Good day and thank you for standing by. Welcome to the Imerys Q1 2025 Results Webcast and Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Alessandro Dazza, CEO. Please go ahead.

Good evening to all of you, and thank you for joining us today to review Imerys Q1 2025 results. With me here tonight, Sébastien Rouge, our CFO. As usual, let me start by giving you some highlights of the first quarter of the year. Imerys continues on its growth path despite an uncertain environment and weak industrial markets, especially in Europe. First quarter revenue reached €871 million, which is a 0.7% organic growth at constant scope and exchange rate versus the first quarter of last year. This is the fourth consecutive quarter of organic growth. The adjusted EBITDA for the period amounted to €128 million, benefiting from an improved contribution from the Performance Minerals business and the Graphite & Carbon business. It also reflects a scope change and a deterioration in the contribution from joint ventures compared, I remind you to an exceptional performance in the first quarter of 2024. Net of the contribution of JVs and these scope effects. This performance is an improvement both in absolute and percentage terms compared to 2024. Finally, Imerys is reaffirming its commitment to sustainability through two significant actions, the issuing of its first biodiversity report and the signing of a new major power purchase agreement in the United States. On this slide the focus is on Imerys’ sales performance. In Q1 with €871 million in revenue Imerys posted as practically 1% organic growth versus last year. As said, this is the fourth consecutive quarter of growth. Group volumes were just slightly down compared to last year, impacted especially by the weakness in the construction market and the significant slowdown in industrial and especially automotive in Europe, only partly offset by steady consumers demand and the strong growth in sales of electric vehicles where we have a very solid positioning. Prices were up 1.4% in first quarter of the year compared to last year in line with our expectations. On this slide, I want to illustrate the robustness of our business model. On the left side of this slide is the analysis of the adjusted EBITDA change year-on-year excluding the perimeter effect, mainly attributable to the divestiture of the assets serving the paper market in July of last year, and the deterioration as said in the contribution from joint ventures, which had an exceptional Q1 in 2024 and Sébastien will go in more detail later on. Adjusted EBITDA increased by about 4% year-on-year. On the right side, the balanced pricing costs highlights once again Imerys agility to rapidly react to inflationary or deflationary changes in the markets, but also its strength to maintain this balance always positive. Consequently, even moderate cost increases have been passed on to our customers to safeguard our long-term profitability. Let's now briefly take a look at our main underlying markets and their trends. First, it should be noted that end markets have not significantly or they've not been significantly impacted by the different tariff policies we have heard a lot in the last weeks, at least not yet as these were announced or enforced only after the end of the first quarter. However, and this is really valid for all our markets. So I will not repeat it each time. Outlooks, all outlooks for the rest of the year and beyond have been revised downwards from the different institutions, sometimes quite significantly as a consequence direct or indirect of such theories. So if we look at the market now. Construction, I would say, probably a limited direct impact from tariffs as it is a very local market. However, investments might be delayed following widespread uncertainty. In Europe, the recent ECB rate cuts should support demand finally. North America difficult to predict as tariffs might cause higher costs and the announced immigration policies might increase labor shortages. For China, I would say, generalized slowdown as we have seen in the latest quarters. Consumer goods performed well in Q1 across all region and we believe it will continue on this trend. Maybe with a small question mark on the U.S. if inflation starts rising again. On the next slide, the automotive market has definitely been bad and the outlook with very few exceptions is probably today even worse with production at risk of further suffering from tariffs. China is probably the only exception and should benefit from this new trade in for new policy. Energy will certainly be impacted by weakened industrial production in Europe and probably North America. Electronics strong 2024 expectations for 2025 are a bit dampened by current uncertainties. Regarding the electrical vehicle market, robust performance across all geographies in this first quarter. In the EU rebound is expected to continue throughout the year. Some uncertainties in the U.S., but more important, we expect again a very strong development in China sustained by the ongoing success of this trading subsidy program and growing EV adoption rates. On this last slide, industrial activity in general, as I said, will be negatively impacted by what's going on. And certainly in Europe and in the U.S. maybe a bit less in China as exports for the time being hold. For the iron and steel production, which fundamentally is a consequence of the different users. So construction, automotive, industry, we expect to see a farther weak Europe, probably a better U.S. and some rising difficulties in China as exports will be restricted by foreign policy. A word on sustainability on our efforts and let me introduce our first biodiversity report. It's a comprehensive voluntary document where Imerys presents its strategy, its targets, its progress to preserve natural heritage. It's an innovative approach in the industrial minerals sector and illustrates really our dedication to combine mineral extraction with the preservation of biodiversity. And our final target is no net loss of biodiversity. I think for a company like ours this is very important. We have around 150 sites and quarries around the world in 35 countries. This robust framework is the support of environmental scientific experts in the use of recognized tools and methodology that will accompany in the future. Good progress in 2024 and our commitment is to continuous improvement as we move forward. I now hand over to Sébastien for more details about our financial results.

Thank you, Alessandro. Good evening everyone. We'll go through the key aspects of our financial performance and we start with revenue. The group reports sales at €871 million for the first quarter. It represents a plus 0.7% rise at constant exchange rate and perimeter as compared to prior year. It is the fourth quarter in a row, Imerys delivered organic growth. We have a perimeter effect of minus €68 million and that is mainly due to the disposal of the paper dedicated activities that were disposed of last year. July and we have €6 million of positive FX effect mostly related to the U.S. dollar. To be noted sequentially, reported sales continue in an upward trend, Q1 sales are higher than Q3 and Q4 last year, which are the last two comparable quarters after paper assets disposal. If we look now into more detail at our three business segments and we start with Performance Minerals. This business generated €522 million since the beginning of 2025 representing 60% of Imerys group. Overall an organic growth of plus 1.2% as compared to last year. Revenue in the Americas were the most dynamic up 2.3% at constant scope and exchange rates. Sales were supported by volume and price increases as well as market share gains. The performance across end market was mixed. Consumer goods sector demonstrated resilience and growth whereas construction related markets continued at softer levels. Revenues in Europe, Middle East, Africa and Asia Pacific was stable like-for-like. Volume decreased slightly as sales into polymer application were impacted by a weak automotive market in Europe. This decline was partially offset by resilient consumer goods sales, especially in filtration and agriculture sectors. Prices showed a positive trend as compared to the prior year. If we look now at our solutions for Refractory, Abrasives and Construction business. This segment recorded sales of €289 million in Q1 2025. Volume decreased in the quarter particularly due to lower sales of the refractory products, which was – and the market was severely impacted by low industrial activity in Europe and higher competition from China. Prices were positive in Q1 2025 as compared to Q1 2024. And if we now complete the segment review with the Solutions for Energy Transition. Good news on the graphite and carbon business which generated revenue of €61 million, confirming the strong sales recovery that began in Q3 of 2024. Like for like, it represents an increase of 22.5% as compared to a prior year. Sales growth is driven by robust end markets, mainly electric vehicles and conductive polymers, and also by market share gains and new products. The Quartz Corporation, our JV 50% owned dedicated to high purity quartz. As you may remember, we disclose figures for this JV only on a half year basis. We can do a few qualitative comments, still low production levels are affecting the global solar value chain largely due to persistent high inventory. We remain confident in the solar market, we remain confident it will continue to grow consistently and that it is a good market to be in, but definitely we suffer short term. If we look now at the group profitability globally. For first quarter of 2025, adjusted EBITDA reached €128 million compared to Q1 2024. The profitability of the group was impacted by the deterioration of the contribution from our joint ventures. As you remember, its contribution was exceptional and announced so in Q1 2024. The adjusted EBITDA was also impacted by the perimeter effect of minus €16 million resulting from the disposal of the assets serving the paper market last July. Restated from this perimeter and JV impact, adjusted EBITDA from our fully owned business is growing by €3 million net of change impacts, which proves again the resilience of Imerys business model. The adjusted EBITDA margin reached 14.7% benefiting from a strong performance of the Graphite and Carbon business as well as Performance Minerals, partially offsetting the lower contribution from our joint venture. If we look now at the other elements of our income statement for Q1 2025, current operating income reached €56 million following the evolution of the EBITDA and a slight increase of depreciation expenses. With current financial expenses close to last year and lower tax expenses. The current net income group share landed at €31 million, suffering from the lower contribution of our JV and the negative perimeter impact. Net income group share after non-recurring expenses of €8 million reached €23 million. I now hand over to Alessandro for the conclusion of this presentation.

Thank you, Sébastien. And let me now wrap up with a bit of an outlook for the coming months. First, a comment on tariffs. We do not expect any significant direct impact from the recent theories on Imerys. We have a widespread industrial network and very minimal flows between regions across the world. So we can say, that we are largely local for the local markets. Still, we find ourselves in unchartered territory with a lot of moving parts, continuous changes we do create uncertainty for the global economy. That is why the indirect impact of such potential future tariffs is impossible to predict as of today. We delivered a solid Q1 in 2025 with March being by far the best month in the quarter. So the trajectory is going in the right direction. We will build on this performance and on our local production capabilities to continue our growth path. Thank you for your attention. And we can now open to questions.

Thank you. [Operator Instructions] And your first question comes from the line of Ebrahim Homani from CIC. Please go ahead.

Hello, Alessandro. Hello, Sébastien. Thank you for taking my question. I have three, if I may. The first one is about the EBITDA. Given the EBITDA at producing Q1, do we confirm that maintaining the margin at a level at 16% as it was in 2024 would be maybe difficult? My second question is about your organic growth. Could you please give us more details on volume and prices? And did you outperform your comps in terms of volume and gain market share? And my last question is about Tech QC [ph] and its contribution in Q1 – it is the same contribution, sorry, than it was in Q3 and far below than in Q4. Is there any Trump impact and what to expect in the next quarters? Thank you.

Thank you, Ebrahim. In terms of projection going forward, as you well know, we give our guidance rather around the middle of the year, and given the current uncertainty around the world, I think it becomes even more complicated. What I would like however, to comment is that our traditional businesses are performing quite well. And partly to answer your second question, we had flattish volumes minus 0.5% in Q1 compared to last year and 1.4% price increases. This light volume decrease is mainly in Europe and it can really be reconducted to two main markets is iron and steel and automotive which in Europe are suffering heavily from the current situation. If I look in the quarter, definitely January was. We came from a difficult Q4. So January remained a difficult month. February was better, March was a very solid month and the average is the 14.7% that you see. For sure March was significantly better than this number. So if volumes hold as we believe they will be pending general recession, which I said at this moment we do not see, I think we can do a better second quarter than the first quarter and continue our growth. Yes, we are gaining market share. Some of our peers have started to communicate results on Q1 and I'm sure you know the three, four, five names selling minerals in similar markets. I think as of today none has posted organic growth nor volume growth and mid-single digit drops. And we are growing. So the explanation is clearly not only new capacities in good and growing markets, not only innovation, new products, but is also I would say commercial actions that help us to gain market share everywhere and always no, but strongly yes. And last on TQC, I don't know how to compare Q3 [indiscernible] and Q1. What I can compare is Q1 last year which was the best quarter in the history of the company. And if you remember when we commented there was a significant shift from Q4 2023 into Q1 for weather reasons. So we had an incredible Q1. There were some spot sales. So the Q1 of last year was definitely not the reference. We are trying to find a reference for the future. The underlying market photovoltaic continues on a growing path. I would say high single digit or double-digit growth. As we kept saying in the last two quarters there is overstocking in the supply chain. It will take a few months or a few quarters to destock limited visibility. We do see some activity coming back. We do see very different performance month by month but looking more generalized on the quarters. As you can see we are still not on a steady recovery trend. So more to come. It will come back. We know the product is unique, is a fantastic product needed for performance in the downstream market. So we will patiently wait the outcome. Maybe a comment because it might come. That the main competitor in this market is an American company. Theoretically if theories are confirmed in the as they are announced lately, we – could benefit from in that case a positive impact because we produce in countries that are not subject to tariffs today. But I said everything is a moving target at the moment and therefore too early to really estimate the impact. Thank you.

Thank you very much, Alessandro.

Thank you. Your next question comes from the line of Sven Edelfelt from ODDO. Please go ahead.

Yes, thank you. Good afternoon and congratulations for the result. I had three questions, if I may. The first one is on Talc. Can you comment on what's going on with Imerys Italy, which has been included within the agreement? And my second question regarding the Talc litigation would be about the agenda. It seems that there is a new hearing that is scheduled on the 26th of June. I just wanted to – to better understand what this hearing about. And does that mean that the confirmation hearing is now over? So that's the first question. Sorry, it's a bit of a long question. The second question would be. Do you want to answer this one or shall I continue to ask?

Continue, Sven, continue. It's easier.

Okay, okay. The second question, I don't really understand the volume trend, actually. I appreciate you mentioned your competitor being down at 5% on the – you're basically gaining market share. But what I don't understand is when looking at the base of comparison, I mean, last year Q1 was the worst quarter of the year. It was down volume wise, 3.4% with the rest of the quarter being up 2% to 4% in volume. So that's the part that I'm missing here. Does that mean that Q1 2025, there is a cliff and something went wrong on the end market? So that's the second question. The third one would be about the full year. I know you don't provide guidance, but I mean, are you still on track to make the €650 million of EBITDA for the year that the consensus is targeting? Maybe you can give a little bit of flavor on that. That's the three question with the one being a bit long.

Thank you, Sven. No problem at all. Let's address the Talc issue. The hearing, the confirmation hearing is ongoing. It started as planned, without delay on 22 of April. The judge has reserved basically two weeks to give herself time to address properly all the topics. It's ongoing, of course we have an update every day with our American lawyers. But there is really. It's a very complex, long and sometimes boring hearing. So we cannot comment at all. We are right in the middle of hearing the different witnesses. So today I have really no comment in any form on how is it going. What I can guarantee to you, I'm not aware of any other hearing planned, especially not on the 26th of June. Normally this is the only one existing. Hopefully it will end as planned by latest May 2, and then the judge will emit its verdict or her verdict within days or weeks, depending on the time that he will be required to write the verdict. Not aware of anything else. And we do count that it will remain like this. And the sooner we have a verdict, the better for clarity and for the future. On the small topic, Imerys Talc Italy, it's nothing unexpected. The Italian subsidiaries of our Talc business, which is a very small business, we are talking about, I think €15 million, €20 million, €15 million, €20 million in sales. This company has sold products in the past in the U.S. and therefore from day one it was included in the overall procedure of the Chapter 11. For technical reasons, being a foreign entity and so on. It is simply managed or handled in a different way. And that's why it was never put in Chapter 11 until when you go for the confirmation hearing. And normally – if the hearing is confirmed and the plan is confirmed, this company will just have a transitory period under Chapter 11 to be then returned to Imerys afterwards. So, it's a very technical meta. Therefore, everything is scheduled, everything is planned, everything is written in the agreement with the court. So really, I would say no topic at all. On volumes, it's a good question yours has been. We also are targeting, we're targeting to grow volume in Q1, as we have done in Q2, Q3 and Q4 of last year. We came short, we came just below zero and is really mainly, I would say one market strongly is automotive Europe. So, all our sales into especially polymers for automotive and partly paint for automotive Europe are the ones that really suffered. They suffered in November, in December, in January and in February. And I would say this one alone has caused this negative volume. Iron and steel is not performing particularly well. So, the refractory side is also Europe affected. But performance in America is growing. Filtration, consumer goods, life science is growing. Ceramics business is growing. We see signs of growth finally in construction being Europe or the U.S. China is holding quite well. It's really a specific market that has, that at the moment is really tough. And fortunately, it's only part of our business. But March was the best month of the quarter. So, I hope the slowdown we saw in December and January fundamentally is behind us and we count on continuing our growth. What reassures me is really the main competitors that published the last really three, four days are definitely in terms of volume and organic growth behind us. That reassures me that we are doing the right thing. We have invested in the right products in the right markets. And I hope that going forward we also not only show organic growth, but also volume growth. The last one is a simple one. We have no guidance at this time of the year. And frankly, today, looking at the world, I think it's extremely unpredictable. It can change very rapidly. So, we will continue to do our job the way we have done always. We don't today, really, we don't assume a major – recession maybe, yes, a slowdown compared to previous forecasts, which were of solid growth. But we still plan a year of growth in 2025.

Okay, so €650 is still possible then. Thank you very much.

Thank you. [Operator Instructions] And your next question comes from the line of Aron Ceccarelli from Berenberg. Please go ahead.

Hello, good evening. Thanks for taking my question and congratulations on the good result. I have a question on carbon black and synthetic graphite and very strong rebound continuing. Maybe can you provide some color around the split of the growth here between volumes and pricing. And also, I would like to understand, I know that your product is better than competitors one here. I'd like to understand how do you think about the potential profitability going forward once the volume continue to come and we saw around 24% before the destocking. So I would like to understand how you think about normalizing margins here. And the second question is around current trading. I would like to understand if you can provide any color around business environment in April. I understand you said March was the best month. I would like to understand about April, if that's possible. Any comment would be useful. Thank you.

Thank you, Aaron. So, graphite and carbon, as you rightly noticed, it’s we had a very strong quarter. You might remember that in February when we commented Q4, we already said that. Finally, this market, which went through this – a strong destocking at the end of 2023 and at the beginning of 2024, has been growing steadily on the back of growth in lithium-ion batteries in general and specifically for EVs. Finally, we see Europe picking up in production and sales of EVs, even the U.S. unexpectedly, but still picking up. And the biggest market in the world, which is China, that continues on a steady growth, which should even accelerate thanks to all the incentives being put in place, we have a leading position, we have invested heavily. So we have capacity to follow growth I would say for at least the next two to three years. And I expect this trend to continue really in a solid way. This is to say that most of the growth is really in volumes. Prices are in average stable. We sell, it's an international market, so we sell a lot in dollars. So we are a bit penalized from the current exchange rate. The renminbi, the Chinese renminbi was devalued. So some Asian competition. Sometimes we have to adjust to competition. But I would say rather stable or likely positive pricing and a strong, strong volume growth. To finish on trends and markets April, as we see today is on the good trend. As I said today, we don't see and to give you a few numbers, the group sells to the United States around €160 million per year or last year 2024 on sales of €3.5 billion. It means our exposure to sales to the U.S. are less than 4%. So no matter what the tariff impact will be, it's very, very limited. On top, many of the minerals we sell to the United States are exempt from duties as they are considered critical. So really we do not expect a significant impact from tariffs. On the contrary, we might see here and there, since we are 30% of our sales are in the United States, Canada, Mexico. We do expect even some potential advantages against imports. So as of today, we have no reason to fear a dramatic downturn. But therefore April seems to be okay. No major disappointment. Simply today it's really a matter of it changes every day. It changes every day. And the uncertainty does not help the overall economy which brings slowdown in investments, in capital expenditures, in decisions, which slows down the economy in general. So to be seen what the impact is. But under normal circumstances I think will be okay. And on margins. Sebastian, do you want to comment?

We will not comment on the future. If you remember, the EBITDA margin of this business was almost 24% in 2023. It went down lower than 20% last year. Obviously, our goal is to restore historical margin or better.

Absolutely. And we are well underway. If I may look at the overall company today, we have I would say very strong solid contribution margin in the area of 52%, 53%. So as volumes come back, you will immediately see the profitability kick in general terms, €100 million of sales is €53 million of EBITDA or profitability coming in. So we will deleverage is very strong and remains very solid as the economy picks up. We should see the benefit thereof.

Thank you. All the best.

Thank you, Aron.

Thanks.

Thank you. That was our final question for today. I will now pass the call back for closing remarks.

Thank you very much for dedicating time tonight. And we do look forward to some good news in Q2, especially in an economy that's find some stability and predictability. Thank you very much. Good evening.

Thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.