Posted on 17 Jun 2024
Belgian sustainable materials developer Umicore is reassessing its growth and investment plans post-2024 due to the “disappointing” short-term battery materials outlook.
The company has downgraded earnings for its Battery Materials business for this year after a slowdown in sales. It foresees an adjusted EBITDA around break-even, compared to the €135 million previously expected. Sales volumes are set to be similar or lower than in 2023.
That’s because its cathode materials sales have been negatively impacted by the faster-than-anticipated termination of volumes from legacy contracts; a delay in the anticipated volume ramp-up in new contracts in Europe; and the non-materialisation of volumes for a Chinese battery OEM this year.
A “sharp slowdown” in the EV growth demand is impacting the entire supply chain, with customers’ demand projections for Umicore’s battery materials declining steeply in recent weeks, it says. “Customers in Europe are scaling back their electrification ramp-up plans. The take-or-pay mechanisms of these contracts come in gradually during ramp-up,” the company adds.
Ceo Bart Sap notes that while “disappointing,” like in any other significant industry transformation, the electromobility trajectory will not be linear, Kallanish reports.
“This is why we are re-assessing our own growth plan with agility and determination, while we maintain a strong belief in the long-term prospects of electrification,” he says. “We are adapting our pace to this new reality and are taking the necessary actions to navigate the immediate challenges.”
The company will phase its capex plans to “closely match the future growth pace of its customer base.” This year, it anticipates expenditure will not exceed € 650 million. A cost-cutting review is also underway.
Source:Kallanish
