Full Year 2023 Umicore SA Earnings Call

Laura: 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. This can be done by pressing Star 1 on your telephone keypad to register your question.

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.

This can be done by pressing star one on your telephone keypad to Richard for your question.

Laura: If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have the CEO, Mathias Midreik, and CFO, Vanas Preferon, as our presenters. I will now hand you over to your host, Mathias Midreik, to begin today's conference. Thank you.

If you require assistance at any point, Please press star zero and you will be connected to an operator.

Today, we have the C O Mark, Yes, mid Reich, and CFO wellness Preferer on S. All present us.

I'll now hand, you over to your host Muffy estimate right to begin today's conference. Thank you.

Mathias Midreik: 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, Wanis Teferlon, and we will share the presentations and Q&A together. Now, on to the agenda for today. It follows our usual structure.

Good morning, and welcome to the presentation of human cost 2023 results.

<unk> announced by the operator I am here today as usual with our CFO Stefan and we will share the presentation.

Q&A together, if we go to the agenda of today 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 2003 financial buy once and then we will conclude the session with an outlook.

Mathias Midreik: We will start with the highlights of 2023, then give you a deep dive into our business groups, that will be followed by a more detailed review of the 23 financials by Wanis, 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 were 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 a year for us to confirm and further precise key assumptions for our RISE strategy and, with that, replace planning with facts and data like the strong order book for battery materials and the reduced Revenues decreased in 2023, mainly impacted by the metal price environment, and we will come back in more detail to that later. However, our profitability remained at a high level with a 25% EBITDA margin showing the very good ability of Umicore to counteract the headwinds in PGM prices, inflation, and also some reduced volumes in some of our end markets.

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 23, mainly impacted by the metal price environment, and we will come back in more detail to the 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.

Mathias Midreik: Very notably, we have unlocked strong cash flows in 2023, applying 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 percent from EBITDA to operational cash flow in 2023 versus 73 percent in the year before. At the same time, you will 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 or nearly doubling the amount of CAPEX that we are spending. And those two developments, doubling the CAPEX and having more cash flows, were extremely good because we could fully compensate for that additional CAPEX through organic cash flows, and that's exactly how our growth model is built.

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 operating cash flow in 'twenty three versus 73% in the year before at the same time, you will have noticed that we have been significantly stepping up our growth investments as planned.

With all capacity expansion programs for battery materials ramping up on track and with more than nearly doubling the amount of capex that we are spending in those.

Two developments.

Coupling 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.

Mathias Midreik: Finally, I want to mention that we have been working very intensively in 2023 on ways to further boost and accelerate the more mid- and long-term EBITDA and cash flow generation, while also reducing volatility from PGM pricing. I think that's a key point forward. We call this initiative the Efficiency for Growth Program, and I will now hand over to Johannes, who had already pre-announced a little bit of that in our half-year results, but now will give you more details on this very important program for Unico. Thank you, Matthias, and good morning to you all.

Finally, I want to mention that we have been working in 2003 also very intensively on ways to further boost and accelerate.

The more mid and long term EBITDA and cash flow generation, while also reducing volatility from PGM pricing I think that's a key point forward.

These initiatives the efficiency for growth program and I will now hand over to <unk>, who had already pre announced a little bit of that in our half year results, but now we will give you more details on this very important program for humans.

Thank you Martin and good morning to your multiyear talk to the strong margins and a strong balance sheet of the group, which are a clear illustration of the financial discipline, we are applying.

Vanas Preferon: Matthias talked about the strong margins and the strong balance sheet of the group, which are a clear illustration of the financial discipline we apply. Now, given the context of the market headwinds, we have been further reinforcing financial discipline across the group. In October last year, we shared the revised needs for net capital expenditures between now and 26. And over the past year, we also stepped up the forward-heading of the precious metals exposure in order to increase the visibility of future earnings and cash flows. I will come back to this later.

Now given the context of the market headwinds, we have been further reinforcing the financial discipline across the group.

So over the last year, we shared our revised needs for net capital expenditures between now and 2006.

Over the past year, we also stepped up the forward hedging of the precious metals exposure in order to increase the visibility of the future earnings and cash flows our come back to this later.

Vanas Preferon: Now, last summer, we also kicked off a program across the company called Efficiency for Growth, which focuses on identifying and implementing efficiency improvements across the different businesses and functions. The program targets recurring improvements to EBITDA through top-line growth and cost optimizations and also improvements to working capital needs. Our teams have identified over 350 initiatives which are expected to create a 70 million euro EBITDA impact in 2024 and more than 100 million from 2025 onwards. The initiatives cover, amongst others, volume-based pricing, leveraging centralized procurement, standardizing operations to increase flexibility between plants, digitalization and automation in manufacturing and administration, streamlining and prioritization of our project portfolios in IT, R&D, and maintenance. So, as you can hear, the different initiatives will bring more focus and synergies across the group. And this ties well with the next topic that Mathias will cover. Yeah, thank you, Wanis.

Last summer, we also kicked off a program.

Cross the company called efficiency for growth, which focus on identifying and implementing efficiency improvements across the different businesses and functions.

The program targets recurring improvements to EBITDA through topline growth and cost optimizations and also improvements to working capital needs.

Our teams have identified over 350 initiatives, which are expected to create a $70 million zero EBITDA impact in 2004 and more than $100 million from 'twenty five onwards the.

The initiatives cover amongst other volume based pricing leveraging on centralized procurement standardizing operations to increase flexibility between plants.

Digitalization and automation in manufacturing and administration, streamlining and prioritization of our project portfolios and it R&D and maintenance. So as you can hear is the different initiatives that will bring more focus and synergies across the group and this purchased bell to the next topic that materials will cover yes. Thank you one and exactly some update now on.

Mathias Midreik: And exactly, some update on the refined structure of the group. We have, as previously announced, now implemented refined business segmentation in Umicore since the beginning of this year, going from three to four business groups. And while there is no change for catalysis and recycling, the former ENSD perimeter is now split into two business groups.

The refined structure of the group, we have as previously announced now implemented.

Our refined business segmentation and Umicore since the beginning of this year going from three to four business groups and while there is no change for catalysis and recycling the former <unk> <unk> perimeter is now split into two business groups first the battery materials and obviously as we have discussed many many times our target is to give.

Mathias Midreik: First, the battery materials, and obviously, as we have discussed many, many times, our target is to give more clarity and transparency on the business dynamics and the growth evolution. But with that also, we will be exposing more, as we think, the secure and resilient nature of our battery material business model, especially if you compare it with other market participants. And at the same time, this setup will allow the management team to apply full focus and dedication to execute the growth strategy and ramp up for battery materials. Now, secondly, specialty materials. This business group is mainly concentrating Umicore businesses with a non-auto context and non-auto end markets.

More clarity and transparency on the business dynamics and the growth evolution forward.

But with that also we will be exposing more as we think the secure and resilient nature of our battery materials business model, especially if you compared with other market participants and at the same time. This setup will allow the management team to apply full focus and dedication to execute the growth strategy.

And ramp up for battery materials now secondly, speciality materials. This business group is mainly concentrating the human core businesses with the non out of context now to end markets and also here. It gives focus and exposure for management to nurture this business in its own market context.

Mathias Midreik: And also here, it gives focus and exposure for management to nurture this business in its own market context. So, after this introduction of the highlights, let us now deep dive into the different businesses, still in the structure as we had it before. And we will start with ENST.

After this introduction of the highlights let's now deep dive in the different <unk>.

Business is still in the in the structure.

As we had it before and we will start with.

Mathias Midreik: When we look at ENST, the business group that we have now had for a while, and especially the battery material business, 2023 was the final year to prepare the growth ramp-up for battery materials that is now starting in 2024 and to set up the right structure with a dedicated business group, as just explained. And as we promised now, two years ago, we have been reshaping the battery material business in all of its aspects, from customer base to technology, from capacity expansion to funding. In that sense, we see 2024 as the year of the rebirth of the Umicore battery material business. It marks, if you want, the start of Umicore battery materials 2.0.

He and his team when we look at.

Steve.

Business group that we have been now had for a while and especially the battery material business. In 2023 was the final year to prepare the growth ramp up for battery materials that is now starting in 'twenty four and to set up the REIT structure.

With a dedicated business group has just explained and as we had promised.

Now two years ago, we have been reshaping the battery material business in all of its aspects from customer base two technology from capacity expansion to funding in that sense, we see 2020 as the year of rebirth of the Umicore battery material business at Max If you want.

The start of Umicore battery materials 2.0.

Now looking back to 2023, we have achieved all major steps and milestones that we had targeted securing the assumptions in our plan as I said previously with facts and data. The focus is now on execution to ramp up the volumes and to continuously work on our efficiencies.

Mathias Midreik: Now, looking back to 2023, we have achieved all major steps and milestones that we had targeted, securing the assumptions in our plan, as I said previously, with facts and data. The focus is now on execution to ramp up volumes and to continuously work on efficiencies in CAPEX and OPEX, using also the efficiency for growth framework that has been introduced by ONE to drive sustainable EBITDA growth forward. We are also confident that the unique and resilient business model of UBM will start to stick out from the competition, especially in the current more volatile environment for electrification globally.

Capex and Opex using also the efficiency for growth framework that has been introduced by one is to drive sustainable EBITDA growth forward. In addition.

We are also confident that the unique and resilient business model of UBM will start to stick out from competition, especially in the current more volatile environment for electrification globally, we come back to that.

Mathias Midreik: We come back to that in our guidance for that new business group. To summarize, 2024 can be considered, as I just said, as the birth year of Umicore battery materials 2.0 that will, as we ramp up, grow faster than the market on the back of a strong order book with superior profitability and with a robust funding plan in place for the needed CAPEX. But before we look into 2024, let us share how 2023 looked in the previous setup of ENST. Revenues of ENST in 2023 decreased year-on-year, while the adjusted EBITDA margin increased to 24.6%. In rechargeable battery materials, RBM at that time, revenues were down versus 22, reflecting the lower non-recurring lithium effect and reduced volumes of some legacy contracts.

In our guidance for fit our new business group to summarize 2024 can be considered as just said is the first year of a umicore battery materials to zero that will as we ramp up grow faster than the market on the back of a strong order book with superior profitability and with a robust funding plan in place.

For the needed Capex forward, but before we look into 2024, let us share how 'twenty three looked like in the previous setup of the MST revenues of USD 23 have decreased year on year, while the adjusted EBITDA margin has increased to 24 six.

<unk>.

In rechargeable battery materials IBM at that time revenues were down versus 22, reflecting the lower nonrecurring lithium effect and reduced volumes of some legacy contracts earnings who are slightly above last year. Despite increased spending on growth preparation R&D as they were.

Mathias Midreik: Earnings were slightly above last year, despite increased spending on growth preparation ROD, as they were supported by substantial one-off effects of lower-cost mass production test runs and valuation of battery materials. And just to clarify, mass production test runs are needed to validate the launch of new products and processes, and they are especially frequent in years of greenfield startups in 2022.

By a substantial one off effects of lower cost mass production test runs and valuation of battery materials equipment, and just to clarify mass production test once they are needed to validate the launch of new products and processes and they're especially frequent in years of Greenfield startups in 2022 as you remember we.

Mathias Midreik: As you remember, we started up NISA, and we had this cost, but then in 2023, not anymore to that extent. I want also to remind everyone of the composition of the revenues in RBM, which is important now that we have separate reporting on that segment.

We had started up Nissan and we had this cost but then in 2023.

Any more to that extent I want also to remind everyone of the composition of the revenues in IBM now important when we.

I have a separate reporting on that segment. There is a split between the cash revenues the castle active material.

Mathias Midreik: There is a split between the CAM revenues, the castle active material that is a one-to-one function of the CAM volumes, and there is a second element, the refining revenue, that is an upstream revenue that is a function of an active make-or-buy decision that Umicore takes. And this upstream flexibility is a great asset for us, as we can always optimize profitability by choosing the best mix between make and buy, depending on market conditions. So, in addition, let us now also look at the business units that will be part of the specialty materials business group in the future. And I will also make some comments, just as a reminder, on the end markets that those businesses are serving. So, cobalt and specialty materials were the end markets of the two materials industry, industrial catalysts, superalloys, and ingredients for pigments and paints.

One to one function of the can volumes and there is a second element the refining revenue that is.

In upstream.

That is a function of an active make or buy decision that umicore takes in this upstream flexibility is a great asset for us as we can always optimize profitability by choosing the best mix between make.

Depending on the market conditions.

So.

In addition that is not also look to the business units that are in there.

The future part of the specialty materials business group and I will also make some comments just as a reminder, on the end markets that those businesses are serving so cobalt and specialty materials, where the end markets of the two materials industry industrial catalyst Super alloys, and ingredients for pigments and paints in 2020.

Mathias Midreik: In 2023, we saw a combination of slowdown in demand in the CSM end market, as well as a further decline in cobalt and nickel prices, leading consequently to a decline in the year-on-year performance. Metal deposition solutions, the end markets here, are the electronics and semiconductor industry, the optics industry, as well as the jewelry industry. And in MDS, as we call it, we had stable revenues, with 2023 being the year to successfully introduce a new platinum-based electrolyte in the portable electronics market, a key success, especially in the plating of smartphone contact systems that we also think is a great asset into the future. Electro-optical materials, finally, were the end markets of optics, telecommunication, and space power.

Three we saw a combination of slowdown in demand in the end markets as well as a further decline in cobalt and nickel pricing, leading consequently to a decline in the year on year performance metal deposition solutions the end market.

The electronics and semiconductor industry optics industry as well as the jewelry industry and in Mds as we call. It we had stable revenues with 2023 being the year to successfully introduce our new platinum based electrolyte in the portable electronics market a key success, especially.

In the plating of smartphone content systems that we also have <unk>.

<unk> is a great asset into the future electro optical materials. Finally, it was the end markets of optics telecommunications and space power.

Mathias Midreik: Here, we saw a good increase in revenues versus the year before, driven by space power applications and optics. Let us now move to the catalysis business group. And before we dive into the segment specifics, let's look at the market as usual. So here we can state that in 2023, we saw an increase in global internal combustion engine car production of 80 percent in comparison to a weaker 22. And this is mainly driven by the effect of now largely unblocked supply chains in the automotive sector and the consequent catch-up effect of volumes. Gasoline and diesel life-duty production was in particular well up in Europe, North America, and China.

We saw a good increase in revenues versus the year before driven by space power applications and optics.

Let us now move to the <unk>.

<unk> business group and before we dive into the segment specifics, let's look to the market as usual. So here we can state it in 'twenty three we saw an increase in global internal combustion engine car production of eight 2% in comparison to a weaker 2002 on this.

Mainly is driven by the effect of an hour largely unblocked supply chains in the automotive sector and the consequent catch up effect of volumes gasoline and diesel light duty production goes in particular, well up in Europe, North America and China.

Mathias Midreik: And finally, also the heavy-duty diesel segment recorded a significant increase in production, mainly in China and Europe, with good growth forward. Now, for catalysis, that is resulting in a record performance again, so this is the consecutive third year where catalysis is posting a record performance, with revenues up in EBITDA increasing by more than 4 percent year-on-year, resulting in increased margins. And this performance uplift is driven by an accelerated work on operational efficiency. Again, efficiency for growth, or what we call the EFG, really pays out here, especially into the future, as well as higher volumes. And strict working capital management, coming back to what I said in the beginning, has unlocked very substantial cash flows in line with the plan, because we have always said that catalysis and recycling will be the key cash providers for our growth forward, and that works pretty well.

And finally also the heavy duty diesel segment recorded a significant increase in protection.

Mainly in China, and Europe as well.

It's a good growth for us now for catalysis.

Is resulting into a record performance again, so a consecutive third year, where catalysis is posting a record performance with revenues up and EBITDA, increasing by more than 4% year on year, resulting in increased margins and this performance uplift is driven by an accelerated work.

Operationally.

Efficiency again.

Efficiency for growth or how we call the ESG.

Really pays out here.

Especially into the future as well as by higher volumes and strict working capital management coming back to what I've said in the beginning has unlocked very substantial cash flows in line with the plan because we have always said that catalysis and presenting will be the key cash provide us for our growth forward and that works pretty well.

Mathias Midreik: In automotive catalysts, sales and volumes are up versus the previous year, and the business unit was especially strong in the European market, outperforming in the passenger car segment as well as in the heavy-duty diesel segment, and with that, increasing market share further in that region, also according to our plan. PMC, precious metal catalyst, was impacted by lower demand in some markets, while the business unit fuel cell and stationary catalyst had very good traction in securing business for hydrogen electrolyzers. And as you know, we do here not only the catalyst for fuel cells but also for electrolyzers.

In automotive catalyst sales and volumes are up versus the previous year and the business unit was especially strong in the European market outperforming in the passenger car as well isn't the heavy duty diesel segment and it was at increasing market share further in that region also according to our plan.

PMC precious metal catalyst was impacted by lower demand in some end markets, where the business unit fuel cell and stationary catalyst had a very good traction in securing business for hydrogen Electrolyze us.

And as you know we do not.

Not only the catalysts for fuel cells, but also for the electrolyte.

Mathias Midreik: And that's also one of the reasons why last year we had the honor to break ground for our fuel cell and electrolyzer catalyst plant in China as a further capacity extension. Now, on the next page, as usual, we want to give you some more insights into our very successful automotive catalyst business and to explain a little bit why we have such a good position. So, first of all, the first important data point is the fact that we have been able to even further increase our exposure to what we call the longevity segments of the market. I remind you, this is the heavy-duty diesel and the light-duty gasoline part of the market that will really be there in the long run, even if you look into hybridization, et cetera, which is now representing 84% of our automotive catalyst revenues. And the second important fact is that we also have a very healthy regional split of our revenues in this light-duty gasoline segment, with Europe, China, and America well-balanced, providing an excellent platform for the business to go forward.

That's also one of the reasons why last year we.

On or to break the ground for our fuel cell in electrical as a catalyst plant in China as a further capacity extension now on the next page.

As usual, we want to give you some more insights in our very successful automotive catalysts business and to expand a little bit why we have such a good position. So first of all the first important data point is the fact that we have been able to even further increase our exposure to what we call. The longevity segments of the market I remind this is the heavy duty diesel and the light.

Duty gasoline part of the market that will really be there on the long run even if you look into.

Hi, Brutalization et cetera.

Is now representing 84% of our automotive catalyst revenues in the second important effect is that we also have a very healthy regional split of our revenues in this light duty gasoline segment with Europe, China and America, well balanced providing an excellent platform for the business forward.

Mathias Midreik: Now, finally, let's move to the recycling business group. And even though it probably needs no repetition, I will quickly talk about the PGM price environment that came down significantly in 2023 and posed a serious headwind to our business, with average rhodium rates down by 58 percent or more than 58 percent and palladium by 38 percent. And that recalls the importance of strict cost and efficiency management to counter these effects.

Now finally, let's move to the recycling business group and.

Even though it needs probably no repetition I will quickly talk about the PGM price environment that came down significantly in 2003 and post <unk>.

Serious headwind to our business with average rhodium rates down by 58% of more than 58% in palladium 38, and that really caused the importance of strict cost and efficiency management to counter this effect now in this challenging context, the recycling business group continued to deliver a strong.

Mathias Midreik: In this challenging context, the recycling business group continued to deliver a strong performance in 2023, with revenues above 1 billion euros and EBITDA of 372 million euros. And those results are well above the pre-2020 levels, the year in which the rhodium price started to peak, and that demonstrates the resilience of this Umicore recycling business model. The countermeasures that the teams took versus this decreased PGM price environment were threefold. First of all, to optimize the input streams and maximize the PGM density.

Performance in 'twenty, three with revenues above 1 billion and EBITDA of 372 million Euro and those results are well above the pre 2020 levels of the year in which the rhodium price started to peak and will that demonstrating the resilience of this umicore recycling business.

The counter measures that the teams have taken versus this decreased PGM price environment were threefold first of all to optimize the input streams and maximize the PGM density and secondly to focus on operational excellence and cost reduction in manufacturing and finally, an accelerated forward hedging strategy.

Mathias Midreik: And secondly, to focus on operational excellence and cost reduction in manufacturing. And finally, an accelerated forward hedging strategy to protect our future earnings. And that's an important point that we'll talk more about in the financial section just in a second.

To protect our future earnings and that's the important point that one is we're talking about in the financial section just in a second and finally, two more things that I wanted to highlight and battery recycling. We are continuing to prepare for the capacity expansion and significant ramp up with currently being a definitive version of the site selection for that ramp up and secondly, our.

Mathias Midreik: In battery recycling, we are continuing to prepare for the capacity expansion and significant ramp-up, with we currently in the finalization of the site selection for that ramp-up. And secondly, our precious metal management business unit for them in 2023 was a year where, again, they were able to demonstrate the strengths of this side of the Umicore metals management system in a volatile market environment, resulting in a significantly higher return on results year on year. And with that, details on the businesses, I hand over to Johannes to give more insights on the financials. Okay, thank you, Matthias.

Precious metal management business unit for them in 2003 was a year, where again they have been able to demonstrate also the strength of this side of the unique unicorp metals management system in a volatile market environment, resulting in a significant higher results contribution year on year end with details on the <unk>.

I hand over to want us to give more insights on the financials.

Okay. Thank you Martin.

Johannes: Let me start the financial review with the year-over-year bridge of the top line and the earnings of the group. Revenues amounted to €3.9 billion, which is 7% down versus the previous year, which is primarily reflecting the decline in PGM prices and the reduced non-recurring lithium margin effect in 2023. The adjusted EBITDA reached €972 million, which is €179 million below the previous year. The decline in PGM prices resulted in a headwind of more than €150 million, in particular in recycling and to a lesser extent in catalysis. Cost inflation created another €50 million year-over-year headwind.

Let me start the financial review with a year over year bridge of the top line and the earnings of the group.

Revenues amounted to $3 9 billion, which is 7% down versus previous year, and which from which is primarily reflecting the decline in PGM prices and reduced nonrecurring lithium margin effect in 'twenty three.

Adjusted EBITDA reached 972 million, which is 179 million below previous year. The decline of PGM prices resulted in a headwind of more than 150 million euro in particular in recycling and to a lesser extent in catalysis.

Cost inflation created another 50 million euro year over year headwind the different initiatives to increase operational efficiencies supported EBITDA and working capital across the different businesses.

Johannes: The different initiatives to increase operational efficiency supported EBITDA and the working capital across the different businesses. Now, the EBITDA margin of the group remains high at 25%, with every business group performing well above the RISE 2030 target of 20%. And the ROCE of the group, as we mentioned earlier, reached 30.5%, well in Value Creators territory. Now if we look at the consolidated P&L, depreciation and amortization increased to 298 million euros, resulting in an adjusted EBIT of 674 million euros versus 865 million euros in 2022. Adjusted net finance costs decreased to €110 million, reflecting lower forex-related costs, while net financing costs remained stable. The average cost of gross debt remained at a reasonable level of 3.3%.

Now the EBITDA margin of the group remains high at 25% with every business group performing well above the rise 2030 target of 20% and the ratio of the group as we mentioned earlier it reached 35% low in value creators territory.

Now if you look at the consolidated P&L.

Depreciation and amortization increased to 298 million euro, resulting in an adjusted EBIT of 674 million versus 865 in 2002.

Adjusted net finance cost decreased to $110 million, reflecting lower forex related costs, while the net financing costs remained stable and the average cost of gross debt remains at a reasonable level of three 3%. The cost of debt is expected to remain well under control considering the maturities and the conditions of the existing instruments and the <unk>.

Johannes: The cost of debt is expected to remain well under control, considering the maturities and the conditions of the existing instruments and the recently secured funding instruments. The lower taxable profit resulted in an adjusted tax charge of €121 million. The adjusted effective tax rates for the group increased slightly to 21.6% versus 20% last year.

Simply secured funding instruments.

The lower taxable profits resulted in adjusted tax charge of 121 million euros, the effective Saudi adjusted effective tax rate for the group increased slightly to 21, 6% versus 20% last year.

Johannes: And then the adjusted net profit group share amounted to €447 million, which resulted in an adjusted EPS of €1.86. The adjustments had a negative impact on EBIT of €82 million and are spread across the different business groups. The adjustments are mainly related to divestments of historic activities, streamlining the footprint in catalysis and the technology portfolio in ENSD, and finally, some updates to environmental provisions related to legacy items. Now moving to the cash flow generation in the group. As shown in the green line in the top graph, the net working capital needs for the group decreased to 346 million euros. Next to declining BGM prices, operational efficiencies and strict inventory management in catalysis resulted in a 50% improvement in the cash conversion cycle. In energy and surface technologies, net working capital remained stable year over year.

And then the adjusted net profit group share amounted to 400 to 447 million, which resulted in an adjusted EPS of $1 86 year.

The adjustments had a negative impact on EBIT of 82 million and a spread across the different business groups. The adjustments are mainly related to divestments of historic activities streamlining the footprint in catalysis, and a technology portfolio and NSC and finally also some updates to environmental provisions related to legacy items.

Now moving to the cash flow generation in the group.

As shown on the Green line in the top graph the networking capital needs for the group decreased to 346 million Euro negative decline PGM prices, the operational efficiencies and strict inventory management in catalysis, Brazil did in a 50% improvement of the cash conversion cycle.

In energy <unk> surface technologies networking capital remained stable year over year.

Johannes: The inventory growth in preparation of the ramp-up in chem volumes was offset by the decreasing battery metal prices. The substantial reduction in net working capital combined with the solid EBITDA led to an increase in cash flow for operations to 1.2 billion euros. However, capital expenditures, including capitalized development expenses, increased to €885 million.

Inventory growth and preparation of the ramp up and can volumes was offset by the decreasing battery metal prices.

The substantial reduction in networking capital combined with the solid EBITDA led to an increase in <unk>.

Increase of cash flow from operations to $1 2 billion Euro.

Capital expenditures, including capitalized development expenses increased to 885 million Europe energy <unk> surface technologies accounted for more than two thirds of the group's capex driven by the expansion of the European footprint and better materials.

Johannes: Energy and services technologies accounted for more than two-thirds of the group's capex, driven by the expansion of the European footprint in battery materials. Now even when considering the investments in CapEx, the free operating cash flow continues to remain very strong at a level of 332 million euros. In the next slide, you can see the net cash flow bridge, which shows that the net financial debt at the end of 2023 increased by 162 million euros and now amounts to 1.3 billion euros. This results in a leverage ratio of 1.3 times last development adjusted EBITDA. The group continues to have a strong balance sheet, and we expect to stay well within investment grade territory. The free operating cash flow of 332 million euros supported the funding of taxes, dividends, and equity injection into IronWay.

Even when considering the step in Capex the free operating cash flow continues to remain very strong at a level of 332 million Euro.

And the next slide you can see the net cash net cash flow bridge, which shows that the net financial debt at the end of 'twenty three increased with 162 million Euro and dollar amounts to $1 3 billion Euro. These results in a leverage ratio of one three times last 12 months adjusted EBITDA. The group continues to have a strong balance sheet and we expect to stay.

Well within investment grade territory.

The free operating cash flow of 332 million euros supported defending of Texas dividends and equity injection into <unk>.

In December <unk> successfully signed a new five year revolving credit facility of 600 million euros and the sustainability linked loan format with a solid pool of international banks. This rcs replaces the $495 million Rcs expiring in 'twenty five.

Johannes: In December, Humicore successfully signed a new five-year revolving credit facility of €600 million under the sustainability-linked loan format with a solid pool of international banks. This RCF replaces the €495 million RCF expiring in 2025 and comes in addition to the existing €500 million sustainability RCF contracted in 2021. In early February, Umicore concluded an eight-year loan agreement with the European Investment Bank for €350 million to support the financing of our R&D activities at attractive conditions.

And comes in addition to the existing 500 million Euro sustainability Rcs contracted in 'twenty one.

Early February Umicore concluded an eight year loan agreement with European investment Bank for 350 million supporting the financing of our R&D activities at attractive conditions.

As Jeff in October last year, we confirm that the total net capital expenditures for the group between 22% and 26 are expected to amount to $3 8 billion Euro.

This takes into account the nonrefundable capital grants the partial funding of highway to nonrecourse debt disciplined phasing of capacity expansion in line with customer contract in August and the improved utilization of existing assets in Asia, and an optimized asset light upstream model.

Johannes: As shared in October last year, we confirmed that the total net capital expenditures for the group between 2022 and 2026 are expected to amount to €3.8 billion. This takes into account the non-refundable capital grants, the partial funding of IronWay through non-recourse debt, the disciplined phasing of capacity expansion in line with customer contracts and orders, and the improved utilization of existing assets in Asia and an optimized asset-light upstream model. The net capital expenditures, including the contribution to IronWay, amounted to €922 million in 2023.

The net capital expenditures, including the contribution to <unk> amounted to 922 million in 2003.

Now as we highlighted earlier during 'twenty three we entered into forward contracts locking in larger shares and longer periods of strategic metal exposures at historically attractive prices.

The graph on this slide showed a significant increase of the future hedges and pop in particular for rhodium and palladium.

This metal hedging approach enables us to protect future cash flows from volatility in metal prices and as such provides better visibility on our future earnings.

We'd like to conclude this section on the financial performance and then a back ended back to mid teens.

Johannes: Now, as we highlighted earlier, during 2023, we entered into forward contracts, locking in larger shares and longer periods of the strategic metal exposures at historically attractive prices. The graphs on this slide show the significant increase in future hedges, in particular for rhodium and palladium. This metal hedging approach enables us to protect future cash flows from volatility in metal prices and, as such, provides better visibility on our future earnings.

<unk> very much want us I also want to highlight again, especially the topic on the increased visibility of.

The precious metal price environment towards hedging. This is really also a strong addition to our 2030 rise strategy and I'm very happy that we have been able to secure that last year now looking to our progress on sustainability.

<unk> three was also a year with a good and very good progress in our decarbonization robot with now 41% Glu.

Global use of renewable energy compared to a 35% baseline in 'twenty, one and in Europe. It is even.

Mathias Midreik: I would like to conclude this section on financial performance and hand it back to Matthias. Thank you very much, Wallis, and I also want to highlight again, especially the topic of increased visibility of the precious metal price environment through hedging. This is really also a strong addition to our 2030 growth strategy, and I'm very happy that we were able to secure that last year. Now, looking to our progress on sustainability, 2023 was also a year with good and very good progress on our decarbonization roadmap, with now 41% global use of renewable energy compared to a 35% baseline in 2021, and in Europe, it is even close to 60%. And with this development, we can confirm that we are well on track for our 2025 target to be at 100% renewable energy use.

Rose to 60% and with this development, we can confirm that we are well on track for our 2025 target to be at 100% renewable energy use and last year. We have also unveiled the umicore climate transition plan that underlines, our commitment to climate action resilience and transparency and with it.

We feel very comfortable that our sustainable element of the growth forward is secured now with that deep dive on the business is in 'twenty three let's come to the outlook of 2024. So let me start with battery materials and here in battery materials as we said we.

I want to give to the market.

Good as possible outlook, because it's the first time that we give this guidance and.

Since we did.

Defining it in a way that we are expecting revenues in the range of 575 to 675 million euros in an adjusted EBIT margin of around 22%.

Mathias Midreik: Last year, we also unveiled the Umicore Climate Transition Plan that underlines our commitment to climate action, resilience, and transparency, and with that, we feel very comfortable that our sustainable element of the growth forward is secure. Now, with that deep dive on businesses in 2023, let's come to the outlook for 2024. So, let me start with battery materials.

Let me make three comments to the first one is.

This 22% of EBITDA margin should also be understood as a reconfirmation of our.

Guidance on the post 2026, EBITA margins of more than 25%. We are fully on track with our planning in this regards second remark on the revenues I also want to remind everybody that this revenue guidance in our division of revenues is excluding the value of the battery metals like nickel cobalt.

Mathias Midreik: And here in battery materials, as we said, we want to give the market the best possible outlook because it's the first time that we give this guidance. And in that sense, we define it in such a way that we are expecting revenues in the range of 575 to 675 million euros and an adjusted EBITDA margin of around 22%. Let me make three comments on that.

Lithium and.

Manganese and the third comment would be that the revenues and earnings I expect it to be weighted in H $2 24, as a reflection of the ramp up profile of the new customer contracts and with that.

First year of Umicore battery materials to zero.

It's happening now as we had.

Hope for so Thats very good secondly on catalysis the.

Mathias Midreik: The first one is this 22% of EBITDA margin should also be understood as a reconfirmation of our guidance on the post-2026 EBITDA margins of more than 25%. We are fully on track with our planning in this regard. Second, on revenues, I also want to remind everybody that this revenue guidance, in our definition of revenues, excludes the value of battery metals like nickel, cobalt, lithium, and manganese. And the third comment would be that revenues and earnings are expected to be weighted in H2-24 as a reflection of the ramp-up profile of the new customer contract. And with that, the birth year of Umicore Battery Materials 2.0 is happening now, as we had hoped for. So that's very good.

Adjusted EBITDA is anticipated to be slightly below the levels of the previous record years close to current market expectations and maybe a comment to that with this outlook. We are continuing to be significant about above historic levels on such a plateau that we are now trying to push into the future.

With all of the good elements that we have laid out in 2023 entities before.

Recycling.

In recycling, we expect that 2024, and adjusted EBITDA will be below the level of the previous year, but still well above the pre 2020 levels and in line with current market expectations.

And he also a comment that due to the shutdown as we usually have a maintenance shutdown.

Scheduling the solid underlying performance is particular shifted in <unk> 2024, as a function of the shutdown or maintenance shutdown of the smelter in Hoboken.

Mathias Midreik: Secondly, on catalysis, the adjusted EBITDA is anticipated to be slightly below the levels of the previous record year, close to current market expectations. And maybe a comment to that, with this outlook, we are continuing to be significantly above the historic levels on such a plateau that we are now trying to push into the future with all of the good elements that we have laid out in 2023 and the years before. Recycling, we expect that 2024 adjusted EBITDA will be below the level of the previous year but still well above the pre-2020 levels and in line with the current market expectations. And here also a comment that, as we usually have a maintenance shutdown scheduling, the solid underlying performance is particularly shifted in H2 2024 as a function of the shutdown or maintenance shutdown of the smelter in Hoboken in H1. Finally, specialty materials. The 2024 adjusted EBITDA for specialty materials is expected to be somewhat below the level of the previous year.

H one.

Finally specialty materials, the 2020 for adjusted EBITDA for specialty materials is expected to be somewhat below the level of the previous here now.

On top of that is anticipated, we anticipated corporate cost will be $15 million to $20 million lower than 24 versus 23 that is already to be understood. As one consequence of our efficiency for growth program and all things together and based on the above we expect the group's adjusted.

EBITDA for the full year 2004 to be in the range of 900 to 950 million Euro now.

Now before we go to the Q&A session.

Page on ramp up so if you would only remember three things from that presentation. Then I would ask you to remember first that Umicore delivered a strong cash flow performance in 2023 with strong margins and a tough year confirming the unique business model in the different segments of Umicore secondly that.

Mathias Midreik: Now, on top of that, we anticipate that corporate costs will be 15 to 20 million euros lower in 2024 versus 2023. That is already to be understood as one consequence of our efficiency for growth program. All things together, and based on the above, we expect the group's adjusted EBITDA for the full year 2024 to be in the range of 900 to 950 million euros.

2023 was the year of reshaping battery materials battery materials to zero has been born and is now setting the base for the ramp up in growth starting in 2024, and finally that Umicore is well equipped for 2024 and beyond applying financial discipline and <unk>.

Mathias Midreik: Now, before we go to the Q&A session, the last page on the wrap-up. So, if you could only remember three things from that presentation, then I would ask you to remember first that Umicore delivered a strong cash flow performance in 2023 with strong margins in a tough year, confirming the unique business model in the different segments of Umicore. Secondly, 2023 was the year of reshaping battery materials. Battery materials 2.0 were born and are now setting the base for the ramp-up and growth starting in 2024.

<unk> related efficiencies.

Execution of our 2030 rise strategy with it we finished the first part of the session and now hand over back to the moderator for Q&A.

Thank you very much.

Ladies and gentlemen, as a reminder, if you would like to ask a question. Please press star one on Italy can you bet. Thank you.

Well Paul suggested Aman.

To give it time for everyone to Kevin. Thank you so much.

We will take our first question from Tristan <unk> with Deutsche Bank. Please go ahead.

Mathias Midreik: And finally, that Umicore is well-equipped for 2024 and beyond, applying financial discipline and accelerated efficiencies in the execution of our 2030 RISE strategy. With that, we finish the first part of the session and now hand over to the moderator for Q&A. Thank you very much.

Hi, three questions please quite related.

I calculate an EBITDA around $138 million for battery materials for 2023, given the comments that EBITDA will be at a similar level year on year.

Operator: Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We'll pause for just a moment to give a chance for everyone to queue up. Thank you so much.

Could you confirm that's in the right ballpark and could you also provide the base for battery materials revenue for 2023, you've guided to growth.

Would it be fair to assume growth in line with the EV market at around 20% for 2020 for second.

Tristan Lamotte: We'll take our first question from Tristan Lamotte, with Deutsche Bank. Please go ahead. Hi. Three questions, please, all quite related. I calculate an EBITDA of around £138 million for battery materials for 2023, given the comments that EBITDA will be at a similar level year on year. Could you confirm that's in the right ballpark and could you also provide the base for battery materials revenue for 2023? You've guided us to growth. Would it be fair to assume growth in line with the EV market at around 20% for 2024? The second question is around the one-offs in battery materials.

Second question is around the one offs and battery materials I was wondering if you could quantify roughly the size of those one offs and the proportion of EBITDA.

And the third question is on the relative size of the Cam revenues versus the refining revenues in battery materials.

15% of EBITDA for refining be a reasonable assumption thanks very much.

Yes. Thank you very much very relevant question, let me start with the last one then I'll go to the first one.

I wanted to cover the middle one so on the refining revenues. Please understand this is commercially sensitive topic, because it's part of our.

Mathias Midreik: I was wondering if you could quantify roughly the size of those one-offs and the proportion of EBITDA. And the third question is about the relative size of the CAM revenues versus the refining revenues in battery materials. Would, say, 15% of EBITDA for refining be a reasonable assumption? Thanks very much.

Our business model that we don't feel comfortable to share.

The importance.

The message that we wanted to bring through is that the.

Refining revenue will always be optimized based on profitability and not for revenue and that's kind of the moving parts in the puzzle, but we will not disclose the split unfortunately of those now looking to the guidance of battery materials with the math that you have just made.

Mathias Midreik: Thank you very much. Very relevant question. Let me start with the last one.

Mathias Midreik: Then I'll go to the first one, and Juanes will cover the middle one. So on the refining revenues, please understand this is a commercially sensitive topic because it's part of our business model that we don't feel comfortable sharing. The important message that we wanted to bring through is that the refining revenue will always be optimized based on profitability and not revenue. And that's kind of the moving part in the puzzle, but we will not disclose the split, unfortunately. Now look to the guidance of battery materials with the math that you have just made.

So please understand that we have tried to make.

A maximum clarity very early in the year normally umicore is not giving.

A quantitative guidance so early in the year, we normally do that in April and July, but we felt it is necessary to give a range and you should take it as it is it is a range today that we will be further.

Trying to narrow once we go alongside in the year and looking to growth now we don't know what will be the growth of this year of the market, but if you refer to as a comparison the last year market growth in battery materials.

Mathias Midreik: So please understand that we have tried to give maximum clarity very early in the year. Normally, Umicore is not giving quantitative guidance so early in the year. We normally do that in April or in July.

Bold and confident that we will outperform the market growth with our volume growth forward.

One is on the one offs so looking at the one offs in battery materials.

There's a few moving parts I mean first of all the lithium margin.

Mathias Midreik: But we felt it was necessary to give a range, and you should take it as it is. It is a range today that we will try to narrow further once we go alongside in the year and look to growth. Now we don't know what the growth of this year will be in the market, but if you compare the last year's market growth in battery materials, we are more than confident that we will outperform that market growth with our volume growth forward. So looking at the one-offs in battery materials, I think there are a few moving parts. I mean, first of all, there's a lithium margin that was substantial in 2022 and that started fading out in 2023. This is something where you can get a grasp of, let's say, the magnitude.

More substantially in 'twenty, two and that sort of fading out in 'twenty three.

Is it something that you can get lost let's say the magnitude. If you look at the revenue bridge you can see that the substantial part of that is linked to the lithium margin that has been fading out.

Moving from 'twenty to 'twenty three than looking at tier cost sites. We highlighted that we have some mass production testaments that we had in 'twenty two in particular linked to the ramp up of the NESA lines and it is something that that reduced in 'twenty three.

After that ramp up in 'twenty two.

And then looking at the valuation of the battery scraps.

It's something that is also linked to those mass production testaments in 'twenty two the output of these testaments the scraps.

Vanas Preferon: If you look at the revenue bridge, you can see that a substantial part of that is linked to the lithium margin that has been fading out, moving from 2022 and 2023. Then, looking at the cost side, we highlighted that we have the mass production test runs that we had in 2022, in particular, linked to the ramp-up of the NISA lines. And this is something that will be reduced in 2023 after that ramp-up in 2022. And then looking at the valuation of the battery scraps, that's something that was also linked to those mass production test runs. So in 2022, the output of these test runs, the scraps, was written off, as we didn't see an immediate opportunity to valorize them, while in the course of 2023, we were able to develop adequate routes to recover the value, and as such, that also contributed.

Were written off as we didn't see an immediate opportunity to valorize dose while in the course of 'twenty three we were able to.

Developed.

Adequate routes to recover the value and as such debt also contributed so I think those are the big moving parts. If you look year over year 'twenty two 'twenty three I think it's important to highlight those moving parts at the same time I think what we also want to do looking forward is setting the baseline 24, what is driving the performance.

And giving given that those insights.

Thank you, we'll now take our next question from Sebastian Bray with <unk> Bank. Your line is open. Please go ahead.

Hello, everyone. Good morning, and thank you for taking my questions I have three please the first one is on.

What has changed versus six to eight months ago in terms of your own expectations.

You can see the cobalt prices come under significant pressure.

Vanas Preferon: So I think those are the big moving parts. If you look here over the year, 2022 and 2023, I think it's important to highlight those moving parts. At the same time, I think what we also want to do looking forward is set the baseline for 2024, what is driving performance, and give those insights. Thank you. We'll now take our next question from Sebastian Bray with Bernbeck. Your line is open. Please go ahead. Hello, everyone. Good morning, and thank you for taking my questions. I'd have three, please.

And if I take a step back it looks as if implicitly in our guidance for LNG in surface Tech for 2020 for EBITDA is around 50 to 60 million below consensus expectations could you confirm this and how does the only thing that has changed for this segment relative to your initial expect.

Patients with 24, whatever they may have been.

Cobalt price or a pause I'm going to ask a couple of questions in time.

Yes so.

It is very relevant topics. So detailed several elements to it's the first one is that the underlying raw material prices have a different effect to the different parts of our business and indeed in the in the CSM business, especially.

Sebastian Bray: The first one is on what has changed versus six to eight months ago in terms of your own expectations. I can see that cobalt prices have come under significant pressure. And if I take a step back, it looks as if implicitly the guidance for energy and surface tech for 2024 EBITDA is around 50 to 60 million below consensus expectations. Could you confirm this? And has the only thing that has changed for this segment relative to your initial expectations for 2024, whatever they may have been, the cobalt price? I'll pause them, and I'll ask the other questions in turn.

There is.

Aggressively direct correlation of profitability to those prices and cobalt.

Nickel prices have been going down because nuclear is also an element that is used in the chemistries are going forward. So you are right with with your assumption and Youre also right.

To read it in a way that the.

Former LST performance, if you want would be.

More in the range of 2023. So yes. There is this gap to the current consensus that's what I confirm now.

Mathias Midreik: Yes, so it's a very relevant topic. And, indeed, there are several elements to it. The first one is that the underlying raw material prices have a different effect on the different parts of our business. And, indeed, in the CSM business, especially, there is a relatively direct correlation of profitability to those prices. And cobalt and nickel prices have been going down because nickel is also an element that is used in chemistry going forward.

What has not changed in our assumptions.

We're seeing around the battery materials business and if you.

<unk>.

If you recall, we have been looking at the half year results to a battery material result above the last year that has been achieved.

And going forward in 2024, the composition, we see.

As a complete different structure right, we are ramping up not what business.

Mathias Midreik: So, you're right with your assumption and you are also right to read it in a way that the former ENST performance, if you want, would be more in the range of 2023. So, yes, there is this gap between the current consensus and that's what I confirm.

It's a rebirth as I've said many times it must be before.

The new contracts are ramping up and the volumes and driving our profitability and the impact of those one time effects that <unk> been talking about is largely faded out. So it's a complete new business setup that we have been trying to guide and the best way in.

Mathias Midreik: Now, what has not changed in our assumptions is everything around the battery material business. And if you recall, we have been looking at the half-year results for a battery material result above the last year that has been achieved. And going forward in 2024, the composition we see as a completely different structure.

In our outlook so far.

That's helpful. Thank you and the second question is just on the consensus from eating out to 2026 and it relates to how the JV would be W is accounted for.

I have a feeling looking at consensus EPS.

Mathias Midreik: We are ramping up the business now. It's a rebirth, as I said many times in my speech before, where the new contracts are coming in, and the volumes are driving our profitability. And the impact of those one-time effects that Juan has been talking about is largely faded out. So, it's a complete new business setup that we have been trying to guide in the best way in our outlook so far. That's helpful.

The working assumption for many analysts for 26 is just to pro rate or consolidate umicore share of revenue and EBIT for this JV is that a reasonable thing to do for 2006 were waiting for clarity on what happens or is it 100% sure but.

This will end up in an associates line that is not added to EBIT comes after it.

Yeah.

Yes, so to be to be.

Vanas Preferon: And the second question is just on the consensus leading out to 2026, and it relates to how the JV with VW is accounted for. I have the feeling, looking at consensus EBIT, that the working assumption for many analysts for 2026 is just to prorate or consolidate an unascertainable share of revenue in EBIT for this JV. Is that a reasonable thing to do for 2026, awaiting further clarity on what happens, or is it 100% sure that this will end up in an associate's line that is not added to EBIT but comes after it? So to be frank, to be direct, I have not looked too much into how the consensus is built up around the Ironway joint venture. At the same time, if you look at how we will do it, it's indeed accounted for under the equity method, but then the income from the JV will be included in the EBIT and EBITDA performance indicators that we publish.

Frank to be direct not look too much into how the consensus is buildup around highway joint venture at the same time, if you look at how we will do indeed accounted under the equity method.

On the income.

From the JV will be included in the EBIT and EBITDA performance indicators that we publish.

And there is I would say to directly answer. Your question. There is we don't see that this will change and we will it will be part of our EBITDA. That's one important thing to mention is that we had announced earlier as well there is a certain time.

In 'twenty five 'twenty, six where the volumes of power Corp will be.

Directly served by Umicore, while the <unk> ramp up capacities.

Buildup and during that time of course, that's normal revenue and EBIT EBIT <unk> line that we are reporting, but thats just a bridging.

Vanas Preferon: Yeah, and no, and there is, I would say to directly answer your question, there is, we don't see that this will change, and it will be part of our EBITDA. There's one important thing to mention that we had announced earlier as well. There is a certain time, in 25-26, when the volumes of PowerCore will be, you know, directly served by Umicore while the IronWay ramp-up capacities are, you know, built up. And during that time, of course, that's the normal revenue and EBITDA line that we are reporting. But that's just a bridging and kind of risk mitigation if there should be any timing delays for the joint venture capacities. And that was—but we have said that before.

Kind of a risk mitigation, if there should be any timing delays for the.

For the joint venture capacities and it was but we have said it before so no I think there is no change to our planning and how to account.

The revenues with ultimately flip side.

That's helpful just to double check here of a capital market stay at 25% EBITDA that is pro rata consolidating the sales from VW JV and the EBITDA or its just taking the EBITDA contribution and allowing that to raise the margins as well.

It's a second one on <unk> it is consolidating the EBITDA versus the revenues.

Sebastian Bray: So, no, I think there's no change to our planning in how to account for the revenues with ultimately Volkswagen. Just to double check here, the capital market today, 25% EBITDA, is that pro rata consolidating the sales from BWJV and the EBITDA, or is it just taking the EBITDA contribution and allowing that to raise the margins as well? It's the second one, indeed, so it's consolidating the EBITDA versus the revenues generated at Umicore level. I see. So in other words, if we were to do a pro rata consolidation, the margin target would actually be lower. So let's say we take, we multiply the JV scale by 51% and add them back in. It's now a 25% margin target. Is that right?

Generated at Umicore level.

I would say.

Other words, if we were to do a pro rata consolidation the margin target would actually be lower.

So, let's say we take.

We multiply the JV by 51% and add them back in actually at about 25% margin target is that right or.

Yes, you would see that I think that again I think the effect is something which will become more visible as from 2006 onwards.

Andre joint venture starts to ramp ups and associates, that's not something that is driving the equation.

Understood I appreciate I'm, taking time here, but just just to clarify in 2026% a reasonable base case modeling assumption. It pretends umicore is still servicing the VW JV out of its own fully consolidate production.

Vanas Preferon: Yes, you would see that effect, but again, I think the effect is something which will become more visible as from 2026 onwards, as Iron Bay Joint Venture starts to ramp up during the first years. That's not something that is driving the equation. That's understood, and I appreciate I'm taking time here. But just to clarify, in 2026, a reasonable base case modeling assumption is to pretend that Unicor is still servicing the VWJV out of its own fully consolidated production. Sorry, could you repeat the last topic? What should be assumed? We didn't totally understand it.

Sorry could you could you repeat the last topic, what should be assume we didn't totally get it.

I appreciate it's early but as a reasonable base case for 2026.

I believe you alluded to this.

We can assume that umicore is.

Servicing the JV out of its own fully consolidate was presented.

Understood, Yes, yes, yes, that's correct and second remark I wanted to make to your previous math that you made on the non consolidation of revenues.

Sebastian Bray: I appreciate it's early, but as a reasonable base case for 2026, Van, I believe you alluded to this. We can assume that Umicore is servicing the JV out of its own fully consolidated production. Okay, understood. Yes, that's correct. And a second remark I wanted to make on your previous math that you made on the non-consolidation of revenues. Please also note that we guide for an EBITDA margin larger than 25%. That's an important notion I wanted to make.

Please also note that we that we guide for an EBITDA margin.

Jud and 25% that's an important notion I wanted to make.

That's helpful. Thank you for taking my questions.

Thank you and we'll now take our next question from Jason <unk> with JP Morgan. Your line is open. Please go ahead.

Yeah, Hi morning.

Firstly I have two.

The.

Acknowledged that your guidance is eight besides <unk>.

$50 million.

Hopefully you can all be.

The uncertainties that you have talked about.

Vanas Preferon: Thank you for taking my question. Thank you, and we'll now take our next question from Chetan Udeshi with JP Morgan. Your line is open, please go ahead. Yeah, morning. But I have to, you know, I have to, and all.

Given the second half phasing.

It's just interesting to me how precise the guidance.

But just an observation.

Yes.

Following up on your previous comment and I. Appreciate you don't want to give us a split off.

<unk>.

Gamma in the refining part.

Chetan Udeshi: It's just interesting to me how precise the guidance is. But just as an observation, I was just following up on your previous comment, and I appreciate you don't want to give us a split of... and Nathalie Debruyne of that number because I would have thought your refining business typically is serving your, you know, captive camp business. So maybe the revenues are not that high, but I might be wrong. So, any sort of.

Can you sort of point us to some sort of.

Goalposts in terms of how big the related gave revenues are within your guidance.

Guidance this is really more than half.

Of that number because I would have thought your refining business.

Yes.

Sure.

Captive.

<unk> business. So maybe the revenues are not that high but I might be wrong, so any sort of.

Vanas Preferon: Color on the relative size of the two businesses would be useful. R&D spending in the NST business in 2020. And it seems, you know, in the second half, for instance, we've seen almost a €30-40 million reduction in absolute R&D spend. How much of this is actually the one-off impact that you mentioned, which is..., and Nathalie Debruyne.

Yes.

Color on the relative size of the businesses that would be used for the second question I was just looking at your.

R&D spending.

Indeed.

And SD business in 2020.

And second half for instance.

Is it 30 40 million Euro reduction.

Okay.

How much of this is actually.

<unk> impact that you mentioned.

Associated with the validation for.

Vanas Preferon: Thank you. Thank you. Thank you, and Nathalie Debruyne. Given that, you know, with ENS, sorry, not ENS, the batching materials, you're still sort of ramping up that business, and clearly, I guess, the aim is to be at the forefront in terms of the technology roadmap. Maybe any color there would be useful.

For the mass production versus how much of this is more rationalizing and I'm just curious why would you rationalize.

Spend on.

One can understand.

Catalyst.

Given that.

Bacterin with deals you're still sort of ramping up that business at gilead.

Has to be at the forefront.

The technology roadmap maybe.

And maybe any color there would be useful and last question.

Vanas Preferon: And last question, my internship will begin in gat bey..., and Roy Paul Park for 2020. Thank you very much. Yeah, thank you, Chetan. Very good questions. So first, let me react to your comment and explain why we're so precise in our guidance. So that should also be understood as a result of our intent, first of all, to be as transparent as we can. And secondly, why can we be so sure about it?

When he is the 800 million capex.

The right ballpark for 2020.

Or.

What is the DNA that we should have with Liberty Paul Thank you very much.

Thank you chip and very good questions. So first let me Rick to your comment on Hotwire voice. So precise our guidance. So that should be also understood. As a result of the our intense first of all to be as transparent as we can and secondly, why can we you saw Shaw.

About it it's because we have a major difference to the past, which is the increased hedging. If you have seen the slides of one is where we are significantly up selling, especially rhodium and palladium too.

Mathias Midreik: It's because we have a major difference from the past, which is increased hedging. If you have seen the slides for Bonis where we are significantly upscaling, especially rhodium and palladium, to, you know, nearly three quarters of the expected volumes, that gives us much more clarity in the planning forward. And that's what we want to achieve, to have a more stable result as we, you know, in the battery material business, also try to always make sure that we are not linked to the effects of metal price variations going into the future. Now, your first question on the refining of refining versus CAM, here it's important to mention, so we will not give you a number, but I can reassure you that, of course, the CAM portion is significantly larger than the refining portion.

Nearly three quarters of the expected volumes that gives us much more clarity in the planning forward and that's what we want to achieve to have a more stable result.

As we know in the battery material business also trying to.

Always.

Make sure that we are not linked to the effects of the nickel price variations going into the future now the second quarter.

First question on the refining of the.

Refining versus Kim.

It's important to mention.

We'll not give you a number but I can reassure you that of course.

The cash portion is significantly larger than the refining costs.

And it's.

Mathias Midreik: And it should not be understood that we have a refining business that we sell to the outside world. It is a captive refining business for UBM. But it depends on, and maybe if needed, Bonis can give more explanations about the exact accounting for it. But if we are refining upstream materials ourselves, there is a revenue that we are recognizing. If we are buying metal salts, we don't have revenue, but only a cost on our bill of materials, which we will, as we said, we're able to do based on market conditions, always to optimize our profitability. And that's how it should be understood. It's not to say that there is a big refining business besides the CAM business. It's an internal measure to optimize results.

It is not to be understood that we have a refining business that we sell to the outside world is it's a captive refining refining business for for UBM, but it depends on and maybe what it is.

Neither one is can give more explanations to the exact accounting to it but there is if we are refining upstream materials. Our cells. There is the revenue that we're recognizing if we are buying metal salts.

We don't have that revenue, but only a constant in our bill of material, which we will as we said we're able to do that based on the market conditions always to optimize our profitability and that's how it should be understood. It's not to say that there is a big refining business. Besides the Cam business. It is an internal measure to optimize.

Vanas Preferon: And with that, I hand over to Bonis for the other two questions. So maybe let me first come back to your question on R&D and the fluctuation over the different periods in the year. What you see in the R&D underlying is indeed the MPTR runs, so the mass production test runs, but also looking at qualification runs and the cost that entails. So that is explaining some of those seasonalities, I would say, and some of those fluctuations across the year.

And with that I hand over to one is for the other two questions yes.

So maybe let me first come back to your question on R&D and the fluctuation I would say over the different.

Different periods in the year.

What <unk> seen R&D underlying is indeed also the MPT arguments for the mass production distance, but also looking at quantification rents and of course that Intelsat is explaining.

Some of those seasonality I would say, it's all of those fluctuations across the year.

Vanas Preferon: Now, looking at CAPEX, you asked for certain CAPEX guidance for 2024. I mean, if you look at our plan, we expect CAPEX in 2024 to be in the same order of magnitude as we had in 2023. And then looking at the depreciation and amortizations, how that will evolve going into 2024, given all of the new rampant that is happening. This is where we expect depreciation amortizations to increase by about, let's say, 10% versus the level of 2023. Thank you. You're welcome.

Looking at Capex, So your Oscar and certain Capex guidance for 'twenty four I mean, if you look at our plan, we expect for Capex in 2004 to be in the same order of magnitude as we as we head into 'twenty three.

And then looking at depreciation and amortization is how that will evolve going into 2004.

Given all of the new ramp up that that is happening.

This is where we expect depreciation and amortization to increase at about let's say, 10% versus the level of 23.

Thank you.

Youre welcome.

Riya Khadija: Thank you. Thank you. We'll now move on to our next question from Riya Khadija with Bank of America. Your line is open. Please go ahead. Hi morning. I've got three questions, please, related to RBM. My first is on the guide for 24.

Thank you. Thank you, we'll now move onto our next question Tim react data with Bank of America. Your line is open. Please go ahead.

Hi morning, I've got three questions. Please Malaysia.

My first is on the guide between call with EBITDA Guide at this plant and one is now mentioning that DNA is expected to be high.

Mathias Midreik: With EBITDA guided as flat, and RAN is now mentioning that DMA is expected to be higher year-on-year, is it then fair to assume that actually EBIT and EPS are much lower at 24 for RBM? My second question is how exposed the company is to the underlying EV market, and within that range of revenues, is the lower end of 575 protected by some minimum offtake, or are you still exposed to underlying EV market volumes here? And my third question is, just taking a step back, how should we think about profit growth in this division over 2024 to 2026, as this year, despite volumes expected to be above the EV market, profits have clashed, and we've got another greenfield project ramping up in 2026. So when do you expect the inflection in EBIT in this division? Thanks. Okay. Thank you, Ria.

Saturday actually.

It's much lower into 'twenty four for IBM.

Second question is on how exposed the company as at the end.

Underlying in market and within that range.

It's the lower end <unk> protected by some minimum offtake or you still expect to underlying market volume tab.

And that's that question is just taking a step back how should we think about profit growth in this division of between 24 to 26.

This year, despite volumes expected to be about the EV market profit to cash.

The Greenfield project ramping up internal tools, so when do you expect inflection.

In this division.

Okay. Thank.

Mathias Midreik: I will take the two and three, and then one is we'll talk about EBIT and DNA, etc. So, the EV market. So, you know, I want to differentiate between this year and maybe the future or the near future.

Thank you Maria I will take the two.

Two and three and then we'll talk about EBIT.

Hey, et cetera, so EV market so.

Thanks.

We.

Want to differentiate between this year and maybe the future of the knee.

Mathias Midreik: This year, we are, as we have said, basically a new business that is ramping up with a strong order book. So, that means in the ramp-up year, you have, of course, the risk of volatility because our customers could have problems during the ramp-up, etc., but it's less a function of the EV market. It's more a function of the technical performance of the different ramp-ups that are happening.

Future.

In this year, we are as we have said it.

Basically.

Our new business that is ramping up with them with a strong order book so that means in a ramp up year you have of course, the risk of volatility because our customers could have problems in the ramp up et cetera, but it's less a function of the EV market. It's more a function of the technical performance of the different ramp up debt.

Ramp ups that are happening and.

Mathias Midreik: And, you know, there is also a part of our business that is going into China, as we have said, into Chinese EVs that will be delivered to Europe, which I think are currently the big winners in all of these discussions. Now, going forward, if we look into a more mid-term exposure to volatilities, of course, we have for our contracts the take-or-pay conditions that we have laid out, but there's another important, you know, risk mitigation factor that I wanted to mention is that when we look to our North American business that we had announced, we have as the key customer that was also officially announced BMW, and we can also confirm that the models of BMW actually, if you look to any impact that you might have from a, you know, presidential election in the U.S., let's put it like this, on IRA or some people speculate around that, that wouldn't impact your record because anyway, those models that our products go into, they are not from a price point of view, from a market price point of view, they have not been planned to be IRA compliant, and also these are the models that our customers are exporting all over the world, so I think that's also a very reassuring fact going forward.

There is also a part of our business that is going into China. As we have said into Chinese evs that will be.

Delivered to Europe, which I think currently the big winners in all of these discussions now going forward. If we look into a more midterm exposure to volatility of course, we have our contracts the take or pay conditions that we have laid out but there is another important.

Risk mitigation factor that I wanted to mention is that when we look to our north American business that we had announced.

We have.

The key customer that was also officially announced BMW and we can also confirm that.

The models of the.

BMW actually if you look to a any.

Any impact that you might have from.

Presidential election in the U S. Let's put it like this on IRR on some people speculate around it that wouldnt impact your recall because anyway. Those models that our products go into they are not from a price point of view from a market price point of view they have not been planned to be ironic comply.

Compliant and also these are the model that our customers is exporting all over the world. So I think Thats also a very reassuring.

Mathias Midreik: Now, your question, I want to be precise about the coverage of, are we covered in terms of take-or-pay this year, in the ramp-up? I say for the part of our business that has take-or-pay contracts, we said the Chinese didn't have Chinese contracts, but the other ones, yes, but in the year of ramp-up, the bandwidth of coverage is bigger, that's also normal because the ramp-up can always be Now, the second question or third question is on profitable growth going forward. And you know that maybe I will give you some data points for the math.

Going forward now your question I want to be precise on the coverage of our recovered in terms of take or pay in this year.

And the ramp up let's say for the part of our business that has take or pay contracts. We set the Chinese doesn't have Chinese contract, but the other ones, yes, but in the year of ramp up the bandwidth of coverage is bigger that's also normal because the ramp up it can always be a little bit more fluctuating, but overall, we feel confident.

That the volumes that we have plant will also materialized now a second question or third question is on the profitable growth forward and you know that.

Maybe I will give you some.

Mathias Midreik: So we are guiding for a 22% EBITDA margin this year. And you can also see that we have a good, you know, increased capacity utilization. But it is not a fully utilized setup yet.

Data points for the masses. So we are guiding for 22% EBITDA margin. This year and you can also see that we have a good.

Increased capacity utilization, but it is not.

Fully utilized set up yet.

Mathias Midreik: And as our business is basically a function of utilization automatically into 2025, when you imply a higher utilization rate with the ramp-up, the contract that now ramps up for being at full rate in 2025, you can, you know, calculate what will be the consequence of that. So that gives us, you know, gives us good confidence in the growth of profits going forward. Now, for the third question, EBITDA, et cetera, I hand over to Manus. Okay. So looking at EBITDA in battery fuels, I mean, as we indicated, it's early in the year to give precise guidance yet. So this is why we prefer to create a range. At the same time, looking at that range, we can say that it's roughly in line with the 23.

As our business is basically a function of utilization automatically into 2025, when you imply a higher utilization rate with the ramp up the contracts that now ramp up in 'twenty four being at full rate in 'twenty five.

You can calculate what will be the consequence out of that so that makes us.

<unk>.

Gives us a good confidence on the growth of profits going forward now for the third question EBIT, DNA et cetera, I hand over to <unk>. Okay. So looking at the EBITDA in battery materials I mean, as we indicated it's early in the year to give already.

<unk> guidance. So this is why we prefer to create a range at the same time looking at that range. We can say that it's roughly in line with 2020 now looking at the question on EBIT and DNA on.

Vanas Preferon: Now, looking at the question on EBITDA and DNA, on DNA, I've indicated the overall expected increase. If you look at the total level versus 23, where we expect an increase of about 10%. And obviously, this is primarily in battery materials, given that the focus of the investment is in battery materials. So DNA would indeed increase in battery materials.

On DNA I've indicated.

The overall expected increase if look at the total level versus 'twenty three we expect an increase of about 10% and obviously this is primarily in battery materials given that the focus of the investments in battery materials. So that DNA will indeed increase in battery materials, so looking or bringing it back to <unk>.

Vanas Preferon: So looking at or bringing it back to the EBIT level will weigh in on EBIT. At the same time, I think we can confirm that EBIT is expected to stay in positive territory. Thank you. You're welcome.

Vit level. This will weigh in on EBIT at the same time I think we can confirm that EBIT is expected to stay in positive territory.

Thank you.

Youre welcome.

Vanas Preferon: Thank you. And we'll now take our next question from Geoff Haire with UBS. Your line is open. Please go ahead.

Thank you and we'll now take our next question Jim Geoff Haire with UBS. Your line is open. Please go ahead.

Geoff Haire: Good morning and thanks for the presentation. I just had a few questions if you could help me with them. First of all, on the hedging that you've done in the longer term in recycling. Does that mean that going forward the recycling business is not going to see the same level of profitability at peak metal prices that it has on the planet because you've done so much long-term hedging?

Good morning, and thanks for the presentation I just had a few questions. If you could help me with some first of all on the hedging that you have done longer term and recycling does.

Does that mean.

Going forward the recycling business is not going to see the same level of profitability uptake by oil prices that it has in the past because you've done so much long term.

Hedging.

Mathias Midreik: So that's one question. Secondly, just on RBM, I just wonder if you could clarify: is the Concola refining complex for the supply of cobalt materials within RBM, or does that still fit within cobalt and specialty materials? And if it sits within cobalt and specialty materials, when you take product from that into RBM, does that come at cost or price? Those are my questions. Thank you. Yeah, thank you, Geoff. Let me immediately react to the second one.

So that's one question and secondly, just on RPM I, just wonder if you could clarify.

Is the controller.

Refining complex for the supply of cobalt materials is that within RPM or does that still sit within cobalt <unk> specialty materials.

And if it fits within cobalt <unk> specialty materials when you tick.

From that and RPM does that come at cost price.

Those are my questions. Thank you.

Yes, Thank you Jeff.

Let me immediately react on the second one.

Mathias Midreik: It's actually not the fact that it's in CSM. We have the full activities in Coca-Cola. So the refining and the precursor PKM activity is consolidated in UBM. So there is no transfer price or any type of set up. It's fully part of the business. And for hedging, I give it to one.

Actually not affected in CSM, we have the full activities and Coca Cola, So the refining and the precursor of peak activity is consolidated in <unk>. So there is no transfer price or any type of setup, it's fully part of the business and for hedging.

Give it to one.

Vanas Preferon: Yep, so bringing it back to the recycling business. Yes, you are correct. I mean, looking at the peak profitability that we have seen, this is something we do not expect to come back. Also, if you look at the drivers, the drivers were primarily the peak in prices for rhodium and palladium. And you have seen the evolution of rhodium and palladium.

Yes.

Turning it back to the recycling business.

Yes, you are correct I mean looking at the peak profitability that we have seen this is something we do not expect to come back also if you look at the drivers the drivers, but primarily the peak in prices for rhodium and Palladium and you have seen the evolution of rhodium and palladium. It has come down on average of 60% and 40% respectively.

Vanas Preferon: It has come down on average to 60 percent and 40 percent, respectively. And if you look at the key applications of rhodium and palladium, they are very much linked to and very uniquely driven by automotive catalysts. And we know that the internal combustion engine is not a market we expect to grow substantially in volume or to further decline basically over time. So this is where we have confidence that the metal price will not necessarily go back to previous levels and where the levels that we have been able to secure are, from a historical perspective, still very interesting. So this is where we have decided to increase the hedging, in particular for rhodium and palladium, which secures future earnings and future cash flows and brings also more visibility to the results.

If you look at the key applications of rhodium and Palladium is very much linked to and we're uniquely driven by automotive catalysts and we know about the internal combustion engine is there is not a market we expect to grow substantially in volume or to further decline basically over time. So this is why we have confidence that the metal price will not necessarily go back to previous levels.

And where the levels that we have been able to secure or from a historical perspective or still very interesting. So this is where we have decided to increase the hedging in particular for rhodium and palladium, which secures the future earnings future cash flows and brings also more visibility to the results and if I want to address.

Vanas Preferon: And if I want to add, that's a deliberate decision that we take because, as Juana said, we are judging the upside potential lower than the downside risk. And the downside risk for us, it is important with our plan forward that we have a stable view of cash flows because we want to make sure that, as we have said in our plan, we use as much as possible organic cash flows to secure our growth forward.

Deliberate decision that we take because we as <unk> said, we are judging the upside potential lower than the downside risk and the downside risk for us. It is important with our plant forward that we have a stable view on cash flows because we want to make sure that.

As we have said in our plan use as much.

Yes.

Possible organic cash flows.

Q our growth forward and this I think is an excellent move that we noted.

Mathias Midreik: And this, I think, is an excellent move that we have now to have that secured while giving up on an opportunity that is very unlikely to materialize. So we think it's a great deal. Okay, thank you. Could I just ask one other question? I forgot I wanted to ask.

To have that secured while giving up on an opportunity that is very unlikely to materialize. So we think it's a great deal.

Okay. Thank you.

One other question I forgot I wanted to ask.

Geoff Haire: The other question was around pricing. We've seen a number of EV OEMs reducing prices, and certainly in the UK, a number of OEMs are offering 0% APR if you buy an EV. How do you deal with OEMs reducing their prices for their selling product and perhaps coming back to you and asking for lower prices for materials that you're putting in? How do you protect yourself in that negotiation? Yeah, actually, it'

The other question was around pricing, we've seen a number of EV Oems, reducing pricing and certainly in the U K a number of Oems are offering zero percent APR, if you bought <unk>.

How do you deal with Oems, reducing their prices of our selling product and perhaps coming back to you and asking for lower pricing and materials that you place you're putting in what is the how do you protect yourself in that negotiation.

Yes, actually its actually two we see a lot of inflow of those requests and we really like those requests because that.

Mathias Midreik: We see a lot of inflow of those requests, and I really like those requests. Because you know that our revenue, and that's why I pointed it out at the beginning, our revenue definition, and consequently also the underlying EBITDA, is excluding metals. So we are not interested in having certain metals at a certain price or certain metals even in our battery chemistry. So the feedback and what we're doing with the OEMs that want to reduce their cost is to work on chemistries that use less of those critical metals or no metals at all. So, for example, our cobalt-less technology that we are developing, the HLM technology, which replaces nickel with manganese, we have seen, indeed, quite an uptake in interest, by the way, also on the mid-nickel high-voltage technology that reduces nickel.

Our revenue and that's what that's why I pointed it out in the beginning our revenue definition and consequently also the underlying EBIT EBITDA.

Excluding the metals. So we are not interested to have a certain metals at a certain price certain methods even in our battery chemistries. So the feedback and what we're doing with the Oems that want to reduce their cost is to work on chemistries that use less.

Those critical metals are no metals that also for example, our cobalt less.

The technology that we are developing the <unk> technology, which replaces the nickel by manganese and we have seen indeed quite an uptake and interest by the way also on the high voltage technology that reduces nickel. So that is a great driver for us to potentially even have a margin up.

Mathias Midreik: So that is a great driver for us to potentially even have a higher margin because we can offer our customers a significant reduction of, I don't know, 10, 20, 30 percent of cathode costs through the use of less or different materials. And if we can increase by two, three, whatever, five percent our transformation technology premium, that's still a very good win-win deal. So, indeed, the number of people wanting to have these discussions has been significantly increasing over the last six months, and we are very much welcoming them. And it's, again, great news that we have such a business model that is not dependent on the metals itself. But if you have a platform that you're already supplying to, and the OEM comes back to you and says, "We need to cut the cost here because we're cutting our prices," Do they not have to retest with a new cathode so you have to go through that process again, or how does that work?

Because we can offer to our customers the significant reduce of I don't know 10, 20, 30% of castle cost through the use of less or different materials.

And if we can increase by two or three or whatever 5% our transformation technology premium that's still a very good win win deal. So indeed it has been.

Significantly increasing over the last six months to have these discussions and we are very much welcoming them and it is again a great news that we have such a business model that is not dependent on the on the metals itself.

But if you have a platform that already youre already supplying into on the OEM cost back to you and says we need to cut the costs here, because we're cutting our price do they not have to retail outlets with our new cathode. So you have to go through that process or how does that work.

So in principle, our contracts as we said long term.

Mathias Midreik: Yeah, so in principle, you know, our contracts, as we said, long term, they have an average of eight years of duration and have fixed prices. So that means if OEM comes back and says, hey, I want to reduce the price, we are always reactive to that. And we're trying to implement new, as I said, different technologies that need to then be validated and need to be brought into the platform.

<unk> eight year duration and have fixed pricing so that means if.

OEM comes back and say, Hey, I want to reduce the price. We are always reacted to that and we're trying to implement a new.

As I said different technologies that need to then be validated and need to be brought into the into the platform.

Mathias Midreik: So it's not, it will not happen overnight. That's also clear. But it's also a protection mechanism for us because we can plan better for the business years to come.

It will not happen overnight. It is also clear, but it's also a protection mechanism for us because we can plan better for the business here to come okay.

Geoff Haire: Okay, thank you. Bye. That's all the questions that we have for today.

Thank you.

Thanks.

That's all the questions that we have for today I will now hand, it back to Matt for closing remarks. Thank you.

Mathias Midreik: I will now hand it back to Mathias for closing remarks. Thank you. Very good. Thank you very much for the good questions, good discussions, and I look forward to hopefully seeing many of you during our London Roadshow next week, the Paris Roadshow, and also here in Brussels. Thank you very much and have a great weekend when it comes. Greta, you can close the call.

Very good. Thank you very much for the good questions. Good discussions and looking forward to hopefully see many of you during our <unk>.

London Roadshow next week per restructure and also here in Brussels. Thank you very much and have a great weekend when it comes.

Operator, you can close the call.