2024 Third Quarter Sales

Performance by segment

Advanced Materials sales totaled €173 million in third-quarter 2024, an organic increase of 1.6% versus the prior-year period. Sales in the solar and silicon semiconductor markets were low, since customer inventories are currently high. Growth was particularly robust in the transportation market (aeronautics and rail). Sales for the SiC semiconductors market increased slightly. Lastly, deliveries for the chemicals and process industries markets also grew, particularly in North America.

Electrical Power sales amounted to €135 million, representing organic growth of 0.6% versus the same period in 2023. Sales in electric vehicles remained buoyant, as did other transportation markets (rail, aeronautics). However, sales contracted in renewable energy and power electronics. Lastly, sales in the process industries market remained strong, despite the slowdown in electrical distribution in the United States.

Performance by region

Europe reported moderate growth, driven by an improvement in the transportation (rail, aeronautics and electric vehicles) and SiC semiconductor markets, offset by a decline in renewable energies and electrical distribution. Business remained firm in both France and Italy, while Germany saw a decline, due to the economic environment.

In Asia, Group sales dipped 8.3% compared with last year, mainly as a result of a sharp slowdown in the solar market in China. India and South Korea, on the other hand, enjoyed strong growth, driven respectively by the rail and energy storage markets.

In North America, business was brisk in aeronautics and chemicals. The semiconductors market was stable year-on-year. As expected, electrical distribution contracted from the very high level of activity in 2023, while the other process industries remained buoyant.

Acquisitions

In early October, Mersen completed the acquisition of KTK Thermal Technologies, an expert in cooling solutions based in Macedon, New York in the United States, which will contribute around USD 8 million to Mersen's annual sales. The Group is currently finalizing another acquisition in the materials sector in the United States, with sales of around USD 15 million. These two acquisitions will represent a total cash outflow of around USD 20 million.

The Group will continue to be highly selective in its acquisitions and has no further plans at present.

Outlook

Based on the results for the first nine months of the year and the low level of sales expected for the solar market in China and the semiconductor market in the fourth quarter, the Group now expects organic sales growth of between 1% and 2% for full-year 2024 (compared with around 5% previously) and an operating margin before non-recurring items of between 10% and 10.5% (compared with around 11% previously). Capital expenditure for the year should amount to approximately €220 million (versus between €200 million and €240 million previously).

Mersen intends to ramp up the implementation of optimization measures. In addition to the disposal of a small rail business in China in April 2024 (announced at the end of July 2024), the Group has halted production of two unprofitable product lines, in India and China. It will also close a production unit in the Netherlands and move production to other existing sites in Europe. Lastly, it will bring together all its expertise on cooling devices in North America on the newly acquired Macedon site (United States). All these measures will represent savings of around €15 million, including €3 million in 2024. The measures will require the Group to recognize around €20 million in non-recurring expenses in the 2024 financial statements, including €3 million recorded in the first half. This amount breaks down into €12 million in cash expenses and €8 million in asset depreciation.

The Group confirms the objectives of the 2027 medium-term plan presented in March 2023. 

Glossary

Organic growth: Calculated by comparing sales for the year with sales for the previous year, restated at the current year’s exchange rate, excluding the impact of acquisitions and disposals.

Scope effect: Contribution from companies acquired in the year in relation to sales for the year.

Currency effect: Calculated by comparing sales for the previous year at the exchange rate of the previous year with sales for the previous year at the exchange rate of the current year.

Financial calendar: 

Capital Market Day: December 5, 2024 at 2pm CET

Full-year 2024 sales: January 29, 2025, after the markets close