Umicore says that in order to preserve cash and mitigate the impact of Covid-19 on results, it has taken several measures to reduce costs, improve working capital and delay certain investments.
This includes adjusting its production capacity where needed and furloughing 10% of its workforce. The company says that it is also delaying certain investments and expects capital expenditures for 2020 to be in a range of €400 to €450 million, below the levels of 2019.
Umicore notes that its automotive segment was particularly affected by the pandemic, with production at its automotive catalysts and battery materials plants located in China impacted, although production levels have slightly picked up since then. Overall demand for vehicles in this region remains however fragile, while outside of China, Korea and Japan, Umicore has temporarily stopped production at its automotive catalyst plants following the widespread shutdown of assembly lines of its automotive customers.
‘While the magnitude of the impact of Covid-19 on the global economy is becoming visible, its duration remains highly uncertain and the visibility on market demand extremely low,’ a press release said. ‘It is therefore impossible today to give any reliable quantified outlook for 2020. Notwithstanding this limited visibility, Umicore expects recurring EBIT for the group to be well below the level of 2019.’
‘The Covid-19 pandemic is causing unprecedented challenges to all of us and my first thoughts go out to people who are hardest hit and to everybody fighting the pandemic on the front lines,’ said Marc Grynberg, CEO. ‘Today more than ever, our priority is the health and safety of all Umicore employees. We have the ability to navigate these trying times and I am confident that Umicore will resume its superior growth trajectory once this crisis will be overcome, as the world needs to move towards a more sustainable development path.’
This story uses material from Umicore, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.