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Umicore FY 2020 performance11 February 2021
Highlights 2020
2021 outlookMaintaining strategic course while responding effectively to COVID-19 crisis2020 business review
Wrap-up
Q&A
Overview
Umicore FY 2020 performance 2
Highlights 2020
Umicore FY 2020 performance 3
Record performance with a nearly doubling of adj. EBIT YoY, reflecting strong growth across all business units
Exceptional metal price environment
High activity levels despite COVID-19 crisis and favorable trading conditions
Impact of pandemic on several end-markets
Excluding impact of excess inventories, Umicore’s EV cathode materials volumes grew broadly in line with EV battery demand
Adj. EBIT reflecting underutilized capacity and pricing pressure in China, as well as costs related to recent and ongoing expansions
Significant impact of pandemicon automotive market in H1
Umicore disproportionatelyexposed to market recovery in H2 due to strong position in gasoline for LDV
Strict cost management and operational excellence initiatives
3
CATALYSISENERGY & SURFACE
TECHNOLOGIES RECYCLING
Record earnings in unprecedented conditions
2021 outlook
5
2021 outlookUmicore 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 disruptions to the economy or Umicore’s operations
Umicore FY 2020 performance
CATALYSIS RECYCLINGENERGY & SURFACE TECHNOLOGIES
Further benefit from leading edge technology offering in gasoline applications for LDV in China and EuropeInitial impact of China VI legislation for HDD applications Savings from footprint adjustments and cost improvements carried out in 2020
Favorable metal pricesSupportive supply mix and moderate volume growth in Precious Metals RefiningIf current elevated metal price levels were to prevail throughout the year, Adj. EBIT would increase very significantly vs 2020
Substantial growth in sales volumes of cathode materials for EVs Persisting Chinese overcapacity and pricing pressureSome € 50m increase in fixed costs in Rechargeable Battery MaterialsVolume growth to result in meaningful Adj. EBIT growth, in line with current market consensus1
1 Umicore has engaged Vara Research GmbH to survey brokerage analysts to provide analysts' consensus estimates to the market. The most recent consensus is available on https://vara-services.com/umicore/
Maintaining the strategic course while responding effectively to the COVID-19 crisis
Maintaining the strategic course…
7Umicore FY 2020 performance
Strong regulatory drivers underpin Umicore’s growth
strategy
Umicore committed to strategic investments in clean mobility
and recyclingEU ambition : zero-emission mobilityChina :
NEV subsidy plan extended (2022)Higher NEV penetration rate (20% by 2025, 50% by 2035)
Green recovery measures and stimuli for cleaner mobilityStricter emission norms for ICE (China VI regulation for HDD in July 2021)Increased need for a more circular economy
Greenfield cathode materials plant in Poland :Commissioning by end of H1 20211st industrial-scale plant in Europe
Fuel cell catalyst production ramp-up in Korea Catalyst production capacity expansion in China for LDV and HDV Multi-year investment program to improve safety and environmental performance of Hoboken recycling plant
… while responding effectively to the COVID-19 crisis
8
Health & safety Strong capital and liquidity management
Umicore FY 2020 performance
Remain top priorityStrict hygiene and other precautionary measuresDedicated task force monitoring global operations
Strict cost managementOptimization of working capitalPostponement of certain investmentsFurther strengthening of liquidity
Production footprint reassessment
Consolidation of North American Automotive Catalysts productionStreamlining of Cobalt & Specialty Materials activitiesImpairment of certain assets
2020 business review
Free Operating Cash Flow€ 167 m (- € 39 m in 2019)
Net debt at € 1,414 mNet debt / LTM Adj. EBITDA 1.76x
Key figures FY 2020
1010
Record earnings in unprecedented conditions
€ 3.2 bn -4% YoY
REVENUES
Adjusted EPS € 1.34Proposed gross annual dividend of € 0.75 per share
Adjusted NET PROFIT (Group share) € 322 m
ROCE 12.1%
€ 536 m+5% YoY
Adjusted EBIT
€ 403 mCAPEX€ 804 m+7% YoY
Adjusted EBITDA
Umicore FY 2020 performance
Note: All references to revenues in this document refer to revenues excluding metals (all revenue elements – value of purchased metals)
-7%-5%
-39%
-93%
-64%
-22%
-10%-18%
3%
-4%
1% 3%
Jan
Feb
Mar Ap
r
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
COVID-19 outbreak: significant impact on auto-industry
FY 2020 YoY evolution of passenger car production across all powertrains (source: IHS & Umicore - 31/12/2020)
China Europe North America Global market
Umicore FY 2020 performance
-12%-21%
-34%
-62%-51%
-16%
-5%-8%
5% 3%
-2%
1%
Jan
Feb
Mar
Apr
May Jun Jul
Aug
Sep
Oct
Nov Dec
-27%
-88%
-47%
-1%
16%21% 20%
6%12% 9%
3%
-2%
Jan
Feb
Mar Ap
r
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
-2%
3%
-31%
-99%
-84%
-20%
6%
-6%
3% 3%
-9%
5%
Jan
Feb
Mar Ap
r
May Jun
Jul
Aug
Sep
Oct
Nov
Dec
-18% YoY-5% YoY -22% YoY -20% YoY
H1: shut down of car OEM’s assembly lines and dealerships in key regions as a result of government imposed lock-downsH2: pick-up in global car demand, albeit with discrepancies between regions in terms of timing, speed and intensity of the recovery
11
Automotive CatalystsRevenue decline much lower than global car marketcontractionDisproportionate benefit from market recovery in H2Outperformed LDV market in China and EuropeHigher sales of catalysts for HDD applicationsCost savings (footprint adjustments + operationalexcellence initiatives)
Precious Metals ChemistryRevenues down due to COVID-19 impact on automotive industryContinued strong demand for fuel cell catalysts
Catalysis FY 2020 performance
12
Revenues -7% and Adj. EBIT -17%; reflecting severe impact from the pandemic in H1
Umicore FY 2020 performance
REVENUES
H1
H2
598 633 709 717 571
565 620 652 743794
1.163 1.2531.360 1.460 1.364
0
300
600
900
1.200
1.500
2016
2017
2018
2019
2020
78 81 86 8721
75 85 82 99
132
152 166 168185
154
0
50
100
150
200
2016
2017
2018
2019
2020
Adjusted EBIT
million €
Evolution global EV LDV battery demand (GWh)
Umicore FY 2020 performance
Source: EV Volumes, Umicore
EV battery demand evolution
13
Global market
137
60%
79%
100%
23%
17%
0%
20 %
40 %
60 %
80 %
10 0%
12 0%
0
20
40
60
80
10 0
12 0
14 0
2015 2016 2017 2018 2019 2020
Global (LDV in Gwh)
Global YoY LDV GWh growth (%)
Global EV battery market up 17% to 137 GWh, driven by Europe
Regional differences in demand patterns:
Little year-on-year growth in China, well below industry anticipations
More than doubling of demand in Europe driven by CO2 Directive
Contrasting evolution in China with demanddropping in H1 and some recovery starting at year-end
14
Revenues -15%; Adj. EBIT -59%; severe COVID-19 impact and significant negative operating leverage
Umicore FY 2020 performance
Rechargeable Battery MaterialsLower cathode materials revenues: higher NMC volumes for EVs; lower LCO and ESS volumesUnderutilized capacity and unfavorable pricing in ChinaHigher fixed costs related to expansionsPositive contribution of Kokkola activities acquired in Dec. ’19
Cobalt & Specialty MaterialsLower revenues reflecting impact of COVID-19Lower contribution from refining & recycling activities; reduceddemand for cobalt and nickel chemicals
Electroplating recorded slightly higher revenues; revenues in Electro-Optic Materials decreased
H1
H2
REVENUES
million €
E&ST FY 2020 performance
288 398650 607 557
322495
639 618488610
894
1.289 1.2251.045
0250500750
1.0001.2501.500
2016
2017
2018
2019
2020
37 61121 102
5445
79
13681
2182
141
257
183
75
050
100150200250300
2016
2017
2018
2019
2020
Adjusted EBIT
Recycling FY 2020 performance
15Umicore FY 2020 performance
An exceptional metal price environment, in particular for rhodium
Historically high and volatileprecious and PGM price levels in2020, in particular for rhodium.Rhodium price surged in H2 20 in acontext of tight supply and highdemand from the car industry as aresult of increasingly stringentemission norms.Current prices for precious andPGM metals already well above theaverage received prices in 2020.
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
2018 2019 2020
Palladium (EUR/kg)
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
2018 2019 2020
Rhodium (EUR/kg)
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
2018 2019 2020
Gold (EUR/kg)
Source: Umicore*Comparison of average metal rates December 2019 vs December 2020
+148% Dec. 2019/2020*
+12% Dec. 2019/2020*
+33% Dec. 2019/2020*
62 73 79 7619163 55 56 112
171
125 128 135188
362
0
100
200
300
400
2016
2017
2018
2019
2020
H1
H2
Recycling FY 2020 performance
16
Revenues +23%; Adj. EBIT +92%; higher metal prices and to a lesser extent favorable trading conditions and supply mix
Umicore FY 2020 performance
Precious Metals Recycling Higher metal prices, particularly for PGMsSupportive supply environmentHigher processed volumes (vs. extended maintenance in ‘19)
Increased Jewelry & Industrial Metals revenuesSubstantial increase in earnings contribution fromPrecious Metals Management
REVENUES
323 339 327 313 440
318 311 300 368396
641 650 626 681836
0
250
500
750
1.000
2016
2017
2018
2019
2020
Adjusted EBIT
million €
Environmental focus on the Hoboken plant
Lead in blood
Multiple years of decreases with 2019 readings historically low, well below 5µg/dl norm
Unexpected increase in July 2020 readings, despite dust emissions well below the legal norm
Root cause analysis pointed to a combination of external factors
October 2020 test results show a clearreduction, again below 5µg/dl norm
Extra measures taken
Extra cleaning inside and outside plant
Redesigning raw materials storage
Enhancement of ventilation system
17
Creation of green zone
€ 50 m provision booked
Concertation ongoing
Umicore FY 2020 performance
Wrap-up
Wrap-up
19Umicore FY 2020 performance
Success of Horizon 2020 strategy, building on
complementarity of activities
Strongest financialperformance ever despiteunprecedented conditions
Long-term strategic drivers stronger than ever; furtherprogress in execution of growth strategy in 2021
Maintaining strategic course and commitment to growth investments in clean mobility and recycling while
responding effectively to the COVID-19 crisis
Umicore’s priority remainsto keep its employees
healthy and safe
Q&A
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