Umicore SA (UMI) Earnings Call Transcript & Summary

Good morning, everyone. And thank you for joining Umicore's conference call this morning. The reason for the call this morning is to provide some color to the brief trading update which we released this morning and to answer any questions that you may have regarding the update. Given the low market visibility, which has prevailed since the beginning of the COVID-19 outbreak, I thought it would be appropriate to provide you with an update of trading conditions since we last spoke at the end of April. As I mentioned in previous communications, my priority is to keep Umicore employees safe and healthy, and we adopted a comprehensive set of precautionary measures early on at Umicore in order to minimize the risk of on-site contamination. We have also provided support to our employees to help them stay healthy outside the workplace. All in all, our preventive approach has so far proven effective with a number of infected employees remaining very low. And I'm grateful that my colleagues have been following the sanitary guidelines with a high degree of discipline. The good news, generally speaking, is that we have moved past the peak of the pandemic in several regions, allowing society to gradually reopen. I would like to use this occasion to express once more my admiration to those who have fought and continue to fight the pandemic on the front lines. This gradual reopening is also a positive development for Umicore employees. You will recall from the communication at the end of April that we had to shut down most of our automotive catalyst plants outside China, Korea and Japan, following the closure of many of our automotive customers' assembly lines. As a result of these shutdowns, about 10% of Umicore employees had been furloughed. This number is now down to 3% of our employees. Let me now elaborate on the developments in automotive catalysts since our last communication at the end of April. In China, we have seen demand for automotive catalysts recover in recent weeks somewhat faster than was anticipated at the end of April, and Umicore's catalyst production in China is now back to full capacity. While this is a very satisfactory development, it is impossible to make out today if demand will remain equally sustained in the second part of the year. Outside China, the picture is less buoyant. Automotive OEMs have gradually restarted production in most plants, albeit with some delays compared to their original schedule. In addition, car sales are picking up at a modest pace in Europe and North America. They remain subdued in Korea, Japan and Southeast Asia, and they are very weak in South America, where the pandemic is unfortunately still gaining ground. We have resumed catalyst production in all regions and tuned it to the pace of market recovery. The faster-than-expected recovery in China is more or less compensating for the more subdued developments in other regions. And all in all, the comments we made at the end of April and the directional guidance we provided then regarding the automotive catalyst business remain valid. And I still expect the full year recurring EBIT of this segment to be well below the levels of 2019. You may also recall from our communication at the end of April that we were assuming that global car production for the full year would be down approximately 25% compared to 2019. My views in this respect have not changed. The sales of electric vehicles have also been substantially affected by the COVID-19 crisis, leading to a downturn in the demand for cathode materials. The full effect of this downturn, as anticipated, has started to be felt in the second quarter. The comments we made at the end of April and the directional guidance we provided then are still very much valid. And similar to Catalysis, I expect full year recurring EBIT in Energy & Surface Technologies to be well below the levels of 2019. While market visibility remains pretty limited in the short term, the midterm picture in Energy & Surface Technologies remains very promising. The crisis has not changed the need for a transition to cleaner mobility, and several stimulus programs have just been announced in China and in Europe, which should support the adoption of electric mobility. In China, for instance, the existing subsidy scheme for new energy vehicles has been extended by 2 years through the end of 2022. In Germany and France, new incentive schemes are being introduced with subsidies up to EUR 9,000 for buyers of electric vehicles. Additional stimulus programs may be announced soon in Europe, and new budgets have been set aside to accelerate the installation of charging stations. Our investment project in Poland is making good progress, and we expect commissioning to start towards the end of this year on schedule. This investment will help us address the growing European demand, and the support we have just obtained from the European Investment Bank goes to show how well this project fits into the plans of the European Union to develop a sustainable and innovative battery value chain in the region. In recycling, we continue to benefit from very good market conditions across the board, high availability and good supply mix for the precious metals refining operations as well as in jewelry and industrial metals, high metal prices, high demand for investment products and favorable trading conditions for the precious metals management business. Regarding metal prices, rhodium continues to stand out and to prove supported. I expect the contribution from the recycling segment to be well above the levels of 2019 and market expectations. However, this strong performance may not be evenly distributed over the 2 halves of the year, taking into account some seasonality effects and the fact that the scheduled maintenance shutdown of the Hoboken plant will take place in the second half of this year. You may recall that in 2019, we had an extended shutdown in Hoboken in the first half of the year. And of course, it remains to be seen how metal prices and trading conditions will develop in the second half. Having commented on the expected performance of the 3 business groups, well above 2019 for recycling and well below for Catalysis and E&ST, where does this lead us in terms of group performance? Today, I can provide some guidance for the first half, and I can say that we expect recurring EBIT in the first half of the year to be broadly in line with the levels achieved in the first half of last year. This reflects a significant increase in the contribution from recycling and lower results in Catalysis and Energy & Surface Technologies, as expected. Unfortunately, it remains impossible at this point in time to formulate any reliable quantified guidance for the full year as visibility over market demand in the second half remains too low. Back at the end of April, notwithstanding the limited visibility, we communicated that we expected full year recurring EBIT for the group to be well below the levels of 2019. The directional guidance we gave then still stands today. In other words, I still expect full year recurring EBIT to be below the levels of last year. A few comments regarding our balance sheet before opening the floor to your questions. As you could read in the press release this morning, we have continued to increase liquidity since the end of April. We now have EUR 1.5 billion of immediately available cash, an improvement of some EUR 300 million since we last spoke. Our balance sheet is strong, and we have a well-balanced debt profile with no maturities of any material size in the near term. Our CapEx plans were adjusted at the beginning of the pandemic, and we still expect full year CapEx spend to be in the range of EUR 400 million to EUR 450 million, in line with the guidance we provided at the end of April. Finally, our net debt has increased since the beginning of this year due to high PGM prices. These high PGM prices benefit margins in recycling. At the same time, as Filip explained back in April, they result in higher working capital requirements. With this, I would now like to open the floor to your questions. From a practical point of view, you will have to raise your questions through the chat box, and Evelien will act as a moderator on our side.

Thank you, Marc. And we have a first question from Geoff Haire. Do you expect recycling to be at record EBIT levels this year as in 2H '11 recycling delivered an EBIT of EUR 153 million? And now, in the first half, you expect to be above this level. Also, can you give us some guidance for depreciation in H1 and H2?

It will all depend on the -- how metal prices and trading conditions develop in the second half of the year. So it's -- that is difficult to or impossible to make out today by definition. But assuming that the current metal prices and trading condition would persist throughout the balance of the year, we indeed would expect to achieve very, very high results in the recycling segment. As I mentioned in my introductory remarks, all the planets are aligned today. We have very good supply availability and very high quality of the supply mix. Supported metal prices, supported trading conditions. Good demand for investment products. So all in all, if these conditions continue to prevail, yes, we should have a very strong performance for the full year. Please bear in mind, though, as I mentioned a moment ago, that there is some degree of seasonality in the results of the recycling segment, for instance, in the jewelry and industrial business unit. And that unlike last year, the maintenance shutdown -- the scheduled maintenance shutdown of the Hoboken plant will take place in the second part of the year.

Yes. And maybe on the depreciation. So based on the CapEx guidance we have given, I would guide for a D&A depreciation level for the full year of about EUR 270 million. You know that there may be some timing effects, so it's never an exact science. And for the first half, obviously, we'll give you the exact number in July. But for the first half, I would guide towards something like EUR 130 million of depreciation charges.

We have a question from Ranulf also for Filip on the working capital bridge. What capacity utilization is it today in Catalysis, RBM and CSM? Presumably, inventories were ramped down and now ramping back up. Receivables still coming down. What about working cap in recycling going up on metal prices? What are the mechanics of the rise in working capital in recycling? So quite a lot of..

Yes. Very complete question. And obviously, we'll provide some more color again in July. What I would say is, in terms of working capital, the main driver, as Marc has mentioned, and as we also mentioned end of April, is clearly metal prices. I mean -- and especially whether it's a combination of precious metals and PGM prices, which really drive the working capital in, I would say, in Catalysis, for obvious reasons. You will see that also in the turnover numbers that we will be reporting that this price effect is again quite substantial. You asked good questions in terms of the mechanics. The COVID impact and the fact that we have different plants operating at different levels at different points in time, for example, the differences between China and the rest of the world, make it very difficult to answer your questions. And I would say the disruption to the supply chain means that it's very difficult to give details. But obviously, when plants shut, you have inventory already on board. So to bring that down is not as straightforward. Another example, as plants ramp up, again, for example, what we've seen in China, you get indeed an increase in receivables. So it's really a mixed effect. I would say that most of the effect clearly is metal price-driven is in Catalysis. And the other element I would add that in recycling, we have the Hoboken operations, which are relatively low in working capital, but we also have some other businesses in recycling, the jewelry business, the metals management business, which may also feel an impact from metal prices. I hope that answers your complete question, but we'll provide some more granularity in end of July.

A question from Mutlu on the EV subsidies. When do you expect these subsidies in Europe and China to benefit your sales numbers?

That's a very complicated question to answer today because, as I mentioned already at the end of April, I do not expect that buying a new car would be top of mind of most consumers. Clearly, the COVID-19 crisis and the ensuing recession are having an impact on the purchasing power of consumers. And there are probably other priorities in terms of consumer behavior today than going back immediately to the dealership to buy a new car. Let's face it, buying a new car is a decision that, in many instances, you can postpone if your purchasing power is being affected. So difficult to make out. The good news that I see there is definitely that electrified mobility is being confirmed as the solution of the future in terms of cleaner mobility for passenger car applications and that the willingness of a number of regions to go in that direction is totally unaffected by the crisis. So it is good to see that the stimulus programs, our focus on clean mobility instead of like was the case in 2008 to be undifferentiated. So I see that as a positive, but clearly, it is difficult for me to put a timing on this. We'll have to see how sales figures of new cars and order books of our customers fill up in the next few weeks. Visibility is pretty limited in that respect today.

A question on recycling. And how much of the profit increase has been metal price volatility? And how much was a function of higher prices?

You may recall from -- those who have followed Umicore for quite a while may recall what I said on a number of occasions in the past is that the -- when metal prices are high and volatility is high, their contribution of precious metals management to the segment results is disproportionately high. And this is one year where we observed this phenomenon to the full extent, indeed. Yes. So it's -- I would not want to quantify that and can indeed confirm that the contribution from both metal prices, PGM prices, in particular, for the unhedged portion and for the unhedgeable metals and the high volatility are proving a significant factor in the current picture and are proving extremely supported.

A question from Charlie Webb. Can you please provide us more details in terms of what you're seeing in your battery material business through to date? Is this business down in line with the market? Have you seen a sequential recovery? Is there greater competition for new volume wins?

Yes. So I see a number of trends in that business. I believe that we are doing in line or slightly better than the market. You have undoubtedly monitored EV sales in recent weeks and months and have seen that they have remained fairly depressed in all regions around the world. And I don't know when they will pick up. I mean I refer to the previous question, and the impact of the subsidy schemes remains to be seen when the sales of EVs will recover. So I believe that in that context, we have -- based on the view I have on our business and on the market, that we have done relatively well, meaning in line or slightly better than the market. But the market has not been good. Let's be clear about it. Now there is one factor also to be taken into account, and that is the fact that our customers in the battery value chain for EVs have been gearing up for a significant growth in battery production and in EV production in the course of 2020 and have developed capacity and inventories as well to prepare after that. Now with the significant decline in sales of EVs, there has been a widespread correction in the value chain of inventory levels. And that has, to a certain extent, exacerbated the decline in demand for capital materials across players in the industry. So the picture is not great. And as I mentioned back in April, clearly, the picture is not great for Catalysis. It's not great for rechargeable battery materials. And in the overall context, I believe we are doing relatively well and are continuing to prepare for future growth as we also indicated in the release.

A question on recycling again. Can you talk about the very good supply and trading conditions that has been covered, but which areas were the strongest, and where do you stand in terms of capacity utilization in total?

Yes. Maybe let me perhaps start with the last part of the question because that's, indeed, a subject that I have not addressed in my remarks and has proven a significant factor. As I mentioned in prior years, we had been working on ramping up the new capacity quite systematically and, in the course of last year, continued to make investments to be able to ramp up to the full potential of the plant. As I mentioned also on previous occasions, this effort was going to be done by the end of 2019, such that we will be able to benefit from the full potential in 2020. And I'm happy to report that this is indeed the case and is also explaining part of the spectacular improvement in results and expected performance compared to 2019.

Maybe to follow up on recycling. You talked previously about improving trading conditions as Euro 5 diesel catalysts are now coming back, and China has introduced stricter rules on end-of-life electronics. Has that helped?

Definitely. Definitely, these 2 factors continue to help. The availability of spend catalysts will continue to improve in the coming months and years because of the time lag effect between the moment these catalysts are being produced and fitted on the cars and the moment they are collected at the end of the useful life of the car and become available for recycling. So typically, there is a time line of, let's say, 12, sometimes, a little more, 12 years, sometimes a little more, which means that today, we see the inflow of catalysts from Euro 4 and Euro 5, the generations, starting to come to the market in growing numbers. And at a later point in time, you will start to see, I would say, also the Euro 6 catalyst -- or the China 6 catalysts that we have still time to prepare for that. But clearly, the trend is very supportive short, mid and long term. For electronic scrap, the same observation that the factors we mentioned as positives last time continue to prevail. The availability of electronic scrap continues to be good. And the fact, indeed, that China has closed its borders to solid waste is one of the reasons behind that.

A question for Filip on the hedges. Have you hedged more of the 2021 price exposure for the different precious metals and PGMs?

Compared to what we said end of April, there's nothing really new to mention. And what we said then is that, indeed, for 2020, we have -- I mean the large majority, more than 2/3 of precious metals, and we are thinking of gold and certain PGMs, hedged in terms of the expected exposure. And for 2021, we have a majority for those same metals, indeed, had shown no news versus end of April. And obviously, again, with the caveat that volume is not hedgeable, it is, therefore, not hedged.

We move back to cathode materials. LFP cathodes are gaining traction in China. Do you see the same trend in Europe? And what does it mean for Umicore?

No, we do not see a similar trend in Europe. And my personal view is -- on the subject is that LFP is probably appropriate for niche applications. And what differentiates China and Europe in that respect is that when I say certain applications, it's for lower range because of the lower energy density. And the major difference between China and Europe in this respect is that in China, there is quite some available spare capacity for LFP, while in Europe, there is no capacity at all for any cathode materials, and the market is going clearly to NMCs and similar technologies. So I think that there is a convergence of factors in China, one being the appropriate use of LFP for certain less demanding applications and to the availability -- existence of ample available capacity.

We go to autocats again. For the first half of 2020, do you expect the autocat operations to be profitable at EBIT level?

Yes, I do. Modestly profitable, indeed, given what we experienced in the second quarter of this year, I should say, since mid-March, but in particular, in the second quarter, you have seen the car sales statistics for the month of April and May all over the world. And so we have been able to make out that outside of China, the market has been extremely weak. So that will have an impact. This being said, yes, again, I can repeat and confirm that the autocat business in the first half will be in the back.

How much of the working capital build for the new cathode plants did you take last year? And how much is left to invest this year? And will you have the net working capital investment for Poland this year or next? So I think the first one is referring to China, and the second is then specifically on Poland.

Yes. So related to the working capital increase we've guided for the first half of this year, so this does not yet include the expansion in Poland. So that's really what we mentioned. It's metal prices, PGMs, fresh metals. And so that means that most of this ramp-up of this investment in working capital will come next year since we will -- I mean mark the timing in terms of the commissioning of the plant. So that will take place next year. And most of that, we will -- I mean we still need to have. Obviously, that doesn't mean that part of the working capital, we may have secured in recent years, but most of it, you will see coming through. And in terms of timing, that will be next year.

Back to the cathode market. So we discussed already LFP, but there's also more discussed about the hybrid NMCA chemistry. How is Umicore looking at this evolution? And would you be able to supply NMCA if needed?

As I've mentioned on previous occasions, when we talk about NMC, we actually refer to the broad family of technology that includes these nickel materials, nickel, cobalt and other components. So that covers equally NCA and hybrid technologies like NMCA, indeed. So it depends on the customer development. Certain customers have preferences for NCAs, other for straight NMCs. Some others go for the hybrid. We work on all the fronts with our customers and are pretty indifferent as to the choices made by customers. Actually, we're in a position, indeed, to supply any of these to our customers.

A few questions from Chetan. Clearly, an upside to H1 recurring EBIT versus consensus from recycling. Do you think H1 EBIT in Catalysis and E&ST are in the right ballpark? Or do you see upside, downside to these numbers?

Yes. To be clear, I do not see any upside to these numbers compared to the market consensus. And in a way, that's why I confirm that the guidance, the directional guidance that we provided at the end of April for both Catalysis and Energy & Surface Technologies was still very much valid. So there is no change in -- since the end of April in this business group that would lead us to revisit the guidance. And unfortunately, today, I do not see upside. I wish I could say something different. The reality of the automotive market is what it is, with very, very depressed figures for Q2 -- of car sales for Q2 and question marks for the remainder of the year.

Are you able to give any color on the cathode materials volumes in the first quarter and the second quarter? And based on current trends, you think cathode material volumes will grow for the full year 2020?

I would prefer to reserve that question for the half year publication. By the end of July, we should have a bit more color on that and, hopefully, somewhat better visibility. I would prefer not to answer that question today.

Can you discuss where the big part of the CapEx cut for 2020 is directed? It is -- in which segment was the biggest cuts done?

Well obviously, we're trying to adjust the CapEx to the market and all the different segments, so would not want to highlight one or the other. At the same time, making sure that the strategic projects that you -- that we have and that you very well know remain intact. So...

Yes, yes. I think that's -- what Filip has just mentioned is really crucial. So let me answer the question the other way around. Where have we not cut? And we have not cut on any environment, health and safety-related CapEx. And we have not cut on the strategic growth projects, like, for instance, or current investment program in Poland because we need to be ready in time with these production capabilities to serve the European markets.

We go back to recycling. Why is rhodium mentioned more often than palladium in recycling? Is Umicore overexposed to this metal versus the other PGMs?

No, it's actually because there is a technical difference or a mechanical difference between the 2 metals is that palladium is hedgeable. And as a matter of fact, we had hedged a sizable part of our exposure, while rhodium is not hedgeable and, therefore, not hedged and has a more significant impact on the variation in results, therefore.

A few questions on our competitive position in RBM. What are you doing to protect your leading position in rechargeable battery materials? You've always talked about scale being important to cost. But what about [indiscernible] building over 300,000 tonnes of capacity? Is this a threat to cathode pricing? Is it a threat to you? How are you responding?

Yes. As usual, I do not get carried away by announcements and announcement effects. And I would also advise you not being carried away by these announcements. The reality on the ground is pretty different compared to all the announcements. So next to scale, which is important, I would like to repeat that what matters are joint development programs with the customers. It's technology play and the ability to scale up. It's not only to scale that matters, but the ability to scale up complex technologies in line with the rapid ramp-up schedules of automotive and battery customers and maintaining the -- or meeting the quality requirements, the stringent quality requirements of the automotive industry. These are very challenging propositions, and this is where Umicore is -- and together with some years, Umicore is thriving. So our focus remains where I've mentioned on previous occasions that it was, that is technology development, joint development programs with the customers. It's process improvement. It is quality. And at the same time, it is building the scale.

There are a few questions on chemistries in cathode materials on LFP reviving -- or so-called revival. So we have covered that, but where do we stand in the development of our silicon-based anodes?

Yes. It's -- as we mentioned the last time we spoke about it, which must have been early this year or in the course of last year, these new anode materials are being sampled and tested by a certain number of customers, not yet in the automotive -- for automotive applications, though. So that is still ongoing. And while the first generation of materials is being sampled and tested, we have already started to work on next-generation of such materials for future programs and future applications.

We go to the guidance of the first half. When you say that you expect it to be broadly in line with the levels of the first half of 2019, does this mean within the single-digit range on either side?

Yes. I have to do the math. Now I would say, give or take, EUR 10 million either side. That's what I mean by broadly.

Will the RBM business be profitable in H1 2020?

Yes.

Going back to recycling. So you did answer -- when we talked about the capacity in recycling, you did mention that we had the increase in capacity, but you didn't answer on the capacity utilization. So if you could clarify that in overall consideration. So if you could clarify...

It is very high. It is very high. So you must assume that we have achieved the ramp-up that we said a while ago that we would achieve and that we are operating in an optimal manner. Please bear in mind, though, that we constantly make a trade-off between volumes and the mix in order to optimize our returns in that business. So when I mentioned that we're reaching the uptick that we have reached the optimum point, it's taking into account these trade-offs. So it doesn't necessarily mean that we are pushing through the maximum volumes. It's a combination of high volumes, high capacity utilization and ideal mix, high-quality and high-value mix.

And what about the utilization rate demand in your Korean and Chinese cathode plants?

Well it's pretty much in line with what you see in the market today. That's what I mentioned earlier. We are doing relatively well in the sense that we are moving in line or slightly better than the market. And so the capacity utilization reflects that. So it's not great. It's not where we want it to be, and which means that from a margin and operating leverage point of view, this is one of the factors which will weigh on the results. And that's why back in April already -- that's one of the reasons why back in April already, we mentioned that the results there will be well below the levels of 2019. So yes, there is, indeed, quite a way to go for us to be back to better capacity utilization rates.

Question for Filip again. Can you explain liquidity increasing by EUR 300 million since April while working capital has increased with only one -- this is -- okay. So there is only EUR 125 million of additional borrowings. So why did your liquidity increase by EUR 300 million?

Okay. May need to clarify that. I think you need to differentiate between, on the one hand, liquidity, on the other hand, the net financial debt on the balance sheet. So net financial debt, we wanted to update you to say that we see an increase. And again, that's -- working capital is a topic there, because we've seen in terms of market expectation that there was a market expectation to see stable net financial debt or even a decline in net financial debt. So we just wanted to give that guidance. Liquidity is a different concept. Liquidity is what cash availability do you have if you would need it in the future. And so actually, the increase between the EUR 1.2 billion of liquidity end of April and the EUR 1.5 billion, I think the message to send is that we have ample liquidity, and we have been able to increase it further. Actually, most of that and the increased -- EUR 300 million increase comes from undrawn committed lines. The example is the ECB -- the EIB line, the European Investment Bank line, which I mean, we're very proud of that one is committed, but it's undrawn today. So that goes into the availability in terms of liquidity but not in terms of the net financial debt. And so we'll update you on the net financial debt end of July. So there's 2 different concepts.

Yes. But if I may add. So it's a EUR 300 million increase, of which EUR 125 million is the new EIB line, as you described it, and the balance is made of new lines, committed lines with core relationship banks.

Which are also undrawn at this point. Yes. Indeed. Yes.

And do you expect to receive more battery loans in the future? And what is the rate of your loan announced this morning?

European Investment Bank?

Yes.

Look, you probably know that this process with European Investment Bank is a very, very thorough process. So we have been working diligently with the teams the last few months. And again, we're proud of that because it's not just about the money, it's about of the fact that I think it enters perfectly in the ambition of the European Union. So we're proud of that. Could we have future loans? I mean, that is a possibility, but obviously, that is not on the table today. But we have gone through that process. I think we've built that partnership, which, again, we're very proud of. The term, the interest rate is very attractive. Unfortunately, I cannot provide the details because it's not public. But you can -- and you know that is the principle also of the European Investment Bank, is that this funding is very attractive funding in terms of, I would say, market conditions.

Back to RBM. Can you describe the competitive landscape in Europe for RBM? Are you still protected, thanks to tariffs from imports from China? We hear that CATL is able to source cathodes from China. If confirmed, would that be a threat to you?

I would not talk about protection. The reality is that if you import products from China into Europe, there are import tariffs. So it's not forbidden to import. So everybody is able to import products raw materials from China as long as you pay import duties. So the point is not there -- or strategic positioning is such that we are the only player or will be the first player to have similar production capabilities in 3 regions, being Korea, China and Europe and a unique ability to serve global platforms in that respect. And as you will also infer from the European plans -- the European Union plans to build a regional value chain, innovative battery value chain, clearly, there will be quite some demand for local production, local sourcing in Europe. Every region, every country also has some local sourcing conditions for certain industries, and the automotive industry is no exception. So you should not only look at import duties and tariffs. You need to look at a combination of factors which justify -- will justify our presence in Europe.

A question on the battery recycling. Are you still considering a new plan for recycling of battery materials? Do you have an update on when there will be a decision on that matter?

Yes. That is still work in progress. And the indications that we have today is that we will not need to make an imminent decision in that respect because the availability of end-of-life batteries is still quite a while away. So we continue to fine-tune or process and engineering studies to be ready to push the button at a certain point in time, but it's not likely to be this or next year.

The shift to EVs is clearly supported by the European Union. Does this put long-term pressure on Catalysis?

Well, I think you would have to make your own assumptions about the pace at which EVs will penetrate the market and take over from combustion engines. Please bear in mind that the hybrids, plug-in hybrids are also quite popular in certain regions and still need a combustion engine. Now where I see pressure is clearly on diesel technologies because they have fallen out of great ways for a number of reasons that you know as well as I do. And you have seen quite a number of automotive OEMs given up on new diesel engine technology developments. So I see pressure there more than anything else in the mid -- in the short, mid and long term. Now when it comes to gasoline engines, the world will continue to need those for quite a while. And the good news, as we mentioned already back in our Capital Markets Day in 2018, is that the more stringent emission norms that are coming into force require or actually command higher catalyst value per vehicle. So you will continue to see, I would say, a trend of value increase, catalyst value increase per vehicle, which will be, at a certain point in time, partly offset by lower volumes, at another point in time, in the longer-term offset -- or more than offset by volume decreases. I'm not so concerned about that because this is exactly the reason for the strategic choices that Umicore made many years ago to be present across drivetrain with materials and solutions across drivetrain technologies and to continuously increase the value of our solutions per vehicle, which we do. And the shift in the long run to electrify mobility or to clean mobility, whether it's being electric, fuel cells, whatever, is actually a positive for us as it's driving up the value of raw materials per vehicle.

Thank you. There are a few questions still in the chat box, but I believe most of these questions have been answered -- situations on certain questions. If that would not be the case, please you can contact the IR team afterwards. But I think, Marc and Filip, that we have covered the questions.

So thank you, Evelien, for moderating the Q&A session, and thank you to all participants for joining the call this morning. And indeed, as have been offered, if you have follow-up questions, please do not hesitate to reach out to our Investor Relations team. So thank you for now, and wish you a pleasant day, and bye-bye. Talk to you soon.