Imerys Sa Ord

Good afternoon to all of you, and thank you for joining us today to review Imerys H125 results. With me this afternoon, as usual, Sébastien Rouge, our CFO. And as usual, please let me start by giving you a few highlights of the semester we just closed, and in particular, on the second quarter of the year. I think Imerys delivered a very resilient H1 results. On a comparable basis, our sales were flat. and our EBITDA for the underlying business was even up. And I think this is a great achievement, considering the environment around us. If we go a bit more in detail, the performance in the first half was the result of a good start in the year with a solid Q1, and for sure a softer Q2. This sudden and unpredictable U.S. tariff policy, and especially the changes thereof, triggered a global uncertainty in the U.S. land, a bit everywhere, but also in North America. Despite softer volumes in two, organic growth for the first half of the year was flat, basically, compared to last year. Even in this challenging context, we posted an increase in EBITDA versus last year, 1.7, both for the second quarter and for the full first half, excluding, of course, Perinita and the contribution of JD, as well as change, which in Q2 turned significantly negative, reporting in Euro, and Sébastien will show you the impact of the dollar devaluation. As I said, this demonstrates the strength and the resilience of our company, but also the good work done on cost-saving, cost-saving initiatives and programs, pricing discipline, innovation, and I will come back on this because it starts to be significant, and also thanks to the investments we have launched in the last two years on growing businesses, such as conductive additives, that are finally starting to deliver significant sales and profits. The adjusted EBITDA for the first semester was 281 million euro, a 16% margin. For 2025, the group targets an adjusted EBITDA in the range of 540, 580 million euro, assuming no big deterioration or change in the overall economic environment. And during the call, this call will provide you a bit more details on our assumption, as well as important, a progress update on our lithium project in France. So, the new slides on the second slide, which gives you, I think, a good picture to illustrate the sales performance of the group for H1 by geography. Contrast this, as you can see. Top rights, Europe, is clearly the weak link in the chain with persistently low industrial activity, notably a difficult automotive sector, maybe an improving construction industry, but still at historical low levels. And again, to give you an example of the, let's say, tough situation in Europe, I mentioned Germany. The country alone dropped in H1 of this year by almost 10% in sales compared to last year, or a drop of 18 million euro. So more than the entire drop of the group sales in H1. There are reasons to be optimistic, but we'll come back to that for the future, and I'll come back to that later on. Even with a softer Q2 compared to Q1, especially around the construction world, not only can we install it with organic growth, also for the full H1. Asia growing nicely, not only India where we invested with our last green field around construction and steel, not only in China where we invested in automotive, and of course around the battery production world. So dynamic, and last but not least, on the contrary, in terms of growth, the fastest growing is South America. We invested a lot in innovation, and as I mentioned before, we start seeing the fruits of the work. The next slide, I would say here, it underlines the robustness of the image business model. On the left, you can see the evolution of adjusted debita, as I already mentioned, including the perinita. And I remind you, it's the divestiture of the assets serving the paper market in July of last year, so the last quarter where we will see an impact. And removing contribution of gavees. which was exceptionally exceptional in H1 last year, significantly lower this year, and Sebastien will give you more details, adjusted the increase for the underlying business by 1.5% year on year. And on the right is one of the reasons, I say one of them. The reason for this increase is the balance between price and cost, which remains strongly positive and constantly positive, which has good work done on costs, on cost retainments, but also our agility to react to market changes in terms of pricing when it comes. As I always said, it is important to maintain this balance always positive, and I think we do it successfully. If we now look at our mid-market and their trends, I'll be quick because partly we discussed it already or I presented it already looking at geographies. It should be noted that fluctuating U.S. tariffs has had a limited direct impact on the English business. We said it before, but they did have a more important impact on some of our customers or our end markets, and I think of automotive in Europe, and generated a global uncertainty with, for sure, slowdown demand a bit everywhere. Maybe more optimism for the future, and we will look at it in our audit. Looking at the markets, construction in general, not good. We see a lot of or very little growth. Europe, historical low levels, but we do see signs of a rebound. North America was good in infrastructure, low in residential. Q2 was really low. I hope the recent agreements with the different countries will bring more Certainty and confidence to consumers to spend and hopefully a limited inflation causing to interest rates to finally drop. Positive in Asia and even in China. Consumer goods, next slide, very little to say, resilient, solid, all geographies. Now that seems to have a limited impact in the U.S. probably. we do expect also in the US to remain sustained. The next slide automotive is definitely the most difficult Europe with the third quarter of significant drop in a row. The US also turning negative. One bright spot, which is China, the local market as well as exports. Our last investor issue we call our polymers for light weighting of, sorry, our investment in light weighting, in terms of light weighting of polymers, especially in the car industry in China was definitely a good choice, and we do see a strong market in China. On the next one, energy, depends a lot on industrial activity, so quite soft in Q2 and H1. Electronics has been okay, also okay, and the very good news is the The electric vehicle market is showing a significant rebound in Europe, double-digit in America even, and remains very, very solid in China, by far the biggest market in the world. And this trading for new policies is definitely showing its effects. We do expect the market to continue on a very solid base. In the financial activity we mentioned before, soft in Europe, softer in the U.S. in Q1, but even Okay, and we do see good momentum in Asia in general. And a lot of iron and steel, which is typically a consequence of the construction and automotive industry, which are the main users by far of iron and steel and reflects. But the markets are slowing up. It should be good in the U.S. if these 50% theories are confirmed, which is the case. and slowing in China, and slower construction industry compared to past years. Also, we do expect countries to limit Chinese export of steel through protectionism, and therefore, going forward, Chinese steel production should remain subdued. If we look now a bit more in detail at our figures, I hand over to Sebastian.

Thank you, Alessandro. Good evening, everyone. Let's go through some of the key aspects of our financial performance, and we start with revenue. The group report says that 1.76 billion for the first semester of 2025. It represents a 0.4 decrease at constant exchange rate and perimeter as compared to last year. The perimeter effect, minus 136 million, is mainly due to the disposal of the paper activities made last July. And we have also deterioration of 19 million of the FX effect. This comes in particular from a drop of the USD versus Euro in Q2. To be noted, sequentially, sales continue in an upward trend. Q2 sales are higher than Q1 of this year. They are also higher than Q3 and Q4 of 2024, which were comparable quarters after the disposal of the paper of the assets serving the stock market zone. If we look now into more detail at our three business segments, we start with Performance Minerals. This business generated $1.056 billion since the beginning of 2025, and it represents 60% of Imerys Group. Overall, the business shows a slightly positive organic growth as compared to last year, supported by price development across all regions. Revenue in the Americas was most dynamic, up 1.3% at constant scope and exchange rate. Price increase negated the impact of software volumes as the construction sector was still penalized by high interest rates and business uncertainty. Revenues in Europe, Middle East, Africa, and Asia-Pacific shows a slight decrease of 1%, at constant scope and exchange rate in H1 this year as compared to last year. This has mostly due to 1.9% decline in volume, reflecting low activity in automotive, painted and coating industries, and partially offset by positive filtration business. At the CDBGA, of H1 stood at 186 million in 1994 at comparable exchange rate and perimeter, thanks to effort on costs and well-adjusted price-cost balance. Now looking at our audience for FLE abrasive construction, generated by this business in the first semester, reached 518 million, a 5% decrease as compared at constant scope and X rate. Sales in the refractory market were particularly impacted by low industrial activity in Europe, increased Chinese competition, and, to a lesser extent, low industrial activity in the U.S. Our construction solutions, in a difficult market, held up very well. The second quarter saw similar trends to the first-bar incentives caused by the U.S. tariff policy. The prices held up well across all regions. The adjusted EBDA decrease was really due to the volume drop. Pretty fresh balance and cost-efficient actions helped mitigate this impact in the first half year. Now we complete this segment review with the solutions for energy transition business. The graphite and carbon activity generated revenue of 123 million in H1 this year. up 20% versus 2024, confirming in Q2 a good start of the year. Sales growth is driven by robust end markets with vehicles and creative polymers, by market share gains and by new product launches. Adjusted EBDA improved thanks to this significant sales volume increase. If we look now at the Quast Corporation as a whole, 100%, The business generated 82 million revenue, a large almost 70% drop versus last year's exceptional first half. The performance remained affected by a very disturbed solar value chain with persistent high inventory, even if activity improved progressively in Q2. Net income fell sharply to 12 million. If we now look at the profitability as a whole, for the first semester of 25, adjusted EBITDA reached 281 million. Compared to last year, the profitability was impacted by the deterioration of the contribution from our joint ventures. You remember, its contribution was exceptional in H124. The adjusted EBITDA was also impacted by the perimeter effect of minus 34 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 5 million, net of change impact, which proves again the resilience of Umairi's business model. The adjusted EBDA margin, which is 16%, benefiting from a strong performance of the graph size and carbon, and performance mineral businesses. It reached 17.3% if we look at Q2 alone. Let's look now at the other elements of our income statements for the first semester of 2025. Current operating income reached $143 million following EBITDA decrease year-on-year and a slight increase of depreciation expenses. With current financial expenses close to last year level, same thing with lower tax expenses, the current net income group share landed at 83 million, suffering mainly from the lower contribution of our JV and the negative perimeter impact. Net income group share after non-recurring expenses, which are limited to 12 million euros, reached 71 million euros as compared to 142 the previous year, reflecting the decrease in current net income. Let's have a look now at our cash flow generation. We reported a net current free operating cash flow of 60 million before strategic capex, 40 million if we include the lithium capex. The decrease compared to prior year is practically primarily due to a lower profitability and significantly reduced dividends from our joint venture, and that was partially offset by a decrease in efforts in our capital expenditure. For the full year, net current free operating cash flow should benefit from improved operating working capital, traditionally better in H2, and lower capital expenditures. Excluding the strategic capex, these are expected to be below 270 million as compared to 290 million last year. How do these different elements translate into Emery's balance sheet? With the normal seasonality of our working cap and the limited impact of non-operational cash, the net debt increased by $135 million, mostly linked to the dividend distributed last May. Net financial debt to adjusted EBITDA ratio increased mechanically to 2.5, following the impact of scope and JV contribution. Rating agencies remain confident in the strength of Imery's financial structure, and reiterated recently their investment rate rating. On this good note, now hand over to Alessandro for the outlook and Émile.

Thank you, Sébastien.