Umicore S.A.

Marc Grynberg – CEO Filip Platteeuw – CFO

Mutlu Gundogan – ABN AMRO Peter Olofsen – Kepler Rakesh Patel – Goldman Sachs Paul Walsh – Morgan Stanley Simon Fickling – Exane BNP Paribas Oliver Reiff – Deutsche Bank Adam Collins – Liberum Geoff Haire – HSBC Wim Hoste – KBC Securities

Thank you and good afternoon, everyone. It's a pleasure for me to welcome you to today's call.

Today we will update you on how trading has progressed in the third quarter of 2014. In terms of overall evolution, what we see is that group revenues were up slightly in the third quarter compared to the same period in 2013.

In Catalysis, we saw revenues increase by 2%, which was due to the ramping up of sales of heavy duty diesel catalysts, which were obviously quite a way above the levels seen last year when the production lines were either under construction or being tested. In Energy Materials, revenues were up by 5% and that was mainly due to higher revenues in Cobalt and Specialty Materials.

In Performance Materials, revenues were 4% lower as the construction activity in Europe took something of a breather after a period of higher activity in the first part of the year. Finally, Recycling revenues were up by 2%, driven by increased volumes and clearly, we're happy to report that the first wave of investments in Hoboken is generating the anticipated benefits.

Filip will comment in more detail on the evolution in each of our businesses in a moment. Operational cash flows continued to be strong during the quarter and we have continued to return cash to shareholders through the interim dividend payment and share buyback.

The debt level at the end of June was slightly higher or somewhat higher than at the end of June, with that, I would like to let Filip now guide you through the evolution in each of our business groups.

Thank you, Marc and good afternoon everybody. I will briefly run you through the quarterly evolution in each of our four business groups and propose to start with Catalysis.

Catalysis where revenues were up by 2%. In automotive catalysts, the revenue growth was driven exclusively by the continuing increase in sales of catalysts for heavy duty diesel applications, which in our case are still mainly in Europe.

In this HDD segment, our production and sales are keeping pace with the increased demand related to the introduction of Euro VI emission standards. In Catalysts for light duty applications, our overall volumes sold reflected the growth in the global car market of around 3%.

However, our revenues lacked volumes as we faced a less supportive platform and regional mix. In Europe, the delayed introduction of some of the Euro VI compliant models for which we have been qualified has contributed to a lower portion of diesel in our mix.

This is something that should reverse over the coming months. In North America, the mix impact is more related to the platforms that we are exposed to with market growth mainly seen in smaller engine sizes and for Asian brands where we have a lower exposure.

We continue to perform well in Asia and in China in particular where we outgrow the market. In terms of investments, we are continuing to build capacity to enable us to cater for newly awarded business and the new plants in India and Poland are on track for completion this year and in 2016 respectively.

In Precious Metals Chemistry, we recorded lower revenues mainly due to the ongoing challenges in the Brazilian automotive market. Moving to Energy Materials, in Energy Materials, revenues were up by 5% and most of this growth came in the cobalt and specialty materials business unit.

The unit saw higher sales volumes in the ceramic and chemicals activities and higher throughput add its cobalt and nickel refining operations. This was complemented by the revenues from the Palm Commodity acquisition that we completed at the end of last year.

The business unit has made some further small acquisitions recently that have strengthened its portfolio both in North America and in Europe. The Electro-Optic Materials activities also showed an improvement with the revenue increase coming mainly from substrates and finished optics.

In rechargeable battery materials, the demand is spread more evenly over the year resulting in slightly lower revenues for the third quarter compared to last year while year-to-date volumes and revenues remain well ahead of last year. The market outlook for batteries and electrified vehicles remains promising and we're continuing to build a strong presence on current and future platforms.

Finally in thin film products, we recorded higher revenues as well, mainly due to increased demand for ITO, Indium Tin Oxide targets used in display applications. Looking at Performance Materials, we saw revenues decrease by 4%.

This was primarily attributable to building products and you will recall that the very mild winter conditions in Europe led to a glut of activity in the first part of the year and activity levels in the summer tapered off from these high levels. Revenues in platinum engineered materials and in technical materials were also somewhat lower during the quarter, mainly due to lower sales in Ukraine where we supply platinum gauzes for the fertilizer industry and in China respectively.

In zinc chemicals, we generated higher revenues due to better product sales for primary battery applications, anticorrosive paints and chemicals. However, the availability of residues for the unit's Recycling activities remained low, which continued to put pressure on margins.

The electroplating business recorded higher revenues driven by growing sales for most applications, including LEDs, electronics and jewelry. And finally, the Element Six abrasive joint venture is continuing to show a strong improvement in its product mix and in the resulting revenues.

Turning now to Recycling, in recycling, we recorded revenues that were up 2% on the same period of last year and this despite the impact of lower metal prices. This was due to higher process volumes at the precious metal refining operations in Hoboken.

As you will recall from earlier conversations, we had a major maintenance shutdown this summer during which we were able to carry out further improvements to the flow sheet. We're happy to confirm that these investments were implemented successfully and have allowed us to increase throughput in the weeks since the work was completed.

We will now turn our attention to the final wave of investments, which are due to be completed during two maintenance shutdowns next year and which will be complemented by other smaller investment projects on-site. We currently anticipate that the higher throughput rate will allow us to compensate for the longer production downtime in 2015 as associated with these two shutdowns.

While we counted higher arrivals across the different feed segments, the product mix is still not as supportive as it was a year ago with for example supplies of PGM rich materials being still less abundant. Finally, it is important to recall that overall metal prices remain volatile and sensitive to a changing global economic growth outlook and financial market sentiment as was illustrated by the sharp fall in precious and platinum group metals during the third quarter.

In Jewelry and Industrial Metals, we generated high revenues as higher product sales helped to compensate for lower metal prices and refining volumes also stabilized. In the precious metals management activities, the market conditions were less supportive and revenues were down.

With that, I have finished the walkthrough of our four business groups. I would like to hand back over to Marc for the outlook.

Thank you, Filip. So we can see that from a revenue perspective, the quarter was quite stable with many of our businesses bearing up well in what I have to say remain challenging circumstances.

While metal prices and premiums have not moved in a positive direction since we spoke in July. We’re seeing some other benefits coming up in other areas.

Our cost-reduction programs for instance, continue to bear fruit and as Filip mentioned, we're also starting to feel some benefits from the increased throughput at the Hoboken plant. So on balance, the outlook for 2014 is unchanged and I can confirm that the expectation is that we will remain in the upper half of the range of €250 million to €280 million recurring EBIT and that's the guidance that I gave back at the end of July.

With that perhaps I can now turn the line over for any questions that you might have.

Four questions, two on Recycling and two on Catalysis, the first on Recycling. You had a prolonged maintenance shutdown this quarter, as well as lower metal prices, but you were still able to increase revenues.

So this means that you're capacity has increased quite substantially. With that in mind, why are you that so cautious when it comes to next year as you expect limited volume growth?

Secondly, on recycling, can you tell us why you are going for two maintenance shutdowns instead of one prolonged maintenance shutdown next year? And then on Catalysis, I think you spoke about it already, but can you tell us a bit more in detail what is going on in your European business?

Where does the diesel share stand today and why was there some delay in the introduction of some Euro VI platforms? And then finally on Catalysis North America, the reason that you provide for the underperformance of this business do seem as a structural trend going to smaller cars and so on.

Do you agree with this view and if yes, what are you doing about it?

Let me start with the questions about Recycling. Yes, you're right.

The reason we have revenue growth in Recycling is because we manage to benefit from the increased throughput that was achieved after the first wave of investment was completed in Hoboken and that indeed enabled us to make up for the downtime or the increased downtime compared to 2013. Why are we cautious about 2015?

I wouldn't say that we're cautious about 2015. What we anticipate or what our engineers are calculating today is that we'll need more downtime in 2015 and so the further benefit that we will see from increased throughput in the course of next year will be necessary to make up for the increased downtime and it is I think important to bear in mind that the bulk of the investments in modifications that have to be carried out in Hoboken will be carried out in the course of 2015 and that's far more massive than what has been achieved in the course of this year.

So, I think it's not about being cautious, that is the most realistic assumption that can be made today by the engineers knowing the amount of modification and the type of modifications that have to be brought to the facility. Why are we planning to do that in two shutdowns and not shutting down the facility only once and for a prolonged period of time?

Because simply this cannot be done. There are a number of things that have to be done in sequence that require planning, ordering of equipment that requires a certain number of people and contractors to be on-site and there are sequencers and intervals to be respected for the works to be done and this simply cannot be done in one shutdown.

So, if we had one extended shutdown it wouldn't help us because it wouldn't replace the need for a second shutdown for the investment projects. Let me now move to automotive catalysts and your questions regarding the European and North American performance.

In Europe, we have indeed some of our customers that have delayed the introduction of some Euro VI diesel programs and that indeed has a negative impact on our sales mix and therefore the revenue evolution and the margin evolution. This is mostly a timing effect and why that's happening is basically the choice of the customer to extend the life of existing engine platforms as much as possible just for cost reasons.

You may recall that actually Euro VI norms are being introduced in two steps which is fairly typical for European norms. In the first instance and that is happening now at the end of 2014, the norms start to apply for new models and a year later, they become enforceable for all models.

So that provides our customers a certain degree of flexibility as to the timing of introduction of new engine platforms for existing models and they tune that in function of market demand, cost considerations and possibly other factors. So I would see no other reason or see no other reason to explain that delay.

And as Filip mentioned during his comments, basically it's just a timing effect and will be recovered in the next few months. In North America, we're indeed also seeing an unfavorable mix for the time being and we’ve more limited success or more limited presence with smaller engines and that is also related to our OEM mix.

You may recall that we have historically had a more limited presence with the Japanese OEMs and as you see them regaining some of the lost market share in North America. This is not playing in our favor in terms of mix, what we do about that is we are positioning Umicore in a different manner with Japanese OEMs globally and that is an effort that has started a number of years ago and that also entailed or involved the change of business configuration of our Japanese joint venture and it's starting to bear fruit.

So in the next few years, we will see a better positioning of Umicore, a higher market share of Umicore with Japanese OEMs globally and that will have repercussions in our mix. So it is being addressed.

This being said, we need a bit of time to see that bearing fruit.

Two questions if I may. First, on the product areas, could you shed some light on what you've seen during Q3?

I mean July, August typically soft because of the holidays but a seasonal pickup in September. Was that a kind of normal pickup or were there exceptions there?

And then on the outlook for Recycling, you have not changed the guidance for the group, but for Recycling. Have there been any changes to your expectations since the half year results also given the changes that we've seen in some metal prices?

If you could shed some color on that please.

Okay, Peter. Well first of all, let me say that it's somewhat complicated to comment about seasonality since our businesses tend to experience different seasonal patterns and to a certain extent also linked to their geographical exposure in a way.

I would say that in the businesses that have a fairly vast presence in Europe. We saw the usual summer slowdown in the months of July and August and a decent pickup of demand in the month of September.

So there was, I would say nothing out of the extraordinary to be noted in that respect. There is one element that I would like to clarify with respect to seasonality and that's the comment that we made regarding the rechargeable battery materials business unit because those may have been misunderstood to a certain extent.

What we really meant about rechargeable battery materials that in the past years, we have typically seen quarterly patterns of demand with very low demand in the first quarter of the year a pickup of demand in the second quarter, high demand in the third quarter as our customers were preparing for the year-end sales season and then lower demand again in the fourth quarter. This is a pattern that was also linked to the way our customers were managing their inventories with a certain degree of stocking and destocking behavior and that has tended to change over time, with better inventory and product cycle planning, we see our customers now being far more even and steady in their demand forecast and demand patterns.

So to cut a long story short, what we see now is that the demand from our customers is much more evenly distributed across quarters and there isn't a slowdown, we haven't seen a seasonal slowdown or any slowdown in the third quarter of this year. Actually it is difficult to comment on or to extrapolate from the quarterly figures in rechargeable battery materials.

You really have to look at the full-year figures and there, the volumes are clearly much ahead of what they were last year, confirming the pickup in demand for both portable electronic applications and automotive demand. So I hope that clarifies a little bit the seasonality comments that were made in the press release.

As far as Recycling is concerned, the outlook now is not much different or not materially different compared to what we had in mind when we published the guidance at the end of July. Clearly, we wanted to see, as I mentioned then, we wanted to see how the facility would restart and perform after the modifications that were carried out this summer in order to be able to confirm as we do today, that there is indeed an improvement in throughput rates that enable us to have more capacity and make up to a certain extent for the increased downtime or to a large extent for the increased downtime.

So the outlook has not materially changed and the metal price evolution, while I would say it's largely unwelcome by us as you would imagine, is not materially altering the forecast for this year as we are pretty much advanced in the year and we have a significant portion of the transactions for the year duly fixed and covered already. So the variations that we have seen recently would have only a limited impact on the overall full year guidance and that would fall within the limits of the uncertainties that were built in the previous guidance.

I hope also that clarifies the matter.

Yes, maybe one question on the rechargeable batteries. If I understand correctly in Q4 last year, you still had the traditional seasonal pattern with some destocking and some seasonal slowdown there, which means that for Q4 this year, the comparison might be quite easy, so to say.

Well, the full year trend will be maintained indeed. So the positive trend that we see on a full-year basis will definitely be maintained.

So the demand for the next few months looks reasonably good.

Okay, maybe one final question on building products where you mentioned slower activity in Europe. Was that across the board or were there certain countries that stood out negatively?

Well, I would say there are two answers to that question actually and if you look at the statistics of the construction industry. The slowdown was observed across the board.

However, as far as Umicore is concerned, our exposure is concentrated on a limited number of countries. I would say the bulk of the exposure is concentrated on a limited number of countries that have a well-established tradition of using zinc in either facade or roofing applications.

So I would say in our case, it's clearly Western Europe that has caused the slowdown.

Just a couple of questions if I can, first of all, I just wondered in cobalt and specialty it seems as though you had a better mix effect, which, if I remember, is something of a swing from what you were saying at the first half. I wondered if you could give us some color around that.

Secondly in recycling, I just wondered if you could perhaps quantify for us what the percentage increase in throughput is just so we can get an idea of how much extra volume you're processing. And then finally, I think one of the things that you're flagging in the reports which I'm just trying to understand in terms of numbers for next year.

I can understand if you don't want to talk about the hedge book, but if metal prices were to stay where they are and bearing in mind your increased throughput and the maintenance shutdown, do you think it would be possible to grow EBIT in that division next year? Thanks very much.

Okay, let me start maybe with your question about cobalt and specialty materials. The main effect was growth, external growth in particular more than any mix effect and you may recall that we made an acquisition in the U.S.

in December of 2013, so the quarterly comparison is still favorable because we didn't have that business in Q3 of last year. We started to consolidate it in January of this year.

So this is a large contributor to the growth effect and for the rest. We have not seen major mix swings in cobalt and specialty materials activities.

I'm sorry, Rakesh I missed the second question.

It was just on what percentage increase of throughput have you got from the shutdown this summer just to try and understand how much extra volume you're now able to process.

I think it's a bit too early to provide some details on that, but clearly it's something that was material. So it's not the marginal type or I would say not marginal, incremental type of improvements that are being achieved year-in and year-out.

This was a material improvement and that's why we're also providing some, I would say, positive or optimistic statements about next year. Although we know that there is still a lot of work to be done in Hoboken to complete the investment programs.

And then let me also address then the next question about EBIT guidance. I think it's premature to provide EBIT guidance for next year.

We would typically do that in early part of the year, so we would do that in early 2015. Suffice to say at this stage, that we’re optimistic about the revenue evolution because of the throughput improvement that we have achieved so far and because we're also optimistic about the evolution of feed.

This being said, I have to add that metal prices remain an unknown quantity and so you have to bear in mind that this is a variable we do not control.

I just wondered if I could push you guys a little bit on Rakesh's question because consensus has got a €20 million increase in EBIT next year in your Recycling business and clearly over time, the expansions are going to grow that business strongly, but I'm just trying to understand the phasing of the ramp ups because is it feels like Phase 1 has gone better than expected. So you've maybe got a bit more volume this year which might have cannibalized a bit next year.

So I guess my question is, to cut a long story short, next year, are you really saying that volume available to you will be flat on the basis that the production increases are offset by the maintenance downtime? And if we're taking lower average PGM prices, we should maybe be a little bit more conservative around the outlook for that business next year?

Paul, I would say that yes, you can push Filip and me indeed and we may push back to a certain extent which is what I will do now. So I would say your reading on the volume evolution is reasonable indeed and the reading that I would share.

On the margin side again, it's too early to tell and it's difficult to make assumptions. Now, if you think about the metal price impact you may -- I mean there are many factors that I would say are at play -- the mix, the volumes, the market conditions, refining charges, etcetera.

So I think it's a bit risky to single out only one of these and extrapolate from there to arrive at the EBIT evolution. So I would probably ask you to bear with us a little more and we'll provide some more guidance early next year.

That would be very helpful and just maybe two small follow-up questions if I can. In terms of your order books, are you seeing evidence of further deterioration in either construction or automotive markets?

Obviously, we are getting a lot of doom and gloom right now. Just wondering if that's actually manifesting itself in the company's order books?

And regarding FX, clearly, that optically looks like it's gotten better, any comments around FX developments for you guys?

Paul, we don't see as we speak deterioration in the order books from the automotive industry. So the trends that we commented on in the past few months with I would say the strength in Asia and in China in particular, the mix effects in Europe and in North America, the weakness in Brazil, etcetera.

These patterns continue to be by and large valid indeed and we don't see an immediate deterioration. So of course, the economic prospects remain largely uncertain and the automotive industry tends to be fairly sensitive to GDP evolution, but we don't see today a drastic or a dramatic change in ordering patterns.

I will give the floor to Filip to address the FX question.

So Paul, on the Forex, in the fast half of the year, we clearly mentioned that Forex for us was a headwind and in the third quarter, that kind of changed in the sense that it's no longer a headwind. To say that it's a tailwind would be going too far.

For example, if you go and look at the dollar euro, if you take quarter-on-quarter, you see it's actually pretty much the same as last year. So let's see how Forex continues over the rest of the year, it could become a slight tailwind certainly, it has improved.

Again, for us, the dollar in itself is not the only factor, metal prices tend to have a relationship with the euro dollar, but overall I would say headwinds indeed no longer the case, but we'll prefer to be cautious for the remainder of the year.

A couple of questions please, firstly, Marc, you commented previously on the long term outlook for diesel and I think your view was that it will continue to remain an important part of your overall mix, largely due to its contribution to OEMs meeting emission norms. There has been a bit of negative news flow recently particularly moving standards towards more real-world testing conditions in a few years' time.

I wonder if your view has changed at all on that. And then, secondly on Catalysis as well, the release mentions China, trucks legislation and how that should become enforceable on a countrywide scale from the start of next year.

I wonder if you could comment a bit on how you expect enforcement to be rolled out and is there a timeline and any guide on sort of back-end loading, for instance of that would be useful. Thank you.

Simon, I continue to believe in the need for a significant proportion of diesel cars in the mix for Europe and European OEMs and in particular those producing large and powerful vehicles in order for them to meet upcoming (indiscernible) to legislation and you may recall that that legislation tightening step is coming into force in 2021. So in the meantime, there may continue to be some diesel (indiscernible) as you have seen in a number of West European countries and by the way.

Also, in India, which is one of the few Asian diesel countries for passenger cars and to a certain extent, I mean diesel is being utilized as a source of additional revenues for governments because taxes on diesel fuel have typically been lower than on gasoline. So there is a little bit of diesel bashing [ph] that is not so good for that technology, but in the long term the 20% to 25% CO2 advantage is there, will continue to be there and will continue to be needed to meet CO2 regulations.

The introduction of real driving conditions testing, emission testing could be I would say a plus for the catalyst industry because it will, I would say make the requirements on catalysts even tighter and more demanding as we move to real driving cycles. So there will be quite a bit of development work that will be required, durability testing that will be required under the new driving conditions and I would tend to see that as a positive for the catalyst industry as a whole rather than as a threat.

Now please also bear in mind that real driving conditions testing will also apply to gasoline and actually I also expect, as you may recall from previous discussions, some leveling out of the demands on diesel and gasoline, in particular when it comes to particulate matter is because so far diesel has been at a cost disadvantage to gasoline engines because of the cost of removing the particulate matters while some of the most advanced fuel efficient gasoline engines, in particular those that are downsized, turbocharged and have direct injections, are producing a lot of very fine particulate matter that will have to be addressed. So there are a number of developments along the introduction of real driving emission testing that should provide opportunities for the catalyst industry going forward and then on the enforceability of Euro IV legislation for heavy duty in China, it's difficult for me to provide more visibility or clarity because things tend to change fairly constantly in that respect.

And I would say today we play it by ear and we expect a gradual introduction. So probably no big bang but that remains to be seen, and hopefully we'll have better visibility as we enter into 2015.

Three questions for me, two on recycling and one on engine materials. The first is just to clarify on hedging, are you saying that you will not see a meaningful impact of the recent decline in metals prices in Q4 and the impact would actually come through in 2015?

That's the first one. The second is more generally just in terms of how aggressively you're hedging at the moment in Recycling compared to history.

And thirdly, just on the profitability of Energy Materials and I think previously you guided to weaker pricing in the second half and whether that's materialized and how you expect it and when you expect it to bottom out as well. Thanks very much.

I will take the questions or I will actually group them the first two questions because they're both related to hedging. If you refer to Marc's comment that he made on recycling and the outlook for the rest of the year, what he referred to is basically because we only have a few months, we have very good visibility on basically the metal terms of the contracts to be exercised.

He wasn't referring to the hedging. So I mean in hedging, there's not really anything to mention, on the hedging portfolio, it is still low compared to what we had certainly the last few years.

There hasn't been any meaningful change in the hedge book recently and so I would say that the impact of the hedge book, when you look at the overall performance in terms of profitability, certainly not significant. Is that an answer to your question?

Yes, so it's fair to say that the Q4 contracts or the contracts so far aren't reflective of current metals prices. Is that the right way to look at it or is it just the visibility that you've got that you're commenting on?

Basically I want to say that look at the overall hedge book and again, we only have a few months to go for this year, the overall hedge book that we had this year and the few hedges that we still have for next year are relatively low compared to the last few years and are not I would say material towards the profitability of recycling.

Then let me address the other question about pricing in Energy Materials and confirm that the price pressure continues to be there in most activities of Energy Materials and continues to be a factor. This is something that is quite normal for the kind of market segment that we're serving there and it is important for us to also grow the volumes and create a critical mass so that we can offset or more than offset the price pressure as we grow the business.

I've got three. So firstly, on the throughput issue, again, at Hoboken, I know you can't talk about the volume improvement, but can you give us any sense about what the principal operational improvements have been?

What areas of the facility have been debottlenecked via the midyear improvements? Just an idea in basic terms of the main areas of operational improvement.

The second question is on the PGM-related Recycling areas. You're saying in the statement that auto cat, scrap recycling conditions remain challenging and also I think you're alluding to the fact that the PGM refinery residue business remains tough.

And this is despite the fact that we've seen a return to production in South Africa. So I wondered if you could say to me to what extent do you think that's structural or is this largely down to the fact that we haven't seen a return to full production volumes in South Africa and then the final thing is, in China, help me understand how you've managed to maintain guidance for the year?

It strikes me that you've encountered a couple of deteriorating scenarios. One is the slower than anticipated introduction of Euro VI from some customers and then there's obviously been a deterioration towards the end of the quarter in the precious metal prices.

So what is the positive factor that's enabled you to maintain the position before? Has there been, for example, an inclination to build a safety buffer around the introduction of the implementation of the expansion program in the summer?

Is that the reason why you've been able to maintain guidance as that's come through in a better-than-anticipated way? They're the three questions.

Thanks.

Okay, Adam, let me start with the changes that are being brought to the flow sheet in Hoboken. Recall that, in the past two or three years, the focus was on the peripheral equipment and facilities and utilities and what we have debottlenecked in the past two or three years was mainly the sampling, the treatment, the utilities etcetera.

What we are doing now is actually modifying the equipment and the operating conditions of the main pieces of equipment, the smelter, the blast furnace, for instance and this is where the improvements are being achieved and these are two areas where we will continue to work in the course of next year. What will also have to be done in the course of next year, and this is only one part of the investment, is that we need to redo the logistics of the site because, if you want to move, I would say, 40% volumes into the site, within the site and out of the site, you need to basically adjust all of your logistics arrangements and also feeding systems, etcetera.

So there is quite a lot of work that will be done in the course of next year to address the sheer volume increase of materials that have to be transported and processed in a number of the plans within the site because you may also recall that the recycling process at Hoboken requires materials to move from one piece of equipment to another in a successive separation and refining steps. So that will be addressed in the course of next year.

May I just ask you, you suggested that the debottlenecking has been mainly around the smelter and the blast furnace. So has there been anything substantive in terms of the downstream?

Has there been any debottlenecking, for example, of a substantial nature of the refineries?

No, actually not because that's one area where we had spare capacity to start with. So the bottlenecks in Hoboken are typically at the periphery, the utilities, water treatment, gas cleaning, etcetera and sorry, I forgot to mention that's an important factor that's being subject to significant investment this year and next year.

That's gas cleaning. So the bottlenecks were typically in the utilities and at the periphery, so infrastructure-related bottlenecks and sampling as well which is the upstream part of the process, the upfront part of the process and the (indiscernible) plants of the smelter and the blast furnace and downstream of that in the refineries, we do have spare capacity.

Now let me address your question about the PGM feed. In spent automotive catalysts, there is no change compared to what we described in previous quarters and what we described last year basically.

So as far as we're concerned, we’ve a much reduced level of arrivals of spent or intake of spent automotive catalysts because the market conditions are not where we would like them to be and are at a level where spent automotive catalysts may be less attractive as feed materials and other products that we are able to process. So there is the usual trade-off that we are making between sources of supply as we try to optimize the mix and maximize the earnings.

(Indiscernible) residue streams have not returned to normal, I would say to prestrike normal levels because not all operations in South Africa have ramped up back to their pre-crisis levels. And in addition to that, some shops are simply not reopening.

And so I'm not sure we will be ever back to what used to be considered as normal production levels and there is the possibility of a more fundamental transformation of the industry taking place down there. So we continue indeed to see a more restricted availability of those residues in the marketplace.

And then let me turn to your last question about the guidance and clarify that it's not (indiscernible) but it was factored in the guidance back in July that enabled us to stay within the range. We have a number of positives and a number of negatives.

You have outlined some of the negatives indeed like the mix effect of the delayed introduction of some platforms in automotive catalysts. We have some positive effects.

We have indeed some positive developments in our Energy Materials division. In Performance Materials, we’ve a number of units that are doing relatively better indeed.

And all in all, these positive and negatives tend to compensate each other compared to what we saw in July. I would also clarify that none of the positive or negative developments in isolation would be huge.

It's a number of small factors moving in either direction.

Just two questions, first one, I may have misheard, but I think I heard you saying that you expect a recovery in the feed from platinum-rich raw materials in the Recycling business. If I did hear that correctly, could you just explain why you feel that?

And secondly, just going back to -- I was wondering if you tell us where you stand with the throughput on the new capacity at Hoboken? Has it ramped up to the operational 100% or are we still some way off that?

Geoff, let me start with the first question and clarify that I do not see today or expect a recovery in the availability of PGM-rich residues. I hope there will be one, but I'm not sure because we see indeed some possibility some more structural changes taking place to the industry and consideration being given to whether some shafts should be reopened at all.

So it is difficult for me at this stage to be I would say outright positive about these (indiscernible) moving back to pre or I would say strike levels. And I don't have sufficient visibility about how the South African PGM industry will address all of its challenges going forward.

It's a bit too early to tell. And the second question was about the throughput and it's difficult for me to talk in terms of capacity utilization because we're in this unusual situation of being in the midst of a significant investment project and in the midst of a significant transformation where we remove a number of bottlenecks and we can't possibly remove all of them simultaneously.

So it will take until the investment project is completed at the end of next year, early 2016, to be able to tell you that we're operating at full capacity once all of the bottlenecks have been addressed. But I wouldn't be in a position to tell you that today and that's why our comments are expressed in terms of throughput as we speak rather than in capacity utilization.

And could you tell us when you will be taking the maintenance shutdowns next year for the additional work that you have to do on the debottlenecking?

Yes, there will be one in each half of the year.

Coming back to the mix, we had a discussion on PGM, which material on auto cats. Could you may be comment on some of the other streams like electronic scrap and then also on the petro catalysts, which seem to be a growing business for you?

How do you expect further growth in feed from those two? And also have you made progress in securing volumes once the throughput, once the expansion works in Hoboken have fully been carried out?

That's the first question. And then on Catalysis, can you shed some light on the ramping up of the HDD business?

Is that delivering the kind of profitability increase that was hinted at the time of the first half results? Thank you.

Let me start then with the question about the supply streams in Recycling. We see some stability in e-scrap and you may recall that we commented on the competitive situation in that segment in the first part of the year, as well as last year as we have seen additional treatment capacity coming on stream and probably excessive capacity or excess capacity coming on stream recently in the region.

So I think conditions are fairly stable for the time being. We continue to be extremely well-positioned for the more complex types of electronic scrap and it's our ability to treat the most complex materials and also to process them very quickly that gives us a very strong position in petrochemical catalysts.

And that is indeed a segment where we're well-positioned and where growth -- there could be indeed further growth. That will depend on the evolution of refining capacity investments, but indeed this is an area of significant interest to us.

We're also making progress in securing additional volumes for the longer term once the additional capacity will be on stream. This is a work in process and I would say work in progress as well.

So this is fairly encouraging and I would say the first results are confirming or I put this that the additional capacity will mainly be set by industrial byproducts and products, complex products coming from the mining industry. And then, sorry, you had a question on Catalysis (multiple speakers).

Yes, that's the HDD ramp up. Yes, the HDD ramp up is working according to plan and it's delivering the benefit that we had factored in the guidance back at the end of July.

So this is pretty much in line indeed.

I had a couple of follow-up questions. Sticking with Recycling, Marc, you talk about a material increase in the capacity.

Can you share with us what you mean with that? I'm sensing that's more than double-digit or that's double digits and then if we use that word material, looking at the two stops next year, would you expect again a material capacity increase in each of these stops?

So that's the first question. The second question is related to the capacity increase and then talking about the three stops you planned for the 40% total increase.

Just wondering what the associated course will be of running that 40% additional capacity increase, by how much should we expect your fixed costs or your variable costs to increase? And then, thirdly, I think you talked about it a little bit, but overall the mix for Recycling next year, what is your feeling in terms of direction?

Let me start with the volume evolution and I mean suffice to say, at this stage, that it is material; I would prefer not to quantify that. I use material as opposed to I would say typical 2%, 3% incremental I would say process improvements effect.

So it's more than that. I wouldn't want to say more at this stage.

Coming to next year, you should not expect the same kind of improvement to be achieved at each stop because of what I explained about how we remove the bottlenecks one after the other and not simultaneously and so there will be a back loaded I would say improvement with most of it coming after the second wave of investments last year, I would say after the second shutdown next year. So it's not going to be linear across the year, it's not going to be evenly distributed and not necessary -- not visible in the same manner and to the same extent after each shutdown.

Let me now comment on the cost picture and I would like to remind you what we said at the time we explained the investment project a while ago, I think a year ago or so. One of the things that the capacity increase will enable us to do is to reduce the processing costs per unit.

And this is one of the important benefits of the investment project or it's one of the important benefits of the expansion. It will make the Hoboken facility even more competitive in a number of segments.

And so suffice to say, at this stage, that the cost picture will improve as a result of the investment wave. And then the mix for next year -- sorry -- my colleagues have kindly reminded me the last part of your question The mix for next year is based on what I can see today, which is not a full picture for next year, I would not bank on a changing mix for next year.

You will continue probably to see a somewhat subdued picture for end-of-life products such as spent automotive catalysts and probably indeed a more supportive picture in terms of products coming from other industries or byproduct and complex residue streams coming from the mining industry in general. So no dramatic change to be expected based on what I can see today.

Just one explanation because you said that it will make the Hoboken facility more competitive in certain areas. So is there a certain area where you will significantly increase your position, vis-a-vis the others?

Well by definition, if we want to gross at 40% more material, we will have to indeed attract more volumes from a number of segments and the focus areas are in industrial byproducts and products, complex products coming from the mining industry.

Okay, thank you very much and at this point, I would like then to close the conference call and invite you to raise further questions that you usually do by addressing them to our Investor Relations team. We're happy to take your follow-on questions and we'll make a point to provide the response as quickly as possible.

So thank you for your participation to the call today and wish you a nice rest of the day. Bye.