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If Imerys is almost unknown to the general public, the French company is part of the world elite of mineral specialties for industry. In other words, Imerys supplies professionals with all kinds of natural minerals (clay, bentonite, feldspar, kaolin, etc.) or synthetic minerals (graphite, zirconia, etc.) used in the composition of industrial products. These can be, for example, bonding agents, abrasives, raw materials for complex applications or filtration components. Consequently, Imerys sells to both ceramics and cosmetics producers, animal feed manufacturers and battery designers, and the biotechnology industry as well as the construction industry. The dazzling white of washbasins, the opacity of paintwork, the lightness of automotive plastics or the filtration of blood plasma… Imerys is behind it all.
More specifically, its main customers are in construction (30% of revenues), consumer goods (21%) and steel (16%). Half of the activity is carried out in Europe and the rest mainly in North America (23%) and Asia Pacific (21%). Imerys claims a world No. 1 position in three-quarters of its activities, by dint of refocusing on its most strategic businesses. Recently, the tricolor group thus sold its paper division and its high temperature solutions branch.
Financially, it is difficult to speak of growth value. Over the 2014-2018 period, its revenues increased by 5% per year on average, most of it thanks to acquisitions. They then fell in 2019 and 2020, before rebounding strongly in 2021, thanks to a favorable comparison base. As for the results, they are not flamboyant either: the operating margin rose to 14.2% in 2017, but it has since fallen to around 10%. The valuation of the file is not depressed for all that, but it fluctuates quite a bit from one year to another because the results tend to be rather volatile. The balance sheet is healthy overall, with methodical debt reduction. Combined with proper cash generation, it allows the company to serve a relatively generous coupon. On the stock market, the stock has risen quite strongly recently, but it is trading at about half its price from the two previous cycle highs, 2007 and 2018.
But why talk about Imerys if its performance is fairly ordinary? Because the company has carried out a clever refocusing on essential, and therefore strategic, minerals, and it is in the process of opening up a new field of possibilities in lithium. The group has indeed announced in mid-October the launch of a lithium mine project in France, in the Allier. The preliminary study shows a minimum potential of twenty-five years of operation based on 34,000 tonnes of lithium hydroxide per year, at an attractive production cost even with strong environmental constraints (lithium extraction is very polluting). The actual entry into production could take place in 2028, with a good thousand jobs at stake.
The project, which will require at least 1 billion euros of investment, ticks the boxes of reindustrialisation, energy autonomy and transition. A little less the environmental box a priori. In any case not that of well-meaning people, who want us to drive beautiful electric cars, leaving the care of poor populations living on the other side of the globe, far, very far from our eyes, the burden of mining. However, we will have to develop new sectors for the ambitions of decarbonizing mobility to materialize. Imerys’ “Emili” mining project is one of them, if it overcomes the pitfalls that will inevitably arise in front of it.
