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[Audio Gap] for the announcement of the sales figures for the first quarter of 2018. [Operator Instructions] So we will now hear from Luc Themelin and Thomas Baumgartner.
Hello, everyone, and welcome to our conference on the group's sales figures for the first quarter of 2018. So as usual, I will start by commenting on our press release, and then Luc Themelin and I will take your questions. So the sales for the first quarter 2018 are EUR 209 million with organic growth at 11%. These are very satisfying results, and they are in line with our forecast and with the growth level we saw in the second half of 2017. As expected, the exchange rate effect was negative by nearly 8%, due primarily to the depreciation of the dollar. We expect to see this continue in the second quarter, but the effect should soften in the second half of the year. So what are some of the highlights of the quarter? Well, first of all, we saw buoyant growth across our 3 geographic zones. Business was especially strong in Asia with organic growth of 19%. And China and South Korea led the way, particularly in solar, electronics and process industries. Growth in North America was over 10% in organic growth, and this was in line with what we saw at the end of 2017. The oil & gas market continues to recover, and we still have good business in the electronics market. In electrical distribution, sales are also higher than last year for the same period, but they are not particularly buoyant. Now in Europe, we saw 7% growth, driven mainly by France, where we had growth across all of our product lines; and also good performance in Germany. Now the second highlight is the vitality of our core markets, particularly solar and electronics. As we said in early March, the largest manufacturers of solar cells in China are increasing their production capacity for solar panels. So Advanced Materials saw high-volume orders from Longi and Zhonghuan. So in total, our sales in this market grew by nearly 50%, reaching EUR 14.5 million. So this was all across the group, so including all of our solutions for solar. This includes fuses for the production of panels and the electrical components for -- in the Energy segment, which also saw growth. Now the electronics market is also trending upwards like last year, particularly for the semiconductor manufacturers for power conversion. This is EUR 40 million in sales in the first quarter, which is double-digit growth over last year.Our 2 segments saw comparable levels of growth. Let's start with Advanced Materials where we had organic growth of 12% with sales recorded at EUR 116 million. I can no longer hear the speaker.[Technical Difficulty] Here we go. Thank you.So we saw good sales in solar and electronics and aeronautics as well as the rail market. Sales in the chemicals market saw moderate growth, but with a positive trend in orders. As for process industries, we saw good growth, especially in Asia, thanks to the glass molding business for smartphone and also electrical discharge machining connected to the automotive and aeronautics market. As for the Electrical Power segment, organic growth was 10% there, with sales of EUR 93 million. As I mentioned, sales in solar and electronics saw a very strong growth. Now in the transport market, rail saw moderate growth, whereas electric -- the electrical vehicle market represented double-digit growth compared with the rather weak first quarter in 2017. So we are still moving forward quite well with -- for obtaining certification from German manufacturers. Now after the closing of the first quarter, we completed 3 acquisitions, all in the Electrical segment. First of all, we acquired the remainder of the share capital of Cirprotec. We had originally acquired a majority stake in February 2014 to boost our position in surge protection in Europe. This new phase will allow us to expand more quickly in Asia. The transaction will have an accretive effect on earnings per share, but will not affect the sales or operating profits since they are already consolidated on our books. We have also acquired a stake in the startup, CALY Technologies. This transaction boosts our R&D capabilities for the design of semiconductor devices to protect equipment from overvoltage and overcurrent damage. And we have acquired the company Idealec to consolidate our position in bus bars for power electronic applications, and this will bring in sales of nearly EUR 5 million in 2018. The total cost of these acquisitions was slightly over EUR 10 million. So to conclude, these are very strong results in line with our forecasts. So sustained vitality on our core markets and across our 3 main geographic zones. So the group is confirming its target for 2018, which we set out in March when we presented 2017 results. So this is organic growth in sales between 3% and 6%, and operating margin before nonrecurring items between 9.6% and 10.1% of sales, which is an improvement over 2017, which was 9.2%. So those are my main comments on today's publication. So Luc Themelin and I will now take your questions.
[Operator Instructions] We have our first question, Jean-Francois Granjon, ODDO BHF.
Now we've seen a strong start to the year. Do you expect to see the same pace of growth in the second quarter? Whereas -- well, last year there had been a slight slowdown in the second quarter. Could you -- so could you give us an idea if you expect to see this pace continue? And as concerns acquisitions, could you say a bit more about Idealec and CALY Technologies in terms of your strategy there? And is that integration at the -- when will you be doing that during the year?
Okay. We're not giving any guidance. We don't give quarterly guidance in fact, but it's true in 2017 in the second quarter, it's true. There will be the -- there will be a positive reference basis, but we are continuing to confirm our annual guidance. As concerns the acquisitions, well, as far as consolidation goes, this will be done as soon as of the month of April. Now Cirprotec, remember, there's no impact on sales. As for CALY Technologies, this isn't going to change very much either. And as for Idealec, less than EUR 5 million for the year. So these are not big sales figures in fact. And on the strategic side of things, Idealec, this allows us to consolidate in bus bars and power electronics and to perhaps reach some customers that we didn't have before. As for CALY Technologies, this is more about the work in transistors with hybrid switches for electric vehicles where we would be able to make them instead of having to buy them.
Another question. You talked about double-digit growth in electric vehicles market. What's the value then in that sector?
Around EUR 10 million -- so EUR 10 million for the year. It's not that significant for the entire group. But currently, we are getting some new products certified for 2019, 2020.
Another question, Martin Boeris of Exane.
I have a first question of the solar market. Are you seeing downward price pressure or has that calmed down? And what about materials cost? Are you seeing any notable change in the cost of materials? Then looking at Europe and the chemicals market, is there potential for catching up to previous levels? And another question on distribution -- electrical distribution in the U.S. What do you think explains the continued difficulties? Was it excess inventories? Is it that's still too high? What's the problem there? Is it more about outlets for your market? Is it -- how do you explain that? Is that a structural effect of the market?
Let me start then on solar. Now prices have been rising already since the end of last year. Demand has been high with 2 big customers. It's -- the demand is so high that we were able to pass on some price rises. And that has continued in the early part of the year. So the -- we're no longer seeing a downward price pressure. And last year, there was some negative price effect, but it was -- it turned around in the last quarter. So we are seeing rises in raw materials, it's true.
Well, so would you say then that manufacturers, while they're trying to reduce their production costs, they're trying to upgrade the quality of their production? But are you saying that you are benefiting then from a steep rise in demand that offsets some earlier difficulties?
Well, our customers are using advanced technologies and they have very low costs. So the graphite was never a major portion. Of course, they used to haggle over prices in graphite in the old days, but that is no longer a focal point for them. The focus lies elsewhere now in keeping costs down. And the types of graphite that they've been asking for in the past 6, 7 months is -- and we're one of the -- pretty much the only one able to provide those grades that puts us in a strong position. Now talking about raw materials, it's true that we have pretty good visibility through June, July. We'll see how things -- if things change from there, but profitability should be stable in terms of the prices and costs. Now to focus on Europe, there's a fairly stable growth here. Last year, in China, we had some really good projects there. So the business in Europe and even in the U.S. is good. Now distribution in the U.S., well, it's looking fairly good at the beginning of the year, okay, overall growth, not every month, but last year was not good. We are seeing some segments in Utilities, Oil & Gas are recovering and we're pretty satisfied for fuse distribution, in particular, in the U.S. It's true that it's below growth that we see elsewhere for the group, but at least it is trending upwards so that's a good sign. Last year, yes, there were some -- it's recovered. Well, the year had not got off to a good start last year, it's true. But things picked up in the second half of the year. And so we are -- but we are seeing growth. What we have to see is if that growth continues. It's true that we don't always have very good visibility. So it's hard to answer your question on that point today.
Okay, the next question -- [Operator Instructions] Jean-Francois Granjon from ODDO BHF has another question.
I'd like to come back to the organic sales of the first quarter. Can you -- could you tell us about the price impact? You said you would be raising prices significantly for graphite. So could you give us an idea what's the volume effect and what's the price effect?
Well, volume is up 1%. So it's really in Advanced Materials where we're seeing growth in prices.
We have no other questions for the moment. [Operator Instructions]
No further questions? All right, then we thank you all for joining us this evening. And the next conference will be July 30 at 6:00 p.m. for our half year results. Thank you, and good evening.
Ladies and gentlemen, that's the end of our conference. Thank you for joining us and you can disconnect now. Thank you, and good evening.