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Welcome. You have joined the conference call of Mersen Group's third quarter sales. So we'll be hearing from Luc Themelin and Thomas Baumgartner.
And this is Luc Themelin. So I would like to make a few general comments before handing over to Thomas. So our reported growth in Q3 was up by 12% compared to 2020, which brings us close to 2019 level. So EUR 234 million in 2019, EUR 233 million this quarter. Over the first 9 months of the year, our growth markets in solar, semiconductors, electric vehicles have outperformed once again, demonstrating the relevance of our positioning. So because of this good performance and a favorable product mix, we are revising our guidance upwards for the full year. We are now aiming for the top of the range announced on July 8 for organic growth, so between 6% and 8%; and a slightly higher level for current operating margin, previously between 9.2% and 9.6%. On the investment side, we are following the dynamics of our growth markets, and therefore, expect to be at the top of our initial forecast, which were between EUR 70 million and EUR 80 million. So I will now hand over to Thomas, who will comment on the sales figures.
Thank you, Luc. Hello, everyone. So this was indeed a very good third quarter. The group posted consolidated sales of EUR 233 million, which is up 9.5% on a like-for-like basis.If we look at the scope, we benefited from slightly up 1% from the consolidation of Fusetech since January 2021 and from the acquisition of Americarb in September 2020. We also benefited from a favorable foreign exchange effect, mainly due to the appreciation of the Chinese currency. So the strong organic growth of the third quarter came from both of our division as well as our main geographic areas.So let's have a look at the geographic side. In Europe, this business is growing strongly in all countries. In France, momentum is driven by the recovery in the aircraft sector; while in Germany, it's power electronics and renewable energies that are the main growth drivers. If we look at Asia, growth came mostly from China, thanks to the vibrant solar and electronics markets. Growth was also significant in Japan and Taiwan, thanks to new contracts in power electronics and chemicals. In North America, both division grow, thanks to electronics markets and the recovery of process industries. Finally, in the rest of the world, there was a decline in activity primarily tied to a sluggish chemical sector. Now if we look at the different divisions, let's start with Advanced Materials. Here, we saw organic growth of more than 11% with sales of EUR 127 million. So what are the main drivers? First of all, the solar market continues to be dynamic, as expected. And we have seen a record level of billings this quarter of over EUR 19 million. Then at the end of the second quarter, we had already seen signs of improvement in the process industries, and this was confirmed in the third quarter with a double-digit growth in those markets. We can also see the beginnings of a recovery in aeronautics with a double-digit growth but we are still, obviously, very far from our 2019 levels. And sales in the chemicals market remained slightly down as expected, and the rail transportation market has contracted due to the weakness of traffic. Now if we look at the Electrical Power division, sales were EUR 105 million, with organic growth of over 7%. So in electrical distribution in North America, there was continued strong growth there, as is the same for electrical projections from the solar market. The number of power electronics contracts has also grown strongly, and sales for the electric vehicle market is also turning upwards. However, as with Advanced Materials, the rail market saw a decline. So let me say a few words about the first 9 months of the year. Sales were EUR 684 million, which is organic growth of 7.5%. All of this were being driven by our sustainable development markets, solar, wind, electronics, green transport, which posted growth of 10.5% compared with 6% in other markets. So that makes a good performance that allows us to raise our guidance for the whole year as Luc indicated in his introduction. So those are my comments for the sales figures, and now Luc and I will take your questions.
[Operator Instructions] We have a first question. [indiscernible], do you have a question?
Thank you for your presentation. I have a question. First of all, you mentioned the figures for 9 months, but -- so the sustainable developed markets, just for the third quarter, could you say something more specific about the solar market, electric vehicles and electronics? And so you said you're going to raise the guidance. Could you say a bit more about that?
Okay. So just to answer your second question, first of all, yes, we're at the upper guidance on sales figures, and we have a favorable product mix.
Luc. So your question about our 3 markets for the quarter, they are close to what we saw earlier in the year but developing perhaps a bit more slowly in electronics. We had a very high level of comparison with last year, with previous years, but there's no real notable gap there.
Okay. And also, could you tell me about electric vehicles? Are -- is that moving forward as expected?
Luc. well, what we're following here is the qualifications by clients. So things are moving forward. So we can't communicate much on this. However, the sales will not really come for another 2 years. We're currently at EUR 12 million for 9 months, and that was a bit less last year. So that's not the main point here. Where we're really expecting the sales is 2023, 2024. So we are continuing to move forward with our projects. But things are moving forward quite satisfactorily. We've got some new types of uses, for example. And so all of that is positive. It's very intense work. We're really picking up speed in our projects.
Next question, Jean-Francois Granjon, ODDO BHF.
First question on the Advanced Materials division, so organic growth is picking up speed. Could you say what explains that? And do you think it's going to be durable? Then could you say about energy cost as well. I mean, you haven't said much about that. Is that covered? How is that going to impact you? So tell me about that in terms of your coverage on that?Also in the solar market, what are you expecting for total sales for the year? And the final question, and currently seeing that good performance. Do you expect to maintain that position next year?
Okay, that's a lot of questions. So this is Thomas responding to Advanced Materials. Yes, growth has picked up, and this comes from a process industry, so that's not over its peak. Electrical division has recovered more quickly than Advanced Materials. Now chemicals performed fairly well, in fact, this quarter. And aeronautics is coming back -- okay, starting from a very low level, of course. So it's really process industries that is recovering. As for sale prices, we are gradually renting our sales prices about 1% for the quarter. We are making up for some of the effect of the raw materials. And we said before, that's all taken into account in our guidance. Because while there's a certain phasing to this in the way that we can raise prices, so it takes a little bit of time for us to press on these price hikes in incoming orders.
Now, Luc. So you asked a question about the prices of energy. Well, in raw materials, while there's a copper and silver, they don't weigh in that much on us. But for 2021, that was covered and we were able to raise prices a bit as well. Then there are other raw materials rising, certain plastics, fibers. So we're digesting these. We also have productivity gains program that's performing very well. So we had that. As for energy cost increases, this is more recent. And of course, we're hearing a lot about this in the news, but we are mostly covered. We have our per-kilowatt cost that is set for certain years, but other costs that are not covered. So we're going to have to keep an eye on the impact. But thanks to productivity gains, we believe that this will not be a major challenge for us. Though yes, it is something that, of course, will have an effect on us. So we have a room for maneuver currently and then we might have to raise prices. But we are preparing for 2022. We will be raising prices significantly for some products. You asked a question about solar. Well, it's -- I can't be too precise. I'd say, to use the rule of 3, there's nothing to spectacularly different from what we have been announcing.Okay. So yes, I mean if you look at our sales for the first 9 months, well, you can look up for the full year. So you also had another rather complicated question. We're pretty confident about the semiconductors market. The demand is good. So we are prepare -- we expect to have a good year for the semiconductors market, both the traditional and the silicon carbide. As for solar, we don't expect any decline there. We are at the maximum that we can do here for now -- there, because we do need some of our materials for other markets. But that's good. As for process industries, those start recovering. But of course, we are being careful. But then I think for the full year, that should look pretty good. What else? Well, the chemicals market, well, was not so great before, but it's doing better. But we won't have gone back to our 2019 level yet. But for rail, we also expect the slightest decline before it begin recovering. So 12 2022, I certainly am not going to try to predict the sales figures for next year, but we expect it to be a satisfying year. Of course, there's a lot of things, contributing factors, okay. China showing some signs of slowing down, but there's still good growth. So you asked the same question, I give you similar answers there every year, Mr. Granjon. Thank you.
Next question, Stephen Benhamou, BNP Paribas.
So I hope you can hear me okay? Well, congratulations on those results. Well, for one question that hasn't been answered, could you say something about your adaptation plan? You were anticipating EUR 10 million, and then EUR 16 million on the full year this year. Given some of the inflation, do you think that you can find any new savings or not? So tell us where you stand with your adaptation plan and what you expect to see for 2022.On the M&S, from what I understood, things haven't totally opened up in China. So what's your perspective on that? And as for supplies, is this worsening your backlog? Or are you managing to make deliveries on time?
Thomas, I'll answer the first question. So the adaptation plan is moving forward as expected. So EUR 10 million in, say, for the first part of the year, EUR 16 million for the full year. Now there were some additional savings, and that will -- of course, there was an offset of travel. Well, that didn't happen during the pandemic, of course. Now for 2022, we will be seeing inflation for materials, energy, salary increases as well. Though nothing has been decided yet, that's all being negotiated. But as Luc said, we are working on raising our sale prices to be able to absorb all of those factors. But it's a little too early to say exactly how much that will represent [indiscernible] either. Over to Luc.
Okay, well. So the mergers and acquisitions, well, we still -- we are discussing with certain companies that we'd already been in contact with before, but things have slowed. Well, we weren't able to make much progress there for a while. As for China, there's still a very long quarantine time; 3 weeks, in fact. So we won't be going there for any discussions on acquisition targets. We've got various targets in Europe, but it's still not very easy. So no, there will be no -- nothing this year, nothing additional this year. And even for 2022, well, that would be a bit short to try to finalize anything. So not expecting to see much on that side, but we're still quite busy with our growth markets already. So we have that -- that has to be managed, that return to growth. There's a lot of projects underway. And we've got a few transfers of factories as well to manage. As for supplies, the supply chain, well, there is -- in North America, it can be a bit tight, particularly for fuse production. Some things are a bit behind schedule. Well, some projects have been postponed. And there is some backlog, but it's not that big, delivering it 15 days instead of 5 or 10. And demand is high. And so there are some delays, but it's really because demand has been so high and not caused by other factors, particularly for electrical distribution. But we have no particular risk on that side.
And can you distinguish between your purchase as well your backup stock? Is there a high demand for that?
Well, the products that we're delivering are heading straight to the distributors. They are being quickly bought up off the shelves.
[Operator Instructions] We have no further questions.
Are there any further questions? Well, if there are no further questions, so we're going to have a meeting on December 7. We will have a 1-hour presentation on our positioning and strategy on the semiconductor market. So it will be an online event, and you can find the information about that on our website if you would like to sign up for that. So thank you again for joining us, and have a good evening. Thank you, everyone.
Ladies gentlemen, that's the end of our conference. Thank you for joining us, and now you can disconnect. Thank you, and good evening.