Umicore Group key figures

Revenues1 of € 1.8 billion

Adjusted EBITDA of € 393 million and adjusted EBITDA margin of 21.8%

Adjusted EBIT of € 241 million

Adjusted net profit (Group share) of € 118 million and adjusted EPS of
€ 0.49

Adjustments to EBITDA of -€1.66 billion (mainly because of a -€1.60 billion non-cash impairment and write down in Battery Materials)

ROCE of 11.3%

Cashflow from operations of € 453 million: free operating cash flow of
€ 168 million

Capital expenditure of € 269 million

R&D expenditures of € 131 million

Net debt at € 1,434 million corresponding to a net debt/ LTM adj. EBITDA ratio of 1.70x

Total recordable injury rate of 5.1

Interim dividend of € 0.25 per share on 21 August 2024

Statement from Bart Sap, CEO
“In recent months, short- and medium-term growth projections for the electric vehicles market have been scaled back substantially, significantly affecting Umicore’s Battery Materials business. Today, we share the elements of how we are adjusting to this new reality. The large impairment of our Battery Materials assets is painful and reflects the changed situation as we see it today. In the coming months, we will continue to thoroughly reassess our Battery Materials activities, with energy and an open mind, always in close alignment with our customers and partners. We are shaping a new way forward and will share the outcomes during a Capital Markets Day in Q1 2025.” says Bart Sap, Umicore’s CEO. “In these challenging times, we must focus on what we need to adjust while not forgetting the strong fundamentals on which we stand. I deeply value the hard work and resilience of the Umicore teams, whose long-standing experience and deep knowledge will continue to be the driving forces in everything that we do. Our foundation businesses continue to provide strong cash flows and returns, evidenced by their robust performance over the first half of this year. This solid base enables us to bridge the current headwinds while we reposition to seize new opportunities."

Update on strategic review of Battery Materials activities and impairments
Adjusting to new market reality
Umicore updated its 2024 outlook for the Battery Materials business on June 12th, following the recent significant slowdown in short- and medium-term EV growth projections affecting its activities. The Group has taken immediate action to deal with this situation. The following measures have been initiated and are ongoing:

Launch of a strategic review to reassess the growth projections in the Battery Materials business beyond 2024;
Strict capital allocation discipline: Group capital expenditures in 2024 will be below € 650 million;
Additional Group-wide efficiency and cost measures: such measures come on top of Umicore’s Efficiency for Growth program, which was launched in 2023 and is already well on track to deliver at least €70 million EBITDA anticipated for 2024 (included in the 2024 outlook), with more than half achieved over the first half of 2024.

Building on existing footprint and projected orderbook
With the information available today, and building on the existing assets and orderbook, Umicore developed a scenario to realign its operations to the new market reality. This is based on the following assumptions:

At least 18 months delay in the ramp-up of its customer contracted volumes;
Substantially reduced volume projections reflecting current offtake commitments at take-or-pay thresholds in line with currently confirmed investment waves;
More prudent assumptions on operational cost evolution;
Minimized further expansion of the existing footprint in Europe and Korea to serve its customers, which implies lower capex spending.
This scenario results in a well utilized capacity in the last years of this decade, except for the Chinese CAM assets which Umicore assumes to remain underutilized.


Impairments
Based on this scenario an impairment exercise has been performed, leading to a € 1.60 billion reduction in the Battery Materials’ capital employed. The impairment relates to Property, Plant and Equipment (PPE) and non-current inventories across Battery Materials’ activities, mainly in Asia. Therefore, the remaining capital employed for this business amounts to € 1.51 billion on 30 June 2024.

Within this scenario, Umicore anticipates that Battery Materials’ EBIT will remain below break-even levels in 2025 and 2026, and returns above the cost of capital are expected to be achieved in the last years of this decade.


Ongoing review of medium- to long-term Battery Materials strategy
With the current scenario as baseline, a strategic review has been launched with the intent to unlock and maximize future business value in Battery Materials. This comprehensive review will explore opportunities on top of the current scenario. It will be developed in close engagement with Umicore’s stakeholders, in particular its downstream industry partners.

The Group’s guiding principles for the review remain:

Maximizing capacity utilization of existing assets, before considering any further expansion. Umicore is assessing the configuration of its existing footprint in Asia and Europe as well as its expansion project in North America. Pending the outcome of this review and keeping options open, Umicore is delaying spending on the construction of its battery materials plant in Loyalist, Canada;
Optimizing the battery materials setup, closely aligned to customers’ new growth paths. Tight controls will ensure investments are only committed to, once customer demand is confirmed. Umicore will continue to leverage the strong customer agreements in place, as well as the differentiating market position of its CAM plant in Europe;
Further customer diversification as well as openness to partnerships across Umicore’s Battery Materials value chain;
Focus on technology, as well as overall operational and cost efficiency.
With the Battery Materials review process ongoing, the Group remains committed to executing the strategy and business plans in Umicore’s other activities, all while implementing above mentioned capital and cost discipline.


Capital Markets Day in the first quarter of 2025
The Group intends to schedule a Capital Markets Day in the first quarter of 2025 which will include an in-depth review of the Battery Materials’ business following the strategic review, as well as an update of the Business Groups Catalysis, Recycling and Specialty Materials. Umicore will present the future growth prospects and targets of each Business Group. In the meantime, updates will be provided when further information becomes available.


Business performance in the first half of 2024
Umicore’s Group revenues for the first half of 2024 amounted to € 1.8 billion versus € 2.1 billion in the first half of 2023. The adj. EBIT for the Group stood at € 241 million and the adj. EBITDA at € 393 million, down 36% and 24% respectively compared to the first half of 2023.

see & read more on
https://www.umicore.com/en/newsroom/news/half-year-results-2024/