UMICF - Umicore SA (UMICF) Q4 2023 Earnings Call Transcript
2024-02-16 13:26:03 ET
Umicore SA (UMICF)
Q4 2023 Earnings Conference Call
February 16, 2024 02:30 AM ET
Company Participants
Mathias Miedreich - Chief Executive Officer
Wannes Peferoen - Chief Financial Officer
Conference Call Participants
Tristan Lamotte - Deutsche Bank
Sebastian Bray - Berenberg
Chetan Udeshi - JPMorgan
Riya Kotecha - Bank of America
Geoff Haire - UBS
Presentation
Operator
Hello, and welcome to the Umicore Full Year 2023 Results Call. My name is Laura, and I will be your coordinator for today's event. Please note this call is being recorded. And for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. [Operator Instructions] Today, we have the CEO, Mathias Miedreich; and CFO, Wannes Peferoen as our presenters.
I will now hand you over to your host, Mathias Miedreich, to begin today's conference. Thank you.
Mathias Miedreich
Good morning, and welcome to the presentation of Umicore's 2023 results. As announced by the operator, I am here today as usual with our CFO, Wannes Peferoen, and we will share the presentation and Q&A together. If we go to the agenda of today, it follows our usual structure. We will start with 2023 highlights, give you then a deep dive into our business groups that is followed by a more detailed review of the 2023 financials by Wannes, and then we will conclude the session with an outlook wrap up and Q&A.
So, let us start with the highlights of 2023. 2023 was a successful year for Umicore, where we have been able to demonstrate again agility and resilience in a tough environment. It was also a year that concluded our preparation for the volume ramp up in battery materials that is starting now in 2024, as well as it was the year for us to confirm and further precise key assumptions for our RISE strategy and with that, replacing planning with facts and data like the strong order book for battery materials and the reduced funding needs to execute that order book.
Revenues decreased in 2023 mainly impacted by the metal price environment and we will come back in more detail to that later. Our profitability remained on a high-level with a 25% EBITDA margin showing the very good ability of Umicore to contact versus the headwinds in PGM prices inflation and also some reduced volumes in some of our end markets. Very notably, we have unlocked strong cash flows in 2023, applying a very strict working capital management in all units, especially in Catalysis and Recycling and this resulted in a very healthy operational cash generation with a cash conversion rate of 125% from EBITDA to operational cash flow in ‘23 versus 73% in the year before.
At the same time, you would have noticed that we have been significantly stepping up our growth investments as planned with all capacity extension programs for battery materials ramping up on-track and with more than nearly doubling the amount of CapEx that we are spending. And those two developments, doubling the CapEx and having more cash flows was extremely good, because we could fully compensate that additional CapEx through organic cash flows and that's exactly how our growth model is built....
Umicore SA (UMICF) Q4 2023 Earnings Call Transcript