Imerys (NK) H1 2024 earnings summary

Executive summary

• H1 2024 adjusted EBITDA rose 11% year-over-year to €384 million, with margin up 260 bps to 20%, supported by strong U.S. demand, cost controls, and three consecutive quarters of sequential growth.

• Revenue for H1 2024 was €1,919 million, with Q2 volumes up 2.7% year-over-year and sequential growth, driven by volume gains and market share increases in the U.S.

• Current net income from continuing operations, Group share, increased 25% to €173 million in H1 2024.

• Completed disposal of paper market assets for ~€150 million in July 2024, streamlining the portfolio and eliminating exposure to graphic paper.

• Disclosed a Climate Transition Plan, targeting significant GHG reductions by 2030, and renewed a biodiversity partnership.

Financial highlights

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

• Adjusted EBITDA margin improved to 20% in H1 2024 (up from 17.4% in H1 2023), driven by volume recovery, €70 million in cost savings, and positive price-cost balance.

• Net current free operating cash flow before strategic capex was €120 million; free operating cash flow was €88 million.

• Net financial debt at June 30, 2024, was €1,232 million, with a net financial debt/adjusted EBITDA ratio of 1.7x.

• Net income, Group share, for H1 2024 was €142 million, slightly below H1 2023 due to the absence of discontinued operations' contribution.

Outlook and guidance

• Expects continued positive business momentum in H2 2024, targeting full-year adjusted EBITDA of €670–690 million, compared to €668 million in 2023 (which included divested paper assets).

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

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