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Jewellery & Industrial Metals<br />
Dietmar Becker –<br />
Capital Markets Event on Recycling –<br />
Senior Vice President<br />
18-19 18 19 <strong>No</strong>v 2010
Jewellery & Industrial Metals<br />
Provides gold, silver and other precious metals containing<br />
products to the jewellery sector and industrial applications<br />
Closed loop offering for precious metals products, refining<br />
and related supply services<br />
•<br />
Recycling of high-value scraps & sweeps<br />
Multi-regional business concept, strong in Europe and<br />
expanding worldwide<br />
•<br />
•<br />
#1 gold and silver semi-finished products in Europe<br />
#1 machined platinum alloy products for jewellery in Europe<br />
The business unit includes Allgemeine Gold &<br />
Silberscheideanstalt AG (listed company, 91% owned by<br />
<strong>Umicore</strong>)<br />
2
Agenda<br />
•<br />
•<br />
Business model<br />
Key customer groups<br />
•<br />
•<br />
Jewellery & Lifestyle<br />
Industry<br />
• Business strategy<br />
3
Business model
Business model<br />
Leading supplier of precious metals and<br />
products for Jewellery and Industrial<br />
Metals<br />
Customer vicinity and presence in<br />
relevant regional key markets<br />
Refining and supply services combined<br />
with precious metals management<br />
One-stop-shop PM cycle offering with<br />
complete customer service leading to<br />
competitive advantage<br />
5<br />
Ag Au<br />
Pt Pd<br />
Cu<br />
Application<br />
know-how<br />
Chemistry<br />
material<br />
Material science<br />
solutions<br />
Metallurgy<br />
Recycling<br />
Life style<br />
Jewellery<br />
Chemistry<br />
Electrical<br />
Medical
Business model<br />
Full product and service offering to multi-regional<br />
markets offering<br />
•<br />
•<br />
•<br />
Wide range of customized products<br />
Refining/Recycling services<br />
Analytical & Applied Tech services<br />
Market leader in Europe in several segments with<br />
growing business in Asia and <strong>No</strong>rth-America<br />
Strong supply advantage by recycling<br />
• 70-100% of Au<br />
• 50% of Ag<br />
• 40% of Pt<br />
50% of all refining customers also buy products,<br />
50% of delivered product volume comes back as<br />
recycling feed<br />
6<br />
4<br />
3<br />
2<br />
1<br />
0<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Recycling volume (indexed)<br />
2005 2006 2007 2008 2009 2010<br />
Au Ag Pt<br />
Product volume (indexed)<br />
2005 2006 2007 2008 2009 2010<br />
Source: <strong>Umicore</strong> actuals & estimates
Pforzheim<br />
Germany # 357<br />
• Headquarters<br />
• Refining/recycling<br />
• Production<br />
Toronto<br />
Canada # 58<br />
• Production<br />
• Refining/recycling<br />
Manaus<br />
Brazil # 12<br />
• Production<br />
People<br />
Total workforce : 651 people<br />
7<br />
Amsterdam<br />
Netherlands # 58<br />
• Production<br />
Vienna<br />
Austria # 93<br />
• Production<br />
• Refining/recycling<br />
Foshan<br />
China # 31<br />
• Refining/recycling<br />
• Production<br />
Bangkok<br />
Thailand # 56<br />
• Refining/recycling<br />
• Production
Key customer groups
Key Customer Groups<br />
Jewellery & Industrial Metals<br />
Core competencies are built on know-how<br />
•<br />
•<br />
•<br />
•<br />
Precious metals metallurgy<br />
Chemistry<br />
Material science<br />
Customer service<br />
Main presence of gold in jewellery<br />
and silver in industry segment<br />
BU Jewellery & Industrial Metals gives access to the largest<br />
segment of gold recycling<br />
9<br />
Au<br />
5%<br />
85%<br />
95%<br />
Ag<br />
15%<br />
Source: <strong>Umicore</strong> actuals<br />
Jewellery<br />
Industry<br />
Jewellery<br />
Industry
Recycling<br />
Jewellery scrap<br />
Recycled scrap, sweeps,<br />
solutions<br />
Secondary materials<br />
Primary materials<br />
Common<br />
raw<br />
materials<br />
Complex<br />
raw<br />
materials<br />
Special<br />
high-grade<br />
recyclables<br />
10<br />
Complex<br />
recycling<br />
residues<br />
Gold<br />
Silver<br />
Platinum<br />
Palladium
Jewellery -<br />
Supply Metal Product Application Market<br />
Old jewellery<br />
Recycled scrap, sweeps,<br />
solutions<br />
Value Chain<br />
Gold<br />
Silver<br />
Platinum, Palladium<br />
Medal / Coin blanks<br />
Sheets, strips, plates,<br />
discs, tubes, rings, …<br />
Sheets, wires<br />
Fine metals, alloys,<br />
solders<br />
11<br />
Art medals Private art collectors<br />
Local Goldsmiths<br />
Jewellery industry<br />
Watches<br />
Rings<br />
Fashion jewellery<br />
Lifestyle goods<br />
High-end jewellery<br />
Fashion products
Jewellery<br />
Market dynamics<br />
World jewellery fabrication volume declined<br />
significantly in last decade driven by economy<br />
and gold price development<br />
Off-shoring of low price segment jewellery<br />
producers to low-cost countries<br />
Emerging jewellery markets in Far East along with<br />
economic development and individual<br />
wealth increase<br />
Traditional local/regional markets still important<br />
Top luxury brand segments remain strong<br />
Jewellery scrap recycling increased, offering<br />
opportunities for <strong>Umicore</strong><br />
12<br />
4,000<br />
3,000<br />
2,000<br />
1,000<br />
0<br />
Global gold consumption<br />
(in tonnes)<br />
2000 2008 2009<br />
Evolution gold jewellery consumption<br />
2.0<br />
1.5<br />
1.0<br />
0.5<br />
0.0<br />
2000 2008 2009<br />
Source: GFMS<br />
Jewellery<br />
Industry<br />
Investment<br />
China<br />
Global
Jewellery<br />
Market position & approach<br />
Europe as successful home market<br />
•<br />
•<br />
# 1 Au jewellery refining<br />
# 1 Pt and Ag semi-finished products<br />
Recent investments in Asia (Thailand and China) and acquisitions (Canada)<br />
have complemented the growth of the business<br />
•<br />
•<br />
Thailand has gained importance as manufacturing base for fashion jewellery<br />
(e.g. Pandora, Swarowski)<br />
China is a growing market in both industrial and jewellery segment<br />
Well positioned at leading luxury brands<br />
Competitors:<br />
•<br />
Metalor, Other Swiss, Cookson, local Pforzheim companies, …<br />
13
Industrial Metals –<br />
Value Chain<br />
Supply Metal Product Application Market<br />
Old jewellery<br />
Recycled scrap, sweeps,<br />
solutions<br />
Fresh Ag granules<br />
Gold<br />
Silver<br />
Platinum, Palladium<br />
Medal / Coin blanks<br />
Sheets, strips, plates,<br />
discs, tubes, wires,<br />
solders, rings, …<br />
Sputter targets, machined<br />
parts, evaporation<br />
materials<br />
Silver catalysts<br />
14<br />
Coins Investors, collectors<br />
Medical equipment<br />
Industrial Customers<br />
High purity silicon<br />
producers, coating uses,<br />
Formaldehyde synthesis<br />
Medical device industry<br />
Electrical and PM<br />
fabrication<br />
Photovoltaic,<br />
Semiconductor,<br />
Chemical, leather,<br />
wood industries, …
Industrial Metals<br />
Market dynamics<br />
Overall significant growth of silver demand in<br />
industrial fabrication and new energy technologies<br />
Ongoing demand for coins as “safe haven” by<br />
investors, with trend towards special alloys with<br />
les silver content to compensate for higher PM prices<br />
Demand for PM targets and silver anodes used in<br />
surface technology expected to grow in line with GDP<br />
and poly-silicon industry recovery respectively<br />
Silver catalysts for use in the formaldehyde<br />
industry, expected to grow according to GDP<br />
Increasing demand from automotive industry<br />
Medical industry expected to continue on a steady growth path<br />
15<br />
15,000<br />
12,000<br />
9,000<br />
6,000<br />
3,000<br />
0<br />
Global Ag consumption<br />
(in tonnes)<br />
2000 2008 2009 2010<br />
Source: GFMS + 2010 <strong>Umicore</strong> estimate<br />
Jewellery<br />
Industry<br />
expected, with recent upswing in production<br />
Photography<br />
Silverware<br />
Investment
Industrial Metals<br />
Market position & approach<br />
Europe remains of high relevance i.e. for high quality and technology;<br />
<strong>Umicore</strong> is # 1 for silver semi-finished products in Europe<br />
Industry and coins are the two main development and growth segments<br />
with China being a main growth market<br />
Industrial niche markets in PV, chemical and medical industry with organic growth<br />
opportunities<br />
Recycling and market knowhow and large manufacturing capability and capacity leads to<br />
competitive advantage over Metalor, Cookson and several local Pforzheim companies<br />
16<br />
Source: GFMS
Business strategy
Business strategy<br />
Europe is <strong>Umicore</strong>’s successful home market<br />
Strengthen and broaden current position by leveraging<br />
•<br />
•<br />
•<br />
Presence with top brand customers<br />
Industrial opportunities in photovoltaic, chemical, electrical, automotive and medical industries<br />
Expansion into other regions, in particular Asia and <strong>No</strong>rth America<br />
Pursuing front-end outsourcing opportunities<br />
Development of jewellery and industrial refining business (scrap, sweep)<br />
18
Forward-looking statements<br />
This presentation contains forward-looking information that involves risks and uncertainties,<br />
including statements about <strong>Umicore</strong>’s plans, objectives, expectations and intentions.<br />
Readers are cautioned that forward-looking statements include known and unknown risks<br />
and are subject to significant business, economic and competitive uncertainties and<br />
contingencies, many of which are beyond the control of <strong>Umicore</strong>.<br />
Should one or more of these risks, uncertainties or contingencies materialize, or should any<br />
underlying assumptions prove incorrect, actual results could vary materially from those<br />
anticipated, expected, estimated or projected.<br />
As a result, neither <strong>Umicore</strong> nor any other person assumes any responsibility for the<br />
accuracy of these forward-looking statements.<br />
19
Dietmar Becker<br />
Senior Vice President Jewellery & Industrial Metals<br />
Dietmar Becker holds a university degree in<br />
Economics and Organisational Sciences. He started<br />
working for Degussa AG – part of which was<br />
acquired by <strong>Umicore</strong> in 2003 - in 1988, heading a<br />
number of businesses in Germany as well as in<br />
Italy, prior to being appointed Senior Vice-<br />
President Technical Materials in 2007. He became<br />
Senior Vice-President of the newly created<br />
business unit Jewellery & Industrial Metals in<br />
2010.<br />
20
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