Earnings Release • Nov 2, 2021
Earnings Release
Open in ViewerOpens in native device viewer
PARIS, NOVEMBER 2, 2021
" Imerys achieved another quarter of solid, double-digit organic growth and current EBITDA increase as we strived to serve our customers in a challenging context. While market conditions have changed since we reported our results for the first half year at the end of July, we are determined to ensure that pricing discipline and tight cost management continue to offset the impact of higher input costs on our profitability. We expect demand for Imerys' specialty minerals solutions to remain strong in most markets and are confident in our ability to deliver on our objectives for 2021. "
| 1 Unaudited consolidated results (€ millions) |
Q3 2020 | Q3 2021 | Change (%) |
9M 2020 | 9M 2021 | Change (%) |
|---|---|---|---|---|---|---|
| Revenue | 912 | 1,104 | +21.0% | 2,812 | 3,262 | +16.0% |
| Organic growth | -14.4% | +18.6% | - | -14.4% | +17.3% | - |
| Current EBITDA | 165 | 194 | +17.7% | 454 | 594 | +30.8% |
| Current EBITDA margin | 18.1% | 17.6% | +50 bps | 16.2% | +18.2% | +200 bps |
| Current operating income | 78 | 118 | +51.9% | 210 | 363 | +73.0% |
| Current operating margin | 8.5% | 10.7% | +220 bps | 7.5% | 11.1% | +370 bps |
| Operating income | 69 | 115 | +66.4% | 180 | 338 | +87.5% |
| Net income from current operations, Group share |
44 | 75 | +70.4% | 117 | 233 | +99.7% |
| Net income, Group share | 39 | 74 | +91.7% | 95 | 216 | +126.5% |
| Net income from current operations per 2 share |
€0.52 | €0.89 | +70.5% | €1.44 | €2.75 | +91.7% |
1 The definition of alternative performance measures can be found in the glossary at the end of the press release.
2 Weighted average number of outstanding shares: 84,706,741 in 9 months of 2021 compared with 81,305,809 in 9 months of 2020.
On July 24, 2021, Imerys signed an agreement to sell to Thiele Kaolin Company, one of the world's leading producers of processed kaolin clay, certain assets and mining resources supplying hydrous kaolin to the paper & packaging markets. These assets, which are part of Imerys' Performance Minerals Americas business segment, posted revenue of approximately \$76 million in 2020 with 109 employees. This transaction is expected to be completed around the end of the current year.
Imerys expects to generate net proceeds of ca. €100 million from the sale of these assets and other disposals initiated in 2021 (such as its stake in Fiberlean Technologies, related production facilities and other minor non-strategic assets).
On October 13, 2021, the Court overseeing the North American Chapter 11 cases issued a ruling that certain ballots cast in favor of the North American talc entities plan of reorganization (the "Plan") will not be counted. This means the approval of the Plan now falls just short of the required 75% majority vote. This ruling is expected to result in a resolicitation of the votes on an updated Plan that will extend the Chapter 11 timeline into 2022.
The Group does not expect this ruling to have any material effect on the settlement with Imerys SA and its affiliates embodied in the Plan, which is in part already consummated through the sale of the assets of the North American talc entities to a third party. The representatives of current and future potential claimants continue to support the settlement with Imerys SA and its affiliates under the terms and conditions currently outlined in the Plan.
The Group continues to consider that the balance of the provision in the financial statements as of the end of 2020 is appropriate to cover the expected financial impact of the Chapter 11 process on Imerys.
Imerys expects demand for its specialty minerals solutions to remain sustained across most market segments well into 2022.
Pricing discipline and tight cost management should continue to offset the impact of higher input costs.
In current market conditions, Imerys targets current EBITDA between €735 and €755 million in 2021, a significant improvement from the €631 million recorded in 2020.
| Unaudited quarterly data (€ millions) |
2020 | 2021 | Reported Change |
Like-for-like change |
Volumes | Price mix |
|---|---|---|---|---|---|---|
| First quarter | 1,028 | 1,058 | +2.9% | +6.3% | +5.8% | +0.5% |
| Second quarter | 872 | 1,100 | +26.2% | +28.9% | +26.3% | +2.6% |
| Third quarter | 912 | 1,104 | +21.0% | +18.6% | +15.0% | +3.6% |
| Total | 2,812 | 3,262 | +16.0% | +17.3% | +15.2% | +2.2% |
Revenue for the fIrst nine month of 2021 was €3,262 million, up 17.3% year-on-year at constant scope and exchange rates, including an exceptional growth of 28.9% in the second quarter. Group sales volumes were up 15.2%, in the first nine months, confirming the demand recovery across all underlying markets despite logistics and supply issues.
In a context of high inflation, Imerys' price mix accelerated in Q3 (+3.6%), averaging 2,2% for the first nine months versus the prior year.
Revenue included a significantly negative currency effect of €75 million (-2.7%), primarily as a result of the depreciation of the U.S. dollar against the euro in the first part of the year.
The scope effect was €52 million for the first nine months, related mostly to the positive contribution of recent acquisitions (Haznedar group, Cornerstone, Sunward Refractories and Hysil) and the divestiture of the kaolin operations in Australia.
| Unaudited quarterly data (€ millions) |
2020 | 2021 | Change |
|---|---|---|---|
| First quarter | 165 | 183 | +10.9% |
| Second quarter | 125 | 218 | +74.5% |
| Third quarter | 165 | 194 | +17.7% |
| Nine-months | 454 | 594 | +30.8% |
| Margin | 16.2% | 18.2% | +200 bps |
Current EBITDA reached €594 million for the first nine months of 2021, a 30.8% increase vs. 9 months 2020. Current EBITDA margin improved by 200 basis points to 18.2% versus the first 9 months of 2020.
It benefitted from positive volume contribution (€205 million) and strong price mix (€39 million), which compensated for the €32 million increase in variable costs, a consequence of extremely high inflation on freight, raw materials, energy and packaging costs. For the full year, the Group targets a positive price mix cost balance, leveraging its purchasing savings, hedging positions and continuous operational improvement actions.
Fixed costs and overheads were up €75 million vs last year, following increased activity at all production sites.
The currency effect was negative at €18 million.
Current operating income reached €363 million for the first nine months of 2021, a 73.0% increase compared to the first nine months of last year.
Net income from current operations, Group share, totaled €233.2 million, up 99.7% vs. 2020. Net financial result was negative at -€29.6 million. The income tax expense of €90.0 million corresponds to an effective tax rate of 27.0%, compared with 28.0% in the first nine months of 2020. Net income from current operations, Group share, per share, was up 91.7% to €2.75.
Net income, Group share, totaled €216.2 million in the first nine months of 2021, after -€17 million of other income and expenses, after tax.
| Q3 2020 | Q3 2021 | LFL change on Q3 2020 |
Unaudited quarterly data (€ millions) |
9M 2020 | 9M 2021 | LFL change on 9M 2020 |
|---|---|---|---|---|---|---|
| 217 | 244 | +11.3% | Revenue Americas | 681 | 717 | +10.5% |
| 244 | 281 | +14.5% | Revenue Europe, Middle East and Africa (EMEA) |
745 | 864 | +16.8% |
| 103 | 131 | +30.3% | Revenue Asia-Pacific (APAC) | 320 | 386 | +27.8% |
| (40) | (38) | - | Eliminations | (133) | (135) | - |
| 523 | 619 | +17.6% | Total revenue | 1,613 | 1,831 | +16.9% |
Performance Minerals (56% of consolidated revenue)
Revenue generated by the Performance Minerals segment was up 16.9% like-for-like in the first 9 months of 2021. On a reported basis, revenue was up 13.5% after a negative currency effect of €45.5 million (-2.8%).
Revenue in the Americas was up 10.5% at constant scope and exchange rates in the first 9 months of 2021, of which +11.3% in the third quarter, despite persisting logistic issues which created a significant order backlog. The overall rebound in activity was supported by sales of paints, rubber, polymers and ceramic products in the construction industry and a better performance of filtration and agriculture markets in the consumer goods sector.
Revenue in Europe, Middle East and Africa increased by 16.8% at constant scope and exchange rates in the first 9 months of 2021. During the third quarter (+14.5%), the Group benefited from a dynamic construction sector, especially in renovation (paints & coatings, tiles and sanitaryware) and better consumer goods market (filtration and life science applications). The automotive market continued to suffer from the global semiconductors shortage.
Revenue in Asia-Pacific was up 27.8% at constant scope and exchange rates in the first 9 months of 2021 (+30.3% in the third quarter) thanks to the continued, strong demand for carbon black and synthetic graphite for mobile energy and the recovery of paper & board, ceramics and filtration.
| Q3 2020 | Q3 2021 | LFL change on Q3 2020 |
Unaudited quarterly data (€ millions) |
9M 2020 | 9M 2021 | LFL change on 9M 2020 |
|---|---|---|---|---|---|---|
| 160 | 204 | +15.2% | Revenue High Temperature Solutions |
461 | 588 | +17.0% |
| 243 | 306 | +26.2% | Revenue Refractory, Abrasives & Construction |
785 | 913 | +19.5% |
| (8) | (13) | - | Eliminations | (26) | (41) | - |
| 394 | 497 | +20.5% | Total revenue | 1,220 | 1,459 | +17.5% |
Revenue generated by the High Temperature Materials and Solutions segment was up 17.5% in the first 9 months of 2021 at constant scope and exchange rates. On a reported basis, revenue increased by 19.6% with a positive scope effect of €51.8 million (+4.2%) and a negative currency effect of €21.9 million (-1.8%).
Revenue in High Temperature Solutions, which is serving the iron & steel, thermal and foundry markets, increased by 17.0% year-on-year at constant scope and exchange rates in the first nine months of 2021, posting growth of 15.2% in the third quarter. The business continued to benefit from various commercial initiatives and the strong underlying market recovery, particularly in India and China, and to a lesser extent in Europe and the US. The rebound was supported by the dynamism of the iron & steel and foundry segments, despite increasing supply issues, notably in the automotive market. Haznedar in Turkey continued to perform above expectations.
Revenue in the Refractory, Abrasives & Construction business area was up 19.5% at constant scope and exchange rates in the first nine months of 2021, driven by a strong recovery (mainly in refractories and abrasives) in demand for industrial equipment and steel, as well as further growth in building and infrastructure (specialty binders). In India, the new greenfield plant in Vizag continued to ramp up to serve the dynamic domestic refractory and construction markets.
The press release is available on the Group's website www.imerys.com. The Group will hold a live webcast to discuss the third quarter and nine months 2021 results at 6.30 PM (CET) on November 2, 2021, which can be accessed on the Group's website www.imerys.com.
| February 17, 2022 | 2021 annual results |
|---|---|
| April 28, 2022 | 1st quarter 2022 results |
| July 28, 2022 | 1st half 2022 results |
| November 2, 2022 | 3rd quarter 2022 results |
These dates are subject to change and may be updated on the Group's website https://www.Imerys.com/finance.
The world's leading supplier of mineral-based specialty solutions for industry with €3.8 billion in revenue and 16,400 employees in 2020. Imerys delivers high value-added, functional solutions to a great number of sectors, from processing industries to consumer goods. The Group draws on its understanding of applications, technological knowledge and expertise in material science to deliver solutions by beneficiating its mineral resources, synthetic minerals and formulations. Imerys' solutions contribute essential properties to customers' products and their performance, including heat resistance, hardness, conductivity, opacity, durability, purity, lightness, filtration, absorption and water repellency. Imerys is determined to develop responsibly, in particular by fostering the emergence of environmentally-friendly products and processes.
More comprehensive information about Imerys may be obtained from its website (www.imerys.com) in the Regulated Information section, particularly in its Registration Document filed with the French financial markets authority (Autorité des marchés financiers, AMF) on March 22, 2021 under number D.21-0167 (also available from the AMF website, www.amf-france.org). Imerys draws investors' attention to chapter 2 "Risk Factors and Internal Control" of its Registration Document.
Disclaimer: This document contains projections and other forward-looking statements. Investors should be aware 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 | Claire Lauvernier: +33 (0)1 49 55 66 65 |
| [email protected] | Hugues Schmitt (DGM Conseil): +33 (0)1 40 70 11 89 |
| Q3 2020 | Q3 2021 | Reported change on Q3 2020 |
Unaudited quarterly data (€ millions) |
9M 2020 | 9M 2021 | Reported change on 9M 2020 |
|---|---|---|---|---|---|---|
| 216.9 | 243.9 | +12.4% | Revenue Americas | 681.2 | 716.5 | +5.2% |
| 243.7 | 281.1 | +15.4% | Revenue Europe, Middle East and Africa (EMEA) |
744.6 | 863.7 | +16.0% |
| 103.4 | 131.5 | +27.2% | Revenue Asia-Pacific (APAC) | 320.3 | 386.2 | +20.6% |
| (40.5) | (37.9) | - | Eliminations | (132.7) | (135.5) | - |
| 523.5 | 618.6 | +18.2% | Total Performance Minerals revenue |
1,613.4 | 1,830.9 | + 13.5% |
| 159.8 | 203.6 | +27.4% | Revenue High Temperature Solutions |
461.1 | 588.1 | +27.5% |
| 242.7 | 306.4 | +26.3% | Revenue Refractory, Abrasives & Construction |
785.3 | 912.7 | +16.2% |
| (8.3) | (13.0) | - | Eliminations | (26.0) | (41.4) | - |
| 394.2 | 497.1 | +26.1% | Total High Temperature Materials & Solutions revenue |
1,220.4 | 1,459.5 | +19.6% |
Key income statement indicators
| (€ millions) | Q3 2020 | Q3 2021 | Change | 9M 2020 | 9M 2021 | Change |
|---|---|---|---|---|---|---|
| Revenue | 912 | 1,104 | +21.0% | 2,812 | 3,262 | +16.0% |
| Current EBITDA | 165 | 194 | +17.7% | 454 | 594 | +30.8% |
| Current operating income | 78 | 118 | +51.9% | 210 | 363 | +73.0% |
| Current financial expense | (15) | (12) | - | (44) | (30) | - |
| Current taxes | (18) | (29) | - | (46) | (90) | - |
| Minority interests | (1) | (3) | - | (2) | (10) | - |
| Net income from current operations, Group share |
44 | 75 | +70.4% | 117 | 233 | +99.7% |
| Other operating income and expenses, net |
(5) | (1) | - | (21) | (17) | - |
| Net income, Group share | 39 | 74 | +91.7% | 95 | 216 | +126.5% |
Imerys uses "current" indicators to measure the recurrent performance of its operations, excluding significant items that, because of their nature and their relatively infrequent occurrence, cannot be considered as inherent to the recurring performance of the Group (see section 5.5 Definitions and reconciliation of alternative performance measures to IFRS indicators in the 2020 Universal Registration Document).
| Alternative Performance Indicators | Definitions and reconciliation to IFRS indicators |
|---|---|
| Growth at constant scope and exchange rates (also called life-for-like change, LFL growth organic or internal growth) |
Calculated by stripping out the impact of currency fluctuations as well as acquisitions and disposals (scope effect). Restatement of the currency effect consists of calculating aggregates for the prior year at the exchange rate of the current year. The impact of exchange rate instruments qualifying as hedging instruments is taken into account in current data. Restatement of Group structure to take into account newly consolidated entities consists of: subtracting the contribution of the acquisition from the aggregates of the current year, for entities entering the consolidation scope in the current 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 prior year, for entities entering the consolidation scope in the prior year. Restatement of entities leaving the consolidation scope consists of: subtracting the departing entity's contribution from the aggregates of the prior year as from the first day of the month of divestment, for entities leaving the consolidation scope in the current year; subtracting the departing entity's contribution from the aggregates of the prior year, for entities leaving the consolidation scope in the prior year. |
| Volume effect | The sum of the change in sales volumes of each business area between the current and prior year, valued at the average sales price of the prior year. |
| Price mix effect | The sum of the change in average prices by product family of each business area between the current and prior year, applied to volumes of the current year. |
| Current operating income | The operating income before other operating income and expenses (income from changes in control and other non-recurring items). |
| Net income from current operations | The Group's share of income before other operating income and expenses, net (income from changes in control and other non-recurring items, net of tax) and income from discontinued operations. |
| Current EBITDA | Calculated from current operating income before operating amortization, depreciation and impairment losses and adjusted for changes in operating provisions and write-downs, share in net income and dividends received from joint ventures and associates. |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.