Umicore Reports Resilient 2023 Financial Performance Amid Increased Investments for Future Growth
In 2023, Umicore maintained robust cash flows and profit margins despite facing a challenging year, underscoring its commitment to future growth through significant investment increases. The company's Catalysis segment delivered a record performance for the third consecutive year, with adjusted EBITDA reaching €436 million, a 4% increase from the previous year, primarily driven by the Automotive Catalysts business unit.
The Energy & Surface Technologies segment saw a dip in revenues compared to 2022, largely due to decreased earnings in Rechargeable Battery Materials and Cobalt & Specialty Materials. Despite these challenges, the segment managed an adjusted EBITDA of €259 million, achieving an EBITDA margin of 24.6% thanks to efficiency improvements and one-off benefits.
Recycling operations proved resilient, with adjusted EBITDA totaling €372 million, down 30% from the exceptional performance of 2022 but significantly above pre-2020 levels. The decline was attributed to falling prices for precious group metals (PGMs) and cost inflation, partly offset by strategic metal hedges and an efficiency program aimed at countering decreased PGM prices, resulting in a strong EBITDA margin of 36.7%.
Key financial figures for 2023 include a 7% decrease in revenues to €3.9 billion, a 16% drop in adjusted EBITDA to €972 million, and an adjusted EBIT of €674 million, down 22% from the previous year. Capital expenditures surged 82% to €857 million, driven by investments in Rechargeable Battery Materials. Despite higher capital expenditures, operational free cash flow remained strong at €332 million, and net financial debt slightly increased to €1.3 billion, maintaining a leverage ratio of 1.30x LTM adjusted EBITDA.
Umicore proposes a gross annual dividend for 2023 of €0.80 per share, with an interim dividend of €0.25 already distributed in August 2023 and the remainder to be paid in May 2024. This performance aligns with Umicore's 2030 RISE target of maintaining an adjusted EBITDA margin above 20%, demonstrating the company's resilience and strategic focus on long-term growth amidst market challenges.
UPD: Umicore saw its shares fall by 2.8% to EUR 20.38 in early trading on Friday, following the release of its earnings report, which fell short of market expectations. The company experienced a significant drop in its share price, hitting a session low of EUR 19.76, amid investor reactions to the reported financial outcomes.
