Umicore — Audit Report / Information 2018

Mar 22, 2019

FREE TRANSLATION

UMICORE

Statutory auditor's report to the general shareholders' meeting on the annual accounts for the year ended 31 December 2018

20 March 2019

FREE TRANSLATION

STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS' MEETING OF THE COMPANY UMICORE ON THE ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2018

We present to you our statutory auditor's report in the context of our statutory audit of the annual accounts of Umicore (the "Company"). This report includes our report on the annual accounts, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible.

We have been appointed as statutory auditor by the general meeting of 25 April 2017, following the proposal formulated by the board of directors, following the recommendation by the audit committee and the proposal formulated by the works' council. Our mandate will expire on the date of the general meeting, which will deliberate on the annual accounts for the year ended 31 December 2019. We started the statutory audit of the annual accounts of Umicore before 1993.

Report on the annual accounts

Unqualified opinion

We have performed the statutory audit of the annual accounts of the Company, which comprise the balance sheet as at 31 December 2018, and the profit and loss account for the year then ended, and the notes to the annual accounts, characterised by a balance sheet total of EUR 3.817.935.415,44 and a profit and loss account showing a profit for the year of EUR 227.001.378,00.

In our opinion, the annual accounts give a true and fair view of the Company's net equity and financial position as at 31 December 2018, and of its results for the year then ended, in accordance with the financial-reporting framework applicable in Belgium.

Basis for unqualified opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing (ISAs) as approved by the IAASB for the years ending as from 31 December 2018, which are not yet approved at the national level. Our responsibilities under those standards are further described in the "Statutory auditor's responsibilities for the audit of the annual accounts" section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the annual accounts in Belgium, including the requirements related to independence.

We have obtained from the board of directors and Company officials the explanations and information necessary for performing our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

PwG Bedrijfsrevisoren cvba - PwG Reviseurs d'Entreprises scrl- Financial Assurance Services Maatschappelijke zetel/Sil3ge social: Woluwe Garden, Woluwedal18, B-1932 Sint- Stevens-Woluwe Vestigingseenheid/Unite d'etablissement: Sluisweg 1 bus 8, B-9000 Gent T: +32 (0)9 268 82 11, F: +32 (0)9 268 82 99, www. pwc.com BTWITVA BE 0429.501.944 / RPR Brussel - RPM Bruxelles / ING BE43 3101 3811 9501 - BIG BBRUBEBB / BELFIUS BE92 0689 0408 8123 - BIG GKGG BEBB

f····················································· .................................................................................................................................................................................. .

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts of the current period. We have determined that there are no matters to report.

Responsibilities of the board of directors for the preparation of the annual accounts

The board of directors is responsible for the preparation of annual accounts that give a true and fair view in accordance with the financial-reporting framework applicable in Belgium, and for such internal control as the board of directors determine is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, the board of directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board of directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Statutory auditor's responsibilities for the audit of the annual accounts

Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts.

In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the annual accounts in Belgium.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors.
• Conclude on the appropriateness of the board of directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor's report to the related disclosures in the annual accounts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the annual accounts of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Other legal and regulatory requirements

Responsibilities of the board of directors

The board of directors is responsible for the preparation and the content of the directors' report, the report on non-financial information attached to the directors' report and of the documents required to be deposited by virtue of the legal and regulatory requirements as well as for the compliance with the legal and regulatory requirements regarding bookkeeping, with the Companies' Code and with the Company's articles of association.

Statutory auditor's responsibilities

In the context of our mandate and in accordance with the Belgian standard (revised in 2018) which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors' report, the report on non-financial information attached to the directors' report and certain documents required to be deposited by virtue of legal and regulatory requirements, as well as compliance with the articles of association and certain requirements of the Companies' Code and to report on these matters.

Aspects related to the directors' report

In our opinion, after having performed specific procedures in relation to the directors' report, this report is consistent with the annual accounts for the year under audit, and it is prepared in accordance with the articles 95 and 96 of the Companies' Code.

In the context of our audit of the annual accounts, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors' report is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you.

The non-financial information required by virtue of article 96, §4 of the Companies' Code is included in a separate report attached to the directors' report. The Company has prepared the non-financial information, based on the reference framework 'Global Reporting Initiative Standards' (GRI). However, in accordance with article 144, §1, 6° of the Companies' Code, we do not express an opinion, in this report, as to whether the non-financial information has been prepared in accordance with the 'Global Reporting Initiative Standards' (GRI).

Statement related to the social balance sheet

The social balance sheet, to be deposited in accordance with article 1 �O, § 1, 6°/2 of the Companies' Code, includes, both in terms of form and content, the information required by virtue of the Companies' Code and does not present any material inconsistencies with the information we have at our disposition in our engagement.

Statement related to independence

• Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the annual accounts and our registered audit firm remained independent of the Company in the course of our mandate
• The fees for additional services which are compatible with the statutory audit of the annual accounts referred to in article 134 of the Companies' Code are correctly disclosed and itemized in the notes to the annual accounts.

Other statements

• Without prejudice to formal aspects of minor importance, the accounting records were maintained in accordance with the legal and regulatory requirements applicable in Belgium.
• The appropriation of results proposed to the general meeting complies with the legal provisions and the provisions of the articles of association.
• There are no transactions undertaken or decisions taken in breach of the Company's articles of association or the Companies' Code that we have to report to you.
• This report is consistent with the additional report to the audit committee referred to in article 526 bis, §6, 40 of the Companies' Code referring to article 11 of the Regulation (EU) W 537/2014.
• In accordance with article 523 of the Companies' Code, we are also required to report to you on the following transactions, which have taken place during the year ended 31 December 2018: prior to the board of directors' meeting of 8 February 2018, the Chief Executive Officer confirmed having a conflicting interest of a financial nature with respect to decisions taken by the board of directors. These decisions relate to the performance assessment and to the remuneration (including the grant of shares and options) of the Chief Executive Officer. The decisions taken on 8 February 2019 have the following financial consequences:
  • ^oRemuneration in cash: the Chief Executive Officer received a fixed gross remuneration of EUR 700.000 in 2018. Also in 2018, he received a gross variable cash remuneration totalling EUR 220.000 as non-deferred part of his variable cash remuneration for the reference year 2017. Furthermore he received in 2018 a gross amount of EUR 130.950 as first half of the deferred payment of his variable cash remuneration for the reference year 2016 based on (1) the two year average Umicore group profitability criterion, i.e. the average return on capital employed (ROCE) for the reference years 2016 and 2017 (i.e. 14.9% giving rise to a percentage pay-out of 74%) and (2) the two year average EBIT growth for the same reference years 2016 and 2017 multiplied by two (i.e. 11.6% giving rise to a percentage payout of 23%). Also in 2018 he received a gross amount of EUR 133.650 as the second half of the deferred payment of his variable cash remuneration for the reference year 2015 based on (1) the three year average Umicore group ROCE for the reference years 2015, 2016 and 2017 (i.e. 14.5% giving rise to a percentage pay-out of 70%) and (2) the three year average EBIT growth for the same reference years 2015, 2016 and 2017 multiplied by two (i.e. 14.5% giving rise to a percentage pay-out of 29%). The ROCE range is set between 7.5% (= payout of 0%) and a maximum of 17.5% (= pay-out of 100% at plan performance). When the achieved ROCE percentage falls between the above targets, the pay-out will be pro-rated. The impact of the EBIT growth is calculated by multiplying the average percentage of the EBIT growth for the reference years by two. In 2019 he will receive the second half of the deferred payment of his annual variable cash remuneration for the reference year 2016 based on (1) the three-year average Umicore group ROCE for the reference years 2016, 2017 and 2018 and (2) the three-year average Umicore EBIT growth for the same reference years 2016, 2017 and 2018. Upon recommendation of the nomination & remuneration committee, the board of directors decided on 8 February 2018 that, as from reference year 2017 a deferment of three years applies with a pay-out after three years for each reference year, based upon a three-year average ROCE and EBIT growth. With respect to the threeyear average EBIT growth, the threshold increased from 2% to a minimum of average EBIT growth of 10%.

• ^oGrant of shares and stock options: The financial consequences for Umicore consist of: either 1) as long as Umicore decides to keep the shares it holds today: the financing and opportunity cost of maintaining such shares in its portfolio until the delivery date of the shares granted or the option's exercise date, or 2) if and to the extent that Umicore sells such shares at a later date: the difference on the date of exercise of the options between the exercise price and the market value of the shares that Umicore would have to buy on that date.
• An interim dividend has been distributed during the year in relation to which we have issued the attached report in accordance with legal requirements.

Sint-Stevens-Woluwe, 20 March 2019

The statutory auditor PwC Bedrijfsrevisoren cvba I Reviseurs d'Entreprises scrl represented by

u oen edrijfsrevisor/Reviseur d' Entreprises

Appendix: statutory auditor's report on 30 July 2018 to the board of directors of Umicore on the statement of assets and liabilities in connection with the distribution of an interim dividend

UMICORE

Verslag van de commissaris aan de raad van bestuur van Umicore over de staat van activa en passiva opgesteld ter gelegenheid van de uitkering van een interimdividend

30juli 2018

VERSLAG VAN DE COMMISSARIS AAN DE RAAD VAN BESTUUR VAN UMICORE OVER DE STAAT VAN ACTIV A EN PASSIV A OPGESTELD TER GELEGENHEID VAN DE UITKERING VAN EEN INTERIMDIVIDEND

Inleiding

Wij hebben de beoordeling uitgevoerd van de in bijlage opgenomen staat van activa en passiva (hierna "Staat" genoemd) van Umicore NV op 30 juni 2018, op basis waarvan de raad van bestuur van Umicore NV (hierna "Vennootschap" genoemd) de uitkering van een interimdividend voorstelt voor een bedrag van EUR 0,35 per aandeel, zoals voorzien op grond van artikel 21, paragraaf 3 van de statuten. De raad van bestuur is verantwoordelijk voor het opstellen en de getrouwe weergave van deze Staat op 30 juni 2018 in overeenstemming met het in Belgie van toepassing zijnde boekhoudkundig referentiestelsel en het Wetboek van vennootschappen.!. Onze verantwoordelijkheid bestaat erin een conclusie te formuleren over deze Staat op basis van de door ons uitgevoerde beoordeling overeenkomstig ISRE 2410 en artike1 618 van het Wetboek van vennootschappen.

Omvang van de beoordeling

Wij hebben onze beoordeling van de Staat op 30 juni 2018 uitgevoerd overeenkomstig de International Standard on Review Engagements 2410, "Beoordeling van tussentijdse financiele informatie uitgevoerd door de onafhankelijke auditor van de entiteit" (ISRE 2410). Een beoordeling van de Staat bestaat uit het verzoeken om inlichtingen, in hoofdzaak bij de voor fin ancien en administratie verantwoordelijke personen, alsmede uit het uitvoeren van cijferanalyses en andere beoordelingswerkzaamheden. De reikwijdte van een beoordeling is aanzienlijk geringer dan die van een overeenkomstig de Internationale Controlestandaarden uitgevoerde controle. Om die reden stelt de beoordeling ons niet in staat zekerheid te verkrijgen dat wij kennis zullen krijgen van alle aangelegenheden van materieel belang die naar aanleiding van een controle mogelijk worden onderkend. Bijgevolg brengen wij geen controle-oordeel tot uitdrukking.

Conclusie

Op basis van de door ons uitgevoerde beoordeling, hebben wij geen kennis van feiten waaruit zou blijken dat de Staat geen getrouwe weergave is, in alle van materieel belang zijnde opzichten, van het vermogen en de financiele toestand van de Vennootschap, in overeenstemming met het in Belgie van toepassing zijnde boekhoudkundig referentiestelsel en met het Wetboek van vennootschappen.

Tot slot blijkt dat, op basis van de Staat, de voorgenomen uitkering niet tot gevolg he eft dat het nettoactief, zoals bepaald in artike1 617 van het Wetboek van vennootschappen, zou dalen tot beneden het gestorte kapitaal vermeerderd met de reserves waarvan het Wetboek van vennootschappen of de statuten van de Vennootschap vereisen dat ze niet worden uitgekeerd.

PwG Bedriffsrevisoren cvba, burgerlijke vennootschap met handelsvorm - PwG Reviseurs d'Entreprises scrl, societe civile aforme commerciale - Financial Assurance Services Maatschappelijke zetel/Siege social: Woluwe Garden, Woluwedal 18, B-1932 Sint-Stevens-Woluwe Vestigingseenheid/Unite d'etablissement: Sluisweg 1 bus 8, B-9000 Gent T: +32 (0)9268 82 11, F: +32 (0)9268 82 99, www.pwc.com BTW/TVA BE 0429 -501 .944 / RPR Brussel - RPM Bruxelles / ING BE43 3 101 3811 9501 - BIG BBRUBEBB / BELFIUS BE92 068 9 0408 8 123 - BIG GKGG BEBB

� ....................................................................................................................................................................................................................................... .

Onderhavig verslag heeft uitsluitend betrekking op de vereisten van artikel 618 van het Wetboek van vennootschappen en is niet bestemd voor gebruik in een andere context.

Gent, 30 juli 2018

De commissaris PwC Bedrijfsre ' vertegenwoor 'g

Bijlage: Staat van activa en passiva per 30 juni 2018

Umicore: Staat van activa en passiva per 30/06/2018

ACfIVA

EUR

4·122·574 18.790.324

Vaste Activa	2.097.712·364
Oprichtingskosten	9·267·114
ImmaterieIe vaste activa	107.552.673
Materiele vaste activa	404.235.636
Financiele vaste activa	1.576.656.943
Vlottende activa	2.148.090.023
Vorderingen op meer dan eenjaar	60.010.000
Voorraden en bestellingen in uitvoering	368.015·413
Vorderingen op ten hoogste eenjaar	1.433·004·462
Geldbeleggingen	264.147.251

TOTAAL ACfIV A

Overlopende rekeningen

Liquide middelen

PASSIVA

Eigen vermogen	2.172·755.015
Kapitaal	550.000.000
Uitgiftepremies	848.129.766
Herwaarderingsmeerwaarden	-1.690.696
Reserves	351.052.030
Overgedragen winst	414·301.334
Resultaat van het boekjaar	1.439.650
Kapitaalsubsidies	9·522·930
Voorzieningen en uitgestelde belastingen	108.321.806
Voorzieningen en uitgestelde belastingen	108.321.806
Schulden	1.964.725.567
Schulden op meer dan eenjaar	693.061.233
Schulden op ten hoogste eenjaar	1.192.044.515
Overlopende rekeningen	79.619.819

TOTAAL PASSIV A

UMICORE

Rapport du commissaire au conseil d'administration de Umicore sur la situation active et passive au sujet de la distribution d'un acompte sur dividende

Le 30 juillet 2018

RAPPORT DU COMMISSAIRE AU CONSEIL D'ADMINISTRATION DE UMICORE, SUR LA SITUATION ACTIVE ET PASSIVE AU SUJET DE LA DISTRIBUTION D'UN ACOMPTE SUR DIVIDENDE

Introduction

Nous avons procede a l'examen limite de la situation active et passive (nommee ci-apf(!s « Etat » ) au 30 juin 2018, incluse en annexe de ce rapport, sur la base de laquelle le conseil d'administration de Umicore SA (nommee ci-apres « Societe) » propose, de distribuer un acompte sur dividendes pour un montant de EUR 0,35 par action, tel que prevu par l'article 21, paragrapbe 3 des statuts. Le conseil d'administration est responsable de l'etablissement et de la presentation sincere de cet Etat conformement au rHerentiel comptable applicable en Belgique et au Code des societes. Notre responsabilite consiste a formuler une conclusion sur cet Etat sur la base de notre examen limite, conformement a la norme internationale ISRE 2410 et a l'article 618 du Code des societes.

Etendue de l'examen limite

Nous avons effectue notre examen limite de l'Etat au 30 juin 2018 conformement a la Norme Internationale d'Examen Limite 2410 « Examen limite d'informations financieres intermediaires effectue par l'auditeur independant de l'entite » (ISRE 2410). Un examen limite de cet Etat consiste en des demandes d'informations, principalement aupres des responsables financiers et comptables, et dans la mise en reuvre de procedures analytiques et d'autres procedures d'examen limite. L'etendue d'un examen limite est tres inferieure a celle d'un audit effectue selon les normes internationales d'audit et, en consequence, ne nous permet pas d'obtenir l'assurance que nous avons releve tous les faits materiels qu'un audit permettrait d'identifier. En consequence, no us n'exprimons pas d'opinion d'audit.

Conclusion

: : .

Sur la base de notre examen limite, nous n'avons pas releve de faits nous laissant a penser que l'Etat ne presente pas sincerement, dans tous ses aspects significatifs, le patrimoine et la position financiere de la Societe, conformement au rHerentiel comptable applicable en Belgique et au Code des societes.

Enfin, il apparait, sur la base de cet Etat, que la distribution envisagee n'a pas pour effet de reduire l'actif net, conformement a l'article 617 du Code des societes, a un montant inferieur a celui du capital libere augmente des reserves que le Code des societes ou les statuts de la Societe ne permettent pas de distribuer.

PwG Bedriffsrevisoren cvba, burgerlijke vennootschap met handelsvorm - PwG Reviseurs d'Entreprises serf, societe civile aforme commerciale - Financial Assurance Services Maatschappelijke zetellSiege social: Woluwe Garden, Woluwedal 18, B- 1932 Sint-Stevens-Woluwe VestigingseenheidlUnite d'etablissement: Sluisweg 1 bus 8, B- 9000 Gent T: +32 (0)9268 82 11, F: +32 (0)9268 82 99, www.pwc.com BTWITVA BE 0429.5 01.9441 RPR Brussel - RPM Bruxelles 1 ING BE43 3 101 3811 9501 - BIG BBRUBEBB 1 BELFIUS BE92 0689 0408 8 123 - BIG GKGG BEBB

....................................................................................................................................................................................................................................... .

Le present rapport a ete etabli pour repondre au preserit de l'article 618 du Code des societes. 11 ne peut etre utilise a d'autres fins.

Gand, le 30 juillet 2018

Le eommissaire PwC Reviseurs ' ntreprises seerl Representee ar �c--------

Annexe: Situation active et passive au 30 juin 2018

Umicore: Situation Active et Passive au 30/06/2018

ACfIF

EUR

Actifs immobilises	2.097.712·364
Frais d'etablissement	9.267.114
Immobilisations incorporelles	107.552.673
Immobilisations corporelles	404.235.636
Immobilisations financieres	1.576.656.943

Actifs circulants	2.148.090.023
Creances cl plus d'un an	60.010.000
Stocks et commandes en cours d'execution	368.015.413
Creances cl un an au plus	1.433.004.462
Placements de tresorerie	264.147.251
Valeurs disponibles	4.122.574
Comptes de regularisation	18.790.324

TOTALACfIF

PASSIF

Capitaux propres	2.172·755·015
Capital	550.000.000
Primes d'emissions	848.129.766
Plus-value de reevaluation	-1.690.696
Reserves	351.052.030
Benefice reporte	414·301·334
Resultat de l'exercice	1.439.650
Subsides en capital	9·522·930
Provisions et impots differes	108.321.806

Provisions et impots differes

Dettes

Dettes cl plus d'un an Dettes cl un an au plus Comptes de regularisation

TOTAL PASSIF

693.061.233 1.192.044.515

1.964.725.567

108.321.806

79.619.819