212 results
Highlights Solid performance despite challenging economic environment REBITDA (-5%) and REBIT (-11%) impacted by economic downturn Growth investments and R&D intensified Footprint adjustments in response to slowdown Cashflows were positive and net debt decreased further Stable dividend proposed at 1. / share Share buyback to continue in 213 2
Outlook Visibility remains limited Currently no signs of significant changes to market conditions as prevailing in H2 212 Recurring EBIT for 213 unlikely to reach 212 level In the absence of any improvements in the end markets Anticipating a lower contribution from the Recycling activities 3
Growth in revenues Revenues 4 Revenues up 5% Catalysis and Recycling represent bulk of revenue growth Performance Materials and Energy Materials stable Growth predominantly in H1 51 529 526 1,36 829 883 861 844 965 1,115 86 987 1,147 1,241 1,358 81 864 841 863 1,693 1,725 1,685 945 1,91 985 2,1 1,723 1,13 2, 1,172 1,187 2,319 2,428 2,5 2, (in million ) 1,5 1, 5 22 23 24 25 26 27 28 29 21 211 212 H1 H2 Application of revenue definition reviewed, affecting 211 figures Restated for discontinued operations in 24, 26 and 28
Margins affected by economic slowdown Recurring EBITDA 6 5 4 3 2 1 18 222 11 164 265 218 28 426 188 184 372 224 21 434 255 216 471 269 198 467 17 156 263 247 222 469 281 272 553 266 258 524 Economic slowdown affecting margins Changes in product and regional mix Price pressure Less favourable metal prices 5 4 3 2 1 22 114 146 23 48 49 98 48 98 155 126 28 24 25 26 27 28 29 21 329 359 355 233 159 16 14 122 111 17 199 215 5 97 146 186 156 343 Recurring EBIT 215 22 416 211 192 181 372 212 Growth investments impact costs Step-up in R&D expenditure Start-up and qualification costs Higher depreciation charges ROCE at 16.7% H1 H2 5 Restated in 24, 26 and 28 for discontinued operations in following year Revenues restated in 211 for reviewed application of revenue definition
Continued investment in growth projects R&D 2 15 1 5 31 48 13 111 62 53 115 73 51 125 69 96 165 68 67 136 68 71 139 76 87 163 9 91 181 R&D spend up 11% Efforts stepped up, especially in Catalysis and Recycling Corresponds to 6.8% of revenues (in million) 3 25 2 15 1 5 78 74 151 22 64 78 142 23 51 94 146 24 54 91 145 25 26 27 216 28 18 84 153 125 5 58 69 91 Capex 13 88 19 29 76 96 172 21 98 115 213 211 95 159 253 212 Capex of 253 million, an increase of 19% High level of investments in Automotive Catalysts and Recycling Investments in Energy Materials remain high, although lower than in 211 (mainly in Rechargeable Battery Materials) H1 H2 6 Restated in 24, 26 and 28 for discontinued operations in following year R&D restated for scope adjustment in 21
Sustainability performance & recognition 14 12 1 8 6 4 2 Accident frequency rate 11.7 7.5 7.1 6.3 7.2 5.3 5.32 3.12 3.54 3.61 22 23 24 25 26 27 28 29 21 211 2.86 212 Following a period of stagnation, safety performance has improved Accident frequency rate at lowest level ever: 2.86 83% of industrial sites accident-free Strong foundations laid to reach other environmental and social objectives (reporting end March) Positive external recognition of Umicore s efforts 7
Workforce evolution 18, 16, 14, 12, 1, 8, 6, 4, 1,582 8,338 11,47 14,54 9,895 14,26 9,828 14,142 People 13,932 14,844 15,413 9,53 9,826 1,79 9,315 13,72 9,558 14,386 1,164 14,572 14,438 1,396 Workforce numbers remained largely stable Increases in businesses with significant growth investments Reduction in businesses affected by market downturn Umicore is adapting its organisation in response to changes in the market Streamlining production footprint (Energy Materials, Performance Materials) 2, 22 23 24 25 26 27 28 29 21 211 212 Consolidation of activities on certain sites (e.g. Optics) Stepping out of certain product lines (e.g. AZO) Fully consolidated Associates 8 Restated for discontinued operations in 24, 26 and 28
Business review 212
Catalysis 212 figures 1, 8 6 4 2 (in million) 1 8 6 4 2-2 57 7 64 28 399 314 712 Revenues 586 699 311 359 814 866 424 413 275 339 391 453 29 21 211 212-14 31 17 89 91 78 44 42 39 39 46 49 Recurring EBIT Revenues up 6%, recurring EBITDA up 4% and recurring EBIT up 2% Global sales volumes and revenues of Automotive Catalysts in line with market growth of 6% Overall shift in geographical and product mix impacted margins Slight outperformance in declining European market and negative mix with fewer diesel cars produced Slight underperformance in North America In line with Asian market, with strong growth in China Continued success of Precious Metals Chemistry s catalytic solutions for life science and pharmaceuticals H1 H2 14
Catalysis Investing in Asia Continued Investments to address growing market in China New production line commissioned in Suzhou H2 212 Technology development centre opened H2 212 Dedicated SCR line for HDD under construction H1 214 Building position in growing Indian market Production facility under construction in Pune, India mid 214 Supporting global and local OEMs Addressing smaller market share with Japanese OEMs Umicore Shokubai, new majority-owned JV setup H2 212 Allows broad technology offering and global production support New technology development centre under construction near Nagoya, Japan H2 213 15
Catalysis and elsewhere Ramping up for Euro 6 business in light and heavy duty Capacity and capability expansion in Bad Säckingen, Germany H2 213 Dedicated HDD line in Florange, France, commissioned H2 212 Decision taken to invest in second HDD line in Florange H1 214 Strengthening of position in South America New technology centre in Americana, Brazil mid 214 Expand offering for Precious Metals Chemistry in North America New plant in Tulsa, Oklahoma H1 214 16
Energy Materials 212 figures 5 4 3 2 1 (in million) 6 5 4 3 2 1 36 21 57 28 25 19 395 Revenues 35 348 358 151 174 178 183 366 154 173 18 184 29 21 211 212 44 41 2 2 7 17 24 24 21 14 4 18 Recurring EBIT Revenues grew slightly (+2%), recurring EBITDA down 25%, recurring EBIT down 56% Strong sales volume growth in Rechargeable Battery Materials, mainly driven by demand for high-end portable electronics batteries Cobalt & Specialty Materials affected by economic slowdown, but showing resilience Electro-Optic Materials and Thin Film Products particularly affected by low demand Photovoltaics market decline hampered introduction of new technologies such as CPV Postponed investments in display industry impacted sales of sputtering targets H1 H2 2
Energy Materials Rechargeable Battery Materials on growth track Rechargeable Battery Materials investing to keep pace with demand Greenfield for NMC precursors under construction in Cheonan, South Korea H2 213 Further NMC cathode material capacity expansion in Cheonan H2 213 Expansion of NMC cathode production in Jiangmen, China H2 213 Expansion of cathode material product portfolio to LFP belife, JV set up with Prayon to develop LFP-based cathode materials H1 212 Pilot plant operational in Engis, Belgium H2 212 21
Energy Materials Adapting footprint to changing market conditions Adaptation of production footprint for Electro-Optic Materials Consolidation of Ge optics production to Quapaw, Oklahoma H2 212 Reducing Ge substrates production in Quapaw, Oklahoma H1 213 Refocusing product portfolio in Thin Film Products Termination of AZO target production and development in Balzers, Liechtenstein H2 212 22
Performance Materials 212 figures 6 5 4 3 2 1 (in million) 28 257 226 483 Revenues 44 446 249 519 196 227 28 219 271 29 21 211 212 267 256 523 Revenues stable (+1%), recurring EBITDA down 11%, recurring EBIT down 19% Building Products and Technical Materials revenues down, on the back of a deterioration of the construction market in Europe Zinc Chemicals revenues stable, although with increased competitive pressure in all activities 1 8 6 36 88 29 75 28 67 55 Low order levels in Platinum Engineered Materials, linked to postponed investments in display industry 4 2 52 16 21 37 47 39 31 24 Strong growth in Electroplating, built on the successful introduction of new products Recurring EBIT H1 H2 Lower contribution from Element Six Abrasives, affected by weaker end markets 26
Performance Materials Main developments Investments for Zn powder and oxide production in Asia Capacity expansion for Zn oxides in Goa, India H2 213 New plant for Zn powders in Changsha, China H1 215 Further focus Building Products portfolio on advanced products Surface-treatment plant under construction in Viviez, France H1 214 Streamlining of activities in Element Six Abrasives Capacity reduction for cemented carbides in South Africa H2 212 Construction of global synthetic diamond innovation centre near Oxford, UK H1 213 27
Recycling 212 figures 8 Revenues 637 681 Revenues up 7%, recurring EBITDA down 1%, recurring EBIT down 3% 6 58 427 56 327 339 Precious Metals Refining performance stable at high level 4 2 (in million) 3 25 2 15 1 5 95 16 22 28 253 255 24 252 222 254 31 29 21 267 211 118 93 195 134 66 52 12 133 Recurring EBIT 122 137 259 212 342 Further input optimisation of residues from non-ferrous metal industry Increased supply of e-scrap and spent industrial catalysts, while availability of spent automotive catalysts was lower Lower prices for specialty metals affected profitability Less buoyant conditions in Jewellery & Industrial Metals impacted product mix and margins Lower contribution from Precious Metals Management due to low metal price volatility and reduced economic activity H1 H2 3
Recycling Preparing for future growth Investments in Hoboken to prepare for future debottlenecking 1 st phase of upgrade and expansion of sampling facility finalised H2 214 now going into 2 nd phase New biological water treatment plant H2 213 New gas cleaning equipment on lead operations being installed H2 213 Battery recycling developments Dismantling centre for large batteries opened in Maxton, North Carolina H1 212 Adapting recycling capabilities in jewellery and industrial metals Closure of recycling operations in Foshan, China H2 212 Expansion of Ag recycling in Bangkok, Thailand H1 213 Expansion of Ag recycling in Pforzheim, Germany H2 214 31
212 financials
EPS remains at a high level Stable dividend proposed at 1. / share Recurring EPS Dividend.28.31.6.33.48.84.62.95.96.59 1.17.18.55.73 1.24 1.39 1.31.8.57 1.41 1.21.78 1.73.83 1.8.74 1.93 1.9 2.33 1.3 2.69 1.16 2.47 3. 2.5 2. 1.5 1..5. (in / share) 22 23 24 25 26 27 28 29 21 211 212 22 23 24 25 26 27 28 29 21.28.32.33.37.42.65.65.65.33.8 211 212.4.5 1. 1. 1..75.5.25. (in / share) H1 H2 Dividend interim dividend Restated for discontinued operations in 24, 26 and 28 Dividend proposed for 212 34
Non-recurring elements Non-recurring items (in million ) 212 Restructuring charges & provisions (42.4) Environmental charges & provisions (2.5) Impairments on metal inventory (3.1) Other 1.3 Non-recurring EBIT (46.7) Non-recurring tax result 5.4 Non-recurring minority result (1.7) Net non-recurring result (39.5) Net IAS 39 effect (2.3) Net result from discontinued operations - Total impact on net result (41.8) Non-recurring EBIT of -46.7 million Total negative impact on net result of 41.8 million Some ¾ of the amount is non-cash 35
Strong operational cashflows further reduced net debt Net financial debt evolution 3 2 1 +475 +34-253 Working capital changes -1-2 -267-94 -222 Net debt 31/12 211 Capex Taxes -13 Net interests -129 +24 Net debt 31/12 212-3 Operating cashflow (in million ) Dividends Other 36
Strong capital structure maintained Net financial debt Gross financial debt Debt ratios 1, 8 6 767 725 616 813 643 (in million ) Other bank facilities 11% Fixed rate loan 213 6% 5% Syndicated 4% loan 213/216 23% 3% 35% 31% 34% 45% 1. 8. 6. 585 4 2 24 34 515 178 333 177 36 267 222 22 23 24 25 26 27 28 29 21 211 212 Commercial paper 6% 2% 1% % 16% 1.1 1.3 1.6 1.3 1.7 1% 1.1 2%.8 11% 1. 19%.5 13%.6 11%.5 22 23 24 25 26 27 28 29 21 211 212 4. 2.. Securitisation Net financial debt Restated for discontinued operations in 24 37 End of year Restated for discontinued operations in 24 Gearing ratio (debt / debt+equity) Average net debt / recurring EBITDA Restated for discontinued operations in 24
Wrap-up
Wrap-up Second best ever performance in 212, despite challenging environment Recurring EBIT for 213 unlikely to reach 212 level Investments in growth initiatives to continue combined with further cost optimisation 4
Financial calendar 3/4/213 213 Q1 trading update & Annual General Meeting 3/5/213 Ex dividend trading date 7/5/213 Dividend record date 8/5/213 Dividend payment date 3/7/213 213 H1 results publication 23/1/213 213 Q3 trading update Forward-looking statements This presentation contains forward-looking information that involves risks and uncertainties, including statements about Umicore s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore. Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements. 41