Mersen : 2012 full-year results

PR Newswire/Les Echos/ 
Press release 
                      Mersen: 2012 full-year results 
Paris, March 20, 2013 - Mersen (Euronext FR0000039620 - MRN), a global expert in
materials and equipment for extreme environments and for the safety and
reliability of electrical equipment, has today reported its full-year results
for 2012. 
Mersen's Supervisory Board met on March 19, 2013 and reviewed the audited 2012
financial statements. The Management Board met on the same day to approve them. 
2012 key figures 
Reported sales (EUR811 million) in line with the 2011 level (down 8.8% on a
like-for-like basis) EBITDA(1) of EUR116 million, representing 14.3% of sales
Operating income before non-recurring items of EUR76.3 million or 9.4% of sales
in line with expectations
Net income attributable to Mersen's shareholders (EUR5.6 million) impacted by
impairment losses arising from the plan to dispose of non-core businesses
Dividend of EUR0.45 per share proposed, representing a payout ratio (excluding
impairment losses arising from the disposal plan) in line with the 2011 level
(35%)
High level of cash flow from operating activities(2) (EUR109 million, up EUR41
million compared with 2011)
Net debt of EUR241 million, representing a solid net debt to EBITDA ratio of
2.1x(3). 
Highlights of 2012 
Integration of Eldre bolstering the Group's position in power electronics 
Execution of adaptation plans in response the economic conditions 
Decision to dispose of unprofitable non-core businesses
Refinancing of the syndicated loan strengthening the Group's finances 
(1) Operating income before non-recurring items + depreciation and amortization
(2) Continuing operations before capital expenditures
(3) Ratio calculated using the covenant method for the USD350 million syndicated 
loan 
Luc Themelin, the Chairman of the Management Board, commented: 
"2012 was marked by a complex and very mixed environment. While the Group
achieved commercial success in the chemicals, aerospace and process industries,
Europe's economy was particularly sluggish, and the solar energy market
contracted. Against this backdrop, Mersen took measures to adjust its production
and its organization. During 2013, we will continue this drive to strengthen the
Group's competitiveness. I am confident in our ability to seize any
opportunities arising and strengthen our leadership positions in our business
segments." 
Sales and operating margin before non-recurring items 
The Group's consolidated sales totaled EUR810.7 million. They declined 8.8% on a
like-for-like basis compared with the pro forma 2011 figure*. On a reported
basis, the decline came to just 0.7%, owing to the contribution made by Eldre,
which was consolidated from the beginning of the year, and positive currency
effects. 
EBITDA(4) totaled EUR116.0 million, representing 14.3% of sales, compared with
17.6% in 2011 on a pro forma basis*. 
The Group's operating income before non-recurring items(5) came to EUR76.3
million in 2012, representing an operating margin of 9.4% of sales, down 3.7
points compared with the pro forma 2011 figure*. 
Sales in the Advanced Materials and Technologies (AMT) segment posted an organic
contraction of 11.3% during the year owing to the slowdown in the solar energy
market. Excluding solar energy, the Group posted organic growth of 7.2% thanks
to billings on major chemicals contracts and healthy performance in process
industries and aerospace transportation. 
The AMT segment's EBITDA totaled EUR62.5 million. This represented 18.0% of the
segment's sales, down 6 points compared with 2011. This decline was primarily
attributable to the business contraction. Another contributing factor was the
unfavorable product mix, with strong sales of lower-margin chemicals and, to a
lesser extent, price cuts towards the end of the year. These factors were
partially offset by savings measures launched in 2012. Operating income before
non-recurring items totaled EUR35.2 million, representing an operating margin of
10.1% of sales. 
Sales recorded by the Electrical Components and Technologies (ECT) segment came
to EUR464 million in 2012, up 3.2% compared with 2011 thanks to the contribution
made by Eldre, which was acquired in early 2012. On a like-for-like basis, the
segment's sales contracted by 6.7%. The decline was felt across all markets and
electronics in particular. 
The ECT segment generated EBITDA of EUR66.1 million, representing 14.2% of sales
compared with 15.4% in 2011. In spite of the top-line contraction, this healthy
resilience was largely attributable to the savings plans introduced. Operating
income before non-recurring items totaled EUR54.0 million, representing an
operating margin before non-recurring items of 11.6% of sales. 
(4) Operating income before non-recurring items + depreciation and amortization
(5) Based on the definition laid down in CNC regulation 2009.R.03.
 *  Restatement of the 2011 financial statements to exclude the businesses to be 
sold or discontinued 
Net income from continuing operations 
Net income from continuing operations totaled EUR34.0 million during the fiscal
year, compared with EUR62.4 million in 2011. Non-recurring income and expense
showed a loss of EUR11.3 million owing chiefly to the recognition of
restructuring costs linked to the adaptation plans. Net financial expense
totaled EUR13.0 million in 2012, up EUR3 million compared with 2011, owing to
the EUR20 million increase in average debt during the year and the rise in the
Group's average borrowing rates with the significant extension in the maturity
of its debt. Lastly, income tax expense totaled EUR17.1 million over the year.
This represented an effective tax rate of 33%, which is similar to  the 2011
rate. 
Assets held for sale and discontinued operations 
The net loss from assets held for sale and discontinued operations came to
EUR27.7 million, compared with EUR2.7 million in 2011. This mainly reflected the
EUR25.4 million charge linked to the plan to withdraw from metal boilermaking
equipment for the nuclear power market, metal plate heat exchangers, and
stirrers and mixers, and discontinuation of activities for the nuclear power
market at Xianda's facility in China. This charge comprised a
EUR20 million impairment loss, plus the EUR5.4 million net loss (excluding
disposals) posted by the business activities in 2012. 
Net income 
Accordingly, net income came to EUR6.3 million. Net income attributable to
Mersen's shareholders came to EUR5.6 million, down from EUR56.9 million in 2011. 
Cash and debt 
Cash flow generated by operating activities before tax and the change in the WCR
came to EUR103.8 million in 2012, compared with EUR135.4 million in 2011.
The working capital requirement was reduced by EUR28 million owing to the
business contraction and continued implementation of action plans to reduce
inventories.
Capital expenditures totaled EUR42.2 million, with the bulk devoted to
finalization of the plan to roll out new graphite production capacity launched
in 2011 and implementation of dedicated new equipment for SiC coatings for
electronics applications.
Accordingly, net cash flow from operating activities generated by continuing
operations posted a significant increase to EUR108.9 million from EUR68.0
million in 2011. 
Net debt at year-end 2012 came to EUR241 million, stable compared with the 2011
level of EUR239 million. This change reflects the impact of the Eldre
acquisition and payment of the majority of the 2011 dividend in cash. 
Financial structure 
The Group's finances remained solid. Its net debt to EBITDA ratio stood at
2.07x(6) compared with 1.61x(6) at year-end 2011. The net debt to equity ratio
came to 45%(6), the same level as its year-end 2011 level (44%). 
Dividend 
At the forthcoming AGM on May 16, the Supervisory Board is set to propose
payment of a dividend of EUR0.45 per share. This would represent a payout ratio
of 35% of the Group's net income before the impact of impairment losses linked
to the disposal plan. Shareholders will be given the option of electing for
payment of the dividend in shares. 
Outlook 
As in 2012, the Group will face a mixed economic environment in 2013. 
Mersen aims to generate 2013 sales comparable with 2012 level on a like-for-like
basis. The Group anticipates a tough start to the year, in line with the second
half of 2012, with a top-line recovery during the second half of 2013.
As previously announced, Mersen will continue to roll out its adaptation plan
during the year to reduce its cost base by some EUR10 million, but it will have
to contend with pricing pressures and an unfavorable product mix in the AMT
segment. Accordingly, Mersen aims to achieve an EBITDA margin of around 14% of
sales and an operating margin before non-recurring items of around 9% over the
full year.
In addition, Mersen will continue to implement its plans to improve the
logistics chain and its cash management and anticipates a significant decrease
in capital expenditures compared with 2012.
In the medium term, the Group will continue to leverage the strengths of its
teams, its expertise and the relationships it has built with its customers to
strengthen its positions and step up the pace of its development. 
(6) Ratio calculated using the covenant method for the USD350 million syndicated 
loan 
Simplified consolidated income statement 
In EUR million                    Dec. 31, 2012  Dec. 31, 2011   Dec. 31, 2011 
                                                 Pro-forma 
Sales                                     810.7          816.2           829.6
Gross income                              242.1          263.1           264.4
Selling costs & other                    (79.3)         (77.1)          (80.5)
Administrative & research costs          (86.5)         (79.5)          (80.4)
Operating income before 
non recurring items                        76.3          106.5           103.5 


                    in % of sales             9.4%          13.1%           12.5%

Non-recurring income and expense         (11.3)          (3.5)           (4.2)
Amortization of revalued 
intangible assets                         (0.9)          (0.9)           (0.9)
Operating income                           64.1          102.1            98.4

Financial costs                          (13.0)         (10.2)          (10.2)
Current and deferred income tax          (17.1)         (29.5)          (29.5)
Net income from continuing operations      34.0           62.4            58.7
Net income from assets held for sale     (27.7)          (2.7)             1.0

NET INCOME FROM THE YEAR                    6.3           59.7            59.7

EBITDA                                    116.0          143.5           140.7
in % of sales                             14.3%          17.6%           17.0%

Segmental analysis excluding corporate expenses
                Advanced Materials & Technologies   Electrical Components &
                                                            Technologies

In EUR million    Dec. 31, 2012   Dec. 31, 2011   Dec. 31, 2012  Dec. 31, 2011
                                    Pro-forma                      Pro-forma

Sales                  346.3           366.2          464.4          450.0
EBITDA                  62.5            87.9           66.1           69.5
in % of sales           18.0%           24.0%          14.2%          15.4%
Operating income before 
non recurring items     35.2            63.2           54.0           57.3
in % of sales           10.1%           17.3%          11.6%          12.7%


Simplified balance-sheet

In EUR million                               Dec. 31, 2012     Dec. 31, 2011  
Non-current assets                              664.6              651.5
Inventories                                     173.6              188.7
Trade and other receivables                     126.7              148.7
Other assets                                     14.9                5.1

TOTAL                                           979.8              994.0

In EUR million                                Dec. 31, 2012    Dec. 31, 2011
Liabilities and equity                          527.6              542.9
Provisions                                        3.3                5.5
Employee benefits                                36.2               35.6
Trade and other payables                        119.2              131.8
Other liabilities                                52.0               38.7
Net debt                                        241.5              239.5

TOTAL                                           979.8              994.0

Simplified statement of cash-flow

In EUR million                  Dec. 31, 2012    Dec. 31, 2011   Dec. 31, 2011
                                                   Pro-forma

Operating cash-flow before 
change in WCR                      103.8              135.4          131.5
Change in WCR                       27.7              (35.6)         (36.8)
Income tax paid                    (22.6)             (31.8)         (31.8)
Net cash generated by continuing 
operating activities               108.9               68.0           62.9
Cash generated by discontinued 
operations                          (7.1)              (5.5)          (0.4)
Operating cash-flow                101.8               62.5           62.5
Capital expenditure                (42.2)             (52.7)         (53.3)
Operating cash-flow 
after capex                         59.6                9.8            9.2
Change in scope 
(acquisitions)                     (30.0)              (9.5)          (9.5)
Property disposal and others         1.5                7.9            7.9
Cash generated/(used) by 
investing activities from 
discontinued activities             (0.6)              (0.6)
Cash-flow used by 
investing activities               (71.3)             (54.9)         (54.9)
Cash generated by operating and 
investing activities                 30.5                7.6           7.6

The reference document is available for download from the Mersen website

Financial calendar
2013 Q1 sales: April, 29 2013 (after market)

About Mersen

A Global expert in materials and solutions for extreme environments as well as
in the safety and reliability of electrical equipment, Mersen designs innovative
solutions to address its clients' specific needs to enable them to optimize
their manufacturing process in sectors such as energy, transportation,
electronics, chemical, pharmaceutical and process industries.

With around 7,000 employees in over 40 countries, Mersen achieved consolidated
sales of c.EUR830 million in 2012.
        The Group is listed on NYSE Euronext Paris - Compartment B
                     Visit our website www.mersen.com

Analyst and Investor Contact      Press Contact
Véronique Boca                    Nicolas Jehly / Guillaume Granier
VP Financial Communication        FTI Consulting Strategic Communications
Mersen                            Tel: +33 (0)1 47 03 68 10
Tel: + 33 (0)1 46 91 54 40   Email: nicolas.jehly@fticonsulting.com /
Email: dri@mersen.com             guillaume.granier@fticonsulting.com

www.mersen.com


                  
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-0- Mar/20/2013 09:43 GMT
 
 
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