Mersen (MRN) H1 2024 earnings summary

Executive summary

• Record H1 2024 sales of €624 million, with 4.9% organic growth year-over-year, driven by SiC semiconductors and electric vehicles.

• EBITDA margin rose to 16.9%, up 40 basis points year-over-year, and operating cash flow increased by 39% compared to H1 2023.

• Acquisition of GMI, the largest independent graphite machining facility in the US, completed for $50 million, expected to add $40 million in annual sales and strengthen US presence.

• Net income attributable to shareholders declined to €38.9 million, impacted by non-recurring expenses and acquisition costs.

• Integration of GMI supports the 2027 growth plan and expands presence in aeronautics, process industries, and energy.

Financial highlights

• EBITDA before non-recurring items rose 5% to €105.5 million (16.9% margin), and operating income before non-recurring items grew 2% to €70.1 million (11.2% margin).

• Net income attributable to shareholders: €38.9 million, down from €43.9 million in H1 2023, mainly due to non-recurring expenses.

• ROCE decreased to 12.4% from 13.3% year-over-year, reflecting increased investment.

• Leverage ratio increased to 1.33x, and net debt rose to €258.5 million at June 30, 2024.

• Working capital requirement improved to 21.8% of sales, down from 23% in H1 2023.

Outlook and guidance

• Full-year 2024 guidance confirmed: organic growth around 5%, operating margin before non-recurring items around 11%, and capital expenditure between €200–240 million.

• 2027 targets reaffirmed: sales around €1.7 billion, operating margin before non-recurring items 12% ±50bps, recurring EBITDA margin 19% ±50bps, and ROCE at 13% +50bps.

• H2 expected to be stronger, especially in silicon carbide and solar segments.