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1. Company Snapshot

1.a. Company Description

Umicore SA operates as a materials technology and recycling company worldwide.The company operates through Catalysis, Energy & Surface Technologies, and Recycling segments.The Catalysis segment produces automotive catalysts for gasoline, and diesel light and heavy-duty diesel applications; stationary catalysis for industrial emissions control; and precious metals-based compounds and catalysts for use in the pharmaceutical and fine chemicals industries, as well as fuel cell applications.


The Energy & Surface Technologies segment offers cobalt and specialty materials, rechargeable battery materials, and electro-optic materials, as well as metal deposition solutions, including electroplating and PVD coating.The Recycling segment treats waste streams containing precious and other specialty metals from a range of industrial residues and end-of-life materials.This segment also produces precious metals-based materials for glass production, electric, and electronic applications.


The company was formerly known as Union Minière du Haut Katanga and changed its name to Umicore SA in 2001.Umicore SA was founded in 1805 and is headquartered in Brussels, Belgium.

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1.b. Last Insights on UMI

Umicore's recent performance was driven by several positive factors. The company's sale of permanently tied-up gold inventories from its Jewelry & Industrial Metals and Precious Metals Refining Business Units is expected to generate approximately €410 million in net cash proceeds, strengthening its balance sheet and liquidity. Additionally, JP Morgan Asset Management Holdings Inc. has increased its holding of direct voting rights and equivalent financial instruments to 3.43%. The company's Battery Cathode Materials segment also showed a gradual ramp-up of contracts. Furthermore, the global battery materials market is projected to grow at a CAGR of 13.7% from 2025 to 2030.

1.c. Company Highlights

2. Umicore's Resilient Performance in Challenging 2024

Umicore reported a mixed bag of results for its full-year 2024, navigating through significant headwinds, particularly in its Battery Materials segment. The company generated €3.5 billion in revenues, marking an 11% year-over-year decline, primarily due to slower electrification trends and reduced vehicle production impacting its Catalysis business. Adjusted EBITDA stood at €763 million, with a robust margin of 22%, though this represented a decline from the previous year. Operational cash flow remained strong at €384 million, underscoring the company's ability to generate cash despite challenging conditions.

Publication Date: Feb -26

📋 Highlights
  • Strong Performance in Core Businesses:: Catalysis and Recycling segments delivered standout results, with Catalysis achieving a 26% EBITDA margin and Recycling reaching 36%, supported by structural efficiency measures and robust market positions.
  • Challenges in Battery Materials:: The segment faced significant headwinds due to slower EV demand, resulting in a €1.6 billion impairment. Despite this, the company implemented cost-saving measures and reduced CapEx by 35%, achieving near breakeven adjusted EBITDA.
  • Group-Wide Efficiency and Dividend Commitment:: Umicore exceeded its €70 million EBITDA target with €100 million in efficiency savings. The Supervisory Board proposed a gross annual dividend of €0.50 per share, maintaining the policy of stable or rising payouts.
  • Resilience in Financial Performance:: Despite an 11% year-over-year revenue decline to €3.5 billion, the company maintained strong free operating cash flow of €384 million. However, adjusted net profit group share was €255 million, impacted by one-time adjustments.
  • 2025 Outlook and Strategic Focus:: Umicore expects adjusted EBITDA of €720-€780 million for 2025, with a 20% reduction in CapEx and a focus on efficiency improvements. The company remains committed to a strong balance sheet and targets a leverage ratio of 2.5x in 2025.

Segment Performance and Strategic Adjustments

The Catalysis segment proved resilient, achieving a 26% EBITDA margin and an impressive 40% return on capital. Recycling also performed commendably with a 36% EBITDA margin and nearly 80% return on capital. However, Specialty Materials faced weaker market conditions, particularly in cobalt and nickel, leading to a 20% EBITDA margin and a modest 9% return on capital. The Battery Materials segment was the most affected, with a significant €1.6 billion impairment, though the company managed to reduce costs and lower CapEx by 35%, bringing adjusted EBITDA near breakeven.

Balance Sheet Strength and Future Outlook

Umicore maintained a strong balance sheet with €2 billion in cash and €1.4 billion in net debt, resulting in a leverage ratio of 1.87x. The company is committed to a strong financial position and aims for a leverage target of 2.5x in 2025. The outlook for 2025 indicates an expected adjusted EBITDA range of €720-780 million, with a 20% reduction in CapEx, focusing on efficiency and strategic investments such as the IONWAY joint venture, which remains on track with robust financial safeguards.

Valuation and Investor Appeal

From a valuation perspective, Umicore's price-to-sales ratio of 0.14 suggests undervaluation, while the enterprise value over EBITDA of -0.27 reflects the impact of impairments. The attractive dividend yield of 8.65% and a free cash flow yield of 15.55% make the stock appealing to income and value investors, despite negative returns on invested capital and equity. Management's commitment to disciplined capital management and strategic investments positions Umicore for potential future growth.

3. NewsRoom

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Umicore - Transparency notification by Bank of America Corporation

Dec -01

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Umicore (ENXTBR:UMI): Assessing Valuation After Recent Share Price Volatility

Nov -27

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Umicore - Transparency notification by Groupe Bruxelles Lambert S.A.

Nov -21

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Umicore - Transparency notification by Bank of America Corporation

Nov -21

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HS Hyosung Signs Joint Venture Agreement with Umicore for Next-Generation Anode Material Business

Nov -12

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Europe Lithium Iron Phosphate (LFP) Battery Recycling Industry Research 2025-2035: Sustainability and ESG Commitments from Automakers and Energy Companies Driving Adoption

Nov -11

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Assessing Umicore (ENXTBR:UMI) Valuation: Are Recent Gains Justified?

Nov -09

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Hyosung to acquire Umicore’s battery materials unit EMM

Nov -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.24%)

6. Segments

Recycling

Expected Growth: 8.97%

Umicore SA's recycling segment growth of 8.97% is driven by increasing demand for sustainable materials, stringent environmental regulations, and rising adoption of electric vehicles. Additionally, the company's strategic investments in recycling technologies and capacity expansions have improved operational efficiency, contributing to the segment's growth.

Catalysis

Expected Growth: 9.27%

Umicore SA's Catalysis segment growth of 9.27% is driven by increasing demand for emission control catalysts in the automotive industry, growth in the hydrogen fuel cell market, and rising adoption of clean energy technologies. Additionally, Umicore's strategic investments in R&D and expansion into emerging markets have contributed to the segment's growth.

Energy & Surface Technologies

Expected Growth: 9.9%

Umicore SA's Energy & Surface Technologies segment growth of 9.9% is driven by increasing demand for clean mobility and electrification, growth in renewable energy, and rising adoption of fuel cells and hydrogen technologies. Additionally, the segment benefits from its leading position in catalysis and surface treatment, as well as its exposure to the growing e-mobility and battery materials markets.

Corporate & Unallocated

Expected Growth: 4.83%

Umicore SA's Corporate & Unallocated segment growth of 4.83% is driven by increasing demand for clean mobility and recycling solutions, coupled with effective cost management and strategic investments in growth initiatives. Additionally, the segment benefits from a strong balance sheet and solid cash flow generation, enabling investments in research and development to drive future growth.

7. Detailed Products

Catalysts

Umicore's catalysts are used to reduce emissions in the automotive industry, enabling cleaner air and a healthier environment.

Electro-Optic Materials

Umicore's electro-optic materials are used in a wide range of applications, including optical fibers, LEDs, and laser diodes.

Rechargeable Battery Materials

Umicore's rechargeable battery materials are used in electric vehicles, renewable energy systems, and portable electronics.

Precious Metals Recycling

Umicore's precious metals recycling services recover valuable materials from waste streams, reducing waste and conserving natural resources.

Jewelry and Industrial Metals

Umicore's jewelry and industrial metals are used in a wide range of applications, including jewelry, coins, and industrial processes.

Cobalt and Specialty Materials

Umicore's cobalt and specialty materials are used in a wide range of applications, including aerospace, energy storage, and medical devices.

8. Umicore SA's Porter Forces

Forces Ranking

Threat Of Substitutes

Umicore SA operates in the automotive and industrial markets, where substitutes are limited, but the company's focus on sustainable and eco-friendly products reduces the threat of substitutes.

Bargaining Power Of Customers

Umicore SA's customers are mainly large automotive and industrial companies, which have limited bargaining power due to the company's strong market position and diversified customer base.

Bargaining Power Of Suppliers

Umicore SA's suppliers are mainly raw material providers, and the company's diversified supply chain reduces the bargaining power of suppliers, but the dependence on certain critical materials increases the risk.

Threat Of New Entrants

The barriers to entry in the industries Umicore SA operates in are high, and the company's strong market position, patents, and expertise in sustainable technologies make it difficult for new entrants to compete.

Intensity Of Rivalry

The industries Umicore SA operates in are highly competitive, with several established players, and the company's focus on innovation and sustainability is crucial to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.88%
Debt Cost 6.30%
Equity Weight 57.12%
Equity Cost 9.14%
WACC 7.92%
Leverage 75.06%

11. Quality Control: Umicore SA passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Österreichische Post

A-Score: 6.8/10

Value: 7.5

Growth: 3.2

Quality: 6.1

Yield: 8.8

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Webuild

A-Score: 5.9/10

Value: 7.0

Growth: 6.6

Quality: 2.9

Yield: 5.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Ipsos

A-Score: 5.6/10

Value: 7.8

Growth: 5.3

Quality: 6.7

Yield: 6.2

Momentum: 1.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
FCC

A-Score: 4.9/10

Value: 5.9

Growth: 2.7

Quality: 3.5

Yield: 7.5

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Umicore

A-Score: 4.0/10

Value: 4.2

Growth: 2.1

Quality: 1.6

Yield: 5.0

Momentum: 8.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Munters

A-Score: 2.7/10

Value: 1.4

Growth: 9.1

Quality: 3.2

Yield: 1.2

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.7$

Current Price

15.7$

Potential

-0.00%

Expected Cash-Flows