2024 Mersen Magazine: Energy to innovate #4

Energy

to innovate

For 130 years, Mersen has been bringing progress to life.

Inside Mersen

2023, A YEAR

OF TRANSFORMATION FOR THE GROUP

Back to the future

A CENTURY OF STEADY

RAMP-UP

In the air

Mersen, leading the way in energy transition markets

2 0 2 4 # 4

The energy transition: a market on the move

CONTENTS

EDITORIAL

"Our financial strength is an asset for meeting the challenges of the environmental transition"

LUC THEMELIN, CEO

In the air

6

8 Mersen poised and ready to take on all technological challenges

10 Upstream through downstream, excellence at every stage

12 Interview:

"The electric vehicle market is being driven by global demand"

Back

to the future

16 1913: Gennevilliers, the first steps of a future giant

18 1990s: an ability to anticipate market change

20 Entering the 21st century: bigger, further and more sustainable

Inside

Mersen

24 A transformation led by growth

28 Mersen on the road to success

30 Mersen, world expert in electrical power and advanced materials for high-tech industries

It's quite unusual to talk about financial results and the environment at the same time. The two are rarely linked in people's minds. But we at Mersen believe they

are. In fact, we believe our financial strength is an asset that will allow us to be a responsible player over the long term, capable of meeting the many challenges of the environmental transition. For many years now, our Group has been positioning itself in sustainable development markets, to the extent that they now account for 56% of our sales. And our new record results in 2023, with €1.2 billion in sales,

	ENERGY TO INNOVATE IS A MAGAZINE PUBLISHED BY MERSEN - Tour Trinity, 1 bis place de La Défense, 92400 Courbevoie (France) - RCS Nanterre B572 060 333 -
	Tel.: [phone] - www.mersen.com - Managing Editor: Luc Themelin - Chief Editor: Véronique Boca - Editorial Committee: Thomas Baumgartner,
	Laurence Lamy, Luc Themelin - Design and production: Avant d'aller dormir sous les étoiles - 119 rue de la Pompe, 75116 Paris - Writing: Le Prompteur -
	Photos: Florence Brochoire, Coll. Mersen, Hiroshi Watanabe/GettyImages, Jorg Greuel/GettyImages, iStock - Graphic designer: studio paipai - Publication: march 2024 -
	OTT Imprimeur, 67310 Wasselonne (France)
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an operating margin before non-recurring items of 11.3% and a sharp rise in operating cash flow, are largely due to

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EDITORIAL

the momentum of these growth markets.

Today, with this milestone reached in 2023, we are on track with our 2027 roadmap, which aims to reach sales

of €1.7 billion.

Exponential growth in demand

As you can read in this issue's feature on the energy transition, the world today is faced with many intersecting and conflicting challenges and issues. From the acceleration of extreme weather events to global tensions over energy

supply, the issues of strategic independence and renewable energy development

are on everyone's mind. At the same time, the continuing growth of the world's population, which is approaching 7 billion, and the rapid development of many countries will create even greater needs.

In other words, we're going to have to produce more energy, but energy that is greener.

And to achieve this, there's only one solution: investment. Investment to help manufacturers,

automakers and energy suppliers maintain their growth and respond to this increase in demand.

And that's where our financial strength is of paramount importance.

Investing for the future Mersen has a long history

in capital expenditure.

For over 130 years, we have been deploying the technical and human resources needed to fulfill our ambitions and stay one step ahead in all our markets. After several major acquisitions over the last decade, particularly in the United States, we continue to invest heavily in expanding our sites and increasing our production capacity in order

And, of course, we invest

in people. Over the next few years, several hundred new employees will join Mersen worldwide.

New backgrounds, new professions, new skills that will enhance our Group and enable us to participate more effectively in the major challenge that is the environmental transition.

So yes, Mersen is proud of its profitability. It's what allows us look to the future with optimism. It gives us the means to attract the best skills and acquire the best equipment. It guarantees that we can offer our employees around the world a working environment that is conducive to their personal

In the air

"For over 130 years,

we have been deploying the technical and human resources needed

to fulfill our ambitions and stay one step ahead in all our markets."

to keep pace with our industry-leading customers. Our medium-term plan includes €300 million in additional investments above our recurring level - a record amount that confirms

our determination to boost our efforts to meet our customers' needs.

development. Lastly, it allows us to adapt, to grow with our customers and to support their development by providing them with the quantities and quality they need for their products. Together, we are ready

to make the environmental transition a reality.

PROGRESS AND THE MERSEN SPIRIT GO TOGETHER WELL. SINCE ITS ORIGINS IN FRANCE IN 1889, THE GROUP HAS FACILITATED CHANGE IN SOCIETY. WHAT'S NEW TODAY AND FOR TOMORROW? SPOTLIGHT ON ENERGY TRANSITION MARKETS.

The energy transition: a market on the move p.6

Mersen poised and ready to take on all technological challenges p.8 Upstream through downstream, excellence at every stage p.10

Interview: "The electric vehicle market is being driven by global demand" p.12

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In the

air MERSEN, LEADING THE WAY IN ENERGY TRANSITION MARKETS

The energy transition: a market on the move

Faced with the threat of global warming, more and more action is being taken to support the energy transition. To meet the COP21 targets, however, some crucial challenges still need to be addressed.

How can we produce more energy while drastically reducing CO2 emissions globally?

This is the problem

that industry manufacturers will need to solve over the next few years in order

to simultaneously address the inexorable rise in the world's population

(10 billion people by 2050) - and the subsequent increase in energy requirements - and the critical need to cut carbon emissions on a global scale. "Contrary to what many people think, the energy transition doesn't necessarily mean producing less energy, but producing and consuming better," says Salvador Lamas, Vice President, Solutions for Power Management.

"It's an underlying trend that requires action on all

sources (wind, solar, hydro). Renewables have been growing at double-digit rates every year: so fast, in fact, that renewable electricity capacity expanded by 50% in 2023,

a trend that is expected to intensify in the coming years. "The trend is global," says Philippe Meunier, Senior Manager Strategic Marketing at Mersen, "and everyone has understood the importance of capturing it, starting with China, which now leads the rollout of renewable capacity, accounting for more than half of global additions each year. Just about everywhere, proactive public policies are being implemented to reduce the share of fossil fuels and increase the use of so-called"clean" energies."

Supporting power grid development

Total worldwide electricity production is expected to rise from

28,000 TW currently to 31,000 TW by 2030 and exceed 35,000 TW by 2035

The share of renewable energy in global production is set

to rise to 42% by 2028, from 29% in 2022

capacity and adapt the use of these intermittent energies in order to integrate them into the overall energy mix. As Pierric Gueguen, VP Global Strategic Marketing at Mersen, points out,

"If renewable energies are to replace fossil fuels in the long term, they will have to be available when and where they are needed, despite their intermittent nature, including in isolated areas with little or no supply from the grid." The development of power grids and the building of high-voltagedirect current (HVDC) lines to transmit electricity over long distances will be critical to meeting this challenge.

fronts - from production to consumption, including energy conversion, transmission and storage - and which therefore brings together a whole range of technologies and stakeholders, through to the end consumer, in pursuit of a single, common goal."

Double-digit growth The global energy crisis in 2022 and the rising number of extreme weather events have underscored the need to increase the production of energy from renewable

The complexity of the energy transition lies in the fact that it affects the entire ecosystem. A case in point is the fast- growing electric vehicle industry, which requires both cutting-edge technology and appropriate infrastructure, while at the same time striving to keep costs down to allow as many people as possible to benefit from the EV revolution. In addition to improving production, it's therefore also necessary to minimize losses, improve transmission, increase storage

"In 2023, renewable electricity capacity expanded by 50%."

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In the

air MERSEN, LEADING THE WAY IN ENERGY TRANSITION MARKETS

Mersen poised and ready to take on all technological challenges

Hydropower

Regular maintenance to ensure reliability

Conversion and transmission

Protecting systems and minimizing losses

Working for over 15 years alongside manufacturers who are making the energy transition a reality, Mersen has developed unique expertise for every need.

Solar power

Striving for efficiency

Hydropower accounted	Mersen assists industry
for 37% of total renewable	operators throughout the
electricity generation at the	life cycle of the power
end of 2022 and supplied	up	plants by providing
to 75% of demand in some	them with solutions
countries like Brazil. While	dedicated to hydroelectric
hydro is undoubtedly the	generators (brushes,
most sustainable renewable	brushholders, slip-ring
energy source with facilities	assemblies) and services
that can operate for up to	to optimize facility
50 or even 100 years, dams	performance.
require sophisticated technical
solutions adapted to their
specific operating conditions
(humidity, oil vapors, dust).

Operators require conversion and transmission systems that are increasingly powerful and efficient in order

to distribute energy at the point of consumption and minimize losses. HVDC*

is a common technology that uses overhead transmission lines or submarine cables to transmit power from various sources (solar, wind) over long distances. The systems use converters to transform

alternating current into direct current and vice versa.

Mersen's products help to optimize the efficiency of the converters (interconnection busbars, cooling devices, power capacitors) and ensure the electrical protection of installations (fuses).

* High-voltage direct current.

With production capacity reaching nearly 450 GW in 2023 and an annual growth rate of 15%-20%, the solar market continues to expand, with China accounting for more than 85% of overall manufacturing capacity. The challenge facing the

new technologies aimed at improving solar cell efficiency.

Mersen has promoted the emergence of this market with high-end graphite and insulation felts for producing silicon ingots,

Storage

Making energy available when you need it

Wind power

The race for bigger and better

industry right now is to continue developing

the raw material of solar cells. It leverages proven expertise in delivering high value-added solutions, and also offers a host of products for the electrical protection of solar panels.

For intermittent renewable sources like solar and wind, storage solutions are critical to ensure that the energy is available at all times.

The industry is focusing on lithium-ion batteries, which have the advantage of being

Mersen's solutions provide electrical protection

of storage batteries (high- speed fuses) and improve connections between the cells or the modules (busbars).

Wind power production is steadily increasing, thanks to the boom in onshore and offshore wind capacity. The past few years have seen a push for ever-larger turbines and farms, but the market has now entered

a phase of technological stabilization, which should be accompanied by an improvement in power station performance.

Mersen supplies power generation and distribution products (brushes, brush-holders,slip-ring assemblies, signal transfer systems), as well as products for the protection of equipment (fuses, fusegears), and is recognized for its ability to provide innovative solutions to the wind power industry.

3,372 GW

of energy generated by renewable energies in 2022

both compact and safe, in addition to being able to efficiently manage peaks in energy demand.

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In the

air MERSEN, LEADING THE WAY IN ENERGY TRANSITION MARKETS

Upstream through downstream, excellence at every stage

Whether it's helping to boost renewable production capacity, minimizing losses during conversion and transmission, protecting equipment or improving storage capacity,

over the years Mersen has developed unique expertise for industrial companies actively involved in the energy transition.

RENEWABLEGENERATION ENERGY

ELECTRICAL PROTECTION	CONNECTION	POWER CONVERSION
• Fuses and fusegear	• Busbars	• Cooling
• Overvoltage protection		• High-speed fuses
• Overcurrent protection		• Capacitors
• Smart switches		• Busbars

CONVERSION

ENERGYTRANSMISSION

AND

STORAGE

SOLUTIONS FOR	POWER TRANSMISSION
HIGH-TEMPERATURE	• Motor brushes and brush-holders
MANUFACTURING PROCESSES
• Pantograph strips
• Graphite furnace linings	• Signal and power transfer
• Machined graphite parts	• Slip ring assemblies

• Graphite and carbon components
• Graphite susceptors
• Furnace insulation

ENERGY	INFRASTRUCTURETRANSPORT
	AND

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In the

air MERSEN, LEADING THE WAY IN ENERGY TRANSITION MARKETS

INTERVIEW

"The electric vehicle market is being driven by global demand"

Mersen's strength lies in its ability to supply products with consistent quality over several years, in the quantities needed by our customers."

OLIVIER RAYMOND, VICE PRESIDENT, GLOBAL SALES AND BUSINESS DEVELOPMENT, GRAPHITE SPECIALTIES

In just a few years, Mersen has emerged as a key partner to electric vehicle manufacturer suppliers, both upstream and downstream of the value chain. Philippe Griaud,

Vice President, Electric

Vehicles Business, and

Olivier Raymond, Vice

President, Global Sales

and Business Development,

Graphite Specialties,

discuss the reasons for this success and Mersen's growth prospects.

Is the electric revolution fully underway in the automotive sector?

Philippe Griaud: The shift from internal combustion engines to electric vehicles is driving a transformation, the likes of which the industry hasn't seen for decades. Under pressure from changing regulations, the major automakers have all joined the fray over the last few years, resulting in strong growth. This growth is expected to continue for quite some time, with global sales projected to rise from 14% today (20% in Europe) to 40% or 45% in 2030.

But beyond all the media hype and the windfall effect, the real question is how fast will the transition go. Olivier Raymond: It's also important to distinguish between all-electric vehicles, hybrids and plug-in hybrids that can be charged using a wall outlet and also run in full electric mode. The market isn't yet fully mature and is moving forward in fits and starts, which means that we need to anticipate developments in the short and medium term.

Are all-electric vehicles the future for Mersen? OR: If our aim is to move towards the model with the lowest carbon emissions, hybrid vehicles can only be transitional technologies. So, yes, in the long term, all-electricwill become the norm. But there are still some challenges to overcome, such as improving vehicle performance - and especially battery performance - making the vehicles more widely available and developing adequate charging infrastructure.

PG: It's a market where development depends on a wide range of stakeholders, not only manufacturers and energy suppliers, but also charging station installers and local authorities. For the shift to take place, the entire ecosystem needs to be up and running.

One of Mersen's distinctive features is that it's present both upstream and downstream of the value chain.

OR: Absolutely. Upstream, we supply isostatic graphite equipment and purified carbon insulation felts for the furnaces used in manufacturing silicon carbide (SiC) wafers.

These wafers serve as a base for the active elements contained in power semiconductors, which are used in converters that transform alternating current into direct current and vice versa. Our solutions are essential for the manufacture of SiC crystals at very high temperatures (2,400°C).

PG: Downstream, we have two standout product lines, particularly busbars, which are used in batteries and can be found in various electric vehicle modules. We have also developed a specific range of fuses for 400V and 800V batteries that appeal to many customers, including automakers, battery producers and power interconnector manufacturers.

What do customers want from Mersen?

OR: Our unique expertise, built up throughout our history. For decades we have been producing isostatic graphite

that is among the best in the world and helping manufacturers

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"The revolution is underway,

but the real question is how fast will

the transition go."

PHILIPPE GRIAUD, VICE PRESIDENT, ELECTRIC VEHICLES BUSINESS

In the

air MERSEN, LEADING THE WAY IN ENERGY TRANSITION MARKETS

to produce wafers. These are highly complex processes that are difficult to control, where having products with lot-to-lot stability over several years is crucial so that they can be used almost in "plug and play" fashion. Tech leaders like Wolfspeed, onsemi, SiCrystal and SICC trust us because we can offer them this quality and stability, in addition to providing them with the quantities they need.

PG: Another of our strengths is being able to deliver tailor- made solutions. If we take busbars, for example, each model is co-developed with the customer in order to produce a customized battery module. That's one of the reasons why we were recently chosen by ACC, the joint venture between Stellantis, TotalEnergies/Saft and Mercedes-Benz, to support vehicle development at Peugeot, DS, Opel and Fiat. The goal is to deliver more than 10 million busbars over a seven-year period, with production starting in the middle of this year.

You address two rather different segments: how can you create synergies between the two? OR: Synergies are less about products and technologies

than about market vision and development. We're working on two branches of the same sector that aren't disconnected:

if manufacturers make certain technical or technological choices, there are bound to be consequences further up the chain.

So having a Mersen business unit whose core business is electric vehicles and with which we discuss on a regular basis helps us

to anticipate change and to adapt. Agility has always been one

of our assets.

PG: The automotive sector is extremely demanding and efforts to create solutions aligned with customer expectations contribute to the development of Mersen's technical expertise. For example, we have developed new high-speed manufacturing processes for busbars that have enabled us to divide production times by ten, while at the same time improving product robustness.

Back

to FROM FRENCH MANUFACTURER the OF CARBON ARC RODS TO GLOBAL

EXPERT IN ELECTRICAL POWER AND ADVANCED MATERIALS FOR HIGH-TECH INDUSTRIES, MERSEN HAS RISEN

TO PROMINENCE IN A GRADUAL, CONTROLLED AND CONFIDENT MANNER

futureTHANKS TO ITS STRATEGIC CHOICES AND INVESTMENTS.

1913: Gennevilliers, the first steps of a future giant p.16

1990s: an ability to anticipate market change p.18

Entering the 21st century: bigger, further and more sustainable p.20

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Back to the future

1913:

Gennevilliers, the first steps of a future giant

The crown jewel of the Group's innovation process, the Gennevilliers site is constantly changing to support research efforts and new production lines.

Top view of the construction project at the Le Carbone manufacturing site in Gennevilliers and a watercolor of one of the buildings.

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Aerial view of the Le Carbone Lorraine plant in Gennevilliers, 1950s-1960s.

1950

1913

1970

The Le Carbone Lorraine plant in Gennevilliers, 1948.

	Continuous baking furnaces,
		Gennevilliers, 1970.
A few years after it was created,	furnaces, making it one of the	Mersen's manufacturing base,	Gennevilliers site will continue
Le Carbone chose a seven-	world's best equipped plants	where scores of innovative	to drive the Group's growth
hectare site in Gennevilliers	for manufacturing carbon	products are designed.	in the years ahead, with new
(France) as the location for	arc rods. Over time, the site	Henceforth specialized	production lines dedicated
its new plant. The company	has expanded and evolved	in graphite solutions for	to the manufacture of silicon
invested in brand-new	to become a key element of	high-tech applications, the	carbide (p-SiC®) substrates.

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Back to the future

1990s:

an ability to anticipate market change

In the 80s and early 90s, Mersen decided to invest in several sites in Europe and the United States to better assist local manufacturers in leading-edge industries.

1985

SAINT-BONNET-DE-

MURE (FRANCE)

Acquired in 1985, the Saint-Bonnet-de-Mure site has enabled Mersen to become

a world leader in electrical protection. Lying at the heart of an agreement between Mersen and ACC - the joint venture between Stellantis, Mercedes-Benz and TotalEnergies - the site continues to occupy a central position. Over the next few years, the Group will invest in new busbar production lines for the "new generation" batteries that will equip Europe's future electric vehicles.

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BAY CITY (USA)

Acquired in 1990, the Bay City plant engages in graphite machining and purification activities and silicon carbide (SiC) coating capabilities

for the semiconductor industry. These materials are highly acclaimed by participants

in the energy transition, and the Group has decided to expand the site to meet demand from major players like Wolfspeed.

1990

1991

ST MARYS (USA)

In 1991, Mersen acquired the Stackpole plant in

St Marys, where it decided to transfer its manufacturing operations of isostatic graphite for high temperatures.

Today, Mersen continues to invest in St Marys to further enhance its production capacity.

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