Imerys Sa Ord

Good day and thank you for standing by. Welcome to the EMERIS first quarter 2026 results conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, 1, 1 on your telephone keypad. You will not hear an automatic message advising your hand is raised. To withdraw a question, 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 our first speaker today, Alessandro Dazza, CEO. Please go ahead.

Thank you, and good evening to all of you. Thank you for joining us today to review Imerys Q1 2026 results. With me here, Pierre Lebreuil, our CFO. Let me start, as usual, by giving you some highlights of the first quarter 26. I'd say immediately a strong quarter for Imerys with organic growth, improved profitability at constant exchange rates in a market which was certainly challenging. Revenue at $835 million was up 0.7% versus last year at constant FX, driven by volume growth and steady pricing. To be noted, the significant currency headwinds in Q1, representing approximately 40 million or 5% of sales compared to last year, where the dollar was still very strong. Pierre will show you in detail later on this specific effect. Adjusted EBITDA for the period amounted to €118 million, up 4% at constant exchange rates, reflecting solid execution, volume increases, and cost control. Short update on our strategic roadmap. Project Horizon, very important for this year, one of our priorities. has been launched across all main relevant countries. Social and legal processes are ongoing and in progress. Deployed, I would say, per plan, on time, on track to deliver the targeted savings, and I remind you, $50 million to $60 million minimum versus the 2025 cost base, and it's said on time. We announced on April 10 a binding agreement to buy, to acquire Great Lakes Minerals, a processor of industrial minerals in the USA, addressing typically refractory and abrasives, approximately $80 million sales at run rate. If you look at the following slides, it shows Emery sales performance by geography in Q126. We start by Asia, very strong, strong growth driven by good sales of conducted additives, but in general, good industrial activity, especially in China. Europe, still slightly negative, I would say impacted by softness of the residential market, progressing, as we said, but still in a starting phase and low industrial activity. good performance in consumer markets in Europe as well as everywhere else in the world. Europe, Middle East, and Africa, so EMEA, also includes the Gulf area, and we did, we were impacted by the Gulf crisis. We estimate missed sales of approximately 4 million euro, and I will go in a bit more detail in a couple of slides, only for the month of March. North American sales subdued in Q1, confirming a bit the trends of Q4 of last year. Softers in the, especially in the housing segments. Poor weather condition in January. Do not forget the very cold weather that cost us a few million euros in January. And the Q125 with the strong dollar was, of course, a very strong starting base. I would say business, however, in March showing significant rebound, so probably the worst even in America, in North America behind us. South America was strong, solid, good consumer goods, a bit weaker in construction, but positive, especially including the FX exchange. If we look on the next slide on end markets and their trends, largely reflecting what I already said on the previous slide, but if we talk more in general, I would say the year 26 started slow. January was low, a bit of the same trend in Q4 25. It started improving in February, and we recorded a very solid month of March. Now, the real question is what will be the impact or long-lasting impact of the Middle East crisis going forward? And frankly, I think nobody knows. But the trend is definitely pointing in the right direction. Looking specifically at construction activity, subdued compared to expectation, especially in the U.S. Positive trend in Europe, rebounding slowly but certainly. Consumer goods, as I said, very solid in all geographies. Automotive, soft, basically everywhere in the world, with the exception of electric vehicles, which continue to grow strongly, certainly in China, and now also steadily and certainly in Europe. Finally, general industrial activity, it follows a little bit other or is a consequence of other industries, so rather soft in Western economies, but better in Asia and in China in general. Let's focus on our activities in the Gulf and our presence. I would like to start by saying we have a plant in the area in Bahrain. a greenfield project we established in 2014 with a local partner. The idea behind was competitive cost base to produce locally and export to customers worldwide our fused minerals. We have around 103 employees, and I can tell you all of them are safe, which is the most important thing. Operations were stopped. On the 28th of February, the night the war started, we did experience some explosion very close to the site, although the site has not been touched by any event. Middle of the month of March, we have gradually restarted operations, but we did not experience or we did not register any sales in the month of March, because the commercial ports is closed, and to exit Bahrain, you have to go to the Strait of Hormuz. Therefore, exporting from this base is today still impossible. This unit normally has a turnover of approximately 25 million euro per year. So you can estimate a normal month would be in the area of 2.5 million, which have been missing in much of this first quarter. We are investigating alternative routes to ship containers to our customers. There are possibility to go through Saudi Arabia, still under investigation, being tested. At the moment, certainly expensive. On top of this local business that exports, we do sell as a group into the area, into the Gulf area, Emirates, Saudi, Qatar, Israel itself, approximately 30 million euros per year. It was impacted in March, yes, especially everything going via container to the area for the very same reason. We estimated about a million dollars or slightly more, the sales that have been canceled because of the war. I expect these non-realized sales to continue as long as this trade remains closed. Summarized, 4 million sales approximately lost in the month of March. Altogether, a business of around 55 to 60 million per year, so potentially up to 5 million a month if the situation does not improve or alternative routes are found. On the next page, the last slide on my side to underline the good work done by the teams. On the left side, you can see the evolution of the full year adjusted, sorry, of the first quarter adjusted EBITDA year on year. Compared to last year, strong impact of the U.S. dollar, which in Q1-26 is significantly lower. This effect should normally reduce, eventually disappear, as current FX level aligned to those of last year Q2 and certainly Q3-Q4. At constant exchange rates, adjusted EBITDA improved the erronea by 4%, mainly thanks, as I said, to volumes, positive volume, steady pricing, and good work on costs. On the right side, the balanced price costs, which highlights the good and continuous work done by the group on cost reductions. Despite inflation, because we do live in a world with inflation, And despite higher volumes, as I said before, accumulating fixed costs, variable costs, and overheads, we are in Q126 below Q125 in absolute terms. You see the minus one as the sum of the three. That's really our operational excellent programs, saving initiatives, and also the first effects of our Project Horizon. All of these contributed to this good performance. Pricing. Prudence, I would say, to adapt to competitive pressure, but also because we can afford to be more prudent this year. Pierre will now give you some more details or more detailed analysis of our financial results. Pierre, over to you.

Thank you, Alessandro. Good evening, everyone, and thank you for joining us today. So let me recap some of the key aspects of our financial performance, starting with revenue. Group sales amounted to 835 million euros. This represents a 0.7% increase at constant exchange rates and perimeters compared to last year, especially driven by a 0.5% growth in volumes. Price increases were moderate to reflect improved costs and protect market shares. Currencies had a strong negative effect of 42 million euros. So as a reminder, USD was at a strong 1.05 USD per euro level in the first quarter of 2025. Let's now look more in detail at our three business segments. Starting with performance minerals, as a reminder, this business generated 597 million in June 2026. It represents 60% of Imerys group sales. Overall, the business remains very resilient given market circumstances, showing just a slightly negative organic growth with contrasted performances between America and Europe, Middle East, Africa and Asia Pacific. For performance America, sales volume declined slightly by 1.1%, impacted by continued softness in the housing market and poor weather conditions in January. This was partly offset by a solid increase in sales to consumer goods, particularly filtration. Prices continued to hold well. In the Europe, Middle East, Africa and Asia-Pacific region, Sales were solid in consumer goods, notably filtration and animal feed, and in automotive, driven by market share gains. This was partly offset by slower sales to construction, notably in the ceramic business. Prices showed a positive trend. Now let's look at our solutions for refractory, abrasive and construction business. Sales volume increased by 1.1%, supported by a dynamic momentum in the Asia-Pacific region, offsetting the impact of the Middle East conflict, including disruption at our Bahrain plant, as Alessandro was reporting, and offsetting as well poor weather in the US in January. Selling prices were slightly lowered to reflect improved costs and protect market shares. The solutions for refractory, abrasive and construction business delivered a third consecutive quarter of organic growth. Now let's complete the segment review with the solutions for energy transition. Starting with graphite and carbon, which delivered a very good first quarter with a 10% revenue growth at constant exchange rate. Revenue is solid at 65 million euros. fueled by a 11% volume increase. This is due to strong sales of conductive additives for electric vehicles, energy storage systems, and polymers, and confluence the trend of previous quarters. To complete this segment review, let me now say a few words on TQC. As a reminder, TQC is our 50% joint venture in high-currency quartz business. You may remember that we disclose figures for this GV only on an Altair basis. We can nevertheless report that business is normalizing in the context of markets which remain challenging in Asia. Now, let's look at the group's profitability. For the first quarter, adjusted EBITDA reached €118 million, corresponding to a 14.2% margin. Looking at Ineris' direct operational performance, highlighted in the box in grey color in this slide, you can see that adjusted EBITDA was very resilient, with a 4% share-on-year growth, driven by positive sales volumes, disciplined pricing, good cost management, and a slightly higher contribution from joint venture. On a reported basis, EBITDA decreased 8% in comparison to first quarter of year 2025, as a consequence of a massively unfavorable exchange rate effect of 14 million euros. Let's now move to the bottom of the P&L. financial expenses are increasing as a consequence of the 600 million euro bond issued last November. Other operating expenses are negative by 20 million. Most of this 20 million charge corresponds to restructuring costs related to Project Horizon and to the most building of Imerys British Litron. As a consequence, Net income group share is marginally positive at 1 million euros. I will now hand back to Alessandro for the outlook.