DEVELOPING THE BEST TECHNOLOGIES FOR THE INDUSTRIES OF THE FUTURE - JANUARY, 2020 - Mersen
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DEVELOPING THE BEST TECHNOLOGIES FOR THE INDUSTRIES OF THE FUTURE JANUARY, 2020
WE PROVIDE INDUSTRIAL COMPANIES
WORLDWIDE WITH INNOVATIVE SOLUTIONS ENHANCING THE
PERFORMANCE OF THEIR PRODUCTS AND SERVICES
SALES €879M
KEY FIGURES AND EBIT MARGIN* 10.4%
PROFILE
EMPLOYEES 6,900
2018 figures
* Before non recurring items
EXPERTISE WITH LEADERSHIP POSITIONS
ELECTRICAL POWER – 45%* ADVANCED MATERIALS – 55%* * 2018
Sales
NO. 1-2 NO. 1-2 NO. 1-2
NO. 2 WORLDWIDE NO. 1 WORLDWIDE WORLDWIDE
Components WORLDWIDE WORLDWIDE
Industrial fuses Graphite
for power electronics High-temperature Brushes for industrial
anticorrosion
applications motors
equipment
ELECTRICAL PROTECTION SOLUTIONS FOR ANTICORROSION GRAPHITE POWER TRANSFER
& CONTROL POWER MANAGEMENT EQUIPMENT SPECIALTIES TECHNOLOGIES
Competition
EATON (US), ROGERS (US), SGL CARBON (Ger) TOYO TANSO (JP), MORGAN ADVANCED
EATON (US), LITTELFUSE (US) METHODE (US), LYTRON (US), TOKAI CARBON (JP), MATERIALS (UK),
CORNELL DUBILIER (US), SGL CARBON (Ger) SCHUNK (Ger)
PANASONIC (JP) SCHUNK (Ger)
3 January 2020 - Mersen
HALF OF MERSEN SOLUTIONS ARE FOR GROWING SUSTAINABLE
DEVELOPMENT MARKETS
SUSTAINABLE DEVELOPMENT MARKETS ~50%
34% 19%
PROCESS INDUSTRIES ENERGY
ENERGY EFFICIENCY RENEWABLE ENERGIES
19%
2018 SALES ELECTRONICS
SEMICONDUCTORS
POWER CONVERSION
11% 17%
CHEMICALS TRANSPORTATION
WATER TREATMENT RAIL
ELECTRIC VEHICLES
4 January 2020 - Mersen
FOR PRESTIGIOUS AND EXACTING CUSTOMERS
34% 11% 17% 19% 19%
PROCESS
as a % of sales in 2018
INDUSTRIES
CHEMICALS TRANSPORTATION ELECTRONICS ENERGY
> 65% customized products
Replacement market
65% of sales
Largest client
~3% of sales
Longstanding
ties
5 January 2020 - Mersen
GLOBAL FOOTPRINT
EUROPE Headcount 2,360
NORTH AMERICA Headcount 2,100 34%* Industrial plants 22
33%* Industrial plants 13
50%1 of the plants are
ISO 14001 certified
1 environmental perimeter
ASIA-PACIFIC Headcount 1,780
89% of the employees SOUTH AMERICA- 29%* Industrial plants 13
AFRICA Headcount 670
are proud to be part of Industrial plants 5
4%*
the Group (2018)
* % 2018 Sales
6 January 2020 - Mersen
HUMAN CAPITAL: THE GROUP’S FOUNDATION
PREVENTION AND PROTECTION A SHARED CULTURE A WEALTH OF DIVERSITY
Develop and consolidate a culture of health Excellence, Collaboration, People Teamwork and collaboration for creativity
and safety within the Group conscious, Agility & Entrepreneurial Spirit, and a better understanding of customer
Partnering with our customers needs worldwide
Improve by 15% the number of safety 88% human capital success rate in 25% to 30% of women managers and
visits by 2021 2021 (85% in 2018) professionals by 2022
Reach LTIR
LEADERSHIP POSITIONS THAT ARE SOURCE OF PROFITABILITY
STRENGTHS
Leader : >65% Expertise :
#1 or #2 customized high barriers
in our markets products to entry
HIGH GROSS MARGIN GLOBAL OPERATIONS SUSTAINABLE DEVELOPMENT
MARKETS
34%
32%
Customer proximity
30% Access to local Solar Semicon EV
markets Wind
28%
26%
2013 2014 2015 2016 2017 2018
8 January 2020 - Mersen
LONG-TERM RELATIONSHIPS WITH OUR SHAREHOLDERS
BOARD OF DIRECTORS
INDIVIDUAL & EMPLOYEE BPI & CDC 15% 10 members
SHAREHOLDERS,
2 representatives from Ardian
TREASURY SHARES 15%
2 representatives from BPI
ARDIAN 10%
1 employee director
SHAREHOLDER
Independance: 55%
STRUCTURE
AT JUNE 30, 2019 Women at the board: 44%
OTHER Compliance with
INSTITUTIONAL the AFEP-MEDEF
SHAREHOLDERS 25% corporate governance code
FRENCH
INSTITUTIONAL
SHAREHOLDERS 35%
9 January 2020 - Mersen
COMMITTED TO THE FUTURE
Capex program for Strategic acquisitions
OUTLOOK growing markets in 2019
GROWTH POTENTIAL FOR THE MEDIUM TERM CONFIRMEDA PROGRAM OF INVESTMENTS IN 2019 TO UNDERPIN MID-TERM GROWTH
ENVIRONMENT GROWTH
CAPEX CAPEX
LASER SCAN
SIC SEMI-
CONDUCTORS
MAINTENANCE €65-75m*
CAPEX EV
POWER
ELECTRONICS SOLAR
DIGITAL
CAPEX
* Columbia starting date delayed
…THAT WILL CONTINUE IN 2020-2021
11 January 2020 - MersenSOLAR: CONSISTENT GROWTH AHEAD
NUMBER OF PANEL INSTALLATIONS GROWING EACH YEAR MERSEN OFFER
Annual (GW)
FURNACE INTERNAL PARTS
IN GRAPHITE
200 2019-2024 CAGR
180 +8% 190
GRAPHITE RESISTANCE
180 CRUCIBLE SUPPORT
160 169
IN C/C COMPOSITE
158
140 144 FLEXIBLE FELT
INSULATION SOLUTIONS
120 125
100
2011-2018 CAGR 99
106
80 +20%
76
60
59
40 47
32 35
20 28
0
2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E
Sources: IHS Markit, Exawatt, Bloomberg NEF, SolarPowerEurope, IEA
12 January 2020 - MersenINVESTMENTS FOR THE FAST-GROWING SIC SEMICONDUCTORS MARKET
COMPOUND SEMICONDUCTORS
MATURE MATURING OTHER
MARKET MARKET TECHNOLOGIES
RAW MATERIAL/ GaN/
Silicon SiC GaN GaAs InP
Sapphire
SUBSTRATE
COMPONENTS Microprocessor Memory Power component RF Opto
LED
chip (IGBT, MOSFET, JFET) component electronic
END-MARKET Networks and Speed Energy Renewable
EV Lighting Communications
computers drives storage energies
13 January 2020 - MersenSIC SEMICONDUCTORS MARKET SET TO ACCELERATE AFTER 2020-2022
IN LINE WITH EV MARKET GROWTH
POWER SIC DEVICE MARKET REVENUE
MERSEN OFFER
IN USD MILLIONS
INSULATION
GRAPHITE CRUCIBLE
2500
2022-2024 CAGR
Other
2000
+40%
Speed drivers
1500
2016-2021
EV
CAGR
1000
+25%
500 Renewables
Rail
Power supply
0
2016 2017 2018 2019 2020 2021 2022 2023 2024
Source: Yole Development, Power SiC 2017 for 2016&2017 Power SiC 2019 from 2018 to 2024
14 January 2020 - MersenFURTHER PROGRESS IN EV
FOR HEAVY VEHICLES FOR HIGH-END PASSENGER
Power conversion CARS
Battery management
Cooling devices Bus bars
Fuses Bus bars
Battery management
Battery protection
Selected by a
Fuses Cooling devices Bus bars leading
manufacturer
DC hybrid Protection
Battery protection
Fuses
Fuses
15 January 2020 - MersenSTRATEGIC ACQUISITIONS IN 2019
COLUMBIA AGM Italy GAB NEUMANN
USA (Columbia) Italy (Malonno) Germany (Maulburg)
Sales: ~€17m Sales: ~10M€
OBJECTIVE
OBJECTIVE OBJECTIVE
- Access to complementary
isostatic graphite production - Capacity of finishing of - Strengthening presence
- Repatriation within the customized extruded graphite in specialty chemicals in
Group of the production of parts the DACH countries
specialty extruded graphite - Synergies with Columbia - Broader expertise in
plant which will eventually heat exchanger
supply with blocks
16 January 2020 - MersenCOLUMBIA: AN EXCELLENT OPPORTUNITY FOR MERSEN
12,000 t
Columbia: additional
Isostatic graphite production
production capacity of
capacity not utilized
graphite
Isostatic graphite
production capacity
utilized
2016 2017 2018 2019 2020 2021 2022 2023
17 January 2020 - MersenCOLUMBIA: A NEW INDUSTRIAL BASE FOR THE FUTURE
Delivering
Malonno
June 28, 2019 End of 2019 End of 2020 End of 2021
Production
Commissioning
start
Closing
Cash-out 7 MUSD
CAPEX ~€20m Decision
for additional capex
18 January 2020 - Mersen2019 OUTLOOK: FY GUIDANCE RAISED IN JULY 2019
INITIAL GUIDANCE
between 2 and 5%
ORGANIC* GROWTH in SALES
VS 2018 between 4 and 5%
CURRENT GUIDANCE
GUIDANCE (BEFORE POSITIVE IMPACT OF IFRS16)
OPERATING MARGIN BEFORE between 10.5 et 10.7%
NON-RECURRING ITEMS
INITIAL GUIDANCE
between €60m and €70m
CAPEX
between €65m and €75m (o.w. €5m for Columbia)
CURRENT GUIDANCE
* Excluding foreign change and scope effects
19 January 2020 - MersenQ3 2019: STRONG PERFORMANCE IN THE CURRENT
MACRO-ECONOMIC ENVIRONMENT
2019 QUARTERLY SALES
9-months sales figures
Total growth +15.3% +9.7% +5.1% +10% vs 2018
Like for like +8.4% +4.8% +2.5% Incl. +5% like-for-like
Organic growth in all regions:
Europe: +5.7%
Asia-Pacific: +0.4%
240.5
240,5 243.2
243,2 234.3
234,3 North America: +8.4%
Rest of the World: +7.1%
Q1 2019 Q2 2019 Q3 2019
20 January 2020 - MersenVERY STRONG PERFORMANCE IN H1 2019
Further improvement in sales and operating results
H1 2019
10TH CONSECUTIVE QUARTER OF ORGANIC GROWTH IN SALES
7TH CONSECUTIVE HALF-YEAR OF GROWTH IN OPERATING RESULTS
BEFORE NON-RECURRING ITEMSA GOOD HALF-YEAR 2019
OPERATING MARGIN BEFORE
SALES OPERATING CASH-FLOW
NON-RECURRING ITEMS
Organic
growth +6.5% vs H1 2018 +30 pts before IFRS16 vs H1 2018 +10% before IFRS 16 vs H1 2018
484 54 20
430 +12.4% 18
46
11.1%
10.9%
10.6% before
IFRS16
H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019
Sales (€m) Operating income Net cash-flow from operations (€m)
before non-recurring items (€m)
22 January 2020 - MersenRISE IN PROFITABILITY
As a %
H1 2018 operating margin before non-recurring items 10.6%
Volume/mix effects +0.8% Higher prices to
offset the increase in
Price/raw materials net impact +0.6%
the cost of raw
Impact of productivity +1.6% materials: net
Cost inflation -1.8% positive
Impact of exchange rates, change in scope and other -0.9%
Cost inflation
Comparable H1 2019 operating margin before offset by
10.9%
non-recurring items
productivity plans
IFRS 16 impact +0.2%
H1 2019 operating margin before non-recurring items 11.1%
23 January 2020 - MersenGROWTH IN MARGIN DRIVEN BY ADVANCED MATERIALS
STEADY PERFORMANCE IN ELECTRICAL POWER
ELECTRICAL POWER ADVANCED MATERIALS
(m€) 278
Sales 240
206
190
15% reported
Operating margin before
14.7% before IFRS16
non recurring items (%) 14.1%
10.2% 10% reported
9.7% before IFRS 16
34 41
19 20 Operating income before
non recurring items
H1 2018 H1 2019 H1 2018 H1 2019
Dilutive effect of acquisitions on margin (-0.3 pt) Positive volume effect
Negative volume/mix effect Price increases higher than the rise in raw
Price increases materials costs
24 January 2020 - MersenSTRONG GROWTH IN NET INCOME
In €m H1 2018 H1 2019 H1 2019
before IFRS 16
Operating income before
non-recurring items
45.8 52.6 53.6
Non-recurring income and expenses (1.5) (3.2) (3.2)
Non-recurring expenses
Net financial income (4.7) (4.7) (6.1) include restructuring
charges, acquisition costs
Income tax (10.3) (10.7) (10.6) and provision for litigation
Net income 29.3 34.0 33.7 +16% Effective tax rate
24% (vs 26% in H1 2018)
Attributable to owners of the parent 27.9 33.1 32.8
25 January 2020 - MersenINCREASED OPERATING CASH-FLOW COMPARED TO H1 2018
Operating cash-flow before capex, financial interest
and acquisition
26
An improvement despite:
20 ▪ Increase in raw materials
18
inventories at the end of 2018
(paid in H1 2019)
▪ Increase in late payment at
the end of June
H1 2018 H1 2019 before IFRS 16 H1 2019 reported
26 January 2020 - MersenSTRONG FINANCIAL STRUCTURE
NET DEBT/EBITDA 1.6 1.5 NET DEBT/EBITDA
NET DEBT/ NET DEBT/
EQUITY
39% 41% EQUITY
in €m
228
7 4
216 20 21
including
19 Capex
Dec. 2018 Operating cash-flow Investments Acquisitions Other including interests June 2019
27 January 2020 - MersenMAIN IMPACTS OF IFRS16 STANDARD APPLICATION
in €m H1 2019 IFRS 16 H1 2019
before IFRS 16
Operating income before Depreciation of lease
52.6 +1.0 53.6
non-recurring items liabilities
Financial income (4.7) -1.4 (6.1) Interest charge
Net income 34.0 -0.4 33.6 Rental expenses
Depreciation 19.9 +5.5 25.8 Depreciation expense
EBITDA 72.5 +6.5 79.0
Lease liabilities +45 45
Rights of use +45 45
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