2015: Fuelled by uncertainties, but Umicore managed to maintain momentum

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Thomas Leysen and Marc Grynberg (Foto: Umicore)

Brussels — Umicore has recently published its „Performance 2015“ report and key figures. Simultaneously Umicore Chairman Thomas Leysen and CEO Marc Grynberg looked back on 2015 and the accomplishments of the Vision 2015 strategy and took a look at Umicore’s future.

„The past year has been pivotal in Umicore’s development. Despite a challenging macro-economic and metal price context in the latter stages of 2015, Umicore managed to maintain momentum, posting double digit growth in both revenues and earnings. Revenues increased 11 percent year on year to € 2.6bn and recurring EBIT grew 21 percent to € 330m. It was particularly rewarding to see that a significant part of this increase stemmed from strong demand in businesses to which we have continued to allocate significant resources such as Automotive Catalysts and Rechargeable Battery Materials. This recovery was further supported by productivity improvements and selective restructuring initiatives.“

„Most of those business units that rely partly on metal margins for their profitability encountered increasingly challenging market conditions as the year progressed. Fuelled by uncertainties related to China and other emerging countries, many metals saw pricing headwinds turn into a price collapse as the year progressed. For some metals this resulted in price levels not seen since the start of the financial crisis. The combination of higher sales volumes, supply and product mix improvements and some foreign exchange tailwinds did more than offset these negative metal price effects.“

From Vision 2015 to Horizon 2020

„2015 marked the final year of our Vision 2015 strategy and the articulation of new goals for the coming five years – Horizon 2020. The overriding conclusion from the past five years is that we have made the right strategic choices. From an economic perspective, the Horizon 2020 strategic priorities sould be seen very much as a continuation of the agenda that we set for Umicore a number of years ago. With the exception of photovoltaics, the megatrends that are driving our business are, if anything, even stronger than they were back in 2010. We have laid sturdy foundations for growth in the businesses that are driven by the push towards cleaner mobility and recycling and while the negative metal price evolution in 2015 prevented us from attaining the growth potential we outlined in 2010, we expect that the contribution of these investments has started to be visible in 2015 and should be felt more fully as from 2016.“

„Our overall 2020 goals are to be a clear leader in materials for clean mobility and in recycling, to have doubled the size of the business in terms of earnings and to ensure that our Catalysis and Energy & Surface Technologies make up proportionately more of our earnings by 2020, meaning a more balanced portfolio. In order to ensure the best chance of success over the coming years we will need to continue sharpening the focus of the business. With this in mind, in early 2015 we announced our intention to divest the zinc business units – Building Products and Zinc Chemicals. „

A high level of engagement and satisfaction

„With regards to people development and stakeholder engagement we also made big strides. The people survey of 2014 indicated a high level of engagement and satisfaction among our employees and in 2015 the business units and sites made progress with their action plans for further improvements. By 2015 we had ensured that the vast majority of Umicore employees received an annual appraisal and development plan and we had also made good progress in further reducing the exposure levels of our employees to various metals. In the area of sustainable procurement we have built on our reputation as a pioneer in the field and have ensured a steady roll out of our Sustainable Procurement Charter and a rigorous implementation of measures to guarantee that materials treated by Umicore are conflict free and sourced in a sustainable and ethical manner.“

Safety performance unsatisfactory

„The one area where performance has been less than satisfactory has been safety. We set ourselves the target of becoming an accident-free company by 2015 and, while our safety performance is better than at the start of the programme in 2010, we have fallen short of this objective. We recorded 47 lost time accidents in 2015 compared to 37 accidents recorded the previous year. While we can be proud of the achievements in certain parts of Umicore, with 84 percent of our production sites having had no lost time accident for a year or more, it is evident that we need to adapt our approach if we are to realise our zero accident ambition.“

High level of market volatility

„At the time of writing, 2016 is off to a volatile start and the global macro-economic environment has been proving uncertain. The markets have been fearful of the possibility of an economic hard landing in China and these nerves have been frayed further by various well-documented geo-political risks. Commodity prices – metal prices in particular – remain at low levels and announcements of supply cuts have hardly had any positive impact. While we anticipate significant volume growth across our main growth platforms, metal prices are currently at lower levels than the average of last year. Given the high level of market volatility it is difficult to estimate what impact metal prices might have on the anticipated benefits from the strong volume growth. As usual, we will provide more guidance at the end of April when issuing the first quarter trading update.“

„We would like to take this opportunity to extend our thanks and appreciation to all our stakeholders for their contribution to our success over the course of 2015. We have a clearly defined path ahead of us and we are looking forward to making the most of the various opportunities together with our customers, employees, shareholders, suppliers and other business partners.“

Key figures 2011 – 2015 can be found under annualreport.umicore.com.

Source: Umicore