UMICORE Rising to the challenges
Integrated Annual Report 2020
Contents
About us Business groups Umicore at a glance Horizon 2020 Global trends
Taking on the big challenges Business model
CEO and Chairman's review Stakeholder Engagement Advocacy for impact Materiality
Giving back to society
3 Umicore's response to COVID-19 26
4 Economic Review 29
5 Value chain and society 39
6 Eco-efficiency 45
8 Research, development & innovation 49
9 Great place to work 54
10 Supervisory Board 61
13 Management Board 66
16 Senior management 71
21 Management approach 72
22 Managing risk effectively 76
25 Governance statements, G1-G13 87
Economic statements 101
Financial statements, F1-F41 108
Value chain statements, V1-V5 181
Environmental statements, E1-E8 188
Social statements, S1-S9 198
About this report 211
GRI index 213
Assurance reports 216
References and key links 221
Key figures 222
Front cover image: Reda Malakauskaité, Peter Verholen
And Steven Van Hout working in the solid state battery teamThe Umicore integrated annual report offers a comprehensive and integrated view of our economic, financial, environmental, value chain and social performance for 2020. This report is in accordance with the GRI Standards: Core option.
Access all items in this report, online, at:ANNUALREPORT.UMICORE.COM
About us
THE GLOBAL MATERIALS TECHNOLOGY & RECYCLING GROUP
PROVIDING TOMORROW'S SUSTAINABLE SOLUTIONS FOR CLEAN MOBILITY AND RECYCLING
Umicore is uniquely positioned in all aspects of clean mobility materials and in recycling. we provide clean-mobility solutions for all platform types and we recycle these materials when they reach the end of their useful life.
Using our metallurgy, chemistry and materials science expertise, this closed-loop business model is our powerful differentiator and it will continue to be the basis on which we carry out our business and build our strategy.
We provide automotive catalysts to clean the exhaust gases from internal combustion engines for lightduty and heavy-duty vehicles of all fuel types, and the rechargeable battery materials and automotive catalysts that are required to power hybrid, plug-in hybrid and full electric vehicles. We also produce catalysts for fuel cell-powered vehicles and for static or industrial applications.
Umicore operates one of the world's most sophisticated precious metals recycling facilities and, across our activities, we can recover 28 precious and non-ferrous metals from industrial residues, used electronic scrap, batteries, automotive and industrial catalysts, fuel cells and more. We also provide recycling services to customers to help maximize their efficiency.
The recovered materials are then transformed into pure metals or new products.
We develop custom materials and ensure that processes take account of health and safety, recyclability, cost efficiency, waste reduction and energy efficiency, both in our own facilities and across the value chain.
We believe our success is linked to how we balance the economic, environmental and social impact of our operations.
Our integrated approach to sustainability is not just about minimizing the impact of our industrial operations: our commitment to ethical and responsible sourcing distinguish us from our competitors while delivering value for all.
Umicore strives to have a positive impact, enhancing quality of life through our products and services, reducing harmful vehicle emissions, giving new life to used metals and powering the cars of the future.
Business groups
OUR COMPLEMENTARY BUSINESS GROUPS ENABLE A MORE SUSTAINABLE WORLD
COMBINING CUTTING-EDGE TECHNOLOGIES AND RECYCLING TO GIVE NEW LIFE TO USED METALS
Umicore at a glance
To position Umicore to thrive faced with the accelerating global megatrends of stringent emissions control, transport electrification and resource scarcity.
GROUP REVENUES ANNUAL GROWTH RATE 2015-20
+4.3%
To secure Umicore's future success and sustainability by consistently investing in R&D to develop and market innovative products and services, and to ramp-up capacity to meet growing market demand for Umicore products and services.
€ 536m
2020 RECORD ADJUSTED EBIT
ROCE 15%+ TARGET 42%
STEADY ROCE INCREASE THROUGH 2018;
AVERAGE CAPITAL EMPLOYED NEARLY
DOUBLED DURING HORIZON 2020 21%
OBJECTIVE ACHIEVED 2018
(€m)
GROUP ADJUSTED EBIT
600
500
400
300
200
100
0
'14
2020 adjusted EBIT contribution per segment does not offer a representative view, due to the significant COVID-19 impact on the automotive industry and the counter cyclicality of Recycling.
To provide environmental and ethical sourcing benefits for comparatively scarce raw materials in order to foster sustainable success and growth.
To develop products and services that create sustainable value for our customers and society and increase resource security.
OBJECTIVE ACHIEVED IN 2019
FULLY ALIGNED WITH OECD DUE DILIGENCE GUIDANCE FOR RESPONSIBLE SUPPLY CHAINS OF MINERALS FROM
77%
CONFLICT-AFFECTED AND
33%
HIGH-RISK AREAS
OF TOTAL REVENUES FROM CLEAN MOBILITY AND RECYCLING
MUCH OF THE REST IS FROM SOLUTIONS SUCH AS IMPROVING CONNECTIVITY OR REDUCING ENERGY CONSUMPTION
The Horizon 2020 strategy represents a strong focus on materially important topics for Umicore in the coming years: Economic performance, Value Chain and Society, Eco-Efficiency, and Great Place to Work.
OUR MATERIAL ISSUES AND STAKEHOLDER ENGAGEMENT
Umicore applies a localized approach to stakeholder engagement and manages stakeholder relationships in line with our decentralized approach to unit management.
Global trends
CLEAN AIR
Automotive emission legislations and public advocacy for clean air continue to increase. In Europe and in Asia, legislators are developing clean mobility policies to reduce SOx, NOx and CO2 emissions and strengthening emission standards to push industry to design innovative emission control systems, including catalysts and catalytic filters.
VEHICLE ELECTRIFICATION
The transport sector is the fastest growing source of global greenhouse gases, with the largest share from road transport. Electrified transport is essential to meet ambitions of reduced emissions and clean air by combining energy efficient systems with renewable energy sources. Incentives favoring electric vehicles are increasing globally.
RESOURCE SCARCITY
Developing technologies, such as increasingly powerful rechargeable batteries to reduce the environmental impacts of society, increases the demand for specialty and precious metals. Mining metals from primary sources has significant environmental impacts, including a high carbon footprint. Easy-to-mine deposits are increasingly scarce and ore bodies poorer.
Taking on the big challenges
ADDRESSING THE WORLD'S MOST PRESSING ISSUES
Umicore is working to meet the growing demand for clean mobility and clean air. We are a leading producer of catalysts and catalytic filters used in emission abatement systems for light and heavyduty vehicles, on-road and off-road. Our catalysts and particulate filters convert pollutant emissions into harmless gases and trap the particulate matter, enabling our customers to meet present and future environmental standards. Our products have prevented hundreds of million tonnes of harmful pollutants from being emitted into the air.
We strive to deliver environmentally friendly technologies that ensure resource efficiency and sustainability in industry's supply chain.
Umicore is working to deliver energy efficiency technologies, optimize resource use and reduce pollution. We are a leading producer of cathode materials for lithium-ion batteries, which are key in determining the power and energy density of rechargeable batteries, to maximize driving distance of electrified vehicles. Our nickel-manganesecobalt (NMC) cathode materials are a reference in the industry. To meet growing market demand, we announced significant investments from 2017 to 2019 to further increase our production of NMC cathode materials.
We provide solutions for a cleaner and more resilient future.
Umicore fosters sustainable growth and champions its circular business model. Our Hoboken facility is the world's largest and most complex precious metals recycling operation, processing over 200 types of raw material - from mining and industrial residues to "Endof-life" materials, such as electronic scrap and spent rechargeable batteries - and recovering over 20 different metals. As part of our closed-loop business model, most of our business units recycle industrial residues from customers. Umicore is growing its capacity to cater to rising demand.
We deliver environmental and ethical sourcing benefits, and increased resource security.
Umicore is determined to be a preferred employer wherever we operate and is committed to empowering women for leadership. We are a growing business with presence in markets around the world and have won Top Employer status for our sites in Europe and Asia. We think this is because we strive to create a collaborative environment, ensuring meaningful work and career-long learning and development opportunities. This means our employees have an average length of service of 10 years, and that group-wide we have a 96% retention rate.
We all share the same values, we all respect one another and we are all working towards making materials for a better life.
Business model
RECYCLING
We transform metals into functional materials and recycle them to make new materials.
We transform metals into functional materials that are integrated into products by our customers, usually companies making products for consumer or industrial use. Our catalysis materials provide clean air and health solutions, while our battery materials give added range and performance to electric vehicles and increased battery life to portable electronics. Our materials are also inside computer motherboards and in the fiber optics and satellites that keep you connected.
Our products deliver solutions for cleaner air and increased e-mobility, while we turn waste metals into a resource.
Our ethical sourcing and closed-loop approach distinguish us from our competitors.
MATERIAL SOLUTIONS
APPLICATION KNOW-HOW
We take metal and apply our expertise in metallurgy, chemistry, engineering and materials science skills, we add our product, process and market know-how and offer solutions that enable our customers to develop better, more sophisticated and safer products.
Metals are an outstanding ingredient for sustainable materials production because they can be recycled infinitely without losing any of their chemical or physical properties. This is one of the foundations of our business model.
A high volume of our metals come from recycled sources - production scraps and residues from customers and other industries, and end-of-life materials through our closed-loop services. Our recycling operations can recover 28 metals. Our precious metals recycling operation in Hoboken, Belgium, is built to recycle and refine the most complex materials and to recover a broad spectrum of metals. Using our Sustainable Procurement Charter and our framework for Cobalt, we purchase the remainder of our metal supplies from sustainably and ethically vetted primary sources.
Many factors - from raw materials supply to talent retention - underpin our business model. We manage these resources and relationships for the long term.
SKILLS AND EXPERTISE
Our employees contribute their expertise and commitment to Umicore. Metallurgy, chemistry, engineering and materials science skills are critically important in our key growth areas: recycling and materials for clean mobility.
We are growing in Asia and in Europe and this means a greater focus on attracting talent for positions ranging from production operators, engineers, research scientists, to commercial and administrative functions.
UMICORE TECHNOLOGY
Technology is at the core of our success. We are committed to innovation and research and development (R&D) are key for innovation-led growth. We develop a significant part of our technology using Umicore R&D findings and invest 6% of our revenues in R&D. Umicore also develops technology in with our industrial or academic partners and we protect our intellectual property with patents.
UMICORE OPERATIONS
Our operations are carried out in recycling plants, specialized chemicals and materials production facilities, offices and research centers, in 30 countries, often close to our customers to support collaboration and to meet their specific product requirements. We aim for excellence in environmental and social performance in all our operations. We seek to minimize the impact of metal emissions, generate improved material and energy efficiency and offer a safe and healthy workplace. Operational excellence is important both in securing our license to operate and in helping to make Umicore more competitive.
MAXIMUM EFFICIENCY
Input materials such as fuels and chemicals are essential to Umicore operations and are purchased using our Sustainable Procurement Charter framework. In most of the countries where we operate and given the specific nature of many of our operations, there is limited choice in terms of energy sourcing. For this reason, our priority is to maximise energy and auxiliary materials efficiency.
INVESTMENT & FUNDING
Investing in Umicore is an investment in producing materials for a better life - our mission - and supporting our strategy. Umicore has a proven track record of funding strategic growth initiatives from the cash-flow generated by our own operations. Indebtedness is kept at reasonable levels, as we aim to retain an investment-grade credit status at all times.
PRODUCTS & SERVICES
Our ambition is to produce materials for a better life.
Umicore products can be found in applications that make day-to-day life more comfortable and contribute to a cleaner, more efficient world. We work closely with our customers to develop customized materials or processes that consider health and safety, recyclability, cost efficiency, waste reduction and energy efficiency both in our own facilities and in the value chain.
We continuously search for innovative solutions for our customers and work to meet the needs of a rapidly changing and more demanding world.
THE UMICORE WAY
Umicore is committed to the principles of sustainable development. We aim for excellence in environmental and social impact and strive to offer a safe and healthy workplace. We offer solutions to global challenges: our recycling services address growing resource scarcity and reduce industrial waste and emissions. Our catalysts help reduce air pollution, while our rechargeable battery materials help make electrified transportation a reality. Umicore offers high quality employment with competitive salaries, training and development opportunities and long-term employment prospects.
Each site aims to be considered as a preferred employer locally. Umicore supports the principle of collective bargaining and signed a Global Framework Agreement on Sustainable Development with the IndustriALL Global Union.
SUPERIOR GROWTH & RETURNS
Umicore aims to generate a return on capital employed of more than 15%. One of our Horizon 2020 goals is to double our earnings, mainly through growth in recycling and materials for clean mobility. While the primary focus is on organic growth, acquisitions are also considered if they fit the strategy and can add value for shareholders.
Our closed-loop business model delivers economic, social and environmental value for all our stakeholders.
DELIVERING VALUE
CEO and Chairman's review
MARC GRYNBERG & THOMAS LEYSEN ON 2020, REACHING HORIZON 2020 AND THE OUTLOOK FOR UMICORE
MARC GRYNBERG CEO & THOMAS LEYSEN CHAIRMAN
Virtual meeting between Marc Grynberg and Thomas Leysen
The pandemic outbreak in 2020 brought sudden challenges to our living and working environment. Our priority was immediately the wellbeing of our employees and the communities in which we operate.
We would like to thank Umicore employees for their spirit, solidarity and strength during the pandemic.
We would also like to express our gratitude to all the Umicore medical staff and employees who worked hard under difficult circumstances to make sure we could be safe, first and foremost, and keep our operations up and running.
The challenge has been tremendous and the effort to get through these times has been very demanding.
Despite the severe disruption brought on by the COVID-19 pandemic, Umicore posted its strongest financial performance ever in 2020. This reflects the merits of our strategy as well as a stellar performance in Recycling, which was boosted by an exceptional price environment in platinum group metals, and the resilience of our business operations overall. It also reflects the agility and engagement of our teams to adapt to challenging conditions and keep serving our customers with diligence.
Revenues for the full year were down 4% at € 3.2 billion while adjusted EBITDA increased 7% to € 804 million, with adjusted EBIT up 5% at € 536 million, thereby exceeding the Horizon 2020 goal of doubling earnings in five years' time. Return on Capital Employed was 12.1%, well above our cost of capital despite continued growth investments.
Umicore generated a solid performance in the first half of 2020, with a strong result in Recycling offsetting the impact of the automotive industry downturn on the results of Catalysis and Energy & Surface Technologies. The second half of the year was marked by a strong sequential improvement in the Group's revenues and earnings driven by a sharp recovery in Catalysis as well as continued robust operational performance and buoyant metal prices in Recycling. Umicore's response to the COVID-19 pandemic included some temporary plant closures in the spring and certain projects, development or qualification programs incurred delays due to government-imposed lockdown measures or travel restrictions. The vast majority of operations, however, were kept on stream throughout the year. While we pursue ambitious growth programs, we further streamlined our operations by closing plants in the USA at Tulsa (Automotive Catalysts) and Wickliffe (Cobalt & Specialty
Materials). This is largely reflected in the 2.7% total headcount decrease to 10,859 at the end of 2020.
In Catalysis revenues decreased, albeit less than the global car market, thanks to Umicore's strong market position in gasoline technologies for light-duty vehicles, particularly in China and Europe, as well as higher sales of heavy-duty diesel and fuel cells catalysts. Revenues in Energy & Surface Technologies reflected the impact of the pandemic as well as lower sales of cathode materials for high-end portable electronics and energy storage applications. Sales of cathode materials for EV batteries grew broadly in line with EV battery demand. Recycling had a stellar performance due to high metal prices, high activity levels despite the COVID-19 crisis and favorable trading conditions.
Investments in strategic growth projects continued in 2020 with capital expenditure totalling € 403 million, compared with € 553 million in 2019. This reduction reflects the decision taken shortly after the start of the COVID-19 outbreak to postpone selected investment projects pending more clarity on market outlook, except for those related to safety, health and environment and strategic growth programs. Considering the continued investment in Rechargeable Battery Materials' greenfield plant in Poland, Energy & Surface Technologies accounted for close to two thirds of the Group's capital expenditure.
Our operations generated cashflows of € 603 million, up from € 549 million in 2019, enabling Umicore to continue funding its ambitious growth programs. Our balance sheet is strong with net financial debt of € 1,414 million at 31 December 2020, corresponding to 1.76 times adjusted EBITDA, below the ratio of 1.92 at the end of 2019. In the first half of the year, we further diversified our sources of funding by completing a € 500 million convertible bond offering due in 2025 and by concluding a € 125 million 8-year loan with the European Investment Bank.
One of the ambitions defined in our Horizon 2020 strategy was to turn sustainability into a greater competitive edge. In 2020 Umicore achieved a Platinum EcoVadis rating, placing us among the top 1% of our industry peers in the EcoVadis global network of over 65,000 rated companies.
Our safety performance made encouraging improvements in 2020 compared to previous years. The pandemic has led us to pay closer attention to detail and we are convinced this has had a positive impact on safety. However, in December, a fatal accident occurred at Umicore's Cobalt & Specialty Materials site in Subic, the Philippines. This tragic event shows that the journey to make Umicore a zero-accident workplace is far from completion, even in sites with an outstanding safety record: Subic had operated more than 13 years without LTA. Overall, the group recorded 49 lost time accidents in 2020 compared with 90 in 2019.
Our efforts in 2020 to make Umicore a great place to work focused on our response to the COVID-19 pandemic, with the protection of employees' health remaining our top priority. We introduced strict hygiene and other precautionary measures starting with our facilities in Asia, which were the first to be affected. Measures were quickly tightened at all Umicore sites worldwide, with the aim of reducing the transmission risk within the organization, keeping our employees healthy and offering them a safe workplace. Umicore delivered surgical masks for private use to the homes of all employees worldwide at a time when they were unavailable on the open market.
We have seen a gradual increase in women in management and non-management positions although we have not met our Horizon 2020 diversity goals. Our commitment to increase gender diversity at all management levels is intact and we have adapted our recruitment programs accordingly. In 2020, the share of women recruited into management positions increased to 30%.
In terms of the environmental profile of our operations, our focus continues to be on minimizing the impact of our production activities. For several decades, the blood levels of children living close to the Umicore recycling plant in Hoboken, Belgium, have been monitored twice a year by the authorities. The sudden rise in the lead in blood readings of the children living close to the plant in July 2020 came unexpectedly. A combination of external factors, including exceptional weather conditions and the children's increased exposure from spending several months at home due to the COVID-19 lockdown measures, contributed to the elevated readings. In addition to taking the necessary measures to return to the positive trend of recent years, and although the root cause investigation showed no major source of lead emissions in our plant, Umicore is working on creating a green zone, to increase the distance from the residential area, by buying the houses closest to the plant. In doing so, Umicore aims at a structural and sustainable solution to this historical issue. A € 50 million provision was booked to cover the estimated costs of establishing the green zone.
Our eco-efficiency is measured against our Horizon 2020 goal of performing equally well or better than in 2015, with values adjusted for activity levels. The impact of our operations was substantially reduced, with metal emissions to water and air down by 59% and 67%, respectively, compared with 2015 levels. Energy consumption was slightly higher than in 2019 in absolute value, but adjusted to 2015 activity levels, energy consumption was down 17% as a result of significant efficiency improvements.
The growing added value of our sustainable business is demonstrated by over 60% of secondary and end-of-life materials in our input mix. Future sourcing for catalysts, fuel cells and batteries alike, will only be possible by closing the loop and recovering the scarce metals used in these products when they reach end of life. Umicore's unwavering pursuit of ethical raw materials supply is the driver of our sustainable sourcing. Umicore remains the first cathode material producer to offer certified materials from a clean and ethical origin to its customers.
Our work with the Global Battery Alliance, of which Umicore was a founding member in 2017, continues. In addition to the battery passport initiative to share reliable information and data to consumers about the level of sustainability of a battery, the Alliance is developing a standard for responsible artisanal mining in the Cobalt Action Partnership to address the socio-economic risks linked to cobalt mining activities in the Democratic Republic of Congo (DRC) and to eradicate child labor. In 2020, the Alliance created a collaborative fund for the Prevention of Child Labor in Mining Communities, seeking to strengthen cobalt mining communities in the DRC and tackle the root causes of child labor. The Fund, administered and programmed by UNICEF, works in cooperation with local government entities and civil society organizations in the DRC. Umicore is proud to be the first contributor to the Fund.
Many of the sources of turbulence in 2020, including the impact of COVID-19 and its impact on industry, particularly in the automobile sector, remain unresolved and limit visibility. Umicore adjusted with agility to the challenges caused by the pandemic. We implemented measures to protect employee health, cashflows and strengthen liquidity, and we reassessed our production footprint and the carrying value of certain assets. We are convinced that these steps strengthened our position in an uncertain environment and we will continue to remain agile in the face of evolving market dynamics.
The push towards clean mobility is stronger than ever, with various governments including green recovery measures and stimuli for cleaner mobility in their crisis recovery packages, in particular in Europe and China. In this context, we chose to move forward with our ambitious growth strategy in cathode materials for electrified vehicles and made significant progress with the construction of our greenfield plant in Nysa, Poland, which on commissioning by the end of the first half of 2021, will be the first industrial-scale cathode materials plant in Europe.
In addition, we are moving ahead with our growth plans in fuel cell catalysts for automotive applications and with the expansion of light-duty and heavy-duty catalyst production in China, to cater to the growing demand for our technologies as emission norms continue to tighten. In terms of addressing resource scarcity, Umicore continues to invest to improve the environmental and safety performance of the Hoboken recycling plant.
Technology innovation remains vital to our success and R&D expenditure increased by 6% in 2020 to € 223 million, equivalent to 7% of our revenues. The majority of this increase came from higher R&D spend on new product and process technologies in Rechargeable Battery Materials.
We are proud of our performance and results in 2020 and confident that our long-term growth strategy will continue to deliver value.
The global economy is showing signs of recovery from the severe downturn caused by the COVID-19 pandemic. However, a high degree of uncertainty remains with respect to the evolution of the pandemic and the pace and speed of the recovery in different regions. Against this backdrop and under the assumption that COVID-19 will not result in additional material or protracted disruptions to the economy or Umicore's operations, Umicore expects to achieve substantial growth in earnings in 2021, with growth in all Business Groups.
We have successfully completed our Horizon 2020 strategy and have reached new heights.
Everything is in place for Umicore to keep thriving - talented teams, a promising innovation pipeline, highly supportive megatrends and the financial means to fund our ambition. With all this in place, we feel that it is an auspicious moment to think about the next chapter of Umicore's success story and start preparation for the CEO succession. The Supervisory Board will take the time to identify a successor who will build on these strong fundamentals and bring Umicore to its next stage of development and Marc will assist the Board with a smooth transition in due course.
This year's annual report provides additional clarity on the value Umicore brings to society, as we prepare to move into a new strategic phase as of 2021 and marks our first report in our transition to "digital first" communications.
We would again like to express our thanks to all the stakeholders for their contribution to our performance in the face of the unprecedented conditions in 2020, most especially to all Umicore employees for their spirit and their prompt, determined and effective response to the COVID-19 threat.
MARC GRYNBERG CEO & THOMAS LEYSEN CHAIRMAN
Stakeholder Engagement
Umicore is a publicly listed company. As such, we interact with many parties who have an interest in the way we conduct business. The relationship that we foster with these parties or stakeholders has a direct impact on our success.
Stakeholder engagement at Umicore is based on a localized approach whereby all sites are required to identify their respective stakeholders and establish suitable ways of engaging with them. In many cases, such as the dialogue with customers and suppliers, the stakeholder relationships are primarily managed by the business units themselves, in line with our decentralized approach to unit management.
The management board receives feedback from stakeholders in several ways, ranging from direct feedback from visits to customers, suppliers, employees and investors, to information provided by the business units, departments or workers' representatives during their regular briefings to senior management. Other forms of input include periodic employee survey results.
The Horizon 2020 strategy represents a strong focus on what is of material importance for Umicore through 2020. The development of the strategy has involved a specific stakeholder approach, described in the materiality assessment process in this chapter.
Umicore is an active participant in various industry associations through which we engage with policy makers to contribute to a better understanding of industry-related issues. These associations are also important platforms for Umicore to contribute to broader, industry-wide action on sustainable development.
On a less formal level, members of our senior management are often called upon or volunteer to participate in public forums to discuss our business strategy and sustainable development approach. Such events provide the opportunity to interact with various groups including business leaders, academics and civil society.
Umicore's main stakeholder groups are highlighted and have been categorized in broad terms, using generic stakeholder categories that apply to most industrial organizations. Also shown are the nature of the transactions that occur and a brief description of the dialogue between Umicore and the stakeholders.
CUSTOMERS
EMPLOYEES
Umicore materials can be found in a variety of applications that deliver solutions for cleaner air and increased e-mobility. Umicore's unique closed-loop services turn waste metals into a resource. To be the preferred partner of our customers, we work closely with them to develop, produce and recycle metal-related materials for material-based solutions tailored to their needs.
Umicore employs 10,859 people worldwide. Because our employees are key to our success, we invest significant resources in ensuring we are an employer of choice in all the regions where we operate. In 2020, Umicore paid a total of € 798 million in salaries and other benefits to the employees of fully consolidated companies, of which € 97 million in social security payments.
We provide advanced products that are built on our customers' specific performance, environmental and sustainable sourcing needs, including development of bespoke solutions when needed. Beyond this customer-oriented approach, we provide close collaboration across all regions to deliver a sustainable and secure supply of high-quality products and services. Umicore has an international customer base and the presence to support them in both growing and established markets. Our high investments in R&D provide advanced and efficient production and process technologies that enable our customers to meet the most stringent sustainability demands and ambitions.
Ongoing interaction with customers is managed by the business units. In addition to this close contact, all business units have a customer feedback process to periodically gauge customer satisfaction.
83
Countries with Umicore costumers
Umicore is committed to providing competitive salaries and working conditions to its employees and to providing occupational and professional training opportunities. Employees are expected to adhere to the principles and policies outlined in The Umicore Way and Code of Conduct. Open dialogue is promoted within the company and includes an opinion survey every 3 years.
Umicore respects the principle of collective bargaining wherever it is requested. While such practice is commonplace in Europe, in other locations collective bargaining mechanisms and trade unions may be less common or face local legal restrictions. In 2019, Umicore renewed the sustainable development agreement with the international union IndustriALL on the global implementation of its policies on human rights, equal opportunities, labor conditions, ethical conduct and environmental protection. The agreement allows trade unions to participate constructively in the pursuit of these objectives. A joint monitoring committee composed of both parties oversees the implementation of the agreement.
Company-wide communication channels include intranet and company and business unit newsletters. Umicore operates a Group-wide learning management platform called "MyCampus".
€798m
In salaries & other benefits
SOCIETY
SUPPLIERS
Umicore can only continue operating if it has the license to do so from society and we the utmost to operate in a way that promotes sustainable development, going beyond the legally defined boundaries set for all companies. We set our own standards, applicable across the Group, often surpassing the legislative demands in many areas where we operate. Umicore also strives to develop materials that enhance quality of life and specifically addressing certain critical environmental or societal challenges.
Umicore operates through 3 business groups on 5 continents. These business groups not only require materials to make their products but also energy, transportation and a range of other services. Overall, Umicore has over 18,000 suppliers across over 90 countries. These suppliers benefit from our presence as a customer: in 2020, Umicore paid these suppliers € 18.7 billion (including the metal content of raw materials).
Contact with the communities where Umicore operates is the most direct way that we interact with society. Open and transparent dialogue with such communities is an integral part of our stakeholder engagement. Through employment, Umicore participates in the generation of wealth in the areas where it operates. Although wealth generation is an obvious benefit, the way in which this wealth is generated is also of great importance. We strive to be top employer wherever we operate. ivil society groups periodically declare a stake in our operations and the way we do business. Umicore welcomes such interest and attempts to engage openly and constructively.
Umicore makes voluntary contributions at site and Group-level to a range of charitable causes. We manage Group-level engagement efforts through a Group Donations Committee that has the mandate of engaging with civil society groups and determining the extent of partnerships. For information on these initiatives in 2020 see Giving Back to Society.
€1.5m
Donated to charitable causes
We are engaged in a constant dialogue with our suppliers to define technical specifications and to ensure mutually acceptable terms and conditions for continued partnership, such as prompt and uninterrupted delivery of materials/services. The business units are responsible for the purchase of raw materials while the corporate Purchasing and Transportation department works to ensure that transportation, energy and other provisioning needs are met.
Our approach is shaped by our Sustainable Procurement Charter. This charter is complemented by specific approaches or frameworks for some critical raw materials. Our Horizon 2020 strategy includes an objective on sustainable supply that builds on the experience gained through our previous objective on sustainable procurement. For information, see Value Chain & Society.
€18,719m
Paid to suppliers worldwide
ASSOCIATE & JOINT VENTURE COMPANIES
SHAREHOLDERS & INVESTORS
Umicore has investments in various business activities over which it does not exercise full management control. Associate companies are those where Umicore has a significant influence over financial and operating policies, but no control. Typically, this is evidenced by ownership of between 20% and 50% of the voting rights, while joint ventures usually entail a 50:50 split in ownership and control. Joining forces is a way to speed up technological developments or gain access to specific markets.
Where management control is not exercised by Umicore, we are able to guide and control the management and monitor business developments through representation on the board of directors. Although we cannot impose our own policies and procedures on any associate (or indeed any joint venture where we do not possess majority voting rights), our expectations that the operations be run in accordance with the principles of the Umicore Way are clearly communicated.
Umicore is rigorous in safeguarding any intellectual property that is shared with associate or joint venture partners. For a full list of associate and joint venture companies, see note F17.
4
Associate companies
Umicore strives to provide timely and accurate information on its strategy, performance and prospects to its shareholders. In 2020, the macro-economic uncertainty brought on by the COVID-19 pandemic significantly affected the financial markets, driving extraordinary volatility on the stock exchanges. Against this background, Umicore's Investor Relations team focused on communicating Umicore's business continuity plan and actions to mitigate financial and operational headwinds. This involved the publication of several updates on the impact of COVID-19 throughout the year as result of the rapidly evolving market environment. As well as publishing press releases and the Annual Report, Umicore's management and Investor Relations team communicated in 2020 with investors during virtual roadshows in North America, Europe and Asia, as well as through virtual investor conferences, webcasts, conference calls and the annual general meeting of shareholders. Main topics covered included the description of the impact of COVID-19 on Umicore's operations, the liquidity position, the shareholder remuneration, investment plans and outlook. Umicore's disclosure covers both financial and Environmental, Social and Governance (ESG) performance and we regularly engage with our investors on those topics.
Umicore has a high free float with a broad base of international shareholders which at the end of 2020 were primarily situated in Europe and North America. The overview of shareholders holding voting rights equal to 3% or more and analyst research and consensus information can found on our website under Share Information. 22 brokerage firms cover and publish equity research notes on Umicore, reflecting strong and global interest from the financial market in Umicore's equity story and growth opportunities.
16
Management roadshows
PUBLIC SECTOR & AUTHORITIES
In 2020 Umicore engaged with a variety of stakeholders to introduce the technology fundamentals of the material solutions we offer to our customers. Umicore coordinates and fosters a range of interactions in the countries and regions where we are operationally active. We focus on policy development supporting the introduction of clean mobility supporting the global energy transition to reduce climate impact. In addition, we contribute to a better understanding and faster implementation of circular economy models in the applications related to Umicore activities. Continuous innovation is crucial to improve our products and services and therefore we also engage in national and international programs and initiatives that develop longer-term technology roadmaps serving as a basis for collaborative funding opportunities. As a result, Umicore was approved as a partner in the first Important Project of Common European Interest for Batteries (IPCEI) starting from early 2020. Part of the innovation and upscaling activities for battery materials and battery recycling in Belgium, Germany and Poland will be funded by the national governments. Umicore is mindful of the sensitivity of taking positions on issues of public interest and has developed guidelines to do so responsibly through the industry groups to which we are affiliated. Well-developed science and facts form the basis of the opinions and position we take.
Umicore paid € 79 million in taxes on our 2020 operations and with our employees contributed € 97 million in social security payments. Umicore regularly enters scientific partnerships with public institutions such as universities with the primary aim of furthering research projects or providing expert advice on technology directions. Partnerships and research grants are occasionally contracted with public organizations. As a matter of policy, Umicore does not make donations to political parties or organization.
€79m
Taxes paid on our 2020 operations
KEY MEMBERSHIPS
A3M (L'Alliance des Minerais, Minéraux et Métaux); Agoria (Belgian multi-sector federation for the technology industry); American European Community Association (AECA); Bebat; Belgian Indian Chamber of Commerce and Industry (BICC&I); Belgian industrial Research and Development (BiR&D); Belgium-Japan Association & Chamber of Commerce (BJA); Eurometaux (European Non-Ferrous Metals Association); European Industrial Research Management Association (EIRMA); European Round Table of Industrialists (ERT); ETION; Federation of Belgian Industrial Energy Consumers (FEBELIEC); Flemish Aerospace
Group (FLAG); Flemish Network of Enterprises (Voka); Flanders-China Chamber of Commerce (FCCC); Global Legislators for a Balanced Environment (GloBE EU); Metalle pro Klima (WirtschaftsVereinigung Metalle); TransAtlantic Business Council (TABC); Verbond van Belgische Ondernemingen (VBO); Vlaamse Technische Kring (VTK); World Economic Forum (WEF).
Associacao dos Fabricantes de Equipamentos para Controle de Emissoes Veiculares da América do Sul (AFEEVAS); Association for Emissions Control by Catalyst (AECC); Catalyst Manufacturers Association, Japan (CMAJ); Committee of Vehicle Emission Control in China (CVEC); Emission Controls Manufacturers Association, India (ECMA); European Precious Metals Association (EPMF); Hydrogen Council; Hydrogen Europe; Manufacturers of Emission Controls Association (MECA); Verband der Automobilindustrie (VDA); Verband der Chemischen Industrie e.V. (VCI).
Battery Europe Partnerhip Association (BEPA); Cobalt Institute; Cobalt REACH consortium; Deutsche Gesellschaft für Galvano- und Oberflaechentechnik (DGO); Energy Materials Industrial Research Initiative (EMIRI); European Association for Battery, Hybrid and Fuel Cell Electric Vehicles (AVERE); Nickel Institute; Nickel REACH consortium.
European Battery Recycling Association (EBRA); European Electronics Recyclers Association (EERA); European Precious Metals Federation; Fachvereinigung Edelmetalle (German Precious Metals Association); Global Battery Alliance (GBA); International Platinum Group Metals Association (IPA); International Precious Metals Institute; Minor Metals Trade Association; Responsible Jewellery Council (RJC); The European Association of Advanced Rechargeable Batteries (RECHARGE); The International Platinum Group Metals Association (IPA); The London Bullion Market Association (LBMA); The London Platinum and Palladium Market (LPPM); Vereniging Nederlandse Metallurgische Industrie (VNMI).
Advocacy for impact
We focus on supporting clean mobility for the global transition towards reducing climate impact and on supporting a better understanding and faster implementation of circular economy models related to Umicore activities.
CORPORATE
The World Economic Forum's Global Battery Alliance was launched in September 2017. This global public-private partnership comprises over 40 international organizations to establish a sustainable battery value chain to power the decarbonization of the world's energy and transport systems. Umicore chairs the Executive Board. As part of this initiative we maintained a strong effort toward ensuring that the cobalt extraction industry is free of child labor and that alternative livelihoods for cobalt-dependent households are made available. In addition, we contributed to a new WEF working group (Circular Car Initiative) focusing primarily on policy recommendations to make a circular economy model for batteries viable in the future. This work also explored also the impact of a second life battery market, material passports and focused on design-for-recycling concepts in the future automotive and transportation business models.
ENERGY & SURFACE TECHNOLOGIES
Accelerating the transition to a low-carbon society requires driving down the cost of clean mobility technologies and clean energy. Electrification of transport and heating processes in industry using electricity generated from renewable sources are crucial to meet the goals of the Paris Agreement. Advanced materials represent a sizeable part of the cost of these clean technologies and are key enablers of the low-carbon society. The advanced materials path from lab to market is long, risky and capital-intensive, so industry welcomes risk-sharing initiatives supporting European industrial leadership. Founded in 2012 by Umicore and other industrial and research organizations, EMIRI (the Energy Materials Industrial Research Initiative) works to increase awareness about the role of advanced materials in everyday life and in the European economy, and advocates for stronger EU-level innovation support.
We also engage in national and international programs and initiatives that develop longer-term technology roadmaps.
Well-developed science and facts form the basis of the opinions and positions we take.
CATALYSIS
As concerns on air quality continue to increase, legislation aiming to minimize the impact of transportation using internal combustion engines on air quality is becoming increasingly stringent. As a producer of key components of catalytic emission control systems, Umicore is a member of various industry associations worldwide through which, in close collaboration with automotive engineering companies, we aim to contribute significantly to the portfolio of ultra-clean transportation options of the future using the most advanced emission control technologies. We also engage with authorities responsible for air quality impact as a result of maritime transport to further increase the emission purification of ships and vessels.
Umicore has also actively participated and supported the creation of the European Battery alliance (since 2017) and the Battery European Partnership Association (BEPA) which is the public-private entity that will support the European Commission in defining the technology roadmaps and the research and innovation priorities to be funded in the 2021-2027 time frame (under the Horizon Europe program).
RECYCLING
The European Union is striving to establish a Circular Economy. Umicore, a frontrunner with our "closed loop" business model, contributes to numerous conferences and expert working groups. Specifically, we emphasize the links between a Circular Economy and responsible sourcing, resource efficiency, waste management and high-quality recycling. We use our experience to promote electromobility as a gateway to a Circular Economy in Europe. In 2020, Umicore chaired the 'Traction Batteries' working group of the Circular Economy Initiativ Deutschland to develop recommendations for the future in creating a circular economy model for batteries.
Materiality
SETTING THE COURSE WITH OUR STAKEHOLDERS FROM 2015 THROUGH 2020
Umicore strives to plan for the best possible future by remaining in a healthy and competitive position whilst considering global economic, social and environmental megatrends.
Our Vision 2015 strategy built on existing competencies, market positions and our long-standing expertise in metallurgy, materials science, application know-how and recycling, and combined them with our closed-loop business model to give us strong growth potential in clean air, clean energy, vehicle electrification and addressing resource scarcity.
Horizon 2020, launched in 2015, represents continuity in Umicore's strategic choices over the past decade and sets out further economic, environmental, value chain and society challenges. The definition of the environmental, value chain and society objectives for the Horizon 2020 strategy involved a materiality assessment to identify areas with the potential to turn sustainability into a greater competitive edge.
VALIDATING GLOBAL MEGATRENDS & ASSESSING VISION 2015 ACHIEVEMENTS
In 2014-15, the executive committee scanned in detail the four megatrends that underpin Umicore's growth ambitions. The results clearly showed that three of the four megatrends were strengthening: resource scarcity, the need for clean air and vehicle electrification (see pages 10-11 for more on these megatrends). The landscape had shifted significantly in photovoltaics, the fourth megatrend, where a combination of economic and technology choices led to a less favorable market for Umicore's higher-end solutions. Based on the results, the executive committee elected to focus Umicore's Horizon 2020 growth ambitions on activities that are linked to clean air (automotive catalysts), vehicle electrification (rechargeable battery materials) and resource efficiency, ensuring precious and specialty metals recycling through our closed-loop business model. These activities are therefore at the heart of our ambition to double Umicore earnings by 2020.
In terms of sustainability performance, Vision 2015 yielded positive results. On the environmental front, we achieved a significant reduction in CO2 and metal emissions to water and air, surpassing our targets in all three cases.
We also made strides in personnel development and stakeholder engagement. By 2015, the vast majority of Umicore employees had received an annual appraisal and development plan and we had further reduced exposure levels of our employees to various metals. Our last People Survey in 2018 confirmed that we had achieved several of our Horizon 2020 objectives.
In sustainable procurement, we built on our reputation as a pioneer in the field by deploying our Sustainable Procurement Charter and sought out conflict-free certifications for our smelters.
Safety was the sole area where performance was less than satisfactory. We set ourselves the target of becoming an accidentfree company by 2015 and, while our safety performance improved, we fell short of this objective.
The challenge for Horizon 2020 is to maintain the progress made, continue focusing on topics such as safety where we fell short of our goals and to develop goals that enhance Umicore's competitive positioning, as follows:
● MAINTAIN ACHIEVEMENTS in carbon and metal emissions, preferred employer and stakeholder engagement. Although we will not set further objectives for these themes, we will continue to measure and report on the impact and performance when relevant from a materiality point of view.
● IMPROVE safety and occupational exposure. We will continue to pursue the zero accident and zero excess readings goals.
● SECURE COMPETITIVE ADVANTAGE through sustainable sourcing. Thanks to the implementation of the Umicore Sustainable Procurement Charter, we have developed a reputation for ethical sourcing. This approach is aligned with Umicore's values and ethics but comes at a cost that is only gradually accepted by customers. Horizon 2020 seeks to leverage this sustainable sourcing approach to generate an enhanced competitive edge.
IDENTIFYING AND CHOOSING MATERIAL TOPICS FOR HORIZON 2020
With the activities linked to clean air, vehicle electrification and recycling defined as the main levers for Umicore's growth, we screened for other topics of material importance to our business units and to our main stakeholder groups.
In addition to producing the initial list of material topics, based on the learning from Vision 2015, other potential topics were identified through direct feedback from stakeholders, including the findings of the annual internal business risk assessment, the results from the 2014 People Survey for all employees, the data from the implementation of Umicore's APS (Assessment of Product and services Sustainability) tool from 2012 to 2015 and direct questions submitted to Umicore or its business units by customers.
At corporate level, we screened material issues at peer companies and customers, as well as potentially relevant topics discussed by international business groups, research groups and media.
All topics identified in the materiality screening phase were used to produce a draft materiality matrix. The relevance of these topics for Umicore was assessed by a project team and discussed with the Environment, Health and Safety (EHS) and Human Resources (HR) corporate teams. The starting matrix, containing about 65 topics, was submitted for further refining with the business unit management teams.
Based on the feedback received, a revised version of the Umicore Group materiality matrix was compiled consisting of top quartile topics. These 25 topics were the basis of the materiality testing and for ease of reference were clustered into five categories: Supply, Products, Operational Excellence, Human Resources, Health and Safety.
The list of material topics was then tested using an online survey that was sent to 48 stakeholders. These stakeholders - investors, customers and employees - ranked the topics.
DEFINITION OF OBJECTIVES AND REPORTING SCOPE
Based on the results of the first two phases, we established the scope of the objectives for Horizon 2020. We clustered our objectives in four main themes. Three of the Vision 2015 themes were kept - Economic Performance, Eco-Efficiency and Great Place to Work - but "Stakeholder Engagement" was replaced by "Value Chain and Society" to highlight our ambition of adopting a more holistic view of Umicore's presence in and impact on the overall value chain. This constitutes Umicore's main focus through 2020.
The process for defining the environmental, value chain and society objectives within Horizon 2020 involved a structured dialogue with the management of each business unit to determine the social and environmental topics that could generate a greater competitive edge.
To ensure a degree of alignment with external expectations, we also conducted an online stakeholder survey. The objectives were debated and ratified by the executive committee in February 2016.
We also identified a range of issues that Umicore and our stakeholders identified as important for management purposes, which should remain part of the report, albeit not part of any specific Horizon 2020 objective.
One example is CO2 emissions: in our Vision 2015 review, we assessed that the absolute level of our CO2 emissions was dependent on the energy mix of the countries in which we operate, a roadblock to pursuing a specific CO2 emission reduction objective. We therefore chose to pursue energy, operational and materials efficiency instead. However, many stakeholders expect Umicore to report CO2 emission and this data remains part of the reporting scope.
VALIDATION
The matrix and its translation into specific environmental, value chain and society objectives were validated by the executive committee in February 2016. The economic objectives and growth ambitions had been previously validated in 2015.
As a result, we believe that our Horizon 2020 objectives and the information that we report in this document represent a balanced reflection of external requirements and our own internal needs, and enable a balanced appreciation of our performance.
You will find the strategic targets associated with this materiality assessment on the following page.
UPDATES
Following the 2020 review, the management board confirmed that Operational Excellence, Supply, Products, Human Resources and Health and Safety remain Umicore's material issues. We continue to follow our Horizon 2020 objectives and the associated materiality in determining the content and disclosure in this report.
As part of preparations for the next strategic cycle, Umicore reviewed materiality in 2020. The findings will be used in reporting during the new strategic cycle, as of 2021.
HORIZON 2020 TARGETS
Other topics that were defined as material by at least one stakeholder group during the materiality assessment but are not a specific Horizon 2020 objective (i.e, CO2 or metal emissions) are reported in the statements section of the report.
Giving back to society
UMICORE SEEKS TO CONTRIBUTE TO THE WELL-BEING OF THE COMMUNITIES IN WHICH IT OPERATES
AND TO BE A RESPONSIBLE CORPORATION AND GOOD CORPORATE NEIGHBOR
Children in Kolwezi, Democratic Republic of Congo
Umicore supports several causes both financially and by making time and talent available. Umicore channels resources to sponsorships and donations with each business unit expected to allocate an annual donations budget based on an internal framework that promotes stable and longer-term commitments, irrespective of the wider economic environment.
Umicore believes that by empowering Umicore sites for local sponsorship and donation initiatives, it will make a positive difference in the communities in which it operates, beyond the direct benefits generated by employment and local taxes. Umicore's support may include contributions in kind and releasing staff to work on community-related projects.
While sites determine the specific focus of their own initiatives, the general focus is on supporting and promoting a strong social fabric in the community around the site, with priority given to educational initiatives.
At corporate level, the emphasis is on projects with an international scope. Priority is given to initiatives with a clear educational component and that link with sustainable development (social, environmental and/or technological).
Educational initiatives are particularly relevant for Umicore as a technology-oriented business and provide an excellent way of engaging with young people in the community and reinforcing links between Umicore and its neighborhood.
PARTNERING FOR IMPACT
Quality education for all is one of the main objectives of UNICEF, with which Umicore has had a long-term partnership since 2011, committing to 2 specific child-education projects in India and Madagascar. Despite impressive achievements and tireless work, big efforts are still needed to ensure that every child has access to quality education in both countries. UNICEF is doing a remarkable job by acting in the field, hand in hand with local authorities. Our partnership translates into very concrete actions such as the construction of four school classrooms per year in Madagascar, benefiting more than thousand boys and girls, and the development of an action plan to empower young girls in India and to end child marriage.
In addition, Umicore is a founding member of Entrepreneurs pour Entrepreneurs/ Ondernemers voor Ondernemers which pairs corporate donors with development charities that focus on promoting entrepreneurship in the developing world. Over the years, Umicore and Entrepreneurs for Entrepreneurs have supported work in Bolivia, Cambodia, Congo, Ecuador, Haiti, Mali, Togo and more.
Umicore also aims to contribute to disaster relief wherever it may be needed, contributing in 2020 to the Red Cross to help the victims of the bushfires in Australia and to the Doctors without Borders fund to help people fleeing violence in Ethiopia.
In 2020, Umicore also co-initiated and was the first contributor to the Fund for the Prevention of Child Labour in Mining Communities - A Global Battery Alliance Collaboration. This Fund seeks to address the issue of child labour in DRC's cobalt mines by strengthening communities and addressing the root causes of the problem. Through a multi-sectoral package of interventions, the Fund supported projects will contribute towards alleviating poverty, strengthening social services for children, supporting responsible production and consumption and getting children out of mines.
In 2020, Umicore also donated ventilator machines to hospitals and supported hospitals, care homes and home nurses with surgical masks and cleaning supplies in their fight against COVID-19.
These combined efforts around the globe support us in our ambition to be a responsible company and to give back to society.
Umicore's response to COVID-19
KEEPING OUR BUSINESS RUNNING & OUR EMPLOYEES SAFE DURING THE PANDEMIC
Registration point at Umicore Hoboken
Within only a few weeks after COVID-19 first broke out in China, the pandemic had spread around the globe, making its way to even the most remote communities. It was soon clear that COVID-19 was more than just a seasonal flu and that the consequences could potentially be serious.
By the time COVID-19 had reached pandemic proportions, Umicore was already taking farreaching measures to protect its employees and ensure continuity of production, at a time when it was impossible to predict exactly how the pandemic would progress.
FAST AND DECISIVE RESPONSE
In these exceptional and very difficult circumstances, Umicore's top priority has always been the health and safety of its employees worldwide. As of the end of January 2020, we introduced strict hygiene and other precautionary measures starting with our facilities in Asia, which were the first to be affected.
Individual and workplace hygiene measures were quickly tightened at all Umicore sites worldwide, with the aim of reducing the transmission risk within the organization, keeping our employees healthy and offering them a safe workplace. Prompted by the fact that contamination could occur in public spaces, Umicore delivered surgical masks for private use to the homes of all employees worldwide at a time when they were unavailable on the open market.
Weekly meetings were held with the management board and a task force of health professionals to review the COVID-19 situation in all regions globally and to evaluate the measures in place according to each local situation. Even when national policies were less stringent, Umicore implemented its strict company policy to keep employees healthy and safe and to contain further spread of the virus.
ESSENTIAL TO SOCIETY
As far as possible, Umicore also needed to take measures to mitigate the impact of COVID-19 on its performance. Umicore continued to operate in order to provide activities and products which are essential for the protection of the vital interests and needs of the population.
The continuation of our production was utterly important because of the essential applications in which our products are used. Ourmetals are of great importance in the medical sector. Without our precious and other non-ferrous metals, no high-tech products can be produced for healthcare, including cancer treatment, treatment of arrhythmias, pain therapy and the production of ventilators, catheters and medicines.
Umicore also provides materials for the early detection and monitoring of coronavirus. Screening is often based on infrared (IR) thermal imaging optical components to check places where dense groups are gathered, such as airports and train stations, serving as an additional source of information when people may not show symptoms.
Following the widespread shutdown of assembly lines by our automotive customers, Umicore also temporarily shut down 10 of its 16 automotive catalyst plants. Any disruption in the production plants caused by the pandemic was because of interruptions to the supply chain. These sites resumed operations shortly thereafter. None of the other production sites worldwide was shut down during the pandemic.
THE RESILIENCE OF OUR EMPLOYEES
Our employees have shown great resilience in dealing with this difficult situation, impacting all aspects of their lives. Their determination, agility and hard work ensured that our working environment could remain safe and healthy. While adjusting to very challenging conditions in order to ensure business continuity, many of our employees also volunteered for a number of charity initiatives, including the donation of food, masks, money and goods for children.
UMICORE THERMAL IMAGING
IN THE FIGHT AGAINST COVID-19
Concatenation of the Tessella ™ technology together with full optic assemblies
Limiting the spread of the virus by early detection has been crucial in all phases of the pandemic. One method of early detection is screening with thermal imaging cameras in densely populated places such as airports, hospitals, companies and schools.
Thermal imaging cameras can measure temperatures with up to 0,3°C accuracy and can detect an elevated body temperature that could indicate fever. While body temperature is not proof of COVID-19, and while somebody infected with the COVID-19 virus may not always have a higher body temperature, this is still is an excellent early detection mechanism to help contain widespread outbreaks.
From February 2020 until summer, Umicore's Infrared Optics team saw a drastic increase in demand for its optics. Globally hundreds of thousands optics were sold for integration into thermal cameras used in detection of elevated body temperature. The team was able to absorb the sudden demand peak in demand as Umicore is, to a large extent, vertically integrated (starting from metals) and therefore less dependent on third party suppliers. Additionally, activity levels were increased in challenging circumstances (for example, introduction of hygiene rules and higher preventive absences). The ramp-up of Umicore's newly introduced and costeffective wafer optic Tessella™ technology supported its customers in rapidly introducing affordable high-performance systems.
New Business Incubator as part of Umicore's innovation strategy
Umicore's innovation strategy targets robust business growth for years to come. To further leverage and expand its innovation capabilities, Umicore has created a new unit called New Business Incubator (NBI). Built on a startup-based operating environment that benefits from the support of a global company and sizeable scale organization, NBI is both focused and agile in managing Umicore's long-term horizon innovation projects.UMICORE.COM/STORIES
KEY RISKS & OPPORTUNITIES
Driving economic performance
1 Regulatory and legal context
2 Sustainable and ethical supply
3 Technology and substitution
Economic Review
ADJUSTED EBITDA
Millions of Euros
1,000
500
0
505 527 599
ADJUSTED EBIT
720
804
2016
2017
2018
2019
2020
Millions of Euros
750
514 509 536
500 250
351
410
0
RETURN ON CAPITAL EMPLOYED %
16
2016
2017
2018
2019
2020
14
12
15.1
RECORD RESULTS
We selected 3 key performance indicators to measure our success in the execution of our ambitious Horizon 2020 growth strategy and our progress towards our longer-term targets and objectives:
● Adjusted EBITDA gives a clear indication on earnings and profitability, and is a good proxy for generated operating cashflows (cashflow from operations before change in cash working capital).
● As part of our Horizon 2020 strategy we set a 2020 adjusted EBIT target of doubling the 2014 figure or in other words, reaching € 500 million.
● We want our investments to create value by generating attractive returns and set a Group ROCE target of 15%+.
Despite the severe disruption brought by the COVID-19 pandemic in its end-markets, Umicore posted its strongest financial performance ever, boosted by an exceptional PGM price environment. This underscores Umicore's resilience and the merits of its strategy building on the complementarity of its activities.
After a solid performance in the first half of 2020, with a strong result in Recycling offsetting the impact of the automotive industry downturn on the results of Catalysis and Energy & Surface Technologies, the second half of the year was marked by a strong sequential improvement in the Group's revenues and earnings driven by continued robust operational performance and buoyant metal prices in Recycling, as well as strong growth in Catalysis.
Umicore's earnings and profitability reached new highs with full year adjusted EBIT amounting to € 536 million (up 5% year on year) and adjusted EBITDA amounting to € 804 million (up 7% year on year). 2020 ROCE for the Group stood at 12.1% (down from 12.6% in 2019), reflecting a lower ROCE in Catalysis and in Energy & Surface Technologies.
Revenues in Catalysis decreased, albeit less than the global car market, due to Umicore's strong market position in gasoline technologies for light-duty vehicles, particularly in China and Europe, as well as higher sales of heavy-duty diesel and fuel cells catalysts. Adjusted EBIT declined more than revenues for the full year reflecting the significant impact of the pandemic in the first half of the year.
Revenues of Energy & Surface Technologies reflected the impact of the pandemic as well as lower sales of cathode materials for high-end portable electronics and energy storage applications. The decline in adjusted EBIT was more pronounced reflecting significant negative operating leverage and the impact of an unfavorable pricing environment for cathode materials due to substantial industry overcapacity in China.
Recycling doubled its adjusted EBIT compared to the previous year, driven by strong growth across business units, reflecting high metal prices, high activity levels despite the COVID-19 crisis and favorable trading conditions.
2016
2017
2018
2019
2020
CATALYSIS
ADJUSTED EBITDA
Millions of Euros
400
ADJUSTED EBIT
Millions of Euros
200
200
0
152 203
165 224
168 237
185 264
154 234
100
0
RETURN ON CAPITAL EMPLOYED (ROCE)
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
%
20 15 10 5
16.6
16.3
2016
2017
2018 2019
In 2020, revenues in Catalysis decreased by 7% year on year, amounting to € 1,364 million, against the backdrop of an 18% contraction in the global car market. Umicore's revenues suffered much less than the global car market, due to the company's strong market position in gasoline technologies for light-duty vehicles, particularly in China and Europe. Revenues were further supported by higher sales of Umicore's catalysts for heavy-duty diesel applications and fuel cells catalysts.
Adjusted EBIT in Catalysis amounted to € 154 million, down 17% year on year due to the significant negative operating leverage in the first half of 2020 as a result of the COVID-19 pandemic impact on the automotive industry. In the second half of the year adjusted EBIT increased significantly, both sequentially and compared to the same period in the prior year, boosted by a sharp volume recovery in Automotive Catalysts and savings in manufacturing and SG&A costs. For the full year, adjusted EBITDA was € 234 million, down 11%. ROCE decreased to 9.6% (from 13.6% in 2019) due to the combination of lower returns and a higher capital employed base. Rising PGM prices, particularly in the second half of the year, increased the working capital needs in the business group .
The global automotive industry was significantly impacted by the COVID-19 pandemic and declined by 18% for the full year, with a marked contrast between the first and the second half of the year.
In the first half of 2020, car OEMs had to shut down their production plants and close their dealerships in several key regions as a result of government imposed lock-downs. Global car demand started to pick up again in the second half of 2020, albeit with discrepancies between the regions in terms of timing, speed and intensity of the recovery.
After a year-on-year contraction of 35% in the first half, car production in the second half grew by more than 40% sequentially (yet declined by 2% compared to the second half of 2019), with China being the clear driving force behind the global recovery. Other key markets started to pick up later and more gradually and still recorded negative growth for the second half of the year.
Against this extremely challenging backdrop, revenues and adjusted EBIT for Automotive Catalysts were only moderately below the level of the previous year as the business unit demonstrated tremendous resilience. It benefited disproportionately from the sharp market recovery in the second half of the year and outperformed the car market both in volumes and revenues, due to its strong position in the Chinese and European light-duty gasoline markets. In addition to the positive operating leverage created by the strong sales recovery, earnings were supported by cost savings resulting from recent footprint adjustments and operational excellence initiatives in manufacturing and SG&A.
In China, where car production for the full year was down 5%, Umicore's revenues were well up, reflecting Umicore's exposure to the growing penetration of direct injection gasoline platforms which require particulate filters under China 6 emission norms.
In Europe, Umicore's sales volumes and revenues were down less than the car market due to the company's strong market position in gasoline catalyst technologies.
In North America, sales performance was slightly lower than the market as a result of an unfavorable customer mix, while volumes in South America outperformed a heavily contracting car market.
2020
The sharp economic contraction and the lower industrial production induced by COVID-19 also had a significant and a more prolonged impact on the heavy-duty diesel market segment in 2020 except in China. Despite this challenging context, Umicore grew volumes and revenues in this market segment, due mainly to strong demand in the second half of the year for its China V technologies and a favorable customer mix.
Umicore's revenues in Japan and Korea evolved in line with the overall market. In South-East Asia, volumes and revenues substantially outperformed the market, driven by market share gains in India as Umicore qualified for new platforms compliant with Bharat 6 regulation.
Umicore's stationary catalyst activity was substantially impacted by the disruptions caused by COVID-19, in particular in its power, chemicals and oil refining end-markets where several large projects were postponed.
Revenues and earnings for Precious Metals Chemistry declined compared to the previous year, despite stronger demand for Umicore's fuel cells catalysts in Korea. The business unit was hit in the first half of the year by the severe downturn in the automotive industry and the related impact on demand for its inorganic chemicals. Demand for Umicore's homogeneous catalysts used in pharmaceutical and fine chemical applications remained stable.
Against a backdrop of accelerating demand for Umicore's state-ofthe-art catalysts for proton exchange membrane (PEM) fuel cells and to enable this activity to pursue its growth strategy, Umicore decided to house it in a new business unit Fuel Cells & Stationary Catalysts within the Catalysis business group. As of 1 January 2021, this business unit combines both Umicore's fuel cell catalyst activities, previously included in the business unit Precious Metals Chemistry, and Umicore's stationary catalyst activities, previously part of the Automotive Catalysts business unit. This change has no reporting impact on the Catalysis business group level. The new business unit will build on a strong portfolio of technologies to grow globally both in PEM fuel cells and stationary catalysis.
To learn more, see our story aboutUmicore fuel cell catalysts(p. 37).
ENERGY & SURFACE TECHNOLOGIES
ADJUSTED EBITDA
Millions of Euros
500
250
ADJUSTED EBIT
Millions of Euros
400
0
82 132
141 198
257 323
200
183 271
75 186
0
RETURN ON CAPITAL EMPLOYED (ROCE)
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
%
20
10
In 2020, revenues in Energy & Surface Technologies amounted to € 1,045 million, down 15% compared to 2019, driven by the negative impact of the pandemic on several end-markets and reflecting much lower sales of cathode materials for high-end portable electronics and energy storage applications. After a severe contraction of the global EV market in the first half, Umicore's sales volumes of cathode materials for EVs grew in the second half of the year, both sequentially and year on year. The integration of the cobalt refining and cathode precursor activities acquired in Finland at the end of 2019 also helped mitigate the decline in the business group's full year revenues.
As expected and in line with guidance, adjusted EBIT amounted to € 75 million, 59% below the 2019 levels. The underutilized capacity in Umicore's Chinese greenfield cathode material plant, in combination with higher fixed costs related to recent and ongoing expansions, resulted in a significant negative operating leverage. In addition, the unfavorable pricing environment in China, due to the substantial excess capacity in that region, severely weighed on margins. Adjusted EBITDA was € 186 million, down 31% year on year. 2020 ROCE further reflected the higher investments in Rechargeable Battery Materials and was 3.4% (versus 9.1% in 2019) .
Revenues and volumes in Rechargeable Battery Materials were down compared to 2019 as higher sales of NMC cathode materials used to power EVs were more than offset by lower sales of high energy LCO cathode materials for high-end portable electronics and reduced demand for NMC cathode materials used in energy storage applications.
0
2016
2017
2018
2019
2020
The global EV market was profoundly affected by the COVID-19 pandemic in the first half of the year and rebounded in the second half of the year, primarily driven by strong EV growth in Europe and, later in the year and to a lesser extent, by increasing EV sales in China. For the full year 2020, EV sales grew 50% to 3.4 million vehicles. This translated in an addressable market for cathode materials producers of some 137 GWh, or a 17% year-on-year growth.
For the full year, Umicore's sales volumes of cathode materials going into EVs grew less than battery demand in GWh as the cathode materials industry, including Umicore, could not immediately benefit from the rebound in battery demand in the second half of the year because of the existence of excess inventories in the supply chain. These excess inventories were largely depleted by yearend. Excluding this inventory effect, Umicore's sales volumes grew broadly in line with EV battery demand. As anticipated, Umicore's sales volumes for EVs grew in the second half of the year, both sequentially and year on year.
In China, battery demand for EVs remained bleak until the summer and turned positive in the second half of the year, albeit compared to a depressed second half in 2019. After years of strong year-on-year growth, culminating with a more than doubling of demand in 2018 and leading to massive capacity additions in the battery materials value chain, demand for cathode materials for EVs has lagged the anticipated growth in 2019 and 2020. This slowdown has resulted in significant excess capacity and pressure on the pricing environment. Umicore is not immune to this effect and its performance in the region was also impacted by underutilized capacity in its Chinese greenfield cathode materials plant.
In Europe, battery demand for EVs recorded strong momentum throughout 2020, in particular in the second half of the year, and doubled compared to 2019. This growth was driven by new models launched by car OEMs to comply with the more stringent CO2 directive which kicked in in 2020, local incentives for EV buyers in several countries as part of their recovery plans and more environmentally-friendly choices by consumers when purchasing a new car. Umicore sales of cathode materials in the region grew in line with the market trend. Umicore is currently using its capacity in Korea to serve that growth, until its new greenfield plant in Nysa, Poland will start commercial production. The Nysa plant will be the first industrial cathode materials production plant in Europe and its construction is progressing well with commissioning expected towards the end of the first half of 2021. Once production lines will have gone through customers' qualifications, initial commercial
production volumes are expected in the fourth quarter of 2021, with the full ramp-up of volumes taking place in 2022.
While having production capacities in three different locations (Korea, China and Europe) involves higher capital investments and operating costs than for most competitors, Umicore is convinced that having a presence in multiple key markets will prove a strong competitive differentiator over time as battery and car OEMs will increasingly require electric car components to be produced locally to minimize their CO2 footprint.
The push towards electric mobility is stronger than ever, driven by regulatory initiatives to protect air quality and reduce greenhouse gas emissions in several regions. Europe recently reconfirmed its ambition to achieve zero-emission mobility and remains committed to increasingly more stringent CO2 emission targets. The EU ambitions and commitments to a cleaner future imply rapid growth in GWh of battery demand in the coming years. In China, the Ministry of Industry and Information Technology announced an extension of the NEV subsidy plan from 2020 until end 2022. It also confirmed its long-term commitment to achieve a target penetration rate of 20% NEVs in 2025 and 50% by 2035. Although it will take a while before the current excess capacity in China is fully utilized, these targets will boost electrification in the coming years.
Revenues for Cobalt & Specialty Materials were below the level of the previous year, reflecting the severe impact of COVID-19 on the activity levels in most of the business unit's end-markets.
Although demand for cobalt and nickel chemicals and activity levels in the distribution activities gradually recovered in the second half of the year, this could not compensate for the volume losses incurred in the first half of 2020. Order levels for tool materials declined substantially year on year, impacted by reduced activity levels in the construction and industrial manufacturing sectors throughout the year. The reduced demand levels for cobalt and nickel chemicals also resulted in lower throughput and contribution from the refining and recycling activities. Revenues from carboxylates remained stable compared to the previous year.
As part of the ongoing assessment of its global production footprint, Umicore announced in September its decision to consolidate the cobalt refining and transformation activities in Kokkola, Finland and Nashville, US in order to achieve synergies and strengthen the unit's competitive position. The transfer of the activities is on track and is anticipated to be finalized by mid-2023. Earlier in the year, the business unit closed its cobalt, nickel and rhenium refining and recycling plant in Wickliffe, Ohio.
Revenues for Electroplating were slightly higher compared to the previous year reflecting primarily higher demand for advanced precious metal-based electrolytes used in portable electronics. This more than offset the impact of lower demand for precious and base metal compounds as a result of the COVID-related slowdown in the jewelry and industrial end-markets.
As of 1 January 2021, the business unit Electroplating has been renamed Metal Deposition Solutions. In addition to the activities previously included in Electroplating, the new business unit also includes the thin film products business, which was previously part of the Electro-Optic Materials business unit and which manufactures evaporation materials and sputtering targets for the microelectronic and optical industries, with activities in Liechtenstein and Taiwan. The purpose of this transfer is to bring together businesses serving similar applications and customers in electronics and semiconductors.
Revenues for Electro-Optic Materials decreased compared to the previous year. This was mainly due to lower demand for high purity chemicals used in optical fibers as a result of a delay in 5G-deployment. Revenues increased both for substrates and for infrared optics, following the successful launch of innovative new products and services.
RECYCLING
ADJUSTED EBITDA
Millions of Euros
500
250
ADJUSTED EBIT
Millions of Euros
425
500
250
0
125 187
128 189
135 195
188 250
362
0
RETURN ON CAPITAL EMPLOYED (ROCE)
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
%
100
50
72
The Recycling business group delivered a record performance in 2020, posting an increase in revenues of 23% to € 836 million and nearly doubling its adjusted EBIT to € 362 million. This stellar performance was driven by strong growth across all business units, reflecting high metal prices, high activity levels despite the COVID-19 crisis and favorable trading conditions. Adjusted EBITDA amounted to € 425 million, an increase of 70% compared to 2019. These record earnings drove ROCE up to 72% (versus 39.3% in 2019).
Revenues for Precious Metals Refining increased significantly year on year and adjusted EBIT more than doubled, reflecting primarily higher received metal prices, particularly for platinum group metals, and to a lesser extent a supportive supply environment and higher processed volumes.
The performance of the business unit was boosted by a favorable metal price environment. Average received metal prices were well above the level of the previous year for most precious and platinum group metals, in particular rhodium. In a context of tight supply and growing demand from the car industry as a result of increasingly more stringent emission norms, the rhodium price surged from the high levels already reached at the end of 2019. The business unit also benefited, to a more moderate extent, from the price increases of gold, platinum and palladium as it previously hedged a significant portion of its exposure to these metals.
The overall supply of industrial by-products remained favorable over the period, despite the temporary shutdowns of certain mining activities in response to COVID-19. Also the supply of end-of-life materials remained strong and the Hoboken plant benefited from an ample inflow of highly complex spent automotive catalysts.
The business unit continued to leverage its unique recycling technology to efficiently treat such highly complex materials. Processed volumes in 2020 were higher compared to 2019 as a result of the process improvements which were introduced in 2019 and which required a longer than usual shutdown during that year. The higher processed volumes, in combination with the valuable mix, further supported the performance of the Hoboken plant.
As part of its endeavors to continuously drive improvement in the robustness of the Hoboken operations and the overall safety performance of the plant, a multi-year investment program has been launched with a priority on fire prevention and emergency planning. In parallel, Umicore continues with the execution of the investment program aimed at further reducing emissions.
Revenues for Jewelry & Industrial Metals increased compared to the previous year. The impact of lower demand from the jewelry and industrial sectors was offset by a substantial increase in orders for precious metal based investment products as well as strong demand for platinum engineered materials. The revenues and margins of the business unit were further supported by a higher contribution from the refining and recycling activities, which benefited from robust demand as well as a favorable metal price environment, in particular for gold.
The earnings contribution from Precious Metals Management substantially increased compared to 2019 as the business unit benefited from high metal prices and exceptionally high metal price volatility which resulted in favorable trading conditions. In addition, demand for gold and silver investment bars was strong.
0
2016
2017
2018
2019
2020
Net financial charges totaled € 104 million, up from € 83 million in the same period last year due to higher net interest charges resulting from a higher average financial debt as well as fees and costs linked to the issuance of new debt instruments. These higher charges were partly offset by lower forex costs and lower discounting costs related to provisions. The adjusted tax charge for the period amounted to € 103 million, stable compared with the same period last year despite substantial changes in the underlying regional result distribution. Both the adjusted taxable base for the group and effective group tax rate were stable year on year. The latter reached 24,2%, compared to 24,7% last year. Taking into account the tax effects on EBIT adjustments, the net tax charge amounted to € 59 million. The total tax paid in cash over the period amounted to € 79 million, which is lower than last year.
FINANCIAL REVIEW
FINANCIAL RESULT AND TAXATION
CASHFLOWS
Cashflow generated from operations, including changes in net working capital, amounted to € 603 million, compared to € 549 million last year. After deduction of € 436 million of capital expenditures and capitalized development expenses, this corresponds to a free cash flow from operations over the period of € 167 million, compared to a cash drain of - € 39 million in 2019, demonstrating the resilience of the Group's cash flows in a challenging market context. Adjusted EBITDA was € 804 million compared to € 753 million last year, corresponding to an adjusted EBITDA margin for the Group of 24.6%, up versus 22.1% in 2019 driven by the strong performance in Recycling. Net working capital for the Group increased by € 104 million since the end of 2019. Working capital needs increased in Catalysis and, to a lesser extent, in Recycling due to strong year-on-year price increases in precious metals, PGM's in particular. Energy & Surface Technologies reported a decrease in working capital needs year on year due to subdued sales volumes and metal prices. Capital expenditures totaled € 403 million, compared with € 553 million last year. This reduction reflects the decision taken shortly after the start of the COVID-19 outbreak to postpone selected investment projects withthe exception of safety and license to operate investments, awaiting more clarity on market outlook. Taking into account the continued investment in Rechargeable Battery Materials' greenfield plant in Poland, Energy & Surface Technologies accounted for close to two thirds of the Group's capex. Spending for this strategic project will continue into 2021. Capitalized development expenses amounted to € 32 million compared to € 35 million last year. The net cash outflow related to the exercise of options and the purchase of treasury shares to cover option plans and share grants was € 27 million, slightly lower than in the previous year.
FINANCIAL DEBT
Net financial debt at 31 December 2020 stood at € 1,414 million, slightly down from € 1,443 million at the end of 2019. This corresponded to 1.76x adjusted EBITDA which is lower than the ratio of 1.92x at the end of 2019. In the first half of the year, Umicore further diversified its sources of funding by completing a € 500 million convertible bond offering due in 2025 and by concluding a € 125 million 8-year loan with the European Investment Bank. Prior to that, in response to the COVID-19 outbreak, Umicore had already increased its undrawn committed bank lines, ensuring itself of ample liquidity to pursue its strategy. Group shareholders' equity was € 2.557 million at the end of the year, including the value of the convertible bond's conversion rights, corresponding to a net gearing ratio (net debt / net debt + equity) of 35,0% (35.2% at the end of 2019).
EBIT ADJUSTMENTS
Adjustments had a negative impact of € 237 million on EBIT in 2020 of which € 72 million were already recognized in the first half. Of this total, € 112 million were related to Energy & Surface Technologies. The latter including € 56 million charges linked to the restructuring initiatives in Cobalt & Specialty Materials, a resulting € 34 million impairment charge linked to the rightsizing of permanently tied up cobalt inventories in that same business unit as well as a € 15 million impairment in Rechargeable Battery Materials due to a site reconfiguration in Korea. Catalysis accounted for € 57 million charges of which € 55 million were already recognized in the first half, linked mainly to the consolidation of the North Americanautomotive catalyst production and some impairments including selected capitalized development costs and license agreements. In Recycling, a charge of € 51 million was accounted for, comprising a € 50 million provision to cover costs related to the intention to buy houses closest to the Hoboken plant and create a green zone. These costs comprise an estimated purchase value of the houses (based on third party appraisal) to be demolished as well as an estimate of demolition and landscaping costs. Concertation with the city council and residents is ongoing and might result in adjustments to this cost estimate. Finally, EBIT adjustments also include € 14 million charges linked to restructuring, property, plant and equipment and goodwill impairments in Element Six Abrasives, a JV in which Umicore has a 40% stake. Of the total adjustments, € 147 million have a non-cash nature. Restructuring-related charges account for € 128 million of the total, environmental items for € 56 million and selected asset impairments for € 45 million. After tax, the adjustments to net group earnings over the period correspond to - € 192 million.
METAL HEDGING
Over the course of 2020 and early 2021, Umicore entered into additional forward contracts, thereby securing a substantial portion of its structural future price exposure to certain precious metals and providing increased earnings visibility. For 2021 and 2022, approximately two thirds of the expected gold and palladium exposure and somewhat less than half of the expected silver exposure have been locked-in. In addition, close to one third of the expected platinum exposure for 2021 has been hedged. In spite of the absence of a liquid futures market, Umicore entered in recent months into forward contracts locking in a minority of its expected 2022 and 2023 rhodium exposure.
INVESTING IN UMICORE
€ 1.34 | |
EARNINGS PER SHARE | |
DENOMINATOR ELEMENTS | |
2020 | |
Total shares issued as at 31 December | 246,400,000 |
of which treasury shares | 5,733,685 |
of which shares outstanding | 240,666,315 |
Weighted average number of outstanding shares | 240,589,550 |
Potential dilution due to stock option plans | 1,183,525 |
Adjusted weighted average number of outstanding shares | 241,773,075 |
Investing in Umicore is an investment in producing materials for a better life - our mission - and supporting our growth strategy. We have a healthy capital structure with funding headroom to execute our growth strategy while remaining within the equivalent of an investment grade credit status territory.
THE UMICORE SHARE
Umicore shares are listed on the Euronext stock exchange.
The total number of outstanding and fully paid-up shares, and the number of voting rights, are 246,400,000. During 2020, no new shares were created as a result of the exercise of stock options with linked subscriptions rights. During the year Umicore used 1,024,435 of its treasury shares in the context of the exercise of stock options and 66,430 of its treasure shares for shares granted. In the course of 2020, Umicore bought back 1,200,000 own shares. On 31 December 2020, Umicore owned 5,733,685 of its own shares representing 2.33% of the total number of shares issued as of that date.
SHAREHOLDER RETURNS
Umicore aims to create value for its shareholders. There is no fixed pay-out ratio.
Umicore's Supervisory Board will propose a gross annual dividend of € 0.75 per share for the full year 2020. This compares to a full dividend of € 0.375 per share paid out for the financial year 2019. Taking into account the interim dividend of € 0.25 per share paid out on 25 August 2020 and subject to shareholder approval, a gross amount of € 0.50 per share will be paid out on 5 May 2021.
The Supervisory Board has decided that starting in 2021, the interim dividend will be a fixed amount of € 0.25 per share. The dividend policy of a stable to growing dividend remains unchanged.
Over the course of its Horizon 2020 strategy, Umicore delivered strong and sustainable shareholder returns through growth of its intrinsic value and dividend distribution.
Over the 2015-2020 period, Umicore substantially outperformed the Stoxx Europe 600 Chemicals index with a share price performance of 140.2% versus 60.6% for the index. The corresponding annualized share price performance amounts to 15.7% per year over the 5-year period.
INDEXES & RATINGS
EURONEXT | BEL20; Euronext 100 |
ECPI | EMU Ethical Equity; Euro ESG Equity; World ESG Equity |
FTSE RUSSELL | FTSE4GOOD; FTSE Environmental Opportunities 100 |
ISS OEKOM | PRIME ESG Rating |
MSCI | ACWI Sustainable Impact Index, ACWI Low Carbon Target, |
Belgium IMI Index, EMU ESG Enhanced Focus Index, Global | |
Pollution Prevention Index, World ESG Leaders Index, AAA | |
ESG Rating (Leader) | |
SOLACTIVE | Solactive Europe Corporate Social Responsibility Index |
STOXX | STOXX Europe 600; STOXX Europe Mid 200 |
SUSTAINALYTICS | 29.1 (Low Risk) |
VIGEO EIRIS | Benelux 20; Eurozone 120 |
For more, visit:UMICORE.COM/INVESTORS
Open fuel cell stack with Umicore proton-exchange membrane catalyst
UMICORE FUEL CELL CATALYSTS
Around the world, the way energy is managed is changing, moving away from fossil fuels and towards more sustainable energy solutions, including for cleaner mobility. Umicore provides clean-tech solutions for all vehicle types including cathode materials used in lithium-ion batteries for electromobility and electro-catalysts for fuel cell vehicles.
A fuel cell is like a battery in that it generates electricity from an electrochemical reaction, and is built with an anode and a cathode. However, fuel cells do not run down or need recharging. The main difference between a battery and fuel cell is that a battery stores energy, while a fuel cell generates energy. A fuel cell takes an energy source (the "fuel"), such as hydrogen, and an oxidizing agent, oxygen from air, and through its reaction converts it into electricity. In doing so, as long as air and fuel are supplied, a fuel cell can run indefinitely. The assembly of fuel cell components is referred to as a stack, which is the power generation unit of a fuel cell system.
Typically batteries and fuel cells can be found working together, where a battery will store the electricity generated by a fuel cell and the total energy output will be the combined output from the two energy sources.
At Umicore, our tailor made Proton Exchange Membrane (PEM) fuel cell catalyst provide superior performance to accelerate the development of fuel cells, boasting longer ranges, shorter refueling times and higher energy density.
In the move towards cleaner mobility, and with the technology maturity now demonstrated, fuel cell drivetrains are gaining momentum in the trend towards electrified vehicles. Since 2019, Umicore has recorded strong growth in the demand of fuel cell catalysts used in the transportation segment. To support the rapid growth of our automotive customers we have created a new and promising business unit for fuel cell and stationary catalysts and are ready to ramp up our production.
With 30 years of experience developing PEM fuel cell catalysts, covering both anode and cathode electrode applications, Umicore's competitive products are key components of commercial stack platforms found on the road today. We are present in most of the development platforms of the biggest OEMs, and our R&D centers and industrial production activities both in Germany and South Korea are well placed to globally serve our automotive customers.
We expanded our production capacity in Korea, close to Umicore's technology development center near Seoul, to support the growth of Hyundai Motors Group and we will also support our other automotive customers allowing further expansion to cover future growing demand.
Umicore's fuel cell material solutions are also applicable to water electrolysis, the cleanest production of low-carbon hydrogen. Looking ahead, we share the vision that clean hydrogen has a key role to play in decarbonizing the energy, mobility and industry systems. Scaling up of hydrogen technologies is direly needed to achieve competitiveness across many applications and reach its full deployment potential by 2050. Hydrogen technologies are therefore crucial to climate change mitigation while delivering on economic value creation and generating massive job opportunities.
Umicore also closes the loop for fuel cells, recycling end-of-life and production waste in our Precious Metals Refining operations, a world market leader in eco-efficient recycling of complex waste streams containing precious and other non-ferrous metals. At Umicore, after recovering precious metals, we are able to convert these scarce metals back into advanced materials for new fuel cell technology.
Today, fuel cell vehicles are already circulating on roads all over the globe though in limited numbers. Market deployment of fuel cell vehicles will intensify provided that a refueling infrastructure is sufficiently developed. Electric buses and energy-intensive heavyduty applications such as trucks will strongly rely on fuel cell technology. On the road to 2050, fuel cell electric vehicles will dominate long range and medium-high duty applications.
Fuel cells have a clear role to play in the engine and energy mix providing one of the various technologies required towards zero emissions. They provide the best of both worlds by combining the environmental advantages of battery drivetrains with the driving range and refueling time of internal combustion engines. Therefore, as a complementary technology, Umicore's fuel cell catalysts are part of our unique technology portfolio offering the full spectrum of clean mobility materials.
For Umicore products and services, visit:UMICORE.COM/INDUSTRIES
Prebes Award
In November, our colleague from the Cobalt & Specialty Materials site in Bruges, Jens Le Comte, won the Prebes Award for his thesis to obtain his degree for "Prevention Advisor Level 3". Each year, Prebes, a Belgian non-profit organization focused on health, prevention and the environment, rewards a number of final works that contribute to improving or promoting well-being at work. Jens earned the award for his thesis on the CO2 fire extinguishing system.UMICORE.COM/STORIES
Value chain and society
2020 TARGET
KEY RISKS & OPPORTUNITIES
1 Regulatory and legal context
2 Sustainable and ethical supply
3 Technology and substitution
SUSTAINABLE DEVELOPMENT GOALS
Value chain and society
Human rights are fundamental to Umicore.
We want Umicore to be a leader in providing and creating material-based solutions to contribute to fundamental improvements in the quality of life.
Human rights within the Umicore organization are enshrined in The Umicore Way which is the cornerstone of everything we do at Umicore, representing our organization's values. All Umicore personnel commit to upholding these values under the following key statement: " We uphold fundamental human rights and respect those rights in conducting our operations throughout the world.We engage with the communities around our operations and communicate transparently with our stakeholders". Our success is measured in our ability to provide environmental and ethical sourcing benefits of scarce raw materials and to deliver products and services that create sustainable value for our customers and society.
Umicore's Horizon 2020 objectives reflect a proactive view of our role in the overall value chain.
More specifically, it covers human rights, including collective bargaining and equal opportunities, safe and healthy working conditions, environmental and supply chain matters and digital transformation. All parties have undertaken to pursue the constructive dialogue they initiated in 2007 to ensure successful implementation of the agreement.
To ensure our activities are conducted in line with the Umicore Way, we have adopted policies including the Umicore Code of Conduct, Human Rights Policy, and our Sustainable Procurement Charter. Umicore fully supports the United Nations Universal Declaration of Human Rights. We are committed to uphold fundamental human rights and respect those rights in conducting our operations throughout the world.
Upstream, we have placed greater emphasis on the management of key raw materials supply requirements. We have also sought to ensure that Umicore's efforts in the field of ethical sourcing can generate a competitive edge for the company.
Downstream, we have a strong portfolio of products and services that offer specific sustainability advantages to our customers and society. We use our long-standing and growing experience in ethical sourcing and sustainably managing raw materials to advocate for better practices.
Umicore and IndustriALL Global Union renewed their Global framework Agreement on Sustainable Development in 2019, for 4 years. The agreement reaffirmed Umicore's commitment to sustainable development, embracing economic, environmental and social objectives.
This commitment applies to all Umicore employees, all subsidiaries and joint ventures where we have operational control and all subcontractors working on our sites.
Our success depends on a relationship of trust and professionalism with employees, commercial partners, shareholders, government authorities and the public. These principles are embedded in our Code of Conduct which sets the framework for ethical behavior and respect of the rule of law, including regarding anticorruption and bribery. It incorporates whistle blowing procedures (Integrity Hotline) and supports our commitment to equal opportunities and diversity. All employees have access to, and are required to comply with, the Code of Conduct and The Umicore Way.
SUSTAINABLE & ETHICAL SUPPLY
We aim to leverage our sustainability approach in the value chain, both upstream with our suppliers and downstream with our customers.
As a global materials technology and recycling group, we purchase and recycle minerals and metals for use in a wide range of products and technologies.
For our operations to function, we need raw materials, transportation, energy and other goods and services.
Sustainable procurement is a key driver in Umicore's Horizon 2020 aspiration to turn sustainability into a greater competitive edge.
Our Sustainable Procurement Charter mitigates the supply chain risks, including human rights. The Charter outlines our commitment to fair dealing, transparency and communication, health and safety, and our efforts to include smaller sized and local suppliers in our procurement processes wherever possible, to support local economies where we operate.
We are determined to ethically and sustainably secure a competitive edge in our approach to critical raw materials. To avoid misuse of precious metals and minerals to finance armed conflict, cause human rights abuses, draw upon forced or child labor or support corruption and money laundering, we ensure that conflict minerals procurement is in line with Umicore's values through our policy for Responsible global supply chain of minerals from conflict affected and high-risk areas which is based on the OECD guidelines.
Umicore also continues to ensure that gold and silver production operations are certified as conflict-free, and that our cobalt, platinum, palladium and rhodium are sourced responsibly. Our customers are increasingly requesting such guarantees and we provide them with the necessary documentation to assure the conflict-free status of our products.
Umicore sites undergo audit and certification for the London Bullion Market Association (LBMA), the Responsible Jewellery Council (RJC) and the Responsible Minerals Initiative (RMI). For more information on our many accreditations see note V2(p. 182).
We expect our suppliers to be committed to business integrity, to promote the principles of sustainable procurement in their supply chain, to be compliant with local environmental laws and to respect international human rights law on their own sites and from their own suppliers, including to abolish child and forced labor and eliminate discrimination.
Overall, we have over 18,000 suppliers worldwide to which we paid over € 18.7 billion (including the metal content of raw materials) in 2020. Umicore's Purchasing & Transportation teams worldwide manage indirect procurement processes for energy and other goods and services (accounting for usually around 10% of our spend) while the metal-bearing raw materials are purchased directly by the business units (accounting for the vast majority of our spend).
In 2020, EcoVadis continued to assess indirect procurement streams for Umicore.
Umicore Responsible global supply chain of minerals from conflict affected and high risk areas available at:
UMICORE.COM/RESPONSIBLE-SUPPLY-CHAIN-POLICY
Umicore Sustainable Procurement Charter available at:
UMICORE.COM/SUSTAINABLE-PROCUREMENT-CHARTER
For over a century Umicore has been a world leader in cobalt products, used in many applications, from tooling to rechargeable batteries for electric cars.
SUSTAINABLE COBALT
Some reserves of cobalt ore are in regions fraught with challenges, giving rise to unethical practices such as forced labor, poor health and safety conditions, child labor and corruption.
For us, sustainable procurement of cobalt means considering economic, environmental and social performance of our suppliers, and the social and environmental impact of the supply, in the purchase of materials. To source cobalt, we have implemented a pioneering Sustainable Procurement Framework for Cobalt and were the first to obtain external validation for our approach in this area.
The various sustainability aspects of the battery supply chain include the conditions under which raw materials are extracted and processed. Umicore is aware of the sustainability risks that are linked to the sourcing of cobalt particularly in the Democratic Republic of Congo. Often, artisanal and small-scale mining (ASM) activities are linked to issues such as human rights abuses, child labor, poor occupational health and safety conditions. In 2004 Umicore decided to exclude cobalt obtained from ASM from its supply chain.
Umicore is the first company in the world to have introduced a Sustainable Procurement Framework for Cobalt and to obtain external validation for its ethical procurement approach in this area. It aims to minimize the risk of any connection between the cobalt in its supply chain - and subsequently that of its customers - and human rights abuses or unethical business practices. Building on the specific approach to sustainable and ethical cobalt sourcing that Umicore introduced in 2004, the framework has evolved to address specific risks linked to unethical mining practices, such as child labor and poor health and safety conditions. Regular independent audits ensure that Umicore's supply chain remains compliant with these policies.
To ensure the traceability of materials in our supply chain, we carry out detailed research and risk assessments of our suppliers. This includes visiting plants, screening policies and procedures and, if required, developing improvement programs. In 2020, Umicore again performed due diligence activities for all its purchased cobalt materials used in rechargeable batteries, tools, catalysts and several other applications. In 2019, Umicore piloted a new third-party site audit protocol on our largest cobalt supplier, with a plan to roll out to other suppliers starting in 2020. Due to the COVID-19 pandemic, the roll out of our new third-party audit was not possible. Umicore did however follow up on mitigation actions defined in the previous year's audit.
Umicore obtained, for the sixth year in a row, third-party assurance from PwC that our 2020 cobalt purchases are carried out in line with the conditions set out in the Framework. The share of cobalt from recycled origin was also reviewed as part of the assurance process and decreased to 4% in 2020, down from 9% in 2019, in part due to the impact of COVID-19 on the availability of cobalt-containing industrial scraps and end-of-life materials for recycling.
The 2020 Due Diligence Compliance Report for Cobalt Procurement, as well as previous years' reports are available online.
Umicore also supports the development of traceability projects across the industry. In 2019, the Cobalt Institute launched the Cobalt Industry Responsible Assessment Framework (CIRAF), a management framework which strengthens the ability of cobalt producers and buyers to assess, mitigate, and report on responsible production and sourcing risks in their operations and supply chain. Umicore is again reporting on our supply chain using the CIRAF, which we helped develop. In 2020, Umicore's supply chain approach is aligned with the level 3 requirements of the CIRAF, an improvement from level 2 in 2019. The compliance report for 2020 is available online.
Within the Battery Alliance, Umicore continues to support the development of a battery passport to ensure transparency on the origin of the raw materials, their transformation, use and end of life.
The passport will trace the origins of battery materials and monitor them throughout their entire lifecycle on a global digital platform, to help eradicate unacceptable social or environmental practices and push unsustainable materials out of the market.
Umicore Sustainable Procurement Framework for Cobalt available at:
UMICORE.COM/SUSTAINABLE-PROCUREMENT-CHARTER-COBALT
CLEAN MOBILITY & RECYCLING REVENUES %
SUSTAINABLE PRODUCTS AND SERVICES
80
70
60
2016
2017
2018
2019 2020
In 2020, 77% of Group revenues were from activities that deliver products or services that are directly linked to clean mobility or recycling, up from 75% in 2019, and up 18% compared to 2016, when we began tracking revenues in this way. Many of the materials and services making up the remaining 23% of revenues provide answers to specific societal needs such as improved connectivity (materials for high quality glass, displays) or reduced energy consumption (materials for use in energy-efficient lighting such as LEDs).
Umicore's Horizon 2020 objective is to generate further competitive advantage through the development of products that have specific sustainability benefits.
Our primary focus is on activities that provide solutions for clean mobility and resource scarcity.
Umicore plays a pioneering role in promoting a sustainable value chain for batteries and was the first company to provide its customers with battery materials of a certified sustainable and ethical origin. We strongly believe that higher transparency along the value chain will increase the sustainability of the battery industry. Therefore, Umicore joined Glencore, ERG and CMOC in the Re|Source consortium. Re|Source is developing an industry-wide blockchain platform to trace the origins of the raw materials and track them along the entire battery value chain.
To be a preferred sustainable supplier, we work directly with our customers to meet their environmental requirements and disclose our own performance and ambitions. In recent years, some customers have opted for a third party sustainable supplier assessment. For these customers, Umicore discloses to the CDP (see responses:CDP).
Umicore has fully monitored and reported on emissions since 1999 and included reduction targets in our strategic approach in 2010. We delivered emissions reductions beyond our targets then, and in the context of Horizon 2020 we're committed to continuous improvement of our environmental performance even as we continued to grow.
In 2020, Umicore received the Platinum Medal in Corporate Social Responsibility from EcoVadis, placing us among the top 1% of our industry peers in the EcoVadis global network of over 65,000 rated companies.
To support our ambition to turn sustainability into a greater competitive advantage, it is essential to develop a full understanding of the impact that our products have on the world and use it as a lever for improving the footprint of our products and services. At Umicore, the business units work with corporate EHS on life cycle assessments (LCA) to identify the environmental impact of their products and services and set a baseline against which improvements can be measured.
We share our learning and participate in association-driven efforts, such as those of the Nickel Institute, the International Platinum Association and the Cobalt Institute.
We perform LCAs on our materials on an ongoing basis. Using the opportunities identified in this new robust data, Umicore can leverage our unique combination of materials chemistry, energy mix and raw and recycled materials for improved overall environmental impact and a lower-carbon mobility. Umicore will continue to develop selective products and services that have specific sustainability benefits and answer the growing sustainability needs of our customers.
We develop specific sustainability solutions for our products and their applications by working closely with customers.
As a metal that offers huge potential for innovative applications such as clean tech and cutting-edge semiconductors, germanium is an important focus for Umicore's circularity ambitions. Over the last five years, we have taken significant strides toward our goal of supplying 100%-sustainable germanium through a number of initiatives.
Germanium sourced through zinc production has an 85% smaller footprint than germanium sourced from coal, and recycled germanium has a 95% smaller footprint. Today, 50% of the germanium we use is recycled and more than two thirds of the remainder is recovered from industrial by-products, rather than coal.
We also collaborate with companies around the world to develop innovative new ways to recover germanium from production processes and waste streams. For more on Umicore's approach to Germanium, read Pioneering the sourcing & recycling of sustainable germanium(p. 52).
For Umicore products and services, visit:UMICORE.COM/INDUSTRIES
Umicore's virtual trade show booth
UMICORE INNOVATES
WITH VIRTUAL TRADE SHOW
Every year, Umicore participates in more than 60 trade shows where we meet and talk face to face with our customers and potential customers. Due to COVID-19, almost all trade shows were postponed, cancelled or replaced by virtual events. While our commercial teams still favor the live events where a close interaction with the customer is possible, we quickly realized we could not miss the opportunity to join virtual trade shows. Group Communications started to develop a new concept of virtual exhibits that can be customized for the different business units. Very soon a first project appeared: the e-scrap conference, a high-profile trade show on electronic waste.
As a global player in the field of e-scrap recycling, Precious Metals Refining (PMR) was not only one of the exhibitors, but the only one with a virtual booth. Group communications demonstrated that innovation applies to all areas of the business by including trade shows in its long-term "digital first" approach.
GLOBAL TEAMWORK
As the decision to convert the e-scrap conference into a virtual event was communicated very late, it was a race against time to get our very first virtual booth ready in time. "A team from the United States, Germany, Brazil and Belgium worked very hard to get PMR's first virtual exhibition booth ready just in time. I am also proud that we can provide all our business units with this platform to present theiractivities and interact with their customers virtually." --Werner Appel, Head of Exhibitions and Events
THE ONLY COMPANY WITH VIRTUAL MODE
During the two-day e-scrap conference a whole team literally worked behind the screen. Lies Geunens, Junior Supply Manager Recyclables at PMR was one of them. "We were the only company with a customized virtual booth fully in line with the look and feel of our booth for physical events. The fact that we were there with a virtual stand shows what an innovative company Umicore really is." -- Lies Geunens, Junior Supply Manager Recyclables
Visit one of our virtual booths at:VIRTUAL-BOOTH-U.COM
Climate Action Program
Through the Umicore Climate Action Program created in 2019, we invite our employees to submit innovative ideas to reduce our ecological footprint in all areas, from quick wins in the office to global responsible business travel. Employees have answered the call for ideas with great enthusiasm. In Germany, for example, over 50 ideas were submitted and 31 currently implemented. In China, over 100 ideas were submitted of which 84 have been slated for action.UMICORE.COM/STORIES
Eco-efficiency
WE AIM TO OPTIMIZE THE SUSTAINABILITY PERFORMANCE OF OUR OWN OPERATIONS, FOCUSING ON ENERGY EFFICIENCY
-17%
ENERGY CONSUMPTION VS 2015
-67%
METAL EMISSIONS TO AIR VS 2015
-59%
METAL EMISSIONS TO WATER VS 2015
64%
SECONDARY & END-OF-LIFE MATERIALS IN INPUT MIX
As a materials technology company, we aim to drive an even more efficient use of metals, energy and other inputs in our operations to balance environmental and economic factors and work to increase closed-loop relationships with our customers.
As part of our commitment to sustainability, we take into account the environmental impact of our operations, and strive to continuously improve our environmental performance, implement risk management strategies based on valid data and sound science, actively participate in the management and remediation of risks that are the result of historical operations and facilitate and encourage responsible design, use, re-use, recycling and disposal of our products.
Our success is measured in our ability to make sustainability a competitive advantage by being increasingly energy and material efficient compared with our 2015 baseline.
Umicore is a world leader in the eco-efficient recycling and refining of precious metalbearing materials.
These materials include by-products from other non-ferrous industries, end-of-life consumer and industrial products and e-scrap. Our eco-efficient process entails maximizing both the physical recycling of materials and the revenue obtained, while minimizing the associated environmental burden and total cost. We recover and sell precious, special, secondary and base metals and our closed-loop business model maximizes material re-use.
This ambition to address increasing global resource scarcity and achieve material efficiency is an important factor in our strategy. Over the span of our Horizon 2020 strategy we have consistently secured over half our materials supply from non-primary sources. In 2020, 64% of the materials we used were from end-of-life or secondary origin, while 34% were of primary origin.
In our Horizon 2020 strategy, we defined energy efficiency and metal emissions reduction as key eco-efficiency performance indicators. We pursue eco-efficiency initiatives to generate compelling value and a competitive edge through reduced costs, minimizing our carbon footprint and strengthening our license to operate. In addition, we believe that it is equally important to continuously monitor, control and report our performance in relation to other environmental aspects. Our Horizon 2020 approach of continuous improvement was successful in improving our efficiency and reducing our impact.
We continue to invest in research to innovate in clean mobility and sustainability.
Umicore prioritizes R&D to support our Horizon 2020 ambitions by focusing on the development of innovative solutions for materials and processes. Our ability to create a pipeline for these innovations and solutions is an important component of our long-term ecoefficiency performance.
ECO-EFFICIENCY
NORMALIZED ENERGY CONSUMPTION %
96
48
2016
2017
2018
METAL EMISSION REDUCTION TO WATER %
100
20
2016
2017 2018
METAL EMISSION REDUCTION TO AIR %
70
2019
2020
2019 2020
30
2016
2020
ENERGY EFFICIENCY
Umicore plays a key role in the transition to a low-carbon society.
We produce rechargeable battery materials for EVs, catalysts for reducing transport and industrial emissions, and contribute to resource stewardship by recycling metals and end-of-life products in a closed loop. In our own operations, we are committed to achieving further energy efficiency compared to our 2015 levels.
Energy consumption is continually monitored and regulated at all sites. The bigger contributors are additionally encouraged to develop energy efficiency projects and are required to report on them. Several Umicore sites have implemented the ISO 50001 energy efficiency standard and the 2 largest sites in Belgium have been part of the energy efficiency covenant with the Flemish government since 2004.
In 2020, 26 sites accounted for 95% of the Group's energy consumption with a total of 38 energy efficiency projects implemented over the course of the year. By the end of 2020, Umicore had achieved a 17% reduction in energy consumption compared to the 2015 baseline, correcting for production intensity. This result is the combination of improvements in productivity and the continuous implementation of energy efficiency projects. Over the last 5 years, 189 efficiency projects were implemented, the bulk of which tackled heat, HVAC, lighting and process efficiencies.
2017
2018
2019
When looking at our carbon emissions, we register a 7% reduction compared to 2019. In 2020, we built a nitric acid plant at our Hoboken site in Belgium, where we also produce sulfuric acid. Nitrous oxide, a byproduct of sulfuric acid production also known as laughing gas, is a greenhouse gas that has about 300 times more impact on global warming than carbon dioxide (CO2). By capturing and transforming nitrous oxide released during production into nitric acid, we avoid the emission of nitrous oxide into the air. In doing so, we reduce our carbon footprint by almost 40,000 tonnes CO2e/year and turnwaste into a resource, a pillar of the Umicore business model. When compared to the outset of our Horizon 2020 strategy, our carbon emissions have increased 3%. In that time, Umicore has expanded in terms of operational footprint and ramped up production lines while maintaining a continuous process improvement approach. For more information, see note E3(p. 192).
In recent years, as part of our commitment to sustainable operations, we began examining the share of renewable energy in our purchased energy mix. 2019 marked the first year we systematically collected information from our sites on purchased electricity sourced from wind, solar and/or biomass energy and could report the result. In 2020, the share of renewables in Umicore's purchased energy mix was 15%. For more information, see note E4(p. 192).
While choosing the share of renewables in our purchased energy mix is a challenge in some of the regions where we are most active, Umicore is actively pursuing an increase in the share of renewables in our purchased energy mix.
METAL EMISSIONS
We monitor and take steps to reduce the impact of metals emissions on the environment - both to water and air. Each of the different metals that we emit has a specific level of potential toxicity for the environment and human health. For this reason, we focus on reducing the impact of our emissions.
The aim for Horizon 2020 was to reduce metal emissions impacts while considering growing volumes of production. While monitoring continues on all sites, reporting focuses on the 10 or fewer sites that contribute to 95% of the emissions expressed in impact.
In 2020, the impact of metal emissions to air fell by 67% compared to 2015, mainly thanks to further efforts to improve filtration and process efficiency. Compared to 2015, after correction for activity levels, the impact of metal emissions to water in 2020 fell by 59%. For more information, see note E2(p. 189).
STEWARDSHIP
Umicore is a global company with a global footprint. In terms of our products and services, we are uniquely positioned to address global megatrends - namely the need for cleaner air and resource stewardship, and environmental performance and safety are at the heart of our process designs.
Umicore continues to provide advanced emission control and battery material technologies while advocating for a ramp-up of clean energy and clean mobility technologies. We also emphasize the links between a Circular Economy and responsible sourcing, resource efficiency, waste management and high-quality recycling. We aspire to turn sustainability into a greater competitive edge through our unique business model and our commitment to ethical and responsible sourcing.
Managing impact in Hoboken
Umicore's Hoboken proposed green zone
Part of our commitment to sustainability is to take into account the environmental impact of our operations with growing and expanding capacity. Many factors are considered in choosing to build new sites or to expand existing sites.
Our new site in Nysa, Poland, for example, was selected for its vicinity to our European customers (providing reduced transport impact of our products) and a skilled technical workforce, as well as low-carbon electricity supply. The Nysa site will make use of wind, hydro and photovoltaic energy.
Active participation in the management and remediation of risks from operations is an integral part of the Umicore Way. Our proactive program for assessing and remediating, where necessary, soil and groundwater contamination progresses tirelessly.
For more, see note E7(p. 195).
The Umicore site in Hoboken is one of the world's largest precious metals refiners, offering recycling and refining services for precious metal bearing materials such as by-products from industry, electronic scrap and spent industrial and automotive catalysts. For several decades, the blood levels of children living close to the plant have been monitored twice per year by the authorities. In July 2020 the readings of the children living close to the Umicore recycling plant in Hoboken, Belgium, showed elevated levels of lead in their blood after multiple years of steady decreases, with historically low levels in 2019. Although the root cause investigation showed no major direct source of lead emissions in the plant, Umicore is aware that the risks associated with lead need to be well managed at all times. Various actions have been taken to reduce diffuse emissions and to ensure that the local community and industry can co-exist sustainably.
Read the full story on:UMICORE.COM/STORIES
EXEMPLARY MANAGEMENT OF HISTORICAL RADIOACTIVE WASTE STORED IN OLEN
UMICORE'S OLEN SITE LEGACY
Aerial view of Umicore Olen
From 1922 until the end of the 1970s, Umicore's predecessor companies manufactured radium and uranium products in Olen, Belgium. Until the 1960s radium was the only treatment for cancer. Uranium oxide was used in fuel rods for nuclear power stations. Since the 1970s there has no longer been any radium or uranium production at the Olen site. All buildings and installations where radioactive material was processed have been dismantled. The residues storage area has been cleaned up to eliminate any possible adverse effect on employees, the surrounding population or the environment.
Some low radioactive residues remain from these past activities and are stored at the Umicore site in Olen using the best available techniques and in concertation with the authorities. These residues cannot be compared in any way to the radioactive waste from nuclear power plants. Waste from nuclear power plants is category C waste (according to the classification of the International Atomic Energy Agency) which is highly radioactive and generates significantheat. Such waste has to be buried at a depth of several hundred meters. The residues present on the Umicore site (essentially category A residues and a small quantity of category B) are of very low radioactivity and are stored according to the guidelines set out by the relevant federal agencies.
In Olen, Umicore has state-of-the-art storage facilities of industrial residues where there is only a small fraction that is lightly contaminated. Additionally, there is a dedicated facility on site, built in the 80s, to contain radioactive storage for light radioactive materials. Strict inspections are carried out regularly by the competent authorities.
LONG-TERM SOLUTIONS
While a study in the 1990s, still applicable today, stated that 'at present there is no danger to public health and the environment', Umicore has sought a long-term solution to maximize safety in the storage of the historical radioactive waste. Umicore has depolluted the premises outside the plant in order to make permanent improvements to the existing conditions and to provide effective long-term protection to human beings and the environment. We continue to work with the authorities on monitoring and on longterm solutions.
Umicore has set in place a monitoring program with an external radiation expert, and periodic reporting to the authorities. This program includes visual inspection to ensure the integrity of the external grass cover, radon emanation measurements, stability measurements and monitoring of groundwater quality. The government has confirmed that there are no risks to the health of employees, local residents or the environment.
"There is no danger to public health."
-- FANC, Federal Agency for Nuclear Control
Since 2009 the Federal and Regional Agencies (FANC, NIRAS and OVAM) have been working with Umicore to find a long-term solution to the storage of historical radioactive waste. Early in 2020, the Federal Government, through FANC and NIRAS, issued a vision document in which a final waste storage destination is proposed to deal once and for all with the historical radioactive legacy at the Olen site. Umicore fully supports the proposed approach and is cooperating with the authorities on planning the next steps in this major step forward towards a long-term, sustainable and agreed solution to Olen's radioactive legacy. Working groups comprising representatives of OVAM, NIRAS, FANC and Umicore are being formed to shape this program.
OPEN AND CONSTRUCTIVE DIALOGUE
While no further action is needed at present, the ongoing proactive and constructive cooperation between FANC, the Municipality of Olen and Umicore has been publicly confirmed by the neighbors and by the local authorities .
"We have always had an open dialogue with Umicore about radioactivity." -- Seppe Bouquillon, Mayor of Olen, Belgium
The mayor of Olen believes the experts of the Federal Agency for Nuclear Control and Umicore when they say that there is no immediate danger for public health and the environment*. (Source: Belga)
* Burgemeester van Olen: 'Steeds open overleg gehad metUmicore over radioactiviteit' - België - Knack
Research, development & innovation
As a materials technology company, our future success depends on our ability to develop and market innovative products and services. We strive to meet the needs of a rapidly changing world and continuously search for new solutions for our customers. We dedicate our research and development (R&D) to solving some of the world's largest societal challenges in the areas of clean mobility and clean air, resource scarcity and sustainability.
We have prioritized our R&D programs to support our short term and long term ambitions, focusing on the development of closed-loop material solutions. We are consistently investing in research to meet the growing demand for clean mobility materials and for quality recycling of precious and other valuable metals. Besides our core strategic domains, we are exploring new developments in adjacent and new markets based on our expertise domains.
From production and process technology to deep knowledge of metallurgy and materials science, a significant part of our technology is delivered using Umicore R&D findings. Umicore also develops technology in collaboration with industrial or academic partners and, where appropriate, we protect our intellectual property with patents. 63 patents were filed in 2020.
Umicore continues to invest in R&D and to attract international scientific talent to develop the next generation of sustainable products and process technologies for our customers.
Umicore R&D employees cover 35 nationalities in 15 locations, and in 2020, 1 in 4 were women.
Over the past 5 years, the R&D investments increased by over 40%. In 2020 Umicore invested € 223 million on R&D, 6% more than in 2019, largely on rechargeable battery materials product and process technologies development, new business incubation and competence development. The R&D spend represented 7% of revenues and capitalized development costs accounted for € 32 million.
TECHNOLOGY IS AT THE CORE OF OUR SUCCESS
€ 223m
2020 R&D SPEND
15
R&D SITES
1,325
R&D EMPLOYEES
R&D EXPENDITURE
Millions of Euros
CLEAN MOBILITY INNOVATION
The clean mobility trend, toward zero well-to-wheel emission ambitions, points to a combination of electric and hybrid vehicles, fuel cell vehicles and carbon neutrally-fueled internal combustion engines.
Umicore has a unique position in clean mobility materials across all drive-train technologies. It is one of three global leaders in emission control catalysts for internal combustion engines, a leading supplier of materials for rechargeable batteries used in electric vehicles and catalysts for fuel cell applications.
Legislation increasingly requires gasoline vehicles to be equipped with particulate filters. Our work focuses on improved catalyst technologies for gasoline and diesel vehicles in a cost efficient way to meet these increasingly stringent regulations. For gasoline particulate filters (GPF), Umicore is optimizing the distribution of the catalytic material in the pores of the filter so that an optimal balance of backpressure, filtration efficiency and chemical reactivity is obtained.
400
200
0
156
175
196 211 223
2016
2017
2018
2019
2020
In response to COVID-19, recovery projects worldwide accelerated the adoption of sustainable technologies, such as electric vehicles. The key to improving the total cost of EV ownership, and the environmental footprint of their batteries, is their increase in energy density. As battery-powered vehicles become mainstream, different user segments emerge, each with different cost and performance needs, presenting opportunities for tailored materials solutions. Research programs on cathode and anode materials with novel compositions, or for batteries working at a higher voltage, address these upcoming needs. To ensure synchronization with market demand, this type of innovation is often performed in close collaboration with our external partners who test samples of our next-generation products.
Hydrogen is a promising future energy carrier which is converted into clean electricity by fuel cells.
Umicore's electrocatalysts play a crucial role in Proton Exchange Membrane fuel cells used in stationary and mobility applications on the global path to zero emissions. Our fuel cell catalyst portfolio covers all relevant technologies for both anode and cathode electrode applications. Working with platinum and platinum alloy on carbon catalysts as well as special protective additives, Umicore R&D improves the robustness of the fuel cell under critical operating conditions to achieve performance requirements in vehicle applications.
INNOVATION IN RECYCLING
Umicore is the world's leading recycler of complex waste streams containing precious and other valuable metals, including from batteries, electronics and catalysts. Umicore's closed-loop business model will be a powerful strategic differentiator for the foreseeable future. Umicore's recycling is not only the cornerstone in the sustainable development of several industries, but with the supply of metal based products and recycling under one roof, Umicore is also the partner of choice for the management of metals throughout the loop, providing reliable sourcing and financial optimization of both working capital and metal price exposure in the value chain.
Innovation projects for recycling follow industry trends closely. In 2020, our attention in battery recycling went beyond the recycling process, to the safety and ergonomics of operations and how these can be supported by automation and robotization. We started mapping what the future urban mine may look like and how this may inspire new flowsheets.
DIGITAL TRANSFORMATION
Digitalization and Industry 4.0 are powerful tools to create value in many domains. Three initiatives have been undertaken to scale these efficiently across the group: first, the definition of digitalization roles and the corresponding training programs; second, the choice of Umicore standard tools for certain business processes, such as financial planning, procurement or the storage and self-service analysis of operating data; third, the set-up of a central team that guides business units in the drafting and implementation of digitalization roadmaps. Such roadmaps aim at unlocking value through projects covering a spectrum of opportunities, from operational excellence, over the pro-active management of our EHS performance, to revolutionizing R&D.
R&D FIT FOR FUTURE GROWTH
A carbon neutral economy by 2050 will require further adoption of clean mobility solutions and renewable energy sources for electricity such as hydrogen and other alternative fuels with zero carbon footprint (synthetic fuels, e-fuels, biofuels, etc.). Clean cities with zero local emission and with zero-waste streams are the ultimate goal. The evolution towards zero-waste streams will put even more emphasis on circular economy to address resource scarcity in all smart sectors (mobility, IoT, Industry 5.0, etc.).
The push towards decarbonization of industry will form a Hydrogen economy with new opportunities for innovation in catalysis. Building on our expertise of fuel cell technologies in stationary and mobile applications, Umicore intensified the development efforts in the field of anode and cathode catalysts for green hydrogen production.
Value creation through innovation goes further than R&D. The New Business Incubation unit created in 2019 grew in 2020 to become the unit in which our long-term research projects and internal ventures, such as battery recycling, silicon composite anodes or chemical metal deposition solutions, are groomed to become mature businesses over a horizon of 5 to 10 years.
OPEN INNOVATION
We continuously strengthen our in-house competence expertise in metallurgy, chemistry and material science, while constantly expanding our external collaboration network. Despite travel restrictions in 2020, Umicore remained committed to open innovation; a dedicated team facilitates the collaboration with dozens of research institutes, start-ups and universities worldwide. Foresight is crucial now, more than ever, and we composed a strategic insights and analysis team to develop a coherent view on future scenarios.
Often multiple innovation disciplines contribute to the result. For instance, the Umicore open innovation and digitalization teams helped in setting up the collaboration with an external partner to bring robotization expertise to battery recycling. In another example, Umicore, Imec and other partners have started to work together in the development of a new sensor for harsh industrial environments.
A worldwide, ever more diverse Umicore community of over 1300 scientists is collaborating with customers, academic and technology institutes to sharpen our skills, improve the quality of our products, develop our processes, speed up development, lower costs, improve safety and reduce our environmental impact.
World-class expertise is used and developed into effective building blocks of our innovation engine. The most important building blocks include:
● Metallurgy
● Materials science
● Analytics, trace analysis and material characterization
● Chemistry and PGM chemistry
● Surface science
● Computational science including data science
● Application testing and testing methods
● Process technology and process scaling
These areas are all undergoing rapid developments, creating opportunities to improve our technology. We follow, test anddevelop these science and technology trends and integrate them in our development work.
Deeper understanding of thermodynamics, kinetics and complex element interactions are driving the speed of our development and help avoid excessive experimental or pilot validations. We work with worldwide consortia to develop and finetune methods that are applicable to Umicore's different metallurgical flows.
Advances in modeling fuel insights on improving materials and on understanding and predicting performance. Surface engineering has become important in optimizing product performance, complementing our expertise in materials synthesis and colloid chemistry. Increased availability, development and deployment of accurate analytical methods provide operational efficiency and accelerate both our innovation process and learning speed.
Computational science and data science are essential at all phases of the innovation process and play a growing role in optimizing our workflows. Natural language processing in market and technology intelligence, image and pattern recognition, machine learning, amongst others, make computational science our fastest growing area of expertise.
Technology innovation and differentiation remain key for our future growth. Umicore's forward-looking approach is fueled by our expanding expertise. The combination of detailed modeling and growing improvements in integrated process data, strengthened by artificial intelligence, accelerate process understanding and improvements. Our ambition is to grow our portfolio of collaborative programs focusing on measuring and understanding materials functionality, leading to better product design.
"We use the power of technology, innovation and data to help people have better lives and to reduce our impact on the planet" -- An Steegen, CTO
PIONEERING THE SOURCING & RECYCLING OF SUSTAINABLE GERMANIUM
Production scraps from fiberoptic cables containing germanium
We continuously strive to transform sustainability into a competitive advantage.
GERMANIUM: VALUABLE & VERSATILE - BUT NOT SIMPLE TO FIND
When it comes to high-tech innovation, the unique characteristics of germanium are valuable in a whole host of applications, and the semiconductor is recognised as a critical material by the governing bodies of the European Union and the United States. To give just a few examples, germanium is used in fibre-optic cables required for 5G connectivity, in solar cells powering satellites and Mars rovers and in cutting-edge semiconductors.
Because its elemental state isn't found in nature, most germanium is extracted through coal combustion or sourced as a by-product fromthe zinc production process. However - and crucial for Umicore as a supplier of sustainable materials - germanium can also be recycled.
LEADING THE ENTIRE INDUSTRY
BY DEFINING SUSTAINABLE BEST PRACTICES
Research has shown that germanium sourced through zinc production has a 85%-smaller carbon footprint than germanium sourced from coal, and recycled germanium boasts a 95%-smaller footprint. As a result, sustainable germanium is an important focal point for our circularity efforts.
We've made significant progress on our quest toward 100%sustainable germanium, enabling us to set highly demanding industry benchmarks through our own operations. In fact, between 2015 and 2020, Umicore has reduced its supply of coal-sourced germanium by 50%. Today, 50% of the germanium used by Umicore is recycled and more than two-thirds of the remainder is recovered from industrial by-products. Thanks to these efforts, we are considered amongst the most sustainable germanium manufacturers worldwide.
Among the key milestones we've achieved through partnerships, Umicore:
● signed multiple long-term agreements with a major company for sustainable germanium;
● established multiple licensing and recycling agreements with international partners to extract and concentrate germanium from waste streams;
● collaborated with a partner to develop an innovative, costeffective process for germanium extraction from scrap and production waste;
● guided a photovoltaic technology business in methods to optimise the collection of germanium from their new manufacturing processes.
SHAPING THE FUTURE
OF CIRCULARITY IN HIGH TECH - & BEYOND
In addition to identifying and developing new ways to source germanium sustainably, these achievements have also led to deep, lasting and impactful relationships with our customers and partners. The positive outcomes are many and mutual, including financial benefits for every party in the supply chain, a stronger global focus on germanium as a circular resource, more environmentally friendly industrial processes, and much more.
PAVING THE WAY FOR A CIRCULAR ECONOMY
At Umicore, we see it as our responsibility as a global industrial player to commit to ensuring a healthier planet for all. We're proud of what we have achieved in collaboration with our partners, and look forward to further closing the germanium loop through innovative, multidisciplinary projects.
For Umicore products and services, visit:UMICORE.COM/INDUSTRIES
Umicore supports "That's brilliant" to bring young people closer to STEM
The next generation of innovators will play an important role for a technology oriented company like Umicore. Stimulating scientific interest and challenging young people to think about innovation are important links in building a sustainable future. Science, technology, engineering and mathematics (STEM) education gives students the tools to building that future.
UMICORE.COM/STORIES
Further improve people engagement with specific focus on talent attraction & retention, diversity management and employability.
Reduce employee exposure to specific metals.
Great place to work
THE LONG-TERM SUCCESS OF UMICORE DEPENDS ON OUR BEING A SAFE, HEALTHY AND ENGAGING PLACE TO WORK
10,859
Group employees
21.7%
Women in our workforce
96%
Retention rate
Our success is measured by our ability to offer a safe workplace and embed a safety culture in our workforce, to monitor, manage and protect our employees from exposure risks, to ensure Umicore's status as an employer of choice in all the regions where we operate and to manage talent as a driver for reaching our desired business growth.
We are proud of our position as a pioneer and world leader in materials technology and sustainability, but in a disruptive industry, we need to continue innovating, challenging the status quo and growing, both as a company and as an employer.
We strive to create an environment in which all our employees can succeed, and which encourages innovation, thrives on collaboration, rewards contribution and provides every employee with the opportunity to develop.
The varying ambitions and interests of our colleagues and new recruits enrich Umicore with new outlooks and new ways of working together which build our competitive advantage.
Our values and mutual respect remain consistent as we all work towards the same vision: to create materials for a better life.
Umicore has a truly global profile, with operations on every major continent. 10,859 employees currently work at Umicore, across 47 production sites, 15 research & development centers and in supporting offices including our global headquarters in Brussels.
Our Horizon 2020 strategy is designed to consider the future trends that impact Umicore, the labor market and societal expectations. Our objectives are centered on health and safety, talent management, diversity and employability - aspects that will have the greatest impact on reaching Horizon 2020 goals.
Despite competitive markets we are making strides in talent management, diversity and employee engagement. We continue to pursue our long-term goals of eliminating lost-time accidents and occupational-related ill-health and to seek new ways of engaging colleagues by promoting safety and wellbeing in the workplace.
HEALTH & SAFETY
49
Lost Time Accidents
83%
Reporting sites without LTA
1.6%
Exposure Ratio, all biomarkers aggregated
The safety of our people is a key priority.
ZERO ACCIDENTS
In 2020, while 83% of the reporting sites operated without a lost time accident, our overall safety results were again disappointing. In December 2020, a fatal accident occurred at Umicore's Cobalt & Specialty Materials site in Subic, the Philippines. This tragic event shows once more that the journey to make Umicore a zero-accident workplace is far from completion, even in sites with an outstanding safety track record such as Subic which had operated more than 13 years without LTA.
Umicore recorded 49 lost time accidents in 2020 compared to 90 in 2019. The frequency rate was 2.52 (4.60 in 2019) and the severity rate was 0.47 (0.20 in 2019).
In the past we reported that there is a clear need to change behavior and mindset to install a true safety culture. While absence from the workplace due to the COVID crisis did not have an impact on lost time accidents, we have noted that health precautions tied to the crisis did improve the safety culture at Umicore. The sense of urgency in the face of the crisis, the purposeful care of one another combined with a workplace communications style that focused on safety coaching resulted in improved safety performance. Umicore's commitment to safety is unwavering, and these results have confirmed that tackling cultural change in terms of safety is the right path to creating a safe and great place to work.
In 2020, process safety activities focused on executing process risk assessment studies. At year end,over 70% of the production processes had received specific process hazard and risk assessments compliant with Umicore standards. A detailed timeline for completion of the remaining studies over the coming years gives priority to processes with high risk-profiles.
Umicore continues our internal HAZOP leader training program to increase and secure process safety knowledge.
OCCUPATIONAL EXPOSURE
Umicore makes continuous efforts to eliminate occupational-related health issues and to promote wellbeing in the workplace. The main occupational health risks are related to exposure to hazardous substances and physical hazards (mainly noise).
Umicore is leading the industry by setting voluntary, science-based targets for potentially hazardous exposure that are more stringent than legal requirements, where they exist.
All employees with a potential workplace exposure to any of the target metals (arsenic, cadmium, cobalt, indium, nickel, lead and platinum salts) or other metals are monitored by an occupational health program. The Horizon 2020 objective for occupational exposure is to reduce to zero the number of individual readings that indicate an exposure for an employee that is higher than the internal target levels. While these excess readings do not necessarily indicate a risk for the person concerned, they are important indicators of recent or lifetime exposure and are used as the basis for further improvements on specific sites.
In 2020, a total of 7,406 biological samples were taken from employees with occupational exposure to at least one of the metals mentioned above (platinum salts excluded). 122 readings showed a result in excess of the internal target value, bringing the total excess rate to 1.6%, down from 1.8% in 2019 and 3.2% at the beginning of our Horizon 2020 strategic cycle. All occupationally exposed employees are regularly monitored by an occupational health physician.
TALENT MANAGEMENT
WORKFORCE BY REGION
N°
10,000
6980
5,000
4049
704 964
622
0
Europe
North America
South America
Asia-Pacific
Africa
VOLUNTARY LEAVERS RATIO BY REGION %
10
9.25
Europe
5.29
North America
5
South America
Asia-Pacific
41.49 1.77
43.10 1.65
Africa
AVERAGE NUMBER OF TRAINING HOURS PER EMPLOYEE
0
HOURS / EMPLOYEE
Talent management involves finding and retaining the right people at all levels of the organization and in a wide variety of functions, including equipment operators, laboratory analysts, office staff and production engineers. For Umicore the main drivers are linked to the Horizon 2020 growth ambitions in the sectors and regions where we are active.
The number of employees in the fully consolidated companies decreased from 11,152 at the end of 2019 to 10,859 at the end of 2020. This decrease mainly reflects the plant closures in Tulsa, US (Automotive Catalysts) and Wickliffe, US (Cobalt & Specialty Materials).
Umicore can attract, develop and retain high caliber leaders by offering attractive and challenging leadership roles.
36.33 0.84
In 2020, following up on the outcomes of the previous year's talent review, Umicore implemented mentoring programs for emerging talent, including for young top talent, with targeted development programs. These programs revolve around developing broad profiles and providing multifunctional development opportunities.
50
45.33
48.73
2016
2017
25
2018
2019
2020
In 2020, our overall retention rate increased to 96%, up from 94% in 2019. Significant regional differences in retention rates continue, with Asia-Pacific reporting the highest voluntary leaver rate at 9.25%, an improvement from 11.87% in 2019.
Umicore provides managers with a training curriculum aligned across all regions and promotes career development using an internal online vacancies tool, promoting greater internal mobility. Training at Umicore encompasses traditional classroomtype modules, e-learning and in-service instruction.
In 2020, the average training hours per employee reached 36 hours, lower than 49 hours in 2019, primarily due to COVID-19. Due to the pandemic, training was organized differently: in smaller groups and respecting social distancing where in-person presence was possible, and through online sessions. Some training was postponed or cancelled. In 2020, managers training hours (27 hours) were lower than for other employees (39 hours).
0
DIVERSITY
Employees under 18 are trainees, apprentices or interns.
Umicore seeks to benefit as much as possible from diversity, for example in gender, culture and ethnicity. Umicore believes that more diverse management teams improve the quality of decisionmaking.
Umicore developed a group policy on diversity to support an inclusive work culture that offers equal opportunities, leading to a high level of employee engagement for all employees, irrespective of their diverse backgrounds. Diversity includes gender, religion, race, national or ethnic origin, cultural background, social group, disability, sexual orientation, marital status, age or political opinion.
We are especially seeking broader cultural representation in our management teams. Considering that 60% of our revenues are generated outside Europe and our growing global footprint, we decided to act to ensure that non-Europeans are better represented in our senior management. Currently, 20% of the top management positions in Umicore are filled by non-Europeans, up from 18.5% from 2019 and 16.7% in 2016. Our efforts continue, as a better balance in this regard will enable us to make business decisions that are better aligned with the markets we serve.
Umicore employees covered 74 nationalities in 2020, as in 2019.
Women are underrepresented at senior management level at Umicore. While this can be partly ascribed to the fact that chemical companies tend to attract fewer women, the career prospects for talented women can still be improved within Umicore. In 2020, only 21.6% of Umicore employees were female, a slight increase from 2019. This is attributed to the nature of industrial operations, where candidates are usually male. Despite this, our commitment to an inclusive and diverse workplace remains.
Our overall focus continues to be on recruiting and developing female managers. In 2020, 30% of managers recruited were female. Women in management roles have slowly increased from 18.6% in 2010 to 23% in 2020. The number of overall managers grew again in 2020, leading to a slightly decreased share of women in these roles from 23.1% in 2019 to 23% in 2020, despite our recruitment efforts.
Women in senior management decreased slightly to 10.7% in 2020, down from 10.9% in 2019, and below our overall ambition of 15% by 2020. We remain committed to increasing the female representation in senior management at the earliest possible date.
EMPLOYEE ENGAGEMENT
In today's dynamic environment, digital literacy and a mindset focused on collaboration, transparency and self-organized learning are crucial. If applied correctly, digital tools can improve efficiency, productivity and innovation. Yet providing tools and training is not enough. The most difficult and most important step is to change familiar patterns and ways of thinking. Employees need to break out of their comfort zone, share successes and failures transparently, try out new approaches, network across regions and departments, take the initiative and be empowered to do all this through an appropriate environment.
The vision of our digital workplace is to enable everyone within Umicore to collaborate from anywhere in the world.
KEEPING OUR COLLEAGUES CONNECTED THANKS TO THE DIGITAL WORKPLACE
Launched globally in December 2019, Umicore's Digital Workplace project aimed to improve the efficiency, productivity and innovation of our employees by optimally using digital tools. The vision of our digital workplace is to enable everyone within Umicore to collaborate from anywhere in the world, sharing experiences and knowledge through a worldwide network as part of our daily routine.
Little did we know at the end of 2019 that the timing of the launch of Umicore's digital workplace would come at exactly the right time, given the spread of COVID-19 a few months later. By the time the first wave of the pandemic hit, Umicore employees had been using the digital tools on a daily basis for several weeks already. Digital meetings and calls had become part of our routine and collaborating on documents for projects was becoming increasingly common.
DIGITAL HEROES TO THE RESCUE
When the COVID-19 pandemic made it impossible to hold physical meetings and so many of us had to work from home, Umicore employees were familiar with the digital tools. As such, they were able to keep our activities running and stay connected with colleagues, almost as in normal times. Those in need of support could rely on an ambassador community of 'digital heroes' to personally help them solve technical issues. We also hosted a series of specific learning sessions on digital workplace topics such as remote working, efficient online meetings, file sharing and virtual leadership.
DIGITAL ALTERNATIVES
As the uncertainties around COVID-19 and the corresponding safety measures persisted throughout 2020, many Umicore employees began looking for innovative solutions to their daily challenges which they found in the digital workplace. For example, audits were conducted remotely; physical town hall meetings (where information is typically shared to a broad live audience) were successfully replaced by virtual town hall meetings; a digital onboarding program was implemented to virtually welcome new employees joining during the pandemic; and to maintain the connection between colleagues, virtual social events were hosted, such as birthday celebrations. In our operations, smart glasses made it possible to install production systems in some of our plants.
Amidst the many challenges of 2020, our digital workplace enabled us to seize the opportunity to stay connected and engaged with our global community of colleagues.
WORKING AT UMICORE
Saskia Bodvin, Thomas Morias and Kris Tolpe in the pyrometallurgical lab, Olen
We aim to lead the way, both for our customers and for our employees.
We strive to create a collaborative environment and a culture of shared ideas, developing expertise and advancing careers, working together on technologies that will benefit future generations and setting new standards in one of the world's most dynamic and disruptive industries.
In our state-of-the-art production processes technical operators, production supervisors and engineers use their know-how and ideas to benefit future generations. Our support teams play a critical role in supporting the business growth by making sure our decisions are commercially viable, enhancing our reputation, building new customer relationships or finding the right people who can build on what we have already achieved.
Leading for Excellence (L4E) is offered to a selected group of managers in the Asia Pacific region to drive performance in the region by fostering collaboration and engagement across sites and sharpening leadership skills.
Entrepreneurs for Tomorrow (E4T) is offered to a selected group of middle to senior managers to develop corporate culture with highly competent managers and promote cross-functional integration within Umicore.
The Strategic Leadership Program is offered to a selected group of senior managers, organized in collaboration with INSEAD. Participants move from exploration of the economic 'macro-environment', through doing business in Asia, to the challenges of creating an agile strategy and an aligned organization and developing their personal leadership style.
Managers at Umicore work on projects that are as exciting as they are challenging. R&D experts develop the technologies that address issues from clean mobility to resource scarcity.
We seek to ensure career-long learning and development opportunities for our employees and to promote the transferability of skills and knowledge across Umicore.
The Junior Management Program (JUMP) is offered to a selected group of junior managers using a "twin-coaching" format, bringing together two participants from different regions and business units, but within the same function family, to develop international thinking, shadow best practices and provide exposure to other business units.
People work longer before retiring, particularly in Europe. Umicore wants to ensure that people who are working well into their sixties are provided with suitable, motivating and rewarding work and can transfer their skills and knowledge to younger colleagues. This is accomplished by training, maintaining their mental flexibility to carry out new tasks, managing work-life issues, and providing support in the transition from employee to retiree.
UMICORE.COM/CAREERS
Leadership
Supervisory Board
From left to right, 1st row: Mark Garrett, Laurent Raets, Liat Ben-Zur, Mario Armero. Second row: Ines Kolmsee, Thomas Leysen, Marc Grynberg (invited by the Board), Géraldine Nolens. 3rd row: Marc Van Sande, Françoise Chombar, Eric Meurice, Koenraad Debackere
THOMAS LEYSEN
CHAIRMAN
MARIO ARMERO
MEMBER
LIAT BEN-ZUR
INDEPENDENT MEMBER
Belgian, 60
Spanish, 62
American, 44
DATE APPOINTED TO BOARD
10 May 2000 (date appointment Chair: 19 November 2008)
DATE APPOINTED TO BOARD 30 April 2020
DATE APPOINTED TO BOARD 25 April 2017
EDUCATION
Law - KU Leuven, Belgium
EXPERIENCE
Thomas Leysen became Chairman of Umicore in November 2008 after serving as Chief Executive Officer of Umicore since 2000. During this mandate, he transformed the former Union Minière from a non-ferrous company into an international materials technology group called Umicore. He joined the group in 1993 as member of the Executive Committee, and successively managed several industrial divisions.
EXTERNAL APPOINTMENTS
Chair, Mediahuis, a European newspaper publishing group - Chair, King Baudouin Foundation, Belgium - Member of the Supervisory Board of Royal DSM
Expiration of mandate
Annual General Meeting of 2021
Chairman since
19 November 2008
Chairman of the Nomination & Remuneration Committee since 19 November 2008
EDUCATION
Law - University Complutense of Madrid, Spain
EXPERIENCE
Mr Armero started his professional career at the Armero Law firm and later joined AT&T Spain. From 1992 to 1999 he served as Secretary General at General Electric Plastics Spain, a position which he held until 2001, when he was appointed Chairman and CEO of General Electric Spain and Portugal, being the ultimate responsible for all the Group's Divisions in Iberia. In March 2008, he joined Corporación Llorente, a diversified family owned industrial group, as CEO. Following that he joined Ezentis as Executive Chairman. From 2012 until 2020, Mr Armero has been the Executive Vice President of ANFAC, the Spanish Car manufacturers association.
EXTERNAL APPOINTMENTS
Advisor of Global Infrastructure Partners - Chairman of ENSO
- Independent Board member of Bankinter Consumer Finance
- Member of the CEDE Foundation (Spanish Confederation of Executives)- Board member of non lucrative association Junior Achievement
Member of the nomination & remuneration committee since 9 December 2020
Expiration of mandate
Annual General Meeting of 2023
EDUCATION
Electrical engineering - UC Davis, USA Business Administration - UCLA Anderson, USA
EXPERIENCE
Liat Ben-Zur has been Corporate Vice President for Modern Life and Devices Product Marketing Management at Microsoft since September 2018.
Prior to joining Microsoft, she was SVP and Digital Technology Leader at Royal Philips where she was responsible for driving the connectivity and digital strategy, since 2014. She served previously in several leadership positions at Qualcomm, a US wireless telecommunications company, and was cofounder and Chairwoman of the AllSeen Alliance, a consortium for an open source, common language for the Internet of Things.
EXTERNAL APPOINTMENTS
No external appointments
Expiration of mandate
Annual General Meeting of 2023
FRANÇOISE CHOMBAR
INDEPENDENT MEMBER
KOENRAAD DEBACKERE
INDEPENDENT MEMBER
MARK GARRETT
INDEPENDENT MEMBER
Belgian, 58
Belgian, 59
Australian/Swiss, 58
DATE APPOINTED TO BOARD 26 April 2016
DATE APPOINTED TO BOARD 26 April 2018
DATE APPOINTED TO BOARD 28 April 2015
EDUCATION
Master Applied Language Studies Dutch, English, Spanish - Ghent University, Belgium
EXPERIENCE
Françoise Chombar is co-Founder, Chief Executive Officer and Managing Director of Melexis, a producer of smart sensor and driver semiconductors for automotive, industrial and durable consumer and health applications. She served previously as planning manager at Elmos GmbH and operations manager and director at several companies within the Elex group. Françoise was a mentor in the Belgian women's network Sofia for 17 years and is committed to STEM and gender balance advocacy, for which she received a Flemish Community Honour in 2019. In 2012, she was granted an Honorary Ambassadorship for Applied Language by the University of Ghent. In 2018, she received the title of Science Fellow by the VUB, University of Brussels.
EXTERNAL APPOINTMENTS
CEO and Director, Melexis NV, Belgium - Chairwoman, Flemish STEM Platform, an independent advisory group to the government of Flanders - Independent Director, Soitec S.A., France
EDUCATION
Engineering - Ghent University, Belgium Management - Ghent University, Belgium Management - MIT Sloan School of Management, USA
EXPERIENCE
Prof. Dr. Ir. Koenraad Debackere has been with KU Leuven since 1995, where he teaches Technology & Innovation Management and Policy. He has won numerous awards for his research, and in 2010 was awarded a Francqui Lecture Chair in economics and business. From 2005 until September 2020 he was the general manager of KU Leuven and member of the Board of KU Leuven.
EXTERNAL APPOINTMENTS
Chairman of the Board, KBC Group NV, Belgium - Member Board of Governors, RWTH Aachen University, Germany
Expiration of mandate
Annual General Meeting of 2021
Member of the nomination & remuneration committee since 9 December 2020
EDUCATION
Economics - University of Melbourne, Australia Applied Information Systems - Royal Melbourne Institute of Technology, Australia
EXPERIENCE
Mark Garrett has been Chief Executive Officer at Marquard & Bahls AG, a Hamburg-based leading independent energy supply, trading and logistics company, since August 2018.
Before joining Marquard & Bahls AG, he served as Chief Executive Officer at Borealis AG, Austria, a position he had held since 2007. Prior to that, he built an extensive career in the chemical industry working with companies such as Ciba-Geigy and DuPont.
EXTERNAL APPOINTMENTS
CEO, Chairman of the Executive Board, Marquard & Bahls AG, Germany - Non-Executive Chairman, Board of Directors, Axalta Coating Systems Ltd., USA- Non-executive Chairman, Board of Directors, OMV AG
Expiration of mandate
Annual General Meeting of 2021
Expiration of mandate
Annual General Meeting of 2022
Member of the Nomination & Remuneration Committee since 26 April 2018
Member of the Audit Committee since 26 April 2018
Member of the Nomination & Remuneration Committee since 29 July 2017
INES KOLMSEE
INDEPENDENT MEMBER
ERIC MEURICE
INDEPENDENT MEMBER
LAURENT RAETS
MEMBER
German, 50
French, 64
Belgian, 41
DATE APPOINTED TO BOARD 26 April 2011
DATE APPOINTED TO BOARD 28 April 2015
DATE APPOINTED TO BOARD 25 April 2019
EDUCATION
Process and Energy Engineering - Technische Universität Berlin, Germany Industrial Engineering - École nationale supérieure des Mines de Saint-Étienne, France Business Administration - INSEAD Business School, France
EXPERIENCE
Ines Kolmsee was Chief Executive Officer of Services & Solutions at Aperam from October 2017 through September 2020. She previously served as CEO of SKW Stahl-Metallurgie Group, a specialty chemicals company with operations worldwide, COO and CTO at German utility EWE AG and CFO at Arques Industries AG.
EXTERNAL APPOINTMENTS
No external appointments
Expiration of mandate
Annual General Meeting of 2023
Member of the Audit Committee since 26 April 2011
Chairman of the Audit Committee since 28 April 2015
EDUCATION
Economics - Sorbonne, France Mechanical Engineering - École Centrale Paris, France Business Administration - Stanford Graduate School of Business, USA
EXPERIENCE
Eric Meurice was formerly President and Chief Executive Officer of Netherlands-based ASML Holding, a major provider of advanced technology systems for the semiconductor industry. He was previously EVP in charge of Thomson Multimedia TV Division and held senior positions in several technology groups such as Intel, ITT, and Dell Computer.
EXTERNAL APPOINTMENTS
Non-Executive Director, Global Blue Group S.A., Switzerland- NonExecutive Director, IPG Photonics Corp, USA - Non-Executive Chairman, Board of Directors, Soitec S.A., France
Expiration of mandate
Annual General Meeting of 2021
EDUCATION
Commercial Engineering - Solvay Brussels School of Economics & Management, Belgium
EXPERIENCE
Laurent Raets joined Groupe Bruxelles Lambert (GBL) in 2006 and became Deputy Head of Investments in 2016. He began his career in 2002 as an M&A consultant at Deloitte Corporate Finance, where he was involved in buy and sell mandates, due diligence and valuation assignments.
EXTERNAL APPOINTMENTS
Censor of the Board of Directors of Imerys S.A., France
Expiration of mandate
Annual General Meeting of 2022
Member of the Audit Committee since 25 April 2019
MARC VAN SANDE
SENIOR ADVISOR
GÉRALDINE NOLENS
BOARD SECRETARY
KAREL VINCK
HONORARY CHAIRMAN
Formerly EVP Energy & Surface Technologies
Belgian, 49
Belgian
Belgian, 69
(see Management Board)
ABOUT THE SUPERVISORY BOARD
EDUCATION
Physics - University of Antwerp, Belgium Business Administration - Antwerp Management School, Belgium
EXPERIENCE
Marc Van Sande was appointed Executive Vice-President Energy & Surface Technologies in June 2010, after serving as CTO from 2005 to 2010 and as EVP Advanced Materials from 1999 to 2005. Marc joined Umicore in 1980, and held several positions in research, marketing and production. He was also responsible for the Energy & Surface Technologies business group and China.
The Supervisory board's cumulative industry experience is broad, covering automotive, electronics, chemicals, metals, energy and finance sectors in addition to the fields of academia and science.It also includes people experienced in the public and private sector and members with experience in the different regions in which Umicore is active.
Collectively, the Supervisory board possesses strong experience of managing industrial operations and counts 8 active or former CEOs in its ranks.
The board also has collective experience in disciplines that are specifically relevant to Umicore's non-financial Horizon 2020 goals such as health and safety, talent attraction and retention and supply chain sustainability.
READ MORE ABOUT CORPORATE GOVERNANCE(p. 87)
Management Board
From left to right, 1st row: Marc Grynberg, An Steegen, Ralph Kiessling. 2nd row: Denis Goffaux, Filip Platteeuw, Géraldine Nolens, Stephan Csoma
MARC GRYNBERG
CHIEF EXECUTIVE OFFICER
FILIP PLATTEEUW
CHIEF FINANCIAL OFFICER
AN STEEGEN
CHIEF TECHNOLOGY OFFICER
Belgian, 55
Belgian, 48
Belgian, 50
EDUCATION
Commercial Engineering - Solvay Brussels School of Economics & Management, Belgium
EDUCATION
Applied Economics - Ghent University, Belgium Financial Management - Vlerick Management School, Belgium
EDUCATION
PhD in Material Science and Electrical Engineering - KU Leuven, Belgium
EXPERIENCE
Marc Grynberg was appointed Chief Executive Officer in November 2008 after heading the Automotive Catalysts business unit from 2006 to 2008, and serving as CFO of Umicore from 2000 until 2006. He joined Umicore in 1996 as Group Controller. Prior to joining Umicore, Marc worked for DuPont de Nemours in Brussels and Geneva.
EXPERIENCE
Filip Platteeuw was appointed Chief Financial Officer in November 2012. He joined Umicore in 2004 and served as VP Corporate Development from 2010 to 2012 and was instrumental in streamlining the business portfolio, including the divestment of the copper and zinc smelting operations. Prior to Umicore, Filip worked for KBC Bank, taking up positions in corporate banking, equity market research and investment banking.
EXPERIENCE
An Steegen joined Umicore and was appointed Chief Technology Officer in October 2018, after serving as Executive Vice President Semiconductor Technology and System R&D at imec, a leading research center with a focus on nanoelectronics and digital technology innovation.
Prior to joining imec in 2010, An worked at IBM's Semiconductor Research & Development center in Fishkill, NY and in the last several years of service at IBM, was in charge of the bulk CMOS technology development.
GÉRALDINE NOLENS
EXECUTIVE VICE-PRESIDENT, CHIEF COUNSEL
DENIS GOFFAUX
EXECUTIVE VICE-PRESIDENT ENERGY & SURFACE TECHNOLOGIES
STEPHAN CSOMA
EXECUTIVE VICE-PRESIDENT RECYCLING
Belgian, 49
Belgian, 53
Belgian, 56
EDUCATION
Master of Laws - University of Chicago Law School, USA European Economic Law - Julius Maximilians Universität Würzburg, Germany Law - KU Leuven, Belgium
EXPERIENCE
Géraldine Nolens was appointed Chief Counsel for the Group in 2009 and joined the Management Board in 2015.
She started her career at the international law firm Cleary Gottlieb Steen & Hamilton before joining GDF Suez (now Engie) in 2001, where she was Electrabel's Chief Legal Officer for Southern Europe, France and new European markets. Géraldine's career includes periods working and living in the US, Germany, Italy and Belgium.
EDUCATION
Mining Engineering - Université de Liège, Belgium
EXPERIENCE
Denis was appointed Executive Vice-President Energy & Surface Technologies in 2018. He will take up the position of Executive Vice-President Recycling as of 1 April 2021. Previously he served as Chief Technology Officer from 2010 to September 2018 and EVP for Precious Metals Refining from 2015 to 2018.
Prior to that, he occupied successive business line and country management functions in China and Japan. Denis began his career at Umicore with Research & Development in Olen, before moving to what was then our Cobalt & Energy Products Business Unit.
EDUCATION
Economics - UC Louvain, Belgium Chinese/Mandarin - Fudan University Shanghai, China
EXPERIENCE
Stephan Csoma was appointed Executive Vice-President Recycling in 2015, serving through March 31 2021. He served as EVP of the former Performance Materials from 2012 to 2015, SVP Government Affairs from 2009 to 2012, and SVP South America from 2005 to 2009.
Stephan joined Umicore in 1992 and set up Umicore's first industrial operations in China in the mid-1990s and went on to lead the Zinc Chemicals business unit.
RALPH KIESSLING
EXECUTIVE VICE-PRESIDENT CATALYSIS
BART SAP
EXECUTIVE VICE PRESIDENT CATALYSIS (as of 1 March 2021)
German, 55
Belgian, 43
EDUCATION
PhD Chemical Engineering - University of Erlangen, Germany
EDUCATION
Commercial Science - Vlerick Management School, Belgium
READ MORE ABOUT OUR MANAGEMENT APPROACH(p. 72)
EXPERIENCE
Ralph Kiessling was appointed Executive Vice-President Energy & Surface Technology as of 1 March 2021. Before this he was EVP Catalysis since 1 February 2019, after serving as SVP Operations for Automotive Catalysts since 2015.
He previously occupied successive management functions in process technology, production and business controlling, including 5 years in China. In 2012 he moved to India where he built Umicore's automotive catalyst plant. Prior to joining Umicore, Ralph held management positions in the Degussa group from 1995.
EXPERIENCE
Bart Sap was appointed Executive Vice-President Catalysis as of 1 March 2021. Bart joined Umicore in 2004 as a controller for Cobalt & Specialty Materials and, after successive assignments in Korea and Belgium covering finance, supply of raw materials, business development and refining operations, he became Senior Vice-President for Cobalt & Specialty Materials and Supply at the beginning of 2020.
WILFRIED MÜLLER SVP Product Management
JÖRG VON RODEN SVP AC Global Sales & MarketingSTEPHANIE DAM VP AC OperationsJOAKIM REIMER THOGERSEN VP Fuel Cells & Stationary Catalysis
GEERT OLBRECHTS VP AC Research & TechnologyENRICO CISCO VP Control & IT
VP AC China
LAWRENCE LI
JENSEN VERHELLE VP Precious Metals Chemistry
Management approach
The Umicore Way is the cornerstone of everything we do at Umicore.
We believe that materials have been a key element in furthering the progress of mankind, that they are at the core of today's life and will continue to be enablers for future wealth creation.
We believe that metal-related materials have a vital role to play, as they can be efficiently and infinitely recycled, which makes them the basis for sustainable products and services. We want Umicore to be a leader in providing and creating material-based solutions to contribute to fundamental improvements in the quality of life.
The overarching principles guiding our "Materials for a better life" mission are:
VALUES We hold the values of openness, respect, innovation, teamwork and commitment to be crucial to our success.
ENVIRONMENT AND SOCIETY We recognise that our commitment to financial success must also take into account the broader economic, environmental and social impact of our operations.
EMPLOYEES We strive to be a preferred employer of both current and potential employees.
BUSINESS INTEGRITY Wherever we operate, our reputation is a most valuable asset, and it is determined by how we act. We avoid any action that would jeopardise our reputation.
POLICIES
The Umicore Way is supplemented by detailed company codes including:
● Code of Conduct, a comprehensive framework for ethical business practice;
● Corporate Governance Charter, which sets out our management philosophy and governance principles;
● Sustainable Procurement Charter, which outlines our commitment to align our supply chain to our own values and practices; and
● Many internal policies developed in support of our vision and values such as Safety, Human Rights and Working Conditions, Training & Development and Donations & Sponsorship.
GOALS AND PERFORMANCE 2016-2020
The Umicore Way outlines our values, the way in which we wish to achieve our strategic goals and our overall commitment to the principles of sustainable development. Our Horizon 2020 economic growth ambitions are tied to the megatrends of resource scarcity, clean air and vehicle electrification. The social and environmental objectives are clustered in three themes: Great Place to Work, Eco-efficiency and Value Chain and society. These objectives reflect our operational excellence and the aspects of our products and services that we can further improve to turn sustainability into a greater competitive edge.
The supporting components of our Horizon 2020 strategy described in this chapter, including policies, responsibilities and evaluation, ensure a close monitoring of our economic, environmental and social performance.
RESPONSIBILITIES
Final accountability for all aspects of Umicore's business lies with the executive committee.
The broad sustainability approach is guided by an interdepartmental team with representatives from Environment, Health and Safety (EHS), Human Resources (HR), Finance and Procurement &Transportation. This team is responsible for developing and obtaining approval for sustainability objectives and guiding business units in their efforts to contribute to these objectives.
At business group level, the economic/financial, environmental and social performance is owned by the Executive Vice-President of that entity. At business unit level, these aspects are owned by the head of the business unit. At site level, the site manager is responsible for the economic, social and environmental performance of the site.
MONITORING, EVALUATION AND CONTINUOUS IMPROVEMENT
Corporate EHS and Corporate HR have developed detailed technical guidance notes to assist the business units and sites, ensuring a collective understanding of concepts, definitions, roles and responsibilities. Regular workshops and meetings are organised each year at various levels of the organisation to share best practices.
Progress towards our objectives is measured annually against a set of KPIs reported through a group data management system. The data is collected and reported at the relevant entity level: site, business unit or business group. Social and environmental performance indicators that are relevant and material to Umicore's operations are also measured and reported. Corporate EHS, Corporate HR and Corporate Finance aggregate the performance of the business units to evaluate Umicore's overall progress towards the Horizon 2020 objectives.
On-site data verification relating to social and environmental performance and progress towards objectives is carried out internally. In addition, Umicore uses an assurance provider to check its social and environmental data. This assurance has been carried out by PricewaterhouseCoopers (PwC) since 2011. PwC evaluates the completeness and reliability of the reported data as well as the
robustness of the associated data management system. Wherever necessary, performance indicators and reporting processes are reviewed and updated after every assurance cycle, as part of a continuous improvement process.
ECONOMIC & FINANCIAL PERFORMANCE
GOALS AND PERFORMANCE 2016-2020
Based on the validity analysis of the megatrends relevant for Umicore's Vision 2015 strategy, we identified specific growth areas where Umicore can contribute to solve certain societal and environmental problems. These growth areas form the basis of the Horizon 2020 strategy and are expected to enable Umicore to double its adjusted EBIT between 2014 and 2020.
OPERATIONAL RETURNS
Umicore seeks to generate economic value through our existing businesses and any acquisitions or organic growth initiatives that we undertake, in line with our Horizon 2020 strategy. This entails generating a return on capital employed (adjusted pre-tax operating profit/average capital employed for the period) in excess of our overall pre-tax cost of capital.
This cost of capital can vary over time in function of our risk profile and the state of the world's debt and equity markets. The return on capital employed (ROCE) targeted for the Group in our Horizon 2020 strategy is over 15%.
Investments are assessed on a case-by-case basis: acquisitions are expected to be earningsenhancing in the early phase of their integration and value-enhancing shortly thereafter. Similar criteria exist for organic investments, although the pursuit of longer-term growth projects invariably requires a longer view on expected returns.
In terms of operational performance, emphasis is placed on ROCE. We deal with precious and other rare metals and we therefore have a relatively high working capital intensity. Management
is therefore incentivised to optimise performance both from an earnings perspective and by minimising capital employed.
SHAREHOLDER RETURNS
Umicore aims to create value for its shareholders. This is achieved through the development of a compelling strategy and a strong track record of delivering a solid performance against the strategic objectives. We seek to grow our existing businesses while maintaining or establishing strong leadership positions on the back of innovative technologies (see below). Shareholder returns depend on the valuation of the Umicore stock and are supported by the payment of dividends.
FINANCIAL STRENGTH
Umicore aims to safeguard the business through sound financial management and by maintaining a strong balance sheet. While we have no fixed target regarding debt levels, we aim to maintain an investment grade status at all times. We also seek to maintain a healthy balance between short and longer-term debt and between debt secured at fixed and floating interest rates. This approach, coupled with strong cash flow generated from operations, allows us to self-fund the majority of our growth initiatives.
RESEARCH AND DEVELOPMENT
As a materials technology company, the future success and sustainability of our business depend on our ability to develop and market innovative products and services. We invest consistently in research and development (R&D), with the equivalent of 5% to 7% of revenues typically dedicated to R&D every year.
MARKET PRESENCE
As part of our Horizon 2020 strategy, Umicore seeks to maintain market leadership positions in recycling and clean mobility materials. The nature of our business, which consists of products for highly specific applications, means that we do not have a presence in any country or region which makes up a significant part of that country or region's economy. Our business is global in nature with 50 production sites in 33 countries.
ECONOMIC AND FINANCIAL PERFORMANCE POLICY
Our approach to financial and economic management derives from our vision, values and organisational principles as described in The Umicore Way. Specific internal policies have been developed to frame the Company's approach to specific financial and economic aspects including: Dividend, Financing and Funding, Transfer Pricing, Credit Management, Hedging, Capital Expenditure and Mergers & Acquisitions.
ECONOMIC AND FINANCIAL PERFORMANCE RESPONSIBILITY
Accountability for the overall economic and financial performance of Umicore lies with the Chief Executive Officer while each Executive Vice-President is responsible for the financial performance of his/her business group. The Chief Technology Officer and his/her organisation has oversight for the technology portfolio of the Group and the overall research and development activities.
At business unit level, the head of the business unit is responsible for the operational and financial performance of the business unit. The Chief Financial Officer has overall oversight of Umicore's financial and economic performance and is supported by a Corporate Finance team that includes specific expertise centres covering aspects such as tax, treasury, accounting & control, and the internal control environment. At business unit level, financial controllers are responsible for managing the financial and reporting aspects of the business unit.
VALUE CHAIN & SOCIETY PERFORMANCE
GOALS AND PERFORMANCE 2016-2020
The relationship between customers and suppliers is an essential element to building financial and economic value and plays a key role in the promotion of social and environmental best practices. The Umicore Way also covers the relationships with our various stakeholders. The value chain and society objectives cover Umicore's presence and impact upstream with suppliers, and downstream contribution of our products and services to a better life. The
performance review of these material topics is reported in Value Chain and Society(p. 39).
While Umicore's value chain and society objectives determine a special focus through 2020, we believe it is equally important to continuously monitor, control and report our relationship with all the other stakeholders. Information on our stakeholder groups is listed in the Stakeholder Engagement(p. 16). In addition, we report on the following topics in the Value Chain Statements(p. 181) section:
● Monitoring of the supplier assessment for indirect procurement, note V3(p. 184)
● Product regulatory compliance,note V4(p. 185)
● Monitoring of our donations, note V5(p. 186) The following specific management approach applies to both materials topics and the underlying performance indicators.
VALUE CHAIN AND SOCIETY PERFORMANCE POLICY
Our approach to stakeholder engagement derives from the vision, values and organisational principles found in The Umicore Way. Specific charters/policies have been developed to frame specific elements of our approach to stakeholder engagement, including the Sustainable Procurement Charter, Responsible global supply chain of minerals from conflict-affected and high risk areas Policy, Human Rights & Working Conditions Policy and External Communications Policy.
VALUE CHAIN AND SOCIETY PERFORMANCE RESPONSIBILITY
Our presence and impact both upstream and downstream is based on a business-specific approach whereby all business units are required to identify and engage with their respective suppliers, customers and stakeholders. In addition, a team comprising members of various departments, including Corporate EHS, Corporate HR, Group Communications, Corporate Finance and Procurement & Transportation, meets regularly to map the overall stakeholder expectations and to convene, whenever necessary, internal or external stakeholder dialogue sessions.
VALUE CHAIN AND SOCIETY PERFORMANCE BOUNDARY
The value chain and society theme focuses on potential impacts on society incurred through our activities, products and services. For reporting, all entities are considered. While we focus primarily on those of our activities that are directly linked to clean mobility and recycling, other initiatives targeting suppliers, customers or society are tracked and appropriately reported, whether through communications such as this annual report or through other specific communication channels.
ENVIRONMENTAL PERFORMANCE
GOALS AND PERFORMANCE 2016-2020
In The Umicore Way, Umicore commits to continually improve its environmental performance. As a materials technology company, we have defined energy efficiency and the reduction of metal emissions as core environment-related objectives in our Horizon 2020 strategy. These objectives represent what we believe to be the most material environmental aspect of our business and the ones that are most important to our various stakeholders (see Materiality)(p. 22). The performance review of energy efficiency is reported in Eco-Efficiency(p. 45).
While Umicore's environmental objectives through 2020 focus on energy efficiency and the reduction of metal emissions, we believe it is equally important to continuously monitor, control and report the performance of our organisation in relation to other environmental aspects. We do that using the same measurement tools indicated in our General Management Approach. These indicators monitor how we are building on the Vision 2015 achievements in terms of environmental performance. These underlying performance indicators, detailed in the Environmental Statements(p. 188) section, include:
● Emission to water and air, note E2(p. 189)
● Greenhouse gases, note E3(p. 192)
● Water consumption, note E5(p. 194)
● Waste volumes, note E6(p. 195)
● Control and remediation of historical pollution,note E7(p. 195)
● Regulatory compliance and management systems, note E8(p. 197)
The following specific management approach applies to both material topics and the underlying performance indicators.
ENVIRONMENTAL PERFORMANCE POLICY
Our approach to environmental management derives from the vision, values and organizational principles found in The Umicore Way. An internal Group EHS Guidance Note details the approach to measuring and reporting on each relevant environmental indicator. A specific internal policy on energy efficiency was rolled out throughout the Group from 2011 to 2015 and created a high level of awareness and commitment at sites and within business units to strive for continual energy efficiency improvement. In addition, Umicore encouraged all business unit initiatives that increased recycling potential. On a global scale, metals recycling reduces the environmental impact related to the acquisition and transformation of metals into products.
ENVIRONMENTAL PERFORMANCE RESPONSIBILITY
Umicore's environmental performance and impact accountability lies with the executive committee. In the executive committee, the Chief Counsel is Executive Vice-President for Environment, Health and Safety, Corporate Security and Internal Audit and responsible for all environmental matters and is supported by the Senior Vice President Environment, Health & Safety. The Executive Vice-Presidents are responsible for the overall environmental performance of their business group. At business unit level, the head of the business unit is responsible for the overall environmental performance. The general manager of each site has a similar responsibility at site level.
ENVIRONMENTAL PERFORMANCE BOUNDARY
Energy efficiency performance and underlying performance indicators contribute to reducing our impact on the environment, for example through an expected reduction of our carbon footprint of lower impact or the metal emissions on air and water.
SOCIAL PERFORMANCE
GOALS AND PERFORMANCE 2016-2020
As set out in The Umicore Way, we strive to be a preferred employer for both current and potential employees and to act and operate in line with the expectations of society. We have defined three social objectives within the context of our Horizon 2020 strategy: reducing losttime accidents to zero, further reducing occupational exposure to specific metals and increasing our diversity, talent attraction and retention and employability. We also have objectives which relate to our broader social impact and these can be found in our Management Approach to Value Chain and Society, later in this chapter. These objectives were defined as material topics in the materiality assessment both by internal and external stakeholders. Talent management is key to reaching our desired business growth.
Attracting, developing and retaining talent in competitive labour markets support the business units in their growth plans. In addition, while increasing the diversity of our workforce is in line with expectations from society, it should also increase our chance of success. Given the ageing population and the need for longer careers, we are also putting programmes in place to increase the employability of our workforce. The performance review of these material topics, including zero accident and reducing occupational exposure, is reported in Great Place to Work(p. 54).
● Monitoring of contractor safety, note S7(p. 208) The following specific management approach applies to both materials topics and the underlying performance indicators.
SOCIAL PERFORMANCE POLICY
Our approach to social performance derives from the vision, values and organisational principles found in The Umicore Way. An internal Group Social Reporting Guidance Note provides detailed guidance on measuring and reporting on social performance. Specific internal policies have been developed to frame specific elements of our social management approach including Safety, Human Rights and Working Conditions and Training & Development. In addition, Umicore has a Global Framework Agreement on Sustainable Development in place with international trade unions.
SOCIAL PERFORMANCE RESPONSIBILITY
Umicore's social performance and impact accountability lies with the executive committee.
In the executive committee, the CEO has oversight responsibilities for Umicore's Human Resources issues and is supported by the Senior Vice President Human Resources. The Executive Vice-Presidents are responsible for the social aspects of their business group. At business unit level, the head of the business unit is responsible for the overall social performance.
While Umicore's social objectives determine a special focus through 2020, we believe it is equally important to continuously monitor, control and report our social performance in other areas. We do that using the same measurement tools indicated in our General Management Approach.
The general manager of each site has a similar responsibility at site level. A regional Human Resources organisation exists to manage social aspects at regional and country level, and to provide structural support to the business units in all aspects of human resources management.
These underlying performance indicators, detailed in the Social Statements(p. 198) section, include:
● Monitoring of workforce demographics, note S2(p. 200)
● Monitoring of human rights, compliance and risk, note S4(p. 204)
● Monitoring of employee health aspects beyond metal exposure, notes S5(p. 204)-S6(p. 205)
SOCIAL PERFORMANCE BOUNDARY
Social performance and the underlying performance indicators have a direct impact on Umicore's workforce (enhanced engagement and well-being at all levels and attracting and retaining the right skills).
Managing risk effectively
M. Ko and Y. Kang at Cheonan
Each business unit operates in an environment which carries specific growth expectations and differing degrees of market and technological uncertainty that could impact strategic objectives. As such, the primary source of risk and opportunity identification lies within the business units.
Similarly, each business unit is responsible for mitigation of its own risks. Mitigating actions are systematically reported corresponding to the respective strategic objectives and identified risks.
Specific corporate departments are also tasked with managing and mitigating certain risks under the auspices of the Management Board. These risks cover Group-wide elements that extend beyond the purview of individual business units. These include environmental risks, financial risks, etc.
OUR INTERNAL CONTROL SYSTEM
Internal control mechanisms exist throughout Umicore to provide management with reasonable assurance of our ability to achieve our objectives. They cover:
● Effectiveness and efficiency of operations
● Reliability of financial processes and reporting
● Compliance with laws and regulations
● Mitigation of errors and fraud risks
Umicore adopted the COSO framework for its Enterprise Risk Management and has adapted its various constituents within its organization and processes. "The Umicore Way" and the "Code of Conduct" are the cornerstones of the Internal Control environment; together with the concept of management by objectives and through the setting of clear roles and responsibilities they establish the operating framework for the company.
Specific internal control mechanisms have been developed by business units at their level of operations, while shared operational functions and corporate services provide guidance and set controls for cross-organizational activities. These give rise to specific policies, procedures and charters covering areas such as supply chain management, human resources, information systems, environment, health and safety, legal, corporate security and research and development.
Umicore operates a system of Minimum Internal Control Requirements (MICR) to specifically address the mitigation of financial risks and to enhance the reliability of financial reporting. Umicore's MICR framework requires all Group entities to comply with a uniform set of internal controls in 12 processes.
Within the Internal Control framework, specific attention is paid to the segregation of duties and the definition of clear roles and responsibilities. MICR compliance is monitored by means of selfassessments to be signed off by senior management. The outcome is reported to the Management Board and the Audit Committee.
Out of the 12 control cycles, 2 cycles (Procure To Pay, Information Technology Management) were assessed in the course of 2020 by the 99 control entities currently in scope. Risk assessments and actions taken by local management to mitigate potential internal control weaknesses identified through prior assessments are monitored continuously. The Internal Audit department reviews the compliance assessments during its missions.
The aim of our risk management system is to enable the company to identify risks in a proactive and dynamic way and manage or mitigate risks to an acceptable level wherever possible.
KEY RISKS AND OPPORTUNITIES
WE TAKE A BALANCED APPROACH TO MANAGING RISK AND SEIZE OPPORTUNITIES TO DELIVER ON OUR STRATEGIC GOALS
RISK & OPPORTUNITY
REGULATORY & LEGAL CONTEXTSUSTAINABLE TECHNOLOGY &
& ETHICAL SUPPLY
SUBSTITUTION
CYBER SECURITY
MARKET
METAL PRICE & AVAILABILITY
TALENT ATTRACTION &
RETENTION
CLIMATE & ENVIRONMENT
CHANGE IN RISK PROFILE
CHANGE IN OPPORTUNITY PROFILE
Key:increaseno change
1 REGULATORY AND LEGAL CONTEXT
POTENTIAL IMPACT
Umicore is exposed to changes in the regulatory environment in the countries or regions where it operates. Umicore's businesses stand to benefit from certain regulatory trends, notably those regarding more stringent emission controls for vehicles, low carbon mobility, electrification and enforced recycling of end-of-life products.
Some regulations, such as environmental or product-related laws, can present operational challenges, higher costs and a potentially uneven competitive environment.
Data protection, IP and IP protection-related matters impact technology-driven businesses.
CHANGE IN CONTEXT
Worldwide, changes to existing product-related legislation and the introduction of new legislation might impact our business. Although the European REACH regulation is still the most relevant for Umicore, Korean REACH is gaining importance. For more information, see note V4(p. 185).
The push towards clean mobility is stronger than ever, with various governments including green recovery measures and stimuli for cleaner mobility in their crisis recovery packages, in particular in Europe and China, and regulatory initiatives to protect air quality and reduce greenhouse gas emissions in several regions. Europe recently reconfirmed its ambition to achieve zero-emission mobility and remains committed to increasingly more stringent CO2 emission targets. In China, the Ministry of Industry and Information Technology announced an extension of the New Energy Vehicle (NEV) subsidy plan from 2020 until end 2022. It also confirmed its long-term commitment to achieve a target penetration rate of 20% NEVs in 2025 and 50% by 2035, which is likely to boost electrification in the coming years.
Geopolitical conditions, trade and tariffs continue to be a factor in Umicore's trans-border activities.
MEASURES TAKEN BY UMICORE
Umicore provides continuous training on regulatory requirements to ensure compliance with applicable legislation.
To ensure ongoing compliance with environmental legislation on our industrial sites, Umicore has a well-established EHS compliance audit program and constantly monitors changes in legal requirements where we operate. For more information, see Statements, note E8.
Umicore continues to play an active role in informing legislators of various emission control technologies for both diesel and gasoline powered vehicles, to help legislators make informed decisions about future emission and testing norms.
We monitor that our products have the freedom to operate and we proactively manage our patent portfolio. Umicore trade compliance closely follows and responds to global trade conditions.
Umicore monitors closely all changes in interpretation as well as guidance documents that might affect its REACH implementation strategy. In 2020 we submitted 27 additional substances for registration under REACH due to new business developments. As part of regular maintenance, we updated 76 REACH dossiers. Umicore has submitted 2 registrations in Korea in 2020 for priority chemical substances.
2 SUSTAINABLE AND ETHICAL SUPPLY
POTENTIAL IMPACT
Umicore requires certain metals or metal-containing raw materials to manufacture its products and feed its recycling activities. Some of these raw materials are comparatively scarce and require very specific sourcing strategies. Obtaining adequate supplies of these materials is important for the ongoing success and growth of our business.
Some metals are also found in regions facing social challenges. Trading in precious metals and minerals can be used to finance armed conflict, cause human rights abuses, draw upon forced or child labor and support corruption and money laundering. We ensure that procurement of minerals from conflict-affected and high-risk areas is in line with Umicore's values, while providing an advantage to our customers.
CHANGE IN CONTEXT
Existing and upcoming laws aiming to drive the responsible sourcing of conflict minerals (tin, tantalum, tungsten and gold), have increased the visibility and concern on the conditions around conflict mineral sourcing in public discourse.
COVID-19 and the measures taken to contain contagion could have an impact on the availability of materials and in general on the supply chain.
MEASURES TAKEN BY UMICORE
Only limited and temporary impacts due to COVID-19 were reported on Umicore's supply chain.
Umicore implemented policies and measures covering human rights, the right for workers to organize, collective bargaining, equal opportunities and non-discrimination, banning of child labor, banning of forced labor, consistent with International Labour Organisation (ILO) standards. These commitments are supported through a Global Framework Agreement on Sustainable Development with IndustriALL Global Union which was renewed in 2019.
In addition to existing policies and charters such as the Umicore Code of Conduct, Human Rights Policy and Sustainable Procurement Charter, Umicore also has a specific policy for "Responsible global supply chain of minerals from conflict-affected and high-risk areas".
In 2020, Umicore again received third-party validation for the application of its Sustainable Procurement Framework for Cobalt, which is aligned with the OECD 'Due Diligence Guidance for Responsible Supply Chains from Conflict-Affected and High-Risk Areas'. Umicore continues to ensure that its production operations are certified as conflict-free and receives site and metal-specific responsible sourcing certifications from the LBMA and RJC. For more information, see note V3(p. 184).
Umicore remains the first cathode material producer to offer certified materials from a clean and ethical origin to its customers.
In 2020, Umicore achieved a Platinum EcoVadis rating, placing the group among the top 1% of their industry peers.
We use our long-standing and growing experience in sustainable sourcing to advocate for more responsible practices in industry. To read more about some of our advocacy work, see Stakeholder Engagement(p. 21).
CHANGE IN CONTEXT
3 TECHNOLOGY AND SUBSTITUTION
POTENTIAL IMPACT
Umicore is a materials technology group with a strong focus on the development of innovative materials and processes. The choice and development of these technologies for existing and new markets represents the single biggest opportunity and risk for Umicore.
Achieving the best cost-performance balance for materials is a priority for Umicore and its customers. There is always a risk that customers will seek alternative materials for their products should those of Umicore not provide this optimum balance. The risk is especially present in businesses producing materials containing expensive metals (especially those with historically volatile pricing characteristics).
Trends in rechargeable battery materials for automotive applications have underscored that NMC material platforms with increasing nickel content as well as medium nickel low cobalt content are the technologies of choice for customers in current and upcoming electrified vehicle platforms. Besides the focus on high performing battery materials, novel processes are being developed to decrease cost and environmental impact across the entire battery value chain.
In vehicle emission control, regulatory debates have reinforced the need for a broad spectrum of technologies for both gasoline and diesel applications. These technologies need to be optimized for performance and for cost.
MEASURES TAKEN BY UMICORE
Every year, the Management Board identifies innovation projects which are key to achieving our short term and long-term growth ambitions and cover product and process developments. These technologies are followed up closely by management to ensure on time delivery of new and innovative products to the market.
Previous years' R&D investments have brought great success and created a space to expand R&D positioning to adjacent and new markets within Umicore's field of expertise. In 2020, overall spend was equivalent to 6.9% of revenues. The Innovation Fit for Future program focusing on innovation excellence best practices protects Umicore's technology leadership and future growth.
Umicore patents disruptive technologies. In 2020, Umicore registered 63 new patent families.
For more information, see Research, development & innovation(p. 49).
MEASURES TAKEN BY UMICORE
4 CYBER SECURITY
POTENTIAL IMPACT
Umicore's production plants and services highly depend on the availability of IT services.
Unavailability of services, disruption of the supply chains or interruption of our production facilities due to cyber-attacks could have a major impact on our customers. A compromise in the confidentiality of intellectual property would negatively impact our competitive advantage. Unauthorized modification of financial data would jeopardize accurate reporting to shareholders.
CHANGE IN CONTEXT
Cyber-attacks may be very focused and advanced. The expanding threat landscape and expanding digital footprint is leading to an increase in cyber-attacks. Several cases of industrial manufacturing businesses being interrupted for several weeks as the result of a cyber incident have been extensively covered in the media. In addition, due to the increased use of a digital work environment (on site and at home), the role of IT services in delivering seamless access to all corporate resources as well as ensuring information security is more important than ever.
Umicore continues to regularly assess and improve its information security, and the state of cyber resilience of its IT landscape, against evolving threats.
A security roadmap is being implemented which includes projects in preparation for an ISO27001/2 certification and initiatives to increase awareness across the Group on the importance of information and cyber security. Third party expert security assessments are made and the corporate cyber security team is being expanded. Umicore increases its investments in security-related IT systems and applications such as backup processes, virus and access protection, authentication and encryption tools. Security-related IT controls are being extended and are tested as part of Umicore's external audit process.
The state of cyber security is reported to the Management Board semi-annually and is followed-up by the Audit Committee.
MEASURES TAKEN BY UMICORE
5 MARKET
POTENTIAL IMPACT
The main industries served by Umicore are automotive (clean mobility materials, recycling), consumer electronics (rechargeable battery materials, recycling, coating and electroplating solutions) and non-ferrous metal mining and refining industries (recycling activities). Umicore is sensitive to any major growth or global reduction in activity levels or market disruptions in these industries.
CHANGE IN CONTEXT
In 2020, the global automotive industry was significantly impacted by the COVID-19 pandemic with a marked contrast between the first and the second half of the year.
In the first half of 2020, car OEMs had to shut down their production plants and close their dealerships in several key regions as a result of government imposed lock-downs. Global car demand started to pick up again in the second half of 2020, albeit with discrepancies between the regions in terms of timing, speed and intensity of the recovery.
Car production in the second half grew by more than 40% sequentially (yet declined by 2% compared to the second half of 2019), with China being the clear driving force behind the global recovery. Other key markets started to pick up later and more gradually and still recorded negative growth for the second half of the year.
The sharp economic contraction and the lower industrial production induced by COVID-19 also had a significant and a more prolonged impact on the heavy-duty diesel market segment in 2020 except in China.
The global EV market was profoundly affected by the COVID-19 pandemic in the first half of the year and rebounded in the second half of the year, primarily driven by strong EV growth in Europe and, later in the year and to a lesser extent, by increasing EV sales in China.
In China, battery demand for EVs remained bleak until the summer and turned positive in the second half of the year, albeit compared to a depressed second half in 2019. The demand for cathode materials for EVs has lagged the anticipated growth in 2019 and 2020, resulting in significant excess capacity and pressure on the pricing environment.
In Europe, battery demand for EVs recorded strong momentum throughout 2020, in particular in the second half of the year, and doubled compared to 2019. This growth was driven by new models launched by car OEMs to comply with the more stringent CO2 directive, local incentives for EV buyers in several countries as part of their recovery plans and more environmentally-friendly choices by consumers when purchasing a new car.
The slowdown in consumer electronics demand continued along with a reduced demand for NMC cathode materials used in energy storage applications.
In recycling, our process remains unique, supported by high metal prices and high activity levels with favorable trading conditions in 2020, despite the COVID-19 crisis. The overall supply of industrial byproducts remained favorable over the period, despite the temporary shutdowns of certain mining activities in response to COVID-19. Also the supply of end-of-life materials remained strong.
Umicore is delivering on its growth strategy in clean mobility materials and recycling.
Despite the severe disruption brought by the COVID-19 pandemic in its end-markets, Umicore posted its strongest financial performance ever, boosted by an exceptional metals price environment. This underscores Umicore's resilience and the merits of the Horizon 2020 strategy that builds on the complementarity of our activities. After a solid performance in the first half of 2020, with a strong result in Recycling offsetting the impact of the automotive industry downturn, the second half of the year was marked by a strong sequential improvement in revenues and earnings. This has been driven by continued robust operational performance and buoyant metal prices, and strong growth in Catalysis, thanks to Umicore's strong market position in gasoline technologies for light-duty vehicles, particularly in China and Europe, as well as higher sales of heavy-duty diesel and fuel cells catalysts.
Umicore should continue to benefit disproportionally from the accelerating penetration of electromobility given our broad portfolio of material technologies certified for the most stringent automotive requirements and our industrial-scale production capabilities.
For more information, see Economic Review(p. 29).
Umicore's earnings are exposed to risks relating to the prices of the metals which we process or recycle. These risks relate mainly to the impact that metal prices have on the surplus metals recovered from materials supplied for recycling, and concern platinum, palladium, rhodium, gold, silver and a wide range of base and specialty metals. For some metals quoted on futures markets, Umicore hedges a proportion of its forward metal exposure to cover part of the future price risks.
for the balance, procured from primary metal producers. Umicore's ability to procure the required quantity of such metals is key to determine its ability to produce the materials which have been ordered by the customers.
6 METAL PRICE AND AVAILABILITY
POTENTIAL IMPACT
Umicore also faces transactional price risks on metals. The majority of its metal-based transactions use global metal market references. If the underlying metal price were constant, the price Umicore pays for the metal contained in the raw materials purchased would be transferred to the customer as part of the price charged for the product. However, because of the lapse of time between the conversion of purchased raw materials into products and the sale of products, the volatility in the reference metal price creates differences between the price paid for the contained metal and the price received. Accordingly, there is a transactional exposure to any fluctuations in price between the time raw materials are purchased (when the metal is "priced in") and the time the products are sold (when the metal is "priced out"). The Group's policy is to hedge the transactional risk to the maximum extent possible, primarily through forward contracts.
For more information on the structural risk and on the transactional and inventory risk related to the metal prices, see note F3(p. 123).
Materials produced by Umicore contain precious or scarce metals which are partly sourced from in house recycling operations and,
CHANGE IN CONTEXT
Prices for precious metals strengthened further in 2020, reaching historically high levels for precious metals and PGMs. The price of rhodium in particular increased significantly in the second half of the year, in a context of tight supply and high demand from the car industry.
Demand for cobalt containing products was mixed in 2020, severely hit by the COVID-19 crisis in the first half of the year, showing first signs of recovery in the second half. , Cobalt price remained stable over the course of the year.
MEASURES TAKEN BY UMICORE
Over the course of 2020 and early 2021, Umicore entered into additional forward contracts securing a substantial portion of its structural price exposure for certain precious metals in 2021, 2022 and 2023, thereby increasing earnings predictability. For 2021 and 2022, approximately two thirds of the expected gold and palladium exposure and somewhat less than half of the expected silver exposure have been locked-in. In addition, close to one third of the expected platinum exposure for 2021 has been hedged. In spite of the absence of a liquid futures market, Umicore has entered into forward contracts locking in a minority of its expected 2022 and 2023 rhodium exposure.
Umicore is continuously increasing production of precious and scarce metals from its recycling capabilities, thereby securing a significant proportion of its metals needs. In addition, the group maintains close commercial relationships with leading primary metals producers from which it procures metals through annual or evergreen contracts.
MEASURES TAKEN BY UMICORE
7 TALENT ATTRACTION AND RETENTION
POTENTIAL IMPACT
The attraction and retention of skilled people are important factors in enabling Umicore to fulfil its strategic ambitions and to build further expertise, knowledge and capabilities in the business. Being unable to do so would compromise our ability to deliver on our goals.
The Horizon 2020 strategy was predicated on growth for Umicore, especially in Asia where labor markets are highly competitive and fluid. Umicore's challenge is to attract and retain talent at all sites and in all regions on a sufficient scale and at an appropriate pace.
CHANGE IN CONTEXT
In 2020 the novel coronavirus (COVID-19) pandemic severely affected people, society and industries globally.
In response to the COVID-19 outbreak, Umicore rolled out its business continuity plans and took precautionary measures to keep its people healthy and to ensure that the workplace is safe. Umicore rapidly adjusted its production capacity where needed and furloughed part of its workforce; when all production plants resumed operations, most furloughed employees returned to work. In administrative positions, working from home was adopted.
Umicore introduced strict hygiene and other precautionary measures in its facilities worldwide in response to the COVID-19 pandemic and delivered surgical masks for private use to the homes of all employees worldwide at a time when they were unavailable on the open market. A dedicated task force continues to monitor its operations globally with a focus on protecting employees' health.
To meet recruitment needs in this COVID-19 context, we moved to virtual recruitment and virtual onboarding wherever possible. Operators were recruited and onboarded with utmost safety and health measures.
Umicore ensured continued safety trainings, both virtually and in small groups to respect health measures. Other trainings, including on leadership and development, were delayed while adjusting the offering to the digital delivery in a virtual context but did continue in the second half of 2020.
CHANGE IN CONTEXT
8 CLIMATE AND ENVIRONMENT
POTENTIAL IMPACT
Climate and environment impacts are mostly related to our supply of primary raw materials or to our suppliers' extraction of these primary raw materials. Easy-to-mine deposits are becoming increasingly scarce and ore bodies poorer. Many specialty metals required for new, environmentally-friendly technologies can only be obtained as a by-product of other metals. Treating complex materials from above-ground sources, such as industrial residues and end-of-life materials, is increasingly important.
Climate change causes extreme natural events, chronic deviations in mean temperatures and precipitation patterns, and rising sea levels. This could impact our sites or supply chain.
Increasingly stringent regulations on energy use and emissions can induce higher operational costs.
Our license to operate is predicated on managing the impact of our operations in the communities where we operate. Historical industrial activity requires active management and remediation.
Civil society and political discourse are increasingly demanding that business takes an active role in mitigating climate change. In the context of COVID-19, the attention on environmental and climate-related performance of private sector and industry has increased, as has attention around developing a "green recovery".
The ongoing transition to a lower carbon economy continues to present Umicore with opportunities to expand and develop processes in ways that can mitigate or address climate change and environmental risks.
MEASURES TAKEN BY UMICORE
Umicore plays a key role in the transition to a low-carbon future as our materials tackle global trends for clean air and e-mobility, and our closed loop business model tackles resource stewardship.
Our facility in Hoboken is the world's largest and most complex precious metals recycling operation, processing over 200 types of raw material and recovering over 20 different metals. We ensure that a high volume of our metals come from secondary sources - production scraps, residues and end-of-life materials. We can also recycle customers' residues and production scrap to help them maximize their material efficiency and then transform the recovered materials into new products. In total we recover 28 metals from our closed loop activities and we continue to adapt our processes to recycle new and more complex end-of-life products. Our high yield recycling process continues to be a driving force in resource efficiency and contributing to the circular economy.
Our global footprint and diverse site locations reduce our exposure to physical risks. New sites have been chosen considering proximityto customers, access to skilled workforce, excellent logistics, infrastructure and green energy.
Umicore performs life cycle assessments on all products and services on a rolling and ongoing basis to sharpen insight on environmental performance, through the right choice of the chemistry, energy mix, and raw materials, including recycled materials. For the new battery production plant in Poland, Umicore maintains the commitment that electricity will be from renewable sources.
We ensure that our current activities keep to the most stringent environmental standards for air and water and work every year to improve our energy efficiency and environmental footprint despite our growth and increased production. For more information, see Environmental Statements(p. 188) .
Umicore manages its historical environmental legacy, ensuring adequate financial provisions that are reviewed twice a year. For more information, see notes E7(p. 195) and F29(p. 162).
In 2020 Umicore continued strategic preparation work on climate and environment-related impact.
Governance statements
G1 | CORPORATE GOVERNANCE FRAMEWORK | 88 | G6 | RELEVANT INFORMATION IN THE EVENT OF A TAKEOVER BID | 91 | G10 MARKET MANIPULATION AND INSIDER TRADING | 93 |
G2 | CORPORATE STRUCTURE | 88 | G7 | CONFLICTS OF INTERESTS (ART. 7:115 through 7:117 BCCA | 92 | G11 COMPLIANCE WITH THE CG CODE 2020 | 93 |
G3 | SHAREHOLDERS | 89 | and ART. 523 - 524TER OLD COMPANIES CODE) | G12 REMUNERATION POLICY | 94 | ||
G4 | SUPERVISORY BOARD | 89 | G8 | STATUTORY AUDITOR | 93 | G13 REMUNERATION REPORT | 94 |
G5 | MANAGEMENT BOARD | 91 | G9 | CODE OF CONDUCT | 93 |
G1 CORPORATE GOVERNANCE FRAMEWORK
During the financial year 2020, Umicore (also the "Company") was subject to the Belgian Code on Corporate Governance 2020 (the "CG Code 2020), which entered into force on 1 January 2020.
The English, Dutch and French versions of the CG Code 2020 can be found on the website of the Belgian Corporate Governance Committee (www.corporategovernancecommittee.be).
Following the entry into force of the CG Code 2020, the Company's supervisory board adopted a new corporate governance charter (the "CG Charter") on 30 July 2020. The CG Charter was further amended by the supervisory board on 9 December 2020. It describes in detail the governance structure of the Company and the policies and procedures of the Umicore group. The CG Charter is available on the Umicore website (https://www.umicore.com/storage/group/2020-07-30-cg-charter-en.pdf) or may be obtained on request from Umicore's Group Communications Department.
Umicore has articulated its mission, values and basic organizational philosophy in a document called "The Umicore Way". This document spells out how Umicore views its relationship with its customers, shareholders, employees and society. It is supplemented by detailed company codes and policies, the most significant of which is the Code of Conduct (see G9).
Company's articles of association to the new Belgian Code of companies and associations (the "BCCA") and to the adoption of a genuine two-tier board structure.
Prior to the above extraordinary shareholders' meeting of 30 April 2020, the board of directors ("raad van bestuur"/"conseil d'administration") was the ultimate decision-making corporate body of Umicore, subject only to matters explicitly reserved to the shareholders' meeting by the old Code of companies or the articles of association.
Following the adoption of a two-tier board structure, as provided the BCCA, by the extraordinary shareholders' meeting held on 30 April 2020, the management board ("directieraad"/"conseil de direction") has now become competent for all matters not specifically reserved to the supervisory board ("raad van toezicht"/"conseil de surveillance") or the shareholders' meeting by the BCCA or Umicore's articles of association.
The supervisory board is responsible for the general policy and the strategy of Umicore, as well as for all actions that the BCCA reserves specifically for the board of directors in a one-tier system. It appoints and dismisses the CEO and the other members of the management board and it also supervises the management board. The supervisory board is assisted in its role by an audit committee and a nomination & remuneration committee.
In terms of organizational philosophy, Umicore believes in decentralization and in entrusting a large degree of autonomy to each of its business units. The business units in turn are accountable for their contribution to the group's value creation and for their adherence to group strategies, policies, standards and sustainable development approach.
In this context, Umicore is convinced that a sound corporate governance structure constitutes a necessary condition to ensure its long-term success. This implies an effective decision-making process based on a clear allocation of responsibilities. Such approach must ensure an optimal balance between a culture of entrepreneurship at the level of the business units and effective steering and oversight processes. The CG Charter deals in more detail with the responsibilities of the shareholders, the supervisory board, the CEO, the management board and the specific role of the audit committee and of the nomination & remuneration committee. The present statements provide information on governance issues which relate primarily to the financial year 2020.
G2 CORPORATE STRUCTURE
The Company's corporate structure underwent an important change during 2020 following the resolutions of the extraordinary shareholders' meeting held on 30 April 2020, which resulted in a full alignment of the
The day-to-day management of Umicore has been delegated to the CEO, who also chairs the management board.
The management board, under the leadership of the CEO, is responsible for proposing the overall strategy of Umicore to the supervisory board and for Umicore's operational management. It also approves the strategies of the individual business units and monitors their implementation. The management board is furthermore responsible for screening the various risks and opportunities that Umicore may encounter in the short, medium or longer term (p. 76) and for ensuring that adequate systems are in place to address these. The management board is responsible for defining and applying Umicore's approach to sustainable development.
Umicore is organized in business groups which in turn comprise business units that share common characteristics in terms of products, technologies and end-user markets. Some business units are further subdivided into market-focused business lines. In order to provide a group-wide support structure, Umicore has regional management platforms in China, North America, Japan and South America. Its corporate headquarters are based in Belgium (Brussels). This centre provides a number of corporate and support functions in the areas of legal, finance, human resources, tax, internal audit, public and investor relations.
On 31 December 2020 there were 246,400,000 Umicore shares in issue.
G3 SHAREHOLDERS
3.1 ISSUED SHARES - CAPITAL STRUCTURE
appointed Mr Mario Armero as new director11 for a period of 3 years. Furthermore, the mandates of Mrs Ines Kolmsee and Mrs Liat Ben-Zur as independent directors22 was renewed for 3 years. The annual shareholders' meeting also approved the remuneration of the board of directors33 for 2020. Details of the fees paid to the members of the board of directors44 in 2020 are disclosed in the remuneration report.
The identity of shareholders having declared a participation of 3% or more as of 31 December 2020 can be found in the chapter "parent company separate summarized financial statements" (Financial statements)The special shareholders' meeting approved a change of control clause in accordance with the article 556 of the old Belgian Companies Code.
Also on 31 December 2020, Umicore owned 5,733,685 of its own shares representing 2.33% of its capital. Information concerning the shareholders' authorization for Umicore to buy back its own shares and the status of such buy-backs can be consulted in the CG Charter and on Umicore's website.
During the year, 1,024,435 own shares were used in the context of the exercise of employee stock options and 66,430 shares were used for share grants, of which 10,000 to the members of the supervisory board, 52,000 to the management board members and 4,430 following a partial conversion into shares of the bonus of a member of the management board.
3.2 DIVIDEND POLICY AND PAYMENT
Umicore's policy is to pay a stable or gradually increasing dividend, save for exceptional circumstances.
In 2020, Umicore paid a gross dividend of € 0.375 per share relating to the financial year 2019. This was a decrease by € 0.375 compared to the gross dividend paid in 2019 in respect of the financial year 2018.
Finally, the extraordinary shareholders' meeting approved various amendments to the articles of association in view of fully aligning it with the provisions of the BCCA and introducing a genuine two-tier board structure. As a result, all members of the former board of directors, save the CEO, became members of the supervisory board. The members of the former executive committee, including the CEO, became members of the management board following resolutions adopted by the supervisory board on the same date.
G4 SUPERVISORY BOARD
4.1 INTRODUCTION
As above mentioned, the extraordinary shareholders' meeting held on 30 April 2020 has adopted a two-tier board structure, as provided under the BCCA. As a result, the Company's board of directors was replaced by a supervisory board as of the same date. All members of the former board of directors, save the CEO, were appointed members of the supervisory board, also as of the same date.
In July 2020 the supervisory board, in line with the Umicore dividend policy, decided to pay a gross interim dividend of € 0.25 per share, which was paid on 25 August 2020.
3.3 SHAREHOLDERS' MEETINGS 2020
The (annual, special and extraordinary) shareholders' meetings were held on 30 April 2020 and were subject to amended, restricted participation modalities, in line with the Belgian Royal Decree nr. 4 of 9 April 2020 containing various provisions on co-ownership as well as on company and associations law in the framework of the fight against the Covid-19 pandemic. As a result, the shareholders were not allowed to physically participate to these meetings but only by means of postal or proxy voting. The shareholders' meeting could be viewed via a live (or differed) webcast.
Any reference in this chapter to the supervisory board should be read as a reference to the former board of directors, insofar it relates to events having taken place before the above extraordinary shareholders' meeting of 30 April 2020.
4.2 COMPOSITION
The supervisory board, whose members are appointed by the shareholders' meeting resolving by a simple majority of votes without any attendance requirement, is composed of at least 6 members. The members' term of office may not exceed 4 years. In practice, supervisory board members are elected for a (renewable) period of 3 years. A member of the supervisory board cannot at the same time be member of the management board.
On the occasion of the annual shareholders' meeting, the shareholders approved the resolutions regarding the annual accounts, the appropriation of the results and the discharges to the directors and to the statutory auditor regarding their respective 2019 mandates. At the same meeting, the shareholders
1 Member of the supervisory board after the extraordinary shareholders' meeting held on 30 April 2020.
2 Independent members of the supervisory board after the extraordinary shareholders' meeting held on 30 April 2020.
3 Supervisory board after the extraordinary shareholders' meeting of 30 April 2020.
4 Members of the supervisory board after the extraordinary shareholders' meeting of 30 April 2020.
Members of the supervisory board can be dismissed at any time following a resolution of a shareholders' meeting, deciding by a simple majority of the votes cast. There are no attendance requirements for the dismissal of supervisory board members. The BCCA provides for the possibility for the supervisory board
to appoint members of the supervisory board in the event of a vacancy. The next general meeting must decide on the definitive appointment of the above member of the supervisory board. The new member completes the term of office of his or her predecessor.
On 31 December 2020, the supervisory board was composed of 9 members. On the same date, 6 supervisory board members were independent in accordance with the criteria laid down in article 3.5 of the CG Code 2020.
In terms of gender and cultural diversity, the supervisory board counted 3 women and 6 different nationalities among its 9 members on 31 December 2020. Diversity also arises from the supervisory board members' educational backgrounds which include engineering, law, economics, finance and applied languages. The supervisory board's cumulative industry experience is broad, covering automotive, electronics, chemicals, metals, energy, finance and scientific/educational sectors. It also includes people experienced in the public and private sector and members with experience in the different regions in which Umicore is active. Collectively, the supervisory board possesses strong experience of managing industrial operations and counts 8 active or former CEOs in its ranks. The supervisory board also has collective experience in disciplines that are specifically relevant to Umicore's non-financial Horizon 2020 goals such as health and safety, talent attraction and retention and supply chain sustainability.
The composition of the supervisory board underwent the following changes in 2020:
● Mr Mario Armero was appointed director (and, hence, supervisory board member) for a period of three years at the annual shareholders' meeting held on 30 April 2020;
● Mr Gérard Lamarche resigned as director with effective date 30 April 2020;
● Following the incompatibility between the mandates of management board member and supervisory board member, Mr Marc Grynberg, who was a member of the old board of directors until the adoption of the new two-tier board structure by the extraordinary shareholders' meeting, was not appointed supervisory board member by the same extraordinary shareholders' meeting.
Furthermore, the mandates of Mrs Ines Kolmsee and Mrs Liat Ben-Zur as independent directors (and hence, independent supervisory board members) were renewed for three years on 30 April 2020.
Finally, Mr Koenraad Debackere was appointed vice-chairperson of the supervisory board on 30 July 2020.
The matters reviewed by the supervisory board in 2020 included the following:
● financial performance of the Umicore group;
● approval of the annual and half-year financial statements;
● adoption of the statutory and consolidated annual accounts and approval of the statutory and consolidated annual reports (including the remuneration report and the remuneration policy);
● approval of the agenda of an ordinary, a special and an extraordinary shareholders' meeting and calling of these meetings;
● Covid-19 updates;
● investment and divestment projects;
● issuance of convertible bonds (and approval of ancillary documents and reports in that context);
● audit committee reports;
● strategic opportunities and operational challenges;
● business and technology reviews, and market updates;
● corporate governance (including the adoption of the new CG Charter);
● metal price sensitivity and net working capital evolution;
● mergers & acquisitions projects and updates;
● annual performance review of the CEO and the other members of the management board;
● performance review of the supervisory board and its committees;
● succession planning at the level of the supervisory board and the management board;
● interim dividend distribution.
4.4 PERFORMANCE REVIEW OF THE SUPERVISORY BOARD AND ITS COMMITTEES
The supervisory board undertakes at least every three years an evaluation of its own performance and its interaction with the CEO and the management board, as well as its size, composition, functioning and that of the board committees.
The last performance review took place in 2020 and included a preliminary feedback round and an in-depth discussion during a supervisory board meeting held in July 2020.
4.5 AUDIT COMMITTEE
The audit committee's composition and the qualifications of its members are fully in line with the requirements of article 7:99 of the BCCA and of the CG Code 2020.
The supervisory board held eleven regular meetings in 2020. Ten of these meetings were held by means of a videoconference due to the covid-19 pandemic. On two occasions, the supervisory board also took decisions by unanimous written consent.
4.3 MEETINGS AND TOPICS
The audit committee is composed of three members of the supervisory board, two of them being independent. It is chaired by Mrs Ines Kolmsee.
The composition of the audit committee remained unchanged in 2020.
All the members of the audit committee have extensive experience in accounting and audit matters as demonstrated by their curriculum.
The committee met four times in 2020, including three videoconference calls. Apart from the review of the 2019 full year and the 2020 half year accounts, the audit committee reviewed reports and discussed matters related to internal audit, financial reporting, internal controls, cyber security, group auditor succession and other audit-related matters. The 2021 internal audit plan was validated. The committee met with the group's auditor and reviewed and approved provided non-audit services. Members of the audit committee also discussed ad hoc matters with senior management.
4.6 NOMINATION & REMUNERATION COMMITTEE
The composition of the nomination and remuneration committee's composition is fully in line with the requirements of article 7:100 of the BCCA and of the CG Code 2020.
On 31 December 2020, the nomination & remuneration committee was composed of five members, all members of the supervisory board, three of them being independent. The committee is chaired by the chairman of the supervisory board.
The composition of the nomination & remuneration committee underwent the following changes in 2020:Any references to the management board in this chapter should be read as references to the former executive committee, insofar they relate to events having taken place before the above extraordinary shareholders' meeting of 30 April 2020.
5.2 COMPOSITION
The management board is composed of at least four members. It is chaired by the CEO. All members of the management board, including the CEO, are appointed by the supervisory board upon recommendation of the nomination & remuneration committee.
The composition of the management board remained unchanged in 2020.
On 31 December 2020 the management board was composed of 7 members, including the CEO.
5.3 PERFORMANCE REVIEW
The management board regularly reviews and assesses its own performance. The valuation is also discussed at the nomination and remuneration committee and presented to the supervisory board.
The last performance reviews of the CEO and the other members of the management board took place on 6 February 2020.
● Mr Mario Armero was appointed member of the committee with effective date 9 December 2020;
● Mr Koenraad Debackere was also appointed member of the committee with effective dated
9 December 2020.
Five nomination & remuneration committee meetings were held in 2020, including three videoconference calls. During the same period the committee discussed the remuneration policy for the supervisory board members, the supervisory board committee members and management board members, and the rules of the stock grant and option plans offered in 2020. The committee also discussed the succession planning at the level of the supervisory board and the management board.
G5 MANAGEMENT BOARD
5.1 INTRODUCTION
Following the adoption of a two-tier board structure, as foreseen in the BCCA, by the extraordinary shareholders' meeting held on 30 April 2020, the Company's executive committee was replaced by a management board as of the same date. All seven members of the former executive committee, including the CEO, were appointed members of the management board as of the same date.
G6 RELEVANT INFORMATION IN THE EVENT OF A TAKEOVER BID
6.1 RESTRICTIONS ON TRANSFERRING SECURITIES
Umicore's articles of association do not impose any restriction on the transfer of shares or other securities.
The Company is furthermore not aware of any restrictions imposed by law except in the context of the market abuse legislation and of the lock-up requirements imposed on some share grants by the BCCA.
The options on Umicore shares as granted to the CEO, to the members of the management board and to designated Umicore employees in execution of various Umicore incentive programs may not be transferred inter vivos.
6.2 HOLDERS OF SECURITIES WITH SPECIAL CONTROL RIGHTS There are no such holders.
6.3 VOTING RIGHT RESTRICTIONS
Umicore's articles of association do not contain any restriction on the exercise of voting rights by shareholders, providing the shareholders concerned are admitted to the shareholders' meeting and their rights are not suspended. The admission rules to shareholders' meetings are articulated in article 20 of
the articles of association. Pursuant to article 7 of the articles of association, if a share is the subject of concurrent rights, the rights attached to these shares are suspended until one person is designated as owner vis-à-vis the Company.
To the supervisory board's best knowledge, none of the voting rights attached to the shares issued by the Company were suspended by law on 31 December 2020, save for the 5,733,685 shares held by the Company itself on that date (article 7:217 §1 of the BCCA).
6.4 EMPLOYEE STOCK PLANS WHERE THE CONTROL RIGHTS ARE NOT EXERCISED DIRECTLY BY THE
EMPLOYEES
Umicore has not issued any such employee stock plans.
6.5 SHAREHOLDERS' AGREEMENTS
To the supervisory board's best knowledge, there are no shareholders' agreements which may result in restrictions on the transfer of securities and/or the exercise of voting rights.
6.6 AMENDMENTS TO THE ARTICLES OF ASSOCIATION
Save for capital increases decided by the supervisory board within the limits of the authorized capital, only an extraordinary shareholders' meeting is authorized to amend Umicore's articles of association. A shareholders' meeting may only deliberate on amendments to the articles of association - including capital increases or reductions, mergers, de-mergers and a winding-up - if at least 50% of the subscribed capital is represented. If the above attendance quorum is not reached, a new extraordinary shareholders' meeting must be convened, which will deliberate regardless of the portion of the capital represented. As a general rule, amendments to the articles of association are only adopted if approved by 75% of the votes cast. The BCCA provides for more stringent majority requirements in specific instances, such as the modification of the corporate object or the company form.
The Company's articles of association were amended once in 2020, following the resolutions of the extraordinary shareholders' meeting held on 30 April 2020 in order to bring them in line with the provisions of the BCCA (including the adoption of a two-tier board structure).
supervisory board is authorized to increase the capital in one or more times by a maximum amount of € 55,000,000. The authorization will lapse on 28 May 2023 but it can be renewed.
Up until 31 December 2020, the supervisory board has once made use of its powers under the above authorized capital, i.e. when it resolved on 15 June 2020 to issue senior unsecured convertible bonds due 2025 for an aggregate principal amount of € 500,000,000. These convertible bonds carry a zero-coupon and their initial conversion price amounts to € 55.32 per share. In connection with the issuance of these convertible bonds, the supervisory board resolved to disapply the preference subscription right of existing shareholders in accordance with articles 7:191 juncto 7:198 of the BCCA. The terms of the convertible bonds provide that the bonds can be converted in to new shares and/or existing shares; in case of new shares, they will be issued in the framework of the authorized capital. The above terms also provide for specific cases of early redemption at the option of the Company and/or the bondholders.
The exact amount to be allocated on the above authorized capital limit of € 55,000,000 will be determined, as the case may be, upon (full or partial) conversion of the convertible bonds into new shares.
Following a resolution of the extraordinary shareholders' meeting held on 26 April 2018, the Company is authorized to acquire own shares on a regulated market within a limit of 10% of the subscribed capital, at a price per share comprised between € 4 and € 100 and until 31 May 2022 (included). The same authorization was also granted to the Company's direct subsidiaries. The Company acquired 1,200,000 own shares in 2020 in implementation of the above authorization.
6.8 AGREEMENTS BETWEEN THE COMPANY AND ITS DIRECTORS OR EMPLOYEES PROVIDING FOR
COMPENSATION IF THEY RESIGN, OR ARE MADE REDUNDANT WITHOUT VALID REASON, OR IF THEIR
EMPLOYMENT CEASES BECAUSE OF A TAKE-OVER-BID
All the senior vice-presidents of the Umicore group are entitled to a compensation equivalent to 36 months base salary in the event of a dismissal within 12 months after a change of control over the Company. As far as the members of the management board are concerned, reference is made to the remuneration report (Remnueration Report).
6.7 AUTHORISED CAPITAL - BUY-BACK OF SHARES
The Company's capital may be increased following a decision of the supervisory board within the limits of the so-called "authorized capital". The authorization must be granted by an extraordinary shareholders' meeting; it is limited in time and amount and is subject to specific justification and purpose requirements.
The extraordinary shareholders' meeting held on 26 April 2018 (resolutions published on 29 May 2018) renewed the authorization granted to the supervisory board51 to increase the Company's share capital. The
G7 CONFLICTS OF INTERESTS (ART. 7:115 THROUGH 7:117 BCCA AND ART.
523 - 524TER OLD COMPANIES CODE)
On 6 February 2020, prior to the board of directors discussing or taking any decision, Marc Grynberg, who at that time was still a member of the board of directors, declared that he had a direct conflicting interest of a proprietary nature in the implementation of the decisions taken by the board relating to his performance assessment and to his remuneration (including the grant of shares and options). In
1 The authorization was originally granted to the former board of directors, but this authorization was automatically vested in the supervisory board following the adoption of the two-tier board structure by the extraordinary shareholders' meeting held on 30 April 2020.
accordance with the then applicable article 523 of the old Belgian Companies Code, Marc Grynberg did not take part in the board's discussions concerning this decision and he did not take part in the voting.
The above decisions had/will have the following financial consequences:
A FIXED AND VARIABLE REMUNERATION
The CEO received a fixed gross remuneration of € 720,000 in 2020. Also in 2020, he received a gross variable cash remuneration totalling € 87,500 as non-deferred part of his variable cash remuneration for the reference year 2019.
Furthermore he received in 2020 a gross amount of € 256,500 as deferred part of his variable remuneration for the reference year 2017 based on (1) the 3-year average Umicore group profitability criterion, i.e. the average return on capital employed (ROCE) for the reference years 2017, 2018 and 2019 (i.e. 14.4% giving rise to a percentage pay-out of 69%) and (2) the 3-year average EBIT growth for the same reference years 2017, 2018 and 2019 multiplied by 2 (i.e. 13.2% giving rise to a percentage pay-out of 26%).
The ROCE range is set between a minimum of 7.5% (= pay-out of 0%) and a maximum of 17.5% (= pay-out of 100% of the target). When the achieved ROCE percentage falls between the minimum and the maximum, the pay-out will be pro-rated. The impact of the EBIT growth is calculated by multiplying the average percentage of the EBIT growth for the reference years by 2. The Group EBIT growth incentive only applies for a minimum compounded average adjusted EBIT growth of 10%.
B GRANT OF SHARES AND STOCK OPTIONS
The financial consequences for Umicore consist of: either 1) as long as Umicore decides to keep the shares it holds today: the financing and opportunity cost of maintaining such shares in its portfolio until the delivery date of the shares granted or the option's exercise date, or 2) if and to the extent that Umicore sells such shares at a later date: the difference on the date of exercise of the options between the exercise price and the market value of the shares that Umicore would have to buy on that date.
During 2020, no specific transactions or contractual commitments occurred between a member of the supervisory board or of the management board61 on the one hand, and Umicore or one of its affiliated companies on the other hand.
1 Or a member of the board of directors or the executive committee until the extraordinary shareholders' meeting of 30 April 2020.
G8 STATUTORY AUDITOR
At the annual shareholders' meeting held on 30 April 2020, the statutory auditor's mandate of PricewaterhouseCoopers Bedrijfsrevisoren/Réviseurs d'Entreprises BV/SRL was renewed for a period of 3 years. The statutory auditor is represented by Mr Kurt Cappoen for the exercise of this mandate.
The Umicore policy detailing the independence criteria for the statutory auditor may be requested from Umicore.
G9 CODE OF CONDUCT
Umicore operates a Code of Conduct for all its employees, representatives and supervisory or management board members. This Code of Conduct is fundamental to the task of creating and maintaining a relation of trust and professionalism with its main stakeholders namely its employees, commercial partners, shareholders, government authorities and the public.
The main purpose of Umicore's Code of Conduct is to ensure that all persons acting on behalf of Umicore carry out their activities in an ethical way and in accordance with the laws and regulations and with the standards Umicore sets through its present and future policies, guidelines and rules. The Code of Conduct contains a specific section on complaints and expressions of concern by employees and "whistle-blower" protection.
The Code of Conduct is published in Appendix 6 to the CG Charter.
G10 MARKET MANIPULATION AND INSIDER TRADING
Umicore's policy related to market abuse including insider trading is spelled out in the Umicore Dealing Code, which can be found under Appendix 7 to the CG Charter.
G11 COMPLIANCE WITH THE CG CODE 2020
During the financial year 2020, Umicore's corporate governance systems and procedures were in line with the CG Code 2020, with one exception related to the grant of stock options to the CEO. As explained in the remuneration policy, which was approved by the shareholders' meeting held on 30 April 2020, the stock options granted to the CEO vest immediately upon grant, as contractually agreed. This deviates from provision 7.11 of the CG Code 2020. However, even if they vest immediately, the options can only be exercised after three years, which is in line with the above provision 7.11.
G12 REMUNERATION POLICY
On 6 February 2020 the nomination and remuneration committee presented the remuneration policy (the "Policy") to the board of directors for discussion and approval. This Policy outlines the remuneration principles for the members of Umicore's supervisory board and management board11 and is effective as of 1 January 2020. The Policy was approved at Umicore's annual shareholders' meeting on 30 April 2020 with 82.07% of the votes cast (disregarding the abstention votes, as provided under Belgian company law). The Policy is available on Umicore's website:https://www.umicore.com/en/investors/governance/documents/remuneration-policy/
G13 REMUNERATION REPORT2
REMUNERATION FOR THE MEMBERS OF THE SUPERVISORY BOARD
The remuneration of the members of the supervisory board is in accordance with the Policy and unchanged versus the previous year, with exception of one small change in relation to the additional attendance fee for members of the supervisory board residing outside Belgium. This additional attendance fee also applies as of 2020 for the committee meetings, attended in person and not combined with a supervisory board meeting.
Supervisory board
● Chairman: annual fixed fee: € 60,000 + € 5,000 per meeting attended + 2,000 Umicore shares + company car
● Member: annual fixed fee: € 27,000 + € 2,500 per meeting attended + € 1,000 per meeting attended in person (for foreign-based members) + 1,000 Umicore shares
Audit committee
● Chairman: annual fixed fee: € 10,000 + € 5,000 per meeting attended
● Member: annual fixed fee: € 5,000 + € 3,000 per meeting attended + € 1,000 per meeting attended in person (for foreign-based members)
Nomination and remuneration committee
● Chairman: € 5,000 per meeting attended
● Member: € 3,000 per meeting attended + € 1,000 per meeting attended in person (for foreignbased members)
1 Respectively board of directors and executive committee for the period between 1 January 2020 and 30 April 2020.
2
2020 Remuneration overview members of the supervisory board
All components of the remuneration of the members of the supervisory board for the reported year are detailed in the table below.
Any references in this remuneration report to the supervisory board or the management board of Umicore should be read as references to respectively the board of directors and the executive committee of Umicore when relating to events or circumstances having occurred prior to the extraordinary shareholders' meeting of 30 April 2020, as referred to in the above corporate governance review.
13.1 REMUNERATION OVERVIEW MEMBERS OF THE SUPERVISORY BOARD
in (€) Name Mandate
LEYSEN T.
Chairman of the supervisory board Chairman of the nomination & remuneration committee ARMERO M.
19-11-2008
19-11-2008
Member of the supervisory board Member of the nomination & remuneration committee BEN-ZUR L.
Member of the supervisory board CHOMBAR F.
Member of the supervisory board Member of the nomination & remuneration committee DEBACKERE K.
Member of the supervisory board Member of the audit Committee Member of the nomination & remuneration committeeStart dateEnd dateFixed Fee
Shares1Attendance
FeeNumber of meetings attended Online/In person
60,000
74,660
55,000
10 / 1
25,000
4 / 1
30-4-2020
18,074
24,974
17,500
7 / 0
9-12-2020
3,000
1 / 0
25-4-2017
27,000
37,330
12,500
5 / 0
26-4-2016
27,000
37,330
20,000
7 / 1
26-4-2018
15,000
4 / 1
26-4-2018
27,000
37,330
25,000
9 / 1
26-4-2018
5,000
12,000
3 / 1
Other (Car)Total
217,385
2,725
63,548
76,830
99,330
109,330
in (€)
GARRETT M.
Member of the supervisory board Member of the nomination & remuneration committee KOLMSEE I.
Member of the supervisory board Chairman of the audit Committee LAMARCHE G.
Member of the supervisory board MEURICE E.
Member of the supervisory board RAETS L.
Member of the supervisory board Member of the audit Committee
28-4-2015
25-4-2017
26-4-2011
28-4-2015
25-4-2017 30-4-2020
27,000
106,330
37,330
26,000
9 / 1
16,000
4 / 1
120,330
27,000
37,330
26,000
9 / 1
10,000
20,000
3 / 1
32,282
8,926
12,356
11,000
3 / 1
87,830
28-5-2015
27,000
37,330
23,500
8 / 1
108,830
25-4-2019
27,000
37,330
27,500
10 / 1
25-4-2019
5,000
12,000
3 / 1
1 The share grant relates to the services rendered in the reported year. The shares were granted on 15 May 2020 and were valued at the fair market value of the share at € 37.33, equivalent to the closing share price on 14 May 2020 (share value is set at the lowest of the closing share price on the day before the delivery date and the average closing price of the last 30 calendar days before delivery date).
REMUNERATION FOR THE CEO AND THE OTHER MEMBERS OF THE MANAGEMENT BOARD The remuneration of the CEO and the other members of the management board was reviewed by the supervisory board on 6 February 2020, on the basis of recommendations from the nomination and remuneration committee following a comparison survey with BEL20 and European peer companies.
9-12-2020
3,000
1 / 0
The remuneration for the CEO and other members of the management board included in 2020 the following components: fixed remuneration, variable compensation, share-based compensation, pension plans and other benefits.
Remuneration CEO
On proposal of the nomination and remuneration committee, the supervisory board of 6 February 2020 decided to set the fixed remuneration of the CEO at € 720,000 as of 1 January 2020 and to maintain the annual variable cash remuneration potential of € 700,000 for the reported year. 140,000 stock options were granted for 2020 as part of the annual Umicore Incentive Stock Option Plan.
In addition, the board of 10 February 2021 decided to grant 10,000 Umicore shares for services rendered in the reported year. These shares are subject to a 3 year lock-up and are not subject to forfeiture conditions.
All components of the remuneration earned by the CEO for the reported year are detailed in the table below.
Remuneration other members of the management board
On proposal of the nomination and remuneration committee, the supervisory board of 6 February 2020 decided to set the fixed remuneration of each other member of the management board at € 440,000 as of 1 January 2020 and to maintain the annual variable cash remuneration potential of € 380,000 for the reported year. 30,000 stock options per person were granted for 2020 as part of the annual Umicore Incentive Stock Option Plan. Mr. Goffaux received 10,000 additional stock options following his foreign assignment in South Korea.
In addition, the supervisory board of 10 February 2021 decided to grant 7,000 Umicore shares per person for services rendered in the reported year. These shares are subject to a 3 year lock-up and are not subject to forfeiture condition All components of the remuneration earned by the other members of the management board for the reported year are detailed in the table below.
13.2 REMUNERATION OVERVIEW MEMBERS OF THE MANAGEMENT BOARD
in (€)
Name Position
Mandate Start date End date
Fixed CompensationUndeferred Variable 50%Deferred Variable 50%
Shares
Stock Options
(1)1
(2)2
(3)3
(4)4
(5)5
Grynberg M.
CEO
Csoma S.
EVP Goffaux D.
EVP Kiessling R.
EVP Nolens G.
EVP Platteeuw F.
CFO Steegen A.
EVP Reymondet P.
EVP
Van Sande M.
EVP
19/11/2008 01/11/2012 01/07/2010 01/02/2019 01/07/2015 01/11/2012 01/10/2018 01/08/2003 31/01/2019 01/09/1998 31/03/2018
720,000 440,000 440,000 440,000 440,000 440,000 440,000
315,000 190,000
159,300
95,000 190,000 190,000 190,000 190,000
88,500 88,500
0
- -- -
88,500 88,500 22,125 88,500 22,125
470,800 329,560 334,273 329,627 329,560 329,560 329,560
904,400 193,800 258,400 193,800 193,800 193,800 193,800
- -- -
Pension | Other | ||
Plans | Total | fixed | |
(6)6 | (7)7 | (8)8 | |
54,332 | 2,838,509 | 83% | 17% |
40,447 | 1,410,396 | 80% | 20% |
162,352 | 1,506,721 | 88% | 12% |
23,306 | 1,268,605 | 85% | 15% |
16,517 | 1,390,234 | 80% | 20% |
23,823 | 1,398,104 | 80% | 20% |
21,922 | 1,289,279 | 84% | 16% |
- | 88,500 | 0% | 100% |
- | 22,125 | 0% | 100% |
Ratio
Ratio variable
(9)9
214,677 128,089 128,196
91,872
131,857 132,421 91,872
- -
1 The fixed compensation includes the fixed remunerations from Umicore entities.
2 The undeferred variable has been determined in accordance with the Policy and relates to the reported year 2020. The pay-out was done in 2021 in cash.
3 The deferred variable relates to the reference year 2018 and takes into account, over the years 2018-2019-2020, an average ROCE of 13.4%, resulting in a pay-out of 59% of the 2018 deferred target, and a compounded average EBIT growth% of 9.4%, which is lower than the 10% threshold and therefore not resulting in an additional variable payment. The pay-out was done in 2021 in cash.
4 The share grant relates to the services rendered in the reported year 2020. The shares were granted on 11 February 2021 and were valued at the fair market value of the share at € 47.08, equivalent to the lowest of the closing share price on the day before the delivery date and the average closing price of the last 30 calendar days before delivery date. For German and Korean tax purposes, the shares were valued at respectively € 47.09 (lowest market quotation of the shares on the delivery date), € 48.00 (the closing share price on the delivery date).
5 The stock option grant relates to the services rendered in the reported year 2020. The stock options were granted on 10 February 2020 and were valued at a notional value of € 6.46 per option according to the Black & Scholes formula.
6 Includes DC and DB contributions (service cost).
7 Includes the representation allowance, benefit in kind company car, insurance benefits and additional benefits for Mr. Goffaux D. following his foreign assignment in South Korea (housing, mobility premium, medical insurance).
8 (1)+(4)+(5)+(6)+(7)/Total remuneration
9 (2)+(3)/Total remuneration
COMPARITIVE INFORMATION ON THE CHANGE OF REMUNERATION - PAY RATIO
Below table provides an overview on the annual change of remuneration for the CEO, the other members of the management board (in aggregate), the mandates within the supervisory board and the committees, the average employee remuneration on a full-time equivalent basis and the performance of the Company. Incomplete years of remuneration due to a start or end of the mandate in the course of the reference year, have been adjusted to an annual base. The number of shares in the table represents for all years the number of shares taken into account the share split of 16 October 2017.
The average employee remuneration relates to Umicore (Belgium), in accordance with applicable legal provisions.
13.3 COMPARATIVE TABLE ON THE CHANGE OF REMUNERATION AND COMPANY PERFORMANCE OVER
THE LAST FIVE REPORTED FINANCIAL YEARS
Annual ChangeRemuneration management boardType of remunerationFixed VariableCEO
Number of shares Number of options Pension + other
FixedMembers of the management board (excl. CEO)
VariableNumber of shares Number of options Pension + other
REMUNERATION SUPERVISORY BOARD
Type of remuneration
FixedChairman supervisory boardAttendance fee/meeting Number of shares
FixedChairman audit committeeAttendance fee/meeting Number of shares
Annual ChangeChairman nomination & remuneration committeeFixedAttendance fee/meeting Number of shares
FixedMember supervisory boardAttendance fee/meeting Number of shares
FixedMember audit committeeAttendance fee/meeting Number of shares
2016 vs 2015
2017 vs 2016
2018 vs 2017
2019 vs 2018
2020 vs 2019
CommentsMember nomination & remuneration committee
FixedAttendance fee/meetingNumber of shares
2016 vs 2015
2017 vs 2016
2018 vs 2017
2019 vs 2018
2020 vs 2019
Comments
-
-
-
-
-0.0% - 0.0%
0.0% - 35.0%
0.0% - 0.0%
0.0% - 0.0%
0.0% - 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% - -0.0% - -0.0% - -0.0% - -0.0% - -0.0%
0.0%
0.0%
0.0%
0.0%
-
-
-
-
-
AVERAGE EMPLOYEE REMUNERATION ON A FULL TIME EQUIVALENT BASIS
0.0% 0.0% -42.8% 0.1%
0.0% 2.8%
3.0% 27.0%
0.0% 0.0% 4.8% 2.5%
2.9% -24.8%
0.0% 0.0% 1.1% 3.3%
0.0% -5.6%
-3.8% -6.7% 8.2% 0.4%
2.9% 37.9%
0.0% 0.0% 13.0% 4.5%
% change versus previous year COMPANY'S PERFORMANCE ROCE
0.0% 0.0% -2.1%
7.0%
31.1%
0.0% 0.0% -7.4%
-28.0%
0.0% 0.0% -2.3%
-5.4% -14.3% 1.9%
18.3%
10.6%
0.0% 5.6% 13.8%
EBIT M€ % ROCE change versus previous year % EBIT change versus previous year
2015 13.7% 330
(1)1 (2)2
2.5%
5.1%
3.6%
3.7%
2.7%
2016 14.6% 351
2017 15.1% 410
2018 15.4% 514
2019 12.6% 509
2020 12.1% 536
6.6%
3.4%
2.0%
-18.2%
-4.0%
6.4%
16.8%
25.4%
-1.0%
5.4%
1
The increase versus 2019 relates to the additional stock options granted to Mr. Goffaux D. following his foreign assignment in South Korea.
2 The increase versus 2019 relates to the foreign assignment benefits provided to Mr. Goffaux D. for the entire reported year (mobility premium, housing, medical insurance).
0.0%
0.0%
50.0%
0.0%
0.0%
The pay ratio 2020 between the highest and lowest pay level at Umicore (Belgium) was equal to 62.
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
SHARE AND SHARE OPTION PLANS AND TRANSACTIONS 2020
Management board share option transactions 2020
0.0% -0.0% -0.0% -0.0% -0.0% -
The below table provides an overview on the number of stock options granted, exercised and expired in the course of the reported year, as well as the main provisions of the outstanding stock option plans.
13.4 MANAGEMENT BOARD SHARE OPTION TRANSACTIONS
Transactions in the reported year 2020
Name
Position Grynberg M.
CEO Csoma S.
EVP Goffaux D.
EVPKiessling R.
EVPNolens G.
EVPPlatteeuw F.
CFOSteegen A.
Options GrantedOptions ExercisedOptions ExpiredISOP 2020
140,000
ISOP 2014
150,000 75,000
0
ISOP 2015
ISOP 2020
30,000
0
ISOP 2020
40,000
ISOP 2015
7,500
0
ISOP 2020
30,000
ISOP 2015
9,000 9,000
0
ISOP 2016
ISOP 2020
30,000
0
ISOP 2020
30,000
ISOP 2015
15,000 5,000
0
ISOP 2016
ISOP 2020
30,000
0
EVP
MAIN PROVISIONS OF THE OUTSTANDING STOCK OPTION PLANSISOP PLAN
2020 2019
2018 2017
2016 2015
2014
Grant Date
Exercise Price *1
10/02/2020 11/02/2019
09/02/2018 13/02/2017
05/02/2016 09/02/2015
10/02/2014
Exercise window
Start End
42.050 34.080
10/02/2023 - 09/02/2027 01/03/2022 - 10/02/2026
40.900 25.500
01/03/2021 - 08/02/2025 01/03/2020 - 12/02/2024
16.632 17.289
01/03/2019 - 04/02/2023 01/03/2018 - 08/02/2022
16.143
01/03/2017 - 09/02/2021
1 The exercise prices take into account the share split of 16 October 2017
Details of all options exercised and other share-related transactions can be found on the FSMA website.
Management board share grant 2020
The below table provides an overview of the number of shares granted in 2020 to the CEO and the other members of the management board for the services rendered in 2019. The shares were granted on 10 February 2020 and were valued at the fair market value of the share at € 42.05, equivalent to the closing share price on 7 February 2020 (share value is set at the lowest of the closing share price on the day before the delivery date and the average closing price of the last 30 calendar days before delivery date). For German and Korean tax purposes, the shares were valued at respectively € 41.41,€ 43.75. The shares are subject to a 3 year lock-up until 9 February 2023 included, and are not subject to forfeiture conditions.
Mr. Goffaux D. decided to receive part of his variable cash compensation in Umicore shares, resulting in 4,430 additional shares, granted on 2 March 2020 and valued at the fair market value of the share at € 37.77, equivalent to the closing share price on 28 February 2020 (share value is set at the lowest of the closing share price on the day before the delivery date and the average closing price of the last 30 calendar days before delivery date). For Korean tax purposes the shares were valued at € 38.26. These shares are subject to a 2 year lock-up until 1 March 2022 included.
13.5 MANAGEMENT BOARD SHARE GRANT
Name Position
Nombre d'actions reçues en 2020
Grynberg M. CEO
10,000
Csoma S. EVP Goffaux D. EVP
7,000
11,430
Kiessling R. EVP Nolens G. EVP Platteeuw F. CFO
6,417
7,000
7,000
Reymondet P. EVP
583
Steegen A. EVP
7,000
CommentPro rata the services in 2019 as of 01/02/2019
Pro rata the services in 2019
until 31/01/2019
As per the Policy, the CEO is required to build up, within 3 years from the date of appointment, and to retain minimum 30,000 Umicore shares throughout his tenure. This requirement is also applicable to the other members of the management board, in respect of a minimum of 15,000 shares.
On 31 December 2020 the CEO and the other members of the management board reached this minimum shareholder requirement, with exception of Mr. Kiessling R. and Mrs. Steegen A. being both still in the 3 years' time frame to build up the required minimum.
100
The members of the management board collectively hold a total number of 1,144,097 shares on 31 December 2020.
The members of the supervisory board collectively hold a total number of 960,387 shares on 31 December 2020.
Supervisory board share grant 2020
The below table provides an overview of the number of shares granted in 2020 to the members of the supervisory board for the services rendered in 2020. The shares were granted on 15 May 2020 and were valued at the fair market value of the share at € 37.77, equivalent to the closing share price on 14 May 2020 (share value is set at the lowest of the closing share price on the day before the delivery date and the average closing price of the last 30 calendar days before delivery date). The shares have to be held until at least one year after the member leaves the supervisory board and until at least three years after the delivery date.
13.6 SUPERVISORY BOARD SHARE GRANT
Name
Mandate in the supervisory board
Leysen T.
Chairman
Armero M.
Member Ben-Zur L.
Member Chombar F.
Member Debackere K.
Member Garrett M.
Member Kolmsee I.
Member
Lamarche G.
Member Meurice E.
Member Raets L.
Member
Number of shares received in 2020 2,000
Comment
669
Pro rata the services in 2020 as of 30/04/2020
1,000 1,000
1,000 1,000
1,000
331
Pro rata the services in 2020 until 30/04/2020
1,000 1,000
APPROVAL OF THE 2019 REMUNERATION REPORT
The 2019 remuneration report was approved by the shareholders' meeting with a majority of 82.46% of the votes cast (disregarding the abstention votes, as provided under Belgian company law).
CHANGES TO REMUNERATION SINCE THE END OF 2020
Remuneration for the members of the supervisory board
Based on the review of the overall compensation of the members of the supervisory board and of each element of the compensation, the nomination and remuneration committee concluded on 5 February 2021 that the compensation is appropriate.
Remuneration for the CEO
On 5 February 2021, the nomination and remuneration committee reviewed the remuneration of the CEO based on a comparison survey with European peer companies and BEL20 index companies.
On proposal of the nomination and remuneration committee, the supervisory board of 10 February 2021 decided to maintain the annual fixed and the annual variable cash remuneration potential at the same level. 80,000 stock options were granted for 2021 as part of the annual Umicore Incentive Stock Option Plan. These changes are in accordance with the Policy.
Remuneration for the other members of the management board
On 5 February 2021, the nomination and remuneration committee reviewed the remuneration of the other members of the management board based on a comparison survey with European peer companies and BEL20 index companies.
On proposal of the nomination and remuneration committee, the supervisory board of 10 February 2021 decided to maintain the annual fixed remuneration at € 440,000 but to increase the annual variable cash remuneration potential from € 380,000 to € 400,000 as of the year of performance 2021. The number of stock options granted for 2021 as part of the annual Umicore Incentive Stock Option Plan, were maintained at the same level. These changes are in accordance with the Policy.
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Umicore NV published this content on 26 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2021 11:14:10 UTC.
