• Revenue: EUR3.5 billion for 2024, a decrease of 11% year-over-year.
• EBITDA: EUR763 million, with an EBITDA margin of 22%.
• Operational Cash Flow: EUR384 million.
• CapEx: EUR555 million, below the target of EUR650 million.
• Return on Capital: 12.3% for the group.
• Leverage Ratio: 1.9 times.
• Adjusted Net Profit Group Share: EUR255 million, resulting in an adjusted EPS of EUR1.06.
• Net Result Group Share: Minus EUR1.48 billion, impacted by EUR1.6 billion non-cash impairment in Battery Materials.
• Dividend: Proposed gross annual dividend of EUR0.50 per share, representing a payout ratio of 47%.
• Battery Materials EBITDA: Close to breakeven for 2024.
• Catalysis EBITDA Margin: Close to 26%, with a return on capital more than 40%.
• Recycling EBITDA Margin: 36%, with a return on capital close to 80%.
• Specialty Materials EBITDA Margin: Below 20%, with a return on capital of 9%.
• Efficiency Gains: Over EUR100 million, exceeding the initial target of EUR70 million.
• Free Operating Cash Flow: EUR384 million.
• Net Financial Debt: EUR1.4 billion, with a leverage ratio of 1.87 times.
• Cash Position: EUR2 billion.

• Warning! GuruFocus has detected 7 Warning Signs with UMICF.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Umicore SA (UMICF) reported strong operational cash flow of EUR384 million for 2024.
• The company achieved an EBITDA margin of 22%, indicating solid profitability.
• Umicore SA (UMICF) successfully reduced CapEx by 35% year-on-year, demonstrating effective cost management.
• The Catalysis segment showed robust performance with an EBITDA margin close to 26% and a return on capital over 40%.
• Efficiency and cost-saving measures resulted in EUR100 million in savings, surpassing the initial target of EUR70 million.

Negative Points

• Revenues decreased by 11% year-over-year, primarily due to a slowdown in Battery Materials and vehicle production.
• The company faced a significant EUR1.6 billion impairment in its Battery Materials business.
• Recycling revenues were negatively impacted by maintenance shutdowns and a less favorable PGM trading environment.
• The Battery Materials segment experienced a slowdown in demand, leading to decreased revenues and EBITDA.
• Umicore SA (UMICF) anticipates a negative free cash flow for 2025 due to ongoing investments and equity contributions.

Q & A Highlights

Q: Can you provide an update on the IONWAY program, including the timeline and expected returns on equity injections? A: Wannes Peferoen, CFO: We are on track with IONWAY, with capital injections being front-loaded due to the lengthy project financing process. We expect financing to be in place by the second half of 2026. While we can't share specific commercial details, we remain confident in the project's value creation.

Q: How might Umicore be impacted by trade tariffs, and why is CapEx in Battery Materials not reduced further despite low EBITDA? A: Bart Sap, EVP Catalysis: Trade tariffs are unpredictable, but we have an agile footprint and diversified supply base to mitigate impacts. CapEx in Battery Materials is focused on debottlenecking the Korean plant to meet customer commitments, despite the pause in Canada.

Q: Are there any considerations to exit larger contracts in Battery Materials to reduce CapEx, and will Umicore generate positive free cash flow in 2025? A: Bart Sap, EVP Catalysis: We are committed to our customer contracts and are building against these commitments. Wannes Peferoen, CFO: Free cash flow will be negative in 2025 due to equity contributions to IONWAY and CapEx, with leverage expected to increase.

Q: What are the remaining restructuring costs, and how will metal hedge roll-offs impact 2025 and 2026? A: Wannes Peferoen, CFO: The cash out for restructuring in 2025 is approximately EUR70 million. Metal hedge roll-offs will impact 2025, with further effects expected in 2026.

Q: Can you clarify the funding structure for the IONWAY investment and any risks to the debt-to-equity components? A: Wannes Peferoen, CFO: We aim to fund at least 50% of IONWAY's needs through debt financing. Equity contributions are front-loaded, with EUR400 million expected in 2025. Inflation has affected the project, but we have strong guardrails in place.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.