Half Year 2023 Umicore SA Earnings Call
Last 12 months EBITDA.
Speaker 1: 1.3 last 12 months EBITDA.
I will come back to the performance of the business groups a little bit later in the presentation in more detail, but already a brief summary. Capitalist delivered another outstanding performance as we had planned, recording revenues and earnings above the levels of the first half of 2022. E&C Energy and Surface Technologies did as well develop as anticipated and...
progress on different fronts also in H1 of this year. Let us start with growth. We continue to have traction in closing value creative contracts for RBM as well as gaining further market share in catalysis and coming closer now to 2024 we fully confirm the significant volume ramp up.
that RBM will see and that we are well prepared to master. In addition, we have confirmed, as we think, our position as technology leaders. One example is our new solid-state battery material prototyping center that is one of its kind and will give us significant advantages in development speed and time to market.
for solid-state battery technologies. And other examples are the strongly increased customer engagements on our HLM technology, with now 12 projects in A and B sample phase confirming our own conviction on this technology, as well as the gaining market conviction on HLM.
And then finally in terms of governance, we will align our organization and reporting structure even better to our growth path. And I will come to that in more detail in a minute. We have completed the management board with the Chief Technology Officer and EVP People and Organization.
And at the level of the Supervisory Board we have created two committees, the Investment and Sustainability Committee.
So, since the introduction of our 2030 RISE Strategy in June of last year, we have continuously strengthened our governance and organization to support our growth plans towards 2030 in the best way. And we are continuing to do so by creating two new positions in our management board.
reflecting the importance of people, talent, technology and R&D for UNICO. And for this we have appointed first of all Anna Fonseca Nordheim to take the role of Executive Vice President, People and Organization from September 1st. Anna brings over 20 years of international experience.
in various executive human resources roles, spending a large part of their career at Equinor. And Anna will continue to ensure together with us, the other management board members, that the people strategy is kept at the heart of Umicore's thinking and planning going forward.
As already announced in May, he has always joined the management board as of August 1st and become EVP and Chief Technology Officer of the group. He has began his career at Umicore already in 2000 and currently serves as SVP and Chief Technology Officer of the group.
research and technology and supply at our automotive catalyst business unit. And in his new function he will drive technology and innovation together with the other stakeholders of the group.
In addition to the completion of the management board, we will also implement an enhanced organizational structure as a consequence and in support of the significant growth ahead, especially in rechargeable battery materials. So what we know as RBM today will be organized and individually reported as a new business group.
battery materials led by Ralph Kiessling who is currently the EVP Energy and Surface Technologies. We provide the needed focus and structure.
as we think to support the anticipated strong growth of the battery materials business and would provide and that's also important, additional transparency and insight into the business groups performance going forward. The business units, cobalt and specialty materials, electro-optical materials and metal deposit solutions are now part of the business.
ESD, Energy and Surface Technologies, will be grouped in a new business group under the leadership of Hiet Albrecht as responsible EVP. The external reporting according to this new organization structure will be implemented as from the fiscal year 2024, meaning as from next year.
Let's now turn to the business review and go more in detail on the underlying trends of the markets of our different business groups starting with catalysis.
The first half, when we look at the automotive market first, the first half of 23 saw an upward trend in global ICE, internal combustion engine car production, in comparison to a weaker first half of 2022 enabled by recovery of the global automotive supply chains and I'm talking.
The HDD segment recorded also a significant increase in production driven by strong growth in the Chinese as well as the European market in this regard.
In front of this backdrop, Catelsis posted again an outstanding performance in H1 of this year with increased revenues and margins, and able to continue to work on operational efficiency as well as by the increased volumes in the automotive market as we have just covered.
In automotive catalyst sales and volumes are up versus the previous year. The business unit was especially strong in the European market, outperforming passenger car as well as in the HD heavy duty diesel segment and with that increasing market share further in the region.
precious metal catalyst PMC performance was in line with last year with H122 while the business unit fuel cell and stationary catalyst had very good traction in securing business for PEM electrolyzer catalysts now already representing about 10%
of the total revenues in the fuel cell and hydrogen segment of Umicore.
Now moving to energy and surface technologies.
In rechargeable battery materials, revenues and earnings are in line with previous year despite an increased spending on growth preparation and ROG still including a remaining positive effect from lithium. RBM is continuing to progress in the execution of the 2030 RISE strategy.
The business unit has now several long-term value-creative customer partnerships and contracts with car and battery OEMs in place. And as we had communicated previously, we expect that these contracts will now result in a significant volume increase from 2024, actually already starting at the later end of this year.
In cobalt and specialty materials, a slowdown in demand, as we also had reported before, impacted performance as well as the decline in cobalt and nickel prices compared with an exceptionally strong H1 2022. And finally in metal deposits with solutions revenues were snarky down compared to H1 while revenues...
in electro-optical materials, Wear-UP vs H1 2022 Reflecting Strong Customer Traction
So, last but not least, let's move to recycling. First of all, I propose to have a look on the market context, in this case, the precious metal price environment. And as we can see on this slide, the first half of this year was marked by a very volatile and also decreasing PG&M price.
environment. This was particularly the case for Rodeo where the average price in H1-23 nearly halved compared to the average price in H1 of the period in the previous year, H1-22.lan and
In this challenging context, the recycling business group continued to deliver a strong operational performance in the first half of 23. The business group record revenues of 536 million euro in line with the level achieved in the same period of the previous year with a strong performance of precious metals management.
which benefits by nature of their business model benefiting from a volatile metal price environment compensating lower revenues in the other business units. A dedicated operational excellence program has been started in the perimeter of recycling in order to further improve profitability of our customers.
competitiveness and to reduce operating costs, and Onest will give some more flavor on that in this section. And having said that, I will give now the floor to Onest to comment on the financial aspects of our H1 results.
Thank you, Matthias, and good morning to everyone.
As shared earlier by Matthias, in again challenging market conditions, the group was able to demonstrate a solid financial performance during the first half of the year.
Revenues reached 2.1 billion euro, which is in line with the same period last year, despite the less supportive precious metal price levels.
The revenues and catalysis increased in line with the market growth. In energy and surface technologies, revenues declined, due to the cobalt and specialty materials unit.
In recycling, revenues remain stable year over year, with an exceptionally strong precious metals management unit compensating for the decrease in the other units.
The adjusted EBITDA amounted to 519 million euro in the first half of the year, versus 601 million euro in the same period last year.
In catalysis, EBITDA increased thanks to the volume growth across the different regions and segments, and a further increase in operational efficiencies.
In energy and surface technologies, the EBITDA declined year over year as anticipated.
While earnings were stable year over year in returnable battery materials, cobalt and specialty materials were impacted by less supportive cobalt and nickel prices and a lower amount due to the stocking in the supply chain.
In recycling the EBITDA was negatively impacted by the combination of both lower PTM price levels and year-over-year cost inflation.
Early this year we launched a major operational excellence program in our largest recycling facility in Hovopin, which also started to generate savings and will gradually offset the increase in barrels and energy costs in Belgium.
The program includes the use of automation and digitalization, as well as lean methods to improve the operational performance. Initiatives range from automation of the sampling activities to automation of the loading and unloading of process steps to the optimization of maintenance and downtime cycles.
Now moving to the adjusted EBDAR margin, the group reached an adjusted EBDAR margin of 25.1%, which reflects the overall strong performance.
Across all business segments, the adjusted EBITDA margin remains well above the rise 2030 target of 20%.
The ROCI for the group amounted to 15.2% which is well above our cost of capital.
The adjusted net profit group share amounted to 233 billion euro for the first half of the year versus 321 billion euro the previous year. The decrease in adjusted EBIT resulted in lower tax charges while the financial costs somewhat increased. I'll come back later to the cost of financing.
The free operating cash flow generated in the first half of the year amounts to 60 million euro.
So let's move to the next slide where we can have a deeper look into the cash flow movements from operations.
The networking capital for the group increased slightly with 26 million euro. In catalysis, strict inventory management, combined with declining PGM prices, helped to substantially reduce networking capital, even though volumes were up. In energy and surface technologies, networking capital increased somewhat, anticipating the volume ramp up towards the end of the year.
At current metal prices we expect networking capital to remain more or less stable in the second half of the year.
In the bottom graph you can see the capital expenditures including capitalized development expenses.
that increased to 349 million euro in the first half.
Energy and surface technologies accounted for more than two-thirds of the group's capex driven by the expansion of European footprints in rechargeable battery materials.
We anticipate that capital expenditures will increase up to 800 million for a full year, which is aligned with current consensus.
As I mentioned earlier, the free operating cash flow for the group amounts to 60 million euro, meaning that the expansion of rechargeable battery materials is entirely supported by the free operating cash flow generated in Catalysis and response.
CAPEX Discipline continues to be a key focus area in the group, with the necessary governance at business unit, corporate and board level. New expansion programs remain conditional upon concluding long-term, value-creating agreements with our partners with the necessary margin protection measures.
Now let's have a look at the net financial debt position and the leverage ratio of the group.
At the end of June , the net financial debt of the group amounted to 1.4 billion euro.
Considering the leverage ratio of 1.30 times last 12 months adjusted EBITDA, the group continues to stay well within investment grade territory and continues to have a strong balance sheet.
In January , the group has drawn the funds of the sustainability linked US private placement notes for a total of about 500 million euro. The average cost of growth left now amounts to 3.23%, which is 57 basis points from last year.
The cost of debt is expected to remain well under control given that the average maturity of the group financial debt is close to 5 years and there is no major refinancing needed before 2025.
As illustrated in the bridge, net financial debt increased with 287 million euro versus end of last year.
Next to generating a free operating cash flow of 60 million euro, we financed approximately 350 million euro related to taxes, dividends, net interest and also 79 million euro equity injection into our joint financial rate power core. Towards the end of the year, we expect net financial debt to remain roughly in line with the level seen.
at the end of June . I would like to conclude the financial review by reminding you that in line with our dividend policy, an interim dividend of 25 eurocents per share will be paid on August 22nd.
And here I will give the floor back to Matthias who will share the article with you. Thank you very much, Sylvain. So as you have just said, the outlook and the guidance for 2023 for catalysis is expected to continue to benefit from a strong market position in gasoline catalyst applications and a further...
gradual recovery of the Chinese heavy duty diesel market. In this context, adjusted EBITDA in 2023 is expected to be somewhat above the levels of 2022. Revenues and earnings in the second half of the year are however anticipated to reflect the lower PGM price environment as just discussed.
versus the first half across the business units. In ENST rechargeable battery materials, 2023 adjusted EBITDA is anticipated to be above the level of previous year. Considering the normalized performance of cobalt and specialty materials in 2023 compared to the exceptional profitability in 2022,
environment for PGM rich recyclables and assuming current metal prices were to prevail and considering the current outstanding strategic metal hedges, it is expected that the 2023 adjusted EBITDA of the business group will be below the level of 2022. However
still well above historical pre-2020 levels. Revenues and earnings in the second half of the year are also anticipated to be below the levels of the first half, also reflecting the further recent decline of PGM prices. So all together, summing it up based on the solid performance of the first half of the year and as...
So this was the guidance and before we go into the Q&A session, I just wanted to wrap up our short presentation. So if you would only remember three things from today's presentation and it would be the following three points.
to 1,020 million euro. And third, we are actively progressing in the execution of the 2030 right strategy, also by aligning our organization, governance, and reporting structure to the expected growth forward.
And with that, we would like to conclude our presentation, and I'm more than happy to receive your questions.
At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Reynolds Core from CT.
Please go ahead.
Hi, morning everyone. Thanks for taking questions. Three from me. So firstly on RBM, you've confirmed the volume ramp up and growth acceleration for next year, but how should we think about EBITDA? Should that follow that? I think consensus is around 24% growth in for...
EST EBITDA next year? Are you kind of comfortable with that level of growth? Secondly, how should we think about free cash flow in the second half given the continued rapid PGM price declines? And thirdly, just an update on the Canada plant, please, and where you are with that. Thank you very much.
Very good. Let me give you the first and the last and one is we'll talk about the cash flow. So indeed for RBM we expect volumes to increase. We also expect EBITDA to increase next year significantly. However if-
is expected to be not following in the same way the volume increase because we're still in the ramp-up phase and we're investing into further growth, but the answer is yes, you will see an EBITDA increase next year. Now on the Canada side.
I can confirm that our plan is fully on track. And the plan, I remind all of us, we have said that we will start construction within this year. This is all aligned going forward. And we are, you know, negotiating the different contracts on the different fronts on the customer side, but also with C placing the successful the the body
but I can confirm we are on track for what we have said before in terms of timing and start of the activities.
And then the third question to one is in terms of cash flows.
In terms of cash flows, first of all if you look at Catalysis, looking at the PGM price level which is under pressure, this is as you can expect also by creating pressure on the EBITDA. At the same time, in Catalysis we are able to accelerate freeing up of cash flow from the inventory, from the working capital. So the latest forecast is that from Catalysis we still expect.
to generate the 3 billion of cash flow until 2030. And then looking at recycling, this is where we also have hedges in place to a certain extent, which will also support the cash flow generation going forward.
Okay, thank you.
Your next question comes from the line of Sebastian Bray from Berenberg. Please go ahead.
Hello, good morning and thank you for taking my questions. I have two please. Firstly, I may have misunderstood how the segments, the sub-segments of energy and surface tech are being structured. But to me it looks like there's rechargeable battery materials and everything else.
Within the everything else category, if we take the examples of metal deposition, electro-optic materials and so on, are those parts of UMI core core, or are they a potential source of funding for expansions in cathode material later down the line? And my second question is just on recycling hedges. The business.
beat consensus expectations slightly in H1. I'm wondering how much of this
metal exposure that we've got going into H2 and to 24 is spot because Umicore was previously given some indication of how much has hedged in the past. Thank you.
Thanks, Sebastian. Very relevant question. So let me answer the first one. So indeed, let me reconfirm, so the new organization structure we will have and report in four business groups, no change on catalysis and recycling. There will be one.
single business group that is prime, that is basically the scope what we call RBM today. So we will report the battery material business on the level of a business group. And then we have the fourth business group that is housing electro-optical materials, metal deposition solutions and CSM cobalt and specialty materials.
I have to say that all of those business groups and the business units are part of our integrated business model and we consider them indeed as core because the underlying threat of metals, of recycling and circularity and of the metals business model that we are running, they are all part of our integrated business model.
I would consider more specialty or advanced material businesses.
that probably don't have such a big growth market in front of them, but are very profitable and very high-rosy businesses. And with that, we consider all of them as core for UNICO. Now on the hedges, I hand over to one. Yes, so looking at recycling at the performance in H1, the first half.
As I mentioned earlier, we had exceptionally strong performance in metals management on the back of the volatility in precious metals prices. So this supported definitely the performance in H1. Looking at the hedges at the start of the year for Rode, in particular, we had hedged about let's say 25%. Now moving into the second half.
we are at a higher rate, so about two thirds of the rhodium exposure for the second half is hedged. At the same time, we also need to know that the average price of rhodium over the first half is still substantially higher than the spot price of rhodium today. So there is that impact that we also expect in the second half.
Now moving into 24th, this is where the ages of rhodium are today at the level of around one third I would say.
Thank you, that's helpful.
Your next question comes from the line of Riya Ghatachar from Bofa Securities. Please go ahead.
Hi, good morning. Thank you for taking my questions. I have three questions, please. My first one is about utilization at different battery plants regionally going into 2024. Aside from the new contracts to ACC and the China Battery OEM, any other incremental volumes we should be thinking about? My second question is that the
A peer recently announced a capacity increase to 1 million tonnes, citing that this decision was in part taken to uphold its 20% market share target. At the Capital Markets Day last year, Umicore 2 mentioned that it has a 20% market share target. As such, should we expect the company to also increase its capacity by 2030 to uphold this?
or is there a risk that if industry growth is more rapid than you record that this market share target is pared back? My third question is on cash flows. The FCF was particularly weak given the sharp decline in the PGM price in the second quarter. So can you give some more colour on the moving parts of the working capital and timeline on expectations of the unwind?
and if cash conversion remains weak, does this have any impact on the financing options in RBM? And more widely, can you give us an update on financing here and the carve-out as well? Thank you.
Thank you, Rhea. Very important question. So number one, regarding the utilization of next year, so I would say that in order of utilization the Korean plants obviously will be the ones that will have the highest utilization rate.
because of the existing business but also of the incremental ones. We have then China where we have said that already end of this year we can start with the new Chinese contract that we have secured and that will significantly increase the utilization in China.
And then in Europe , in NISA actually, we are starting one very significant project next year, SOP, which is the ACC business that will be SOPed in NISA that will come on top of the current activity. So you can see also an increased utilisation here.
Now in terms of the second question, in terms of the capacity announcements and market share consequences and what we would do about it, I want to rephrase our point of view on that. So when we had communicated our vision, we had communicated our vision, we had communicated
In the right strategy we have said that we have an ambition towards 2030 in terms of capacity and market share based on value creative contracts. And for us the first priority are the value creative contracts to close them and to come to the goal that we have pronounced. Now here's the other priority we made plans on that support with an Persian
That goal is not to follow every announcement of other competitors in terms of capacities. For us, the only thing that counts are contracts.
Capacity per se is not valuable for a company. It's only valuable if you can fill it. So what we're doing, we are progressing towards 2030. We are continuing with our contracts. We have had good traction, and we are also looking forward to some good traction on that front. Thanks.
No, there is no change in our end on our conviction and plans in regards to the RISE 2030 targets.
And then finally cash flow, I will handle what two ones are. So looking at some of the dynamics in the working capital, as explained earlier, in catalysis this is where we have been able to reduce substantially the inventory in the pipeline, so looking at buffer inventory but also scraps.
and so on. So that has substantially increased the cash conversion cycle in Catalysis. Looking at Catalysis, Catalysis was able to create over half a billion of free cash flow in the first half.
Looking at the E&ST as I explained earlier, this is where we are anticipating some of the volume growth in the second half and where the inventory has gone up somewhat in preparation of the volume ramp. At the same time, we also expect that it will again somewhat go down towards the year end. So looking at working capital overall,
we think it should not exceed or not substantially exceed today's levels. Now looking at the financing options we continue to explore and as we explained earlier over time the car hood could create opportunities so that's where we continue to make progress with the car hood and where we expect to be able to land by the year-end car hood and which also will help us
going into 24 and reporting externally on the battery materials group.
24 and reporting externally on the on the battery materials group. Next question.
Your next question comes from the line of Georgina Fraser from GIS. Please go ahead. Hey, good morning everyone. Thanks for taking my questions. The first one's on catalysis.
I think it's clear that we should be thinking about a lower 2H than 1H, but I just wanted to check that that's driven by metal prices and that there aren't any kind of underlying end market drivers behind that. Second question is, you've hedged on electricity and gas prices to a fairly large extent.
Thank you very much, Georgina. Let me comment on the first topic. So, indeed, the variables here that we see are the precious metal prices. You see volumes also for the second half of the year are still quite robust and there is also no other underlying topic.
comment the EBITDA announcement of our competitors, however we see and here also we have to make sure to always and we had this discussion before compare apple to apple because some of the competitors include metal into the EBITDA margins, others not so. In our case where we do not include that.
It largely hedged for the European activities. Going into the next year, 24 until 27, we also have hedged outstanding, although those hedges are at more attractive rates and basically more close to historical rates.
Okay, thank you.
Your next question comes from the line of Shita and Adashi from JPM. Please go ahead. How have you worked all the way through the college?
Yeah, hi, morning.
A few questions first. Can I start Mathias with your comments around utilization because I found it interesting you you ranked the regions by utilization for next year and I was surprised China is actually looking better in terms of utilization than Europe .
Can I start, Mathias, with your comments around utilization? Because I found it interesting. You ranked the regions by utilization for next year. And I was surprised. China is actually looking better in terms of utilization than Europe . So despite the PBS
Can you help us understand what's going on in the European capacities? Because I thought you already had certain business that you were supplying to LG and Samsung as part of those old contracts that were signed in 2018-19.
So are you saying most of that business is now happening only via Korea and your European business is actually not participating in the supply to those customers and hence we have to wait for ACC and
and all the other contracts to help increase the utilization of the European plant. The second question was,
on just this lithium impact because I'm always a bit confused. If I look at the release it says the lithium is now considered to be a hedged.
metal but then it also says
there is still a benefit from transactional exposure. So can you maybe help us understand the difference between the two? And the last question, I guess might be more difficult to answer, but I'll try anyway. But given the strategic hedging across
lithium across all the other PGMs. I'm just curious if you had any mark to market number in mind that we should be thinking about as a potential earnings.
level for Umicore if the metal prices were to remain at these levels into next year and year after.
and the hedging benefit starts to unwind step by step, what is the earnings level that we should have in mind? I was sort of calculating somewhere between
500 to 600 million of EBIT per year based on all the stuff that we know or I know at least at the moment. But if you have any such number, I think that would be highly appreciated. Thank you. Thank you, Chaitanne. Let me take the first one and one of the next two.
of the existing or longer existing capacities, especially in China when we have this relatively short-term ramp up that we had reported on is good because it's increasing short-term the utilization in China and where we all know that has been quite for some time not so well utilized now in Europe
Just to give you some more flavor on that, of course, Europe is as of today, before Canada, the site where we are constantly investing in capacity expansion, so it will be a construction site for the next year. So there will be always additional capacity on top of that. So, that's all I have to do to improve the rise of accessibility and the wine policy
What I can confirm is that for the European capacities, we basically have a major SOP next year, which is the SOP for ACC. But having said that, the activities, and we have said that also before, when you ramp up such a plant going forward in the growth period, is also consisting a lot of qualifications and...
the plant will be quite busy over the next year as well. We're already starting to feel that at the second half of this year. So that's the granularity I can give at that point in time. Of course.
when we come closer to 24 and when we are reporting that in our new structure we have more room to give more details but that's basically where I would put it right now. And then I would, for the lithium topics, I would hand over to Wanis.
Okay, so looking at lithium as we explained last year, we had access last year to a substantial amount of supply of lithium at historically attractive prices. And this is why we decided to hedge transactionally, to hedge lithium going forward. So hopefully just to get through the paper I believe there is a release date of February
matching the historical purchases, the historical supply and expected prices, we matched those with sales in 22 but also with sales for 23. So that's where there's still the discolored between purchase and sales price on the lithium for the sales in 23. So again, with new sales being recorded, we we transactually hedge those, meaning there's
We are nearing the end of that.
And then maybe coming back to your question on the market to market, on the strategic hedges, this is something unfortunately I cannot share. At the same time, the figures you mentioned seem way out of proportion to what I would anticipate.
And then maybe coming back to your question on the market to market, on the strategic hedges, this is something unfortunately I cannot share. At the same time, the figures you mentioned seem way out of proportion to what I would anticipate. Thank you.
Your next question comes from the line of Joaf Hare from UBS. Please go ahead..
Yeah good morning and thank you for the opportunity to ask some questions. First of all could I just ask about the outlook for RBM in Q3. We had LG Energy Solutions and also LG Chem yesterday talking about weakness and softness in Q3 for their business. Is this something that you're seeing as well?
And my second question is on recycling. You mentioned, Matthias, that a lot of the......there was an offset to lower metal prices from the volatility in the trading business.
I'm assuming that metal prices sort of stabilize there would be another leg done in profitability because that volatility Disappears and therefore you don't get the creating profit coming through to offset and then my final question Is could you possibly give us what the RBM EBITDA in 2022 is so that we can then work out
have a better understanding of how the outlook works, please. Thank you, Joff. I would take the question one and three and we'll ask one to talk about two. So for IBM, let me repeat again the pattern that we have here. So we have set way back that 2022 and 2023.
With that we have basically induction of volumes.
that is not directly related to the current market trending week or software. It's simply adding more projects to the plan. So I don't know if this helps, but this is not comparable to a statement which would be based on current production. We are increasing the number of projects that are being produced by the industry. We are increasing the number of projects that are being produced by the industry.
the output because we have closed more contracts in the past and they are now hitting our plants and bringing us up towards 2024. Now on the RPM side I fully understand why this is a necessary number for you to have but at this point in time we cannot provide it just like that.
we're working on a way to make that more transparent and understandable. And then on the recycling and PMM question, I hand over to Hans. So looking at recycling, as you have seen the evolution of the rhodium price that created an excellent environment for the metals trading for the metals management activity.
to create exceptional results. If you look at the Rodion price of the last week, we expected that someone reached a floor, and we expected it will be rather stable going into the second half. So meaning that for the second half, we expect that the result, the distribution from metals management, will basically normalize again.
Okay, thank you. We have now come to our last question. Your final question comes from the line of Mazahir Mamadli with Redburn. Please go ahead. Hi, my name is Mazahir Mamadli and I am a member of the Redburn family.
Hello, thanks for taking my questions. I only have two. So in the Q1 update you said that the RBM result you expect flat year-on-year, but now it seems like you've upgraded it to increase year-on-year. Can you maybe give some more colour?
what has changed in the interim, how the market has evolved. And the second question is, how has the market changed
So you are serving the European demand from the Korean RBM plant right now and as the NISA plant ramps up, you will shift serving the European demand from there. So shall we expect the Korean capacity utilization to slightly go down from 2024 onwards?
Thank you. Yes, let me maybe start with the second question. Now, of course, there is a certain volume shift between what we had at the Korean footprint only at that point in time to European-based volumes.
to Europe . However, we also have new contracts, new projects that will then land in our Korean facilities. So we are quite confident that in 2024, and that's what I had said before, we will also have, despite that unloading effect, if you want, a quite good utilization of Korea.
significant decrease in utilization of the career plans, I would say that is not the case because we will be able to replace those volumes. And for the IBM question I will hand over to Juan to give you some flavor. Yes, so for IBM we expect earnings and performance somewhat in line with last year.
I will now turn the call back over to Mathias for closing remarks.
Yes, thank you very much. Thank you for your attention. Thank you for the good discussion. And good questions. We wish you all a very good summer break and look forward to engage then maybe some of you next week during our round show that we will be doing. Thank you very much and have a great end of the day.
Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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