Umicore 2014: Recycling units felt, but growing earnings at the other segments

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Quelle: Umicore AG

Brussels — According to Umicore’s Annual Report 2014, the Recycling units felt, as expected. But the bulk of the impact of the metal price headwinds were able to generate a very high return on capital employed of 40 percent, well ahead of any industry peer. The other three segments grew their earnings. In Catalysis, recurring EBIT was up 13 percent, driven by the ramp-up of heavy duty diesel catalysts which started in the second half of the year and higher sales of catalysts for passenger cars. Energy Materials continued its recovery with all units performing better than in 2013 and together generating 59 percent higher earnings, including the contribution of recently acquired businesses. Most units in Performance Materials also increased their earnings, helped by the difficult but necessary cost reduction efforts initiated in recent years. Including a stronger contribution of the element six abrasives joint venture, Performance Materials grew recurring EBIT 12 percent.

The growth in Rechargeable Battery Materials continues to be supported by an almost continuous stream of capacity and capability enhancements, particularly in South Korea and China. In 2014 theorganic growth initiatives were nicely complemented by external growth in Energy Materials as Umicore welcomed new colleagues through the acquisitions of Todini and Co and CP Chemicals. The company`s solid balance sheet can continue to accommodate further sizeable expansion both through organic growth and through acquisitions and will continue to seek deals where these can generate obvious value for Umicore and our shareholders. Given the financial strength of the Group these deals could range from the potentially transformative to smaller complementary acquisitions for individual business units.

Revenues and earnings for the Automotive Catalysts business unit were up year on year due to the ramp-up of catalyst production for HDD vehicles in Europe and China and higher sales of catalysts for passenger cars. The most significant growth in HDD catalysts was in Europe, driven by the introduction of Euro VI-compliant platforms and where a third HDD production line in Florange, France, became operational towards the end of the year.

Revenues for the Precious Metals Chemistry business unit were lower year on year. This was due to lower order levels for precursors used in catalytic applications, particularly in the Brazilian automotive market which contracted significantly in 2014. Demand for precursors used in noncatalytic applications were up compared to the previous year with demand increasing in the second half. This was particularly the case for bulk chemical applications, for example in the synthesis of silicones. Sales of API’s (Active Pharmaceutical Ingredients) continued to show good volume growth and the business unit is successfully securing sales contracts in the European and AsiaPacific markets.

Revenues for the Cobalt & Specialty Materials business unit grew substantially, mainly due to the integration of Palm Commodities and higher sales volumes in ceramics & chemicals. Revenues in Electro-Optic Materials increased, driven by volume growth in finished optics and a greater contribution from the recycling and refining activities. The measures to reduce costs and increase operational efficiency continued to benefit earnings. In Rechargeable Battery Materials, the Li-Ion battery market continued to grow in 2014 and Umicore’s sales volumes and revenues were well up compared to the previous year. The segment of portable electronics is currently still by far the largest segment and continued to grow. The introduction of new applications and devices such as battery-powered home appliances and power banks also boosted the growth of the market..

Revenues for Performance Materials were down 3 percent year on year. Recurring EBIT increased by 12 percent reflecting a higher contribution from Element Six Abrasives and as a result of cost reduction measures that were initiated in 2013.

Revenues and recurring EBIT for Recycling were down 10 percent and 30 percent respectively, mainly due to the impact of lower metal prices. Lower demand in certain end-mar-kets of the business units Jewellery & Industrial Metals and Precious Metals Management also had a negative impact on revenues and profitability of the business group. In Precious Metals Refining, revenues and earnings were down year on year, due to lower prices of precious and specialty metals and a somewhat less favourable supply mix. Higher volumes were processed as a result of an increased throughput rate, which helped offset part of these headwinds. Processed volumes were up year on year, despite the preparatory engineering work and the first major phase of investments carried out in the Hoboken plant to expand capacity. These investments resulted in a higher throughput rate which more than offset the volume loss caused by the downtime.

2014 was another important year in the execution of Umicore’s Vision 2015 strategy. The company successfully completed the first major phase of the Hoboken capacity expansion and was confidentto be able to complete the remaining major investments in the coming year. Umicore also completed or anounced major growth initiatives in the Automotive Catalyst activities and the new plant in India came onstream at the end of the year with new facilities expected to start up in Poland and Korea in 2015. The company also announced an investment in a new plant in Thailand to cater for the burgeoning demand in the South East Asian market.

The full Annual Report 2014 can be downloaded from umicore.com.

Source: Umicore