Umicore grows annual revenue in 2019

After softer first-half performance, revenue and recurring EBIT in the second half saw strong sequential growth of 6 percent and 12 percent, respectively, the company says.

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February 10, 2020

Global materials technology and recycling group Umicore, with headquarters Brussels, says it posted a strong performance in 2019, despite persistent headwinds in key markets, particularly the automotive sector.

The company grew its annual revenue by 3 percent to 3.4 billion euros ($3.7 billion), and recurring earnings before interest, taxes, depreciation and amortization (EBITDA) increased 5 percent to 753 million euros ($823 million), while recurring EBIT was 509 million euros ($556 million), close to the record levels the company achieved in 2018. After a somewhat softer first half performance, revenues and recurring EBIT in the second half posted strong sequential growth of 6 percent and 12 percent, respectively, the company says.

“I am proud of our performance in 2019 and pleased to confirm the growth outlook for 2020 despite the adverse market trends that developed in the course of 2019,” says Marc Grynberg, CEO of Umicore. “I am confident that our strategy to be a leader in clean mobility materials and recycling will result in further growth for Umicore and we will execute it with determination while adjusting our investment programs to take account of evolving market needs.”

Umicore says it grew revenues and recurring EBIT in its Catalysis business in 2019 in spite of the global recession in the automotive market. The company attributes this growth to market share gains in light-duty gasoline applications and the increasing penetration of gasoline particulate filters in Europe and China.

The company says, as anticipated, the performance of Energy & Surface Technologies business was well-below the record levels of last year because of a temporary market slowdown, particularly in the electric vehicle (EV) segment in China, as well as from the depressed cobalt price and the inflow of cheaper cobalt units unethically sourced from artisanal mining. This segment’s performance also was affected by higher depreciation charges and upfront costs related to greenfield investments. Sales of Umicore’s cathode materials used in EVs grew in line with the global EV market.

The strong performance and year-on-year growth in recycling were driven by higher metal prices, a favorable supply environment and Umicore’s ability to optimize its feed mix, which offset most of the impact of the extended shutdown and the fire in July 2018, the company says. That month, the smelter at Umicore’s recycling plant in Hoboken, Belgium, caught fire. The fire was extinguished that same morning, and nobody was hurt.

Umicore also reports higher cash flow from operations of 549 million euros ($600 million) compared with 92 million euros ($100 million) in 2018, including a 78 million euros ($85 million) increase in working capital requirements from higher platinum group metals (PGMs) prices.

“While the EV market was in the spotlight, the strength of Umicore’s position as a supplier of materials technologies to all types of clean mobility solutions was confirmed,” the company states in the news release announcing its yearly results. In Catalysis, Umicore points to “several successes in catalyst technologies, such as particulate filters for gasoline engines and the opening of the new plant for fuel cells catalysis in Korea.” The company says its Energy & Surface Technologies business continued to invest in growth, albeit at an adjusted pace in line with current market demand.

Umicore commissioned its new Process Competence Center in Belgium, is ramping up production at its new plant in China and started construction of the greenfield plant in Poland in 2019. The company says it also promoted a global sustainable battery materials value chain with its acquisition of cobalt refinery and cathode precursor operations in Finland and long-term partnerships for sustainable cobalt supply. Finally, Umicore signed sizeable multiyear strategic supply agreements with LG Chem and Samsung SDI for nickel-magnesium-cobalt cathode materials, which the company says demonstrate the quality of its technology offering.

In Recycling, Umicore says it completed the multiyear expansion program at the Hoboken plant and carried out various investments to further improve the environmental performance of the plant.

Umicore says it expects to grow revenues and earnings this year, despite a deterioration in the global macroeconomic environment, particularly in the automotive sector. This growth outlook assumes that the recent coronavirus outbreak will not result in a protracted or material effect on the economy in 2020, the company adds.

Looking ahead to its performance in 2020, while no signs of an imminent recovery in the automotive market are visible, Umicore says it expects the Catalysis business to continue to benefit from its strong market position in gasoline catalyst applications and further penetration of higher value gasoline particulate filters in Europe and China. Despite the expectation of subdued EV sales in China, the company says its Energy & Surface Technologies business anticipates to benefit from higher sales of cathode materials for EVs in 2020, as well as the consolidation of the recently acquired activities in Kokkola, Finland. At the same time, the business group’s performance will reflect higher fixed costs related to the ongoing investments in capacity and innovation. Performance in Recycling is expected to benefit from a combination of higher metal prices, some of which were hedged in the course of 2019, a sustained favorable supply environment and increased availability of the Hoboken smelter.