Trading Update Q1 2014
Revenues increased by 1% in the first quarter of 2014. Positive developments in most of the product related businesses were offset by the effects of lower metal prices in Recycling and, to a lesser extent, currency headwinds.
In Catalysis revenues grew by 4% driven by global automotive production. Energy Materials revenues were up by 26% with all business units recording growth, particularly Rechargeable Battery Materials. Performance Materials revenues were down by 1% with improvements in the two zinc-related business units offsetting somewhat less favourable conditions in the other activities. Recycling revenues were down by 16% with lower received precious metals prices impacting most business units coupled with lower volumes in the Precious Metals Refining operations.
Cash flows remained strong and were at similar levels to those of the previous year. Net debt was reduced further from the levels reported at the end of 2013.
During the first quarter Umicore continued to buy back its own shares and up until 25 April 1,020,000 shares had been bought back. Umicore thereby held 10,958,750 shares in treasury, or 9.13% of the issued shares at that date.
As anticipated, margins in the product related business units are improving, driven by increased demand and the positive effects of recent cost reduction measures. However, this improvement is not sufficient to offset the effect of lower earnings in Recycling. In addition to the effect of lower metal prices, volumes are also expected to be lower due to engineering and testing work in preparation for the planned expansion of the Hoboken facility. Umicore therefore expects full year recurring EBIT for 2014 to be between € 250 million and € 280 million, assuming current market conditions persist.
Note: All comparisons are made with the first quarter of 2013, unless mentioned otherwise.