Good afternoon, everyone and welcome to this conference call. On March 26, we provided you with the first view of the impact of the COVID-nineteen pandemic on Umicore. The purpose of the call today is to provide an update of what we have seen and done since our last communication at the end of March. As we have explained it in the press release, which was issued this morning, and the purpose is also to answer any questions you may have. For preclinical circumstances, the coronavirus is having a huge impact on our society and my thoughts go, 1st of all, to all those most affected by the crisis.
Also wish to pay my deep respect to everyone who is fighting pandemic in the frontline and who is selflessly committed to the well-being of all of us every day. I would also like to see a special word of thanks to all unicorns employees. I am deeply impressed by their discipline and the hard work they have put in to ensure that our working environment can remain safe and healthy. It is through their dedication that we can continue our business and continue Since the COVID-nineteen outbreak, our top priority at Umicore has been the health and safety of our employees. As of the end of January, we introduced strict hygiene and other precautionary measures, starting with our facilities in Asia which were the first to be affected then later in the rest of the world.
Measures include social distancing, home working wherever possible and systematic disinfection of workplaces. Strict medical protocols were also introduced in case of suspected contamination and our health professionals are providing invaluable assistance to those who needed. A dedicated task force is working to monitor operations on a daily basis to protect our employees' health and contain further spread of the virus. Thanks to the early implementation of such measures, The number of infected employees at Umicore has so far remained extremely limited. In addition to protecting our employees, we are committed to mitigating the impact of COVID 19 on Umicore's results as much as possible and to taking measures needed to limit our expenditures.
For example, where necessary, we quickly adjusted our production, which also meant, unfortunately, that we placed some of our employees on temporary unemployment with 10% approximately today on further We continue to support all colleagues, including those who are temporarily out of work and hope to welcome everyone back again very soon. We have also re examined our investments across the various activities and postpone them where possible. We now expect our capital expenditures in 2020 to be around 1000000 to 1000000, which is well below the 2019 level and also well below the spending we had initially planned for 2020. The Board of Directors has proposed to reduce the dividend for the full year 2019, to per share, which actually corresponds to the amount of the interim dividend that was already paid out in August 2019. Umicore is financially healthy and has a strong balance sheet with no less than 1,000,000,000 in readily available cash, providing a strong buffer in the current uncertain times.
Jimmy Chorus Debt also has a balanced and well spread maturity profile with no major maturity before 2023. Nevertheless, in this uncertain market context, it is important that we take these precautions to maintain the financial strength. Of our company. Before the full effect of COVID-nineteen was felt ubicorp produced a strong performance in the first quarter of the year, well ahead of the equivalent period in 2019. This performance primarily reflects a strong contribution from the Recycling business group, where all business units contributed to the results.
Precious metals refining benefited from supportive supply conditions and favorable metal prices. Training conditions for precious metals in certain platinum group metals were favorable in our precious metals management unit, while Jewelry And Industrial Metals benefited from strong demand for gold investment projects and gold recycling services. Both Catalysis And Energy And Surface Technologies also made a good start to the year with the automotive catalyst and rechargeable battery materials businesses outperforming the car market in the first quarter. Unfortunately, the outbreak and further spread of the virus first led to a significant contraction of the car market in China in February, then in other key regions such as Europe and the United States from mid March. And that impact was also felt in Umicore's automotive catalysts and battery materials businesses.
I suppose that it has by now become evident to all observers that the automotive industry has been severely hit by the nineteen crisis, with car production down by 25% year on year in the first quarter, for example. The impact differs from region to region depending on the phase of the pandemic. In China, where car productions fell drastically by 80% in February at the time of below the 2019 level. This decrease was even more pronounced in the electric vehicle segment which was 57% below 2019 levels. Demand car demands in the world's largest market remains weak.
And high stocks in dealerships mean that a rapid recovery of production in China seems unlikely to date. In other key regions such as Europe and North America, where the virus is currently spreading or peaking, Automakers have been forced to shut down assembly lines in recent weeks, and there are lockdown measures imposed by national governments. As a result, in March, the number of cars produced in Europe fell by 45% and in the U. S. By 30% compared with 2019.
For April, we assume that there was hardly any production in either region. However, demand also fell considerably as end users do not immediately buy new cars in times of recession, and especially, and that will be fairly obvious when car dealerships are temporarily closed. In Europe, car production is restarting, albeit cautiously at some manufacturers, and we expect a similar trend in mid May in the United States. However, even if car production is resumed on a larger scale and the lockdown measures are lifted, we do not expect consumer demand for cars to recover quickly as the purchasing power of end users may be affected by COVID-nineteen and the ensuing recession. You recall, therefore, currently expect car production for 2020 to be about a quarter lower in 2019 levels.
Looking now at the impact of COVID 19 on our various businesses, it is clear that in the Catalysis segment, the Automotive Catalysts business and in the Energy And Surface Technologies segment, the rechargeable Battery Materials business are most affected by the impact of COVID 19. After being affected in China around the lunar New Year period, Umicor has had to temporarily shut down its Catlin's manufacturing plant in regions outside China, Japan and Korea since late March, since our vehicle manufacturer customers shut down their own production. Humor demand is only expected to be felt from the second quarter. Other business units, including fresh smell and cobalt and special materials are also significantly affected by the economic recession and lower market demand as a result of COVID-nineteen. By contrast, in the recycling business group, the factory in Hoboken And Umicore's other recycling plants have continued to operate, subject, of course, to strict precautionary and argument.
National Management Business Unit continues to benefit from favorable trading conditions for certain pressures and platinum group metals while the Jewelry And Industrial Metals business units is benefiting from strong demand for recycling services, and gold investment products as customers seek out a safe haven and invest in gold. Let me now turn to the 2020 outlook. Despite our strong start to the year, the impact of COVID-nineteen on the automotive industry and therefore, our unicorns automotive catalysts and rechargeable battery materials businesses will have a significant impact on our results in 2020. Based on our current assumption that global car production may decrease by about 25% in 2020 compared to last year, we expect recurring EBIT in Catalysis And Energy And Surface Technologies to be well below 2019 levels. This impact will be partially offset by the Recycling business group based on the strong performance in first quarter and the assumption of continued favorable supply conditions, recurring EBIT for recycling in 2020 is expected to be well above 2019 levels as serving metal prices remain at current levels.
It is not clear that COVID-nineteen has a huge impact on the world economy, in particular, the car sector. However, it remains difficult to estimate the duration of the crisis and the visibility on market demand is to be extremely low. It is therefore impossible to provide a reliable, quantified outlook for the group in 2020 at this time. Nevertheless, We expect Umicore's recurring EBIT to be well below 2019 levels. Umicore has demonstrated in the past that it can adapt quickly and flexibly to changing market conditions.
Unconvinced that even now we have taken the right precautions and set the right priorities to get through these uncertain times without compromising our long term strategic success. And therefore, looking forward to continuing our superior growth trajectory once this crisis is overcome. In the meantime, we will continue to closely monitor the impact of COVID 19 on our end markets and we undertake to inform our shareholders according to visibility about the impact on our activities and the measures taken at appropriate times. With this, I would now like
Your first question comes from the line
Hi, thank you for taking my questions. Just on the How should we think about the margins given the expected drop in volume? And how should we think about the EBIT drop through from these lost volumes. That's the first question. And then the second question on from a cash flow perspective, the press release talked about a managing the working capital.
Could you please provide some color on how we should think about that for 2020 in light of some thoughts being ramped up? What if, like, after that, so should we be anticipating?
Hi, Mubasher. Let me start with the first question and then I will hand over to Filip to speak about working capital. Obviously, there will be an impact on margins as such a significant drop in volumes that our customers means a significant drop at volumes in our businesses as well. And given the level of fixed costs that we have, in these high-tech businesses, I mean, in particular, the catalyst and the rechargeable battery materials businesses, the volume drop, will have a significant impact on margin indeed.
Yes. Maybe choose to add to that because I've seen there's been some questions on operating levers and on costs indeed. I would refer maybe if you want to have some indication, to the annual report, if you look at notes 9 and 10, there you have some costs, details on the group in general, and that was for 2019. Obviously, to be careful with it. It gives you some indications.
I mean, you know, that we have, already on the DNA side, we had last year, 244,000,000 of depreciation. So this year, clearly, that will increase again by, I think, 10%. So that's also in the fixed cost beside. On the so maybe that's helpful for you. On the, the working capital, I mean, extremely difficult to look to the future.
And if we look today, remember when we came out with the full year results, we gave a bit of a guidance for a higher working capital, really driven by higher metal prices and especially the PGM prices. And clearly, we've seen in the first quarter, higher PGM prices also higher, I would say in general precious metal prices. So that has played the role. So we have somewhat of an increase in our working capital base, again, driven by those cattle prices. Your question going forward is is very difficult to address because as you can imagine, it all is related to, to, I mean, to volumes, to timing, And that is very uncertain.
You can also imagine that in the supply chains, everybody is in a way faced with similar challenges. And so everybody is trying to optimize working capital. So I would say, unfortunately, you have to bear with us because we don't have the visibility today to make any reasonable assessments on working capital going forward. So so far, we've had some increase, but driven by metal prices.
Thank you. If I may just one more on Holbrook. You said that HolbrookOM is currently operational. And if I was to think about it from a year on year perspective, from a utilization perspective, there were some extended shutdown last year. Is Hoboken up similar sort of utilizations compared to last year or is it at lower levels given the demand and an impact from social distancing too?
The several comments around at what rates it is currently operational at?
Actually, Hoboken is working at the high level of utilization, despite the hygiene measures that have been introduced, we managed to realize the improvement that we said we would realize indeed. So it's a very high utilization rate and a very high contribution or performance so far in the group.
Thank you. And your next question comes from the line of Mutlu Gundogan. Please ask your question.
Yes. Good afternoon, Mark and Philip. Two questions, if I may. First is on your, expansion program in battery materials. Do you still think you can reach the 60 gigawatts of cathode materials capacity by mid-twenty 21?
That's the first question. And then secondly, obviously not yourself, but also other players have been expanding capacity. Demand for EPs has come down. So there's probably some overcapacity right now in the market. What are you seeing in terms of price development?
Is there price pressure? If so, how significant is that? Thank you.
I can start, Mutla, with the second question because it's pretty straightforward. Our sales are already priced. It's based on, on long term contracts. So, the current situation has no impact on prices. The impact on margins that I referred to earlier is coming from the volume and the leverage effect only.
And in terms of capacity expansion, I think we should probably reserve that for a later occasion because Let's see first how the market develops. The visibility today is so poor that I would probably not want you to venture there. We continuously adjust to market conditions. And I think it would be somewhat premature confirm or not confirm any such targets.
Your next question comes from the line of Gunther Dickman of Bernstein.
Hi, good afternoon, everyone. My first one is on one of your competitors reported 15% volume growth in Q1. Are you able to say if you are holding your market share Talysis market at least in the first quarter? And second question is on the CapEx side. How much of the reduced CapEx, not CHF 1000000 to CHF 450,000,000, would you say is still growth CapEx?
And how much is maintenance CapEx? And then thirdly, just a small technical question. The fellow staff, are you paying any top ups in terms of wages towards them that would still be a cost to you or is that all covered by the government?
Hi, Gunther. Let me start with the 3rd question. Yes, we're topping up some of the government allowances because I want to make sure that, those of our colleagues who are hardest hits by the crisis because they are on temporary unemployment, still make a decent income and stay engaged with the company. So indeed, we do that. And I have to say, and again, the reason I started off by thanking the Umicore employees for their engagement is that I see an amazing level of engagement in the company and hard work to go through the crisis and I'm really, grateful to our employees for keeping up the morale and keeping up the operations in the manner that they do today.
In terms of CapEx, the cuts? Yes, it's growth. It's so the vast majority of of what we have now in the expectation is indeed a growth CapEx, of course, some maintenance CapEx is still there. It's not always easy to make a clear cuts between maintenance CapEx and the growth CapEx because every time we do, I would say replacement CapEx, we seek improvements or expansion as part of that. But the vast majority is growth.
And there is one category of CapEx expenditures on which we're not making any cuts. That's all the CapEx related to environment, health and safety. So this being said, the vast majority is growth. And then last, in reverse order, let me go your first question. I haven't seen any of our competitors in Catalysis publishing any figures for Q1.
As far as I know, Umicore is the first is first in line to come with the publications whether it's now at Q1 or half year or full year always. And this time, it was no exception. So I'm not trying to understand where the 15% reference comes from.
Maybe just thanks, maybe just to clarify, Mark, the 15% comes from BASF's results this morning in the Catalysis division. And on the call, they commented that the equivalent of the Automotive Catalysts business performed very well.
Yes. Their Catalysts division is in no way comparable to ours because It includes many, many things that are unrelated to, emission control catalysis for the automotive industry. So I'm afraid that, this is not a benchmark that we can use and I cannot make any comments on that. Suffice to say, at time, as we mentioned it in the press release, that the we were off to a very good start in Automotive's catalyst and that we outperformed the car market in the first quarter of the year.
Thank you. And your next question comes from the line of Charles Bentley.
Hi, Mark. Hi, Philip. Thanks for taking my questions. So firstly, when you reported Q4, it seems that completing the Poland plant this year rested on a CapEx level, at least equal to, if not in excess of the GBP 550,000,000 spent last year. Does that mean that Poland essentially can't complete this year?
Secondly, so if I look at the release today versus a month ago, you have a cash position that's GBP 200,000,000 more favorable, is this essentially a working capital inflow between those two points in time. And I guess if pricing has been a negative, that would mean that volume has been a strong positive inflow. And therefore, kind of from here, would you, as your customers start to ramp back up, you would expect a working capital outflow like And I am not asking for you a number. I'm just trying to understand that basically this is the point where you've seen a significant inflow on a volume basis. And then finally, what's your current budgeting expectations around capital volumes for this year?
Are you assuming they're up, they're flat, they're down? And whether you can give any indication of year to date, China's obviously been more challenging, Europe has been quite strong.
Hi, Charles. Let me start with the third question. And, no, we're not giving any detailed guidance. And again, I have to repeat and insist on the fact that market visibility today is absolutely in existing. And I don't think it would be wise to to venture into a precise guidance.
I mean, if I could put it, if I had to put it in another way, If our automotive customers do not know what to expect for the rest of 2020, how could I venture into making this kind of detailed forecast Market visibility is not there. I'll let Philip comment on, answer your second question, but I would like to come back to first question about CapEx. The construction in Poland is ongoing. And, remember, we have we building the plan on the back of existing contracts. So we'll have to deliver on time.
And so the construction is ongoing and the CapEx caps are spread across units across the activities, again, with the only exception being for environmental health and safety, capital expenditures. And, but if I can reassure you, the construction of the plant in Poland is ongoing. Philippe, sorry for the
cash. So Charles, so the $200,000,000 increase versus the last release really was not referring to any underlying cash flow. It was more to say that the immediate cash availability, so I would say the short term liquidity of the group has further improved the increase versus that, that release. And that increase became came basically from additional committed credit lines that we have been able to secure. So it's really a message of of comfort that the short term liquidity has increased that, in general, from our broad banking relationship group that we receive full support.
And it was not so much referring to underlying cash flow growth. So on working capital, As I mentioned, compared to the end of last year, we've seen an increase driven by the metal prices. And to answer your questions, do we now already see a major inflow for cash from that, no, that is not the case. But so it's more more to reinforce the message that in terms of short term liquidity, we're very comfortable and have increased our position.
Thank you. Your next question comes from the line of Chetan Udeshi. Please ask your question.
Yes, hi. Thank you. Just maybe a couple of questions. If it's easier, Mark, If you can give us color at all on how to think about, say, if you have a 1 month shutdown in Catalysis or across the group in automotive, any sort of view on what is the earnings hit that you are taking on EBIT basis that will be used for any some a quantification? And second question was, are you seeing any slowdown in terms of customer activity on qualification or roadmap into the next few years to what's happening right now?
This is of course related to more on rechargable battery materials business?
Hi, Chetan. No, I'm not ready to give details about the earnings impact of a month shutdown. Obviously, it is sizable because This is a fairly, a relatively high fixed cost business. And so it's it's painful, but I'm not going to quantify that. Do we see delays in in qualification in the rechargeable battery materials.
I have to say, to a certain extent, yes, for practical reasons of, I would say, travel restrictions, customers, for, I mean, during a certain period of time, not being allowed to come to the plant or not being allowed to interact the authorities, etcetera. Whether it's on the research side, on testing side, on the line qualification side. So the mobility restrictions have meant a certain technical difficulty to to keep all the qualification programs on the original schedule. The roadmap in a way is unchanged in terms of the programs on which for which we are in the process of qualifying It is just indeed some practical delays due to restrictions. We see that.
Thank you.
Thank you. And your next question comes from the line of Sebastian Bray Please ask your question.
I would have 2 please. 1 on the recycling segment, one on automotive cathode. The first one on recycling, could you provide an update on how much of high gold palladium price you have locked in for 2021, I imagine that specifically your current gold price is such an attractive thing to do. Second question on automotive cathodes. Can I just check a comment on the pricing?
So if I'm understanding correctly, Mark, the pricing looks as if it will be flat year on year. Can you do you have the same level of certainty around volumes? And am I right in saying that the majority or the vast majority of UniCore's volumes as produced in 20 20 are covered by take or pay. And does this include ones not disclosed like the LG and Samsung contracts?
Max Sebastian, do you want to start with the hedges hedges?
So the update of the hedges, remember, in February, we already mentioned that, and we're really talking precious metals hedging that we had significant hedges already in place throughout 2020 and partly for 2021. We have since then that was beginning February increased some of these hedges indeed. Also, by now, obviously, for this year, we have, 3 months behind us. The passage on the hedging is that for the precious metals, indeed, certainly for this year and partly for next year, we have the large majority And we're talking about gold, we're talking about palladium and partly also platinum. We have that indeed locked in The only exception, and I want to repeat it because it's important is obviously the volume price because audio is not eligible or efficiently eligible.
So yes, we have increased somewhat our positions. So the large majority Sebastian,
could
you put yourself on mute because we hear background noise. So let me go to the, your other questions. Maybe I've misunderstood your comment. And if that's the case, please forgive me. But I didn't say that the prices were flat.
I said that prices are unaffected for us are unaffected by the COVID-nineteen crisis and the possibility that there would be either capacity in the market because the prices at which we're selling today and next year, etcetera are defined, were defined by contracts entered into in prior periods. So they are not subject to, I would say, short term fluctuations in the supply and demand balance in the market play. And beyond that, again, I think it would be premature to comment on where premiums would be this year. And that's why I think it makes sense at this point in time to share with you that we see the automotive market in general going and we'll have to fine tune these assumptions, in over the course of the next few weeks and few months. When the visibility becomes better.
Do you have any comments in particular on expected market share or is it
too early at this stage? No, again, for the same reason, I think it's, I think it would be, to, I mean, I would find it difficult to make comments on market share. I don't see any reason why market shares would move in a material manner either way. And as I would say, the qualification programs and qualification roadmaps are pretty much unaffected by the current situation save, for the temporary effect that I mentioned previously of the practical impossibilities, sometimes of, of meeting and interact by new lines of
Thank you. And your next question comes from the line of Geoff Hair of UBS. Please ask your question.
Good afternoon, Mark and Philip, and thank you for the update. Just two questions. First one on the Catalysis business. What is the risk that the Catalysis business could be loss making at the EBIT level in Q2? And secondly, I was just wondering if we get back to a more normal economic environment in 2021 or 2022, would the implication be that the CapEx level goes back to what you were expecting at the beginning of this year?
Hi, Geoff. Since we're not publishing quarterly results, I don't think it would make sense for us to provide a quarterly guidance on what the Catalysis results could be in Q2. So I don't want to do that.
But I'm trying to get what the probability would be, not what the guidance is. I mean, that's what I'm trying to understand. Given the comments you've made on fixed costs?
Yes. But actually, we're not going I'm not going to answer that question. This is not
a confirmation
we're willing to give. I think it's, it's also quite sensitive from a commercial and competitive point of view. So I don't think it's with the service to do that. Then, yeah, the question about the future CapEx is really a tough one in the current circumstances because, as we speak today, I have a hard time conceiving what the new normal will be. If you say when things will get back to normal, either in 2021 or 2022.
So I still have to figure out what normal will mean at that point in time. And so I think there is a good chance that the CapEx will, would go back up again But I cannot actually qualify by how much or by which margin. It would go back up again because most of the the, I would say, the savings that we have today or the avoidance that we have now this year in terms of CapEx are things that we're pushing out. There are not many things that we are cancelling. There are a lot of projects that we are rescheduling instead.
So I would say without being able to give any ideal indication of by which margin, I would say, yes, there would be a great chance that the CapEx would go back up again once things get back to normal or closer to normal and of course, subject to, being able to define what normal is on
Okay. Thank you.
And your next question comes from Chris Stofander Galen. Please ask your question.
Hi, good afternoon for taking my questions. You've stated in the in statements that you said that the EBIT for Catalysis and energy and service technologies are going to be well below the EBIT level of last year. Would you dare say that the that they would still be positive or would that be too bold a statement And the second question would be on the supply chain. Have you had any discussions with your, clients and suppliers noticed that there would be some shift in the supply chain that they would like to bring these closer to home, reschedule or rearrange these in any way. I'm not sure how you supply look like I guess they're already close to customers, but have there been any such discussions that you've noticed of some kind of de globalization or double, double lines in your supply chains?
Yes, I think you will need to help us and clarify what you mean with your second question. But in the meantime, let me answer that, yeah, at this stage, we only want to say that well below these 2019 levels, Again, I think it's the visibility is such that there is no point in trying to quantify the guidance. But on second question, Christoph, can you repeat the the question maybe try to clarify what you wanted to get it?
Well, it's sort of, as we see now, that's there. They try to, I guess your supply chains are now, for instance, that some of the products that you make in Europe or come from supply chains in Korea. And of the places, do you see that there's a tendency that, your supply your customers are asking to have them closer to home, and that they sort of want to have? Because if they look up Asia again, and there's no parts flying and things like that. I mean, we've also seen with a couple of companies that supply chains are more disrupted because there's is difficult to find space on the shipping planes, and to have in that way, to have some supply closer to home, a second batch supplier closer to home.
I think Malek is alluded in a way. I know it's a very different sector, but they alluded in a way that car companies want to have a bit of a double a double lineup of supply and have some batches have a bit more inventory closer to home and then they have had in the past. So have you had any discussion on the just in time supply chains that might be in place today?
No, for the simple reason that we already have it in place. And whether you look at our Catalyst business or our other businesses, we produce where the customers need us to produce. So it's not like we have a huge production hubs in 1 or 2 countries serving the entire world. We produce, in China, for China, we produce in Europe, for Europe, we produce in North America for North America, we produce in Brazil for South America, and in India, for India, in Southeast Asia, for Southeast Asia, etcetera, etcetera. So, we're not so much affected by this type of request or trends.
Because we, in a way, we have always made to choice the, as part of our business philosophy, to produce in a close proximity, in a close vicinity of where our customers are, where our markets are. And if you look at, for instance, the for Catalyst, it's quite well established elements. If you look at BATCH Materials will be the 1st player in the industry to have production capabilities in 3 key regions for EVs, while all of our competitors in that space have manufacturing capabilities in a single region. So not a topic for us, a topic for probably several of our customers. And this being said, It will not be easy for automotive supply chains to adjust completely to what you described, which I think is adjustment, but I think it will be complicated because if you look at, I mean, a car is made of more than 10,000 components.
And so I think it would be, in illusion to think that all 10,000 components can be made in 20 different locations around the world to serve 20 different big production centers.
And your next question comes from the line of John Baptiste of Roland. Please ask your question.
Good afternoon, Mark. Good afternoon, Philippe, and thank you for taking my questions. I would have 2, please. You're saying that visibility on volumes in cathode material is pretty much in existence. And at the same time, you stated that you have to deliver volumes from your Polish plant on time.
I thought your contracts were meant to start pretty soon. However, with LGM and Samsung, And that's pretty much the majority of the portion of these contracts were actually stemming from your Polish plant. I was just wondering if you could clarify if I misunderstood anything here. And then second question on, the competitive markets in Asia, for cathode materials and also catalyst. Do you expect to see any I know you talked about market share not being currently, but would you expect some competitors which are not necessarily as well funded as you are with a weaker balance sheet?
Actually potentially be forced out of the market simply by issues related to the to leverage balance sheet and etcetera. Thank you.
Hi Jean Baptiste. So for now, I don't see many changes in the competitive landscape, but it's probably early days to early days. For that to happen. So I cannot totally rule it out, especially in the battery space where you have a lot of I would say campaigns maybe with not a lot, we have a number of companies, that may not have a very I would say a strong balance sheet, indeed, but again, too early to tell. In terms of the the cathode material production.
Let me clarify that our plant in Poland is due to come on stream towards the end of the year. And to start commissioning at that point in time. So there is no change to that. The contracts are indeed contract that you referred to already did in place already this year and for deliveries out of other locations that Poland, because Poland is only coming on stream at the end of the year. So there is no change there to the contractual configuration.
Thank you. And your next question comes from the line of Georgina are you Motto of Goldman Sachs. Please ask you.
Hi, good afternoon, Mark, good afternoon for Thanks for taking my questions. And my first question is on your expectations for EV penetration rates. So you've been very clear that you expect a materially lower overall auto production number for this year. But how do you think about the kind of relative volumes in terms of catalysts, sorry, in terms of combustion engines versus electric vehicles? Like do you think that actually you'll see materially negative volume in both Catalysis and electric vehicles, but one might be more pronounced than the other?
And then I have a question, just in terms of your customers in RBM, the 2 kind of very well known ones have recently lowered their revenue growth forecast for for EB batteries, but they still expect high double digit growth this year. Is there a particular reason for the discrepancy in the kind of growth outlooks from Umicore versus its customers? And then final question is just quickly on recycling. I'm just wondering if you could give some idea if you've seen a change in mix in the first quarter versus the end of last year? Thanks very much.
So let me start with the in reverse with your questions in reverse order. So no, there is no major change in the mix compared to what we processed towards the end of last year. The mix is very supportive. We have a high proportion of very complex materials, end of life materials, spent catalyst, electronic scrap and other complex materials, rich in precious metals. And so no, no, the mix is really a fairly continues to be good and continues to be in line with the comments we made towards the end of last year.
Then, about the, yeah, the statements made by, one of our customers and our statements about the outlook. I've only made an outlook about the, the automotive industry in a way. So and today, we don't have and actually I'm answering both your first and your second question at the same time in a way. I don't have a lot of I don't have granularity in terms of the market outlook at what and what the engine mix may look like for this year. I think it's a really complicated situation in the sense that our customers themselves or automotive customers themselves have no view because for the time being, consumers are simply not buying cars or not in the mood to think about buying cars.
So it's difficult for car companies to make out, what the overall volumes and what the mix may look like going forward. And this has repercussions on the value chains, whether it's the catalyst or the easy batteries, value chains. And so I cannot make a lot of comments about my customers' comments. I can only repeat that visibility today is at its lowest. And I find it impossible to to make any sensible forecast about the mix for the time being.
Thank you. At this stage, we will take 2 further questions. And your next question comes from the line of Wim Host Please ask your question.
Yes, good afternoon. Also two questions from my side. First on recycling and whole book and Can you offer us a little bit additional clarity on how much visibility you have for that business? How much material, for example, is already on-site? How many months can you work with that or how sure are you that that material is on its way and will come in.
So that's the first question. And the second one is, yes, on the dividends policy, you canceled the final dividends, but what does that mean for the dividend outlook? Is it a temporary cancellation? Do you expect to resume very shortly with the $0.75 once a bit more visibility on the economy emerges. Any clarity on that will also be appreciated.
Thank you.
Hi, Wim. So typically we have approximately 6 months of the ability, for the, I would say, the supply in, in Hoboken taking into account a combination of materials that is already at the plant side, materials that is on its way and I would say supply contracts that are confirmed. So we have, I mean, it's an approximation, but just to give you a rough ID, we have quite a good visibility there. Yes, the second question is difficult because I think it would be, again, premature to make any pronouncements about the dividends, the next steps in terms of dividends. It's not like we absolutely had to cancel the you call it the balance of the dividends.
The final dividend of $0.375, I mean, we have the financial strength And it's not like we had liquidity issues or we were stretched and could not pay out. We could not pay it out It's just a matter of precaution because the visibility is low, the uncertainty is high, and we are quite highly exposed to a sector, which is hard hit by the inter crisis, the automotive sector. So we thought that this was the right precautious to take and in addition, because, we have such a painful impact on employment We also wanted to show that there is a degree of solidarity and social cohesion that is required for the company to navigate these trying times. And that's why we thought that the shareholders should share the efforts together with the employees and management. But unfortunately, in the current circumstances, I cannot provide, a view of what the board's position will be on the next steps in that respect.
And you will have to bear with us, most likely until the end of July when the board meet, again, and we'll have to make a pronouncement about the dividends or an interim.
Again, thank you.
Thank you. And your last question comes from the line of Edward Donahue Please ask your question.
Gentlemen, good afternoon. A couple of my side. I mean, just to get an idea on the production sites? Or are all your production sites up and running or are any of them actually closed? And then just with regard to the 10% of employees on government schemes, where are they actually sitting on those government schemes, which geographies and how long do they run for?
Hi, Heather. So, we have, as we mentioned, we have closed we have temporarily closed production capacity and in the automotive catalyst. So we have closed some of our plants outside of, you know, automotive catalysts again, outside of China, Korea and Japan. For the simple reason that the automotive industry, so our customers have shut down their assembly lines outside of China, Korea and Japan. So this is the with a few exceptions, I would say these are the areas where, or we have people on the government schemes for temporary unemployment.
This is in countries like in regions like Europe, North America, in, in some other regions like India, etcetera, South Africa, in South America. So where basically the automotive catalyst plants are not running because the customers have shut down their assembly lines. It's fully aligned.
Okay. And how long do you actually have the support on the government schemes for? Because a number of them are actually sort of quite tight at this particular juncture with regard to their runoffs?
Well, actually, where we do have them, it's there are limited they are not strictly limited in time. Of course, governments and business and companies alike I like hope that this will be for a very limited period of time. And there are signs of hope there is light at the end of the tunnel. We see some European carmakers restarting or starting to resume production gradually in certain countries in Europe, we may expect the same to occur in some of the regions. Once these regions will be part the pandemic peak.
So hopefully it will be for a limited period of time, but in most places, we don't have a strict limit.
Right, okay. And then just with regard to the region that has opened up the Asia region, where what level of utilization are you seeing in your plants as of now as of in April as we've moved on from the closed off period?
Well, as, I mean, you have to look at the market statistics about the power production in these regions. And And then you will figure out the, I would say, you will have an indication of where we are. We are basically moving in line with the market in these regions as well.
So if I take those statistics.
As I mentioned, The recovery is not that quick in countries that are past the peak. Because there is still a degree of fragility in the economy and in consumer behaviors. So you should expect that it will take a bit of time for demand to recover in those countries, which are on the on the way to normalization of the peaks.
Okay. Last point, I mean, I take your statements at the beginning regard to the employee base and the support and flexibility. But I'm also thinking that as you if I take those statistics in here and then the regions are now reopened, the utilization of your plants is significantly soft optimal. And you also won't be getting the government support programs that might have existed in those areas. They were, what do you do with regard to the cost structure there?
What do you mean?
Well, how, yes, the under recovery that you'll be getting as you're actually ramping up? Do you, I mean, it's trying to get an idea of the flexibility you have now on that cost side.
Well, again, as I mentioned, on previous answering previous questions, we have a certain level of fixed cost and Philippe also give some indications of where to look for, quantified mutations in our annual report. And I mean, it's not because We have a temporary shutdown that we don't have these fixed cost and depreciation charges continue to run and some of the overhead continue to be there. We cannot decide not to pay, the people, or, obviously, because of the utilization is less than than better download. So the flexibility is as what I described it. It's on where we have is where we have placed people on the temporary environment.
The flexibility is on the CapEx side. Where we can decide, to cancel our postponed projects. But we cannot decide not to pay our bills.
No, I appreciate that. Okay. Thank you very much. And a good presentation. I appreciate it.
Thank you.
I have no further questions.
Sorry, I was anticipating already a little bit your comments. Sorry about that. So with this, I would like to close the call for today. And thank you for your participation and invite you to raise further questions that you may have directly to our Investor Relations team. And despite the very peculiar circumstances, I would like to wish you a good long weekend for those who will have a possibility to somewhat enjoy the labor day.
Holiday, public holiday tomorrow. And, of course, I wish everyone to stay healthy and to keep well. Thank you for now.