Umicore Faces Challenging 2024 Amid EV Slowdown and Market Pressures
Umicore experienced a difficult 2024, with its performance affected by weaker demand for electric vehicles, declining metal prices, and economic challenges in the European industrial sector. Despite these pressures, the company's core businesses remained stable, and efficiency measures helped mitigate some financial difficulties.
Group revenues for 2024 were €3.5 billion, down from €3.9 billion in 2023. Adjusted EBIT fell 29% year-over-year to €478 million, while adjusted EBITDA declined 22% to €763 million, with a Group EBITDA margin of 22%.
Battery Materials saw a drop in revenues due to lower cathode active material (CAM) sales volumes and reduced refining income. The segment's adjusted EBITDA approached break-even, with a return on capital employed (ROCE) of -4.9%.
Catalysis performed well, maintaining earnings near record levels despite lower revenues. Automotive Catalysts faced a weaker customer mix and market challenges, while Fuel Cells & Stationary Catalysts revenues remained stable. The segment achieved a ROCE of 40.4%.
Recycling revenues and earnings declined due to lower volumes in Precious Metals Refining and an unfavorable pricing environment. Efficiency measures helped offset some losses, with ROCE at 78.3%.
Specialty Materials revenues were slightly down from 2023, with a ROCE of 9.1%. Adjusted EBITDA fell due to market pressures in Cobalt and Specialty Materials.
Amid weaker EV demand, Umicore paused construction of its battery materials plant in Canada and limited further expansion, focusing on existing European and Korean facilities. Capital expenditures fell by 35% to €555 million. The company also contributed €175 million to IONWAY, its joint venture with Volkswagen's PowerCo.
Free operating cash flow remained strong at €384 million, supported by lower net working capital and reduced investments. Net financial debt stood at €1.4 billion, with a net debt/EBITDA ratio of 1.87x.
Uncertainty remains high due to ongoing geopolitical tensions and limited visibility on market demand. Umicore expects adjusted EBITDA for 2025 to range between €720 million and €780 million.
Battery Materials' adjusted EBITDA is projected to stay in line with 2024 levels. Catalysis is expected to maintain its strong performance. Recycling earnings may decline due to the gradual expiration of favorable metal price hedges, though efficiency improvements will help offset losses. Specialty Materials is projected to see a slight increase in adjusted EBITDA.
Corporate costs are expected to decline in 2025. Capital expenditures will be reduced by 20% compared to 2024, excluding contributions to the IONWAY joint venture. Efficiency improvements are set to generate an additional €100 million in EBITDA, helping to counteract the impact of expiring metal price hedges.
