Q2 25 results broadly in line, guidance falling short Imerys'' Q2 25 sales were down 10.7% and down 1.5% LFL to EUR886m as volumes contracted 3.3% due to the adverse demand backdrop in Europe. Adj. EBITDA declined 22% to EUR154m, reflecting 1) lower contribution from the Quartz JV due to excess inventories in solar end markets and 2) the deconsolidation of paper-related activities (at constant perimeter and ex. JV, EBITDA was up 1.7% thanks to cost savings). The group guides for FY 25 EBITDA of EUR540m-580m, which compares to Bloomberg consensus at EUR605m. Lithium project seeing capex overruns and delays Management now expects the Lithium project to start commercial production in 2030 vs. 2028 in its initial estimate. The group also pointed to increased capex for the project, from EUR1.0bn to EUR1.8bn. The capex uplift was said to be due to ESG compliance enhancement and inflation. The group also highlighted that due to market conditions, it is now seeking partners to support the project. We cut our estimates and TP - Neutral maintained We have cut our EPS est. by 36%/29% in 2025E/2026E to factor in the guidance shortfall, lower contribution from the Quartz JV and higher financial results. We have also reduced our TP from EUR30 to EUR22 to reflect 1) lower earnings forecasts for the core business, for which our valuation comes out at EUR24 (average of ROCE/WACC and DCF methods), 2) a negative NPV for the Lithium project (minus c.EUR2/share), reflecting the further decline in Lithium prices (at c. EUR10/kg vs. unit operating costs projected by management at EUR7-EUR9/kg), and 3) the sharp increase in projected capex for the project. We keep our Neutral stance.