Industria
Umicore: FULL YEAR RESULTS 2023
FULL YEAR RESULTS 2023
Key highlights
Umicore's Group revenues for the full year 2023 amounted to €3.9 billion versus € 4.2 billion in 2022. The adjusted EBIT for the Group stood at € 674 million and the adjusted EBITDA at € 972 million, both below the levels of 2022, including a more than € 200 million PGM price and inflation headwind . Umicore maintained a strong adjusted EBITDA margin of 25% in 2023, which is well in line with its 2030 RISE target of above 20%.
Capital expenditures amounted to € 857 million, up 82% year-on-year, mainly driven by investments to execute the contracts secured in the order book for Rechargeable Battery Materials. Operational free cash flow remained strong at € 332 million, despite the significantly increased capital expenditures, enabled through a Group-wide working capital improvement focus. Net financial debt slightly increased to € 1.3 billion resulting in a leverage ratio of 1.30x LTM adjusted EBITDA.
A gross annual dividend of € 0.80 per share, of which € 0.25 was already paid out in August 2023, will be proposed at the Annual General Meeting in April.
Mathias Miedreich, CEO of Umicore, commented “Umicore's 2023 results demonstrate our ability to deliver strong cash flows and margins, despite challenging market conditions and a step up in investments as we continue to prepare our growth trajectory. We made strong progress on cost savings in operations and are further accelerating this into 2024. In addition, we reached significant strategic milestones across our activities. In Battery Materials we have secured a sizeable and diversified orderbook, safeguarded by very strong contractual terms. We also have been able to secure substantial government grants for our expansions in Europe and North America amounting to close to € 1 billion. With these grants, and an optimized capacity ramp up phasing, we have been able to decrease our anticipated net capital expenditures needed to execute our orderbook. As we move into 2024, our teams are now focusing on execution excellence, remaining firmly committed to delivering on our targets. I would like to thank our employees, customers, partners and shareholders for their trust and support.”
Umicore is making strong progress on its 2030 RISE strategic trajectory with significant milestones achieved over the past 18 months. The current macroeconomic environment has changed significantly from when Umicore launched its strategy in June 2022, in particular with faster and more steeply declining precious metal prices.
In that context, Umicore announced in 2023 that the net total capital expenditures for the Group between 2022 and 2026 are expected to amount to € 3.8 billion. This reduction of funding needs compared to the earlier assumptions made when launching the 2030 RISE strategy, results from securing higher-than-anticipated government grants and subsidies, and the partial funding of joint venture capital expenditures by non-recourse debt. It also results from a disciplined capacity phasing strictly in line with customer contracts and orders, an improved utilization of existing capacities in APAC and an optimized, asset-light upstream model, leaving room for highly selective additional customer programs.
In addition, Umicore has launched the 'Efficiency for Growth' program over the summer 2023, a company-wide program that accelerates ongoing efficiency improvements across the different business groups to support both cost optimization, top-line growth and working capital improvement in the context of the 2030 RISE execution.
Umicore expects Efficiency for Growth to deliver at least € 70 million EBITDA in 2024 (included in the outlook) and as from 2025 a run-rate exceeding € 100 million EBITDA .
Finally - and in the framework of its strategic metal hedging approach - Umicore has entered, over the course of 2023, into forward contracts covering for a longer period and a significantly larger portion of its structural price exposure compared to the past approach with the aim to reduce volatility, protect future earnings linked to its exposure to certain precious metal prices and to increase visibility on future cash flows.
Since the introduction of the 2030 RISE Strategy in June 2022, Umicore has adapted its organizational structure by aligning it with its ambitious growth plan towards 2030. As announced previously , a new organization has been put in place to support the anticipated growth in Rechargeable Battery Materials. Umicore's business units are from this year onwards housed in four, instead of previously three, Business Groups. The new segmentation still reflects the important synergies and common characteristics, while at the same time bringing increased focus on the different business activities: Battery Materials, Catalysis, Recycling and Specialty Materials.
Outlook
Based on the current market visibility and all else equal, Umicore expects revenue growth in
Battery Materials with revenues in the range of € 575 million to € 675 million and an adjusted EBITDA margin around 22%. The ramp-up of new customer contracts in Europe and an improved capacity utilization in Asia will result in a significant year-on-year increase in volumes and revenues from cathode active materials (CAM), while the contribution from the upstream refining activities are expected to remain roughly in line with 2023.
Given the absence of the one-off that supported 2023 earnings as well as the impact of costs related to the ongoing ramp-up and capacity expansions in Europe and North America, earnings for the full year are expected to remain roughly in line with the previous year. Excluding this one-off effect, the underlying performance in Battery Materials is expected to increase significantly year on year.
Revenues and earnings are expected to be weighted in the second half of 2024, reflecting mainly the ramp-up profile of the new customer contracts.
In 2024, the business unit Automotive Catalysts is expected to continue to benefit from its strong market position. Growth in heavy-duty diesel volumes in China is expected to offset lower volumes in ICE light-duty vehicle applications resulting in continued strong underlying performance. Adjusted EBITDA in Catalysis is anticipated to be slightly below the level of the previous record year, close to current market expectations , in a context of a lower PGM price environment and taking into account the current strategic metal hedges.
Precious Metals Refining is expected to post solid underlying performance particularly in the second half of the year, with a maintenance shutdown of the smelter anticipated to impact volumes in the first half. Earnings of the Recycling Business Group will feel the effect of a less favorable precious metal price environment. Assuming current metal prices were to prevail throughout the year and taking into account the current strategic metal hedges, it is expected that the 2024 adjusted EBITDA for the Business Group will be below the level of the previous year, still well above the pre-2020 levels and in line with current market expectations .
In Specialty Materials , Umicore anticipates continued strong performance in Electro-Optic Materials, partially offsetting less favorable market conditions impacting the performance of the business units Cobalt and Specialty Materials and Metal Deposition Solutions. It is expected that the 2024 adjusted EBITDA for the Business Group will be somewhat below the level of the previous year.
It is anticipated that Corporate costs will be € 15 to € 20 million lower in 2024 versus 2023.
Based on the above, Umicore expects Groups' adjusted EBITDA for the full year 2024 to be in the range of € 900 million to € 950 million.
Investor Relations
Media Relations
Link to all documents related to Umicore's 2023 FY results.
22 March 2024 Publication of the annual report 2023
25 April 2024 Annual General Meeting
29 April 2024 Ex-dividend trading date
30 April 2024 Record date for the dividend
4 May 2024 Payment date for the dividend
26 July 2024 Half year results 2024
19 August 2024 Ex-dividend trading date, interim dividend 2024
20 August 2024 Record date for the interim dividend 2024
21 August 2024 Payment date for the interim dividend 2024
Umicore is the circular materials technology Group. It focuses on application areas where its expertise in materials science, chemistry and metallurgy make a real difference. Its activities are organized in four business groups: Battery Materials, Catalysis, Recycling and Specialty Materials. 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 with more than 11,500 employees. The Group generated revenues (excluding metal) of € 3.9 billion (turnover of € 18.3 billion) in 2023.
A conference call and audio webcast for analysts and investors will take place today at 08:30 AM CET. Access the webcast here .
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Further details of the individual performance of the Business Groups and Business Units during the year can be found in the Catalysis, Energy & Surface Technologies and Recycling sections of this press release.
Of which the cost inflation headwind amounted to € 50 million over 2023.
3 All revenue elements less the value of the following purchased metals: Co, Ni, Li and Mn.
4 Net capital expenditures = capex – government grants and subsidies + equity contribution (e.g. Ionway).
5 More information can be found in the Financial Review – Hedging section of this press release.
6 VARA consensus as at February 15 2024.
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