Mersen (MRN) CMD 2024 summary

Strategic transformation and market positioning

• Shifted from a cyclical, traditional industry focus to a diversified, global footprint with strong positions in advanced materials and electrical power, emphasizing energy transition markets and sustainability.

• Leadership in isostatic graphite, electrical power components, and advanced materials, with a unique global manufacturing and R&D footprint serving diversified, sustainability-driven markets.

• Maintains a balanced and diversified customer portfolio, limiting risk exposure to any single client or sector, with balanced geographic sales across North America, Europe, and Asia-Pacific.

• 56% of sales linked to sustainable development markets, reinforcing CSR commitments and a focus on social responsibility across all geographies.

• Three strategic pillars: unique expertise, key customer value chain positions, and sustainability.

Market outlook and growth drivers

• Renewable energies expected to grow steadily, with solar installations projected to triple by 2030 and renewables representing over €200 million in revenue by 2029.

• Electric vehicle and SiC semiconductor markets face a three-year delay, but medium- and long-term outlooks remain strong, targeting over €100 million in EV turnover and above €220 million in SiC sales by 2029.

• Traditional markets continue to provide stable cash flow and resilience, supporting investments in high-growth segments.

• Silicon semiconductor market to recover in 2025, with AI and data center demand boosting prospects.

• New opportunities identified in nuclear (SMRs, HTGRs), smart grids, and microgrids, with potential for significant long-term growth beyond 2027.

Financial performance, guidance, and capital allocation

• Sales grew 23% from 2017–2023, reaching €1.2bn in 2023, with EBITDA margin rising to 17% and net cash from operations averaging €134m in 2019–2023.

• Medium-term targets of €1.7bn sales, 12% operating margin, 19% EBITDA margin, and 13% ROCE postponed to 2029 due to delays in EV and SiC markets.

• CapEx peaked in 2024, with reductions planned for 2025 and 2026; investments for 2023-2025 reduced by €30–40 million to €280–290 million, excluding inflation.

• Negative free cash flow expected in 2024, with a challenging outlook for 2025; positive free cash flow targeted as investments normalize.

• Financial structure remains robust, with leverage well below covenants, net debt expected at €400–430 million by end-2024, and substantial liquidity for investments.