SLIDE 1
Umicore H1 2020 performance
31 July 2020
COVID-19 outbreak and Umicore’s response H1 2020 business review Outlook H1 2020 financial review Wrap up Q&A
Overview
Umicore H1 2020 performance 2
Umicore H1 2020 performance 31 July 2020 Overview COVID- 19 - - PowerPoint PPT Presentation
Umicore H1 2020 performance 31 July 2020 Overview COVID- 19 - - PowerPoint PPT Presentation
Umicore H1 2020 performance 31 July 2020 Overview COVID- 19 outbreak and Umicores response H1 2020 business review Outlook H1 2020 financial review Wrap up Q&A Umicore H1 2020 performance 2 COVID-19 outbreak: impact on auto-industry
SLIDE 2
SLIDE 3
COVID-19 outbreak: impact on auto-industry
H1 2020 YoY evolution of passenger car production across all powertrains (source: IHS & Umicore - 20/07/2020) China Europe North America Global market H1 2020 global car production down 35% YoY
1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 7.000.000 8.000.000 9.000.000
January February March April May June
2019 2020
500.000 1.000.000 1.500.000 2.000.000 2.500.000
January February March April May June
2019 2020
500.000 1.000.000 1.500.000 2.000.000 2.500.000
January February March April May June
2019 2020
500.000 1.000.000 1.500.000 2.000.000 2.500.000
January February March April May June
2019 2020
- 88%
- 47%
- 27%
- 93%
- 39%
- 67%
- 34%
- 31%
- 99%
- 85%
- 30%
- 12%
- 21%
- 34%
- 62%-54%
- 26%
SLIDE 4
50.000 100.000 150.000 200.000 250.000 300.000
January February March April May June
2019 2020
COVID-19 outbreak: impact on EV sales
H1 2020 YoY evolution of BEV and pHEV car sales (source: EV Volumes) China Europe Global market
50.000 100.000 150.000 200.000 250.000 300.000
January February March April May June
2019 2020
- 62%
- 49%
- 50%
- 21%
- 27%
- 54%*
*Pre-buying in June 2019 due to lower subsidy regime as of July 2019
50.000 100.000 150.000 200.000 250.000 300.000
January February March April May June
2019 2020
+17%
- 14%
- 7%
- 26%
- 21%
- 31%
+112% +40% +117% +20%
- 18%
+49%
Average H2 2018 128,000 Average H2 2018 36,000 Average H2 2018 218,000
H1 2020 EV sales down 17% YoY
SLIDE 5
Immediate measures in response to COVID-19
5
Keeping our people healthy and ensuring safe working conditions Preserving cash
Strict hygiene and precautionary measures Dedicated task force to monitor
- perations globally
Reduce costs (e.g. production capacity adjusted and use of temporary unemployment measures where applicable) Optimize working capital Delay investments except for EHS and strategic projects Reduced dividend of € 0.375 per share for the full year 2019
SLIDE 6
Longer-term measures in response to COVID-19
6
Strengthening of funding structure and increasing liquidity Assessing production footprint and asset utilization
Consolidation of North American automotive catalyst production activities in Burlington, Canada Discontinuation of automotive catalyst production in Tulsa, USA Additional cash and non-cash adjustments may be required in H2 Additional funding: placement of € 500 m convertible bond and € 125 m loan from EIB Strong balance sheet with ample liquidity (€ 1.2 bn cash and equivalents + ~ € 1bn additional committed undrawn credit lines) Well-balanced LT debt profile with no material maturities prior to 2023
SLIDE 7
H1 2020 business review
SLIDE 8
Free Operating Cash Flow € 108 m Net debt at € 1,349 m Net debt / LTM Adj. EBITDA 1.75x
Key figures H1 2020
8 8
Strong performance in Recycling offset COVID-19 impact in Catalysis and E&ST € 1.6 bn
- 4% YoY
REVENUES
€ 148 m
Adjusted EPS € 0.62 Interim dividend of € 0.25 per share
Adjusted NET PROFIT
(Group share)
ROCE 10.9% € 243 m
Stable YoY Adjusted EBIT
€ 152 m CAPEX € 376 m
+5% YoY
Adjusted EBITDA
Umicore H1 2020 performance
SLIDE 9
Automotive Catalysts
Widespread car OEM production shutdowns and car sales plunging Severe impact on revenues and volumes Further outperformance of LDV market in China HDD less down than market given higher demand for China V technologies
Precious Metals Chemistry
Revenues down due to COVID-19 impact on automotive industry Continued strong demand for pharmaceutical ingredients and fuel cell catalysts
Catalysis H1 2020 performance
9
Revenues -20% and Adj. EBIT -75%; severe impact from COVID-19 and related car OEM production shutdowns
Umicore H1 2020 performance
REVENUES
million €
H1 H2
Adjusted EBIT
598 565 633 620 709 652 717 743 571 200 400 600 800 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 78 75 81 85 86 82 87 99 21 20 40 60 80 100 120 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
SLIDE 10
10
Revenues -8%; Adj. EBIT -47%; severe COVID-19 impact and higher fixed costs
Umicore H1 2020 performance
Rechargeable Battery Materials
Overall volumes of cathode materials lower YoY and materially lower than expected due to COVID-19 Higher fixed costs related to recent and ongoing expansions Significant negative operating leverage Positive contribution of Kokkola activities acquired in Dec. ’19 Construction of Nysa plant delayed due to COVID-19 restrictions; commissioning planned in H1 2021
Cobalt & Specialty Materials
Most end-markets impacted by COVID-19 Lower cobalt and nickel prices impacted refining & recycling activities
Electroplating recorded slightly higher revenues; revenues
in Electro-Optic Materials were roughly stable
H1 H2
REVENUES
million €
REBIT
E&ST H1 2020 performance
288 322 398 495 650 639 607 618 557 100 200 300 400 500
600 700
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 37 45 61 79 121 136 102 81 54
- 10
10 30 50 70 90 110 130
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
Adjusted EBIT
SLIDE 11
Adjusted EBIT
H1 H2
Recycling H1 2020 performance
11
Revenues +40%; Adj. EBIT +150%; increased volumes, higher metal prices and favorable supply mix
Umicore H1 2020 performance
Precious Metals Recycling
Higher processed volumes (vs. extended maintenance in H1 19) Higher metal prices Robust supply conditions and optimization of input mix Increased Jewelry & Industrial Metals revenues Substantial earnings contribution from Precious
Metals Management
REVENUES
million € 323 318 339 311 327 300 313 368 440
150 300 450 600
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 62 63 73 55 79 56 76 112 191
50 100 150 200
H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
SLIDE 12
Environmental focus on the Hoboken plant
Lead in blood children
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 investigations ongoing, exploring solutions, including the possibility
- f making an offer to buy certain
houses closest to the plant
Fire incidents
Fire in lead refinery in March 2020 Small fire on the roof of a waste water treatment section in July Root-cause investigations ongoing, increased focus on prevention and fire protection Continue to dedicate substantial investments to the environment and intensify the investment program launched several years ago to further reduce emissions. Reinforce internal organization and further strengthen emergency planning to protect the environment and to minimize the impact on the community. Safe operations remain our top priority. .
12
SLIDE 13
Outlook
SLIDE 14
14
2020 outlook
2020 Adj. EBIT expected well below levels of 2019 2020 Adj. EBIT expected well above levels of 2019
Given the current evolution of the pandemic and the uncertainty it creates in Umicore’s key end-markets, it remains impossible to provide a reliable quantified outlook for 2020. Notwithstanding the very limited market visibility, Umicore continues to expect its full year adjusted EBIT to be below the levels reached in 2019.
Umicore H1 2020 performance
2020 Adj. EBIT expected well below levels of 2019 CATALYSIS RECYCLING ENERGY & SURFACE TECHNOLOGIES
H2 revenues and Adj. EBIT well above H1 levels, based on a scenario of 25% drop in global car production in 2020 H1 performance not to be extrapolated to H2:
- 4-week planned maintenance
shutdown (PMR)
- Seasonality effects in other
businesses H2 Adj. EBIT likely below H1 levels as inventory corrections in the rechargeable battery supply chain are expected to exacerbate the impact of weak trading conditions across business units
SLIDE 15
15
Long-term growth drivers remain intact
Umicore H1 2020 performance
CATALYSIS ENERGY & SURFACE TECHNOLOGIES
Tightening emission norms continue to be on the agenda in key regions, confirming the need for more complex automotive catalyst technologies going forward 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 Europe: EU recovery plan predicated on European Green deal, including ambition towards zero-emission mobility. Stimuli packages in several countries (Germany, France, Spain) with subsidies for electrified vehicles RECYCLING
Resource scarcity and complexity of materials Path towards a more circular economy
SLIDE 16
H1 2020 financial review
SLIDE 17
17
- Adj. EBIT & Adj. EBIT margin
Group, excluding discontinued activities, million €
Umicore H1 2020 performance
Recycling results offset impact of automotive industry downturn on Catalysis and E&ST
Adjusted EBIT at € 243 million, in line with H1 19 Stellar Adjusted EBIT growth in Recycling
- ffset by decreases in Catalysis and E&ST
€ 16 million higher D&A charges year on year from recent investments & acquisition Increased Adjusted EBIT margin, supported by higher Recycling margin Adjusted EBITDA increasing 5% Strong operating cash flow with second highest half year Adjusted EBITDA contribution of recent years High Adjusted EBITDA margin further increased in H1 20
million €
- Adj. EBITDA & Adj. EBITDA margin
155 165 195 203 261 252 240 269 243 12,3% 12,8% 13,5% 13,0% 15,2% 15,9% 14,3% 15,3% 15,3%
0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% 14,00% 16,00%100 200 300 400
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 238 258 288 299 364 356 357 396 376 19,2% 20,5% 20,3% 19,8% 21,3% 22,4% 21,4% 22,7% 23,8%
12% 14% 16% 18% 20% 22% 24%100 200 300 400 500
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
SLIDE 18
18 Umicore H1 2020 performance
Pronounced offsetting operating leverage effects
Group
Revenues -4%
- Adj. EBITDA +5%
- Adj. EBIT +1%
Negative in Catalysis and E&ST vs positive in Recycling
- 20%
- 8%
+40%
- 51%
- 23%
+108%
- 75%
- 47%
+150%
- 100%
- 50%
0% 50% 100% 150% 200%
Catalysis E&ST Recycling
Revenues
- Adj. EBITDA
- Adj. EBIT
H1 YoY evolution
SLIDE 19
Full P&L
19
H1 2020
243.0 (44.5) (47.5) 151.1 (2.7) 148.4 0.62 (57.5) 90.9 Adjusted EBIT
- Net finance cost
- Adjusted Tax
Adjusted net result
- Minorities
Adjusted net result Group share Adjusted EPS Adjustments to net result Group share Net result Group share
Umicore H1 2020 performance
H1 2019
239.6 (39.2) (46.2) 154.1 (3.1) 151.0 0.63 (2.7) 148.3
Million €
Stable Adjusted net Group result and Adjusted EPS, reflecting stable operating income Higher interest charges on the back of higher financial debt, partly offset by lower forex costs Stable adjusted tax charge and stable effective adjusted group tax rate (24.3%) Substantial adjustments in response to COVID-19
SLIDE 20
EBIT adjustments
20
EBIT adjustments of - € 72 million :
- Reflects impact of COVID-19
- Combination of :
- impact from restructuring
measures (€ 31 million); and
- impairment of selected non-
current assets (€ 31 million)
- € 48 million non-cash charges, € 24
million cash-nature items
- Additional sizeable adjustments may
be required in H2 20
Million € H1 2020
(30.9) (31.5) (9.9) (72.3) 13.6 1.2 (57.5) Restructuring-related charges Selected non-current asset impairments Other adjustments Total EBIT adjustments Adjustment to tax result Adjustment to minorities Net adjustments (Group Share)
million €
Umicore H1 2020 performance
SLIDE 21
93 120 102
- 10
308 241 275
- 156
- 120
- 335
- 373
10
- 89
- 72
249 240 437 363 298 330 347
- 600
- 400
- 200
200 400 600
H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Cashflow generated from operations after net working capital cash flow Net working capital cash flows Cashflow generated from operations before net working capital cash flow
21 Umicore H1 2020 performance
*Free cashflow from operations = cashflow generated from operations – capex & capitalized development expenses
Cash flow from operations before changes in working capital up at € 347 million Increase in cash working capital of € 72 million mostly driven by higher precious metal prices Cash working capital increase in Catalysis and Recycling, partly offset by decrease in E&ST Free cash flow from operations up at € 108 million More than double last year’s number Capex delayed in view of market context (€ 152 million vs € 241 million in H1 19)
Increase in free operating cash flows
million €, continued operations only million €, continued operations only
93 120 102
- 10
308 241 275
- 149
- 228
- 207
- 291
- 258
- 329
- 167
- 56
- 108
- 105
- 301
50
- 89
108
- 400
- 300
- 200
- 100
100 200 300 400
H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Cashflow generated from operations after net working capital cash flow Capex + capitalized development expenses Free cashflow from operations
SLIDE 22
22 Umicore H1 2020 performance
Net cash flow bridge
million €
275 108 94 167 28 28 50 29 21 Conversion right of convertible bond recognized in equity Cashflow from
- perations
Net acquisition amount treasury shares Capex & capitalized development expenses Free Operational Cashflow Taxes paid Net interest paid Other Decrease in reported net financial debt
Free operating cashflow of € 108 million translating in similar decrease in reported net financial debt (€94 million) versus start of the year Includes € 50 million portion of convertible bond accounted for as equity Combined cash out related to net interest charges and taxes below level of H1 19 Benefiting from absence of final 2019 dividend payout
SLIDE 23
14,3% 13,8% 23,2% 31,1% 14,1% 24,4% 28,6% 35,2% 33,6%
23
Further strengthening and diversification of funding base
100 200 300 400 500 2023 2024 2025 2026 2027 2028 2029 2030 2031
Long-Term Fixed Rate Debt Maturity Profile
million €
Umicore H1 2020 performance
Stable net financial debt of € 1,349 m, slightly below the level of end 2019 Corresponds to robust credit ratios :
- Net debt / LTM Adjusted EBITDA
ratio of 1.75x
- Net gearing ratio of 34 %
Further extended strong liquidity base in June :
- € 125 m 8-year EIB loan
- € 500 m 5-year convertible bond
- € 1.2 bn cash on balance sheet at 30
June in addition to appr. € 1 bn of committed undrawn credit lines
Consolidated net financial debt, end of period Gearing ratio Net debt / LTM Adj. EBITDA 298 296 556 840 429 861 1059 1443 1349
0,39 0,56 0,99 1,40 0,64 1,19 1,48 1,92 1,75
- 1,40
- 0,90
- 0,40
200 400 600 800 1000 1200 1400
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
million €
SLIDE 24
Wrap-up
SLIDE 25
Wrap-up
25 Umicore H1 2020 performance
Strong performance in Recycling offset COVID-19 impact in Catalysis and Energy & Surface Technologies Resilient H1 20 results, in most challenging context ever faced, highlight merits
- f complementarity of
activities within portfolio Long-term strategic drivers remain intact, supporting growth opportunities in clean mobility and recycling Portfolio of complementary activities, prudent liquidity management and disciplined investment approach make Umicore well equipped to maintain its strategic course and emerge stronger from this crisis Umicore’s priority remains to keep its employees healthy and ensure safe working conditions
SLIDE 26
Q&A
SLIDE 27
`
27 Umicore H1 2020 performance
Financial calendar
21 August 2020 24 August 2020 25 August 2020 Ex-interim dividend trading date Record date for the interim dividend Payment date for the interim dividend