Umicore Sa · EURONEXT:UMI
Umicore Sa — H1 2010 Earnings Presentation
43 slides from Umicore Sa's earnings presentation, Aug 6, 2010
Slide 1: Half year results 2010
Half year results 2010 6 August 2010
Slide 2: Highlights
Highlights • Results improved substantially driven by recovering demand • Longer-term growth projects on track • Strong capital structure maintained • Organisational structure aligned to strategy • Full year EBIT guidance raised • Interim dividend of € 0.325 2
Slide 3: Recovering economy drives revenues growth
Recovering economy drives revenues growth Revenues (in million €) 1,250 1,115 • Revenues up 15% at € 987 million 965 985 987 1,000 945 860 863 • Recovery in main markets of Advanced Materials and Precious Metals Products & 750 Catalysts • Global automotive production up 38% 500 • Portable electronic
Slide 4: Revenue growth and cost savings drive EBIT
Revenue growth and cost savings drive EBIT Recurring EBIT (in million €) 250 • Recurring EBIT of € 186 million, 215 199 versus € 50 million in H1 2009 200 186 160 • Driven by growing revenues 150 140 • Full effect of cost reduction measures 97 100 implemented in 2009 50 50 • Better supply conditions
Slide 5: Profitability recovers to pre downturn level
Profitability recovers to pre downturn level ROCE 25% 22% 22% • ROCE of 20% reflects recovering EBIT 20% 20% and disciplined capital management 20% 17% 14% 18% 15% 17% 14% 11% 14% 13% 11% • Profitability back to pre-downturn levels 10% 7% 5% 6% 7% 5% 0% 2002 H1 H2 2003 H1 H2 2004 H1 H2 2005 H1 H2 20
Slide 6: Guidance raised
Guidance raised Based on H1 performance and forecast demand, full year recurring EBIT expected to be in the range of ¤ 315 million to ¤ 335 million • Good demand levels in key markets and applications • Strong supply conditions for precious metals recycling and activities • High metal prices secured
Slide 7: Safety performance
Safety performance Accident frequency rate 14 12 10 8 6 • Safety indicators slightly above 2009 level 4 2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1 • Group safety initiative, started in 2009, pursued, 0.5 aiming for zero accident work environment 0.4 0.3 0.2 0.1 0.0 Accident severity rate 7
Slide 8: Growth projects
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Slide 9: Continued investment in growth projects
Continued investment in growth projects R&D 200 165 136 • R&D spend of € 66 million, 150 125 93 104 112 110 representing 6% of revenues 67 100 62 53 48 31 72 50 63 68 66 57 0 • Capex reached € 76 million 2002 2003 2004 2005 2006 2007 2008 2009 2010 (in € million) 250 216 • Capacity and capability in
Slide 10: Status of main investments: Li-Ion cathode materials expansions in Asia
Status of main investments Li-Ion cathode materials expansions in Asia • Capacity & capability expansion in Cheonan, South Korea • Preparation work ongoing • Initial production foreseen in H2 2011 • Greenfield plant in Kobe, Japan Rechargeable battery materials plant in Cheonan, South Korea • Prepar
Slide 11: Status of main investments: Automotive Catalyst expansions in China
Status of main investments Automotive Catalyst expansions in China • Expansion of production capacity & capability in Suzhou, China • Completed • Operational since June 2010 Expansion of production plant in Suzhou, China • Technology development centre in Suzhou, China • In preparatory stage • Commi
Slide 12: Status of main investments: UHT & battery recycling facility in Hoboken
Status of main investments UHT & battery recycling facility in Hoboken • New battery recycling plant in Hoboken • Construction ongoing Artist impression of battery recycling plant in Hoboken • Commissioning foreseen in Q3 2011 • Significant higher level of input stream of small batteries compared to
Slide 13: Business review
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Slide 14: Advanced Materials
Advanced Materials Cobalt & Specialty Materials Key figures H1 H1 (in million €) 2009 2010 Revenues 153.9 173.3 EBITDA 10.0 52.9 REBIT 0.5 39.5 Electro-optic Materials of which associates (4.6) 18.3 EBIT 3.5 35.6 R&D 8.4 9.0 Capex 32.9 16.4 REBIT margin 3.3% 12.2% Thin Film Products Element Six Abra
Slide 15: Advanced Materials
Advanced Materials Revenues • Business review 250 • Revenues up 13% 205 190 200 170 162 154 151 173 • Recurring EBIT back to pre-downturn level, 150 and almost double H2 2009 100 • Increased activity levels in all end-markets of 50 Cobalt & Specialty Materials 0 (in € H1 H2 H1 H2 H1 H2 H1 • Higher s
Slide 16: Precious Metals Products & Catalysts
Precious Metals Products & Catalysts Automotive Catalysts Key figures H1 H1 (in million €) 2009 2010 Revenues 387.9 478.6 EBITDA 10.4 82.3 REBIT (9.1) 67.4 Technical Materials Jewellery & Electroplating of which associates (10.6) 1.2 EBIT (13.3) 67.7 R&D 46.3 45.9 Capex 28.9 25.5 REBIT margin 0.4% 1
Slide 17: Precious Metals Products & Catalysts
Precious Metals Products & Catalysts Revenues • Business review 600 551 • Revenues up 23% 471 455 450 479 500 422 388 • Strong EBIT recovery 400 300 • Automotive Catalysts revenues grew in line with 200 global automotive production 100 0 • Strong contribution of Jewellery’s recycling (in € H1 H2 H1
Slide 18: Precious Metals Services
Precious Metals Services Precious Metals Recycling Key figures H1 H1 (in million €) 2009 2010 Revenues 185.7 204.6 EBITDA 76.5 108.3 Battery Recycling REBIT 60.2 87.3 of which associates - - EBIT 54.0 83.0 R&D 3.6 2.4 Capex 27.5 23.0 REBIT margin 32.4% 42.7% Precious Metals Management ROCE 61.9% 121
Slide 19: Precious Metals Services
Precious Metals Services Revenues • Business review 250 213 • Revenues are up 10%, reflecting improved supply 207 205 200 177 181 186 168 environment 150 • Favourable mix development with higher portion 100 of complex materials and end-of-life materials 50 • Positive impact of higher metal prices 0
Slide 20: Zinc Specialties
Zinc Specialties Key figures H1 H1 (in million €) 2009 2010 Building Products Revenues 132.6 130.5 EBITDA 30.7 22.2 REBIT 19.7 13.4 of which associates 1.1 1.2 EBIT 24.7 16.4 Zinc Chemicals R&D 1.4 1.9 Capex 6.6 5.0 REBIT margin 14.0% 9.3% ROCE 14.4% 9.0% 20
Slide 21: Zinc Specialties
Zinc Specialties Revenues • Business review 160 148 146 151 • Revenues in line year on year 133 133 131 122 120 • Strong improvement in revenues in Zinc Chemicals 80 • Building market affected by harsh winter conditions in Europe and low number of new 40 projects initiated in 2009 0 (in € H1 H2 H1 H
Slide 22: Financials
Financials
Slide 23: Financial overview
Financial overview • Robust cashflows • Strong capital structure maintained • Non recurring elements essentially non-cash • Recurring earnings per share well up to ¤ 1.24 • Dividend policy changed 23
Slide 24: Robust cash flow generation
Robust cash flow generation Net financial debt evolution (in million €) 100 +199 -97 -161 -241 0 -76 Net debt 31/12 Working -100 Net debt 2009 capital -20 -8 30/06 changes -73 2010 Capex Operating Taxes Net -200 -5 cashflow interests paid Dividends Other -300 24
Slide 25: Robust cash flow generation
Robust cash flow generation • Strong operating cashflows of ¤ 200 million (excluding working capital element) • Working capital increase of ¤ 100 million due to increased revenues and higher level of metal prices • Capex of ¤ 76 million • Net financial charges low in line with lower indebtedness and
Slide 26: Strong capital structure
Strong capital structure Net financial debt • Net debt at ¤ 241 million (in million €) • Gearing ratio (debt/debt+equity) of 13.7% 1,000 • Net debt / EBITDA of 0.6 (based on last 12 months) 773 800 743 • Diversified debt structure in terms of sourcing 610 600 577 and time horizon 620 510 Gross finan
Slide 27: Non-recurring items
Non-recurring items Non-recurring items H1 (in million €) 2010 Inventory impairments (7.3) • Non-recurring EBIT primarily due to Other impairments (4.2) impairments on metal inventories (mainly Other (0.4) zinc) and the goodwill of Hycore Non-recurring EBIT (12.0) Non-recurring tax result 2.7 • Impa
Slide 28: EPS back at pre-downturn levels
EPS back at pre-downturn levels EPS (in € / share) 1.93 2.00 1.80 1.73 0.74 0.84 0.78 1.41 1.50 0.57 1.21 0.59 1.24 • EPS up substantially due to strong net 1.17 1.00 0.80 earnings improvement and lower number 0.95 0.95 0.73 0.61 0.48 0.84 of shares outstanding in the market 0.55 0.50 0.31 0.62 0.28
Slide 29: Dividend policy changed
Dividend policy changed • Introduction of interim dividend payment • Interim dividend equals half of previous year’s total dividend • Difference with total dividend for the current year, paid out after AGM. • Policy of stable to growing dividend maintained • Interim dividend of ¤ 0.325 / share will
Slide 30: Wrap-up
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Slide 31: Conclusions
Conclusions • Results improved substantially • Longer-term growth projects on track • Strong capital structure maintained despite higher working capital needs and sustained investment level • Organisational structure aligned to strategy • Positive outlook • Interim dividend introduced 31
Slide 32: Annexes
Annexes
Slide 33: Organisational structure adapted
Organisational structure adapted Thin Energy Zinc Performance Film Materials Chemicals Materials Products Electro- Fuel Building Technical Electro- Optic Cells Products Materials plating Materials Cobalt & Platinum Specialty Engineered Materials Materials Business units Precious Precious clustered i
Slide 34: Segment breakdown
Segment breakdown Revenues EBIT Capital employed (excluding metal) (recurring) (average) ZS ZS AM AM ZS 13% 6% 18% 19% 17% AM 26% PMS PMS 8% 21% PMS 43% PMPC 32% PMPC PMPC 48% 49% J AM Advanced Materials J PMPC Precious Metals Products & Catalysts J PMS Precious Metals Services Corporate not include
Slide 35: Segment breakdown
Segment breakdown Capital expenditure R&D expenditure Workforce (end of period) C AM C C ZS 7% AM 14% ZS 11% 7% 7% 22% 3% ZS 15% PMS AM 4% 41% PMS PMS 10% 31% PMPC PMPC 33% PMPC 27% 68% J AM Advanced Materials J PMPC Precious Metals Products & Catalysts J PMS Precious Metals Services Corporate not i
Slide 36: P&L Profit & Loss statement
P&L Profit & Loss statement H1 H1 (in million €) 2009 2010 Turnover 3,384.8 4,678.7 Revenues 860.2 987.1 Recurring operating profit 66.6 166.5 Recurring contribution from associates (17.1) 19.8 Recurring EBIT 49.5 186.3 Net recurring financial result (17.4) (9.9) Net recurring tax result (9.8) (33.4
Slide 37: Income statement
Income statement Consolidated income statement H1 H1 (in million €) 2009 2010 Turnover 3,384.8 4,678.7 Operating income 3,405.5 4,712.4 Operating expenses (3,345.3) (4,544.9) Income (loss) from other financial assets 0.2 1.2 Result from operating activities 60.4 168.7 Net financial expenses (19.1) (
Slide 38: Balance sheet
Balance sheet Consolidated balance sheet 30/06 30/06 (in million €) 2009 2010 Non-current assets 1,189.9 1,316.6 Current assets 1,735.9 1,911.0 Total assets 2,925.7 3,227.6 Group shareholders' equity 1,260.4 1,453.7 Minority interest 47.6 61.7 Non-current liabilities 708.0 605.5 Current liabilities
Slide 39: Cashflow statement
Cashflow statement Consolidated cashflow statement H1 H1 (in million €) 2009 2010 Cashflow from operations 119.5 199.4 Tax paid 1.9 (19.5) Change in working capital requirements 153.4 (97.1) Net cashflow from operations 274.9 82.7 Capex (102.9) (75.5) Acquisitions (3.1) (8.8) Disposals 12.0 0.6 Loan
Slide 40: Shareprice performance
Shareprice performance Umicore shareprice Relative Umicore Umicore Umicore (in € / share) Performance year/year vs BEL20 vs DJ-SpCh 30 31/12/1999 +19.3% +25.2% -8.8% 25 31/12/2000 +3.6% +14.5% +3.4% 31/12/2001 +10.6% +20.3% +14.0% 20 31/12/2002 -7.1% +27.7% +12.6% 31/12/2003 +35.6% +22.3% +29.5% 31/
Slide 41: Financial calendar
Financial calendar 20/10/2010 Q3 2010 trading update 18-19/11/2010 Capital Market Days in Hoboken 10/02/2011 2010 results publication 26/04/2011 AGM and Q1 2011 trading update 04/08/2011 H1 2011 results publication 41
Slide 42: Forward-looking statements
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
Slide 43: Umicore
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