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Schott: growth expected to continue in fiscal 2011

International technology group Schott has seen its business develop well during the first four months of the fiscal year 2010/2011 (1 October to 31 January). We expect sales to remain at a high level …

International technology group Schott has seen its business develop well during the first four months of the fiscal year 2010/2011 (1 October to 31 January). We expect sales to remain at a high level and consolidated net income to continue to improve for the fiscal year as a whole, Prof. Udo Ungeheuer, Chairman of the Board of Management, stated at the company“s annual results press conference held in St. Gallen, Switzerland. Schott has thus continued its positive development after emerging from the economic crisis. Sales revenue rose by 26% to EUR 2.85 billion (2008/2009: EUR 2.26 billion) already during the past fiscal year 2009/2010. All of the divisions, but most notably solar, special glass tubing, pharmaceutical packaging and specialty glass products for building and safety technology, contributed to this positive development. The share of international sales, in other words manufacturing and sales from outside Germany, rose by 4 percentage points to 77%. Profit from operations (EBIT) came in at EUR 263 million (2008/2009: loss of EUR 22 million) and underscores how well the operational business has been developing. Consolidated net income amounted to EUR 108 million. Cash flow from operating activities improved to EUR 415 million (fiscal year 2008/2009: EUR 199 million). The number of employees as of the balance sheet date, 30 September 2010, remained almost constant at 17,468 (2008/2009: 17,396). Thanks to our economic success during this past fiscal year, we were able to recognize the outstanding performances and unique commitment our employees have shown by offering extra bonuses, Prof. Ungeheuer told media representatives. The Chairman of the Board of Management emphasized that Schott has emerged from the crisis as a stronger company and is now looking to further extend its position in various markets with even greater momentum. With respect to marketing and sales activities, the group now plans to rely more heavily on the power of its leading brands, such as Ceran glass-ceramic cooktop panels, Robax viewing panels for fireplaces or Fiolax special glass tubing. The subject of green products will also become more and more important. The product line already includes a number of special glasses that are manufactured without using arsenic and antimony. And thanks to its patented melting technology, Schott is the only company in the world that is currently capable of producing a black glass-ceramic cooktop panel without using these two heavy metals. The company even received the German Innovation Award 2010 for this development that marks yet another milestone in the success story of Ceran. In the current fiscal year, Schott is hoping to significantly strengthen its position in the area of pharmaceutical packaging, among other areas. New plants in Argentina and Russia and a joint venture in Japan, the world“s second largest pharmaceutical market, should help the company achieve this objective. Here, Schott already ranks as one of the world“s leading suppliers, thanks to the 7 billion syringes, ampoules, vials and cartridges the company manufactures each year. Schott also continues to see huge potential in the area of photovoltaics. Nevertheless, the demand for these products in Germany is likely to cool down considerably following the boom year 2010, in which the market benefited from sales that were made earlier than usual. The goal of its subsidiary, Schott Solar, is to continue to increase its export share and improve its international competitiveness by manufacturing in a more cost-effective manner. The joint venture that was formed only recently with Hareon Solar Technology Co. Ltd. is part of this strategy. Module production is scheduled to begin already at a plant located near Shanghai in the spring of 2011. This means Schott will be doubling its production capacity with respect to solar modules to 830 MW. Through this new partnership, Schott Solar is now also present on the production side in Asia, one of the largest growth regions for photovoltaics. At the same time, Schott Solar also plans to continue investing in other sites. For instance, the wafer production capacity at the site in Jena will be doubled to 500 MW over the next few months. Schott Solar currently holds the lead in the race for efficiency. With improved module technology based on multi-crystalline solar cells, the company now offers a photovoltaic module with previously unmatched efficiency of 17.6%. The company is also planning to strengthen its technological leadership through product and process innovations in the area of receivers for solar thermal parabolic trough power plants, the second area of solar that Schott pursues next to photovoltaics. These include new heat transfer media, improved coating methods and larger dimensions with the aim of further increasing the efficiency of solar thermal parabolic trough power plants. The new fiscal year also started off well for electronic packaging and components that perform safety-related functions. The increases continue to come from Asia, for the most part; however Germany has also developed into a growth engine for the electronics industry. Here, the area of automotive electronics that is again proving to be very stable deserves special mention. The opto-electronics industry, yet another important market sector, also continues to grow as a result of growing worldwide demand for data communications networks and telecommunications. Promising opportunities arise from the launch of a new ultra-thin glass that offers a rather attractive, highly shatterproof and scratchproof surface as a high-strength control and cover glass for the displays of mobile phones, smartphones and laptops. The business with processed flat glass products for the home appliance industry relies heavily on the markets in Europe and Brazil to remain strong. In the US, the real estate crisis and difficult overall economic environment is still having an impact on business. Europe remains the most important sales region for Robax viewing panels for fireplaces. The company is constantly extending its range of shapes, decorative colours and patterns. A 90 bent viewing panel that offers an unobstructed view of the fire from almost any position in the room, thanks to its extremely large bending radius, will be unveiled very soon. Schott plans to invest rather heavily in fixed assets once again during the fiscal year 2010/2011. EUR 200 million have been allocated in total, half of which will go towards sites in Germany. The main investment areas include pharmaceutical packaging, photovoltaics and specialty glass products for use in buildings. We are confident that these innovations will help us to open up new business fields and contribute significantly to an increase in earnings, Prof. Ungeheuer emphasized.

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