2004 Umicore Umicore 2004 Annual Report Umicore Tel +32 2 227 71 11 Société Anonyme/Naamloze Vennootschap Fax +32 2 227 79 00 VAT BE 401 574 852 Your home Broekstraat 31 rue du Marais e-mail [email protected] Company Number 0401574852 EN B-1000 Brussels, Belgium www.umicore.com Registered Office : Broekstraat 31, Rue du Marais - B-1000 Brussels - Belgium a world of Umicore materials Contents Dividends Additional information If the appropriation of profit proposed to you on Message to the shareholders 2 Stock Euronext Brussels page 99 of this report is approved, a gross dividend of Key figures 4 EUR 1.65 per share will be paid for the financial year Financial Institutional investors and analysts who 2004, i.e. information wish to obtain additional information Advanced Materials 6 may apply to the Investor Relations a net dividend of EUR 1.2375 after deduction of the Precious Metals Products and Catalysts 12 department at the company’s registered 25% withholding tax on presentation of coupon office Precious Metals Services 18 No. 13 Contact: Zinc 20 a net dividend of EUR 1.40 after deduction of the 15% withholding tax on presentation of coupon Tim Weekes Copper 24 and VVPR strip No. 13 Phone: 32-2-227.73.98 E-mail: [email protected] Corporate & Investments 26 Annual This report is also available in French, Human resources 30 Starting 15 April 2005 report Dutch and German Environment, Health & Safety 34 Payment of dividends on presentation of coupon No. 13 Internet This report can be downloaded from the at the registered offices and branches of the following Umicore Website: www.umicore.com Investor relations 36 institutions: Registered Umicore Financial review 40 Fortis Bank office Rue du Marais 31 Glossary financial definitions 42 ING B-1000 Brussels - Belgium Phone: 32-2-227.71.11 Financial statements 2004 - Contents 45 Bank Degroof Fax: 32-2-227.79.00 Dexia Bank Report of the statutory auditor 101 Internet: www.umicore.com KBC Bank E-mail: [email protected] Corporate governance 102 Petercam S.A. Company Number: 0401574852 Board of directors and management 108 VAT No: BE 401.574.852 Dividends and financial calendar 113 Publisher Umicore Corporate Communication Financial calendar responsible Contact: Eddy Cornelis at law Phone: 32-2-227.70.64 E-mail: [email protected] 22 February 2005 Press release and final figures for financial year 2004 Realisation Concerto Photographs Publication 13 April 2005 General Meeting of Shareholders (financial year 2004) Printing Dereume 17 August 2005 Press release and interim results for the first half of 2005 mid February 2006 Press release and final figures for financial year 2005 12 April 2006 General Meeting of Shareholders (financial year 2005) Materials for a better life… Umicore is a specialty materials company with activities in five business groups. Advanced The world’s leader in cobalt and Materials germanium compounds and materials. Did you know? Umicore’s compounds can be found in the rechargeable batteries in a quarter of the world’s laptop computers and mobile phones. Precious Metals Products One of the world’s top three producers and Catalysts of automotive catalysts and a leading producer of other precious metals based compounds and functional products. Did you know? Approximately one car in four produced today contains a Umicore catalyst. Precious Metals The ultimate precious metals recycler. Services Did you know? Umicore is the only recycler in the world that can process a full range of precious metals bearing materials – from industrial by-products to end of life materials such as electronic scrap and spent automotive catalysts. Zinc The world’s number one in zinc specialty products and recycling. Did you know? More than a quarter of Umicore’s zinc comes from recycling. Zinc can be found in a wide range of applications such as paint, tyres, zippers and roofing. Copper One of Europe’s leading copper producers. Did you know? Umicore’s products are used in the production of copper wires, sheets and tubes. A typical family car can contain up to 1,500 copper wires totaling some 1.5km in length. Message to the shareholders The challenge for Umicore at the beginning A smooth integration of 2004 was to move on from what had been a landmark year in 2003 in terms of Our first concern in setting the targets for the the evolution of the Group. The challenge integration process after the PMG acquisition was on three levels: to successfully complete in 2003 was to minimize unnecessary the process of creating a fully integrated disruption in the various businesses, so that company united by a common and coherent we would stay focused on our operations strategy; to realize the potential of the Group and on our customers. Only in the areas where there was a clear need to harmonize 2 in terms of financial performance and to enhance the understanding of the company and streamline procedures and practices or in the wider world. The first two goals were where there were strong cost benefits did clearly achieved in 2004. The integration we seek rapid changes. This approach paid of the PMG activities was completed ahead off in 2004, with all former PMG businesses of schedule and the financial results of the continuing to grow and delivering results Group progressed significantly in almost all ahead of our expectations. In the coming areas. However, more work still needs to be years, we will have to further deepen the done to fully explain the full nature of our integration to ensure that Umicore realizes transformation to all relevant stakeholders. its full potential. In this respect “The Umicore Way”, a framework of guiding principles, was published this year as the foundation for a Operating results shared understanding about what is common and essential for our Group. Almost all business units improved their performance over the previous year. Umicore was helped by a favourable business Dealing with the past environment: economic growth in the world was at its highest for many years; metals The agreement, which we signed in April prices were generally strong and our key with the Flemish Authorities, was another markets developed well. Furthermore, we very significant development. With this were protected from the negative evolution agreement, we moved forward pro-actively of the dollar by our prudent hedging policy. and decisively to deal with the longstanding But beyond these positive external factors, issue of historical pollution in and around our we think it is essential to highlight the strong four Flemish sites. The cost of dealing with intrinsic performance in Umicore’s businesses. this legacy of 125 years of industrial activity is high, although it had no impact on our This performance was built on outstanding results as the necessary provisions had been contributions from our teams around the built up in previous years. By dealing with world. Much of Umicore’s success over the the issue once and for all and preventing this past years has been built on the fostering environmental inheritance being passed on of entrepreneurship and ownership within a to future generations Umicore is following the decentralized operational structure. This has right path in developing a sustainable future enabled our colleagues to pursue their own for itself and doing so in harmony with its objectives within a broad framework and stakeholders. with the support from the corporate centre limited to those areas where there is clear value added. One of our challenges as Umicore Investing for the future grows is to ensure the successful marriage of As Umicore develops as a specialty materials this spirit of independance and the integration company the importance of staying at the of our businesses behind a common Group forefront of technological developments identity and goal. becomes ever more important. In 2004 the company’s research and development materials business. For Cumerio, whose spending reached almost € 90 million, the performance has been turned around in equivalent of 5% of Group revenues. We are recent years, it provides the opportunity to more than ever convinced that for all of our pursue a growth strategy capitalizing on its businesses, technological leadership and a unique geographic positioning and strong free deep understanding of our customer needs cash flow generating potential. The Cumerio will be the single most important factor management will now be able to do so on its determining our success in the future. own strategic terms and with full control over its own capital allocation. For any company able to generate strong free 3 cash flows, capital allocation decisions are In zinc we announced our intention to of key importance. In 2004 the company’s reduce our output of commodity zinc by organic growth initiatives included the 130,000 tonnes and to concentrate on launch of investment projects such as a new the development of our downstream zinc automotive catalyst test centre in Germany, specialties activities. Unfortunately this will an automotive catalyst production facility involve job losses at two of our facilities in the in China and a facility for the production of North of France. During the course of the social optical assemblies for car night vision systems plan negotiations Umicore will do its utmost to in the US. Umicore’s philosophy remains to ensure that an equitable settlement is found grow where possible through our own internal for the people affected. initiatives and to complement these with Both of the above initiatives will add clarity acquisitions if and when there is a compelling to the structure of our business and will also strategic fit and value can be created. have the effect of reducing our sensitivity to external factors.