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Hello, and welcome. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Umicore 2026 Q1 Update and Outlook Call. Please note that this call is being recorded. [Operator Instructions]

Thank you. I would now like to hand the call over to Bart Sap, Umicore's CEO; and Wannes Peferoen, Umicore's CFO. You may now go ahead, please.

Yes. Thank you. So welcome and welcome all, and thank you for being here on this Thursday evening. So first of all, before I go through the Q1 update and the outlook, of course, I would like to give some more context to the leadership changes that we have announced this morning. So first of all, we welcome Lily Liu as our new CFO as of August 1. She has a strong record at public companies. She has worked in the chemical industry, manufacturing, engineering industry. At this point, she's the CFO of Synthomer, before that at Essentra, Xaar and Smiths Detection, but she's also a Nonexecutive Director and member of the Audit Committee at DCC plc. So I believe she's a strong asset for Umicore to also continue on the great path that I set forward together with Wannes on focus on operational excellence and capital discipline.

Now next to that, we are also establishing a role, which is this Chief Digital and Transformation Officer within the ELT. You know that we have started the transformation journey, that we will be more process-oriented and that we also would like to establish a stronger performance culture. And now we want to drive that focus across the group even more. We want more alignment throughout the group. And of course, next to that operational excellence for which Marten Zieris, which we welcome, will be focusing on. He will also be focusing on the digitalization, information systems and, of course, also further working on that -- on the artificial and augmented intelligence throughout the group. So Marten Zieris has a strong experience in transforming organizations. I've worked sometimes side by side by him. I know he's driven for excellence. He's widely recognized in the industry for transformational projects. So we are very happy and also looking forward to welcome Martin next to Lily.

But it also means, of course, that if a CFO joins, our current CFO, Wannes, he will be closing a chapter here at Umicore after more than 20 years. Wannes has been the CFO for the company for 4 years by now. I really would like to thank him for his dedicated service, his strong leadership, especially in quite, let's say, particular times in the recent history for Umicore. So his commitment to the core strategy, capital discipline, operational excellence really has set the group now again on a strong footing. And I would say that he was definitely part of that success that we can share today. So Wannes will be handing over to Lily on August 1, but he will stay on until February -- end of February 2027 to do the further handover and continue to work on some projects that we have. But maybe, Wannes, you would also like to give some perspective.

Yes. Thank you, Bart. I mean, as you rightfully say, after 20 years with Umicore, I will be closing an important chapter in my career. I'm grateful for the great opportunities and the trust that has been put into me over the past 2 decades. In '22, I stepped into the role of CFO at the time when the company was entering probably one of its most demanding periods in its history. Over the past years, we navigated through an extraordinary combination of challenges, initially financing an ambitious growth agenda, then quickly facing unprecedented inflation and market volatility, adapting to a sudden slowdown in electrification, leadership transitions, including yourself, Bart, and a strategic reset with our core strategy.

Now what I'm proud of is that with our focus on cost and capital, we have been able to rebuild the company's financial health and the credibility in the capital market. I was also very pleased that throughout these challenges, the leadership acted as one team with resilience, discipline, creativity and a firm commitment to the long term.

At this point in my career, I realize that I've built quite a bit of depth over the past 20 years within the same organization. And this is where I also realize I still have many years but also curiosity ahead of me. So this feels like the right moment to pause, to reflect and to explore new horizons.

I also want to thank my colleagues and my teams for their unconditional support and commitment throughout these demanding and challenging times. I'm proud of the progress we achieved together, strengthening processes and systems, increasing the agility and consistently finding solutions under pressure.

Now in my final months, I remain fully committed to the execution of our strategy and to a smooth transition to my successor in August. And this to ensure the continuity and value creation for our investors. And finally, I want to thank the investors for their trust in me.

Yes. Well, thank you very much, Wannes. And of course, we have been working for a very long period together in different stages of our career. So I can say that you will be missed at the company. We wish you a lot of success. But in the next 4 months, I intend still to work very closely with you. So looking forward to that as well.

So this brings us actually to the Q1 update and then later on the outlook. So I think it's fair to say that for -- that we had a very strong start of the year. Our sustained commitment to operational efficiency, capital allocation and that value orientation is definitely paying off now that while there's also a supportive metal price environment. So we are in a very good position to perform solidly or even strongly in 2026, and we are very happy with where we stand at this point in time.

If I look at Catalysis, here also a strong start to the year, outperformance of the light-duty vehicle market as we see it today. We see also a strong demand in the EU, China, India, but also HDD in EU and China is also stronger than the year before.

In fuel cells and stationary catalysts, it's actually a story of two tales. I think the fuel cell market is soft also in China at this point in time in Asia, while the stationary catalyst market with the strong data boom and need for data centers actually is gaining momentum and further growing and actually is contributing very substantially.

Now also precious metals chemistry had a strong start. Of course, it's linked to the strong business in automotive catalysts. The good PGM environment, but also the overall business is performing stronger.

If we go to Recycling, then I have to say a very strong performance. The planned maintenance shutdown was successfully completed. Our JIM business units, Jewelry & Industrial Materials, really enjoyed from a strong recycling market for jewelry basically. So we really enjoy that market. But we also see across their portfolio, strong end market demand.

Precious Metals Management, we have seen significant volatility, of course, in PGM prices. That is a good environment also for Precious Metals Management to optimize and further leverage those market circumstances.

When I go to Specialty Materials, I would say it's an outstanding performance for that business group. We have definitely a noteworthy profitability for cobalt and specialty materials. There's a strong momentum in the cobalt market, especially running from '25 into 2026, and maybe we'll come back to that later during the Q&A.

In Electro-Optic Materials and MDS, the growth track is also there. And also, we continue to grow on the solid foundations of these businesses.

Battery Materials Solutions, our focus is still and will remain on value recovery. We have a slight improvement in CAM material sales volumes, but as earlier indicated, the weight of the take-or-pay element in the overall EBITDA contribution for 2026 is growing, probably at a higher level than we would initially would have wanted for the year. Anyway, we have these contracts exactly for these circumstances, so they are also part of our EBITDA.

BRS is moving according to plan. And as you have also noticed, our anode joint venture with Hyosung is also now completed.

Now if I now go to the outlook. I think we -- with a strong start in 2026, we now expect a group EBITDA to approach EUR 1 billion for the year. Of course, this assumes that the metal prices will stay around the levels of Q1 2026. We know the world is volatile, no needless to say. But right now, I think the things that move the world at this point in time where our direct exposure is limited. We have a very limited exposure to the Middle East in terms of sales and purchases or supply of materials. We're well hedged on the energy side. So yes, that gives us confidence looking forward.

If I then go to the business groups. Catalysis anticipated to further benefit from the strong market position in light-duty gasoline. We see a declining, of course, global internal combustion engine production, but still our volumes remain very solid. We continue to focus on quality and resilience of earnings as we have done over the past years.

And Recycling, assuming, of course, that this continued favorable metal price environment stays and also the activity level, there, we see that we see a performance, which will more than offset the setback that we were foreseeing in the lower average hedge rate from '25 into 2026 as well as the shutdown. So there, we now see further progression beyond those 2 negatives that we were foreseeing earlier. Now so we are convinced that our performance will materially exceed the current market forecast.

If we go to Specialty Materials, this business is projected to slightly exceed present market expectations. So there's a positive -- so I have to rephrase, I made a mistake. So it's projected to significantly exceed present market expectations or beat significantly. The positive momentum in cobalt market is anticipated mostly in H1. H2, we will see a more normalized performance there. And the top line growth, of course, is sustained with the strong demand for germanium and of course, the other end markets.

Battery Materials Solutions. For the year, volumes somewhat expected in line with previous years. As the -- as earlier said, the anticipated ramp-up of certain customer platforms is not coming as we would have wanted during our CMD update. Again, the improved performance for the year is reflecting our take-or-pay commitments that we have. So we continue to execute our stand-alone midterm plan, and we continue to reduce our cost base. And of course, we continuously closely manage our capital expenditure for this business.

For CapEx, we see a slight increase versus 2025, mainly because of selective high-quality growth investment that we're starting in our foundation business. We're also investing already in the engineering for the [ Orion ] flow sheet, so basically the expansion of the flow sheet of our precious metals refinery in Hoboken, Belgium, in which we still think to take the decision -- the final investment decision for the expansion in the latter half of this year.

Now on the leverage, there we can confirm that assuming current price environment, of course, stays, we would see leverage below 2, basically significantly below the initially anticipated of 2.5 as we communicated earlier.

So in a summary, we had a strong start in 2026. We see a good momentum. We see high activity levels in our business. We benefit from current supportive metal prices linked to the geopolitical situation and new end applications which are emerging, of course. But our expertise, but also our value orientation and efficiency focus allows us to benefit to the best extent possible from these evolutions. So I would say it's very energizing and good to see how Umicore teams are taking the next step courageously going forward. They take their accountability, they collaborate. And this way, we make progress on our core 2028 strategy and are putting the foundation for good results going forward.

With this, maybe I would like to suggest to open the Q&A.

[Operator Instructions] Your first question comes from the line of Thea Badaro of BNPP.

Congrats on a great start to the year. Two questions from me, please. On the Recycling business more particularly, you mentioned strong industrial metal and jewelry businesses in Q1. So I was wondering if some of that might be linked to the situation in the Middle East. So i.e., have you seen any prebuying or inventory build that has helped the performance? And a quick follow-up on this. Can you maybe elaborate on what makes you so confident in the division for the rest of the year?

Yes. So thank you, Thea. On JIM, no, it's not actually a prebuy. We had already strong momentum in 2025 and yet at the latter half of second half of the year that really continues into the first quarter. And of course, as it's over-the-counter business, you cannot just extrapolate that for the full year. So we have to see, but the gold price remains supportive. We still see very good collection at this point in time. So, so far, so good, I would say. So indeed, that's one of the main drivers in the JIM.

Now if you then step from that strong Q1 to the full year, we also see that in precious metals refining, actually, we see a very good performance going forward at current metal prices throughout the full metal basket. And remember that in, of course, the first quarter, we had a standstill. So that means in the other months, we are good to process volumes.

Your next question comes from the line of Chetan Udeshi of JPMorgan.

I have a few. First one was, I'm just curious, you have a note in your release at the very bottom on the take-or-pay accruals. So you are essentially saying the way it works is you're accruing the take-or-pay contribution to your EBITDA. And then at the end of the year, it will be basically the difference between the committed volumes and the shortfall will be invoiced. I mean I'm just curious because historically, and we've had this discussion in the past, I mean, we've struggled to see customers uphold the take-or-pay volumes and Umicore are getting paid for it. So my -- I guess the risk is you are accruing this and maybe the customer just doesn't pay. I mean, have you seen that? How do we get comfortable that, that may not be the scenario that eventually plays out here? I know the numbers are small, but they are getting bigger as the volume shortfall perhaps is getting more substantial.

The second question was within your Specialty Materials, and you alluded a little bit to this in terms of your germanium business. I'm just curious how much of the upside in germanium is driven by pricing versus product? And what I'm trying to get to is how much of that upside is actually structural? And if you can talk about how you fit into the germanium value chain from a product perspective because I saw in your press release or media release recently, you talked about exposure to, of course, space satellites and stuff, but also silicon photonics and whatnot. I'm just curious how real these businesses are? Or are they still sort of pie in the sky in terms of [ jam ] tomorrow?

And the last question, it's a very natural sort of -- it's natural for people to think, okay, $1 billion of EBITDA for Umicore. Essentially, that's as good as it gets. I mean, what -- why would that not be the case? Like what we should be looking up to beyond $1 billion?

I like your ambition, Chetan. I like your ambition. Maybe, Wannes, you'll take the first one, and then I'll take the second question.

Yes, sure. So Chetan, looking at the take-or-pay, I mean, in past, we have different contracts in place, looking at some of the legacy contracts. So looking at this current contract, this is a particular contract where the contract is that the accrual -- I mean, that the shortfall is being monitored throughout the year and accrue for the shortfall. And then at the very end of the year, once we have the full view on the effective volumes shipped versus contractually agreed, that's where we then issue the invoice for the shortfall. So again, here, what we want to do through that note is also bringing that transparency that some of the fundamental support to the step-up in EBITDA is also coming from some of those take-or-pay accruals.

Yes, exactly. So on Specialty Materials and specifically -- more specifically germanium. Well, as you probably are all aware, today, there's not 1 kilogram of germanium leaving China for no matter what application, especially because, of course, germanium is critical for technology advancement. But of course, it's also a metal that is typically going into the defense sector. What we have seen both in customers across Europe, both at the governmental, but also at the general customer level as well as in the U.S., we really see heightened demand and a structural longer-term demand where customers are really also committing.

So yes, there is, of course, a tailwind of the germanium price because I mean, it's significantly higher, right? But at the same time, also on the product side and on the pricing side of the end products, we also see good progress. We also have some initiatives in the U.S. to further expand our capacity as well as in Europe. So this is one of these selective high-quality growth initiatives I typically refer to. So we are excited that this business will continue to grow in the next years with what we see today.

Clearly, the limitation of the export of China, of course, triggers through in the metal price and availability. That's an important driver going forward, but the momentum is now, and we will definitely do everything to seize that momentum.

Well, beyond the EUR 1 billion mark, I mean, I'm happy that you say that, of course, the EUR 1 billion is, well, in your terms, as good as it gets. I mean, let's see what really is good in the end. Of course, it's not today a CMD that we're doing on the future for Umicore beyond what we have today. But as I said before, given the geopolitical situation, the particularities around the ICE and the CO2 -- basically the CO2 tolerance in the U.S., the longer momentum for ICE in Europe, right, and also the way that China is limiting today exports of key materials, I think these are all positive undercurrents for our business, and we will continue to explore options how we can further capitalize on that.

Your next question comes from the line of Sebastian Bray of Berenberg.

I have one just on the IONWAY JV, which is not mentioned in the press release. But conceptually, the single largest use of capital at Umicore over the last 2 or 3 years has been the business which is performing the least well. People don't seem to muster the same enthusiasm internally when talking about the battery opportunity as is the case with market share gains in Catalysis and Recycling. Is this JV really going ahead as conceived? I mean you have a new CFO who has spent a lot of time restructuring the 2 previous companies. Is this full JV likely to proceed as conceived?

And my second one is a quick one, but the local press in Korea, I think, picked up that Umicore is going to receive EUR 120 million for its silicon anode contribution JV, which Hyosung will have an 80% stake in. Does this mean that the H1 results, there's an incremental EUR 120 million inflow?

So maybe I'll take one and you take 2, Wannes? Well, no, I think as we said before, I mean, we have the IONWAY joint venture together with PowerCo, so a daughter of Volkswagen. Both parties continue to contribute capital, and we continue to finish off this site. So there's no update to be given there. It is true that, of course, Lily has been instrumental in some of the restructuring and of course, putting the companies back on track at different -- well, at different companies right now. So it shows that she can focus really also on the finance operational excellence and capital allocation, but it's nothing to do -- you don't -- there's no read across at all with the IONWAY joint venture.

Yes. And looking at the joint venture that we concluded with Hyosung around the silicon anodes. So this is where Umicore contributed the assets and the IP and where Hyosung contributed capital in order to support further scaling. So looking at the next phase in that scaling being industrialization, this is where Hyosung will contribute further capital to the joint venture, but where Umicore gets diluted through that capital contribution by Hyosung. So it's not something you will necessarily see one-to-one in our balance sheet.

[Operator Instructions] And your next question comes from the line of John Campbell of Bank of America.

I wanted to just come back on the topic of your Battery Materials business. And maybe if you could reassure us related to the contracts that you have, there's no risk that you see, for example, that anything could be renegotiated such as any of the ramp-up phasing, ramp-up scale, et cetera, just to get, kind of, get comfortable on the take-or-pay clauses that none of it could be kind of watered down even if they proceed and go ahead.

Yes. No, I think our stance hasn't changed. I mean we have very strong contractual clauses. We will continue to enforce and leverage basically these contractual clauses. Nothing has changed to our stance in this respect and nothing to be mentioned at this point in time related to the question that you posed.

The next question comes from the line of Chetan Udeshi of JPMorgan.

Sorry, one last follow-up. You're saying CapEx will be slightly above last year. So are you able to quantify maybe it's, what, EUR 350 million, maybe less than EUR 350 million? And I'm asking this because you are taking this FID on your new brownfield expansion in Hoboken. And I'm just curious whether that will come on top of the -- of that number? Or is that CapEx mainly next year and the year after, so it won't impact the CapEx for this year?

Yes. So Chetan, a very good guesstimate, I would say. So indeed, we target a rough order of magnitude of EUR 350 million. And this includes the engineering that is ongoing for the expansion in recycling.

So yes, the majority of the CapEx will come in indeed '27, '28, '29 as we previously guided during the CMD. So we're perfectly according to plan.

There are no further questions at this time. With that, I will now turn the call back over to Bart Sap. Please go ahead.

Yes. So thank you, everyone, for attending the call. Once again, I think we're off to a great start for 2026. We are set for a solid performance for the overall year. Once more, I would like to thank [indiscernible] Wannes for all his contribution and resilience during these particularly interesting 4 years at Umicore with ups and significant downs. I continue to look forward to work together with the teams, also the new team members joining to further build on the foundations of the group and to continue to be ready then when opportunities come that we actually can strike those. So I wish you all a wonderful evening. Thank you for attending and talk to you soon.

This concludes today's call. Thank you for attending today's call. We hope to see you soon. Have a wonderful day, and stay safe.

Ladies and gentlemen, welcome to the Umicore Full Year Results 2025 Conference Call. Your speaker for this call will be Bart Sap, CEO; and Wannes Peferoen, CFO. [Operator Instructions] I will now hand the conference over to the speakers. Please go ahead.

Good morning, everyone, and welcome to the full year results 2025 of Umicore. And as you can see here, of course, we have taken this picture, a beautiful gold nugget. And I think for the ones following us will understand why we have put that picture forward. And of course, I'll be coming back on that later when I look back on 2025.

Now if you read our set of numbers, I would like to highlight again that we have adjusted during the CMD a new reporting structure, different segmentations in our business group. So please do have another good look at this slide because we will be reporting and commenting the numbers in the new structure. So Wannes is sitting here on the left with me, and he will also comment, of course, on the finance and some of the business trends as well as usual.

And let's have a short look at the agenda. So nothing particular here. First of all, we go on the core strategy, the key numbers. We're going to go over the outlook ultimately for 2026 and then hopefully have an engaging Q&A at the end of the session.

Yes, our core strategy. Now we launched our core strategy in March 2025, where we indeed had a different approach and not just chasing growth at any cost, much more towards that value recovery and battery materials, but also more value extraction in our foundation businesses. And roughly around the time that we were announcing our CMD, our new strategy, the world started to move violently, I would say. And the geopolitical landscape has been changing fundamentally. And therefore, also the markets as well as supply chains have been reshaped and continue to be influenced by new policies coming out. So the world is structurally different versus roughly a year ago. Volatility is, for the time being, the new normal, and we will continue to navigate and, of course, react and adjust according to the volatility that we see.

Now if I zoom out and see what's happening in the world, it's clear that we have a much more fragmented world and that the world is waking up that if you want to be a technology leader, if you want to have a strong economy going forward, you need these critical raw materials. You need to have your own supply chains, and that's where Umicore's circular business model, which is multi-metal on the one hand, on the recycling refining side, but also on the materials that activate the world downstream, the applications downstream is more relevant than ever. So having a secure and sustainable supply chain in different parts of the world becomes a key element for society.

And this is right up the alley of our strategy, and we [indiscernible] our business model with 4 key pillars: capital, performance, people and culture and partnerships. And let me now highlight some of the achievements that we had in these different segments over the years and some of the actions that we took. First of all, on the capital, and that was the first picture of the presentation. Obviously, we sold and had a subsequent lease-in of our permanent gold inventories. This has unlocked significant value. This also has helped further to deleverage the company, but also it transitions the price risk, the long-term prices of these inventories outside of Umicore.

Now we also said at that time that lease rates for gold are typically stable. It's an alternative versus cash or pure money in the end. And even in that volatility and that frenzy, let's say, around PGMs at this point in time, also lease rates have -- for gold have remained stable at 0.5% to the 1% mark, well below typical financing rates that you would expect for normal debt. Now next to the gold, we also have been very disciplined on our CapEx. Remember, we guided at the start of the year more to EUR 400 million. In the end, we came in at EUR 310 million by making deliberate choices, but also being very strict on the execution of the projects that we are having.

If I go to the performance pillar, there the full year results is in line with our latest upgraded guidance. So we said between EUR 790 million and EUR 840 million during the summer. We came out slightly above that EUR 840 million. So we're very satisfied with this set of numbers, a strong performance, I would say. And this was really, really also supported by the efficiencies, targets and the mindset that we are cultivating more and more within Umicore. And we promised EUR 100 million. We achieved that target, and Wannes will explain later on, of course, that has helped to offset the inflation, but also some FX headwinds that we had in2025.

So I mentioned it already, we're driving the company much more to a performance culture where we take our accountability. We really focus on what is the essence. We do what we need to do in a very disciplined way, and this is showing results, and we will continue to push forward in that direction.

On the partnerships, we also not have been sitting still, I would say. We had quite some action there as well. And we closed a partnership around our silicon anode materials with a Korean company, HS Hyosung Advanced Materials. And together with them, we will industrialize this really an interesting and exciting technology, and we found a way actually to bring that technology to the market without having to allocate excessive cash or very sizable amounts of cash for Umicore.

Next to that, critical raw materials. We have been working on that trend, of course, already for quite a while. And we announced our partnership with STL, Societe du Terril de Lubumbashi. So basically, we have shared technologies, have upgraded installations in the DRC in order to recover germanium from old mining tailings. And this was really a support for the business going in '25 and beyond.

Now let me go to the key figures. Wannes will go in more detail, so I'll stay pretty high level here. I would say we really had a strong performance in our foundation business. It was supported by group-wide operational excellence efforts and a favorable metal price environment. EBITDA up 11% to EUR 847 million, 24% EBITDA margin, a good free cash flow supported by the gold inventory sales of EUR 524 million and leverage of 1.6. I think we can all agree this is a very solid set of numbers in the current environment that we live in. So happy with that.

Let me now go to the different business groups. Let's start off with Battery Materials Solutions. So for your reference, Battery Material Solutions now represents, on the one hand, Battery Cathode Materials and the battery recycling business. And before I go in the details of the different business units, I would like to have another glance at the Battery Cathode Materials and EV markets out there at this point in time. So at the CMD in March 2025, we said that this market is still taking shape and has inherent volatility. Well, that's what we have seen in 2025 and also what we continue to see in 2026.

EV penetration around the globe is progressing, but at quite different speeds, China leading decisively. Europe is following more moderate and U.S., well, there, actually, we are quite behind. And of course, the policy change of the U.S. -- the new U.S. administration is not helping that. The CO2 tolerance is much higher than in previous administrations. That is clear. And that's why the policy is shifting and pivoting away, I even would have to say, from EVs to internal combustion engines, right? This clearly has an impact, and you have seen announcements that even battery makers in the U.S. are now focusing more on energy storage than pure EVs. And of course, quite a number of OEMs have had to make difficult announcements.

If I look to Europe and China, that's really a -- and it's depicted here as well with an arrow. That's really an area where there's an interdependency. Today, we see that China still has overcapacity that a lot of OEMs are relying on China to import their batteries into Europe. Also for cathode material, we still see cathode material flowing into Europe at this point in time. So competition is fierce. I think that is fair to say. Now at the same time, we also see that there's a heightened risk of trade tensions of potential restrictions on exports of certain technologies by the Chinese government on the one hand, but also in Europe, a much stronger talk about these local Brazilian supply chains and local content requirements.

So the next days, the EU is expected to come out with some policies. These will be important to monitor those and could really make a substantial difference in the European landscape. So in general, summarizing, the recent industry announcements are emphasizing that the growth in Europe is somewhat challenging, but it also highlights the increased importance of our take-or-pay contracts, and I'll get back to that.

Now going to the numbers. So if we look in 2025 for Battery Cathode Materials, we did see a revenue growth, a revenue growth of roughly 11% versus 2024. Volumes -- actual deliveries were up versus last year. We did collect take-or-pay compensation for contractual volume shortfall. And there was a partial offset by lower refining income because of a weaker, more challenging cobalt environment on the pure refining side. And also, of course, the nickel price environment was not necessarily beneficial. Now the adjusted EBITDA as per our expectation came in around breakeven, which is a clear improvement versus last year, where the breakeven result was still containing a substantial one-off, a positive one-off in 2024.

Now if you look at Battery Recycling Solutions, during the CMD, we said we would be roughly at minus EUR 25 million. We came in at minus EUR 21 million. Really also here, we continue to focus on optimizing our process and recycling technology. At the same time, we're also very diligent here on the execution and cost management. Overall, you can see a clear also improvement on the EBITDA level, '24 versus '25 despite that we did not have that one-off in there.

All right. Let's go to the next business group, and that's Catalysis. In good tradition, we also always start with an overview of the internal combustion passenger car production numbers. And here, we see that '25 is slightly lower than '24. It's not a substantial drop actually. It's minus 0.7%. Europe was more down. At the same time, South America and China, these regions even further progressed. If I then look at the HDD segment, Europe, a slight decline, but a positive evolution in China of 7.1% growth, of course, starting from a relatively low base as the previous quarters -- or actually the last quarters in 2024 were not strong.

Now looking at the numbers, a solid set of numbers. We see a sustained demand for our products throughout the business group in a volatile market, I would say, so in an overall challenging economic backdrop. At the same time, we also continue to focus on our operational excellence as we have been doing for the last years, and we're getting increasingly better at this year after year.

Now if I look to the Auto Cat, our volumes in Auto Cat were strong. We outperformed the ICE, so the internal combustion engine light-duty vehicle market, which reflects our strong position. But also the focus, as I mentioned, of operational excellence and efficiency is really part of the DNA. We continue further footprint consolidation, amongst others in Asia, where we have taken decisions around our Japanese operations.

Precious Metals Chemistry, that follows to a certain degree, of course, the Automotive Catalysts business with the inorganic chemicals. They're the supplier of the inorganic solutions to the Automotive Catalysts business. So also a strong performance there. A good set, of course, PGM price support helping this business also forward. Now our homogeneous catalyst business, which is selling typically in the broader chemical industry, we saw some softness in line with the overall chemical industry pain that we're all going through.

Fuel Cell and Stationary Catalysts, the earnings clearly improved. We had higher deliveries for our fuel cell catalyst solutions. We also are on track with our proton exchange membrane fuel cell plant in China, expected to start production in the course of 2026. On the stationary catalyst side of things, we do see a strong demand for backup power solutions and exhaust for these backup power solutions, specifically for data centers in the context of the high demand of the AI companies, AI application. So Catalysis EBITDA margin, 27%.

Recycling. Well, you cannot talk about recycling about -- unless you talk about the metal prices. And here, you can, of course, see that metal prices in 2025 are significantly higher than 2024. You know that Umicore that we decided to hedge quite a number of our -- quite an amount of our exposure forward. Why? It creates visibility. It stabilizes earnings profile and it also protects against downside risk. That means if the price environment rallies beyond the average hedge price, indeed, you have some opportunity loss. But still today, we're very happy with these hedges. Now on the remaining open exposure, of course, there's a positive upside of stronger PGM prices to the overall earnings of the business group segment.

Now if we look at the overall set of numbers for the business group, we see an advancement in the revenues. At the same time, a stable EBITDA performance with a 39% EBITDA margin. So in Precious Metals Refining, our revenues were in line with previous years. The metal price environment was supportive. We had good volumes. There were -- of course, we had some average hedge rates decreasing year-on-year, which was a backdrop or actually a drag, let's say, on the results as such. The overall mix was somewhat less favorable, still a very strong set of numbers for Precious Metals Refining.

We had some slight temporary process inefficiencies, which will no longer be there in 2026, but we were able to offset these by solid contributions from our operational excellence and cost-saving efforts also in this business unit. Jewellery and Industrial Metals, I mean, the central theme here is gold, gold recycling, gold processing. I mean, really a very strong market, strong revenue growth and also a good margin expansion. So this business is also doing really well on basically also the gold evolution and the gold focus, which is there in the market. Precious Metals Management, well, we've talked about already volatility in precious metals prices is an excellent market environment to trade and make trading gains. So this business unit also performed really strong.

Next business group would be Specialty Materials. And Specialty Materials is maybe a business group which is sometimes a bit yes, underrepresented or underappreciated maybe by the markets or -- and maybe we should also further strengthen our communication on this business group because it has a couple of beautiful gems in there.

If I look at the business group here, a 16% EBITDA growth in 2025, EBITDA margin approaching 20%. Cobalt and Specialty Materials, there was a support of a cobalt trend where we saw a better momentum for cobalt premium products, right? And also here, again, efficiency. You've understood by now that efficiency is really part of our overall performance, and that's why we continue to stress it.

If I look at Electro-Optic Materials, there we have seen that China has taken a stronger stance on exports and not a lot of germanium has left China in the course of 2025. We have this joint venture with, for instance, Societe -- so with STL basically, which I highlighted earlier. And this allowed us also to continue to supply our customers in a very strong germanium price market, added by our closed-loop refining and recycling services that we have. So Electro-Optic Materials sees strong top line growth at the end of the year, and we continue -- we expect to continue to see that growth also in 2026. So one to watch going forward.

Metal Deposition Solutions, I would say, overall, a good stable performance with a different mix between the business groups. But yes, also pretty good there. So I think this is where I would like to leave it at this point in time and hand the word to Wannes.

Thank you, Bart, and good morning, everyone. Today, I will start with EBITDA before moving on to cash flow, net debt, the P&L and balance sheet. Adjusted EBITDA was up 11%, reaching EUR 847 million, driven by volume growth across all businesses and efficiency savings. This broad-based growth resulted in EUR 125 million of EBITDA contribution. We also delivered EUR 100 million of efficiency benefits, which more than offset inflation of EUR 68 million. Metal result declined by EUR 17 million due to favorable hedges rolling off. This was partially offset by increased prices for precious and platinum group metals as well as minor metals for the remaining open or unhedged position. There was a headwind from foreign exchange of around EUR 45 million, largely due to translational effects as the euro strengthened. Adjusted EBITDA margin improved from 22% to 24%, in line with our Capital Markets Day target of more than 23%.

Now zooming in on our efficiency program. We delivered EUR 100 million of efficiency benefits, in line with our target. 25% came from top line growth, 20% was due to a reduction in cost of goods sold and 55% came from a reduction in SG&A and research and development, in particular, in Battery Material Solutions, Catalysis and Corporate. Headcount in the group reduced 3%.

Turning to cash flow. Cash flow from operations before changes in working capital amounted to EUR 1.1 billion. This was supported by cash proceeds of EUR 525 million from the sale and subsequent lease-in of the permanent gold inventory in recycling. We finalized this transaction in October last year. It enabled us to unlock significant value, strengthen our balance sheet and reduce finance costs. Net working capital increased by EUR 298 million, mainly as a result of higher activity and to some extent, increased metal prices. The significant reduction in CapEx down to EUR 310 million demonstrates our capital discipline. This reduction is most prominent in Battery Cathode Materials, where we are leveraging footprint flexibility and phasing our spending. Free cash flow from operations was EUR 524 million.

Moving to the net cash flow bridge and net debt. The free operating cash flow largely covered the EUR 250 million equity injection into our joint venture, IONWAY in January '25 as well as taxes, interest and dividends paid. In January this year, after the year-end, Umicore and PowerCo each contributed an additional EUR 175 million to the IONWAY joint venture. Net debt reduced slightly to EUR 1.4 billion, resulting in a leverage of 1.6x adjusted EBITDA, down from 1.9x at the end of '24. This is well below the anticipated peak of 2.5x as we focus on capital discipline and maintaining a solid balance sheet.

Looking at the consolidated P&L. Adjusted EBIT improved by 21% to EUR 579 million. Adjusted net finance costs of EUR 173 million were up EUR 65 million, mostly due to lower interest income on cash as rates came down and a negative impact from foreign exchange. Adjusted tax charges were in line with the prior year. Pretax income was slightly up, but the adjusted effective tax rate came down from 29% to 26%.

Adjusted net income of EUR 288 million was up EUR 33 million. And adjusted earnings per share were up 13% at EUR 1.2. We are proposing a dividend of EUR 0.50 per share, in line with last year and with our policy of a stable or rising dividend. And this represents a payout ratio of 42%. Adjustments to EBITDA amounted to EUR 365 million. As I said earlier, we optimized our business model in recycling by selling the permanent gold inventory and replacing it by revolving leases. This generates a pretax gain of EUR 486 million. This was partly offset by an impairment of our joint venture participation in Element 6 and provisions related to specific restructuring programs.

Adjustments to net result include a derecognition of a previously recognized deferred tax asset and the tax impact of the gold inventory sale. Net income was EUR 385 million compared to minus EUR 1.5 billion in the prior year when there was an impairment charge for Battery Cathode Materials. There was a big improvement in return on capital employed from 12.3% to 15.7%.

Now turning to the consolidated balance sheet. Our liquidity remains robust with cash of EUR 1.6 billion after repaying a EUR 500 million convertible bond in June. And as I said earlier, net debt was stable at EUR 1.4 billion, and the leverage ratio came down from 1.9 to 1.6 by the end of the year. Group equity improved to EUR 2.3 billion, corresponding to a net gearing ratio of 37%.

We have hedged a substantial portion of our metal exposure for '26, '27 and '28, and we continue to look for opportunities to hedge further, in particular, for '29 and 2030, taking into account market interest and forward rates. So to sum up, we delivered a strong performance in '25 as a result of volume growth across the board and EUR 100 million of efficiency benefits. Adjusted EBITDA improved in every business, except recycling, where it was stable and CapEx was well below the prior year. Selling the permanent gold inventory has given us additional headroom while reducing future finance costs. And we continue to focus on driving cost efficiencies, controlling working capital and disciplined capital allocation in '26.

I will now hand it back to Bart. Thank you.

Thank you, Wannes, for that overview. Very clear. Let's maybe have a look at the outlook for 2026. So the essence basically is that we entered the year on a stronger footing. And if I look at the different business groups, on Catalysis, we continue to have a very strong performance in this business group. We see that continue into 2026, and we are happy with the state in which it is, and that will continue going forward.

And Recycling, I think the essence is that in the current favorable metal price environment that we'll be able to offset the negative impact of the average lower hedged metal prices as well as the shutdown, which is foreseen in 2026. So also moving on well there. Specialty Materials, continued strong performance. We do expect we continue -- we believe we continue to see the top line growth, amongst others, in the germanium products, but also a supportive cobalt price environment will help to further support the results.

And in Battery Materials, we continue to pursue the midterm plan to recover value, while at the same time, we, of course, have to navigate a volatile and competitive market. So we continue to focus on rigorous capital allocation. We're going to continue to lever our customer contracts with our take-or-pay commitments on which we clearly say that the importance of the take-or-pay mechanisms is increasing given the volume development that we see. And in Battery Materials Solutions, we're going to continue to be disciplined in our spending broadly in line with 2025.

On corporate costs, we expect a slight increase because we continue to invest in AI-driven solutions to further enhance and support our operational excellence. For capital expenditures, we are expected to increase versus 2025. And this is mainly driven by a selective growth initiatives in Recycling. So engineering that we do for the decision we need to take around the expansion in Hoboken in our precious metals recycling business that we will take in 2026, but also selective high-quality growth investments in Specialty Materials. So on CapEx, we do expect to be in a range between this year and last year guidance of EUR 400 million with, again, a very good focus on disciplined execution.

So if I sum that up, I would say that we will not be providing a concrete guidance today and this is because the market is still very dynamic. And we will have to continue to navigate that environment. Yet based on what we see today, we would expect adjusted EBITDA to further progress into 2026.

Now shortly wrapping up before we go into the Q&A. So -- and this is also a shout out to the teams. I think 2025 was really a pivotal year. And Umicore and the teams have shown great resilience. They have shown great discipline also to focus on what our core is and taking courageous actions to basically be able to deliver this strong set of numbers. It's fully in line with our core strategy execution. We're well on track. We're entering 2026 on a much stronger footing, and we will continue to build on the momentum of 2025 going into 2026. So really positive 2025 and with confidence we go into 2026.

And with that, we go to the Q&A.

[Operator Instructions] The first question that we have is coming from Wim Hoste from KBC Securities.

Do you hear me?

Yes.

I have 2, please. On metal price hedging, you indicated that hedge levels in '26 will be below '25. Can you maybe elaborate a little bit on the outlook of your hedge book? Is it fair to assume that the hedging price levels will increase probably materially as from '27 onwards? Can you maybe elaborate on that? And then also linked to metal price hedges, what are the limitations to hedging more and further into the future? I think you indicated that you're looking to increase the hedging for '29 and 2030. What is prohibitive in this case? Is it just availability of counterparties? Is it financing costs, which get increasingly expensive, extending the hedges into time? Can you maybe elaborate also a little bit on that? Those are the questions.

Wim, Wannes here. I'll take those questions. So looking at the metal price levels of the hedges, that is something we don't communicate. But at the same time, we can also share that, I mean, moving from '25 into '26, there will be less support from the average hedge prices that we have looking at '26. At the same time, looking at the average hedges that have been locked in or the volume of hedges that we have locked in, looking at '26 and '27, this is where 70% on average of the exposure that has been locked in. So I think looking at the metal price exposure, this is where in the current favorable environment, there's still potential. There's still upward potential, but it's limited to that open exposure of, let's say, roughly 30%.

Now we are looking into hedging further looking at '29, 2030, again, on the back of creating that visibility, creating that predictability of the earnings. But this is where looking at the market environment, on the one hand, we see a heavy backwardation, looking in particular at the PGM prices, but also limited market interest from counterparties to lock in those prices, hence, also the heavy backwardation. So this is something that we are monitoring closely in order to secure basically at the right time, the right price levels for those years, '29 and 2030.

The next question is coming from Sebastian Bray from Berenberg.

Sebastian, we don't hear you.

I have a few, please. The first is on the financing costs. Are there any one-off [Technical Difficulty]

Sebastian, we lost you for a second. I will open your line again.

I think there's a lag on the mic, so I'm just going to speak. What would you provide as guidance for '26 financing costs? My second question is on the [Technical Difficulty]

Sorry, Sebastian, we really can't hear your questions.

What exactly -- why can't we go back by '28, '29 to a level of recycling earnings akin to what we had in '21, i.e. [Technical Difficulty]

So maybe let's see what we think we understood. So I think there's a question on the one hand around financing evolution...

And final one on the VW JV. Is there any chance [Technical Difficulty]

Maybe we go to...

I think we have an issue with the line on your side, Sebastian. So I think it's difficult to receive your questions. If there is any opportunity to send them over the chat, that would maybe be helpful, and then we can move on for now to the next analyst, I believe, because it's difficult to take these as such. Gaia, can you move on to the next analyst, please?

Yes. The next question is coming from Chetan Udeshi from JPMorgan.

Can you hear me okay?

Yes, yes. Loud and clear, Chetan.

Okay. Cool. So I had a few questions. First one, I appreciate you're not giving the guidance, even though you gave same point last year, some guidance for 2024, but I also remember Umicore historically never gave guidance at the start of the year. So I don't know if you are just going back to the old practice. But just based on all of the things that you mentioned, qualitative assessment, what you've seen so far, what is your feeling on the consensus that we have from [indiscernible] for 2026? Do you have a view on where the consensus is? And is that in the right ballpark?

The second question, I was just curious on your take-or-pay contribution in the Battery Materials. I mean it's pretty clear right now that some of your customers like ACC, they publicly announced that they are scaling back the ramp-up plans. So I'm just curious, are you getting compensated 1:1 for the lost volumes? Or is it more a negotiation where you are still trying to be flexible if your customer can't take the volumes?

And the third question, on Recycling, you mentioned some process inefficiencies. Can you quantify that? Is that a material drag last year, which shouldn't recur this year?

Okay. Wannes, you go on the guidance or I can go on the guidance, doesn't matter?

Well, I think on the guidance, again, we highlighted it's too early to be very concrete. At the same time, looking at EBITDA, this is where we say, yes, we are confident on the year '26, and we expect to make some progress in '26. Looking at other elements of guidance. CapEx, we highlighted, we expect the CapEx to come in between EUR 300 million and EUR 400 million. We will continue to be diligent and disciplined. If you look at Battery Cathode Materials, we reduced the spend in '25 versus what we anticipated, and we anticipate to do the same for '26.

At the same time, looking at the foundation business, this is where in Precious Metals Refining, we are working. We're engineering on that expansion of the flow sheet that will result in some step-up in CapEx. And in Specialty Materials, we see some very specific growth opportunities, which we want to support. So hence, the range of EUR 300 million to EUR 400 million. Now the favorable metal price environment is obviously -- can be supportive to the EBITDA, but it can also put pressure on the working capital. And this is something where we will diligently work on in order to make sure that we can offset to a maximum extent any upside pressure on working capital. I think those are key elements, I think we can guide on today.

Yes, that's right, Wannes. And last year, we decided to guide because of the specific circumstances around all the trade uncertainty and the tariffs, right? So we wanted to be clear also there where group was heading and to give you clarity because it was probably the biggest uncertainty out there in the market at that point in time.

Now on your second question, the take-or-pay and the further progress. Well, first of all, I mean, I think we have been pretty transparent and clear that in 2025, there is indeed a portion of take-or-pay in the results for which we are financially covered. The ramp-up across contracts. I will not talk about specific contracts. I will never do that. But we see that across -- if I talk more broadly on the ramp-up, it is slower than what we would have wanted to see or what our best view was at the CMD in March. So the weight of take-or-pay in that trajectory that we shared is increasing. right? And this is something that I would like to highlight. At the same time, we continue to have strong confidence in the contracts, and we will continue to leverage these contracts as we have done in '25 and will go -- will also be doing going forward. On the Recycling, I forgot what exactly the question...

The process inefficiencies.

The process inefficiencies. Yes. Wannes, if you want to.

Yes. So I mean, looking at recycling, we highlighted that the volumes were up -- the volumes processed were up. At the same time, looking at the downstream, this is where we had some technical hiccups resulting in some additional costs, some additional rework, but not too material, but at the same time, we also wanted to highlight as it does impact the results.

That's right. And as I highlighted in my presentation, we did offset those with further efficiencies in other parts of the plant. We just want to be transparent and open around this. Again, for 2026, there's not going to be any effect of these operational inefficiencies, so not to be taken into account for you for 2026.

Sorry, before we move on, we can maybe take the questions of Sebastian Bray that have come in through the chat.

Yes. Thank you, Chetan.

So the first question is the financing costs in 2026. Could this be down versus 2025? The second question is, could Recycling return to levels of full year 2021? And then the final question is on the JV, the IONWAY JV. Could this be recut or renegotiated as Volkswagen is cutting back on that?

Maybe you take the first one. I'll take the 2 other ones.

Yes. So looking at finance costs, obviously, very difficult to guide because there's 2 components which we don't have fully in control. One is basically the cash deposits and the interest rates we get on those cash deposits. And this is also where there has been a steep decline in '25 and hence, also less contribution to the finance income, I would say.

The other element is the forward points, looking at the financing transactions in foreign currencies. This is where we also carry the forward points and again, hard to predict, I would say. At the same time, I think '25 seems rather exceptionally high looking at the financing costs. I think I would anticipate to have that lower going into '26. But again, hard to give guidance on.

Yes. And then on Recycling, well, I think it's true. I mean, it's a fact that actually your hedged exposure or unhedged exposure, let's say, in '29, 2030, the more we move out in that period, I think we're substantially less hedged in that time frame. Suppose that the current favorable metal environment remains for all the main metals such as platinum, palladium, rhodium and of course, some others as well. Clearly, there could be a substantial upside versus the EBITDA that we are reporting today. Hence, at the same time, these prices are not guaranteed. So it's impossible for us to guide on that. But in theory, there would be, of course, a higher upside possible.

On the Volkswagen question, you understand I will not comment on that. We have clear contracts in place. We are going to continue to enforce these contracts. And at this point, I have nothing material to share with you on that point.

[Operator Instructions] We have our final question at the moment coming from Mazahir Mammadli from Rothschild & Co Redburn.

One from me. So assuming that we have a favorable metals price environment going forward in the next couple of years, what would your priorities be in terms of allocating the excess free cash flow that you generate?

Yes. So basically, if I understood well, it's actually a cash flow allocation question, Wannes. But I mean, let me start off here as well. I think our focus today is still really on further being cash disciplined. It's really on that value recovery. And once the balance sheet continues to remain strong and solid, we will, of course, then decide what to do with the excess funds and will be coming out to the market. So we don't have a clear view on that at this point in time because we're still -- our focus is still on solidifying in a structural way, the balance sheet. So Wannes, I don't know if you would have any...

No, completely right. I mean, looking at what we said in the CMD is that we look at landing at a leverage -- structural leverage between 1.5 and 2, let's say. And once we have that in place, once we see that recurring, that's the next topic that we will need to discuss.

We will now take our final question from Stijn Demeester.

I have received a message from Stijn. Sorry, I will read the message. Okay, you're in.

Yes, some difficulties here. So first one is on the SK On contract and the probability of renewal in '26. Second one, on the margins for take-or-pay versus actual volumes, can you say something there in terms of where they sit? And then the last one on the shutdown in Recycling, any view on when this will happen? These are my questions.

Sorry, Stijn, can you repeat the last question?

When the shutdown will happen.

On the shutdown in Recycling and when we should plan it in.

Yes. So okay. Thank you, Stijn. Very clear. On SK On, indeed, we said that there was a probability to extend the contract, and that did happen. So we continue to supply SK On in 2026. So that is definitely a positive. On the margin of the take-or-pay, there, I think what I said, I mean, the idea of the take-or-pay margins is to protect the investments that we have done. And as you have seen also when we were guiding for 2028, we had seen different scenarios of take-or-pay and actual volume delivery, and you saw that, that range, EUR 275 million, EUR 325 million, right, was rather muted. So you could, from that, of course, deduct that the margins indeed are sufficiently strong to cover volume shortfall margins. Now on the shutdown from Hoboken PMR, I mean, this is happening in -- yes, in the second half or later this month, actually. So we are preparing or entering, as we speak, the shutdown.

If I may...

And then before we close -- go ahead, Stijn.

So is it a correct assumption that if you would fully lean on take-or-pay that you hit the EUR 275 million? Or is that a too positive take?

I mean, we have said during the CMD that indeed different scenarios of take-or-pay as well as volume -- real volume offtake would give that range of EUR 275 million, EUR 325 million. So the answer is yes.

Correct.

Before we close it off, I still have an e-mail of Georgina from Goldman Sachs. I also want to highlight that we will look into the difficulty that people are having to connect to this call that this will not happen going forward. But so let me then phrase Georgina's questions here. How much CapEx investment needs still outstanding for Battery Materials? The next question is, is it increasingly in conflict with potential growth opportunities in recycling specialty materials in management's views? It feels to me like the opportunity cost is getting larger.

Okay. Very clear. Wannes, maybe you take 1, I'll take 2.

Yes. So looking at Battery Cathode Materials, as I said, in '25, we reduced the CapEx spend as we are optimizing the -- or using basically the footprint flexibility in order to reduce and phase the CapEx. So looking at Battery Cathode Materials, what we shared with the market during the CMD is that on the one hand, we have the fully owned capacity where we would need to invest about EUR 350 million. This is where we expect to be able to reduce it with EUR 100 million looking at '25 and '26.

Then what we also highlighted in the Capital Markets Day is that we have the capital injection into IONWAY, where we anticipated still to invest EUR 500 million between '25 and '26. This is where we invested in 2025, EUR 250 million and where at the start of this year, invested EUR 175 million. So bringing that to a total of EUR 425 million. We expect to stay within that budget of EUR 500 million in order to finalize basically IONWAY.

Yes. So I think that's correct, Wannes. So in other words, I mean, we're phasing our CapEx and function of the real underlying demand that we see, and we said that we would be disciplined. And for the time being, we're not spending those CapEx. As discussed earlier, the importance of take-or-pay is growing and that immediate need is not there.

And that's transit in that question on the conflict versus Recycling. Well, I mean, I would say, first of all, we have a set of businesses that we have today, right, a very strong core foundation business in which we're going to continue to invest in selective growth initiatives. I've been highlighting in the germanium in the field of Electro-Optic Materials. We will decide on the investment in Hoboken in 2026. And I think the current evolution in Battery Materials is not holding us back to do that if we wanted to do that from a financial point of view. So no, there's not an immediate conflict. Of course, if you would think about really bold moves, then, of course, value recovery in Battery Materials would definitely be, yes, an important milestone to achieve. So no, I don't see that immediate conflict on the CapEx as we are keeping it to the lowest amount possible, and we continue to lean on our take-or-pay contracts.

Okay. Then we still have questions from UBS as well. A small reminder that normally, we stick to one question per analyst but given the situation that we are in, I'm making some exceptions. So for UBS, the first question is, can you tell us what percentage of Battery Materials Solutions sales came from take-or-pay payments?

The second question is, does the guidance for the CapEx includes the IONWAY payments? If not, what should we anticipate for? And then in the cost savings, could you give an indication for the cost savings in 2026? And then we still have a question on what do you expect you to do to protect the EV supply chain? And then a final one has Umicore been asked to join projects?

Well, it's growing the list.

We will slowly start to close the call, but of course, IR will remain available to respond to your questions. And I'm now handing the floor back to Bart and Wannes to answer these final questions.

Yes. Thank you, Geoff, for the questions. Wannes, you take 1 and 2 or...

Yes, so looking at take-or-pay in '26, I mean, as you have seen, looking at the revenues, top line and bottom line, we saw a step-up. I mean, looking at revenue, it's 11% up. Looking at the bottom line and excluding the one-off of '24, we also saw a significant step-up. This is driven by effective volume shipments, but also by take-or-pay. And that's also why we highlighted because it is a material contribution to the top line and bottom line.

Now looking at CapEx guidance. So the guidance we gave, the EUR 300 million to EUR 400 million is excluding contributions to IONWAY. And this is where, as I highlighted earlier, in '26, we contributed already EUR 175 million, and we will stay within the budget that we shared in the Capital Markets Day. So meaning that for '26, we will not exceed EUR 250 million for IONWAY equity contributions.

Then looking at the cost saving objective for 2026, this is where -- in line with what we shared with the market in March last year is where we are targeting to offset inflation, and we anticipate inflation to be EUR 50 million to EUR 75 million. So that's a target that we have put forward to the teams to at least generate savings in order to offset that anticipated inflation.

Yes. And then on the question on the EU EV supply chain. Well, I think I can only base myself, of course, on the information which is out there in the press and that you might also have seen, but which somehow also confirms the feeling that I had earlier is that the commission might be looking at indeed onshoring more battery production as well as battery materials production in the EU, right?

The word on the street is that if you would want to get support from the EU in terms of CapEx or OpEx going forward that you would need to have a strong amount of local content, including for batteries and therefore, also cathode materials. So as mentioned in that one slide that I had, that could significantly change, of course, the equation of the European battery investments for battery materials investments, which are out there. So probably I'm as keen as you to learn what ultimately the commission will decide.

On Project Vault, I mean, I would say that in general, we're talking to several regional, let's say, leaderships, not only in the EU, but of course, also in the U.S. In the meanwhile, I think the biggest impact of Project Vault, of course, is that the overall price environment for these metals is supportive. So whether a direct or an indirect fact that you have is basically that such stockpiling, which they are talking about is typically supportive for price trends at least in the shorter term.

So with that, Caroline, I think we -- I don't know if there's any other questions outstanding.

No, I think with this, we can indeed wrap it up and close the Q&A for today.

Well, first of all, I was looking for an engaging Q&A. The quality of the questions was definitely good. The quality of the line, definitely not. But I mean, we can rematch with most of you next week in London and really looking forward to that. Now in a summary, it will not be a surprise. We're really satisfied on how things evolved in 2025. It was a pivotal year. Where '24 was a year of crisis management, '24 -- '25 was a year of a clear new direction for the company with disciplined execution on which we delivered strongly. Our culture and the organization is moving in the right direction. We are focused on our goals, and we will continue to do so for 2026.

So with that, I would like to thank you for your attendance and the ones that I see next week, looking forward to that and talk to you soon. Have a wonderful day.

Thanks for participating to the call. You may now disconnect.

Welcome to the Umicore Half Year 2025 Results Conference Call. My name is Alan, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions]

I will now hand you over to your host, Bart Sap, CEO, to begin today's conference. Thank you.

Hello. A very good morning, everyone, and welcome to the H1 2025 results for Umicore. I do realize that for many of you, it's a very busy season and very busy week. So I highly appreciate for you being here in the call.

As usual, we have an interesting agenda for you. On the first point, I wanted to take us back to the CORE strategy in the first snapshot. So a small reminder, of our CMD. Then we'll have a look at our key figures and highlights, covered the business review. Wannes as will then go to the financial review. I'll be back with the outlook 2025. We'll wrap it up, and then we'll open the floor for Q&A.

So let's have a look at our CORE strategy, which we launched in March 2025. Now as you might remember, we are building on our CORE, which our business model, right? And our business model is more relevant than ever.

We are building on our business model with 4 key pillars: key focus domains by the first one being capital, then we have performance, people and culture and partnerships. So on the capital, it's all about a more mid-term balanced capital allocation. So what does that mean? SP534981887 We continue to invest in battery materials but at a lower pace, but we also allocate a significant portion of our future CapEx to our recycling business in Hoboken to further unlock the flow sheet.

It means for the mid-term plan that we have been reducing our CapEx with EUR 1.4 billion over that '25 to 2028 period and this versus the previous plan.

On performance, as you can also see in our numbers, we really focus on increasing our operational efficiency and our overall performance and value extraction across all our activities. The goal for this year is EUR 100 million EBITDA, and we are well on track in H1 to already be halfway with EUR 15 million in the buckets.

If we look at people and culture that it's all about installing this performance and value-oriented culture, and building on the successful cultural shift we have in Automotive Catalysts. This we now want to bring to the entire group to further unlock that potential that we have with this beautiful company.

Partnerships. We continue to actively explore partnerships, especially in the field of our battery materials solution activities, while at the same time, we continue to focus on our solid mid-term plan for our Battery Cathode Material business.

Now if we also, I also would like to highlight and it's important for, also for the analyst community outer and anybody who is following Umicore closely, we did update our reporting structure with our new strategy. It means that we have expanded the battery cathode material business group with the Battery Recycling business that we have put in there. So we now have the business group Battery Materials Solutions. And this actually encompasses all battery-related activities. But that means that also from a reporting point of view, we are now restating our numbers for 2024, and we are actually reporting in H1 2025 for the first time in this new reporting structure. So it means that the recycling activities, battery recycling activity, which used to be reported under the Recycling business group, has now been moved to the Battery Materials Solutions. So it's important to shift those numbers in order to have a good comparison.

Now let me now have a look on the key figures and highlights. Now I would say that we really have an encouraging performance in H1 2025. We have seen a sustained demand and also very good operational efficiency. So we're happy with this set of numbers.

Now if we look at our revenues, we came out at EUR 1.8 billion. Our EBITDA for H1, EUR 433 million, well up versus last year. A return on capital of EUR 16.4 million. Our leverage remains below 2.5 and at the level of 2.3 and a very EBITDA margin of 24.3%, and we are slightly free cash flow negative for the first half.

If I look at some of the business group out there, you will see that consistently throughout the business groups, we have good returns on capital. Catalysis, 43.7%; Recycling, 154%. And also in Specialty Materials on the back of a stronger cobalt momentum, we now have a return on capital above 12.5% or at 12.5%, which is in line with our 2028 target.

Now we also recently upgraded our guidance for 2025, and we have update in that EUR 790 million to EUR 840 million range. We did that at the start of July.

Now if I look at the highlights of H1, and I would like to highlight 2 pillars here basically is capital deployment and capital rigor. Now our work -- our capital expenditures have come in, in H1 2025 at EUR 109 million, which is well below the level of H1 2024. And now we foresee for 2025, CapEx projections to be reduced to EUR 350 million. I remind you, last year, we were at EUR 550 million. We were aiming roughly to be 20% lower. So still here, we take another step down in expected CapEx, reflecting our strict approach in capital allocation, but also in timing on CapEx at the right moment.

Now if we look at performance, we did more than EUR 50 million in the first half in efficiency savings, which is a great objective. And as mentioned before, we're aiming for at least EUR 100 million for the year.

Now if I now go to the business review, let me start off with the Battery Materials Solutions. Battery Materials Solutions for the first half of the year, we see that revenues are somewhat lower. We have an adjusted EBITDA roughly in line with H1 2024. Now for Battery Cathode Material, which is the first leg within the Battery Materials Solutions business group, we have revenues of about EUR 208 million, which is below H1 2024. We have slightly lower refining volumes and also slightly lower CAM volumes as we anticipated. So our legacy contracts are fading out and new contracts are ramping up.

Now the main customers for the ramp-up in 2025 are SK On, ACC and IONWAY. Now SK On, we talk about this contract. It's quite relevant in 2025 from a volume point of view. So this is also an interesting customer that we have, showing the diversification of our customer portfolio and on a technology position.

Now if I look at the adjusted EBITDA for the first half of 2025, it stands at minus EUR 15 million, while for the full year in the outlook. And I'm mentioning here, the outlook for Battery Cathode Materials specifically, we are still, we are still confident in being around breakeven for the full year, so that will mean that the run rate in the second half of the year would be EUR 15 million positive. So on an annualized basis, EUR 30 million positive EBITDA run rate for the business.

For Battery Recycling Solutions, we see lower spending in H1 2024, and the majority of our spending is really on further optimizing and preparing ourselves on that flow sheet and technical capabilities of this really unique [indiscernible] metallurgical process that we have.

So on the technology front, we also have a small yet significant update for you. That is that now you have seen that BMW and Solid Power have brought an all-solid-state battery vehicle to the market. And we can share with you that actually this is Umicore cathode material in site. So it means, and it reconfirms and that's also what we see across the board that our solid-state battery cathode material technology is really well received. So we're very proud but also we now have this real test car on the road together with BMW and Solid Power.

Let me now turn it to Catalysis. Now if you look to the overall IC passenger car production for the year, we see a slight decline H1 '24 versus H1 2025. So we go down from 38.3% to 37.5%. This means a contraction of the market of 1.7%. It's a different picture throughout the world, like China, slight growth. North America minus 6%, minus 9%, but South America, 8.7%.

While we had a slow underperformance in the Chinese market, so a marginal underperformance there, we did strongly outperform the market in North America, in Europe and especially South America. And in South America, it has to do with the introduction of PLA, where we acquired the customer base there's a step-up legislation, so it's an additional brick and also actually a higher PGM loading. So we're pretty happy with that.

In the HDD, we see that the market was a bit softer in Europe, while in China, the market recovered.

So then looking at the underlying numbers. So once more, a strong performance with good volume and also a really great quality of earnings.

Now if you look at Automotive Catalysts, revenues in line with H1 2024 and earnings as well. So that means we continue to offset, let's say, and improve our quality of earnings, and we continue to offset the historical PGM price decline we have seen. So if I would take you back to 2021 at the bottom right of the slide, we would have had an H1 performance of EUR 240 million at much higher PGM prices versus today where we are now posting a EUR 222 million EBITDA at significantly lower PGM prices. So it's clear that our quality of earnings is improving, and also our average EBITDA margin has been trending up over the last years.

Now if we look at Precious Metals Chemistry, there, we have higher revenues in our inorganic chemicals and this more than offset a somewhat weaker volume development in our Homogeneous Catalysts business. Fuel Cell & Stationary Catalysts also quite interesting evolutions, both in Fuel Cells & Stationary Catalysts our volumes and revenues are up. In the Stationary Catalyst business, interesting evolution, as you know, that back up these backup generators for data centers there, we also have a very interesting business, and we see quite some volume growth in that segment.

If we then look at the construction of our fuel cell catalyst plant in China, well on track, really also focused on points well managed and still to be expected commissioning in early 2026, as communicated earlier.

So let's have a look at Recycling. So Recycling, of course, when we talk about recycling, we have to talk about metal prices, and we have seen that rhodium, gold, platinum, silver, right? These levels, the price level that we have seen in euros, right, because the dollar significantly depreciated versus the euro lately. But in euro, we see stronger prices than before.

A reminder, is that we are well hedged for PGM exposure at H1, in H2, and that we were complemented by a supportive minor and specialty metal price environment to which exposure is not hedged. And Wannes will come back to you later on, on this PGM hedge evolution.

Now let's go to the second slide section. So a deep dive more in the numbers. Also here, I here to say that it's a really solid performance with a strong adjusted EBITDA, in line with H1 2024 in the precious metals refining activities, our revenues were close to H1 2024. We have seen higher volumes, yet a slightly less favorable supply conditions. What do I mean by this? We see the stock market still move on in the same range as we have seen it before. We spent industrial catalyst. There's a weaker chemical segment out there. So there's some softness there. And also with the flooding in South Africa, some complex refinery feed did not -- well, was lower than before as anticipated, but you see that recovering better in the second half of the year.

Now as the earnings are somewhat lower than H1 2024 for Precious Metals Refining, this is really reflecting the decreasing average hedge price level. And as well, of course, we have had some inflation, which is always there, yet we were able to partially offset this inflation increase by operational efficiencies.

In the Jewelry & Industrial Metals, we have higher revenues against H1. 2024. We see good volumes, strong contribution from refining and recycling activities, but also really a strong product demand for products for the luxury end markets. Precious Metals Management, we have seen PGM volatility and precious metals volatility in general. And of course, volatility means a beneficial and favorable trading environment and then also the momentum was strong. Here again, EBITDA margin still well above 41%. So also here, pretty happy with our performance.

Now of course, as you know, for Umicore, we do add a lot of value to sustainability, meaning that we continue to invest in sustainability improvements of our facilities and the surroundings. What does this mean? It means that we were able to continue the building of that perimeter and the green zone. It's almost finalized now. And yet on top, we continue to invest an annual EUR 25 million to further improve our environmental performance because we continue to raise the bar and are committed to remaining the world's most efficient and environmentally frankly, refined. For us, business and the statements go hand in hand and that protects the long-term potential of this activity.

Let me now transit to Specialty Materials. So Specialty Materials, we had a strong H1 for this business. EBITDA up 35%. Higher margins in the cobalt product segments, yet also here again, operational efficiency improvement. And you see operational efficiency focusing on tax value and capital discipline. It runs throughout the organization. And that's why, yes, we almost have to come back to it because you really see that reflection in our numbers.

Now in Cobalt & Specialty Materials, revenues were some lower. At the same time, higher margins for the cobalt products, as mentioned, but also here, again, those efficiency measures.

In Metal Deposition Solutions, it was all about a solid demand for a decorative application, a solid demand and semiconductor, somewhat offsetting lower revenues in the electronics segment.

In the Electro-Optic Materials business units, we had good demand for our high-purity germanium crystals, and we continue to see a strong demand for our germanium refining and recycling services. So you know that also there, the geopolitics play and having that in-house recycling capability is also really a differentiator for this business. So EBITDA margin now again above the 20%. So we are at 21%, close to 22%. So also here, a good step-up in performance.

Now we have seen how the world around us is evolving. We see that metals or resources are often used to play out the political game or actually used to actually put some tension between different blocks in the world. And it means that also for Umicore the fact that we are active in so many metals and so many of these core or critical metals is really differentiated, especially as we also have a footprint not only in China, but especially also in Europe. And this you clearly see here on this slide.

At Umicore, we are active in 17 out of the 34 critical raw materials. So that's on the refining side, at the same time, also for some of these products on the material side. So you can understand as that more critical raw material independence or more balanced dependency becomes more important, you can see that this is a very interesting future undercurrent for organization.

Now with that, Wannes, maybe you can have a look at the financials a bit from close by.

Yes. Thank you, Bart, and good morning, everyone. So as Bart mentioned, over the past 6 months, we continued our disciplined approach to cost and capital allocation. Our results were boosted by group-wide operational efficiencies, together with solid activity levels in Catalysis, Recycling and Specialty Materials. The group EBITDA margin increased from 22% to 24%. Adjusted EBITDA was up 10% or EUR 40 million and amounted to EUR 433 million for the first half of the year.

The efficiency measures supported earnings with more than EUR 50 million from initiatives across the foundation businesses, Battery Materials Solutions as well as the Corporate segment, and I will come back with insights on the key drivers later in this presentation.

The increased activity levels, as Bart mentioned, in Catalysis, in Recycling and in Specialty Materials resulted in an EBITDA uplift of almost EUR 40 million. These uplifts allowed to compensate for the EUR 53 million headwind from inflation and foreign exchange, with the ForEx impact being largely linked to the translational effect for non-euro subsidiaries.

In the first half, the reduction of favorable price levels for precious metal hedges was almost fully compensated by improved prices for nonhedged precious, minor and specialty metals.

So let me provide you more insight into our efficiency program.

Savings are well on track with a year-to-date contribution of EUR 55 million versus a full year target of EUR 100 million.

Now looking at the breakdown of the savings, 25% of the uplift in EBITDA came from top line growth, 15% from reduced cost of goods sold, 40% from SG&A and around 20% from savings in R&D.

The restructuring of group corporate functions as well as the streamlining of corporate R&D, which we announced end of last year was implemented ahead of plan this year.

In Catalysis, the R&D footprint was further optimized with the consolidation of the research center for heavy-duty diesel in Germany and in Battery Materials SG&A was structurally reduced.

Now turning to the consolidated P&L. The net result group share was EUR 137 million. The depreciation and amortization decreased to EUR 131 million following the impairment in Battery Materials in June last year. Adjusted EBIT was EUR 302 million, up EUR 61 million. Adjusted net finance costs increased to EUR 102 million due to a higher average net debt, lower interest income on cash deposits as the interest rates came down, together with a negative impact from ForEx.

The average cost of gross debt amounted to 3.2% and was stable versus previous year, thanks to loan maturities and over 80% of that being fixed rate.

The adjusted tax charge amounted to EUR 64 million, stable versus last year. The pretax income was up, but the adjusted effective tax rate decreased from 36% to 32% this year. And this resulted in an adjusted net profit group share of EUR 135 million. The adjusted earnings per share were up 16% to EUR 0.56.

Moving to the consolidated balance sheet. The liquidity of the group remains strong with a cash position of EUR 1.1 billion. Gross financial debt decreased from EUR 3.4 billion to EUR 2.9 billion after the repayment of the EUR 500 million convertible bond in June. And the equity for the group amounted to EUR 2.02 billion. Net financial debt was EUR 1.9 billion and net gearing ratio landed at 47.6%.

Now let me provide more insights on our net financial debt position based on the net cash flow bridge. Cash flow from operations amounted to EUR 260 million. Net working capital increased with EUR 197 million, reflecting the higher activity levels in Catalysis, Recycling and Specialty Materials.

CapEx, including capitalized development expenses decreased to EUR 117 million. We apply a maximum control on the phasing of CapEx, and spending will be more weighted in the second half of the year. So CapEx, excluding capitalized development expenses for '25 is now anticipated to be around EUR 350 million versus the initially foreseen, let's say, EUR 440 million. This results in a free cash flow from operations of minus, minus EUR 54 million.

Taking into account the contribution of EUR 250 million into -- of equity into IONWAY in January and cash out related to taxes financing, dividends and other items of EUR 99 million. This resulted in a net financial debt increase of EUR 404 million and a net debt of EUR 1.8 billion for the group.

This is in line with what we anticipated for, and as a result, the leverage ratio increased to 2.28x last 12 months adjusted EBITDA. And here, I want to repeat that, as mentioned during our Capital Markets Day, leverage will peak during '25 and '26. We anticipate leverage to turn below 2x from '27 onwards, following the strong cash flow generation in the group and with the finalization of the investments in Battery Cathode Materials.

Now moving to the next slide. I would like to remind you that for '25 to '28, a substantial portion of the future strategic metal exposure has been locked in through forward contracts. And with this strategic hedging policy, we aim to protect future earnings from price volatility while ensuring we also do not over hedge our anticipated exposure.

Over the past 6 months, our hedged position remained largely stable. We have increased forward metal hedges for silver in 2019, and we are in the midst of executing additional mandates for '29 for rhodium.

So as a conclusion, we are putting a strong focus on those things that we can control: cost, cash and capital. EBITDA improved and is at EUR 40 million, driven by a solid underlying performance and supported by over EUR 50 million in efficiency measures.

Capital expenditures were reduced to EUR 109 million, and we expect full year CapEx to be around EUR 350 million. And we continue to keep tight control over net debt and leverage, and we expect to keep the leverage below the 2.5x adjusted EBITDA.

And here, I would like to hand it back to Bart for the outlook.

Yes. Thank you, Wannes. Very clear. Now let's have a look at the outlook and the outlook we communicated already early June, of course. And it's anticipated that we indeed will be in that EUR 790 million to EUR 850 million EBITDA range. So there's no change there today versus what we announced earlier.

So just wrapping it up before we go to Q&A. Yes. So I really like to say that H1 was, we really had encouraging results and a solid performance. So it was driven by a sustained demand and also really strong operational efficiencies, and there was also somewhat a supportive metal price environment. So it's 3 elements: operational efficiency, sustained amount and is supportive metal price environment.

Now if you look at H1, it was a strong performance in our foundation business. While we start to see indeed that gradual ramp-up in our Battery Cathode Materials contracts. So with that, I think, once more an encouraging according to a good guidance for the second half of the year, or at least the full year, right? And with this, I would like to open the floor for Q&A.

[Operator Instructions] We will take our first question from Ranulf Orr Citi.

Just one from me, please. I think you mentioned that the metal price impact including hedges at the group level was just minus EUR 1 million. But I was wondering, could you please break this down or give some more color by division? Just help us better understand the underlying earnings development. That would be great.

Yes. So looking at the metal price effect, you're right. I mean, year-over-year, the uplift is minimal. As you know, and as we also highlighted, we have the precious metal hedges. And those are favorable versus today's rate. At the same time, the contribution is rolling off this year, and we'll continue to roll off, also going to next year.

So if you look at the first half, this is where the roll-off resulted in year-over-year lower contribution. And I would say, low double-digit type of a contribution from those favorable hedges year-over-year. And that has been offset by a more favorable environment, looking at the Precious Metals called thinking of business like Jewelry & Industrial Metals but also looking at minor and special metals. And again, this is where it lands in the Recycling segment. So primarily in the Recycling segment is where we see those movements.

Okay. So there's no metal price impact coming through in Specialty Materials and the cobalt specialty part of the business.

Yes. So looking at the Specialty Materials business, indeed, here, we see a solid price level of EUR 40 million. For Cobalt, we also have seen a hiccup in the price, and this has resulted in somewhat stronger margins, I would say, in those segments. That's correct.

We will take our next question from Thea Badaro, BNP Paribas.

Two questions from me, if I may. The first one is on the Catalyst division. I'm conscious you've had a pretty strong H1 with record profitability reached. But I was wondering if this is all underlying or if there was a specific one-off somewhere, maybe a new contract that has kicked in? And maybe as a follow-up, how should we think about profitability levels going into H2 and beyond?

My second question would then be on the efficiency measures. Can you maybe give us more color on the short-term levers you're taking actions on?

Yes. So maybe let me take the first question first and maybe one to start with the second one, and I might chip in if I would like to add some more color. So on the first one, indeed, we had a very strong H1. And I would also like to remind all of you that we took a bit more cautious approach in H1 versus the overall market forecast initially. Yes, demand remained solid. So that was also good news for us. And if you talk about customer wins, I would mainly refer to South America, where PL8 or the L8, if we really focus on that light-duty segment, has kicked in, right? So there, we see volume growth with indeed a better customer positioning and additional brick and higher PGMs. So I would say that if you look at the market in South Africa grew roughly 9%. Our growth was well north of 30% in that segment. So yes, there was some elements, but it was mainly across the board, the strong underlying performance of the market from a demand point of view.

If we look at H2, there we see the classical seasonality. And there we also have taken again a realistic approach what demand could be for that second half. And we see that for the time being trending in line with our expectations. So Wannes, if you could comment on the efficiencies.

Yes. So looking at the levers for efficiencies, I mean, the one that we pulled was probably the last -- in the first half basically were those linked to the restructuring and to the consolidation of footprint. So looking at SG&A and R&D. So those have been implemented.

The levers that we continue to pull is looking at the top line, looking at pricing, but also look at operational efficiencies. So looking at the plants, looking at the operations, improving yields, reducing waste basically, improving quality. And those are elements that we continue to drive. So if you look at the full year, normally, if all runs according to plan, you will see that the proportion of contribution from top line and cost of goods sold will increase versus the overhead, I would say.

Yes. And maybe adding another additional metric just to give some flavor and some substance is that, as you know, we announced, let's say, restructuring in November last year, where we had indeed, let's say, 200-plus people directly impacted. Now if we -- that was, of course, a very painful situation. Now at the same time, we are still very diligent in our workforce development. And year-over-year, I think we're now 6% down. And on top, we had a significant reduction in contingent workforce, which also, I would say, estimating here a bit between 1% and 2% of the workforce equivalent. So yes, we have been very disciplined, and we will continue to do so. Of course, with the ramp-up of battery materials, as volumes start to grow, we will see, of course, more hands coming in to deliver those volumes.

We will take our next question from Chetan Udeshi, JPMorgan.

First question I had was I was just looking at the presentation slide on Catalyst business. And when you are saying revenue and earnings in catalyst -- Automotive Catalyst is flat. It seems all of the growth is coming from the other 2 smaller divisions and especially Precious Metal Chemistry. Can you remind us what's going on in that business and how much sticky that growth in Precious Metals Chemistry business might be?

The second question was just looking at the guidance, you are talking about moderation in recycling earnings, if I understood that correctly, in H2 versus H1. And is that based on an assumed price decline for some of the unhedged metals from current levels? Or is this assuming that you have another leg down from hedging activity sort of reducing your effective prices for the metals that you hedge?

And the last question is you talked about the strategic importance of Umicore's recycling business in the context of geopolitics. I'm just curious, you do use rare earths in your Automotive Catalyst. I think they are part of the wash coats? Do you have any trouble sourcing some of these materials now in the context of geopolitical environment? Or you are well diversified from that point of view?

Yes. So Wannes will take 1 and 2, and I'll take 3 on the rare earth question.

Yes, sure. So looking at Catalysis, I mean, your conclusion is right. I mean, looking at automotive catalysts, this is where the underlying market has been shrinking year-over-year, where we have been able to keep our revenues and volumes flat, slight increase to flat. So the growth is indeed coming from fuel cells, stationary catalysts and PMC.

If you look at fuel cells, this is where the sales, and particularly in Korea for fuel cells has picked up in the first half. If you look at stationary catalysts, this is, as Bart mentioned, catalysts that are used in also power solutions, power grid solutions, and that also resulted in an increase. And then PMC, also there in some of those end markets, we had a solid activity. We had increase in volumes.

Now looking at Recycling and the profile of Recycling. So looking at H2, this is where we will have a continued roll-off of those favorable hedges, and that also comes into play as we can call it a type of seasonality if you look at the profile of H2. And maybe for rare earths, Bart Sap.

Yes, yes, absolutely. So indeed, that's right, Chetan, indeed, there's rare earth in our wash coat solution, more rare earth oxide solutions that we, of course, introduced there. And indeed, China has put up some restrictions on export on some of these elements. At the same time, I would like to highlight that the catalytic applications are not under that ban.

Now this being said, we have seen, of course, that the queues and customs have been longer. Now we're not only sourcing from China. We have a diverse supply chain. And so far, we have not had any issue, let's say, in getting material through our active management on stocks and our diversified supply chain. On top, if customers would desire, we even have solutions not including some of these rare earths from China. So, so far, things look to be okay.

But you don't source the rare earths yourself, right? You are buying the oxides from Solvay or some of the other suppliers. So I guess you are less directly involved from that point of view, I suppose.

We do source indeed rare earth oxides. That's right.

We will take our next question from Sebastian Bray, Berenberg.

First two, please. The first is on the balance of price downs or pricing changes in hedges for recycling and current metal spot prices. If I were to take the Umicore book for '26, which is largely hedged and current metal spot prices, would the group-wide impact on EBIT neutral or negative if things continue as they are?

My second question is on the ACC contract with Stellantis. There was some chatter last year about Stellantis stepping away from NMC as a technology and increasing the role of LFP in its portfolio. Do you have any indications if the customer is going to drop to the minimum end of volumes under these contracts?

Okay. Wannes, you go for the first?

Yes. Sebastian. So looking at the evolution of the prices for the hedged metals going into '26, this is basically where indeed that support -- that support rolls offs and where we would say that the effect versus today's metal prices is more neutral.

Yes. And on the ACC Stellantis question, indeed, I think Stellantis made some statements on LFP. Initially, ACC was going to build 3 plants. Ultimately, they -- so far, they only built 2 blocks of capacity in France, right? So these installations are actually progressing well according to the customer. I mean that's happening. These are pure NMC blocks, but it's true that, let's say, the NMC potential of ACC as a whole for the time being is somewhat lower.

Now as you well know, we have the take-or-pay provisions in these contracts. At the same time, we continue also to work on customer diversification as mentioning in our Capital Markets Day in March. So I would say the situation has not changed versus the latest comments we had in March. yes, therefore, there's no reason for us to change our outlook into 2028 as presented.

To clarify on the first question, the neutral metals pricing effect is current spot prices plus hedges or it's just no changes in hedging prices for '26 compared to '25?

Yes. So if you look at '26, I mean, a significant portion of the exposure is hedged. If you look at those prices, on average, I would say, versus today's metal prices, there is a neutral effect. So on the one hand, there's some prices where -- that are elevated versus today's prices. On the other hand, there's elements, metals where the prices are below today's prices.

If you think about silver and gold, this is where prices have come up substantially, and this is where the hedge rates are somewhat lower. On the other hand, we have PGMs where the hedge rates are still higher than today's rates. So overall, this is where we see a more neutral effect versus the average price levels, I would say, in '26.

We will take our next question from Georgina Fraser, Goldman Sachs.

I've got two questions. The first one is just on your guidance. Given that you now have these hedging policies in place in precious metals as well as take-or-pay contracts, can you talk about how much visibility that you have on your earnings trajectory in the second half and where you're currently tracking versus the full year guidance you've given?

And the second one is on geopolitical risks and there's so many changes all the time from the U.S. administration that I might have misunderstood something. But I was thinking about the case of aluminum at the moment where there are tariffs on the base metal, but not on aluminum scrap, meaning that there's an incentive for scrap to go to the U.S. to be smelted and use that. Is -- how does Umicore think about those types of risks? Are you seeing anything in the metals that are important to you? And can you remind us what the competitive landscape looks like? Does the U.S. have capabilities to recycle metals the same way that Umicore does?

Yes, Georgina, maybe I can take the first question. So we're operating in a volatile environment. At the same time, having some of those -- I mean, a substantial portion of the exposure locked in, having those take-or-pay mechanisms that gives us also solid confidence looking at the range that we have put out as a guidance. And maybe on the geopolitical.

Yes, for sure. Now well, it's fair to say, Georgina, indeed, it's quite a roller coaster of announcements these days in the market. And let me also remind that the direct impact of tariffs for Umicore as we see it today is really not material. There could always be an indirect impact in the overall economy evolution, of course, but that's more difficult to estimate.

Now to your specific question and the impact on PMR, I would like to say that, first of all, the U.S. is not a big market for us to -- where we source raw materials and also another market where actually we see a big inflow of some of the materials that we refine in Europe. So as we see the situation today, we don't expect a major competitive change in landscape by the measures taken by the U.S. What China is doing at this moment in time is more relevant, especially for the specialty metals that have this more positive undercurrent, I would say.

We will take our next question from Geoff Haire, UBS.

I was wondering if I could ask some questions around metal pricing. First of all, in terms of the outlook that you've got for the second half, are you assuming that the benefit that higher metal prices was in the trading business within recycling will continue into the second half?

And then secondly, I was wondering on the metal head split of minus EUR 1 million, which ran off faster but, could you actually split out what the benefit was from hedges versus movements in spot prices? I think that would be really helpful just to understand that movement.

And I may completely misunderstand what hedging is about, but given platinum prices have moved up significantly in the last sort of couple of months, we start to see that benefit of those -- of that spot price come through into your P&L through the hedging. But it looks of things, looking at the charts that you provided, it could be another 2 years before you see that price coming into your business. Is that right? Or am I completely wrong?

Okay. Just thinking of the different questions and where to start. So, looking at the outlook, this is where, indeed, we expect some volatility in the market and hence, also in metal trading. This is also what we anticipate in the guidance that we give. If you look at the year-over-year comparison, where we want to highlight what are now the key drivers of the uplift in EBITDA, this is where we illustrate that the metal price environment by itself has not necessarily resulted in an uplift year-over-year. But if you decompose it and you look at, on the one hand, we have exposure that has been hedged in past where the metal price levels had been fixed, this is where year-over-year the average level of metal price on that exposure comes down. So there's less support on those hedges from a price level.

On the other hand, we have exposure that has not been hedged, which we call open exposure, and this is where you benefit from the spot price movements. And this offsets basically what we lose because of those average hedge price levels being lower year-over-year. So this is where we see that offset effect. And on top of that, also looking at some of the special and minor metals, also here we see a price uplift in the overall environment. And also here, we benefit. So that's an element that offsets that roll-off of those favorable hedges.

Now coming back to your question, when you say [indiscernible] or again, getting an uplift, when will we see that effect that affect this, as I explained earlier already today, to the open exposure and where we sell dedicated at spot prices. But also to an extent, if we continue to hedge forward, the future strategic exposure, that's where we can also start benefiting. But again, between '25 and '28, we already recently hedged, so we're not necessarily increasing much. But for '29, for instance, this is where we see opportunities to lock in that exposure at today's price levels. I hope that is helpful. Geoff.

We will take our next question from Tristan Lamotte, Deutsche Bank.

The first is maybe coming back to precious metals. There's a good bridge you provided in the slides, which shows that your EBITDA is up EUR 40 million or 10% versus the prior year. And you're saying metal prices are neutral, efficiency savings were offset by inflation. So I'm just wondering if you could maybe talk through what has changed to drive that large increase year-on-year. And in particular, in Recycling, Recycling is up EUR 40 million year-on-year. So maybe you can outline how much of that is PMM? Or what else has changed to lead to that significant increase? I'll stop there and then continue with the other questions.

Yes. Tristan, just reflecting on your statement where you say Recycling that EUR 40 million, I don't know where...

In the EBITDA.

Tristan, I'm just trying to see what you referred to?

Anyway, maybe you can explain the underlying drivers of the Recycling business, Wannes, and the different business units because that's...

Yes, the key question is cost efficiencies are offset by inflation, and the metal price is neutral, but you have an increase year-on-year. So what's the underlying driver?

So basically, Recycling, what we have is last year in the Precious Metals Refining activity, this is where we had a maintenance shutdown, which we don't have in '25. So that is driving up the volumes at process in Precious Metals Refining. At the same time, as Bart explained, there was a somewhat less favorable mix, and that is not offsetting that volume increase.

At the same time, in Recycling, what is also positive is a strong support is looking at Jewelry & Industrial Metals, where we have the current high gold prices and that is driving that Recycling and Refining business. So the over-the-counter type of scrap that comes in, and that's driving that volume and the margin that we generate.

And next to that, we have the metals management, the trading business, where the volatility on the PN and the PGMs also contribute strongly.

Got it. That's helpful. And then maybe second, I'm just wondering about your exposure. Some of your peers give a sensitivity to changes to USD 0.01 in the U.S.-euro rate. So could you maybe give us some kind of indication there on how that works for you? And how hedging impacts there?

Yes. So looking at the magnitude of the ForEx impact, I mean, we highlighted there is a headwind of more than EUR 50 million. Over half, majority of that comes from inflation, but there's an element related to ForEx.

Now very concrete for '25. This is where we had hedged quite a bit of the exposure against the dollar, but also other currencies, so we are less impacted by the volatility by the fluctuations in ForEx.

At the same time, we have subsidiaries that are recorded in different currencies at euro and where the results get translated into a result upon consolidation. And this is primarily the impact that we see in the ForEx effect.

We will take our final question from Stijn Demeester, ING.

Also two, if I may. First, can you comment on the size, duration and the nature of the newly disclosed contracted SK On seems to be a driver for sequentially higher cathode volumes in the second half, yet it doesn't alter the guidance. This suggests that the ramp-up of your take-or-pay contracts is slower than previously assumed.

Secondly, maybe related in a recent press article Volkswagen Brand CEO, Thomas Schafer, suggested to lean more on LFP for its entire lineup, starting with the IG2 up until the IG7 in a bit to lower cost, how should we interpret this announcement? Does it some way alter your road map with IONWAY?

So first of all, on the SK contract, you should not see it on top -- of the trajectory that we have given in GMV and the CMD really focused, let's say, on that 2028 road map, but it was included, let's say, in those numbers. This being said, in 2025, we see that ramp-up of IONWAY as well as ACC and our numbers as well. Volumes are still more modest, but that's what the ramp-up also means.

Now there's a good probability that the SK contract will also flow over in 2026. And to your question on Volkswagen in general, as you might remember, we have included 2 waves out of the 164-gigawatt or 70-gigawatt equivalent in our mid-term plan. These waves are still confirmed and are underpinned by solid contracts. So that's not changing anything to the equation versus what we communicated in March.

Understood. Is it the sizable contracted with SK On?

Well, I mean, it's one of the drivers of the 2025 volumes. And if you look at the volumes that we have, indeed, is with the current volumes that we have, it's a significant contract, yes.

I think it's over.

Yes. So sorry, I got your queue. So, as the last question, we have maybe a small wrap-up. So everybody once more, thank you for being there. I know it's a busy season. Some of you will see back, I believe, next week on Monday and the days after. So we're looking forward to our exchange. And in the meantime, wishing you all a wonderful rest of the day and weekend. Talk to you soon. Buh-bye.

Bye.

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