Mersen : 2023 URD - Universal Registration Document

2 02 3 U R D

Universal Registration Document

1

MERSEN

Universal Registration Document

		page
1	Group Profile	3
2	Corporate governance report	27
3	Management Report	71
4	Non-financial information	99
	Information about the Company,
5	the share capital and share ownership	173
6	Consolidated financial statements	189
7	Parent company financial statements	243
8	Additional information & glossaries	267

This is a translation into English for convenience purposes only of the (universal) registration document of the Company issued in French and it is available on Mersen website www.mersen.com

Mersen is a global expert in electrical power and advanced materials

for high-tech industries.

With more than 50 industrial sites and 18 R&D centers in 33 countries around the world, Mersen develops custom-built solutions and delivers key products for clients in order to meet the new technological challenges shaping tomorrow's world.

For over 130 years, Mersen has focused tirelessly on innovation to accompany its clients and meet their needs.

Be it in wind power, solar power, electronics, electric vehicles, aeronautics, space or countless other sectors, wherever technology is progressing, you will always find a bit of Mersen.

GROUP PROFILE

3

04

INTRODUCTION

04 • MESSAGE FROM LUC THEMELIN

06	20
	PROFILE		AMBITIONS
06	• MERSEN IN A NUTSHELL		20 • FOUR PILLARS
	OF MEDIUM-TERM
		& KEY FIGURES
			GROWTH
08	• HISTORIC DATES
	22 • MEDIUM-TERM
	10 • TRENDS AND OPPORTUNITIES
		STRATEGIC PLAN
	12• BUSINESS MODEL
14	• OUR EXPERTISE
16	• OUR SOLUTIONS
		BY MARKET
	18 • OUR STRENGTHS

24

GOVERNANCE

26

SHARE OWNERSHIP & TRADING

MERSEN GROUP PROFILE 2023

4

MERSEN GROUP PROFILE 2023

INTRODUCTION MESSAGE FROM LUC THEMELIN

MESSAGE

FROM LUC THEMELIN CHIEF EXECUTIVE OFFICER OF MERSEN

2023: a turning point for Mersen.

Luc Themelin, 63, has been Chief Executive Officer of Mersen since May 11, 2016, after serving as Chairman of the Management Board from August 2011 to May 2016.

He also sits on the Group's Board of Directors. He holds a PhD

in ceramic materials science, and initially joined the Group in 1993 as an R&D engineer.

2023 marked a new turning point for Mersen with the presentation of its 2027 strategic roadmap. This is a major change in dimension for the Group, and attests to our strong positioning in the energy transition markets. We are present in renewable energy, electricity transmission and power conversion in general, with SiC semiconductors improving efficiency, and, of course, the boom in electric vehicles. The announcement of our roadmap was accompanied by a major investment plan to adapt our production base and rapidly increase our production capacity of materials and components for the electric vehicle market. Moreover, in May 2023, we successfully completed a €100 million capital increase with a view to maintaining our financial and strategic flexibility and consolidating our very solid financial structure.

Lastly, in early 2024, we added a CSR component to our roadmap to align our objectives with the same 2027 timeframe.

We achieved excellent results in 2023, with sales of €1.2 billion for organic growth of 13%, far exceeding initial forecasts. Sustainable development markets accounted for 56% of Group sales, with particularly strong growth in sales of SiC semiconductors and electric vehicles. Overall volume growth combined with good pricing power enabled us to achieve a sharp year-on-year increase in operating income before non-recurring items, taking into account the costs required to position ourselves in the electric vehicle market and to develop the new p-SiC technology for power semiconductors, as well as costs of ramping up production at the Columbia plant in the United States.

+13%

ORGANIC SALES

GROWTH IN 2023

COMPARED TO 2022

26%

OF ENGINEERS

AND MANAGERS

ARE WOMEN

5

MERSEN GROUP PROFILE 2023

Major new contracts with customers in the SiC semiconductor industry drove a significant increase in advanced payments, which led to very strong net cash flow from operating activities. Meanwhile, in line with our roadmap, we have significantly increased our capital expenditure, particularly at our Advanced Materials sites in the United States.

Our non-financial performance in 2023 was equally remarkable, with a particularly noteworthy 26% reduction in carbon emissions compared with 2022. On top of that, the proportion of women in engineering and managerial positions rose to more than 26%, while no less than 75% of our sales were EU Green Taxonomy eligible.

In light of this excellent performance, the Board of Directors will ask shareholders at the Annual General Meeting to approve a cash dividend of €1.25 for 2023, in line with the Group's policy.

In 2024, we will continue to implement our strategic plan with care and enthusiasm, bringing all our teams on board. I strongly believe that the year ahead holds further development for Mersen and will see even more value created for all our stakeholders.

Luc Themelin

In 2024,

we will continue to implement our strategic plan.

6

MERSEN GROUP PROFILE 2023

PROFILE MERSEN IN A NUTSHELL & KEY FIGURES

MERSEN IN A NUTSHELL & KEY FIGURES FOR 2023

A global expert in electrical power and advanced materials,

Mersen partners companies around the world that drive today's industry

and shape tomorrow's society.

A committed partner and core technology provider.

OUR SOLUTIONS

The Group develops tailor-made	• High-temperature graphite solutions
solutions and supplies key products	• High-temperature insulation
across ten main product lines to meet	• Overcurrent protection
new technological challenges.	• Overvoltage protection
	• Power conversion
	• Motor brushes
	• Signal transfer
	• Power transfer
	• Anti-corrosion equipment
	• Advanced optics

€1,211M	56%
IN SALES		FOR SUSTAINABLE
		DEVELOPMENT MARKETS.

EARNINGS

€203M

EBITDA BEFORE NON-RECURRING

ITEMS

€137M

OPERATING INCOME

BEFORE NON-RECURRING ITEMS

€82M

NET INCOME ATTRIBUTABLE TO MERSEN SHAREHOLDERS

DIVIDEND

PER SHARE

€1.25

Subject to shareholder approval at the Annual General Meeting

FINANCIAL STRUCTURE

13.0%

RETURN ON CAPITAL EMPLOYED

1.09

LEVERAGE

OUR COMMITMENTS

MERSEN

WORLDWIDE

7

MERSEN GROUP PROFILE 2023

7,500 33

EMPLOYEESCOUNTRIES

NORTH AMERICAEUROPE

33%	37%
EMPLOYEES	EMPLOYEES
14	20
MANUFACTURING SITES	MANUFACTURING SITES
38%	33%
OF SALES	OF SALES

REST OF THE

WORLD

7%

EMPLOYEES

4

MANUFACTURING SITES

3%

51

SITES WORLDWIDE

(of which 18 have more than 125 employees)

ASIA-PACIFIC

23%

EMPLOYEES

13

MANUFACTURING SITES

26%

OF SALES

OF SALES

8

MERSEN GROUP PROFILE 2023

PROFILE HISTORIC DATES

HISTORIC

DATES

The revolution in electricity, where it all began

Mersen's roots lay in a technology that was about to play a decisive role in the coming electrical revolution: carbon arc rods. These would illuminate public spaces and large department stores from the 1870s.

Following on from lighting and arc lamps, electric motors gave the Group's founders opportunities to develop on an industrial scale. Electricity was being produced by dynamos in which the current was transmitted by sliding contacts

in the form of small brushes made of carbon, another major market that would underpin Mersen's growth.

In addition, electrical networks also required distribution, control and protection equipment: Mersen rapidly became a leader in the electrical appliances industry.

THE FOUNDATIONS

The adventure began with two entrepreneurs, Maurice Lacombe and Fabius Henrion. Their companies - Le Carbone and the Compagnie Lorraine de Charbons - merged in 1937 to give rise to the Carbone Lorraine group. These two entrepreneurs are the true founders of Mersen.

1891 Establishment of the Fabius Henrion factory, producing electric motors, dynamos and lamps

1892 Creation of Le Carbone in Paris, specializing in the manufacture of brushes for motors

1897 Opening of the first foreign subsidiary, in Germany

1937 Foundation of Carbone Lorraine

NEW MOMENTUM

When France was liberated in 1945, Carbone Lorraine recovered most of its plants in working order. However, the Group emerged weakened from the global conflict.

It was now faced with a major challenge: modernize or disappear. Under the leadership

of its new Chairman, Charles Malégarie, the Group rallied to return to the industrial presence it had enjoyed in the 1930s.

1950-1985 Resumption of worldwide distribution of products from Ferraz, a Lyon-based manufacturer of industrial fuses

1961 Construction of the Amiens plant to manufacture brushes for electric motors