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Umicore H1 2019 performance
31 July 2019
Highlights H1 2019
2019 outlook
H1 2019 business review
Financial review
Wrap up
Q&A
Overview
Umicore H1 2019 performance 2
Highlights H1 2019
33
RECURRING NET
PROFIT (Group share)
Umicore H1 2019 performance
Committed to long-term strategy in clean
mobility materials and recycling
Important steps taken to expand integrated and
sustainable battery materials value chain in Europe
Agreement to acquire Freeport Cobalt’s refining
and cathode precursor activities in Finland
Long-term partnership with Glencore for
sustainable cobalt supply
Capacity expansions supporting growth in Automotive
Catalysts; greenfield sites under construction in China
and Poland for battery materials
Continued investments in R&D
Robust performance in challenging
market conditions and compared to
record levels in 2018
Catalysis: substantially outperforming automotive
market
E&ST: disciplined approach to capital spending,
adapting to short-term fluctuations in demand
Recycling: significant improvement in throughput rates
following last wave of investment
Free Cash Flow of € 50 m (- € 104 m in H1 18);
cashflow from operations of € 308 m (€ 102 m in H1
18) including stable working capital
Successful placement of € 390 m private debt at low
fixed interest rates
Interim dividend of € 0.375
Continued increase of
throughput rate and favorable
supply environment
Annualized processed volumes
well above 2018 record level
Favorable supply environment
Tailwinds from metal prices
July fire in Hoboken (REBIT
impact of about € 10 m)
Volume growth expected in
cathode materials
Full impact of subsidy cuts on EV
demand in China
Potential pick-up in demand for
ESS
Lower demand from portable
electronics and e-buses
New capacity in China, at an
adapted pace
Higher D&A and upfront greenfield
costs
Persisting low cobalt price
Strong performance expected
despite persisting headwinds in
automotive industry
Market share gains in gasoline
Benefitting from cGPFs in Europe
and China
Capacity expansions in Poland,
China and India
Revenue growth in Precious
Metals Chemistry
4
CATALYSIS ENERGY & SURFACE
TECHNOLOGIES
RECYCLING
Umicore H1 2019 performance
H2 2019 perspectives
5Umicore H1 2019 performance
Umicore confirms its outlook of recurring EBIT for the full year 2019 in a range of
€ 475 million to € 525 million, assuming no material further deterioration of the macroeconomic environment
2019 outlook confirmed
CATALYSIS ENERGY & SURFACE
TECHNOLOGIES
RECYCLING
Recurring
EBIT to grow
year on year
Recurring EBIT
well below the
level of last year
Recurring
EBIT to grow
year on year
H1 2019
business review
7Umicore H1 2019 performance
Catalysis H1 2019 market contextStrong headwinds in the automotive industry
Global light-duty vehicle production contracted by 6.7% year on yearChina down 12.1%
Europe down 6.4%
North America down 3.6%
China, the world’s largest car market, significantly declining since H2 2018
after years of strong growth
Falling diesel production in Europe (-13%), share of 36% of car production in
the region
No concrete signs of immediate recovery
61 63
78
75 8
1 85 86
82 8
7
0
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20
19
Automotive Catalysts (~90% Catalysis revenues)
Market share gains in light duty gasoline
Growing penetration of cGPFs
Good customer and platform mix esp. in China
Higher revenues in heavy-duty diesel
Precious Metals Chemistry
Strong demand from pharmaceutical and chemical
industries
Higher revenues from fuel cell catalysts
Catalysis H1 2019 performance
8
Revenues +1% and stable REBIT; in strong contrast with declining auto market
Umicore H1 2019 performance
549
545
598
565 633
620 709
652 717
0
100
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800
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20
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19
REVENUES
million €
H1
H2REBIT
9Umicore H1 2019 performance
Tightening emission norms for
LDV and HDD, in particular in
China, Europe and India
Significant value uplift especially
in gasoline catalysts
Increasing share of gasoline
platforms in the global mix
Increasing uptake of fuel cell
drivetrains
Umicore best positioned to
capture growth in growing
gasoline segment
Largest share of cGPF platforms
won in China and Europe
Umicore well positioned to
capture growth in HDD segments
Umicore expanding capacity in
fuel cells
Strong growth drivers in Catalysis
E&ST H1 19 market context
10Umicore H1 2019 performance
Transportation: slowdown in EV demand in China, the world’s largest EV market
ESS in Korea: production of new systems halted after safety incidents
Subdued demand for high-end portable electronics
Depressed cobalt price and inflow of unethically sourced artisanal cobalt
Excess customer inventories of high-cobalt containing products
Slowing growth pace of demand for cathode materials and lower metal prices
11
Revenues -7%; REBIT -16% reflecting slowdown in demand and lower metal prices
Umicore H1 2019 performance
Rechargeable Battery Materials
Lower NMC for ESS and LCO sales
Flat demand for automotive applications
Recycling and refining activities hit by lower metal prices
Cobalt & Specialty Materials
Customer destocking of excess inventories
Activities impacted by low metal prices
Inflow of cheaper unethically sourced artisanal cobalt
Revenues for Electroplating slightly down; stable for
Electro-Optic Materials
Battery materials value chain is ~70% E&ST revenues
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288
321 398 4
95
650
639
607
0
100
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500
600
700
H1
20
15
H2
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H2
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H1
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H2
20
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H1
20
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H2
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H1
20
19
H1
H2
REVENUES
million €
REBIT
4030 37
4561
79
121136
102
0
20
40
60
80
100
120
140
160
H1
20
15
H2
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H2
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H2
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H1
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H2
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H1
20
19
E&ST H1 19 performance
12Umicore H1 2019 performance
Electrification and technology differentiation
Electrification confirmed as the main
avenue to drastically reduce vehicle
emissions in mid & long term
Strongly supported by legislation:
Continued regulatory push in China
despite earlier than anticipated
subsidy cuts
CO2 legislation in Europe
and evidenced by the massive roll-
out of car OEM’s e-mobility strategies
Technology roadmap offers ample
room for innovation and
differentiation:
Product: range, charging times,
durability
Process: ability to scale up fast, cost
efficient and flexible processes,
quality consistency
Closed loop offering
Umicore ideally positioned to address the long-term requirements of
this industry, while managing short-term fluctuations with agility
Strong growth drivers for E&ST
13
Expanding integrated and sustainable battery
materials supply chain
Umicore H1 2019 performance
Umicore battery supply chain in Europe
Agreement to acquire Freeport
Cobalt’s refining and cathode
precursor activities in Finland
Fully integrated and sustainable battery materials
supply chain in Europe
To support Umicore’s and its customers’ European
growth plans
Supply precursors for cathode materials production in
Poland, due to start in H2 2020
Complementary IP and know-how for refining and
precursor production
Team of experienced battery industry professionals
Acquisition earnings accretive from 2020 and value
accretive from 2021
Closing subject to customary conditions and approvals
Partnership with Glencore for
sustainable cobalt supply
Long-term supply guarantee for substantial part of our
cobalt needs
Cobalt sourced from state-of-the-art industrial mining
operations, then shipped to our refineries globally
14Umicore H1 2019 performance
Strong supply mix
Increased availability of complex materials, in particular end-
of-life materials
Stricter enforcement of import ban of e-scrap in China
High volumes of more complex spent catalysts
Higher prices for certain PGMs
Recycling H1 2019 market contextSupportive market environment
H1
H2
343
320
323
318
339
311
327
300
313
0
150
300
450
600
H1
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H2
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Recycling H1 2019 performance
15
Revenues and REBIT -2%(*) due to extended maintenance shutdown
(*) excluding the impact of the divestment of the European activities of Technical
Materials at the end of January 2018 Umicore H1 2019 performance
Precious Metals Recycling (~70% Recycling
revenues)
Better throughput rates following latest wave of
investments in Hoboken
Lower processed volumes due to extended scheduled
shutdown
Better supply mix and higher metal prices
Revenues for Jewelry & Industrial Metals
slightly up; higher earnings contribution from Precious
Metals Management
REVENUES
million €
REBIT
7765 62 63
73
55
79
56
76
0
50
100
H1
20
15
H2
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15
H1
20
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H2
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H1
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H2
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H2
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16Umicore H1 2019 performance
Increasing resource scarcity
and need for closing the loop
Growing complexity of
materials to recycle
Eco-efficient recycling
processes are becoming the
norm
Umicore uniquely positioned to
capture growth in this segment
as the world’s largest and most
complex precious metal
recycler with world class
environmental and quality
standards
Strong drivers for Recycling
Financial review
18
REBIT & REBIT margin
REBITDA & REBITDA margin
Group, excluding discontinued activities, million €Umicore H1 2019 performance
Robust performance in a challenging environment
Down compared to a record H1 18 and resilient
sequential performance
vs H1 18 vs H2 18
Revenues - 3 % + 3 %
Recurring EBIT - 8 % - 5 %
Recurring EBITDA - 2 % =
Robust margin performance despite higher costs (D&A
and greenfield expansions) :
Recurring EBIT margin of 14.3%
Recurring EBITDA margin of 21.4%
Adoption of IFRS 16 lease standard increasing D&A and
recurring EBITDA by € 7.3 million
ROCE of 12.3% reflecting impact of recent investments
148
120 155
165 195
203 2
61
252
240
11.8%
10.0%
12.4%
12.8%
13.5%
13.0%
15.2%
15.9%
14.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
100
200
300
400H
1 2
015
H2 2
015
H1 2
016
H2 2
016
H1 2
017
H2 2
017
H1 2
018
H2 2
018
H1 2
019
220
206 238
258
288
299 3
64
356
35717.9%
17.4%
19.3%
20.5% 20.2%19.8%
21.3%22.4%
21.4%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
0
100
200
300
400
500
H1
201
5
H2
201
5
H1
201
6
H2
201
6
H1
201
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H2
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7
H1
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H2
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8
H1
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9
19Umicore H1 2019 performance* Free operating cashflow = cashflow generated from operations – capex & capitalized development expenses
Cashflow generated from operations tripled
compared to H1 18 and highest in recent years
Stable net working capital in 1H19 versus last
year’s strong increase
Higher capex (€ 241 m) of which two thirds in
E&ST
Complemented by increased capitalized
development expenses (€ 17 m) also mostly in
E&ST
Substantial improvement in free operating
cashflow year on year (€ 50 m in H1 19)
Full year projected capex of appr. € 600 m and
targeting stable working capital
*
Stronger free operating cash flows
20Umicore H1 2019 performance
* Cashflow generated from operations includes net working capital cash flows
Free operating cashflow
of € 50 m
(- € 104 m in H1 18)
** Free operating cashflow = cashflow generated from operations – capex & capitalized development expenses
Tax and net interest cash
out of € 86 m
(€ 88 m in H1 18)
Higher dividend pay-out to
Umicore shareholders
(€ 96m vs € 91m in H1 18)
Non-cash increase in net
financial debt of € 37 m
from IFRS 16 adoption
**
*
Net cash flow profile
15% 15% 14%14%
23%
31%
14%
24%29%
Umicore H1 2019 performance 21
Net financial debt € 1,059 m
Modest impact from the adoption of
IFRS 16 due to limited use of
operating leases (€ 37 m)
Ample funding headroom to
execute growth strategy, no
need for additional capital
injection
Corresponds to :
1.35 x average net debt to
recurring EBITDA ratio
29% net gearing ratio
Consolidated net
financial debt, end of
period
Gearing
ratio
Average net debt
/ recurring EBITDA
million €
314 321 298 296
556
840
429
8611,059
0.59 0.65 0.600.55
0.72
1.15
0.87 0.91
1.35
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
0
200
400
600
800
1000
1200
1400
1600
1800
2000
H1 2
015
H2 2
015
H1 2
016
H2 2
016
H1 2
017
H2 2
017
H1 2
018
H2 2
018
H1 2
019
Maintaining a strong capital structure
22Umicore H1 2019 performance
Issuance of € 390 m US private placement notes,
complementing existing committed credit facilities :
Historically low, fixed interest rates
Maturities of 7, 10 and 12 years
Expected drawdown in September
Total of committed medium and long term debt facilities
amounting to € 1,875 million.
No major maturities before 2029
330
360
390
795
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Committed medium & long term
facilitiesTotal of € 1,875 m
2017 Schuldschein
2017 US Private Placement
2019 US Private Placement
Syndicated bank facilities
(largely undrawn)
0
100
200
300
400
500
2023 2024 2025 2026 2027 2028 2029 2030 2031
Debt maturity profile
million € million €
Further extended funding base
Umicore H1 2019 performance 23
Adoption of IFRS 16 lease agreements standard
Adoption of IFRIC 23 Interpretation on uncertain tax positions
Change in valuation principles of permanently tied-up metal inventories :
Existing separate inventory category of metal stock with indefinite use required to run
operations without business interruptions
Change from LOCOM to IAS 16 & IAS 36 rules to reduce future non-cash and non-recurring
earnings volatility without underlying commercial and operational performance relevance
Market value of Group’s total permanently tied-up metal inventories double current book
value
Limited negative non-recurring EBIT items (€ 3 m)
Accounting changes and non-recurring items
Wrap-up
25Umicore H1 2019 performance
Performance in H1 and outlook
for the full year in line with
guidance provided in April
Robust H1 performance in
challenging market conditions
Catalysis: substantially
outperforming the automotive
market
E&ST: adjusting capital spending
to current slower pace of growth
Recycling: significant
improvement in throughput rates
Drivers behind growth strategy in
clean mobility materials and
recycling intact
Dealing with agility in challenging
market conditions while consistently
executing long-term strategy
Robust performance and strong
balance sheet providing ample
room to fund growth, R&D
investments and dividends
Wrap-up
Q&A
27 August 2019
7 February 2020
30 April 2020
Payment date for the interim dividend
Full Year Results 2019
Ordinary General Meeting of Shareholders
`
27Umicore H1 2019 performance
Financial calendar
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 subject to
significant business, economic and
competitive uncertainties and
contingencies, many of which are
beyond the control of Umicore.
Should one or more of these risks,
uncertainties or contingencies materialize,
or should any underlying assumptions
prove incorrect, actual results could vary
materially from those anticipated,
expected, estimated or projected.
As a result, neither Umicore nor
any other person assumes any
responsibility for the accuracy of these
forward-looking statements.
28Umicore H1 2019 performance
Forward-looking statements
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