Umicore Battery Materials - from strategic plan to execution with global footprint in place

Umicore has, over the past 18 months, made strong progress in the execution of its “2030 RISE” strategy in Umicore Battery Materials, reaching key milestones in the build out of long-term value creative strategic customer contracts^[1]. 

Following Umicore’s recent entry in the North-American market, its order book in the Battery Materials business currently stands at 190 GWh contracted CAM volumes for 2027 and reaches already today 270 GWh for 2030. It is well diversified across several battery and car manufacturers in Asia, Europe and North America and covers entry, volume and premium platforms for a wide variety of brands and car models. 

The long-term value-creative contractual agreements with customers include significant protection mechanisms providing visibility on future returns, in particular when additional capacity investments are required. Taking into account these guardrails, adjusted EBITDA margins^[2] above 25% are anticipated from 2026 onwards. As such, the profitability targets envisaged under Umicore’s 2030 RISE Strategy in Umicore Battery Materials have been firmly secured.

With this strong order book in place, Umicore will now shift its focus to the flawless execution of the capacity extensions announced to date in Europe and North-America. In order to maximize capacity utilization, expansions will be closely matched to the customer volume ramp-up trajectories, resulting in a total global installed CAM production base by the end of 2026 of 195 GWh^[3]. The capacity in Europe and North-America will be optimally utilized through secured contracts beyond 2030 with the production footprint in APAC providing regional flexibility and further upside potential on capacity utilization. 

Consequently, the total net capital expenditures^[4] for the Umicore Group between 2022 and 2026 are expected to amount to € 3.8 billion^[5], representing an average annual net capital expenditures run-rate of approximately € 800 Mn, which is also expected to last into 2027. This reduction of funding needs results from higher-than-anticipated government grants and subsidies, the partial funding of JV capital expenditures by non-recourse debt. It also results from a disciplined capacity phasing strictly in line with customer contracts and orders, an improved utilization of existing capacities in APAC and an optimized, asset-light upstream model. Moreover, it leaves room for highly selective additional customer programs.

Umicore confirms its disciplined funding policy during the execution of this investment plan, aiming at a leverage ratio^[6] within the 2.5x investment grade scope. Moreover, the existing funding levers, as well as increased government grants and subsidies, combined with strict financial discipline, clearly enable Umicore to fund the plan.

“Umicore demonstrates once more the strength of its unique value proposition in Battery Materials with a high-quality order book of 190 GWh in 2027 and going towards 270GWh in 2030.  We confirm our strong commitment to financial discipline and returns on investment and will now focus to the fullest extent on the successful execution of our expansion plans, maximizing capacity utilization and operational efficiency.”

Mathias Miedreich, CEO of Umicore 

Disclaimer

This press release contains forward-looking information that involves risks and uncertainties, including statements about Umicore’s plans, objectives, expectations and intentions. Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore. As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements.

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[1] For more information we refer to the press releases on the long-term supply agreements with ACC, PowerCo and AESC in the Newsroom section of Umicore’s website: Umicore Newsroom
[2] Based on revenue ex. metals (I.e. all revenue elements - value of the following purchased metals : Au, Ag, Pt, Pd, Rh, Co, Ni, Pb, Cu, Ge, Li and Mn) 
[3] Including the Ionway capacity in Europe
[4] Net capital expenditures = capex – government grants and subsidies + equity contribution (e.g. Ionway)
[5] Of which already € 884 Mn capex in FY 2022- H1 2023  
[6] Net debt / LTM adj. EBITDA ratio