Mersen: Excellent Performance in H1 2019

Excellent Performance in the First Half of 2019

  • Strong 12% growth in sales in the first six months (+6.5% like-for-like)
  • Increase in operating margin before non-recurring items:  11.1%1 vs. 10.6% in H1 2018
  • Full-year guidance raised

Paris, July 30, 2019 – Mersen (Euronext FR0000039620 – MRN), a global expert in electrical power and advanced materials, has released its sales figures for the second quarter of 2019 and interim results for the period ended June 30, 2019.

"Following on from 2017 and 2018, 2019 was another year of very satisfactory interim growth for Mersen, with a significant increase in sales and rise in profitability prompting us to raise our guidance for the full 12 months. The Group’s commitments for the future include a series of ambitious investments in response to high demand in specific markets, making our strategic acquisition of the Columbia site in the United States that gives us additional graphite production capacity a perfect fit. My sincere thanks go to each and every member of the Group without whom none of this would be possible” said Luc Themelin, Chief Executive Officer of Mersen.

First-Half Financial Highlights2

(in € million) H1 2019 H1 2019 before IRFS16 H1 2018 H1 2019 before IFRS16 vs H1 2018
Consolidated sales 484 484 430 +12%
Operating incone before non-recurring items 53.6 52.6 45.8 +15%
Operating margin before non-recurring items 11.1% 10.9% 10.6%  
EBITDA 79.0 72.5 64.4 +13%
Net income 33.7 34.0 29.3 +18%
Net cash generated by operating activities 26.2 19.7 17.9 +8%
Net financial debt 228 228 205  
Net financieal debt to EBITDA ratio 1.5 1.5 1.5  

1 10.9% before IFRS16
2 See glossary

2019 Second-quarter sales

Mersen reported consolidated sales of €243 million for the second quarter of 2019, up nearly 5% at constant scope of consolidation and exchange rates on the same period in 2018. Including the companies acquired or formed in 2018 and a favorable currency effect linked primarily to the appreciation of the US dollar, sales grew by close to 10% as reported.

In € million Q2 2019 Q2 2018 Like-for-like
Advanced Materials 138.9 124.1 9.8% 0.8% 1.2% 11.9%
Electrical Power 104.3 97.6 -1.6% 6.2% 2.4% 6.9%
Europe 83.0 73.9 5.2% 7.6% -0.5% 12.3%
Asia-Pacific 66.7 66.2 -1.3% 1.4% 0.6% 0.7%
North America 83.0 72.2 8.6% 0.6% 5.4% 15.0%
Rest of the world 10.5 9.4 13.4% 0.5% -1.1% 12.4%
Group  243.2 221.7 4.8% 3.2% 1.7% 9.7%


In Europe, growth was supported by the chemicals and semiconductor markets despite the slowdown in the power electronics market, particularly in Germany. In Asia, growth was weaker than in previous quarters, with lower invoicing in China in the chemicals market while the solar market is expected to regain ground in the second half of the year. Lastly, growth in North America continues to be driven by the electronics and process industries markets.

2019 First-half sales

Consolidated sales for Mersen amounted to €484 million in the first six months of 2019, a like-for-like increase of 6.5% compared with the same period last year. Including the currency effect and the impact of consolidating the companies acquired or formed in 2018, year-on-year sales growth came to 12.4%.


In € million H1 2019 H1 2018 Like-for-like
Advanced Materials 278.1 240.1 13.1% 0.8% 1.7% 15.8%
Electrical Power 205.6 190.2 -1.7% 7.0% 2.8% 8.1%
Europe 167.0 146.9 5.8% 8.4% -0.5% 13.6%
Asia-Pacific 130.3 124.7 1.6% 1.4% 1.5% 4.6%
North America 166.7 141.8 10.0% 0.7% 6.3% 17.6%
Rest of the world 19.7 16.9 19.2% 0.6% -2.8% 16.5%
Group  483.7 430.3 6.5% 3.5% 2.2% 12.4%


Sales for the Advanced Materials segment totaled €278 million, up 15.8% on first-half 2018 as reported or 13.1% like for like. This performance was led by strong growth in the electronics, aeronautics, chemicals and process industries markets, whereas sales in the renewable energies market retreated during the period, as expected. 

In the Electrical Power segment, sales came to €206 million, up 8.1% thanks to the contribution of companies acquired in 2018. On a like-for-like basis, sales for this segment edged down 1.7%. The main growth markets during the period were transportation, and to a lesser extent, process industries. The power electronics market, however, had fewer projects than in the first six months of 2018.

In Europe, growth was particularly robust for Advanced Materials, fueled by the electronics and chemicals markets. Italy, Spain and the Nordic countries saw especially strong momentum during the period. The chemicals and electronics markets were also buoyant in Asia, but topline performance in China decreased year on year, due to lower sales in the solar market. Growth in North America was boosted by sales in the electronics and process industries markets.

The Group adopted IFRS 16 "Leases" as from January 1, 2019, using the modified retrospective approach. The comments below refer to the figures before the impact of applying IFRS 16. The condensed consolidated financial statements including both reported data and data before the application of IFRS 16 are presented in pages 7 and 8 of this document.

2019 First-half results

Operating income before non-recurring items came to €52.6 million, yielding an operation margin of 10.9% of sales (up on the 10.6% figure reported for the first half of 2018).

Operating income before non-recurring items for the Advanced Materials segment was €41.0 million, resulting in an operating margin of 14.7% compared to 14.1% for the same period of 2018. This improvement stemmed mainly from a favorable volume effect and an increase in selling prices that more than offset the impacts of higher raw materials costs and customs tariffs.

In the Electrical Power segment, operating income before non-recurring items increased by 3% year on year from €19.3 million to €19.9 million, representing 9.7% of sales against 10.2% in first-half 2018. This segment’s performance was hampered during the period by a 0.3-point dilutive impact from acquisitions (FTCap and Idealec) and a negative volume/mix effect. Conversely, higher selling prices had a positive effect.

Consolidated EBITDA for first-half 2019 totaled €72.5 million (15% of sales), up nearly 13% year on year.

Non-recurring income and expense represented a net expense of €3.2 million, including restructuring costs, acquisition costs, and other costs mainly provisions for litigation.

Mersen’s net financial expense came to €4.7 million in the first half of 2019, in line with the first-half 2018 figure. The impact of the €30 million increase in the Group’s average debt was offset by lower‑than‑expected earnout payments to shareholders of acquired companies (recognized under debt at December 31, 2018).

Income tax expense totaled €10.7 million for the period, representing an effective tax rate of 24%, slightly lower than the 26% rate for first-half 2018.

Net income advanced by close to 18% to €34.0 million from €29.3 million in first-half 2018.

Cash and debt at June 30, 2019

Operating activities generated nearly €20 million in net cash flow in the first half of 2019, an improvement of €2 million compared to last year. This figure takes into account an increase in working capital requirement (WCR) of €46 million, primarily driven by strong sales growth and a seasonal effect. The working capital to sales ratio stood at 24.7%, up 2 points on first-half 2018 as a result of an increase in back-up inventories of raw materials and delays in customer payments observed towards the end of the period.

Capital expenditure totaled €19.0 million in the first six months of 2019. Two thirds of this total related to the Advanced Materials segment, particularly the Group’s specific growth projects such as increasing its capacity for the silicon carbide (SiC) semiconductor market.

The €12 million cash outflow for acquisitions mainly corresponds to the acquisition of the Columbia site in the United States as well as additional price related to the buyout of non-controlling interests in Cirportec (already recognized in debt at December 31, 2018).

Net cash flow for the period, after interest paid and share buybacks, represented a negative €16.4 million (versus a negative €21.7 million in first-half 2018).

Financial structure at June 30, 2019

Net debt stood at €228 million at June 30, 2019, up €13 million on the €215 million reported at December 31, 2018. The end-June 2019 figure includes the following impacts: (i) €7 million related to acquisitions, principally the purchase of the Columbia site in the United States, and (ii) €21 million in capital expenditure, including €2 million in capitalized R&D costs related to the EV project.

The Group’s financial structure remains robust, with a net debt-to-EBITDA ratio1 of 1.5 (1.6 at December 31, 2018). The net debt-to-equity ratio1 was 41%.

Impact of applying IFRS16 standard

Since January 1, 2019, lease recognition has changed. Under the new standard, all leases will be recognized on the balance sheet2. The numerical majority of Mersen’s leases correspond to vehicles and forklift trucks, but buildings (offices, factories and warehouses) represent the most monetary value.

Impacts of applying IFRS 16 are presented in this document, on pages 7 and 8. They are limited and are not affecting Mersen’s financial flexibility.

Outlook for 2019

The Group does not expect to see any substantial changes in its markets in the medium term compared to the information communicated at the beginning of the year.

For 2019:

  • The solar market should recover in the second half of the year compared with the first half.
  • Growth in the electronics market should be driven by SiC semiconductors, whereas the silicon semiconductor segment is expected to decline.
  • Chemicals market growth is likely to be moderate for the year as a whole, reflecting a lower level of sales in the second half following a high level of invoicing in the first six months due to the phasing of projects.
  • Process industries should follow the same trends as the world’s major economies.

In view of its good first-half results, Mersen now expects like-for-like sales growth to come in between 4% and 5% (versus the previously published guidance of between 2% and 5%). The Group is standing by its forecast of operating margin before non-recurring items ranging between 10.5% and 10.7% for the year (before the impact of applying IFRS 16).

The Group’s capex program should amount to between €65 million and €75 million (compared with the initial guidance of €60 million to €70 million). This reflects the announcement on July 8, 2019 that the Group intends to spend additional capital expenditure for the commissioning at the Columbia site in the United States.

1 Ratio calculated using the method required by the covenants contained in Mersen’s confirmed loans.
2 Contracts above 5,000 euros and/or more than 1 year


About Mersen

A global expert in electrical power and advanced materials, Mersen designs innovative solutions to address its clients' specific needs to enable them to optimize their manufacturing performance in sectors such as energy, electronics, transportation, chemicals & pharmaceuticals and process industries.

Mersen, with 6,900 employees working across 35 countries, recorded sales of €879 million in 2018.

Mersen is listed on Euronext Paris – Compartment B


Véronique Boca
VP, Communication Mersen
Tel. + 33 (0)1 46 91 54 40

FTI Consulting Strategic Communications
Emily Oliver/Léa Truchetto
Tel. +33 (0)1 47 03 68 10
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Download the documents:

Mersen: First Half of 2019
2019 Half-Year Financial Report
2019 Interim Results Presentation