Umicore Half Year 2023 Results: Strong Margins in a Volatile Market Environment
HALF YEAR 2023 RESULTS
STRONG MARGINS IN A VOLATILE MARKET ENVIRONMENT
Key highlights
- Revenues of € 2.1 billion (0%)
- Adjusted EBITDA of € 519 million (-14%)
- Adjusted EBIT of € 373 million (-19%)
- EBIT adjustments of - € 13 million
- ROCE of 15.2% (compared to 20.8% in first half 2022)
- Adjusted net profit (Group share) of 233 million and adjusted EPS of € 0.97
- Cashflow from operations of € 409 million, including a € 26 million increase in working capital requirements; free cashflow from operations of € 60 million
- Capital expenditure amounted to € 335 million (+77%)
- R&D expenditures of € 147 million (+4%)
- Interim dividend of € 0.25 per share on 22 August 2023
- Net debt / LTM adj. EBITDA ratio of 1.30x with net debt at € 1,390 million
Umicore posted a solid performance in the first half of 2023, despite a less favorable precious metal price environment, subdued macro-economic growth and cost inflation. Group revenues for the first 6 months amounted to € 2.1 billion, in line with the levels achieved in the first half of 2022 and 2021, demonstrating business resilience in a context of increasingly challenging market conditions since end 2022.
Adjusted EBIT of the Group amounted to € 373 million and adjusted EBITDA to € 519 million, below the levels of the first half of 2022, reflecting the less favorable precious metal price environment, cost inflation and increased spending on innovation and growth in the framework of Umicore’s 2030 RISE Strategy. The Group’s adjusted EBITDA margin amounted to 25.1%, well in line with Umicore’s 2030 RISE ambition1.
Free cash flow from operations stood at € 60 million, reflecting a significant step-up in capital expenditures to prepare the accelerated growth in Rechargeable Battery Materials. Net financial debt increased to € 1.4 billion, resulting in a leverage ratio of 1.30x LTM adjusted EBITDA which is well within the 2.5x investment grade scope targeted by Umicore’s 2030 RISE Strategy.
Note: 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)
Catalysis delivered another outstanding performance, recording revenues and earnings above the levels seen in the first half of 2022. Sales volumes and revenues of Automotive Catalysts increased, benefiting from growth in light-duty ICE production as well as a gradual recovery in Chinese HDD production. Revenues in Fuel Cell & Stationary Catalysts were well up, reflecting in particular high demand for stationary catalysts and a favorable product mix. This positive revenue evolution, in combination with cost discipline and high operational efficiency, led to an adjusted EBITDA of € 227 million in the business group.
Revenues in Energy & Surface Technologies were, as anticipated, below the level of the previous year, reflecting a normalization in Cobalt & Specialty Materials compared to an exceptionally strong first half of 2022. Rechargeable Battery Materials’ revenues and earnings were in line with the first half of 2022 despite increased spending on growth preparation and R&D. Adjusted EBITDA of the business group amounted to € 132 million.
The Recycling business group delivered a robust performance in the first half of 2023, albeit below the exceptional performance of the first half of last year. Revenues were in line with the level achieved in the same period of the previous year, with a strong performance of Precious Metals Management compensating lower revenues in the other business units. Adjusted EBITDA amounted to € 204 million, reflecting the lower PGM price environment and the impact of cost inflation.
During the first half of 2023 Umicore made further progress with the execution of its 2030 RISE Strategy, designed to deliver value creative growth. The Rechargeable Battery Materials business unit closed a new long-term battery materials supply agreement for the Chinese market, while the Catalysis and Recycling business groups continued to demonstrate a strong performance, operational excellence and an ability to generate solid cash flows in a challenging market context. Umicore also announced changes in its leadership team and a new organizational structure with responsibilities aligned to execute and deliver on its 2030 RISE strategy.
Mathias Miedreich, CEO of Umicore, commented: “Umicore has demonstrated once more the ability to achieve a robust business performance despite significant market headwinds. At the same time, we remained focused on the execution of our 2030 RISE Strategy. We announced a new organizational structure that will support the significant growth ahead in Battery Materials and have put in place a leadership team with responsibilities aligned to execute and deliver on the key pillars of our strategy. We stepped-up investments related to innovation and growth while maintaining our commitment to financial discipline and return on investment. I would like to thank all Umicore employees for their continued energy and dedication and I am very confident that we are on the right trajectory to achieve our 2030 RISE ambitions, while creating shareholder value and benefits for all our stakeholders.”
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Financial calendar
18 August 2023 Ex-interim dividend trading date
21 August 2023 Record date for the interim dividend
22 August 2023 Payment date for the interim dividend
16 February 2024 Full Year Results 2023
Umicore profile
Umicore is the circular materials technology Group. It focuses on application areas where its expertise in materials science, chemistry and metallurgy makes a real difference. Its activities are organised in three business groups: Catalysis, Energy & Surface Technologies and Recycling. 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 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 fulfils 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. The Group generated revenues (excluding metal) of € 2.1 billion (turnover of € 10.0 billion) in the first half of 2023 and employed more than 11,900 people.
1 In June 2022, Umicore launched “2030 - RISE”, its new strategic plan designed to accelerate profitable growth with constant value creation towards 2030 and beyond (adjusted EBITDA margins > 20% throughout the period):
