Annual report 2003

Adapting the Group’s structure
Dealing with a weaker dollar
In parallel with the integration of PMG, the company has also One of the realities that many European companies have had to
reviewed the organisation of all its corporate support functions. face during 2003 has been the gradual erosion of the value of
This led to the streamlining of its sales and marketing operations, the US dollar against the Euro. This affects Umicore mainly in its
with the third party trading and marketing business being injected businesses were the margins are largely dollar-denominated and
into a joint venture with Arcelor called Traxys. Umicore Marketing where it has a strong European cost base, such as copper and zinc
Services was thus refocused on the provision of sales and marketing smelting. Umicore has been sheltered from this development
support for the Group’s business units. We also decentralised and through its currency hedges that provided protection in 2003 and
reduced the Group’s in-house engineering activities. The copper will continue to do so in 2004 and into 2005. In the meantime,
business was organised in such a way that it could function as a Umicore continues to prepare for the eventuality of continued dollar
stand-alone company.
weakness both by further cost reduction initiatives, adaptation of
pricing policies where possible and the further internationalization
New accounting standards
of its operations.
During the year the Group’s finance and accounting department
have dedicated much time and effort towards ensuring a smooth
Addressing the legacy
transition to international accounting standards (IFRS). Although In the course of the past year Umicore has made major progress
the introduction of these standards does not become mandatory in the remediation of the remaining issues regarding historic
for listed companies in the EU until 2005, we were convinced pollution around its plants. In Bulgaria we finalized the remediation
of the benefits of making the transition as early as possible. of the significant pollution left over from former times. This was
The switch has of course meant changes to certain definitions, done in collaboration with the World Bank and the Bulgarian
figures and ratios, the details of which are outlined in this report. authorities and we were pleased that this effort was recognized
in the form of a prestigious sustainable development award.
A broader shareholder base
In Belgium we worked closely with the authorities and are now
close to a comprehensive agreement on an action plan. In France
If the year was notable for the changes in Umicore’s business we have initiated an in-depth risk assessment.
portfolio it was similarly marked by a significant evolution in
shareholder profile. In August, Umicore sold one million of the
treasury shares it owned to partly refinance the PMG acquisition.
This was followed in October by Suez’s placement of two million
Umicore shares. The level and diversity of investor interest in
As far as can be assessed today, provisions in the balance sheet
at 31 December 2003 should be sufficient to adequately address the
remediation of all substantive risks related to historical pollution.
these placements was very encouraging. The real test, however, Good prospects for the future
came in November when we launched an equity offering for
2.8 million new shares. Although we were convinced that interest
would be strong, we were impressed by the positive response,
This report looks back on a year, which was challenging and
intense but ultimately very rewarding for Umicore.
which resulted in the shares being more than four times over We are now a different and a stronger company, with a number
subscribed. Finally, in the first months of 2004, the remaining of world-leading materials businesses. We look forward to building
holders of the Suez exchangeable bonds exercised their option to on this base in 2004 and taking our company to the next level
exchange. Following all these transactions Umicore has a much more
diverse and international shareholder base and investors in the UK,
France and the US showed a particularly high level of interest during
the year. The increase in free float also led to a very welcome
increase in the stock’s liquidity on Euronext.
of performance, for the benefit of all our stakeholders.
Thomas LEYSEN Karel VINCK
Chief Executive Officer Chairman
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