May I take this opportunity to welcome you, on behalf of the Management Board, to this year's Annual General Meeting of SIMONA AG.

Ladies and Gentlemen,
Fiscal 2010 proved to be a year of mixed emotions, both good and bad. On a positive note, the 2010 financial year produced tangible growth in sales volumes and revenues. Given the dramatic slump seen in 2009, the degree of expansion achieved in 2010 had by no means been anticipated. As we entered the financial year, we saw a silver lining on the horizon – particularly in Asia – but unfortunately this was not reflected in our order books. It was not until March that demand for our products showed a significant upturn. But when growth came, it was both dynamic and sustained. It was prompted first and foremost by more expansive investment spending within the industrial sector, driven mainly by the marked recovery in Asia. The benefits of this upturn were felt in particular by the automotive, mechanical engineering and chemical industries – and eventually also by our own company.

Valued Shareholders,
We managed to increase our sales revenue by 24 per cent to €267.4 million in fiscal 2010.
The fact that we retained our core workforce in the challenging year of 2009 was key to our successful sales performance in 2010. As a result, we were able to respond swiftly to the sudden upturn in demand during the year under review. Allow me to take this opportunity to praise the government's response to the economic crisis: the instrument of short-time work helped us enormously.
Revenue growth was attributable largely to our international business, but also to our activities in Germany.

Ladies and Gentlemen,
Germany is one of our key markets when it comes to applications in the chemical process industry and mechanical engineering sector. The significant rise in exports within these segments provided a strong stimulus for investment spending throughout the industry. In total, companies invested almost 10 per cent more in machinery and equipment. On the back of this expansion, our sales revenue generated in Germany rose by 18.4 per cent to €90.6 million.
Traditionally we have always had a strong position in Europe as regards products used in chemical tank and apparatus engineering. We managed to reinforce this position during 2010. In the sales region covering the "Rest of Europe & Africa" we managed to lift revenue by 15 per cent to €132.7 million.
We are extremely satisfied with the company's performance in Asia, America and Australia. Within this context, we managed to exploit the early and pronounced onset of market recovery in Asia, generating significant growth in sales revenue. Our new plant in China made a substantial contribution to these efforts. In total, we increased our sales revenue in the region covering Asia, America and Australia by almost 83 per cent, taking the figure to €44.5 million. Our programme of internationalisation, modest at first but always pursued with commitment, is now bearing fruit. We have taken another giant step forward when it comes to achieving our goal of generating at least 25 per cent of our sales revenue outside Europe by 2014. In 2010, the non-European region accounted for as much as 16.6 per cent of our sales revenue, up significantly from the figure of 11.2 per cent recorded in 2009.

The performance of our key product groups was also somewhat inconsistent in the period under review. Semi-finished plastics made an above-average contribution to growth. Demand was particularly buoyant with regard to sheets used in the area of chemical tank and apparatus construction. Revenue from semi-finished product sales rose by 31.6 per cent to almost €197 million.
Pipes and fittings also generated growth. As a result of the severe winter and sluggishness within the construction industry, however, the gains achieved in this product segment were below average. In total, sales revenue from pipes and fittings rose by 7.8 per cent to €70.6 million.

Ladies and Gentlemen,
Now for the less encouraging news. "Above target, but below expectations" encapsulates our performance in the year under review. Indeed, we can only be partially satisfied with our results. We were aware of the fact the economic crisis of 2009 would also have an impact on the 2010 financial year. With this in mind, our forecast was conservative. Our goal was to achieve a pre-tax profit, and we accomplished that. However, as you can probably imagine, we would have expected a better earnings performance given the growth achieved in sales volumes and revenues. The sudden upturn certainly whet our appetite with regard to profit.

What were the reasons for our unsatisfactory earnings performance?
First and foremost, we saw a surge in the procurement prices associated with commodities used by our company. A case in point: one tonne of polypropylene – one of the most important raw materials for production – cost €840 in April 2009. By June 2010 the price of this material had risen to €1,400, an increase of approx. 67 per cent. As regards some of the additives required for PVC, prices even doubled over the course of 2010. Our products contain a high percentage of material costs. At the same time, competition within all our markets is intense. Against this backdrop, we were unable to pass on the extreme price hikes – neither in full nor in a timely manner.
In total, Group earnings before income taxes stood at €10.5 million. That is almost 48 per cent, or around €3 million, more than in 2009. At €22.7 million, EBITDA was slightly up on last year's figure. That is relatively solid, but not good enough.

What was the focus of our capital expenditure in 2010?
In view of our challenging earnings performance, we proceeded with great diligence when it came to investment spending. What is appropriate from a business perspective and when is the right time to invest? At €6.5 million, our capital expenditure was substantially lower than in previous years. However, we intend to ramp up our investment spending in 2011.

Ladies and Gentlemen,
It can be seen as both positive and important that the structure of the SIMONA balance sheet continues to be solid – despite a dreadful performance in 2009 and a relatively satisfactory one in 2010. With total assets remaining largely unchanged at €245 million, we managed to increase our equity to over €162 million. Our equity ratio stands at over 66 per cent. With business expanding substantially in the year under review, it was inevitable that cash and cash equivalents would contract in favour of higher receivables and inventories. Our financial position and cash flows continue to be very solid.

Valued Shareholders,
SIMONA shares were and continue to be a solid investment. SIMONA's market capitalisation – calculated on the basis of the shares' closing price for 2010 – is covered by equity at a rate of over 85 per cent. At €315, SIMONA's stock closed the 2010 financial year at a level that was close to its opening price. In July 2010, our shares reached an annual high of €385.
Our dividend proposal for the financial year 2010 is €6.50 per share. Thus, we have held firm to our principles: consistent dividend payments and an appropriate share of the profits for the company's owners.

Ladies and Gentlemen,
Encouraging growth in sales volumes and revenues, a positive bottom-line result and solidity in terms of financial position and cash flows are only possible with a qualified and motivated workforce. On behalf of the Management Board, allow me to thank all members of staff for what they have accomplished. Let us continue this good work!
Against a challenging backdrop, we were encouraged by the fact that we were and continue to be seen as a solid and attractive employer. In 2010, we managed to fill almost all our job vacancies.
Our HR policy is structured towards the long term. We have a high proportion of vocational trainees. Each year, apprentices taking part in SIMONA vocational programmes are among the high-achievers in examinations. The measures aimed at nurturing talent are diverse and international in nature, and they invariably produce candidates of the highest calibre. This is reflected in the popularity of such programmes among young – and seasoned – members of staff.
Under the heading "Your Talent. Our Future." our aim is to encourage and support the next generation of managers and specialised staff. Additionally, we are investing in cooperation programmes with universities. The earlier we attract talent to our company, the greater the likelihood that they will appreciate the benefits of working for SIMONA: flat hierarchies, the chance to take on responsibility at an early stage and the prospect of international challenges.
Over the course of 2010, we recruited heavily at our international sites in particular. At the end of 2010, the SIMONA Group employed 1,236 people in total.
Allow me to also express our thanks to our works council for the constructive dialogue maintained throughout the year. It plays a significant role in ensuring that we are able to offer attractive working conditions and incorporate continuous improvements.

Ladies and Gentlemen,
We are equally committed to improving SIMONA as a company, which includes our performance in terms of sales and earnings. We are very pleased with how our business has developed in the current financial year. Indeed, we have exceeded our targets for each month to date. In the first quarter of 2011, we generated sales revenue of approx. €77 million, almost 30 per cent more than in the first quarter of 2010. In May, we recorded the highest monthly revenue figure since the inception of our company. Revenue performance has benefited from price increases. At the same time, however, we have also seen double-digit growth in our sales volumes.
We are particularly committed to profitable growth, and we performed well in this respect during the first quarter. Pre-tax earnings totalled €5.4 million and our EBIT margin was 7 per cent, taking us well beyond last year's figure. We currently anticipate that our result for the first half will also be significantly higher than the figure posted last year. Having said that, the risks emanating from commodity prices remain high. The rapid increase and subsequent fall of the oil price within the last weeks may be cited as an example.

Overall, market risks have increased in recent weeks:

• national debt of European countries,
• unemployment and government finances in the US,
• inflation and slower economic growth in China

to name but a few. Given the various potential scenarios, forecasting has become increasingly difficult. But one thing is certain: demand for intelligent solutions made of plastics will continue to rise. This is not simply a case of wishful thinking. On the contrary, our outlook is supported by reputable studies conducted by various experts.

Ladies and Gentlemen,
The current debate over the future of energy supply serves as a good example: the environment and safety are two key issues to be addressed in the coming decades.
We focused our company's strategy on these aspects as early as 2008/9.
SIMONA is committed to establishing itself as a leading global supplier of safety-critical and eco-specific applications.
In particular, we have identified the energy, water and commodity industry as well as environmental technology and mobility as key growth markets of the future.
We want to be the primary point of contact for our customers in these markets – worldwide.
We offer solutions ranging from piping systems for desalination plants to plastic sheets used by the photovoltaic and solar energy industry. Our portfolio also includes multilayer sheets for the production of lightweight fuel tanks as well as sheets used for energy-efficient artificial ice rinks. Additionally, we supply piping systems for applications in the area of renewable energy and the transport of CO ₂.

Our plastics solutions are setting standards. SIMONA has become synonymous worldwide with quality, reliability and technical expertise.

We have set ourselves some ambitious goals for 2011. We want to increase Group sales revenue to at least €290 million and generate Group earnings before taxes of €15 million or more.

Ladies and Gentlemen,
SIMONA has made good progress. We have products and applications in high-potential segments of the market. We have qualified and committed members of staff. We have a solid financial position and cash flows. Our aim is to safeguard the long-term existence of our company. With this in mind, it is essential that we operate in a well-judged manner. This is the same approach applied by our company in the past:

• From leather to plastics
• From domestic business to international trade.