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2014 half year results
Highlights
Revenues slightly down with volume growth offset by strong metal price and currency headwinds:
• Revenues down 1% versus H1 2013
• Revenues up 5% versus H2 2013
Profitability impacted by lower metal prices, unfavourable exchange rates and higher depreciation, partly offset by cost reductions:
• Recurring EBIT € 138 million (down 15%)
• Recurring EBITDA € 221 million (down 8%)
Execution of growth strategy on track
Strong free cashflows and high cash return to shareholders
Share cancellation proposed to shareholders
Interim dividend proposed of € 0.50/share
2
Outlook
Considering the demand and price trends observed in the key end-markets and assuming current metal prices and exchange rates remain unchanged for the balance of the year, Umicore
expects its full year recurring EBIT to be within the upper half of the previously stated range of € 250 – € 280 million
3
Revenues slightly down with volume growth offset by metal price and currency headwinds
Revenues -1% vs H1 2013; +5% vs H2 2013
Volume growth in Automotive Catalysts and Rechargeable Battery Materials; impact of lower metal prices on the Recycling activities and currency headwinds across businesses
Demand picking up in product businesses
860
987
1,14
7 1,24
1
1,23
3
1,22
0
863
1,01
3
1,17
7
1,18
7
1,15
7
0
200
400
600
800
1,000
1,200
1,400
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014
H1 H2
(in million €)
Revenues
4
Margins affected by lower metal prices, currency effects and higher depreciation
Recurring EBITDA down 8%
• Lower metal prices affecting recycling margins
• Negative currency effects across the businesses (BRL, USD, CAD, KRW, CNY, ZAR)
• Price pressure in several end-markets
Recurring EBIT down 15%
• Higher depreciation charges as a result of recent investments
Benefits from cost reduction measures
50
186
215
192
163
138
97
156
202
181
141
0
50
100
150
200
250
H1 2
009
H2 2
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H1 2
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H2 2
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H1 2
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H1 2
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H2 2
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014
H1 H2
Recurring EBIT(in million €)
5
103
76
98
86
112
72
88
96
115
150 16
8
0
30
60
90
120
150
180
H1
2009
H2
2009
H1
2010
H2
2010
H1
2011
H2
2011
H1
2012
H2
2012
H1
2013
H2
2013
H1
2014
Capital expenditure(in million €)
60 68 76 74 71 74
60
71
87
75 69
0
30
60
90
120
150
180
R&D expenditure
Execution of growth strategy on track
Capital investments on track
• Ongoing expansion in Catalysis and Energy Materials
• Preparatory work for Hoboken expansion in Recycling
R&D expenditure slightly up
• Product-related R&D in Automotive Catalysts reflecting new test centre operations
• Process-related R&D focused on recycling technologies for the planned expansion in Hoboken
• Corresponds to 6% of revenues
6
9,31
5
9,55
8
10,1
64
10,3
96
10,1
90
10,3
19
4,40
5
4,82
8
4,40
8
4,04
2
3,86
7
3,89
0
13,7
20
14,3
86
14,5
72
14,4
38
14,0
57
14,2
09
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2
009
2
010
2
011
2
012
2
013
H1 2
014
Fully consolidated Associates
People
Workforce evolution
Workforce increased
• 129 in consolidated businesses, mainly in Automotive Catalysts and Cobalt & Specialty Materials
• 23 in associates, mainly in Element Six Abrasives
Safety performance
• Accident frequency rate at 2.29
• Accident severity rate at 1.78
Process safety practices are being reinforced following the fatal accident in Olen, Belgium
7
Businessreview
CA37%
EM22%
PM24%
RE17%
Capital employed
(average)
CA26%
EM12%
PM20%
RE42%
EBIT
(recurring)
CA39%
EM18%
PM21%
RE22%
Revenues
(excluding metal)
Business group split for 1H 2014
CA CatalysisEM Energy MaterialsPM Performance MaterialsRE Recycling
excluding Corporate
9
Business group split for 1H 2014
CA CatalysisEM Energy MaterialsPM Performance MaterialsRE RecyclingC Corporate
CA34%
EM18%
PM15%
RE27%
C6%
Capital expenditure
CA58%
EM13%
PM7%
RE14%
C8%
R&D expenditure
CA17%
EM20%
PM38%
RE17%
C8%
Workforce
(end of period)
10
275 33
9 391 45
3
466
480
311 35
9 424
413
427
0
100
200
300
400
500
H1 2
009
H2 2
009
H1 2
010
H2 2
010
H1 2
011
H2 2
011
H1 2
012
H2 2
012
H1 2
013
H2 2
013
H1 2
014
Revenues
(in million €)
-14
39
46 49
44 41
31
39
44 42
29
-20
0
20
40
60
Recurring EBIT
Catalysis2014 H1 figures
Revenues up 3% mainly due to volume growth in a recovering car market
Recurring EBIT down 7%
• Earnings recovering in Automotive Catalysts despite a temporarily unfavourable mix
• Earnings in Precious Metals Chemistry impacted by degrading market conditions and costs related to new investments
Improvement expected in second half as HDD and Euro 6 LDD production starts ramping up
H1 H2
11
Catalysis
Nowa Ruda: H1 2016
New LDV and HDDproduction capacity
Suzhou: H1 2014
SCR line for HDD ramping up production
Tulsa: H1 2014
Move from South Plainfield
Florange: H2 2014
Third SCR line for HDD
Precious Metals Chemistry
Automotive Catalysts
Pune: H2 2014
Commissioning new plant
Hanau: 2014
Capacity expansion for chemicals for metal deposition
Incheon: H2 2015
New technolgydevelopment centre
12
Energy Materials2014 H1 figures
Revenues up in all business units resulting in an overall 12% increase
Recurring EBIT up despite price pressure
Higher sales volumes in Rechargeable Battery Materialsdriven by demand for high-end portable electronics
Revenue growth in Cobalt & Specialty Materials mainly due to the acquisition of Palm Commodities
Higher sales volumes and contribution from refining and recycling in Electro-Optic Materials
Revenue increase for Thin Film Products with higher demand from large area coating applications
Demand trends likely to be supportive in second half and price pressure expected to continue
H1 H2
154 17
3
180
184 20
0 223
151 17
4
178
183 20
3
0
50
100
150
200
250
H1 2
009
H2 2
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H1 2
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H2 2
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H1 2
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H1 2
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H2 2
013
H1 2
014
Revenues
(in million €)
7
24
21
14
12
20
17
20 20
4
13
0
10
20
30
40
Recurring EBIT
13
Energy Materials
Cheonan: H1 2014
Greenfield for precursorsFirst production trials
Cheonan and Jiangmen: H1 2014
Additional capacity investments on-stream
Rechargeable Battery Materials
Cobalt & Specialty Materials
Thin Film Products
Olen: 2015
Co fine powders
Qingyuan: H2 2014
JV with First Rare Materials
14
Performance Materials2014 H1 figures
Revenues down vs H1 2013
Recurring EBIT up following cost reductions
Sales volumes and revenues up in Building Productslargely due to a mild winter in Europe
Lower revenues and sales volumes in Technical Materialsand Platinum Engineered Materials
Stable revenues in Zinc Chemicals with higher earnings due to cost reduction initiatives
Stable volumes and revenues in Electroplating
Higher revenues and earnings in Element Six Abrasivesdriven by market share gains and a favourable product mix
Current trends expected to continue in second half, adjusted for usual seasonality
H1 H2
16
47
39
31 29
33
21
29 28
24 26
0
10
20
30
40
50
60
Recurring EBIT
208
219
271
267
263
252
196 22
7 253
256
247
0
50
100
150
200
250
300
H1 2
009
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H1 2
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H1 2
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H2 2
013
H1 2
014
Revenues
(in million €)
15
Performance Materials
Pasir Gudang: H1 2014
Capacity expansion on-stream
Changsha: 2016
New plant for Zn powdersViviez: H1 2014
New plant for surface-treated products
ramping up
Electroplating
Element Six Abrasives
Zinc Chemicals
Building Products
Robertsfors: 2016
Production discontinuation
Jiangmen: H2 2014
JV with JCX
16
Recycling2014 H1 figures
Revenues down 13% and recurring EBIT down 34% due to impact of lower metal prices
Precious Metals Refining performance reflecting:
• Impact of lower received metal prices
• Lower processed volumes following preparatory engineering for the expansion in Hoboken
• Stable intake of materials yet less favourable product mix
Lower Au and Ag prices caused lower availability of recycling residues in Jewellery & Industrial Metals
Lower revenues from Precious Metals Managementdespite higher industrial demand for precious metals
Performance in second half will largely depend on available capacity and throughput of Hoboken facility after shutdown
H1 H2
66
102
133
122
103
68
52
93
134
137
97
0
30
60
90
120
150
Recurring EBIT
222 25
4
310 34
2
307
268
204 25
2
327
339
283
0
50
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150
200
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400
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H1 2
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H2 2
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H1 2
014
Revenues
(in million €)
17
Recycling
Pforzheim: H2 2014
Expansion of Ag recycling
Hoboken: 2016
Expansion of recycling capacity
Bangkok: 2013 - 2014
Expansion of Ag recyclingPrecious Metals Refining
Jewellery & Industrial Metals
Manaus: H1 2014
Expansion of Ag recyclingProduction started
18
2014 half year financials
Strong free cashflows
• Recurring group EBITDA 8 % lower year-on-year and stable compared to 2H13
• Cash flow generated from operations at € 203 million
• Net cashflow before financing at € 119 million:
• Continued optimisation of working capital
• Relatively slow capex spending in 1H
171
6
72 77
105 11
9
87
-74
236
73 80
-100
-50
0
50
100
150
200
250
H1
2009
H2
2009
H1
2010
H2
2010
H1
2011
H2
2011
H1
2012
H2
2012
H1
2013
H2
2013
H1
2014
H1 H2
Net cashflow before financing(in million €)
Restated for discontinued operations in 2004, 2006 and 2008
20
Further reduction of net financial debt
* Operating cashflow = cashflow generated from operations less change in working capital requirement plus dividend and grants received
Net debt31/122013
Operatingcashflow
Workingcapital
changes CapexDev Cap
Taxes Netinterest
Dividends
Sharebuybacks
Other
Net debt30/062014
-215
192
33 -72
-6 -28
-1 -57
-47
-1
-202
-250
-200
-150
-100
-50
0
50(in million €)
Net financial debt evolution
21
252
177 24
3
360
348
267
255
222
190
215
202
16%
11% 14
%
19%
17%
13% 13
%
11% 10
%
11%
10.6
%
137%
69%
42%
68%
63%
56%
49%
46%
43%
46%
47%
0
250
500
750
1,000
1,250
1,500
H1 2
009
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009
H1 2
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H2 2
010
H1 2
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H2 2
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H2 2
012
H1 2
013
H2 2
013
H1 2
014
Net financial debtGearing ratio (debt / debt+equity)Average net debt / recurring EBITDA
Net financial debt(in million €)
Strong capital structure maintained
Net financial debt € 202 million
Corresponds to :
• 0.5 x Average net debt to recurring EBITDA ratio
• 10.6 % net gearing ratio
Average weighted net interest rate stable at 1.26 %
22
69
54 59 52 54
26
58 54
0
25
50
75
100
125
150
H1 2
012
H2 2
012
H1 2
013
H2 2
013
H1 2
014
Dividend Buyback*
Cash return to shareholders
(in million €)
* Buybacks represent gross purchases
1.24 1.
39
1.31
1.02
0.87
1.07
1.30
1.16
0.93
0.18
0.16
0.25
0.50
0.75
1.00
1.25
1.50
H1 2
009
H2 2
009
H1 2
010
H2 2
010
H1 2
011
H2 2
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H1 2
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H2 2
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H1 2
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H2 2
013
H1 2
014
Recurring EPS
(in € / share)
EPS, dividend and share buyback
EPS reflecting lower EBIT
Recurring effective tax charge: 22.2%
Financial result includes adverse Forex-impact
Interim dividend of € 0.50 / share
Share buybacks
• 1,540,000 shares bought back in 2014 (1.3% of shares); currently holding 11,437,302 shares in treasury
• Board proposal to cancel 8,000,000 shares currently held in treasury
23
Non-recurring elements
Non-recurring EBIT mainly reflecting restructuring costs, partly offset by reversal of inventory impairments
Total negative impact on net result of€ 13.4 million
Non-recurring items H1(in million €) 2014
Restructuring charges & provisions (11.4) Environmental charges & provisions (3.2) Impairments on metal inventory 5.6 Other (0.4)
Non-recurring EBIT (9.4)
Non-recurring tax result (0.2) Non-recurring minority result 0.1
Net non-recurring result (9.7)
Net IAS 39 effect (3.6)
Total impact on net result (13.4)
24
Wrap-up
Revenues slightly down with volume growth offset by strong metal price and currency headwinds
Profitability impacted by lower metal prices, unfavourable exchange rates and higher depreciation, partly offset by cost reductions
Execution of strategy on track, while taking further actions to improve margins in the different businesses
2014 recurring EBIT expected to be in the upper half of the previously stated range of € 250 - € 280 million
25
Q&A
Financial calendar
1 September 2014 Ex interim dividend trading date
3 September 2014 Interim dividend record date
4 September 2014 Interim dividend payment date
23 October 2014 2014 third quarter trading update
6 February 2015 2014 full year results publication
28 April 2015 2015 first quarter trading update
28 April 2015 Annual General Meeting
30 July 2015 2015 half year results publication
Forward-looking statementsThis 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 are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore.
Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected.
As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements.
27
Annexes
Business Group summary
Catalysis Energy Materials
Key figures H1 H1(in million €) 2013 2014
Revenues 466.1 480.4 +3.1%
Recurring EBITDA 62.9 63.0 +0.2%
Recurring EBIT 44.4 41.4 -6.8%of which associates 1.4 3.0 +114.3%
EBIT 44.5 40.5 -9.0%
R&D 41.7 42.5 +1.9%Capex 27.8 24.5 -11.9%
REBIT margin 9.2% 8.0% -1.2%ROCE 11.1% 10.3% -0.8%
Key figures H1 H1(in million €) 2013 2014
Revenues 199.5 222.6 +11.6%
Recurring EBITDA 26.9 36.2 +34.6%
Recurring EBIT 12.0 19.5 +62.5%of which associates 1.7 1.9 +11.8%
EBIT 12.0 15.0 +25.0%
R&D 6.7 9.5 +41.8%Capex 32.9 12.7 -61.4%
REBIT margin 5.2% 7.9% +2.7%ROCE 5.0% 8.3% +3.3%
29
Business Group summary
RecyclingPerformance Materials
Key figures H1 H1(in million €) 2013 2014
Revenues 263.2 252.2 -4.2%
Recurring EBITDA 43.0 46.7 +8.6%
Recurring EBIT 28.6 33.2 +16.1%of which associates 4.0 9.4 +135.0%
EBIT 13.7 30.2 +120.4%
R&D 5.1 5.0 -2.0%Capex 12.7 11.0 -13.4%
REBIT margin 9.3% 9.5% +0.2%ROCE 10.0% 12.9% +2.9%
Key figures H1 H1(in million €) 2013 2014
Revenues 307.4 268.2 -12.8%
Recurring EBITDA 126.8 93.0 -26.7%
Recurring EBIT 102.5 67.6 -34.0%EBIT 98.4 63.0 -36.0%
R&D 10.0 10.6 +6.0%Capex 32.7 19.3 -41.0%
REBIT margin 33.3% 25.2% -8.1%ROCE 63.0% 35.8% -27.2%
30
P&L
H1 H1(in million €) 2013 2014
Turnover 5,390.0 4,355.4 -19.2%Revenues 1,233.1 1,220.5 -1.0%
Recurring operating profit 156.9 125.1 -20.3%Recurring contribution from associates 6.1 13.3 +118.0%
Recurring EBIT 162.9 138.3 -15.1%Net recurring financial result 11.4 14.8 +29.8%Net recurring tax result 33.8 24.5 -27.5%
Net recurring result 117.7 99.0 -15.9%
Net impact of non-recurrings, IAS 39 and Discontinued items (25.5) (13.3) -47.8%
Net result 92.2 85.7 -7.0%of which minority share 3.1 4.3 +38.7%of which Group share 89.1 81.5 -8.5%
Average weighted interest rate 1.3% 1.3% Effective recurring tax rate 23.3% 22.2%
31
H1 H1(in million €) 2013 2014
Operating income 5,419.1 4,379.0 -19.2%Operating expenses (5,276.9) (4,261.7) -19.2%Income (loss) from other financial assets (3.2) 0.4 -112.5%
Result from operating activities 139.0 117.7 -15.3%
Net recurring financial result (5.7) (7.4) +29.8%Foreign exchange gains and losses (6.1) (9.4) +54.1%Contribution from of associates (5.0) 7.6 -252.0%
Profit (loss) before income tax 122.2 108.6 -11.1%
Income taxes (30.0) (22.8) -24.0%
Profit (loss) of the period 92.2 85.7 -7.0%of which minority share 3.1 4.3 +38.7%of which Group share 89.1 81.5 -8.5%
(in €/share)
Total EPS 0.80 0.75 -6.3%Recurring EPS 1.02 0.87 -14.7%Dividend 0.50 0.50
Income statement
32
Balance sheet
30/06 30/06(in million €) 2013 2014
Non-current assets 1,474.6 1,558.1 +5.7%Current assets 2,174.5 2,100.6 -3.4%
Total assets 3,649.1 3,658.6 +0.3%
Group shareholders' equity 1,737.8 1,661.8 -4.4%Minority interest 47.6 44.3 -6.9%Non-current liabilities 453.5 478.9 +5.6%Current liabilities 1,410.3 1,473.7 +4.5%
Total equity & liabilities 3,649.1 3,658.6 +0.3%
Net financial debt, continued 190.1 202.4 +6.5%
Gearing ratio 9.6% 10.6%
33
Cashflow statement
H1 H1(in million €) 2013 2014
Operating cashflow 240.1 191.6 Tax paid (15.3) (28.4) Change in working capital requirements (0.4) 33.2
Net operating cashflow 224.4 196.3
Capex (119.9) (78.6) Development capitalisation (8.2) (6.4) Acquisitions (0.2) - Net recurring financial result 1.1 1.4 Loans to third parties 8.1 5.9
Net cashflow from investing (119.0) (77.7)
Capital changes (27.1) (52.2) Dividends (61.0) (57.0) Interests 0.1 (1.1) Loans to the Group (57.1) 12.0
Net cashflow from financing (145.1) (98.4)
Exchange rate fluctuations 13.2 4.8
Total net cashflow of the period (26.5) 25.1
34
Shareprice performance
Relative Umicore Umicore
Performance year/year vs BEL20
31/12/2002 -7.1% +27.7% 31/12/2003 +35.6% +22.3% 31/12/2004 +24.4% -4.8% 31/12/2005 +66.4% +37.5% 31/12/2006 +29.5% +4.7% 31/12/2007 +31.8% +40.1% 31/12/2008 -58.6% -10.5% 31/12/2009 +66.3% +26.4% 31/12/2010 +66.3% +62.0% 31/12/2011 -18.1% +1.3% 31/12/2012 +30.8% +10.1% 31/12/2013 -18.6% -31.0% 30/06/2014 -0.1% -6.6% 24/07/2014 +3.4% +2.2%
CAGR +12.7% +11.6%
0
5
10
15
20
25
30
35
40
45
01/2
014
02/2
014
03/2
014
04/2
014
05/2
014
06/2
014
07/2
014
Umicore Bel 20 (indexed)
(in € / share)
Umicore shareprice
35
Intro & Strategy
Umicore’s business approach
We transform metals into hi-tech materials
We use application know-how to create tailor-made solutions in close collaboration with our customers
We close the loop and secure supply by recycling production scrap and end-of-life materials
We aim to minimize our environmental impact and be the best employer and neighbour
materialsolutions
Metals
Applicationknow-how
Recycling
Materialsolutions
ChemistryMaterial science
Metallurgy
37
Performance Materials
CatalysisRecycling
Energy Materials
• We develop materials which enable the clean production and storage of energy
• The business is driven by the demand for clean, low-carbon energy solutions
• We develop technologies to treat automotive emissions
• The business is driven by increasingly stringent emission norms to promote clean air
• We produce a range of essential materials and chemicals based on precious metals and zinc
• Diverse applications, such as high-purity glass, construction, pharma, electrics/electronics
• We operate a unique recycling process to deal with complex industrial residues and end-of-life materials
• The business is driven by materials scarcity and recycling legislation
Umicore’s business groups
38
Umicore’s business groups
Recycling Energy Materials Catalysis Performance Materials
Unique recycling process dealing with complex industrial residues and end-of-life materials
Materials which enable the clean production and storage of low-carbon energy
Technology solutions to treat automotive emissions and other chemical processes
Essential materials and chemicals based on precious metals and zinc for pharma, construction, electrical equipment, …
Business drivers
•Materials scarcity
•Recycling legislation
• Energy efficiency
Business drivers
•New (H)EV vehicles
• Photovoltaic demand
•Demand for safer products
Business drivers
•Global emission legislation
• Emerging markets
•New applications (HDD)
Business drivers
• Industrial production
•Geographical expansion
• Eco-friendly products
39
Strong growth potential
Recycling Energy Materials Catalysis Performance Materials
Double digit growth (average over 2010 - 2015/2020)
Based on key growth drivers aligned with market trends
GDP growth
• High R&D• High investments• Many new applications/markets
• Lower R&D• High investments• Some new applica-
tions/markets
Growth will not be linear and not equal over all activities
Innovation as a differentiator for success in all areas
Growth will not be pursued at the expense of value creation
Goal to generate an average ROCE of 15-20% between now and 2015
40
Great place to work
Eco-efficiency
Stakeholder engagement
Economic performance
Sustainability is essential
Zero lost time accidents
Occupational exposure reduction
Peopledevelopment
Preferred employer
We aim to have ZERO lost time accidents
We will reduce the body concentrations of specific metals to which our employees have an exposure: Cd, Pb, Co, Ni, As, Pt
All employees will receive an annual appraisal to discuss individual development
We will target our actions based on the results of the 2010 People Survey
Growth and returns
Reduce carbon footprint
Emissionreduction
Productsustainability
We aim to reduce our CO2 emissions by 20% vs 2006 levels and based on 2006 industrial scope
We aim to reduce by 20% the impact of metal emissions to water and air vs 2009 levels
We will invest in tools to better understand and measure the life cycles and impacts of our products
Sustainable procurement
Localcommunity
We will implement the new Sustainable Procurement Charter throughout our business
All our sites will be expected to make further steps in identifying key stakeholders and engaging with the local community
We aim to achieve double digit revenue growth and our goal is to generate an average return on capital employed of more than 15%
41
