Umicore Sa · EURONEXT:UMI
Umicore Sa — Investor Presentation (November 2020)
58 slides from Umicore Sa's investor presentation, November 2020
Slide 1: Umicore Investor Presentation
Umicore Investor Presentation November 2020
Slide 2: Introduction to Umicore
_ umicore materials fer a bette, life duction to Umicore
Slide 3: We are a global materials technology and recycling group
We are a global materials technology and recycling group One of three global A leading supplier of key The world’s leading leaders in emission control materials for rechargeable recycler of complex waste catalysts for light-duty and batteries used in electrified streams containing heavy-duty vehicle
Slide 4: With a unique position in clean mobility materials and recycling
With a unique position in clean mobility materials and recycling Internal Plug-In Hybrid Combustion Engine Electric Vehicle Umicore provides: Umicore provides: Emission control catalysts Battery cathode materials and emission control catalysts Full Electric Vehicle Fuel cells Umicore provides: Umico
Slide 5: Built on sound foundations
Built on sound foundations Supportive Unique business Industry leader in megatrends & model sustainability legislation resource scarcity more stringent emission control electrification recycling recycling of the automobile We help improve air quality, make electrified transport possible and tackle r
Slide 6: With a robust financial performance and a global presence
With a robust financial performance and a global presence Key figures (FY 2019) Adj. Revenues EBITDA € 3.4 bn € 753 m Adj. EBIT ROCE € 509 m 12.6% 40% - Europe Revenues* by Clean geography 14% - North America mobility and R&D Recycling 6% of 4% - South America 75% of revenues revenues 39% -
Slide 7: We deliver on our Horizon 2020 strategy
We deliver on our Horizon 2020 strategy Clear leadership Doubled the size in clean mobility of the business in materials and terms of earnings recycling Rebalanced the Turned portfolio sustainability into & earnings a greater contributions competitive edge 7
Slide 8: With a focused & balanced Group structure
With a focused & balanced Group structure CATALYSIS ENERGY & SURFACE RECYCLING TECHNOLOGIES Automotive Catalysts Rechargeable Battery Materials Precious Metals Refining Precious Metals Chemistry Cobalt & Specialty Materials Jewelry & Industrial Metals Electroplating Precious Metals Management Electr
Slide 9: Unique position in Automotive Catalysts
Unique position in Automotive Catalysts CATALYSIS Strong growth drivers: Umicore best positioned to Tightening emission norms for capture growth in growing LDV and HDD, in particular in gasoline segment; largest share China, Europe and India of cGPF platforms won in China and Europe Significant valu
Slide 10: Unique position in Rechargeable Battery Materials for xEV
Unique position in Rechargeable Battery Energy & Surface Materials for xEV Technologies Electrification confirmed as main avenue to drastically reduce vehicle emissions in mid- and Umicore uniquely positioned to address long-term long-term requirements of this industry, while managing short-term flu
Slide 11: Unique position in Recycling
Unique position in Recycling RECYCLING Metallurgical leadership and proprietary technologies for Increasing resource scarcity and need for closing the treating complex residues and by- loop products Growing complexity of materials to recycle Closing the loop Increased availability of complex materia
Slide 12: Solid framework for value creation
Solid framework for value creation Focus on Strong Focus on cashflows and growth returns solid capital structure • Multiple growth drivers • Earnings growth objective • Prioritize cash for strategic • Secular trends • Group and segment organic growth projects • Supporting legislation returns > cost
Slide 13: Maintaining a healthy capital structure
Maintaining a healthy capital structure 31,1% 35,2% 33,6% 28,6% 23,2% 24,4% 14,3% 13,8% 14,1% H1 20 net financial debt of € 1,349 m, million € slightly below the level of end 2019 1400 1,40 1,48 1,92 1,75 1443 1,60 1,19 Gearing 1349 1200 0,99 1,10 ratio 0,64 Corresponds to robust credit ratios : 1
Slide 14: Business Group Overview: Catalysis
Business Group Overview Catalysis
Slide 15: Catalysis
Catalysis A world leader in emission control catalysts for light-duty and Automotive heavy-duty vehicles and for all fuel types. Complemented by Catalysts smaller stationary catalyst applications (marine, power generation, …). Precious Develops and produces metal-based catalysts used in chemistry, M
Slide 16: Automotive Catalysts: business model
Automotive Catalysts: business model We develop technologies which allow our customers to meet automotive emission legislation at the lowest Total Cost of Ownership Complete catalyst systems Customer to reduce exhaust focus gas emissions People Operational engagement excellence Global manufacturing
Slide 17: Automotive Catalysts Production Footprint
Automotive Catalysts Production Footprint 17 plants in 14 countries, 9 R&D / tech. centers in 7 countries Frederikssund Karlskoga Lyngby Nowa Ruda Songdo Denmark Sweden Denmark Poland Korea Onsan Burlington Hanau Korea Canada Germany Tokoname Auburn Hills, MI Florange Japan USA France Kobe Japan Rhe
Slide 18: Catalysis – major milestones in 2019
Catalysis – major milestones in 2019 Capacity expansions Sustained investments Opening of new plant to support growth of in product and for fuel cell catalysts Automotive Catalysts in process innovation in Korea China, Poland and India 18
Slide 19: COVID-19 outbreak: impact on auto-industry
COVID-19 outbreak: impact on auto-industry H1 2020 YoY evolution of passenger car production across all powertrains (source: IHS & Umicore - 20/07/2020) China Europe North America Global market 2.500.000 2.500.000 2.500.000 9.000.000 -47% -34% -27% 8.000.000 -12% -54% -39% -67% -62% -26% 2.000.000 2
Slide 20: Catalysis H1 2020 performance
Catalysis H1 2020 performance Revenues -20% and Adj. EBIT -75%; severe impact from COVID-19 and related car OEM production shutdowns REVENUES 800 743 717 600 709 652 633 620 Automotive Catalysts 598 571 565 400 Widespread car OEM production shutdowns and car 200 sales plunging 0 H1 2016 H2 2016 H1 2
Slide 21: Impressions
Impressions Bad-Säckingen plant AC, Germany Catalyst elements Test bench Installation stationary DNox catalyst Nowa Ruda plant AC, Poland Canned catalyst 21
Slide 22: Business Group Overview: Energy & Surface Technologies
Business Group Overview Energy & Surface Technologies
Slide 23: Energy & Surface Technologies
Energy & Surface Technologies Rechargeable A leading cathode material supplier for lithium-ion rechargeable Battery batteries used in electrified vehicles and portable electronics. Materials Cobalt & Refines and recycles cobalt and nickel; produces cobalt and Specialty nickel specialty chemicals for
Slide 24: Rechargeable Battery Materials: business model
Rechargeable Battery Materials: business model Product innovation Process innovation based on strong fuels productivity application know-how improvements while maintaining highest quality standards (stringent Established industrial automotive standards) footprint close to the customer Integrated pro
Slide 25: It takes a lot to play in the automotive league
It takes a lot to play in the automotive league Car OEMs need : High quality cathode materials excellent product quality on 20+ specs • … custom made for different types of xEVs wide spectrum of cathode material technologies • … in massive volumes industrial capabilities • … at the highest speed and
Slide 26: Product, process and supply
Product, process and supply Key success factors 3 Supply 1 Product Technology 2 Process Technology Raw Industrial Lab scale Pilot scale materials scale • Feed flexibility • Ability to scale up fast Wide spectrum of cathode • Cost-efficient processes • Battery recycling material technologies • Indust
Slide 27: Cathode material specs to fulfil cell performance specs
1 Cathode material specs to fulfil cell Product technology performance specs Cathode material Cathode material product specs performance specs • Particle size • Packing • Capacity • Safety • Morphology density • Power • Charge • Composition • Porosity (charge/discharge) efficiency • Purity • Consist
Slide 28: Rechargeable Battery Materials
2 Rechargeable Battery Materials Process technology Expansion projects timeline Year 2016 2017 2018 2019 2020 2021 2022 2023 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 m
Slide 29: Access to raw materials
3 Access to raw materials Supply Unique integration in the value chain Raw material Metal Product Application End use Umicore Flexibility in supply feed, high speed to market and responsiveness to customer needs 29
Slide 30: Access to raw materials
3 Access to raw materials Supply Battery recycling as critical additional source of supply • Umicore is fully aligned with OECD Due Diligence for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas • Certified clean and ethical supply to our customers • Urban mining indi
Slide 31: E&ST – major milestones in 2019
E&ST – major milestones in 2019 Capacity expansions • Commissioning greenfield Commissioning of Acquisition of cobalt refinery plant in China new Process and cathode precursor Competence Center activities in Kokkola, Finland • Start of construction greenfield plant in Poland (Olen, Belgium) Support
Slide 32: COVID-19 outbreak: impact on EV sales
COVID-19 outbreak: impact on EV sales H1 2020 YoY evolution of BEV and pHEV car sales (source: EV Volumes) China Europe Global market 300.000 300.000 300.000 -31% 250.000 250.000 250.000 -14% 200.000 -54%* 200.000 200.000 -21% -7% -26% 150.000 150.000 150.000 -49% +17% -50% -27% 100.000 100.000 100.
Slide 33: E&ST H1 2020 performance
E&ST H1 2020 performance Revenues -8%; Adj. EBIT -47%; severe COVID-19 impact and higher fixed costs REVENUES Rechargeable Battery Materials 700 Overall volumes of cathode materials lower YoY and 600 650 639 618 607 500 557 materially lower than expected due to COVID-19 495 400 398 Higher fixed cost
Slide 34: Impressions
Impressions EV car battery pack Packaging finished product RBM Cheonan production sites, Korea 34
Slide 35: Business Group Overview: Recycling
Business Group Overview Recycling
Slide 36: Recycling
Recycling Operates the world’s most sophisticated precious metals recycling facility Precious Metals and recovers 17 precious and other valuable metals from complex waste Refining streams. Precious Metals Services for hedging, leasing, purchasing and sale of precious and Management platinum group me
Slide 37: Precious Metal Refining
Precious Metal Refining Largest and most complex precious metals recycling operation in the world Leading refiner of 17 different metals Processes more than 200 different types of raw materials World class environmental and quality standards 37
Slide 38: The value chain of metals
The value chain of metals Ores & Refined New concentrates metals products Smelters Consumers Mines Industry & refiners Complex mining Smelting Complex Complex concentrates & refining production end-of-life & residues residues scrap materials Industrial by-products End-of life materials 3838
Slide 39: Revenue Drivers
Revenue Drivers Main revenue drivers Treatment & refining Metal yield charges Treatment charges are Umicore assumes the risk determined, among other of recovery above or criteria, by the complexity under the contractually of the materials agreed recovery rate 39
Slide 40: Metal price exposure
Metal price exposure Managing the effects of metal price movements Direct: Indirect: on earnings through metal through raw Systematic hedging of yield material availability transactional exposure Depending on market conditions hedging of (part of) structural metal price exposure through contractual
Slide 41: Umicore has unique technology
Umicore has unique technology Umicore is unique due to its proprietary complex flowsheet that combines three metallurgical streams This enables Ability to optimize Flexibility to treat Recovery & Scope to broaden feed and a broad range of valorization of the to new types of therefore input materials
Slide 42: Recycling – major milestones in 2019
Recycling – major milestones in 2019 Completion of multi- Investments to sustain Upgrade of key year expansion and improve the equipment during program at Hoboken environmental extended shutdown plant performance of the plant Umicore H1 2019 performance 42
Slide 43: Recycling H1 2020 performance
Recycling H1 2020 performance Revenues +40%; Adj. EBIT +150%; increased volumes, higher metal prices and favorable supply mix REVENUES 600 450 Precious Metals Recycling 440 300 368 339 327 323 318 313 311 300 Higher processed volumes (vs. extended maintenance 150 in H1 19) 0 H1 2016 H2 2016 H1 2017
Slide 44: Impressions
Impressions PMR Hoboken recycling plant, Belgium 44
Slide 45: H1 2020 financial review
_ umicore materials fer a bette, life H1 2020 financial review
Slide 46: Key figures H1 2020
Key figures H1 2020 REVENUES Adjusted EBIT Free Operating Cash Flow € 108 m € 1.6 bn € 243 m Net debt at € 1,349 m -4% YoY Stable YoY Net debt / LTM Adj. EBITDA 1.75x Adjusted NET PROFIT Adjusted EBITDA CAPEX € 152 m (Group share) € 376 m € 148 m +5% YoY Adjusted EPS € 0.62 ROCE 10.9% Interim divide
Slide 47: Recycling results offset impact of automotive industry downturn on Catalysis and E&ST
Recycling results offset impact of automotive industry downturn on Catalysis and E&ST Adj. EBIT & Adj. EBIT margin 15,2% 15,3% 400 12,3% 13,5% 14,3% 16,00% Adjusted EBIT at € 243 million, in line 15,9% 14,00% 15,3% 300 12,00% with H1 19 12,8% 13,0% 10,00% 269 261 Stellar Adjusted EBIT growth in Recy
Slide 48: Pronounced offsetting operating leverage effects
Pronounced offsetting operating leverage effects Negative in Catalysis and E&ST vs positive in Recycling H1 YoY evolution 200% +150% 150% Group +108% Revenues -4% 100% Adj. EBITDA +5% 50% +40% Adj. EBIT +1% 0% -8% -20% -23% -50% -51% -47% -75% -100% Catalysis E&ST Recycling Revenues Adj. EBITDA Adj.
Slide 49: Increase in free operating cash flows
Increase in free operating cash flows million €, continued operations only 600 437 363 330 347 400 249 240 308 200 Cash flow from operations before changes 298 275 0 120 241 in working capital up at € 347 million 93 102 -10 10 -200 -156 -120 -89 -72 Increase in cash working capital of € 72 million -
Slide 50: Net cash flow bridge
Net cash flow bridge million € 275 Free operating cashflow of € 108 million translating in similar decrease in reported net financial debt (€94 million) versus start of the year 167 Includes € 50 million portion of convertible bond accounted for as equity 108 94 28 29 21 50 Combined cash out related
Slide 51: Outlook
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Slide 52: 2020 Group outlook
2020 Group outlook Solid performance in 2020 despite unprecedented and challenging market context Umicore expects its full year adjusted EBIT to be in the range of € 465 million to € 490 million with adjusted EBIT in Catalysis and Energy & Surface Technologies well below the level of 2019 and adjust
Slide 53: 2020 Segment outlook
2020 Segment outlook Based on current market trends, Umicore now expects global car production to be down by approximately 20% for the full year (compared to its previous assumption of a 25% decrease). In this scenario, Umicore expects adjusted EBIT for Catalysis for the full year of 2020 to be in t
Slide 54: Long-term growth drivers remain intact
Long-term growth drivers remain intact COVID-19 stimuli plans aimed at a ‘green recovery’ in China and Europe China: Extension of NEV subsidy plan from 2020 until end 2022 and confirmation of increased mandatory NEV credit targets for 2021-2023 ENERGY & SURFACE TECHNOLOGIES Europe: EU recovery plan
Slide 55: Key Investment Considerations
Key Investment Considerations
Slide 56: Key investment considerations
Key investment considerations • Well positioned to take advantage of accelerating global megatrends : more stringent emission control, electrification of the automobile and resource scarcity • Global presence and unique competences acquired over many years; • A market leader in most key product mark
Slide 57: Forward-looking statements
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, objectives, prove
Slide 58: umicore
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