Umicore: Searching For The Elusive Bottom

2025-05-17 08:15:30 ET

Summary

• Umicore's core segments face cyclical headwinds, but long-term demand for battery and catalyst materials remains strong, supporting a strategic investment case.
• Despite a major EUR 1.6bn write-off and earnings decline, the company generates robust free cash flow and maintains manageable leverage, enabling future investments.
• Management's targets project a 30-55% EBITDA increase by 2027, with batteries turning cash flow positive after significant near-term investment.
• With the stock trading near book value and improving fundamentals, I rate Umicore a long-term buy, but with a cautious, phased entry as the bottom forms.

Umicore S.A. ( OTCPK:UMICF ) ( OTCPK:UMICY ) is a materials technology and recycling company, based in Belgium. The company traces its roots back 200 years, when it started life as a smelting company, quickly diversifying into mining. At the beginning of the century, Umicore made a strategic pivot to align with the megatrends of electrification, battery technology, and the circular economy. Their major business today is as a manufacturer and recycler of catalysts and battery materials for use in the automotive sector....

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