€66 millionin sales109perlite-basedproductsto 26countries37mines, plants& distributioncentresin 11countriesPerliteView of the Perliteprocessing plant andpart of the loading porton Milos Island in Greece.Silos and storage facilitiesenable the simultaneousloading of different perlitegrades.34 S&B Industrial Minerals S.A.
<strong>2010</strong> Perlite Salesby Segment<strong>2010</strong> Perlite Salesby Geographical AreaConstruction &Building Materials 66%WesternEurope 36%NorthAmerica 36%Other 2% Horticulture 28%Filteraids 2%Cryogenics 2%Other 2%Far East 7%EasternEurope 19%<strong>2010</strong>has beena year ofslow recoveryfor the Perlite Division. Thecontinuing deterioration of the constructionmarkets in southern Europewas only partially offset bymoderate volume increases in CentralEurope and North America. Weachieved revenue of €66.2 million,an 8.3% increase over the €61.1 millionof the previous year. Revenuegrowth in Europe, which accountsfor more than half of the Division’stotal revenue, was modest, while werecorded double-digit revenuegrowth in North America and strongdouble-digit growth in Asian markets.Through discipline in maintaining ourpricing policy and our efforts to reducecosts, we recorded EBITDA of€9.9 million, at par with 2009, despitethe significant increase in freightand energy costs. In line with Groupwidetargets, we continued during<strong>2010</strong> to achieve significant improvementsin our working capital and alsocontained our planned investmentsbelow 2009 levels.Despite the protracted period ofchallenges for the Division for a thirdconsecutive year, we managed toretain our customer base and remainedactive in our efforts tolaunch new products. In addition, inline with our strategy to increasevalue from expanded perlite in thesoutheastern part of the UnitedStates, we succeeded in filling thecapacity of both of the expansionplants we have acquired in the areain the previous two years.A key highlight for the Perlite Divisionin <strong>2010</strong> was the establishment ofPergem SA, a joint venture companyin Turkey, through which weexpect to enter the former CIS andAsian markets and benefit from thegrowth anticipated in these regions.In the raw perlite business in Europe,we achieved a modest revenue increaseversus 2009. This performancewas largely driven by theconstruction segment, mainly due torobust demand for ceiling tiles in Germanyand France. Intense competitionin pozzolanic materials resultedin pricing pressure, but we neverthelesssucceeded in maintaining ourmarket share. In contrast, in the marketsof southern Europe, our expandedperlite business related toconstruction was faced with doubledigitdeclines in Greece, remainedstable in Spain, where subdued constructionactivity persisted, and wasfavorable in Bulgaria compared tothe previous year. The prospects forexpanded perlite for the constructionsegment are not promising for 2011,mainly because of the protracted recessionin the construction sector inSouthern Europe, the main concernbeing Greece.In North America, construction activitybottomed out in <strong>2010</strong> in line with stablenew housing starts and flat homesales, keeping raw perlite volumes at2009 levels. However, the related revenuesfor the Division were improved,mainly owing to the fact that throughthe two expansion plants, we sellproducts at higher value.In Asia, construction-related salesposted a significant increase comparedto 2009, supported stronglyby pricing which was significantlyhigher than in the previous year. InChina, the market for new buildingmaterials is booming and theprospects are similar for 2011.In the horticulture segment, raw perlitevolumes in Europe have been increasedby gaining market sharefrom competition. Expanded perliteperformed particularly well, supportedby strong activity in Spain,where we also acquired a newbrand from the competition to complementour product line. In NorthAmerica, the horticultural perlite marketremained resilient and balancedthroughout the economic crisis.While plant and vegetable nurserieswere hit the hardest by the crisis,small retailers supplying home improvementstores were less affected.Our performance in theNorth American horticulture marketwas quite strong, as we recordedhigh double-digit growth in <strong>2010</strong>.This achievement was made possibleby a full year of sales from the twoexpansion plants that we have acquiredon the southeastern coastover the last two years. The outlookfor 2011 is uncertain, as Nationalbuilders anticipate stabilization inhome sales and a potential reductionin landscaping needs.Our Business and Product Developmentefforts produced some verygood results, as we have projectsthat are entering implementationstage. Furthermore, we have developedand marketed new products,like Phyllomat and SpeedSorb,which offer good development potentialin the fillers and absorbentsmarkets for our Division. Our participationin EU funded R&D programshas been and remains a key priority,and we expect to participate in additionalrelevant projects in 2011.in € million742008 2009 <strong>2010</strong>Sales61669 10 10EBITDAWe are cautious in our 2011 outlook,despite having positive signs fromkey areas and markets. The mainchallenges will be the sustainability ofrecovery in U.S. housing and thestrengthening of major Europeaneconomies like Germany andFrance. We will focus on the furtherdownstream expansion of our currentbusiness, as well as on the developmentof our business into newminerals related to the markets we alreadyserve.<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong>35
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