Imerys S.A. (NK) Earnings Call Transcript & Summary

Hello, and welcome to the Imerys 2020 results. My name is Judy, and I'll be your coordinator for today's event. Please note that the call is being recorded. [Operator Instructions] I will now hand you over to your host, Alessandro Dazza, CEO, to begin today's conference.

Good morning to all of you. Thank you for joining us to review Imerys' 2020 annual results. With me in the room today, Sébastien Rouge, our CFO. I would like to start by sharing with you a few key messages which characterize the year 2020. Imerys continued to show resilience amid the global crisis caused by the COVID-19. After the peak of the crisis in Q2, we have seen a continuous recovery in demand for our products. I am particularly proud to point out that in Q4, Imerys posted organic growth of 1.7% versus 2019, though the crisis is, as we all know, far from being over. Finally, our commercial efforts are bearing fruits, and we can demonstrate this with figures as well. I will come back with more details on this later on. On the cost side, we have delivered on the saving targets set, both with regards to the Connect & Shape transformation program and to the specific COVID-19 actions. But not only was the short term well managed, Imerys also continued to invest for the long term with capacity expansions and bolt-on acquisitions. Again, I will come back to it with more details later. Sales at EUR 3.8 billion were down 10% organically and 12% reported for the year. Our EBITDA margin was 16.6% for the full year but was above 18% in Q3 and in Q4, therefore, above last year level on the back of good cost management and progressively increasing volumes, certainly, a good basis for the year 2021. Our focus on cash generation resulted in a net free cash flow of EUR 373 million, up 7% versus 2019, which allowed the group to reduce its net financial debt by EUR 177 million in 2020. Net current income was EUR 167 million. Net income was impacted by exceptional charges of EUR 137 million, mostly noncash, and as a consequence of the ongoing management of our portfolio of businesses. Sébastien will give you more details on this. In this context, the Board of Directors decided to propose to the next general meeting of shareholders a dividend of EUR 1.15 per share, representing a 57% payout. If we now move on to the next slide, you can see that sales rebounded in Q3 and even more in Q4 after the significant drop in Q2 at the peak of the first wave of the pandemic. This is, in my opinion, particularly remarkable, considering that Q4 is historically lower than Q3. As I commented before, organic sales were back in positive territory in Q4, partly thanks, of course, to the general market recovery in the second half of the year, but also to the clear benefits of our customer-centric organization. The group outperformed underlying markets, gaining market shares in most sectors and geographies. This is evident also in the next slide. If we take a closer look at our end markets at the bottom of this page, you can see that all of them improved in the fourth quarter compared to previous ones, but remained largely negative, with the exception of steel production in Europe. Imerys, however, managed to post a sales volume increase of 0.7% for the quarter. This performance, once again, was possible, even considering the group's exposure to paper, which remained the weakest market among all with a fall of around 16% in Europe and in the U.S. in Q4. Going forward, we do expect the iron and steel as well as the automotive market to continue in their recovery patterns and even accelerate. Because of COVID, we have often forgot to talk about other things such as innovation. Imerys is an innovative company. I will not go into the details of each line of this slide, but it is important to know that Imerys launched 70 new products in 2020. I would like to thank our 350 collaborators in the 9 innovation centers worldwide which made this possible in such a difficult environment. This performance was clearly helped by the new customer-centric organization which allow a closer contact to the customer, a better understanding of their needs and joint developments with the customers. There is no shortage of opportunity -- opportunities, sorry, and I'm convinced this can only grow. Minerals are a key component in our economies, in our homes, in our lives. A few example, calcium carbonate in your toothpaste or kaolin in the bathroom tiles, the graphite that makes our -- the battery of our electric cars move or the diatomite which filters the beverages we drink. And I could continue long to give you examples. Our products and solutions are needed everywhere and greatly contribute to higher living standards. Moreover, what we see today in a growing number of applications, minerals replace less environmental-friendly materials and give the end products key priorities such as, for instance, lightweighting, which help reduce energy consumption. As mentioned initially, Imerys' EBITDA rebounded in the second half of the year, both in absolute terms and in percentage, lifted by growing volumes, by cost savings and a strong price-mix as we will see in the next 2 slides. We have managed once again to maintain a positive price-mix effect of approximately 1% on revenues despite the heavy pressure in the market following the COVID crisis and the drop in demand. This is quite exceptional considering that the group could benefit on top from a reduction in variable costs throughout the year and up to EUR 8 million in the fourth quarter. This is another achievement of our Connect & Shape program, which continues to deliver in line or above expectations. The graph on the right shows the full year effect of price-mix and variable costs, a contribution of EUR 54 million for the full year, the highest in the last 3 years. Looking forward, we do acknowledge that the generalized downturn -- downward trend in many raw materials and energy seen in the middle of last year has clearly stopped and even probably reversed towards the end of the year. I remain, however, confident that Imerys will continue to show a positive balance of these elements also in the future. On this slide, you can find a few key figures on our cost base. I have to say I'm proud of the work done in 2020 to manage costs. The Connect & Shape transformation plan generated savings of EUR 45 million on fixed costs and overheads for the year and EUR 73 million cumulative since its start last year -- the year before. We had the positive contribution of the program also on variable costs, and we have already achieved EUR 100 million gross savings target we had set in 2019, therefore, well ahead of plan. The specific COVID-19 action plan we have launched in April also contributed to reduce fixed costs and overheads by a further EUR 86 million. Many of these measures, you might remember from previous communication, were of temporary nature, which allows, today, Imerys to rapidly ramp up production to serve growing demand in the market, very reactive come back. Nevertheless, we are keeping and we are working to make part of such measures permanent and profit from an improved cost profile in the future. Finally, our I-Cube industrial improvement program continued to nicely deliver productivity gains in the range of EUR 40 million. On ESG, Imerys continued to make progress on its road map. We have launched a comprehensive program called SustainAgility in 2018, with ambitious but yet measurable and auditable objectives aligned with the United Nations' Sustainable Development Goals. These targets are today embedded in our way of doing business, and all our employees on all sites are engaged to drive the program and to deliver on it. You see on this slide a few selected achievements of the year 2020, for which we were awarded in December the EcoVadis' platinum rating, placing us among the top 1% of companies assessed in the world. In particular, I would like to mention in the global drive to combat climate change, we have committed to reduce our CO2 emissions by 36% relative to revenue by 2030. We are accelerating the pace of transition towards low-carbon energy across all our businesses, also thanks to dedicated investments in new and cleaner technology which puts us significantly ahead of schedule. I truly believe climate transition will create opportunities for Imerys in the future. Before moving on to analyze in more details our financials, on this slide, an update on the ongoing Chapter 11 process of the North American talc entities. The relevant U.S. court approved on January 27 the disclosure statement and the subsequent submission of the plan of reorganization to the vote of the creditors and claimants. This was a major step, you might remember. Subject to the positive vote of the required majority of creditors, the final approval of the plan by the relevant courts will start on June 21 and can be expected in summer 2021. In parallel, the sale of the assets of the North American talc entities to Magris, a Canadian private equity fund, for a purchase price of USD 223 million has been closed yesterday, February 17. The provisions set aside by the group to resolve this litigation is considered as appropriate to cover the expected financial impact of the plan for the group. I now hand over to Sébastien, who will comment in more details our financial performance.

Thank you, Alessandro. Good morning, everyone. Let me walk through the main elements of the full year financial performance of the group, starting with revenues. We posted revenues of EUR 3.8 billion this year, reported 12.8% down compared to 2019. This was mostly driven by the decrease of organic volumes of EUR 496 million following the COVID-19 crisis. As highlighted, we have a positive contribution of our price-mix efforts, contributing EUR 31 million to the revenues of the year. I want to highlight the change in the perimeter impact, which was negative up to what we reported in Q3 and is now slightly positive, highlighting the progressive performance of the bolt-on acquisition that we have made recently. Another point to highlight is the impact of currencies. It was positive up until H1 this year since there has been a depreciation of the USD and Brazilian real that are 2 important currencies for the group as compared to euros, and this has been giving a negative impact on our sales in Q3 and Q4. If we compare Q4 and show a note of what has been going out throughout the year, while overall, the organic change was minus 10.7% for the 12 months, you remember that we posted an organic growth, positive 1.7% in Q4 this year. If we look now at the detail of our different segments, starting with Performance Minerals that generate 57% of the sales of the group this year. You note as well, a very positive plus 0.7% organic growth for Q4, reflecting an improvement of the trend. The corresponding figure in Q3 was minus 8.6%. If we look by applications in consumer markets, agriculture and pharma performed well. In particular, our recent acquisition in the U.S., Cornerstone, which is specialized in high-purity perlite for our horticulture, continued to develop well throughout the year. Ceramics, construction-related and automotive-related markets continued to recover after being severely impacted by the crisis in the second quarter. On the contrary, paper markets remained weak across all different geographies, with further closure of paper mills throughout the different markets in which we operate. Reported under Asia Pacific, we enjoyed a strong growth of our Graphite & Carbon activities, in particular for mobile energy. You remember that the group has launched a capacity expansion to support this dynamic growth of the main automotive battery players in Q4 this year. At the end, current EBITDA for the segment totaled EUR 430 million in 2020, with a margin reaching 19.7%. If we go through High Temperature and Material Solutions (sic) [ High Temperature Materials & Solutions ] now, our second segment, sales totaled EUR 1.65 billion in 2020. You remember that this business segment has been more severely suffering from the weakness of our underlying markets. Anyhow, the revenues that were still down 16% organic in Q3 are almost stable as compared to last year, in Q4 this year, with a decrease limited to minus 0.9%. This reflects the acceleration of the production of iron and steel and the improvement in automotive sector that have gone throughout the year. In the meantime, building and construction markets remained high throughout the different geographies as well. Note that for 2021, we anticipate an important contribution of newly acquired entities in our High Temperature Solutions business. Current EBITDA posted EUR 188 million this year. With a contained margin erosion, the segment ended up with the current EBITDA representing 11.4% of its sales. How does this now translate for the profitability of the group as a whole? Current EBITDA for 2020 reached EUR 631 million, down 17% as compared to last year, first of all, because of a lower volume contribution, minus EUR 244 million. But this lower contribution has been partially offset by a positive price-mix, plus EUR 33 million at EBITDA level, and a positive contribution of the reduction of variable costs by EUR 13 million. And an important point that Alessandro highlighted is the positive contribution of fixed costs and overhead reduction, EUR 91 million in net for the year, coming from a combination of our structural Connect & Shape program and the specific actions that we have put together to react to the volume drop due to COVID-19. As hinted, we will make sure that we keep in the long run some of this COVID-19 savings. Therefore, we will keep on now reporting on cost reduction. But with a combined program of both Connect & Shape and COVID, we will just report on overall fixed costs and overhead reduction. An important item that I wanted to highlight as well is the positive contribution of the perimeter impact, reflecting the good performance of the newly acquired entities. Last point, currencies. Since the second part of 2020, we have a negative impact of currencies that will probably last a few months in 2021 if the FX remains at the same level. Last point, again, if we look at Q4 only, our EBITDA margin, 18%, was already higher than the one of 2019. If we look at the rest of our P&L, the decrease in absolute value of the EBITDA is driving the decrease of the operating income. We have current financial expenses at EUR 61 million, very much in line with last year if we take into account the one-off positive impact of last year of the reimbursement of the yen private placement. A rather stable corporate income tax rate at 28%, just a bit lower than last year. And Alessandro highlighted that EUR 137 million of other operating and expense of nonrecurring nature, a little bit down as compared to last year. I want to highlight that this EUR 137 million are mostly made out of noncash asset impairment and business reorganization for the main part around our paper business. Also, because of their nature and because of their timing, the vast majority of this EUR 137 million will not generate additional cash-out in 2021 or after. If we come back now to the net income from current operation, EUR 167 million. If you look at that by share, it represents EUR 2.03 per share that is the reference point that has been used to propose the dividend we will speak about in a few minutes. Looking now at the cash flow generation, we are happy to report a cash flow generation at higher by 7% as compared to last year. Two major contributors to this achievement in spite of the softer EBITDA: first of all, the tight and disciplined control of capital expenditures in line with our announcement in Q2; and a continued improvement of the working capital requirement. We have EUR 75 million cash generation coming from the decrease of the operating working cap, mostly coming from a decrease of inventory and a decrease of receivable. When you look at the detail of our financials, you will see these 2 items decreasing significantly as compared to December '19, even though our business was only decreasing by 2% in Q4. How does this strong cash generation impact our financial debt? Walking through the EUR 1.7 billion of net debt that we had at the beginning of the financial year, you'll find again the EUR 373 million of net current free operating cash flow, EUR 40 million coming from the cash out of the debt service; EUR 69 million of restructuring expenses, mostly coming out of the cash-out related to Connect & Shape; and EUR 98 million coming from the net acquisition and in particular, the 4 acquisitions that we have made this year, netted with the small disposal also that we had. I remind you the important impact of the dividend paid in share, which has contained the cash-out for the dividend in 2020 to EUR 18 million, reflecting the distribution made of the prior financial year. All in all, thanks to these different elements, we have reduced the net debt of the group by EUR 177 million, reaching EUR 1.5 billion at the end of the year. What is the structure of this net debt? You remember and you noticed that we have maintained a high level of liquidity. First of all, with EUR 650 million of cash equivalents on our balance sheet plus EUR 1.1 billion of undrawn credit line that are available to the group. Also, you remember that most of the funding of the group is with long-term instruments. We still have bonds outstanding, EUR 1.7 billion, with an average maturity of close to 5 years and no repayment to be made before 2022. The group as well keeps on renegotiating its credit lines on an ongoing basis, so that we keep on extending the average maturity of our available RCF. Imerys is, therefore, maintaining a strong balance sheet and a good liquidity position. The last point I wanted to highlight is the dividend proposal that the Board of Directors will do to the general meeting of shareholders in May. We will be propose EUR 1.15 per share cash payment of the dividend, representing 57% of the net current result. This is consistent with the group's objective of ensuring an attractive shareholder return and reflects the confidence of the Board in the fundamental and in the prospects of the group. This proposal also preserves Imerys' financial structure and ability to continue seizing opportunities in the market recovery phase. On this note, I hand over to Alessandro for the outlook.

Thank you, Sébastien. Let's now look a bit ahead of us. The slide on Page 25 gives you an update on the midterm targets Imerys had disclosed during the Capital Market Day in June 2019. As shown in this table, we are largely on track to deliver on such targets, in particular, in terms of organic growth, cost savings, CapEx and its allocation, financial position and dividends. We might, however, not achieve the increase in EBITDA margin by 2022 due to the setback caused by the COVID-19 crisis. We will, nevertheless, deliver a sequential improvement of EBITDA margin in 2021 and in 2022. Thanks to all the actions in place as well as the future contribution of projects in our pipeline, some of them shown on the next slide. So here, you have a snapshot of our -- some of our recent moves that will support and contribute to Imerys' future development: 3 acquisitions in fast-growing geographies such as India, Turkey and Taiwan; an acquisition in the U.S. in the attractive horticulture market; a capacity expansion for synthetic graphites to serve the booming lithium-ion battery market; and finally, a CapEx in the U.S. to improve our CO2 footprint. Specifically on this, Imerys will replace coal as fuel for its kilns with biomass, reducing the group CO2 footprint by as much as 5% with this action alone. So let me now wrap up this presentation by saying that Imerys can count on strong fundamentals for the future. Our customer-focused organization, our recent investments, acquisitions and CapEx, our efforts on innovation, these all will contribute to drive our growth above the expected recovery of underlying markets. Our improved cost base and active portfolio management will lead to an improvement of our profitability. Finally, Imerys' sound financial structure and liquidity, together with its cash generation capability, will allow the group to grab value creative opportunities as they arise in a responsible way. Thank you for your attention. I now open the session to questions.

[Operator Instructions] The first question in the queue is coming from the line of Sven Edelfelt from ODDO.

Yes. Three questions for me, if I may. The first one is on the substantial COVID-19 action plan. Can you tell us which part of the EUR 86 million saving won't occur again in 2021? And maybe can you give us what was the salary cost for 2020? I think this number was EUR 729 million in 2019, but could you help us to understand the dynamic of the help you had from the state? That's the first question. The second one is on the asbestos litigation. It seems that the agenda has shifted a little bit. I was expecting a resolution to occur in H1, and it seems it could occur in summer. Obviously, nothing to complain, I believe. But since the judge has presented the plan for a vote back in January, what is exactly that has happened on extended maybe this resolution? And the last question, can we have an update on the restructuring of disposal potential -- potential disposal of the paper business? You mentioned a 16% drop in volume this year. That's a lot. So presumably, there is an action plan that is somewhere happening in the coming quarters.

Thank you, Sven, for the questions. I will then ask Sébastien to -- if he has in mind the costs of our staff or the labor cost on the group to a later stage. But to go through it, first of all, actions on COVID-19. Sven, you correctly pointed out when we put them in place in April when the pandemic exploded, we said that we chose voluntarily to opt as much as possible for temporary measures. We are expecting a rebound in demand. It came effectively, as we know from Q4 and as we expect going forward, therefore, the right choice, which allow us today to ramp up very rapidly our capacities to supply/demand. And believe me, it's not easy. Demand is strong at the moment. How much will we -- can we keep of these savings? On Slide 11, you have seen the summary. My comment is the following. First of all, Connect & Shape, EUR 45 million, this is structural, so this will stay. We show here EUR 71 million of variable costs being partly relating to purchasing actions, partly to productivity gains in our sites. This is there to stay. These are structural improvements. And out of the EUR 86 million purely COVID, we do count on transforming some of them to a permanent base because we've changed the way of working because we have organized our productions in a different way. I believe that at least 1/3 of it, on top of what I mentioned before, can be kept. So all in all, largely more than 50% of the cost savings are there to stay. Word on asbestos, your second question. The timing is pretty much in line with expectations. The 27, the court approved the disclosure statement and the submission to the creditors. They have 60 days. The deadline is the 27th of March for voting, so perfectly in line. We are talking about several, several thousands of claimants. Therefore, the count will take a few days. So we expect in the first days of April, around the first 10 days of April, to have the final result of this count. And the judge has already given herself the time to analyze such results and has set the date of June 21 for the hearing on the final confirmation. So potentially, it could still happen in H1, as you correctly said, Sven. A hearing of this size might take a few days. Then the judge has to value and pronounce his judgment. So that's why we are being cautious in saying into the summer, there are potential holidays, there are potential objections that will need to be dealt with, so we allow really few weeks of potential delay. But we remain confident on this timing being all the dates set. Last, on paper, our exposure, to a large extent, to graphic paper, which suffered more than other paper businesses in the COVID crisis, typically magazines, clearly has more difficulties to rebound than other sectors. As long as we don't travel, it has a serious impact. I'm still confident that there will be a natural return of consumption in a structurally declining market we are all well aware. We have no comments on your suggestion to divest or not. Of course, we will and we are analyzing all our options going forward. What is important today is to manage this drop in volume to manage the decline, which we are doing partly with certain impairments that we have decided to take last year and adjust our production capacity accordingly as we did in the past. Sébastien, do we have the figures that...

Yes, we have the figures. Thanks to the -- so what you will see when the detailed figures are published, staff cost overall for 2020 were EUR 875 million as compared to EUR 947 million in 2019. The important thing, and you mentioned that, Alessandro, keeping for us a certain number of the COVID savings, we have learned to operate some of our plants, some of our structure with less costs on the staff, but also having less recourse to external support, less travel, for example. And that is really that kind of savings that we want to maintain down the road.

Thank you, Sébastien.

[Operator Instructions] We have another question coming through on the phone line. The next question in the phone line is coming from the line of Benjamin Terdjman from Kepler.

Yes. I just have several of them, and first one is on your cost structure. So after the cost savings you did last year, could you maybe update us on your current split between fixed cost and variable cost for the group? Second question is on your CapEx program. Do you expect to go back to EUR 300 million CapEx in 2021? And then third question on your working capital. Do you expect the positive inflow you saw last year to fully reverse this year? And if not, what can we expect? That's it for me.

Benjamin, thank you. I will let Sébastien then take the first question on the specific split of fixed cost, variable costs. On CapEx, we have voluntarily chosen to reduce to a minimum CapEx of this year, EUR 250 million. We slightly overspent, in particular, because we have decided to launch the capacity expansion in synthetic graphites for lithium-ion batteries, which was not known or planned when we made the announcement. But it was really an exceptional year, Benjamin. I believe this group needs between EUR 300 million, EUR 350 million of CapEx to maintain its assets, to maintain its mines, to invest in the future and to continue on capacity expansions in markets which are attractive and deserve it. So this is the long-term range we had in the past. I do expect this year to be, again, in this field, especially -- sorry, in this range, especially if the economy continues to recover, as we see today, and with the projects we have in the pipeline. Once again, we supply -- and I'll give you an example of what we have in mind. We supply the lithium-ion batteries. This market had growth around 25% in Q4. It's a trend in which I believe will continue going forward. Capacities are limited, and therefore, I will not be surprised if we do announce the next step in following this market with either a greenfield or a brownfield expansion. On working capital, and then I'll let also add technically from Sébastien on his opinion, working capital, yes, part of the drop is certainly related to the drop in activity. But as Sébastien mentioned in his presentation, Q4 itself, which is the basis of reference, we were down only 2%. So business, in particular, sales receivables, were already picking up at the end of the year when we do the computation. A lot of the work was done on inventories. In my opinion, this is absolutely structural because we have changed our logistics chains, our value chains. We have changed our policy on inventories, on distributions, channels and so on. A lot of work which is not even finished. It might even improve because we have actions also for next year. So the expected and welcome rebound in activity should not automatically mean for Imerys next year a strong significant increase in working capital. Sébastien, do you want to add on this?

No, nothing. No specific figure that to add. Obviously, with a rebound of activity, we will have an increase of working cap. Our ability to contain that with the structural actions is really what we are basing our efforts on so that we mitigate that. This being said, Imerys is and will remain relatively a working capital-intensive business because of the nature of our activity and long lead time that we have. Again, we are working at shortening them. Anyway, when you have a boat crossing the ocean, that has a weight on your working cap by definition. To come back very precisely to your fixed cost variable cost question, we are roughly half-half, I would say, a little bit less fixed cost than variable. But the precise split is 48%, 52%.

And the next question in the queue is coming from the line of Jean-Christophe Lefèvre-Moulenq from CIC.

Yes. I have 2 questions, if you don't mind. The first one, can we come back to some volume numbers in paper? And also in steel, over the fourth quarter, if I remember, steel was positive in France and also in Europe and in Asia but still negative in the U.S. How do you see the situation in the beginning of 2021, first? And secondly, you mentioned the EUR 40 million cost effect of the cube (sic) [ I-Cube ]. Could we have more flavor on this?

[Foreign Language] Thank you, Jean-Christophe, for your questions. Let's first address underlying markets. You mentioned, in particular, steel. On Slide 7, we have figures for the year. Q2, around 30% negative, more or less aligned Europe and U.S., largest market for us; Q3, 20% negative; Q4, U.S. still double-digit negative, Europe finally positive, plus 3%. And I do confirm, if I look specifically December, to give you a flare, France, up 25%; Germany, up 10%; Italy, up 7%; Europe, European Union, up 10%, December figures steel production. Turkey, a market that you know is at our heart, up 18%. Only the United States is still slightly negative. So clearly, the trends on iron and steel is pointing up, which is not -- should not be a surprise because what drives steel consumption, the first market is construction that we know since middle of the year of last year, of course, is rebounding already. Secondly, automotive, and especially in automotive, I do expect a strong pickup, stronger the moment how this lockdown ends. But in principle, after a 70% drop in Q2 and a 10% drop in Q3, the world needs to change its cars. So there will be a natural mechanic strong rebound. I'm convinced of this. And you know that the automotive market not only is important for steel, it's very important for minerals as well. So I do look forward in a positive and optimistic way. On paper, there is, I would say, less to say. Figures are there. Again, there is a positive trend, at least. We had a 30% in Q2, 20% in Q3 and 15% in Q4. So the trend is there as well. It is slower. It is suffering more from home office. You print less. Being home, you travel less, you buy less newspaper, you buy less magazines. Airports are largely empty. So it will take a bit longer to recover. But even there, I'm convinced it will recover. Second question...

It was on I-Cube.

On I-Cube, yes, we mentioned EUR 40 million savings. Specifically, I-Cube is an industrial excellence program. The target is to increase productivity in our operations through technology improvements, specific dedicated CapEx or change of working habits. It's hundreds, if not thousands, of initiatives and of projects launched everywhere. They're all tracked, valued, followed up and then implemented, and if positive, often shared. Our operations are, yes, diversified, but there is always a common ground, a common technology, therefore, then shared and rolled out throughout the group. So talking details is difficult, but you go from better yields to more tons per hour of employee produced, less waste, less landfilling costs, faster running of machines, so typical industrial excellence program.

Okay, okay. So you didn't -- you can correct me, but I think you didn't shut down any plant.

No. To a large extent, no. As we said, the temporary -- and if we did, it was purely a business decisions for the long term. But COVID, we have chosen not to shut down or terminate employees because of COVID. We were convinced there would be a rebound, and we are glad we did not do it because the rebound is there. And today, we can supply, which is difficult when demand picks up so quickly in such a short time. And I know that we do profit at the moment from others that cannot do that so rapidly. But no, there were no major closures at all in 2020, and it's reflected also in the nonoperating figures of the group. No.

And the next question in the queue is coming from the line of Pierre Bosset from HSBC.

I have 3 questions, if I may. The first one is on the working capital requirement. Actually, you improved it by something like EUR 130 million in the space of 2 years. I just wonder whether or not this improvement can be kept in 2021. Or is it any exceptional in the improvement in 2019? It's the first question. So second question is on the new mineral solutions, the 70 new minerals solutions that you sold in 2020. Can you give us an indication of the revenue generated in 2020 or in 2021 on a full year basis? And the third question is on capital employed and return on capital employed. I saw a relatively strong decrease in the value of the mining assets. Any reason behind that? Have you unlocked some new reserves or not? And if you can comment on what is your return on capital employed after tax after the impairment you made this year. And what sort of target do you have on internal return on capital employed?

Thank you, Pierre. I will let Sébastien answer the third question. On working capital requirements, as I said before, yes, there is a certain impact of the drop in activity in 2020, but a lot of it is structural. And I appreciate that you mentioned it's 2 years in a row because these are actions addressing structural inventories, in particular, structural ways to manage the business and improve it as such on a structural basis. So I do hope almost that we will see it growing next year because it means it will be a strong year in terms of activity. But there is a structural improvement that is there to stay. On innovation, yes, we often forget to talk about it, but Imerys has 9 -- 6 large and 3 hubs, 9 innovation centers well spread around the world in the U.S., in China and the main part in Europe. We have 350 people working entirely and exclusively on innovation, developing new products and new solutions, even new technologies, new processes. We invest around EUR 50 million per year, which is around 1.3%, 1.4% of our revenues. And this year -- sorry, last year, 2020, new products contributed for 11% of our sales. So I hope this addresses your question. But we are putting even more focus on it. It is a key for the future, and I count on seeing this number grow next year. Sébastien on...

On the mining assets, yes, as part of the impairments that we have booked this year, there are specific paper-dedicated mining assets that we have impaired, being very confident that the mining assets that we have throughout the world and maintained in operation are enough to cover the whole need of the market. We do not publish and disclose specific targets for return on capital employed. Obviously, that's close to our heart. But we have, with the variability of the net profit this year, decided to wait a little bit until we publish a specific guidance on this aggregate.

And we have some questions coming through the queue -- coming through the web, sorry. The first question is, could you tell us more about your innovation capabilities, staff budget, number of centers, et cetera?