Imerys posts full year 2023 current EBITDA in line with guidance and substantial cash flow generation

2024-02-22

Feb. 21, 2024 - Imerys has published its Group consolidated financial statements for 2023 financial year, with highlights as below:

* Full year revenue at €3,794 million impacted by weak demand in most markets, in particular residential construction,and adverse currency effect

* Current EBITDA in line with guidance1 at €633 million; current EBITDA margin resilient at 16.7% benefiting from cost reductions (€126 million)

* Substantial net current free operating cash flow generation of €191 million (2022: €20 million), and €288 million (2022: €105 million) before strategic capital expenditures, supported by working capital management actions

* Solid financial structure and strong liquidity position: net debt reduced by €548 million (-33%), improving the net financial debt to current EBITDA ratio to 1.8x compared to 2.3x in December 2022

* Proposal of a cash dividend of €1.35 per share, representing a total distribution of €115 million

* New 1.5°C trajectory validated by SBTi: reduction of 42% of scope 1 & 2 greenhouse gas emissions (tCO2eq) and of 25% of scope 3 by 2030 from 2021 base year

Alessandro Dazza, Chief Executive Officer, said: "In 2023, Imerys continued to demonstrate resilience and agility in a complex market environment. The current EBITDA margin remained stable and cash flow generation increased significantly. These results have been achieved by a strongly committed team, of which I am extremely proud. Our main markets may have reached a low point and we will utilize every lever at our disposal to increase sales moving forward, supported by recent capacity additions and innovative mobile and sustainable energy products. At Imerys, we look forward to demonstrating the robustness of our business model and achieving in 2024 new milestones on our strategic roadmap."

Update on strategic projects

As part of its drive to support the energy transition with mineral solutions, Imerys is: 

* Completing its development in the fast-growing lithium-ion battery market (over €140 million invested in capacity increases over the past 3 years). As per plan, a new production line of carbon black for mobile energy at Willebroek (Belgium) was commissioned in 2023 while the construction of the next one is well underway. The capacity expansion for synthetic graphite production in Bodio (Switzerland) was commissioned in Q4 2023. 

* Investing €43 million in a greenfield plant in Wuhu (China), producing high-quality talc used for lightweighting of polymers and typically addressing automotive applications, EVs in particular. This plant was successfully commissioned in Q4 2023. 

Sustainability
 
Highlights

Imerys has further progressed on its ambitious decarbonisation roadmap, and its newly-set targets, validated last July by the SBTi,8 are aligned with a 1.5°C trajectory for 2030. The Group set its objectives to reduce absolute scope 1 and 2 greenhouse gas emissions by 42% (tCO2eq) and scope 3 by 25% by 2030 from a 2021 base year. The scope 1 includes direct emissions from sources owned or controlled by Imerys, and scope 2 concerns indirect emissions from the production of electricity, heat or steam purchased by the Group. 

To fulfill this ambitious roadmap, the Group has started to implement specific actions, such as a multi-year contract signed with E.On, one of Europe's largest operators of energy networks and energy infrastructure, in May 2023 to valorize waste syngas and generate electricity in Willebroek (Belgium). The majority of the energy produced will be supplied to the local grid to satisfy the yearly consumption of approximately 40,000 households. 

Imerys confirmed its commitment to reducing carbon emissions by issuing in November 2023 a €500 million sustainability-linked bond (6-year maturity) with an annual fixed rated coupon of 4.75%. Bond investors will receive a premium payment in 2029 of 0.75% of the principal amount, should the Group not meet its objectives at the end of 2028. 

Performance

Following the successful completion of its first ESG sustainability plan, the Group has launched a more ambitious plan for 2025 centered around three core pillars: empowering our people, growing with our customers and caring for our planet. With regards to the Group decarbonisation roadmap, several levers have been activated, such as fuel switching and biomass utilization, electrification, power purchase agreements, energy efficiency and process innovation. In 2023, Imerys has reduced its scope 1 & 2 CO2 emission by 24% compared to 2021 in absolute terms.

Outlook 

After unprecedented destocking in 2023, markets have stabilized. Construction, notably residential, and, to some extent, Automotive, are expected to remain lackluster, still impacted by high interest rates, while other markets such as Consumers and Life Sciences, or Energy and Electronics are expected to progress. In this uncertain economic and geopolitical environment, Imerys will maintain strict cost discipline and prioritize growth thanks to new industrial capacities, innovative products and its exposure to mobile and sustainable energy.