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Imerys

Earnings Release Feb 11, 2016

1431_iss_2016-02-11_5cbd7239-6c2a-4ba8-9f77-ae9f092e2e0a.pdf

Earnings Release

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Imerys achieves target with + 8.0% growth in net income from current operations in 2015

  • + 10.8% rise in revenue (- 4.6% on comparable basis(1))
  • Firm operating margin at 13.2%
  • Positive contribution from S&B and execution of synergies in line with objectives
  • Financial soundness strengthened by high generation of current free operating cash flow at 343 M€
  • 209 M€ net non-cash impairment charge on the Oilfield Solutions division
  • Further increase in dividend proposed to €1.75 per share

Imerys' Board of Directors, meeting on February 11, 2016, examined the definitive financial statements for 2015. These will be submitted for approval at the Shareholders' General Meeting to be held on May 4, 2016.

Consolidated results (€ millions) 2014 2015 % current change
Revenue 3,688.2 4,086.7 + 10.8%
Current operating income (2) 494.6 538.1 + 8.8%
Operating margin 13.4% 13.2% - 0.2 point
Net income from current operations, Group's
share (3)
316.3 341.5 + 8.0%
Net income, Group's share 271.6 68.4 n.a.
Financing
Paid capital expenditure 241.5 271.6 + 12.5%
Current free operating cash flow (4) 244.1 342.5 + 40.3%
Shareholders' equity 2,470.5 2,671.8 + 8.1%
Net financial debt 869.9 1 480.4 + 70.2%
Data per share (euros)
Net income from current operations, Group's €4.15 €4.31 + 3.7%
share (3) (5) €1.65 €1.75 + 6.1%
Proposed dividend
Headcount as at 31 December 14,900 16,130 + 8.3%

Chairman & CEO Gilles Michel commented:

"Growth in net income from current operations is in line with the target set for 2015. This result, achieved in difficult overall market conditions, attests once again to the quality of the Group's fundamentals and to its teams' responsiveness. In an environment that remains uncertain in the early part of this year, the Group will continue to implement its action plans to protect/improve its operating performance. Furthermore, it will also benefit from the full-year contribution of S&B, with which synergies will continue to ramp up, and the first positive contributions of the other recent acquisitions. In accordance with its development strategy and high cash generation, the Group will continue to invest, in a controlled manner, in innovation and the extension of its activity portfolio."

1 "on a comparable basis" means "at comparable Group structure and exchange rates". See glossary at the end of the present release.

2 Operating income before other operating revenue and expenses. See glossary at the end of the present release.

3 Group's share of net income before other operating revenue and expenses net.

4 Current free operating cash flow: EBITDA after deduction of notional tax, changes in working capital requirement and paid capital expenditure. 5 The weighted average number of outstanding shares was 79,275,846 in 2015 compared with 76,134,904 in 2014.

2015 HIGHLIGHTS

On February 26, 2015, Imerys completed the acquisition of S&B. A global player and European leader in bentonite (binders for foundry, sealing solutions, additives for drilling and functional additives), S&B is also the world leader in continuous casting fluxes for steel and in wollastonite (functional additives for polymers and paints). It also provides perlite-based solutions used in building materials and horticulture. This acquisition, which was accretive on Imerys' net income from current operations per share in 2015, should create value from 2018, with total annual synergies estimated at over €25 million, half of which will be achieved in 2016.

Other external growth operations were completed in 2015:

  • On October 30, Imerys completed the acquisition of the Precipitated Calcium Carbonate (PCC) division of Solvay, Europe's leading producer of fine and ultra-fine PCC, which is used as a functional additive in specialty applications. It operates 4 plants in Europe (Austria, France, Germany, UK) and mainly serves the automotive (polymers, etc.), construction (paints, coatings, sealants) and consumer goods (health & beauty, etc.) markets. It generated €59 million revenue in 2014.
  • On November 1st, the Group acquired BASF's paper hydrous kaolin (PHK) activity in the US. This transaction enables Imerys to improve its service offering for the paper industry through optimization of its production assets and generate incremental revenue of \$60 million on a full-year basis.
  • On October 27, Imerys completed the acquisition of Matisco, a specialized manufacturer of metal accessories for roofing, enabling the Imerys Group to broaden its offering for the roofing market in France by integrating a wide range of accessories (rainwater drainage profiles, waterproofing, etc.). Matisco posted revenue of €23 million in 2014.

In the context of a sharp downtown on the ceramic proppants market in the United States, the Group recorded a non-cash impairment charge on the Oilfield Solutions division corresponding to a net loss of value of €209 million. The prospects of an upturn in this activity in the short term, which still seemed possible early in the year, have become more remote since the second half. These non-recurrent items do not undermine the Group's sound balance sheet.

POST-CLOSING EVENTS

No significant events have occurred between the end of the period and the date of the Board of Directors meeting.

2016 OUTLOOK

Imerys can draw on real strengths to face a highly uncertain macroeconomic environment. The Group will not only benefit from S&B's full-year contribution, but also from the continued momentum of innovation projects and new developments. In addition, Imerys will continue to manage its costs with discipline and adjust its industrial assets to market trends.

CORPORATE GOVERNANCE

At its meeting on February 11, 2016, Imerys' Board of Directors approved the draft resolutions to be submitted to the Shareholders' General Meeting on May 4.

With respect to changes in the composition of the Board, these resolutions provide for, in particular:

  • Approval of the coopting in 2015 of Mr. Colin Hall and Mr. Laurent Raets as Directors;
  • Renewal of the terms of offices as Directors of Mr. Ian Gallienne and Mr. Laurent Raets, which were nearing expiry;
  • And the appointment of Mrs. Odile Desforges and Mr. Arnaud Vial as new members.

At this meeting, the Board noted that Mrs. Fatine Layt, Mr. Robert Peugeot and Mr. Amaury de Seze, whose terms of office were nearing expiry, had not requested their renewal. The Board, who thanked them all warmly for their outstanding contribution to the work of the Board and its Committees throughout the past years, paid tribute in particular to Amaury de Seze as Vice-Chairman and proposed Mr. Paul Desmarais III to succeed him in that capacity.

The new composition of the Board reflects its wish for a more international profile, greater gender balance (40% female members following the General Meeting) and a more diverse set of skills among its members.

DIVIDEND

The Board of Directors will propose the payment of a €1.75 dividend per share to the Shareholders' General Meeting of May 4, 2016. This corresponds to a + 6.1% increase compared with the dividend paid in 2015, i.e. a total distributed amount of €139 million, which represents 40.6% of net income from current operations. This proposal reflects the Board's confidence in the Group's development potential. The dividend should be paid out from May 12, 2016.

DETAILED REVIEW OF THE GROUP'S RESULTS

REVENUE

Revenue
(€ millions)
Change
in Revenue
(% previous year)
Comparable change
in Revenue
(% previous year)
Of which
Volume
effect
Of which
Price/Mix
effect
2013 3,697.6 - 4.8% - 1.3% - 2.5% + 1.2%
2014 3,688.2 - 0.3% + 3.2% + 1.7% + 1.5%
2015 4,086.7 + 10.8% - 4.6% - 5.9% + 1.3%
Non-audited quarterly
data
2014
Revenue
(€ millions)
2015
Revenue
(€ millions)
Change in
Revenue
(% previous year)
Comparable
change
(% previous year)
Of which
Volume
effect
Of which
Price/Mix
effect
st quarter
1
904.1 973.6 + 7.7% - 4.5% - 5.9% + 1.3%
nd quarter
2
933.8 1,083.7 + 16.1% - 3.3% - 4.8% + 1.5%
rd quarter
3
943.8 1,027.2 + 8.8% - 5.6% - 6.5% + 0.9%
th quarter
4
906.5 1,002.2 + 10.6% - 5.1% - 6.2% + 1.1%

Integration of S&B and positive impact of exchange rates

  • Volumes affected by fall in ceramic proppants market
  • Development of new products
  • Positive price/mix in each business group

Revenue in 2015 totaled €4,086.7 million, a + 10.8% increase on a current basis from 2014. This growth results from:

• a positive net Group structure effect of + €350.3 million (+ 9.5%) mainly comprised of the consolidation since March 1, 2015 of S&B and, to a lesser extent, the acquisitions made in the Kaolin, Carbonates, Roofing and Monolithic Refractories divisions;

• a positive exchange rate effect of + €218.2 million (+ 5.9%), relating to the euro's depreciation against the US dollar in particular.

At comparable Group structure and exchange rates, revenue decreased - 4.6% in 2015 compared with 2014 and - 5.3% in the second half, due to the persistent weakness of some markets and geographic zones, as well as a particularly unfavorable basis of comparison in ceramic proppants (gradual ramp-up of production during the previous year). Excluding ceramic proppants, comparable change in revenue is - 2.7% in the second half and - 2.5% for full-year 2015.

In this difficult environment, revenue from new products increased + 8.5% to €490 million, i.e. a + 29.9% rise excluding ceramic proppants, which contributed €21 million in 2015 vs. €90 million in 2014. The price/mix effect remained firm at + 1.3% for the whole Group for 2015 (+ €46.0 million).

CURRENT OPERATING INCOME

Non-audited quarterly data
(€ millions)
2014 2015 % change
st quarter
1
117.3 123.2 + 5.0%
Operating margin 13.0% 12.7% - 0.3 point
nd quarter
2
130.4 150.8 + 15.7%
Operating margin 14.0% 13.9% - 0.1 point
rd quarter
3
127.0 135.0 + 6.3%
Operating margin 13.5% 13.1% - 0.4 point
th quarter
4
119.8 129.1 + 7.7%
Operating margin 13.2% 12.9% - 0.3 point
Year 494.6 538.1 + 8.8%
Operating margin 13.4% 13.2% - 0.2 point

Firm operating margin at 13.2%

Favorable impact of price-mix component and exchange rates

Effectiveness of cost reduction programs

Current operating income, at €538.1 million in 2015, grew + 8.8% compared with 2014. It includes a favorable exchange rate effect of + €41.1 million, reflecting in particular the euro's depreciation against the dollar, and a + €47.7 million Group structure effect that includes S&B's contribution.

The slump in sales volumes (- €95.9 million) is partly offset by group structure and exchange rates effects. Current operating income also benefits from a favorable trend in the activity mix and the effectiveness of management measures:

  • Change in product price/mix (+ €35.1 million);
  • Improvement in variable costs (+ €19.6 million), supported in particular by the I-Cube operating excellence program;
  • Decrease in fixed costs and general expenses (+ €20.4 million).

The Group's operating margin remains firm at 13.2% (13.4% in 2014).

NET INCOME FROM CURRENT OPERATIONS

Net income from current operations rose + 8.0% to €341.5 million (€316.3 million in 2014). It includes the following items:

  • Financial expense for €55.5 million (vs. €45.1 million in 2014), with three components:
  • interest expense on net financial debt for €49.1 million in 2015 (vs. €40.2 million in 2014). This increase is mainly due to the rise in average net financial debt over the period (€1,467.0 million in 2015 vs. €922.3 million in 2014), mainly relating to the acquisition of S&B;
  • net financial cost of pensions and other changes in provisions for €14.9 million in 2015 (vs. - €10.7 million one year earlier);
  • net impact of foreign exchange and financial instruments, corresponding to a gain of + €8.5 million in 2015 (vs. + €5.8 million in 2014).
    • €140.5 million current tax charge (- €131.5 million in 2014). The effective tax rate is stable at 29.1% (29.2% in 2014).

Net income from current operations per share increased + 3.7% to €4.31. It takes into account a + 4.1% increase in the weighted average number of outstanding shares, following the issue of new shares with respect to the acquisition of S&B.

NET INCOME

Other operating income and expenses, net of tax, total - €273.1 million (vs. - €44.7 million one year earlier). They include the following items:

  • Restructuring costs for €64.1 million, comprised in particular of restructuring expenses relating to the integration of S&B and the adaptation of the industrial facilities to the market evolution.
  • Non-cash impairment charge on the Oilfield Solutions division (Energy Solutions & Specialties business group), corresponding to a net loss of value of €209.0 million, half of which is on the whole goodwill and the rest on part of the division's assets.

After taking into account other operating income and expenses, net of tax, the Group's share of net income amounted to €68.4 million in 2015 (€271.6 million in 2014).

CASH FLOW

(€ millions) 2014 2015
EBITDA 673.8 745.4
Change in operating working capital requirement (WCR) (48.9) 21.8
Paid capital expenditure (241.5) (271.6)
Current notional tax (144.6) (156.7)
Current free operating cash flow* 244.1 342.5
Paid financial expense (net of tax) (21.0) (31.8)
Other WCR items 4.4 27.7
Current free cash flow 227.5 338.4
* including subsidies, value of divested assets and miscellaneous 5.3 3.6

Further development capital expenditure

High generation of current free operating cash flow at 343 M€

The Group's operating working capital requirement, stated as a percentage of annualized sales in the last quarter, amounted to 23.5% in 2015.

Paid capital expenditure totaled €271.6 million in 2015. The booked amount (€274.2 million) represents 122% of depreciation expense (vs. 115% in 2014). Development capital expenditure continued selectively, totaling €78.4 million (€82.2 million in 2014), to support the Group's growth potential. Details of the main projects are given under each business group.

Consequently, Imerys generated substantially higher current free operating cash flow in 2015, at €342.5 million (€244.1 million in 2014).

FINANCIAL STRUCTURE

(€ millions) December 31, 2014 December 31, 2015
Paid dividends (125.3) (132.6)
Net debt, end of period 869.9 1,480.4
Average net debt of the period 922.3 1,467.0
Shareholders' equity 2,470.5 2,671.8
EBITDA 673.8 745.4
Net debt / shareholders' equity 35.2% 55.4%
Net debt / EBITDA 1.3x 2.0x

Increase in net financial debt due to acquisition of S&B

Sound financial ratios

The Group's net financial debt grew + €610.5 million to €1,480.4 million as of December 31, 2015, mainly due to the acquisition of S&B, which was completed at the end of February 2015 and paid partly in cash, partly in stock, the payment of dividends for an amount of €132.6 million and purchases of the Group's own shares under its buyback program. These transactions concerned 1.5% of the Company's capital, i.e. €74 million.

Imerys therefore has €2.9 billion in total financial resources as of December 31, 2015. After deduction of gross financial debt, available non-cash resources total €1 billion with an average maturity of 4.6 years.

Imerys' financial ratios remain sound with gearing at 55% and net financial debt at 2.0 times EBITDA.

On November 20, 2015, Moody's confirmed its rating for Imerys' unsecured senior debt, at Baa-2 since 2011 with a stable outlook. The short-term rating was also confirmed at P-2, also with a stable outlook.

REVIEW BY BUSINESS GROUP

Energy Solutions & Specialties

(31% of consolidated revenue 2015)

Non-audited quarterly data
(€ millions)
2014 2015 Current change Comparable
change
st quarter revenue
1
303.2 312.5 + 3.1% - 4.7%
nd quarter revenue
2
321.1 323.5 + 0.8% - 3.5%
rd quarter revenue
3
338.9 314.1 - 7.3% - 9.7%
th quarter revenue
4
315.5 303.0 - 4.0% - 8.1%
Full-year revenue 1,278.6 1,253.1 - 2.0% - 6.6%
Current operating income 149.5 119.7 - 19.9% - 21.0%
Operating margin 11.7% 9.6% - 2.1 points
Booked capital expenditure 84.5 85.5 + 1.2%
% depreciation expense 147% 170%

The Energy Solutions & Specialties business group's revenue totaled €1,253.1 million in 2015, a - 2.0% decrease on a current basis. This change factors in a positive exchange rate effect of + €59.2 million (+ 4.6%) and reflects a sharp downturn in the Oilfields Solutions division because of the fall in the US ceramic proppants market, with an unfavorable basis of comparison in the second half. On a comparable basis, the business group's sales therefore decreased - 6.6% but were stable excluding ceramic proppants.

The Carbonates division's sales continued to benefit from the development of specialty applications for consumer goods and construction, particularly in the United States (plastic films, polymers, paint, etc.). Solvay's precipitated calcium carbonate activities were consolidated from October 30.

In the Monolithic Refractories division, which serves high-temperature industries (steel, metallurgy, power generation, incineration, casting, cement, petrochemicals etc.), demand held out well in Europe on industrial markets but declined on steel markets.

The Graphite & Carbone division's sales for electronics and automotive markets (lithium-ion batteries) were buoyant in 2015.

In the Oilfield Solutions division, demand for ceramic proppants for non-conventional oilfields flumped further in the 4th quarter, against a backdrop of falling oil prices since late 2014. This division's negative impact on the Group's current operating income totaled - €27 million for the year as a whole. In 2016, assuming unchanged market conditions, this figure should not be higher than for 2015.

Current operating income decreased - 19.9% to €119.7 million (- €29.8 million) and improved slightly (+ 0.3%) excluding ceramic proppants. It includes an exchange rate of + €2.8 million. Current operating income reflects the decrease in volumes, a positive price/mix effect and lower fixed costs and general expenses due to the adjustments to the fall in demand for ceramic proppants.

Taking these factors into account, the business group's operating margin decreased - 2.1 points to 9.6%.

Capital expenditure in 2015 includes two new production units in India: a new ground calcium carbonate (GCC) production line for the high value-added board packaging market and Calderys' third plant, to meet growth in monolithic refractory products in India and the Middle East. Another major capital project was a new carbonates production unit for food plastic film in Sylacauga, California.

Under its innovation programs, Imerys developed FiberLeanTM, a patented and innovative manufacturing technology for micronized cellulose ("MFC") composite with great potential in multiple industries. The Food and Drug Administration (FDA) recently authorized its use as a food contact substance. The first commercial applications are in paper and packaging markets. Imerys signed two commercial contracts with leading paper groups in 2015, for which two on-site plants are under construction in the United States and India.

Filtration & Performance Additives

(26% of consolidated revenue 2015)

Non-audited quarterly data
(€ millions)
2014 2015 Current
change
Comparable
change
st quarter revenue
1
159.0 218.9 + 37.6% + 2.8%
nd quarter revenue
2
165.8 306.2 + 84.7% + 3.6%
rd quarter revenue
3
167.8 284.5 + 69.6% - 0.1%
th quarter revenue
4
165.4 271.9 + 64.4% + 2.7%
Full-year revenue 658.0 1 081.5 + 64.4% + 2.2%
Current operating income 113.4 178.1 + 57.0% + 9.6%
Operating margin 17.2% 16.5% - 0.7 point
Booked capital expenditure 42.9 64.9 + 51.3%
% depreciation expense 125% 111%

The Filtration & Performance Additives business group's revenue totaled €1,081.5 million in 2015, including a + €350.5 million structure effect, mainly relating to the consolidation of S&B over 10 months, and a positive exchange rate impact of + €58.4 million. S&B's operational integration was completed in the 4th quarter and synergies are being implemented in accordance with the Group's expectations.

The business group's growth was vibrant in the 4th quarter and amounted to + 2.2% at constant structure and exchange rates for the year as a whole. Its activity was buoyed by the rapid development of new products. In addition, the sales of the Performance Minerals and Minerals for Filtration activities benefited from a vibrant automotive sector and a firm consumer goods market, respectively.

The Additives for Metallurgy division, resulting from the integration of S&B, held out well against the slump in steel production, particularly in Europe, thanks to the foundry sector, of which a large share of outlets are related to the automotive market.

The business group's current operating income, at €178.1 million, rose + 57.0%. It takes into account a significant structure impact (+ €45.7 million), including the first synergies relating to S&B, and favorable exchange effects (+ €8.1 million).

Under this new configuration, operating margin totaled 16.5%.

Capital expenditure programs continued in 2015, particularly with the aim of increasing production capacity in talc for automotive polymers at the Luzenac (France) and Timmins (Ontario, Canada) plants. The programs also include the setup of a new talc refining process for the automotive sector in Vermont (USA).

Ceramic Materials

(28% of consolidated revenue 2015)

Non-audited quarterly data
(€ millions)
2014 2015 Current
change
Comparable
change
st quarter revenue
1
289.5 291.0 + 0.6% - 6.3%
nd quarter revenue
2
292.5 301.4 + 3.0% - 1.7%
rd quarter revenue
3
295.1 285.8 - 3.1% - 4.4%
th quarter revenue
4
279.7 294.2 + 5.2% - 4.7%
Full-year revenue 1,156.9 1,172.4 + 1.3% - 4.2%
Current operating income 211.0 210.1 - 0.4% - 11.0%
Operating margin 18.2% 17.9% - 0.3 point
Booked capital expenditure 69.5 78.2 + 12.5%
% depreciation expense 82% 92%

The Ceramic Materials' business group's revenue totaled €1,172.4 million in 2015. The + 1.3% current increase compared with 2014 includes a + 4.9% exchange rate effect (+ €57.1 million) and a + 0.6% structure impact (+ €7.5 million), relating in particular to the acquisitions of BASF's paper hydrous kaolin (PHK) activity in the United States and of Matisco's metal accessories activities in the Roofing division. The - 4.2% comparable decrease in revenue mainly results from slack construction markets in France and the paper market's slump.

In 2015, the Roofing division carried out its activities on a French clay roof tile market that was - 7.0% lower than in 2014(6) . The division's sales decrease slowed down in the 4 th quarter while construction permits levelled out, showing a slight decrease on a rolling twelve-month basis to the end of November 2015. Furthermore, singlefamily housing sales, an advance indicator of roof tile sales, grew + 7.3% in the 3rd quarter of 2015 (7) .

In the Kaolin division, the Group continued its developments in specialty applications, particularly in the United States, while the North American paper market slumped significantly. The contribution of BASF's PHK activities partly offset lower sales for paper in the 4th quarter.

In the Ceramics division, the Group continues to benefit from its strategy of geographic repositioning in emerging countries and from its development in new segments. Sales were also firm in traditional markets (floor tiles, sanitaryware, tableware).

Current operating income decreased slightly by - 0.4% to €210.1 million in 2015 and includes a + €20.1 million exchange rate effect. It reflects the decrease in volumes, partly offset by the product price/mix and tight control of general expenses.

In this context, the business group's operating margin remained sound at 17.9% in 2015.

Capital expenditure includes production capacity extension in kaolin for the ceramics industry to serve growth in Southeast Asia.

6 Source: French Roof Tiles & Bricks Federation (FFTB) – December 2015 newsflash 2015

7 Source: French Sustainable Development Commission, November 2015

High Resistance Minerals

(15% of consolidated revenue 2015)

Non-audited quarterly data
(€ millions)
2014 2015 Current
change
Comparable
change
st quarter revenue
1
163.3 165.3 + 1.2% - 7.4%
nd quarter revenue
2
165.6 165.0 - 0.4% - 10.4%
rd quarter revenue
3
154.2 156.0 + 1.1% - 3.4%
th quarter revenue
4
158.6 143.1 - 9.7% - 10.5%
Full-year revenue 641.7 629.4 - 1.9% - 8.0%
Current operating income 72.8 81.6 + 12.1% - 3.3%
Operating margin 11.3% 13.0% + 1.7 point
Booked capital expenditure 41.0 42.7 + 4.0%
% depreciation expense 134% 143%

The High Resistance Minerals business group, which mainly serves the high temperature (steel, casting, glass, aluminum, etc.) and abrasive product industries, posted revenue of €629.4 million in 2015, a - 1.9% decrease on a current basis from 2014. This change takes into account a €44.9 million positive exchange rate effect and a - €6.0 million structure impact, relating to the divestment of a minerals trading activity in the United States at the end of June 2015. The - 8.0% decrease in revenue on a comparable basis mainly results from the downturn on the refractories market and the refocusing on high value-added products.

The Refractory Minerals division coped with slack demand in the United States and in Asia, while sales held out well in Europe.

In the Fused Minerals division, demand was stable in Europe, unlike in Brazil and China where the Group completed its refocusing in higher value-added products.

At €81.6 million, the business group's current operating income recovered. It includes a + €10.2 million exchange rate effect and benefits from the business group's cost reduction and activity restructuring programs.

In this context, the business group's operating margin improved + 1.7 point to 13.0%.

The business group's main development capital expenditure involved a new production line in Austria for ultrafine alumina for high-performance applications in abrasives.

Financial agenda 2016

April 29 (before market opening) 1st quarter 2016 results
May 4 at 11:00am Shareholders' General Meeting
July 27 (after market close) 1st half 2016 results
October 28 (before market opening) 3rd quarter 2016 results

All above dates are tentative and may change. Updates are available on the Group's website at www.imerys.com, in the Investors & Analysts/Financial Agenda section.

_______________________________________________________________________________________________________________________________________

Presentation

The press release is available from the Group's website www.imerys.com with access via the homepage in the "News" section.

The presentation for the 2015 results will be held on February 12, 2016 at 11am and streamed live on the Group's website.

_______________________________________________________________________________________________________________________________________

The world leader in mineral-based specialty solutions for industry, with €4.1 billion revenue and 16,130 employees in 2015, Imerys transforms a unique range of minerals to deliver essential functions (heat resistance, mechanical strength, conductivity, coverage, barrier effect, etc.) that are essential to its customers' products and manufacturing processes.

Whether mineral components, functional additives, process enablers or finished products, Imerys' solutions contribute to the quality of a great number of applications in consumer goods, industrial equipment or construction. Combining expertise, creativity and attentiveness to customers' needs, the Group's international teams constantly identify new applications and develop high value-added solutions under a determined approach to responsible development. These strengths enable Imerys to develop through a sound, profitable business model.

More comprehensive information about Imerys may be obtained from its website (www.imerys.com) under Regulated Information, particularly in its Registration Document filed with the Autorité des marchés financiers on March 19, 2015 under number D.15-0173 (also available from the Autorité des marchés financiers website, www.amf-france.org). Imerys draws the attention of investors to chapter 4, "Risk Factors and Internal Control", of its Registration Document.

Disclaimer: This document contains projections and other forward-looking statements. Investors are cautioned that such projections and forward-looking statements are subject to various risks and uncertainties (many of which are difficult to predict and generally beyond the control of Imerys) that could cause actual results and developments to differ materially from those expressed or implied.

_______________________________________________________________________________________________________________________________________

Analyst/Investor relations: Press contacts:
Vincent Gouley - + 33 (0)1 49 55 64 69 Vincent Gouley - + 33 (0)1 49 55 64 69
[email protected] Philémon Tassel - + 33 (0)6 30 10 96 11
Sarah Fornier - + 33 (0)7 87 40 83 50

CONSOLIDATED RESULTS TO DECEMBER 31, 2015

APPENDIX

(non-audited quarterly data)

1. CONSOLIDATED REVENUE BREAKDOWN

Comparable quarterly change 2015
vs. 2014
Q1 2015 Q2 2015 Q3 2015 Q4 2015
- 4.5% - 3.3% - 5.6% - 5.1%
Comparable quarterly change 2014
vs. 2013
Q1 2014 Q2 2014 Q3 2014 Q4 2014
+ 5.0% + 3.7% + 3.9% + 0.1%
Revenue by business group
(€ millions)
09/30/14 09/30/15 Current
change %
Group
structure
%
Exchange
rates %
Comp.
change %
Energy Solutions & Specialties 963.1 950.2 - 1.3% - 0.7% + 5.4% - 6.0%
Filtration & Performance Additives 492.6 809.6 + 64.3% + 51.9% + 10.4% + 2.1%
Ceramic Materials 877.1 878.1 + 0.1% - 0.9% + 5.1% - 4.1%
High Resistance Minerals 483.1 486.2 + 0.6% - 0.5% + 8.3% - 7.2%
Holding & Eliminations (34.2) (39.6)
Total 2,781.7 3,084.5 + 10.9% + 8.6% + 6.8% - 4.4%
Revenue by business group
(€ millions)
Q4 2014 Q4 2015 Current
change %
Group
structure %
Exchange
rates %
Comp.
change %
Energy Solutions & Specialties 315.5 303.0 - 4.0% + 1.9% + 2.3% - 8.1%
Filtration & Performance Additives 165.4 271.9 + 64.4% + 57.3% + 4.4% + 2.7%
Ceramic Materials 279.7 294.2 + 5.2% + 5.4% + 4.4% - 4.7%
High Resistance Minerals 158.6 143.1 - 9.7% - 2.3% + 3.0% - 10.5%
Holding & Eliminations (12.7) (10.2) n.s. n.s. n.s. n.s.
Total 906.5 1,002.2 + 10.6% + 12.4% + 3.3% - 5.1%
Revenue by geographic destination
((€ millions)
2015 revenue % change
2015 vs 2014
(Current change)
% consolidated
revenue
2014
% consolidated
revenue
2015
Western Europe 1,795.8 + 9.1% 45% 44%
of which France 464.3 - 1.2% 13% 11%
USA / Canada 1,000.3 + 14.0% 24% 24%
Emerging countries 1,091.3 + 12.0% 26% 27%
Japan/ Australia 199.3 + 5.2% 5% 5%
Total 4,086.7 + 10.8% 100% 100%
Distribution of revenue by business group 2014 2015
Energy Solutions & Specialties 35% 31%
Filtration & Performance Additives 18% 26%
Ceramic Materials 31% 28%
High Resistance Minerals 16% 15%

2. KEY RESULTS INDICATORS

(€ millions) 9 months 2014 9 months 2015 Change
Revenue 2,781.7 3,084.5 + 10.9%
EBITDA 515.2 575.3 + 11.7%
Currrent Operating Income 374.7 409.0 + 9.1%
Current financial expense (38.1) (39.5)
Current taxes (96.6) (107.9)
Minority interests (0.9) (1.7)
Net income from current operations (1) 239.1 259.9 + 8.7%
Other operating income and expenses, net (32.5) (41.4)
Net income (1) 206.6 218.5 + 5.8%

(1) Group share.

(€ millions) Q4 2014 Q4 2015 Change
Revenue 906.5 1 002.2 + 10.6%
EBITDA 158.6 170.1 + 7.3%
Currrent Operating Income 119.8 129.1 + 7.8%
Current financial expense (7.0) (16.0)
Current taxes (34.8) (32.6)
Minority interests (0.8) 1.1
Net income from current operations (1) 77.2 81.6 + 5.7%
Other operating income and expenses, net (12.2) (231.7)
Net income (1) 65.0 (150.1) n.a.

(1) Group share.

3. GLOSSARY

  • The term "on a comparable basis" means: "at comparable Group structure and exchange rates";

  • Restatement of the foreign exchange effect consists of calculating aggregates for the current year at the exchange rate of the previous year. The impact of exchange rate instruments qualifying as hedging instruments is taken into account in current data.

  • Restatement of Group structure effect of newly consolidated entities consists of:
  • for entities entering the consolidation scope in the current year, subtracting the contribution of the acquisition from the aggregates of the current year;
  • for entities entering the consolidation scope in the previous year, subtracting the contribution of the acquisition from January 1 of the current year, until the last day of the month of the current year when the acquisition was made the previous year;
  • Restatement of entities leaving the consolidation scope consists of:

  • for entities leaving the consolidation scope in the current year, subtracting the departing entity's contributions from the aggregates of the previous year as from the first day of the month of divestment;

  • for entities leaving the consolidation scope in the previous year, subtracting the departing entity's contributions from the aggregates of the previous year.
  • the term "Current operating income" means operating income before other operating income and expenses;
  • the term "Net income from current operations" means the Group's share of income before other operating revenue and expenses, net;
  • the term "Current free operating cash flow" means EBITDA after deduction of notional tax, changes in working capital requirement and paid capital expenditure and including subsidies, value of divested assets and miscellaneous;
  • the term "Current free cash flow" means Current free operating cash flow less financial expense (net of tax) and other working capital requirement items.

APPENDIX

SUMMARY OF FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015

The Board of Directors met on February 11, 2016 to close the financial statements for 2015. Audit procedures have been carried out and the audit reports are being issued.

CONSOLIDATED INCOME STATEMENT

(€ millions) 2015 2014
Revenue 4,086.7 3,688.2
Current income and expenses (3,548.6) (3,193.6)
Raw materials and consumables used (1,299.5) (1,199.4)
External expenses (1,117.8) (1,010.3)
Staff expenses (877.7) (746.4)
Taxes and duties (51.9) (47.3)
Amortization, depreciation and impairment losses (225.5) (209.5)
Other current income and expenses 23.8 19.3
Current operating income 538.1 494.6
Other operating income and expenses (357.2) (59.8)
Gain or loss from obtaining or losing control (8.4) 58.9
Other non-recurring items (348.8) (118.7)
Operating income 180.9 434.8
Net financial debt expense (49.1) (40.2)
Income from securities 9.5 6.8
Gross financial debt expense (58.6) (47.0)
Other financial income and expenses (6.4) (4.9)
Other financial income 241.8 122.9
Other financial expenses (248.2) (127.8)
Financial income (loss) (55.5) (45.1)
Income taxes (56.3) (117.4)
Net income of assets held for sale - 1.0
Net income 69.1 273.3
Net income, Group share(1) & (2) 68.4 271.6
Net income, share of non-controlling interests 0.7 1.7
(1) Net income per share
Basic net income per share (in €) 0.86 3.57
Diluted net income per share (in €) 0.85 3.51
(2) Net income from current operations, Group share 341.5 316.3
Basic net income from current operations per share (in €) 4.31 4.15
Diluted net income from current operations per share (in €) 4.24 4.09
Other operating income and expenses net of income taxes, Group share (273.1) (45.7)
Net income of assets held for sale - 1.0
(€ millions) 2015 2014
Non-current assets 4,189.1 3,341.5
Goodwill 1,631.3 1,106.8
Intangible assets 105.1 66.4
Mining assets 552.3 471.6
Property, plant and equipment 1,589.6 1,503.2
Joint ventures and associates 126.2 83.3
Other financial assets 31.6 26.0
Other receivables 33.5 37.8
Derivative financial assets 15.0 11.7
Deferred tax assets 104.5 34.7
Current assets 1,979.7 2,080.9
Inventories 738.3 670.0
Trade receivables 578.1 538.8
Other receivables 223.6 180.3
Derivative financial assets 5.0 6.1
Other financial assets(1) 19.6 29.3
Cash and cash equivalents(1) 415.1 656.4
Consolidated assets 6,168.8 5,422.4
Equity, Group share 2,644.1 2,444.4
Capital 159.2 151.8
Premiums 530.2 334.1
Reserves 1,886.3 1,686.9
Net income, Group share 68.4 271.6
Equity, share of non-controlling interests 27.8 26.1
Equity 2,671.9 2,470.5
Non-current liabilities 2,224.2 2,121.6
Employee benefit liabilities 322.9 306.5
Other provisions 304.2 258.4
Loans and financial debts(1) 1,500.0 1,494.3
Other debts 42.4 11.7
Derivative financial liabilities 1.9 7.6
Deferred tax liabilities 52.8 43.1
Current liabilities 1,272.7 830.3
Other provisions 19.2 24.3
Trade payables 441.0 411.9
Income taxes payable 50.4 3.0
Other debts 315.6 307.7
Derivative financial liabilities 19.2 14.6
Loans and financial debts(1) 423.8 66.9
Bank overdrafts(1) 3.5 1.9
Consolidated equity and liabilities 6,168.8 5,422.4
(1) Positions included in the calculation of the net financial debt 1,480.4 869.9

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(€ millions) 2015 2014
Cash flow from operating activities 544.5 416.5
Cash flow generated by current operations 760.4 654.0
Interests paid (61.7) (53.7)
Income taxes on current operating income and financial income (loss) (105.8) (150.9)
Dividends received from available-for-sale financial assets 0.3 (0.1)
Cash flow generated by other operating income and expenses (48.7) (32.8)
Cash flow from investing activities (610.5) (205.3)
Acquisitions of intangible assets and property, plant and equipment (271.6) (241.4)
Acquisitions of investments in consolidated entities after deduction of cash acquired (351.0) (67.5)
Transaction costs (10.6) 10.4
Changes in estimate of the contingent remuneration of the seller (0.2) 7.4
Acquisitions of available-for-sale financial assets (0.4) -
Disposals of intangible assets and property, plant and equipment 7.2 7.9
Disposals of investments in consolidated entities after deduction of cash disposed of 6.7 70.9
Net change in financial assets 0.2 0.5
Paid-in interests 9.2 6.5
Cash flow from financing activities (154.4) 92.2
Capital increases and decreases in cash (10.0) (28.0)
Disposals (acquisitions) of treasury shares (11.8) (14.5)
Dividends paid to shareholders (132.5) (122.4)
Dividends paid to non-controlling interests (0.1) (2.8)
Acquisitions of investments in consolidated entities from non-controlling interests - (3.5)
Loan issues 23.5 607.2
Loan repayments (342.8) (307.7)
Net change in other debts 319.3 (36.1)
Cash flow from assets held for sale - 0.6
Change in cash and cash equivalents (220.4) 304.0
(€ millions) 2015 2014
Opening cash and cash equivalents 654.5 340.2
Change in cash and cash equivalents (220.4) 304.0
Impact of changes due to exchange rate fluctuations (22.5) 10.3
Closing cash and cash equivalents 411.6 654.5
Cash 286.8 218.2
Cash equivalents 128.3 438.2
Bank overdrafts (3.5) (1.9)
(€ millions) 2015 2014
Net income 69.1 273.3
Adjustments 683.3 413.8
Income taxes 56.3 117.4
Share in net income of joint ventures and associates (8.1) (4.6)
Dividends received from joint ventures and associates 7.4 1.7
Impairment losses on goodwill 118.8 30.1
Share in net income of associates out of the recurring business 0.1 1.9
Other operating income and expenses excluding impairment losses on goodwill 238.3 27.8
Net operating amortization and depreciation 225.1 209.2
Net operating impairment losses on assets - 4.8
Net operating provisions (9.4) (20.5)
Dividends receivable from available-for-sale financial assets (0.1) -
Net interest income and expenses 49.1 41.9
Share-based payments expense 7.3 9.5
Change in fair value of hedge instruments 2.2 (1.8)
Income from current disposals of intangible assets and property, plant and equipment (3.7) (2.6)
Net income of assets held for sale - (1.0)
Change in the working capital requirement 8.0 (33.1)
Inventories 6.1 (56.3)
Trade accounts receivable, advances and down payments received 41.2 (15.0)
Trade accounts payable, advances and down payments paid (25.5) 22.6
Other receivables and debts (13.8) 15.6
Cash flow generated by current operations 760.4 654.0

NOTE A: CASH FLOW GENERATED BY CURRENT OPERATIONS

NOTE B: CASH FLOW GENERATED BY OTHER OPERATING INCOME AND EXPENSES

(€ millions) 2015 2014
Other operating income and expenses (357.2) (59.8)
Adjustments 308.5 27.0
Transaction costs 10.6 (10.4)
Changes in estimate of the contingent remuneration of the seller 0.2 (7.4)
Income from disposals of consolidated investments and available-for-sale financial assets (2.4) (41.1)
Impairment losses on goodwill 118.8 30.1
Income from non-recurring disposals of intangible assets and property, plant and equipment 0.1 -
Other net operating amortization and depreciation 153.0 6.5
Other net operating provisions 15.0 34.5
Share in net income of associates out of the recurring business 0.1 1.9
Income taxes paid on other operating income and expenses 13.1 12.9
Cash flow generated by other operating income and expenses (48.7) (32.8)

CURRENT FREE OPERATING CASH FLOW

(€ millions) 2015 2014
Current operating income 538.1 494.6
Operating amortization, depreciation and impairment losses 225.5 209.5
Net change in operating provisions (17.5) (27.5)
Share in net income of joint ventures and associates (8.1) (4.6)
Dividends received from joint ventures and associates 7.4 1.8
Operating cash flow before taxes (current EBITDA) 745.4 673.8
Notional taxes on current operating income (156.7) (144.6)
Current net operating cash flow 588.7 529.2
Paid capital expenditures (271.6) (241.5)
Intangible assets (48.9) (8.3)
Property, plant and equipment (174.4) (188.9)
Overburden mining assets (50.9) (42.8)
Debts on acquisitions 2.6 (1.5)
Carrying amount of current asset disposals 3.6 5.3
Change in the operational working capital requirement 21.8 (48.9)
Inventories 6.1 (56.4)
Trade accounts receivable, advances and down payments received 41.2 (15.0)
Trade accounts payable, advances and down payments paid (25.5) 22.5
Current free operating cash flow 342.5 244.1

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