Navigating the peaks and troughs for long-term growth

How long have you been working at Umicore and when did you join?

I started at Umicore back in 2005 as a management trainee in Group Control in Brussels. This followed with financial controlling positions in Cobalt & Speciality Materials (CSM) in Olen, Precious Metals Refining (PMR) in Hoboken and Electro-Optic Materials in Olen. Through these experiences I could get to know the Umicore Group, the different business units and activities, and also build a network, really connecting with the business. I then moved into general management in 2017 first with assignments abroad in France before returning as SVP for Electro-Optic Materials, and then onto my current position as CFO in October 2022.

You were among the first young graduates, tell us why the program is so important.

I was in the second wave of the newly created young graduate program or management traineeship as it was called then. A similar concept but slightly different in that it welcomed people who had graduated or those who had had a first work experience elsewhere. In my case, I had already worked at PriceWaterhouseCoopers as an auditor and advisor when I came to Umicore in September 2005. The Young Graduate Program provides a great opportunity to gain experience in the world of work but also to take ownership of your own career. Typically, you have important assignments and the freedom to define and structure how you will deliver and achieve the outcomes of the project you have been set. You define your own success. It is also a yearly “rotational” program so employees gain experience and a flavour of the various aspects of the business in a way that they would not if they responded to a specific job opportunity. The fact that you rotate also means you are confronted with the challenges from different angles, functions and units. It’s an excellent way to learn about the business.

What were the pivotal decisions in your career that shaped your path towards C-level? What advice do you have for today’s young graduates?

My advice: take every challenge as an opportunity to learn and actively develop yourself and your technical and professional skills, particularly in leadership. Look for diversity in teams, embrace it and learn from it. Build a network both within and, equally important, outside the organization. Bring in outside perspectives and continuously challenge yourself and your current way of operating. And remember, there maybe times when you are ready to take on a new opportunity but it may not be immediately available. Use the time to continue developing yourself, challenge your leadership style, experiment with your team to see how you can achieve even more together. Take the constructive feedback and learn from it. Define your own future, create your own opportunities to learn and consider situations from different angles. This is your golden opportunity, seize it!

What is the most challenging aspect of your role as CFO?

Dependency on the effectiveness of the organization to be successful, particularly when thinking about performance and risk management. You need solid insights and understanding of the different business areas and quick access to the right data and
market intelligence in order to be able to challenge teams. You need to know how detailed the teams are; how open they are in sharing what is really happening on the shop floor; what is really happening in the market versus what the competitors are up
to; how we are performing in terms of our products, price, quality, delivery times and so on. Simultaneously, you need to balance
this with the appropriate trust towards the teams. I believe the key to being successful in this role is bringing outside perspectives in, and ensuring the Group makes business decisions that are well aligned with our 2030 RISE strategic and financial
performance goals.

“Define your own future, create your own opportunities to learn and consider situations from different angles. This is your golden opportunity, seize it!”

Wannes Peferoen, Chief Finance Officer

How has Umicore managed to navigate the headwinds (e.g. rising inflation & interest rates, energy crisis recovery, geopolitical tensions, more stringent regulation and fluctuations in the price of precious metals)?

On the one hand, we focus on the factors that we can control. We accelerated initiatives around operational excellence in a Group-wide program called Efficiency for Growth. Focus is on income generation and price setting, on procurement savings and creating greater efficiencies in our operations. The program is driving the mindset of continuous improvement. Umicore has the ambition to be a frontrunner in sustainability, think of our “Net-Zero” strategy. We are convinced that this approach generates a sustainable competitive advantage in the context of geopolitical tensions and climate change.

For the factors we cannot control, we aim to reduce the impact and increase the visibility on our future earnings. For precious metals, we adopted a strategy of increasing the hedging of future exposures. The metals management team successfully developed forward sales opportunities for all three Platinum Group Metals (PGMs) up to 2028. Similarly for energy, the procurement team was able to lock in a large share of the energy needs of the major European operations through sustainable long-term supply contracts at attractive conditions. When it comes to rising interest rates, it’s again similar to energy and metal prices and therefore about securing the longer term. Having a long-term financial perspective, locking in for longer tenors with attractive conditions helps us to bridge those periods when we are facing headwinds. If you look at the overall weighted average of the interest cost, it remains attractive for the Group.

This past year has been the first full year of the 2030 RISE Strategy. What progress has been made in implementing the strategy?

We have secured long-term value creative contracts supporting the expansion of Battery Materials in Europe and North America. Additionally, we have made substantial progress in securing business to improve the utilization rate of battery materials activities in Asia. We also carved out the Battery Materials Business Group to support the rapid growth and remain agile in case of future opportunities. On the one hand, we reduced the funding needed to execute our strategy. While on the other hand, we have secured funding (e.g. close to € 1 billion in non-refundable government grants), reduced working capital and renewed funding instruments (e.g. € 600 million from the Revolving Credit Facility (RFC) until 2030 and an eight-year loan granted by the European Investment Bank for € 350 million). In Catalysis we reinforced our market position across the different regions and were able to demonstrate significant cash flow generation. We demonstrated that the € 3 billion to be generated between 2022 and 2030 is well on track. In recycling, we continue with our strong performance despite the headwinds in PGMs.

What achievements are you most proud of over this last year?

2023 was about creating clarity and laying solid foundations to meet our strategic objectives going forwards. The clear funding roadmap with different options, which was stress tested under various scenarios and on the back of deteriorating macro-economic conditions is a key achievement of the past year. We also designed the Enterprise Performance Management platform for the whole Group, encompassing Finance, People & Organization (P&O) and environmental, social & corporate governance (ESG). Promoting and instilling an operational excellence mindset across all businesses and support functions has also been another notable achievement.

What three words sum up 2023 for you?

Agility because in the past year we have had to overcome some adverse macroeconomic conditions, but we displayed agility in our response by investing in value creating growth and adopting supportive funding options. Transformation as we have been assessing the culture within Umicore and developing, growing and transforming some elements. Courage particularly for management because it’s times like these when you need the courage to believe and take decisions so the company can deliver and perform to the best of our ability. This last one is also about interpersonal interactions at every level, for example, having the courage to give and receive constructive feedback.

What are your priorities going forward for Umicore?

2024 will be about execution in all areas. It will be about: ramping up the contracted capacity on time and within budget; implementing the funding roadmap as designed, including the working capital improvements in the different businesses and the issuance of new funding instruments at the right conditions; carrying out initiatives defined under the Efficiency for Growth program and seeking ways to replenish the funnel of initiatives to continuously drive operational excellence; building the Group-wide Enterprise Performance Management system, encompassing Finance, P&O and ESG; and further investing in our governance model with financial risk management. Intense focus and investment on safety in terms of changing the mindset, creating a caring safety culture and enhancing operations will also continue this year.

Tell us a bit about yourself: when you are not busy being Umicore’s CFO, what do you do to wind down and relax?

It’s really important to disconnect once in a while and I do that by reading both nonfiction business books, financial articles but also novels. I frequently read novels in French to maintain my language skills, but I am currently reading “Remains of the Day” from the Japanese writer Kazuo Ishiguro. I very much enjoy being out and about in nature either running, cycling or sailing and even better if I can do those activities together with family or friends. Last autumn, I sailed five days non-stop from Malaga to Las Palmas de Gran Canaria with my cousins, a great adventure.