Imerys Sa Ord

Good day and thank you for standing by. Welcome to the MRS Q1 2025 Results Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your questions, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alessandro Daza, CEO. Please go ahead.

Good evening to all of you, and thank you for joining us today to review Imerys Q1 2025 results. With me here tonight, Sébastien Rouge, our CFO. As usual, let me start by giving you some highlights of the first quarter of the year. Imerys continues on its growth path despite an uncertain environment and weak industrial markets, especially in Europe. First quarter revenue reached 871 million, which is a 0.7% organic growth at constant scope and exchange rate versus the first quarter of last year. This is the fourth consecutive quarter of organic growth. The adjusted EBITDA for the period amounted to 128 million euro, benefiting from an improved contribution from the performance minerals business and the graphite and carbon business. It also reflects a scope change and a deterioration in the contribution from joint ventures compared I remind you, to an exceptional performance in the first quarter of 2024. Net of the contribution of JVs and these scope effects, this performance is an improvement both in absolute and percentage terms compared to 2024. Finally, Imerich is reaffirming its commitment to sustainability through two significant actions. the issuing of its first biodiversity report, and the signing of a new major power purchase agreement in the United States. On this slide, the focus is on Imery's sales performance. In Q1, with 871 million in revenue, Imery's posted as practically 1% organic growth versus last year. As said, this is the fourth consecutive quarter of growth. Group volumes were just slightly down compared to last year, impacted especially by the weakness in the construction market and the significant slowdown in industrial and especially automotive in Europe. Only partly offset by steady consumer's demand and the strong growth in sales of electric vehicles where we have a very solid positioning. Prices were up 1.4% in the first quarter of the year compared to last year, in line with our expectations. On this slide, I want to illustrate the robustness of our business model. On the left side of this slide is the analysis of the adjusted EBITDA change year on year. excluding the perimeter effect mainly attributable to the divestiture of the assets serving the paper market in July of last year, and the deterioration, as said, in the contribution from joint ventures, which had an exceptional Q1 in 24, and Sebastian will go in more detail later on, adjusted EBITDA increased by about 4% year on year. On the right side, The balance pricing costs highlights, once again, Emery's agility to rapidly react to inflationary or deflationary changes in the markets, but also its strength to maintain this balance always positive. Consequently, even moderate cost increases have been passed on to our customers to safeguard our long-term profitability. Let's now briefly take a look at our main underlying markets and their trends. First, it should be noted that end markets have not significantly or have not been significantly impacted by the different tariff policies. We have heard a lot in the last weeks, at least not yet, as these were announced or enforced only after the end of the first quarter. And this is really valid for all our markets. So I will not repeat it each time. Outlooks. All outlooks for the rest of the year and beyond have been revised downwards from the different institutions, sometimes quite significantly. As a consequence, indirect of such theories. So if we look at the market now, construction. I would say probably a limited direct impact from tariffs as it is a very local market. However, investments might be delayed following widespread uncertainty. In Europe, the recent ECB rate cuts should support demand finally. North America difficult to predict as tariffs might cause higher costs. and the announced immigration policies might increase labor shortages. For China, I would say generalized slowdown, as we have seen in the latest quarters. Consumer goods performed well in Q1 across all region, and we believe it will continue on this trend, maybe with a small question mark on the U.S. if inflation starts rising again. On the next slide, the automotive market has definitely been bad, and the outlook, with very few exceptions, is probably today even worse, with production at risk of further suffering from tariffs. China is probably the only exception and should benefit from this new, let's say, trade-in for new policy. Energy will certainly be impacted by weakened industrial production in Europe and probably North America. Electronics, strong 24. Expectations for 25 are a bit dampened by current uncertainties. Regarding the electrical vehicle market, robust performance across all geographies in this first quarter. In the EU, rebound is expected to continue throughout the year. Some uncertainties in the US. More important, we expect, again, a very strong development in China sustained by the ongoing success of this trading subsidy program and growing EV adoption rates. On this last slide, industrial activity in general, as said, will be negatively impacted by what's going on, and certainly in Europe and in the U.S. maybe a bit less in China as exports for the time being hold. For the iron and steel production, which fundamentally is a consequence of the different users, so construction automotive industry, we expect to see a further weak Europe, probably a better U.S., and some rising difficulties in China as exports will be restricted by foreign policy. A word on sustainability, on our efforts, and let me introduce our first biodiversity report. It's a comprehensive, voluntary document where Imerys presents its strategy, its targets, its progress to preserve natural heritage. It's an innovative approach in the industrial minerals sector and illustrates really our dedication to combine mineral extraction with the preservation of biodiversity. And our final target is no net loss of biodiversity. I think for a company like ours, this is very important. We have around 150 sites and quarries around the world in 35 countries. This robust framework is the support of environmental scientific experts in the use of recognized tools and methodology that will accompany the future. Good progress in 24, and our commitment is to continuous improvement as we move forward. I now hand over to Sébastien for more details about our financial results.

Thank you, Alessandro. Good evening, everyone. We'll go through the key aspects of our financial performance, and we start with revenue. The group report sales at 871 million for the first quarter. It represents a plus 0.7% rise at constant exchange rate and perimeter as compared to prior year. It is the fourth quarter in a row Imerys delivered organic growth. We have a perimeter effect of minus 68 million, and that is mainly due to the disposal of the paper dedicated activities that were disposed of last July. and we have 6 million of positive FX effect, mostly related to the U.S. dollar. To be noted, sequentially, reported sales continue in an upward trend. Q1 sales are higher than Q3 and Q4 last year, which are the last two comparable quarters after paper assets disposal. If we look now into more detail at our three business segments, and we start with performance minerals, this business generated 522 million since the beginning of 25, representing 60% of Imerys Group. Overall, an organic growth of plus 1.2% as compared to last year. Revenue in the Americas were the most dynamic, up 2.3% at constant scope and exchange rate. Sales were supported by volume and price increases, as well as market share gains. The performance across end market was mixed. Consumer goods sector demonstrated resilience and growth, whereas construction-related markets continued at softer levels. Revenues in Europe, Middle East, Africa, and Asia Pacific were stable like for like. Volume decreased slightly. as sales into polymer applications were impacted by a weak automotive market in Europe. This decline was partially offset by resilient consumer goods sales, especially in filtration and agriculture sectors. Prices showed a positive trend as compared to the prior year. If we look now at our solutions for refractory, abrasive, and construction business, This segment recorded sales of 289 million in 2025. Volume decreased in the quarter, particularly due to lower sales of the refractory products, and the market was severely impacted by low industrial activity in Europe and higher competition from China. Prices were positive in Q1 25 as compared to Q1 24. And if we now complete the segment review with the solutions for energy transition, good news of the graphite and carbon business, which generated revenue of 61 million, confirming the strong sales recovery that began in Q3 of 24. Like for like, it represents an increase of 22.5% as compared to a prior year. Sales growth is driven by robust end markets, mainly electric vehicles and conductive polymers, and also by market share gains and new products. The Quartz Corporation, our JV, 50% owned, dedicated to high purity quartz. As you may remember, we disclose figures for this JV only on an half year basis. We can do a few qualitative comments. Still low production level are affecting the global solar value chain, largely due to persistent high inventory. We remain confident in the solar market. We remain confident it will continue to grow consistently and that it is a good market to be in, but definitely we suffer short-term. If we look now at the group profitability globally, for the first quarter of 25, adjusted EBITDA reached 128 million. Compared to Q1-24, The profitability of the group was impacted by the deterioration of the contribution from our joint ventures. As you remember, its contribution was exceptional and announced so in Q124. The adjusted EBITDA was also impacted by the perimeter effect of minus 16 million, resulting from the disposal of the assets serving the paper market last July. Restated from this perimeter and JV impact, adjusted EBDA from our fully owned business is growing by 3 million, net of change impact, which proves again the resilience of Imerys business model. The adjusted EBDA margin reached 14.7%, benefiting from a strong performance of the graphite and carbon business, as well as performance minerals. partially offsetting the lower contribution from our joint venture. If we look now at the other elements of our income statement for Q125, current operating income reached 56 million following the evolution of the EBITDA and a slight increase of depreciation expenses. With current financial expenses close to last year, and lower tax expenses the current net income group share landed at 31 million suffering from the lower contribution of our jv and the negative perimeter impact net income group share after non-recurring expenses of 8 million reached 28 23 million euro i now hand over to alessandro for the conclusion of this presentation thank you sebastian