Thank you for writing the article. Campine is a rather unknown Belgium company and it is good to have some research on it. Last year results were "depressed" by the activation of a strategic (1 month) reserve of antimonytrioxide. Many people see this as a revolving stockpile of antimony emptied in 1 month of production but this was anything but that. On the balance sheet this reserve was activated as as a tangible asset for €8,25mln (not to be marked-to-market if prices move upward!!)...at the end of the year this was far more worth than €8,25mln and thus a hidden reserve. I think this move was done not in january but and the end of H1 to dampen the outstanding results (otherwise it would have been a profit on stockpile). So bear in mind that 2024 was much better than reported and that 2025 had a very promising start. Conclusion for me is that the board of Campine's statement about what kind of results to expect for 2025 is one of deeply underpromise and easy to overdeliver.
I'm a bit puzzled by the strategic reserve indeed. It is one month of production which should be between 800 and 1.000 tons of antimony, but the book value is only €8.25 million, while the market price of antimony was close to $20k / ton when they formed the strategic reserve.
The only reason I can find is that they based the historical cost of the strategic reserve on the cost of the recycled antimony and not on the input cost of the bought antimony or a mix of both. Suppose that on an annual basis there is a total of 1.500 tons of antimony used in their production process that comes from their recycling activities on a total production of 12.000 tons I would have expected them to base the historical cost on a cost mix of 12,5% recycling cost (1.500 / 12.000) and 87,5% (10.500 / 12.000) bought antimony.
Thanks, another very good article. What are the arguments against the thesis that EBITDA in the specialty chemicals segment will triple again in 2025 if antimony prices double to an average of 46,000 in 2025?
The EBITDA margin in the segment was about 8% in 2024. If you assume they will be able to sell 10.000 tons of antimony trioxide (which is probably aggressive given the shortages in raw materials) at a $46k price point and an 8% EBITDA margin you get to USD 31 million or below EUR 30 million in EBITDA.
At the same time you can see that in 2024 they had "only" EUR 187 million in revenues in the segment. So my above shortcut estimation is not 100% trustwurthy as if you assume they sold 10.000 tons at the average antimony price of $23k / ton you already get to over EUR 200 million in revenues.
So even a doubling in EBITDA could be a stretch for the segment. The circular metals division should however benefit from the increase in antimony prices and the increased recycling capacity so overall they could end up with EUR 60 million in EBITDA.
Are they currently buying all of their antimony in the specialty chemicals division from 3rd party suppliers or is there a synergy between the 2 divisions (for example, antimony from recycled batteries is used in chemicals)?
If not, aren't they very exposed to prices falling as the supply demand situation is fixed in the next 2-3 years (based on the fb post you linked)? Any sharp dip in prices will crush profits in that segment, right?
Where do they outline the growth project / new recycling method? (how much capex required, what is improvement in tons expected, etc).
Historically the circular metals division has been the segment that was more stable and had less volatile results. As mentioned in my initial post the segment is part of an oligopoly with Campine being the 2nd biggest recycler of lead acid batteries in Europe (behind Eco-Bat). That gives them some pricing power. The specialty chemicals segment has been more volatile as the results really depended on the price fluctuations of antimony.
There are indeed synergies between both segments: 15% of the antimony trioxide that is used in the specialty chemicals business comes from the circular metals division. That is about 1.500 out of the 10.000 tons of antimony trioxide they produce annually. In a recent interview the CEO mentioned they intend to recycle 5.000 tons of antimony per year by 2030.
They are definitely exposed to antimony prices falling in the specialty chemicals segment. The thing is that since they became the largest producer of antimony trioxide worldwide it seems they also have more pricing power, so I guess that their situation improved compared to how it was historically. You can find back more info in the latest annual report "Even beyond the current crisis, our enhanced market position will leave a lasting impact on our industry standing."
On the growth projects: my info mainly comes from (public) CEO interviews, but there is also some information in their annual reports as well. As mentioned here above, they intend to increase their recycling from 1.500 tons per year to 5.000 tons per year by 2030. I understand that they foresee two additional production lines (going from a single to three production lines), each costing EUR 3 million. The director specialty chemicals also referred to a 4th reactor, but I'm not sure how much capex they foresee for that reactor. They are really tight lipped as they consider that they are the first mover. This is one of the projects they have been working on (mentioned in their 2023 annual report): https://www.lifeplasplus.eu/consortium/
Thank you for writing the article. Campine is a rather unknown Belgium company and it is good to have some research on it. Last year results were "depressed" by the activation of a strategic (1 month) reserve of antimonytrioxide. Many people see this as a revolving stockpile of antimony emptied in 1 month of production but this was anything but that. On the balance sheet this reserve was activated as as a tangible asset for €8,25mln (not to be marked-to-market if prices move upward!!)...at the end of the year this was far more worth than €8,25mln and thus a hidden reserve. I think this move was done not in january but and the end of H1 to dampen the outstanding results (otherwise it would have been a profit on stockpile). So bear in mind that 2024 was much better than reported and that 2025 had a very promising start. Conclusion for me is that the board of Campine's statement about what kind of results to expect for 2025 is one of deeply underpromise and easy to overdeliver.
I'm a bit puzzled by the strategic reserve indeed. It is one month of production which should be between 800 and 1.000 tons of antimony, but the book value is only €8.25 million, while the market price of antimony was close to $20k / ton when they formed the strategic reserve.
The only reason I can find is that they based the historical cost of the strategic reserve on the cost of the recycled antimony and not on the input cost of the bought antimony or a mix of both. Suppose that on an annual basis there is a total of 1.500 tons of antimony used in their production process that comes from their recycling activities on a total production of 12.000 tons I would have expected them to base the historical cost on a cost mix of 12,5% recycling cost (1.500 / 12.000) and 87,5% (10.500 / 12.000) bought antimony.
Thanks, another very good article. What are the arguments against the thesis that EBITDA in the specialty chemicals segment will triple again in 2025 if antimony prices double to an average of 46,000 in 2025?
I don't think it is feasible.
The EBITDA margin in the segment was about 8% in 2024. If you assume they will be able to sell 10.000 tons of antimony trioxide (which is probably aggressive given the shortages in raw materials) at a $46k price point and an 8% EBITDA margin you get to USD 31 million or below EUR 30 million in EBITDA.
At the same time you can see that in 2024 they had "only" EUR 187 million in revenues in the segment. So my above shortcut estimation is not 100% trustwurthy as if you assume they sold 10.000 tons at the average antimony price of $23k / ton you already get to over EUR 200 million in revenues.
So even a doubling in EBITDA could be a stretch for the segment. The circular metals division should however benefit from the increase in antimony prices and the increased recycling capacity so overall they could end up with EUR 60 million in EBITDA.
We will see. Antimony price is already > 55k.
Once again, a well-researched article.
Thank you for sharing!
FYI Don't know if you are on X but I cited you here: https://x.com/Phoenix_FFM/status/1939263768262767014
Thanks phoenix, I'm indeed on X. My handle is @pepersoons
Nice article. A few questions:
Which segment do you think is better?
Are they currently buying all of their antimony in the specialty chemicals division from 3rd party suppliers or is there a synergy between the 2 divisions (for example, antimony from recycled batteries is used in chemicals)?
If not, aren't they very exposed to prices falling as the supply demand situation is fixed in the next 2-3 years (based on the fb post you linked)? Any sharp dip in prices will crush profits in that segment, right?
Where do they outline the growth project / new recycling method? (how much capex required, what is improvement in tons expected, etc).
Thanks for your questions.
Historically the circular metals division has been the segment that was more stable and had less volatile results. As mentioned in my initial post the segment is part of an oligopoly with Campine being the 2nd biggest recycler of lead acid batteries in Europe (behind Eco-Bat). That gives them some pricing power. The specialty chemicals segment has been more volatile as the results really depended on the price fluctuations of antimony.
There are indeed synergies between both segments: 15% of the antimony trioxide that is used in the specialty chemicals business comes from the circular metals division. That is about 1.500 out of the 10.000 tons of antimony trioxide they produce annually. In a recent interview the CEO mentioned they intend to recycle 5.000 tons of antimony per year by 2030.
They are definitely exposed to antimony prices falling in the specialty chemicals segment. The thing is that since they became the largest producer of antimony trioxide worldwide it seems they also have more pricing power, so I guess that their situation improved compared to how it was historically. You can find back more info in the latest annual report "Even beyond the current crisis, our enhanced market position will leave a lasting impact on our industry standing."
On the growth projects: my info mainly comes from (public) CEO interviews, but there is also some information in their annual reports as well. As mentioned here above, they intend to increase their recycling from 1.500 tons per year to 5.000 tons per year by 2030. I understand that they foresee two additional production lines (going from a single to three production lines), each costing EUR 3 million. The director specialty chemicals also referred to a 4th reactor, but I'm not sure how much capex they foresee for that reactor. They are really tight lipped as they consider that they are the first mover. This is one of the projects they have been working on (mentioned in their 2023 annual report): https://www.lifeplasplus.eu/consortium/