Umicore Sa · EURONEXT:UMI
Umicore Sa — FY2018 Earnings Presentation
35 slides from Umicore Sa's earnings presentation, Feb 8, 2019
Slide 1: Umicore reaches Horizon 2020 targets two years ahead of schedule
Umicore reaches Horizon 2020 targets two years ahead of schedule and reaffirms upside potential 8 February 2019
Slide 2: Overview
Overview Highlights 2018 Reaching Horizon 2020 targets 2 years ahead of schedule Current market environment and Umicore developments 2018 Performance Reaffirming upside potential Q&A 2018 results 2
Slide 3: Highlights 2018
Highlights 2018 REVENUES REBIT R&D +17%* to € 3.3 bn +29%* to € 514 m € 196 m RECURRING NET ROCE CAPEX PROFIT (Group share) +22% to € 326 m 15.4% € 478 m *Excluding Discontinued Operations Strategic choices and recent investments are paying off 2018 results 3
Slide 4: Delivering on our Horizon 2020 strategy
Delivering on our Horizon 2020 strategy Clear leadership Doubled in clean mobility the size of the materials and business in recycling terms of earnings Rebalanced Turned the portfolio sustainability & earnings into a greater contributions competitive edge 2018 results 4
Slide 5: Delivering on our Horizon 2020 strategy
Delivering on our Horizon 2020 strategy Won largest share of gasoline GPF platforms Qualified for additional major EV platforms of leading OEMs Completion of first € 460 million investment wave ahead of schedule 2018 results 5
Slide 6: Clear leadership in clean mobility materials and recycling
Clear leadership in clean mobility materials and recycling ICE (p)HEV Emission control Battery catalysts materials and emission control catalysts BEV Fuel cells Battery Electro-catalyst materials and battery materials 2018 results 6
Slide 7: Delivering on our Horizon 2020 strategy
Delivering on our Horizon 2020 strategy Won largest share of gasoline GPF platforms REBIT Qualified for additional of € 514 million major EV platforms of in 2018 leading OEMs Completion of first € 460 million investment wave ahead of schedule 2018 results 7
Slide 8: Doubled the size of the business in terms of earnings
Doubled the size of the business in terms of earnings 800 REBIT 700 600 upside potential 500 400 Original 300 *excluding discontinued operations 514 2020… 200 100 255 0 2014 2018 Horizon 2020 ambition Million of Euros 2018 results 8
Slide 9: Delivering on our Horizon 2020 strategy
Delivering on our Horizon 2020 strategy Won largest share of gasoline GPF platforms REBIT Qualified for additional of € 514 million major EV platforms of in 2018 leading OEMs Rebalanced the portfolio & earnings contributions Completion of first € 460 million investment wave ahead of schedule 2018 re
Slide 10: Rebalanced the portfolio and earnings contribution
Rebalanced the portfolio and earnings contribution REBIT REBIT DISTRIBUTION PER SEGMENT Recycling Energy & Surface Technologies Catalysis 2015 2017 2018 (*) excluding Discontinued Operations 2018 results 10
Slide 11: Delivering on our Horizon 2020 strategy
Delivering on our Horizon 2020 strategy Won largest share of gasoline GPF platforms REBIT Qualified for additional of € 514 million major EV platforms of in 2018 leading OEMs Rebalanced Certified clean the portfolio and ethical supply & earnings contributions Completion of first € 460 million invest
Slide 12: Turned sustainability into a greater competitive edge
Turned sustainability into a greater competitive edge Application know-how Full alignment with the OECD Due Diligence Chemistry Guidance for Responsible Material Science Material Metals Supply Chains of Minerals Metallurgy solutions from Conflict-Affected and High-Risk areas https://www.umicore.com/
Slide 13: Consistent execution of the strategy: Investments
Consistent execution of the strategy Investments • Integration of recent acquisitions • Capacity expansion in Europe, China and India following major business wins Catalysis TIANJIN, CHINA • Completion of € 460 million investment program in China and Korea on an accelerated schedule • Start of € 660
Slide 14: Consistent execution of the strategy: Technology innovation
Consistent execution of the strategy Technology innovation R&D • Up 12% to € 196 million ENERGY & SURFACE • 6% of Umicore’s revenues TECHNOLOGIES • Innovation roadmap spanning the next 20 years for rechargeable CATALYSIS battery materials • New product developments for upcoming emission • Developing
Slide 15: Consistent execution of the strategy: Attracting new talents
Consistent execution of the strategy Attracting new talents Total number of employees 10,419 (+650), in line with growth strategy New hires Attractive employer in China, Korea with pioneering role in and Belgium sustainability and in offering solutions to societal problems 2018 results 15
Slide 16: Current market environment and Umicore developments
Current market environment and Umicore developments ENERGY & SURFACE CATALYSIS RECYCLING TECHNOLOGIES More challenging New xEV models Extended shutdown in macro-economic Hoboken environment New capacity in China in H2 and construction Supply mix broadly Evolving engine mix starting in Europe unchang
Slide 17: 2018 Performance
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Slide 18: Record results in 2018
Record results in 2018 And all three business groups contributing to growth* REVENUES REBIT RECURRING NET PROFIT +17%** to € 3.3 billion +29%** to € 514 million +22% to € 326 million 44% revenue growth in Energy & Surface Technologies Recurring EPS of € 1.36 (+12%) Energy & Surface Technologies alre
Slide 19: Strategic choices and recent investments are paying off
Strategic choices and recent investments are paying off REBIT & REBIT margin 700 15.5% 600 13.2% 12.2% 12.6% 514 500 10.9% 2014 REBIT 398 400 320 255 299 253 split per 300 203 200 128 140 165 Business 261 100 126 160 155 195 Group 0 2014 2015 2016 2017 2018 H1 Catalysis REBITDA & REBITDA margin
Slide 20: 15% group ROCE objective met, all businesses creating value
15 % group ROCE objective met, all businesses creating value ROCE `2014 ROCE `2018 35 35 30 30 25 25 20 RECYCLING 20 RECYCLING 31.4% 29.7% Group 15 Group 15 ROCE 10 ROCE 10 15.4% CATALYSIS E&ST 12.8% E&ST CATALYSIS 5 5 10.2% 10.1% 17.5% 14.0% 0 0 Average capital employed Average capital employed Cat
Slide 21: Catalysis
Catalysis 2018: Revenues +9%, REBIT +2%, REBITDA + 6% REVENUES 1,360 Automotive Catalysts 1500 1,094 1,163 1,253 917 1000 651 • Increased contribution of HDD activity 545 565 620 H1 450 • Growth driven by higher gasoline volumes, 500 598 633 708 H2 467 549 despite slowing market 0 • Significant
Slide 22: Energy & Surface Technologies
Energy & Surface Technologies 2018: Revenues +44%, REBIT +82%, REBITDA +63% REVENUES Rechargeable Battery Materials 1500 1,289 • Strong demand for NMC cathode materials for 1000 894 639 transportation applications 587 610 H1 488 495 • Fast ramp-up of new capacity in China and Korea 500 289 322 H
Slide 23: Rechargeable Battery Materials
Rechargeable Battery Materials Expansion projects on track Year 2016 2017 2018 2019 2020 2021 EUR 160 million announced April 2016 Brownfield in China Greenfield in Korea Completed on accelerated schedule Significant scale effects that EUR 300 million benefitted 2018 margins announced May 2017 Green
Slide 24: Recycling
Recycling 2018: Revenues +6%, REBIT +12%, REBITDA +7% (*) REVENUES 1000 800 678 663 Precious Metals Refining 641 650 626 600 H1 • Higher processed volumes despite fire 400 336 320 318 311 300 H2 • Somewhat more supportive metal prices 200 343 343 323 339 326 • Commercial conditions in some segme
Slide 25: Investing in growth
Investing in growth 3% Capital 14% 17% Group capex of € 478 million: expenditure • Energy & Surface Technologies: capacity expansions in Korea and China • Catalysis: capacity expansions in Poland, China and India Catalysis • Recycling: environmental investments in Hoboken Energy & 66% Surface Te
Slide 26: Net debt and cash flows
Net debt and cash flows 195 32 127 881 478 840 861 163 800 707 Million € Net debt Operating Working Capex Taxes Net interest Dividends Capital raise net Other Net debt 31/12/2017 Cash Flow Capital cash proceeds 31/12/2018 Including net acquisitions and divestments and treasury shares Operating cashf
Slide 27: Strong capital structure
Strong capital structure 31.1% 14.6% 15.3% 13.8% 24.4% 1.40 1000 1.19 Gearing ratio 900 800 700 0.67 0.64 840 861 600 0.56 Net debt, 500 end of period / 400 recurring EBITDA 300 200 321 Net debt, 298 296 end of period 100 0 2014 2015 2016 2017 2018 million € 10% equity raise in February 2018 C
Slide 28: Non-recurring elements
Non-recurring elements FY 2018 Non-recurring EBIT Million € including: Restructuring charges (14) • € 14 million restructuring charges, related to Brazil Impairments on permanently tied-up metal (6) inventories 6 • € 6 million impairments on Other (14) permanently tied-up metal inventories, Non-recu
Slide 29: Reaffirming upside potential
Reaffirming upside potential
Slide 30: Wrap-up
Wrap-up We will make further progress in the Horizon 2020 targets reached execution of our growth strategy through two years ahead of schedule 2019. However, we expect that REBIT growth in 2019 will be tempered by the present On track to capture upside potential subdued demand in the automotive and
Slide 31: On track to capture the upside potential
On track to capture the upside potential ENERGY & SURFACE CATALYSIS RECYCLING TECHNOLOGIES • Unprecedented • Rapidly increasing • Growing complexity value growth driven electrification of waste streams by legislation • Capturing • Expansion in • Well positioned to significant growth Precious Metals
Slide 32: Preparing the ground for further growth
Preparing the ground for further growth Clean Mobility innovation roadmap spanning the next 20 years H2 O2 Full electric Plug-in Cleaner Fuel cells hybrid combustion engines Battery Recycling gaining traction 2018 results 32
Slide 33: Q&A
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Slide 34: Financial calendar
Financial calendar 25 April 2019 Ordinary General Meeting of Shareholders 29 April 2019 Ex-dividend date 30 April 2019 Record date for the dividend 2 May 2019 Dividend payment date 31 July 2019 Half Year Results 2019 ` 2018 results 34
Slide 35: Forward-looking statements
Financial calendar Forward-looking statements This presentation contains forward- Should one or more of these risks, looking information that involves risks uncertainties or contingencies materialize, and uncertainties, including statements or should any underlying assumptions about Umicore’s plans,