Imerys delivers solid growth in adjusted EBITDA in H1 2024, supported by good business momentum in second quarter

¹_{The definition of alternative performance measures can be found in the glossary at the end of the press release}

²_{According to IFRS 5, HTS is accounted for as a discontinued operation and reported under ‘Net income from discontinued activities’ (its revenue, expenses and pre-tax profits are not detailed in the consolidated income statement), linked to the divestiture of the High Temperature Solutions business in January 2023}

³_{Until December 31, 2023, the Group communicated on current EBITDA. Thereafter, the definition of adjusted EBITDA no longer takes into account dividends received from joint ventures and associates, but includes their share in net income, which is specified in the Glossary. Comparative information was restated.}

⁴_{Share of net income from joint ventures contributes 2.9 and 4.4 percentage points to Q2 2024 and H1 2024 adjusted EBITDA margin, respectively (2.4 pp in Q2 2023, 2.2 pp in H1 2023)}

⁵_{Including €44 million of contribution of discontinued operations (High Temperature Solutions disposed of in January 2023)} 

Highlights

As part of the Group's portfolio management, Imerys completed on July 5, 2024, the disposal of its assets serving the paper market⁶, for a transaction price close to €150 million. The payment of the purchase price is staged over time and based on the future performance of the business. 

The EMILI project, the Group’s lithium project in Allier, France, has been recognized as being of “major national interest” by the French Government. It is the recognition of the importance of this project for national sovereignty and the energy transition. In parallel, the national public debate conducted by the CNDP (“Commission Nationale du Débat Public”) has progressed constructively and should conclude by the end of July. Its conclusions will be disclosed by the end of September 2024.  

As part of the Group’s sustainability roadmap:

Imerys disclosed its comprehensive Climate Transition Plan⁷on May 14, 2024, demonstrating its commitments, progress and plans to address climate change. Imerys’ Climate Transition Plan lays out a clear implementation roadmap showing how climate considerations are integrated into its core business and how it will meet its Greenhouse Gas (GHG) emissions reduction targets -  i.e. to reduce absolute scope 1 and 2 GHG emissions by 42% (tCO2eq) and scope 3 by 25% by 2030 from a 2021 base year - validated by the Science Based Targets initiative (SBTi) last year.

Imerys renewed on June 13, 2024, for another 5 years, its partnership with PatriNat, a French national public organization under the joint supervision of the Office Français de la Biodiversité (OFB), the Muséum National d’Histoire Naturelle (MNHN), the Centre National de la Recherche Scientifique (CNRS) and the Institut de Recherche pour le Développement (IRD), reaffirming its commitment to biodiversity protection. This successful collaboration embodies the Group’s determination to take concrete actions to protect and restore ecosystems across all operating sites.

Outlook

The Group expects to continue benefiting from a positive business momentum in H2 2024, supported by its well diversified geographical footprint, broad applications offering, and improved economic conditions.

Assuming no material change in the current macroeconomic environment and a significantly lower contribution of joint ventures in the second half, Imerys targets a full year 2024 adjusted EBITDA in a range of €670 to €690 million. This compares with €668 million in the full year 2023 which included the contribution of the assets serving the paper market, divested in July 2024.

With a streamlined portfolio, Imerys continues to progress on its strategic roadmap, serving end-markets with significant growth potential.
 

Revenue

Revenue in the second quarter of 2024 was €992 million, a 2.2% year-on-year increase at constant scope and exchange rates. Group sales volumes were up 2.7%, reflecting the progressive recovery of European end-markets, especially consumer goods and industrial applications, and a good momentum and market share gains in the US. Prices stabilized in the second quarter of 2024, after two years of high inflation. 

In the first semester 2024, volumes were flat compared to prior year, and revenue reached €1,919 million, marginally below previous year.

Adjusted EBITDA 
 

Adjusted EBITDA increased by 13.6% in the second quarter of 2024 thanks to growing revenues, a positive price/cost balance and cost reductions. 

For the first six months of 2024, the adjusted EBITDA margin reached 20%, a significant improvement of 260 bps compared to H1 2023, driven by a stronger operating leverage and by the contribution of joint ventures.  

Current net income

Current net income, Group share, totaled €90 million, up 25.9% vs. Q2 2023. Net financial result was negative at €12 million. 

In the first semester, current net income, Group share was €173 million, an improvement of 24.8% compared to last year. 
 

Net income

Net income, Group share, totaled €73 million in the second quarter of 2024, after other income and expenses of -€17 million. 

For the first six months of 2024, net income, Group share totaled €142 million vs €145 million in the first semester of 2023, which had benefited from the contribution of discontinued operations for €44 million (High Temperature Solutions, disposed of in January 2023).
 

Net current free operating cash flow

The net current free operating cash flow in the first half of 2024 reflects the results of several actions started in 2023 aiming at improving operating working capital. The increase in “Others” at -€30 million is mainly due to the difference between joint ventures' share in net income and dividends effectively received.
The Group maintained its level of strategic capital expenditures, in particular in lithium and other key minerals for the energy transition. 

Financial structure

As of June 30, 2024, net financial debt totaled €1,232 million, which corresponds to a net financial debt to adjusted EBITDA ratio of 1.7x, in line with December 31, 2023 (€1,198 million on June 30, 2023). 

The Group's financial strength is demonstrated by the "Investment Grade" ratings confirmed by Standard and Poor's (November 24, 2023, BBB-, stable outlook) and Moody's (March 6, 2024, Baa3, stable outlook).

⁶_{Please refer to the press release on Imerys website}

^{7_{Please refer to the Climate Transition Plan on Imerys website}}

^{8_{Share of net income from joint ventures contributes 2.2 and 4.4 percentage points to H1 2023 and H1 2024 adjusted EBITDA margin, respectively}}

^{9_{Based on the last twelve months adjusted EBITDA}}

Performance by activity

Performance minerals

_{*Reported variation}

First semester 2024 revenue generated by Performance Minerals reached €1,200 million, in line with last year. 

Revenue in the Americas was up 3.0% at constant scope and exchange rates, reaching €543 million in H1 2024. Sales were supported by volumes (+1.4% vs H1 2023), mainly driven by consumer goods and construction end-markets, as well as price increases. Revenue in the second quarter 2024 at €284 million (+7.1% vs prior year like-for-like) confirmed this good business momentum, notably benefiting from some market share gains.

Revenue in Europe, Middle East, Africa and Asia-Pacific decreased by 1.7% at constant scope and exchange rates in H1 2024 compared to prior year. After a weak first quarter, Performance Minerals EMEA & APAC enjoyed a significant rebound in Q2, driven by dynamic sales into plastics, paints and filtration activities, with volumes up 4.7% and flat prices vs Q2 2023. 
Adjusted EBITDA of the Performance Minerals activity increased by 19% in H1 2024 compared to prior year, sustained by a solid second quarter, confirming the recovery of demand for specialty minerals and significant cost savings.

Solutions for Refractory, Abrasives and Construction (32% of consollidated revenue)

_{*Reported variation}

First semester 2024 revenue generated by Solutions for Refractory, Abrasives and Construction reached €620 million, benefiting from a rebound in the refractory business worldwide (+4% vs H1 2023) and an overall good level of activity in the US. Prices have decreased by 2.2% as energy surcharges were discontinued at the beginning of 2024. 

Adjusted EBITDA in absolute value and as a percentage of sales has improved significantly, supported by a positive price/cost balance and cost saving actions. 

Solutions for Energy Transition

The Graphite and Carbon business posted a 13% revenue decrease in H1 2024 vs last year. Nevertheless, carbon black revenue is progressively recovering, as demand rebounds in Asia after a prolonged destocking period. Adjusted EBITDA for the first semester 2024 reached €20 million, a decrease of 29% vs last year, reflecting lower volumes and some price concessions, partially offset by cost savings.

The Quartz Corporation (high purity quartz joint venture, 50% owned by Imerys) posted an increase in revenue of 64% compared to the first semester 2023. It reflects a very robust H1 performance supported by well oriented underlying end-markets. However, photovoltaic overproduction and consequent high inventories in the value chain are currently heavily affecting TQC sales. 

_{*Reported variation}

_{**For the definition of TQC’s EBITDA, see Imerys 2023 Universal Registration Document}

2024 first semester 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 first semester 2024 results at 9.30 AM (CET) on July 30, 2024, which can be accessed via this link.

Financial Calendar

These dates are subject to change and may be updated on the Group’s website https://www.imerys.com/finance 

*For the appendix, download the PDF version of press release

Imerys is the world’s leading supplier of mineral-based specialty solutions for the industry with €3.8 billion in revenue and 13,700 employees in 54 countries in 2023. The Group offers high value-added and functional solutions to a wide range of industries and fast-growing markets such as solutions for the energy transition and sustainable construction, as well as natural solutions for consumer goods. Imerys draws on its understanding of applications, technological knowledge, and expertise in material science to deliver solutions which contribute essential properties to customers’ products and their performance. As part of its commitment to responsible development, Imerys promotes environmentally friendly products and processes in addition to supporting its customers in their decarbonization efforts.

Imerys is listed on Euronext Paris (France) with the ticker symbol NK.PA.

More comprehensive information about Imerys may be obtained from its website (www.imerys.com) in the Regulated Information section, particularly in its Registration Document filed with the French financial markets authority (Autorité des marchés financiers, AMF) on March 26, 2024 under number D.24-0183 (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 difficult 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:

Cyrille Arhanchiague : +33 (0)6 07 16 67 26 
finance@imerys.com 
 

Press contacts:

Claire Garnier : +33 (0)1 49 55 64 27
Mathieu Gratiot : +33 (0)7 87 53 46 60
Hugues Schmitt (Primatice) : + 33 (0)6 71 99 74 58
Olivier Labesse (Primatice) : + 33 (0)6 79 11 49 71