Umicore Sa · EURONEXT:UMI
Umicore Sa — FY2008 Earnings Presentation
30 slides from Umicore Sa's earnings presentation, Feb 12, 2009
Slide 1: 2008 results
2008 results 12 February 2009
Slide 2: Overview
Overview • Continued strong performance • Rapid deterioration of business environment in Q4 • Dealing with reduced demand • Continuing to build for longer-term growth • Stable dividend • Strong balance sheet 2
Slide 3: Key figures
Key figures key figures • Continued strong performance driven (in million ¤) 2007 2008 by substantial growth in Precious Metals Services and Advanced Revenues 1,910.0 2,123.6 +11.2% Materials EBITDA 528.8 488.8 -7.6% • Sales volumes in several business REBIT 359.1 355.3 -1.1% areas negatively impact
Slide 4: Continued strong performance
Continued strong performance Revenues (excluding metal) Recurring EBIT (in million €) (in million €) 19.2% 19.7% 4,000 600 17.9% 17.3% 17.4% 3,500 15.2% 500 15.3% 14.7% 3,000 13.6% 400 359 355 2,500 11.5% 2124 329 160 140 9.4% 1910 280 2,000 1725 997 300 159 8.2% 1693 1685 8.3% 945 7.4% 233 126 1358
Slide 5: Rapid deterioration of business environment in Q4
Rapid deterioration of business environment in Q4 • Annual global car production down 4% (down 12% in H2 and down 21% in Q4) Plant closures at most major OEMs and significant destocking underway • Sales of mobile phones down 13% in Q4, while sales growth of laptops was slower than generally anticipa
Slide 6: Reflected in H2 figures
Reflected in H2 figures revenues Recurring EBIT Cashflow (in million €) (in million €) (in million €) 1,600 400 400 352 1,400 350 350 1,200 1126 300 300 997 965 945 238 1,000 250 250 215 199 800 200 200 160 168 600 150 140 150 400 100 100 200 50 50 17 0 0 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2007 2
Slide 7: Dealing with reduced demand
Dealing with reduced demand • Umicore is adapting its production profile to the current demand situation • Workforce of consolidated companies reduced by 400 people • main countries are China, US, Germany • primarily in PMP&C • Workforce reduction of 400 at associate companies • More than 1,000 peop
Slide 8: Investing in the long-term: Capex
Investing in the long-term: Capex Capex 300 • 2008 capex up by 41% • pre-concentration investment in 250 Hoboken (Precious Metals Services) 216 125 • production and testing investments in 200 Automotive Catalysts 153 148 153 150 143 145 • combined heat power generation 74 84 84 92 91 108 facility in
Slide 9: Investing in the long-term: Capex
Investing in the long-term: Capex • Capex expected to remain at high levels in 2009 • Investments are aimed at increasing Umicore’s capabilities in several areas • new rechargeable battery materials • germanium substrates • automotive catalyst technologies • jewellery production and recycling in Chi
Slide 10: Investing in the long-term: R&D focus
Investing in the long-term: R&D focus R&D 200 (in million €) 7.0% • R&D expenditure increased further in 2008 175 5.7% 5.8% 5.8% 166 5.4% 93 • higher expenditure in Automotive 150 Catalysts (mainly due to the inclusion of 125 Delphi R&D) 125 112 110 104 62 3.2% 53 • Corporate projects 100 2.5% • 43
Slide 11: Investing in the long-term: R&D focus
Investing in the long-term: R&D focus Less is More Creating value by reducing the use of rare and valuable materials Energy Recycling Environmental Solutions Solutions Solutions Materials for energy Addressing resource Technologies storage and sustainable scarcity and emissions by to mitigate energy
Slide 12: Business review
Business review Precious metals pre-concentration plant in Hoboken, Belgium, opened in 2009
Slide 13: Advanced Materials
Advanced Materials key figures • Strong growth in revenues and profits (in million ¤) 2007* 2008 • Cobalt & Specialty Materials grew well, although sales volumes fell in Q4 Revenues 332.0 395.0 +19.0% • Strong growth in germanium EBITDA 83.5 86.3 +3.3% substrates feeding increased demand REBIT 62.3
Slide 14: Precious Metals Products & Catalysts
Precious Metals Products & Catalysts key figures • Revenues increased, largely as a result (in million ¤) 2007* 2008 of full-year inclusion of Delphi operations Revenues 926.0 1,016.9 +9.8% • Automotive Catalysts felt the full EBITDA 193.5 136.6 -29.4% impact of significant contraction in REBIT 159.
Slide 15: Precious Metals Services
Precious Metals Services key figures • High availability of both industrial by- (in million ¤) 2007 2008 products and end-of-life materials • Higher revenues generated from by- Revenues 357.9 420.1 +17.4% products EBITDA 173.3 218.2 +25.9% • Performance aided by contracted high REBIT 133.9 183.7 +37
Slide 16: Zinc Specialties
Zinc Specialties key figures • Improved contribution from Building (in million ¤) 2007 2008 Products (compared to a weak 2007) Revenues 294.1 291.7 -0.8% • Construction sector in Europe weakened through 2008 EBITDA 61.7 65.5 +6.1% REBIT 41.9 45.7 +9.1% • Reduced contribution from Zinc of which assoc
Slide 17: Financials
Financials
Slide 18: Business group breakdown
Business group breakdown Revenues Recurring EBIT Capital employed (excluding metal) ZS AM AM ZS (average) ZS 11% 19% 18% 16% AM 14% 24% PMS PMS 12% 20% PMP&C 26% PMS 45% PMP&C 47% PMP&C 48% AM = Advanced Materials, PMP&C = Precious Metals products & Catalysts, PMS = Precious Metals Services, ZS = Zi
Slide 19: P&L Profit & Loss statement
P&L Profit & Loss statement (in million ¤) 2007 2008 Turnover 8,309.9 9,168.6 +10.3% Revenues 1,910.0 2,123.6 +11.2% Recurring operating profit 332.3 323.3 -2.7% Recurring contribution from associates 26.8 32.0 +19.4% Recurring EBIT 359.1 355.3 -1.1% Net recurring financial result (40.3) (52.8) +31.
Slide 20: Non-recurring items
Non-recurring items Non-recurring items (in million ¤) 2008 • Most non-recurring items are non-cash Restructurings (15.1) in nature Inventory impairments (29.5) Nyrstar impairment (68.1) Capital gains (sale of land and shares) 19.7 • IFRS-based impairments Other (11.1) • Nyrstar stake Non-recurring
Slide 21: EPS
EPS EPS (in €) 1.93 2.00 1.80 1.73 • Adjusted EPS increased by 7% 1.50 1.41 1.21 • Accretive share buy-back effect of 9% 1.00 0.80 • Proposed dividend of € 0.65 per share, 0.60 stable versus 2007 0.65 0.65 0.50 0.32 0.33 0.37 0.42 • Ex-dividend date is 29 April with 0.28 payout commencing on 6 May 0
Slide 22: Cashflow development
Cashflow development Net financial debt evolution (in million ¤) 500 400 +51 -17 -216 +17 300 +429 Acqui- Disposals sitions 200 Working H2 capital -76 changes 100 -35 -168 Capex -75 -329 0 Net debt H1 Taxes -239 Financial -100 31/12 charges Net debt 2007 Dividends 31/12 -200 Operating 2008 cashflow
Slide 23: Net debt evolution
Net debt evolution Net financial debt (in million €) 2,000 43.9% 1,750 • Strong balance sheet 1,500 34.2% 33.4% 31.5% • Debt levels and gearing remain low 1,250 1,000 • Net debt < EBITDA 19.8% 743 773 730 750 610 • Average interest rate up slightly in 11.0% 619 500 590 510 9.9% 329 2008 (5.83%) due
Slide 24: Gross debt composition
Gross debt composition Gross debt Other bank Bonds facilities (maturity 17% 2012) 26% • Debt composition is very healthy Commercial paper Long-term in the current climate loan 14% (maturity 2013) • 69% long term 3% • 31% short term Revolving credit facility (maturity 2011-2013) 40% 27
Slide 25: Business outlook
Business outlook
Slide 26: Divisional outlook
Divisional outlook Advanced Precious Metals Materials Services • Challenging start to 2009, low • Supply conditions could visibility weaken especially in industrial by-products • Destocking continuing at battery producers; portable • Some downside protection electronics market expected against lower
Slide 27: Divisional outlook
Divisional outlook Precious Metals Zinc Products & Catalysts Specialties • Annual global car production • Demand in key end-user likely to decrease significantly sectors is likely to remain low: construction, tyre producers, • Technical Materials will paint producers continue to be impacted by lower
Slide 28: Group outlook
Group outlook • Downturn in global economic activity affects most business activities • Destocking at key customers in several businesses reduces visibility to a matter of weeks • First half operating profit expected to be well below the record levels of 2008 • Despite the difficult economic picture
Slide 29: Forward-looking statements
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
Slide 30: Materials for a better life