Ladies and gentlemen, hello and welcome to the presentation of Mersen's Healthier Results, presented by Luc Themel and Thomas Baumgartner. So, before I hand over to Luc and Themel, I'd like to remind you that the presentation and press release are available on the website. And after the presentation, you can ask your questions of Luc Themelin, CEO, and Thomas Baumgartner, CFO. So you can use either the conference call or the web chat to ask your questions. I'll hand over to Luc now.
Thank you very much. I'll start with a quick summary of the past year, which has been very good for the group. We start with 11% organic growth in the business, which has enabled the group to reach EUR 524 million in sales, which is a record for Mersen for a healthier period.
You can also see income from operations before non-recurring items increased by 90 basis points. And the EBITDA is at EUR 87 million , representing a margin of 16.6%. So again, a good performance. So let's see a few words about our markets. You can see for North America, to begin with, great growth there at 16%. The process industries were very dynamic, in particular for the electrical distribution sector, which reached a record level of EUR 50 million in first half. In the semiconductor market, also very active, as is the wind power industry. We saw good performance in the transport market, particularly in aeronautics and electric vehicles. Now, looking at Europe, organic growth, 11%. This was in both divisions. And as in North America, these industries were dynamic, along with renewable energies and wind power. And we are also seeing renewed vitality in aeronautics.
If we look at Asia, 7% growth. Nonetheless, impacted by China with still rather strict confinement measures. So this slowed down activity for the period. But there was a great half year for the solar market and business in semiconductors. Growth was also quite dynamic in Japan and China. Overall, you can see that we have good growth, particularly in solar and wind power, to a lesser extent also in semiconductors and also in transportation. So growth was driven, in part, from a 3% price increase, but mainly from volume growth, which is a very good sign for Mersen. So now, if we look at our four main growth markets, and we already talked about this in March, of course, the trend here, as you can see, is very strong for solar.
We expect that this will come down a bit for the second half of the year, not because the market is stagnating, but just because of certain cycles. So we are also focusing our deliveries to our more high-end customers. So we are also expecting good trends in 2023. We know also that there's a new silicon fab announced in Europe. So this is all good news for Mersen. Okay. In SIC semiconductors, no growth in the first half of the year, coming off a very high-end comparison. R eally picking up in 2023. As electric vehicles, we have five new certifications or awards by manufacturers, particularly for fuses, also working on batteries as well. So now let me hand over to Thomas for the main financial data.
So have a look at some of our main indicators. As you can see, we've got EBITDA at 22%, which is nearly the EUR 1 million , 16.6% of sales. So that's a 90 basis point improvement. Growth in operating income is also up, thanks to our investment. I nside of the Columbia plant. So there have been additional volume, so that our operating margin has also been 90 points. So for a margin of 10.5% and EUR 55 million in growth. So if we look at our operating margin, this was mainly exploited by higher volumes and prices. So Luc mentioned volumes. So that explains the 2.9 margin of growth. And we have been able to raise prices, which has more than offset inflation the cost of raw materials and energy. And so our productivity efforts have helped offset inflation.
So overall, it is very satisfying to see the group's ability to neutralize inflation in this way through stresses and productivity. Another important point to note is that we have, of course, exceptional costs, but which are temporary, primarily related to the startup production at the Columbia site. So those costs will come down. And then also, we have been putting in place a dedicated electric vehicle team to prepare for demand. And so in the case of the EV team, costs will be higher because we are still in the hiring phase. So as I've said, all of these costs do weigh on our profit and loss statement. But at the same time, this is for our investments. And then there is the depreciation that I mentioned earlier in the introduction. So let's look at the different divisions, starting with advanced materials.
Growth in operating income was over 30%, with operating margin of 15.9% of sales. You see there's a very strong volume effect. We have increased prices to compensate for energy and raw material costs. We will continue to increase that price to follow continually increasing costs. In the United States, we've observed the startup costs of the Columbia plant as well as an increase in depreciation related to those investments. As for electrical power division, here we have a positive volume effect. The inflation in raw materials and wages is only partially set by price increases and productivity plans. Price hikes in the first half of the year will be particularly noticeable in the second half of the year. The division has also observed costs related to the electric vehicle market related to the new.
Now, if we look at net income, it improved significantly, with growth of over 50%, with a tax rate of 22%. Financial expenses are lower than last year, thanks to our improved financial terms at the latest USPP. Now let's look at cash flow from operations. This was impacted by the high level of working capital. Let's explain this. First of all, working capital rises with the increase in sales and orders, of course. This plays on inventories and payables. We saw continuing unfavorable seasonality in the first half. At the same time, while this is in comparison with 2021, there was a payment of sizable bonuses, for example, for the year 2021. The fourth explanation is high increase in inventories linked to the Columbia site and also to secure raw material supplies in a tight supply chain for some product lines.
Inventories should not be going up much in the second half. And the working capital should remain well now stands at 25% of sales, which is, of course, then the exceptionally low rate in June last year. As a result, the cash flow is at EUR 3 million compared to EUR 46.2 million at the same time last year. You can see that there is net financial debt to that EUR 241 million, with low operating cash flow that I just explained, taking into account EUR 33 million of industrial aspects and EUR 3 million investment in our IT systems. Financial structure remains. So, w e've got our net debt to a bit to rate of 1.53. And our provisions for retirement plans have come down, thanks to the rise in interest rates.
If we look at our liquidity profile, you can see that the maturing of our financing is 5.7 years. The major maturity will come in 2026 with the re-financing of the short chain. In addition, there are EUR 60 million of available cash and EUR 165 million of undrawn confirmed lines to 2024. In short, we have a very solid financial structure. I'll hand back over to Luc.
Thank you, Thomas. As I mentioned, our indicators are quite positive, as is Luc. This is why we have also raised our guidance for organic growth between 8%-10% compared to 3%-6% previously, and then operating a margin around 10.5% of sales. We will also be at a DA margin growth of around 50 basis points. There were nine. We are confirming our level of industrial tax, even higher, in fact.
And as for sales, we will be expected to have more than EUR 1 billion in sales. We expect still very good markets in SIC and electric vehicles. And so the roadmap also requires that we continue to achieve our CSR objectives in terms of the environment and employment and other CSR criteria. So we are particularly working on responsible purchasing and limiting our emissions, lowering water consumption, and improving waste recycling. And of course, to continue to develop our human capital. Those are our main comments. And now Thomas and I will take your questions. So if you have questions, you can press zero one on your pad, or you can use the chat, the web chat, to ask questions. First question, Thomas Konu.
Hello, everyone. My first question is the Graphite. You've got your can you explain if there will be any opportunity loss?
And can you tell us if Columbia is on route to performance expected? And can we expect to see changes on the electric vehicle market? And what about raw materials? What are you anticipating there? Are you seeing any lowering of raw material costs? And yet another question about your goal for 2025. Will you be able to achieve 50 big plus points if you're expecting sales at over EUR 1 billion?
That seems very conservative to me. Well, I'll start with some of the first questions. So let me try to sum up quickly. Decided to focus particularly on the very high tech. We have a very profitable business, and so we were able to deliver well in the early part of the year. The pie added value. So that's what we want to focus on.
We do want to increase our capacities at Columbia to meet demand, but we don't want to overexpose ourselves. There is no opportunity, lost opportunities there. The market is quite strong. We've got 15% market share that we believe is very solid for the future. As for graphite, we're number one or number two, in fact. We've got some very long-term business there. As for Columbia, it's starting up, but it will take a year or a year and a half to raise its capacity in isostatic graphite. Currently, we're focusing on extruded. For 2025, you made a comment. You asked about operating margin. Yes, we are being prudent. But it is above 11%. We don't really have any basis to give you figures different from that. We need to monitor the trends in the EV market. Then there's, of course, inflation.
We need to see and energy prices will have to see how it continues to weigh on our margins. Thomas. We told you that there are still some investment costs for Columbia, but of course, the sales will begin to bring us the benefit of that. So those costs, of course, will be offset. And as concerns raw materials, yes, as you know, I mean copper, aluminum, and silver. So yes, we'll just drop in the prices, and we'll try to take advantage of that. So yes, of course, we'll want to take advantage of that. And then next year, well, that's for the electrical division. As for advanced materials, we've seen higher rises in raw materials. There's some lag there. But yes, we have been pressing on these rises in our selling price. So variations are not quite the same between the two divisions, in fact.
Thank you.
Ladies and gentlemen, if you would like to ask a question via the phone line, please press zero one. Otherwise, you have the web chat. Question from Stephen Binamu, BNP.
Everyone can hear me? Hello. I have several questions. First, the breakdown of the top line and the main drivers in terms of volume and price and the product mix. And so you expect that to remain the same in the second half of the year. Second question. Could you give us an idea of order bank log? Also, do you expect any further improvements in productivity? Thank you. So Thomas. Well, you can see there's as concerns the top line, you can see there's no scope effect here. So the volume was the main driver. Well, we'll have to see how the foreign exchange impact is. So what do we expect?
Well, in the second half of last year, we were already raising prices. So we're continuing to do that. You feel the effect a bit later. We expect about a 5% increase in the prices. Right now, as I've said, we don't get the effects of that immediately. We've got a backlog of about six months from now. So that's good. We have a good outlook in terms of the backlog. And we do have orders that will continue into 2023, deliveries in the next year, definitely in the chemicals market. Well, coming back to the question on the backlog, how did you sign for that? If you signed in February and March, what if your costs go up? We chose not to revise the prices of the backlog, except if there were clauses for these revisions.
At the same time, when we raise prices, so yes, there is a bit of a lag. We've said this before. So we've raised the prices a bit in relation to the increases in raw materials prices. Luc. Yes. Yes, so we ourselves have been raising our prices. As for the deliveries for 2023, yes, some of those have price revision clauses. And you also asked a question about productivity. I'll try to answer that. But we continually work on productivity. In general, this was offsetting inflation this year. And so what we expect to see, we know particularly for salaries, yes, we have to continue our efforts there. So yes, productivity will have to keep improving.
All right. Thank you. And I have another question, please. So you gave your guidance, but are you seeing any wait-and-see attitudes on the part of some clients for 2023?
I mean, you said you're pretty secure for 2022 in terms of sales. Luc.
Well, we have various markets. Some are very dynamic that will continue to be buoyant, SIC in particular for semiconductors, continually seeing strong growth. And we also have already for next year. Particularly SIC, I mean, there's a real demand there linked in particular to electric vehicles. So even though if there is a slight downturn in the economy, nonetheless, the manufacturers of electric vehicles are all putting in place very new manufacturing platforms. And otherwise, we don't see customers adopting wait-and-see attitude. So in spite of the context, the orders are still coming in the United States very well and renewable energies, of course. So we don't expect to see any sign there, all in relation to climate change and addressing those issues. Perhaps in profit industries, you're right. Thomas.
How those orders tend to come well in advance. Now, in aeronautics and transport, it's a significant drop during the crisis, but they need to play catch-up now. So even if there is an economic downturn, they are coming off a very low.
Thank you very much for your answers.
Are there any other questions? Once again, if you had any questions, please press 01 on your phone pad or use the chat. A question from Vincent Normal. Over to you.
Hello, everyone. I'd like to come back to profit industries and the working capital. And it's particularly the United States. We are seeing a slowdown in GDP growth. Can you explain also about your market share? You've talked about volume increases. Luc.
Now, there are several things in profit industries. First of all, in the U.S., good performance in electrical distribution. We have our production in Mexico.
What we are seeing is, well, our clients don't want to have too much inventory. But of course, since the economic recovery demand picked up, some of that is driving demand quickly. But we can really only tell you what the current situation is. There are no particular signs for the U.S. or Europe for a slowdown there.
And we have a very, this is Thomas speaking, and we have a very well-balanced distribution of our sales. And another question, please, on the working capital requirements. So are you at a peak at your inventories? What about cash flow? So are you seeing any positive trends for the second half of the year? Thomas. Yes, in June, it tends to be a less favorable time of the year in terms of working capital.
And then there's also the payout bonuses in April, which also weighs down on us for the first half year. And so December is generally better than midyear at that level.
Okay. And a final question. We talked about the increases for Columbia. So you've made quite a bit of capital. What are your expectations? Thomas.
Well, we talked about 85 to 90 million total cap max, total. So these will not come down for a few years. This is going to depend greatly on several of our markets. So it's all based on the cap max. But we are still investing to keep up with the SIC market and always investing in the most profitable market. Luc. For several years now, we've been noticing the rising demand for SIC for semiconductors for the market is getting structured. So clients are already beginning to plan for 2024, 2025.
So that's good news for us. So we expect to see sales and deliveries, and we have to invest to achieve that. Also, we do have some plants that are already at capacity. But the business continues at pace. So it's going to depend on the end market and how profitable it is. But we will be in capacity to invest further.
All right. Thank you very much.
Another question. Louis Guion of Odo Business.
Hello, everyone. I have a question. The operating margin for electrical power and growth there compared to the 2021 fiscal period? And well, I partly had an answer to the cap max, but we'll increase when we down on that. Thomas.
In electrical power, we're coming off a very high basis of comparison. But the level is very good, still very high. So we've explained what were the impacts on our operating margins.
We explained that earlier. But inflation is offset by raising our selling prices. So you've got that explanation. Now, Luc. Now, inflation, yes, has been, of course, integrated into our plans for cap max. So for now, I can't say too much about 2023. We're going to have to see what we do.
All right. Thank you.
Are there any other questions? If you would like to ask a question by phone, please press 01. All right then. Well, if there are no further questions, we wish you all a great summer. And so the next meeting, October 26th, after the closing of the market to announce the sales figures for the third quarter. Thank you, everyone. And.