S&B Industrial Minerals S.A. Annual Financial Report for the year ...

Despite the delivery of solid results on a consolidated Group level, due to the reported net loss of
the parent company, S&B will not be paying an annual dividend for fiscal year 2011 in line with
current legislation, though our Board may propose an alternative reward to shareholders at a later
time.
Continuing and Discontinuing Operations
On November 8, 2011, we announced jointly with Mytilineos Holdings S.A. the attainment of an
initial agreement for the gradual acquisition of S&B’s bauxite operations in Greece by Mytilineos’
fully owned subsidiary Aluminium S.A. The initially agreed price for this transaction is € 61,1 million
and is to be confirmed upon completion of a financial, legal, tax and technical due diligence
process. Upon the successful completion of the due diligence process, a detailed procedure, the
terms and the relevant timeline for the gradual transfer of our bauxite operations to Aluminium S.A.
will be established. The initial agreement foresees the divestment, contribution to and absorption of
the Group’s bauxite activity in Greece by Delphi Distomon (D.D.), a fully-owned subsidiary of
Aluminium S.A. engaged in bauxite production. At that stage, S&B will become a shareholder in the
resulting structure (New D.D.). Thereafter, Aluminium S.A. will gradually acquire S&B’s contributed
share, such that, its own share initially reaches a 51% participation in New D.D. and acquire the
remaining 49% gradually, over the following 30-month period.
In accordance with the provisions of IFRS 5, at December 31, 2011 S&B’s bauxite operations in
Greece and “Greek Helicon Bauxite S.A.”, a fully-owned subsidiary of the Parent Company, were
classified as a discontinuing operation.
Continuing Operations
Discontinuing Operations
€ 000s Full Year
2011
Full Year
2010
% Change Full Year
2011
Full Year
2010
% Change
Net Sales 422.787 391.639 8,0% 32.933 28.495 15,6%
EBITDA 63.318 57.925 9,3% 4.248 1.892 124,5%
Operating profit 43.386 37.700 15,1% (3.785) (10.089) 62,5%
Profit before tax 36.438 32.530 12,0% (4.478) (10.772) 58,4%
Net profit 1 25.221 23.612 6,8% (4.604) (10.479) 56,1%
EPS 2 0,4935 0,4609 7,1% (0,0901) (0,2045) 55,9%
1
Net profit attributable to shareholders
2
Based on net profit attributable to shareholders and the basic weighted average numbers of shares
Continuing operations summary
Continuing operations reflect the performances of the Bentonite, Perlite, Continuous Casting
Fluxes and Minerals Trading Divisions, as well as, bauxite operations in Sardinia, Italy. Market
trends and revenue commentary for each of these Divisions have been discussed above.
Consolidated revenue of continuing operations amounted to € 422,8 million in 2011, which
represents an 8% increase compared to € 391,6 million in 2010. Sales volumes were only slightly
above the level of 2010 and therefore the revenue increase is primarily the result of a much better
product mix and improved pricing. Costs in 2011 were significantly higher than in 2010.
Indicatively, crude oil prices were on average higher by approximately 40% during 2011 compared
to 2010. Higher energy costs drove higher production costs but also high increases in certain raw
materials (resins, packing materials) used in various production processes. Other raw materials
such as coal and graphite, increased significantly as a result of shortages and supply-demand
dynamics. Ocean freights were on average lower by 36% in 2011 compared to 2010. However, this
was offset by the higher oil prices which are a constituent of total ocean freight cost. In total, cost of
goods sold increased by 8,7% resulting in a 5,9% growth in gross profit which came to € 109,1
million together with a broadly stable gross margin compared to 2010.
Selling, General & Administrative (SG&A) expenses were reduced by 2,4% at € 67,1 million,
despite the recognition of an impairment loss related to perlite operations in Spain stemming from
the slowdown of the domestic industries served. Total impairment amounted to € 1,8 million, of
which € 1,1 million is included in SG&A expenses. Net operating expenses remained at the prior
10