Corporate Calendar

Solid start of the year

SAB started the year in line with expectations despite downward price pressure on key metals manifesting itself over the quarter. 

The Catalysis business group posted a strong performance in the first quarter of 2023, above the level of the previous year. Global light-duty car production remained broadly in line with the level of the first quarter of 2022, masking however contrasting evolutions. While year-on-year car production in Europe and North-America increased, benefitting from a gradual recovery of the global supply chains, this growth was offset by a substantial year-on-year decline in Chinese car production. Against this background, Automotive Catalysts performed in line with the global car market, with volumes and revenues reflecting the market trends in the key regions. The business unit delivered an especially strong performance in the European and North American car markets driven by its strong position in light-duty gasoline applications and a favorable platform mix. As a strong recognition of its best-in-class gasoline technology, SAB was awarded a majority of the Euro 7 gasoline platforms, further reinforcing its leadership position in this segment. In the heavy-duty diesel segment, Automotive Catalysts benefitted from strong demand in the European market and a gradual recovery in Chinese heavy-duty diesel production. A solid start of the year in the business units Fuel Cell & Stationary Catalysts and Precious Metals Chemistry further contributed to the strong performance of the first quarter.  

In the Energy & Surface Technologies business group, Rechargeable Battery Materials performed broadly in line with the first quarter of the previous year. The business unit was able to reduce its sensitivity to a volatile lithium price through the implementation of hedging mechanisms1. As anticipated, sales volumes of cathode active materials (CAM) remained subdued over the first quarter. However, since the start of the year, the business unit made further important progress in the ramp-up of high-nickel CAM volumes towards end 2023, with significant growth in volumes expected as of 2024. In this context, a new agreement - covering an annual commitment of 20,000 tons of high-nickel NMC CAM for China - was closed with a Chinese battery OEM. First commercial volumes under this agreement will start to be produced as of end 2023 and are expected to result in a material increase in the utilization of SAB plant in China. As anticipated, the performance of the Cobalt & Specialty Materials business unit returned to more normalized levels compared with the exceptional profitability in the first quarter of 2022 on the back of extraordinary strong demand and supportive prices in the cobalt and nickel chemicals and related distribution activities. The performance of Metal Deposition Solutions and Electro-Optic Materials remained stable year on year. Based on the above, the first quarter performance of the Energy & Surface Technologies business group was, as anticipated, below the level of the previous year. 

The Recycling business group delivered a solid operational performance in the first quarter of the year. As anticipated, earnings were below the level of last year reflecting the impact of a less favorable PGM metals price environment, in particular for rhodium and palladium, and the full impact of cost inflation in the year-on-year comparison with the first quarter of 2022. The Precious Metals Refining business unit continued to benefit from a solid input of complex PGM-rich industrial by-products. The availability of PGM-rich recyclables remained however subdued, reflecting the tendency of collectors to hold on longer to scrap materials in a lower precious metal price context. The business unit continues to take measures to reduce the impact of its operations on the environment by creating a green buffer zone around the plant. The demolition works for the creation of this green buffer zone are set to start in May and expected to be finalized by end 2024. 

The Battery Recycling Solutions business unit continued to benefit from rapidly increasing customer interest in its battery recycling technologies. 

Outlook for 20233

In Catalysis, it is expected that the business unit Automotive Catalysts will continue to benefit from its strong market position in gasoline catalyst applications, a further recovery of the automotive supply chain and of the Chinese heavy-duty diesel market. Taking this into account, adjusted EBIT/EBITDA in 2023 is expected to be somewhat above the record levels of 2022, slightly above current market expectations.

In Energy & Surface Technologies, SAB expects earnings in Rechargeable Battery Materials to be in line with the 2022 level. Taking into account the normalized performance of Cobalt & Specialty Material in 2023 compared to the exceptional profitability in 2022, adjusted EBIT/EBITDA of the business group in 2023 is anticipated to be somewhat below the level of 2022, slightly above current market expectations.