Feb. 12, 2020 - Highlights:

1. Revenue down -3.8% at constant scope and exchange rates, in contracting industrial markets, especially in the second half of the year 

2. Current EBITDA margin at 17.6%1 and current operating margin at 10.1% : positive price mix (+2.2%) 1 and reduction in fixed costs and overheads 

3. Solid cash flow generation: net current free operating cash flow reached €348 million1 

4. Proposed dividend per share maintained level at €2.15, with an alternative payment option in the form of new shares 

Patrick Kron, Chairman of the Board of Directors and interim Chief Executive Officer, said, 

“Conditions in industrial markets have deteriorated, particularly in Europe, which has led to a significant drop in sales volumes, severely impacting the Group’s performance, even if the positive price mix and cost reductions helped to mitigate this impact. Despite those difficult economic conditions, Imerys improved its strong cash flow. As we enter into 2020, in an uncertain market environment, we will continue to prioritize cost reduction and cash generation by tightly managing our capital expenditure and working capital requirement. The Board of Directors, who’s confident in the Group’s fundamentals and development prospects, has decided to propose to maintain the dividend to €2.15 per share. It has also decided to offer to shareholders to opt for a dividend payment in shares in order to increase the Group's room for maneuver to seize development opportunities while maintaining a solid financial structure. Alessandro Dazza, who will become Chief Executive Officer on February 17, 2020, will apply his leadership skills and his deep understanding of Imerys and its business to successfully complete the necessary transformation that has been undertaken and pursue this profitable growth strategy.” 

On February 12, 2019, Imerys’ Board of Directors examined the definitive, audited financial statements for 2019. They will be submitted for approval by the Shareholders’ General Meeting on May 4, 2020. The report certifying the consolidated financial statements will be published once the Management Report prepared by the Board of Directors has undergone its final review and the procedures required to file the Universal Registration Document have been completed. All 2018 financial data included in this press release are presented excluding the Roofing division. 

A simplified, more efficient customer-focused organization 

The new organization announced in December 2018 is now implemented throughout the entire Group. With fewer management layers, it is more market-oriented and helps to respond more effectively to customer needs. The new organization leverages the benefits of a broad portfolio of mineral specialties and expands opportunities to cross-sell several complementary mineral products. It is supplemented with an operational excellence program. 

The simplified organization is made up of two segments, grouping five business areas built around the Group’s core markets: 

1. The Performance Minerals segment brings together three geographic business areas – Europe, Middle East and Africa (EMEA), Americas and Asia-Pacific (APAC) – serving the plastics, paints & coatings, filtration, ceramics, renewable energy and paper & board markets. 

2. The High Temperature Materials & Solutions segment regroups two business areas: High Temperature Solutions, and Refractory, Abrasives & Construction serving the refractory, foundry, iron & steel, abrasives and building chemistry markets. 

In addition, product innovation was decentralized to each of these five business areas to ensure it is more effectively oriented toward customer needs in the markets supplied. Technical support teams were also expanded as a result. In order to maximize economies of scale, the Group has put in place specialized support departments, deploying shared service centers, in particular in finance and human resources. Furthermore, centralizing purchasing activities will enable the Group to improve its efficiency by significantly reducing the number of suppliers and negotiating payment terms. 

The new organization will enable Imerys to achieve its full organic growth potential and further improve its competitive position to boost sustained value creation. 

Alessandro Dazza, new Chief Executive Officer at Imerys from February 17, 2020 

On October 21, 2019, the Imerys Board of Directors asked its Chairman, Patrick Kron, to take over the role of Chief Executive Officer on an interim basis. On December 17, 2019, based on the proposal of the Appointments Committee, the Board of Directors decided to: 

1. once again separate the offices of Chairman of the Board of Directors and Chief Executive Officer; 

2. appoint Alessandro Dazza to the position of Chief Executive Officer; 

3. ask Patrick Kron to continue his role as Chairman of the Board of Directors. These decisions will come into effect on February 17, 2020, the date at which Alessandro Dazza joins Imerys.

A leaner and renewed Board of Directors 

At its meeting on February 12, 2020, Imerys’ Board of Directors also agreed the draft resolutions that will be submitted for approval by the Shareholders' General Meeting on May 4, 2020. These draft resolutions include, in particular, the nomination of two new Board Directors, Mrs Annette Messemer and Véronique Saubot, following the departure of Mrs Odile Desforges, and the non renewal of the terms of offices of Mrs. Marion Guillou and Martina Merz. The Board of Directors would consequently be reduced to 10 members (plus two directors representing the employees). 

Continued discussion as part of the U.S. talc litigation 

The North American talc subsidiaries, which were deconsolidated on February 13, 2019 (with a negative impact on revenue and current operating income in 2019 of €126.1 million and €19.1 million, respectively), are now working to permanently resolve all talc-related litigation in the region under the legal protection of Chapter 11. They have entered into negotiation with the representatives of existing and future claimants over the business continuity plan, the approval of which by the competent jurisdiction will settle past talc-related liabilities in the U.S. 

Dividend per share maintained at €2.15, with an alternative payment option of part or all in form of new shares 

The Board of Directors will propose the Shareholders’ General Meeting of May 4, 2020 to approve the payment of a €2.15 dividend per share, which is level on the dividend paid in 2019 and represents 61% of net income from current operations, Group share. 

Subject to approval by the Shareholders’ General Meeting, the Board of Directors has decided to offer Imerys shareholders the choice between receiving part or all of the dividend payment (i) in cash and/or (ii) in new shares of the Company. The price of new ordinary shares issued as payment for the dividend will be set, in accordance with the provisions of article L. 232-19 of the French Commercial Code (Code de commerce), at 95% of the average Imerys share price on the Euronext Paris market over the 20 trading days prior to the Shareholders’ General Meeting, minus the amount of the dividend per share. 

Groupe Bruxelles Lambert (GBL), the Group’s majority shareholder owning a 53.9% interest, has indicated its intention to opt for a dividend in shares for the totality of its holdings.