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2009 results2009 results
2
Highlights
•
Results improving in H2 2009
•
Positive impact of cost reductions
•
Growth programs on course
•
Improved safety performance
•
Strong cashflows and balance sheet
•
Dividend maintained at €0.65/share
•
Positive outlook
3
2009 key figures
•
Revenues and earnings impacted by the economic downturn, although signs of gradual recovery were evident in H2
•
Revenues of € 1.7 billion (€ 2.1 billion in 2008)
•
Recurring EBIT of € 146 million (€ 355 million in 2008)
•
ROCE of 8.2%
•
Adjusted basic EPS of € 0.73 / share
•
Strong net operating cashflow of € 451 million
•
Net debt reduced by € 168 million to € 161 million
•
Unchanged dividend of € 0.65 per share proposed
4
Revenues
1,358
1,693 1,725 1,685
1,910
2,100
1,723
1,036
0
500
1000
1500
2000
2500
2002 2003 2004 2005 2006 2007 2008 2009
(in million €)
Restated for discontinued operations in 2004, 2006 and 2008
Recurring EBIT
98
146
280
233
329359 355
146
7.4%8.3%
15.3%
13.6%
19.2%19.7%
17.9%
8.2%
0
100
200
300
400
500
2002 2003 2004 2005 2006 2007 2008 2009
(in million €)
ROCE
Restated for discontinued operations in 2004, 2006 and 2008
Revenues and EBIT evolution
− − ROCE
Restated for discontinued operation in 2004, 2006 and 2008
5
Revenues and EBIT evolution per half year
Revenues
844
1,115
860
965
841
945985
863
0
250
500
750
1,000
1,250
H12006
H22006
H12007
H22007
H12008
H22008
H12009
H22009
(in million €)
H1 H2
Recurring EBIT
170
199215
50
159 160
140
97
0
50
100
150
200
250
H12006
H22006
H12007
H22007
H12008
H22008
H12009
H22009
(in million €)
H1 H2H1 H2
Restated for discontinued operation in 2004, 2006 and 2008
6
Positive impact of cost reductions
•
Significant, selective footprint adjustments from Q4 2008, particularly in
Precious Metals Products & Catalysts and Element Six Abrasives
•
Overall workforce reduction of more than 800 in fully consolidated companies in 2009 (~8%) + overall workforce reduction of more than 900 in associates
•
Job creation continued in growth areas
•
Wherever possible flexible measures were implemented. Of the 1,000 people formerly on temporary unemployment, the majority has now returned to work
•
The footprint adjustments have had a significant positive impact
on the financial
performance in H2 2009
7
Continued investment in growth projects
•
R&D spend of some € 136 million,
representing 6.9% of revenues
•
Includes € 8.9 million of capitalised development costs
•
In Automotive Catalysts, efficiency improvements led to lower development and testing costs
•
R&D efforts were stepped up in precious metals refining, rechargeable battery materials and electro-
optic materials, partly offset by reduced efforts in other units
•
Capex
reached € 190 million
•
Some 50% dedicated to growth initiativesCapex
151 142 146 145
108
153
216190
0
50
100
150
200
250
R&D
3148
104 112 110125
165
136
0
50
100
150
200
2002
2003
2004
2005
2006
2007
2008
2009(in €
million)
8
•
Li-Ion cathode materials
•
Capacity & capability expansion in Cheonan, South Korea
•
Completed
•
Li-Ion cathode precursors & materials
•
Production plant in Jiangmen, China
•
Completed
Growth investments Energy solutions → Rechargeable batteries
JUC plantJUC plant
Cheonan
plantCheonan
plant
Cheonan
Jiangmen
9
•
Germanium substrates for high-efficiency cells
•
Production plant in Quapaw, US
•
Plant constructed, under qualification
•
Rotary sputtering targets for thin film cells
•
Development lab in Balzers, Liechtenstein
and Providence, US
•
Development intensified
•
Solar grade silicon for bulk and thin film cells
•
R&D lab in Olen, Belgium;
Development facility in Porsgrunn, Norway
•
Development put on hold
Growth investments Energy solutions → Photovoltaics
Rotary sputtering targetsRotary sputtering targets
Quapaw plantQuapaw plant
Quapaw
ITO rotary target
10
•
Expansion of testing and R&D facility
•
Hanau, Germany
•
Completed
•
Expansion of production and testing facility
•
Onsan/Ansan, South Korea
•
Completed
•
Expansion of production capacity & capability
•
Suzhou, China
•
Investment approved
Growth investments Environmental solutions → Automotive catalysts
Onsan/Ansan
buildingOnsan/Ansan
building
Hanau R&D facilityHanau R&D facility
R&D facility Hanau
Onsan
11
•
Jewellery and electroplating materials
•
Recycling and production facility in Foshan, China
•
Completed
•
Battery recycling
•
Pilot line in Hoboken, Belgium
•
Initial investment of €25m approved
Growth investments Recycling solutions
Batteries to be recycledBatteries to be recycled
Foshan
12
Improved safety performance
•
Notable improvement in safety performance across businesses and geographies
•
Further initiatives underway in 2010
Accident severity rate
0.00
0.10
0.20
0.30
0.40
0.50
Accident frequency rate
02
46
810
1214
2002
2003
2004
2005
2006
2007
2008
2009- target
Business review
14
Advanced Materials
Key figures (in million €) 2008 2009
Revenues 395.0 305.1 -22.8%
EBITDA 86.3 36.6 -57.6%
REBIT 71.1 21.6 -69.6%of which associates 18.7 5.1 -72.7%
EBIT 48.3 28.6 -40.8%
R&D 18.5 16.8 -9.2%Capex 52.3 51.0 -2.5%
REBIT margin 13.3% 5.4% -7.9%ROCE 15.2% 4.8% -10.4%
Cobalt
& Specialty
Materials
Electro-optic
Materials
Thin
Film Products Element Six
Abrasives
(40%)
15
Advanced Materials
•
Significant recovery in profitability in H2, mainly due to impact of cost reductions in Element Six Abrasives and improved sales in Umicore businesses
•
Sales of rechargeable battery materials picked up in H2 but with a less positive mix
•
Other cobalt activities also performed better in H2
•
Steady performance in Electro-Optic Materials
•
Increased development efforts in Thin Film Products for rotary targets
Revenues
170
205
154162190
151
0
50
100
150
200
250
H12007
H22007
H12008
H22008
H12009
H22009
(in €million)
Recurring EBIT
31
38
1
31 33
21
0
10
20
30
40
16
Precious Metals Products & Catalysts
Key figures(in million €) 2008 2009
Revenues 1,001.5 809.8 -19.1%
EBITDA 134.5 69.7 -48.2%
REBIT 103.1 32.7 -68.3%of which associates 14.8 (9.5) -164.2%
EBIT 90.3 24.5 -72.9%
R&D 123.6 92.5 -25.2%Capex 73.3 62.6 -14.6%
REBIT margin 8.8% 5.2% -3.6%ROCE 11.5% 4.0% -7.5%
2008 restated for discontinued operations
Automotive
Catalysts
Catalyst
TechnologiesPlatinum
Engineered
Materials
Technical
Materials Jewellery & Electroplating
17
Precious Metals Products & Catalysts
•
Automotive production improved in H2 and reached 57 million units world-wide in 2009 (versus 65 million in 2008)
•
Combination of improved revenues and cost reduction measures had a significant positive impact in Automotive Catalysts in H2
•
Cost reduction measures supported Technical Materials’
performance in H2
•
Gold recycling activities offset some of the fall in demand for jewellery materials
Revenues
471551
388455 450 422
0
100
200
300
400
500
600
H12007
H22007
H12008
H22008
H12009
H22009
(in €million)
Recurring EBIT
9583
-9
65
20
42
-20
0
20
40
60
80
100
18
Precious Metals Services
Key figures(in million €) 2008 2009
Revenues 420.1 353.6 -15.8%
EBITDA 218.2 140.9 -35.4%
REBIT 183.7 104.7 -43.0%EBIT 182.0 96.8 -46.8%
R&D 3.9 7.0 +79.5%Capex 60.9 45.7 -25.0%
REBIT margin 43.7% 29.6% -14.1%ROCE 80.1% 59.2% -20.9%
Precious
Metals
Recycling
Precious
Metals
Management
Battery
Recycling
19
Precious Metals Services
•
Overall very strong results for 2009, with ROCE at 59%
•
As anticipated, H2 margins reflected the weaker supply environment in early 2009
•
Gradual reduction of the benefits from contracts secured at higher metals price levels
•
Intake of end-of-life materials lower, especially for spent automotive catalysts
•
Metals Management activities performed well, but below the exceptional levels of 2008
Revenues
177207
186181213
168
0
50
100
150
200
250
H12007
H22007
H12008
H22008
H12009
H22009
(in €million)
Recurring EBIT
66
86
6068
98
45
0
20
40
60
80
100
120
20
Zinc Specialties
Key figures(in million €) 2008 2009
Revenues 283.7 254.6 -10.3%
EBITDA 66.2 47.9 -27.6%
REBIT 46.6 29.5 -36.7%of which associates 1.7 3.1 +82.4%
EBIT 32.3 37.0 +14.6%
R&D 3.4 3.5 +2.9%Capex 18.5 16.8 -9.2%
REBIT margin 15.8% 10.4% -5.4%ROCE 15.2% 10.5% -4.7%
2008 restated for discontinued operations
Building Products
Zinc
Chemicals
21
Zinc Specialties
•
2009 performance was down on 2008 in both business units; H2 performance was down on H1, reflecting seasonal trends and a weaker year-on-
year business environment
•
In Zinc Chemicals, the recycling activities performed well, benefiting from supply contracts priced in prior years; low demand for zinc oxides and powders despite end of destocking
•
In Building Products sales volumes stabilized in France and Benelux. Other European markets remained depressed
Revenues148 151
133146
133122
0
40
80
120
160
H12007
H22007
H12008
H22008
H12009
H22009
(in €million)
Recurring EBIT
29 30
20
1317
10
0
10
20
30
40
Financials
23
2009 financial overview
•
Strong cash flow generation
•
Further reduction in net debt
•
Non-recurring items
•
Financing and tax items
•
EPS and dividend
24
Strong cash flow generation
Net financial debt evolution
Net debt31/122009Net debt
31/122008
Operatingcashflow
Workingcapital
changes
CapexNet
financialcharges Dividends
(includingcapital
changes)
Other
-329
254
202 -190
-24-75
2
-161
-400
-300
-200
-100
0
100
200(in million €)
25
Net debt
Net financial debt
743
577 610
773
168
329
161254
620
438510
118
9.7%
34.2%
25.4%
33.4%
43.9%
9.9%
19.8%
10.5%
0
250
500
750
1,000
1,250
1,500
1,750
2002 2003 2004 2005 2006 2007 2008 2009
(in million €)
SecuritisationNet debt, continued
Gearing ratio (debt / (debt+equity), continued
Restated for discontinued operations in 2004
•
Net debt reduced further to € 161 million
•
Gearing ratio (debt/debt+equity) of 10.5%
•
Diversified debt structure in terms of sourcing and time horizon
Gross financial debt
Long term
Short term
Bonds 41%
(maturity 2012)
Fixed rate loan 6%
(maturity 2013)
Commercial paper 30%
Other bank facilities 23%
26
Non-recurring items
•
Restructuring costs and provisions partially offset by reversals of metal inventory impairments (mainly zinc)
•
Overall limited impact of non-recurring items on net result
Non-recurring items (in million €) 2009
Restructurings (38.4) Inventory impairment reversals 26.8 Other 0.2
Non-recurring EBIT (11.4) Non-recurring tax result 2.6 Non-recurring minority result 0.1
Net non-recurring result (8.9)
Net IAS 39 effect 5.0 Net result from discontinued operations (4.2)
Total impact on net result (8.1)
27
Financing and taxation
Net recurring financial charges
23
34
50
34
41 40
53
34
4.3%4.5%
5.1%
5.8%
3.9%
0
10
20
30
40
50
60
70
80
90
2002 2003 2004 2005 2006 2007 2008 2009
(in million €)
Average weighted interest rate
Restated for discontinued operations in 2004, 2006 and 2008
Recurring taxes
613
45
35
64
84
73
25
9.7%
13.3%
20.9%21.4%
25.8%
28.7%27.0%
20.7%
0
20
40
60
80
100
2002 2003 2004 2005 2006 2007 2008 2009
(in million €)
Effective recurring tax rate
Restated for discontinued operations in 2004, 2006 and 2008Restated for discontinued operation in 2004, 2006 and 2008
28
EPS and dividend
•
The Board of Directors will recommend to shareholders a dividend payment of €0.65 per share
•
Proposed dividend is stable compared to 2008 (paid in 2009) and
in line with Umicore’s dividend policy
EPS
0.28 0.33
0.84
0.62
0.95 0.95
1.17
0.31
0.48
0.57
0.59
0.780.84
0.74
0.55
0.18
0.61
0.80
1.801.93
0.73
1.41
1.21
1.73
0.00
0.50
1.00
1.50
2.00
2002 2003 2004 2005 2006 2007 2008 2009
(in € / share)
H1 H2
Restated for discontinued operations in 2004, 2006 and 2008
Outlook
30
Divisional outlook
30
Advanced
Materials
•
An improved overall performance is anticipated
•
Demand in rechargeable battery materials recovering
•
Steady performance expected in Electro-Optic Materials
•
Full year impact of cost-
reductions in Element Six Abrasives
Precious Metals
Products & Catalysts
•
Overall a significant improve-
ment
is anticipated in 2010
•
Automotive Catalysts and Technical Materials to benefit from cost reduction efforts and improving revenues
•
Other businesses expected to perform at similar levels or show some growth
31
Divisional outlook
31
Precious Metals
Services
•
Raw materials availability set to improve
•
Continued roll off of contracts secured at higher metal prices
•
Higher levels of development spending related to the battery recycling activities
Zinc
Specialties
•
Some improvement in demand for zinc chemical products anticipated
•
Less beneficial recycling margins
•
2010 could be a difficult year for the building industry in Europe
32
Group outlook
32
•
Umicore expects recurring EBIT to show a significant improvement
from the levels of 2009
•
The impact of the cost reduction measures taken to date should be complemented by a gradual recovery of revenues in many product-
related businesses
•
Capital expenditures and R&D spend are expected to be at similar
levels to those of 2009
Annexes
34
Revenues
AM18%
PMS21%
PMPC46%
ZS15%
(excluding metal)
Corporate not included
EBIT
AM11%
ZS16%
PMPC17%
PMS56%
(recurring)
Corporate not included
Capital employed
AM26%
ZS16%
PMPC48%
PMS10%
(average)
Corporate not included
Segment breakdown
AM Advanced MaterialsPMPC Precious Metals Products & CatalystsPMS Precious Metals ServicesZS Zinc Specialties
Excluding Corporate
35
Workforce
AM38%
ZS16%
PMPC27%
PMS11%
C8%
(end of period)
Corporate not included
R&D expenditure
AM12%
ZS3%
PMPC68%
PMS5%
C12%
Corporate not included
Capital expenditure
AM27%
ZS9%
PMPC32%
PMS24%
C8%
Corporate not included
Segment breakdown
AM Advanced MaterialsPMPC Precious Metals Products & CatalystsPMS Precious Metals ServicesZS Zinc SpecialtiesC Corporate
36
P&L
Profit & Loss statement (in million €) 2008 2009
Turnover 9,124.0 6,937.4 -24.0%
Revenues 2,100.3 1,723.2 -18.0%
Recurring operating profit 322.6 146.4 -54.6%Recurring contribution from associates 32.0 - #VALUE!
Recurring EBIT 354.6 146.4 -58.7%
Net recurring financial result (52.8) (33.7) -36.2%Net recurring tax result (72.9) (24.6) -66.3%
Net recurring result 229.0 88.1 -61.5%
Net impact of non-recurrings, IAS 39 and Discontinued items (101.1) (7.6) -92.5%
Net result 127.9 80.5 -37.1%of which minority share 6.2 6.7 +8.1%of which Group share 121.7 73.8 -39.4%
Average weighted interest rate 5.8% 3.9% -1.9%Effective recurring tax rate 27.0% 20.7% -6.3%
37
Income statement
Consolidated income statement (in million €) 2008 2009
Turnover 9,124.0 6,937.4 -24.0%Operating income 9,226.7 7,010.7 -24.0%Operating expenses (8,917.7) (6,861.0) -23.1%Income (loss) from other financial assets (68.1) 0.5 -100.7%
Result from operating activities 240.9 150.1 -37.7%
Net financial expenses (54.8) (34.9) -36.3%Foreign exchange gains & losses (7.4) (6.6) -10.8%Share in result of associates 8.2 (9.0) -209.8%
Profit before tax 197.2 105.2 -46.7%
Income taxes (66.9) (20.6) -69.2%
Profit from continuing operations 130.3 84.7 -35.0%
Profit from discontinued operations (2.4) (4.2) +75.0%
Profit of the period 127.9 80.5 -37.1%of which minority share 6.2 6.7 +8.1%of which Group share 121.7 73.8 -39.4%
38
Balance sheet
Consolidated balance sheet 31/12 31/12(in million €) 2008 2009
Non-current assets 1,130.4 1,243.6 +10.0%Current assets 1,894.5 1,596.1 -15.8%
Total assets 3,024.9 2,839.6 -6.1%
Group shareholders' equity 1,290.7 1,314.2 +1.8%Minority interest 41.7 52.5 +25.9%Non-current liabilities 739.3 516.1 -30.2%Current liabilities 953.3 956.7 +0.4%
Total equity & liabilities 3,024.9 2,839.6 -6.1%
Net financial debt, continued 328.6 161.1 -51.0%Gearing ratio 19.8% 10.5% -9.3%
39
Cashflow statement
Consolidated cashflow statement (in million €) 2008 2009
Cashflow from operations 436.2 253.9 -41.8%Tax paid (75.9) (5.1) -93.3%Change in working capital requirements 10.0 201.8 +1918.0%
Net cashflow from operations 370.3 450.7 +21.7%
Capex (216.0) (190.5) -11.8%Acquisitions (14.5) (11.1) -23.4%Disposals 50.6 20.8 -58.9%Loans (211.1) (202.0) -4.3%
Net cashflow from investing (175.0) (192.3) +9.9%
Capital changes (239.1) - #VALUE!Dividends (74.9) (74.8) -0.1%Interests (30.9) (15.0) -51.5%Loans 180.2 (228.9) -227.0%
Net cashflow from financing (164.8) (318.7) +93.4%
Exchange rate fluctuations 6.5 (5.0) -176.9%
Net cashflow for continuing operations 37.0 (65.4) -276.8%
40
Shareprice performance
Relative Umicore Umicore Umicore
Performance year/year vs BEL20 vs DJ-SpCh
31/12/1999 +19.6% +25.6% -8.6%31/12/2000 +3.6% +14.5% +3.4%31/12/2001 +10.6% +20.3% +14.0%31/12/2002 -7.1% +27.7% +12.6%31/12/2003 +35.3% +22.1% +29.2%31/12/2004 +24.4% -4.8% +10.3%31/12/2005 +66.4% +37.5% +26.4%31/12/2006 +29.5% +4.7% +18.5%31/12/2007 +31.8% +40.1% +7.2%31/12/2008 -58.6% -10.5% -33.9%31/12/2009 +66.3% +26.4% +14.9%09/02/2010 -6.0% -2.1% -4.1%
CAGR +13.9% +17.4% +7.0%
DJ-SpCh = Dow Jones Specialty Chemicals index
Umicore shareprice
0
5
10
15
20
25
30
01/2009 04/2009 07/2009 10/2009 01/2010
(in € / share)
Bel 20 (indexed) DJ-SpCh (indexed)
41
Financial calendar
•
27/04/2010
AGM and Q1 2010 trading update
•
06/08/2010
H1 2010 results publication
•
20/10/2010
Q3 2010 trading update
•
10/02/2011
2010 results publication
42
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 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.
