materials better life · materials for a better life during 2000, um continued to implement its...
TRANSCRIPT
A n n u a l r e p o r t 2 0 0 0
abetterMaterials for
life
Cont
ents
Key Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Highlights of the Financial Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Message to the Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Business Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Advanced Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Precious Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Zinc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Technology & Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Environment, Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Corporate Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Investor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Legal Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Annual Accounts 2000 - Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Report of the Statutory Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Board and day-to-day Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Dividend and Financial Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
ANNUAL REPORT 2000
1
Materials for a better life
During 2000, UM continued to implement its strategy of turning the metals itrefines and recycles into more and more value added materials. UM focuses onapplication areas where it knows its expertise in materials science and metallurgycan actually make a difference, be it in products that are essential to everyday lifeor those at the cutting edge of exciting, new technological developments. UM’soverriding goal of sustainable value creation is based on this ambition to develop,produce and recycle metals in a way that contributes to a better life for all.
Throughout this report, you will find illustrations of the often surprising placeswhere UM materials show up.
>>>>>>>>>>>>>>>>>>>>>>
Lithium-ion batteries made with ourlithium cobaltite offer a doubleadvantage: increased longevity andlighter weight.
Mobile phones provide freedom and comfort.
And yet mobile phones would not be comfortable without some of UM’s products.
The external antenna connector is madeof a zinc alloy. This material is preferredfor its high conductibility and platingpossibilities.
Printed circuit boards in cellularphones make extensive use of gold,which is an excellent conductor ofelectricity.
Thousands of transparentindium oxide wires aredensely woven over the screen and carry thecurrent that controls the image on this phone’s display.
2 Union Minière
Key
Fig
ures
KEY FIGURES
1996 1997 1998 1999 2000 2000(amounts in million) € € € € € BEF
Turnover 3,248.1 3,889.8 3,449.0 3,180.2 3,834.7 154,693EBIT (1) 46.9 123.7 (16.7) 88.5 163.5 6,593EBITDA (1) 141.9 233.0 134.3 207.5 294.0 11,860Net consolidated profit (loss), Group share 9.7 91.2 (51.2) 69.3 136.1 5,491
EPS declared (2) 0.39 3.56 (2.0) 2.70 5.31 214Net consolidated profit (loss), 36.2 88.4 (38.0) 60.2 140.0 5,648before extraordinary items, Group share
EPS adjusted (2) 1.46 3.45 (1.48) 2.35 5.47 220Net cash provided by (used in) operating activities 174.9 (45.9) 101.1 173.7 271.2 10,941Cash flow before financing (3) (2.8) (176.7) (77.8) 175.2 192.4 7,760Consolidated net financial debt 245.3 424.1 515.9 334.7 184.3 7,433Net debt / Equity (4) 25% 38% 54% 32% 16%Capital employed (4)(5) 1,343.4 1,680.5 1,634.3 1,508.3 1,464.8 59,088
Workforce at end of period 10,188 9,779 8,613 8,065 7,892
(1) Including equity contribution(2) Treasury shares not deducted(3) Net cash provided by (used in) operating activities + Net cash provided by (used in) investing activities(4) End of period(5) Total equity + net interest bearing debt
Contributions to EBIT (1)
Full Year 2000
Technology and Services 6%
Zinc 47%
Diamonds
Advanced Materials
Copper
Precious Metals
(1) Before corporate costs-2
-1
0
1
2
3
4
5
6
1996 1997 1998 1999 2000
EPS declaredEPS adjusted
(in €)
EPS
17%
30%
3
CONTRIBUTIONS TO OPERATING PROFIT (LOSS)
1996 1997 1998 1999 2000 2000(amounts in million) € € € € € BEF
Advanced Materials 39.9 42.7 27.3 9.2 22.8 919Synthetic Diamonds (1) 3.4 11.1 12.9 8.6 8.0 322Copper 9.0 13.8 11.2 1.7 25.0 1,007Precious Metals (15.2) (21.6) (62.4) (0.3) 30.6 1,236Zinc 34.6 98.4 49.9 84.0 85.8 3,461Technology & Services 2.2 0.5 0.4 2.4 10.1 406Inventory Write-Downs 0.0 0.0 (34.5) (1.1) 0.0 0.0Corporate and Other Activities (27.0) (21.2) (21.5) (16.0) (18.8) (758)
Total 46.9 123.7 (16.7) 88.5 163.5 6,593of which Equity Method 4.2 10.6 4.9 15.8 13.5 543
(1) Diamant Boart included until December 31, 1998
SHARE PRICE EVOLUTION
(Base 30/12/1998 = 100)
J F M A M J J A S O N D J F M A M J J A S O N D J F M
1999 2000 2001
UM performance versus BEL 20UM performance versus Dow Jones Non-Ferrous Metals Index
50
100
150
200
4 Union Minière
Hig
hlig
hts
of th
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ear
2000
ADVANCED MATERIALS Doubling of operating result compared to 1999, with more than 20% increase
in sales volumes.
Reorganisation into 7 market-oriented business lines.
Investments in new plants and capacity extensions.
Official commissioning of the lithium cobaltite manufacturing plant in South Korea.
Acquisition of 2 UK-based finished optics businesses, V & S SCIENTIFIC and TAYSIDE OPTICAL TECHNOLOGY.
Venture Unit: capital gain of EUR 16.3 million on the sale of Emcoreshareholding.
COPPER Operating result improved by EUR 23 million.
Production capacity increased by 74% at UNION MINIERE PIRDOP COPPER
in Bulgaria, up to 165,000 tonnes of copper anodes. USD 109 millioninvestment plan for further capacity increase up to 210,000 tonnes.
Increase in production capacity of Foxrod® oxygen-free copper wire rod from2,500 tonnes to 15,000 tonnes per year.
PRECIOUS METALS EUR 30.9 million improvement in operating income due to better efficiency
combined with high platinum group metals prices and the resulting increase in supply.
Decision to invest EUR 30 million in a new copper leaching and electrowinningplant at Hoboken, expected to be operational in the first quarter of 2003.
5
ZINC Excellent operating result again.
Decision to increase smelting capacity by 60,000 tonnes by 2002 (EUR 24 million), most of it from secondary materials.
Acquisition of 44.8% of PADAENG INDUSTRY of Thailand, South East Asia's solezinc producer.
Acquisition of LARVIK PIGMENT, the world’s leading producer of high-quality zinc dust.
TECHNOLOGY & SERVICES Establishment of the NORGEM joint venture between SOGEM and Norilsk of
Russia, one of the most important cobalt producers world-wide.
Sale of an 80% stake in its LME brokerage subsidiary SOGEMIN METALS.
Increased focus of UM ENGINEERING on supporting UM's growth strategy.
UM GROUP Outperformance of the UM share price against the BEL 20 Index by 14%
and the Dow Jones Non-Ferrous Metals Index by 30%.
Hedging of full dollar exposure for 2001 and 2002, and half of the dollarexposure for 2003 to protect future earnings and cash flows.
Share buy-back programme pursued up to 2.05 million shares, representing 8% of the total outstanding.
First Environment Report published in September.
6 Union Minière
Mes
sage
to th
e Sh
areh
olde
rs An Outstanding Year
2000 proved to be a milestone year for UM, not so much because it heralded a new century, but because we completed the ambitious repositioning of ourcompany initiated in 1995.
UM emerged from this challenging period as a technologically strong metalsand materials group with world leadership position in most markets in which itcompetes.
The list of the accomplishments which we achieved in 2000 speaks for itself. We improved the overall performance and financial results in each of ourbusinesses. Customers rewarded our product development and quality effortswith increased market shares. Safety and environmental performance againmade notable progress. Through new capital expenditure programmes and aseries of acquisitions, we expanded our core businesses. New growth targetswere formulated for the coming years. And finally, a smooth transition at thehelm of the company was effected.
Let us examine these various points in turn:
Improved performance in every business area
With net after tax profits of EUR 136.1 million UM increased its results by 96% over 1999 and is now earning more than its cost of capital. EBIT grew from EUR 88.5 million to EUR 163.4 million. The results were favourably influenced bythe USD exchange rate and by some metal prices, but intrinsic progress was themost important contributor. It was gratifying that this advance was derivedfrom each business group. UM’s Zinc business turned in a truly impressiveperformance. Our sustained effort at serving our customers with specialityproducts rather than commodities clearly paid off. The Advanced Materialsbusiness almost doubled its contribution despite continued large investments inresearch and product development. Precious Metals operations made anotherleap forward and exceeded the original profitability targets. The strategic andtechnological choices proved to be the right ones. Although Copper results arenot yet in line with our return on capital employed target, significant progresswas made in 2000, especially at the Pirdop smelter in Bulgaria. Finally, in theTechnology & Services area SOGEM produced outstanding results in its tradingand marketing activities. UM ENGINEERING increased its focus on supporting UM’s growth strategy, whilst UM Research worked closely together with thevarious business units to prepare new breakthroughs in process developmentand product innovation.
Increasing market shares
Our sustained efforts at cost competitiveness and product development,together with a driven marketing force, resulted in increased market sharesacross the businesses. For example, in battery grade cobalt oxide, our share ofthe world market exceeded 60% and our product found its way into more than300 million lithium-ion batteries for portable phones and laptop computers. In zinc alloys, we gained market share in Europe and established a first footholdin North America. Also in zinc powders, germanium tetrachloride, nickel hydroxideand many smaller niche products, our sales grew faster than those of ourcompetitors.
Significant progress in safety performance
In terms of safety performance, the targets we had set last year for 2002 havealmost been reached already. The accident frequency rate was reduced by 33%.We continued to invest in site rehabilitation and emission reduction. Wecontinued our policy of pro-activity in all environmental matters, and publishedour first audited environment report, which was very favourably received.
New investments and acquisitions to spur growth
Some important capital investment programmes were completed. In December,we inaugurated our lithium cobaltite plant in South Korea. We continued theexpansion programme for our copper smelter in Pirdop, decided to increase ourzinc smelting capacity by 60,000 tonnes and took several other investmentdecisions in the advanced materials area. To support our zinc growth strategy,we acquired LARVIK PIGMENT, the leading zinc dust producer for paints, and took a 44.8% stake in the Thai zinc producer PADAENG INDUSTRIES. In the electro-opticsarea, we took control of 2 UK-based manufacturers, V&S SCIENTIFIC and TAYSIDE,after the earlier attempt to acquire Laser Power Corporation in the US wasabandoned as the price had become unattractive. On the other hand, wedivested an 80% stake of our LME broker, SOGEMIN METALS.
7
“2000 proved to be a milestone for UM,after we completedthe ambitiousrepositioning of ourcompany initiated in 1995.”
>Ka
rel V
INCK
Exec
utiv
e Ch
airm
an
>Th
omas
LEY
SEN
Chie
f Ex
ecut
ive
Off
icer
8 Union Minière
New growth targets
During the first half of the year, the Executive Committee, together with manymanagers throughout the company, developed a new growth vision. This resultedin a revised mission statement and a set of concrete growth targets to be achievedby the year 2003. These include:
doubling the size of the advanced materials business;
growing the value added zinc business and zinc recycling activities by 50%;
exploiting the full potential of precious metals refining and recycling capacityby capturing a growing supply and consolidating our world leadership position;
achieving 12% return on capital employed in the copper business by continuedfocus on operational efficiency and growth in the sales of copper products.
To allow the organisation to be more responsive and to stimulateentrepreneurship, several business units, notably in the advanced materials andzinc areas, were subdivided into a number of smaller business lines, eachfocusing on a specific market segment and entrusted with full profit and lossresponsibility.
* * *
We were pleased to be included in the Dow Jones Sustainability Group Index,which was a recognition of our commitment to sustainable development.
Although UM outperformed the Brussels BEL 20 index for the second year in arow and also outperformed the Dow Jones non-ferrous metals index in 2000, we feel that UM’s achievements and prospects are not yet fully appreciated bythe financial markets. Therefore, a major image–building campaign aimed at thegeneral public and a stepped-up investor relations effort are a priority for 2001.If current market conditions continue, we also intend to pursue our share buy-back programme. During 2000, UM repurchased about 1.8 million shares,bringing the total shares repurchased to 8% of the total outstanding.
The fact that our free float is set to increase following the issue by Suez of exchangeable bonds redeemable in UM shares is viewed positively by the company,as it removes a degree of uncertainty over the eventual destination of the 25% stake held by Société Générale de Belgique. In addition, it will contributeto greater liquidity of the shares and give UM access to a broader internationalshareholder base.
* * *
“The good results in2000 are not a reasonfor complacency, but rather a powerfulincentive to do evenbetter in 2001.”
At the General Assembly of May 2001, Christine Morin-Postel and Eric De Jonghewill be leaving the board of directors. UM owes both of them a debt of gratitudefor their wise counsel over the last few years.
* * *
Throughout the challenging years of UM’s repositioning, the people throughoutthe Group have shown enormous energy, commitment, and resilience. The resultsof 2000 are the clearest tribute to that spirit.
Although these achievements are a great source of satisfaction and pride to allat UM, we also know that this is no time to sit back and relax. The economicconditions in some key markets may become less buoyant. While our dollarhedging programme offers complete downside protection on this front untilpart way through 2003, other external factors may affect us.
Therefore, we have to continue along the path we have set ourselves: morevalue added, more new products, the search for operational excellence,disciplined capital management and focused acquisitions. The good results in 2000 are not a reason for complacency, but rather a powerful incentive to do even better in 2001.
Thomas LEYSEN Karel VINCK
Chief Executive Officer Executive Chairman
9
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Adv
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Very thin layers of other semiconductor materialssuch as gallium arsenide are deposited on thegermanium substrates to build a solar cell.
These solar cells will generate power for thetelecommunications satellites that make our livesmore comfortable by allowing instant communicationand the transmission of images world-wide.
Advanced Materials Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Operating profit (loss) 39.9 42.6 27.3 9.2 22.8 919EBITDA 45.1 50.8 39.9 28.1 46.7 1,885Turnover 245.5 342.4 363.2 358.3 434.5 17,527Average capital employed 172.2 195.4 204.7 212.1 226.9 9,154ROCE 23.2% 21.8% 13.3% 4.3% 10.0%Capital expenditure 14.9 39.3 33.8 11.4 27.0 1,089
Workforce at end of period 887 1,179 1,105 965 1,034
Synthetic Diamonds Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Equity contribution 4.2 11.5 10.5 16.0 11.9 482Goodwill amortisation (3.4) (4.3) (4.7) (4.4) (4.0) (160)Net contribution 0.8 7.2 5.8 11.6 8.0 322
The Advanced Materials business group, which produces a wide range of metalbased speciality products, and holds a world leadership in cobalt compoundsand germanium products, more than doubled its operating result in 2000compared to the previous year.
A major milestone was laid during 2000 for UM's fastest growing business groupwith the setting of a target for again doubling its 1999 turnover by 2003, to alevel of approximately EUR 750 million. UM is confident that this revenue targetcan be reached by a combination of three components: business excellence,innovation and acquisition.
3 paths to growth
Roughly 50% of the growth can be achieved by being excellent at what thebusiness group already does, making better use of its capacities and fullydeveloping the potential within the existing portfolio. Innovation meanspursuing internal ideas to achieve new product and application breakthroughsand it has been decided to implement a specific innovation programme forAdvanced Materials in 2001. Finally, a solid acquisition programme gotunderway in 2000 when TAYSIDE and V&S SCIENTIFIC joined the Group. Otheracquisitions that fit with the UM Advanced Materials business model arecontinually under review.
11
>M
arc
VAN
SAN
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Vice
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“Our target by 2003:doubling the size of our advancedmaterials business.”
12 Union Minière
Concrete results from the Venture Unit
The Venture Unit was established in 1998 as an “incubator” for product andapplication ideas from within the business units and to create a nurturingenvironment for start-up companies in which UM is a shareholder.
The fact that such ventures can evolve from good ideas to full scale industrialproduction is demonstrated by the opening of a new optics materials plant inearly 2001 at VERTEX (the French lens manufacturer in which UM has a 40%share) and a pilot plant producing nickel and copper powders for capacitorswhich was started up in 2000.
The joint venture with Emcore for the development of germanium substratescame to an end in July with both partners able to benefit from the fruits of the research. Furthermore, UM registered a significant capital gain of EUR 16.3 million in 2000 on the sale of its stake in Emcore.
A smooth reorganisation
In line with UM's downstream, market-oriented strategy, on January 1st 2000,the business group reorganised itself into seven business lines, namely, batteries,engineered powders, ceramics/chemicals, optics, substrates, high-purity chemicalsand speciality materials. Each has its own production and marketing division.The change over has been smooth and successful and is showing results.
MEGAPODE- the cutting edge
UM, via SIBEKA, holds a 50% stake in MEGAPODE, the world’s leading producer of industrial diamonds which are marketed by De Beers Industrial Diamonds,UM’s partner in MEGAPODE.
Synthetic diamonds are advanced materials and as such are now reported in theAdvanced Materials business group. Among MEGAPODE’s product portfolio are alsopolycrystalline diamonds (PCD) and polycrystalline cubic boron nitrate (PCBN) forcutting tools, carbide-backed diamonds and PCBN composites for mining, drillingand machining applications and diamond-coated silicon carbide tool parts.
2000 has been a good trading year in synthetic diamonds although cheaper,lower quality synthetic diamonds from China and South Korea are puttingpressure on the market. MEGAPODE will maintain its strategy of providingproducts developed in close consultation with customers while deciding toimplement a reorganisation in order to improve its cost competitiveness. Thebottom line has consequently been impacted by a USD 15 million provision forrestructuring.
Synergies with other advanced materials such as cobalt and other engineeredpowders, used for example in the diamond tool industry, are being explored.
0
50
100
150
200
Sales of germanium products Sales of cobalt productsSales of zinc products for primary batteriesSales of synthetic diamonds
1996 1997 1998 1999 2000
(Units of metals or carats sold in 1996 = 100)
SalesTrends
UM COBALT & ENERGY PRODUCTS
In 2000, UM Cobalt & Energy Products started to reap the benefits of newproduct development and plant construction. A buoyant economic climate also helped to lift sales in all application areas. Sales volumes have grown by 26% for cobalt products, 20% for nickel products and 23% for zinc products.
The year began with the introduction of a focused organisational structure ofthe unit consisting of three separate business lines:
Engineered powders – the world leader
UM is the world leader in engineered powders for hard metals and diamondtools and sales were the highest in 5 years. Both the hard metal and diamondtools sectors were very strong in 2000.
The biggest growth area has been in submicron cobalt powders used forsophisticated micro applications. An extension of the submicron plant comes online in Olen in the first quarter of 2001 and the industrial scale production ofan even finer half-micron powder was launched in Canada.
The teething problems at the NANODYNE® plant in North Carolina in the US havebeen overcome and micro and nano sized tungsten carbide cobalt compoundswill start selling in larger quantities this year.
The year has also seen a continued growth of the cobalt powders business inChina where UM is the biggest, non-integrated cobalt powders producer. A newplant will come on stream in the first quarter of 2001.
Rechargeable batteries – a 60% world market share
UM's cobalt oxide is the raw material of choice for the production of lithiumcobaltite used in lithium-ion batteries for portable phones and laptop computers.UM holds a market share of approximately 60% in this fast growing application.
In South Korea, the 1,000 tonne-per-year lithium cobaltite plant was successfullycommissioned and the first sales were achieved before year-end.
Although the rechargeable battery sector will slow down in the first quarter of 2001, the prospects for growth during the year ahead remain tremendous.UM is already increasing capacity in preparation. A new cobalt oxide line isbeing built in Olen and production capacity of spherical nickel hydroxide fornickel metal hydride batteries is to double in Canada.
UM is clearly well placed to hold its leading position as prime supplier of materialsto the rechargeable battery market.
13
>Lu
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Coba
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“Sales volumes have grown by 26%for cobalt products,20% for nickel productsand 23% for zincproducts.”
14 Union Minière
Demand has also been good for primary disposable batteries. Market shareincreased. A new zinc powder plant in Overpelt, Belgium, commissioned in the second half of the year, will help to cater for the increased sales volumes in the years to come. Meanwhile, sales of powders from our Shanghai operationcontinue to grow.
UM has moved out of the cadmium compound business and sold off Produits Chimiques Wiaux in 2000 to focus on materials for newer generationbattery systems.
Ceramics and Chemicals – more capacity and a bigger range
There was high demand for cobalt oxide and salts for the ceramics industry in 2000. Volumes increased and UM is improving its market share. The capacityof the South African cobalt compound plant has been increased and theproduct range has been broadened.
In the course of the year UM started to introduce other nickel- and cobalt-basedchemicals in an effort to diversify its product offering in the ceramics andchemical fields.
Powering ahead
In 2001 a major focus will continue to be research and development,particularly in the fast moving battery business. UM will continue to prepare for sales volume and revenue growth in the coming years, and will be seekingopportunities to grow its business both organically and by acquisition.
UM ELECTRO-OPTIC MATERIALS
UM Electro-Optic Materials saw a 20% increase in sales volume in 2000 - bringing with it significant added value growth.
High-Purity Chemicals – dynamic growth
The fibre optics market was booming and as a result, sales of germaniumtetrachloride increased by 25% with a further 50% growth expected in the yearahead. There are plans to start production in North America by the end of 2001.UM recovered and improved its market share in germanium dioxide as salesvolumes grew by 25 %, boosted by the new fast soluble grade developed by UM.
Sales by Business Line
Ceramics andChemicals 17%
Batteries 46%
Engineeredpowders 37%
Geographical Breakdown of Sales
Japan 33%
Other Asia 20%
America 16%
Europe 28%
Africa 3%
Sales by Business Line
SpecialityMaterials 13%
High-PurityChemicals 39%
Substrates 20%
Optics 28%
15
Optics - first move downstream
An attempt to acquire Laser Power Corporation in the United States wasabandoned after the price became unattractive. However, the acquisition of twoUK-based finished optics businesses has provided a sound alternative, giving UMthe opportunity to become a key supplier of these materials.
V & S SCIENTIFIC designs and manufactures optical components for CO2 lasersproviding downstream integration for the US based zinc selenide unit, PHASE4.TAYSIDE OPTICAL TECHNOLOGY provides coating solutions for CO2 lasers and for infrared and visible systems. World demand for night vision systems in cars is growing, and UM will now be able to provide the final coating for thechalcogenide glasses already produced by its French affiliate VERTEX, which is dueto open a new chalcogenide glasses plant in Rennes in the first quarter of 2001.
Turnover of the global finished optics business is expected to double by the endof 2002.
Substrates - on the right track
Germanium substrates for space solar cells did twenty percent better in volumesthan in 1999 and a promising new area is the use of germanium to producesolar cells for terrestrial applications such as portable consumer electronics.
Speciality materials – demand soars
The demand for high-purity cobalt took off in 2000, requiring UM to move fromthe already significant quantities produced in the pilot plant to full industrialproduction in 2001 - building on the successful development of this newmaterial for electronics which offers better conductivity than the titaniumusually used for integrated components.
Another successful research programme is the use of indium tin oxide for flatpanel displays. There is huge interest and the products are expected on themarket in 2001.
Recycling is the key
Almost all the germanium processed by UM comes from residues. In order toimprove the global recycling yield as well as to increase the recycling capacityfor residues from the fibre optics industry, a new EUR 6 million recycling plant is being built at Olen.
Since there is limited scope for growth in traditional products in view of UM Electro-Optic Materials' large world market shares the business unit’sgrowth strategy is to diversify downstream and expand its product range.
Geographical Breakdown of Sales
Japan 22%
North America 37%
Germany 4%Benelux 4%
UK 5%Other Europe 6%
France 17%
Miscellaneous 5%
>M
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l CAU
WE
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Elec
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Opt
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ater
ials
“Our business unit’sgrowth strategy is todiversify downstreamand expand its productrange.”
16 Union Minière
Copp
er
Robots have removed the burden of tedious,repetitive operations from humans in manyindustries.
The innumerable movements of the robot arm –hourafter hour, day after day– place a heavy load on theflexible cables that provide electric power and transmitsignals to the sensors. For this specific application, UMdeveloped Foxrod®, an oxygen-free copper wire rod withhigh resistance to mechanical fatigue.
Copper Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Operating profit (loss) 9.0 13.8 11.2 1.7 25.0 1,007EBITDA 20.7 31.8 29.9 25.2 54.4 2,196Turnover 835.5 787.3 712.1 791.7 1,154.5 46,571Average capital employed 249.4 253.1 268.7 366.9 399.7 16,123ROCE 3.6% 5.5% 4.2% 0.5% 6.2%Capital expenditure 44.1 42.6 14.4 24.0 38.1 1,538
Workforce at end of period (1) 1,034 946 858 2,282 2,087
Despite a continued unsatisfactory copper price and no recovery in thetreatment and refining charges for copper concentrates and blister, UM Copperstarted to reap the rewards from the heavy investment programme of theprevious years. Operating profit increased from EUR 1.7 million to EUR 25 million.
Leading position in Europe
With a total output in excess of 500,000 tonnes of copper wire rod and shapesfor the construction, transport and electronics sectors, UM is a leading Europeancopper producer. Capacities of 270,000 tonnes per year in Olen (Belgium) and160,000 tonnes in Avellino (Italy) make UM the largest non-integrated Europeanproducer of wire rod. Olen also produces more than 100,000 tonnes of billetsand cakes.
Integrated operations
Currently, the effective capacity of the Group's main copper refinery in Olenamounts to 320,000 tonnes per year. The UNION MINIERE PIRDOP COPPER smeltingplant in Bulgaria, with a capacity of 165,000 tonnes (at which a major modernisationand expansion programme is still underway), is well integrated as the mainsource of feedstock for Olen. The balance of Olen's needs is assured by anodesfrom NFI (NON FERROUS INTERNATIONAL), blister copper from the Group's operationsat Hoboken (until 2003, when the new copper leaching and electrowinningcapacity comes on stream), as well as long-term contracts with various copperraw materials suppliers from around the world.
NFI
NFI, in which UM holds a 19.9 % stake, is one of the leading collectors andrecyclers of copper scrap in Europe. It has a wide network of scrap-yards in most European countries and operates copper smelters and refineries in Belgium(Metallo Chimique in Beerse) and Spain (Elmet in Bilbao). Beyond the supply ofcopper anodes, UM co-operates with the NFI group in the sourcing of zinc- andprecious metals-bearing secondary materials.
17
(1) UNION MINIERE PIRDOP COPPER consolidated as from January 1st 1999
>Th
ierr
y CA
EYM
AEX
Seni
or V
ice-
Pres
iden
t Co
pper
“Our target by 2003:achieving 12% returnon capital employedby continued focus onoperational efficiencyand growth in the salesof copper products.”
18 Union Minière
UM COPPER
World demand for copper remained strong in 2000 and UM Copper’s results saw a marked improvement over last year. This was achieved partly throughincreased production volumes and sales in all activities, better supplies, an improved dollar rate and good cost prices in both the refining andtransformation sectors.
The Olen refinery produced 312,000 tonnes of cathodes. Sales of UM Copper’send products reached 512,000 tonnes, with deliveries of billets and cakesboosted by the building and electronics industries. Sales of copper wire rod weredriven by the dynamic activity in the cable and wire sector, although the marketweakened during the last quarter, especially in Italy.
Pirdop takes off
The improved overall figures owe much to UNION MINIERE PIRDOP COPPER in Bulgaria,which has seen dramatic changes in 2000. The first operational year followingmodernisation exceeded expectations with production of 165,000 tonnes ofcopper anodes compared to 95,000 tonnes in the previous year.
2000 saw an important phase of the USD 150 million investment programmescheduled for completion in the second quarter of 2002.
The clean up of the plant is finished and further investments are being made tocomply with European environmental regulations and to increase both smeltingand refining capacity, up to 210,000 tonnes of anodes (higher than the initialtarget of 185,000 tonnes) and 45,000 tonnes of cathodes.
Investment in oxygen-free rod
In line with its strategy to develop and market products with higher addedvalue, UM Copper decided to invest in a new installation for the production ofits oxygen-free copper wire rod Foxrod®, a product that meets the most stringentrequirements of the electrical wire & cable and electronics industry. Thisinvestment will increase its annual production capacity from 2,500 tonnes up to15,000 tonnes.
0
100
200
300
400
500
600
1996 1997 1998 1999 2000
ShapesContirod wire rod
('000 tonnes)
Sales of Copper Semis
Geographical Breakdown of Sales
France 7%
Italy 31%
Other World 6%
Other Europe 17%
Germany 21%
Benelux 12%
Spain 6%
19
Safety first
The safety at work record at Pirdop was the best in the UM Group and Olencontinued its marked improvement by reducing time lost to accidents by 60%.
On the environmental front, dioxin emissions in Belgium have been tackled andare now well within the new required standards.
There are also plans to improve gas cleaning at the Olen shape plant.
Secure supply
Copper concentrates supply for the year ahead is already assured for the Pirdopsmelter and long-term commitments, together with the feed coming fromPirdop, will ensure 95% of the supply to Olen.
Healthy prospects
Despite some concern about the economic climate for the year ahead, copperremains in high demand with an expected increase of 3% even in the seeminglysaturated markets in Europe and North America.
UM Copper is confident that it will further improve its operating results in 2001despite still poor, although probably improved, refining and smelting commercialconditions.
20 Union Minière
Prec
ious
Met
als
Recycling plays a major role in sustainable development.
UM refines by-products from other smelting and refiningoperations such as silver and gold – extracted from copperrefinery tankhouse slimes. Electronic scrap contains up to 10 different metals including gold, palladium and silver.Catalytic converters from cars are collected and refined to yield platinum, palladium and rhodium.
Precious Metals Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Operating profit (loss) (15.2) (21.6) (62.4) (0.3) 30.6 1,236EBITDA 2.9 (4.8) (40.5) 20.8 50.9 2,053Turnover 767.5 832.3 688.3 777.8 739.7 29,838Average capital employed 225.7 270.2 274.7 221.0 176.5 7,120ROCE (6.7%) (8.0%) (22.7%) (0.1%) 17.4%Capital expenditure 16.7 58.8 27.3 10.4 14.6 590
Workforce at end of period 1,730 1,297 1,245 1,215 1,226
UM Precious Metals is the world market leader in recycling complex materialscontaining precious metals.
Its facility in Hoboken, near Antwerp, is one of the world’s largest, cleanest andmost advanced precious metals recycling and recovery operations and providesrefining services to a global customer base. The plant efficiently processescomplex intermediate materials and specific precious metals-bearing scrap fromelectronic, photographic and catalytic (oil refining, petrochemical andautomotive) applications.
Precious metals, special metals, minor metals and base metals are recoveredwith a unique, environment-friendly metallurgical flowsheet, satisfying the moststringent environmental standards.
21
>H
ugo
MO
REL
Vice
-Pre
side
nt P
reci
ous
Met
als
“Our target by 2003:exploiting the fullpotential of ourrefining and recyclingcapacity by capturinga growing supply andconsolidating ourworld leadershipposition.”
22 Union Minière
UM PRECIOUS METALS
New found strength
The fact that the problems besetting the UM Precious Metals business unit in the late 90s are well and truly over is reflected in a EUR 30.9 millionimprovement in operating income. The Isa smelter is operating very well and UM Precious Metals benefited from improved efficiency in terms of throughput,combined with high platinum group metal (PGM) prices and the resultingincrease in supply.
PGM prices remain extremely high indeed as supplies from Russia are muchreduced, and as a result of a sustained demand. The rest of the 15-plus metalsthat have a direct impact on our profitability are showing positive trends.
New horizons
A major growth initiative is the decaptivation programme in which majorinternational non-ferrous smelters and refiners can improve their profitabilityby contracting UM to refine their drosses, slimes and other materials containingprecious metals. This effort is proving increasingly successful.
UM Precious Metals’ dedicated website too is attracting attention and shouldcreate additional sourcing opportunities.
A major step in ensuring growth for the business unit is the recent approval of aEUR 30 million investment in a new copper leaching and electrowinning unit atthe Hoboken facility. This will allow the business unit to shorten the circuit andreduce the lead-time. Productivity at Hoboken will increase as will capacity andUM Copper will be able to optimise the capacity of the Olen refinery.
UM Precious Metals will greatly benefit in the coming years from the upcomingEU regulations governing the recovery and recycling of end-of-life parts fromcars, electric and electronic equipment. Printed circuit boards are becoming anincreasingly important supply source for which UM Precious Metals has a unique,efficient and environment-friendly process. The joint venture with Metallo Chimiquefor the recovery and collection of automotive catalytic converters is proceedingwell and the supply is increasing.
Geographical Origin of Materials in 2000
Europe 46%
North America 29%
Australia/ Oceania 7%
Africa/ Middle East 12%
Central and South America 3%
Asia 3%
Source of Materials in 2000
Concentrates 1%
By-product in zinc and lead industry 46%
Catalysts 10%
Electronic scrap 10%
Preprocessing 7%Other 5%
By-product in copper industry 9%
By-product in preciousmetal industry 12%
(expressed in terms of refining charges)
(expressed in terms of refining charges)
23
A leadership position
With the world’s largest silver refinery, UM Precious Metals is now the globalleader. It is the number one refiner of rhodium in Europe and occupies thenumber two position for platinum and palladium with respective capacities of 15 and 25 tonnes.
Having thoroughly consolidated the processes, focus is now on increasingproductivity and further strengthening UM Precious Metals’ competitiveposition in the broad market of complex, precious metals-bearing materials it treats.
0
3
6
9
12
15
1998 1999 2000
TotalElectronic scrap with plasticCatalysts
('000 tonnes)
Supplies of Key Recycling Materials
24 Union Minière
Zinc
DVD readers provide superb picture quality and sound.
The sledge holds all the optical, electrical and mechanicalparts in a DVD laser beam mechanism. Its small size and wallthickness, low weight, and high tolerance specifications makezinc alloy the ideal material for its manufacture.
Zinc Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Operating profit (loss) 34.6 98.4 50.0 84.0 84.1 3,394Equity contribution PADAENG - - - - 1.7 67EBITDA 71.4 134.5 80.8 121.1 125.1 5,048Turnover 669.0 1,033.8 828.6 841.5 971.8 39,203Average capital employed 352.9 377.8 369.3 347.1 333.2 13,443ROCE 9.8% 26.0% 13.5% 24.2% 25.7%Capital expenditure 27.7 32.4 38.8 17.9 25.3 1,022
Workforce at end of period 2,735 2,724 2,282 2,440 2,448
UM's Zinc business group posted another year of excellent operating profits, by applying the principles of its mission statement, which calls for UM to bepresent in all applications where zinc adds value and where UM can make adifference.
UM's underlying business model is based on four key elements:
efficient zinc smelting and refining operations a wide range of value-adding products and services, developed for all
major zinc applications a closed loop for zinc products, through effective recycling and reuse
of zinc metal a truly global presence.
The four strategic guidelines, resulting from this business model, continued to be implemented in 2000.
Environmental responsibilityUM conducted further research and invested significantly in cleaner processesand environment-friendly products. For example, a pilot plant was brought intofull operation for the production of Gravelite, an inert product made from theprocess residues of our refining operations.
Excellence in technology and operationsUM has launched a major programme aimed at the de-bottlenecking of itsoperations. This programme will significantly improve the efficiency of theexisting zinc refinery operations.
The development of new products and new applicationsIn 2000, UM reached a record level of sales of speciality products, for thegalvanising, die-casting and building industry. It also launched a number of new products which further strengthen its position in several applications.
25
>Je
an-L
uc D
ELEE
RSN
YDER
Exec
utiv
e Vi
ce-P
resi
dent
“Our target by 2003:growing the valueadded zinc businessand zinc recyclingactivities by 50%.”
26 Union Minière
Growth in new geographic marketsThe Zinc business group reinforced its presence world-wide, through the acquisitionof a large stake in PADAENG INDUSTRY (Thailand), the acquisition of LARVIK PIGMENT
group (Norway, Malaysia, Australia) and the full ownership of UNIMET (Mexico).
Each of the three business units has developed its own strategy and action planbased on the business group's strategic guidelines.
UM ZINC
More added value
Sales in 2000 have been very positive with a 19% volume increase in specialityalloys for die-casting and galvanising, coupled with a voluntary decrease incommodity zinc. This reflected the overall good performance of the steelgalvanising and die-casting sectors, as well as UM’s increased market sharefollowing the withdrawal of a competitor in zinc alloys for die-casting. Higherpremiums were enjoyed for all speciality products. Prospects for 2001 remaingood and UM Zinc continues to develop new value added products in line withthe Group's downstream philosophy.
60,000 tonnes extra
A 60,000 tonne capacity increase at Auby and Balen was announced during the year, representing an investment of EUR 24 million. A sizeable proportion of the expansion has already been achieved at Balen where the effects of the de-bottlenecking process have made a major contribution. The 60,000 tonne extracapacity will come on stream during 2002, bringing the total smelting capacityup to more than 500,000 tonnes.
Some operational problems at Auby led to a cost slippage in the first half of 2000. The process is now back to specification but additional maintenance is required to anchor its performance.
0
100
200
300
400
500
600
('000 tonnes contained zinc)
Zinc oxide ex secondariesThermal zinc OverpeltSlabs Auby + Balen
% Recycled 17% 19% 21% 23% 23%
1996 1997 1998 1999 2000
Overall Zinc Production
0
100
200
300
400
500
600
('000 tonnes)
Zinc dust + Zinc oxideBuilding productsSpecial alloys - die-castingSpecial alloys - galvanisingCommodity zinc
% Added value
68% 68% 70% 73% 78%
1996 1997 1998 1999 2000
Sales of Zinc Products
Zinc slab production of PADAENG INDUSTRY
(101,600 tonnes in 2000) not included
Commodity zinc (78,000 tonnes in 2000)and special alloys for die-casting (23,000 tonnes in 2000) produced byPADAENG INDUSTRY not included
Multi-year supply contracts
In 2000, UM Zinc continued to implement its strategy of negotiating multi-yearsupply contracts.
The fundamental approach is to maintain the geographical diversification ofsupply sources and to propose longer term contracts of 2, 3, 5 years or even more.As a result, more than 70% of the concentrates needed for 2001 are alreadysecured at agreed terms and conditions and tonnage has already beencontracted for as far ahead as 2006.
The concentrate market has allowed better purchase terms to be negotiatedthan the previous year. In particular, average treatment charges in 2000 were upon 1999 by more than 4.5% (at constant zinc price). The outlook for the 2001negotiations, which are not yet complete at the time of writing, is favourable tobuyers and UM Zinc will make further progress in its goal of securing long-termbusiness under good conditions.
A profitable future with PADAENG
In the second half of 2000, UM acquired a major shareholding in South East Asia’ssole zinc producer, PADAENG INDUSTRY in Thailand. UM’s 44.8% stake represents aninvestment of EUR 36 million. In 2001 UM will exploit the synergies and strategicfit by working together to adapt and optimise PADAENG’s sourcing strategy and to align the two companies’ commercial strategies in South East Asia. In terms of product mix, PADAENG will be cutting back on commodity zinc in favour of more value added products. Alloy production in 2001 shouldincrease from 23,000 tonnes to approximately 40,000 tonnes.
Synergies, operational improvements and a significant decrease in financingcharges, make UM fully confident that PADAENG will flourish and improve itscontribution to the Group’s bottom line in 2001.
UM Zinc has also increased its shareholding in UNIMET (zinc alloys in Mexico)from 50% to 100%.
Recycling
Recycling continues to be a major focus, with most of our scheduled capacityexpansion coming from secondary materials. This means that there is onlylimited additional production of sulphuric acid, which is a benefit, given thecontinuing depressed level of sulphuric acid prices.
27
MarketSegmentation
Other 4%
Continuousgalvanising 25%
Generalgalvanising 23%
Die-casting 48%
GeographicalBreakdown of Sales
Other 2%
Asia/Pacific 8%
Middle East 6%Other Europe 4%
EU 80%
>An
dré
van
der
HEY
DEN
Seni
or V
ice-
Pres
iden
t Zi
nc
“UM Zinc continues to develop new valueadded products.”
28 Union Minière
UM BUILDING PRODUCTS
Building on solid ground
An increased market share and a 10% rise in sales volumes mark the end of avery good year in 2000 for UM Building Products.
The aftermath of the huge storm in France at the end of 1999 brought in extrabusiness; sales were also good in Denmark, Spain, the Czech Republic, Hungaryand the United States.
The two pronged strategy of UM Building Products - to broaden its productrange in more mature markets but to offer a more focused choice in developingmarkets - is clearly working well and bearing fruit.
American success
A two-year study of customer needs in the US led to the introduction of anarrow product range of coated zinc cladding and façade systems. Intensemarketing began and a new sales office was opened in Raleigh, North Carolinain August. The figures now speak for themselves as US sales have alreadyincreased sixfold and are expected to double again in 2001.
More to offer
In France, three new products have been launched: the Pluviazinc and Kanthararainwater evacuation systems and the Sine-Wave profile façade system. Theseproducts are now being introduced in other mature markets such as Beneluxand Germany.
Further efforts are being made to penetrate the highly competitive Germanmarket through VM Zinc Centres - independent distribution companies whichpromote the use of UM Zinc products. There are now seven in Germany withthree more planned to open in 2001.
Looking to the future
UM currently has a 35% share of the world zinc building products market.However, there is clearly a need to penetrate new markets and additional countriesare being considered. The priority growth area is in ready-to-lay cladding. UM façades have already been used in some prestigious building projects suchas the reconstruction of the fire-ravaged Liceu Opera House in Barcelona.
A downward trend is expected in Germany where the construction industry hasbeen hit by the repeal of tax incentives for private house building, but this willbe offset by growth in other markets such as France, Spain and the US.
One important new product to be launched on the market next year is a façadefor high rise buildings.
(1996=100)
Share %of preweathered products
10% 11% 13% 13% 15%
1996 1997 1998 1999 200096
100
104
108
112
116
120
Total Sales Zinc Building Products
>Er
nst
PLEY
ERVi
ce-P
resi
dent
Bui
ldin
g Pr
oduc
ts
“An increased marketshare and a 10% rise insales volumes markthe end of a very goodyear in 2000.”
29
UM ZINC CHEMICALS
World’s No 1 zinc dust producer
At the end of 2000, a major strategic move was announced in the form of UM’spurchase of the activities of LARVIK PIGMENT – the world’s leading producer of zinc dust – from Australia’s Normandy Mining Ltd. The 30,000 tonnes of zinc dustand oxide produced by LARVIK every year will bring UM Zinc Chemicals’ annualproduction to 130,000 tonnes, consolidating its position as the world’s No.1producer of zinc dust. Furthermore UM continues to retain the lead as theEuropean No.1 in zinc oxide.
Now, with the addition of plants in Australia, Malaysia and Norway, UM Zinc Chemicals broadens its geographical position and will serve an evenmore extensive world-wide customer base. The new acquisition means that UM Zinc Chemicals has a 30% share of the global market in zinc dust for anti-corrosive paints – dust’s main application.
A commitment to product development
The markets for zinc dust and oxide are highly competitive and UM's productsare already used in a broad range of applications. In this environment, a deepunderstanding of the markets supplied and a commitment by leading players todevelop existing and new markets are the drivers for growth. For this reason, in 2000, UM has continued to invest in research into new products andapplications - an annual investment amounting to 3% of the added value.
Higher volumes
Sales increased by 2% despite a fierce competitive environment particularly in zinc oxide, where rising imports of low-priced Chinese products put severepressure on prices and volumes in the ceramics sector.
Sustainable development
UM Zinc Chemicals is an active player in the recycling of zinc secondaries fromthe galvanising and building industries. With the acquisition of LARVIK, whosefeedstock is essentially recycled secondaries, our contribution to thisenvironmentally sound practice is even higher.
Breakdown of SalesZinc Dust
Asia/Pacific 7%Other Europe 13%
Americas 22%
EU 58%
>Ju
lien
DERA
EDT
Vice
-Pre
side
nt Z
inc
Chem
ical
s
“UM Zinc Chemicals is an active player in the recycling ofzinc secondaries.”
30 Union Minière
Tech
nolo
gy &
Ser
vice
s an
d O
ther
Diamond tools are essential in the construction.
Brick, stone and concrete are cut by circular saw blades withsegments made from synthetic diamonds embedded in a metal matrix of sintered powders. UM’s extra-fine cobalt powder is generally considered to be the best bonding material.
Technology & Services Key Figures (amounts in million)
1996 1997 1998 1999 2000 2000€ € € € € BEF
Operating profit (loss) 2.2 0.6 0.4 2.4 10.1 406EBITDA 3.9 2.2 2.7 8.9 11.8 478Turnover 448.4 604.2 597.2 383.2 526.5 21,238Average capital employed 64.1 91.2 106.5 109.1 121.9 4,918ROCE 3.4% 0.7% 0.4% 2.2% 8.3%Capital expenditure 2.0 2.1 2.5 3.7 1.9 78
Workforce at end of period 488 501 521 529 464
RESEARCH
UM Research has continued to focus on developing new and environmentallysound production processes, and has contributed to the further optimisation ofexisting processes. However, in 2000, the drive for new product developmenthas increased and has led to a series of tangible results.
Innovation for growth
Some examples of research that has led to product innovation and industrialproduction are:
Lithium cobaltite - for use in rechargeable batteries, pioneered by UM Researchin collaboration with universities world-wide. This UM product generates moreadded value for our cobalt-based products and is to be found in batteries thatpower more than half the world’s mobile phones and laptop computers.
High-purity cobalt - for electronics applications. This is the purest cobalt inthe world produced on an industrial scale. It is used to make integratedcomponents more efficient in terms of their conductivity. This newly createdproduct was very successful in 2000, complementing UM's portfolio ofelectronic powders.
31
>G
uido
VER
MEY
LEN
Vice
-Pre
side
nt R
esea
rch
“The drive for newproducts developmenthas increased in 2000and has led to a seriesof tangible results.”
32 Union Minière
Galveco® - a new galvanising alloy that produces less residues in which “eco”stands for ecology and economy. A pioneering product which is used to applya suitable coating on a wide range of steels, including the most reactive types.
A new generation of zinc powders for alkaline batteries - improve thecharacteristics of disposable batteries including increasing their longevity.These powders are making a major contribution to volume growth reflected inthe performance of the batteries business line.
New types of tailor-made, alloyed cobalt-based powders - developed toreplace pure cobalt as a binding material on diamond tools, reducing theirmanufacturing cost.
Cadmium telluride compounds - used to produce thin-layer solar cells on low-cost substrates such as glass, making possible high volume production of terrestrial solar cells for construction purposes. They are a factor in UM’s efforts to play a role in sustainable energy generation and build on UM'scompetencies in metallurgy and recycling.
>M
arce
l GO
ETST
OU
WER
SVi
ce-P
resi
dent
Pu
rcha
sing
& T
rans
port
atio
n
“Suppliers and logisticpartners are invited tocontribute to thedevelopment of UM.”
UM ENGINEERING
A new focus
UM Group's ambitious strategy of growth and international development willrequire increased technological resources and expertise which UM ENGINEERING'sunique experience can provide. Therefore it was decided in 2000 that UM ENGINEERING’s new mission will primarily be to support the implementation of this programme and to reduce the emphasis on external projects.
Of course UM ENGINEERING will continue its involvement with all existing externalprojects (Namibia, South Africa, Morocco, Brazil, Korea,…) until they aresuccessfully completed.
UM ENGINEERING will also continue to assist UM with technology transfer and acquisition on selected third party projects deemed to be consistent withthe Group's overall strategy.
UM ENGINEERING expertise serving the Group
A major contribution will be UM ENGINEERING's expertise in project managementpractices, which are recognised as key to UM's success.
Because it is during the conceptual design phase that the ability to influenceplant efficiency is the greatest, UM ENGINEERING will be involved from the pre-feasibility phase of investment projects as well as at all critical milestonesincluding the assessment phase of project results.
UM ENGINEERING's extensive project execution experience for international clientswill be of great value in:
assisting the business units in defining and subcontracting revamping orcapacity extension projects
providing project management and engineering services during implementation technical audits (consulting prior to UM acquisitions and joint ventures).
Effective customer service to UM will be delivered by a multi-site, decentralisednetwork of UM ENGINEERING offices.
33
>Et
ienn
e DE
NIS
Exec
utiv
e Vi
ce-P
resi
dent
“It was decided in 2000that UM ENGINEERING’Snew mission will be to primarily support UM’s growth initiatives. As for SOGEM, 2000 was a record year.”
34 Union Minière
SOGEM
Until 2000, SOGEM specialised in three types of business: agency and distributionon behalf of UM and third parties; trading for its own account – especially inores, concentrates and certain minor metals; and futures brokerage via its Londonsubsidiary, SOGEMIN.
The sale of 80% of SOGEMIN to Natexis Banques Populaires in October 2000allows SOGEM to concentrate on its core activities of agency, distribution andtrading, relying on its network of more than 30 offices around the world.
Excellent results
Results have been exceptionally good in 2000 - 4 times the 1999 level - due inno small part to excellent trading profits and favourable dollar exchange rates.But increased market share was also a major contributor.
Although Europe is still the largest contributor to income, Asia is growing fastand a break-even position was reached in China for the first time in 2000.
Expert teams
A core of 6 expert teams is in place covering batteries, electronics, steel & foundries,die-casting, plating & catalysts and ceramics & glass. Each covers its field on aworld-wide basis with team members sharing knowledge, expertise and marketinformation. SOGEM has also continued to hire technically skilled sales people inthe electronics field with the aim of increasing its market share in this sector.
A growing force in cobalt and nickel
SOGEM's market share in the distribution of cobalt and nickel metal has risen tosignificant levels and a joint venture - NORGEM - has been created with Norilskof Russia, one of the most important producers of cobalt world-wide, to marketand sell its cobalt.
>Fr
eddy
VAN
GRI
MBE
RGEN
Man
agin
g D
irect
or S
OG
EM
“SOGEM’s marketshare in thedistribution of cobaltand nickel has risento significant levels.”
35
Developing an e-commerce platform
A major investment has been made in the creation of an e-commerce supplychain system allowing SOGEM clients to monitor sales, cash flow, shipmentinventories etc. on-line. The system, which will be fully available by spring 2001,will considerably enhance the support to SOGEM’s principals. The intention is toextend it to end-customers soon.
>Ed
win
D’H
ON
DTVi
ce-P
resi
dent
Info
rmat
ion
Syst
ems
“We support the growthof our business with state-of-the-artinformation technology.”
36 Union Minière
Envi
ronm
ent,
Hea
lth a
nd S
afet
y
Precious metals help protect the environment.
A ceramic honeycomb coated with a medium containingplatinum, rhodium and palladium in catalytic converterstransforms harmful pollutants in a car’s exhaust system intowater vapour and harmless gases – carbon dioxide, oxygenand nitrogen. At the end of the catalytic converter’s life, theprecious metals are extracted and recycled.
UM’s efforts in Environment, Health and Safety are based on 4 building blockscomprising management systems in the field, auditing systems, reporting systemsand objective setting. Significant progress has been made in all areas during 2000.
Safer practices
On the safety front, the number of accidents per million working hours has showna dramatic decrease from a high of 38.5 in 1998 to 20.4 in 2000.
Sustained efforts are continuing to reduce this figure and continue the positive trend.
The first environment report
A highlight of the year was the publication of UM’s first environment reportwhich offered a detailed overview of the environmental performance of allindustrial sites in the EU. It provides everyone with an opportunity to monitorthe Group’s environmental performance in a structured manner, year by yearand to measure the performance against the objectives set. Facts and figuresand the system itself were externally audited. Key elements of the first reportwere that emissions of metals into the atmosphere and water have halved overthe past five years and that UM is systematically increasing the proportion ofrecycled products in its total feedstock. They now account for 28% of total rawmaterials which is a much higher proportion than for the sector as a whole. In 2001, the report will extend beyond the EU to include the Pirdop plant inBulgaria.
Managing history’s legacy
3 major plant rehabilitation projects were implemented in 2000. The old plant atHoboken was demolished and a significant proportion of the site rehabilitated.A waste dump at the Eijsden facility in the Netherlands has been cleaned upand is being transformed into a nature park and the clean-up process at thePirdop copper plant is proceeding according to plan. All rehabilitation activitiesare supervised by the local authorities concerned.
The Dow Jones Sustainability Group Index
In September it was announced that UM has been included in the Dow JonesSustainability Group Index of companies which tracks the performance of thetop 10% of leading sustainability-driven companies world-wide. UM’s inclusion- which comes after a stringent selection process - is clearly a recognition of itsefforts to put the principles of sustainable development into practice and toincorporate responsible economic, environmental and social behaviour into itsbusiness strategy.
37
>An
toon
FRA
NCK
AERT
SVi
ce-P
resi
dent
Env
ironm
ent,
Hea
lth
& S
afet
y
“The number ofaccidents per millionworking hours hasshown a dramaticdecrease.”
38 Union Minière
Peop
le
Minerals are essential to life.
Zinc is an essential nutrient mineral,required for a healthy immune system, skin replenishment and brain development.
It is also required, among other things, formaking the white blood cells that regulatethe body’s response to injury and infection.That is why multivitamins often containsmall quantities of zinc.
In the context of a corporate mission aimed at sustainable growth, three basicpeople questions arise. Does UM have the basics right from a human resourcesperspective? What has been achieved in the year 2000 to build on the basics?And what has been done to support the sustainable growth objective?
Getting the basics right
Here, an analysis of the current workforce of almost 8,000 reveals that 20% ofall employees have a university or higher technical degree, and a further 60%have a high school diploma. Although the mean age of employees is only 39,they have, on average, 16 years of experience with the company, indicating avery low rate of turnover (6% in 2000) even in periods of high demand forlabour. UM therefore has the human talent it needs in terms of education,experience and energy and it is able to retain those skills in-house.
Building on the basics
Although total headcount reduced by 173 in 2000 (mainly due to productivityimprovements in Bulgaria), 70 positions were added at all levels in maturemarkets, showing that the company is now growing organically. Growth alsooccurred overseas. In China, headcount has doubled and in South Korea, a newstart-up has taken place with just one expatriate appointment.
The company’s commitment to professional development is manifest in the factthat in 2000, 90% of the entire workforce attended formal classroom training –an extremely high level.
Aiding sustainable growth
This objective is supported in several areas. A stock option plan with identicalcomponents has been extended to all countries where the company is active,facilitating the movement of executives around the world.
Structured career management is now a priority and efforts are being made to fill vacancies via the intranet which is leading to applicants emerging from all over the company’s network, irrespective of the location of the job. As we continue to benchmark ourselves with the best in the industry, the Employee Satisfaction Survey will be repeated in 2001 and by 2002, UM is committed to an EFQM self-assessment per business unit.
Total workforce (1) 31.12.1999 31.12.2000
Belgium 4,338 4,355France 1,387 1,373Bulgaria 1,441 1,281Rest of Europe 460 390Rest of World 439 493
Total Union Minière Group 8,065 7,892
(1) Staff of recently acquired companies, i.e. PADAENG INDUSTRY (Thailand), V & S SCIENTIFIC (UK), TAYSIDE OPTICAL TECHNOLOGY (UK)and LARVIK PIGMENT (Australia, Malaysia, Norway) not included
39
>Jo
s BO
SMAN
SCo
rpor
ate
Vice
-Pre
side
nt
Hum
an R
esou
rces
“UM has the humantalent it needs interms of education,experience andenergy. It can nowbuild on these basicsand contribute tosustainable growth.”
40 Union Minière
Corp
orat
e D
evel
opm
ent
Beyond the on-going organic growth initiatives, UM is also actively searchingfor and evaluating various acquisition opportunities, across all business groups.The Corporate Development department supports the Group’s businesses inscreening potential targets and in the negotiation of acquisitions and alliances.
The sound financial position of the Group means that significant financialmeans could be made available in support of the right acquisition projects. In 2000, UM has acquired a controlling interest in four businesses - namelyPADAENG INDUSTRY (Thailand), LARVIK PIGMENT (Australia, Malaysia, Norway), V&S SCIENTIFIC (UK) and TAYSIDE OPTICAL TECHNOLOGY (UK) - while increasing its stakein UNIMET (Mexico) to 100%.
The desire to be pro-active on the acquisition front will undoubtedly require astrong discipline going forward. Management has already indicated thatacquisitions would only be considered in so far as they meet three basicfundamental criteria. Firstly, they must be earnings accretive in the short term.Secondly, they must conform to the Group’s overall philosophy of creating valueby moving further downstream. Finally, the necessary management resourcesmust be available in such a way as to ensure an adequate control and a smoothintegration of the acquired companies within the Group.
In 2000, UM evaluated in depth more than 20 opportunities. The proposedacquisition of Laser Power Corporation was not finalised, as a higher bidderemerged. UM decided against increasing its bid above a pre-set target, as thiswould no longer have been consistent with the above-mentioned criteria.
41
>M
iche
l MO
SER
Vice
-Pre
side
nt
Corp
orat
e D
evel
opm
ent
“The desire to be pro-active on theacquisition front willundoubtedly require a strong disciplinegoing forward.”
Looking ahead, the focus of the Zinc business group will remain on reproducingoutside Western Europe its highly successful business model. In the AdvancedMaterials area, UM will continue to search for acquisition targets aimed atwidening the scope of the business and moving further downstream. As far asthe Copper and Precious Metals business group is concerned, UM will look forways to further its world-wide leadership in precious metals while remainingattentive to opportunities arising from a possible consolidation of the copperindustry, at least to the extent that those would be value creating.
42 Union Minière
Inve
stor
Rel
atio
ns
A webcast is an efficient interactive tool to enhance investor relations.
The computer used to access such programmes may contain as many astwenty different metals- including palladium of which UM is the pre-eminentrecycler in the world -, which are essential for image quality, transmissionspeed, data processing, etc.
UM is a significant producer of many of those metals.
43
Share price
In 2000, UM’s share price increased by 3.6%, from EUR 38.6 to EUR 40,outperforming the BEL 20 Index by 14% and the Dow Jones Non-Ferrous MetalsIndex by 30%.
On 30 March 2001, UM’s share closed at EUR 43.69, up 9% as compared to the end of 2000. This represents an outperformance of 16%, 27% and 19%compared to the BEL 20 Index, the Dow Jones Non-Ferrous Metals Index andthe Next 150 Index respectively, in the first few months of this year.
Share buy-back
UM repurchased about 1.8 million shares during 2000, bringing the totalnumber of own shares held by the company down to 2.05 million, or approximately 8% of the capital, as at 31 December 2000.
As at 29 March 2001, UM held 2,556,000 shares, i.e. 9.98% of its outstandingshares. The Extraordinary General Meeting of Shareholders of 30 March 2001approved the cancellation of 6.3% of the shares (1,617,515 shares), bringing thetotal number of shares down to 24,000,000. The balance is being held by UM toavoid the potential dilution related to existing stock option plans. A new sharebuy-back programme allowing the company to own up to 10% of the totalnumber of shares was also approved.
UM’s policy is to continue to buy back its own shares as long as this isconsidered an attractive allocation of financial resources and that it does notconstrain other, more value-creating development opportunities.
Stock Option Plans
Several stock option plans currently exist.
Stock Option Plan 1994 - 1998 (senior management)
All employee Stock Option Plan 1999 (all personnel)
Incentive Stock Option Plan 2000 (managerial staff)
822,040 options, corresponding to 822,040 shares, have been allocated in the framework of these stock option plans. As mentioned previously, it is the intention that UM shares held by the company will be allocated whenthe options are exercised, and no new shares will be created to avoid or limitthe potential capital dilution of about 3%.
An Incentive Stock Option Plan, similar to the 2000 plan, will also be launchedin 2001.
44 Union Minière
>Is
abel
le M
ICH
OTT
EIn
vest
or R
elat
ions
“Stepping up ourinvestor relationsefforts will remain apriority in the future.”
Shareholder base
Société Générale de Belgique, a Suez subsidiary, currently holds 6,468,986 shares(25.25% of the share capital at 31 December 2000). On 7 December 2000 Suez issued bonds worth EUR 247 million exchangeable for UM shares, with a 4 year-term. This exchangeable bond issue represents 22.25% of UM’s share capital.Société Générale de Belgique has granted options on the balance of the holding (3%)to members of UM's senior management.
Assuming that all options to exchange bonds for shares and all managementoptions are exercised, Société Générale de Belgique will have sold its entireinvestment in UM.
There is currently no other shareholding above 5%. The declaration threshold forsignificant shareholdings has been lowered to 3% by the Extraordinary GeneralMeeting of Shareholders of 30 March 2001.
Dividend Policy
UM’s policy is to pay to the extent possible a stable or gradually increasingannual dividend.
In accordance with this policy, a gross dividend of EUR 1.40 per share for theyear 2000, up 12% on 1999, has been proposed to the shareholders.
Financial Communication
UM has taken several steps in order to improve communications with thefinancial markets, and stepping up investor relations efforts will remain apriority in the future:
a detailed half-yearly report was published in September 2000;
the date for publishing the annual results has been brought forward by one month;
the Review of Operations, which precedes the Annual Report, was released at the same time;
the website has been totally revamped and is used to communicate proactively.A webcast of the analysts meeting where the 2000 results were presented is available on the website;
the frequency and geographical spread of roadshows to meet existing and potential investors has been significantly broadened (Belgium, France,Germany, Luxembourg, The Netherlands, Switzerland, UK, USA, etc.).
45
Institutions which have issued an equity research opinion on UM since thebeginning of 2000 include (in alphabetical order)
International Belgium
BNP Paribas Bank DegroofCrédit Agricole Indosuez Chevreux CordiusCrédit Suisse First Boston De MaertelaereDeutsche Bank DewaayING Barings FortisMerrill Lynch KBC SecuritiesRoyal Bank of Canada PetercamSociété Générale PuilaetcoUBS Warburg Reyers, Beauvois, de Villenfagne
46 Union Minière
DATA PER SHARE
1996 1997 1998 1999 2000 2000€ € € € € BEF
Equity, Group share 35.20 39.91 36.19 38.63 42.95 1,733Net consolidated profit (loss), Group share
(EPS declared) (1) 0.39 3.56 (2.00) 2.70 5.31 214Net consolidated profit (loss)before extraordinary items, Group share
(EPS adjusted) (1) 1.46 3.45 (1.48) 2.35 5.47 220Added value 25.08 27.46 20.87 22.34 25.66 1,035Net cash provided by (used in) operating activities 7.07 (1.79) 3.95 6.78 10.59 427Gross dividend (2) - 1.09 1.09 1.25 1.40 56.48Net dividend per ordinary share - 0.82 0.82 0.94 1.05 42.36Net dividend per share presented with VVPR strip - 0.93 0.93 1.06 1.19 48.00
Share price on Brussels Boursehigh 60.49 94.08 70.65 46.50 42.00low 49.45 52.06 29.00 26.30 29.85closing 53.30 63.71 32.42 38.60 40.00weighted average 56.10 70.28 53.35 35.97 37.94
PER (3) 136.1 17.9 ns 14.3 7.5
Market capitalisation (amounts in million) (4) 1,319 1,632 831 989 1,025 41,336(1) Treasury shares not deducted(2) Last dividend prior to 1997 paid in 1990(3) Closing price/EPS(4) Closing price x number of shares issued at 31.12 (25,617,515)
PRICE OF THE UNION MINIERE SHARE
20
30
40
50
EUR Bel 20
2500
3000
3500
4000
J F M A M J J A S O N D J F M A M J J A S O N D J F M
1999 2000 2001Forward price on Brussels Bourse (weekly average)Bel 20 index (weekly average)Daily transaction volumes (monthly average), expressed in thousands
46 47
68
80
64 57 47
78
45 50 48
61
26
36 27
37
24
45
23
80
68
33
8285
60
7769
47
1996 1997 1998 1999 2000Capital at 31.12 (BEF thousand)
Issued capital 15,000,000 15,000,000 15,526,451 15,529,240 15,529,240
Stock option plans - 13,094 2,789 - -
Exchange offer for SIBEKA - 513,357 - - -
Total 15,000,000 15,526,451 15,529,240 15,529,240 15,529,240
Number of shares at 31.12
Categories of shares
Ordinary shares 22,559,302 23,427,752 23,432,352 25,617,515 25,617,515
VVPR shares 2,185,163 2,185,163 2,185,163 - (1) -
Total 24,744,465 25,612,915 25,617,515 25,617,515 25,617,515
Type of shares
Registered shares 11,860,889 4,861,369 4,995,368 4,995,310 4,810,969
Bearer shares 12,883,576 20,751,546 20,622,147 20,622,205 20,806,546
Total 24,744,465 25,612,915 25,617,515 25,617,515 25,617,515
Shareholder base at 31.12 (%)
SGB group 50.19 25.26 25.25 25.25 25.25
Templeton Worldwide Inc. 7.66 7.40 7.40 n.a. n.a.
Other shareholders 42.15 67.34 67.35 74.75 74.75
Total 100.00 100.00 100.00 100.00 100.00(1) The VVPR shares were stripped on 26 March 1999, with coupon No. 5 from VVPR shares entitling holders to a sheet of strips and coupon No. 5
from ordinary shares being cancelled
48 Union Minière
Corp
orat
e G
over
nanc
e BOARD OF DIRECTORS
Working Procedures
In accordance with the articles of association, the board of directors isauthorised to perform whatever acts are necessary to achieve the company’sobjects. This includes approving strategic plans, expansion plans and budgetsand ensuring that such plans are duly implemented. It shall take the necessarysteps to ensure that the organisational structures meet the company’srequirements and that a system of reporting and efficient internal controlsexists. In addition, it shall take steps to ensure that the policies adopted by thecompany are properly co-ordinated, particularly with regard to issues such asfinance, human resources, the environment and safety, and also the informationmade available to company shareholders and the general public.
The board of directors, whose members are appointed by the Annual GeneralMeeting, must comprise at least six members. Their period of office may notexceed six years, but they may be re-elected.
The age limit for directors is set at 67; however, the board may make anexception to this rule in the interests of the company.
The board may only conduct business if the majority of its members are presentor represented at the meeting. Decisions are taken by majority vote. In theevent of votes being equally divided, the person chairing the meeting shall havethe casting vote.
The Annual General Meeting of Shareholders of 10 May 2000 approved a totalboard remuneration of BEF 12,000,000 (EUR 297,472) for the year 2000. The allocation of the said amount among the board members was decided by the board.
The board of directors met five times in 2000.
Committees
I. AUDIT COMMITTEE
The Audit Committee consists of three members who are all non-executivedirectors, two of them being independent directors.
The mission of the Audit Committee is:
to recommend to the board the external auditors to be appointed ordismissed, and their remuneration;
to approve the annual audit programme; to carry out an in-depth examination of the company and consolidated
accounts for the year and half year before transmitting them to the board; to review with the external auditors, the nature, extent and results of
their auditing work, and more particularly any remarks on, or reservationsconcerning, the financial statements, and recommendations to improveinternal controls;
49
to review the appropriateness of, and the changes and amendments to, the accounting principles and valuation rules used by the company;
to review with the chief financial officer and the financial controller thecompany’s control methods and the results thereof.
The chairman of the Audit Committee reports to the board on the results of its work and examinations and, if necessary, makes recommendations.
The Audit Committee’s fee is BEF 350,000 per meeting.
II. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of three memberswho are all non-executive directors, one of them being an independentdirector.
The members should neither be employed by the company, nor have beenemployed by the company in the previous two years.
The mission of the Nomination and Remuneration Committee is:
to recommend new directors to the board; to recommend to the board the members of the UM Executive Committee
to be appointed or dismissed; to recommend to the board the most appropriate management remuneration
policy.
The chairman of the Nomination and Remuneration Committee reports to theboard on the results of its work and examinations and makes recommendations.
The Nomination and Remuneration Committee’s fee is BEF 350,000 permeeting.
III. STRATEGY COMMITTEE
The Strategy Committee consists of at least five members, appointed by the board.
Its mission is to review the strategic business plans of the UM Group, as wellas major acquisitions or divestments, and to submit their recommendationsto the board of directors.
The Strategy Committee’s fee is BEF 450,000 per meeting.
STATUTORY AUDITOR
PRICEWATERHOUSECOOPERS, Reviseurs d’Entreprises SCCRL represented by Robert Peirce and Luc Discry.
The auditor’s mandate expires at the 2002 Annual General Meeting.
50 Union Minière
>Al
ain
GO
DEFR
OID
Corp
orat
e Vi
ce-P
resi
dent
“The ExtraordinaryGeneral Meeting of Shareholdersapproved the loweringof the declarationthreshold for significantshareholdings to 3%.”
DAY-TO-DAY MANAGEMENT
Working Procedures
In accordance with the provisions of the articles of association, the board ofdirectors has delegated responsibility for the day-to-day management of thecompany to Mr Thomas Leysen, in his capacity as chief executive officer. In connection with this delegation of responsibility for day-to-day management,the board of directors has decided to set up an Executive Committee, chaired byMr Thomas Leysen. In order to enhance industrial coherence and expeditedecision making at operational level, three business groups were also set up :
the Zinc business group comprising the Zinc, Building Products and Zinc Chemicals business units;
the Copper/Precious Metals business group comprising the Copper andPrecious Metals business units;
the Advanced Materials business group comprising the Electro-Optic Materialsand Cobalt & Energy Products business units.
Each of these groups is supervised by a business group Executive Committee,which is chaired by an executive vice-president. These executive vice-presidentsare also in charge of certain subsidiaries or functional departments.
Committees
UM EXECUTIVE COMMITTEE
The Executive Committee supervises and co-ordinates the day-to-daymanagement of the company. It submits for approval to the board of directorsany proposal concerning mergers, acquisitions, reorganisation measures,investments and disposals, involving amounts in excess of BEF 500 million.
The Executive Committee has full authority for any decision with respect tomatters delegated by the board of directors, in particular decisions connectedwith the Group’s operational organisation, mergers and acquisitions,reorganisation measures, disposals and changes to the Group’s legal structureinvolving amounts of less than BEF 500 million, and also any investmentsinvolving amounts in excess of BEF 50 million and less than BEF 500 million.
BUSINESS GROUP EXECUTIVE COMMITTEES
The business group Executive Committees supervise and co-ordinate the day-to-day management of the business group. They propose the strategy fortheir business group and decide on matters concerning more than one businessunit within that business group.
They have full authority for any investment involving an amount in excess of BEF 20 million and less than BEF 50 million.
All other matters are the responsibility of the various business units.
51
Lega
l Not
es
COMPANY CODE - ARTICLE 134
During the financial year Union Minière requested the statutory auditor to provide assistance and advice on various issues.
The fees paid to the statutory auditor for this work carried out in addition to its auditing assignment amounted to BEF 7,051,379.
COMPANY CODE - ARTICLE 523
Prior to the board discussing or taking any decision, Mr Th. Leysen declares that he has a direct material interest in the implementation of a secondIncentive Stock Option Plan (“ISOP 2001”) the approval of which is submitted to the board insofar as Mr Th. Leysen would be a beneficiary of the said plan. In accordance with Article 523 of the Company Code, Mr Th. Leysen withdrawsand, consequently, is not present during the board’s discussions concerning thisdecision and does not take part in the voting.
The board approves the terms and conditions of the ISOP 2001, which areessentially the same as those of the ISOP 2000, and confers all such powers asare necessary on:
the Nomination & Remuneration Committee in order to designate thebeneficiaries of the said plan and to determine the number of options to be offered to each beneficiary; and
to certain persons for its implementation.
The decision taken by the board of directors will have the following effects on the company’s net worth: either, to the extent that the company were todecide to retain the shares it holds today, the financing and opportunity cost of maintaining such shares in its portfolio until the options exercise date, or, to the extent that the company were to decide to sell such shares at a laterdate, the difference, at the date the options are exercised, between the optionsexercise price and the market value of the shares that Union Minière wouldhave to buy at that date.
52 Union Minière
>M
arc
GRY
NBE
RGCh
ief
Fina
ncia
l Off
icer
“Thanks to improvedperformance in everybusiness area, UM isnow earning morethan its cost of capital.”
53
Consolidated key figures and ratios and their breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Comments on consolidated results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Statement of consolidated cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Consolidated income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Notes to the consolidated accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Statutory auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Summarised annual accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
ANNUAL ACCOUNTS 2000
CONTENTS
54 Union Minière
1996 1997 1998 1999 2000€ € € € € BEF
Working capital (amounts in million):
Current assets minus short-term debts 668.99 655.33 498.17 519.51 578.44 23,334
Liquid position:
Current assets
Short-term debts 2.03 1.66 1.57 1.59 1.66
Financial autonomy:
[Financial debts (LT+ST) – current investments, cash & banks] (1)
Total equity (1) 25% 32% 45% 43% 24%
Cover ratio net debt charges/operating profit:
Operating profit
Net debt charges (2) 3.40 50.14 (1.17) 6.26 7.37
Return on equity (Group share):
Net profit (loss) for the year (Group share)
Equity (Group share) 1% 9% (6%) 7% 12%
Cash flow before financing (3) (amounts in million): (2.8) (176.7) (77.8) 175.2 192.4 7,760
Added value (4) (amounts in million): 620.49 703.25 534.77 566.81 657.12 26,508
Investments in tangible assets (amounts in million): 131.85 195.91 135.99 73.30 110.46 4,456
(1) Annual average(2) Debt charges minus income from current assets(3) Net cash provided by (used in) operating activities + Net cash provided by (used in) investing activities(4) Operating result + remunerations, social security charges and pensions + current depreciation/amortisation charges + write-downs
CONSOLIDATED KEY FIGURES AND RATIOS
55
BALANCE SHEET AT 31.12 (amounts in million)
1996 1997 1998 1999 2000€ € € € € BEF
ASSETS 2,220.92 2,687.56 2,406.29 2,425.45 2,512.13 101,339
Intangible assets 33.34 32.26 28.88 14.49 9.74 393Consolidation differences 96.60 118.71 110.79 88.45 84.36 3,403Tangible assets 539.49 637.18 642.25 677.12 700.12 28,243Financial assets 227.76 239.42 240.29 245.61 265.13 10,695Amounts receivable after one year 5.21 9.36 6.70 2.43 1.20 49
Fixed assets (expanded) 902.40 1,036.93 1,028.91 1,028.10 1,060.55 42,783Inventories and contracts in progress 656.65 784.17 729.38 645.43 728.98 29,407Amounts receivable within one year 450.47 626.99 505.32 496.36 358.96 14,481Invested cash 105.97 129.99 48.75 71.30 161.71 6,523Cash at bank and in hand 90.51 76.68 54.31 64.14 61.29 2,472Deferred charges and accrued income 14.92 32.80 39.62 120.12 140.64 5,673
Current assets 1,318.52 1,650.63 1,377.38 1,397.35 1,451.58 58,556
LIABILITIES AND SHAREHOLDERS' EQUITY 2,220.92 2,687.56 2,406.29 2,425.45 2,512.13 101,339
Group equity 871.32 1,022.08 927.09 989.74 1,100.33 44,387Minority interests 106.50 89.83 35.02 47.29 49.60 2,001
Total equity 977.82 1,111.91 962.11 1,037.03 1,149.93 46,388Provisions and deferred taxes 317.05 285.35 255.28 262.75 282.48 11,395Financial debts payable after one year 263.88 287.07 303.32 240.87 198.73 8,017Other amounts payable after one year 12.64 7.97 6.53 6.92 7.85 317
Long-term liabilities 276.52 295.04 309.85 247.79 206.58 8,334Financial debts payable within one year (including current portion of long-term financial debts) 177.89 343.73 315.64 229.23 208.53 8,412Other amounts payable within one year 417.30 548.19 465.93 530.11 498.29 20,101Accrued charges and deferred income 54.34 103.34 97.48 118.54 166.32 6,709
Current liabilities 649.53 995.26 879.05 877.88 873.14 35,222
INCOME STATEMENT
1996 1997 1998 1999 2000€ € € € € BEF
Turnover 3,248.07 3,889.75 3,449.00 3,180.18 3,834.73 154,693
Remunerations, social security charges and pensions 480.62 472.26 434.54 374.97 377.63 15,234
Depreciation and amortisation charges of the year 94.97 109.40 116.42 118.99 122.17 4,929
Operating profit (loss) 42.69 113.11 (21.53) 72.60 149.96 6,049
Financial charges 53.69 85.57 117.00 99.19 78.38 3,162
Net debt charges (1) 12.54 2.26 18.38 11.62 20.34 820
Pre-tax current profit (loss) 35.62 102.85 (27.28) 53.55 134.72 5,434
Profit (loss) for the year 8.18 105.73 (47.66) 87.94 141.53 5,709
Group share of profit (loss) 9.69 91.22 (51.15) 69.28 136.12 5,491
(1) Debt charges minus income from current assets
AND THEIR BREAKDOWN
56 Union Minière
UNION MINIERE GROUPCONSOLIDATED ACCOUNTS AT 31 DECEMBER 2000
INTRODUCTION
The consolidated accounts are published in accordance with the provisions of the Royal Decree of 25 November 1991, which governs holding companies’ accounts. The accounts are stated in millions. In view of the industrial nature of the Group, the income statement is analysed according to the type of results, in line with the plan set out in the Royal Decree of 6 March 1990 on companies’ consolidated accounts.
As was the case in previous years, the consolidated accounts of Union Minière have been drawn up using accounting standards– described in section VI.a. of the Notes to the Consolidated Accounts - which are based to a large extent on European andinternational rules and which are common to the whole Group.
It should be noted that the accounts of companies included in the scope of consolidation have been restated to make themuniform and consistent with the principles mentioned above.
COMMENTS ON THE CONSOLIDATED RESULTS, BALANCE SHEET AND STATEMENT OF CASH FLOWS FOR THE 2000 FINANCIAL YEAR
RESULTS
The fully consolidated companies posted a profit for the year of BEF 5,166 million against BEF 2,910 million in 1999, i.e. an improvement in the profit of BEF 2,256 million.
The profit shown by companies included by the equity method, which stands at BEF 543 million against BEF 638 million in 1999, i.e. a decrease of BEF 95 million, should be added to the above profit.
The BEF 482 million profit shown by the SIBEKA group’s synthetic diamond operations and the BEF 67 million profit posted by PADAENG INDUSTRY account for the greater part of the profit generated by the companies included by the equity method.
The Group closed the year with a consolidated profit of BEF 5,709 million, which includes a total amount of BEF 1,186 millionrepresenting the profit realised on the disposal of assets such as:
the participating interest held in Emcore the premises on “rue Royale” (SIBEKA) the participating interest held in Laser Power 80% of the participating interest held in SOGEMIN METALS.
The consolidated profit also includes a total amount of BEF 358 million, representing the negative balance resulting from :
exceptional write-downs booked on miscellaneous participating interests the impact of cancelling the goodwill on companies which have been removed from the scope of consolidation.
The analysis of the consolidated profit (loss) is as follows:
BEF million2000 1999
Consolidated results 5,709 3,548
Group share- total Group share 5,491 2,796
- of which exceptional profit -1,186 -2,928- of which exceptional loss 358 891
-828 -2,037i.e. Group share excluding extraordinary transactions 4,663 759
i.e. an improvement of BEF 3,904 million
minority share- total minority share 218 752
- of which exceptional profit -42 -596i.e. minority share excluding extraordinary transactions 176 156
i.e. an improvement of BEF 20 million
i.e. a total improvement excluding extraordinary transactions of BEF 3,924 million. 4,839 915
57
OPERATING RESULTS
The operating profit stands at BEF 6,049 million, representing an improvement of BEF 3,120 million.
The analysis of the contributions made by the various operations to the Group’s profit (loss) is as follows :
BEF millionOperations 2000 1999 Change
Advanced materials 919 372 547Copper 1,007 69 938Precious metals 1,236 (13) 1,249Zinc 3,461 3,387 74Technology & services 406 98 308Diamonds 322 346 -24Write-downs on inventories - (46) 46Corporate and other activities (759) (646) -113
6,592 3,567 3,025of which profit shown by companies included by the equity method 543 638 95
6,049 2,929 3,120
Advanced Materials Profit BEF 919 million (+547)EUR 22.8 million (+13.6)
The buoyant economy boosted Cobalt & Energy Products’ sales in all application areas, resulting in a 26% increase for cobalt-based products, a 20% rise for nickel-based products and 23% for zinc-based products.
Sales volumes achieved by Electro-Optic Materials, including germanium substrates, climbed by 20% and generated a significantincrease in added value.
Copper Profit BEF 1,007 million (+938)EUR 25 million (+23.2)
Copper operations started to feel the benefits of the major investment programme which has been implemented in Belgiumand Bulgaria over the course of the past few years, despite the fact that copper prices remain depressed and treatment andrefining charges for concentrates and blister copper are still too low.
Precious Metals Profit BEF 1,236 million (+1,249)EUR 30.6 million (+30.9)
The problems faced in the past by UM’s Precious Metals business unit have now been resolved and this unit saw its operatingprofit improve by BEF 1,249 million (EUR 30.9 million).
In addition, the business unit, which was previously a borrower of precious metals, became a lender of precious metals in 2000.
Zinc Profit BEF 3,461 million (+74)EUR 85.8 million (+1.8)
Once again the Zinc business group closed the year with an excellent operating profit despite a non-recurrent increase in costsin the first half of 2000 incurred as a result of operating problems at Auby.
The zinc operations are continuing to focus their research activities on developing high added value products. Via the interest acquired in PADAENG INDUSTRY in Thailand, the only zinc producer in South East Asia, the business group will beable to take advantage of the synergies generated and also bring about an improvement in operations and financial charges.PADAENG INDUSTRY’s contribution to the operating profit for 2000 was BEF 67 million (EUR 1.7 million).
Technology & Services Profit BEF 406 million (+308)EUR 10.1 million (+7.7)
Following the sale of an 80% interest in SOGEMIN METALS, SOGEM concentrated on its core agency, distribution and tradingactivities. The good results achieved are due to the profits generated by its trading activities, to the increase in its marketshare and to the favourable US dollar exchange rate.
In 2000, UM ENGINEERING saw its mission mainly geared to providing back-up for the UM Group in implementing its growth andinternational expansion strategy. It will of course remain involved in all on-going projects until they have been completed.
Synthetic Diamonds Profit BEF 322 million (-24)EUR 8 million (-0.6)
Despite the downward pressure on prices caused by sub-standard synthetic diamonds from China and South Korea, the MEGAPODE
group (50% owned by UM) had a good year. But with a view to enhancing its competitive position and improving its costs, thecompany will be reorganised and booked a USD 15 million provision for restructuring.
This provision negatively impacted the profit for the year.
FINANCIAL RESULTS
The year closed with a net financial charge of BEF 615 million against BEF 768 million in 1999. The BEF 153 million improvement isthe balance between the BEF 686 million decrease in financial income and the BEF 839 million reduction in financial charges .
The Group’s consolidated financial income decreased by BEF 686 million.
This is mainly due to the reduction in “Other financial income” (BEF -816 million) which mainly reflects the combined impactof exchange differences and translation adjustments (BEF -903 million), which was partly offset by an increase in income fromcurrent assets (BEF 166 million).
The Group’s consolidated financial charges decreased by BEF 839 million.
This reflects:
the increase in “Debt charges” as a result of debts contracted by the Group (BEF 518 million) the increase in “Write-downs on current assets” (BEF 96 million)
and also :
the decrease in “Other financial charges” (BEF -1,453 million).
“Other financial charges” mainly consist of exchange differences and translation adjustments (BEF 1,573 million).
The net loss on exchange stands at BEF 53 million, against a loss of BEF 603 million in 1999.
Debt charges increased despite the net decrease in indebtedness shown in the balance sheet at 31 December 2000 comparedwith 1999. This is due to two factors:
interest rates showed a slight increase in 2000 the lower level of debt is due to the securitisation programme put in place at the end of December.
58 Union Minière
59
EXTRAORDINARY RESULTS
The financial year closed with an extraordinary profit of BEF 149 million against BEF 947 million in 1999, i.e. a reduction of BEF 798 million.
This reduction in the extraordinary profit reflects the BEF 1,863 million decrease in extraordinary income, which was partlyoffset by the BEF 1,065 million decrease in extraordinary charges.
The Group’s extraordinary income stands at BEF 1,610 million, and mainly comprises the following item:
BEF million
capital gains realised on fixed assets ( BEF 1,391 million) of which :- sale of tangible fixed assets 230- sale of participating interests (before deducting charges) 1,161
The Group’s extraordinary charges stand at BEF 1,461 million and comprise the following main items:
extraordinary depreciation and amortisation (BEF 149 million) of which :- on tangible fixed assets 18- on consolidation differences 131
amounts written down on financial fixed assets (BEF 249 million) of which :- AMERICA MINERAL FIELDS 227- UNION MINIERE INC. subsidiaries 18- SOGEM subsidiaries 4
provisions for extraordinary liabilities and charges net of amounts applied (BEF 485 million) of which :- net provision for pensions and early retirement benefits -175- provision for miscellaneous liabilities and litigation -24- provision for the environment 684
capital losses realised on fixed assets (BEF 5 million)
other extraordinary charges (BEF 573 million) of which:- charges for pensions and early retirement benefits covered by provisions 469- charges on disposals of participating interests 21- reorganisation costs 43- charges entailed by litigation 17- other extraordinary charges 23
INCOME TAXES
Taxes for the financial year stand at BEF 417 million against BEF 198 million in 1999, i.e. an increase of BEF 219 million. The following companies and sub-groups mainly account for the above taxes
BEF million
French companies 322
SOGEM group 97
Bulgaria -192
United States 41
Italy 46
Union Minière (parent company) 1
Union Minière (Belgian subsidiaries) 23
Dutch companies 29
other subsidiaries 50
The Group’s overall tax burden as at 31 December 2000 remains high owing to the taxable profits generated by the Groupcompanies, which contrast with the tax-deductible losses which n.v. Union Minière s.a. was still able to bring forward in 2000.
SHARE IN THE PROFIT OF COMPANIES INCLUDED BY THE EQUITY METHOD
The SIBEKA group accounts for the greater part of the profit realised by Group companies which are included by the equity method.
The BEF 543 million profit booked in 2000 is lower than the equivalent profit for 1999 (BEF 638 million) mainly due to theBEF 325 million provision charged for restructuring, which brought the contribution from the SIBEKA group’s synthetic diamondoperations down to BEF 482 million.
The Thai company, PADAENG INDUSTRY, which was included by the equity method with effect from 1 July 2000, also contributedto the profit (BEF 67 million).
Analysis of the profit of companies included by the equity method:
BEF million2000 1999
Operating profit 765 564
Financial profit 181 136
Extraordinary profit (loss) (328) 13
Taxes -75 -75
543 638
60 Union Minière
61
BALANCE SHEET
ASSETS
INTANGIBLE FIXED ASSETS (-191)
Intangible fixed assets decreased owing to the amortisation booked for the year (BEF 218 million) exceeding the acquisitionsand own production (BEF 24 million).
Investments during the year included an amount of BEF 16 million for the acquisition of new software.
The SAP charges booked to assets are amortised over three years. The amortisation charged on these projects in 2000 was asfollows:
Belgium BEF 82 million
France BEF 53 million.
CONSOLIDATION DIFFERENCES (-165)
The decrease in consolidation differences carried under assets can be broken down as follows:
BEF million
change in the scope of consolidation
- UNIMET 20
- PADAENG INDUSTRY 440
- translation adjustments 28
488
amortisation booked for the financial year
- operating charges -522
- extraordinary charges -131
-653
TANGIBLE FIXED ASSETS (+928)
Tangible fixed assets increased due to the on-going investment programme, particularly at UNION MINIERE PIRDOP COPPER,Bulgaria (BEF 1,358 million).
Industrial investments, including own production, totalled BEF 4,467 million, including BEF 1,360 million at n.v. Union Minière s.a.,Belgium, BEF 387 million at UNION MINIERE FRANCE, BEF 1,358 million at UNION MINIERE PIRDOP COPPER, Bulgaria, BEF 192 million at UNION MINIERE KOREA and BEF 194 million at UMEX.
An amount of BEF 4,192 million was booked to cover ordinary depreciation and BEF 18 million to cover extraordinarydepreciation.
Changes in the scope of consolidation, disposals due to sales and retirals had a net impact of BEF + 243 million.
FINANCIAL FIXED ASSETS (+787)
The changes in financial fixed assets reflect the following factors:
BEF million
- BEF 1,229 million change in participating interests included by the equity method, which breaks down as follows:
change in scope of consolidation and capital increase (decrease)PADAENG INDUSTRY +996SOGEMIN METALS +94SOGEM USA -8UNIMET -10Umcore -49
sales to third parties - (net) result realised +543 dividend distribution -392 translation adjustments +55
+1,229
- BEF -343 million change in non-consolidated participating interests, which breaks down as follows:
acquisitions from third parties and capital increase- SIGEN +152- UM OPTICS UK +7- ACEC (USA) (capital increase) +4- OIL TANKING BULGARIA (capital increase) +26
+189 sales to third parties and capital decrease
- Laser Power -93- Emcore -240- VM Zinc Inc. -21
-354 amounts written down
- AMERICA MINERAL FIELDS INC. (AMFI) -228- miscellaneous subsidiaries -6
-234 reversals of amounts written down following disposals +2 transfers and changes in scope of consolidation
- ANTWERPSE HANDELSMAATSCHAPPIJ -47- UMCI -4- Umcore +29- LONDON CLEARING HOUSE -19- NON FERROUS INTERNATIONAL +60
+19 translation adjustments +35
TOTAL -343
- BEF -99 million change in amounts receivable, which breaks down as follows:
repayments -187 new receivables +56 change in scope of consolidation - transfers +35 amounts written down -6 translation adjustments +3
-99
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INVENTORIES AND CONTRACTS IN PROGRESS (+3,370)
The difficulties encountered with modernising the industrial processes were finally solved and all operations achieved asignificant increase in production and sales volumes. Coupled with the fact that metals prices remained at a healthy level, this resulted in a significant increase in inventories in terms of both volume and value.
As a result, Union Minière, which at the end of 1999 had terminated the metal borrowing contracts it had been obliged toenter into in order to comply with its physical delivery undertakings, became a lender of the same metals in 2000.
As SOGEM is a trader its inventories can fluctuate sharply from one year end to the next depending on the level of transactionsoutstanding.
It should be remembered that since 1992 the Group has valued its metal inventories on an annual LIFO basis in view of thenature of its activities and the problems entailed by stocktaking.
The Group’s metal inventories are valued at BEF 14,664 million on a LIFO basis and have a market value of BEF 32,974 million.
AMOUNTS RECEIVABLE WITHIN ONE YEAR (-5,542)
The BEF 8,359 million decrease in trade receivables is mainly due to a securitisation programme being implemented in December 2000 under which receivables will be converted into securities.
The portfolio of trade receivables due from third parties funded in this way amounted to BEF 8,694 million for the UM Groupat 31 December 2000, of which BEF 1,907 million has been deferred and carried under “Other receivables”.
The impact of this financial transaction was partly offset by the increase in trade receivables due to the significant increase in sales.
Other receivables increased by BEF 2,817 million, which includes the deferred purchase price (BEF 1,907 million) of thesecuritised receivables.
INVESTED CASH (+3,647)
The increase in invested cash mainly reflects the combined effect of the following factors:
own shares +2,632
In 1999 Union Minière decided to buy back its own shares in accordance with statutory limits and conditions.
This decision was renewed for the last time at the Extraordinary General Meeting held on 10 May 2000.
The following acquisitions of own shares were effected:
BEF million
at 31 December 1999 : 241,488 shares for 309 in 2000 : 1,808,160 shares for 2,632 at 31 December 2000 : 2,049,648 shares for 2,941
These shares are not included in the dividend distribution and the corresponding coupon has been destroyed.
An unavailable reserve for the same amount has been set aside.
other investments +1,015
Other cash investments increased as follows:
BEF million
Union Minière, Belgium 406 UNION MINIERE SERVICES & FINANCE 2,833 UNION MINIERE USA 110 SIBEKA 16 SOGEM group 184 other subsidiaries 33
3,582
CASH AT BANK AND IN HAND (-116)
At the end of the financial year cash at bank and in hand stood at BEF 2,472 million, which breaks down as follows:
BEF million
Union Minière, Belgium +299 UNION MINIERE SERVICES & FINANCE +278 UNION MINIERE FRANCE +132 METALRAME, Italy +382 SIBEKA +36 SOGEM group +458 UNION MINIERE PIRDOP COPPER +103 UNION MINIERE USA +142 UMEX +143 other subsidiaries +499
+2,472
DEFERRED CHARGES AND ACCRUED INCOME (+827)
The main items carried under this heading are the result of revaluing exchange positions at n.v. Union Minière s.a. (BEF 1,655 million) which are booked to accrued income and the result of marking to market forward exchange contracts at UNION MINIERE SERVICES & FINANCE (BEF 1,867 million).
LIABILITIES
SHAREHOLDERS’ EQUITY (+4,409)
Changes in Group shareholders’ equity are analysed in section XI of the Notes to the Consolidated Accounts.
They can be summarised as follows:
BEF million
profit for the year (Group share) +5,491 capital increase - increase in share premium account - translation adjustments +254 consolidation differences -5 proposed dividend distribution -1,331
+4,409
The capital and share premiums account of n.v. Union Minière s.a., Belgium, did not show any change in 2000.
The increase in translation adjustments (BEF 254 million) made when consolidating foreign companies is mainly due to the appreciation of the US dollar against the Belgian franc (consolidation currency), in particular at SIBEKA (BEF 110 million)and UNION MINIERE PIRDOP COPPER, Bulgaria (BEF 110 million), and also to the appreciation of the Canadian dollar at 755490 ALBERTA (BEF 48 million) and to including PADAENG INDUSTRY, Thailand (BEF -89 million), in the scope of consolidation.
The reduction in consolidation differences carried under liabilities is due to amortisations and write-downs for the period (BEF 5 million).
Union Minière has decided to propose to the Annual General Meeting of Shareholders that a pre-tax dividend of EUR 1.40 be paid on the shares not held by Union Minière, i.e. 23,567,867 shares (BEF 1,331 million).
This amount may be amended to make allowance for the number of its own shares held by Union Minière on 9 May 2001, the date of the Annual General Meeting of Shareholders.
With effect from 26 March 1999, all the VVPR shares were converted into ordinary shares with a coupon strip attached.Coupon No. 5 from the VVPR shares entitled holders to a strip of coupons (a total of 2,185,163 strips were issued) and coupon No. 5 from the ordinary shares was cancelled.
64 Union Minière
65
MINORITY INTERESTS (+93)
The increase in the minority shareholders’ share of the Group’s equity mainly reflects the following changes:
BEF million
minority shareholders’ share in the profit for the year +218 dividend paid to minority shareholders (1999) -20 proposed dividend payment for 2000 to minority shareholders -96 capital increase and additional acquisition of shares in UNION MINIERE PIRDOP COPPER, Bulgaria -34 translation adjustments +25
+93
PROVISIONS FOR LIABILITIES AND CHARGES AND DEFERRED TAXES (+795)
The changes in the various types of provisions are analysed in section XVIII of the Notes to the Consolidated Accounts.
They can be summarised as follows:
BEF million
amounts charged in the financial year +3,066
of which as operating charges BEF 1,999of which as financial charges BEF 76of which as extraordinary charges BEF 975of which as deferred tax charges BEF 16
amounts applied in the financial year -2,170
of which as operating charges BEF -1,487of which as extraordinary charges BEF -491of which as deferred tax charges BEF -192
amounts released in the financial year -239
of which as operating income BEF -214of which as extraordinary income BEF -17of which as deferred tax charges BEF -8
change in the scope of consolidation +62 translation adjustments +76
+795
The various categories of provisions registered the following changes in the course of the financial year:
pensions and similar obligations -262 taxes +12 major repairs and maintenance -85 other liabilities and charges +1,255 deferred taxes -125
+795
The decrease in provisions for pensions and similar obligations (BEF -262 million) reflects the net result of the amountscharged, applied and released in the course of the financial year.
Provisions for major repairs and maintenance decreased by BEF -85 million.
These provisions, which mainly cover the cost of carrying out regular maintenance work on the furnaces and cell houses,fluctuate according to the maintenance cycles and to the investments and disposals effected.
Provisions for other liabilities and charges increased by BEF 1,255 million, reflecting the amounts charged, applied and releasedin 2000 and the impact of the changes in the scope of consolidation (BEF +65 million).
On the environmental front n.v. Union Minière s.a. concluded an agreement with the Flemish Regional Authorities in 1997 on the rehabilitation of its industrial sites, spread over a period of 10 years. A joint working party was set up to compile a detailed inventory of the work to be carried out and to determine priorities, and also to find optimum solutions for long-standing pollution problems. The studies currently under way will be completed in the first half of 2001 and will be used as a basis for drawing up a concrete plan of action with OVAM (the Flemish regional waste authority) and for prioritising objectives.
66 Union Minière
The Union Minière Group’s environmental provisions included under “Other provisions for liabilities and charges” at 31 December 2000 can be broken down as follows:
BEF million
covering ponds 1,326 cleaning up the soil 761 rehabilitating sites 265 demolishing facilities 438 waste treatment 388 studies 19 miscellaneous 146
3,343
The decrease in the provision for deferred taxes (BEF -125 million) mainly reflects the situation at UNION MINIERE PIRDOP COPPER,Bulgaria (BEF -132 million), and the increase in deferred taxes at UNION MINIERE FRANCE (BEF +7 million).
The provision for deferred taxes set aside by UNION MINIERE PIRDOP COPPER in accordance with Group rules, which are based on IAS 12, was estimated on the basis of the company’s special tax position at the time of acquisition. However, the taxposition of UNION MINIERE PIRDOP COPPER is still not clear and may change in future depending on the Bulgarian tax system.
AMOUNTS PAYABLE AFTER ONE YEAR (-1,662)
The decrease in amounts payable after one year can be analysed as follows:
BEF million
transfer of the current portion -1,851 repayment effected in 2000 -1,398 new loans contracted +1,040 amounts written down -41 change in scope of consolidation +500 translation adjustments +12 subsidies +76
-1,662
The change in the scope of consolidation can be analysed as follows:
inclusion of FONCIERE DU MARAIS in scope of consolidation +502 merger of Ateliers d’Art Français -2
500
AMOUNTS PAYABLE WITHIN ONE YEAR (-2,066)
Amounts payable within one year mainly comprise financial debts, trade debts and amounts due in respect of taxes, wagesand social security.
The current portion of amounts payable after one year increased by BEF 1,435 million owing to the following:
BEF million
repayment of loans -739 transfer from amounts payable after one year (current portion) +1,851 change in scope of consolidation (merger Ateliers d’Art Français) -2 new loan +325 other -
+1,435
Financial debts decreased by BEF 2,270 million and trade debts by BEF 1,420 million.
67
Table summarising short-term and long-term financial debts (amounts in million)
Total Credit institutionsBEF € BEF €
Long-term debts
Unsubordinated debentures 7 0.18 - -Leasing 12 0.28 - -Credit institutions 7,973 197.65 7,973 197.65Other debts 25 0.62 - -
8,017 198.73 7,973 197.65
Current portion of long-term debts
Unsubordinated debentures 25 0.62 - -Leasing 1 0.01 - -Credit institutions 2,477 61.41 2,477 61.41Trade debts 5 0.13 - -Other debts 2 0.04 - -
2,510 62.21 2,477 61.41
Short-term debts
Credit institutions 4,573 113.37 4,573 113.37Other non-bank 1,329 32.95 - -
5,902 146.32 4,573 113.37
TOTAL 16,429 407.26 15,023 372.43
Repayment of debts
Within the year 8,412 208.53 7,050 174.77Between 1 and 5 years 7,711 191.15 7,675 190.27After 5 years 306 7.58 298 7.39
TOTAL 16,429 407.26 15,023 372.43
Long-term debts with credit institutions, including the current portion of such debts, account for 99% of total debts. 91.8% of these long-term debts were contracted in euro.
The average interest rate at the year end for long-term floating-rate loans in euro was 5.2%.
The weighted average residual maturity of long-term financial debts at the year end was 3.3 years.
Short-term financial debts (BEF 4,573 million) are mainly denominated in USD (66.2%), in EUR (22.3%), in South Korean WON (3.6%), in Yen (2.9%) and miscellaneous other currencies (5%).
The average interest rate for short-term financial debts was 6.4% for the USD and 4.24% for the euro.
Current borrowing requirements are covered by short-term credit lines, either confirmed or unconfirmed, in USD, euro andother currencies.
These are multi-purpose credit lines which can be used in the form of advances, overdrafts, acceptances, etc.
In addition, the Coordination Centre UNION MINIERE SERVICES & FINANCE has at its disposal short-term financial resources forissuing commercial paper up to an amount of EUR 125 million or BEF 5,000 million.
68 Union Minière
ACCRUED CHARGES AND DEFERRED INCOME (+1,927)
At Union Minière these items comprise treatment charges to be incurred on material to be toll treated. These charges havealready been invoiced to customers but have not been booked to income as the treatment has not yet been carried out. They increased from BEF 739 million at the end of 1999 to BEF 768 million at the end of 2000.
The value of metals which had been invoiced but not delivered rose from BEF 91 million to BEF 1,608 million, i.e. an increaseof BEF 1,517 million, reflecting higher levels of activity and inventories.
“Accrued charges and deferred income” also include the potential loss resulting from the revaluation of exchange positions at n.v. Union Minière s.a. (BEF 1,536 million) and the result of marking to market of metal positions (BEF 312 million) andforward exchange contracts at UNION MINIERE SERVICES & FINANCE (BEF 1,149 million).
69
STATEMENT OF CONSOLIDATED CASH FLOWS
DEFINITIONS
The Union Minière Group’s statement of cash flows shows the difference between actual amounts received and amountsdisbursed in the course of the financial year and provides an analysis of these amounts on the basis of operating, investingand financing activities.
Operating activities should be understood in the broadest sense of the word, i.e. also including cash flows linked to debtservicing and financial products (financial income), extraordinary items which are not linked to investment transactions andalso income taxes. The cash flow from operating activities is calculated on the basis of the net profit (indirect method):
by eliminating from this profit the charges and income:
- which do not have an impact on cash flows, such as depreciation, provisions, write-downs, etc.
- which are linked to investment transactions (such as the proceeds from the sale of fixed assets);
by taking into account the difference in operational working capital requirements.
The difference in operational working capital requirements represents the difference between current assets and currentliabilities, excluding cash at bank and in hand and financing, where necessary re-stated to allow for the impact of changes in the scope of consolidation and exchange rates, plus items more specifically linked to investing activities.
Financing activities comprise the various changes in loans and debts at more than one year (repayments of loans and new loans)and other cash movements pertaining to permanent funds, such as capital increases or decreases and dividends paid either tominority shareholders by fully consolidated subsidiaries, or to the company’s shareholders.
The change in the net cash position includes changes in liquid financial assets, i.e. short-term cash investments, available assetsand short-term financial debts.
COMMENTS
Increase in the cash flow from operating activities
The cash flow from operating activities given in the table on page 71, stands at BEF 10,103 million for the Group, i.e. animprovement of BEF 4,640 million compared with 1999.
The positive change in operational working capital requirements (BEF 1,601 million), the impact of the changes in the scope of consolidation and translation adjustments (BEF -665 million) and other changes (BEF -98 million) resulted in an increase inthe cash flow of BEF 838 million, i.e. a positive difference in the cash flow from operating activities for the 2000 financial yearof BEF 10,941 million (against BEF 7,009 million in 1999 and BEF 4,080 million in 1998).
Investing activities
Investing activities for 2000 stand at BEF 5,938 million, against BEF 3,705 million in 1999. This figure was offset in part bydisposals of intangible, tangible and financial investments totalling BEF 2,757 million against BEF 3,764 million in 1999, i.e. a negative net position of BEF –3,181 million.
70 Union Minière
This mainly reflects the following transactions:
BEF million
continuation of major investments in tangible assets in Belgium and abroad 4,188
acquisition of interests in consolidated companies and companies included by the equity method 1,438
acquisition of additional interests in Group companies 12
sale of consolidated participating interests 1,024
including the sale of:- Produits Chimiques Wiaux 22- SOGEMIN METALS (80%) 777- rue Royale (SIBEKA) 217
sale of financial fixed assets 1,220
including the sale of:- Laser Power 205- Emcore 922
Financing activities
The new loans at more than one year contracted with financial institutions in 2000, i.e. BEF 1,441 million, less repayments of existing loans, i.e. BEF 2,132 million, the acquisition by n.v. Union Minière s.a. of its own shares for an amount of BEF 2,632 million and dividend payments to shareholders of BEF -1,120 million give a negative net balance of BEF 4,601 million.
Change in net cash flow
The positive net change (BEF 3,159 million) in the Group’s cash flow in 2000 is mainly due to the significant improvement inthe cash flow from operating activities (BEF 10,103 million in 2000 against BEF 5,463 million in 1999).
The position can be summarised as follows:
BEF million
increase in cash flow from operating activities 10,941
decrease in cash flow from financing activities - 4,601
net investments realised in 2000 - 3,181
Positive net change in cash flow 3,159
71
STATEMENT OF CONSOLIDATED CASH FLOWS
(amounts in million)
2000 2000 1999 1998BEF € € €
Operating activities
Consolidated profit (loss) (Group share) 5,491 136.12 69.31 (51.14)Minority interests in consolidated profit (loss) 218 5.40 18.66 3.50Profit (loss) of companies included by the equity method, net of dividends received (151) (3.74) (3.82) 6.99Depreciation of tangible fixed assets 4,207 104.29 105.60 106.84Amortisation of intangible assets and consolidation differences 866 21.47 15.61 24.44Amortisation of investment grants (41) (1.02) (1.21) (1.71)Write-downs (write-backs) on amounts receivable - - - (0.10)Write-downs (write-backs) on financial fixed assets 231 5.73 2.65 1.56Increase (decrease) in provisions for liabilities and charges 658 16.31 9.32 (28.06)(Gain) loss on disposal of fixed assets (1,376) (34.11) (80.70) (21.54)Cash flow 10,103 250.45 135.42 40.78(Increase) decrease in working capital requirements for operations 1,601 39.68 99.53 86.04Impact of changes in scope of consolidation and translation adjustments onworking capital requirements and on net cash and equivalents (665) (16.48) (62.32) (27.49)Transfers of current assets and current liabilities and other movements (98) (2.43) 1.12 1.81
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 10,941 271.22 173.75 101.14
Investing activities
Acquisitions and own production of tangible fixed assets (4,188) (103.81) (77.29) (140.58)Acquisitions and own production of intangible fixed assets (25) (0.62) (3.15) (3.32)Acquisitions of financial fixed assets (consolidated) (1,438) (35.65) - (4.09)Acquisitions of additional shareholdings in Group companies (12) (0.30) (0.10) (74.19)Acquisitions of financial assets (201) (4.98) (8.35) (11.95)New loans extended (74) (1.83) (2.96) (6.49)Sub-total acquisitions (5,938) (147.19) (91.85) (240.62)Disposal of tangible fixed assets 394 9.77 3.20 5.43Disposal of intangible fixed assets 1 0.02 - -Disposal of consolidated financial investments 1,024 25.38 65.81 40.43Disposal of financial fixed assets 1,220 30.24 24.00 11.16Repayment of loans 118 2.93 0.30 4.71Sub-total disposals 2,757 68.34 93.31 61.73
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (3,181) (78.85) 1.46 (178.89)
Financing activities
Capital increase - - 0.27 0.92New loans 1,441 35.72 54.51 125.68Own shares (2,632) (65.25) (7.66) -Repayment of loans (2,132) (52.85) (68.98) (90.53)Dividends paid to shareholders (1,210) (29.99) (27.76) (27.94)Dividends paid to minority shareholders by fully consolidated subsidiaries (68) (1.69) (11.11) (1.59)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (4,601) (114.06) (60.73) 6.54
INCREASE (DECREASE) IN NET CASH AND EQUIVALENTS 3,159 78.31 114.48 (71.21)Net cash and equivalents: opening position (3,017) (74.79) (168.54) (102.01)Change in scope of consolidation and transfers on opening position 11 0.27 (20.73) 4.69Net cash and equivalents: closing position 153 3.79 (74.79) (168.53)
72 Union Minière
ASSETS (amounts in million)
2000 2000 1999 1998BEF € € €
FIXED ASSETS 42,734 1,059.35 1,025.67 1,022.21
II. Intangible assets 393 9.74 14.49 28.88
III. Consolidation differences 3,403 84.36 88.45 110.79
IV. Tangible assets 28,243 700.12 677.12 642.25
A. Land and buildings 8,114 201.15 202.94 195.74B. Plant, machinery and equipment 16,040 397.61 410.51 364.07C. Furniture and vehicles 897 22.23 22.54 25.01D. Leasing and similar rights 555 13.76 1.68 1.94E. Other tangible assets 94 2.33 4.15 5.23F. Construction in progress and advance payments 2,543 63.04 35.30 50.26
V. Financial assets 10,695 265.13 245.61 240.29
Investments included by the equity method 5,301 131.43 100.93 189.25Unconsolidated investments 3,421 84.80 93.32 29.20Amounts receivable 1,973 48.90 51.36 21.84
CURRENT ASSETS 58,605 1,452.78 1,399.78 1,384.08
VI. Amounts receivable after one year 49 1.20 2.43 6.70A. Trade receivables - - - 3.15B. Other amounts receivable 49 1.20 2.43 3.55
VII. Inventories and contracts in progress 29,407 728.98 645.43 729.38A. Inventories 27,535 682.57 605.79 696.51B. Contracts in progress 1,872 46.41 39.64 32.87
VIII. Amounts receivable within one year 14,481 358.96 496.36 505.32A. Trade receivables 10,366 256.97 464.18 465.72B. Other amounts receivable 4,115 101.99 32.18 39.60
IX. Invested cash 6,523 161.71 71.30 48.75A. Own shares 2,941 72.90 7.65 -B. Other investments and deposits 3,582 88.81 63.65 48.75
X. Cash at bank and in hand 2,472 61.29 64.14 54.31
XI. Deferred charges and accrued income 5,673 140.64 120.12 39.62
TOTAL ASSETS 101,339 2,512.13 2,425.45 2,406.29
CONSOLIDATED BALANCE SHEET AFTER APPROPRIATION AT 31 DECEMBER
73
LIABILITIES AND SHAREHOLDERS' EQUITY (amounts in million)
2000 2000 1999 1998BEF € € €
TOTAL SHAREHOLDERS’ EQUITY 46,388 1,149.93 1,038.33 962.11
GROUP SHAREHOLDERS’ EQUITY 44,387 1,100.33 991.04 927.09
I. Capital 15,529 384.96 384.96 384.96
II. Share premiums 5,090 126.18 126.18 126.18
IV. Reserves 23,265 576.72 473.60 434.71
V. Consolidation differences 44 1.08 1.20 1.82
VI. Translation adjustments 459 11.39 5.10 (20.58)
MINORITY INTERESTS
VIII. Minority interests 2,001 49.60 47.29 35.02
PROVISIONS AND DEFERRED TAXES 11,395 282.48 262.75 255.28
IX. A. Provisions for liabilities and charges 10,628 263.46 240.65 248.601. Pensions and similar obligations 5,288 131.09 137.58 157.672. Taxes 22 0.54 0.24 0.603. Major repairs and maintenance 651 16.13 18.24 12.274. Other liabilities and charges 4,667 115.70 84.59 78.06
B. Deferred taxes 767 19.02 22.10 6.68
CREDITORS 43,556 1,079.72 1,124.37 1,188.90
X. Amounts payable after one year 8,334 206.58 247.79 309.85A. Financial debts 8,017 198.73 240.87 303.32B. Trade debts 12 0.29 0.39 0.42D. Other amounts payable 305 7.56 6.53 6.11
XI. Amounts payable within one year 28,513 706.82 758.04 781.57A. Current portion of amounts payable after one year 2,510 62.21 26.65 44.04B. Financial debts 5,902 146.32 202.58 271.60C. Trade debts 12,121 300.46 335.67 298.67D. Advances received on contracts 2,027 50.26 51.42 36.49E. Taxes, remunerations and social security 3,923 97.26 103.72 86.54F. Other amounts payable 2,030 50.31 38.00 44.23
XII. Accrued charges and deferred income 6,709 166.32 118.54 97.48
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 101,339 2,512.13 2,425.45 2,406.29
74 Union Minière
(amounts in million)
2000 2000 1999 1998BEF € € €
I. Operating income 157,511 3,904.60 3,174.87 3,539.68A. Turnover 154,693 3,834.73 3,180.18 3,449.00B. Increase (decrease) in inventories of work in process,
finished goods, and contracts in progress 894 22.15 (39.17) 39.17C. Fixed assets - own construction 102 2.54 3.88 7.89D. Other operating income 1,822 45.18 29.98 43.62
II. Operating charges 151,462 3,754.64 3,102.27 3,561.21A. Raw materials and consumables 118,196 2,929.99 2,350.28 2,698.08
1. Purchases 120,933 2,997.85 2,337.77 2,647.292. (Increase) decrease in inventories (2,737) (67.86) 12.51 50.79
B. Services and other goods 10,359 256.81 230.43 274.37C. Remunerations, social security charges and pensions 15,234 377.63 374.97 434.54D. Depreciation and amortisation of 4,928 122.17 118.99 116.42
formation expenses and intangible and tangible assets 4,411 109.36 110.66 106.43
consolidation differences 517 12.81 8.33 9.99E. Increase (decrease) in write-downs on inventories,
contracts in progress and trade receivables 297 7.35 0.25 5.34F. Provisions for liabilities and charges:
charges (amounts applied/released) 298 7.39 (10.78) (5.24)G. Other operating charges 2,150 53.30 38.13 37.70
III. Operating profit 6,049 149.96 72.60 (21.53)
IV. Financial income 2,547 63.14 80.14 111.25A. Income from financial fixed assets 296 7.33 8.24 9.81B. Income from current assets 437 10.83 6.71 14.68C. Other financial income 1,814 44.98 65.19 86.76
V. Financial charges 3,162 78.38 99.19 117.00A. Interest and other debt charges 1,257 31.17 18.33 33.06B. Write-downs on current assets 18 0.44 (1.94) 0.44C. Other financial charges 1,887 46.77 82.80 83.50
Net financial income (charge) (615) (15.24) (19.05) (5.75)
VI. Current profit (loss) 5,434 134.72 53.55 (27.28)
CONSOLIDATED INCOME STATEMENT
75
(amounts in million)
2000 2000 1999 1998BEF € € €
VII. Extraordinary income 1,610 39.90 86.08 28.17A. Write-backs on intangible and tangible fixed assets and
consolidation differences 3 0.08 - 0.89B. Write-backs on financial fixed assets 10 0.25 0.09 0.55C. Write-backs of provisions for extraordinary liabilities and charges 18 0.43 1.16 5.08D. Gain on disposal of fixed assets 1,391 34.47 84.46 9.74E. Other extraordinary income 188 4.67 0.37 11.91
VIII. Extraordinary charges 1,461 36.21 62.61 42.41A. Extraordinary depreciation and amortisation of 149 3.69 2.23 15.75
intangible and tangible assets 18 0.44 2.23 9.45 consolidation differences 131 3.25 - 6.30
B. Write-downs on financial fixed assets 249 6.17 2.76 2.11C. Provisions for extraordinary liabilities and charges:
amounts charged (amounts applied) 485 12.03 18.11 (19.03)D. Loss on disposal of fixed assets 5 0.13 0.66 0.17E. Other extraordinary charges 573 14.19 38.85 43.41
Extraordinary profit (loss) 149 3.69 23.47 (14.24)
IX. Profit (loss) for the year before taxes 5,583 138.41 77.02 (41.52)
X. Income taxes (417) (10.34) (4.90) (11.06)
XI. Profit (loss) of consolidated companies 5,166 128.07 72.12 (52.58)
XII. Group share in profit (loss) of companies includedby the equity method 543 13.46 15.82 4.92Profit 554 13.74 16.21 10.60Loss (11) (0.28) (0.39) (5.68)
XIII. Consolidated profit (loss) 5,709 141.53 87.94 (47.66)
XIV. Minority share in consolidated profit (loss) 218 5.41 18.66 3.49
XV. Group share in consolidated profit (loss) 5,491 136.12 69.28 (51.15)
APPROPRIATION ACCOUNT
Appropriation of Group shareTransfer from (to) reserves (4,160) (103.59) (40.18) 78.90Remuneration of shareholders (1) (1,331) (32.53) (29.10) (27.75)
Appropriation of minority shareTransfer from (to) reserves (122) (3.02) (17.46) (2.29)Remuneration of minority shareholders (96) (2.39) (1.20) (1.20)
(1) See comment p. 95
76 Union Minière
I. CRITERIA FOR DETERMINING THE CONSOLIDATION METHODS
Full consolidation is used for subsidiaries in which the consolidating company holds a de facto or de jure controlling interest.
Proportional consolidation is applied to subsidiaries held and managed jointly by a limited number of shareholders.
The equity method is used for associated companies over which one or more of the companies included in the scope ofconsolidation exert a significant influence.
I.bis. CHANGES IN THE SCOPE OF CONSOLIDATION
In 2000 the main changes in the scope of consolidation were the inclusion by the equity method of PADAENG INDUSTRY PUBLIC COMPANY LIMITED, Thailand, in which Union Minière holds a 44.77% interest.
In addition, Union Minière made several financial adjustments to its scope of consolidation but these changes did not have a significant impact on either the balance sheet or the profit and loss account.
For this reason a summarised table showing these changes has not been prepared.
The following changes occurred with regard to the consolidated companies:
1. Acquisitions and additions to the scope of consolidation
1.1. Full consolidation
FONCIERE DU MARAIS (Belgium)
In December 2000 Union Minière acquired the company which owned the title to the Group’s headquarters in Brusselswhich had previously been owned by S.A. Petercam Securities and S.C.A. Peterbroeck Van Campenhout in liquidation.
UM INVEST (Belgium)
The Belgian company UM INVEST was incorporated in December 2000 by Union Minière and its subsidiary ANTWERPSE HANDELSMAATSCHAPPIJ with a capital of EUR 280,000,000, with UM bringing in the participating interests it held in the following subsidiaries:
FININCO - Grand Duchy of Luxembourg UM FINANCE - Grand Duchy of Luxembourg UMCZ - Belgium UM ENGINEERING - Belgium UNION MINIERE FRANCE - France UNION MINIERE INTERNATIONAL - Netherlands SOGEM - Belgium
This transaction did not influence the Group’s consolidated accounts.
UM RESEARCH NORTH AMERICA (USA)
UM RESEARCH NORTH AMERICA (USA) is a company with a capital of USD 615,450 which is 100% owned by Union Minière.
This company was consolidated for the first time at 30 June 2000.
UMCI (Belgium)
On 9 June 1999, UMCI was incorporated with a capital of EUR 150,000 by Union Minière (60%) and Metallo Chimique International N.V. (40%). This joint venture was set up to collect catalytic converters from car exhausts in order to recover the precious metals they contain.
The company was consolidated for the first time at 31 December 2000.
NOTES TO THE 2000 CONSOLIDATED ACCOUNTS (1)
(1) The numbering of these notes reflects the provisions of the Royal Decree of 25 November 1991 pertaining to holding companies’ accounts
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1.2. Proportional consolidation
NORGEM (Belgium)
SOGEM and the Russian group Norilsk Nickel set up a limited company under Belgian law with a capital of EUR 62,000 to jointly develop marketing and sales activities for metals, primarily cobalt from Russia.
The joint venture will also ensure the continuity of pre-existing contracts concluded between SOGEM and Norilsk.
As SOGEM holds a 49% interest in NORGEM, this company was consolidated for the first time at 31 December 2000 on aproportional basis.
1.3. Capital increase and change in the percentage interest held
UNION MINIERE PIRDOP COPPER (Bulgaria)
In December 2000 Union Minière subscribed a capital increase by its Bulgarian subsidiary for an amount of EUR 65,079,400 bringing its participating interest up to 99.52%.
UNION MINIERE SERVICES & FINANCE (Belgium)
At the Extraordinary General Meeting held on 28 September 2000 the company implemented the following capital increases:
a) cash: capital BEF 4,000,000,000share premiums BEF 439,360,000
BEF 4,439,360,000
b) by incorporating share premiums BEF 835,960,000.
The company also decided to express the company capital in euro with effect from 1 October 2000, i.e. EUR 400,000,000.
UNION MINIERE KOREA (South Korea)
In 2000 Union Minière subscribed a capital increase by its subsidiary UNION MINIERE KOREA for an amount of WON 4,873,050,000, i.e. BEF 186,305,975.
NANODYNE (USA)
Union Minière increased the 98.8% participating interest it held in NANODYNE to 100% during the first half of 2000.
1.4. Companies included by the equity method
PADAENG INDUSTRY (Thailand)
Union Minière has invested BEF 1,437 million in the Thai company PADAENG INDUSTRY and as a result holds a 44.77%interest in this company, which is the sole zinc producer in South East Asia. This company was included by the equitymethod for the first time at 31 December 2000.
78 Union Minière
2. Sales and exclusion from the scope of consolidation
2.1. Sales to third parties
SOGEMIN METALS (United Kingdom)
On 29 September 2000 the Union Minière Group sold an 80% interest in its non-ferrous metals broking subsidiary to the French company, Natexis Banques Populaires S.A., in Paris.
This participating interest was excluded from the scope of consolidation and the remaining interest held (20%) was included by the equity method.
2.2. Exclusion from the scope of consolidation
Umcore (USA)
The joint venture set up by Emcore Corporation and UNION MINIERE INC. was closed down and as a result deconsolidated.This joint venture was previously included by the equity method.
Produits Chimiques Wiaux (Belgium)
On 31 March 2000 Union Minière sold its participating interest in Produits Chimiques Wiaux, based in Seneffe, to Floridienne Chimie S.A. in Waterloo.
2.3. Merger, absorption
Ateliers d'Art Français (France)
In the second half of 2000 Union Minière merged with and absorbed its subsidiary which specialised in producingdecorative elements for buildings. For legal and accounting purposes the merger was dated back to 1 January 2000 and did not entail a capital increase.
Ateliers d'Art Français has been legally wound up. This company’s activities are continuing as part of UNION MINIERE FRANCE.
79
II.a. MAIN FULLY CONSOLIDATED SUBSIDIARIES AND SUB-GROUPS
The list of the main subsidiaries and sub-groups given below relates to fully consolidated companies, except where otherwise stated.
The estimated aggregate value of the non-consolidated subsidiaries and sub-groups is of the order of 1 per cent of theestimated aggregate value of the holdings in the subsidiaries and sub-groups.
A full list of the companies referred to in Article 69, II to V, of the Royal Decree of 6 March 1990 pertaining to theconsolidated accounts of companies will be deposited at “Centrale des Bilans”, a department of the National Bank of Belgium.A copy may be obtained free of charge from Union Minière’s head office on request.
VAT or % capitalNAME HEAD OFFICE/COUNTRY National No. 2000
Altenberg Zink Essen (Germany) DE119.658.667 99.68Fininco Luxembourg (GD of Luxembourg) NA 100Foncière du Marais Brussels (Belgium) BE451.899.046 100Metall Dinslaken Dinslaken (Germany) DE119.066.058 100Metalrame Milan (Italy) IT10.022.420.151 100Shanghai Blue Lotus Metals Shanghai (China) NA 75Sibeka (pre-consolidated) and its main subsidiaries : Brussels (Belgium) BE403.202.373 80.44
Syndiaco Luxembourg (GD of Luxembourg) 80.44 Syndianed Amsterdam (Netherlands) NA 80.44 Syndiabel Brussels (Belgium) NA 80.44 Syndian Willemstad (Curaçao) 80.44
Sogem and its main subsidiaries Brussels (Belgium) BE402.964.625 100UM Engineering Louvain-la-Neuve (Belgium) BE422.631.473 100UM International and its main subsidiaries : Amsterdam (Netherlands) NA 100
Maastrichtsche Zinkwit Maatschappij (MZM) Eygelshoven (Netherlands) NL007.269.183B01 100 Union Minière Oxyde (Nederland) (sub-group) Eijsden (Netherlands) NL007.269.183B01 100 Laura Eygelshoven (Netherlands) NL008.863.301B01 100
Union Minière South Africa Rynfield (South Africa) 100UMCZ Liège (Belgium) BE402.343.924 100Umex Toronto (Canada) 100Union Minière Inc. and its subsidiaries Delaware (USA) 99.94Union Minière Finance Luxembourg (GD of Luxembourg) 100Union Minière France and its main subsidiaries (sub-groups): Bagnolet (France) FR10.342.965.001 100
Mapral Fécamp (France) FR57.346.550.072 100 Union Minière Invest France (former SPCV) Bagnolet (France) FR23.775.673.049 100 Union Minière Oxyde (France) La Ciotat (France) FR92.056.801.707 99.99 Asturiana das Minas Porto (Portugal) PT502.367.059 100
UM Invest Brussels (Belgium) NA 100Union Minière Services & Finance Brussels (Belgium) BE428.179.081 99.40Union Minière Korea Chung Nam (South Korea) 100Union Minière Pirdop Copper Pirdop (Bulgaria) 97.73Union Minière Bulgaria Sofia (Bulgaria) 100Union Minière Commercial & Services Fribourg (Switzerland) 100
80 Union Minière
VI.a. ACCOUNTING PRINCIPLES AND VALUATION RULES
1. Restatements and eliminationsApplication of consistent accounting rules and valuation methods within the Group allows the accounts of consolidatedcompanies to be presented on the same economic basis and requires individual company accounts to be restated inaccordance with the accounting principles set out below.After summing up the balance sheet and profit and loss accounts, restated as necessary, the inter-company balances and losses or gains resulting from inter-company operations within the Group are eliminated.
2. Gains or losses of interestA gain or a loss is recorded when there is a reduction in the interest held in a consolidated company following an increase in capital.When, in the same circumstances, the Group increases its holding a consolidation difference is recorded.
3. Translation of assets and liabilities expressed in foreign currenciesAssets and liabilities expressed in foreign currencies are translated at the official exchange rates at the end of the financialyear. For Belgian companies the rule applies to items which are not expressed in Belgian francs; in the case of foreigncompanies, it applies to items expressed in a currency other than that used in their financial statements.Losses or gains resulting from these translations as well as exchange differences realised on operations in the financial year are recorded in the income statement.
4. Translation of financial statements of foreign companies and branchesBalance sheets and income statements of foreign companies and branches are translated into Belgian francs using the officialexchange rates at the end of the financial year and the average rates for that year, respectively. Differences resulting fromthese translations are debited or credited to shareholders’ equity; the Group share in these differences is shown in the“Translation adjustments” component of consolidated shareholders' equity.
5. Closing dateThe consolidated accounts are prepared as at 31 December, the closing date of the parent company and of most of theconsolidated companies. For companies with closing dates between 30 September and 31 December, the annual accounts areused without adjustment; when the closing date is before 30 September, intermediate financial statements as at 31 Decemberare drawn up for consolidation purposes.
6. Intangible and tangible fixed assetsFixed assets are shown at their historical cost less accumulated depreciation and amortisation, calculated over the estimatedeconomic life of the assets concerned, using the straight-line or declining balance method.The economic lives used are as follows: Land non-depreciable Buildings:
- Industrial buildings 20except industrial complexes 15
- Other buildings (offices, laboratories, etc.) 40- Infrastructure works, such as roads and railways 15- Fixtures, fittings and improvements to buildings 10
Plant, machinery and equipment 10except furnaces 7except small equipment 5
Furniture and vehicles:- Computer equipment 3 to 5- Furniture and office equipment 5 to 10- Vehicles 5- Mobile handling equipment 7
Other tangible fixed assets:- Houses and residential buildings 40
Acquisitions are recorded at cost price, together with capitalised interest expenses. Repairs and maintenance are charged tothe income statement. Assets acquired under leasing contracts are recorded as fixed assets at their purchase price; the leasepayments made are recorded in the income statement as depreciation and financial charges.
81
7. Consolidation goodwillWhen a company is consolidated for the first time, a difference arises between the cost of the shares and the related share in the company's equity. This difference is usually attributable to unrealised gains or losses on the assets and liabilities of theacquired company, or to the expected future profitability of the investment.With effect from 1 January 1988, the main differences resulting from revaluing the related assets and liabilities are added to/deducted from the relevant items of the balance sheet, and amortised, written down or written back in the income statementaccording to the rules applying to these items. Any residual intangible difference is recorded in the consolidated balance sheetas “Consolidation differences” and is amortised by the straight-line method over a period not exceeding 20 years.This period is determined on the basis of a prudent assessment of the economic life of this intangible asset taking intoaccount the time required to recover the additional price which was paid and not applied.Additional or exceptional amortisation may be booked in cases where it is no longer economically justified to continue tocarry the consolidation goodwill as an asset.
8. Financial fixed assetsIn the consolidated balance sheet, investments consolidated by the equity method are recorded at the value of the share inthe equity determined according to the consolidation rules, rather than at the book value in the holding company’s books.Holdings in non-consolidated companies comprise long-term investments which give a decisive or significant influence on, or enable business relations to be established with, the companies concerned, but do not meet the consolidation criteria. They are recorded at acquisition cost, excluding any balance of capital uncalled. When the assessment shows a lastingimpairment of value, the value of the investment is written down accordingly.
9. InventoriesInventories are recorded at the historical cost obtained by applying the valuation method which is most appropriate to eachbusiness line within the Group.Consumables and supplies are carried at cost, withdrawals being booked on the basis of a weighted average. An appropriatewrite-down is booked where turnover is slow or there is an impairment of value.Metals - primary materials, production in progress and finished products - which are covered, in particular on the internationalmetal exchanges, continue to be carried at their purchase price. In particular this applies to precious metals and copper.Other metals which are not covered by this system, together with zinc, are valued according to the annual LIFO method,allowing for the specific nature of the activities in question and the problems posed by stock-taking.At the end of the financial year the value of these inventories is written down to bring their book value into line with theirmarket price. Amounts written down in this way are not subsequently written back.Inventories in other sectors of activity are valued on the FIFO (first in, first out) basis or, where this is not applicable, accordingto the average weighted cost method, calculated over a period which does not exceed the average stocking period.Withdrawals are booked according to either method.The cost price of purchased goods includes the net acquisition price plus related expenses. For finished goods and work inprocess, the cost price includes the direct production costs and a share of the indirect production costs.
10. Contracts in progressThe cost price of long-term contracts is determined in the same way as work in process; interest charges incurred directly tofinance such contracts may be included.Long-term contracts are valued using the percentage-of-completion method.
11. Amounts receivable and amounts payableAmounts receivable and amounts payable are recorded at nominal value. When they are expressed in a foreign currency, theyare recorded at the Belgian franc equivalent based on the exchange rate on the day of acquisition. At the end of the financialyear, they are valued using the closing exchange rate of that year. With respect to amounts receivable, the rules for recordingimpairment of value are similar to those applicable to securities.
12. Invested cashThis heading comprises term deposits with credit institutions and securities acquired as market opportunities arise, or as temporary re-investment of excess cash.They are recorded at acquisition cost, or at stock exchange value for listed securities and estimated value for unlistedsecurities if these values are lower than the acquisition price.
82 Union Minière
13. Provisions for pensionsResponsibility for pensions due under the various mandatory retirement schemes to which employers and employeescontribute is generally assumed by specialised institutions independent of the company. The contributions due for thefinancial year are charged to the income statement for that year. Supplementary retirement plans which generate obligations for the companies concerned are covered by provisions determinedaccording to actuarial calculations based on end-of-career salary forecasts (the “projected benefit obligation” method).
14. Company taxationIn the consolidated accounts, deferred taxes are recorded on all temporary differences resulting from charges and incomewhich are included in, or excluded from, the book profit or loss of a given financial year but which should be deducted from,or added to, the tax basis of the financial year during which the differences are reversed. The liability method is applied. Thismeans that deferred taxes are calculated on the basis of the latest enacted tax rate on the last day of the financial year. Onthis date, for each tax entity in the scope of consolidation, the tax assets and liabilities on all temporary differences are offset.The individual balances are then offset, and only the net balance of deferred tax liabilities is recorded in the balance sheet.
VI.b. EXCHANGE RATES USED TO DRAW UP THE CONSOLIDATED ACCOUNTS
Closing rates Average rates
2000 2000 1999 2000 2000 1999BEF € € BEF € €
FRENCH FRANC FRF 6.15 0.15245 0.15245 6.15 0.15245 0.15245
SWISS FRANC CHF 26.48 0.65651 0.62301 25.89 0.64189 0.62488
DUTCH GUILDER NLG 18.31 0.45378 0.45378 18.31 0.45378 0.45378
DEUTSCHE MARK DEM 20.63 0.51129 0.51129 20.63 0.51129 0.51129
POUND STERLING GBP 64.64 1.60231 1.60849 66.20 1.64099 1.51837
US DOLLAR USD 43.35 1.07469 0.99542 43.66 1.08225 0.93833
CANADIAN DOLLAR CAD 28.89 0.71608 0.68456 29.42 0.72934 0.63133
LIRE (100) ITL 2.08 0.05165 0.05165 2.08 0.05165 0.05165
PESETA (100) ESP 24.24 0.60101 0.60101 24.24 0.60101 0.60101
ESCUDO (100) PTE 20.12 0.49880 0.49880 20.12 0.49880 0.49880
DANISH CROWN DKK 5.40 0.13399 0.13435 5.41 0.13416 0.13449
MEXICAN PESO (100) MXP 4.47 0.11085 0.10524 4.62 0.11445 0.09813
BULGARIAN LEVA (new 2000) BGN 20.64 0.51169 0.00051 20.71 0.51334 0.00051
YEN (100) JPY 37.73 0.93528 0.97343 40.54 1.00502 0.82484
RAND ZAR 5.73 0.14206 0.16202 6.31 0.15641 0.15347
HONG KONG DOLLAR HKD 5.56 0.13778 0.12834 5.60 0.13890 0.12093
ZLOTY (new 2000) PLN 10.48 0.25975 0.24046 10.06 0.24951 0.23657
WON (100) KRW 3.43 0.08496 0.08807 3.86 0.09574 0.07892
HUNGARIAN FORINT HUF 0.15 0.00377 0.00393 0.16 0.00385 0.00396
YUAN RENMINBI CNY 5.19 0.12868 0.12868 5.27 0.13074 0.11335
THAI BAHT THB 0.99 0.02455 - 1.09 0.02701 -
83
VIII. STATEMENT OF INTANGIBLE FIXED ASSETS (amounts in million)
Concessions, patents, Software Other Totallicences, goodwill tangible assets
a) Acquisition value
At the end of the preceding financial year 651 1,071 19 1,741
Movements acquisitions 2 16 5 23 own construction - - 1 1 retirals - (21) - (21) transfers - 2 10 12 translation adjustments - - 1 1 sub-total movements 2 (3) 17 16
At the end of the financial year BEF 653 1,068 36 1,757
€ 16.19 26.48 0.89 43.56
b) Amortisation and write-downs
At the end of the preceding financial year 373 778 6 1,157
Movements amounts charged 34 178 6 218 cancellations - (20) - (20) transfers - 10 - 10 translation adjustments - (1) - (1) sub-total movements 34 167 6 207
At the end of the financial year BEF 407 945 12 1,364
€ 10.09 23.42 0.31 33.82
c) Net book value
At the end of the preceding financial year 278 293 13 584At the end of the financial year BEF 246 123 24 393
€ 6.10 3.06 0.58 9.74
84 Union Minière
IX. STATEMENT OF TANGIBLE FIXED ASSETS (amounts in million)
Land Plant, Furniture Leasing Other Constructionand buildings machinery and and tangible in progress
and vehicles similar assets and advanceequipment rights payments
a) Acquisition value
At the end of the preceding financial year 16,272 48,822 3,685 137 7,645 1,424
Movements change in scope
of consolidation (168) (18) (38) 633 (189) - acquisitions 248 812 274 3 17 3,011 own construction 1 20 2 - - 79 disposals (27) (25) (115) (10) (201) 1 retirals (398) (660) (368) - (1,763) (1) transfers 373 1,389 108 1 139 (2,024) translation adjustments 145 367 32 2 3 53 sub-total movements 174 1,885 (105) 629 (1,994) 1,119
At the end of the financial year BEF 16,446 50,707 3,580 766 5,651 2,543
€ 407.69 1,256.99 88.74 18.99 140.08 63.04
b) Depreciation and write-downs
At the end of the preceding financial year 8,085 32,262 2,776 69 7,478 -
Movements change in scope
of consolidation (132) (17) (15) 115 (143) - amounts charged 740 3,011 358 34 67 - write-backs - (3) - - - - disposals (3) (12) (94) (9) (195) - cancellations (374) (588) (362) - (1,761) - transfers (17) (99) (4) - 108 - translation adjustments 33 113 24 2 3 - sub-total movements 247 2,405 (93) 142 (1,921) -
At the end of the financial year BEF 8,332 34,667 2,683 211 5,557 -
€ 206.54 859.38 66.51 5.23 137.75 -
c) Net book value
At the end of the preceding financial year 8,187 16,560 909 68 167 1,424At the end of the financial year BEF 8,114 16,040 897 555 94 2,543of which:
land and buildings 539plant, machinery and equipment 16
€ 201.15 397.61 22.23 13.76 2.33 63.04
85
X. STATEMENT OF FINANCIAL FIXED ASSETS (amounts in million)
a) Investments included by the equity method
At the end of the preceding financial year 4,072
Movements change in scope of consolidation 541 capital increase 489 capital repayment (7) dividends paid (392) profit (loss) for the financial year 543 translation adjustments 55 sub-total movements 1,229
At the end of the financial year BEF 5,301
€ 131.43
Acquisition Write-value downs
b) Non-consolidated investments
At the end of the preceding financial year 6,751 (2,987)
Movements change in scope of consolidation (1,859) 1,818 acquisitions and capital increase 189 - disposals and capital decrease (354) - write-downs - (234) write-backs - 2 transfers 60 - translation adjustments 49 (14) sub-total movements (1,915) 1,572
At the end of the financial year BEF 4,836 (1,415)
€ 119.88 35.08
Net book valueAt the end of the preceding financial year - 3,764At the end of the financial year BEF - 3,421
€ - 84.80
Acquisition Write-value downs
c) Amounts receivable
At the end of the preceding financial year 2,684 (612)
Movements additions and acquisitions 56 - write-downs and write-backs - (6) repayments and disposals (187) - transfers (428) 463 translation adjustments 4 (1) sub-total movements (555) 456
At the end of the financial year BEF 2,129 (156)
€ 52.78 (3.88)
Net book valueAt the end of the preceding financial year 2,072At the end of the financial year BEF 1,973
€ 48.90
86 Union Minière
XI. STATEMENT OF SHAREHOLDERS’ EQUITY (amounts in million)
Capital Share Reserves Consolidation Translation Totalpremiums differences adjustments
At the end of the preceding financial year 15,529 5,090 19,105 49 205 39,978
Movements remuneration of shareholders - - (1,331) - - (1,331) change in
translation adjustments - - - - 254 254 change in
consolidation differences - - - (5) - (5) profit (loss) for the financial year - - 5,491 - - 5,491
At the end of the financial year BEF 15,529 5,090 23,265 44 459 44,387
€ 384.96 126.18 576.72 1.08 11.39 1,100.33
XII. STATEMENT OF CONSOLIDATION DIFFERENCES (amounts in million)
Positive NegativeNet book value differences differences
At the end of the preceding financial year 3,568 49
Movements change in scope of consolidation 460 - ordinary amortisation charges (522) (5) extraordinary amortisation charges (131) - other movements 28 - sub-total movements (165) (5)
At the end of the financial year BEF 3,403 44
€ 84.36 1.08
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XIII. STATEMENT OF AMOUNTS PAYABLE AFTER ONE YEAR (excluding investment grants) (amounts in million)
n+6 n+11A. Breakdown by maturity dates n+2 n+3 n+4 n+5 to 10 to 15 Total
Unsubordinated debentures - - 1 2 4 - 7Leasing and similar obligations 11 - - - - - 11Credit institutions 2,174 2,661 1,674 1,167 270 28 7,974Other financial debts 21 - - - - 4 25sub-total financial debts 2,206 2,661 1,675 1,169 274 32 8,017Trade debts 6 6 - - - - 12Other amounts payable(excl. BEF 305 million of investment grants) - - - - - - -
Total 2,212 2,667 1,675 1,169 274 32 8,029
B. Breakdown of financial debts by currencies (1) EUR Other European currencies USD Other Total
Unsubordinated debentures - 7 - 25 32Leasing and similar obligations - - 11 - 11Credit institutions 9,597 800 - 55 10,452Other financial debts 4 - 21 - 25
Total financial debts 9,601 807 32 80 10,520(1) Including current portion of financial debts (BEF 2,503 million)
XIV. INCOME STATEMENT (amounts in million)
2000 1999A. Breakdown of sales and services (1) € BEF € BEF
By activities: Advanced Materials 435 17,527 358 14,455 Copper 1,154 46,572 812 32,759 Precious Metals 740 29,838 776 31,292 Zinc 972 39,203 842 33,945 Technology & Services 526 21,238 365 14,723 Other 8 315 27 1,114
Total 3,835 154,693 3,180 128,288
By geographical areas of production: Belgium 2,493 100,559 1,997 80,556 France 403 16,269 316 12,740 Germany 265 10,696 322 12,994 Other European countries 400 16,126 322 13,005 America 129 5,190 114 4,595 Asia 145 5,853 109 4,398
Total 3,835 154,693 3,180 128,288
(1) Figures for 1999 have been restated to reflect the breakdown on a business group basis of the SOGEM’s group turnover which was formerly carried underTechnology & Services
88 Union Minière
B. Average number of persons employed
1. Breakdown by categories Consolidated companies
2000 1999
Hourly-paid employees 4,807 5,172 Monthly-paid employees 2,189 2,131 Managerial staff 742 801 Executives 51 66Total 7,789 8,170
2. Breakdown by geographical areas Consolidated companies
Hourly-paid Monthly-paid Managerial Executives Totalstaff
Belgium 2,766 1,119 445 9 4,339France 766 425 123 3 1,317Other European countries 141 1,450 109 24 1,724America 84 89 39 10 222Africa 36 6 4 - 46Asia 59 55 22 5 141Total 3,852 3,144 742 51 7,789
3. Breakdown of remunerations, social security charges and pensions (BEF million)
2000 1999Personnel charges 14,595 14,313Pensions and similar obligations 639 813Total 15,234 15,126
C. Other extraordinary charges (€ million) (BEF million)Reorganisation costs (covered by provisions) 11.53 465Other charges covered by provisions 0.09 4Charges related to sales of assets 0.99 40Write-downs 0.42 17Cost incurred on reorganisation 0.59 24Miscellaneous 0.57 23Total 14.19 573
D. Reconciliation of theoretical and effective tax charges (€ million) (BEF million)Theoretical tax charge: 55.60 2,243
Dividends of non-consolidated companies (income already taxed) (0.31) (13) Untaxed fraction of capital gains (0.38) (15) Use of deferred tax assets from previous financial years
and recoverable tax losses (54.26) (2,189) Impact of the financial year’s loss 7.95 321 Tax rate differences due to foreign tax rates (6.30) (254) Items taxed on other bases (2.77) (112) Sundry deductions and reinstatements 10.81 436
Effective tax charge per income statement 10.34 417
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XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET (amounts in million)
2000 1999BEF € €
Guarantees constituted by third parties on behalf of the Group 2,230 55.28 69.70Guarantees constituted by the Group on behalf of third parties 2,203 54.61 71.77Guarantees constituted by the Group on own assets and for own account 35 0.87 5.05Guarantees received 941 23.33 17.44Property and securities held by third parties in their own namesbut at the Group’s risk 5,327 132.05 5.77Commitments to acquire and sell fixed assets 15 0.37 0.37Forward contracts:
Commodities purchased (to be received) 16,770 415.72 296.57 Commodities sold (to be delivered) 21,452 531.78 383.57 Currencies purchased (to be received) 45,996 1,140.21 644.29 Currencies sold (to be delivered) 47,927 1,188.08 644.33 Options - Currency hedging
Purchases PUT USD/ CALL €-options 15,491 384.01 - Purchases CALL USD/ PUT €-options 19,363 480.00 - Sales CALL USD/PUT €-options 16,908 419.14 -
Property and securities of third parties held by the Group 10,133 251.19 197.39Miscellaneous rights and commitments 390 9.67 25.95
XVII. FINANCIAL RELATIONS WITH DIRECTORS (BEF million)
Aggregate amount of remunerations attributed in the financial year to the directors or executive officers of the consolidating company by reason of their offices in said company, its subsidiaries and its affiliated companies, including the retirement allowances attributed, for the same reason, in the financial year to former directors or executive officers 48
90 Union Minière
XVIII. STATEMENT OF PROVISIONS AND DEFERRED TAXES (amounts in million)
Pensions and Tax Major Other Deferredsimilar charges repairs liabilities taxes
obligations and andmaintenance charges
Net book value
At the end of the preceding financial year 5,550 10 736 3,412 892
Movements change in scope of consolidation - - (2) 65 (1) charged 653 12 759 1,626 16 applied (835) - (593) (550) (192) released (81) - (25) (125) (8) transfers - - (225) 226 - translation adjustments 1 - 1 13 60 sub-total movements (262) 12 (85) 1,255 (125)
At the end of the financial year BEF 5,288 22 651 4,667 767
€ 131.09 0.54 16.13 115.70 19.02
LITIGATION AND MAJOR EVENTS
Valuation of inventories
In accordance with the UM Group’s valuation rules, metal inventories which are not covered are valued on a LIFO basis once a year owing to the fact that physical stock-taking is necessary to determine their value in terms of the metals contained.
The value of the company’s metal inventories on a LIFO basis was BEF 14,664 million and their market value was BEF 32,974 million.
Environment-related risks
In 1997 Union Minière signed an agreement with OVAM (Flemish Regional Waste Authority) with a view to finding a solution to the problem of long-standing pollution at the industrial sites which were still in operation in Flanders. Under this agreement, Union Minière was first to carry out a study on a voluntary basis to identify the risks. This initial phase was completed in 2000.
Union Minière has now embarked on the second phase, which includes detailed studies. Once these studies have beencompleted (first half of 2001) a concrete plan of action will be drawn up in cooperation with OVAM in order to carry out thenecessary rehabilitation work according to a time schedule.
In France a risk inventory for all the Group’s industrial sites had to be completed by the end of 1999 as required by aministerial decree. The aim of this first phase was to classify industrial sites in terms of the degree of risk for the environment.
Owing to the problems and uncertainty encountered in complying with the definitions laid down by the Direction Régionalede l’Industrie, de la Recherche et de l’Environnement (DRIRE = Regional Authority for Industry, Research and the Environment)UNION MINIERE FRANCE was obliged to ask the authority for additional information. This resulted in a delay, which has beenaccepted by the authority.
Once the necessary clarifications have been made it will be possible to complete the risk inventory and start on the secondphase. This phase consists of a detailed assessment solely of the risks falling into the category “significant risk for the environment”which require action to be taken.
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Strategic cover
In 1999 the board of directors decided to use forward sales to fix the currency translation rates for its income expressed in USD, for an amount of USD 240 million, i.e. equivalent to half the annual position.
Further to a decision taken by the board of directors on 28 October 1999, additional cover was taken out in December 1999for the 2000 financial year for an amount of USD 240 million at an average rate of BEF 37.66 to USD 1, i.e. once againequivalent to half the annual position. As the average rate for the year was BEF 43.7 to USD 1, Union Minière benefited froman average rate of BEF 40.6 to USD 1 for the 2000 financial year.
Union Minière also took advantage of the strong performance of the US dollar against the euro to set up various hedgingarrangements to protect its profits and cash flow in 2001 and 2002.
Half of the UM Group’s dollar exposure is hedged by forward exchange contracts at an average rate of BEF 43.4 (USD 0.93/EUR)and BEF 42.4 (USD 0.95/EUR) for 2001 and 2002 respectively. The balance has been covered by so-called “seagull” optionswhich guarantee a floor rate of BEF 40.3 (USD 1/EUR) and allow UM to take advantage of higher rates, except in the bandbetween BEF 44 (USD 0.91/EUR) and BEF 50.4 (USD 0.80/EUR).
In December 2000 the Group covered USD 60 million for the 2003 financial year at a rate of BEF 42.70 to USD 1 and theremainder of half of the USD exposure for this financial year was covered at the beginning of 2001 at an average rate of BEF 41.49 to USD 1.
In addition, the company concluded forward sales of metals whereby the contracts start to run after the end of the financialyear.
At 31 December 2000 these transactions involved 34 tonnes of silver at an average price of USD 156 per kg; 975 kg of gold at an average price of USD 8,995.88 per kg; 343 kg of platinum at an average price of USD 18,727.70 per kg; 2,000 kg ofpalladium at an average price of USD 17,808.80 per kg and 166 kg of rhodium at an average price of USD 61,050 per kg.These sales did not have any impact on the profit for the 2000 financial year.
Application of VAT on deliveries “ex works”
In 1998 and 1999 the Belgian Tax Authorities carried out an inspection at Union Minière into the VAT charged on “ex works”sales of silver to Italy.
In December 2000 Union Minière and the Belgian Tax Authorities came to an agreement on a solution to this dispute coveringthe period from 1995 up to and including 1999. The financial impact of this agreement has been fully allowed for in theoperating profit of the Precious Metals operations.
92 Union Minière
REPORT OF THE STATUTORY AUDITORON THE CONSOLIDATED ACCOUNTS AT 31 DECEMBER 2000
To the shareholders of n.v. Union Minière s.a.
In accordance with legal and regulatory requirements, we are pleased to report to you on the performance of the auditmandate, which you have entrusted to us.
We have audited the consolidated financial statements as of and for the year ended 31 December 2000, which have beenprepared under the responsibility of the board of directors of n.v. Union Minière s.a. and which show a balance-sheet total of BEF 101,339 million and a consolidated profit, Group share, for the year of BEF 5,491 million.
We have also examined the directors' report.
Unqualified opinion on the financial statements
We conducted our audit in accordance with Belgian auditing standards, as issued by the “Institut des Reviseursd’Entreprises/Instituut der Bedrijfsrevisoren”. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, taking into account thelegal and regulatory requirements applicable to consolidated financial statements in Belgium.
In accordance with those standards, we considered the Group’s administrative and accounting organisation, as well as itsinternal control procedures. We obtained all explanations and information required for our audit. We examined, on a testbasis, evidence supporting the amounts in the consolidated financial statements. We assessed the accounting principles usedand significant estimates made by the Group, as well as the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements present fairly the Group’s net worth and consolidated financial positionas at 31 December 2000 and the consolidated results of its operations for the year then ended, in accordance with theapplicable legal and regulatory requirements in Belgium and the information given in the notes to the financial statements is properly presented.
93
Additional certifications and information
We supplement our report with the following certifications and information which do not modify our audit opinion on theconsolidated financial statements:
the consolidated directors’ report contains the information required by law and is consistent with the consolidated financialstatements;
in the context of our audit of the statutory financial statements of n.v. Union Minière s.a., we ascertained that the board of directors of the company had complied with the Belgian legal provisions applicable to cases of conflicting interest of afinancial nature. In conformity with the Belgian Company Code, these transactions have been covered explicitly in our reporton the statutory financial statements of n.v. Union Minière s.a.
Brussels, 16 February 2001
The Statutory Auditor
PricewaterhouseCoopersReviseurs d’Entreprises
represented byRobert Peirce and Luc Discry
94 Union Minière
The annual accounts of n.v. Union Minière s.a. are given below in summarised form.In accordance with the Company Code, the annual accounts of n.v. Union Minière s.a., together with the management reportand the statutory auditor’s report have been deposited with the National Bank of Belgium.These documents may also be obtained on demand from:
n.v. UNION MINIERE s.a.rue du Marais 31B-1000 Brussels (Belgium)
The statutory auditor did not express any reservations in respect of the annual accounts of n.v. Union Minière s.a.
SUMMARISED BALANCE SHEET AT 31 DECEMBER (amounts in thousand)
ASSETS 2000 2000 1999 1998BEF € € €
FIXED ASSETS 56,904,539 1,410,627 1,062,446 1,072,597
II. Intangible assets 607,925 15,070 19,361 17,108
III. Tangible assets 14,430,699 357,728 377,919 412,857
IV. Financial assets 41,865,915 1,037,829 665,166 642,632
CURRENT ASSETS 31,634,195 784,191 713,662 762,511
V. Amounts receivable after one year 7,037 174 241 316
VI. Inventories and contracts in progress 17,011,017 421,692 382,124 478,582
VII. Amounts receivable within one year 8,412,207 208,533 249,865 230,780
VIII. Invested cash 3,277,976 81,259 15,528 7,656
IX. Cash at bank and in hand 299,239 7,418 8,754 5,394
X. Deferred charges and accrued income 2,626,719 65,115 57,150 39,783
TOTAL ASSETS 88,538,734 2,194,818 1,776,108 1,835,108
LIABILITIES AND SHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITY 40,531,982 1,004,762 829,624 797,973
I. Capital 15,529,240 384,960 384,960 384,960
II. Share premiums 5,090,044 126,179 126,179 126,179
III. Revaluation surplus 11,237 279 1,362 1,362
IV. Reserves 10,092,202 250,179 174,445 163,662
V. Profit (loss) carried forward 9,784,633 242,555 141,548 120,130
VI. Investment grants 24,626 610 1,130 1,680
PROVISIONS AND DEFERRED TAXES 7,712,435 191,186 178,360 167,840
VII. A. Provisions for liabilities and charges 7,712,435 191,186 178,360 167,840
CREDITORS 40,294,317 998,870 768,124 869,295
VIII. Amounts payable after one year 6,910,784 171,314 193,169 181,845
IX. Amounts payable within one year 28,811,193 714,211 511,570 615,691
X. Accrued charges and deferred income 4,572,340 113,345 63,385 71,759
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 88,538,734 2,194,818 1,776,108 1,835,108
SUMMARISED ANNUAL ACCOUNTS OF n.v. UNION MINIERE s.a.
95
SUMMARISED INCOME STATEMENT (amounts in thousand)
2000 2000 1999 1998BEF € € €
I. Operating income 126,957,220 3,147,187 2,525,445 2,428,631
II. Operating charges 121,156,675 3,003,395 2,478,797 2,470,086
III. Operating profit (loss) 5,800,545 143,792 46,648 (41,455)
IV. Financial income 4,262,910 105,675 81,286 97,336
V. Financial charges 3,491,567 86,554 45,272 53,177
VI. Current profit (loss) 6,571,888 162,913 82,662 2,704
VII. Extraordinary income 4,744,123 117,604 15,020 13,324
VIII. Extraordinary charges 2,853,889 70,746 35,069 53,751
IX. Profit (loss) for the year before taxes 8,462,122 209,771 62,613 (37,723)
X. Income taxes (1,364) (34) 19 571
XI. Profit (loss) for the year 8,460,758 209,737 62,632 (37,152)
XII. Transfer from untaxed reserves - - - 71,889
XIII. Profit (loss) for the year available for appropriation 8,460,758 209,737 62,632 34,737
APPROPRIATION ACCOUNT
A. Profit (loss) to be appropriated 14,170,768 351,285 182,762 149,618
1. Profit (loss) for the financial year 8,460,758 209,737 62,632 34,737
2. Profit (loss) carried forward 5,710,010 141,548 120,130 114,881
C. Appropriation to equity (3,055,119) (75,735) (10,782) (1,737)
2. To the legal reserve (423,038) (10,487) (3,131) (1,737)
3. To the reserve for own shares (2,632,081) (65,248) (7,651) -
D. Profit (loss) to be carried forward (1) (9,784,633) (242,555) (141,548) (120,130)
2. Profit (loss) to be carried forward (9,784,633) (242,555) (141,548) (120,130)
F. Profit to be distributed (1) (1,331,016) (32,995) (30,432) (27,751)
1. Dividends
- ordinary shares € 1.40 (1,331,016) (32,995) (30,432) (27,751)
(1) The total of these two items will be amended to allow for the amount of the company’s own shares held by Union Minière on the date of the Annual General Meeting of shareholders on 9 May 2001; the gross dividend of EUR 1.40 per share will not change
96 Union Minière
STATEMENT OF CAPITAL
BEF thousand Number of shares
A. Share capital
1. Issued capital
At the end of the preceding financial year 15,529,240 25,617,515At the end of the financial year 15,529,240 25,617,515
2. Structure of the capital
2.1. Categories of shares (1)
Ordinary shares 15,529,240 25,617,515
2.2. Registered shares or bearer sharesRegistered 4,810,969Bearer 20,806,546
E. Authorised unissued capital 14,471,730 -
% capital Number of shares
G. Shareholder base (2)
SOCIETE GENERALE DE BANQUE S.A., rue Royale 30, 1000 Brussels 25.21 6,458,570CONTASSUR S.A., Place du Trône 1, 1000 Brussels 0.04 10,416
SGB group 25.25 6,468,986
Other shareholders 74.75 19,148,529100.00 25,617,515
(1) The VVPR shares were stripped on 26 March 1999, with coupon No 5 from VVPR shares entitling holders to a sheet of strips and coupon No 5 from ordinary shares being cancelled
(2) According to the statement of 19 August 1997, disregarding the existence of warrants for a maximum of 126,400 shares attached to five bond issues reserved for the company's senior management that were floated in 1994, 1995, 1996, 1997 and 1998, and for amaximum of 695,640 shares attached to stock option plans launched for all UM personnel in 1999 and 2000. Maximum potential dilutionif all the options were exercised would be 3.21%. However, this dilution rate would be reduced or cancelled out in the event of the sharescurrently held by UM being used at the time the options were exercised, instead of new shares being created
VALUATION RULES
The valuation rules of n.v. Union Minière s.a. are the basis and provide the essential guidelines for the valuation rules used bythe Union Minière Group as described in point VI.a. of the notes to the consolidated accounts.
Brussels, 15 February 2001The Board of Directors
97
BOARD AND DAY-TO-DAY MANAGEMENT
BOARD OF DIRECTORS
Executive Directors
Karel Vinck, 62, Executive ChairmanBefore joining UM, Karel Vinck was chief executive officer of Eternit and Bekaert. He ispresently chairman of the Executive Committee of Sibelco, the worldwide leader in silicaand clay. He is also a member of the boards of Société Générale de Belgique, Tractebel,Barco, the Catholic University of Louvain and Théâtre Royal de la Monnaie. He is honorary chairman of VEV, the Flemish employers association.
Positions held at UMHe has been executive chairman since May 2000 and a director since October 1994; he is also a member of the Strategy Committee. His present period of office expires at the 2003 Annual General Meeting.
Thomas Leysen, 40, Chief Executive OfficerHe became chief executive officer of Union Minière in 2000, after having held variouspositions within UM and its affiliates. He is also chairman of VUM Media, a newspaperpublishing company, and a member of the board of KBC Bank and Insurance, Atlas Copcoand Alcatel Bell.
Positions held at UMHe has been a director and chief executive officer since May 2000; he is also a member ofthe Strategy Committee. His present period of office expires at the 2003 Annual GeneralMeeting.
Non-executive Directors representing shareholders
Etienne Davignon, 68, Vice-ChairmanFrom 1959 to 1977, Etienne Davignon was Head of the Cabinet of the Belgian Ministry of Foreign Affairs and, from 1969 to 1977, he was responsible for the Political Departmentof the said Ministry. In 1977, he was appointed Vice-President of the EEC, in charge ofindustry, research and energy until the end of 1984. In 1985, he joined Société Généralede Belgique of which he is currently vice-chairman.Etienne Davignon is a member of the board of Suez Lyonnaise des Eaux, BASF, ICL, Sofina,Solvay and is vice-chairman of Fortis Bank.
Positions held at UMHe has been vice-chairman since May 2000 and a director since December 1989; he is also chairman of both the Strategy Committee and the Nomination and RemunerationCommittee. His present period of office expires at the 2003 Annual General Meeting.
98 Union Minière
Christine Morin-Postel, 54Christine Morin-Postel is a member of the board of Société Générale de Belgique,Tractebel and Fortis Bank and chairman of Trigen US. She is senior vice-president in charge of human resources and member of the Executive Committee of the Suez Lyonnaise des Eaux group.
Positions held at UMShe has been a director since December 1997; she is also a member of both the Strategy Committee and the Nomination and Remuneration Committee. Her presentperiod of office expires at the 2003 Annual General Meeting, but she intends to resign at the Annual General Meeting of 9 May 2001.
Jean-Pierre Standaert, 53He started his career at Cimenteries CBR in 1975 and joined Société Générale de Belgiquein 1988 where he is currently general manager. In 1998 he became group director for legal and tax affairs at Suez Lyonnaise des Eaux.
Position held at UMHe has been a director since July 1989. His present period of office expires at the 2003 Annual General Meeting.
Independent non-executive Directors
Marc Blanpain, 59He is chairman of the board of Banque Belgolaise, which is active in 18 African countries.He is chairman of the board of Fortis Banque (France), Banque Mees Pierson Gonet(Suisse) and Cibix. He is member of the board of several cultural and philantropicassociations.
Position held at UMHe has been a director since March 1997. His present period of office expires at the 2003 Annual General Meeting.
Jean-Luc Dehaene, 60Jean-Luc Dehaene has occupied several ministerial posts and was Prime Minister of Belgiumfrom 1992 to 1999. He is a member of the board of Telindus, Domo and Corona-Lotus.He is chairman of the board of the College of Europe (Bruges) and mayor of Vilvoorde.
Positions held at UMHe has been a director since October 1999; he is also a member of the StrategyCommittee. His present period of office expires at the 2003 Annual General Meeting.
Erik E. Dejonghe, 53Erik Dejonghe joined Barco Electronic in 1982. Since 1989, Erik Dejonghe has been seniorvice-president and chief operating officer of Barco. He is a member of the board of Barco,BarcoNet, Uco Textiles, Pauwels International and Vartec.
Position held at UMHe has been a director since September 1997. His present period of office expires at the 2001 Annual General Meeting.
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Philippe Delaunois, 59Philippe Delaunois worked in the Belgian steel industry for most of his career, and until 1999 he was managing director of the Cockerill-Sambre group. He is currentlychairman of the board of Mediabel, CFE and Mosane, a financial holding company. He is a member of the board of BBL, VUM Media and DEME.
Positions held at UMHe has been a director since May 1999; he is also a member of the Strategy Committee.His present period of office expires at the 2002 Annual General Meeting.
Arnoud de Pret, 56Arnoud de Pret was with Morgan Guaranty Trust Company in New York from 1972 until 1978. From 1978 until 1981 he was financial manager of Cockerill-Sambre, and until 1990 he was a member of the Executive Committee of UCB. He was chief financialofficer of UM from 1991 until May 2000. He is a member of the board of Interbrew.
Positions held at UMHe has been a director since May 2000; he is also a member of the Audit Committee. His present period of office expires at the 2003 Annual General Meeting.
Pierre Klees, 67Pierre Klees is the chief executive officer of BIAC (Brussels International Airport Company).He is also chairman of the board of the Belgian Post Office and of Alcatel-Etca andmember of several other boards. In addition, he is president of Société Royale Belge des Ingénieurs et Industriels (SRBII), president of the Comité de l’Académie pour lesApplications de la Science (CAPAS) and emeritus professor of the University of Brussels.
Position held at UMHe has been a director since July 1989. His present period of office expires at the 2003 Annual General Meeting.
Robert F.W. van Oordt, 64He is chairman and chief executive officer of Rodamco Continental Europe. He was aformer partner at McKinsey & Co (1967-1979), chief operating officer and member of the board of Hunter Douglas (1979-1989), chairman of the Executive Board of Bührmann Tetterode (1990-1993) and of KNP BT (1993-1996). He is supervisory director of Draka Holding, and a member of the board of Nokia Corporation and ofSchering-Plough Corporation.
Positions held at UMHe has been a director since May 1997; he is also a member - and since May 2000 he has been chairman - of the Audit Committee. His present period of office expires atthe 2003 Annual General Meeting.
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Klaus Wendel, 57Until 2000 he was a member of the Executive Committee of Société Générale de Belgiqueresponsible for group control. He is a member of the board of Arbed (Luxembourg) and of Tractebel. He is now an independent consultant in finance and budget control.After a career in finance and budget control with General Electric (USA), Siemens,Cockerill-Sambre and CBR, he joined Société Générale de Belgique in 1988.
Position held at UMHe has been a director since July 1989. His present period of office expires at the 2003 Annual General Meeting.
PERIOD OF OFFICE WHICH EXPIRED DURING THE YEAR AND WHICH WAS NOT RENEWED
Independent non-executive Directors
Paul De KeersmaekerHubert Detremmerie
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DAY-TO-DAY MANAGEMENT
Executive committee
Thomas Leysen Chief Executive Officer Copper & Precious Metals business groupCorporate Development
Jos Bosmans Corporate Vice-President Human Resources
Jean-Luc Deleersnyder Executive Vice-President Zinc business groupPurchasing & Transportation
Etienne Denis Executive Vice-President UM ENGINEERING
SOGEM
SIBEKA
Alain Godefroid Corporate Vice-President Legal Affairs Environment, Health & Safety
Marc Grynberg Chief Financial Officer FinanceInformation Systems
Marc Van Sande Executive Vice-President Advanced Materials business groupResearch
102 Union Minière
Senior management
Thomas Leysen Chief Executive Officer
Jean-Luc Deleersnyder Executive Vice-President
Marc Van Sande Executive Vice-President
Etienne Denis Executive Vice-President
Marc Grynberg Chief Financial Officer
Jos Bosmans Corporate Vice-President
Alain Godefroid Corporate Vice-President
Thierry Caeymaex Senior Vice-President Copper
André van der Heyden Senior Vice-President ZincManaging Director PADAENG INDUSTRY
Michel Cauwe Vice-President Electro-Optic Materials
Julien Deraedt Vice-President Zinc Chemicals
Edwin D’Hondt Vice-President Information Systems
Antoon Franckaerts Vice-President Environment, Health & Safety
Luc Gellens Vice-President Cobalt & Energy Products
Marcel Goetstouwers Vice-President Purchasing & Transportation
Leo Jacobs Vice-President UM Zinc Smelting
Christian Lemaître Vice-President UM Zinc Alloying
Hugo Morel Vice-President Precious Metals
Michel Moser Vice-President Corporate Development
Ernst Pleyer Vice-President Building Products
Guido Vermeylen Vice-President Research
Freddy Van Grimbergen Managing Director SOGEM
Kirk Kirkov Managing Director UNION MINIERE PIRDOP COPPER
103
DIVIDENDS & FINANCIAL CALENDARDIVIDENDS
If the appropriation of profit proposed to you on page 95 of this report is approved, a gross dividend of EUR 1.40 per share will be paid for thefinancial year 2000, i.e. a net dividend of EUR 1.05 after deduction of the 25% withholding tax
on presentation of coupon No 8 a net dividend of EUR 1.19 after deduction of the 15% withholding tax
on presentation of coupon and VVPR strip No 8
Starting 14 May 2001 Payment of dividends on presentation of coupon No 8 at the registeredoffices and branches of the following institutions: Fortis Bank Artesia Bank Banque Bruxelles Lambert Dexia KBC Bank Petercam
FINANCIAL CALENDAR15 February 2001 Press release and final figures for financial year 20009 May 2001 General Meeting of Shareholders (financial year 2000)
in the Auditorium of Fortis BankRue de la Chancellerie 1B-1000 Brussels (Belgium)
6 September 2001 Press release and interim results for the first half of 2001mid February 2002 Press release and final figures for financial year 200110 April 2002 General Meeting of Shareholders (financial year 2001)
ADDITIONAL INFORMATIONStock Listed on Brussels BourseFinancial information Institutional investors and analysts who wish to obtain additional
information may apply to the Investor Relations department at the company’s registered office
Contact : Isabelle MichottePhone : 32-2-227.71.47E-mail : [email protected]
Annual report This report is also available in French and DutchInternet This report can be downloaded from the Union Minière Website: www.um.beRegistered office n.v. Union Minière s.a.
Rue du Marais 31B-1000 BrusselsBelgiumPhone : 32-2-227.71.11Fax : 32-2-227.79.00Internet : www.um.beE-mail : [email protected] Trade Register : 85382VAT No : BE 401.574.852
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“A major image-buildingcampaign aimed at the general public is a priority for 2001.”
Publisher responsible at law n.v. Union Minière s.a.Corporate CommunicationContact : Moniek Delvou
Phone : 32-2-227.70.63E-mail : [email protected]
Realisation Image Plus
Printing Snoeck Ducaju & Zoon
Photographs By courtesy of:Saab Belgium, Diamant Boart,Kéops Graphs & Photographs,Mahaux Photography, Image Plus
