• Strong operating performance in 2010: Group sales grew 26 percent to ?3.3 billion, EBITDA increased 47 percent to around ?.4 billion, EBIT rose 89 percent to over ?.6 billion
• Total sales in the Greater China region grew by over 40% to ?.23 billion
• Progress with strategic focus on specialty chemicals
• Additional Executive Board members appointed for chemicals business
• A very good start to fiscal 2011

"2010 was an outstanding year for us. Evonik is more profitable than ever before," commented Klaus Engel, Chairman of the Executive Board of Evonik Industries AG, at the financial press conference on March 16, 2011. The Group’s core chemicals business reported by far the best performance in its history. In order to realize its focus on specialty chemicals, at the end of 2010 Evonik agreed to sell a majority stake in its energy business to a consortium of municipal utilities in Germany’s Rhine-Ruhr region. As a result, the Energy Business Area has been reclassified to discontinued operations. In addition, further progress was made in amalgamating the residential real estate companies Evonik Immobilien GmbH and THS GmbH. "Our refocusing has almost been completed. In the future, the name Evonik will be synonymous with global leadership in specialty chemicals," said Engel. The focus is on the most important global megatrends.

"We want to grow and increase our profitability further. To achieve that, in future the management of Evonik will be geared to making us faster, leaner and more flexible, with an even stronger market focus," said Engel. The chemicals operations are therefore to be linked more closely to the Executive Board, which is being increased to six members effective April 1, 2011. In the future, Patrik Wohlhauser will be the Executive Board member responsible for the Consumer, Health & Nutrition segment, Dr. Thomas Haeberle will be responsible for the Resource Efficiency segment and Dr. Dahai Yu for the Specialty Materials segment. "Evonik therefore has a strong and established management team to tackle the upcoming challenges," said Engel.

With an EBITDA margin of 18.3 percent, Evoniks core chemicals business ranks among the sector leaders as of 2010. "We want to remain among the best in class in the future as well," said Engel. The Group has there-fore embarked on key strategic investment projects. It is planning to invest ?00 million in a new methionine facility in Singapore, which is scheduled to start producing feed additives in 2014. In addition, capacity for precipitated silicas in Asia and Europe is to be increased by 25 percent by 2014. Further, Evonik is planning to build a new facility for isophorone chemicals, preferably in Asia, to come on stream in 2013. The Group already ranks among the global market leaders in all three of these businesses and now aims to strengthen them selectively in the relevant growth markets.

Group sales and earnings considerably higher than last year

Following a considerable upturn in business in the second half of 2009, the positive trend continued with increased momentum throughout 2010, driven principally by higher demand from Asia and Europe. The Group’s sales advanced 26 percent to ?3,300 million. Strong demand, high capacity utilization and improved margins lifted earnings before interest, taxes, depreciation, amortization and the non-operating result (EBITDA) 47 percent to ?,365 million. The Group’s EBITDA margin improved from 15.3 percent to 17.8 percent. In the Chemicals Business Area in particular, the sales grew by a strong 29 percent to ?2,867 million INSERT INTO [lzx].[dbo].[tb_new]([id],[type],[title],[source],[personal],[image],[contents],[time],[number]) VALUES (2009: ?,978 million). This was driven mainly by volumes and prices. In most business units demand was back at or even above the level seen in the first half of 2008, before the recession. As a result, many production facilities operated at full capacity.

Progress with strategic focus on specialty chemicals with core business

Evonik systematically drove forward its focus on specialty chemicals in 2010, with focus on its core business and divesting operations that do not fit in with its strategic growth profile or have limited growth potential within the Group. Preparations to divest the carbon blacks business started in the fourth quarter of 2010. In addition, the Group wants to divest the colorants activities in the mid term. The aim is to find a new ownership structure for each of these businesses that open up new opportunities for them.
Strengthen investment in research and development

Evonik increased research and development spending by 13 percent to ?38 million in 2010 INSERT INTO [lzx].[dbo].[tb_new]([id],[type],[title],[source],[personal],[image],[contents],[time],[number]) VALUES (2009: ?00 million). Around 60 percent of this was spent on the development of new products and new technology platforms. In October 2010, Evonik also embarked on preparations for a new project house, which is scheduled to start operating in Taiwan in April 2011. The Advanced Project House Light & Electronics will focus on the optoelectronics industry, and thus on a market with extremely fast innovation cycles. This is the Group’s first project house outside Germany and provides an additional hub for customers in the high-growth Asia region. Project houses are assigned to strategic research, which Evonik expects to generate additional sales of ?00 million p.a. from 2015.

Outlook for 2011: another very good operating result expected

Although the ongoing risks arising from the high government debt in many economies and the political unrest in Arab countries mean there are still uncertainties regarding the economic development in 2011, overall Evonik expects demand for its products to continue to rise, especially in the growth regions. Adverse factors could come from the continued rise in raw material costs. Overall, the Group expects sales to increase slightly and that the operating results (EBITDA and EBIT) will remain at the record levels reported for 2010.

Burgeoning business development in the Greater China region

In the Greater China region, Evonik generated total sales of ?.23 billion in 2010, an increase of more than 40% compared to 2009. “Evonik has tripled sales in the Greater China region in just four years, and our next goal is to realize ? billion sales in the region by 2015,” said Dr. Yu, President of Evonik Greater China region.

In order to achieve this target, Evonik will continue the “Growth Path Greater China” initiative ? our strategic growth program with comprehensives measures for regional business development. “We will place considerable investment not only in production facilities to grow our market and competitive position in the long term, but also in regional expansion, business innovation, new products & applications, localization of products, organization optimization, core competencies of market and sales, and human resources,” added Dr. Yu.
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