(AOF) – Imerys, specializing in the production and processing of industrial minerals, announced its publication for the first quarter of 2023, reflecting a turnover of 997 million euros, in line with last year (- 0.9% at constant scope and exchange rates) in “difficult” market conditions. Over the period, the current Ebitda margin reached 15.1%, compared to 14.8% in the fourth quarter of 2022 but down slightly from 15.4% in the first quarter of 2022.
Current operating income, up 14.6% compared to last year, amounted to 105 million euros, while net income from continuing operations amounted to 68 million euros, an improvement of 12.2%.
“While weak demand in some markets, particularly construction and industrial applications, is expected to continue over the coming months, recent market data indicates that the Chinese economy and automotive market appear to be on the road to a solid recovery, and that mobile energy, which was weak in the first quarter, should return to sustained growth.
In terms of outlook, Imerys wishes to remain focused on cost and cash management in order to protect its profitability, while continuing to make progress in its strategic plan towards its medium-term organic growth and current EBITDA margin objectives.
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Key points
– World number 1 in mineral specialties for industry, more than a century old;
– 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 market: construction for 35%, consumption for 23%, industry for 13%, steel for 12%, paper for 10% and automotive for 7%;
– Business model to maintain the ranks of world No. 1 (75% of activities) and to promote mineral solutions based on 2 key assets: control of supplies (2/3 of turnover made “from the mine to market”) and equity strength;
– Capital controlled jointly by the Desmarais and Frère families (54.56% of the shares and 67.53% of the voting rights) and Blue Crest 5.07% (6.05% of the voting rights), the Board of administration of 12 members being chaired by Patrick Kron, Alessandro Dazza being general manager;
– Solid balance sheet, with debt reduced to €1.5 billion, or 44% of equity and a leverage effect of 1.9.
Challenges
– Towards a new 2023-2025 strategic plan presented at the 4
th
quarter ;
– 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) / dynamic with the launches of 80 mineral solutions in 2021;
– “SustainAgility” environmental strategy articulated around impact management, biodiversity & site rehabilitation and climate change, and characterized by regular overachievement of objectives: 100% of the biodiversity and rehabilitation program completed in 2021, “sustainable solutions” rating “ for 50% of new products in 2022, 2030 objective of a 36% reduction in CO 2 emissions by 36% vs 2018;
– Launch of 1
er
“sustainable” borrowing;
– Industrial projects in mobility -carbon black in Switzerland, specialty talcs in China- and in energy recovery in the Netherlands;
– As part of the strategy of refocusing on specialty mineral solutions and expanding into green mobility, sustainable construction and natural solutions for consumer goods markets, sale of the High Temperature Solutions business , for €930 million.
Challenges
– Adoption of measures against energy inflation -10% of the cost structure- and ability to offset it by increasing selling prices, from 16.1% on 1
er
semester ;
– After an increase of 18.7% in turnover and 19.7% in current net profit on 1
er
semester, anticipation of a slowdown in growth in the 2
n/a
semester but an improvement in operating profit between €810 and €840 million.
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Lack of visibility
The National Union of Quarry and Building Materials Industries (Unicem) indicates that, after an initial downturn in the second quarter, activity continued to deteriorate in the third quarter and recorded a drop in both aggregates (-1.3 %) than on ready-mixed concrete (-0.9%). Over the first nine months of the year, the decline was 2% for the materials business as a whole. 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 underlines the difficulties in implementing the projects. The production of materials could decline this year by 3% for ready-mixed concrete (BPE) and 4% for aggregates.