deliver
enhanced operating leverage and pro?tability improvements in 2021. Recent
capacity additions in fast-growing markets emphasize the Group's con?dence in
its ability to capture future growth opportunities. "
Change
Unaudited consolidated results (1) Q1 2020 Q1 2021 (%)
(EUR millions)
Revenue 1,028.5 1,058.5 +2.9%
Organic growth -7.5% +6.3% -
Current EBITDA 164.8 182.7 +10.9%
Current EBITDA margin 16.0% 17.3% +130 bps
Current operating income 82.6 116.3 +40.8%
Current operating margin 8.0% 11.0% +300 bps
Operating income 78.0 114.5 +46.8%
Net income from current operations, Group share 49.2 73.3 +48.9%
Net income, Group share 44.0 72.0 +63.6%
Net income from current operations per share (2) EUR0.62 EUR0.87 +38.8%
(1) The de?nition of alternative performance measures can be found in the
glossary at the end of the press release.
(2) Weighted average number of outstanding shares: 84,684,525 in Q1 2021
compared with 78,959,698 in Q1 2020.
Additional capacity expansion and portfolio management
As part of its development strategy, Imerys will invest EUR60 million in the
next two years in the expansion of its carbon black production capacity at its
plant in Willebroek, Belgium, in order to support the fast growing market of
lithium-ion batteries for electric vehicles. With a unique portfolio of natural
and synthetic graphite powders, conductive carbon blacks and tailor-made
dispersions, Imerys will continue to develop innovative materials for safer and
higher-performing batteries in close cooperation with the leading lithium-ion
battery producers in the world.
The Group has sold its 50% holding in Fiberlean Technologies Ltd to Werhahn, a
German diversi?ed, family-owned group. Fiberlean Technologies, based in the
United Kingdom, which employs 70 people, was established in 2016 to develop an
innovative composite material made from micro?brillated cellulose (MFC) and
minerals, used in the the manufacture of paper and packaging, as well as in a
variety of other engineered applications and industries. Imerys will maintain
the rights to the technology thanks to a license agreement, thereby continuing
to provide these solutions and minerals to its customer base. The transaction
also includes the disposal by Imerys of four MFC production facilities for
paper & board clients (two in France, one in India and one in the USA); Imerys
will remain the key mineral supplier to these customers.
Outlook
Imerys is expecting demand for its specialty mineral solutions to continue at a
good pace throughout the year driven by the prospect of further economic
recovery worldwide. Current EBITDA and current EBITDA margin are targeted to
improve in 2021 versus 2020. Recent capacity additions in rapidly expanding
markets will enhance the Group's ability to capture future growth
opportunities.
Imerys North American talc entities' Plan of Reorganization reaches the voting
approval threshold
On April 7, 2021, the Plan of Reorganization ("the Plan") proposed by the North
American talc entities (Imerys Talc America, Imerys Talc Vermont and Imerys
Talc Canada) has received the majority support of 79.7% of the voting creditors
and claimants in the U.S talc related litigation that was necessary to meet the
75% approval threshold required under the relevant statutory provisions
applicable to their Plan. This is an important milestone towards the resolution
of historic liabilities related to talc in the United-States.
The next step in the Chapter 11 process of the relevant talc entities will be
the con?rmation hearing on the Plan by the relevant US. District Court of
Delaware, which is expected this summer, with potential ?nal approval of the
Plan by the relevant US Courts and closure of Chapter 11 process by the end of
2021.
COMMENTARY ON THE FIRST QUARTER RESULTS
Revenue Like-for-
Reported like
Unaudited quarterly data 2020 2021 Change change Volumes Price mix
(EUR millions)
First quarter 1,028.5 1,058.5 +2.9% +6.3% +5.8% +0.5%
Revenue for the ?rst quarter of 2021 was EUR1,058.5 million, up 6.3%
year-on-year at constant scope and exchange rates (of which +7.0% for the
Performance Minerals segment and +4.7% for the High Temperature Materials &
Solutions segment). Group sales volumes were up 5.8%, as the recovery across
underlying markets is gaining traction.
In this context, Imerys maintained a positive 0.5% price-mix versus the prior
year.
Revenue included a signi?cant negative currency effect of EUR52.1 million
(-5.1%), primarily as a result of the depreciation of the U.S. dollar against
the euro.
The scope effect was EUR20.5 million for the ?rst quarter, related mostly to
the positive contribution of recent bolt-on acquisitions (Haznedar group,
Cornerstone, Sunward Refractories and Hysil) and the divestiture of the kaolin
operations in Australia.
Current EBITDA
Unaudited quarterly data
(EUR millions) 2020 2021 Change
First quarter 164.8 182.7 +10.9%
Margin 16.0% 17.3% +130 bps
Current EBITDA reached EUR182.7 million for the ?rst quarter 2021, a 10.9%
increase vs. the ?rst quarter of 2020. Current EBITDA margin improved by 130
basis points to 17.3% versus the ?rst quarter of 2020.
It bene?tted from positive volume contribution (EUR27.7 million), positive
price mix (EUR1.7 million) and ongoing cost control. Variable costs declined by
EUR1.6 million, as in?ation was offset by savings related to purchasing
initiatives and the I-Cube industrial excellence program. Fixed costs and
overheads were down EUR1.6 million vs last year.
The currency effect was negative at EUR11.4 million.
Current operating income at EUR116.3 million showed a 40.8% increase against
Q1 2020.
Net income from current operations
Net income from current operations, Group share, totaled EUR73.3 million, up
48.9% vs. the ?rst quarter of 2020. Net ?nancial result is negative at
-EUR11.7 million, in line with the ?rst quarter of 2020. The income tax
expense of EUR28.2 million corresponds to an effective tax rate of 27.0%,
compared with 28.0% in the ?rst quarter of 2020. Net income from current
operations, Group share, per share, was up 38.8% to EUR0.87.
Net income
Net income, Group share, totaled EUR72.0 million in the ?rst quarter of 2021,
after -EUR1.3 million of other income and expenses, after tax.
COMMENTARY BY SEGMENT
Performance Minerals (56% of consolidated revenue)
Current LFL
Unaudited quarterly data change change
(EUR millions) Q1 2020 Q1 2021 vs. Q1 2020 vs. Q1 2020
Revenue Americas 251 231 -8.0% +0.8%
Revenue
Europe, Middle East
and Africa (EMEA) 273 283 +3.6% +4.8%
Revenue Asia-Paci?c (APAC) 111 130 +16.9% +25.9%
Eliminations (47) (48) - -
Total revenue 589 596 +1.3% +7.0%
Revenue generated by the Performance Minerals segment was up 7.0% like-for-like
in the ?rst quarter of 2021. On a reported basis, revenue was up 1.3% after a
negative currency effect of EUR34 million (-5.7%) and a positive scope effect
of EUR3 million (+0.5%).
Revenue in the Americas was up 0.8% at constant scope and exchange rates in the
?rst quarter of 2021. The overall recovery of paints, rubber, polymers and
ceramic products and the performance of ?ltration and life science markets
were hampered by shipping containers shortage and heavy winter storms affecting
several plants in February.
Revenue in Europe, Middle-East and Africa increased by 4.8% at constant scope
and exchange rates in the ?rst quarter of 2021. Plastics, rubber, paints &
coatings and ceramics & building products bene?ted from the recovery of the
construction and automotive markets in Europe, while demand for consumer goods
and paper was still low in connection with ongoing Covid-19 restrictions.
Revenue in Asia-Paci?c was up 25.9% at constant scope and exchange rates in
the ?rst quarter of 2021 thanks to the rapid recovery of end markets, buoyant
growth of Graphite & Carbon for mobile energy and the rebound of specialty
minerals for plastics, paints & coatings and ceramics, which are back to their
2019 level.
High Temperature Materials & Solutions (44% of consolidated revenue)
Unaudited quarterly data Current change LFL change
(EUR millions) 2020 2021 vs. Q1 2020 vs Q1 2020
Revenue High Temperature Solutions 164 187 +14.1% +7.1%
Revenue Refractory,
Abrasives & Construction 297 295 -0.6% +3.6%
Eliminations (11) (12) - -
Total revenue 449 470 +4.6% +4.7%
Revenue generated by the High Temperature Materials and Solutions segment was
up 4.7% in the ?rst quarter of 2021 at constant scope and exchange rates. On
a reported basis, revenue increased by 4.6% due to a negative currency effect
of EUR18 million (-3.9%) and positive scope effect of EUR18 million (+4.0%).
Revenue in High Temperature Solutions, which is serving iron & steel, thermal
and foundry markets increased by 7.1% at constant scope and exchange rates in
the ?rst quarter of 2021. The business bene?ted from strong underlying
markets recovery, particularly in India and China, and to a lesser extent in
Europe, where the demand was driven by thermal and foundry markets. The recent
acquisition in Turkey, Haznedar, had a good start to the year. Other bolt-on
acquisitions are also proceeding according to plan.
Revenue in the Refractory, Abrasives & Construction business area was up 3.6%
at constant scope and exchange rates in the ?rst quarter of 2021, driven by
an increase in volumes in all market segments, thanks to continuing solid
growth in building and infrastructure (specialty binders) and further recovery
in iron & steel and automotive. The performance was particularly strong in EMEA
and in China. In India, the Group completed the commissioning of a new plant in
Vizag and started production to serve the growing demand of the domestic
refractory market.
First quarter 2021 results webcast
The press release is available on the Group's website www.imerys.com. The Group
will hold a live webcast to discuss the ?rst quarter 2021 results at 9.30 AM
(CET) on April 30, 2021, which can be accessed on the Group's website
www.imerys.com.
Financial Calendar
May 10, 2021 General Meeting of Shareholders
July 27, 2021 1st half 2021 results
November 2, 2021 3rd quarter 2021 results
These dates are subject to change and may be updated on the Group's website
https://www.Imerys.com/?nance.
The world's leading supplier of mineral-based specialty solutions for industry
with EUR3.8 billion in revenue and 16,400 employees in 2020. Imerys delivers
high value-added, functional solutions to a great number of sectors, from
processing industries to consumer goods. The Group draws on its understanding
of applications, technological knowledge and expertise in material science to
deliver solutions by bene?ciating its mineral resources, synthetic minerals
and formulations. Imerys' solutions contribute essential properties to
customers' products and their performance, including heat resistance, hardness,
conductivity, opacity, durability, purity, lightness, ?ltration, absorption
and water repellency. Imerys is determined to develop responsibly, in
particular by fostering the emergence of environmentally-friendly products and
processes.
More comprehensive information about Imerys may be obtained from its website
(www.imerys.com) in the Regulated Information section, particularly in its
Registration Document ?led with the French ?nancial markets authority
(Autorité des marchés ?nanciers, AMF) on March 22, 2021 under number
D.21-0167 (also available from the AMF website, www.amf-france.org). Imerys
draws investors' attention to chapter 2 "Risk Factors and Internal Control" of
its Registration Document.
Disclaimer: This document contains projections and other forward-looking
statements. Investors should be aware that such projections and forward-looking
statements are subject to various risks and uncertainties (many of which are
di?cult to predict and generally beyond the control of Imerys) that could
cause actual results and developments to differ materially from those expressed
or implied.
Analyst/Investor Relations:
Vincent Gouley: +33 (0)1 49 55 64 69
?nance@imerys.com
Press contacts:
Claire Lauvernier: +33 (0)1 49 55 66 65
Hugues Schmitt (DGM Conseil): +33 (0)1 40 70 11 89
APPENDIX
Revenue breakdown
Like for
Revenue by business group Reported Group Exchange like
(EUR millions) Q1 2020 Q1 2021 change structure rates change
Performance Minerals 589 596 +1.3% +0.5% -5.7% +7.0%
High Temperature
Materials & Solutions 449 470 +4.6% +4.0% -3.9% +4.7%
Holding & Eliminations (9) (8) n.s. n.s. n.s. n.s.
Total 1,029 1,058 +2.9% +2.0% -5.1% +6.3%
Key income indicators
(EUR millions) Q1 2020 Q1 2021 Change
Revenue 1,028.5 1,058.5 +2.9%
Current EBITDA 164.8 182.7 +10.9%
Current operating income 82.6 116.3 +40.8%
Current ?nancial expense (13.0) (11.7) -
Current taxes (19.5) (28.2) -
Minority interests (0.9) (3.1) -
Net income from current operations, Group share 49.2 73.3 +48.9%
Other operating income and expenses, net (5.2) (1.3) -
Net income, Group share 44.0 72.0 +63.6%
GLOSSARY
Imerys uses "current" indicators to measure the recurrent performance of its
operations, excluding signi?cant items that, because of their nature and
their relatively infrequent occurrence, cannot be considered as inherent to the
recurring performance of the Group (see section 5.5 De?nitions and
reconciliation of alternative performance measures to IFRS indicators in the
2020 Universal Registration Document).
Alternative Performance Indicators
De?nitions and reconciliation to IFRS
indicators
Growth at constant scope and exchange rates (also called life-for-like change,
LFL growth organic or internal growth)
Calculated by stripping out the impact of currency ?uctuations as well as
acquisitions and disposals (scope effect).
Restatement of the currency effect consists of calculating aggregates for the
prior year at the exchange rate of the current year. The impact of exchange
rate instruments qualifying as hedging instruments is taken into account in
current data.
Restatement of Group structure to take into account newly consolidated entities
consists of:
subtracting the contribution of the acquisition from the aggregates of the
current year, for entities entering the consolidation scope in the current
year; subtracting the contribution of the acquisition from January 1 of the
current year, until the last day of the month of the current year when the
acquisition was made the prior year, for entities entering the consolidation
scope in the prior year.
Restatement of entities leaving the consolidation scope consists of:
subtracting the departing entity's contribution from the aggregates of the
prior year as from the ?rst day of the month of divestment, for entities
leaving the consolidation scope in the current year;
subtracting the departing entity's contribution from the aggregates of the
prior year, for entities leaving the consolidation scope in the prior year.
Volume effect
The sum of the change in sales volumes of each business area between the
current and prior year, valued at the average sales price of the prior year.
Price mix effect
The sum of the change in average prices by product family of each business
area between the current and prior year, applied to volumes of the current
year.
Current operating income
The operating income before other operating income and expenses (income from
changes in control and other non-recurring items).
Net income from current operations
The Group's share of income before other operating income and expenses, net
(income from changes in control and other non-recurring items, net of tax) and
income from discontinued operations.
Current EBITDA
Calculated from current operating income before operating amortization,
depreciation and impairment losses and adjusted for changes in operating
provisions and write-downs, share in net income and dividends received from
joint ventures and associates.
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