Umicore Sa · EURONEXT:UMI
Umicore Sa — Investor Presentation (February 2021)
58 slides from Umicore Sa's investor presentation, February 2021
Slide 1: Umicore Investor Presentation
Umicore Investor Presentation February 2021
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 2020) Adj. Revenues EBITDA € 3.2 bn € 804 m Adj. EBIT ROCE € 536 m 12.1% REVENUES BY GEOGRAPHY* Europe Clean North America mobility and R&D recycling 7% of South America 77% of revenues revenues Asia-Pacific Africa *
Slide 7: Successfully delivered Horizon 2020 growth strategy
Successfully delivered Horizon 2020 growth strategy Clear leadership in Turned sustainability clean mobility into a greater materials and competitive edge recycling Rebalanced the Doubled the size of portfolio & earnings the business in terms contributions of earnings 7
Slide 8: With a focused Group structure
With a focused 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 Electro-Optic Mat
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; technology China, Europe and India leader in cGPF platforms 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: Strong funding base
Strong funding base 35,2% 35,0% 31,1% 24,4% 13,8% 1,92 1500 1,76 1,9 1400 1300 1,40 Stable net financial debt of € 1,414 m, 1200 1,19 1,4 1100 slightly below the level of end 2019 1000 Gearing ratio 900 0,9 800 0,56 1443 1414 700 600 0,4 Net debt 500 / Adj. EBITDA Corresponds to robust credit ra
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 2020
Catalysis – major milestones in 2020 Sustained investments Ramp-up of new plant in product and for fuel cell catalysts process innovation in Korea Capacity expansions Rationalization of to support growth of production footprint and Automotive Catalysts in savings in LDV and HDD in China manufacturin
Slide 19: COVID-19 outbreak: significant impact on automotive industry
COVID-19 outbreak: significant impact on automotive industry FY 2020 YoY evolution of passenger car production across all powertrains (source: IHS & Umicore - 31/12/2020) China Europe North America Global market 21% 16% 20% 12% 9% 6% 5% 5% 3% 3% 3% 3% 1% 6% 3% 3% 1% 3% -1% -2% -2% -2% -4% -6% -5% -8
Slide 20: Catalysis FY 2020 performance
Catalysis FY 2020 performance Revenues -7% and Adj. EBIT -17%; reflecting severe impact from the pandemic in H1 REVENUES 1.360 1.460 1.364 1.500 1.253 1.163 Automotive Catalysts 1.200 743 652 794 900 565 620 Revenue decline much lower than global car market contraction 600 300 598 633 709 717 Dispro
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: expansion projects timeline
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 2020
E&ST – major milestones in 2020 Push towards electrification Progress with strategic Step-up in R&D Capacity expansions stronger than ever expansion in Europe expenditures Ongoing construction greenfield EU: ambition of zero-emission Ongoing construction of greenfield Higher R&D expenditures plant i
Slide 32: EV battery demand evolution
EV battery demand evolution Evolution global EV LDV battery demand (GWh) Global market 140 120% Global EV battery market in 2020 up 17% to 137 137 GWh, driven by Europe 120 100% 100% 100 Regional differences in demand patterns: 79% 80% 80 60% 60% Little year-on-year growth in China, well 60 below in
Slide 33: E&ST FY 2020 performance
E&ST FY 2020 performance Revenues -15%; Adj. EBIT -59%; severe COVID-19 impact and significant negative operating leverage REVENUES Rechargeable Battery Materials Lower cathode materials revenues: higher NMC volumes for 1.500 1.289 1.225 EVs; lower LCO and ESS volumes 1.250 1.045 1.000 894 Pricing p
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 2020
Recycling – major milestones in 2020 Leveraging unique Launch of multi-year Continued investments recycling technology investment plan to to sustain and improve to treat high complex, further improve the environmental PGM rich, materials robustness of the performance of the Hoboken operations plant
Slide 43: Recycling FY 2020 performance
Recycling FY 2020 performance An exceptional metal price environment, in particular for rhodium Rhodium (EUR/kg) Palladium (EUR/kg) Gold (EUR/kg) 500.000 100.000 100.000 Historically high and volatile 450.000 +148% 90.000 +12% 90.000 +33% precious and PGM price levels in 400.000 Dec. 2019/2020* 80.0
Slide 44: Recycling FY 2020 performance
Recycling FY 2020 performance Revenues +23%; Adj. EBIT +92%; higher metal prices and to a lesser extent favorable trading conditions and supply mix REVENUES 1.000 836 Precious Metals Recycling 750 641 650 626 681 396 Higher metal prices, particularly for PGMs 500 318 311 300 368 Supportive supply en
Slide 45: Impressions
Impressions PMR Hoboken recycling plant, Belgium 45
Slide 46: FY 2020 financial review
_ umicore materials fer a bette, life FY 2020 financial review
Slide 47: Key figures FY 2020
Key figures FY 2020 REVENUES Adjusted EBIT Free Operating Cash Flow € 167 m (- € 39 m in 2019) € 3.2 bn € 536 m Net debt at € 1,414 m -4% YoY +5% YoY Net debt / LTM Adj. EBITDA 1.76x Adjusted NET PROFIT Adjusted EBITDA CAPEX € 403 m (Group share) € 322 m € 804 m Adjusted EPS € 1.34 Proposed gross an
Slide 48: Record Adj. EBIT(DA) and margins
Record Adj. EBIT(DA) and margins Adj. EBIT & Adj. EBIT margin Record adj. EBIT (€ 536 m) and record adj. EBIT margin 16,3% 800 15,5% 14,8% 16,0% Stellar adj. EBIT growth in Recycling more than offset 13,2% 12,6% 513 536 14,0% decreases in Catalysis and E&ST. 600 509 12,0% 398 10,0% Includes € 24 m h
Slide 49: Pronounced operating leverage effects
Pronounced operating leverage effects 1H 2020 FY 2020 2H 2020 Group (YoY delta in %) 1H 2020 2H 2020 FY 2020 Revenues -4% -3% -4% Adj. EBITDA +5% +8% +7% Adj. EBIT +1% +9% +5% 49
Slide 50: Increase in free operating cash flows
Increase in free operating cash flows million €, continued operations only 1000 800 489 627 707 Cash flow from operations before changes in 603 500 436 444 549 working capital up 13 % at € 707 m 431 213 323 0 13 92 Increase in cash working capital of € 104 m -113 -78 -104 mostly driven by higher PGM
Slide 51: Net cash flow bridge
Net cash flow bridge million € 650 Free operating cashflow of 600 € 168 million resulting in a 550 € 29 million decrease in 500 reported net debt 450 400 350 603 435 € 44 million portion of 300 convertible bond accounted for 250 as equity 200 150 79 100 Dividend cash out of € 60 m 168 56 limited to
Slide 52: Outlook
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Slide 53: 2021 outlook
2021 outlook Umicore expects to achieve substantial growth in earnings in 2021, with growth in all business Groups Given the current limited visibility, this outlook statement is made under the assumption that the ongoing COVID-19 outbreak would not result in additional material or protracted disrup
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 • Record earnings in 2020 despite challenging market context due to COVID-19, demonstrating the merits of the strategy building on complementary activities • Well positioned to take advantage of accelerating global megatrends : more stringent emission control, electrifi
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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