Half year results 2021
Umicore reports exceptionally strong performance in the first half of 2021
Strong performance across business groups driving record results
Umicore posted a very strong performance in the first half of 2021 reflecting the sharp recovery of demand from the automotive industry for its clean mobility materials after the severe downturn caused by the COVID-19 pandemic last year, as well as a strong boost from record precious metal prices.
Umicore’s revenues for the first 6 months amounted to € 2.1 billion (+37% year on year) and adjusted EBIT amounted to € 625 million, up 157% compared to the first half of 2020. Adjusted EBITDA doubled to € 762 million, which combined with a temporary € 250 million reduction in working capital, resulted in record free cashflows and a reduction of € 0.4 billion in net financial debt since the end of 2020 to just over € 1 billion. Adjusted net profit for the Group close to tripled to € 428 million. The Supervisory Board decided to pay an interim dividend of € 0.25 per share, as fixed by the amended dividend policy which was announced in February.
Revenue growth in Catalysis strongly outperformed the recovering car market as a result of market share gains in the European and Chinese light-duty gasoline markets, a favorable platform mix and strong demand for heavy-duty diesel and fuel cell catalysts. Adjusted EBIT was € 204 million compared to € 21 million in the first half of last year and was also supported by cost savings and high PGM prices.
Revenues in Energy & Surface Technologies increased, reflecting substantially higher sales volumes of cathode materials in Rechargeable Battery Materials, a strong recovery in Cobalt & Specialty Materials and strong demand in Metal Deposition Solutions. Adjusted EBIT was well up with higher revenues more than compensating the increase in fixed costs, as anticipated.
Based on the strong performance in the first half of the year and assuming precious metal prices remain around current levels for the remainder of the year, Umicore expects its adjusted EBIT for the full year 2021 to slightly exceed € 1 billion. This compares to the guidance provided at the end of April of adjusted EBIT for 2021 expected to approach € 1 billion. This full year outlook incorporates an exceptional additional contribution of roughly € 250 million compared to 2020 linked to higher current precious metal prices. As previously announced, the group adjusted EBIT in the second half of the year is expected to be lower than in the first half, which benefited from the spike in precious metal prices. The outlook for the second half includes the effect of the planned maintenance shutdown in Hoboken and the currently anticipated impact of the semi-conductor shortage on car production.
In Catalysis, Umicore expects to continue outperforming the automotive market and more than double adjusted EBIT for the full year 2021 compared to 2020. Revenues and earnings in the second half of the year will be impacted by more subdued demand in the automotive industry due to the ongoing shortage in the global supply of semiconductors. In addition, heavy-duty diesel catalyst sales volumes are expected to be impacted by the phase out of catalysts compliant with the China V legislation.
In Energy & Surface Technologies, adjusted EBIT is expected to grow meaningfully for the full year 2021 and may slightly exceed current market consensus. However, the stronger than anticipated performance in Cobalt & Specialty Materials and Metal Deposition Solutions in the first half is expected to normalize and should not be extrapolated to the second half. As announced in April, Umicore expects substantial growth in sales volumes of cathode materials in 2021 to more than compensate a € 50 million increase in fixed costs.
In Recycling, full year 2021 adjusted EBIT is expected to reach exceptional levels, well above prior year, driven by robust operations, strong growth across business units and regions and assuming that current precious metal prices prevail throughout the remainder of the year. The first half performance should not be extrapolated to the second half as it included a spike in precious metal prices and the availability of the smelter in Hoboken will be lower due to the planned maintenance shutdown starting mid-September.
Revenues of € 2.1 billion (+37%)
Adjusted EBITDA of € 762 million (+103%)
Adjusted EBIT of € 625 million (+157%)
EBIT adjustments of - € 39 million, including € 41 million additional provision in Recycling for the creation of the green zone in Hoboken.
ROCE of 28.4%
(compared to 10.9% in first half 2020)
Adjusted net profit (Group share) of € 428 million (+189%) and adjusted EPS of € 1.78 (+187%)
Cashflow from operations of € 836 million
(€ 275 million in first half 2020), including a € 30 million decrease in working capital requirements; free cashflow from operations of € 656 million (€ 108 million in 2020)
Capital expenditure amounted to € 166 million
(€ 152 million in first half of 2020)
R&D expenditures of € 118 million (+10%)
Net debt at € 1,040 million, down from € 1,414 million at the end of 2020. This corresponds to a net debt/ LTM adj. EBITDA ratio of 0.87x.
The Supervisory Board decided to pay out an interim dividend of € 0.25 per share on 24 August.
Following his appointment by the Supervisory Board to succeed Marc Grynberg as CEO, Mathias Miedreich will officially take up his new role at Umicore on 1 October 2021. Marc and Mathias will work together for a short period of time to ensure an optimal onboarding of Mathias and a smooth transition of leadership.
Bolder, better and faster on ESG ambitions to sustain industry leadership
On 2 June, Umicore held its first event dedicated to sustainability and reaffirmed its commitment to be an industry leader in sustainability. Umicore’s “Let’s go for Zero” sustainability strategy aims at minimizing the impact of operations while continuing to maximize positive impact on society and delivering value to all stakeholders. The strategy, underpinned by an enhanced disclosure and governance approach that includes supporting the TCFD and linking ESG to executive remuneration, consists of three key pillars: Net zero Greenhouse Gas (GHG) emissions by 2035, Zero harm, Zero inequality.
“I am proud of the performance achieved by Umicore in the first half of 2021 and would like to thank all Umicore employees for their remarkable engagement.
I am also proud of our ambitious sustainability roadmap which will set us apart in our industry and goes hand in hand with our strategy to be a leader in clean mobility materials and recycling.
We stand ready to capitalize on the acceleration of electrification in the automotive industry and the growing need for a circular economy.”
Marc Grynberg, CEO of Umicore
 Catalysis adjusted EBIT reached € 154 million in 2020.
 Umicore has engaged Vara Research GmbH to survey brokerage analysts to provide analysts' consensus estimates to the market. The most recent consensus is available on https://vara-services.com/umicore/. Consensus adjusted EBIT for Energy & Surface Technologies amounted to € 129 million at the time of this publication.
 Recycling adjusted EBIT amounted to € 362 million in 2020.
Note: All references to revenues in this document refer to revenues excluding metals (i.e. all revenue elements less the value of purchased metals)