UMICORE

Analysis of Umicore share price

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If you are planning to speculate on the share price of the Belgian Umicore Company then we recommend that you first learn all the information that you will need to implement an effective strategy. In this article we will examine the significant stock market characteristics of this asset as well as detailing the company’s activities, its partners and major strengths and weaknesses. We will also explain how to complete a comprehensive fundamental analysis of this asset so you can identify any upcoming trends of this share price as well as their probable strength and volatility.

Elements that can influence the price of this asset:

Analysis N°1

The Umicore Group, through its specialisations in this highly specific activity sector could also find itself in a quasi-monopoly situation in the coming years. It is therefore important to examine the growth in different parts of this market, sector by sector.

Analysis N°2

We would also closely follow any advances in the automobile industry, notably relating to the vehicle catalysers that offer a strong expansion potential.

Analysis N°3

Of course, given that Umicore is primarily a technological company based on innovative products and solutions, we would of course closely follow all investments of this company in R & D projects that would enable the creation of new products offering a high profitability margin or the improvements of existing products through an increase in their efficacy, notably those relating to solar energy and semi conductors that are two of this group’s core products.

Analysis N°4

We would also monitor the commodities market as any increases in costs in this sector could affect the profitability of the Umicore Company. This is also the case for any changes in interest rates as any increase here would also significantly negatively affect the company’s profitability.

Analysis N°5

Still relating to the monitoring of the Umicore Company’s profitability, we would also follow the level of the costs related to the work force and technicians in the coming years.

Analysis N°6

To conclude, the global economic situation will of course also exert an undeniable influence on the level of demand.

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General presentation of Umicore

The Belgium group Umicore is actually one of the great specialists in the sector of materials technology and their recycling. In fact, it is above all well known for its zinc based products but also concentrates its expertise in specialised areas such as materials science, the chemistry of materials, and metal working which of course distinguishes this company from its competitors. To better understand the group’s core activities it can be useful to know how its activities can be separated into the following three major sectors:

  • The first group and clearly the most important sector concerns catalysis.
  • The second group concerns energy and coatings.
  • The third and last group relates to technologies and recycling.

Of course and as you have undoubtedly noted, each of these three large segments can itself be divided into different sub-categories according to the related materials. These smaller categories enable Umicore to offer their clients highly technological solutions that are truly necessary for them and respond perfectly to their requirements.

However Umicore is also a group that has invested heavily in research and innovation, notably in the green technologies sector which is currently experiencing a surge in growth. It has notably concentrated its efforts in the catalyst sector for controlling emissions, materials for the production of rechargeable batteries, and the recycling of materials. Due to this strategy Umicore is endeavouring to position itself as leader in the development, production, and recycling of materials.

From a geographical point of view Umicore is particularly well developed internationally with its industrial activities that are spread over different continents and a clientele that also extends worldwide.

Analysis of Umicore share price
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The major competitors of Umicore

Umicore is currently the world market leader in its activity sector and notably that relating to the production and processing of zinc. But of course, it is not the only specialist in this sector and therefore faces stiff competition from other companies based around the world and especially those in Europe. To assist you in completing a comprehensive examination of the competition in this activity sector we offer you the opportunity now to learn about Umicore’s principal competitors in terms of turnover classified in order from the largest to the smallest:

Mining Union of Upper Katanga.

The Old Mountain Mining Company and Zinc Foundry.

The Hoboken General Metalworks Company

Imetal

The Penrroya Metalworks and Mining Company

The Royal Mining Company

The Malfidano Mines Company

Metaleurip

Grillo-Werke


The major partners of Umicore

To keep its place as leader and remain at the heart of its activity sector worldwide Umicore relies heavily on the implementation of partnerships and strategic alliances with other major companies. We will now provide details on a few of these more recent strategic alliances so you can better understand their significance.

Solvay

In 2006 for example, the Umicore Group became associated with the chemicals giant Solvay through the creation of a joint company named SolviCore that has since formed a significant client portfolio. Through this joint venture the two companies combined their knowledge to create an innovative technology for the assembly of the membrane and electrodes that have been used ever since in the production of combustible batteries and membrane electrolysis. This joint venture, previously held 50/50 by Solvay and Umicore, has since been sold to the Japanese chemical group Toray.

Toyota

In 2012 the Umicore Group signed a major partnership agreement with the Toyota automobile manufacturer. Through this collaboration Umicore entered into the specialised sector of recycling technologies relating to the Li-on batteries that were used in numerous hybrid Toyota vehicles.

Mahindra Racing

To conclude, more recently, in 2017 to be precise, Umicore became associated with Mahindra Racing for a partnership of initially three years relating to the FIA Formula E Championship. The technologies from these two companies were highlighted by boosting the performances of the electric cars in this competition through alternative energy resources and the use of recycled materials with the batteries. It should be remembered that this type of racing is very popular as it promotes participating technological companies that benefit from a type of trampoline in the form of a significant showcase to enable them to become better known worldwide.

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The factors in favour of a rise in the Umicore share price:
  • Firstly we can note the fact that the Umicore Group entered the stock market and straight into the BEL20 stock market index upon the company’s creation in 1991. This indicates the strength and steadfastness of this asset on the Belgium stock market.
  • We also appreciate the recent strategy of the Umicore Group that decided to specialise in the recycling technologies for ferrous and non-ferrous metals as well as the creation and production of metal based products as well as those non metal based but still specialised. It is currently the only company in this sector to specialise in this way which enables it to distinguish itself from its competitors.
  • The Umicore Group can also be proud of its wide reaching presence worldwide. This company’s activities are developed in numerous countries around the world including India, Brazil, South Africa and the United States. As you may have observed many of these countries are emerging markets which offer many possibilities for the company’s future development.
  • Umicore also strongly relies upon its large sales and distribution network that enables it to sell its products easily throughout the world. It is also supported by financial entities through its numerous activities in research and development which enables the company to be innovative at relatively low costs. It should also be remembered that the leadership of Umicore is particularly strong in certain highly profitable activity sectors such as semi-conductors, recyclable products and solar energy.
  • The shareholders and stock market investors also appreciate the high profitability of this company and its high level income from clients who are generally stable and loyal.
  • Finally, Umicore can also of course count on its work force as it currently employs over 14,000 people around the world.


 

The factors in favour of a drop in the Umicore share price:
  • Firstly we find the high level of technological expenses a cause for anxiety as this could lead to a negative impact on the profitability level that would affect the company’s growth and therefore the investors’ returns on this asset.
  • Although Umicore operates its own distribution and sales network it is still strongly exposed to external sales and distribution networks. This is due to market limits in the type of products the company produces.
  • Finally, we know that recently the Umicore Group lost a number of its shareholders due to a major divestment that had a significant psychological impact on the market.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.
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