Slide 1: Record performance, growth acceleration and capital increase
Record performance, growth acceleration and capital increase 9 February 2018 1
Slide 2: Overview
Overview • Highlights • Capital increase • Record performance 2017 • Outlook • Growth acceleration • Business review 2017 • Financial review 2017 • Wrap-up • Q&A 2
Slide 3: Highlights
Highlights • Record performance in 2017: strong growth in Energy & Surface Technologies • Growth acceleration driven by strong demand for battery materials already showing significant benefits in 2018 and offering upside potential compared to original Horizon 2020 recurring EBIT target • Rechargeabl
Slide 4: Capital increase
Capital increase • Placement of 22.4 million new ordinary shares (10% of outstanding shares) through accelerated bookbuild on 8 February 2018 • Offer rapidly and considerably oversubscribed, reflecting vote of confidence from investors • Transaction price of € 39.80, only slightly below closing pric
Slide 5: Record performance in 2017
Record performance in 2017 • Outstanding growth in 2017 • Revenues +16% and REBIT +24% (excluding discontinued operations) • ROCE increased to 15.1% • Strong growth in Energy & Surface Technologies benefitting from ramp- up of new production capacity for cathode materials • Significant progress in r
Slide 6: Outlook
Outlook Umicore anticipates that it will approach already in 2018 its Horizon 2020 target of doubling recurring EBIT (from the 2014 base – excluding discontinued operations) to a level of € 500 million, driven by buoyant demand for cathode materials and the fast ramp-up of new production lines in So
Slide 7: Growth acceleration
OO ERT umicore materials -for a betfa, life Growth acceleration
Slide 8: Rechargeable Battery Materials powering ahead with new investment of € 660 million
Rechargeable Battery Materials powering ahead with new investment of € 660 million • Accelerate expansion in cathode materials to fulfil fast growing demand • Investments in China (Jiangmen) and Europe (site selection 2018) using latest proprietary process technology • 2017: first benefits from € 46
Slide 9: Upscaled market growth projections
Upscaled market growth projections Cathode materials market (volume indexed) 2018 view • Automotive OEMs rolling out electrification 700 strategies 600 • Strong growth drivers in China 500 • Emission norms 400 • Quota for new energy vehicles 300 • Subsidies for passenger cars and busses 200 • Strong
Slide 10: Growth acceleration
Growth acceleration • Growth acceleration implies an upside potential of some 35 to 45% compared to the original Horizon 2020 recurring EBIT target. This assumes that current macroeconomic conditions continue to prevail. • Maintaining the 15%+ ROCE target at Group level on the expanded capital emplo
Slide 11: Business review 2017
OO ERT umicore materials -for a betfa, life Business review 2017
Slide 12: 2017 FY business review: Catalysis
2017 FY business review Catalysis Revenues Revenues +8% and recurring EBIT +9%: • Growth in Automotive Catalysts: • Consolidation of Ordeg as of second quarter • Higher revenues for HDD catalysts in Europe million € and Asia • Growth below market for LDV catalysts primarily due to lower demand from
Slide 13: 2017 FY business review: Energy & Surface Technologies
2017 FY business review Energy & Surface Technologies Revenues Revenues +46% and recurring EBIT +72%: • Outstanding growth in Rechargeable Battery Materials across applications. Recurring EBIT further supported by scale effects from ramp-up of additional production capacity in H2; six-fold expansion
Slide 14: 2017 FY business review: Recycling
2017 FY business review Recycling Revenues Revenues +1% and recurring EBIT +2%: • Stable revenues for Precious Metals Refining: higher processed volumes and more supportive metal prices offset by lower commercial terms in H2 million € Investments to improve environmental performance ongoing • Higher
Slide 15: Employees and Safety
Employees and Safety People Safety • Accident frequency rate at 3.01 • Accident severity rate at 0.09 People Lower number of employees in fully consolidated companies: divestment of Building Products business unit partly offset by organic growth in Asia and acquisitions in Automotive Catalyst and Co
Slide 16: Financial review
©) umicore materials fr a Letter life Financial review
Slide 17: Record results and higher margins
Record results and higher margins Group, including discontinued activities* Continued activities REBIT & REBIT margin REBIT & REBIT margin REBIT REBIT 2016-2017 2016-2017 +17% +24% million € million € REBITDA REBITDA 2016-2017 2016-2017 +14% +18% REBITDA REBITDA & REBITDA margin & REBITDA margin H
Slide 18: Group ROCE objective met
Group ROCE objective met Group ROCE 2016 14.9% 2017 15.1% Catalysis Energy & Surface Technologies Recycling • Catalysis ROCE 16.3%: remaining well above target ratio • Energy & Surface Technologies ROCE 14.4%: well up on the back of strong earnings growth and despite major growth investments •
Slide 19: Cash flows and net financial debt
Cash flows and net financial debt Includes € 211 million cash out for acquisitions Operating cashflow = cashflow from operations before change in working capital requirement plus dividend and grants received 19
Slide 20: Expenditures for organic growth
Expenditures for organic growth Capital expenditure Capex € 365 million relating mainly to growth million € projects in clean mobility and recycling: • Energy & Surface Technologies accounting for over 60% as a result of ongoing investments in cathode material production capacity • Recycling : inves
Slide 21: Dividend returns to shareholders
Dividend returns to shareholders Data per share Recurring EPS +14% million € Dividend of € 0.70 per share proposed Corresponds to 57% payout ratio based on recurring EPS of € 1.22 per share *The data in this chart were restated after the two-for-one share split on 16 October 2017 Recurring EPS D
Slide 22: Non-recurring elements
Non-recurring elements Non-recurring EBIT charge of € 46 million • Mainly related to divestments in the form of restructuring charges linked to sale of Thin Film Products’ large area coatings activity and accounting impact of sale of Building Products • € 7 million environmental provisions • € 7 mil
Slide 23: Higher leverage and solid capital structure
Higher leverage and solid capital structure Net financial debt Net financial debt of € 840 million million € • Including € 690 million European and US long term private debt placements Corresponds to : • 0.9 x average net debt to recurring EBITDA ratio • 31.1% gearing ratio Capital raising to provid
Slide 24: Wrap-up
Wrap-up • Record performance in 2017 driven by Energy & Surface Technologies • Execution of Horizon 2020 strategy ahead of schedule: Umicore anticipates that it will approach already in 2018 its Horizon 2020 target of doubling recurring EBIT to a level of € 500 million • Proposed gross annual divide
Slide 25: Q&A
©) umicore materials fr a Letter life Q&A
Slide 26: Financial calendar and forward-looking statements
Financial calendar 26 April 2018 Ordinary General Meeting of Shareholders 6 & 7 June 2018 Capital Market Days - South Korea 31 July 2018 Half Year Results 2018 8 February 2019 Full Year Results 2018 Forward-looking statements This presentation contains forward-looking information Should one or more