MERSEN (EPA:MRN) - Mersen: first quarter 2020 sales of €225 million

Transparency directive : regulatory news

29/04/2020 17:40

MERSEN: FIRST QUARTER 2020 SALES OF EUR225 MILLION

* SALES DOWN 6.4% IN THE UNPRECEDENTED CONTEXT OF COVID-19; DECREASE OF 8.9% ON
  AN ORGANIC BASIS VS FIRST-QUARTER 2019

* PRIORITY GIVEN TO THE HEALTH AND SAFETY OF OUR EMPLOYEES AND BUSINESS
  CONTINUITY

* SOLID FINANCIAL STRUCTURE

PARIS, APRIL 29, 2019 - Mersen (Euronext FR0000039620 - MRN), a global expert
in electrical power and advanced materials, has reported consolidated sales of
EUR225 million for the first quarter of 2020.

This figure corresponds to a 6.4% drop in sales compared with the first quarter
of 2019 and takes into account a favorable currency effect linked primarily to
the appreciation of the US dollar and the integration of companies recently
acquired. Sales for the first three months of 2020 were down 8.9% on an organic
basis vs the same period last year.

In millions of euros           Q1 2020          Q1 2019

Advanced Materials               128.8            139.3
Electrical Power                  96.4            101.2
Europe                            79.4             84.0
Asia-Pacific                      61.0             63.6
North America                     77.5             83.7
Rest of the World                  7.3              9.1
Group                            225.2            240.5

Like-for-like   Scope      Currency        Reported
growth          effect      effect           growth

-11.0%           3.2%         0.3%            -7.5%
-5.9%                         1.3%            -4.7%
-10.6%           5.2%        -0.1%            -5.5%
-4.7%            0.6%         0.0%            -4.1%
-9.6%                         2.7%            -7.5%
-15.0%                       -5.9%           -20.0%
-8.9%            1.9%         0.7%            -6.4%

Unaudited figures

See glossary

Mersen's Chief Executive Officer, Luc Themelin, said: "The decline in sales
reported in the first quarter reflects the first signs of the health and
economic crisis that is now affecting all the countries in which we operate. To
mitigate the consequences of this crisis, the Group has introduced strict
controls on costs and capital expenditure, while also increasing monitoring of
inventories and trade receivables. We are doing everything we can to protect
Mersen and ensure the Group is in a position of strength in all its markets
when activity recovers. Our priority remains the health and safety of our
employees, who have ensured the continuity of operations since the beginning of
the crisis. Once again, I would like to thank all the teams in all countries
for their daily commitment."

PERFORMANCE BY SEGMENT

Sales in Advanced Materials amounted to EUR129 million in the first quarter of
2020, down 11% on an organic basis in comparison with the same period last
year. The renewable energies market remains well-oriented, while others are
suffering from the global economic downturn. As previously reported, the
comparable base is high in the chemicals market (particularly in Europe) and
electronics market (mainly in North America).

Electrical Power sales amounted to EUR96 million for the quarter, down almost
6% on an organic basis. The transportation and process industries markets are
in sharp decline across the Asia-Pacific and Europe regions. By contrast,
electrical distribution in the United States has held up well since the
beginning of the year.

PERFORMANCE BY REGION

In Europe, the situation deteriorated in March, as a result of the lockdown
measures taken in each country. The aeronautics and process industries markets
have been the worst affected. In Asia, China reported growth of over 8% for the
quarter, confirming a recovery in activity, particularly in the renewable
energies market. The situation in Japan improved at the end of the quarter.
However, business in India slowed significantly in March. Lastly, the decline
reported for North America was mainly due to a very high comparable base,
particularly in the electronics and process industries markets of the Advanced
Materials segment. Business was strong for Electrical Power, notably through
the electrical distribution market.

BUSINESS REVIEW AND OUTLOOK

At April 29, 2020, approximately 85% of Group plants are operational, with some
running at reduced capacity. The situation is still evolving at several
facilities, in line with government decisions and regulations and the activity
level of our clients and suppliers.

Based on the initial indications of the activity level in April, the Group
expects the Covid-19 health crisis to have a significant impact in the second
quarter, particularly in Europe and America. However, at this stage, the Group
is not in a position to quantify the effects that the economic slowdown and the
various government recovery plans will have on its business in 2020.

STRONG FINANCIAL STRUCTURE

At the end of March, the Group's net debt had changed little since the end of
December, with the fall in sales leading to lower working capital requirements
in comparison with usual seasonal trends.

Mersen has a solid financial structure, with a total of EUR132 million in
undrawn credit lines and EUR100 million in cash (including EUR30 million
covering the maturities on the NEUCP commercial paper program) at end-April
2020, that will see it through this health crisis, even if it were to extend
over several months. The Group has not yet noted any drift in payment terms.

The Group has no major debt maturities to be met before November 2021 other
than those linked to the above-mentioned NEUCP program.

In addition, for its syndicated banking credit and USPP facilities, the Group
has obtained, at its request, greater flexibility as regards the leverage test
(ratio of net debt/EBITDA) of its financial covenant at June 30, 2020[1],
increasing the ratio to 4.5x versus 3.5x before the amendment. This mechanism
allows the Group to approach this period with greater assurance, even if it
does not currently anticipate reaching these levels.

[1] The calculation of the covenant at end of June is made based on the EBITDA
for the first half of the year, multiplied by 2

GLOSSARY

Organic growth: determined by comparing sales for the year with sales for the
previous year, restated at the current year's exchange rate, excluding
acquisitions and/or disposals.

Scope effect: contribution from companies acquired in the year in relation to
sales for the year.

* Advanced Graphite Materials Italy, a benchmark European player in finishing
  for customized extruded graphite parts has been consolidated since
  December 1, 2019.

* On February 28, 2020, the Group finalized the acquisition of GAB Neumann, a
  specialist in the design, manufacture and sale of graphite and silicon
  carbide (SiC) heat exchangers for the chemicals market. It has been
  consolidated since March 1, 2020.

Currency effect: calculated by comparing sales for the previous year at the
exchange rate of the previous year with sales for the previous year at the
exchange rate of the current year.

FINANCIAL CALENDAR

First-half 2020 results: July 31, 2020 before trading

                                 -------
ABOUT MERSEN

A global expert in electrical power and advanced materials, Mersen designs
innovative solutions to address its clients' specific needs to enable them to
optimize their manufacturing performance in sectors such as energy,
electronics, transportation, chemicals & pharmaceuticals and process
industries.

Mersen, with its 6,800 employees working across 35 countries, recorded sales of
EUR950 million in 2019.

MERSEN IS LISTED ON EURONEXT PARIS - COMPARTMENT B

INVESTOR AND ANALYST CONTACT

Véronique Boca
Mersen
Tel.: +33 (0)1 46 91 54
40
Email: dri@mersen.com

MEDIA CONTACT

Guillaume Maujean/Xavier Mas
Brunswick
Tel.: +33 (0)1 85 65 83 45
Email: mersen@brunswickgroup.com

WWW.MERSEN.COM

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MERSEN (EPA:MRN) - Mersen: first quarter 2020 sales of €225 million

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