Welcome to Mersen's half year 2024 results. This is a recorded session. For questions, please press star one. Over to Véronique Boca. Over to you. Good morning. Good morning, and thank you for being with us for with for this call this morning. Please note that the press release and today's presentation are available on our website as always, after this presentation. Luc Themelin, CEO, and Thomas Baumgartner, CFO, will be available to answer all your questions. Over now to Luc. Thank you, Véronique, and good morning, everyone. Mersen has just completed a very good H1. As you can see, the half year sales have reached a record of EUR 624 million. Organic growth, slightly below 5 percent, 4.9%, precisely. We've generated substantial operating cash flow. EBITDA margin 16.9%. Thomas will develop this and operating cash flow up 39%. We're continuing the deployment of our CapEx plan, EUR 83 million, at the end of June. EUR 63 million for the 2027 growth plan. Last but not least, it is with great satisfaction that we can now say that the GMI acquisition has been completed a bit less than a month ago, EUR 40 million of sales, and this will now be part of our industrial structure as of now. I'd like to come back to the 2027 roadmap. It's on the screen, as you can see. Nothing really new, a lot around renewable energies, protection products for EVs and silicon carbide. So if you do the math, you know, the guidance we gave, if with unchanged currency, we should be close to EUR 1.3 billion, and this shows we're perfectly in line. As you know, SiC is really the point of focus. SiC should really start to pick up in 2025 and 2026 and 2027 with the pickup of electric vehicles. So moving on to the silicon carbide market slide. Growth 22% in H1 versus last year. Once again, as a reminder, we operate in different industries, electric vehicles, charging stations, high power charging stations, as well as electric supply systems for data centers that are requiring increasing power needs. Different applications, converters as well, and more and more on new fleets of electric vehicles in the years to come, really starting in 2025, 2026 and 2027. So going from EUR 40 million-EUR 50 million in H1, and we've detailed our customers as well, with different customer cycles, which is positive. We're not serving one single customer, even if there is one big one. We have different customers, customers with different cycles, with the need to install new equipment. So it's, it's very contingent upon our customers' markets, but for us, we're able to smooth things out. As you can see, the overall pie is growing. We're in three major geographies. We have a Chinese customer, European customers, and U.S. customers. Soitec. With Soitec, we're still qualifying a product. We're working on the largest wafers, eight-inch wafers, those that will be used in new applications. Moving to the electric vehicle part, 20% growth, total sales around EUR 13 million. You can see the busbars, fuses, and other markets, different brand names towards the bottom, well-known companies, including one Italian one. We've added additional names and fuses, Panasonic, Marquardt, and ACC. The ACC wave is coming with the share of busbars, which is going to grow significantly. And this will continue and even increase next year. So things are really picking up very much on track with what we said. A quick slide as well on solar. Since 2022, we decided not to follow the growth of the market as a whole, but to really focus only on high value customers and the materials sector, especially the electrical protection sector remains the same with fuses and power conversion, and things are very stable. There is some overstocking in cells in China, but if you read the press release of cell manufacturers, it's not wonderful for H1. But this is a market which can and will pick up quite rapidly, quite brusquely. So nothing special really here to say on this. We're going to really just stick to EUR 100 million, could go up to EUR 130 million, but shouldn't go much higher. Last but not least, before handing over to Thomas, GMI is now part of Mersen, with four sites in the U.S., very close to where we already operate. It's really the industrial area for this industry. No real surprise. It's a family business, high-performance business on business segments where we had some presence, but limited tooling. Namely, it is the largest tooling company, independent company on U.S. territory. They have a large purification capacity, will be very positive, and they are really an expert in different products like insulation felts, extruded and isostatic graphite as well. Total sales nearly $40 million. We paid $50 million for it, and operating margin is higher than Mersen's. So very interesting, and they've been with the family with Mersen now since July. Thomas, over to you. Thank you, Luc. L et's start with organic growth. Organic growth was 5%, half of which was due to price increases, and as you can see, transportation and chemicals at top left were both very dynamic with organic growth between 10% and 20%. And please note that the transport sector in all three markets, aeronautics, rail, and electric vehicles, grew. The process industry market also remained very buoyant. For the electronics market, this is a bit more mixed with strong growth in SiC semiconductors, as Luc explained. The silicon semiconductor market is declining in line with market trends, although there is a slightly positive inflection, which was noted in Q2. The power electronic segment is in slight decline, and the energy market is also in decline, mainly due to solar energy, as Luc explained just moments ago. Looking at the main half-year indicators, EBITDA rose by 5% to over EUR 105.5 million, which is 16.9% of sales, which is an increase of 40 basis points. Depreciation and amortization increased as expected, very much in line with our roadmap, and subsequently, operating income grew slightly, +2%, leading to operating margin of 11.2%, which is very comparable to what we had last year. Last year, we had 11.3%. So before going into the operating margin and before giving you some further explanation, I'd like to come back to the ROCE. Last year, the ROCE was particularly high, 13% for the full year, and it really benefited from the full utilization of our production capabilities. The ROCE for the first half of 2024 is obviously going to be lower, which as it is expected for the whole year, given the much higher level of investment and CapEx, again, very much in line with our plans. The plan is to come back to 13% in 2027. This target we are maintaining. The increase or changes in our operating margin is mainly coming from positive volumes, higher volumes. But there has been a negative product customer mix effect, this half year, representing 0.1%. Between the red lines, you can see a bit like last year or two years, we have more than made up or compensated for inflation, mainly the salary ones, with productivity measures, optimization measures, and above all, price increases, which is reflecting our strong pricing power, at 2.5% increase. So this margin also includes what I would describe as temporary additional costs, development costs coming from the Soitec projects, costs linked to the creation of a dedicated EV team, and hiring costs linked to the growth plan. On the other hand, there is the rise of Columbia, which weighs less heavily than last year. Columbia has really been picking up, so it has less of an impact compared to this year compared to last year. And as mentioned before, the operating margin was impacted by higher depreciation and amortization of charges. So let's take a look at the segment, starting with the advanced materials segment, which maintained recurring operating margin at 15.2%. Higher prices, optimization measures, and productivity gains allowed us to offset higher raw material and wage costs, as well as the costs related to growth projects and the Soitec projects. And it also allowed us to absorb an increase of amortization representing roughly 0.5% in of the increase in margin of advanced materials. Electrical power division's margin was stable, completely stable, compared to last year. Price increases and productivity measures allowed us to offset the increases in material costs, wages, and EV team costs as well. So net income. Net income, as you can see, reached EUR 41.3 million compared to H1 2023, mainly because of non-recurring items and charges, acquisition costs, and charges and provisions linked to the optimization. The operating financial performance has increased. Interest rates, first of all, increased progressively, and there has also been an increase in gross debt. So the tax rate is 24%. It was 23% last year. As mentioned by Luc, the operating cash flow for the half year was high. It is up nearly 40% compared to H1 2023. Working capital requirement at 21.8% of sales, down from 23%. Sound problems. Accounting, which took account of the exceptional or non-recurring items. Debt increased to EUR 259 million at the end of June. This is coming from the announced increase of our industrial investments, EUR 83 million, compared to EUR 62 million in June 2023. 75% of those investments are directly coming from the 2027 roadmap. The balance includes other growth projects, including maintenance, safety, and environmental projects. With this debt, the financial structure remains very solid, with a leverage ratio of 1.33. Coming to our liquidity profile, as you can see, the average maturity of our financing is 4.3 years. In 2026, the majority of our drawn lines is Schuldschein, but we have considerable liquidity, nearly EUR 320 million of undrawn confirmed lines. So in other words, our financial structure remains very sound and solid. So with all these good results for H1, we are happy to confirm our forecasts for the years with organic growth around 5%, operating margin around 11%, and industrial investments between EUR 200 million and EUR 240 million. So the good results allow us to also confirm our 2027 full year guidance announced in 2023. The roadmap is still to achieve EUR 1.7 billion in sales with operating margin before non-recurring items between 11.5% and 12.5%, EBITDA margin between 18.5% and 19.5%, and an ROCE between 12.5% and 13.5%. So this is it for the presentation. Luc and I will now be answering all your questions. Thank you. Ladies and gentlemen, if you would like to ask questions, please press star one. Star one to ask your questions by phone. Thank you. I have a first question: Could you tell us about the EV and EV semiconductor market trends? There have been some freezes, some projects were postponed in different geographies. Could you give us an update on the industry and on the potential impact it could have on Mersen or not? Second question: Excellent performance, but the slowdown in organic versus Q1, what does that suggest? I heard you were confirming your annual guidance, but still. And question three: I'd like to come back to the U.S. acquisition and expected synergies coming from this acquisition. So I can pick up the second question first. This is Thomas. Well, I can talk about the slowdown, Q1 and Q2. June wasn't great in terms of deliveries. It's a fact. Books have been slightly lower. We don't think we need to draw any conclusions at this point. The solar market could have been better obviously. H2 should be better, a lot better than H1, and we also expect the silicon carbide to pick up again in H2. So what we can also add is that we've had some delivery problems in some of our locations, so June was a bit weak, also because of that. Coming to the question on synergies with GMI, we expect major synergies. Between the Mersen site and their site, we're going to have some real complementarities, industrial synergies, commercial synergies as well. They're very responsive. Short circuit, I think with them, we're really going to be able to address the U.S. market, and it's really good to have this proximity now with our customers. And this is really Mersen's strength: be close to customers. And with GMI, we are now—we have this very strong local footprint, and what is important is that the graphite channel is now completely under control. In the past, we were having some 30% of the extruded was coming from somewhere else. Now, we're really going to be fully covering this, and it's going to help us boost our sales. The question on EV, the EV market, well, ACC made some announcements recently. The Italian plant was postponed, and we don't know exactly what their industrial objectives were. We're continuing to focus on the platform which we have with them. It could become their unique platform, and we are really very active on this platform. They have not increased or lowered their volumes to produce. We're very vigilant, of course. We are in regular contact with them. All the rumors on electric vehicles and silicon carbide. We don't think our presence in electric vehicles is going to be changing. The forecasts of our customers are slightly lower than the initial forecasts. 2024 was not going to be that strong a year. But we don't really have any additional precise information to communicate, right? The EV market is really below expectations, and this is true in all countries, including Germany. In March, you announced higher CapEx, especially for the ACC contract. Is that something that has changed? No, no, it has not changed. The electric vehicle sales that are not happening, we've really been involved in a very limited way, a little bit with Volkswagen, but otherwise, and it is. I'm not going to say that if things continue, it won't be good. But right now, we're not there. We're not there. I think we have to see what the 2026, 2027 sales forecasts are. The CapEx is very limited for ACC, and their CapEx is very stable. We simply need to make sure we can meet their needs. You know, we could, and if we have to postpone things a little bit, we can do this. The assembly lines are not very expensive. It's a few million euros. Nothing compared to materials. Okay, thank you. Julien Onillon, next question. Good morning. I would like to have to ask a question on guidance and on your growth plans, 6.8 organic, a slight slowdown. To stay in the vicinity of 5%, you said you would need a slight re-acceleration in Q3, so you would need a slightly different trend. So you said that with solar, things. You explained solar, silicon carbide as well. I'd like to come back to the other markets, the chemical market. You had a very good beginning of the year. Do you expect things to continue? What does your backlog look like for H2? Will it be just as good? And, on process, the process industry, and, distribution of fuses in the U.S., what are your expectations for H2? Could you give us a sneak peek? Do you expect a rebound in organic or not? And how confident do you feel? That's the question, that's my first question. Second question, you we already talked about it, but I'd like to further discuss silicon carbide. You showed five customers. You had four, you now have five customers. I have a question on Wolfspeed. Wolfspeed is a very large customer with whom you have a large project. They have some challenges. Their sales are down. I don't know if they're number one or number three. How do you expect things to go moving forward with Wolfspeed, especially with the large contract you are going to have with them? SGL Carbon says that they had really been suffering on silicon carbide. You seem to be suffering less. Your performance is much better. But I'd like to look at the bigger picture and see how this relates to some of your big customers, like including LGL, for example, who says they've really been suffering. Well, to the first question, we can see the chemical industry is remaining good. We have a good backlog. We have a backlog which is quite high with. Sorry, we're having some sound problems, but June wasn't very good, as we said. It was a weak month, but we're still waiting for components. We're still suffering from some supply chain problems, and I also mentioned some delivery problems. This is very specific because we had some construction in large sites, especially in our American operations and semiconductors. So at the end of the day, we're keeping our guidance 5%, and we have a very good backlog. So moving to the second question on Wolfspeed, they have always been a complex customer. They have a manufacturing site near New York, and this is really, there have been some challenges, the utilization rate, which is at 20%. I think they're working hard to actually ramp up this site. And then they have a site producing wafers, which they use in, and they're selling large volumes to other players. And that's really where we, Mersen, are doing good business. We also sell to the, to Wolfspeed. Wolfspeed's manufacturing. In 2023, they needed a lot of products. At 2024, I think we can say with a year of transition, we don't really have much else to say about Wolfspeed, as you can see on the H1 chart. Some customers, some are of equivalent size. I'm not going to give any names, but we have other customers with whom we're really delivering large volumes. They're picking up operations. And of course, there is Wolfspeed once again. I don't know exactly what's happening with SGL Carbon. Maybe they had a drop. I simply don't know. I don't have any details. I think our product offering is very balanced, and the results are what they are, with good growth. So Wolfspeed is not your third customer? Well, we're not going to answer that. Well, I could be wrong, says the person asking the question. But, well, we have additional customers, all in all. Okay. Thank you. Ladies and gentlemen, once again, for questions, please press star one. Question from Thomas Renaud. Good morning. Can you hear me okay? Yes, we can hear you, sir. I have a quick question on GMI. You said their profitability is higher than Mersen's. Operating margin of 15% for GMI, is that what we could expect? My second question on electric distribution. We saw Rexel's figures this morning with a slowdown in Europe. I'd like to get your opinion on H2 and how things are looking moving forward, especially with a drop in prices on this segment. That's my second question. My third question, coming back to Wolfspeed and silicon carbide. Will the contract allow you to continue your growth in H2? Do you have a specific agreement on growth in volumes? Last question on ACC. Initially, your target was EUR 200 million, now you're between EUR 250 million and EUR 300 million. Is that something you're now questioning? Are you back to EUR 200 million in sales with ACC? Even if I heard what you said, and you said you're only at the, in the very early stages of the agreement, and maybe you need to wait a bit longer. Yes. So, for ACC, we don't know at this point. What we do know is that the platform is going to be used a lot more with Stellantis compared to the first one, which we were not. Let's wait, maybe until the fall, to see precisely what the forecasts with ACC are. We had a contract through 2030, and with a peak the highest numbers in 2027, it's a bit far. We don't want to react or overreact. Right now, we're, you know, waiting for orders for 25 and beyond, well, we simply don't know. So I cannot answer your question. As far as Wolfspeed and deliveries are concerned, we in 2022, they gave us the forecast through 2027, with annual volumes revised every quarter. So we have a fairly clear picture at the end of the year. We don't really know what 2025 will be like, but, again, production needs are updated every three months, every six months. No additional details at this point. You talked about Rexel in Europe. Yes, we've seen that there is, there's been a decline in Germany, in fuses. In France, things are going well. The same thing's true for other countries. So there's been a bit of a slowdown in Germany, but no, we've not seen a drop in prices in electrical distribution. The prices generally remain where they, where they are. And, the U.S. distribution is also good. We have a good backlog. June was not very good, as we said, but bookings in the next two months will be picking up again. It's difficult, again, to forecast what will happen beyond, but the coming months are looking good. And the EBIT asked about for GMI is indeed what you suggested. Okay, very good. Thank you. Thank you, Mr. Renaud. Thank you. Mr. Jean-François Granjon? Yes. I had a question on the U.S., but you just answered it. I had an M&A question. Any other plans, M&A plans? Are you looking at anything soon? Could you give us a quick M&A update? Well, we've just completed GMI. It's going to take some time to actually integrate GMI. We do have other projects in the pipeline. At this point, we do not wish to disclose any dates. You know, we made some announcements for GMI, and it took a lot longer than planned, so no dates at this point. Okay. Thank you. Thank you, Mr. Granjon. Question from BNP Paribas. Good morning. Can you hear me? Yes, we can. I have two questions, please. Question on silicon carbide and EV, 20% growth in H1. Are you expecting the same thing in H2, or are you expecting anything different? Question two on electric vehicles again. What are you going to do in terms of hirings? Well, the annual guidance we already gave. Silicon carbide was good in H1. There is no reason to say anything different for H2. EV recruitment, we recruited new people. I think we have a full team now, a good team. I think we have very good talents, very skilled people, especially for the ACC platform, because that's a major project which requires a lot of automation, expertise. I think we've made substantial progress with new equipment, very high output equipment, high capacity equipment. So I think, yeah, we have a, we have a fully, a fully operational team, and we also have a great team in China on fuses. How many people is that in total, then? I would say nearly 100 people. I think we had about 50 last year, 50 or 60, maybe. I can't remember. Then 80... Okay. Thank you. No more questions. Thank you, sir. Julien Onillon, again? Yes, hello again. I'd like to come back to the Soitec contract. You're now generating your first sales, and you said that—I think you accelerated the process and the production last year. What are your expectations for H2 with Soitec and beyond 2025, in terms of sales, given this recent acceleration? And then my second question is more long term. Soitec signed a new contract with one of your competitors to not only do business with you and not be dependent on you. How and when do you expect Japan, your Japanese competitor, to serve Soitec, and how is it going to impact you? That's my first question. My second question, coming back to the Asia Pacific region, which is a very interesting geography with a good growth in H1, and silicon carbide, you said you had a new customer. I guess it's the Chinese customer you were referring to. What are your expectations for H2, silicon carbide and beyond? What is your outlook? What are your perspectives for Asia, for H2, and beyond in 2025? Okay, I can pick up on your last question. I don't want to give any guidance right now for 2025. Q1 2024 was very good. Last year, growth had been very good as well in the U.S. and North America and Europe, but not in Asia. So if you compare 2024 to 2023, performance has indeed been very good. I think H2 will be similar. In terms of growth for H2, I don't know. It will depend on solar. There has been a slight dip in solar. In China, things go very fast, so we have to wait. We have to be patient and see how things unfold in Q3, and how things go with Chinese producers. Right now, they're really absorbing their stock, their inventory. So your other question was on Soitec. We want to be ready for 2025 to address the volumes at not 400,000 wafers. But to do this, we need to be very prepared with a plant which is really up and running and working well, and then we're going to increase and ramp up during H2 to deliver the quantities that are expected from us that Soitec is expecting. And I think Soitec's continuing to take new orders. I don't know exactly what they will expect from us in 2026. We have a 2025 program with Soitec, which is very ambitious. We need to make sure we stay on track in terms of equipment. We do a lot of sampling to qualify their products. Each customer, you know, needs X number of wafers for qualifications. So this is what we're doing right now. Soitec has always told us that they wanted to have three suppliers to serve their end customers: STMicroelectronics, Infineon. They don't want to work with a company that has a single supplier. So we know this. We've accepted to deliver very large volumes, so we have a lot of market share with Soitec, but we're not the only one. There is this Japanese competitor. I don't know where you found that information. I know them. I'm not going to give their name, and then there is a third one. I think our products are very good products. We have a lot of proximity with Soitec. We have extensive development projects. For communication and distance reasons, I think, it's a bit different with this Japanese competitor. But soon we should have new contacts with new customers to deliver products directly, license small customers through Soitec. The Japanese announcement was very recent, says the person asking the question. You've been working with them for a long time and investing substantially, and you're getting substantial volumes with Soitec now and moving forward. But do you think that, physically and industrially, if this Japanese competitor signed a major deal, do you think they could start delivering now? Or do you think they will start delivering much later in 2028, and that it will take time to actually ramp up and start producing much later? So this was really my question: Do you think your competitors have the capabilities to actually deliver products? As you said, you know, very clearly, you've been investing massively, but I would think that this Japanese customer isn't quite there yet. Well, Soitec has not changed its perspectives with Mersen since they made this announcement, so there is really no news. I think this Japanese competitor started to do business with them before us, but I think they had a few issues, and this is where we appeared on their radar. I have no idea of their output capacity. They make very specific products, but I don't think you can start delivering a company like Soitec overnight. You need to do the qualification. You need to get the... We know our capacity, and we don't want to be the single supplier of Soitec. We know our strengths. We have genuine strengths, and that's it. Okay, very good. Thank you. Thank you. Ladies and gentlemen, once again, for questions, please, please press star one. I think we have no more questions on the phone. Let's see if we have any questions in the webcast. Yes, we have one question for Mr. Brown. The stock price is not following Mersen's. How do you explain this? Well, I think you would need to ask investors. We think there were... As you can see, there were a lot of questions today on electric vehicles, on the cycles of electric vehicles. You know, there have been. We had the elections in France. And this has an impact on a bigger impact on mid-caps than large caps. Next question from Mr. Baud: Could you tell us your objectives in GMI integration, customers, synergies, technologies, and U.S. footprint? Well, I'm not sure what to tell you. We've been talking with GMI for two years. So the integration has pretty much started. We know their industrial tools. We know their customers. We're going to have a U.S. manager who is running a Mersen plant not very far from where they are, so he's going to be supervising the integration, a lot of commercial integration. He's going to help us who does what. We have two plants doing pretty much the same type of... using the same type of machines, and this is necessary to better cover the U.S. GMI and Mersen operate in the same industries. There are certain things that they do better than we do, which is great news. They have a small production of extruded graphite, which is very complementary to Columbia for very specific applications and markets. So there's also some growth or some growth perspectives for Europe. They're making, you know, major bids for battery applications, aeronautics, and so we'll be having a much better connection to these markets. Otherwise, I don't really know what to say. We've always had a very strong footprint in the U.S., and we've known each other for a long time, so I really don't see any problems there. And as Luc said, GMI really works on the downstream part of the market, and they source with Mersen, but not only. They also source with competitors, and obviously, this is going to change. We're going to have major synergies with a lot more sourcing now going to Mersen. It's not going to happen overnight. It will take some time, but eventually we're going to get there. Okay, we have no additional questions in the chat. No more questions on the phone. Gentlemen, over to you for any final comments or closing. Yes. Thank you so much once again for attending this call. Thank you for your many questions. We will see you again October 23rd for our Q3 results and, for our Capital Market Day, December 5th. You may want to pencil that in as well. Thank you so much, and enjoy your summer holidays, and enjoy the Olympic Games. See you soon. Bye-bye. Ladies and gentlemen, thank you for listening to this conference. You may now hang up.