Imerys Sa Ord

And thank you for standing by. Welcome to the IMRS 2025 First Nine Months and Third Quarter Results 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, 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1, 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Alessandro Dazza, Chief Executive Officer, and Sebastian Rouge, Chief Financial Officer. Please go ahead.

Thank you. Good afternoon or good evening to all of you, and thank you for joining us today to review Imerys' first nine months and Q3 2025 results. Next to me this evening, as usual, Sébastien Rouge, our CFO. And as usual, please let me start by giving you some highlights for the nine months we just closed. Imerys' performance for the nine months is the result of a positive start to the year and a softer second part. Q3 reflected an honestly unexpected slowdown in the U.S. economy as a result of uncertainty caused by the U.S. terrorist policy. Europe, even if overall activity remains low, seems to be turning the corner positively. Revenue for the first nine months were $2,583,000,000, slightly down 0.7%, like for like versus last year. Even in this context, which remains challenging, Emeris posted an EBITDA of 421 million in line with last year, like for like, and excluding the contribution of joint ventures. This demonstrates the resilience of our company, also in difficult times. The adjusted EBITDA for the third quarter, 25, was 140 million, representing a 17% margin. And again, reflecting disciplined pricing policy, ongoing continuous cost management, and positive business dynamic in the polymer and additive businesses. For the full year 2025, the group confirms its adjusted EBITDA target in the range of 540 to 580 million euro. Last importance, as we do not see a significant market recovery, or at least is being delayed, on top of the ongoing actions on costs, and I will come back to this, the group is launching a comprehensive cost reduction and performance improvement program aimed at simplifying its organization and adjusting its industrial footprint to restore profitability. Finally, some key updates of the quarter. First on Emily. Imerys has received an indication of interest from a potential investor to acquire a minority stake in the Emily Lithium project. Classic subject to customary due diligence and approvals, this investment will be formalized by the end of January 26 and would allow the completion of the definitive feasibility study of the commercial plans, sometimes around the end of next year. Consequently, any decision concerning future phases, such as the construction of the industrial pilot plant, are on hold and will be made in due course based on market conditions and capital allocation considerations. Second, important good news, Imerys signed today an agreement to purchase SB MineralSao in Brazil. SB Mineração is a Brazilian company specialized in the production of ground calcium carbonate, or GCC, based in Cachoeiro in the state of Espírito Santo. The company is a leading producer of GCC for various applications, in particular polymers, thermosets, paints, and coatings. In 24, the business generated approximately $30 million in revenue with a solid profitability. With this acquisition, Imerys would strengthen It's footprint in Brazil, where it is already one of the main producers of carbonates. The completion of the transaction is subject to customary closing conditions, including regulatory approvals. A word on our decarbonization roadmap. We signed an important partnership in October with ENGIE to supply green energy to approximately 25% of our European operations. via a 10-year corporate purchase agreement for the annual generation of 200 gigawatt hour of renewable electricity in Spain. This agreement will enable the reduction of 70,000 tons of CO2 equivalent per year, or 14% of our scope 2 emissions, so a significant step. Our Imerys graphite and carbon business signed two strategic partnerships aiming at enlarging its innovative product portfolio for batteries. One is with C-Nano, the global leader in carbon nanotubes. The second one with Shanghai Shanshan, which is the global leader in synthetic graphite for lithium ion batteries. I will not enter the details, and more details are available on our website on the two specific projects. What is important, both partnerships directly address Europe's crucial need for a regional, resilient, and competitive battery supply chain based on state-of-the-art technologies. If we move on now to the next slide, you see Emery sales performance by geography for the first nine months, which is a good picture of the a bit contrasted economic activity by area. Europe, you know, represented about 50% of our sales, or slightly less, enjoyed finally a light recovery in Q3, thanks to improving construction and industrial activity. And you see this if you compare to what we published in July last year. with the Q2 results. Nevertheless, on a full-year basis, year-to-date, business is still lagging behind last year, and we know due to soft activity in industrial sector and a poor construction market until recently. North America, the big surprise of the quarter, really subduing Q3, confirming a trend that we have seen at the end of Q2, mostly affected by tariffs. a weak industrial or weak, sorry, residential markets, and a bad quarter infiltration, partly, frankly, relating to our own production issues, relating to CAPEX and some industrial topics. For the nine months, sales are basically flat compared to last year or in line with previous year. We should not forget the significant impact of the devaluation of the U.S. dollar, negatively impacting sale at the level of 4% compared to last year, so becoming significant. In Asia, sales are growing nicely, not only in India, but also in China, which remains quite dynamic, especially around new technologies, electric vehicles, and strong exports in general. Very strong first half, a bit weaker Q3, but I remain confident it will be a good year in South America. The next slide, as usual, a deep dive on what really shows the robustness of Emery's business model. On the left side, you can see the evolution of our adjusted EBITDA year on year. We do have a significant impact of perimeter, as we saw before, coming from the divestiture of the assets serving the pay the paper market, last year in July. End of joint ventures, as we have been discussing since the beginning of this year. FX playing a role, as I mentioned before, but fundamentally the core of Imerys activity remains solid and adjusted EBITDA was resilient, almost flat compared to last year. On the right side, the balance price costs, which highlights the good, continuous work done on cost reductions, first of all, but also on eMERI's agility to react to market changes in terms of pricing when needed. We know this balance remains a key factor for future success. Let's now look at our main underlying markets and their trends. And I'll be quick, as we have partly already addressed the main trajectories and trends by geography. So overall, I would say what we saw in Q2 was confirmed in Q3, with overall markets below expectation, especially construction and automotive, while growth in electric vehicles continues strongly. And while tariffs have a limited direct impact on Imerys, the uncertainty created by these tariffs is impacting more in general business activity and unfortunately specifically some of our customers. To rapidly conclude on this side, construction finally and potentially restarting in Europe remains below expectation in the U.S. Consumer goods, resilient, certainly in the U.S., maybe slowing a bit in America for the reasons we have mentioned. Automotive, continued low production levels in Europe and in North America. China, good, benefited from strong exports, but also these internal stimulus packages or policies launched by the government, and of course, very strong EV growth in the area. General industrial activity, soft in Q2 in Western economies, strong or solid in China. So far for market trends. Sébastien, I hand over to you for more details on our accounts.

Thank you, Alessandro. Good evening, everyone. Let me recap some of the key aspects of our financial performance, and we'll start with revenue. report sales at 2.6 billion for the first nine months of 2025. It represents 0.7% decrease at constant exchange rate and perimeter as compared to last year, with volumes slightly down and prices holding well. You keep in mind the large perimeter effect, 126 million, mainly due to the disposal of the assets serving paper in July 24. We have now an FX impact of minus 47 million, coming from a drop mostly of the USD versus Euro from Q2 onwards. You can see in the chart Imerys' performance for the third quarter alone, quite similar trend for sales volume and prices, and also an high FX impact. Perimeter effect is now positive thanks to the good performance of Chem Viron, the business acquired at the end of last year. If we look now into more details at our three business segments, Beginning with performance minerals, the business generated 1,547,000,000 since the beginning of 25, representing 60% of Imerys Group. Overall, the business shows slightly negative organic growth as compared to last year due to a weak Q3 notably in America. Revenue in Q3 for Americas was down 5.7% at constant scope and exchange rate, reaching 199 million euros. Sales were impacted by a weak residential market in the U.S., suffering from high interest rates, unsold housing inventory, and also a soft filtration market. The prices held well. Revenue in Q3 for EMEA and APAC decreased by 3% at like-for-like in the third quarter of 2025 as compared to last year. Weak volumes, minus 4.1%, were driven by low demand across main markets, where our sales to paints and automotive polymer slightly improved. I already mentioned the good performance of ChemViron's diatomite and perlite businesses, integrated since January 25. Here as well, price grew in line with H1. Now looking at our solutions for refractory, abrasives, and construction business. We note a relative improvement of the business in Q3. posting organic growth in the quarter after a difficult H1. Business revenue reached $278 million in Q3, an increase of 1.9% as compared to last year at constant scope and exchange rate. The recovery is primarily driven by stronger refractory activity, benefiting from positive momentum in the US and China, and some volume gains in Europe. In contrast, the construction business experienced a more mixed performance, impacted by soft-end markets. In this business, prices as well held well. Now, let's complete this segment review with the solutions for energy transition. Q3 revenues for graphite and carbon amounted to 59 million, a 3.6% increase compared to last year at constant scope and exchange rate. Sales growth is still driven by robust end markets, primarily electric vehicles. The business also benefited from successful new product launches, in particular in polymer applications. A small note on the quartz corporation, our high purity quartz JV, 50% owned by Emeris and not consolidated, as you remember. The activity is showing some signs of normalization. However, this has yet to be confirmed as the solar value chain remains affected by persistent high inventories and the lack of significant reduction in production capacity. Now, let's look at the group profitability. For the first nine months, adjusted EBITDA reached 421 million. It decreased by 21% as compared to last year, reflecting the impact of lower contribution of JVs, perimeter impact, and an unfavorable exchange rate effect of minus 11 million. and adjusted EBDA margin of 16.3% at the end of Q3-25. This was supported by improved performance in graphite and carbon, resilient activity in performance mineral, and a continuous cost management approach. Adjusted EBDA Q3-25 decreased by 6%, impacted by volume decrease and a 10 million FX impact. which were partly offset by a positive price-cost balance in this quarter again. Ongoing cost-saving initiatives allowed the group to keep fixed cost and overhead slightly lower than last year in absolute value, fully offsetting inflation. If we look now at the other elements of our income statement for the first nine months of this year, Driven by the decrease of EBITDA in absolute value, current operating income reached $216 million. With slightly higher interest expenses and lower income tax, current and empty income from continuing operation ended up at $126 million at the end of September. You remember that last year, the group booked 326 million in non-cash expenses, mostly originating from the translation reserves associated with the assets serving the paper market that we divested in July 24. This year, in the first nine months of 25, other operating expenses were limited to 16 million. Year-to-date net profit is therefore positive, reaching $110 million at the end of September. I now hand over back to Alessandro for the outlook.