Umicore Sa · EURONEXT:UMI
Umicore Sa — FY2005 Earnings Presentation
45 slides from Umicore Sa's earnings presentation, Apr 26, 2006
Slide 1: 2005 report to shareholders and society
2005 report to shareholders and society
Slide 2: a materials technology group
a materials technology group application know-how chemistry material metals material science solutions metallurgy recycling 2
Slide 3: report to shareholders and society
report to shareholders and society economic report environmental report social report 2005 financial statements 2006 Q1 update 3
Slide 4: we grow together: economic report
economic report we grow together
Slide 5: strong results
strong results recurring ROCE (in million €) 2004 2005 20% revenues 1,692.9 1,725.0 recurring EBIT 280.3 232.9 15% 13.6% 13.1% of which associates 31.1 34.0 EBITDA 441.4 389.9 10% 8.3% net consolidated profit 6.5% 174.3 151.5 Group share* 5% ROCE 13.1% 13.6% Adjusted EPS - basic* 7.06 6.05 0% * recu
Slide 6: stable capex
stable capex capex • Automotive Catalysts (in million €) 200 • test centre in Hanau (Germany) • plant in Suzhou (China) 153 148 143 145 150 • Electro-Optic Materials • GASIR assembly plant in Quapaw (USA) 100 • Precious Metals Refining • H2SO4 plant in Hoboken 50 (Belgium) • environmental 0 • capex:
Slide 7: continued growth in R&D efforts
continued growth in R&D efforts R&D expenditure (in million €) 150 • R&D expenses up by 25% 5.7% (also now includes Element 6 5.3% 125 Abrasives R&D) 112 97 100 99 • new products brought to market 3.2% 75 89 in 2005 2.5% • Pd-based diesel catalysts 50 44 • GASIR® lenses for night-vision 44 25 system
Slide 8: acquisitions
acquisitions • Specialty Oxides & Chemicals • Todini (Italy) • Precious Metals Chemistry • Reaxa (UK) • Technical Materials • Global Stars (China) • Suzhou Alloys (China) • Zinc Alloys • Kunming (China) 8
Slide 9: segment breakdown
segment breakdown recurring EBIT revenues average capital employed AM 21% AM 16% AM 24% PMPC 49% PMPC 44% PMPC 37% PMS 20% PMS 14% PMS 16% ZS 9% ZS 26% ZS 23% • AM Advanced Materials • PMPC Precious Metals Products & Catalysts • PMS Precious Metals Services • ZS Zinc Specialties Corporate & Investme
Slide 10: Advanced Materials
Advanced Materials • growth continues in lithium- (in million €) 2004 2005 cobalt compounds and new generation materials revenues 308.6 275.1 • solid performance of products recurring EBIT 85.4 59.4 for tooling applications of which associates 18.6 18.4 • GASIR introduction continues, EBITDA 106.3 8
Slide 11: enhancing driver safety with GASIR
enhancing driver safety with GASIR® • night driving is 2 to 3 times more risky than day driving • night-vision systems enhance driver visibility & therefore safety • uses deep infrared light (heat source detection) • requires special expensive lenses (in Ge) • Umicore developed GASIR® lenses (only 2
Slide 12: Precious Metals Products & Catalysts
Precious Metals Products & Catalysts (in million €) 2004 2005 • automotive Catalysts remained Revenues 698.0 766.2 on growth track Recurring EBIT 122.8 136.1 of which associates 9.0 8.4 • slight improvement in Technical Materials versus a strong 2004 EBITDA 166.6 177.7 Capital Expenditure 49.2 43.6
Slide 13: making clean air more affordable with automotive catalysts
making clean air more affordable with automotive catalysts • environmental legislation imposes expensive catalyst systems on cars • Umicore developed diesel catalyst allowing for 25% of Pt substituted with Pd • Pd 5 times cheaper than Pt • offers more possibilities for catalytically activated diesel
Slide 14: Precious Metals Services
Precious Metals Services (in million €) 2004 2005 • excellent performance Revenues 204.9 234.5 Recurring EBIT 34.0 56.8 • significantly improved supply of which associates 0.0 0.0 situation for most materials EBITDA 59.0 97.7 Capital Expenditure 20.9 23.5 • strong PGM and specialty metals prices Ave
Slide 15: closing the loop by recycling rechargeable batteries
closing the loop by recycling rechargeable batteries • battery recycling currently not available in a sustainable way • no complete solution available for portable equipment recycling • Umicore developed a unique process for recycling Li-ion rechargeable batteries • allows for recycling of the compl
Slide 16: Zinc Specialties
Zinc Specialties (in million €) 2004 2005 • much lower received zinc price in € versus 2004 Revenues 481.4 448.4 • second half also impacted by using Recurring EBIT 79.9 24.7 slower production rhythm at Auby of which associates 3.4 7.2 • Zinc Chemicals businesses benefited EBITDA 134.0 65.1 from the
Slide 17: protecting ourselves with Zano (nano zinc oxide powder)
protecting ourselves with Zano® (nano zinc oxide powder) • zinc oxide is a protective agent • protects from harmful sun-rays (UV-A & UV-B rays) • has anti-bacterial properties • zinc oxide is currently used in • sunscreens (creams) • protective films (food) • Umicore developed nano-sized zinc oxide
Slide 18: we live together: environmental report
environmental report we live together
Slide 19: environmental performance analysis
environmental performance analysis metals emission to water input of (in kg) secondary materials 6 000 5 000 2004 4 000 2005 3 000 2 000 1 000 0 AM PMPC PMS ZS secondary materials 35% metals emission to air primary materials 65% (in kg) 35 000 30 000 2004 25 000 2005 Umicore is committed to seek 20
Slide 20: environmental achievements 2000 - 2005
environmental achievements 2000 - 2005 • Umicore committed to 8 environmental objectives in 2000* 1) input of secondary materials to >30% ; 34% 2) precious water consumption reduction by >20% : 12% 3) adhere to national climate program ; 4) metals emissions reduction by >50% in air : 38% in water ;
Slide 21: environmental objectives 2006 - 2010
environmental objectives 2006 - 2010 • 5 new objectives in line with “The Umicore Way” consistent with Global Reporting Initiative® 1) improvement plans for all point sources to air & water of processing operations, with specific target for larger emission points, control of diffusion sources 2) env
Slide 22: part of Umicore industrial site integrated into Natura 2000 network
part of Umicore industrial site integrated into Natura 2000 network • Angleur zinc plant • zinc rich soil • Umicore’s oldest industrial site • zinc (contamination) has not only negative impact • protecting biodiversity • development of specific flora: calamine plants • e.g.: yellow calamine violet •
Slide 23: soil remediation
soil remediation • in Flanders • Covenant signed in 2004 • soil excavation program >70% completed at some production sites • program accelerated with Cd concern • in Wallonia • Angleur remediation to be completed in June 2006 • Grâce-Hollogne sees opportunity for site revalorisation • in France • ri
Slide 24: we work together: social report
social report we work together
Slide 25: more than 14,000 people around the world
more than 14,000 people around the world • 14,142 people (of which 4,314 in associates) • working in 76 industrial locations around the world geographical distribution Europe 59% America 12% Asia 21% Africa 8% 25
Slide 26: working in a safe and healthy environment
working in a safe and healthy environment frequency rate 40 target • Umicore’s occupational safety 30 objective: 20 further improve the Group Safety 10 performance; ultimate goal is zero accident 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2006 2007 • Umicore’s occupational health objective:
Slide 27: resulting in employee satisfaction
resulting in employee satisfaction • 3rd worldwide employee opinion survey in 2005 • overall participation rate of 70% • overall results show consistent progress in almost all fields satisfaction with Umicore as employer Umicore in 2005 81% 15% 4% Umicore in 2001 71% 21% 8% Umicore in 1998 71% 23% 6
Slide 28: social objectives 2006-2010
social objectives 2006-2010 • 5 social objectives set for 2006 – 2010 based on Global Reporting Initiative® • each site must develop and implement a local plan for 1) addressing accountability to local community (only industrial sites) 2) becoming a preferred employer 3) constructive internal dialog
Slide 29: code of conduct for suppliers
code of conduct for suppliers • Umicore Code of Conduct extract: “The company seeks business partners whose policies regarding ethical, social and environmental issues are consistent with its own.” • Umicore developed a code of conduct for suppliers in the DRC* • based on the DRC*’s Mining Code • NG
Slide 30: controlling micro-sized particles
controlling micro-sized particles • Umicore leader in fine micro-sized Co powders • production creates dust on the workfloor • dust seen as health hazard • Umicore started a Co dust management programme • reduce exposure to the lowest possible level • achieve major improvements by 2007 • programme s
Slide 31: 2005 financial statements
2005 financial statements 2005 financial statements
Slide 32: income statement recurring
income statement recurring (in million €) 2004 2005 Operating Profit 249.2 198.9 Financial cost (41.9) (34.0) Income from other financial investments 0.0 0.2 Income from associates 31.1 34.0 Income tax (48.8) (35.3) Net recurring result 189.7 163.9 of which group share 174.3 151.5 of which minority
Slide 33: income statement total
income statement total (in million €) 2004 2005 Net recurring result 189.7 163.9 Income from discontinued operations 21.3 20.8 Non-recurring items * (18.5) (30.0) net result 192.5 154.6 of which group share 177.9 142.2 of which minority share 14.5 12.4 EPS declared (€ / share) 7.2 5.7 * Non-recurrin
Slide 34: balance sheet
balance sheet 31/12 31/12 (in million €) 2004 2005 Non current assets 1,109.4 1,188.4 Current assets 1,724.2 1,748.5 Assets of discontinued operations 699.8 - Total assets 3,533.3 2,936.9 Group shareholders' equity 935.0 971.1 Minority interest 53.6 44.3 Equity of discontinued operations 294.2 - Non
Slide 35: cash-flow statement
cash-flow statement (in million €) 2004 2005 Cash flow generated from operations before tax 362.9 288.6 Tax paid (45.4) (46.5) Change in working capital requirements (73.0) (77.0) Net cash flow generated by operating activities 244.5 165.0 Capital expenditure (145.6) (144.6) Acquisitions 16.1 (9.1)
Slide 36: cash flow build-up
cash flow build-up cash flow build-up (in million €) 500 114 9 77 400 other 145 300 276 change in working Cumerio capital debt 200 47 capex 35 tax 25 100 net 70 dividends interest 0 operating reduction cash flow in net debt 36
Slide 37: net financial debt
net financial debt debt (in million €) 800 643 • gearing ratio stable at 33% 584 600 515 • net debt at end of year up 400 compared to H1 2005 • due to increase of working capital 204 34% 33% 200 31% • due to year-end customer 11% payment delays in the automotive sector 0 31/12 31/12 31/12 31/12 2002
Slide 38: hedging summary
hedging summary • current hedging of zinc price exposure • 2006: 80% at average price of € 1,125 per tonne • 2007: 70% at average price of € 1,465 per tonne • H1 2008: 80% at average price of € 1,650 per tonne • for comparison: 2005: 100% at average price of € 974 per tonne • US dollar exposure hedg
Slide 39: dividend raised
dividend raised EPS* & dividend (in €) 8 7.06 6.05 6 • Dividend of € 1.85 proposed 4.41 (compared to € 1.65 in 2004) 4 3.33 • Pay-out ratio of 30.6% 2 1.65 1.85 1.40 1.60 0 2002 2003 2004 2005 Gross dividend EPS* * basic adjusted EPS w ithout discontinued operations (for 2002 + 2003 EPS has been rec
Slide 40: Umicore in 2006
Umicore in 2006 Umicore in 2006
Slide 41: Q1 2006 update
Q1 2006 update • revenues up by 11% versus Q1 2005 → good volume growth in most businesses • Advanced Materials revenues up by 10% → despite poor conditions in the Tool Materials business • Precious Metals Products and Catalysts revenues up by 17% → growth in all business areas • Precious Metals Ser
Slide 42: 2006 outlook
2006 outlook Taking into account Q1 performance but also considering uncertainty in some markets, Umicore expects full year recurring EBIT to be in the range of € 250 million to € 285 million. 42
Slide 43: forward-looking statements
forward-looking statements This presentation contains forward-looking information that involves risks and uncertainties, including statements about Umicore’s plans, objectives, expectations and intentions. Readers are cautioned that forward-looking statements include known and unknown risks and are
Slide 44: glossary
glossary • revenues All revenue elements – value of purchased metals • EBIT Operating profit (loss) of fully consolidated companies + Group share in net profit (loss) of companies accounted for under equity method • non-recurring Includes non-recurring items related to restructuring measures, impair
Slide 45: Slide 45