Ladies and Gentlemen,
while the SIMONA City has indeed grown, the crisis nevertheless took its toll. We concentrated on the important issues – ensuring there was sufficient liquidity, retaining our core workforce and, as far as possible, earning money. I have to say we are quite proud of our success in this respect and feel it has given us the strength to press ahead with our ambitious growth targets for the next few years. First, though, let us look more closely at the year 2009.


‘SIMONA 2009 – Emerging securely from the crisis’
Here we have the core message with regard to our performance in the last financial year, and it is the good news in what was a particularly turbulent year. We were able to consolidate our solid financial position with a positive result. The bad news is that our sales revenue fell by almost 30 per cent. No one at SIMONA or in the plastics industry had ever seen anything like it, and we faced a huge task in preparing our company and our work-force to meet these challenges.

New orders began to show a marked decline in all product groups and all sales regions towards the end of 2008, and substitution was just not possible. That was what made this crisis so unique in a negative way. The two main factors that led to the slump in demand in our business segments were the sharp fall in exports and an extreme reluctance on the part of our customers to invest. In plant and machine construction alone, new orders dropped by 38 per cent in 2009. Total consolidated revenue for FY 2009 was EUR 215.1 million, 29.2 per cent down on the figure for 2008.


How did individual sales regions perform?
In Germany, revenue dropped 31.7 per cent to EUR 76.5 million. In Europe (excluding Germany), the fall was 27.1 per cent with revenue at EUR 115.4 million. To some extent at least, we were able to compensate for the more dramatic collapses in Eastern Europe by our stable position in Western Europe. In the Americas, Asia and Australia region, sales revenue fell 29.6 per cent to EUR 24.3 million.


Looking at individual product groups, the picture is also varied.
Maintaining a broadly based portfolio of products can often help to compensate for declines in one particular segment. In 2009, however, this was not the case. Revenue for semi-finished products was down 31.5 per cent at EUR 149.5 million.
On account of the relatively stable fittings business, the decline in revenue from piping systems was less pronounced than that in overall revenue. SIMONA was able to expand its position in the international market for piping systems for water supply infrastructure. Total revenue for this business unit was EUR 65.5 million, down 23.2 per cent on the previous year.


Earnings
Ladies and Gentlemen,
So what impact did this major decline in revenue have on our earnings?

At the end of 2008, given the likely developments in the economy at the time, our aim was to achieve a positive figure for EBITDA in 2009. That we achieved this is thanks to the commitment of all those who work for SIMONA.

We reduced our costs in good time and made further efficiency improvements. From March onwards, we announced cuts in working hours. These were subsequently introduced at all our German sites, albeit to varying degrees depending on the order situation. Outside Germany, we implemented similar measures in line with national employment legislation. The Management Board and other senior managers waived parts of their fixed and variable remuneration. We were also helped greatly by lower commodity prices – at least in the first half of the year.
All these measures enabled us to achieve pre-tax earnings of EUR 7.1 million at Group level and a figure of EUR 21.9 million for EBITDA. As a proportion of revenue, EBITDA stood at 10.2 per cent, only slightly below the level of the previous year. Net cash from operating activities was EUR 28.2 million.

We have therefore strengthened our financial base. The equity ratio remains unchanged at 64 per cent. All this allows us to remain relatively independent of the capital markets. Further evidence of our solid capital base can also be seen in our cash holdings of over EUR 60 million.


Capital expenditure
In difficult years such as that we are now reviewing, it is important to scrutinise every item of capital expenditure. In 2009, we looked very carefully at which investments made good economic sense and supported our future growth objectives.
 
Capital expenditure in 2008 had reached as high as EUR 21.2 million due to the construction of new factories in the Czech Republic and China. In FY 2009, the corresponding figure was EUR 11.6 million, only slightly below the level of 2007 and below the figure for depreciation (excluding exceptional write-downs).

I should like to give you a brief summary of our investment spending in China and our new factory in Jiangmen. We had postponed the start of production to the fourth quarter of 2009. I announced this rescheduling measure at the last Annual General Meeting, and the severe decline in the Asia/Pacific market served to reinforce our decision. The new factory was officially inaugurated in April 2010. We undertook this major investment in order to follow our customers into the region and by establishing our own production facility have now laid a foundation that will allow us to play a leading role in one of the fastest growing markets for plastics applications.
Investing in new markets needs capital, and of course we have to pay interest on that capital. For you as our shareholders, that return takes the form of dividends and share price movements.


Dividend and shares
Ladies and Gentlemen,
SIMONA’s policy has been and still is to allow management, employees and shareholders to benefit in reasonable measure from the company’s success. This is clear from the consistently high dividends paid out in recent years. This year we have found it difficult to put together a dividend proposal. While our pre-tax earnings remain in positive territory, they have fallen by EUR 13 million. We have nevertheless decided to propose a dividend of EUR 6 per share.

This is equivalent to a total distribution of EUR 3.6 million, almost 72 per cent of our annual profit. I believe you will agree that this is a respectable dividend given the current economic situation.

How did SIMONA’s stock perform in 2009, given the tremendous fluctuations in the markets last year?
The short answer is that the stock remained stable. At the end of 2009, it closed on EUR 317, which was close to the level of EUR 323 at which it started the year. The stock is currently trading at around EUR 355. We, by which I mean the employees and management of SIMONA, are pleased that we can provide this level of consistency even in difficult periods.


Employees
Everything we have achieved was made possible by the dedication and motivation of our workforce. SIMONA is regarded as a reliable, solid and socially responsible employer, and both Dr. Bürkle and his recently deceased wife played an important role in establishing these priorities. Moreover, we are keenly aware that we can only achieve our growth targets with skilled, experienced and committed employees.

Nevertheless, in 2009 we were obliged to make some painful staffing cuts in order to reduce our costs and work more effectively overall. These cuts mainly affected our workforce in Würdinghausen. The decision to close this site and move production to Kirn and Ringsheim was necessary from a business perspective, albeit painful for those concerned. The reasons for doing so were primarily structural and not linked to developments in the wider economy.

From now on, finished parts will be made in Ringsheim and pressed sheets in Kirn. This will create and secure jobs at these two sites.
At the end of 2009, the SIMONA Group’s overall headcount was 1,234, just 17 employees fewer than at the end of 2008 despite a fall of nearly 30 per cent in our business.

For both employees and the management team, 2009 involved considerable effort and financial sacrifice. On behalf of the entire Management Board, I would like to thank all our employees for their performance and the tremendous efforts they have made in 2009. My thanks also go to the Works Council for maintaining a constructive dialogue.


What do we hope to achieve in 2010?
We want to achieve double-figure growth and break through the EUR 250 million revenue mark. We are well placed to do so, even though our results at the start of the year were less than promising.

In March, however, our results were much more positive. With sales up 40 per cent on the previous year, our production capacity and logistics were hard pressed to keep up, though it was a challenge we were glad to accept.

Based on the figures we have up to that point, we are confident that we can achieve a positive half-year result.
Having said that, we do anticipate the possibility of further setbacks as a result of global uncertainty. The economic recovery is not yet firmly established, and we will have to see what awaits us over the rest of the year. Our key target, that of achieving positive pre-tax earnings, is manageable. In our view, the principal risks lie in extremely high commodity prices and constraints on availability.
 
Commodity prices and potential disruption to the availability of raw materials as well as global economic uncertainties are by far the biggest risks to the Group’s performance in 2010.

However, our medium-term outlook is very positive. We have done our homework in terms of optimising our internal processes. Even in a year still marked by economic crisis, we launched a series of innovative new products onto the market.

You can find more examples of our success in the SIMONA City Magazine which forms part of the annual report. By way of example, you can read about the piping systems developed by SIMONA for a deep geothermal energy project devised by the RWTH Technical University in Aachen, designed to supply power to a small housing estate. Also included are details of our multilayer sheets for fuel tanks. In another important development, we won an order for China together with our partner Magna and will be supplying sheets for Audi A6 fuel tanks from our factory in Jiangmen.

Nor have we lost sight of our ‘SIMONA500’ target for revenue, although achieving it will take somewhat longer than originally planned. Our aim is to increase consolidated revenue to EUR 500 million by 2014 through organic growth, new products and acquisitions. The gap created by the sharp downturn in revenue cannot be closed entirely through our own efforts.


Ladies and Gentlemen,
Your investment in SIMONA has been and is a good one. Thanks to our process engineering skills, our people and our access to markets, we are well placed to benefit from potential international growth in plastics. We have a strong brand that is well-known and respected all over the world. We have a relaxed but determined strategy of internationalisation. SIMONA City will continue to grow.

You, our shareholders, form part of that city, and we will do everything we can to ensure that you feel happy there.