Annual General Meetings of Shareholders 25 April 2019
Agenda • Review of 2018 performance • Outlook • ASM • Governance review • Voting Annual General Meetings of Shareholders 2019 2
Review of 2018 performance
Significant progress toward 2020 ambitions Clear leadership Doubled the size Turned sustainability Rebalanced in clean mobility of the business in into a greater portfolio & earnings materials and recycling terms of earnings competitive edge contributions REVENUES ROCE Capex €3.3bn +17%* 15.4% €478m Record results Strategic choices and REBIT EPS R&D recent investments €514m €1.36 +12% €196m +29%* paying off *Excluding discontinued operations Annual General Meetings of Shareholders 2019 4
A focused and balanced portfolio ENERGY & 24% SURFACE 30% CATALYSIS TECHNOLOGIES RECYCLING Higher revenues Revenues Higher revenues RECURRING driven by increased substantially up with driven by higher EBIT contribution of HDD fast growth in EVs and processed volumes segment and higher strong volumes and and a more supportive demand for gasoline prices in H1. metal price 46% car catalysts. environment. 30% Catalysis Revenues +9% Revenues +44% Revenues +6% * 46% Energy & Surface Technologies REBIT +2% REBIT +82% REBIT +12% * 24% Recycling REBITDA +6% REBITDA +63% REBITDA +7% * * excl impact divestment European Technical Materials in Jan ‘18 Annual General Meetings of Shareholders 2019 5 5
Value chain and society 72% 67% Gold & silver certified conflict-free by LBMA Responsible custody/sourcing certified by REVENUES FROM RJC for platinum, palladium & rhodium CLEAN MOBILITY AND RECYCLING Closed the cobalt loop for a world leader in portable electronics 2016 2017 2018 Rated Gold (top 5%) by EcoVadis 6% of cobalt used from recycled origin Annual General Meetings of Shareholders 2019 6 6
Eco-efficiency 42% - 29% - 46% - 71% RESOURCE EFFICIENCY Energy Metal emissions Metal emissions consumption* to air* to water* 58% *vs 2015 benchmark 42 energy efficiency projects at 42% Primary materials 58% Secondary & end-of-life materials 28 sites accounting for 95% of our energy consumption Annual General Meetings of Shareholders 2019 7 7 7
Great place to work Growing workforce mostly in China & Korea (+6%) 2% 13% of new hires globally were women 15% Increase of women in management roles (23%) and in senior 55% management positions (10%) WORKFORCE People Engagement survey results puts Umicore above the BY REGION industry average and shows increased confidence among employees in the future of Umicore 28% 84% of sites without LTAs 55% Europe 10,420 colleagues in 30 countries 28% Asia-Pacific 15% North & South America 71 nationalities 2% Africa 92.8% retention rate Annual General Meetings of Shareholders 2019 8 8 8
Outlook Umicore expects recurring EBIT for the full year 2019 to be in a range of € 475 million to € 525 million. Developments in Catalysis and Recycling are positive, but the Energy & Surface Technologies business group is facing challenging market conditions, resulting in delays of 12 to 18 months in the development of its cathode material sales. Umicore expects significant growth in revenues and earnings in 2020 but this will be below previous upside indications 1 . 1 Umicore had previously indicated that it had identified a potential to exceed its original earnings ambition for the year 2020 by Annual General Meetings of Shareholders 2019 some 35% to 45%. 9
Challenging market conditions in Energy & Surface Technologies Postponed launch of a large xEV platform Slowdown in China following changes to in China subsidy mechanism for EVs Similar trend in the e-bus market Depressed cobalt price and artisanal mining impacting Cobalt & Specialty New energy storage systems in Korea Materials products and high cobalt content stopped following safety concerns cathodes such as LCO In 2019, recurring EBIT for the business group is expected to be well below the levels of 2018 Annual General Meetings of Shareholders 2019 10
Outlook for Recycling and Catalysis In Catalysis, some impact from the slowdown in China and softer demand In Recycling, maintenance shutdown across other regions completed successfully Benefits to come from business awards for Growing complexity of waste streams gasoline engines requiring particulate Expansion in Precious Metals Refining filters and from sales for pharmaceutical, Improved market conditions chemical deposition and fuel cell applications Recycling and Catalysis both expected to grow recurring EBIT, ahead of market consensus. Annual General Meetings of Shareholders 2019 11
Cobalt is critical 65% mined in Democratic 50% of global production goes in batteries 2018 Republic of Congo (DRC) worldwide of which <15% goes to EV batteries 1/3 of cobalt production of which and 1/3 production is from ASM = 20% and 1/3 rd to batteries for smartphones, <15% to batteries for computers around of global production goes to smartphones computers and other electronics. 130.000 t EV batteries and other electronics Umicore is one of the largest cobalt buyers in the world Annual General Meetings of Shareholders 2019 12
This is artisanal mining (ASM) Unacceptable conditions Workers are not Hand-picked cobalt: Highly hazardous Issues with human employed in any manually-intensive working conditions rights, child labor, official structure methods, without any occupational health and protective equipment environmental impact CBS report Annual General Meetings of Shareholders 2019 13
ASM is unacceptable to Umicore How we operate Sustainable Procurement Framework for Cobalt Since 2004, no cobalt from Supplier screening, constant monitoring artisanal mining Full alignment with the OECD Due Diligence Guidance for Responsible Supply of Minerals from Conflict- Affected and High-Risk areas Third party assurance: annually audited by PWC Compliance report available online Annual General Meetings of Shareholders 2019 14
Battery recycling a critical additional source of supply Urban mining indispensable for global electrification of transportation Proven industrial capabilities for all types of Li-ion batteries High recovery rates for cobalt, lithium, nickel and copper Highest environmental standards Umicore Battery Recycling pilot plant in Hoboken, Belgium has had a capacity of 7,000 t/year or about 250 million mobile phone batteries/year since 2011 Annual General Meetings of Shareholders 2019 15
Governance
Board of directors Key • Financial performance and budget for the Group • Equity placement (accelerated bookbuild) board meeting topics • M&A projects in 2018 • Investment projects and strategic opportunities • Business reviews and market updates • HR, EHS (including sustainability) • Monitoring the execution of the Horizon 2020 strategy • Board and ExCom succession 5 full board meetings in 2018 88% attendance for full board meetings Board field trip to Umicore Jiangmen, China 2018 93% attendance for all committees Annual General Meetings of Shareholders 2019 17 17
Executive committee • Fixed remuneration reflecting the level of responsibility Compensation & • Variable (cash remuneration) with 50% deferred over 3 years benefits package • Share-based incentives: share grant + stock options (both with 3-year lock up) • Pension plan and other benefits • Unchanged fixed remuneration for the CEO. Increased fixed remuneration for the executive committee members (+ 5%). Changes • Increased annual variable cash remuneration potential for the CEO as of 2019 (+ €160,000) and the executive committee members (+ € 80,000). The members of the executive committee may also receive their variable cash remuneration partly or totally in the form of Umicore shares at their discretion. • Decrease of the number of stock options for the CEO from 150,000 to 140,000, and for the executive committee members from 35,000 to 30,000. Annual General Meetings of Shareholders 2019 18
Executive remuneration 2018 CEO Executive committee 2017 2018 2017 2018 (in Euros) Fixed 680,000 700,000 2,435,000 2,306,250 Variable for the year 50% 220,000 220,000 790,000 662,500 Deferred variable 25% 130,950 144,450 436,500 481,500 Variable deferred from year prior to prior year 133,650 - 408,375 - Total gross cash remuneration 1,164,600 1,064,450 4,069,875 3,450,250 Non-cash elements Pension 171,408 168,397 734,937 661,608 Other 46,223 51,631 141,735 123,293 Value of shares granted 425,360 354,432 1,815,960 1,381,284 Options (value at grant) 583,500 1,033,500 816,900 1,266,038 TOTAL 2,391,091 2,672,410 7,579,407 6,882,473 1,022,100 shares 1,506,500 outstanding options 2018 Annual General Meetings of Shareholders 2019 19
Proposed board member Laurent Raets Annual General Meetings of Shareholders 2019 20
Voting
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