Slides
Page 1
Annual General Meeting May 16, 2025
Page 2
Agenda Results 2024 Market trends and outlook Report by the Statutory Auditors Corporate Governance Report Explanation of resolutions Answers to shareholder’s questions Vote of resolutions 2 Annual General Meeting – May 16, 2025
Page 3
01 A solid2024 Thomas Baumgartner CFO
Page 4
847 923 0 200 400 600 800 1 000 1 200 1 400 Record sales 4 Reported sales (€m) 1,244 2020 2021 2022 2023 2024 1,211 1,115 Annual General Meeting – May 16, 2025
Page 5
Strong sales growth in North America in 2024 5 North America Europe Asia-Pacific €509m Organic growth +6.3% €37m Organic growth - 4.0% €400m Organic growth +1.8% €298m Organic growth - 1.2% Sales 2024 South America Africa Annual General Meeting – May 16, 2025
Page 6
Growth in end markets over the course of the year, with the exception of the energy market (solar) 6 1,244 M€ +2.6%* TRANSPORTATION CHEMICALS ENERGY PROCESS INDUSTRIES ELECTRONICS 9% 16% 19% 33% 23% + + + ++ - *Estimated breakdown of 2024 sales and organic trend vs. 2023 ++ +10% ; +20% + + 0% ; +10% - -10% ; 0% Organic growth 2024 vs 2023 Annual General Meeting – May 16, 2025
Page 7
EBITDA before non-recurring items (€m) Profitability maintained at a high level 7 123 149 186 203 10% 12% 14% 16% 18% 50 100 150 200 250 206 EBITDA margin 2020 2021 2022 2023 2024 14.5% 16.1% 16.7% 16.7% 16.5% Annual General Meeting – May 16, 2025
Page 8
Operating income before non-recurring items 8 En M€ 2023 2024 EBITDA before non-recurring items 202.7 205.5 As a % of sales 16.7% 16.5% Depreciation & amortization (65.4) (74.5) Operating income before non-recurring items 137.3 131.1 As a % of sales 11.3% 10.5% Annual General Meeting – May 16, 2025
Page 9
Pricing power and productivity gains helped offset inflation 9 Operating margin before non-recurring items (in % points) Operating margin before non-recurring items 2023 Price effect Productivity gains p-SiC project, EV team Volume-mix effect Inflation raw materials / energy Payroll inflation Amortization Operating margin before non-recurring items 2024 Other (including bonuses and profit sharing Currency and scope effect 11.3 10.5 -0.4 +2 -1.2 +1.2 -1.7 -0.6 -0.1 -0.6 +0.6 +0.3 Annual General Meeting – May 16, 2025
Page 10
Acceleration of cost and cash flow optimization measures 10 Reinforced action plan on inventory management Structural optimization and adaptation measures accelerated at the end of 2024 Costs 2024-2025: €23m Cash costs: €14m (2025) Gain: €17m full year Inventory reduction objective -€30m at comparable business level Annual General Meeting – May 16, 2025
Page 11
Net income 11 in € million 2023 2024 Operating income before non-recurring items 137.3 131.1 Non-recurring income & expenses (5.9) (23.5) Net financial expense (19.3) (24.0) Income tax (26.2) (22.0) Net income 85.9 61.5 Net income attributable to owners of the parent 81.6 59.0 Effective tax rate restated from adaptation plan 24% Increase in gross debt and interest rates Mainly adaptation Plan Annual General Meeting – May 16, 2025
Page 12
Cash flow from operating activities before capital expenditure (€m) 133 117 106 179 0 50 100 150 200 250 A cash-generating model 12 194 2020 2021 2022 2023 2024 Annual General Meeting – May 16, 2025
Page 13
Capex in line with the revised growth plan 13 110 10 40 44 Growth plan (SiC, EV) Maintenance Other growth projects Safety and environment €204m + €12m intangible assets -€15m compared with forecasts (carried forward to 2025) Annual General Meeting – May 16, 2025
Page 14
A financial structure that remains robust 14 Bank covenants at 3.5 Net debt 180 193 241 370 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 0 100 200 300 400 500 2020 2021 2022 2023 2024 Leverage Leverage Group Policy 1.8 (€m) 212 Includes €74m cash-out for the acquisitions of which €8m earn-out payments Annual General Meeting – May 16, 2025
Page 15
Solid extra-financial performance in 2024 15 Ethics and compliance Upstream value chain Ethics training completed by 98% of new employees with a PC Improved CSR rating of our suppliers (only 8 have a rating below 25) Non-exhaustive Environmental impact of plants 121 90 77 79 2022 2023 2024 2027 Reduction in GHG emissions intensity (scopes 1 and 2) objective Annual General Meeting - May 16, 2025
Page 16
Solid extra-financial performance in 2024 16 Developing our human capital Non-exhaustive Increase the percentage of women engineers & managers 25.3% 26.1% 27% 29% 2022 2023 2024 2027 objective Develop and consolidate a health and safety culture 1.53 2.78 2.08 1.80 66 68 70 60 2022 2023 2024 Frequency Severity Annual General Meeting - May 16, 2025
Page 17
The first year of the CSRD sustainability report 3 compliance reports: double materiality, ESRS and Taxonomy A double materiality assessment leading to 21 Impacts, Risks and Opportunities 12 material issues for the Group 7 material standards Around 500 data points published Annual General Meeting - May 16, 202517
Page 18
Dividend payout in line with Group policy 18 In line with the Group's dividend policy (30% to 40% payout) * Dividend / Group net income ** restated from restructuring costs 13 21 26 30 22 2020 2021 2022 2023 2024 Amount distributed 0.65 € 1.00 € 1.25 € 1.25 € 0.90 € Dividend per share (€m) PAYOUT RATIO*: 37% of net income 30% of restated net income** Annual General Meeting – May 16, 2025
Page 19
02 Our Medium-termGrowthDrivers Luc Themelin CEO
Page 20
A global presence is an asset in the current geopolitical context 20 Sales of Destination United States 15 industrial sites €450m 2024 sales ~75% locally produced China 7 industrial sites €145m 2024 sales ~95% locally produced Continental Europe 17 industrial sites €375m 2024 sales ~92% locally produced Annual General Meeting – May 16, 2025
Page 21
Acquisitions in 2024: An opportunity for consolidation in a dynamic market 21 • Expertise in cooling and consolidation of other Mersen expertise at a single site • Annual sales: ~8M USD • Consolidation from October 1st 2024 • Graphite consolidation (downstream) • Annual sales: ~15M USD • Consolidation from November 1st 2024 • Graphite consolidation (downstream) • Annual sales: ~40M USD • Consolidation from July 1st 2024 AVERAGE ACQUISITION MULTIPLE: 5x EBITDA Annual General Meeting – May 16, 2025
Page 22
Annual installations in GW 99 106 115 138 170 228 440 610 660 750 810 840 840 0 200 400 600 800 1000 1200 1400 2017 2018 2019 2020 2021 2022 2023 2024 2025e 2026e 2027e 2028e 2029e 2030e Solar energy: Sustained growth in installed capacity to stimulate energy storage and transportation markets 22 Source: Mersen consensus, CRU January 2025 (Exawatt) Actual 2024: beyond expectations, with strong growth in China 560 Conservative scenario Optimistic scenario 680 790 930 1070 1190 1270 Annual General Meeting – May 16, 2025
Page 23
Renewable energies: Untapped medium- to long-term potential 23 Materials Solar: Anticipated decline in 1st half 2025, due to solar cell inventory levels Restructuring of the Chinese solar panel manufacturing industry beneficial after H1 Wind power: maintain our market share of installed capacity Electric Support the deployment of renewable energies outside China, energy storage and energy conversion Materials Leverage our industrial capabilities to build strong positions in the solar market outside China Consolidate our market share in wind power Electric Gain market share by leveraging our relationships with major OEMs in energy storage and transmission (HVDC) and power conversion Sales > €200mSales €142m Trend: downward Solar Sharp slowdown in the 2nd half-year, due to very high inventory levels in the value chain Wind Growth in all regions, especially North America, thanks to our large and solid installed base 2024 2025 2029 Horizon Annual General Meeting – May 16, 2025
Page 24
BEV and PHEV production in millions Electric vehicles’s market growth strongly linked to China; For Mersen, the accessible market remains important 24 0 5 10 15 20 25 30 35 40 45 50 2023 2024 2025e 2026e 2027e 2028e 2029e 2030e 6.5 6.1 12.2 7.0 16.1 19.1 22.1 24.7 7.8 11.0 13.5 16.0 19.3 Source: J.D. Power, S&P Global Mobility; forecast Jan 2025, Mersen estimates Mersen’s addressable market Chinese market 2024: higher than estimated in China, lower in the rest of the world 17.9 20.4 21.5 Forecasts for 2026 onwards are still to be confirmed BEV: Battery Electric Vehicles – PHEV : Plug-in Hybrid Electric Vehicles Annual General Meeting – May 16, 2025
Page 25
A 3-year delay in the EV market, but positive outlook beyond this time horizon 25 Continued deliveries to ACC (small series). Acceleration expected in the 4th quarter Fuses Capture growth in the European market 7 qualifications on new programs for 2025 Accessible market outside China important with uncertainties about EVs' commercial success Strategy: Busbars Strengthen positioning in 2 high value- added applications: cell interconnection and power conversion Fuses Gain market share and continue to invest in innovation Sales ~ €100mSales €30m Trend: moderate growth Strong growth in sales compared with 2023, mainly fuses Includes sales for charging stations 2024 2025 2029 Horizon Annual General Meeting – May 16, 2025
Page 26
SiC power wafer market in $m High inventory levels impacting SiC market growth rates 26 Source : Yole Power SiC Coupound semiconductor Market Q3 2024 + Mersen estimate 0 500 1000 1500 2000 2500 3000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Updated Mersen scenario Initial scenario +40% +46% +72% 0% +62% Annual growth Annual General Meeting – May 16, 2025
Page 27
SiC semiconductors: A 3-year delay compared with the original plan 27 Decrease in 2025 (cf. 3-year delay in Mersen SiC market and customer inventories) Delivery of small p-SiC series and start-up of production facilities Renegotiation of current contracts Potential mainly linked to the EV market Strategy: Continue to diversify our customer base and support our main customers' transition to 8’ through our expertise Continue working on p-SiC and its transition to 8', to bring the market a high-performance, cost-effective solution tested by the customers Sales > €220mSales €100m Trend: downward Lower-than-expected growth Slower growth in 2nd half 2024 2025 2029 Horizon Annual General Meeting – May 16, 2025
Page 28
Global semiconductor market in $ bn Silicon semiconductor market outlook boosted by AI and data centers 28 0 200 400 600 800 1000 1200 2023 2024 2025e 2026e 2027e 2028e 2029e 2030e ~ 1000 est. Source: PwC State of the semiconductor industry Growth strongly linked to data centers and high-speed computing (AI) HBM (High Bandwith Memory): CAGR > 50% +18% 540 640 720 Annual General Meeting – May 16, 2025
Page 29
Resilient medium-term potential for the silicon semiconductor market 29 Recovery at the end of 2024, continuing into 2025 Mersen's strong position in key stages such as ion implant, ALD Considerable demand for high-speed computing (AI) and data centers Strong demand for memory (particularly HBM - High Bandwidth Memory) Strategy: Leverage our relationships with OEMs to gain market share in the technical stages of the process Sales > €100mSales €58m Trend: growth 2024 2025 2029 Horizon Inventory-related decline in 2024, with a recovery at the end of the year Annual General Meeting – May 16, 2025
Page 30
A strategy based on sustainability issues Continue to develop solutions tailored to our customers' needs that help reduce the environmental impact of their products or processes. Reducing carbon footprint Contribute to the development of sustainable development markets, in particular solar energy, electronics, energy storage and electric vehicles. Human capital development Pursue the competitiveness and performance program by guaranteeing the safety of facilities and employees. Ensure the development of human capital, with respect for human rights and a policy of social protection for all. Continuing our policy of local presence Adapting to climate change Prioritize geographic proximity to customers Continue to develop relationships with local suppliers Annual General Meeting - May 16, 202530
Page 31
2025 outlook Annual General Meeting – May 16, 202531 Sales Profitability Reported sales stable to positive on the basis of a EUR/USD exchange rate of 1.05 and EUR/RMB of 7.65 Implies organic growth of between -5% and 0 EBITDA margin between 16% and 16.5% Operating margin before non- recurring items between 9% and 9.5%, including strong growth in depreciation and amortization €160-170m of which €15m carried forward from 2024 (includes normative capex and growth capex) Industrial capex
Page 32
First Quarter 2025 Sales: Solar impacts growth in Asia, SiC semiconductors impacts growth in North America 32 North America South America Africa Europe Asia-Pacific €128m Organic growth -4.9% €12m Organic growth + 24.4% €103m Organic growth -1.4% €62m Organic growth - 19.3% Q1 2025 sales €305m Organic growth -6.4% Reported growth -2.5% Annual General Meeting – May 16, 2025
Page 33
Medium-term plan 2029 Annual General Meeting – May 16, 202533 Around € 1,700 mSALES 12% of sales OPERATING MARGIN BEFORE NON-RECURRING ITEMS CURRENT EBITDA MARGIN ROCE of sales ± 50 pts 19% ± 50 pts 13% ± 50 pts 2029
Page 34
Reports by the StatutoryAuditors 03
Page 35
04 Corporate Governance Report Olivier Legrain Chairman of the Board of Directors
Page 36
Composition of the Board Annual General Meeting – May 16, 202536 *: independent
Page 37
Group Executive Committee 37 Annual General Meeting – May 16, 2025
Page 38
Compensation for 2024 Annual General Meeting - May 16, 202538 Luc Themelin, Chief Executive Officer 2024 Comments Fixed compensation 500,000 Unchanged from 2023 Annual variable compensation 359,050 53.7% of max for operating margin before non-recurring items 150% of max for cash-flow target 38.5% of max for EBITDA target 60% of extra-financial objectives Performance shares 488,105 100% valuation of 17,321 performance shares granted to Luc Themelin in 2024 Profit-sharing 23,184 Benefits in kind 37,679 Olivier Legrain, Chairman of the Board 2024 Comments Fixed compensation 120,000 Directors’ compensation 41,000 Mostly based on participation in committees and on the Board of Directors
Page 39
Proposed compensation policy for 2025 Chairman of the Board of Directors • Fixed compensation (€120,000), unchanged from 2024 Members of the Board of Directors • Maximum ceiling (€330,000) unchanged from 2024 Chief Executive Officer • Fixed compensation (€500,000), unchanged from 2024 • Annual variable compensation identical to 2024, with the exception of the change in relative weighting of financial criteria • Long-term compensation in shares: free shares subject to performance, with a modification of the prorata temporis rule in the event of retirement or change of control Annual General Meeting - May 16, 202539
Page 40
Main work performed by the Board of Directors in 2024 Strategy and development: strategic plans, budget, acquisitions, SiC and EV markets, review of medium-term roadmap CSR policy: CSR performance, sustainability reporting, CSR governance, HR roadmap Group results: approval of financial statements, guidance Governance: Succession plans, Examination of directors' independence, Renewal of the CEO's term of office, Amendments to the Board's Internal Rules Compensation: corporate officers and LTI Annual General Meeting: resolutions Annual General Meeting - May 16, 202540 9 meetings in 2024 with 98% attendance
Page 41
Main work performed by the Governance, Appointments and Remuneration Committee in 2024 Compensation: 2024 compensation and 2025 proposals, LTI plans Governance: Assessment of the Board of Directors, Review of director’s expertise, Review of the Corporate Governance report, CEO succession planning, Assessment of directors' independence, Evaluation of the implementation of the policy to increase the number of women in management bodies Preparing for the Annual General Meeting Annual General Meeting - May 16, 202541 4 meetings in 2024 with 100% attendance
Page 42
Main work performed by the Audit and Accounts Committee in 2024 Results: review of financial statements and reporting process Universal Registration Document Financing CSRD: governance, double materiality matrix Risk mapping (including environment, compliance and cybersecurity) Internal control: review and approval of audit programs CAC and sustainability auditor: independence and fees Other topics, such as pensions, tax and cash Annual General Meeting - May 16, 202542 6 meetings in 2024 with 100% attendance
Page 43
Share grants Annual General Meeting - May 16, 202543 3 plans for 3 types of beneficiaries 1. Executives (including the Chief Executive Officer) - 129,360 shares for 15 beneficiaries 2. Managers - 119,520 shares for around 200 beneficiaries 3. Experts and Talents - 16,800 shares for around 50 beneficiaries Common principles Duration: 3 years Presence criterion Performance criteria ▪ Alignment between Plan 1 and Plan 2, with different weightings • 1 stock market criterion • 3 financial criteria: average change in reported sales, average ROCE, average EBITDA margin • 3 extra-financial criteria: Share of women in I&C, Waste recycling rate, CO2 emission intensity
Page 44
Amendment of the Articles of Association Annual General Meeting - May 16, 202544 3 amendments Possibility of renewing the appointment of a director for a one-year term Raising of the age limit applicable to directors to 75 Consultation of directors in writing for Board deliberations
Page 45
QUESTIONS