IMERYS (EPA:NK) - Imerys: improved results in 1st quarter 2017

Transparency directive : regulatory news

28/04/2017 07:15

PRESS RELEASE
PARIS, APRIL 28, 2017

                  Imerys: improved results in 1st quarter 2017

+ 7.2% revenue growth to EUR1,113 million
      o + 2.4% organic growth(1)

+ 8.7% increase in current operating income to EUR147 million
      o Operating margin 13.2%, up + 20 basis points

Chairman & CEO Gilles Michel commented:
"In the first quarter, Imerys took advantage of healthier market trends that
were already visible at the end of 2016. The increase in our results reflects
the dynamism and positioning of our businesses in this environment, as well as
the effectiveness of our management measures and operating excellence program.
In the coming quarters, the Group will benefit from the contribution of recent
acquisitions and will pursue its development strategy, in particular with the
proposed acquisition of Kerneos."

Consolidated results (EUR millions)           Q1 2016    Q1 2017    Change

Revenue                                       1,038.1    1,113.2    + 7.2 %
Current EBITDA(2)                               189.8      201.7    + 6.3 %
Current operating income (2)                    135.4      147.2    + 8.7 %
Operating margin                                13.0%      13.2%    + 0.2
point
Net income from current operations,
Group's share (2)                               82.7        85.3    + 3.1 %
Net income, Group's share                       72.4        78.8    + 8.8 %
Net income from current operations,
Group's share, per share (EUR) (2)(3)           1.04        1.08    + 3.6 %

(1) Organic growth: growth at comparable Group structure and exchange rates, or
"on comparable basis"
(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 weighed average number of shares was 78,849,404 in Q1 2017 vs.
79,218,628 in Q1 2016

ANALYSIS OF 1ST QUARTER 2017 RESULTS

+ 7.2% REVENUE GROWTH

Revenue in the 1st quarter of 2017 (ended March 31, 2017) totaled EUR1,113.2
million, a + 7.2% increase from the same period in 2016. This growth is due to
the + 2.4% rise in revenue at comparable Group structure and exchange, thanks
to sales volumes, confirming the improved trend recorded in the 4th quarter of
2016 (+ 1.4%).

It also includes a + EUR26.4 million positive structure effect (+ 2.5%),
related to the consolidation of external growth operations completed in 2016
(particularly Alteo and SPAR) and early 2017 (particularly Damolin) and a +
EUR23.5 million positive exchange rate effect (+ 2.3%), mainly due to the
appreciation of the US dollar.

+ 8.7% INCREASE IN CURRENT OPERATING INCOME

Current operating income totaled EUR147.2 million in the 1st quarter of 2017, a
+ 8.7% increase from the 1st quarter of 2016. It benefited from  a more
supportive environment than at the same period last year   (+ EUR12.9 million
positive contribution of volumes), a + EUR3.4 million positive price-mix
contribution and the + EUR1.6 million reduction in variable costs, resulting
from the operating excellence program and tight control over procurement.
The increase in fixed and overhead costs was limited to EUR10.0 million in a
context of production capacity expansion.
Consequently, the Group's operating margin grew + 20 basis points to 13.2%
(13.0% in 1st quarter 2016).

+ 3.1% INCREASE IN NET INCOME FROM CURRENT OPERATIONS

Net income from current operations increased + 3.1% to EUR85.3 million (EUR82.7
million in 1st quarter 2016). It includes net financial expense that rose from
- EUR17.3 million in 1st quarter 2016 to - EUR 25.8 million because of the
EUR4.6 million increase in interest expense (- EUR16.5 million in 1st quarter
2017 vs. - EUR11.9 million in 1st quarter 2016). This increase reflects the
March 2016 and January 2017 bond issues for a total amount of EUR1.2 billion
which were aiming at anticipating in favorable conditions the Group's financing
needs, such as the proposed acquisition of Kerneos. Exchange rates and
financial instruments went from - EUR2.4 million in the 1st quarter of 2016 to
- EUR7.7 million in the 1st quarter of 2017. Finally, the - EUR35.8 million tax
charge (- EUR34.2 million in 1st quarter 2016) reflects an effective tax rate
of 29.5% (29.0% in 1st quarter 2016).

The Group's share of net income from current operations per share increased
+ 3.6% to EUR1.08.

NET INCOME
The Group's share of net income rose by + 8.8% in the 1st quarter of 2017 to
EUR78.8 million, taking other operating income and expenses, net of tax (mainly
related to acquisition costs), into account for - EUR6.5 million in the 1st
quarter of 2017.

FINANCIAL STRUCTURE

At EUR1.5 billion as of March 31, 2017, the Group's net financial debt did not
change significantly compared with December 31, 2016. Following the
announcement of the planned acquisition of Kerneos, Imerys' unsecured senior
debt, as rated by Moody's since 2011, was confirmed at "Baa-2" with a stable
outlook on December 13, 2016. The credit rating given by Standard & Poors on
December 14 is "BBB", also with a stable outlook.

BUSINESS GROUPS' ACTIVITY IN FIRST QUARTER 2017

Energy Solutions & Specialties

(29% of consolidated revenue)

Non audited data (EUR millions)  Q1 2016    Q1 2017     Current   like for like
                                                         change      change

Revenue                            300.8      321.6     + 6.9 %      + 1.0 %

The Energy Solutions & Specialties business group's revenue totaled EUR321.6
million in the 1st quarter of 2017 (+ 6.9% on a current basis). This change
takes into account a + EUR8.7 million structure effect, due in particular to
the acquisitions completed in the Monolithic Refractories division (mainly SPAR
in the United States, in November 2016) and a + EUR9.1 million exchange rate
effect. At constant structure and exchange rates, revenue increased + 1.0% from
the same period in 2016.

The Carbonates division's sales were slightly up, thanks to industrial markets
and the construction sector, in the US in particular.

In the Monolithic Refractories division, the activity stabilized, after several
quarter of underperformance. In addition, the Group consolidated its positions
by acquiring two medium-size firms serving the petrochemicals, electricity
generation and waste incineration markets, NG Johnson (UK) and Set Linings
(Germany).

The Graphite & Carbon division's sales remained dynamic. The Group continued to
execute its multiannual capital expenditure program (R&D, industrial capacities
and mining resources) with the acquisition, early February 2017, of Nippon
Power Graphite (NPG), a technological development company which holds assets
and proprietary technologies for the production of materials for lithium-ion
battery anodes.
In the Oilfield Solutions division, the Group maintained its industrial and
commercial presence on a ceramic proppant market that remained at the same low
level of last year.

Filtration & Performance Additives
(28% of consolidated revenue)

Non audited data (EUR millions)  Q1 2016    Q1 2017     Current   like for like
                                                         change      change

Revenue                            278.2     312.4      + 12.3 %     + 6.5 %

The Filtration & Performance Additives business group's revenue totaled
EUR312.4 million in the 1st quarter of 2017, a + 12.3% increase. It includes
a + EUR11.0 structure effect relating to the acquisition of Damolin, and a
+ 5.2 million exchange rate impact.

At comparable structure and exchange rates, the business group's revenue
continued to grow, rising + 6.5% in the 1st quarter of 2017.

The Performance Additives division's sales grew across all market segments and
regions, driven in particular by automotive polymers.

All of the Filtration division's markets showed positive trends in the 1st
quarter of 2017 (edible liquids, industry, etc.). The Group continued to
develop new segments, particularly high-purity solutions for healthcare.
The Metallurgy division, benefitted from a healthy sales momentum, the upturn
in steel markets and the integration of Damolin's specialty products
(industrial absorbents, etc.).

Ceramic Materials
(27% of consolidated revenue)

Non audited data (EUR millions)  Q1 2016    Q1 2017     Current   like for like
                                                         change      change

Revenue                            323.2     310.9      - 3.8 %     - 4.7 %

The Ceramic Materials business group's revenue totaled EUR310.9 million in the
1st quarter of 2017. The - 3.8% current change from the 1st quarter of 2016
factors in a - EUR2.9 million structure effect (divestment of a production
site) and takes into account a + EUR5.6 million exchange rate effect. It is
worth recalling that the integration of the hydrous kaolin activity portfolio
acquired from BASF end of 2015 involved transition volumes in the first months
of 2016.

The Kaolin division, which mainly serves the paper market, has continued to
expand in specialty applications (paint, rubber, plastics, inks, etc.).

In the Roofing division, the clay roof tile market remained weak, decreasing
- 3.4% in the first quarter of 2017 (source: FFTB), due in particular to a
decrease in the renovation market, even though new construction continued its
growth momentum.

The Ceramics division's sales, which essentially serve the floor tiles,
sanitaryware and tableware markets, were firm in both developed countries
(particularly Europe and the United States) and emerging countries.

High Resistance Minerals
(16% of consolidated revenue)

Non audited data (EUR millions)  Q1 2016    Q1 2017     Current   like for like
                                                         change      change

Revenue                           148.3      184.2      + 24.2 %    + 14.6 %

The High Resistance Minerals business group's revenue totaled EUR184.2 million
in the 1st quarter of 2017. The + 24.2% current change in revenue compared
with 2016 factors in a + EUR10.2 million structure effect relating to the
integration of the Alteo Group's specialty alumina production activities, and
a + EUR4.2 million exchange rate impact.

At comparable structure and exchange rates, sales increased + 14.6%, due to the
refractory and industrial production markets recovery.

In the Fused Minerals and Refractory Minerals divisions, positive market trends
in the 1st quarter 2017 were amplified by inventory rebuilding by most of the
Group's industrial customers.

Financial agenda 2017

May 3 (11.00 am)                   Shareholders' General Meeting

July 27 (before market opening)    1st half 2017 results

October 31 (after market close)    3rd quarter 2017 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.

Conference call

The press release is available on the Group's website www.imerys.com from the
homepage in the News section. The 1st quarter 2017 results will be discussed in
a conference call today at 10am (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
EUR4.2 billion revenue and close to 16,000 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 21, 2017 under
number D.17-0190 (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

finance@imerys.com                      Philémon Tassel - +33 (0)6 3010 9611

                                        Sarah Fornier - +33 (0)7 8740 8350

                    FIRST QUARTER 2017 RESULTS (NON AUDITED)

1. CONSOLIDATED REVENUE BREAKDOWN

Revenue by
business group
(EUR millions)     Q1 2016  Q1 2017   Current     Group     Exchange   Comp.
                                      change %  structure %   rates %  change %
Energy Solutions &
Specialties         300.8     321.6    + 6.9 %    + 2.9 %     + 3.0 %   + 1.0 %
Filtration &
Performance
Additives           278.2     312.4   + 12.3 %    + 3.9 %     + 1.9 %   + 6.5 %
Ceramic Materials   323.2     310.9    - 3.8 %    - 0.9 %     + 1.7 %   - 4.7 %
High Resistance
Minerals            148.3     184.2   + 24.2 %    + 6.9 %     + 2.8 %  + 14.6 %
Holding &
Eliminations       - 12.4     - 15.9     n.s.       n.s.        n.s.      n.s.
Total             1,038.1    1,113.2   + 7.2 %    + 2.5 %     + 2.3 %   + 2.4 %

Revenue by business group
(EUR millions)            Q1 2016    Q2 2016    Q3 2016     Q4 2016     Q1 2017
Energy Solutions &
Specialties                 300.8     316.2       319.6       314.0      321.6
Filtration &
Performance Additives       278.2     292.1       282.0       292.2      312.4
Ceramic Materials           323.2     311.4       293.8       293.6      310.9
High Resistance Minerals    148.3     151.5       146.5       151.4      184.2
Holding & Eliminations     - 12.4    - 12.6      - 12.1      - 12.5     - 15.9
Total                     1,038.1   1,058.6     1,029.8     1,038.7    1,113.2

Revenue by geographic
destination               Q1 2017  Change vs.  % total Q1 2016  % total Q1 2017
                          Revenue   Q1 2016       revenue           revenue

Western Europe             486.7     + 6.7 %         44 %             44 %
of which France            129.4     + 0.9 %         12 %             12 %
USA / Canada               279.0     + 8.6 %         25 %             25 %
Emerging countries         296.4    + 11.0 %         26 %             27 %
Other (Japan/ Australia)    51.1    - 12.3 %          5 %              4 %
Total                    1,113.2     + 7.2 %        100 %            100 %

2. KEY INCOME INDICATORS

(EUR millions)                             Q1 2016     Q1 2017     Change

Revenue                                    1,038.1     1,113.2     + 7.2 %
Current EBITDA                               189.8       201.7     + 6.3 %
Résultat opérationnel courant                135.4       147.2     + 8.7 %
Current financial expense                   - 17.3      - 25.8
Current taxes                               - 34.2      - 35.8
Minority interests                           - 1.1       - 0.2
Net income from current operations            82.7        85.3     + 3.1 %
Other operating income and expenses, net    - 10.3       - 6.5
Net income, Group's share                     72.4        78.8     + 8.8 %

3. GLOSSARY

- 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,
- for entities leaving the consolidation scope in the previous year,
subtracting the departing entity's contributions from the aggregates of the
previous year.
- the term " volume effect " corresponds to the sum of the change in sales
volumes of each division between the current year and the previous one, valued
at the average sales price of the previous year.
- the term " price-mix effect " corresponds to the sum of the change in average
prices by product family of each division between the current year and the
previous one, applied to volumes of the current year.
- the term "Current operating income" means operating income before other
operating income and expenses;
- the term "Net income from current operations" means the Group's share of
income before other operating revenue and expenses, net.

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