Good morning, everyone, and thank you for joining, Umicore's conference call this morning. The reason for the call this morning is, to provide some color to the brief trading update, which we released this morning, and to answer any questions that you may have regarding the update. Given the low market visibility, which, as Since the beginning of the COVID 19 outbreak, I thought it would be appropriate to provide you with an update of trading conditions since we last spoke the end of April. As I mentioned in previous communications, my priority is to keep Umicore employees safe and healthy And we adopted a comprehensive set of precautionary measures early on at Umicore in order to minimize the risk of on-site contamination. We have also provided support to our employees to help them stay healthy outside the workplace.
All in all, our present or preventive approach has so far proven effective with the number of infected employees remaining very low. And I'm grateful that my colleagues have been following the sanitary guidelines with a high degree of discipline. The good news, generally, generally speaking, is that we have moved past the peak of the pandemic in several regions. Allowing society to gradually reopen. I would like to use this occasion to express once more and continue to fight the pandemic on the front lines.
This gradual reopening is also a positive development for unicorns employees. You will recall from the communication at the end of April that we had to shut down most of our automotive catalysts plans outside China, Korea, and Japan, following the closure of many of our automotive customers' assembly lines. As a result of these shutdowns, about 10% of Umicore employees had been followed. This number is now down to 3% of our employees. Let me now elaborate on the developments in automotive catalysts since our last communication at the end of April.
In China, we have seen demand for automotive catalysts recover in recent weeks somewhat faster than was anticipated at the end of April. And Umicore's catalyst production in China is now back to full capacity. While this is a very satisfactory development, It is impossible to make out today if demand will remain equally sustained in the 2nd part of the year. Outside China, the picture is less buoyant, but the Motive OEMs have gradually restarted production in most plants albeit with some delays compared to their original schedule. In addition, car sales are picking up at a modest pace in Europe and North America.
They remain subdued in Korea, Japan, and Southeast Asia, and they are very weak in South America, where the pandemic is unfortunately still gaining ground. We have resumed Catish production in all regions and tuned it to the pace of market recovery. The faster than expected recovery in China is more or less compensating for the more subdued developments in other regions And all in all, the comments we made at the end of April and the directional guidance we provided then regarding the Automotive Catalyst business remain valid. And I still expect the full year recurring EBIT of this segment to be well below the levels of 2019. You may also recall from our communication at the end of April that we were assuming that global car production for the full year would be down approximately 25% compared to 2019.
My views in this respect have not changed. The sales of electric vehicles have also been substantially affected by the COVID 19 crisis, leading to a downturn in the demand for cathode materials. The full effect of this downturn as anticipated has started to be felt in the second quarter. The comments we made at the end of April and the directional guidance we provided then are still very much valid. And similar to Catalysis, I expect full year recurring EBIT in Energy And Surface Technologies to be well below the levels of 2019.
While market visibility remains pretty limited in the short term, the midterm picture in energy and surface technologies remains very promising. The crisis has not changed the need for a transition to cleaner mobility, and several stimulus programs have just been announced in China and in Europe, which should support the adoption of electric mobility in China. And for instance, the existing subsidy scheme for new energy vehicles has been extended by 2 years through the end of 2022. In Germany and France, new incentive schemes are being introduced with subsidies up to for buyers of electric vehicles. Additional stimulus programs may be announced soon in Europe, and new budgets have been set aside to accelerate installation of charging stations.
Our investment in our investment project in Poland is making good progress, And we expect commissioning to start towards address the growing European demand. And the support we have just obtained from the European Investment Bank goes to show how well this project fits. Into the plans of the European Union to develop a sustainable and innovative battery value chain in the region. In Recycling, we continue to benefit from very good market conditions across the board. High availability and good supply mix for the precious metals refining operations, as well as in Jewelry And Industrial Metals.
High metal prices, high demand for investment products, and favorable trading conditions for the precious metals management business. Regarding metal prices, ROADM continues to stand out and to prove supported. I expect the contribution from the recycling segment to be well above the levels of strong performance may not be evenly distributed over the two halves of the year, taking into account some seasonality effects and the fact that the scheduled maintenance shutdown of the Hoboken plant will take place in the second half of this year. You may recall that in 2019, we had an extended shutdown in Hoboken in the first half of the year. And of course, it remains to be seen how metal prices and trading conditions will develop in the second half.
Having commented on the expected performance of the 3 business groups, well above 2019 for recycling and well below for Catalysis and E and ST, Where does this lead us in terms of group performance? Today, I can provide some guidance for the 1st half And I can say that we expect recurring EBIT in the first half of the year to be broadly in line with the levels achieved in the first half of last year. This reflects a significant increase in the contribution from recycling and lower results in Catalysis And Energy And Surface Technologies as expected. Unfortunately, it remains impossible at this point in time to formulate any reliable quantified guidance for the full year as visibility over market demand in the second half remains too low. Back at the end of April, notwithstanding the limited visibility, we communicated that we expected full year recurring EBIT for the group to be well below the levels of 2019.
The directional guidance we gave them still stands today In other words, I still expect full year recurring limit to be below the levels of last year. A few comments regarding our balance sheet before opening the floor to your questions. As you could read in the press release this morning, we have continued to increase liquidity since the end of April. We now have €1,500,000,000 of immediately available cash an improvement of some €300,000,000 since we last spoke. Our balance sheet is strong, and we have a well balanced debt profile with no maturities of any material size in the near term.
Or CapEx plans were adjusted at the beginning of the pandemic, and we still expect full year CapEx spend to be in the range of to EUR 450,000,000, in line with the guidance we provided at the end of April. Finally, our net debt has increased since the beginning of this year due to high PGM prices. These high PGM prices benefit margins in recycling. At the same time, as Philip explained back in April, they result in higher working capital requirements. With this, I would now like to open the floor to your questions.
From a practical point of view, you will have to raise your questions through the chat box, and Evelyn will act as a moderator on our side.
Thank you, Mark. And we have a first question from Shop Hair. Do you expect recycling to be at record EBIT levels this year as in two age eleven recycling delivered an EBIT of €153,000,000, and now in the first half, you expect to be above this level. Also, can you give us some guidance for depreciation in H1 and H2?
It will all depend on, the, how metal prices, and trading conditions developed in the second half of the year. So it's, that is difficult to or impossible to make out, today, by, definition. But assuming that, current metal prices and trading condition would persist, throughout the, the balance of the year. We indeed, would expect to achieve very, very high results, in the recycling, segment. As I mentioned in my, introductory remarks, All, the planets are aligned today.
We have, very good, supply availability and, very high quality of, the supply mix. Supported metal prices, supportive trading conditions, good demand for, investment products. All in all, if these conditions continue to prevail, yes, we should have a very strong performance, for the full year. Please bear in mind though, as I mentioned, a moment ago, that there is some degree of seasonality in the results of the recycling segment. For instance, in jewelry and industrial business unit.
And that unlike last year, the maintenance shutdown, the scheduled maintenance shutdown of the Hoboken plant will take place in the 2nd part, of the year.
Yeah. And maybe on the depreciation. So based on the CapEx, guidance we have given, I would, guide for a DNA depreciation level for the full year of about 1,000,000. You know that there may be some timing effects it's never an exact science. And for the first half, obviously, we'll give you the exact number in, in, in, in July, but for the first half, I would, guide towards something like 1,000,000, of, depreciation charges.
We have, a question from also for Philip on the working capital bridge. What capacity utilization is, is it today in Catalysis, RBM, and CSM, presumably inventories were run down and now ramping back up. Receivable still coming down. What about working cap in recycling going up on on metal prices? What are the mechanics of the rising working capital in recycling?
Quite a lot of that.
Very complete question. And obviously, we'll we'll provide some more color again in July. What I would say is, in terms of working cap So the main driver, as, Mark has mentioned, and as we also mentioned then in April, it's clearly metal prices, I mean, and especially when it's a combination of precious metals and PGM prices, which, really drive, working capital in, I would say, in Catalysis for obvious reasons. You will see that also in the turnover numbers that we will be reporting, that this price effect is, again, quite, quite substantial you ask, good questions in terms of, the, the mechanics, the, the COVID impact and the fact that you have different plans operating at different levels at different points in time. For example, the differences between, China and the rest of the world make it very difficult to answer your questions.
And, and I would say the disruption to the supply chain, chain means that, it's very difficult to give details, but Obviously, when plans shut, you have inventory already on board. So to bring that down is, not that straightforward. Another example, as plans ramp up again, for example, what we've seen in, in China, you get indeed, an increase in receivable. So it's really a mixed effect. I would say that most of the effect clearly is metal price driven.
Is in, Catalysis. And the other, element I would add in, in recycling, you know, we have the open operations, which are, relatively low in working capital, but we also have some other businesses in recycling the jewelry business, the, the metals management business, which may also feel an impact from, from metal prices. I hope that answers your complete question, but we'll provide some more granularity in, end of July.
A question from Mutlu on the EFI subsidies, when do we expect these subsidies in Europe and China to benefit your sales numbers?
That's a very, complicated question to, to answer today because, as I mentioned already, at the end of April, I do not expect, that, buying a new car would be top of minds of, most consumers. Clearly the COVID-nineteen crisis and the ensuing recession, are having an impact on the, the purchasing power of consumers. And, there are probably, other priorities in terms of, consumer behavior, today than going back immediately to the dealership, to buy a new car. Let's face it, buying a new car is, is a decision that, in many instances, you can postpone, if your purchasing power is, is being affected. So, difficult to to make out.
The the good news that I see there is, is to is is definitely that, electrified mobility is being confirmed as the solution of the future in terms of, cleaner mobility for, passenger car applications and that the willingness of a number of regions, to go, in that direction is totally unaffected, by, the, the crisis. So it is good to see that, the, stimulus programs are focused on clean mobility instead of, like, what's the case in, in 2008, to be undifferentiated. So, I see that as a positive, but clearly, it is difficult for me to, to put a timing, on this. We'll have to see how, sales figures, of, of new cars and, and all the books of our customers, Philip, in the next few weeks, visibility is pretty limited in that respect today.
A question on recycling. Again, how much of the profit increase has been metal price volatility, and how much was the function of higher prices?
You you may recall from those who have followed, give me a call for quite a while. May I recall what I what I said on a number of occasions, in the past is that, The, when metal prices are high and the volatility is is high, their contribution of, of precious metals management, to the segment results is disproportionately high. And this is 1 year where we we observe this phenomenon, to the year, to the full extent, indeed. Yeah. So it's, I would not want to quantify that.
And can indeed confirm that, the other contribution from, metal, both metal prices, PGEM prices in particular, for the unhedged portion and for the unhedgeable metals and the, the high volatility, are proving a significant, factor in, in the current, picture and are proving extremely supportive.
A question from Charlie Webb. Can you please provide us more details in terms of what you are seeing in your battery material business through to date? If this business down in line with the market, have you seen a sequential recovery? Is there greater competition for new volume wins?
Yeah. So, I see a number of trends, in that business. I believe that we are doing, in line or slightly better than the market. You have, undoubtedly, monitored the EV sales, in recent weeks and months and, have seen that, they have remained fairly depressed, in all regions, around the world. And, I don't know when they would pick up.
I mean, I refer to the, the previous question and the impact of the subsidy schemes remains to be seen when, when the sales of EVs will will recover. So I believe that in that context, we have, based on the view I have, on our business and on the market that we have done, relatively well, meaning in line or slightly better than the market, but the market has not been good. It's the, clear about it. Now, there is one factor also to be taken into account. And that is the fact that, or customers, in the battery value chain, for EVs had been gearing up for a significant growth in, bi reproduction and in EV production in the course of 2020.
And have developed capacity and, inventories as well, to prepare for that. Now with the, the the significant, decline in servers of EVs, there has been a widespread correction in the value chain of inventory levels. And that has to a certain extent exacerbated the, the decline in demand for cathode materials across players, in the industry. So the picture is not great. And, I mentioned, back, back in April.
Clearly, the picture is not great for Catalysis. It's not great for, rechargeable, battery materials. And in the overall context, I believe we're doing relatively well and are continuing to prepare, for future growth as we also indicated in the release.
A question on recycling again. Can you talk about a very good supply and trading conditions that that has been covered with which areas where the strongest and where do you stand in terms of capacity utilization in Hoboken.
Yeah. Maybe let let me perhaps start with the last part of the question because that's, indeed, a subject that I have not addressed, in my remarks and has proven a significant, factor. As I mentioned in, in prior years, we had been working on, ramping up the, the new capacity, quite systematically. And, in the course of last year, we continued to make investments to be able to ramp up to the full potential, of the plans. As I mentioned also on previous occasions, this effort was going to be done by the end of, 20 team, such that we would be able to benefit from the full, potential, in 2020.
And I'm happy to report that this is indeed the case and is also, explaining part of the, spectacular improvement, in results an expected performance compared to 2019.
Maybe to follow-up on, on recycling. You talked previously about improving trading conditions as you or 5 people catalysts are now coming back, and China has introduced stricter rules on on end of life. Electronics. Has that helped?
Definitely. Definitely. These two factors continue to, to help. The availability of, of spent catalyst, will continue to, improve in the coming, month and the years. Because of the time lag effect between the, the moments these catalysts are being produced and fitted on cars and the moment they are, collected at the end of the useful life of the car and become available for recycling.
So typically, there is a timeline of, let's say 12, sometimes a little more, 12 years, sometimes a little more, which means that, today we see, the, the inflow of a catalyst from, Euro 4 and Euro 5 of the generations, starting to, to come through to the market. In growing numbers. And at a later point in time, you will start to see, I would say, also the, the Euro 6 catalyst, or the China 6 catalyst, and we have still time to prepare for that. But clearly, the trend is, very supportive short, mid, and long term. For electronics scrap, the same, the same observation that, the, the factors we mentioned as, positives, last time continued to, to prevail.
The, the availability of electronic scrub continues to be, good. And the fact, indeed, that, China has closed its borders to solid waste, is one of the reasons behind that.
A question for Philip, on the hedges, have you hedged more, of the 2021 price exposure for the different precious metals and PTMs?
Compared to what we said end of April, there's nothing, really new, to mention. What we said that done is that indeed for 2020, we have, I mean, the large majority, more than 2 thirds of precious metals, and we are thinking of, gold and, and, and so it begins, hedged in terms of the expected exposure. And for 2021, we have a majority for those same metals indeed had shown no news versus end of, end of April. And obviously, again, with the caveat that, podium is, is not, hedgeable because therefore not, not hedge.
We move back to cathode materials and LFP catheters are gaining traction in China. Do you see the same trend in Europe? And what does it means for Umicore?
No. We do not see, a similar trend in Europe. And, my personal view is on the subject is that, LFP is, probably appropriate for niche applications. And what differentiates, China and Europe in, in, in that respect is that, when I say certain applications, it's lower range, because of the lower energy density. And the the the major difference between, China and Europe in this respect is that in China, there is quite some available spare capacity, for LFP.
While in Europe, there is no capacity at all, for any cathode materials and the market is going clearly to, NMCs, and similar, technologies. So I think that there is a, convergence of, of, of factors in China, one being, appropriate, use of, LFP for certain less demanding applications and, to the availability existence of the ample available capacity.
We go to auto caps again for the first half of 2020, do you expect the auto cat operations to be profitable at EBIT level?
Yes. I do. Modestly profitable, indeed, given, what we experienced in, in the second quarter of, of this year, I should say since mid March, but in particular in the, in the second quarter. You have seen, the car, sales statistics, for the month of, April than me all over the world. And so we have been able to, to, to make out that, outside of China, the, the market has been, extremely weak.
So that will have an impact. This being said, yes, again, I can, repeat and confirm that, the auto cat business is in the first half will be in the black.
How much of the working capital build for the new catalyst plant did you take last year? And how much is left to invest this year. And will you have the net working capital investment for Poland this year or next? So I think the first one is referring to China the second is and specifically on Poland.
So related to the working capital increase, we, we've guided for the first half of this year. So this does not yet include the, the expansion in, in Poland. So that's really what we mentioned. It's, metal prices, PGMs, fresh metals. And so that means that most of this ramp up of this investment in working capital will come next year since we will, in, market the timing in terms of the, of the commissioning of the plan.
So that will take place, next year. And most of that, you will, you will, I mean, we still need to have Obviously, that doesn't mean that part of the working capital, we, we, we may have secured in, in, in recent years, but most of it you will see coming through and in terms of timing that will be next year.
Back to, the cathodes market. So we discussed already LFP but there's also more, discussed about, the hybrid NMCA chemistry, how is you looking at this evolution, and would you be able to supply NMCA if needed.
As I've mentioned on, previous occasions, when we talk about NMC, We actually refer to the broad, family of technology, that, includes this, nickel, materials, nickel, cobalt and other components. So that, covers, equally, and and, hybrid technologies like, NMCA, Indeed. So, It depends, on the, the, the customer developments, certain customers have, preferences, for MCAs, other for straight, NMCs. Some others go for the, hybrid. We work on all the fronts, with our customers and, are pretty, indifferent as to, as to the choices made by customers.
Actually, we're in a position to indeed, to supply any of these, to our customers.
A few questions from Chetan. Clearly an upstate an upside to H1 recurring EBIT versus consensus from these cycling. Do you think H1 EBT Catalysis And E NST are in the right ballpark, or do you see upside, downside to these numbers?
Yeah. To be clear, I do not see, any upside, to these, numbers compared to the, market, consensus. And, in a way, that's why I confirmed that the guidance, the directional guidance that we provided at the end of, April for both Catalysis and Energy And And Service Technologies. Was, still very much, valid. So there is no change, in, since the end of April in this business group that would lead us to, revisit, the, the guidance.
And, unfortunately, today, I do not see upside. I wish I could say something different. The reality of the automotive market is what it is, with, very, very, depressed the figures for, Q2 of, of, car sales, for, for Q2, and, question marks, for the remainder of the year.
Are you able to give any color on the cathode material volumes in the first quarter and the second quarter? And based on current trends, do you think cathode material volumes will grow for the full year 2020?
I would prefer to reserve that question for, the, health care duplication. By the end of July, we should have, a bit more, color on that and hopefully, somewhat better visibility. I would prefer not to answer that question, today.
Can you discuss where the big part of the CapEx cut for 2020 is directed? It is in in which segment was the biggest cut down?
Well, obviously, we're trying to, to adjust the CapEx, to the market in all the different, segments. So, with, no one to highlight one or the other. At the same time, making sure that the strategic projects that you, that we have and that you very well know, remain intact. So,
Yeah. Yeah. I think that's what Filipers just mentioned is really, really crucial. So let me answer the question the other way around. Where have we not cut?
And we have not cut, on any environment health and safety related CapEx. And we have not cut, on the, strategic, growth, projects like, for instance, or current investment program in Poland because we need to be ready in time with these production capabilities to serve European markets.
We go, back to recycling, why is Rudy mentioned more often than platinum in recycling? Does Unicore is overexposed to this metal versus the other else?
No. It's actually, because there is a, a technical difference or mechanical difference, between the two metals. Is that palladium hedgegel and as a matter of fact, we had hedged, a sizable part of our exposure, while rhodium is not hedgeable and therefore not hedged and has a, more significant, impact on the evaluation in results therefore.
A few questions on our competitive position in, in RPM, what are you doing to protect your leading position in rechargeable veteran tools? You've always talked about scale being important to cost. But what about Wingo building over 300,000 tons of capacity? Is this a threat to cattle pricing? Is it a threat to you?
How are you responding?
Yeah. As usual, I do not get carried away by announcements and, announcement effects. And, and if I would also advise you not, being carried away by these, these announcements. The reality on the ground is, is pretty different compared to, all the announcements. So, next to scale, which is important, I would like to repeat that, what matters are join development programs, with the customers.
It's, a technology played. And the ability to scale up, it's not only the scale that matters. The ability to scale up complex technologies in line with the, the, the rapid, ramp up schedules of the, modest and battery customers and, maintaining the, or meeting the quality requirements, the stringent quality requirements, of the automotive industry. These are very challenging, for positions, and this is where, unique floor is, and together with, some peers in the car is thriving. So our focus remains, where I've mentioned on previous occasions that it was.
That is, technology, developments, joint development programs with the customers. It's process improvements. It is quality. And at the same time, it is, building the scale.
There are a few questions on, on, on chemistries in cathode materials on, on be reviving, or so called revivals. So we have covered that, but where do we stand in the development of our silicon and silicon based panels?
Yeah. It's, as we mentioned, the last time we spoke about it, which, must have been, early this year or or in the course of last year, these, new, allied materials are, being, sampled and tested by a certain number of customers, not yet in the automotive, for automotive applications, though. So that is, still ongoing. And, while the 1st generation of materials, is, being sampled and tested, We have already started to work on, next generation of, of such materials, for future. Programs and future applications.
We go to the the guidance of the first half when you say that you expect it to be broadly in line with the levels of the first half of twenty nineteen. Does this mean within the single digit range, on either side?
Yeah, I have to do the math. Now I would say, give or take, 10,000,000 either side, that's what I mean by broadly.
Will the RPM business be profitable in H1's 2020?
Yes.
Going back to recycling, so you did answer, when we talked about capacity in in in recycling. You did mention that we we had to increase these capacity, but you didn't answer on the capacity utilization. So if you could clarify that in Hoboken. So if you could clarify It
is very high. It is very high. So you you must assume that, we have achieved the, the, the ramp up that we said a while ago that we would achieve and that, we are operating in an optimal manner. Please bear in mind, though, that, we constantly, make a trade off, between volumes and, and, the, the mix, in order to optimize our returns in that business. So when I mentioned that we're reaching, the have reached the optimum point, it is, taking into account these trade offs.
So it doesn't necessarily mean that, we are pushing through the maximum volumes. It's, a combination of, high volumes, high capacity utilization, and, ideal mix. High quality, high value mix.
And what about the utilization rates demand in your Korean and Chinese scheduled plans?
Well, it's, pretty much, in line with what you see in the, the market today. That's what I mentioned earlier. We are doing relatively well in the sense that we are moving in line or slightly better than the market. And the, the capacity utilization reflects that. So it's not it's not great.
It's not where we want it to be, and which, means that, from a margin and operating leverage point of view, this is one of the factors which will way on the results. And that's why back in April already, that's one of the reasons why back in April already, we mentioned that the results there would be well below the levels of 2019. So, yeah, there is, indeed, quite a way to go for us to to be back to, better capacity utilization rates.
Question for Philip again. Can you explain liquidity? Increasing by 300,000,000 since April while working capital, has increased with only 1. This is okay. There is only 125,000,000 of additional borrowings.
So why did your liquidity increase by 300,000,000? Okay.
We need to, to, to clarify that. I think you need to differentiate between, on the one hand, liquidity. On the other hand, the net financial debts, on, on the balance sheet. So on that financial debt, we wanted to update you to say that we, we see an increase. And again, that's, the working capital is a topic there Because we've seen in terms of market expectation, but there was a market expectation for seeing a stable net financial debt or even a declining net financial debt.
So we just wanted to give that guidance. Liquidity is a different concept. Liquidity is what cash availability do you have and if you would need it, in the future? And so actually the increase between the 1,200,000,000 of liquidity end of April and the 1a half think the message just sends is that we have ample liquidity and we have been able to increase it further. Actually, most of that and the increase, 300,000,000 increase comes from undrawn committed lives.
The example is the e the the ECB the EV line, the European Investment Bank line, which we're, I mean, very proud of that one, is, committed but it's undrawn today. So that goes into the availability in terms of liquidity, but not in terms of the net financial And so we'll update you on the net financial debt end of July. So there's 2 different concepts. Yeah. Philip, if
I may add, so it's a $300,000,000 increase. Of which 125 is the new EIB line as you described it. And the balance is made up of new lines, committed lines with core relationship banks.
Which are also undrawn at this point. Yeah. Indeed. Yeah.
And do you expect to receive more battery loans in the future? And what is the rate of your loans loan announced this morning?
Look, you probably know that this process with European Investment Bank is a very, very thorough process. So we have been working diligently with, with the teams in the last few months. And again, we're proud of that because it's not just about the money. It's about the fact that I think it enters perfectly in the ambition of the European, European Union. So we're proud of that.
Could we have future loans. I mean, that is a possibility, but obviously that is not on the table today, but we have gone through that process. I think we've build that partnership, which, again, we're very proud of. The term, the interest rate is very attractive. Unfortunately, I cannot provide, details because it's not public, but you can, and you know, that is the principle also of the European Investment Bank.
Is that, this funding is, very attractive funding in terms of, I would say, the market's, market conditions today.
Back to RBM, can you describe the competitive landscape in Europe for RBM? Are you still protected? Thanks to tariffs, from imports from China. We hear that CATL is able to source capital from China. If confirmed, will that be a threat to you?
I would not talk about the protection. The, the reality is that, if you import, products from China into Europe, there are import tariffs. So it's not forbidden, to import. So everybody is, is able to import produce or materials from China as long as you pay the import duties. So the, the, the point is not there, or, or, digit positioning is such that we are the only player, or we'd be the 1st player to have, similar production capabilities in three regions, in Korea, China, and Europe, and a unique ability to serve global platforms in that respect.
And as you, would also, infer from the European, plans, the European Union plans to build a, regional, value chain, innovative battery value chain, clearly, there will be quite some demand for local production, local sourcing. In, in, in Europe. Every region, every country, also has some local sourcing, conditions. For certain industries and the automotive industry is a no exception. So you should not only, look at, import duties and, and, tariffs, you need to look at a combination of factors, which, justify, will justify our presence, in Europe.
The question on the battery recycling, are you still considering a new plan for recycling of battery materials? Do you have an update on when there will be a decision on that matter?
Yeah. That is still work in progress. And, the, the indications that, we have today is that we will not need to, to make, an imminent decision in that respect because the availability of, end of life batteries is still quite a while away So we continue to fine tune, or, process and engineering studies to be ready to push the button at a certain point in time. But it's not likely to be, this or next year.
The shift to EVs is clearly supported by the European Union that this with long term pressure on catalysis?
Well, I think you would have to, to make your own assumptions about the pace at which, EVs will, will penetrate the the market and take over from, combustion engines. Please bear in mind that the hybrids plug in hybrids are also quite popular, in certain regions and, still need a combustion engine Now where I see pressure is clearly on on diesel technologies, because they have fallen all of great for a number of reasons that, you know, as well as I do. And, you have seen quite a number of, automotive OEMs given up on new, diesel engine technology developments. So, I see pressure there more than anything else, in the mid during the short, mid, and long term. Now, when it comes to, gasoline engines, the world would continue need those, for quite a while.
And the good news, as we mentioned already back in our Capital Markets Day, in 2018, is that the, the more stringent emission norms that, are coming into force, require or actually command how your catalyst value per vehicle. So you will continue to see a, I would say a trends of value increase, catalyst value increase, per vehicle, which will be at a certain point in time partly offset by lower volumes another point in time, in the longer term, offsets or more than offset, by, volume decreases. I'm not so concerned about that because this is, exactly, the, the, the, the reason, for the strategic choices that Umicore made many years ago, to be, present across, drivetrain with materials and solutions across drivetrain technologies, and, to continuously increase the value of our solutions per vehicle, which we do and the, the shift in the long run to electrified mobility or to clean mobility, whether it's going electric fuel cells, whatever, is actually a positive, for us as it's driving up the value of our materials per vehicle.
Thank you. There are, a few questions still in in the chat box, but I I believe most of these questions have been answered. It's iteration from on certain questions. If if that would not be the case, please you can contact the the IR team afterwards, but I think Mark admitted that we have covered the covered the the questions.
So thank you, Evelyn, for moderating, the, the Q and a session. And, thank you to all participants for joining, the call this morning. And indeed, as Evelyn offered, if you have, a follow-up questions, please do not hesitate to reach out to our investor relations team. So, thank you for now and, wish you a pleasant day, and bye bye. Talk to you soon.