Industria
UMICORE: HALF YEAR RESULTS 2024
Umicore updated its 2024 outlook for the Battery Materials business on June 12th , following the recent significant slowdown in short- and medium-term EV growth projections affecting its activities. The Group has taken immediate action to deal with this situation. The following measures have been initiated and are ongoing:
With the information available today, and building on the existing assets and orderbook, Umicore developed a scenario to realign its operations to the new market reality. This is based on the following assumptions:
This scenario results in a well utilized capacity in the last years of this decade, except for the Chinese CAM assets which Umicore assumes to remain underutilized.
Based on this scenario an impairment exercise has been performed, leading to a € 1.60 billion reduction in the Battery Materials' capital employed. The impairment relates to Property, Plant and Equipment (PPE) and non-current inventories across Battery Materials' activities, mainly in Asia. Therefore, the remaining capital employed for this business amounts to € 1.51 billion on 30 June 2024.
Within this scenario, Umicore anticipates that Battery Materials' EBIT will remain below break-even levels in 2025 and 2026, and returns above the cost of capital are expected to be achieved in the last years of this decade.
With the current scenario as baseline, a strategic review has been launched with the intent to unlock and maximize future business value in Battery Materials. This comprehensive review will explore opportunities on top of the current scenario. It will be developed in close engagement with Umicore's stakeholders, in particular its downstream industry partners.
The Group's guiding principles for the review remain:
With the Battery Materials review process ongoing, the Group remains committed to executing the strategy and business plans in Umicore's other activities, all while implementing above mentioned capital and cost discipline.
The Group intends to schedule a Capital Markets Day in the first quarter of 2025 which will include an in-depth review of the Battery Materials' business following the strategic review, as well as an update of the Business Groups Catalysis, Recycling and Specialty Materials. Umicore will present the future growth prospects and targets of each Business Group. In the meantime, updates will be provided when further information becomes available.
Umicore's Group revenues for the first half of 2024 amounted to € 1.8 billion versus € 2.1 billion in the first half of 2023. The adj. EBIT for the Group stood at € 241 million and the adj. EBITDA at € 393 million, down 36% and 24% respectively compared to the first half of 2023.
In 2023 Umicore launched the 'Efficiency for Growth' program, a Group-wide program that accelerates ongoing efficiency improvements across the different Business Groups to support both cost optimization, top-line growth and working capital improvement. This program is well on track to deliver at least € 70 million EBITDA in 2024 (included in the 2024 outlook), with more than half achieved over the first half of 2024. As from 2025, Umicore anticipates to achieve a run-rate exceeding € 100 million. This will be combined with additional efforts across the Group to help counteract the turbulent market context in the Battery Materials business .
Capital expenditures amounted to € 269 million, down 20% compared to the first half of 2023. Operational free cash flow remained strong at € 168 million, driven by a decrease in net working capital and lower investments. Net financial debt amounted to € 1.4 billion on 30 June 2024, corresponding to a net debt/ LTM adj. EBITDA ratio of 1.70x. The Group remains committed to a strong balance sheet going forward. The Group ROCE of 11.3% reflects the lower earnings and capital employed as a result of the impairments.
2024 Outlook
Based on the performance in the first half of the year and assuming precious metal prices remain at current levels for the remainder of the year, Umicore reconfirms it anticipates 2024 Group adj. EBITDA to be within a range of € 760 million to € 800 million.
As announced on June 12 , customers' most recent demand projections for Umicore's battery materials have steeply declined in a context of a sharp slowdown in global EV sales. As a result, volumes for Umicore's for the full year 2024 are anticipated to be equal to, or slightly below, the level of last year. Umicore expects adj. EBITDA in 2024 for this Business Group to be around break-even, including a positive one-off of c. € 50 million .
It is anticipated that the business unit Automotive Catalysts will continue to benefit from its strong market position in gasoline applications and further progress on efficiency improvements. Taking into account the current outstanding strategic metal hedges and the impact of efficiency measures, it is expected that the adj. EBITDA of the Business Group in 2024 will be in line with the level of the previous year, despite the lower PGM price environment.
Following the completion of the planned maintenance shutdown in the first half of the year, it is anticipated that Precious Metals Refining will post a solid underlying performance in the second half. Assuming that current metal prices continue to prevail throughout the year and taking into account the current strategic metal hedges, it is expected that the 2024 adj. EBITDA of the Business Group will be below the level of the previous year, in line with current market expectations .
Anticipating that the revenues and earnings of the Cobalt & Specialty Materials business unit will continue to be impacted by the challenging market environment. Umicore expects adj. EBITDA in the Business Group for the full year 2024 to be below the level of the previous year and below current market expectations .
It is anticipated that will be roughly in line with previous year.
Capital expenditures for the full year 2024 will be below € 650 million.
Investor Relations
Media Relations
19 August 2024 Ex-dividend trading date, interim dividend 2024
20 August 2024 Record date for the interim dividend 2024
21 August 2024 Payment date for the interim dividend 2024
14 February 2025 Full Year Results 2024
Umicore is a circular materials technology Group. It focuses on application areas where its expertise in materials science, chemistry and metallurgy make a real difference. Its activities are organized in four business groups: Battery Materials, Catalysis, Recycling and Specialty Materials. Each business group is divided into market-focused business units offering materials and solutions that are at the cutting edge of new technological developments and essential to everyday life.
Umicore generates the majority of its revenues from and dedicates most of its R&D efforts to clean mobility materials and recycling. Umicore's overriding goal of sustainable value creation is based on an ambition to develop, produce and recycle materials in a way that fulfills its mission: Materials for a better life.
Umicore's industrial and commercial operations as well as R&D activities are located across the world to best serve its global customer base with around 12,000 employees. The Group generated revenues (excluding metal) of € 1.8 billion (turnover of € 7.4 billion) in the first half year of 2024.
___________________________________________________________________________________________
A conference call and audio webcast for analysts and investors will take place today at 07:30 AM CET. Press representatives are welcome to watch the live audio webcast. For further interpretation, they can contact the Media Relations team.
Access to our webcast on our Financial Results page.
All references to revenues in this document refer to revenues excluding metals (i.e. all revenue elements less the value of the following purchased metals: Au, Ag, Pt, Pd, Rh, Co, Ni, Pb, Cu, Ge, Li and Mn).
For more information, consult the “Update on strategic review of Battery Materials activities” section of this press release.
For more details on the performance of the Business Groups, consult the “Detailed overview of 2024 performance” section of this press release.
Predominantly related to the reversal of a provision for OEM recalls.
VARA consensus as at July 25 2024. Consensus adj. EBITDA for Recycling in 2024 amounted to € 324 million at the time of this publication.
VARA consensus as at July 25 2024. Consensus adj. EBITDA for Specialty Materials in 2024 amounted to € 109 million at the time of this publication.
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti