BASIC INDUSTRIES: Imerys (NK Baa3/BBB-/NR): 2Q24 Results

Neutral for credit. Negative read for autos here, sees stronger than expected drop and negative outlook for the rest of the year. The hoped-for 2H recovery in autos appears increasingly unlikely.

• Revenue was slightly ahead of consensus, beating by just under 2%. That’s up 1% YoY with higher volumes but marginally lower prices.
• Adj. EBITDA beat by 9% (3 estimates). 20% margin was 2.6% better YoY with input costs improving relative to prices as well as cost saving initiatives.
• Despite 11% YoY EBITDA growth, LfL 1H FCF was a touch lower at €88mn, mainly on WC changes. Leverage is unchanged from FY23 at 1.7x.
• Management seems slightly more upbeat than others on the construction market outlook; sees European residential improving but remaining below historical levels. North America remains good overall despite weak residential. Interestingly they see positive trends in China with government measures supporting residential.
• FY24 adj. EBITDA guidance has been provided for the first time at €670-690mn, 2% below consensus at mid-point.
• Call replay https://edge.media-server.com/mmc/p/yo8bxjye/