Earnings Release • Apr 27, 2018
Earnings Release
Open in ViewerOpens in native device viewer
PARIS, APRIL 27, 2018
"During the first quarter, Imerys continued to benefit from improving markets, like in the second half of 2017, its development strategy and innovation policy. Our results grew despite unfavorable currencies and adverse weather conditions. In the coming quarters, the Group will further invest in its growth, strengthen its competitiveness and will benefit from the contribution of recent acquisitions, notably Kerneos. 2018 should therefore be another year of progress in net income from current operations at current market conditions."
| Unaudited consolidated results (€ millions) | 1er quarter 2017 |
1er quarter 2018 |
Change |
|---|---|---|---|
| Revenue | 1,113.2 | 1,207.6 | + 8.5% |
| Current operating income (2) | 147.2 | 154.2 | + 4.8% |
| Operating margin | 13.2% | 12.8% | - 0.4 pt |
| Net income from current operations, Group's share (2) | 85.3 | 95.4 | + 11.8% |
| Net income, Group's share | 78,8 | 91.7 | + 16.3% |
| Net income from current operations, Group's share, per share (€) (2)(3) |
1.08 | 1.21 | + 11.5% |
(1) Organic growth: growth at comparable scope and exchange rates, or "like-for-like"
(2) Throughout this press release, "current" means "before other operating revenue and expenses", as defined in the notes to the financial statements relating to the consolidated income statement
(3) The weighted average number of shares was 79,047,023 in the 1st quarter of 2018 vs. 78,849,404 in the 1st quarter 2017
| Unaudited quarterly data (€ millions) |
2017 Revenue |
2018 Revenue |
Reported change |
Like-for-like change |
of which volumes |
of which price-mix |
|---|---|---|---|---|---|---|
| First quarter | 1,113.2 | 1,207.6 | + 8.5% | + 4.2% | + 1.2% | + 3.0% |
Revenue for the first quarter ended 31 March 2018 amounts to €1,207.6 million, up + 8.5% compared to the same period of 2017. This increase reflects the organic growth of + 4.2%, thanks in particular to a robust price-mix effect in all business groups, up + 3.0%. In markets that continue to be positive, volumes rose by + 1.2%. The activity has been impacted by adverse weather conditions in Europe and the United States.
Revenue also includes a positive perimeter effect of + €129,0 million (+ 11.6%), of which €108.0 million from Kerneos in particular, as well as the impact of significant adverse exchange rates for - €80.9 million euros (- 7.3%).
First quarter 2018 current operating income totaled €154.2 million, up + 4.8% compared to the first quarter of 2017. Excluding the impact of exchange rate fluctuations (- €13.2 million), it is up + 15.1% thanks, in particular, to a positive price-mix effect of + €31.3 million, which is offsetting the increase in variable costs (+ €19.3 million, notably raw materials and energy) which remain under control, and a gradual improvement in the contribution from recent acquisitions (+ €14.1 million), Kerneos, notably. Sales volumes contribute more than €6.7 million.
Moreover, the + €16.8 million increase in fixed costs and overheads includes further investments in new production capacity, innovation, human resources and programmes designed to strengthen the Group's competitiveness and support its growth.
Thus, the Group's operating margin remains firm at 12.8% for the first quarter of 2018, despite a - 0.2 point unfavorable exchange rate impact and taking into account a different business mix in the first quarter.
Net income from current operations rose + 11.8% to €95.4 million (Q1 2017: €85.3 million). It includes a financial result that goes from - €25.8 million in the first quarter 2017 to - €19.6 million in the first quarter 2018, due to the decrease of - €6.2 million in financial costs. The tax charge of - €39.0 million (Q1 2017: - € 35.8 million) reflects an effective tax rate of 29.0 % (Q1 2017: 29.5%).
Net income from current operations, Group share, per share is up + 11.5% to €1.21.
First quarter 2018 net income, Group share , increased by + 16.3% to €91.7 million after taking into account other income and operating expenses, net of taxes of - €3.7 million in the first quarter of 2018, lower than in the first quarter of 2017.
The Group's net financial debt was €2.3 billion as at 31 March 2018, and did not significantly change compared to 31 December 2017. The long-term credit ratings of Imerys attributed by rating agency Moody's ("BAA-2" with a stable outlook) and by Standard & Poors ("BBB", also with a stable outlook) have been confirmed during the quarter.
(27% of consolidated revenue)
| Unaudited quarterly data | 1er quarter | 1er quarter | Reported | Like-for-like |
|---|---|---|---|---|
| (€ millions) | 2017 | 2018 | change | change |
| Revenue | 321.6 | 319.7 | - 0.6% | + 4.9% |
The Energy Solutions & Specialties business group's revenue totaled €319.7 million in the 1 st quarter of 2018 (stable on a reported basis). This change takes into account a significant - €23.8 million exchange rate effect (- 7.4%) and a perimeter effect of + €6.2 million (+ 1.9%) due in particular to the acquisitions completed in the Carbonates division (Micronita in Brazil, in November 2017, and Vimal Microns in India, in February 2018) and the Monolithic Refractories division (Set Linings end of March 2017). On a like-for-like basis, revenue increased + 4.9% from the same period in 2017.
The Carbonates division recorded a good level of activity in Asia, while its operating conditions were affected by weather conditions in the United States. The Monolithic Refractories division's demand has been sustained in most of the European and Asian industrial markets. The Graphite & Carbon division's sales growth was driven by the mobile energy markets. In the Oilfield Solutions division, the ceramic proppant market remained at a low level.
(26% of consolidated revenue)
| Unaudited quarterly data | 1er quarter | 1er quarter | Reported | Like-for-like |
|---|---|---|---|---|
| (€ millions) | 2017 | 2018 | change | change |
| Revenue | 312.4 | 322.6 | + 3.3% | + 5.8% |
The Filtration & Performance Additives business group's revenue totaled €322.6 million in the 1 st quarter of 2018, a + 3.3% year-on-year increase. It includes a strong - 23.4 million exchange rate impact (- 7.5%) and a + €15.7 perimeter effect (+ 5.0%) relating to the acquisition of Regain Polymers (September 2017). On a like-for-like basis, the business group's revenue was up + 5.8%.
In markets which continued to be supportive, the Performance Additives division business was impacted by weather conditions in the United States, the Filtration division continued its diversification developments (healthcare, cosmetics, agriculture ...) and the Metallurgy division revenue has been supported by dynamic industrial markets.
(23% of consolidated revenue)
| Unaudited quarterly data | 1er quarter | 1er quarter | Reported | Like-for-like |
|---|---|---|---|---|
| (€ millions) | 2017 | 2018 | change | change |
| Revenue | 310.9 | 286.6 | - 7.8% | - 1.2% |
The Ceramic Materials business group's revenue totaled €286.6 million in the 1 st quarter of 2018. The - 7.8% year-on-year reported change factors in a significant - €20.7 million negative exchange rate effect (- 6.7%). Revenue is down - 1.2% on a like-for-like basis in a still challenging market for paper.
The Kaolin division recorded negative volumes despite the development in specialty applications (paint, rubber, plastics, inks, etc.). It also suffered from an unfavorable impact of the evolution of the Brazilian real. The activity of the Roofing division was contrasted because of weather conditions in France, in a market that shows signs of recovery. The Ceramics division demand was robust, particularly in emerging countries.
(24% of consolidated revenue)
| Unaudited quarterly data | 1er quarter | 1er quarter | Reported | Like-for-like |
|---|---|---|---|---|
| (€ millions) | 2017 | 2018 | change | change |
| Revenue | 184.2 | 304.2 | + 65.1% | + 10.3% |
The High Resistance Minerals business group's revenue totaled €304.2 million in the 1 st quarter of 2018. The + 65.1% year-on-year reported change in revenue factors in a + €114.4 million significant perimeter effect (+ 62.1%) relating to the integration of Kerneos in the Aluminates division, and to a lesser extent to Zhejiang in China in the Fused Minerals division and a strong - €13.6 million exchange rate impact (- 7.4%). On a like-for-like basis, revenue increased + 10.3%, supported by buoyant markets.
The Aluminates division, which includes Kerneos, continued to grow in the sectors of the construction and civil engineering (building chemistry) and benefited from a firm level of activity in refractories. The revenue of the Fused Minerals division were sustained in all geographies and markets, industrial production in particular. The two divisions faced strong pressure on certain raw materials.
| May 4 (11.00 am) | Shareholders' General Meeting |
|---|---|
| July 27 (after market close) | 1 st half 2018 results |
| October 30 (after market close) | 3 rd quarter 2018 results |
These dates are tentative and may be updated on the Group's website at www.imerys.com , in the Investors & Analysts / Financial Agenda section.
The press release is available on the Group's website www.imerys.com from the homepage in the News section. The 1 st quarter 2018 results will be discussed in a conference call today at 18:00 pm (Paris time). The conference call will be streamed live on the Group's website www.imerys.com .
The world leader in mineral-based specialty solutions for industry , with €4.6 billion revenue and 18,000 employees, Imerys delivers high value-added, functional solutions to a great number of sectors, from processing industries to consumer goods. The Group draws on its knowledge of applications, technological expertise and its material science know-how to deliver resources based on beneficiation of its mineral resources, synthetic minerals and formulations. These contribute essential properties to customers' products and performance, including refractoriness, hardness, conductivity, opacity, durability, purity, lightness, filtration, absorption and 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) under Regulated Information, particularly in its Registration Document filed with Autorité des marchés financiers on March 20, 2018 under number D.18-0150 (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 4955 6469 | Vincent Gouley - +33 (0)1 4955 6469 |
| [email protected] | Philémon Tassel - +33 (0)6 3010 9611 |
| Revenue by business group (€ millions) |
Q1 2017 | Q1 2018 | Reported change |
Group structure |
Exchange rates |
Comp. change |
|---|---|---|---|---|---|---|
| Energy Solutions & Specialties |
321.6 | 319.7 | - 0.6% | + 1.9% | - 7.4% | + 4.9% |
| Filtration & Performance Additives |
312.4 | 322.6 | + 3.3% | + 5.0% | - 7.5% | + 5.8% |
| Ceramic Materials | 310.9 | 286.6 | - 7.8% | + 0,1% | - 6.7% | - 1.2% |
| High Resistance Minerals | 184.9 | 304.2 | + 65.1% | + 62.1% | - 7.4% | + 10.3% |
| Holding & Eliminations | (16.6) | (25.5) | n.s. | n.s. | n.s. | n.s. |
| Total | 1,113.2 | 1,207.6 | + 8.5% | + 11.6% | - 7.3% | + 4.2% |
| Revenue by geographic destination (€ millions) |
Q1 2018 revenue |
Change vs. Q1 2017 |
% total Q1 2017 revenue |
% total Q1 2018 revenue |
|---|---|---|---|---|
| Western Europe | 536.2 | + 10.2 % | 44 % | 44 % |
| of which France | 137.5 | + 6.3 % | 12 % | 11 % |
| USA / Canada | 269.9 | - 3.3 % | 25 % | 22 % |
| Emerging countries | 343.6 | + 15.9 % | 27 % | 29 % |
| Japan / Australia | 57.9 | + 13.3 % | 4 % | 5 % |
| Total | 1 207.6 | + 8.5 % | 100 % | 100 % |
| (€ millions) | 1er quarter 2017 |
1er quarter 2018 |
Change |
|---|---|---|---|
| Revenue | 1,113.2 | 1,207.6 | + 8.5% |
| Current operating income | 147.2 | 154.2 | + 4.8% |
| Current financial expense | (25.8) | (19.6) | |
| Current taxes | (35.8) | (39.0) | |
| Minority interests | (0.2) | (0.3) | |
| Net income from current operations, Group's share | 85.3 | 95.4 | + 11.8% |
| Other operating income and expenses, net | (6.5) | (3.7) | |
| Net income, Group's share | 78.8 | 91.7 | + 16.3% |
The term "on a comparable basis" or "like for like" 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,
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.