Imerys Announces 1st Half 2009 Results

    PARIS, July 30 /PRNewswire-FirstCall/ --

    - Ongoing slackness of the Group's markets, leading to a - 23%
      decrease in sales

    - Goal of an operating margin close to 10% by start of 2010
      maintained

    - Very substantial generation of current free cash flow:
      EUR183 million

    - Acceleration in reduction of fixed costs : - 13% in 1st half

    - Significant improvement in financial structure, resulting
      from the rights issue and the drastic control of working capital
      and investments:

        - Net debt/EBITDA ratio down to 2.5x (2.7x at year-end 2008)

        - Net debt/equity ratio down to 63.5% (101.3% at year-end
          2008)

On Wednesday, July 29, 2009, the Board of Directors of Imerys examined the Group's financial statements for the 1st half of 2009, as presented by Chief Executive Officer, Gérard Buffière.

    Consolidated results          1st half 1st half    % current change
    (EUR millions)                 2009     2008(4)
    Sales                          1 374.0  1 774.1          - 22.6%
    Current operating                110.0    241.5          - 54.4%
     income(1)
                 Operating margin      8.0%    13.6%
    Net income from current
     operations, Group's share(2)     46.7    159.8          - 70.8%
    Net income, Group's share         11.7    144.4             n.s.

    Financing
    Current operating cash flow      172.6    256.4          - 32.7%
    Booked capital expenditure       (56.9)  (114.1)         - 50.2%
    Net financial debt             1 148.2  1 616.1          - 29.0%

    Data per share
    Net income from current
     operations, Group's
     share(2)(3)(4)                EUR0.68  EUR2.37          - 71.3%


    (1) Operating income before other operating revenue and expenses,
        but including the share in income of associates.

    (2) Group's share of net income, before other operating revenue
        and expenses, net.

    (3) The weighted average number of outstanding shares was
        68,688,790 in 1st half 2009 vs. 67,496,827 in 1st half 2008
        (reprocessed following the rights issue completed as on June 2,
        2009).

    (4) First half 2008 results were reprocessed following the two
        presentation changes applied as of January 1st, 2009, details of
        which are given in appendix.

Gérard Buffière commented, "The second quarter showed no improvement in the economic situation created by the unprecedented crisis the global economy is going through. We aggressively continued the drastic reduction of our costs and made generating free cash flow our priority. Our results for the first half of 2009 reflect this. I thank our shareholders for showing their confidence in Imerys by subscribing extensively to the rights issue completed on June 2. Our financial structure is even stronger as a result. We cannot see any tangible signs of improvement on our markets and great uncertainty hangs over activity levels for the coming quarters. We are therefore keeping up the discipline and management efforts that alone can guarantee achievement of our goal of an operating margin close to 10 % for the start of next year."

ONGOING VERY DETERIORATED ECONOMIC ENVIRONMENT

The markets served by the Group in Europe and North America have not posted any upturn since their collapse in the 4th quarter of 2008. Only some emerging markets recovered slightly in the 2nd quarter 2009.

Output decreases remain substantial, especially in industrial equipment-related markets. Steel production in Europe and North America fell approximately - 45% in the 1st half 2009 compared with the same period in 2008, but with a very slight improvement at the very end of the period.

In the construction sector in France, single-family housing starts were down - 23%(e) in the 1st half 2009. The upturn observed in housing sales in recent months was not enough to offset the ongoing decrease. New housing starts in the United States are leveling out, but at an unprecedented low level.

Global production of printing and writing paper slumped heavily in mature economies, with further paper mill closures in Europe and North America in response to slack demand.

Only some consumer-related markets such as filtration showed more resilience.

    FASTER PACE OF DESTOCKING AND COST SAVINGS

    Over the 1st half of 2009, the plans implemented led to:

    - Substantial inventory reduction of - EUR129.4 million, compared with
      - EUR42 million for the 1st quarter;

    - Fixed cost cuts: - EUR85.6 million, made notably possible by the low
      level of production;

    - Halving of booked capital expenditure at EUR56.9 million (compared to
      EUR114.1 million in the 1st half 2008).

These measures allowed to limit the decrease of current operating income at - 54.4% (-57.2 % at comparable Group structure and exchange rates), as a result of an heavily negative impact of volumes, decreasing - 29.2%.

OUTLOOK

The Group does not to date see tangible signs of a lasting upturn. Fixed cost and overhead reduction programs are being maintained, while cash flows generation remains the priority.

Continuation of these actions enable the Group to maintain the goal announced on April 29, 2009 to achieve an operating margin close to 10% by the start of 2010.

    DETAILED COMMENTARY ON THE GROUP'S RESULTS

    SALES


                   Sales   Change in  Comparable   Of which   Of which
                             sales     change in    volume   price/mix
                   (EUR     (% vs.      sales(5)    effect     effect
                 millions) previous     (% vs.
                             year)     previous
                                         year)

    1st quarter
     2009(6)       694.3   - 21.3%     - 23.8%     - 28.2%    + 4.4%
    2nd quarter
     2009(6)       679.7   - 23.8%     - 26.0%     - 30.2%    + 4.2%
    1st half
     2009        1 374.0   - 22.6%     - 24.9%     - 29.2%    + 4.3%


    - Very negative impact of volumes on sales
    - Firm price/mix component across all business groups

Sales for the 1st half of 2009 totaled EUR1,374.0 million (- 22.6% compared with 1st half 2008).

    This change takes into account:
    - The positive effect of exchange rates for + EUR37.6 million, mainly
    reflecting the US dollar's appreciation against the euro;
    - Group structure impact(7) of + EUR4.4 million.

The decrease in sales volumes (- 29.2%) is intensified by the ongoing inventory reduction in many value chains to which the Group's products contribute.

    CURRENT OPERATING INCOME(6)(8)(9)

    (EUR millions)        2009     2008      % Change    % Comparable
                                                           change(5)
    1st quarter           44.4    116.9       - 62.0%      - 66.2%
    Operating margin      6.4%    13.3%
    2nd quarter           65.6    124.6       - 47.3%      - 48.8%
    Operating margin      9.6%    13.9%
    1st half              110.0   241.5       - 54.4%      - 57.2%
    Operating margin      8.0%    13.6%


    - Acceleration in fixed cost savings throughout the first half

Affected by lower volumes (- EUR231.0 million), current operating income totaled EUR110.0 millions for the 1st half of 2009 (- 54.4%, i.e. - 57.2% at comparable Group structure and exchange rates).

This - EUR131.5 million decrease compared to 1st half 2008 takes into account:

- A positive foreign exchange effect (+ EUR7.1 million), mainly related

to the US dollar's appreciation against the euro,

- Limited impact of changes in Group structure(7) (- EUR0.4 million).

The inflation in variable costs is offset by improved price/mix component whereas the savings plans carried out since the 4th quarter of 2008 led to a - 13% decrease in fixed costs: the savings achieved totaled EUR85.6 million for the first six months of 2009.

    (5) At comparable Group structure and exchange rates.
    (6) Quarterly figures: non-audited.
    (7) Acquisitions completed in 2008: Astron China (China, February 2008),
        Svenska Silika Verken AB (Sweden, April 2008), Kings Mountain
        Minerals, Inc. (USA, October 2008) and Suzorite Mining, Inc. (Canada,
        October 2008), deconsolidation of Xinlong (China, January 2009) and
        divestments completed in 2009, mainly Planchers Fabre (France, May
        2009).
    (8) Operating income before other operating revenue and expenses.
    (9) First half 2008 results were reprocessed following the two
        presentation changes applied as of January 1, 2009, details of which
        are given in appendix.

    These savings are resulting from the effects of the following measures:

    - Structural decrease of industrial capacities and workforces,

    - Temporary use of part-time working,

    - Significant temporary cuts in expense lines considered as non-priority
      (maintenance, travel, overheads).

These savings are partly directly related to the temporary slowdown in output rates intended to reduce inventory rapidly, particularly in the 2nd quarter.

The Group's operating margin worked out at 8.0% (13.6% in 1st half 2008).

NET INCOME FROM CURRENT OPERATIONS

Net income from current operations totaled EUR46.7 million (- 70.8% vs. 1st half 2008). This decrease reflects the change in current operating income and takes the following items into account:

    - An heaviness in financial expense, at - EUR44.9 million (vs. - EUR20.6
      million in 1st half 2008) reflecting:

    ­ the increase in interest expense due to the higher average debt for the
      1st half 2009 (the product of the rights issue was received on June 2,
      2009);

    ­ a negative basis effect on foreign exchange and financial instruments
      (a EUR18 million positive income was posted for the 1st half of 2008).

    - A tax charge of - EUR18.7 million (- EUR60.2 million in 1st half 2008),
      i.e. an effective tax rate of 28.7% (27.3% in 1st half 2008).

NET INCOME

Other operating revenues and expenses, net of tax amounted to - EUR35.0 million.

    Gross amount before tax (- EUR46.6 million) is broken down into:

    - a - EUR39.0 million cash charge including restructuring expenses
      related to the cost reduction plans undertaken during the period,
      particularly site closures,

    - a non-cash amount of - EUR18.7 million (industrial asset depreciations
      on restructured sites),

    - a EUR11.1 million gain on divestments (mainly Planchers Fabre, the
      prestressed concrete and reinforced concrete joist and beam
      manufacturing and marketing activity, divested in May 2009).

    CASH FLOW

    EUR millions                        H1 2009       H1 2008

    EBITDA                               204.1         322.2
    Current operating cash flow          172.6         256.4
    Change in operating working capital   93.4         (83.0)
    Paid capital expenditure             (79.0)       (141.6)
    Current free operating cash flow *   187.7          40.3
    Financial expense (net of tax)       (32.0)        (15.0)
    Other working capital items           27.0         (38.3)
    Current free cash flow               182.7         (13.0)

     * Including subsidies, book value
     of assets divested and other        0.7          8.5

    - Working capital substantially reduced

    - Very substantial free cash flow generated

Inventory was reduced by EUR129.4 million. After allowing for the decrease in payables resulting from lower production levels, operating working capital improved by EUR93.4 million. It represented 27.5% of sales (25.9% as on June 30, 2008).

Booked capital expenditure decreased by more than 50% compared with the 1st half of 2008. Capital expenditure represents 63% of depreciation expense(10) (vs. 120% in the 1st half of 2008).

Current free operating cash flow(11), totaled EUR187.7 million, as compared to EUR40.3 million generated in the 1st half of 2008.

    FINANCIAL STRUCTURE

    EUR millions                     June 30,    December 31,    June 30,
                                      2009          2008          2008
    Net debt                         1,148.2      1,566.1       1,616.1
    Shareholders' equity             1,808.1      1,546.3       1,585.6
    EBITDA                             204.1        573.4         322.2
    Net debt/shareholders' equity      63.5%        101.3%        101.9%
    Net debt/EBITDA                    2.5x          2.7x          2.5x

Consolidated net financial debt decreased sharply to EUR1,148.2 million, compared with EUR1,566.1 million as on December 31, 2008 and EUR1,616.1 million as on June 30, 2008.

    It benefited from the following factors:

    - Revenue from the EUR251.2 million rights issue (ie a net revenue of
      EUR248.5 million after allowance of expenses relating to the issuance)
      recorded on June 2. It was allocated in full to the reduction of debt,

    - The cash flow generated by the Group.

As on June 30, 2009, Imerys's financial resources totaled more than EUR2.3 billion (of which EUR1 billion in available resources), with no significant repayments scheduled before the end of the year 2012. The Group's financial flexibility enables it to seize strategic development opportunities when they arise.

POST CLOSING EVENTS SINCE JUNE 30, 2009

As decided, Imerys paid out dividends, on July 7, 2009, amounting EUR62.8 million, i.e. 23.5% of net income from current operations for the financial year ending December 31, 2008.

As part of the Group's cost and financial structure optimization measures, a deconsolidating factoring contract was signed on July 23, 2009, for an amount of trade receivables estimated at EUR90 million. As the risks and benefits related to the trade receivables are transferred to the factoring bank, the receivables will be deconsolidated when the contract is implemented in the 3rd quarter of 2009.

    (10) Booked capital expenditure divided by fixed asset depreciation
         expense.
    (11) Current operating cash flow minus paid capital expenditure and
         changes in operating working capital.

    COMMENTARY BY BUSINESS GROUP

    Minerals for Ceramics, Refractories, Abrasives & Foundry

    (27% of consolidated sales)

    (EUR millions)       1st half    1st half    Current   Comparable
                          2009       2008(12)    change     change(13)
    Sales                 383.2       595.5      - 35.7%     - 38.2%
    Current operating
     income(14)            13.8        75.6      - 81.7%     - 87.2%
      Operating margin     3.6%        12.7%
    Booked capital
     expenditure          25.0         34.7      - 28.1%
      As % of
       depreciation
       expense              94%         114%

    - Record slump in demand and extensive inventory reduction throughout the
      value chain

    - Major cost and output reduction measures

Minerals for Refractories, Fused Minerals and Graphite markets in all geographic zones remain affected by the sharp drop in industrial equipment and automotive production recorded since the middle of the 4th quarter 2008. This trend is intensified by massive inventory reductions across the entire downstream customer chain. However, in Europe and North America, steel production in May and June was marginally higher than in previous months, while Chinese and Indian markets improved slightly compared with the first half of 2008. In abrasives and graphite, levels of demand remain significantly lower than in 2008 but improved in May and June compared with the previous months. The Ceramics market is still affected by the crisis, particularly in the construction sector in developed countries.

Since the end of 2008, output has been cut sharply in all the business group (by more than 50% in some activities) and industrial facilities are adapting to demand. Measures that combine part-time working and working time reductions have been implemented in France, in the United Kingdom and in Switzerland whereas substantial workforce reductions took place in particular in the United States, in Austria, in China and in South Africa. Significant decrease occurred in mining campaign and periodical stoppage or definitive closure were implemented in production lines.

Imerys Technologie Limoges, a research centre dedicated to uprange and specialty minerals for ceramics, was opened (Haute-Vienne, France). With 35 researchers from 5 nationalities, the centre brings together Imerys' innovation efforts in this area to create and develop the products of the future.

Minerals for Refractories enhanced their portfolio of mineral reserves during the 1st half through the acquisition of high quality assets in the United States. This capital expenditure represents a large share of the amount committed by the business group during the period.

Sales, at EUR383.2 million for the 1st half of 2009, were down - 35.7%. Analysis of the variance in sales shows:

    - A limited effect of changes in Group structure(15) for - EUR2.4
      million,

    - A positive foreign exchange effect (US dollar) for + EUR17.1 million.

Current operating income, at EUR13.8 million for the 1st half of 2009, decreased by - EUR61.8 million from the 1st half of 2008. It takes into account a Group structure effect of - EUR0.6 million and a favorable foreign exchange effect of + EUR4.7 million. Excluding those items, the business group's operating performance decreased by - EUR65.9 million.

The impact of the decrease in sales volumes was only partly offset by the results of the energetic actions taken to reduce fixed production costs and overheads and a positive price/mix trend.

    (12) First half 2008 results were reprocessed following the two
         presentation changes applied as of January 1st, 2009, details of
         which are given in appendix.
    (13) At comparable Group structure and exchange rates.
    (14) Operating income before other operating revenue and expenses.
    (15) Astron China (China, February 2008) and divestment of Iberpasta
         (Spain, January 2009).



    Performance & Filtration Minerals

    (18% of consolidated sales)

    (EUR millions)     1st half     1st half      Current    Comparable
                         2009     2008(16)(17)    change     change(18)

    Sales              246.3         291.4       - 15.5%      - 21.5%
    Current operating
     income(19)          9.1          28.9       - 68.5%      - 68.3%
      Operating margin  3.7%           9.9%
    Booked capital
    expenditure         4.7           24.6       - 80.9%
      As % of
       depreciation
       expense          25%            154%

    - Resilience of beverage filtration activities

    - Adjustments to cost base

During the 1st half of 2009, Performance Minerals markets (paint, plastics, adhesives, etc.) in Europe and North America were particularly affected by the slump in construction-related sectors. Minerals for Filtration markets held out better, but were also impacted by the inventory reduction trend among distributors and the Group's customers.

The cost reduction measures planned since the beginning of the year have been implemented. In addition, mining programs have been interrupted, and production units have been idled for extended periods. The combination of Performance Minerals and Filtration Minerals by geographic zone was completed, leading to structural savings.

Sales amounting EUR246.3 million for the 1st half of 2009 posted a - 15.5% decrease. This change takes into account:

- Group structure effect(20) for + EUR4.4 million,

- Foreign exchange impact for + EUR13.2 million.

Current operating income totaled EUR9.1 million, a - EUR19.8 million decrease. It includes + EUR0.5 million in structure effect, offsetting an unfavorable exchange rate impact of - EUR0.6 million. At comparable structure and exchange rates, the decrease amounted to - EUR19.7 million, with the fall in sales volumes only partly offset by cost savings and improvement in the price/mix component.

    Pigments for Paper

    (23% of consolidated sales)

    (EUR millions)        1st half    1st half     Current   Comparable
                            2009    2008(16)(17)    change   change(18)

    Sales                  309.5       365.5       - 15.3%    - 19.6%
    Current operating
     income(19)             15.0        34.5       - 56.5%    - 67.3%
       Operating income      4.9%        9.4%
    Booked capital
     expenditure            11.6        33.9       - 65.7%
        As % of
         depreciation
         expense              45%        128%

    - Significant slump in developed countries' paper production

    - Carbonate production capacities reduced in Europe and United States

    (16) First half 2008 results were reprocessed following the two
         presentation changes applied as of January 1st, 2009, details of
         which are given in appendix
    (17) Certain activities in Asia and South America were transferred from
         Pigments for Paper to Performance & Filtration Minerals.
    (18) At comparable structure and exchange rates.
    (19) Operating income, before other operating revenue and expenses.
    (20) Acquisitions of Kings Mountain Minerals, Inc. (USA, October 2008)
         and Suzorite Mining, Inc. (Canada, October 2008); deconsolidation of
         Xinlong (China, January 2009).

Global production of printing and writing paper decreased - 14.5% in the 1st half of 2009. It reflects the slump in paper demand resulting from lower advertising spending and inventory reductions. Many extended production stoppages weighed on North American and European markets, with lower production in Asia-Pacific (- 5%) entirely due to a slack Japanese market.

To address the new market environment, the ground calcium carbonate plant in Salisbury (United Kingdom) was shut. Implementation of the plan to reduce kaolin production capacities significantly at the Sandersville (United States) plant began in the first half. Temporary measures were taken at most units in Europe, North America and Brazil.

Sales, at EUR309.5 million for the 1st half of 2009, were down - 15.3%. This change takes into account foreign exchange impact for + EUR15.8 million.

Current operating income totaled EUR15.0 million in the 1st half of 2009, a - EUR19.5 million decrease. This result includes + EUR3.8 million in foreign exchange impact, stemming from the US dollar's strength against the euro (conversion impact) and the Brazilian real (transaction impact). At comparable structure and exchange rates, the business group's operating performance decreased by - EUR23.3 million. An allowance for doubtful accounts was booked following the bankruptcy of a major American customer. This provision has an approximately - 2% impact on the business group's margin for the 2nd quarter.

    Materials and Monolithics

    (32% of consolidated sales)

    (EUR millions)      1st half    1st half   Current   Comparable
                          2009      2008(21)   change    change(22)
    Sales                443.4       543.1     - 18.4%   - 17.5%
    Current operating
     income(23)           84.3       125.2     - 32.7%   - 31.9%
       Operating margin   19.0%       23.1%
    Booked capital
     expenditure          14.6        20.4     - 28.1%
        As % of
        depreciation        81%         98%

    - New housing construction in France still decreasing, while renovation
      market shows resilience

    - Cost reduction actions set up

In Building Materials in France, single-family housing starts decreased by - 23%(e)(24) in the 1st half of 2009. Despite a resilient renovation sector, the clay products market posted an approximately - 16% decrease in volumes for roofing items and - 21% for bricks compared with the 1st half of 2008.

Monolithic Refractory markets related to liquid metal production remained very difficult throughout the first half, except in India. Many production stoppages took place in steelmaking, while other outlets (cement, glass, incineration, petrochemicals, etc.) held out better. The end of major original-fit projects weighed increasingly on volumes.

In Building Materials in France, capacity adjustments continued during the 1st half of the year, with most production lines idled. A roof tile line was shut down definitively at Pargny sur Saulx (Marne) and the modernization program at the Wardrecques (Nord) plant was successfully completed. The Bessens plant (Tarn-et-Garonne) was closed early in the year and its production divided between other sites. Optimization of the La Boissière du Doré (Loire-Atlantique) bricks plant is nearing completion. Slate mining is now concentrated on a single site (Grands Carreaux in Trélazé - Maine et Loire).

    (21) First half 2008 results were reprocessed following the two
         presentation changes applied as of January 1st, 2009, details of
         which are given in appendix.
    (22) At comparable Group structure and exchange rates.
    (23) Operating income before other operating revenue and expenses.
    (24) Sources: French Ministry of Ecology, Energy, Sustainable Development
         and Planning & Development for January and February 2009, and
         Imerys estimates for March-May 2009 as no official statistics
         available.

The prestressed concrete and reinforced concrete joist and beam manufacturing and marketing activity, Planchers Fabre, was sold out, in late May 2009, to the Lesage group, the joint French leader in the sector. With an industrial site in Pibrac (Haute-Garonne), Planchers Fabre achieved close to EUR20 million sales in 2008.

In Monolithic Refractories, production capacities were reduced in all geographic zones except India, where business remained firm in the first half. Efforts also focused on the reduction of sales, administration and logistic costs.

At EUR443.4 million, the business group's sales (down - 18.4% in 1st half 2009 vs. the same period in 2008) take into account:

- A Group structure effect(25) of + EUR2.4 million.

- Negative foreign exchange impact for - EUR7.2 million.

Current operating income, at EUR84.3 million, decreased - EUR40.9 million from the first half of 2008. Reprocessed to allow for structure (- EUR0.3 million) and exchange rates (- EUR0.7 million), the business group's operating performance was down - EUR39.9 million.

Financial diary:

Wednesday, November 4th, 2009 3rd quarter 2009 results

The world leader in adding value to minerals, Imerys is active in 47 countries through more than 260 industrial and commercial sites. The Group achieved EUR3.4 billion in sales in 2008. Imerys mines and processes minerals from reserves with rare qualities in order to develop solutions that improve its customers' product performance and manufacturing efficiency. The Group's products have a great many applications in everyday life, including construction, personal care, paper, paint, plastic, ceramics, telecommunications and beverage filtration.

More thorough information on Imerys can be obtained from its website (http://www.imerys.com) in the Regulated Information section, particularly in the Reference Document filed with Autorité des Marchés Financiers on April 3, 2009 under number D.09-0192 (also available from the Autorité des Marchés Financiers website, www.amf-france.org). Imerys draws investors' attention to chapter 4, "Risk Factors", of its Reference Document.

Warning on forecasts and forward-looking information: The statements presented in this document contain forecasts and forward-looking information. Investors are warned that such forecasts and forward-looking-information are subject to many risks and uncertainties (difficult to foresee and generally beyond Imerys' control) that may result in the results and developments actually achieved being significantly different from those expressed or implied.

    (25) Acquisition of Svenska Silika Verken AB (Sweden, April 2008);
         divestment of Planchers Fabre (France, May 2009).


    1st HALF 2009 RESULTS

                                    Appendix

    1. Consolidated sales breakdown


    Change in consolidated sales     %        %          %            %
                                 current structure   foreign     comparable
                                  change   effect    exchange     change(1)
                                                      effect
    Imerys Group                - 22.6%   + 0.2%     + 2.1%       - 24.9%

    Comparable quarterly change(1)     Q1 09       Q2 09
    2009 vs. 2008                    - 23.8%    - 26.0%
    Reminder:
     2008 vs. 2007                     Q1 08       Q2 08     Q3 08    Q4 08
                                      + 3.2%      + 5.1 %   + 5.0%  - 10.5%

    (non-audited,    1st     1st      Current Structure  Foreign   Comparable
    EUR millions)  quarter quarter    change   effect    exchange   change(1)
                    2009     2008        %        %        %          %
    Sales, of
     which:        694.3    881.8    - 21.3%   + 0.7%     + 1.8%    - 23.8%
    Minerals for
     Ceramics,
     Refractories,
     Abrasives &
     Foundry       193.0    288.1    - 33.0%   + 0.2%     + 2.6%    - 35.8%
    Performance &
     Filtration
     Minerals      118.5    140.8(2) - 15.8%   + 1.7%     + 4.5%    - 22.0%
    Pigments for
     Paper         158.7    188.6(2) - 15.9%       -      + 4.3%    - 20.2%
    Materials &
     Monolithics   228.9    274.5    - 16.6%   + 1.1%     - 1.8%    - 15.9%
    Holding
     Company &
     Eliminations   (4.8)   (10.2)      n.s.     n.s.       n.s.       n.s.

    (non-audited,  2nd quarter  2nd     Current Structure Foreign  Comparable
    EUR millions)     2009    quarter   change   effect   exchange  change(1)
                               2008        %       %         %         %
    Sales, of
    which:           679.7    892.3    - 23.8%  - 0.2%     + 2.4%   - 26.0%
    Minerals for
     Ceramics,
     Refractories,
     Abrasives &
     Foundry         190.2    307.4    - 38.1%  - 0.7%     + 2.8%   - 40.3%
    Performance &
     Filtration
     Minerals        127.7    150.6(2) - 15.1%  + 0.7%     + 5.1%   - 21.0%
    Pigments for
     Paper           150.8    176.9(2) - 14.8%      -      + 4.3%   - 19.1%
    Materials &
    Monolithics      214.4    268.6    - 20.2%  - 0.2%     - 0.9%   - 19.1%
    Holding Company
    & Eliminations    (3.6)   (11.2)      n.s.    n.s.       n.s.      n.s.

    (1) At comparable Group structure and exchange rates.
    (2) Transfer of some activities in Asia and South America from Pigments
        for Paper to Performance & Filtration Minerals.

    (EUR millions)   1st    1st half   Current Structure Foreign  Comparable
                     half     2008     change   effect   exchange  change(3)
                     2009                 %       %         %          %
    Sales, of
    which:        1 374.0   1 774.1    - 22.6%   + 0.2%   + 2.1%    - 24.9%
    Minerals for
     Ceramics,
     Refractories,
     Abrasives &
     Foundry        383.2     595.5    - 35.7%   - 0.4%   + 2.9%    - 38.2%
    Performance &
    Filtration
     Minerals       246.3     291.4(4) - 15.5%   + 1.5%   + 4.5%    - 21.5%
    Pigments for
     Paper          309.5     365.5(4) - 15.3%       -    + 4.3%    - 19.6%
    Materials &
     Monolithics    443.4     543.1    - 18.4%   + 0.4%   - 1.3%    - 17.5%
    Holding Company
     & Eliminations  (8.4)    (21.4)      n.s.     n.s.     n.s.       n.s.

    Sales by business group         H1 09    H1 08

    Minerals for Ceramics,
     Refractories, Abrasives
     & Foundry                       27%      33%
    Performance &
    Filtration Minerals              18%      15%
    Pigments for Paper               23%      22%
    Materials & Monolithics          32%      30%
    Total                           100%     100%

    Sales by geographic destination

    (EUR millions)     Sales     % change        %             %
                      H1 2009    H1 2009     consolidated  consolidated
                                  vs. H1      sales H1      sales H1
                                   2008         2009          2008
    Western Europe     725.8     - 25.4%         53%           55%
    United States /
     Canada            270.0     - 17.0%         19%           18%
    Japan / Australia   65.9     - 21.3%          5%            5%
    Emerging
     countries*        312.3     - 20.2%*        23%           22%
    Total            1 374.0     - 22.6%        100%          100%

    * Of which China: - 28%, Eastern Europe - 43%.

    (3) At comparable Group structure and exchange rates.
    (4) Transfer of some activities in Asia and South America from Pigments
        for Paper to Performance & Filtration Minerals.


    2. Simplified income statement

To improve the presentation of the Group's financial statements in line with the evolution of common practices among the main issuers listed in Paris on NYSE-Euronext, in 2009 the Group is making two changes to presentation.

On one hand, the financial components of net expenses for defined-benefit plans for employees (- EUR3.4 million as on June 30, 2009, - EUR0.4 million as on June 30, 2008 and - EUR0.8 million as on December 31, 2008), previously recorded under current operating income, are now recorded under financial income/expense.

On the other hand, the share of net income/loss of affiliates (EUR0.9 million as on June 30, 2009, EUR4.9 million as on June 30, 2008 and EUR10.4 million as on December 31, 2008), previously recorded as income after tax, is now recorded under current operating income.

For the sake of comparison, 1st half 2008 and 2008 full year results were restated accordingly. Earnings per share for previous periods have been adjusted accordingly. The weighted number of outstanding shares was also adjusted by the dilution coefficient for the capital increase carried out on June 2, 2009. <satrt_table>

    (EUR H1 2008 Employee Share in H1 2008
    millions) published benefit net restated
    published financial income/loss
    component of
    affiliates
    Sales 1 774.1 1 774.1
    Current
    operating
    income(5) 236.2 0.4 4.9 241.5
    Financial
    expense (20.2) (0.4) (20.6)
    Current
    income tax (60.2) (60.2)
    Share in net
    income/loss
    of affiliates 4.9 (4.9) 0
    Minority
    interests (0.9) (0.9)
    Net income
    from current
    operations(6) 159.8 159.8
    Other revenue
    and expenses,
    net (15.4) (15.4)
    Net income(6) 144.4 0.0 0.0 144.4
    continued
    (EUR millions) 2008 Employee Share in 2008
    published benefit net restated
    financial income/loss
    component of affiliates
    Sales 3 449.2 3 449.2
    Current
    operating
    income(5) 403.4 0.8 10.4 414.6
    Financial
    expense (46.3) (0.8) (47.1)
    Current income
    tax (98.0) (98.0)
    Share in net
    income/loss of
    affiliates 10.4 (10.4)
    Minority (2.4) (2.4)
    interests
    Net income
    from current
    operations(6) 267.1 267.1
    Other revenue
    and expenses,
    net (105.8) (105.8)
    Net income(6) 161.3 0.0 0.0 161.3
    (EUR millions) Q2 2009 Q2 2008 Change H1 2009 H1 2008 Change
    restated restated

    Sales 679.7 892.3 - 23.8% 1 374.0 1 774.1 - 22.6%
    Current
    operating
    income(5) 65.6 124.4 - 47.3% 110.0 241.5 - 54.4%
    Financial
    expense (20.9) (4.7) (44.9) (20.6)
    Current income
    tax (13.0) (32.4) (18.7) (60.2)
    Minority
    interests 0.4 (0.3) 0.3 (0.9)
    Net income from
    current
    operations(6) 32.1 87.0 - 63.1% 46.7 159.8 - 70.8%
    Other revenue
    and expenses,
    net (13.8) (9.0) (35.0) (15.4)
    Net income(6) 18.3 78.0 n.a. 11.7 144.4 n.a.
    (5) Operating income before other operating revenue and expenses.
    (6) Group’s share.
    APPENDIX Imerys - Summary financial statements to June 30, 2009
    CONSOLIDATED INCOME STATEMENT
    (EUR millions) June 30, June 30, 2008
    2009 2008
    Revenue 1,374.0 1,774.1 3,449.2
    Current revenue
    and expenses (1,264.0) (1,532.6) (3,034.6)
    Raw materials and
    consumables used (530.5) (653.2) (1,268.5)
    External expenses (322.6) (440.1) (890.7)
    Staff expenses (296.0) (336.6) (651.5)
    Taxes and duties (24.1) (27.1) (53.0)
    Amortization,
    depreciation and
    impairment losses (90.5) (95.0) (193.2)
    Other current
    revenue and expenses (1.2) 14.5 11.9
    Share in net income
    of associates 0.9 4.9 10.4
    Current operating 110.0 241.5 414.6
    income
    Other operating
    revenue and
    expenses (46.6) (22.8) (114.9)
    Income on assets
    disposals 11.1 0.0 0.1
    Impairment losses,
    restructuring and
    litigation (57.7) (22.8) (115.0)
    Operating income 63.4 218.7 299.7
    Net financial debt
    expense (35.4) (28.0) (57.0)
    Income from
    securities 0.9 1.9 4.1
    Gross financial
    debt expense (36.3) (29.9) (61.1)
    Other financial
    revenue and
    expenses (9.5) 7.4 9.9
    Other financial
    revenue 58.1 142.5 282.9
    Other financial
    expenses (67.6) (135.1) (273.0)
    Financial income
    (loss) (44.9) (20.6) (47.1)
    Income taxes (7.1) (52.8) (88.9)
    Net income 11.4 145.3 163.7
    Net income, Group
    share 11.7 144.4 161.3
    Net income,
    minority interests (0.3) 0.9 2.4
    Net income, Group
    share 11.7 144.4 161.3
    Net income from
    current
    operations, Group
    share 46.7 159.8 267.1
    Other net
    operating revenue
    and expenses,
    Group share (35.0) (15.4) (105.8)
    Earnings per share
    (in EUR)
    Net basic earnings
    per share from
    current operations 0.68 2.37 3.96
    Net basic earnings
    per share 0.17 2.14 2.39
    Diluted net
    earnings per share 0.17 2.14 2.39
    Average exchange
    rate euro/USD 1.3326 1.5304 1.4708
    Imerys - Summary financial statements to June 30, 2009
    CONSOLIDATED BALANCE SHEET
    (EUR millions) June 30, June 30, 2008
    2009 2008
    Non-current assets 2,817.2 2,788.8 2,839.9
    Goodwill 907.1 934.7 899.4
    Intangible assets 45.5 48.1 45.0
    Mining assets 396.9 377.9 395.6
    Property, plant
    and equipment 1,269.2 1,257.3 1,314.0
    Investments in
    associates 54.6 47.3 50.0
    Available-for-sale
    financial assets 7.0 6.5 7.1
    Other financial
    assets 15.1 14.0 13.8
    Other receivables 43.1 47.0 40.4
    Derivative
    financial assets 18.3 4.6 18.7
    Deferred tax
    assets 60.4 51.4 55.9
    Current assets 1,297.7 1,533.7 1,508.0
    Inventories 489.4 530.4 611.0
    Trade receivables 490.4 676.1 523.3
    Other receivables 125.3 151.8 154.2
    Derivative
    financial assets 4.5 13.5 1.1
    Marketable
    securities and
    other financial
    assets 4.4 6.5 4.4
    Cash and cash
    equivalents 183.7 155.4 214.0
    Consolidated assets 4,114.9 4,322.5 4,347.9
    Equity, Group share 1,789.4 1,566.6 1,526.4
    Capital 150.7 126.3 125.6
    Premiums 339.2 132.6 115.8
    Reserves 1,287.8 1,163.3 1,123.7
    Net income, Group share 11.7 144.4 161.3
    Minority interests 18.7 19.0 19.9
    Shareholders' equity 1,808.1 1,585.6 1,546.3
    Non-current
    liabilities 1,438.1 1,401.3 1,449.8
    Provisions for
    employee benefits 134.7 153.6 133.2
    Other provisions 163.0 153.8 153.7
    Loans and
    financial debts 1,042.8 997.0 1,054.7
    Other debts 10.0 15.6 13.6
    Derivative
    financial
    liabilities 19.7 25.1 19.2
    Deferred tax
    liabilities 67.9 56.2 75.4
    Current
    liabilities 868.7 1,335.6 1,351.8
    Other provisions 26.0 15.8 20.8
    Trade payables 264.2 323.8 337.9
    Income taxes
    payable 24.7 17.9 13.4
    Other debts 249.5 215.0 199.7
    Derivative
    financial
    liabilities 11.5 2.4 49.8
    Loans and
    financial debts 289.3 662.2 727.3
    Bank overdrafts 3.5 98.5 2.9
    Consolidated
    equity and
    liabilities 4,114.9 4,322.5 4,347.9
    Net financial debt 1,148.2 1,616.1 1,566.1
    Closing exchange
    rate euro/USD 1.4134 1.5764 1.3917
    Imerys - Summary financial statements to June 30, 2009
    CONSOLIDATED CASH FLOW STATEMENT
    (EUR millions) June 30, June 30, 2008
    2009 2008
    Cash flow from
    operating
    activities 221.2 88.8 365.2
    Cash flow
    generated by
    current operations 285.0 211.3 580.5
    Interests paid (51.2) (34.8) (46.6)
    Income taxes on
    current operating
    income and
    financial income
    (loss) 5.4 (64.9) (127.1)
    Dividends received
    from available-for-sale
    financial assets 0.3 0.2 0.2
    Cash flow
    generated by other
    operating revenue
    and expenses (18.3) (23.0) (41.8)
    Cash flow from
    investing
    activities (66.7) (242.5) (366.1)
    Acquisitions of
    property, plant
    and equipment and
    intangible assets (79.0) (141.4) (247.9)
    Acquisitions of
    investments in
    consolidated
    entities after
    deduction of cash
    acquired (9.9) (114.6) (142.6)
    Acquisitions of
    available-for-sale
    financial assets - - -
    Disposals of
    property, plant
    and equipment and
    intangible assets 7.8 14.3 20.9
    Disposals of
    investments in
    consolidated
    entities after
    deduction of cash
    disposed of 14.3 - 0.9
    Disposals of
    available-for-sale
    financial assets (0.1) 0.1 0.3
    Net change in
    financial assets (0.2) (2.2) (0.6)
    Paid-in interests 0.4 1.3 2.9
    Cash flow from
    financing
    activities (185.1) 144.7 145.8
    Capital increases 248.5 0.9 0.9
    Capital decreases - - (17.4)
    Disposals
    (acquisitions) of
    treasury shares - (18.7) 11.5
    Dividends paid to
    shareholders - (119.0) (119.0)
    Dividends paid to
    minority interests (0.7) (0.5) (0.7)
    Loan issues 8.9 337.8 490.8
    Loan repayments (332.0) (13.4) (15.2)
    Net change in
    other debts (109.8) (42.4) (205.1)
    Change in cash and
    cash equivalents (30.6) (9.0) 144.9
    Opening cash and 211.2 70.8 70.8
    cash equivalents
    Change in cash and
    cash equivalents (30.6) (9.0) 144.9
    Impact of changes
    due to changes in
    perimeter (2.4) - -
    Impact of changes
    due to exchange
    rate fluctuations 2.0 (4.7) (4.4)
    Impact of changes
    in accounting
    policies - (0.2) (0.1)
    Closing cash and
    cash equivalents 180.2 56.9 211.2
    Cash and cash
    equivalents 183.7 155.4 214.0
    Bank overdrafts (3.5) (98.5) (2.8)


    Analyst/Investor Relations:

    Pascale Arnaud -
    +33(0)1-49-55-63-23
    shareholders@imerys.com
    Press contacts:
    Pascale Arnaud - +33(0)1-49-55-63-91 /66-55
    Matthieu Roquet-Montégon - +33(0)6-16-92-80-65

SOURCE Imerys