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Thursday 29 April, 2010

Imerys

First Quarter 2010 Results

PR Newswire/Les Echos/

PRESS RELEASE

                                                       Paris, April 29, 2010

                   Imerys Announces 1st Quarter 2010 Results
                      Operating Margin Objective Achieved

 • Organic sales growth: + 9.5%
 • Upturn in activities related to industrial sector with a significant
   inventory rebuilding effect
 • Back to a double-digit operating margin: 11.2%
 • Strong increase in net income from current operations

Results for the 1st quarter ending on March 31, 2010 will be commented on by
Gérard Buffière, Chief Executive Officer of Imerys, at the Ordinary and
Extraordinary Shareholders' Meeting to be held at 11am today. It will be
webcasted live at www.imerys.com.

CONSOLIDATED RESULTS        1st quarter  1st quarter     % current      %
non-audited (EUR millions)       2010         2009          change  comparable
                                                                     change(1)
Revenue                       751.6        694.3           + 8.2%      + 9.5%
Current operating income(2)    84.1         44.4          + 89.4%    + 101.4%
Operating margin               11.2%         6.4%       + 4.8 points
Net income from current 
operations, Group share (3)    45.1         14.6         + 209.0%
Net income, Group share        45.0        - 6.6             n.s.
Net income from current 
operations, Group share,
per share(3)(4)              EUR0.60      EUR0.23        + 157.2%

(1) At comparable Group structure and exchange rates.
(2) Operating income before other operating revenue and expenses.
(3) Group's share of net income, before other operating revenue and expenses,
    net.
(4) The weighted average number of outstanding shares rose to 75,428,057
    compared with 62,786,408 in the 1st quarter of 2009, as a result of the 
    rights issue of June 2, 2009.

Gérard Buffière stated, “Economic activity has been slowly improving since 
the 
second half of 2009. Imerys benefited from this. Thanks to the actions taken 
since late 2008, the Group achieved an operating margin of 11.2% for the first 
quarter of 2010. We are confident in Imerys’ ability to resume growth in 
2010.”

ECONOMIC ENVIRONMENT

The improvement observed on the Group's main markets since the second half of
2009 continued into the first quarter of 2010. Business was firmer overall than
in the historically low levels of the first quarter of 2009. Emerging countries
show strong growth. Economic activity in Europe and North America was affected
by poor weather conditions in January and February.

Industrial production-related sectors, which were the worst hit by the global
economic crisis and inventory reduction trends, recorded a significant upturn in
business, particularly due to inventory rebuilding in the value chain. Thus, in
the first quarter of 2010, global steel production grew + 29% compared with the
same period in 2009 and returned to its first quarter 2008 level. Output in
North America and Europe is however still approximately - 20% lower than
pre-recession levels, while growth continues in China.

Global production of printing and writing paper increased slowly.

In France, the construction sector was hit by adverse weather conditions early
in the year. Moreover, single-family housing starts remain low, not taking yet
full advantage of the upturn in sales of new individual housings observed since
mid-2009. In North America, housing starts are stagnating at historically low
levels.

Directly consumer-related sectors such as the filtration market held out well.

DOUBLE-DIGIT OPERATING MARGIN OBJECTIVE ACHIEVED

Thanks to the actions implemented from the end of 2008, the Group succeeded in
restoring a double-digit operating margin (11.2%). Fixed costs and overheads
remained stable over the quarter despite a + 7.6% increase in volumes.

OUTLOOK

In early 2010, most markets are positively orientated and growth is high in
emerging countries. Business, however, remains far below pre-recession levels.
The recent positive trend, therefore, needs to be borne out in the coming
quarters. In this context, the Group will maintain its efforts in tight
operating management in order to improve its operating margin over time.

DETAILED COMMENTARY ON THE GROUP'S RESULTS 

SALES

•  Contrasting increases in sales volumes
•  Sharp rise in industrial equipment-related activities, thanks to inventory
   rebuilding in particular
•  Favorable trend in product price and mix

Sales for the 1st quarter of 2010 totaled EUR751.6 million, up + 8.2% from the
same period in 2009. This growth takes into account:

•  A - EUR4.9 million Group structure effect(1);
•  A - EUR3.8 million foreign exchange effect, mainly reflecting the US
   dollar's depreciation against the euro on average for the quarter compared 
   with the same period in the previous year.

At comparable Group structure and exchange rates, sales growth (+ 9.5% vs. 1st
quarter 2009) reflects the overall upturn in sales volumes (+ 7.6%). This trend,
however, varied from one business group to another.

The price/mix effect improved + 1.9% thanks to inventory rebuilding in specialty
products, which had a positive effect on the mix.

It should be pointed out that business in the 1st quarter of 2009, which was
especially impacted by the inventory reduction trend, forms a favorable basis of
comparison for the 1st quarter of 2010.

Sales by business group

(non-audited, 
EUR millions)  1st quarter  1st quarter  Current  Structure  Foreign Comparable
                  2010         2009     change     effect   exchange  change(2)
                                           %         %       effect %     %

Sales, of 
which:            751.6        694.3    + 8.2%    - 0.7%     - 0.6%    + 9.5%
Minerals for 
Ceramics, 
Refractories,
Abrasives & 
Foundry           244.6        193.0   + 26.6%    - 0.1%     - 1.9%   + 28.6%
Performance & 
Filtration 
Minerals          137.6        118.5   + 16.2%    - 0.9%     - 2.7%   + 19.8%
Pigments for 
Paper             167.4        158.7    + 5.5%         -     - 1.6%    + 7.1%
Materials & 
Monolithics       212.1        228.9    - 7.4%    - 1.6%     + 2.6%    - 8.4%
Holding 
Companies & 
Eliminations     (10.1)        (4.8)      n.s.      n.s.       n.s.      n.s.

Sales by geographic destination

(non-audited, EUR millions)   1st quarter      % change         % consolidated
                             2010 sales    1st quarter 2010       sales in 1st 
                                         vs. 1st quarter 2009     quarter 2010

Western Europe                 365.2             - 2%                49%
United States / Canada         157.7            + 13%                21%
Japan / Australia               37.1            + 10%                 5%
Emerging countries             191.6            + 29%                25%
Total                          751.6           + 8.2%               100%

In the 1st quarter of 2010, sales to emerging countries rose + 29% compared with
the 1st quarter of 2009, thanks to the strong momentum of the Indian and Chinese
economies. Western Europe was affected by the weakness of Building Materials.
The sharp improvement recorded in North America marks the activity's gradual
return to normal, together with the rebuilding of inventory in some industrial
chains despite poor weather conditions.

(1) Deconsolidation of Xinlong (China, late January 2009), divestment of
    Planchers Fabre (France, May 2009).
(2) At comparable structure and exchange rates.

Minerals for Ceramics, Refractories, Abrasives & Foundry 
(32% of consolidated sales)

Minerals for Refractories, Fused Minerals (particularly Abrasives) and Graphite
markets benefited from the turnaround in the steel, industrial equipment and
automotive sectors and from a progressive inventory rebuilding trend in the
segments that were worst hit by the economic crisis. Over the period, the
Minerals for Ceramics markets improved slightly, construction in developed
countries showed no significant signs of improvement.

Sales, at EUR244.6 million for the 1st quarter of 2010, rose + 26.6% compared
with the 1st quarter of 2009 (which was down - 33.0% from 1st quarter 2008). An
analysis of this change shows:

•  A limited structure effect of - EUR0.3 million;
•  Foreign exchange impact of - EUR3.8 million.

The sharp upturn in demand in Fused Minerals, Minerals for Refractories,
Graphite & Carbon and, to a lesser extent, in Minerals for Ceramics, explains
the increase in revenue, which also benefited from sales of high value-added
products.

Several production facilities that were temporarily idled in 2008 and 2009 were
restarted during the quarter.

Performance & Filtration Minerals 
(18% of consolidated sales)

During the 1st quarter of 2010, Performance Minerals markets (paint, plastic,
adhesives, etc.) improved in North America and Europe compared with the very low
levels of the 1st quarter 2009. Minerals for Filtration improved compared the
year-ago period, which was affected by inventory reductions by the Group's
customers and by distributors.

Sales totaled EUR137.6 million in the 1st quarter of 2010 (+ 16.2%). This
increase factors in an unfavorable foreign exchange effect of - EUR3.3 million
and the limited effect of changes in structure(1) (- EUR1.1 million). At
comparable Group structure and exchange rates, the increase reflects the
significant upturn in sales volumes, Minerals for Filtration business benefited
from a strong effect of inventory rebuilding by its customers and distributors.
Product prices and mix improved.

The industrial plan for optimizing the Minerals for Filtration activity is now
delivering the expected results with the improvement in production volumes.

Pigments for Paper
(22% of consolidated sales)

The recovery of the paper sector, which began in 2009, continued into the 1st
quarter of 2010. Global production of printing and writing paper rose + 5.3%
compared with the trough of the 1st quarter of 2009. This rise is driven by
printers rebuilding their inventory in Europe and North America. In emerging
countries, business remains buoyant.

In that context, sales, at EUR167.4 million in the 1st quarter of 2010,
rebounded + 5.5%. This change includes a - EUR2.4 million in foreign exchange
impact. At comparable Group structure and exchange rates, the increase reflects
higher sales volumes, particularly in North America, and a slight improvement in
the price/mix component.

(1) Deconsolidation of Xinlong (China, late January 2009).

Materials & Monolithics 
(28% of consolidated sales)

In January and February, particularly adverse weather conditions temporarily
affected all construction activities in France, and notably roofing renovation.
As of end of March 2010, on a twelve-month rolling basis, the number of
single-family housing starts remained low, down approximately - 13%(1) from the
previous period (April 2008 to March 2009). In that difficult environment,
decreases of approximately - 19 %(2) and - 6%(2) were recorded for clay roofing
products and clay bricks, respectively.

Monolithic Refractories markets benefited from the sharp upturn in steelmaking
and, more generally, all activities involving liquid metal production. Other
segments (cement, glass, incineration, petrochemicals, etc.) that had been less
affected by the economic crisis improved slightly, whereas the number of orders
with respect to new furnace building projects remains limited.

At EUR212.1 million, the business group's sales (- 7.4% in 1st quarter 2010 vs.
1st quarter 2009) take into account:
 • a - EUR3.6 million structure impact(3),
 • a + EUR5.9 million foreign exchange effect.

At comparable Group structure and exchange rates, the decrease in turnover
reflects the significant fall in Building Materials sales volumes.

CURRENT OPERATING INCOME

 • Current operating income up + 89%
 • Upturn in volumes
 • Further reduction in variable costs

Current operating income totaled EUR84.1 million for the 1st quarter of 2010. It
factors in a negative foreign exchange effect (- EUR5.3 million), mainly due to
the US dollar's depreciation against the euro over the period. Changes in
structure had negligible effect.

At comparable Group structure and exchange rates, current operating income
increased twofold from the 1 st quarter of 2009. This performance is due to:
  • higher sales volumes contributing for + EUR12.7 million,
  • an improvement in product prices and mix, at + EUR5.9 million,
  • a decrease in variable costs for - EUR15.0 million,
  • the reduction in fixed costs and overheads (- EUR5.0 million).

The last two factors benefited from a favorable basis of comparison in relation
to the 1st quarter of 2009. 

The Group's operating margin was 11.2% (6.4% in the 1st quarter of 2009).

NET INCOME FROM CURRENT OPERATIONS

Net income from current operations amounted to EUR45.1 million (vs. EUR14.6
million in 1st quarter 2009). This sharp rise is due to growth in current
operating income and takes the following items into account:
 • a financial expense of - EUR19.9 million (vs. - EUR24.0 million in 1st
   quarter 2009), including an unfavorable foreign exchange effect 
   (- EUR1.9 million),
 • a tax charge of - EUR18.0 million (- EUR5.7 million in 1st quarter 2009),
   which represents a stable effective tax rate of 28.0%.

(1) Source: French Ministry of Ecology, Energy, Sustainable development and Sea.
(2) Source: FFTB, French Federation for Roof tiles and bricks.
(3) Divestment of Planchers Fabre (France, May 2009).

NET INCOME

After taking into account other operating revenue and expenses, net of tax 
(- EUR0.1 million over the period, vs. - EUR21.2 million for the same period the
previous year), the Group's share of net income for the 1st quarter of 2010
totaled + EUR45.0 million (vs. a net loss of - EUR6.6 million in 1st 
quarter 2009).

FINANCIAL SITUATION

The Group's financial situation remained sound at the end of the 1st quarter of
2010, with no significant change in net debt since December 31, 2009, despite
adverse currency fluctuations.

                                     ***

Availability of information

The present press release is available on the Group's website www.imerys.com,
and can be consulted from the home page in the "Press Releases" section.

Imerys will be commenting on its 1st quarter 2010 results at the Annual General
Shareholders' Meeting held today at 11:00 am (CET). This meeting will be
webcasted live on the Group's internet site, www.imerys.com.

Financial communication agenda

  • 1st half 2010 results: July 30;

  • 3rd quarter 2010 results: November 3.

These dates are given for guidance only and may be updated on the Group's
website at the address www.imerys.com, in the Investors & Analysts / Financial
Agenda section.

                                    ***

The world leader in adding value to minerals, Imerys is active in 47 countries
through more than 240 industrial and commercial sites. The Group achieved 
EUR2.8 billion in sales in 2009. 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 comprehensive information about Imerys may be obtained from its Internet
website (www.imerys.com) under Regulated Information, particularly in its
Document de Référence filed with Autorité des marchés financiers on April 
1, 2010 under number D.10-0205 (also available from the Autorité des marchés
financiers website, www.amf-france.org). Imerys draws the attention of
investors to chapter 4, "Risk Factors", of its Document de Référence.

Warning on projections and forward-looking statements: This document contains
projections and other forward-looking statements. Investors are cautioned that
such projections and forward-looking statements are subject to various risks and
uncertainties (many of which are difficult to predict and generally beyond the
control of Imerys) that could cause actual results and developments to differ
materially from those expressed or implied

                                   ***

Analyst/Investor Relations:    Press contacts:
Pascale Arnaud -               Pascale Arnaud -+33 (0)1 49 55 63 91 /66 55
+33 (0)1 49 55 63 9            Matthieu Roquet-Montégon - +33 (0)6 16 92 80 65
[email protected]                
                                     

                 1st Quarter 2010 Results (non-audited)
                                 Appendix

1. Consolidated sales breakdown

Quarterly change at comparable Group        Q1 2010
structure and exchange rates, 2010 vs. 2009   + 9.5%
                                             Q1 2009  Q2 2009  Q3 2009  Q4 2009
2009 vs. 2008 (reminder)                     - 23.8%  - 26.0%  - 20.9%   - 7.6%

Sales by business group                       Q1 2010     Q1 2009
Minerals for Ceramics, Refractories, 
Abrasives & Foundry                             32%         27%
Performance & Filtration Minerals               18%         17%
Pigments for Paper                              22%         23%
Materials & Monolithics                         28%         33%
TOTAL                                          100%        100%

Sales by geographic destination               Q1 2010     Q1 2009
Western Europe                                  49%         54%
   - of which France                            18%         23%
United States / Canada                          21%         20%
Japan / Australia                                5%          5%
Emerging countries                              25%         21%
TOTAL                                          100%        100%

2. Simplified income statement*

(EUR millions)                               Q1 2010     Q1 200       Change 
REVENUE                                      751.6       694.3        + 8.2%   
CURRENT OPERATING INCOME(1)                   84.1        44.4       + 89.4%
Financial income (expense)                   (19.9)      (24.0)   
Current taxes                                (18.0)       (5.7)   
Minority interests                            (1.2)       (0.1)
NET INCOME FROM CURRENT OPERATIONS(2)         45.1        14.6      + 209.0%
Other operating revenue and expenses, net     (0.1)      (21.2)
NET INCOME (LOSS)(2)                          45.0        (6.6)        n.s.

(1) Of which share in income of affiliates     0.6         0.9
(2) Group's share.

                                                       IMERYS - April 29, 2010
                      
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