Joint interview of Patrick Kron and Alessandro Dazza
3 questions to the Chairman of our Board and to our CEO
What has the COVID-19 pandemic revealed about Imerys, according to you? How did Imerys deal with the Covid-19 pandemic?
I was impressed by the level of responsiveness, alignment and implementation capacity of Imerys during this unprecedented crisis. The management swiftly put in place a comprehensive action plan in order to protect the employees and mitigate the impacts of the Covid-19 pandemic. This ambitious plan received the full support of the Board of Directors in early April and was then successfully executed by the teams throughout the year with results beyond expectations.
The pandemic also revealed the resilience of Imerys’ business model even under the most challenging circumstances. Imerys is a leading speciality minerals company with strong technical expertise, agile organization and long-standing relationships with more than 15,000 customers in 142 countries in end markets from construction to consumer goods and industrial markets.
In this crisis context, the Group can rely on a solid financial structure and strong liquidity. Most importantly, Imerys benefits from the strong support of its shareholders, who have, to a large extent, opted for the payment of the 2019 dividend in shares, thus contributing to the strength of Imerys’ financial structure which will allow us to seize potential development opportunities as they arise.
First of all, I want to express my gratitude to each and every one of my colleagues for their efforts and achievements during the year. We have shown a great ability to collectively take on the sanitary and operating challenges posed by the crisis, while ensuring the continuity of our activities, especially the supply to our customers. We have managed to complete ongoing projects and to successfully adapt to new ways of working.
Our management team has demonstrated commitment and flexibility. The results speak for themselves: efficient cost management measures led to €131 million gross savings for the year 2020 and the focus set on cash generation translated into a net operating free cash flow of €373 million.
Imerys also demonstrated its engagement and social responsibility through donations to local communities around the world, as well as by providing funding to charities organizations engaged in fighting the pandemic.
What do you expect from the transformation of the Group? Does the Covid-19 crisis change the development prospects of Imerys?
In 2019, the Group embarked on a transformation journey with clear objectives: increasing the focus on customers to better serve their needs, improving efficiency by streamlining the organization, building a more competitive industrial base and leveraging its innovation potential.
The Group has made good progress through the implementation of the Connect & Shape transformation program. It can now rely on strong fundamentals and - at the same time - improved development prospects. The recent bolt-on acquisitions in Turkey, Taiwan and the USA, as well as the capacity expansion announced in synthetic graphite for Lithium-ion batteries, show that we continue to invest for future growth, even in challenging times.
I am convinced that Imerys will emerge from the Covid-19 pandemic stronger and ready to seize opportunities in the long term.
Now that our new customer-focused organization is largely operational and effective, I believe that Imerys is ready to take advantage of the expected recovery in its underlying markets. There is no shortage of opportunities in our business and this new organization gives us more levers. Minerals are a key component in our economies, our homes and our lives: from the calcium carbonates in toothpaste to the kaolin in bathroom tiles, from the graphite in the battery of electrical cars to the diatomite which filters the beverages we drink. Our products and solutions are needed everywhere and greatly contribute to higher living standards.
As part of our business strategy, we will continue to expand our presence in emerging economies and develop our industrial assets with several projects underway to address growing demand in the most promising markets. We also plan to strengthen our innovation capabilities in close collaboration with our customers.
Finally, yet importantly, we will accelerate our Corporate social responsibility (CSR) commitments and initiatives, for which we have already been recognized with an Ecovadis Platinum rating, placing us among the top 1% of companies assessed.
How will sustainable development change Imerys’ strategy?
Corporate social responsibility is an essential and critical topic in today’s world: financial performance can not be dissociated from social and environmental performance. The Board of directors of Imerys plays an important role in overseeing the nature of the CSR commitments of the Group and the actions undertaken by the management to achieve them.
As the world’s leading supplier of mineral-based specialty solutions, Imerys’ technical knowledge and expertise place us in the best position to extract, source and transform minerals responsibly over the long term. Our ambition is simple: we want to unlock the sustainable potential of minerals.
To achieve our CSR commitments, we have launched a comprehensive program called SustainAgility, with clear and measurable objectives aligned with the United Nations Sustainable Development Goals. These targets are embedded in our way of doing business every day and all our people are engaged to drive the program and deliver on it.
In a growing number of applications, minerals help to replace less environmentally friendly materials and give the end products characteristics, such as lightweight, which support energy reduction. We are scaling up our efforts to deliver new solutions to extend the life cycle of our minerals, recognizing both the society and our customers demand to produce better for longer.
We work closely with our local communities and we are determined to play a positive role in the development of local ecosystems and economies in the long-term.
We partner with recognised experts, such as the French Museum of Natural History, to better preserve biodiversity and the environment.
In the global drive to combat climate change, we are committed to act by reducing carbon emissions in our operations by 36%, relative to revenue, by 2030. We are accelerating the pace of transition towards low-carbon energy and cleaner fossil fuels across all our businesses.
To drive the necessary change, we will work even closer with our customers, suppliers and other stakeholders, leading the way towards a more sustainable industry.