Investing in Umicore
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Investing in Umicore is an investment in Materials for a Better Life – our mission – supporting our growth and sustainability strategy.
Sustainability at Umicore is not only about minimizing the impact of our industrial operations, but also, first and foremost, about creating a positive impact on society. We will continue to harness all our capabilities and provide solutions to some of the most pressing societal challenges, including the need for cleaner mobility, the need for a circular economy or the need to address climate change with speed and decisiveness.
Our Let’s go for Zero strategy encompasses bold new ambitions and a strong corporate purpose and is supported by increased transparency and disclosure as well as best-in-class governance.
Our healthy capital structure provides funding headroom to execute our growth strategy while remaining equivalent to an investment grade credit status. Sustainable instruments are henceforth being favored in funding for Umicore and we recently concluded our first sustainability-linked loan, which for the first time ties our funding costs to our sustainability performance. This loan successfully refinances an existing € 300 million syndicated credit facility.
The Umicore share
Umicore shares are listed on the Euronext stock exchange. The total number of outstanding and fully paid-up shares, and the number of voting rights, are 246,400,000. During the year Umicore used 1,692,190 of its treasury shares in the context of the exercise of stock options and 110,500 for shares granted. In the course of 2021, Umicore bought back 1,270,000 of its own shares. On 31 December 2021, Umicore owned 5,200,995 of its own shares representing 2.11% of the total number of shares issued as at that date.
For the majority of 2021 the Umicore share price was subject to volatility, mainly driven by the market.
The share price started the year at € 40.15 and peaked at a historic level of € 60.00 on 13 August after a strong rally in July fueled by positive news flow on electric vehicles. Our record first half results were published at the end of July, driven by a strong underlying performance and high precious metal prices.
In a context of semiconductor supply shortages impacting the automotive industry and the related limited visibility, declining PGM prices, and continued uncertainty about the COVID pandemic, the share price gradually decreased from mid-August to reach levels in the mid- €40s by early December.
Our guidance release indicating significant earnings recalibration with respect to market expectations for the business group Energy & Surface Technologies over the 2022-2023 period triggered a sharp share price reaction in December, finishing the year at € 35.75. Changing perceptions of the cathode materials market by part of the financial community had also generated an overall critical backdrop.
Umicore aims to create value for its shareholders. There is no fixed pay-out ratio and the dividend policy supports a stable to growing dividend.
Umicore’s supervisory board will propose a gross annual dividend of € 0.80 per share for the full year 2021. This compares to a full dividend of € 0.75 per share paid out for the financial year 2020. Taking into account the interim dividend of € 0.25 per share paid out on 24 August 2021 and subject to shareholder approval, a gross amount of € 0.55 per share will be paid out on 4 May 2022.
Engagement with shareholders and investors
Umicore has a high free float with a broad base of international shareholders which at the end of 2021 were primarily situated in Europe and North America. The overview of shareholders holding voting rights equal to 3% or more and analyst research and consensus information can be found on our website under Share Information. 22 brokerage firms cover and publish equity research notes on Umicore, reflecting strong and global interest from the financial market in Umicore’s equity story and growth opportunities.
Umicore strives to provide timely and accurate information on its strategy, performance and prospects to its shareholders. Umicore will be further increasing transparency and disclosure and the first effects of this decision were visible in the announcement of the Full Year results for 2021. The Let’s go for Zero strategy also calls for more disclosure on ESG topics, which has been integrated into this Annual Report and will be expanded in reports for the coming years. A new chapter on EU Taxonomy [hyperlink to EU Taxonomy] reports on the Umicore business activities that contributed to the two EU Taxonomy objectives of Climate Change mitigation and Climate Change adaptation. Umicore is also aligning with TCFD recommendations to improve and increase reporting of climate-related risks and opportunities.
The Let’s Go for Zero strategy creation process was based on a materiality analysis in which players from the financial community were included. We continued to receive feedback from investors through interviews and ongoing dialogue, which strongly impacted the new strategic thinking on targets, disclosure and governance. In particular, a new remuneration policy will be submitted to the shareholders at the Annual General Meeting on 28 April 2022, explicitly integrating ESG targets in management’s remuneration and providing more disclosure on performance and weighting, with specific numerical targets.
2021 was another unusual year. Following the COVID-induced downturn in 2020, the first half of 2021 saw a strong recovery in demand in most of Umicore’s end-markets and a peak in precious metal prices. However, precious metals prices declined in the second half and severe disruption to the automotive industry was caused by the chip shortage. At the same time, Umicore was exposed to a less favorable platform and customer mix in its battery materials business. Despite these factors, 2021 was another record year in terms of revenues and earnings, after the records achieved in 2020. The 2021 results reflect the convergence of a strong operational performance in almost all our business units, with margins growing sustainably. A further strong external tailwind was provided in the form of record precious metal prices. These combined factors far outweighed headwinds such as higher raw material costs, higher fixed costs related to our growth projects and additional R&D spending.
The main topics discussed with investors in 2021 included the factors mentioned above, together with commercial announcements, the launch of our Let’s go for zero strategy, the transition to our new CEO in October and other changes in the management board, including the appointment of a Chief Strategy Officer in December.
In addition to the publication of press releases and the Annual Report, Umicore’s management and Investor Relations team communicated in 2021 with investors during virtual roadshows in North America, Europe and Asia, as well as through virtual investor conferences, webcasts (on 2 June an on-line capital markets day on our Let’s Go for Zero strategy), conference calls (such as on Umicore’s position in the hydrogen economy) and the Annual General Meeting of shareholders. Umicore’s disclosure covers both financial and Environmental, Social and Governance (ESG) performance and we regularly engage with our investors on those topics.
On 22 June 2022 Umicore plans a Capital Markets Day where the Management Board will set out our strategic roadmap to further build on our leadership positions in clean mobility materials and recycling and our pioneering approach to sustainability. Topics that will be addressed include:
the growth prospects in our key markets, in particular the expected drive train transitions in the automotive and transport industry
our ambition and capabilities to capture in full the anticipated exponential growth in demand for Rechargeable Battery Materials to power EVs, while delivering sustainable returns
the value creation potential over the next decade of Umicore’s Automotive Catalysts activities in a context of declining internal combustion engines volumes
the resilience and strong underlying performance of the Umicore businesses, including Precious Metals Refining, in less favorable metal price conditions
our ambition and plan to capture growth from the next wave of sustainability-driven markets, such as fuel-cell catalysts and battery recycling
our initiatives to secure our position as an industry leader in sustainability, technology and operational excellence.
For more, visit: UMICORE.COM/INVESTORS
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