(AOF) – Imerys announces the creation of a new business line called “Solutions for the Energy Transition”. “The creation of this new business line aims to better reflect the growing contribution to the group’s financial performance of these critical minerals such as high purity quartz, graphite and carbon black,” said a press release from the specialist group. in the production and processing of industrial minerals.
“The group supplies critical minerals necessary to secure the energy transition. It is time to recognize the importance and growth of the contribution of these activities, which represent a key driver of Imerys’ growth,” declared Alessandro Dazza, CEO.
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Key points
– World number 1 in mineral solutions for industry, created more than 100 years ago;
– Turnover of €4.4 billion refocused on 2 businesses – performance minerals (54%) and high temperature minerals (46%) – balanced between Europe-Middle East and Africa for 48%, North America for 29% and Asia-Pacific for 23%;
– Revenues by end markets: construction for 35%, consumption for 23%, industry for 13%, steel for 12%, paper for 10% and automobiles for 7%;
– Business model of maintaining the ranks of world number 1 (75% of activities) and promoting mineral solutions by relying on 2 assets: control of supplies (2/3 of the turnover achieved “from the mine to market”) and strength of equity;
– Capital controlled jointly by the Desmarais and Frère families (54.56% of the shares and 68.37% of the voting rights) and Blue Crest 5.07% (5.9% of the voting rights), the board of administration of 12 members being chaired by Patrick Kron, Alessandro Dazza being general director;
– Solid balance sheet, with debt rated investment grade, reduced to €1.2 billion at the end of June 2023, or 36% of equity and 1.7% leverage.
Challenges
– 2023-2025 “Connect & Shape” strategic plan:
– annual organic growth of 3-5%, increase to 18-20% of the operating margin, industrial investments of €400 million per year, including 40% in production capacity,
– debt leverage around 1,
– dividend in line with net current profit and possibility of share buybacks;
– Innovation strategy protected by 2,150 patents and 4,000 trademarks;
– based on the “I-Cube” industrial excellence program,
– focused on natural minerals (replacement of fossil materials), circular minerals and synthetic minerals (niche applications, tailor-made solutions),
– reinforced by industrial partnerships;
– “SustainAgility” environmental strategy, with an increase in the 2030 objective of reducing CO2 emissions to 42% for scopes 1 and 2 and to 25% for scope A3 (suppliers) vs. 2021:
– 100% of the biodiversity and rehabilitation program completed in 2021,
– “sustainable solutions” rating for 50% of new products in 2022,
– launch of the first “sustainable” loan;
– Industrial projects in mobility – carbon black in Switzerland and Belgium, specialty talcs in China -, in energy recovery in the Netherlands and in lithium in England;
– Portfolio rotation: disposals to finance investments, acquisitions in minerals useful for the energy transition.
Challenges
– Ambition to be a major player in lithium in Europe via projects in France and Cornwall;
– Adoption of measures against energy inflation -10% of the cost structure- and ability to increase sales prices;
– Ceramic, paper, refractory and abrasive activities affected by customer destocking;
– After a 5.6% decline in revenue but an increase in margin to 16.7% in the first half, 2023 objective of an operating profit between 630 and 650 million.
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Lack of visibility
The National Union of Quarry and Construction Materials Industries (Unicem) indicates that, after an initial decline in the second quarter, activity continues to deteriorate in the third quarter and records a decline as much in aggregates (-1.3 %) than on ready-mixed concrete (-0.9%). Over the first nine months of the year, the decline was 2% for the entire materials activity. Only tiles and bricks manage to show slight increases in activity.
The general outlook is deteriorating and recruitment difficulties and rising costs are the main sources of concern. Furthermore, Unicem highlights the difficulties in implementing the projects. Production of materials could decline this year by 3% for ready-mixed concrete (BPE) and 4% for aggregates.