Umicore 2013 full year results
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Transcript of Umicore 2013 full year results
2013 resultsProduction of catalysts for the fine
chemicals industry (Picture: Hanau, PMC)
Highlights
Revenues down by 2%
Profitability impacted by lower metal prices, less favourable product/regional mix and start-up costs:
• Recurring EBIT € 304 million (down 18%)
• Recurring EBITDA € 463 million (down 12%)
Cost reduction measures start to have a positive impact
Vision 2015 growth investments on track
Strong free cashflows and high cash return to shareholders
Stable dividend proposed at € 1.00/share
2
Revenues
Revenues down 2% as a result of lower metal prices in Recycling more than offsetting higher volumes in product businesses
883
861
844 96
5
1,11
5
860 98
7 1,14
7
1,24
1
1,23
3
810
864
841
945 98
5
863 1,
013
1,17
7
1,18
7
1,15
7
1,69
3
1,72
5
1,68
5 1,91
0 2,10
0
1,72
3 2,00
0
2,32
3
2,42
7
2,39
0
0
500
1,000
1,500
2,000
2,500
3,000
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
H1 H2
Revenues (excluding metal)(in million €)
Restated for discontinued operations in 2004, 2006 and 2008
Revenues restated in 2011 for reviewed application of revenue definition
3
Profitability
Recurring EBITDA down 12%
• Lower metal prices
• Changes in product and regional mix
• Start-up and qualification costs in Catalysis,particularly in H2
Recurring EBIT down 18%
• Higher depreciation charges
ROCE at 13.6%
H1 H2
Restated in 2004, 2006 and 2008 for discontinued operations in following year
218
188 22
4 255
269
107
247 28
1
266
240
208
184 21
0 216
198
156
222 27
2
258
222
426
372 43
4 471
467
263
469 55
3
524
463
0
100
200
300
400
500
600
700
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Recurring EBITDA(in million €)
155
122 17
0 199
215
50
186 21
5
192
163
126
111
159 16
0
140
97
156
202
181
141
280
233
329 35
9
355
146
343
416
372
304
0
100
200
300
400
500
Recurring EBIT
4
Growth investments on track
Capex of € 280 million:
• Catalysis: new production and testinginfrastructure
• Energy Materials: production capacity inrechargeable battery materials
• Performance Materials: selective growthinvestments
• Recycling: debottlecking in Hoboken, Ag capacityexpansions in Germany and Thailand
R&D spend of € 141 million (corresponds to 6 % of revenues), with some projects moving to commercialisation
H1 H2
R&D and Capex restated in 2004, 2006 and 2008 for discontinued operations in following yearR&D restated for scope adjustment in 2010
R&D and Capex restated in 2012 for reviewed application of definition
62 73 69
68
68 76 74 71
53 51
96
67 71
87
75 69
103
111
115
125
165
136
139 16
3
149
141
0
50
100
150
200
250
R&D expenditure
51 54 50
69
91 103
76
98 86 112
94 91
58
84
125
88
96
115 15
0
168
146
145
108
153
216
190
172 21
3 236
280
0
50
100
150
200
250
300
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Capital expenditure(in million €)
5
Employees
Total number of employees decreased by 381
• Production footprint adjustments mainly in EnergyMaterials and Performance Materials
• Decrease in associated companies primarily due torestructuring in Element Six Abrasives
9,89
5
9,82
8
9,05
3
9,82
6
10,0
79
9,31
5
9,55
8
10,1
64
10,3
96
10,1
90
4,13
1
4,31
4
4,87
9
5,01
8
5,33
4
4,40
5
4,82
8
4,40
8
4,04
2
3,86
7
14,0
26
14,1
42
13,9
32
14,8
44
15,4
13
13,7
20
14,3
86
14,5
72
14,4
38
14,0
57
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Fully consolidated Associates
People
Restated for discontinued operations in 2004, 2006 and 2008
6
Safety
Safety performance further improved in 2013
• Accident frequency rate : 2.08
• 79% of sites accident-free
7.10
6.30 7.
20
5.30
5.32
3.12 3.54
3.61
2.86
2.08
2.00
4.00
6.00
8.00
10.00
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Accident frequency rate
7
Businessreview
2013ECOS ND15 is an example of developing new solutions
to meet the environmental challenges of customers (Picture: Bruges, CSM)
Catalysis
Revenues of Automotive Catalysts were up, with volume growth and the effect of Umicore Shokubai consolidation more than offsetting lower pass-through costs
Volumes in line with regional markets, but margins impacted by:
• product & regional mix
• product development, investment start-up anddepreciation costs
Unfavourable product and regional mix in Precious MetalsChemistry
H1 H2
399
275 33
9
391 45
3
466
314
311 35
9 424
413
42771
2
586 69
9 814
866
894
0
200
400
600
800
1,000
1,200
2
008
2
009
2
010
2
011
2
012
2
013
Revenues (excluding metal)(in million €)
57
-14
39
46 49 44
7
17
39
44 42
29
64
31
78
89 91
73
-20
0
20
40
60
80
100
120
Recurring EBIT
10
Catalysis
Bad-Säckingen: 2H 2013
Capacity expansions Euro 6 LDD
Onsan: H1 2014
New production capabilities
Nagoya: H2 2013
New technology development centre
Suzhou
1. New production capabilities H1 20142. SCR line for HDD H1 2014
Tulsa: H1 2014
New plant
Florange: 2013 - 2014
Three SCR lines for HDD
Americana: H2 2013
New technology development centre
Precious Metals Chemistry
Automotive Catalysts
Pune: H2 2014
New plant
11
Energy Materials
Significant revenue growth in Rechargeable Battery Materials
• mainly driven by demand for high-end portable electronics
• higher demand for NMC cathodes for automotive applications
Strong volume growth in Cobalt & Specialty Materials slightly offset by lower premiums due to competitive pressure
Revenues in Electro-Optic Materials impacted by weak end markets, germanium optics in particular
Revenues from Thin Film Products up, driven by the display market
Overall profitability of the business group benefited from footprint adjustments and cost reduction measures
H1 H2
205
154
173
180
184
200
190
151 17
4
178
183 20
3
395
305 34
8
358
366 40
3
0
100
200
300
400
500
2
008
2
009
2
010
2
011
2
012
2
013
Revenues (excluding metal)(in million €)
36
7
24 21
14 12
21
17
20 20
4 13
57
24
44 41
18
25
0
20
40
60
80
Recurring EBIT
12
Energy Materials
Cheonan: H1 2014
Greenfield for precursorsFirst production trials
Cheonan and Jiangmen
1. Capacity expansion H2 20132. Debottlenecking and additional capacity investments 2014
Nashville: H2 2013
Acquisition of Palm Commodities International
Rechargeable Battery Materials
Cobalt & Specialty Materials
Olen
1. Ni refining H2 20132. Co fine powders 2015
13
Performance Materials
Revenues are largely stable
Benefits start to accrue from footprint adjustments and cost reduction measures in Building products, Technical Materials and Platinum Engineered Materials
Continued pressure on recycling and refining margins in Zinc Chemicals
Higher volumes in Electroplating compensating for pressure on premiums
Lower contribution from Element Six Abrasives, affected by weaker end markets
H1 H2
257
208
219 27
1
267
263
226
196 22
7 253
256
247
483
404 44
6 524
523
510
0
100
200
300
400
500
600
700
2
008
2
009
2
010
2
011
2
012
2
013
Revenues (excluding metal)(in million €)
52
16
47
39
31 29
36
21
29
28
24 26
88
37
75
67
55 55
0
20
40
60
80
100
120
Recurring EBIT
14
Performance Materials
Pasir Gudang: H1 2014
Capacity expansion to serve Asia Pacific
Changsha: H1 2015
New plant for Zn powders
Oxford: H2 2013
Synthetic diamond innovation centre
Viviez: H1 2014
New plant for surface-treated products
Element Six Abrasives
Zinc Chemicals
Building Products
Suzhou: H2 2013
Production discontinuation
Melbourne: H2 2013
Production discontinuation
15
16
Recycling
While lower metal prices impacted revenues and profitability, ROCE remained strong at 58%
In Precious Metals Refining:
• Lower metal prices impacted earnings, partially mitigated bylonger term pricing contracts
• Higher intake of residues from non-ferrous metal industries,more than offsetting lower intake of end-of-life products
Lower contribution from the recycling activities in Jewellery & Industrial Metals
Revenues in Precious Metals Management down due to unfavourable price volatility and lower metal prices
H1 H2
95
66
102 13
3
122
103
106
52
93
134
137
97
202
118
195
267
259
200
0
50
100
150
200
250
300
350
Recurring EBIT
253
222
254 31
0
342
307
255
204 25
2 327 339
283
508
427 50
6 637 681
590
0
200
400
600
800
1,000
2
008
2
009
2
010
2
011
2
012
2
013
Revenues (excluding metal)(in million €)
16
Recycling
Pforzheim: H2 2014
Expansion of Ag recycling
Hoboken
1. 2nd phase of sampling facility expansion H1 20142. Commissioning of biological water treatment H1 20143. New gas cleaning equipment H2 20134. Intention to expand treatment capacity 2014 - 2016
Bangkok: 2013 - 2014
Expansion of Ag recyclingPrecious Metals Refining
Jewellery & Industrial Metals
17
2013 financials
In 2013 Umicore’s recycling operations in Hoboken and Pforzheim were certified conflict-free
by the London Bullion Market Association and Responsible Jewelry Council respectively
Non-recurring elements
Non-recurring EBIT of € -43.4 million
Total negative impact on net result of€ 39 million
Non-recurring items(in million €) 2013
Restructuring charges & provisions (30.6) Environmental charges & provisions (7.7) Impairments on metal inventory (1.6) Other (3.5)
Non-recurring EBIT (43.4)
Non-recurring tax result 4.7 Non-recurring minority result 0.2
Net non-recurring result (38.9)
Net IAS 39 effect (0.1)
Total impact on net result (39.0)
19
Strong free cashflows
Cashflow generated from operations up 8.7 % to € 523 million
• Includes significant release of working capital
Tax paid back to more normalised level
Significant investments
• Capex of € 280m
• Acquisition of Palm Commodities
Nonetheless, increase in net cashflow before financing
195
258
-68
309
150 18
6
-100
0
100
200
300
400
Net cashflow before financing
430
451
143
530
481 52
30
100
200
300
400
500
600
2
008
2
009
2
010
2
011
2
012
2
013
Cashflow generated from operations(in million €)
20
Shareholder returns
Stable dividend proposed at € 1.00 per share
Corresponds to 51 % payout ratio based on recurring EPS of € 1.96 per share
Implied gross dividend yield exceeds 3.0 %
Purchased 2.4 million treasury shares in 2013, amounting to € 84.7 million.
Total cash returned to shareholders (dividend + buybacks) of € 196 million or 38 % of cashflowgenerated by operations
Remaining headroom under existing buyback authorisation of 1.8 million shares
1.41
1.21
1.73 1.
80 1.93
1.24
1.40
2.69
2.47
1.96
0.33
0.37
0.42
0.65
0.65
0.65 0.
80
1.00
1.00
1.00
23%
31%
24%
36%34%
52%57%
37%41%
51%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0.50
1.00
1.50
2.00
2.50
3.00
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Recurring EPS Dividend Payout ratio
Data per share(in € / share)
Restated for discontinued operations in 2004, 2006 and 2008* Dividend proposed for 2013
21
Further reduction of net financial debt
Net debt31/122012
Operatingcashflow
Workingcapital
changes
CapexCap dev
Taxes Netinterest
Dividends
Sharebuybacks
Other
Net debt31/122013
-222
441
97 -280
-14-38
-3 -115
-85
3
-215
-250
-200
-150
-100
-50
0
50
100
150
200
250
300
350(in million €)
Net financial debt evolution
* Operating cashflow = cashflow generated from operations less change in working capital requirement plusdividend and grants received
22
Strong capital structure maintained
585
515
813
140
333
177
360
267
222
215
31% 34
%
45%
10%
20%
11% 19
%
13%
11%
11%
1.6
1.3
1.7
1.1
0.8
1.0
0.5 0.
6
0.5
0.4
0
250
500
750
1,000
1,250
1,500
2
004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
Net financial debt Gearing ratio (debt / debt+equity)
Average net debt / recurring EBITDA
Net financial debt
Restated for discontinued operations in 2004, 2006 and 2008
(in million €)
Net financial debt € 215 million
Corresponds to :
• 0.4 x Average net debt to recurring EBITDA ratio
• 11 % net gearing ratio
Average weighted net interest rate down to 1.61 % (vs 1.92 %)
Increased committed credit lines in 2013 with new syndicated loan
23
Outlook
Outlook
• Revenues set to increase. Mainimpact of Euro 6/VI business in H2
• Continued growth in China and NorthAmerica
• Lower revenues and margins in theabsence of any recovery in preciousand specialty metals prices
• Supportive supply environment set toremain
• Trends unchanged in most endmarkets
• Margin improvement as a result ofcost reduction measures
• Further sales growth in RechargeableBattery Materials
• Recovery underway in some otherend markets
Performance Materials
CatalysisRecycling
Energy Materials
25
Outlook
While we expect a definite improvement in the performance of our product businesses, this may not be sufficient to fully offset the impact of lower metal prices on the profitability of the Recycling business group. If current metal prices persist, full year recurring EBIT could end up slightly below the level of 2013.
26
Financial calendar
29/04/2014 2014 Q1 trading update & Annual General Meeting
02/05/2014 Ex dividend trading date
06/05/2014 Dividend record date
07/05/2014 Dividend payment date
31/07/2014 2014 H1 results publication
23/10/2014 2014 Q3 trading update
Forward-looking statements
This presentation contains forward-looking information that involves risks and uncertainties, including statements about Umicore’s plans, objectives, expectations and intentions.
Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore.
Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected.
As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements.
28
Investor Relations
Evelien Goovaerts [email protected] +32-2-227 78 38