Imerys Announces Improved Results in 2015 First Half
Imerys recently announced financial results for the first half of 2015. Revenue increased 11.9% to nearly €2.1 billion (approximately $2.3 billion). There was a 3.9% decrease on comparable basis, with a relative improvement in activity in the second quarter. The company reported an 11% growth in net income from current operations of €175 million (~ $192 million).
“In the 1st half of 2015, Imerys recorded good performance in a contrasting environment,” said Gilles Michel, chairman and CEO. “The group benefited from the integration of S&B from March onwards and favorable exchange rate trends, but also from a positive price-mix effect in all its business groups, its efficient cost and cash management and its strategy of innovation and sectorial and geographic diversification. Given these results, and while sharp contrasts are likely to remain among its main markets, the Group is confident in its ability to generate firm growth in net income from current operations in 2015.”
Activity remained good overall in North America in the second quarter, despite a slow start to the year and the sharp downturn in oil-related activities. Although signs of a recovery appeared in Europe, driven in particular by consumer goods, the trend was more contrasting in industry, while the construction sector remained negative in France. The dynamics of emerging countries were very different from country to country, with continued growth in India and Southeast Asia, recession in Brazil, and a downturn in construction-related sectors in China.
In February of 2015, Imerys completed its acquisition of S&B. A global player in bentonite, S&B is also the world leader in continuous casting fluxes for the steel industry and in wollastonite, and provides perlite-based solutions for building materials and horticulture. The full integration of S&B, which was consolidated as of March 1, is progressing in line with the group’s expectations and should be effective from October 1. This acquisition, which will be accretive on Imerys’ net income from current operations per share from 2015, should create value from 2018, with annual synergy run-rate estimated at more than €25 million (~ $27 million), half of which should be achieved in 2016.
In addition, on May 7, 2015, Imerys signed an exclusive agreement with Solvay to acquire its PCC division, including four plants in Europe (Germany, Austria, France and the UK). This business serves mainly the automotive, building, and consumer goods markets through specialty applications. It generated €59 million (~ $65 million) in revenue in 2014. The conclusion of this transaction remains subject to the approval of the relevant regulatory authorities and to consultation with employee representatives; it should take place in the second half of the year.
Imerys will continue to operate in a contrasting economic environment. The group will benefit from healthy demand trends in several regions such as the U.S., India, and Southeast Asia, as well as in sectors that continue to show growth, such as automotive and consumer goods. However, some of its markets will remain low (e.g., paper, construction in France), while visibility on ceramic proppants markets for non-conventional oil exploitation remains limited. The group will actively manage its costs and cash, while keeping its production assets flexible. It will further implement its growth strategy and benefit from the first synergies with S&B.
Given this environment and the performance achieved in the first half, Imerys is confident in its ability to generate firm growth in net income from current operations in 2015.
Additional information is available at www.imerys.com.