Capital Markets Event
Seoul, 23 May 2012
Key developments in
Automotive
Catalysts
2
What is an automotive catalyst?
Toxic pollutants
• Carbon Monoxide (CO)
• Hydrocarbons (HC,
NMOG)
• Nitrogen Oxides (NOx...
3
Umicore Automotive Catalysts
business drivers
Growing global light duty vehicle production
• Light duty vehicles (LDV): ...
4
Global light duty vehicle production outlook
Car production
0
10
20
30
40
50
60
2000
2001
2002
2003
2004
2005
2006
2007
...
5
Global powertrain development
Internal Combustion Engine (ICE) remains dominant
Contains combustion engine
Requires cata...
6
Global emission legislation present
in most regions and becoming more stringent
US regulation
EU regulation
Japanese reg...
7
Regional positions
Market leader
(#1 or #2 position)
Smaller player
(distant #3)
Circles indicative of 2011 light duty v...
8
Umicore’s global footprint in automotive catalysts
Burlington
Canada
Tulsa
USA
Himeji
Japan
Onsan
Korea
Ansan
Korea
Suzh...
Impact of CO2 regulation
10
Challenging CO2 emission targets
will push the use of advanced engine configurations
Advanced engine
configurations
• D...
11
Downsized turbo-charged direct injection
gasoline engines are being implemented more widely
Turbo-charged Direct Inject...
12
Lean combustion provides the best fuel economy
Lean burning conditions offer better
combustion properties
• Principle a...
13
Electrification of the powertrain
impacts catalyst size and catalyst complexity
ICE HEV PHEV EV
Normal Start-stop Mild ...
14
Hybrid powertrains require
new operational conditions for the ICE and the catalyst
Engine-stop phases causes significan...
Market status in Europe
16
Production in 2015 expected to reach record 2007 level
CO2 targets drive fuel efficiency
• 130g/km, phasing in in 2012,...
17
Strengthening EURO 6 NOx limits for diesel cars
require NOx aftertreatment systems
0.18 g/km
0.08 g/km
NOx
0.25 g/km
EU...
18
EURO 5 EURO 6
Diesel NOx aftertreatment system concepts
NSC cDPF
H2S
slip
DOC cDPF
DOC cDPF SCR SCR
Urea
Replacement of...
19
Strengthening EURO 6 PM limits
may require gasoline particulate filters
EURO 6 legislations addresses the
number of par...
20
EURO 6cEURO 5 / EURO 6
Potential Gasoline particulate
reduction system concepts
cGPF
TWC
TWC cGPF
All-in-one catalysed ...
21
Umicore’s market position in Europe
European catalyst market should continue to outpace vehicle
production due to the i...
Market status in North America
23
Moderate growth of light duty vehicle production
expected in North America
Production in 2016 expected to reach record ...
24
Gradual implementation of LEV III (SULEV20)
emission standards to be reflected in vehicle fleet
100%
0%
Salesshare
2010...
25
ULEV
SULEV
SULEV20
Various emission categories require
more and more advanced catalyst technologies
TWCTWC TWC
TWC TWC
...
26
Umicore’s market position in North America
LEVIII and EPA Tier III pending legislation offers catalyst growth
opportuni...
Market status in Japan / Korea
28
Moderate growth of domestic light duty vehicle
market expected in Japan and Korea
Korean and Japanese OEMs strongly pos...
29
Umicore’s market position
in Japan and Korea
Korean and Japanese OEMs driven by growing export markets
Umicore has a le...
Market status in China
31
Continued strong growth of vehicle production
expected
Powertrain development mainly focused on
conventional gasoline e...
32
Euro 3 Euro 5Euro 4 Euro 6
C3 C4
C3 C5C4
Chinese emission legislation closely following
European standards
2000 2005 20...
33
Umicore’s market position
in China
Umicore has a leadership position in China
Local production capacity since 2005
Plat...
Market status in South America
35
South American market drivers
South American market for light-duty vehicles is growing
• Constant growth since early 20...
36
Umicore’s market position
in South America
Umicore has a strong leadership position in the market
• Pioneer for Catalys...
Market status in India, Russia
and South-East Asia
38
Markets in Russia, India and South-East Asia
Car production growing with economic development of these countries
Legisl...
On- and non-road HDD market
40
Expansion of scope of emission norms
1985 2006 20162011/2012
41
More stringent legislation enforces the use of emission
control systems worldwide
USA/Canada
On-road 2017
US HDD fuel e...
42
EURO IV/V
HDD Global Technology Trends
Advanced legislation require PM and NOx aftertreatment
US 2007
EURO IV/V
JP 2005...
43
Umicore’s market position in Heavy Duty Diesel
Umicore’s position in on- and non-road HDD
• Decided in 2005 to step in ...
Conclusion
45
Umicore Automotive Catalysts
Automotive catalysts market set to grow faster than vehicle production
due to more stringe...
4646
Forward-looking statements
This presentation contains forward-looking information that involves risks and
uncertainti...
2012 Capital Markets Days Seoul - Automotive Catalysts
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  • 8. August 2013 | |
  • 2012 Capital Markets Days Seoul - Automotive Catalysts

    1. 1. Capital Markets Event Seoul, 23 May 2012 Key developments in Automotive Catalysts
    2. 2. 2 What is an automotive catalyst? Toxic pollutants • Carbon Monoxide (CO) • Hydrocarbons (HC, NMOG) • Nitrogen Oxides (NOx) • Particulate Matter (PM) Non-toxic by-products • Carbon Dioxide (CO2) • Water (H2O) • Nitrogen gas (N2) Combustion engines produce toxic emissions due to incomplete combustion of fuel and the generation of by-products Automotive catalysts are needed for reducing these toxic emissions Legislation enforces this by setting emission limits for vehicles
    3. 3. 3 Umicore Automotive Catalysts business drivers Growing global light duty vehicle production • Light duty vehicles (LDV): passenger cars, SUVs and light trucks • Heavy duty diesel (HDD): trucks and buses • Non-road applications Emission legislation and air quality standards are becoming more stringent in developed and emerging markets CO2 emission reduction • Impacts engine complexity and fuel types used in different regions • Determines choice of powertrain
    4. 4. 4 Global light duty vehicle production outlook Car production 0 10 20 30 40 50 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Umicore estimate based on external data sources [M vehicles] Middle East/ Africa South America South Asia China Car production 0 10 20 30 40 50 60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Umicore estimate based on external data sources [M vehicles] Japan/ Korea North America Europe Established Markets Emerging Markets Source: Umicore estimates based on external databases
    5. 5. 5 Global powertrain development Internal Combustion Engine (ICE) remains dominant Contains combustion engine Requires catalyst system Car production 0 20 40 60 80 100 120 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Umicore estimate based on external data sources EV (Electric Vehicle) PHEV (Plug-in Hybrid Electric Vehicle) HEV (Hybrid Electric Vehicle) ICEflex fuel, CNG, LPG ICEgasoline (Internal Combustion Engine) ICEdiesel [M vehicles]
    6. 6. 6 Global emission legislation present in most regions and becoming more stringent US regulation EU regulation Japanese regulation No legislation EU inspired regulation
    7. 7. 7 Regional positions Market leader (#1 or #2 position) Smaller player (distant #3) Circles indicative of 2011 light duty vehicle production volumes (≠ catalyst revenues) Umicore’s global leadership position NorthNorth AmericaAmerica EuropeEurope ChinaChina KoreaKorea SouthSouth AmericaAmerica JapanJapan IndiaIndia RussiaRussia AustraliaAustralia
    8. 8. 8 Umicore’s global footprint in automotive catalysts Burlington Canada Tulsa USA Himeji Japan Onsan Korea Ansan Korea Suzhou China Rheinfelden Germany Karlskoga Sweden Hanau Germany Florange France Americana Brazil Auburn Hills USA Port Elisabeth South Africa Production plant R&D / Technology development centre Production plant Production plant & R&D / Technology development centre R&D / Technology development centre
    9. 9. Impact of CO2 regulation
    10. 10. 10 Challenging CO2 emission targets will push the use of advanced engine configurations Advanced engine configurations • Down-sized turbo-charged gasoline engines • Gasoline direct injection • Lean burning gasoline engines • Diesel • Hybrid electric vehicles All these configurations require complex catalyst solutions 95 Europe -38%154 152 USA -37% 240 109 Japan -23%141 145 China -22%185 Source: Continental (2011) CO2 emission targets for light duty vehicles [g/km] 130 181 125 167 2010 2015 2020 2010 2015 2020 2010 2015 2020 2010 2015 2020 actual proposed enacted estimated
    11. 11. 11 Downsized turbo-charged direct injection gasoline engines are being implemented more widely Turbo-charged Direct Injection (DI) engines enable reduced fuel consumption • By reduced engine displacement and decreased engine speed • By flexible combustion process • By significant torque increase, esp. at low rpm Profile of exhaust gases is different • Hydrocarbons (HC) emissions increase • NOx emissions decrease • Exhaust gas temperature range increase due to heat sink - turbo charger effect Catalyst requirements more complex • Lower light-off temperature for the catalyst • Catalyst bed temperatures above 1000°C require greater durability • High dynamic lambda behaviour
    12. 12. 12 Lean combustion provides the best fuel economy Lean burning conditions offer better combustion properties • Principle already used in diesel cars • Introduced in lean burning gasoline engines • Works in oxygen-rich environment Direct NOx reduction with excess oxygen is not possible • Engine optimisation offers limited possibilities NOx aftertreatment solutions required in most cases • Selective Catalytic Reduction (SCR) • NOx Storage Catalyst (NSC) Excess of oxygen Lean exhaust No oxygen Rich exhaust Lambda TWC conversion 1 NOx HC CO TWC Lean burning Operating range EURO 6 NOx limit NOx engine output CO2 emission 1 CO2 advantage 50% NOx reduction CO2 penalties CO2 benefits 12 2 NOx aftertreatment
    13. 13. 13 Electrification of the powertrain impacts catalyst size and catalyst complexity ICE HEV PHEV EV Normal Start-stop Mild Full Parallel system Range extender BEV FCEV Relative size +++ +++ +++ ++ ++ + No emission control catalyst Relative complexity + + + ++ +++ + ELECTRIFICATION
    14. 14. 14 Hybrid powertrains require new operational conditions for the ICE and the catalyst Engine-stop phases causes significant cooling of the emission control system • Lower catalyst light-off temperature required • High temperature stability especially required for gasoline applications Engine restarts cause very high emissions peaks Emission control for hybrid applications needs dedicated solutions
    15. 15. Market status in Europe
    16. 16. 16 Production in 2015 expected to reach record 2007 level CO2 targets drive fuel efficiency • 130g/km, phasing in in 2012, full compliance by 2015 • 95 g/km further reduction by 2020 • Engine configurations changing • Diesel should keep market share of ~50% • Gradual introduction of electrified vehicles • Downsized turbo-charged gasoline direction injection should grow fast EURO 6 legislation comes into force in 2014 • Air quality requirements in cities drive NOX aftertreatment introduction for diesel • Particulate emissions regulation could drive Gasoline Particulate Filter (GPF) requirement Moderate growth of light duty vehicle production expected in Europe Car production 0 5 10 15 20 25 2011 2015 2019 XEV ICEflex fuel, CNG, LPG ICEgasoline ICEgasoline DI ICEdiesel [M vehicles] Source: Umicore estimate based on external data sources
    17. 17. 17 Strengthening EURO 6 NOx limits for diesel cars require NOx aftertreatment systems 0.18 g/km 0.08 g/km NOx 0.25 g/km EURO 4 EURO 5 EURO 6 2010 2015 0.5 g/km EURO 3 20052000 -84%
    18. 18. 18 EURO 5 EURO 6 Diesel NOx aftertreatment system concepts NSC cDPF H2S slip DOC cDPF DOC cDPF SCR SCR Urea Replacement of DOC by NOx storage catalyst (NSC) and addition of Sulphur slip catalyst Addition of Urea-based Selective Catalytic Reduction (SCR) Diesel oxidation catalyst (DOC) with catalysed Diesel Particulate Filter (cDPF) 2014
    19. 19. 19 Strengthening EURO 6 PM limits may require gasoline particulate filters EURO 6 legislations addresses the number of particulates, with a transition period of 3 years for gasoline engines Gasoline Direct Injection (DI) engines have higher Particulate Matter (PM) emissions (in number of particles) compared to diesel engines with Diesel Particulate Filter Euro 5 Euro 6bEuro 5b Euro 6c 2008 2011 2014 20202017 Diesel: 6.1011 /km Gasoline DI: 6.1012 /km Diesel & Gasoline DI: 6.1011 /km PN [#/km] Gasoline DI Diesel with DPF Gasoline PFI 1010 1011 1012 1013 1014 0.1 EURO 6c PM limit PM[mg/km] EURO 6b PM limit 10 1
    20. 20. 20 EURO 6cEURO 5 / EURO 6 Potential Gasoline particulate reduction system concepts cGPF TWC TWC cGPF All-in-one catalysed Gasoline Particulate Filter Combination of TWC and cGPF Three Way Catalyst (TWC) 2017
    21. 21. 21 Umicore’s market position in Europe European catalyst market should continue to outpace vehicle production due to the introduction of new legislation Umicore has a strong leadership position in the European market • Catalyst production in Europe started in 1974 Umicore has strong technology portfolio and system knowledge available to support the market requirements • First to market with NOx storage catalysts and SCR systems • Strong position in cGPFs established, critical IP generated and patents granted • R&D centre supports development programmes with OEMs New contract wins for EURO 6 diesel legislation (related to NOx aftertreatment systems) should allow Umicore to further strengthen market position Karlskoga plant, Sweden Florange plant, France Rheinfelden plant, Germany
    22. 22. Market status in North America
    23. 23. 23 Moderate growth of light duty vehicle production expected in North America Production in 2016 expected to reach record 2000 level Corporate Average Fuel Economy (CAFE) regulation • 35.5mpg (miles per gallon) to be reached by 2016 (now 23.1 – 27.5) • From 2017 to 2025 fuel economy will increase to an average of 54.5mpg • CAFE regulation pushes towards more efficient engine types • Focus on turbocharged gasoline direct injection • Diesel market acceptance is increasing gradually New Emission legislation • EPA Tier 3 is currently under discussion • LEV (Low Emissions Vehicle) III cuts emissions by 50% of current most stringent SULEV legislation • Green House Gas Standards (GHG) includes standards for secondary emissions (N2O, methane and particulates) Car production 0 5 10 15 20 2011 2015 2019 XEV ICEflex fuel, CNG, LPG ICEgasoline ICEgasoline DI ICEdiesel [M vehicles] Source: Umicore estimate based on external data sources
    24. 24. 24 Gradual implementation of LEV III (SULEV20) emission standards to be reflected in vehicle fleet 100% 0% Salesshare 2010 20202010 Sales share to be reached to meet emission norms Source: CARB 2010 70 20 125 ULEV SULEV160 LEV -88% NMOG*+NOx[mg/mile] 30 ULEV70 SULEV20 50 ULEV50 Emission categories * NMOG: Non-Methane Organic Gases
    25. 25. 25 ULEV SULEV SULEV20 Various emission categories require more and more advanced catalyst technologies TWCTWC TWC TWC TWC TWCTWC TWC • Low light-off • On-board diagnostics •System requirements • Increased Hydro Carbon (NMOG) performance • Robustness over lifetime • Combined NMOG/NOx performance • Stricter particulate mass standards • Durability increased to 150,000 miles
    26. 26. 26 Umicore’s market position in North America LEVIII and EPA Tier III pending legislation offers catalyst growth opportunities Umicore has a leadership position in the North American market • Catalyst production in North America started in 1983 • Acquisition of Delphi catalysts activities in 2007 Strong technology portfolio and system knowledge available to support the market requirements • State of the art technology development centre in Auburn Hills to manage local development programs • R&D centre in Tulsa to support local engine development Burlington plant, Canada Auburn Hills tech centre, USA Tulsa plant, USA
    27. 27. Market status in Japan / Korea
    28. 28. 28 Moderate growth of domestic light duty vehicle market expected in Japan and Korea Korean and Japanese OEMs strongly positioned worldwide • Japanese OEMs have strong growth path globally and especially South East Asia • Strong position of Hyundai/Kia in Korea with global growth path Decision making power remains strongly in the home country • Strong local automotive catalyst presence is therefore essential OEM’s development focus for domestic and global markets • Gasoline ICE mainly • Strong focus on electrification Emission legislation in Japan changing beyond 2015 Car production 0 2 4 6 8 10 12 14 2011 2015 2019 XEV ICEflex fuel, CNG, LPG ICEgasoline ICEgasoline DI ICEdiesel Source: Umicore estimate based on external data sources [M vehicles]
    29. 29. 29 Umicore’s market position in Japan and Korea Korean and Japanese OEMs driven by growing export markets Umicore has a leadership position in Korea • Catalyst production started in 1987 Distant follower in Japan • Catalyst production started in 1993 • Core strategy to increase position with Japanese OEMs • First successes gained, mainly related to diesel for export markets Umicore is established in Japan and Korea through • Local production facilities fully integrated into the global network • Technology development centres in Korea and in Japan and R&D centre in Japan Umicore supplies catalysts for various hybrid vehicles including PHEV Onsan plant, Korea Himeji plant, Japan
    30. 30. Market status in China
    31. 31. 31 Continued strong growth of vehicle production expected Powertrain development mainly focused on conventional gasoline engines Diesel gaining momentum Legislation follows European norms with a 3 to 5 year lag Continued strong growth of light duty vehicle production expected in China Car production 0 5 10 15 20 25 30 35 2011 2015 2019 XEV ICEflex fuel, CNG, LPG ICEgasoline ICEgasoline DI ICEdiesel [M vehicles] Source: Umicore estimate based on external data sources
    32. 32. 32 Euro 3 Euro 5Euro 4 Euro 6 C3 C4 C3 C5C4 Chinese emission legislation closely following European standards 2000 2005 2010 20202015 BeijingChina gasoline C5+ C3 C5C4 C5+ C3 C4 C5 Countrywide Beijing Countrywide Europe China diesel C4 C3
    33. 33. 33 Umicore’s market position in China Umicore has a leadership position in China Local production capacity since 2005 Platform exposure with both global and domestic OEMs New production line for LDV and HDD being built in Suzhou (commissioning in Q3 2012) Technology development centre under construction in Suzhou (commissioning in Q3 2012) Suzhou plant, China Suzhou tech centre, China
    34. 34. Market status in South America
    35. 35. 35 South American market drivers South American market for light-duty vehicles is growing • Constant growth since early 2000 • Forecasts show local manufacturing of 6 million vehicles by 2017 (IHS) Strongest market is Brazil • Brazil emission legislation with upcoming PL6 regulations • Flex Fuel systems are dominant for passenger vehicles and light duty power trains • Driven by the Brazilian energy portfolio • Specific flex fuel Technologies Car production 0 2 4 6 8 2011 2015 2019 XEV ICEflex fuel, CNG, LPG ICEgasoline ICEdiesel [M vehicles] Source: Umicore estimate based on external data sources
    36. 36. 36 Umicore’s market position in South America Umicore has a strong leadership position in the market • Pioneer for Catalyst production in South America, started in 1991 • Launching of Vehicle Emission Tech Centre in 1992 Umicore has strong technology portfolio for bio-fuels and can provide system development capabilities locally Investment in new vehicle test cell in Americana, Brazil was recently approved to help OEMs meet the upcoming PL6 and PL7 regulations Americana plant, Brazil
    37. 37. Market status in India, Russia and South-East Asia
    38. 38. 38 Markets in Russia, India and South-East Asia Car production growing with economic development of these countries Legislation currently at low level • Following European legislation with 5-7 year delay • Very low durability requirements • No in-use control Umicore ready to invest when markets develop further
    39. 39. On- and non-road HDD market
    40. 40. 40 Expansion of scope of emission norms 1985 2006 20162011/2012
    41. 41. 41 More stringent legislation enforces the use of emission control systems worldwide USA/Canada On-road 2017 US HDD fuel economy Non-road2014-2015 Tier 4 final Brazil On-road 2012 EURO IV + DPF / EPA 2007 Non-road 2015-2017 Stage IIA On-road 2012 EURO V Chile On-road 2014 EURO V Argentina Europe On-road 2013 EURO VI Non-road 2014 Stage IV & Tier 4 final On-road 2015 EURO V Russia On-road 2015 EURO VI Korea Non-road 2013 Tier 4 On-road 2014 Post JP 2009 Japan On-road 2013 EURO IV China On-road 2015 BS IV India
    42. 42. 42 EURO IV/V HDD Global Technology Trends Advanced legislation require PM and NOx aftertreatment US 2007 EURO IV/V JP 2005 US 2010 EURO VI Post JP 2009 DOCcDPFor SCRDOCcDPF SCR 2009 2010 2013 SCRDOCcDPF or SCR 2011 2012 201520142008 2016 USA Canada Europe Japan India Brazil China … 2007 2017 SCRDOCcDPF DOCcDPF DOCcDPF DOC
    43. 43. 43 Umicore’s market position in Heavy Duty Diesel Umicore’s position in on- and non-road HDD • Decided in 2005 to step in HDD market and started R&D efforts • Technology gap with competitors closed by 2008-2009 followed by market positioning • Contract wins in all regions with relatively more success in Europe and emerging markets • Umicore continues to position itself for additional HDD business to be awarded in the near future Technology, system design and customer intimacy are key for success • Existing HDD test capability in Korea, Japan, Brazil, Europe and North America • New technology development centre in China to be commissioned in Q3 2012 HDD production capability being established in North America, Europe and China • Dedicated HDD facility in Florange, France will be commissioned mid 2012 • Expansion of flexible capacity in Suzhou, China will be commissioned in Q3 2012
    44. 44. Conclusion
    45. 45. 45 Umicore Automotive Catalysts Automotive catalysts market set to grow faster than vehicle production due to more stringent emission legislation in all the major markets Umicore is a global leader for light duty applications • Well positioned in Europe, North America and Korea • Strongly positioned in fast growing Chinese and Brazilian markets • Aiming to increase position with Japanese OEMs • Ready to seize opportunities in India Umicore is gradually gaining ground in HDD, supported by customer awards Umicore is continuing to invest in manufacturing and testing capabilities
    46. 46. 4646 Forward-looking statements This presentation contains forward-looking information that involves risks and uncertainties, including statements about Umicore’s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore. Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected. As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements.

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