Imerys (NK) H1 2024 earnings summary

Executive summary

• H1 2024 revenue reached €1,919 million, with three consecutive quarters of sequential growth and Q2 volumes up 2.7% year-over-year, driven by robust U.S. demand and gradual European recovery.

• Adjusted EBITDA for H1 2024 was €384 million, up 11% year-over-year, with margin improving to 20% (+260 bps), supported by cost savings, positive price-cost balance, and joint venture contributions.

• Net financial debt stood at €1.2 billion, maintaining a net financial debt/adjusted EBITDA ratio of 1.7x.

• Completed disposal of paper market assets in July 2024, fully exiting graphic paper exposure and streamlining the portfolio.

• Published a Climate Transition Plan targeting 42% reduction in scope 1 & 2 and 25% in scope 3 GHG emissions by 2030, and renewed a biodiversity partnership.

Financial highlights

• Q2 2024 revenue was €992 million (+0.7% year-over-year, +7% sequentially from Q1); H1 2024 sales reached €1.9 billion, with growth entirely volume-driven.

• H1 2024 adjusted EBITDA margin rose to 20% from 17.4% in H1 2023, driven by volume recovery, €70 million in cost savings, and positive price/cost balance.

• Current net income from continuing operations (Group share) was €173 million, up 25% year-over-year; net income Group share at €142 million, slightly down due to prior year discontinued operations.

• Net current free operating cash flow before strategic capex was €120 million; free operating cash flow was €88 million, with €171 million in capital expenditures, including €32 million in strategic CapEx.

• Strong liquidity with €1.1 billion cash and €960 million in credit lines as of June 30, 2024.

Outlook and guidance

• Expects continued positive momentum in H2 2024, targeting full-year adjusted EBITDA of €670–690 million, compared to €668 million in 2023, despite the absence of paper business contributions.

• Guidance assumes stable macroeconomic conditions and a significantly lower joint venture contribution in H2.

• Anticipates ongoing recovery in traditional businesses and further improvement in graphite and carbon, while remaining cautious on high purity quartz due to inventory overhang.