Mersen: solid results despite unprecedented circumstances

Mersen: solid results in the first half of 2020 despite unprecedented circumstances

  • Sales of €430 million, decrease contained at 11% in the first half
  • Operating margin before non-recurring items of 8.1% of sales
  • €220 million in cash and liquidities
  • The Group continues to press ahead with its roadmap to develop green markets with an efficient local production footprint


Paris, July 31, 2020 – Mersen (Euronext FR0000039620 – MRN), a global expert in electrical power and advanced materials, has released its sales figures for the second quarter of 2020 and interim results for the period ended June 30, 2020.

Luc Themelin, Chief Executive Officer, commented: “Faced with the sudden economic slowdown in April and May linked to the Covid-19 pandemic, Mersen’s teams mobilized to effectively mitigate its social and economic impact. Thanks to the measures we rapidly took to protect the health of our employees and adapt our organization and costs, the Group was able to deliver a respectable performance for the first half of 2020, in terms of both business levels and operating margin. We are pressing ahead with our roadmap to consolidate the leadership positions of the Advanced Materials segment and optimize the industrial base for the Electrical Power segment. Mersen remains active in promising growth markets, including renewable energies, semiconductors and electric vehicles. The acquisition of Americarb will enable the production of insulating felts for the semiconductor and energy efficiency markets to be located on the American continent. In today’s still uncertain climate, we will continue to closely monitor developments in our markets and will communicate on our guidance as soon as visibility improves. I would once again like to thank the teams for their commitment in each of our locations.

Key First-Half Figures

In millions of euros H1 2020 H1 2019
Sales 430 484
Operating incone before non-recurring items 34.7 53.6
Operating margin before non-recurring items 8.1% 11.1%
EBITDA 61.9 79.0
Net income 17.8 33.7
Cash generated by operating activities 34.7 26.2
Net financial debt/EBITDA ratio 2.0 1.5


Second-quarter 2020 sales

Mersen reported consolidated sales of €205 million for the second quarter of 2020, down 18% at constant scope and exchange rates compared with the same period in 2019. Including the contribution from companies acquired in 2019 or early 2020, sales were down by about 16%.

In millions of euros Q2 2020 Q2 2019 Organic
Advanced Materials 119.4 138.9 -17.8% 4.6% -0.9% -14.0%
Electrical Power 85.4 104.3 -18.3%   0.2% -18.1%
Europe 69.6 83.0 -22.2% 6.4% -0.4% -16.1%
Asia-Pacific 64.9 66.7 -2.5% 0.7% -1.0% -2.7%
North America 64.7 83.0 -23.5% 0.4% 1.3% -22.1%
Rest of the world 5.6 10.5 -41.8% 1.7% -10.7% -46.3%
Group  204.8 243.2 -18.0% 2.6% -0.4% -15.8%

April and May saw a sharp slowdown in activity of around 23% year on year, with Europe and North America hit particularly hard by the health and economic crisis. June was better oriented, with a limited organic sales drop of -6%.

In Europe, the slowdown affected all countries, with a slight uptick at the end of the period. In Asia, growth continued in China over the second quarter and business in South Korea saw a return to growth over the period, buoyed by the semiconductor market. Lastly, business slowed significantly in North America during the quarter, impacted by the lockdown measures.

First-half 2020 sales

Mersen’s consolidated sales amounted to €430 million for the first six months of 2020, down 13.4% on an organic basis compared with first-half 2019. Thanks to a positive currency effect and contributions from companies acquired in 2019 or early 2020, the drop was contained at -11.1%.

In millions of euros H1 2020 H1 2019 Organic
Advanced Materials 248.2 278.1 -14.3% 3.9% -0.4% -10.8%
Electrical Power 181.8 205.6 -12.2%   0.8% -11.5%
Europe 149.0 167.0 -16.3% 5.8% -0.2% -10.8%
Asia-Pacific 125.9 130.3 -3.5% 0.7% -0.5% -3.4%
North America 142.2 166.7 -16.5% 0.1% 2.0% -14.7%
Rest of the world 12.9 19.7 -28.8% 0.9% -8.8% -34.1%
Group  430.0 483.7 -13.4% 2.2% 0.1% -11.1%

Performance by segment

Advanced Materials sales came to €248 million, down 14.3% on an organic basis over the period. With the contributions from AGM Italy acquired in December 2019 and GAB Neumann acquired in March 2020, the decline stood at -10.8%. The renewable energies market remains well oriented, while the process industries, aeronautics and chemicals markets have contracted sharply.

In the Electrical Power segment, first-half sales totaled €182 million, down 12%. The process industries market continues to suffer from the economic slowdown in both Europe and North America. Electrical distribution in the United States, significantly affected in April and May, showed a clear improvement in June. The power electronics market posted slight growth due to a low level of activity last year. 

Overall, the sustainable development markets were more resilient, with a decrease limited to 3% over the first half of 2020, compared with a 20% drop for other markets.

Performance by region

In Europe, conditions deteriorated in April and May due to lockdown measures in all countries and a slowdown in the economy. The aerospace and process industries markets were the worst affected. However, the trend improved towards the end of the quarter.

In Asia, China and South Korea posted significant growth of more than 8%, driven by renewable energies and semiconductors, while lockdown measures in India during the second quarter had a significant impact on business levels.

Lastly, in North America, the situation deteriorated during the second quarter, primarily for process industries, before picking up again in June.

EBITDA and operating income before non-recurring items in first-half 2020

Operating income before non-recurring items stood at €34.7 million in the first half of 2020, yielding an operating margin before non-recurring items of 8.1% of sales (down from 11.1% in first-half 2019). Faced with the unprecedented crisis, the Group quickly took measures to reduce costs, and benefited from the furlough schemes set up by governments in some countries.

Operating income before non-recurring items for the Advanced Materials segment was €31.7 million, resulting in an operating margin before non-recurring items of 12.8% compared with 15.0% for the same period in 2019. This decrease is mainly due to an adverse volume effect. Prices had a slightly favorable impact.

In the Electrical Power segment, operating income before non-recurring items came to €11.3 million, representing an operating margin before non-recurring items of 6.2% of sales compared with 10% for the first half of 2019. The segment was impacted by a negative volume effect and higher development costs linked to electric vehicles. In addition, there was less cost flexibility due to the temporary closure of major sites in Mexico and Tunisia with no subsidies.

Group EBITDA amounted to €61.9 million, 14.4% of sales, a decrease of almost 22% and 200 basis points compared with last year.

Net income

Non-recurring items represented a net expense of €4.9 million for the first six months of 2020, corresponding to acquisition costs and other charges, mainly provisions for litigation.

The Group reported a net financial expense of €6.1 million for the first half of 2020, which is in line with the first-half 2019 figure.

Income tax expense amounted to €5.9 million for the period, representing an effective tax rate of 25% versus 24% for the first half of 2019.

Net income for the first six months of 2020 came in at €17.8 million, versus €33.7 million as of June 30, 2019.

Cash and financial debt

Mersen’s operating activities generated nearly €35 million in cash in the first half of 2020. This figure takes into account an increase in working capital requirement of €21 million, primarily driven by a seasonal effect (€46 million in first-half 2019). The working capital-to-sales ratio stood at 28% of sales, up on the previous year since it was calculated based on second-quarter sales which are abnormally low due to April and May. The Group also built up significant inventories, partly to see it through the crisis and partly to prepare for the planned site transfers.

Capital expenditure totaled €24.0 million over the period, three quarters of which was tied to the Advanced Materials segment and to specific Group development projects, such as the commissioning of the Columbia site in the United States and the increase in production capacity for the silicon carbide (SiC) semiconductors market.

The €7 million outflow related to changes in the scope of consolidation corresponds to the acquisition of GAB Neumann in Germany.

Solid financial structure

At June 30, 2020, Mersen’s net financial debt came to €228 million, compared with €218 million at December 31, 2019. The Group’s strong operating cash flow meant it was able to fund its capex and acquisition program (GAB Neumann). It also repurchased 200,000 shares on the market for a total of around €3.7 million between March and April to cover its employee share plans.

Mersen has a solid financial structure, with €130 million in undrawn credit lines and €90 million in cash at June 30, 2020 to see it through the current health crisis and its consequences. It has no major debt maturities to be met before November 2021.

The Group has not yet noted any drift in payment terms.

In May 2020, for its syndicated banking credit and USPP facilities, the Group obtained greater flexibility as regards the leverage test (ratio of net debt/EBITDA) of its financial covenant at June 30, 20201, taking the ratio to 4.5x versus 3.5x before the amendment. In concrete terms, leverage for the period actually came to 2.0x thanks to profitability levels that held up well, good cash generation and contained capital expenditure over the first half of the year.

1 When calculating the covenant at June 30, EBITDA is taken to mean the EBITDA figure reported for the first six months of the year, multiplied by two.

Acquisition of insulation assets of American company Americarb

On July 24, 2020, the Group signed an agreement to acquire the insulation business assets of American company Americarb, for a total of approximately US$ 6 million. This acquisition will enable the company to locate insulating felt production in the Americas and thereby strengthen its position in the semiconductor and energy efficiency markets (this announcement is the subject of a separate press release dated July 31, 2020).  


Mersen’s activity was more upbeat in June, with the contraction in sales limited to 6%. However, lack of visibility remains strong in certain markets, particularly chemicals and process industries, and the Group is unable to set financial guidance for 2020.

For the second half of 2020, the Group expects:

  • a continued sharp decrease in sales for the aeronautics market;
  • probable growth in sales on the semiconductors market;
  • a less dynamic performance for its solar activities compared with the first half.


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 is listed on Euronext Paris – Compartment B


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

Guillaume Maujean
Xavier Mas
Tel.: +33 (0)1 85 65 83 45

Download the documents:

Mersen: First Half 2020 sales
2020 Half-Year Financial Report
2020 Interim Results Presentation
Acquisition of the felt insulation assets of Americarb