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AnnuAl RepoRt 2009
AnnuAl RepoRt 2009
REFINING ADVANCED COATINGS WATCHES AND JEWELRY ELECTROTECHNICS
IntroductIon
Foreword 3Metalorinbrief 6Highlights2009 8
dIvIsIonal actIvItIes
Refining 10AdvancedCoatings 12Electrotechnics 14
FInancIal statements
Financialyear2009report 18Consolidatedbalancesheet 20Consolidatedstatementofincome 21Consolidatedstatementofcashflows 22Consolidatedstatementofchangesinequity 23Groupcompanies 24Governingbodies 25TheoperatingcompaniesoftheMetalorGroup 26-27
table oF contents
annual report 2009
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Foreword
andAdvancedCoatingsDivisions.However,thedeteriorationinshortandlongtermoutlookasasup-pliertotheluxurywatchindustryhasforcedustocommenceclosureofourWatchesandJewelryDivisioninSwitzerland.
Thebankingandliquiditycrisisinthefirstquarterof2009resultedinrapidincreasesinleasingratesforpre-ciousmetals.Duringthisperiodweincreasedtheaveragedurationofourleasestoensureproductivecapa-city.Ourbankingpartnersstayedwithusthroughoutthedifficultperiodand,inthesecondhalfoftheyear,sharprisesinmetalpriceledourbankingpartnerstosupportuswithfurthermetalleasefacilityincreases.
Duringthesecondquarter,werecon-stitutedourstrategicinventoryofplatinumgroupmetals(PGMs),andthisgeneratedsubstantialunrealizedgains.
ConsolidatedNetSaleswere21%behindthepreviousyearwithamajorfallinWatchesandJewelry,followedbyElectrotechnicsandAdvancedCoatings.RefiningNetSaleswereaheadofthepreviousyearby5%.
DearShareholders,LadiesandGentlemen,
Wehavejustfinishedayearofremarkableeventsinthemarketsweserve,ourfinancialresults,andthecompany’shistory.Theinventoryreductionsbyourcustomersseeninthelastquarterof2008continuedintothefirstandsecondquartersof2009,negativelyimpactingthreeofourfourdivisions.Theconsequentreductioninourorderbookpromptedrestructuringmeasurestoreducebothfixedandoperatingcosts,asdetailedinthedivi-sionalcommentariesbelow.
Tremendouspreciousmetalpricevolatilitycombinedwithliquidityneedsledtorecordrefiningvolumes,andanotherexcellentresultintheRefiningDivision.Atthetimeofwritingthislet-ter,visibilityandactivitylevelshaveslightlyimprovedintheElectrotechnics
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Despitethedifficultmarketsituation,theCompanywasabletoachieveanoperatingresultof14%fortheyear.
InOctoberofthisyearamajorityofthesharesinMetalorTechnologiesInternationalSAwereacquiredbyAstorgPartners,aParis,Francebasedprivateequityfirm.AstorgPartnersareworkingcloselywiththeManagementtotakeadvantageofthenumerousopportunitiescreatedforMetalorbytherecenteconomiceventstogrowandexpandinourglobalbusinesses.TheyquicklysupportedaprocessthatwasunderwayforourElectrotechnicsDivisiontoacquiretheAmericasbusinessofAMIDoduco,aleadingelectricalcontactmanufac-turer.ThetransactionwassignedonDecember23,2009andclosedonJanuary4,2010.
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reFInIng
2009wasagainarecordyearfortheRefiningDivisionwithalllocationsreachingfulloperatingcapacityforagoodportionoftheyear.MarketsharegainswereachievedinAsia,theUSAandMexico.WiththerecordpriceofgoldinUSdollars,themarketexpandedsignificantlyinNorthAmerica,however,thiseffectwastemperedinEuropeandAsiawiththedropinthevalueoftheUSdollaragainstmostcurrencies.Therewasareductioninhigh-gradescrapfromtheSwisswatchindustryasmanufacturersslowed,andinsomecasesstopped,production.ThisdifferencewasmadeupbytheEuropeancollectormarket.ThesecondhalfreboundinPGMpricesalsoreactivatedthatcollectormarket.SilverrefiningcapacityandwastewatertreatmentfacilitiesatourNorthAttelboro,USAplantwereexpanded.
advanced coatIngs
Thefirstquarterof2009resultedinanearcessationofordersformetalpowders.Thisforcedustotempor-arilyclosetheAttleboroplantforsixweeksusingMassachusettsstatesupportedfurloughs.Ordersresumedandcapacitygraduallyrampedbackupduringtheremainderoftheyear.Reductioninpreciousmetalschem-icalordersfordecorativepurposesnecessitatedreducedworkinghoursinsomeEuropeansubsidiariesaswellasanumberofpermanentlayoffs.IndustrialdemandintheelectronicindustriesbouncedbackquicklyafterthefirsttrimesterwithAsialeadingtherecovery.Palladiumsubstitutionforgoldintheconnectormarketaddedenhancedtractionforournewproductofferings.Powderproductionandcus-tomerqualificationshavenowstartedinourSuzhou,Chinaplant.
electrotechnIcs
Theorderbookforourelectricalcon-tactproductsdroppedprecipitouslyduringthefirsthalfof2009,andonlystabilizedinthethirdquarter.Atthetimeofwriting,ordershaveincreasedtolevelslastseeninthethirdquar-terof2008.Thissalesreductionpromptedafixedcostreductionpro-gramwhichentailedtheclosureofourRedwitz,Germanyplant,andasocialplaninourCourville,Franceplant.Inaddition,reducedworkinghourswereimplementedinFranceforfourmonths.TheSuzhou,ChinaassemblyplantdidnotsufferthedownturnfeltinEuropeandordervolumesincreasedthroughouttheyear.Relocationdis-cussionsarestillongoingwiththelocalgovernment,whichhavefurtherdelayedourexpansionprograminChina.TheAMIDoducoAmericasacquisitionadds,effectiveJanuary4,2010,threeproductionfacilities,inPennsylvaniaUSA,Mexico,andPuertoRico.Theinitialintegrationandactivityofthisnewbusinessispro-gressingaheadofschedule.
thesediscussions.Theliquiditycrunchearlierintheyearhaseased,andourbankersremaincommittedtothecom-panyandthepreciousmetalsindustry,soweareconfidentofsupportforourexpansionefforts.
TheBoardofDirectorsandtheManagementwouldagainliketotakethisopportunitytoexpressoursincereappreciationtoouremployeesfortheirhardworkinadifficultperiod,ourclientsforworkingwithusduringclosuresandproductiontransfers,andourfinancialandbusinesspartnersfortheircontinuedsupport.
JoëlLacourteChairmanoftheBoardofDirectors
Dr.ScottMorrisonChiefExecutiveOfficer
prospects For the Future
WehavecomeoutofthefinancialcrisiswithastrongbalancesheetandourthreeglobalDivisionswellpositionedandstructuredtotakefulladvantageoftheincreaseindemandcurrentlybeingexperienced.Themarketexpectationforpricesofpre-ciousmetalsisthattheywillremainathighlevelsfor2010asthefragilityinthefinancialsystemscontinuestomakeinvestorsriskaverse.Preciousmetalsareonceagainconsidered“musthave”inaninvestor’sportfo-lio.Increasingdemandasindustriesrecoverwillputupwardpricepressureonafewofthemetalsweuse.
Wehavebeenindiscussionwithanumberofcompaniesoverthelastyearrelatedtoacquisitionsorjointventures,andournewmajorityshare-holdersarefullysupportingusin
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watches and Jewelry
Activityduringthefirstquarterof2009remainedstrong,howeveroncethoseorderswerecompletedsalesreduceddramatically.ThisisechoedintheSwisshallmarkingstatisticsforwatchcaseswhichdeclined50%comparedtothepreviousyear.ThelastfewyearstheSwissluxurywatchindustryhasseenmanyofthemajorbrandssubstantiallyinternalizetheirproduction.Inaddition,strongandrapidgrowingdemandandlongsup-plierleadtimesledtoproductionwellexcessofactualsales,creatinganinventorybubblethatwill,inourview,takewellinto2011toaddress.ThiscombinationofpoorshortandlongtermprospectsfortheSwissactivityofourWatchesandJewelryDivisionledtothedecisiontowithdrawfromthisactivity.WehavecommencedclosureoftheNeuchâtel,SwitzerlandplantandexpectallproductiontoceasebyendofJune2010.WatchesandJewelry’sinternationalactivities,intheUnitedKingdomandSpainmainly,willbeintegratedintotheAdvancedCoatingsDivision.
a global group
Foundedin1852,inLeLocle,intheheartofSwitzerland’sthenrapidlygrowingwatchmakingindustry,the“preliminaryrollingfactory”ofMartindePury&Cieprovidedservicestothewatchmakersoftheregion.Theseincludedtheoperationofagoldsmelterandthemanufactureofwatchcases.Forover140yearsthesmelterwasinthehandsofbankers–theBanqueduLoclebetween1864and1918,andthenfrom1918to1998theSociétédeBanqueSuisse(SBS),whichgaveitthename“MétauxPrécieuxSAMetalor”.Metaloreventuallyoutgrewitsbankingandwatchmakingroleandinthe1950’sbegantoserveanumberofotherindustriesacrosstheworld,eachofwhichsharedaneedforservicesandproductsinvolvingpreciousmetals.RelocatedtoNeuchâtelin1947,Metalorcontinuedtogrowandexpand,addingnewfactoriesinFranceandtheUnited
metalor In brIeF
Metalorhasthreemaindivisions,eachcorrespondingtoagroupofspecificmarkets:Refiningfortherecyclingandprocessingofpreciousmetalsandtheproductionofpurepreciousmetalsiningotsandotherforms;AdvancedCoatingsforelectronicanddecorativeapplications,andElectrotechnics,servingtheelectricalcontactsmarket.Afourthdivision,WatchesandJewelry,willbeclosedorintegratedwithAdvancedCoatingsduringthefirsthalfof2010.AtDecember31,2009theMetalorGroupincludessome17companiesonfourcontinentswithatotalstaffworldwideof1227.EffectiveJanuary4,2010,afurther4companiesandsome400employeeswillbeaddedtotheElectrotechnicsDivisionfollowingtheacquisitionofAMIDoduco’sAmericasbusiness.
Statestoitsnetwork,followedmorerecentlybyHongKongandChina,and,sinceearly2010,MexicoandPuertoRico.Metalor’sindustrialdestinywasfurtherstrengthenedin1998whenagroupofSwissinvestorsfromindustryacquiredamajorityshareholding.AsofApril2001thename“MetalorTechnologies”becamepartofthecorporatelogoofallGroupcompanies.InOctober2009,amajorityofshareswereacquiredbyAstorgPartners,aprivateequitycompanybasedinParis,France.
InnovatIon and qualIty
Theknow-howwhichMetalorhasdevelopedovertheyears,theexceptionalqualityofitsproductsanditsabilitytoanticipatemarkettrendsandrequirementshaveearnedthecompanyareputationforexcellenceallovertheworld.TodayMetalorsuppliespreciousmetalsandadvancedmaterialstopartnersinindustriesasvariedanddemandingaselectronicsandelectricalengineeringandmedicaltechnology.TheGroup’sabilitytoinnovateandcomeupwithreliabletechnologyhasattractedleadingnamesinindustry,fosteringthedevelopmentofnewmarketsegmentsforpartnerslookingforpreciousmetalsbasedinnovation.
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(inCHFmillion) 2009 2008 2007 2006 Netsales(excludingPMvalue) 261.7 331.1 310.5 290.5 Operatingresult(EBIT) 37.5 61.5 48.0 40.4 Netprofit 9.8 62.0 42.0 36.3 Headcount(FullTimeEquivalent-December31) 1227 1380 1342 1191
Dark grey:countriesinwhichtheMetalorGroupispresentthroughitssubsidiaries.
Key statIstIcs
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reFInIng dIvIsIoncontInued success and Further expansIon
TheRefiningDivisionhascontinueditssuccessin2009.Bolsteredbyhighgoldprices,scrapvolumes,particu-larlyofcomplexmaterial,wereatahighlevel.Netsalesincreased5%comparedtothepreviousyear.
Metalor’sstrongfinancialpositionallowedittotakefulladvantageofthefavorablemarketconditions.Operatingprofitincreasedsubstantially,mainlyduetocontinuousimprovementsinoperationalefficiencyandtechnolo-gicaladvances.
TherefineryinSwitzerlandhadstrongactivityingoldrefiningthroughouttheyear,andthismorethancompensatedlowerPGMscrapvolumes.There-fineryinUSAprocessedarecordvol-umeofkaratgoldscrapandcontinueditsstrongtrendofgrowthbygainingmarketshare.
TherefineryinHongKongenjoyedyetanotherrecordlevelofbusinessbothinrefiningandthesupplyofbul-lionproducts.TherefineryinChinalauncheditsgoldbarandwaferprod-uctstothemarketjustbeforetheend2009.
hIghlIghts 2009
advanced coatIngs dIvIsIonnew plant In chIna operatIonal
In2009,theAdvancedCoatingsDivisioncompleteditsdevelopmentsinthefieldofpowdersandflakesforelectronicsapplications.
ThenewproductionplantforsilverpowdersandflakesinSuzhou,China,initiatedin2007,wascompletedin2009andisnowfullyoperational.ThisnewunitallowsustobetterserveourcustomersinAsiaaswellastode-velopourmarketshareinChinawithproductsthatwerepreviouslymanu-facturedexclusivelyintheUSA.
IntherestoftheDivisioncontinuousimprovementsweremadeinboththeorganizationandmarketdevelop-ments.DespiteareductioninNetsalesof21%,verytightcostcontrolandcarefulstockmanagementcon-tributedtomaintainingagoodoperat-ingprofit.
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electrotechnIcs dIvIsIonrestructurIng and marKet share gaIns
In2009,theElectrotechnicsDivisionfacedabigdropindemand,particular-lyinEurope,andNetsaleswere37%belowthepreviousyear.Inresponse,theplantinRedwitz,Germanywasclosed,andproductiontransferredtoCourville-sur-Eure,France,whichwasitselfreorganized.Theseprojectsarenowcomplete,andoperatingprofitwasrestoredforthelastfourmonthsoftheyear.
Despitethedifficultconditions,marketshareinbothEuropeandAsiawasincreased.Heavyinvestmentsweremadetocontinuetoimprovecostanddeliverytimeperformanceandtoremainattheforefrontofhealthandsafetyandenvironmentalbestpractice.TheDivisionhasISO14001andOHSAS18001certificationsandparticipatesintheUNGlobalCompactProgram.
Growthwillbesupportedbyproductandprocessinnovation,forexamplewithmagneticmaterialstoacceler-atearcdissipation,ornewwaystodepositcontactmaterialsusingaddi-tivetechnology.
InDecember,MetaloragreedtoacquiretheAmericasassetsofAMIDoduco.Theacquisitionwascom-pletedinJanuary2010,consolidatingMetalor’spositionasaleadingglobalplayerintheelectricalcontactsindus-try.
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watches and Jewelry dIvIsIona watershed year
TheWatchesandJewelryDivisionhas,forseveralyears,beenattempt-ingtoadapttoanewstrategicland-scape,asitstraditionalcustomerbaseintheSwissluxuryindustryhaveincreasinglyinternalizedmanu-facturing.A48%declineinNetsalesin2009ledtoareductionintheDivision’sworkforcefrom199to128.Inparallelstrongeffortstodiver-sifythecustomerbaseandincreasecompetitivenesswereundertaken.However,ithasnotbeenpossibletoreturntheSwiss-basedproductionactivitytoprofitability,and,combinedwithapoormidtermoutlook,reluc-tantlythedecisiontoclosethisactiv-itywastakeninJanuary2010.Theclosureisanticipatedtobecompletedbymid2010,withsomeproductsandmachinerytransferringtotheRefiningDivision.ThetradingactivitiesintheUnitedKingdomandSpainwillbeintegratedwiththeAdvancedCoatingDivision.
relIable perFormance
meetIng customers’ needs
TheRefiningDivisionspecializesinrecoveringgold,silverandplatinumgroupmetalsfromawiderangeofpreciousmetalbearingmaterials.Dependingonthepreciousmetalcon-tent,thesematerialsareeitherhighgrademetallicsuchasgoldandsilverdore,karatgoldandplatinumscrap,orlowgradematerialssuchasworkshopwastes,spentmetalcatalysts,electro-platedmetallicscrapandelectronicsscrapetc.Thematerialscomefrombullionandcentralbanks,mines,recy-clers,dealersandindustriesgeneratingpreciousmetalwaste.Onarrivalattherefinery,thematerialsarefirsthomoge-nized,sampledandassayedbysworn-inassayerstrainedandcontrolledbytheSwissCentralOfficeforPreciousMetalsControl.Inaddition,ourlabo-
ratorieshavebeenaccreditedbytheSwissFederalOfficeofMetrology(METAS)forpreciousmetalanalysis.
Oncesettledwiththecustomersonthepreciousmetalcontent,thescrapisfedintorefiningprocesses.FinemetalsfromtherefiningprocessesarethenconvertedtobullionproductswhichareaccreditedwithLBMA,LPPM,TOCOM,COMEX,Shanghai,Dubaiandothermajormarkets.Specialtyproductssuchashighpuritygold(above99.999%pure),silverpowders,platinumandpalladiumsaltsarealsoproducedtomeetcustomerneedsinthehigh-techsectors.
TheRefiningDivisionoperatesfourrefinerieslocatedinSwitzerland,USAandChina(HongKongandSuzhou).Inaddition,ithasevaluationcentersandsalesofficesaroundtheworldinmajormarketsprovidingextraconveniencetocustomers.Nomatterwherethecustomersarelocated,ourproactiveandexperiencedsalesteamsarecloseenoughtodeliverdistinctivefullrefiningservicesstartingfromacceptanceofmaterialstofinalsettlement.
the quest For excellence
MaintainingitsreputationofSwissExcellenceisatoppriorityfortheRefiningDivision.Continuouseffortshavebeenmadetoshortenevaluationandrefiningthroughputtime,maximizepreciousmetalrefiningyieldsandreducethecosts.Majorinvestmentsonnewrefiningtechnologiesinthelast
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MetalorRefiningDivisionisamarketleaderingoldandsilver
refiningandanimportantrefinerforplatinumgroupmetals.Itis
alsoaleadingmanufacturerofsmallgoldbarsforinvestment
andjewelryapplications.Withrefineriesandevaluation
platformslocatedinallofthemainterminalmarketsforprecious
metals,Metalorservesworldwidethegoldminingindustries,
recyclersofsecondaryscrapmaterialsandluxurygoods
manufacturers.Inaddition,theRefiningDivisionproducesa
varietyofhighqualitysemi-finishedpreciousmetalproductsfor
electronics,jewelryandwatchesindustriesinSwitzerland.
reFInIng dIvIsIon
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fewyearshaveimprovedrefiningeffi-ciencyandstrengthenedourcompeti-tiveadvantage.
TheevaluationserviceoftheRefiningDivisionishighlyefficient,fastandaccurate.Evaluationcentersperformsamplingandrapidanalysisforquicksettlementwithcustomers.Thefinalanalysisisperformedatoneoftherefineries.Highlyskilledassayersandchemistsguaranteethehighaccuracyoftheresult.MetalorhasbeenanOfficialRefereeoftheLondonBullionMarketAssociation(LBMA)since2003andanOfficialRefereeoftheLondonPlatinum&PalladiumMarket(LPPM)since2007.
Continuousinvestmentonnewpro-cessingtechnologiesenablesustomakefulluseofourindustrialcapacitywhileintegratingenvironmentalprotec-tionconsiderationsaswellasensur-ingsafetystandardsthatareproperlyadaptedtothefieldofrefining.WehaveachievedQualityStandardISO14001forEnvironmentalSystemsandISO9001:2000forManagementSystems.
contInuous Improvement
TheRefiningDivisionappliesthehigh-estethicalstandardsinitsbusinessrelations.Ithasoneoftheleadingduediligenceprocessesonthesourcesofitssupplyandwiththeassistanceof
like-mindedpeopleinindustry,NGO’sandgovernmentbodiesaroundtheworldcontinuestoworkonstrengthen-ingitseffectivenessinthisarea.
Wearemotivatedbythesupportofourcustomersandbankingpartners.Thesignificantimprovementinspeed,qualityandproductivityintheRefiningDivisioninrecentyearshasonlybeenpossiblethankstotheeffortsmadebyitsstaffmembers.Withenthusiasm,theyhavedemonstratedthatpersever-ingwithastrategyaimedatcustomersatisfactionalwaysleadstosuccess.
InnovatIve solutIons
global posItIonIng
TheAdvancedCoatingsDivisionproductsaredevelopedandmanufac-turedatitsproductionsitesinEurope,USAandAsia.AlloperationsareISO9001:2000aswellasISO14001:2004certified,whichguaranteesthesuperiorqualityandreliabilityofitsproducts.InadditiontothistheAttleboro,USAsilverpowderandflakemanufacturingsiteisISO/TS16949certified.Metalorprovidesaglobalsolutiontomeettheneedsofcompaniesoperatingworld-
wideandadaptingtohighlycompetitivetradingconditions.Inordertorespondtotheincreasingdemandforpowdersandflakes,Metalorhasexpandedin2009itsproductionsiteinSuzhou,closetoShanghaiinChina,bysettingupadditionalandback-upproductioncapacity.
exceptIonal platIng processes
Thedivisionoffersawiderangeofbothelectrolyticandelectrolesspreciousmetalplatingproductsandprocessesdevelopedovermanyyears.Theplat-ingrangeisdesignedforbothelectronicanddecorativeapplications,ensuringexcellenttechnicalperformanceintermsofwearresistancecombinedwithhighconductivityforelectronicproducts
(connectors,printedcircuits,semicon-ductors)andnobleappearancefordecorativeproducts(watches,jewelry,leathergoodsandspectacles).
precIous metal salts, solutIons, anodes and crystals
TheAdvancedCoatingsDivisionpro-ducesacomprehensiverangeofpre-ciousmetalchemicalcompoundsassaltsandsolutions,aswellaspurepre-ciousmetalanodesandsilvercrystals.
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TheAdvancedCoatingsDivisionisarenownedproducer
ofpreciousmetalbasedsolutionsforawidevarietyof
industrialsectorsincludinggeneralelectronics,semiconductor,
aeronautics,decorative,automotiveandphotovoltaics.
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advanced coatIngs dIvIsIon
extensIve range oF powders and FlaKes
Silver,goldandplatinumgrouppow-dersareproducedinvariousparticlessizes,surfaceareasandmorphologiesusingchemicalormechanicalmeans.Theproprietarypowderexpertiseisextendedtothefabricationofsilverflakeswhoseexcellenceiswidelyacknowledgedbyformulatorsofcon-ductiveadhesives,inksandpastesthatserveavarietyofelectronicapplica-tions.
a sIngle partner
ThedivisionreliesontheestablishedexpertiseoftheMetalorGroupinthefieldoffinepreciousmetalstoofferacompleteservice;thesupply,custom-izationanddevelopmentofbestqual-itypreciousmetalproducts,processengineering,on-sitesupportthroughoutEurope,intheAsia-PacificregionandintheUnitedStatesofAmericaaswellastherefiningofspentsolutionsandscraps.Thisprovidesaone-stop-shopenablingcustomerstoreducecomplex-ityandthenumberofsuppliers.
complete solutIons
expertIse
TheElectrotechnicsDivisionisrecog-nizedforitsabilitytousesilverinordertoproducepseudo-alloysbyextrusionordiecompaction.Theseelectricalcontactsareoftenmultilayeredandcombinethepropertiesofsilverwithothermaterials(tungsten,graphite,tinoxide,nickel,etc.)toensurehighelec-tricalconductivityandhighresistancetoerosionandwelding.Thismetallurgi-calexpertisetogetherwiththeknow-howinthefieldofassembly,allowtheElectrotechnicsDivisiontoconstantlyreviewitsproductrange.Itoffersmorethan2000typesofsemi-products,riv-ets,tips,assembledcontacts,sliding
contactsandfusestrips,especiallyinmultiplestriptechnology.
guaranteed perFormance
ElectrotechnicsDivisioncontributestothesafetyandenduranceofelectri-calequipment(switches,contactors,circuitbreakers,relays)forthemarketofelectricaldistribution,automation,transportation(automobile,aerospaceandrailway)andthehomeappli-ances.ThequalityofproductsintheElectrotechnicsDivisionrevealsitselfintheformofitstechnicalperformanceandrecognizedreliabilityinordertomakeitapreferredsupplierofmajorglobalgroupsinelectricalindustry.Theproductivityisincreasedeveryyearbyautomationofitsproductionlinesandexpansionofproductrange.Theper-manentenhancementofcompetencesisalsosupportedbysustainedeffort
oftheR&Dteamsthatdevelopnewmaterials,forexamplemagneticmateri-als,ornewprocessesinthefieldofsoldering,weldingorothermethodsofdeposit,notablyadditives.
complete partner
ThroughanorganizationbasedonmultidisciplinaryteamsandflexibleproductioncapacityinEurope,AsiaandAmericas,theElectrotechnicsDivisionisasupplierofcompletesolu-tionsinpartnershipwithitscustomers.TheElectrotechnicsDivisionispres-ent,directlyorindirectly,inmorethan50countriesindifferentregionsoftheworld,inordertomeetthespecificdemandsofmanycustomerswithinamarkethavingdistinctlydifferentcharac-teristics
TheElectrotechnicsDivisionusesthemetalsilvertomake
electricalcontactsthatimprovethesafetyandlifetimeof
electricalequipmentallalongtheirlifecycle.Thedivision
meetsthegrowingrequirementsoftheelectricalindustrybyits
metallurgyexpertise,assemblywork,organizationalflexibility,
innovationcommitmentandpartnershipwithitscustomers.
Targetedmainlyatlargeraccounts,thedivisioniswillingto
provideafullrangeofmaterials,componentsandassembly
parts,withgeographiccoveragethroughouttheworld.
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electrotechnIcs dIvIsIon
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Priorapprovalofmaterialsbythecli-entisastepthatrequiresamultiformpartnershipandadvancedmethodsofelectricaltests.AllR&D,productionandsalesteamsbenefitfromthislongpro-cessofcertification.TheElectrotechnicsDivisionisworkinginclosecooperationwithitscustomersfromthefirststagesofnewproductdevelopmentandpro-videsadviceandexpertisefromtheearlydesignofnewapplications.
Thissupportextendsaftertheindus-trializationofproducts.Thecombina-tionofcompetenceinelectricaltests,applicationresearchandmetallurgyhasenabledMetalortodevelopinnova-tiveproductsonthebasisofAgCW,AgCWC,AgFe,AgFeRe,AgNi,AgZnO,CuCr,CuW,CuCandAgSnO2.
TheElectrotechnicsDivisionalsoofferstoitscustomerstheintegratedmanage-mentoflogisticflowsinordertoensuretheavailabilityofproductsinshortsup-ply,forexample,proposingtheestab-lishmentofconsignmentstocks.Also,Metalorfollowstheindustrialdevelop-mentstogetherwithitscustomersinthegeographicexpansionoftheirproduction
capacity.Metaloroffersitspartnersalong-termcooperationbasedoncontinu-ouseffortsinthedomainofR&D,acon-tinuousimprovementofmanufacturingprocessesandworldwideinvestmentinindividualsandmachines.Specifically,thisexcellencebenefitsusersofelectri-calproductsthroughreliableanddura-bleproducts.
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metalor technologIes InternatIonal sa
FInancIal statements
ConsolidatedfinancialstatementsAsofDecember31,2009
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FInancIal year 2009 report
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Overall,consideringtheextraordinarymarketconditions,Metalor’s2009resultsaresatisfactoryanddemon-stratedtheresilienceandstrengthoftheGroup’sbusinessmodel.AstrongbalancesheetandfinancingmodelandthecontinuedstrongsupportoftheGroup’sbankingpartnersensuredMetalorhadtheliquiditytoexploitthesignificantopportunitiesfortheRefiningDivisiongeneratedbythevolatilityandhighpriceofgoldinparticular.Theotherdivisionssufferedfromthegeneralfallsinindustrialdemandandsales,butrapidlyimplementedshorttermandstructuralmeasurestocontrolcostsandwerethereforesuccessfulinsignificantlylimitingtheoperatingresult(EBIT)impactofthesesalesfalls.
TheconsolidatedNetsalesoftheMetalorGroup,withouttheintrinsicvalueofpreciousmetals,amountedtoCHF261.7millionwhichis21%lowerthaninthepreviousyear.Theoperat-ingresult(EBIT)decreasedfromCHF61.5millionin2008toCHF37.5millionin2009.OperatingcostswereCHF13.7millionor15%lowerthaninthepreviousyear.
NetincomeamountedtoCHF9.8millionfor2009.ThenetresultwasnegativelyimpactedbyrestructuringcostsintheWatchesandJewelryandElectrotechnicsDivisionsdiscussedbelow,andmergerandacquisi-tioncostsbothrelatedtothesaleofMetaloritselfandtheGroup’sowncostsrelatingtoabortedacquisitionprojects.
TheRefining Divisionperformedexceptionallywellin2009andenjoyedanotherrecordyear.Comparedtothepreviousyear,Netsaleswere5%higherandtheEBITimprovedfurther.ReceiptsofhighgradepreciousmetalscrapatthethreerefineriesintheUSA,SwitzerlandandHongKongwerestrong.Platinumgroupmetalreceipts,whichareheavilydrivenbyindustrialactivityweresignificantlydown.ThedivisionsetuparefiningactivityinChinaandachievedthefirstlocalsalesofinvestmentbarsduringJanuary2010.
Advanced Coatings Division’ssalesdecreased21%comparedtothepreviousyear,withtheelectronicsapplicationsespeciallyinAsiarecover-ingsomewhatduringthesecondhalf,whilethemainlyEuropeandecorativeapplicationmarketsheldupduringthefirsthalfbutslowedlaterintheyear.Theflexiblecostbaseandstrongcostcontrolensuredthatanadequateprof-itabilitywasachieved.Despitelowervolumes,marketsharegainswereachievedinthesilverpowderandflakesactivities.TheconstructionofthemanufacturingplantinChinawascom-pletedandsalescommencedduringthesecondhalf.
Electrotechnics DivisionNetsaleswere37%lowerthanthepreviousyearasthesectorexperiencedadramaticreductionindemandandsupplychainde-stockinganditwasonlyduringthefourthquarterthatsignsofarecov-eryindemandwereexperienced.Inresponsethedivision’sGermanmanu-facturingwastransferredtoFranceandtheplantclosed,andafurtherrestruc-turingattheFrenchplantitselfwasundertaken.Despitelowervolumes,marketsharegainswereachieved.
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Althoughthedivisionmadeanoveralllossfortheyear,EBITinthelastfourmonthsoftheyearwaspositive.InJanuary2010theacquisitionoftheAmericasoperationsofAMIDoducofromTechnitrolInc.wascompleted.
TheWatches and Jewelry DivisionwasheavilyaffectedbythecrisisintheSwissluxurywatchindustryandinternationaljewelrymarketsgenerallyandNetsalesfell48%ascustomersde-stockedandcontinuedtointernalizeproduction.Restructuringduringtheyearreducedheadcountby36%,how-everthiswasnotsufficienttoreturnthedivisiontoprofitabilityintheforesee-ablefuture.Inviewofthisafullimpair-mentofthevalueoftheequipmentusedintheNeuchâtelmanufacturingplantwasmadetotallingCHF6.8mil-lion.InJanuary2010itwasdecidedtoclosetheNeuchâtelmanufacturingplantandthecostsofthisclosurewillimpact2010.
TheGrouphasanetcashpositionofCHF57.6millionat31December2009,inadditiontowhichGrouphadabookvalueofCHF56millionstrategicoperatingreservesofplatinumgroupmetals.
Aspartofoftheshareholdingprogramforkeyemployees241treasurysharesweresoldto1employeeand4boardmembers.Thetotalnumberofsharesremainsunchangedat10000.OnOctober29,2009,AstorgPartners,aParis,Francebasedprivateequityfirmaquired5377oftheGroup’sshares,including425sharesheldundertheshareholdingprogram
InMarch2009adividendofCHF10000pershare(CHF100millionintotal)waspaidtothesharehold-ers.TheBoardofDirectorsintendstoinvestinorganicgrowthandacquisi-tionsandproposenottopayanydivi-dendin2010.Theshareholder’sequityatDecember31,2009amountedtoCHF269.2millionor64%ofthetotalbalancesheetvalue.
IdentificationofriskstowhichtheCompanyanditssubsidiariesareexposed,aswellasadequateorgani-zationalmeanstomeasureandman-agesuchrisks,areamongtheBoardofDirectors’duties.During2009,theBoardofDirectorshasactivelypartici-patedintheprocessofidentifyingstra-tegic,financial,operationalandothermajorrisks.TheCompanyhasimple-mentedaprocedurewhichensuresthatsuchrisksareadequatelyman-agedatdivisionalandcorporatelevelunderthesupervisionoftheCorporateManagementandareregularlyreportedtotheBoard.ThisallowstheBoardofDirectorstogainacompre-hensiveknowledgeoftheCompany’smajorrisksandtoadequatelyprioritiseactionsandallocateresources.
20
consolIdated balance sheet as oF december 31, 2009
inCHF1000 31.12.2009 31.12.2008
ASSETS
Cashandcashequivalents 66078 169942Tradereceivables,net 129068 163322Otherreceivables 3161 6080Inventories* 85829 44828Prepaidexpensesandaccruedincome 8443 6825
Current assets 292 579 390 997
Financialassets 436 1779Property,plantandequipment 119584 124915Intangibleassets 754 859Deferredtaxassets 4843 3814
Non-current assets 125 617 131 367
ToTAl ASSETS 418 196 522 364
lIABIlITIES AND SHAREHolDERS’ EQUITY
Tradepayables 47361 36722Otherpayables 15480 10789Provisionsforliabilitiesandcharges 30301 35130Currenttaxliabilities 6118 21520Short-termborrowings 8913 19052Accruedexpensesanddeferredincome 15018 11386
Current liabilities 123 191 134 599
Provisionsforliabilitiesandcharges 4063 7202Deferredtaxliabilities 21702 22717
Non-current liabilities 25 765 29 919
ToTAl lIABIlITIES 148 956 164 518
Sharecapital 800 800Sharepremium 35416 33542Retainedearnings 233024 325473Treasuryshares – (1969)
Shareholders’ equity 269 240 357 846
ToTAl lIABIlITIES AND SHAREHolDERS’ EQUITY 418 196 522 364
*ThemarketvalueofinventoriesasDecember31,2009amountstoKCHF111045(December31,2008:KCHF46884)
21
consolIdated statement oF Income For the year endIng december 31, 2009
inCHF1000 2009 2008
Net sales (excluding precious metals) 261 694 331 068Costofgoodssold(excludingpreciousmetals) (144577) (172615)
Gross profit 117 117 158 453
Sales and logistics (34 661) (38 654)Finance and administration (31 631) (38 652)Other operating costs (9 811) (12 491)Operatingcosts,total (76103) (89797)Preciousmetalsleasingfees,net (5272) (9036)Otheroperatingincome 1728 1927
operating result before precious metals price fluctuations 37 470 61 547
Recoveryof(provision)forpreciousmetalspricefluctuations 2036 (2113)
operating result after precious metals price fluctuations 39 506 59 434
Financialincome 2427 5328Financialexpenses (4252) (10511)
Financial result (1 825) (5 183)
Non-operatingincome 1732 37363Non-operatingexpenses (20055) (8245)
Non-operating result (18 323) 29 118
Income before tax 19 358 83 369
Currentincometax (11653) (23860)Deferredtax 2096 2488
NET INComE 9 801 61 997
22
consolIdated statement oF cash Flows For the year endIng december 31, 2009
inCHF1000 2009 2008
Incomebeforetax 19358 83369Depreciation,amortizationandprovisions 12428 21349Lossonsalesoffixedassets,net 76 35Workingcapitalchanges,net 71682 47970Gainonsaleofexcesspreciousmetalsinventory (684) (36660)Incometaxpaid (28605) (7414)
Cash flows from operating activities 74 255 108 649
Purchaseoffixedassets (18926) (21008)Proceedsfromthesaleoffixedassets 218 436Proceedsfromsaleofexcesspreciousmetalsinventory 4284 62856Proceedsfromthesaleoflong-termfinancialassets 114 109Proceedsfromthesaleof/(acquisitionof)intangibleassets (99) (101)Purchaseofpreciousmetalsinventory (52581) –Paidrestructuringexpenses (5321) (598)
Cash flows from investing activities (72 311) 41 694
Changeinshort-termborrowings (10149) 11177Changeinlong-termborrowingsnet – (3)Disposalof/(acquisitionof)treasurysharesnet 4842 2761Dividendpaid (98808) (66176)
Cash flows from financing activities (104 115) (52 241)
Effectsofexchangeratechangesoncashandcashequivalents (1693) (3858)
Change in cash and cash equivalents (103 864) 94 244
Cashandcashequivalents,atbeginningofyear 169942 75698
CASH AND CASH EQUIVAlENTS, AT END oF YEAR 66 078 169 942
23
consolIdated statement oF changes In equIty For the year endIng dec. 31, 2009
Cumulative Share Share Accumulated translation Goodwillon TreasuryinCHF1000 capital premium profits adjustment acquisitions shares Total
2009
Totalequityasof1.1 800 33542 363517 (26504) (11541) (1968) 357846Profitfortheyear – – 9801 – – – 9801Dividend – – (100000) – – – (100000)Saleofownshares – 2894 – – – 1968 4862Transfers – (1020) 1020 – – – –Exchangedifference – – – (3269) – – (3269) ToTAl EQUITY AS oF 31.12 800 35 416 274 338 (29 773) (11 541) 0 269 240
2008
Totalequityasof1.1 800 29903 369854 (18573) (11541) (3188) 367255Profitfortheyear – – 61997 – – – 61997Dividend – – (68334) – – – (68334)Acquisitionofownshares – – – – – (386) (386)Saleofownshares – 3639 – – – 1606 5245Exchangedifference – – – (7931) – – (7931) ToTAl EQUITY AS oF 31.12 800 33 542 363 517 (26 504) (11 541) (1 968) 357 846
24
group companIes as oF december 31, 2009
Share capital GroupCompany name Headquarter Currency (1 000) interest
MetalorTechnologiesInternationalSA Neuchâtel,Switzerland CHF 800 N/A
MetalorTechnologiesSA Neuchâtel,Switzerland CHF 11750 100%
MetalorFinanceSA Neuchâtel,Switzerland CHF 40400 100%
MetalorFinance(Curaçao)N.V. Curaçao,N.A. CHF 10 100%
MetalorTechnologies(UK)Ltd. Birmingham,UK GBP 150 100%
MetalorTechnologies(Iberica)SA Barcelona,Spain EUR 822 100%
MetalorTechnologiesUSACorporation NorthAttleboro,USA USD 1 100%
MetalorUSARefiningCorporation Attleboro,USA USD 1 100%
MetalorTechnologies(HongKong)Ltd. HongKong,China HKD 3501 100%
MetalorTechnologies(HongKong)Ltd.TaiwanBranch Taipei,Taiwan TWD 5000 100%
MetalorTechnologies(HongKong)Ltd.KoreanBranch Seoul,SouthKorea KRW 2960089 100%
MetalorTechnologies(Suzhou)Ltd. Suzhou,China USD 6400 100%
MetalorTechnologies(France)S.A.S. Courville,France EUR 5079 100%
MetalorTechnologies(Deutschland)GmbH Redwitz,Germany EUR 767 100%
MetalorTechnologies(Italia)S.R.L. Milano,Italy EUR 100 100%
MetalorTechnologies(Sweden)AB Boras,Sweden SEK 100 100%
MetalorTechnologies(Singapore)PTELtd. Singapore,SG SGD 100 100%
Note:FullConsolidationisappliedforallthecompanies.
25
board oF dIrectors
JoëlLacourteMartinBisangSophiePochardDanielSchlatterJean-HubertVial
ChairmanMemberMemberMemberMember
corporate management
Dr.ScottMorrisonDanielTemplemanDr.YuxingShangJacquesMichelRichardLeVaillantDr.ScottMorrisonKennethBeilstein*LaurenceDrummond*
ChiefExecutiveOfficerChiefFinancialOfficerGeneralManagerRefiningDivisionGeneralManagerAdvancedCoatingsDivisionGeneralManagerWatchesandJewelryDivisionGeneralManagerElectrotechnicsDivisionGeneralManagerAsiaGeneralManagerAmericas
*FromMarch2010
audItors
HansIslerMichaelAckermann
Ernst&YoungLtd.,Geneva,SwitzerlandErnst&YoungLtd.,Lausanne,Switzerland
governIng bodIes
the operatIng companIes oF the metalor group(AsofDecember31,2009)
26
swItzerland
metalor Technologies International SAAvenueduVignobleP.O.Box9CH-2009NeuchâtelPhone +41327206111Fax +41327206625www.metalor.comE-mail:[email protected]
metalor Finance SAAvenueduVignobleP.O.Box9CH-2009NeuchâtelPhone +41327206111Fax +41327206601
metalor Technologies SADivisionsAvenueduVignobleP.O.Box9CH-2009NeuchâtelPhone +41327206111Fax +41327206605Fax +41327206614
DivisionsRuedesPerveuils8CH-2074MarinPhone +41327206111Fax +41327206602Fax +41327206612
unIted states
metalor Technologies USA CorporationDivision255JohnL.DietschBoulevardNorthAttleboro,MA02763,USAPhone +15086998800Fax +15086951603
metalor USA Refining CorporationDivision255JohnL.DietschBoulevardNorthAttleboro,MA02763,USAPhone +15086998800Fax +15086951603
Divisionlos Angeles office650SouthHillStreetSuite811LosAngeles,CA90017-1754,USAPhone +12136247687Fax +12136245532
*metalor Electrotechnics (U.S.A) CorpDivision1003CorporateLaneExport,PA15632Phone +1724-733-8332Fax +1724-733-8341
peru
metalor USA Refining CorporationSuccursal del PeruDivisionAv.ProduccionNacional268UrbLaVillaChorillosLima09PeruPhone +5112515456Fax +5112515472
*mexIco
metalor Technologies operations (mexico), S.A. de C. V.metalor Technologies Services (mexico), S.A. de C. V.DivisionProton#22,Esq.NeutronParqueIndustrialNaucalpanNaucalpandeJuarez.EstadodeMexico,CP53370Phone +525553001909Fax +525553006654
*puerto rIco
metalor Electrotechnics (Puerto Rico), llCDivisionRoad992Km0.3Luquillo,PuertoRico00773Phone +17878892400Fax +17878893400
spaIn
metalor Technologies (Ibérica) SADivisionsEspronceda183–1o1a
E-08018BarcelonaPhone +34933030112Fax +34933073795
DivisionC/Albasanz14bis,1°GE-28037MadridPhone +34913757480Fax +34913044142
France
metalor Technologies (France) S.A.S.DivisionRuedesAquées,BP29F-28190Courville-sur-EurePhone +33237237844Fax +33237237467
legend HeadOffice
Divisions Refining AdvancedCoatings WatchesandJewelry Electrotechnics *EffectiveonJanuary4,2010
taIwan
metalor Technologies(Hong Kong) ltd.Taiwan BranchDivisions6F,101Rei-HuStreetNei-HuTaipei,TaiwanChinaPhone +886277207775Fax +886277200303
sIngapore
metalor Technologies (Singapore) PTE ltd.Division67TechParkCrescentTUASSingapore638074Phone +6568631600Fax +6568630102
thaIland
metalor Technologies (Singapore) PTE ltd.Bangkok Representative officeDivisionPrimeStateMiniOffice79/4Moo2,5thFloorSrinakarinRoad,NongbornPravejBangkok10260ThailandPhone +6623660719Fax +6623660720 27
Division11,rueLouisAulagneBP63F-69922OullinsCedexPhone +33472663210Fax +33478869068
germany
metalor Technologies (Deutschland) GmbHDivisionsKronacherStrasse66D-96257RedwitzPhone +499574624803Phone +499574624800Fax +499574624804
the netherlands
metalor Technologies (Deutschland) GmbHThe Netherlands BranchDivisionWeegschaalstraat3NL-5632CWEindhovenPhone +31402911265Fax +31402911266
unIted KIngdom
metalor Technologies (UK) ltd.Divisions74WarstoneLaneUK-BirminghamB186NGPhone +441212363241Fax +441212363568
sweden
metalor Technologies (Sweden) ABDivisionSagagatan22S-50635BorasPhone +4633444250Fax +4633444260
Italy
metalor Technologies (Italia) S.r.l.DivisionsViaG.DiVittorio28I-20068PeschieraBorromeo(Milano)Phone +39025165181Fax +390255301021
chIna
metalor Technologies(Hong Kong) ltd.DivisionsSuite1705-9,TheMetropolisTower10MetropolisDrive,HungHomKowloon,HongKong–ChinaPhone +85225214131Fax +85228451791
metalor Technologies (Suzhou) ltd.Divisions8ZhaoYangRoadSuzhouIndustrialParkJiansuProvinceChina215123Phone +8651265936181Fax +8651265936171
Shanghai liaison officeDivisionNo3Building,800ShenfuRoadXinzhuangIndustryParkMinhanhDistrictShanghaiChina201108Phone +862154423060Fax +862154420790
Dongguan Branch officeDivisionsUnitB213,WanbaoChengDezhengEastRoadChangan,DongguanGuangdongProvinceChina523856Phone +8676985443938Fax +8676985443933
© Copyright Metalor 2010. All rights reserved. Except as permitted by law, no part of this document may be reproduced or transmitted by any process or means without the prior consent of Metalor.
The Metalor logo, the Metalor© name and all product names referred to herein are the registred trademarks and trademarks of the Metalor Group of companies.
No guarantee nor warranty of any kind is given as to the information contained herein, including but not limited to accuracy, completeness, merchantability or fitness for a specific purpose. Metalor shall not be held liable for loss or damage which may result from reliance on the information contained herein.
Published by Metalor Technologies International SA,Avenue du Vignoble, P.O. Box 9, 2009 Neuchâtel, Switzerland.
This annual report is available in English and French.
Design: > graffiti-communication.chPhotos: Metalor / > graffiti-communication.chPrint: IDM, Imprimerie des Montagnes, La Chaux-de-FondsEdition: English 1800, French 1500
REFINING ADVANCED COATINGS WATCHES AND JEWELRY ELECTROTECHNICS
CS – 0001EN / 02.2010 – 1800
Metalor Technologies International SAAvenue du Vignoble, P.O. Box 9, CH-2009 Neuchâtel, Phone +41 (0)32 720 61 11, Fax +41 (0)32 720 66 [email protected], www.metalor.com
