Materis

76% Materis
Specialty chemicals for construction

MATERIS DRIVES GROWTH THROUGH INNOVATION

Why did we invest in Materis?

Materis is one of the world leaders in specialty materials for construction, with leadership positions in aluminates, admixtures, mortars and paints. Materis has high barriers to entry born of global coverage (aluminates), high-value-added products and close relationships with its clients (admixtures, mortars and paints), highend brands and an integrated distribution network with more than 360 sales outlets in Europe (paints). With 28% of its net sales in high-growth markets (Asia, Latin America and the Mediterranean rim) and more than 50% in renovation markets, Materis has demonstrated its qualities of resistance and offers significant growth prospects.

 

What were the highlights of 2010?

After the major economic slowdown in 2009, Materis achieved positive sales growth in 2010, up 8.9% to €1,855 million. Throughout the year the group developed steadily through organic growth, which was 4.9% over all of 2010. Several factors contributed to this performance: robust growth in both emerging and mature markets; an upswing in certain business segments such as steel, continuing healthy sales linked to renovation projects; and ongoing efforts to innovate,
which led to price increases and an improved product range. Materis also pursued its external growth policy, notably with the acquisition of a.b.e., a South African admixture company. For 2010, operating income came in at €191 million, up 3.3%, representing a margin of 10.3% (versus 10.9% in 2009). Higher raw material costs were successfully absorbed by raising prices, developing new formulations and optimizing procurement. Over the same period, Materis also raised capital expenditure to support growth, which temporarily impacted its margin. Materis’ financial debt rose slightly to €1,803 million as a result of the acquisitions made in 2010

What is the outlook for development?

In a global economy showing varying stages of recovery, Materis intends to pursue its biggest source of development—organic growth—over the next five years. Sales are expected to improve by over 5% in 2011. The Group will continue to focus on developing innovative products
and concepts, which will be an important growth driver in the years to come. The successful financial restructuring completed in 2009 also enhanced the group’s financial flexibility, enabling it to resume external growth operations and expand its product range and geographic
coverage. In 2011, Materis will take measures to gradually improve its operating margin as a percentage of sales by boosting sales while also optimizing related costs. In the medium term, the group will continue to be driven by strong structural demand for new housing (due to an increase in the number of homeowners, favorable demographics and housing shortages in mature and emerging markets), steady growth in housing requiring renovation and new energy efficiency standards.