Half year results 2014: Umicore’s revenues slightly down

Quelle: Umicore AG

Brussels — Umicore’s revenues were slightly down compared to the first half of 2013 as a result of volume growth being offset by strong metal price and currency headwinds. Recurring EBIT was down 15 per cent due to lower metal prices, currency headwinds and higher depreciation charges, partly offset by cost reductions. 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.

Revenues for the business group were up by 3 per cent with an  increase  in  Automotive  Catalysts  in  contrast  to lower  revenues  in Precious  Metals  Chemistry. Recurring EBIT  was 7 per cent lower due to a lower contribution from Precious Metals Chemistry. In the  second  half of the  year  the  ramp  up of HDD catalyst  production and the  new  Euro 6 contracts  for light duty diesel catalysts should start contributing to revenues  and EBIT.

Automotive Catalysts

Revenues were  up year on year and earnings  started to recover from the  low levels of the  second  half of 2013. Global car production rose by 4 per cent with a further recovery   of   the    European   and   North   American markets and continued strong growth in China.

In Europe, Umicore’s revenues  and volumes  for light duty  catalyst  sales  were  flat year  on year  due  to  a temporarily unsupportive platform mix; new contracts for   Euro 6   light   duty   diesel   catalysts   will   help Umicore’s sales  in  the  region  resume  their  growth trajectory. The European car market continued its recovery  and  was  up  by  5 per cent.  Production  of  HDD catalysts at Florange is ramping-up according to schedule.  The construction of a third HDD line in Florange is on track and production is set  to start  by the  end  of this year.  Umicore will start  the construction of a new  catalyst facility in Nowa Ruda, Poland for both light- and heavy-duty  diesel catalysts that meet new European emission legislation. Completion  of this  new  facility is planned  for early 2016.

Precious Metals Chemistry

Revenues for the business unit declined compared  to the  same  period  last  year.  This was  largely  due  to lower order levels for precursors used in catalytic applications,  particularly in the  Brazilian automotive market.  Demand for precursors used  in non-catalytic applications   remained    at   a   similar   level   to   the previous year.  Demand  for organic compounds  used in the bulk chemical and life science sectors was also stable.  Sales of API’s (Active Pharmaceutical Ingredients) continued to show good growth and the business  unit  successfully secured  new  contracts  in this segment.

Rechargeable Battery Materials

Revenues and sales volumes increased  year on year. The continued  rise  of new  applications  using  Li-ion batteries,   such  as  home   appliances   is  generating further growth in the total market.

The largest market  segment for Li-ion technology remains portable electronics despite somewhat decreasing  growth rates  in the first half of 2014. The demand  for automotive  applications is steadily increasing  with  the  introduction  of new  car models and the gradually increasing sales of previously introduced models.

Umicore   further   increased   its   shipments    of   LCO (lithium cobaltite) for use in high-end portable electronics  such  as  smartphones  and  tablets benefiting  from its diversified product and  customer base.   The   proprietary   High   Energy   LCO    Cathode Material technology  extended further in the  portable electronics segment and  is expected  to be the  basis for upcoming technological improvements.

Overall   sales   of  NMC   (nickel  manganese  cobalt) cathode materials were down year on year as a result of   lower   deliveries   of   standard    grades   used   in traditional notebook PCs. This is in line with Umicore’s strategy  to reduce  its presence  in this highly competitive  segment. The ordering  pattern  for NMC used in automotive  applications continued to be somewhat erratic  and  price pressure  increased  as  a result of overcapacity at several main Li-ion cell producers.

The full release can be downloaded from hugin.info.

Source: Umicore