Umicore delivers first-half performance in line with Q1 outlook, in a challenging market context, and makes good progress in the execution of the “Umicore 2030 – RISE” strategy

 

Umicore’s first half results were the second highest in its history, despite severe market disruptions, rising cost inflation and a volatile precious metal price environment.

 

Umicore’s revenues for the first 6 months amounted to € 2.1 billion, stable compared to the record levels of the first 6 months in the previous year. Adjusted EBIT of the Group amounted to € 461 million, and adjusted EBITDA to € 601 million, well up in contrast to the second half of last year, however below the record levels of the first half of 2021, reflecting the less favorable precious metal price environment and including higher spending linked to innovation and future growth as well as general cost inflation.  

 

Strong operational cash flows including a less than anticipated increase in net working capital resulted in a stable net financial debt of € 955 million in contrast with end of 2021, corresponding to 0.88 times LTM adjusted EBITDA. In line with the dividend policy, an interim dividend of € 0.25 per share will be paid on August 23.

 

Umicore is actively implementing its RISE 2030 strategy with key milestones achieved in the first half of 2022, such as the signing of long-term customer contracts and preparation of its North-America value-chain presence in Rechargeable Battery Materials.

 

Revenues in Catalysis were stable, reflecting another outstanding performance in Automotive Catalysts, with volumes down less than the global car market driven by further market share gains in the light-duty gasoline market. Revenues in Precious Metals Chemistry were up, while revenues in Fuel Cell & Stationary Catalysts were impacted by a postponement of customer orders as a result of COVID-19 related lockdowns in China. Despite significant cost inflation, earnings were only slightly below the record level of the first half of 2021. 

 

Revenues and earnings in Energy & Surface Technologies increased. Cobalt & Specialty Materials continued  to benefit from exceptionally strong market demand combined with a favorable cobalt and nickel price environment. The performance in Rechargeable Battery Materials reflected a strong positive impact from the unexpected spike in the lithium price.  Sales volumes of cathode materials were, as anticipated and announced in December, subdued.

 

Revenues and earnings in Recycling decreased, reflecting primarily the impact of a lower precious metal price environment in Precious Metals Refining and Precious Metals Management, which was only partially offset by a strong performance in Jewelry & Industrial Metals. Although below the record levels of the previous year, adjusted EBIT represents the second-highest level achieved in the history of the Recycling business group.

 

Umicore expects another strong performance in 2022 across business groups in a severely disrupted market context. 

 

Based on the performance in the first half of the year and assuming precious metal prices remain at current levels for the remainder of the year, Umicore expects its adjusted EBIT for the full year 2022 to be somewhat above consensus, including some € 220 million uplift from precious metal prices versus 2020 (taking into account the effect of strategic hedging). This outlook incorporates a cost inflation headwind estimated less than € 150 million for the full year, excluding offsetting measures such as pricing. This outlook also assumes no further significant disruptions to the economy or Umicore’s operations from geopolitical developments, the pandemic or additional supply-chain constraints.

 

It is anticipated that car production will remain impacted by the ongoing supply disruptions. Notwithstanding the related limited visibility, Umicore expects to continue to benefit from its strong market position in gasoline applications. Taking into account the strong performance in the first half of the year and the current assumptions on volumes for 2022, adjusted EBIT in Catalysis for the full year is expected to be close to the record level achieved in 2021, somewhat above consensus, despite the impact of cost inflation. 

 

Based on the first-half performance and anticipating a normalization in Cobalt & Specialty Materials, Umicore expects adjusted EBIT in Energy & Surface Technologies for the full year 2022 to be above the level of the previous year and above current consensus expectations. 

 

Umicore expects adjusted EBIT for Recycling for the full year 2022 to be in line with current consensus. This is based on the assumption that current precious metal prices will continue to prevail. This also takes into account a somewhat improved supply mix in Precious Metals Refining compared to the first half. 

 

As announced previously, Corporate costs are expected to continue to increase above inflation in 2022 as Umicore is committed to its longer-term innovation and digitalization and is preparing its systems and organization for future expansion.