MERSEN PRESS RELEASE
SOLID PERFORMANCE IN THE GROUP'S EXPANDING MARKETS, BUT TOP LINE HELD BACK BY CHEMICALS
OPERATING MARGIN BEFORE NON-RECURRING ITEMS OF 7.5% STILL TARGETED
AROUND €25 MILLION IN NON-RECURRING CHARGES IN 2015 - MOSTLY NON-CASH ITEMS
DIVIDEND SIMILAR TO 2014 FIGURE (0.5€ PER SHARE)
"Our 2015 sales grew by more than 6% on the previous year. On a like-for-like basis, they decreased by 2.3% owing to a steep contraction in the chemicals market during the year. Excluding chemicals, we posted growth of close to 1% thanks to the healthy performance in the renewable energies, electronics and aerospace markets.
In addition, we made adjustments to our organizational structure to make us more efficient and responsive in our markets and to better focus all our teams on high-potential customer applications. I have every confidence in the commitment of all our employees and in our ability to continue Mersen's transformation. Our aim is to adapt to the changing environment and to give us an edge so we can win market share in 2016", commented Luc Themelin, Chairman of Mersen's Management Board.
Mersen posted full-year 2015 consolidated sales of €777 million, up 6.3% compared with the previous year, with a positive currency effect of €64 million. On a like-for-like basis, the top line contracted by 2.3% compared with the previous year. Excluding the chemicals market, organic growth ran at close to 1%.
2015 | 2014 | total growth | organic growth* | |
Materials segment | 288.3 | 280.0 | 3.0% | -6.6% |
Electrical segment | 488.9 | 450.9 | 8.4% | 0.4% |
Group total | 777.2 | 730.9 | 6.3% | -2.3% |
Europe | 266.0 | 279.5 | -4.8% | -6.2% |
Asia-Pacific | 179.9 | 161.3 | 11.5% | 0.1% |
North America | 291.3 | 256.3 | 13.7% | -2.9% |
Rest of the world | 40.0 | 33.8 | 18.4% | 25.2% |
Group total | 777.2 | 730.9 | 6.3% | -2.3% |
*On a like-for-like basis (no changes in scope in this period)
Unaudited figures
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In Europe, the sales contraction compared with 2014 was driven largely by the unfavorable conditions in the chemicals market, with lower levels of investment and the non-renewal of the Sabic contract. However, the Group recorded significant growth in aerospace and solar energy. In Asia, the situation improved gradually during the year in China. India, South Korea and Taiwan delivered strong growth. In the Americas, the electronics and wind energy markets flourished. Conversely, the chemicals and electrical distribution markets experienced a contraction, as did the oil industry in the United States and Canada.
Fourth-quarter 2015 sales declined 3.2% at constant exchange rates.
Q4 2015 | Q4 2014 | total growth | organic growth* | |
Materials segment | 69.3 | 70.2 | -1.2% | -7.0% |
Electrical segment | 119.8 | 114.4 | 4.7% | -0.8% |
Group total | 189.1 | 184.6 | 2.5% | -3.2% |
Europe | 65.8 | 68.0 | -3.1% | -3.9% |
Asia-Pacific | 47.1 | 41.4 | 13.7% | 5.6% |
North America | 65.8 | 67.2 | -2.2% | -12.6% |
Rest of the world | 10.4 | 8.0 | 31.3% | 49.9% |
Group total | 189.1 | 184.6 | 2.5% | -3.2% |
*On a like-for-like basis (no changes in scope of consolidation this quarter)
Unaudited figures
The fourth quarter trend was in line with the third quarter. In North America, sales to electrical distributors displayed further weakness, contracting more significantly in this quarter since distributors had built up a high level of inventories late last year. In addition, business in the chemicals and oil industry remained sluggish. In Europe, Germany and France posted growth outside the chemicals market, but economic conditions were not very supportive. Conversely, business in Asia was brisk, including good performances in India and Japan. Growth in the Rest of the World was driven by hydropower in Brazil and fertilizer production in Morocco.
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Mersen reiterated its objective - as amended in October 2015 - of a full-year operating margin before non- recurring items of around 7.5% of sales.
The Group will book around €25 million mostly non-cash net non-recurring charges in its 2015 financial statements. This amount largely consists of impairment losses recognized on tangible and intangible assets, reflecting low activity levels in the chemicals market and underutilization of some graphite production equipment. Other contributing factors includes write-downs of deferred tax assets and, as expected, the final charges related to the Transform plan.
In addition, the Group plans to sell a non-core brazing technology business during 2016. Accordingly, the unit will be accounted for as an asset held for sale in the 2015 financial statements. This will have a negative impact of around €5 million on sales and €4 million on net income. The impact on operating income before non-recurring items will not be material.
The Group's net income 2015 is again likely to be in positive territory, at around the same level as in 2014.
At the Annual General Meeting on May 11, 2016, the Group plans to propose a dividend per share equivalent to 2014 (€0.5 per share).
As announced at the beginning of December 2015, Mersen has made adjustments to its internal organization, reflecting the priorities of its expansion strategy. The reporting will now consist of 2 business segments: i) the Advanced Materials segment which brings together the AMT(1) businesses, graphite specialties for high-temperature applications and anti-corrosion equipment, and power transmission technologies, previously in the ECT(1) segment; ii) the Electrical Power segment which brings together the two businesses related to the electrical market - solutions for power management and electrical protection and control.
In the Group's new configuration, the figures for 2015 and 2014 are as follows:
Advanced Materials segment (AM) | Electrical Power segment (EP) | |||||||
2015 | 2014 | total growth | organic growth* | 2015 | 2014 | total growth | organic growth* | |
Q1 | 108.8 | 101.0 | 7.8% | -2.6% | 86.9 | 79.1 | 9.8% | -0.2% |
Q2 | 111.1 | 100.4 | 10.5% | -1.1% | 89.5 | 81.6 | 9.7% | -1.5% |
Q3 | 103.9 | 102.5 | 1.4% | -5.2% | 87.9 | 81.7 | 7.5% | -0.7% |
Q4 | 100.7 | 100.0 | 0.7% | -3.8% | 88.4 | 84.6 | 4.5% | -2.4% |
Total | 424.5 | 403.9 | 5.1% | -3.2% | 352.7 | 327.0 | 7.8% | -1.2% |
(1) Reporting until December 31, 2015
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The figures published for 2015 and 2014 were as follows:
Materials segment (AMT) | Electrical segment (ECT) | |||||||
2015 | 2014 | total growth | organic growth* | 2015 | 2014 | total growth | organic growth* | |
Q1 | 74.3 | 71.7 | 3.7% | -7.7% | 121.4 | 108.4 | 12.0% | 2.6% |
Q2 | 75.2 | 67.8 | 10.9% | -2.4% | 125.4 | 114.2 | 9.7% | -0.6% |
Q3 | 69.5 | 70.3 | -1.2% | -9.1% | 122.3 | 113.9 | 7.4% | 0.6% |
Q4 | 69.3 | 70.2 | -1.2% | -7.0% | 119.8 | 114.4 | 4.7% | -0.8% |
Total | 288.3 | 280.0 | 3.0% | -6.6% | 488.9 | 450.9 | 8.4% | 0.4% |
NEXT REPORTING DATES
2015 results: March 9, 2016, before the market opens - Meeting at 10am.
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Global expert in electrical power and advanced materials, Mersen designs innovative solutions to address its clients' specific needs to enable them to optimize their manufacturing performance in sectors such as energy, transportation, electronics, chemicals, pharmaceuticals and process industries.
CONTACT FOR INVESTORS AND ANALYSTS | PRESS CONTACT |
Véronique Boca | Nicolas Jehly/Guillaume Granier |
Vice-President, Communications | |
Mersen | FTI Consulting Strategic Communications |
Tel. +33 (0)1 46 91 54 40 | Tel. +33 (0)1 47 03 68 10 |
Email: dri@mersen.com | Email: nicolas.jehly@fticonsulting.com /guillaume.granier@fticonsulting.com |
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Mersen SA issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 16:58:05 UTC
Original Document: https://www.mersen.com/fileadmin/user_upload/pdf/corporate/2016/2016-01-pr-Sales-Q4-2015-Mersen.pdf
