Annual report 2003

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Investor relations In 2003 Umicore’s share price increased by 35% from ¤ 41.13 to Suez-Tractebel – a structured withdrawal ¤ 55.65. This performance meant that for the fifth consecutive year the company outperformed its domestic stock market index, the Bel 20. Similarly the company outperformed the HSBC Smaller European Companies Index. The performance compared with the Dow Jones Non-Ferrous Index (DJNF) was not as favourable. However, most of the components of the DJNF are companies with a more direct exposure to swings in the commodity cycles. Suez-Tractebel, a Suez subsidiary, progressed towards its planned exit as a Umicore shareholder during 2003. Following on from the sale of Umicore shares in October, this process culminated in January 2004 with the announcement of the early redemption of the Suez bond exchangeable into Umicore shares. This exchangeable bond was issued by Suez in December 2000 as a way to prepare the divestment of its shareholding in Umicore by January 2005. The early redemption feature was designed to permit an acceleration Shareholder base of Suez’s divestment under the condition that the Umicore stock The shareholder base evolved significantly in 2003. A number of operations took place during the year that enabled a range of new investors to become owners of Umicore stock. In July Umicore sold one million treasury shares in order to refinance part would, on average, trade above 120% of the bond exchange price over a period of approximately one month. The consistent strong performance of the Umicore stock, particularly in the later months of 2003, permitted the activation of this feature. of the loan secured for the acquisition of PMG. In October Suez Suez owned approximately 4 million Umicore shares at the end sold two million shares with a significant amount being placed of 2003, representing just under 16% of the outstanding equity. with investors in the United States. In November Umicore launched On 20 February 2004 Suez-Tractebel confirmed the completion an equity offering for up to 2,800,000 shares in order to refinance of the exit process, announcing that it held 668,603 shares, a further portion of the PMG acquisition. The operation was which could be used to cover options granted to Umicore’s senior successful with investor demand outstripping the number of shares available more than four times. The operation was particularly management at the time of the bond issue in 2000. notable for the interest shown by investors in the UK, France and Canada. As a result of the equity offering Umicore proceeded with Increased free-float a capital increase which brought the number of Umicore shares The net effect of the Suez exit has been a further increase in outstanding to 25,420,175. Umicore’s free float to 97% - the highest among the constituents of the Bel 20. This, coupled with the increased number of shares made available through Umicore’s sale of treasury shares and the equity offering, has contributed to a broadening of Umicore’s shareholder base and a significant improvement in stock liquidity. 250 200 150 100 50 0 Thousand shares Daily transaction volumes (montly average) Does not include sale of 1 million treasury shares in July 2003 or the sale of 2 million shares by Suez in October 2003 34 39 45 59 J F M A M 41 52 56 31 37 32 23 37 29 25 43 31 J J A S O N D J F M A M J J A S O N D J F 2002 2003 2004 22 67 61 73 90 99 125 70 240 115
Treasury shares and stock option plans Following the decision to proceed with the acquisition of PMG, Umicore suspended its share buy-back programme. The company retains the authorization from the shareholders to repurchase a maximum of 10% of its share capital. At 31 December 2003 Umicore held 710,339 shares, representing 2.8% of the outstanding equity. These shares were being held to limit any potential capital dilution from the exercise of options granted to Umicore employees and management in the context of the company’s stock option plans. At 31 December 2003 there were 1.641.160 options outstanding, each equivalent to one Umicore share. Dividend Umicore aims to pay a stable or gradually increasing annual dividend. The Board of Directors proposed that the dividend related to 2003 be increased by 14% to ¤ 1.60 (gross) per share. Financial communications – reaching a broader audience The year proved to be a busy one with respect to financial communication. The company took further steps in its development as a specialty materials company through the acquisition of PMG. Much of the middle part of the year was dedicated to explaining the transaction and the subsequent changes to Umicore’s business drivers, product range and organization. This process was aimed not only at Umicore’s traditional investor and analyst base. Also targeted was a new audience of investors and analysts with specific expertise in the technology-intensive business groups of the company that, following the PMG acquisition, make up such a large part of Umicore’s overall business portfolio. The equity offering in November 2003 also provided senior management with another opportunity to reach new investors in a number of different areas. Three teams visited investors in ten countries during two weeks in November and held meetings with more than 135 institutional investors in the process. With a free float of 97% and a much more diverse shareholder base the need for clear and consistent communication has never been more important. An extensive programme of roadshows and meetings are conducted throughout the year to both inform and receive feedback from investors and financial analysts. The company also organizes visits to its sites in order to improve the overall level of understanding of its activities. The investor relations website provides a wide range of data and information for shareholders and potential investors alike. The institutions that carried out equity research on Umicore during 2003 include (in alphabetical order): International Belgium BNP Paribas Bank Degroof HSBC Delta Lloyd Securities ING Barings Fortis Merrill Lynch KBC Securities Royal Bank of Canada Petercam UBS Warburg Puilaetco SG Bank De Maertelaere A sustainable investment Umicore is part of the FTSE4Good Index and in 2003 was awarded a “best in class” rating by Storebrand Socially Responsible Investments and was also selected for membership of the new Kempen/SNS Smaller Europe SRI Index. 42 |43
Page 1 and 2: Annual report 2003 Umicore’s germ
Page 3 and 4: Umicore is the world leader in coba
Page 5 and 6: Adapting the Group’s structure De
Page 7 and 8: Contribution to Recurring EBIT (1)
Page 9 and 10: however, was in reconfiguring a pre
Page 11 and 12: Sigurd ADLER, Vice President & Gene
Page 13: packaging materials, precious metal
Page 16 and 17: Sales by Business Line Engineered p
Page 18 and 19: 200 150 100 50 0 Sales Trends of Ge
Page 21 and 22: 1| Precious Metals Services is the
Page 23: Source of Materials in 2003 (Expres
Page 26 and 27: Geographical Breakdown of Business
Page 29 and 30: 1| The properties of zinc make it t
Page 31: 120 116 112 108 104 100 96 Share %
Page 34 and 35: 400 350 300 250 200 150 100 50 ('00
Page 37 and 38: 1| Thanks to the acquisition of PMG
Page 39 and 40: 50 40 30 20 10 0 € million R&D Ex
Page 41 and 42: Environment Health and Safety 30 25
Page 43: Some industry terms & definitions A
Page 47 and 48: Belgian GAAP IFRS 1999 2000 2001 20
Page 49 and 50: while the growth in primary supply
Page 51 and 52: Compensation of the Executive Commi
Page 53 and 54: Jean-Luc Dehaene, 63 Independent no
Page 55 and 56: Hugo Morel, 53 Executive Vice-Presi
Page 57 and 58: Main products and applications ADVA
Page 59 and 60: Umicore: a worldwide presence Vanco
Page 61 and 62: Dividends Starting 21 April 2004 If

Annual report 2003

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