letter to shareholders - Imerys, Transform to perform

May 2013
LETTER TO
SHAREHOLDERS
58
MESSAGE
Gilles MICHEL
Chairman and Chief Executive Officer
RESULTS
• 1 quarter 2013
key figures
st
PAGE 2
Dear Shareholders,
In 2012, Imerys achieved its growth target for net income from current
operations and strengthened its financial structure. The Group was quick to
adapt to market conditions and integrated the Luzenac Group one year
ahead of the initial schedule. In parallel, Imerys launched the first stages of
its 2012-2016 plan by accelerating Research & Development programs,
increasing growth investments and developing its diversity in terms of both
regions and sectors.
NEWS
• Imerys invests in the USA
to accelerate its
development in Oilfield
Minerals
• Safety, a major issue at
Imerys
• Intellectual property:
a pillar of innovation
PAGE 3
In the 1st quarter of 2013, Imerys posted sound results despite a more
difficult environment, particularly in the construction and industry sectors in
Europe. Revenue was down - 4% at comparable structure and exchange
rates compared with a high basis of comparison in the first quarter of 2012.
The activity was also affected by harsh weather. The operating margin’s
resilience at 12.6% reflects the Group’s reactivity, as it adapted its industrial
assets to market conditions, as well as the continuation of cost reduction
measures, which have been reinforced since the second half of 2012.
The acquisition of PyraMax Ceramics, LLC, of which the ceramic proppant
plant should start up by the end of 2013, will speed up our growth in the US
oilfield sector. It illustrates our Group’s will to keep up its strategy of
development, innovation and acquisitions that create long-term value.
SHAREHOLDER’S NOTEBOOK
We thank you, dear Shareholders, for your loyalty.
• Share price evolution
• Shareholder structure
• Governance
• Contacts
Gilles Michel
PAGE 4

RESULTS TO MARCH 31, 2013
1st quarter 2013: Sound results
in a tough environment
Imerys continued its
development in the 1st quarter
of 2013 in a more difficult market
environment. While the
economic slowdown was
confirmed in Europe, growth
continued in emerging countries
but at a slower pace, with
trends in the North American
economy remaining positive.
GROUP’S CONSOLIDATED
REVENUE
REVENUE
BY BUSINESS GROUP
-4%
23%
REVENUE
BY GEOGRAPHIC ZONE
22%
5%
25%
(at comparable Group structure and exchange rates)
883
694
974
929 M€
25%
752
29%
23%
48%
Q1
Q1
Q1
Q1
Q1
2009
2010
2011
2012
2013
Minerals for Ceramics, Refractories,
Abrasives & Foundry
Western Europe (of which France 16%)
Performance & Filtration Minerals
United States/Canada
Pigments for Paper & Packaging
Others (Japan/Australia)
Materials & Monolithics
Emerging countries
REVENUE AFFECTED
BY LOWER VOLUMES
RESILIENT OPERATING
MARGIN
Revenue totaled 929 M€, a - 4.6%
decrease compared with the 1st quarter
of 2012. It takes into account a + 8 M€
(+ 0.8%) Group structure effect, mainly
resulting from the acquisition of Itatex
and of Goonvean’s kaolin activities in the
United Kingdom. Currency trends explain
an unfavorable foreign exchange effect
of - 14.3 M€ (- 1.4%). The price/mix effect
improved by + 1.6% while sales volumes
decreased by - 5.6%, in relation to market
trends and adverse weather conditions
that weighed on the Building Materials
activity in France. At comparable Group
structure and exchange rates, turnover
decreased - 4.0% compared with the
1st quarter of 2012, a high basis of
comparison.
At 117 M€, current operating income
decreased - 7.3% compared with the
1st quarter of 2012. It takes into account
a + 2 M€ exchange rate effect, with
the Brazilian cost base benefiting from
the real’s depreciation over the period.
The operating margin held out at
12.6% in the 1st quarter of 2013,
reflecting the effectiveness of fixed
and variable cost control measures in a
context of lower sales volumes. The
improved price/mix component offset
the rise in variable costs.
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@
NET INCOME FROM
CURRENT OPERATIONS
AND NET INCOME,
GROUP’S SHARE
The Group’s share of net income from
current operations, down - 5.1% to
73 M€, mainly reflects the decrease
in current operating income, and
financial expense for - 16 M€ (- 19 M€
for 1st quarter 2012). The Group’s share
of net income amounts to 70 M€
(74 M€ for 1st quarter 2012).
The full press release and slideshow are available from the
website www.imerys.com in the News & Media Center
NEWS
Imerys invests in the USA to accelerate
its development in Oilfield Minerals
On April 11, 2013, Imerys announced the
acquisition, through the purchase of PyraMax
Ceramics LLC, of a ceramic proppant production
unit that is currently under construction.
Proppants are small ceramic balls the size of a grain of sand
(< 1 mm) that are used in non-conventional oil and gas field
operation. Built in Wrens (Georgia, USA), the acquired
industrial complex has total capacity of approximately
225,000 tons per year and will ramp up gradually in 2014.
This capacity will be added to that of Imerys’ first proppant
plant, which opened in Andersonville (Georgia, USA) in
September 2011.
Gilles Michel commented: “The interest in non-conventional
deposits is opening up global prospects for the oilfield
minerals market. By investing in this new industrial
complex, Imerys has reached a significant step in the
implementation of its internal growth strategy by 2016.”
INTELLECTUAL PROPERTY: A PILLAR OF INNOVATION
Imerys has to protect its innovations to take full advantage of them. With almost 1,000 granted or pending
patents, corresponding to over 300 innovations filed in various countries, the Group also has more than 200
models and designs, and over 3,700 trademarks.
Safety, a major issue at Imerys
The Group has recently focused
on driving the supervisors’
safety ownership and improving
the internal mine safety
competence.
A Supervisor Focus Program has
been launched since the beginning of
2013 to maintain diligence and root
safety culture in the operations.
It requires each of the supervisors at
Imerys to take a computer-based
training module and implement the
training through at least one Safety Visit
each month since April.
The Mine Safety Review program was
initiated to better manage the risk in our
quarries, especially on ground control
and mobile equipment.
The program has been put into place by
a special team of internal geotechnical
experts with the partnership of an
international consulting firm.
By the end of 2012, about 20 mining
sites have been reviewed and these
sites are now following up on the
professional recommendations with
concrete action plans to mitigate
pertinent risks.
M AY 2 0 1 3 I L E T T E R T O S H A R E H O L D E R S  3
SHAREHOLDER’S NOTEBOOK
Share price evolution since January 1, 2013
SBF 120 (based on Imerys share price as on 01/01/2013)
€55
SBF 120
+ 3,7%
€50
Imerys
+ 0,2%
€45
January
February
IMERYS
ON THE STOCK
MARKET
March
• Number of shares: 75,551,327
(data as of April 30, 2013)
• Nominal value: €2
Euronext Paris - Eurolist - Valeurs locales
Compartiment A (Blue Chips)
• Closing price: €49.75
(eligible for deferred settlement service)
• Market capitalization: €3.7 bn
As of April 17, 2013, Imerys’
share capital was made up
as follows:
38,4%
2,5%
2,2%
0,2%
Belgian Securities BV
Institutional investors (*)
Individual shareholders and employees
April
ISIN: FR0000120859 - NK
Shareholder
structure
56,7%
Financial markets were affected by
global macroeconomic uncertainties
and the recessionary environment in
Europe. Imerys share price has been
volatile since the start of 2013 but
was finally stable as on April 30, 2013
(+ 0.2%) after recording a + 34% rise
in 2012, while the SBF 120 increased
slightly to + 3.7% over the first four
months of 2013, following a + 14% rise
in 2012.
News in brief
GOVERNANCE
The following resolutions were passed at the Ordinary & Extraordinary General
Meeting of April 25, 2013:
• approval of the 2012 financial statements;
• renewal, for a period of three years, of the terms of office as Director of
Mrs. Fatine Layt, as well as Mr. Ian Gallienne, Mr. Robert Peugeot, Mr. Olivier Pirotte
and Mr. Amaury de Seze;
• ratification of the cooptation of Mrs. Marion Guillou as Director for a period of three
years;
• appointment of Mrs. Marie-Françoise Walbaum, as a new Director, for a period of
two years;
• renewal, in favor of the Board of Directors, of the authorization for the Company to
buy back its own shares and of financial authorizations.
On this occasion, Mr. Jacques Drijard was warmly thanked for his dedication to the
Group for the past 43 years, as well as Mr. Jean Monville and Mr. Pierre-Jean Sivignon
for their contribution to the work of the Board and its Committees.
Others (brokers etc.)
Treasury shares
* of which 9.8 % held by M&G
Investment Management Limited
(including shares held for The
Vanguard Precious Metals & Mining
Funds)
We were very sad to learn of the death of Mr René Mitieus, who held the position
of Chairman & CEO of Imetal from April 1993 to May 1998. The Board of Directors
and the Executive Committee voiced their recognition for the work achieved at the
head of the Group and joined with employees in expressing their deepest sympathy
to his family and friends.
CONTACTS
NEXT DATE
Tuesday, July 30, before trading:
1st half 2013 results
- Financial Communications
154 rue de l’Université - 75007 Paris
Tel: +33 (0) 1 49 55 66 55 - Fax: +33 (0) 1 49 55 63 98 - [email protected]
Website: http://www.imerys.com
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Conception: Bleu Cerise - Pictures credit: © Imerys - © hxdbzxy - © EDHAR
Imerys