Imerys enjoys positive FY but Q4 ‘challenging’; will focus on cost control in 2019

By Davide Ghilotti
Published: Tuesday, 26 February 2019

Imerys will focus on cash generation and cost control this year to combat challenging business that will spill over from the end of last year, it said.

Imerys reported "more challenging" conditions for business during the fourth quarter of 2018 and for 2019 despite achieving overall growth for last year largely thanks to a series of strongly positive previous quarters.

The France-based supplier of minerals and materials for refractories, ceramics, oilfield and other markets will focus on cost control and cash flow this year owing to continued volatility, it said in its latest quarterly report.

"Considering a still volatile and uncertain market environment, the group will continue to sustain its performance by giving priority to cost and cash management in 2019," Imerys chief executive officer Conrad Keijzer said.

The company, which posted a 6.8% increase in 2018 revenue, noted "a contrasted trend between the first and the second half" of the year. Demand slowed following a surge in the first two quarters, it noted.

Organic growth fell from 6% in the second quarter to 3.1% in the third and 0.3% in the last. Net income from current operations increased 6.5% in the year while net debt fell significantly.

Imerys took a series of actions last year to address existing challenges in some of its departments. It pulled out of the ceramic proppants market following a series of losses incurred by that division and put its Namibian graphite operation on care and maintenance because of development issues.

It also sold its roofing business, the last building materials business of the group, which had been underperforming and was not deemed in line with the rest of the operation.

Separately, Imerys’ North America’s talc businesses have filed for Chapter 11 bankruptcy protection - the group sought a termination of the talc-related liabilities brought against the company’s product through a series of lawsuits. The bankruptcy reorganization process will have no repercussions on the rest of the group’s operations.

The company, which used to be organised under five different business arms, has carried out a complete restructuring of its operations under two new segments: high temperature materials & solutions; and performance minerals.

The first segment will look after abrasives, refractories, foundry and industrial while the second will include plastics, paints and coatings, filtration, ceramics and paper.