Mersen : Letter to shareholders – September 2021

°45

September 2021

L E T T E R TO S H A R E H O L D E R S

MARKETNEWSFIRST-HALF 2021 RESULTS FINANCIAL CALENDAR

Electric vehicles:			Excellent
Contract, Acquisition,	Turnover,
a pomising market		Innovation	results		result, AGM…
PAGE 2	PAGE 3	PAGE 4	PAGE 4

I would like to thank all our

teams for what they have achieved in the face

of such a challenging situation over the past 18 months.

Luc Themelin,

Chief Executive Officer

MESSAGE FROM THE CEO
VERY GOOD STRATEGIC
POSITIONING
A
t the end of July we	In view of the very brisk
published excellent	customer demand that we have
results for the first	experienced since the beginning
half of 2021.	of the year and confident in our
Our remarkable	solid positioning in high-growth
performance once again	markets such as solar power,
illustrates our very good strategic	semiconductors and electric
positioning, with strong growth	vehicles, in early July we raised
in sustainable development	our full-year 2021 targets for
markets, which now represent	sales and operating margin
56% of our sales.	before non-recurring items.
This momentum, combined	We now expect full year sales to
with our heightened operational	grow organically by 6% to 8%
efficiency, also drove a sharp	compared to 2020 and an
increase in our operating margin	operating margin before
before non-recurring items.	non-recurring items of between
I would like to thank all our teams	9.2% and 9.6% of sales.
for what they have achieved in
the face of such a challenging
situation over the past 18 months.

FIRST-HALF 2021 KEY FIGURES

million in sales

of sales linked to sustainable development markets

operating margin before non-recurring items

FOCUS

Find out more: for all the latest news, visit www.mersen.com

CORPORATE

MERSEN LAUNCHES ITS NEW EMPLOYER BRAND

Find out more about

MERSEN, AUTHENTIQUEMENT INDUSTRIEL ET HUMAIN.

Chez Mersen, l'esprit d'équipe et la bienveillance sont une réalité au quotidien.

As a springboard for positioning Mersen as a benchmark employer worldwide and attracting talent, Mersen's new employer brand has a strong identity that reflects who we are and the experiences of our employees. It is embodied by the slogan "Mersen, a genuinely industrial & human culture" and revolves around the proposition to «Be part of the changing world», expressed through three pillars: «Be part of the progress», «Be part of the challenge», and «Be part of the family».

How to contact us

WEBSITE	PHONE
www.mersen.com	[phone]
E-MAIL	LINKEDIN
[e-mail]	@company/mersen

the campaign through messages and videos from employees around the

world, on the new mersen.com career pages and on

social media:

https://www.mersen.com/ careers/working-mersen

FACEBOOK

Mersen

YOUTUBE

MersenGroup

2 MARKETS

ELECTRIC VEHICLES: A PROMISING MARKET FOR MERSEN

In its infancy just a few years ago, the electric vehicle market is now taking off. Its growth is enjoying traction from technological innovations created by specialists like Mersen.

With 3.1 million units sold over the year, the electric vehicle market (all-electric or plug-in hybrid) grew by 50% in 2020. And its momentum doesn't look likely to stop anytime soon, since sales are predicted to reach up to 35 million units - roughly 30% of the automotive market - by 2030.

KEY FIGURES

FOR THE ELECTRIC VEHICLE MARKET

increase in sales in 2020

MILLION

vehicles sold in 2020

But the numerous technical challenges have forced manufacturers to take things step by step before embarking on mass production. More widespread adoption has been held back by electric vehicles' short ranges and the lack of charging infrastructure, plus, more generally, battery safety issues. Mersen has been working to resolve all these issues in recent years. The Group works at

various points along the production chain, far upstream for the manufacture of the silicon carbide (SiC) chips required for optimized battery operation, and by supplying fuses, capacitors and busbars for battery power management and electrical safety.

Mersen is at the forefront of this market's sustained growth, meaning that future prospects are very bright indeed!

vehicles by 2030 (EV and pHEV)

(estimate)

BATTERY MODULE

ELECTRICAL PROTECTION

OF VEHICLES

Collaboration

Fuse - Monitoring Busbar

with Autoliv

Main fuse - Hybrid fuse

- Auxiliary fuse

In April 2021,

Mersen and

Autoliv, a Swedish

manufacturer

of safety

equipment for

the automotive

industry,

announced a joint

collaboration

to manufacture

high-voltage

disconnect

devices for

electric vehicles

INVERTER

RAPID CHARGING

STATION 50KW-100KW

(hybrid fuses).

Capacitors - Busbar

SPD - Fuse - Busbar

Mersen components by function

NEWS 3

RXHK BRINGS ELECTRICITY

TO CHINA

WITH

MERSEN

High voltage direct current (HVDC) electric power transmission systems are used for the bulk transmission of electrical power over long distances.

Deployed by the RXHK Group to supply electricity to the Greater Bay Area in China, it required almost 30,000 Mersen cooling plates to protect the power modules.

The new converter stations will be the largest ever built in the world and will ensure a secure supply to the Greater Guandong-HongKong-Macao Bay Area.

Electricity converter station in China

MERSEN JOINS

A EUROPEAN

SEMICONDUCTOR

MERSEN STRENGTHENS MANUFACTURING EFFICIENCY ON EUROPE'S FUSE MARKET

NETWORK

FOR ELECTRIC

VEHICLES

Silicon carbide (SiC) power electronics are much more energy efficient

than systems that use silicon-based semiconductors.

The EU-funded Transform consortium aims to provide European market players with a reliable source of SiC components and systems based on a wholly European value chain covering needs ranging from substrates to energy converters.

During the first half of 2021, Mersen acquired the entire share capital of Hungary-based Fusetech, which it had held jointly with

the Hager Group since 2007.

This transaction helps strengthen the Group's manufacturing efficiency on Europe's electric fuse market, as well as

integrating a high-performance site for the manufacture of some of its future product ranges in accordance with European standards (IEC).

With a headcount of around 300, the plant produces cost-competitive industrial fuses for the European market.

Mersen is bringing its expertise in high- performance materials to the consortium to help improve SiC technologies and develop silicon carbide substrates for increasingly high-performance power semiconductors. The main target markets are power conversion for electric vehicles, renewable energies and manufacturing.

Fuse manufacturing workshop

5 FIRST- HALF 2021 RESULTS

First-half 2021 results

EXCELLENT

Net income for the period

rose by more than 50%. The Group has also a solid financial structure

Thomas Baumgartner,

Chief Financial Officer

Mersen generated consolidated sales of €451 million in the first six months of 2021, up 7% on an organic basis compared with first-half

2020. Sales were lifted by sustainable development markets, which advanced 11%, driven by electronics, renewable energies and electric vehicles. In the Group's other markets, growth was more modest, coming in at under 4%.

Operating income before non-recurring items came to €43.3 million, resulting in an operating margin before non-recurring items of 9.6% (a 150-basis-point increase compared with first-half 2020). The year-on-year increase was largely due to higher volumes and the effects of the adaptation plans announced in October 2020.

EBITDA stood at €71.0 million and represented 15.7% of sales compared with 14.4% in the same period of 2020.

Net income for the period rose by more than 50% to €27.1 million from €17.8 million in the first half of 2020.

Once again, Mersen's cash flow generation was high in the first half of 2021, with operating activities generating more than €46 million in cash, making it possible to finance capital expenditure of €28 million during the period. Over 70% of this total concerned the Advanced Materials segment, notably specific expansion projects launched by the Group, such as the start-up of the Columbia site in the United States and the increase in manufacturing capacity for the solar power and semiconductor markets.

At June 30, 2021, the Group's net debt stood at €184 million, versus €180 million at December 31, 2020. Following a US private placement

(USPP) set up in May 2021 (the funds of which will be made available in October 2021), the average maturity of the Group's debt will be extended to six years. The Group has a solid financial structure, with €210 million in undrawn credit facilities and €81 million in available cash at end-June 2021.

Provisional financial calendar

• Third-quarter2021 sales: October 27, 2021
  after market close
• Full-year2021 sales: January 27, 2022 after market close
• Full-year2021 results: March 16, 2022 before market opening
• First-quarter2022 sales: April 27, 2022
  after market close
• Annual General Meeting: May 19, 2022
• First-half2022 results: July 29, 2022 before market opening
• Third-quarter2022 sales: October 26, 2022
  after market close

NEW

ENERGY TO INNOVATE: MERSEN'S NEW MAGAZINE

For 130 years, Mersen has been bringing progress to life. In May, Mersen launched "Energy to Innovate", a new magazine dedicated to the innovations that have shaped the Group's history.

The first issue, published in digital format on the Group's website, features Mersen's latest developments in electric vehicles, some of the key events that have revolutionized the industry in its time, and the highlights of 2020.

You can also obtain a printed copy by sending your request to Mersen's Shareholder Services at: [e-mail]

Mersen - letter to shareholders Managing Editor: Véronique Boca

Photo credits: Istock - Mersen I Portraits: Caroline Andrieu