Umicore Investor Presentation September 2019
Introduction to Umicore
We are a global materials technology and recycling group The world’s leading One of three global A leading supplier of key leaders in emission control materials for rechargeable recycler of complex waste catalysts for light-duty and batteries used in electrified streams containing heavy-duty vehicles and transportation and portable precious and other for all fuel types electronics valuable metals 3
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 Fuel cells Full Electric Vehicle Umicore provides: Umicore provides: Electro-catalyst and Battery cathode materials battery cathode materials Present across all drive trains and offering sustainable closed- loop services 4
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 resource scarcity 5 5
With a robust financial performance and a global presence Key figures (H1 2019) Recurring Revenues EBITDA € 1.6 bn € 357 m Recurring ROCE EBIT 12.3% € 240 m Revenues* by geography * 2018 data 6
We deliver on our Horizon 2020 strategy Clear leadership Doubled the size in clean mobility of the business in materials and terms of earnings recycling Rebalanced the Turned portfolio sustainability into & earnings a greater contributions competitive edge 7
With a focused & balanced Group structure ENERGY & SURFACE CATALYSIS 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 Materials Capital employed* Revenues* Recurring EBIT* (average) (excluding metal) 14% 19% 33% 29% 35% 44% 51% 37% 38% * H1 2019 data; corporate not included 8
Unique position in Automotive Catalysts CATALYSIS Tightening emission norms for LDV and Total LDV and HDD catalyst market value HDD, in particular in China, Europe and India Significant value uplift especially in gasoline catalysts Increasing share of gasoline cars globally Umicore won largest share of cGPF platforms in China and Europe Increasing uptake of fuel cell drivetrains Technology and innovation play We are well positioned to capture unprecedented value growth in automotive catalyst markets 9
Unique position in Rechargeable Battery Energy & Materials for xEV Surface Technologies Electrification confirmed as main avenue to Umicore uniquely positioned to address drastically reduce vehicle emissions in mid- and long-term requirements of this industry, long-term while managing short-term fluctuations Strongly supported by legislation and evidenced with agility by massive roll- out of car OEM’s e -mobility Full spectrum of highest quality strategies cathode materials Increasing electrification drives strong market demand in mid and long-term Process technology and ability to scale up fast Innovation pipeline spanning next Technology roadmap offers ample room for 20 years innovation and differentiation Integrated supply chain and battery Product recycling Process Closed loop offering 10
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 Increased availability of complex materials, in particular Closing the loop in product businesses by end-of-life materials offering recycling services Eco-efficient recycling processes are becoming the norm Over 200 different input streams Umicore uniquely positioned to capture growth as the Recovery of more than world’s largest and most complex precious metal 20 different metals recycler with world class environmental and quality standards 11
We have a 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 organic growth projects • Secular trends • Group and segment • Currently in accelerated returns > cost of capital • Supporting legislation investment phase • 15%+ ROCE target • Privilege organic growth • Strong self-funding capacity • Value creation precedes • Complementary M&A, with (normalized excl. current ROCE maximization focus on value creation acceleration) • Not overstretch balance sheet R&D • Cash return to shareholders 6% of Capex € 478 m* revenues * 2018 data 12
And maintain a strong capital structure 31% 29% 2000 24% 1.60 23% 1800 1.35 15% 15% 14% 1.40 14% 1600 Gearing 14% 1.15 1.20 ratio 1400 0.91 0.87 1200 1.00 1,059 0.72 1000 861 840 0.80 0.65 Average net debt 0.59 0.60 800 0.55 0.60 556 / recurring EBITDA 600 429 0.40 314 321 298 296 400 0.20 200 Consolidated net 0 0.00 financial debt, end of H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 period million € Net financial debt € 1,059 m Corresponds to : Ample funding headroom to execute growth strategy, no 1.35 x average net debt to Modest impact from the adoption of need for additional capital recurring EBITDA ratio IFRS 16 due to limited use of injection operating leases (€ 37 m) 29% net gearing ratio 13
Business Group Overview 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, Metals life sciences and pharmaceutical applications. Also has a complete portfolio of catalyst technologies for fuel cells. Chemistry 15
Automotive Catalysts: business model We develop technologies which allow our customers to meet automotive emission legislation at the lowest Total Cost of Ownership Complete Customer catalyst systems to reduce exhaust focus gas emissions People Operational engagement excellence Global manufacturing & technical footprint 16
Automotive Catalysts Production Footprint 19 plants in 14 countries, 10 R&D / tech. centers in 7 countries Frederikssund Karlskoga Lyngby Nowa Ruda Songdo Denmark Sweden Denmark Poland Korea Onsan Hanau Burlington Korea Germany Canada Tokoname Japan Auburn Hills, MI Florange USA France Kobe Japan Rheinfelden/ Tulsa, OK USA Bad Säckingen Himeji Germany Japan Houston, TX USA Tianjin China Americana Suzhou Brazil China (2) Production plant R&D/Tech. center Joinville Port Elizabeth Pune Rayong Production plant/R&D Tech. center Brazil South Africa India Thailand Stationary 17
Total LDV and HDD catalyst market set for unprecedented value growth MARKET VALUE EVOLUTION BY REGION Massive tightening of emission norms in China, Europe Europe and India drive Greater China massive value uplift in both the LDV and HDD catalyst Japan / Korea markets Middle East / Africa Value growth North America by far outpacing vehicle production South America South Asia Technology and (mainly India) Innovation play 1 2 3 2017 2020 2025 Source: IHS, KGP, Umicore estimates 18
Umicore well positioned to capture this growth Next to volume growth , unprecedented future system value step-up due to tightening emission norms in Europe, China and India in particular. Stationary : Light-Duty Vehicles Heavy-Duty Diesel ▪ ▪ ▪ Growing niche Gaining significant share Growing from a distant # in growing gasoline 3 position ▪ New legislation segment ▪ Strong position in China, ▪ Leverage global ▪ Disproportionate share of the largest HDD market presence gasoline GPF platforms ▪ Development partner of won in China and Europe most major HDD OEMs Through R&D, we continue to build a competitive technology portfolio and invest in additional flexible capacity using proprietary processes 19
Catalysis H1 2019 performance Revenues +1% and stable REBIT; in strong contrast with declining auto market REVENUES 800 700 Automotive Catalysts (~90% Catalysis revenues) 717 600 709 652 633 620 500 598 565 549 545 400 300 Market share gains in light duty gasoline 200 100 Growing penetration of cGPFs 0 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 Good customer and platform mix esp. in China H1 Higher revenues in heavy-duty diesel H2 REBIT 100 Precious Metals Chemistry 90 80 86 87 85 82 81 70 Strong demand from pharmaceutical and chemical 78 75 60 industries 63 61 50 Higher revenues from fuel cell catalysts 40 30 20 10 0 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 million € Umicore H1 2019 performance 20
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