A hundred-year balanceAnnual Report 2010

Investor Relations Overview

20 %

19 %

Polyshare GmbH

FreefloatUtz Family

Henderson Global Investors

56 %

5 %

Uzin Utz AG Shareholder Structure in %

2009

Group IFRS

172.2

-2.9

11.0

7.1

3.2

5.4

17.0

154.7

22.7

20.1

91.5

87.0

67.6

859

2010

Group IFRS

184.2

7.0

14.4

9.6

6.9

5.6

14.3

167.3

25.7

25.3

95.5

90.1

77.1

841

2006

Group IFRS

152.1

9.8

11.3

8.3

7.3

4.9

11.3

136.0

24.4

18.9

79.5

81.7

54.3

659

2007

Group IFRS

166.1

9.2

12.0

8.6

14.9

4.9

9.8

154.0

25.1

22.8

88.9

94.3

59.7

720

2008

Group IFRS

177.4

6.8

10.5

7.8

7.7

5.2

11.0

160.8

24.0

21.7

93.8

97.7

63.0

806

2005

Group IFRS

138.5

13.6

9.6

6.3

16.3

4.5

6.8

126.1

21.3

17.3

77.5

76.5

49.5

656

2004

Group IFRS

121.9

17.9

6.7

4.7

17.1

3.8

6.5

112.0

19.1

15.0

66.0

70.7

41.3

611

Key-Data in yearly comparison

Revenue data

Sales revenues

Sales revenues growth

Result from ordinary activities

Net profit

Financial data

Investments

Depreciation

Cash flow from ordinary activities

Balance sheet data

Total assets

Accounts receivable

Inventories

Fixed assets

Liabilities (incl. provisions)

Equity capital (incl. third parties)

Personnel (average)

2.000

1.600

1.200

800

400

25

20

15

10

5

12/1

011

/10

10/1

009/

1008/1

007

/10

06/10

05/10

03/10

01/1

004/1

002/1

0

turnover in EUR closing price in Euro

Performance 2010 turnover of all stock exchanges closing price

The Shares

German securities identification number

ISIN number

Market segment

Share capital

Number of shares outstanding

Issuing price October 1997

755150

DE 000 755150 9

Regulierter Markt , General Standard

12.804.813 Euro

4.268.271 no-par share

23,01 Euro

2010

15.194

21,50 Euro

16,51 Euro

26,13 %

17,60 Euro

20,34 Euro

15,57 %

19,10 Euro

86.816.632 Euro

2009

15.194

18,82 Euro

13,90 Euro

30,48 %

14,65 Euro

17,60 Euro

20,14 %

16,14 Euro

75.121.570 Euro

Own Shares (per 31.12.)

High (continous trading)

Low (continous trading)

Varation range

Opening price on the first trading day

Closing price on the last trading day

Performance

Average price

Market capitalisation based on end-of-year- closing price

2009 IFRS

17,60

1,68

10,5

Price Earnings Ratio Year end closing

Year end closing (EUR)

Annual net profit per share (EUR)

Price earnings ratio

2010 IFRS

20,34

2,27

9,0

2010

4.268.271

1,00

4.268.271

4,92%

2006IFRS

23,40

1,96

11,9

2007 IFRS

26,00

2,01

12,9

2008 IFRS

14,70

1,84

8,0

2005 IFRS

15,31

1,49

10,3

2004 IFRS

12,60

1,19

10,6

2009

4.268.271

0,62

2.646.328

3,52%

2008

4.268.271

0,62

2.646.328

4,22%

Proposal to the Annual General Meeting

Shares

Dividend earned (EUR)

Amount to be distributed (EUR)

Dividend yield based on closing price

2006

4.268.271

0,90

3.841.444

3,85%

2007

4.268.271

0,90

3.841.444

3,46%

2005

4.268.271

0,75

3.201.203

4,90%

2004

4.000.000

0,52

2.080.000

4,13%

April 12, 2011

May 17, 2011

August 29, 2011

Dates

Press conference on annual results

Annual general meeting

Six-months’ report

Uzin Utz AG Investor Relations

Phone +49(0)7314097-390Fax +49(0)7314097-169

IR@uzin-utz.comwww.uzin-utz.de

Investor Relations Overview

FoUnDATion

oF SUccESS

Since its foundation in the year 1911, Uzin Utz AG has developed from a small regional adhesive manufacturer

into one of the world’s leading producers of special chemicals and equipment for floor laying and treatment.

The transition to a complete supplier and system partner in matters of flooring expertise has been completed

over recent years by continual efforts at expansion and numerous acquisitions:

With the brands UZIN, Wolff, Pallmann, Arturo (formerly Qeshfloor), codex and RZ, Uzin Utz AG offers a com-

prehensive range of products, systems and services covering all aspects of new laying, reservation and value

preservation of floor coverings of all types, parquet flooring, ceramic tiles and natural stone – all from its own

development and production.

The Group operates its own companies on all the most important markets in the world, and is represented in

37 other countries besides Germany. The clear focus of the Group on the core expertise of flooring is unique

throughout the world. In this way, Uzin Utz AG is successfully meeting the challenges of a globalised economy

at the international level.

The company has also long been active in the area of ecological products and resource-saving production, and

led the way as a pioneer of low-solvent and solvent-free adhesives. Twelve products of the “Ökoline” from Uzin

and two products from Pallmann now carry the environmental seal “The Blue Angel”.

We live flooring! All our group activities are aimed at extending our expertise in flooring.

Brief presentation of the Group

Inhalt

Valuesandsubstance

Strivingforsuccessandstability

Dynamismandsustainability

Structureanddirection

Loyaltytothelocationandgrowth

Clarityofobjectivesandtransparency

Adaptationandsynergy

Bondingforceandexpansion

Developmentandearningpower

8

10

14

16

20

24

28

32

36

Letter to the shareholders

interview

Portrait of the Board

Brand portfolio

The Group

Shares and investor relations

Group companies

Global markets

R+D/U-Vision

7

8 Lettertotheshareholders

Dear shareholders of Uzin Utz AG,

100yearsofUzinUtzmeancontinualchangewithsus-tainabledevelopmentandnotablesuccess.Thereareonlyafewcompanieswhichcanclaimtobesuccessful-lymanagedbythethirdgenerationofthesamefamily.» Evenduringtheglobaleconomiccrisisofrecentye-ars,theUzinUtzGroupwasnotonlyabletomaintainitspositionwell,butalsoappliedconsistentcrisisandriskmanagementtoformthebasisoffurtherstructuralandorganisationaloptimisationintheareasofrawma-terialusage,productivityandlogistics.» Theeffectsandrestrictionsofthecrisiswereusedasanopportunityforfurthervalueadditionandrestructu-ring.Withnotablesuccess:» Thisputsmeintheenviableposition,intheyearofourcentenary,tobeabletopresenttoyouahistoricre-venuereport.Althoughonlyhousingconstructionwasabletorecordanincreaseinthedomesticconstructionsectorin2010,wesucceededinincreasinggroupsalesby7%.Thisimprovement,whichisoutstandinginits-elf,washoweversurpassedbytheover30%increaseinrevenueachievedbythegroupwithitsresultof€14.4million.» Thankstothestrategicallycorrectandconsistentlymaintainedadherencetoourcompanyobjectives,growthandsustainabilitygohand-in-hand,notbychance,butbydesign.2011isalsothe14thyearafterourflotationonthestockmarket,andthereforealsosincethebegin-ningofourlong-termgrowthoffensive.Theambitioustargetswithregardtomarketposition,expansionandfurtherdevelopmentwhichwesetfiveyearsagoinouragenda“U-Vision”havealsobeenlargelyimplementedandachieved.

Georg Utz founds the „Fab-rikation chemischer Produk-te” (manufacture of chemical products) in Vienna.

ThePVCisinvented. HenryFordintroducesthefirstassemblylinefortheproductionofitsvehicles.

OpeningofthePanamaCanal.

Willi Utz is born in Vienna (2nd generation).

19111912

19131914

1915

Values and substance

» Lookingback,therearemanysmalljubilees,eventsanddevelopmentstepswhichoverthecourseofawholecenturycanbecompressedintoonemajorandsuccess-fulevent.Atimetablethereforerunsthroughthecom-pleteJubileereport,providinginformationonthegreatandsmallhistoricalcircumstancesinthecourseofourcompanyhistory.» Idojointhistimetablenowfor33years,inwhichIhaveheldaresponsiblepositioninourcompany.ItthereforegivesmegreatpleasuretoconveytheseJubi-leegreetingstoyoufrommycurrentposition.Iampar-ticularlydelightedtobeabletoannouncepositivenews,andlookbackwithjustifiedprideonthemanysmallandgreatsuccesseswhichwehavemadepossibleoveralltheyears.» AndIlookforwardwithoptimismtothewell-prepa-redpaththatwehavetakenforfurthersustainablede-velopmentinthefuture.» OnbehalfoftheBoard,Iwouldliketoexpressmythanksforyourprovenconfidenceintheearningpowerandfutureviabilityofourcompany,andtoassureyouofourcontinuedundividedandsingle-mindeddedica-tion.WebelievethatyoucanlookforwardwithustoapromisingandprofitableJubileeyear2011!

Sincerelyyours

Dr.H.WernerUtz

9Lettertotheshareholders

19161917

19181919

1920

TheTrans-SiberianrailwayfromMoscowtoVladivostokiscom-pleted.

Georg Utz returns from the French campaign back to Ulm.

EndofWorldWarI. Georg Utz begins with the production of floor wax in Ulm.

StaroftheVIIOlympicGamesinAntwerpisthemarvelousrunnerPaavoNurmiwiththreegoldandonesilvermedal.

10 Interview

Striving for success and stability

AlbertEinsteinreceivestheNo-belPrizeinphysics.

Georg Utz acquires the pro-perty Fischergasse 6, Ulm as a production site.

PeakofinflationinGermany(U.S.$1=4trillionmarks).

FirstinternationalfootballmatchGermany–Italy(0:1).

FirstpublicTVshowsinGerma-ny,EnglandandtheUSA.

19211922

19231924

1925

» Dr. Utz, you can look back today, as the third ge-neration, on a century of company history. You your-self have worked for the company since 1978. Is the-re anything such as a key memory in your personal company biography?

» Well,therehavebeenofcoursemanysuchmomentsinwhichdecisiveeventshaveoccurred.WhenIjoinedthecompanyfreshfromuniversity,Iquicklybegantoconcernmyselfseriouslywiththedifficultsubjectoftheenvironmentandtheworldofbusiness.Mydissertationwasentitled“Environmentalchangeandcompanypoli-cy”.Iwasalreadyveryawareofthissubject,andhadtoadmitthatatthattime,immediatelyafterthegrowthphaseofthe1970’s,UZINhadnotyettackledthisprob-lem.Ithereforesoondevotedmyselfintensivelytotheseissues,togetherwiththeoptimisationofsalesandmar-keting,whichuptothattimehadnooutstandingprio-rityinthecompany.

» What in your opinion are the advantages of a fa-mily-run company in today’s times?

» Afamily-runcompany,evenofourorderofsize,hasmanyadvantages,atleastaslongasthefamilyisinag-reementwithregardtothecompanyobjectivesandma-nagement.Inourcase,thatwasneverinquestion.Themainadvantagesformelieinthepossibilityoflong-termstrategicplanningandorientation,withtheaccentoncontinuity.Thisalsohasaconsequenteffectwithregardtothestabilityofaqualifiedpersonnelbase,becausethesustainabilityaspectisalsodeterminedbythedegree

ofloyaltyandmotivationofacompany’semployees.Hereonecanofcoursefulfilsomethinglikearole-mo-delfunction,whenonehasbeenrunningthecompanyfor20yearsandlonger.Thisisnotusuallythecasewithpurelymanagement-runcompanies.”

» On the subject of role-models: Who has influ-enced your decisions in life particularly strongly, and what advice would you give to somebody foun-ding a company today?

» Formetherehavebeenmanypeoplewhohaveim-pressedmeinaparticularway,andwhoseperformanceIhaveattemptedtoemulate,whetheratuniversityorsomewhereelse,althoughnotinthesensethattherewasanyparticulargreatrole-modelforme.Thisispro-bablyalsoduetothefactthatIalwayswantedtomain-tainmyintellectualindependence,andwasfortunatelyabletodoso.ThisisalsotheadvicethatIwouldgivetocompanyfounders:Tobelieveinoneselfandone’smis-sion,topursueitlong-termandconsistently,eveninthefaceofallpossibleresistance,andnotgiveitup.Successthencomesalmostautomatically.

11Interview

19261927

19281929

1930

Charlestonisthedanceoftheyear.

The„Buna“calledfullysynthe-ticrubberwasinventedinGer-many.

LinaRadkegetsanOlympicgoldmedalinthe800-meterrunasthefirstGerman.

BlackFridayontheWallStreet. MaxSchmelingisworldchampi-oninboxing.

12 Interview

With449mtheEmpireSta-teBuildingiscompletedasthehigheststructureintheworld.

BayernMunichisthefirstGermanfootballchampion.

1stMayisalegalbankdayinGermany.

WernhervonBraundevelopsaliquidrocket,whichrises2,400metershigh.

FerdinandPorschepresentstheprototypeofthe„Beetle“.

19311932

19331934

1935

» Were there also possible alternative paths in life for you, or was your succession as head of the com-pany never in question?

» Ohyes,therecertainlywere!WhileIwasatuniversity,Ihadvisionsofacareerasaracingdriver;inthe1970’sIcompetedinvariouscircuitracesandhillclimbs–notentirelywithoutsuccessbytheway–andwascomple-telyinfectedwiththeracingbug.This‘stormandstress’phasecametoanendformeaftersomelessenjoyab-leevents.Oncompletionofmydissertation,therewasstilltheoptionofascientificcareerattheuniversity,butIwasultimatelyattractedtothecompany,withallitschallengesandpossibilities.

» You are an aesthetically and artistically orienta-ted person, who repeatedly supports art projects and young artists. Do you or did you yourself also have active ambitions in this direction?

» Definitelynot.Butifanyonewantedtointerpretmyenthusiasmforarchitectureasartisticambition,youcouldsaythatIearneditinasortofindirect,artisticwaythoughthesuccessfuluseofourproductsinthepreservationofhistoricbuildings.”(laughs)

» What makes an artist or their work interesting for you, and do you prefer any particular art form or stylistic direction?

» RoyLiechtensteinwasanartistwhoseindependentstyleandworksattractedmeatanearlystage–wellbeforehebecamereallypopularandthereforeunaffor-dable.ButingeneralIdon’tpreferanyparticulardirec-tionorartform,butapproachitquiteintuitively.Theworkshouldhoweverhaveitsownrecognisablyindivi-dualstyleandsenseofexpression,andalsobeabletoconvinceitscreatorasanartisticpersonality.”

» Assuming that you had the chance to take over the chairmanship of another company, which would most attract you?

» (afterbriefconsideration):Therewouldonlybeonecompanyinquestion:Porsche!

13Interview

19361937

19381939

1940

OlympicGamesinBerlin.CrowdfavoriteJesseOwensfromtheUnitedStatescollectsfourgoldmedals.

TheWorldExhibitiontakesplaceinParis.Picassopaintsthepic-ture„Guernica“fortheSpanishpavilion.

OttoHahnisthefirstwhosplitsthenucleusofauraniumatom.

BeginningoftheWorldWarII.

ThefirstcolorTVprogramisbroadcasting.

» Regarding the economic crisis: Was there ever a situation in which you ever considered changing the ownership structure, in other words giving up the majority shareholding of your family?

» Definitelynot.Certainlynotduringthecrisis,butotherwisethissubjectwasonlyontheagendaonesin-gletime,beforestockmarketflotationin1997–withtheknownresult.SomethingwhichIamnaturallyveryhappyabout,otherwisewewouldnotbeabletoceleb-ratethiscompanyJubilee.”

» Looking back on your previous achievements in life – what are you particularly proud of, apart from the success of your company?

» That’seasy:Mychildren,naturally.Ofcourseonlythatwhichconcernsmyowncontributiontotheirposi-tivedevelopment,whichisdifficulttomeasure,andthatallthreeofthemhavebeenabletocreatetherequire-mentsforaself-determinedandsuccessfullife.Onthepersonallevel,Iamproudofhavingbeenablesofartopreserveacertainbasiccomposure,opennessandto-lerance,whichhasenabledmetomaintainandenjoyarelaxeddailylife.Allthemoresosincemydaughterhasrecentlyhadtwins,makingmeagrandfathertwiceover.

» When you think of your personal future and that of Uzin Utz AG: How will your family tradition be continued over the coming generation? Are there already concrete succession scenarios?

» Seethelastquestion:Icanlookforwardtothefuturequiterelaxedandexpectantly,bothmyownandalsothatofthecompany.MytwosonsarepreparingtojointhecompanyintheJubileeyearinordertoearntheirspurs;thecompanymanagementwillthereforepassontothenextgenerationattheappointedtime,althoughIcan-notsayatthemomentexactlywhenorinwhatform.ThecontinuityofUzinUtzAGisthereforeassured.

Whatgrowsoutoftheinsignificantoftenbearsthepowerforgreatness.

14 PortraitoftheBoard

KonradZuse‘s„Z2“isthefirstinpracticeusableprogrammablecomputingmachine.

Willi Utz is communicator on the side of Field Marshal Rommel in Africa.

HansandSophieScholloftheresistancegroup„WeißeRose”(WhiteRose)areexecuted.

The preliminary end: The es-tablishment in the Ulm city is destroyed in an air raid.

FoundingAssemblyoftheUni-tedNationsinSanFrancisco.

19411942

19431944

1945

Dynamism and Sustainability

» Dr.H.WernerUtz− Chiefexecutiveofficer− born:1947− memberofthegeneralmanagementsince1978

» Departments− Strategy− Marketing− Technicalproductservice− Developmentandproducttechnology

» ThomasMüllerschön− Memberoftheexecutiveboard− born:1968− joinedthecompanyin1994− Memberoftheexecutiveboardsince2002

» Departments

− Sales− Operationsandlogistics− Controlling,financeandaccounting− Grouporganisation− Humanresources− Centralpurchasing

“100yearsofdevelopingourexpertiseareourbasis,100ye-arsofcompanysuccessourfoundation!”

“Achievedobjectivesformthebasisfornewtargets.Realistictargetsformthebasisofoursustainability.”

Acompanyalwayshasenvironmentalresponsibility.UzinUtzAGiswellawareofthisfact,andpracticesconsistentenvironmentalmanagement.Here,projectsarecoordi-natedanddefinedinordertosupportthedevelopmentofproductswhichareecological,lowinemissionsandharmlesstohealth.Ourenvironmentalmanagementisbasedontheresponsiblehandlingofrawmaterialsandnaturalresources.

» Thedeclaredaimistodeveloponlyproductswhichmeetthehighestrequirementswithregardtosustaina-bility.Inourproductdevelopment,wetakeintoaccounttheecologicalbalancedataoftherawmaterials,andbyactivecooperationwithoursuppliers,wecanlargelydis-pensewiththeuseofcriticalrawmaterialsinourpro-duction.Partofthisobjectivewillbeachievedin2011:Wewillnotproduceorsellanymoresolvent-basedad-hesivesinGermany.

» Wearealsoconcentratingonthecontinualimpro-vementofallbusinessprocedureswithregardtosusta-inability.Wehavealreadyachievedsignificantsucces-sesinenergysaving,wasteavoidanceandallproductionemissions.

15PortraitoftheBoard

19461947

19481949

1950

The production of UZoL-floor polish and floor care aid resumes.

Werner Utz is born in Ulm (3rd generation).

Registration of the mark „UZin“ at the German Patent office.

TheodorHeussbecomesthefirstPresident.

The first UZin flooring adhesive is delivered.

16 Brandportfolio

Structure and Direction

StartofeconomicmiracleinWestGermany.

AlbertSchweitzerisawardedwiththeNobelPeacePrize

FirstascentofMountEverestbySirEdmundHillaryandTensingNorgay.

WorldSoccerCup:„TheMiracleofBern“.

Start of production of UZin cement fillers.

19511952

19531954

1955

FirstguestworkersinGermany. Sales of the company Georg Utz over 1 million DM.

Thefirstultrasoundexaminationisperformed.

First dispersion adhesive for PVc floorings „UZin Fondur extra“.

ArminHarryisOlympiccham-pioninthe100msprintattheOlympicGamesinRome.

19561957

19581959

1960

DiREcTion

Brandportfolio 17

UZinFormorethan50yearstheestab-lishedtraditionalbrandhasstoodfortheembodimentofprofessio-nalprocessingknow-howinvolvingfloorcare.Thecomprehensivepro-ductandsystemcompetenciesintheUZINassortmentrangehavebeenextendedsince2008bytheinnova-tiveswitchTec®adhesiontechnolo-gy,whichenablesparticularlysimpleanddirt-freefloorrenovation.

PallmannFromtheroottothecrown–thisisthemottowithwhichPallmannsum-marisesitsproductrangeforthenewlaying,renovationandvalueretenti-onofparquetflooring.Theprofessi-onalintheareaofsurfacefinishingwithatraditionextendingbackovermorethan100yearsoffersmatchingproductsforeverylevelofthefloo-ringconstruction–fromtherightsubstratepreparationtoadhesivesandequipment,andontocleaningandcareofparquetflooring.

WoLFFThestrongmachineandtoolbrandforsurfacepreparationandproces-singisestablishedinternationallyasaspecialistinthissegment.Wolffsuppliesacompleteprogram,whichoffersasolutionforeveryprobleminfloor-layingorrenovation.

ArturoWiththenewgroupbrandofArturoUniqueFlooring,theindustrialappli-cationareaoftheformerQeshfloorbrandhasbeentransferredtothele-velofanewsyntheticresinflooringconcept.Asaspecialistforsyntheticresinflooring,Arturooffersabroadselectionofmortarflooring,stonecoverings,coatingsandfloorseal-ants.Thesecomplyinauniquewaywithboththepurelypracticalrequi-rementsandthedesignpossibilitiesofsyntheticresinflooring–bothintheindustrial,commercialandpri-vateapplicationarea.

18 Brandportfolio

Jordan LackeThecomprehensiveflooringexper-tiseofthebrandportfolioisideallycomplementedbytheJordanLackebrand.Afamiliarnameinthecar-pentrytradeandfurnitureindustryforover120years,thisbrandtodayoffersafullrangeoftrend-settingproductsforthevarnishingandfi-nishingoffloorsurfaces.

RZRZispresentedasrefreshinglyinno-vativeandnon-polluting,theyoun-gestbrandinthegroupportfolio.Thespecialistforcleaningandcaresys-temsoffersacomprehensiverangeofproductsforprofessionalcareandpreservationofvalueforalltypesoffloorcoverings.Inthisway,abridgeisbuiltforthefirsttimebetweenthepurelyprofessionaluserandthede-mandingenduser.

codexThedifferentdemandsandrequire-ments,especiallyoftilesandnatu-ralstonecoverings,arecombinedinthehigh-performancecodexnetworkbrand.Thecodexlayingsystemsof-fertheiruserstileandjointmortars,aswellasspecialproductsforsubs-tratepreparation.

UFLooR SystemsTheflooringexpertisebrandofUzinUtzAGstandsforconsultationser-vicesprovidinginnovativesolutionsforthenewlaying,valueretentionandrenovationoffloorcoveringsofalltypes.UFloorSystemsistheonlybrandworldwidewhichcanprovidearchitectsandplannerswithcom-prehensiveadviceonallquestionsofflooring.WithauniquerangeandthebrandsofUzin,Wolff,Pallmann,Ar-turo,codexandRZ,UFloorSystemsofferstailor-madesolutionsforallcustomerrequirements.

Brandportfolio 19

20 The Group

Willi Utz takes over the ma-nagement after the death of the founder of the company.

FirstappearanceoftheBeatlesinthe„StarClub“inHamburg,Germany.

J.F.Kennedyisassassinated. UZin presented as one of the first companies a one side adhesive „UZin 390 D“ on ac-rylic base.

construction of the new production facility in Ulm/Donautal.

19611962

19631964

1965

Loyalty to the Location and Growth

Sincethefoundationofthecompany,thegroupbasehasbeensystematicallybroadenedbymeansoftarge-tedshareholdingsandacquisitions.ThecompanygrouphasbeensteadilybuiltuparoundtheUlmgrouphead-quartersovertwodecades.Itnowincludeseightbrandsuppliersandnowmorethaneverformsthefoundationofourcarefulandsustainablegrowthstrategy.UzinUtzAG,JPCoatingsGmbH,UzinLtd.andthecompaniesinSwitzerlandandtheUSAinparticularhavecontribut-edtothepositivesalesandresultsdevelopments.Asaneffectofconsistentlypracticedcrisismanagement,the7%increaseingroupsalesproducedaveritableresultofthecentury:Resultfromordinaryactivitiesamountedto€14.4million,correspondingtoanimprovementofover30%incomparisontothepreviousyear.

» Investmentstotalling€6.9millionwerealsoputinhand.

Wherethegroundisfertile,muchgrows.

Wherethegroundisreclaimed,muchflourishes.

» Thisoutstandingannualperformanceisalsoduetothededicationofallemployees,whohelpedtoachievethisresultdespitetheslightdeclineinoverallpersonnelnumbersacrosstheGroup.

21

Germanyisappalledbytheso-called„Wembley“goal.

Moving to the present loca-tion in the industrial area Ulm/Donautal.

The„PragueSpring“movesandshockstheworld.

NeilArmstrongbecomesthefirstmanonthemoon.

Beginning of the UZin adhesive production for tiles.

19661967

19681969

1970

The Group

LocATion

Wooded area near Heidenheim

24 Sharesandinvestorrelations

WillyBrandtisawardedwiththeNobelPeacePrize

OlympicGamesinMunich. InGermany,morethan700,000newhomesarecompleted.

GermanyiswinneroftheWorldFootballCup.

Start of production of joint sealant at UZin.

19711972

19731974

1975

Clarity of Objectives and Transparency

Aclearsourcefeedsacleanandpowerfulflow,whichbringsforthblossomingbanks.

ThegenerationandchannellingofinvestmentcapitalforfurthergrowthwasoneofthemainreasonsforthefoundationofUzinUtzAGintheyear1997.

» DuetothedistributionofthesharecapitalofUzinUtzAG,spectacularhighsandlowsinthesharepriceoccurratherrarely–ahighlydesirableeffectforthepurpo-sesofthesustainableandlong-termorientationofourcompanystrategy.

» ThevalueofUzinUtzsharesneverthelessstartedofftheyearwithadynamicupwardstrend:Beginningattheweakenedpriceof€17.60broughtaboutbythefinancialcrisis,itreachedahighof€26.30overthecourseoftheyear.Bytheendoftheyear,theshareshadgainedal-most20%,andwerebeingquotedat€20.27.Thesharepricehasstabilisedatthemomentatjuston€24.00(asofMarch2011).Inviewoftheoverallencouragingre-venuesituation,adividendof€0.80istobepaidoutin2011,togetherwithaJubileedividendof€0.20,makingatotalof€1.00.

» Ouropenandregularcommunicationensuredthemaximumoftransparencyandinformationreliabilityforourshareholdersandotherinterestedparties.

» Inadditiontothegroupandannualfinancialstate-ments,regularinterimreports,pressreleasesandad-hocannouncementsensuredtheup-to-dateandcomprehen-sivelevelofinformation.(UzinUtzAGalsopublishesafinancialcalendarwellinadvanceonallimportantdatesandpublicationsofthecompany)

» Initscapacityas“DesignatedSponsor”,wewereonceagainabletocountonthevaluablesupportandpart-nershipoftheLBBW.

25

TheBayreuthFestivaliscelebra-tingits100thanniversary.

Therock‚n‘rolllegendElvisPresleydiesinMemphis,Ten-nessee.

Dr. H. Werner Utz joins the company.

FirstgeneralelectionstotheEu-ropeanParliament.

Dr. H. Werner Utz takes over the management.

19761977

19781979

1980

Sharesandinvestorrelations

TRAnSPAREncY

Blautopf in Blaubeuren

28 Group companies

Birth of the Utz-triplets Amelie, Julian and Philipp (4th generation).

Thecompactdisk(CD)islaunched.

The first generation of environmentally friendly adhesives of UZin is intro-duced.

Sales of Uzin GmbH & co. KG exceed 33 million DM.

Theonly17-year-oldBorisBe-ckerwinsinWimbledonasfirstGerman.

19811982

19831984

1985

Adaptation and Synergy

Learningfromnaturemeanslearningperfection.Anexamplethatwetreatwithrespect.

Aperfectinterplayofforcesrequiresthemaximumdegreeofindividualreadinessfordevelopmentfromallthosein-volved.Intheinterestsofoptimumadaptationtothere-quirementsofthemarketandourcustomers,ourperfor-mancestructureasasystemsupplieriscontinuallybeingdevelopedfurther.Thisalsoincludescompliancewithin-ternationallyblindingindustrialstandards.Likethepro-ductionlocationsatUlm(UZIN)andHaaksbergen(UniproB.V.),theVaihingenequipmentmanufacturerWolffandHerrmannFrankhavealsobeencertifiedtoISOsince2010.

» Afurthersteptowardsmergingofproductquality,designrequirementsandpracticalsuitabilityhasbeenmadebyUniproB.V.withthecompletelynewsyntheticresinflooringconceptofArturoUniqueFlooring,whichreplacesthebrandofQeshfloorIndustrialFlooring.TheDutchspecialistforsyntheticresinflooringpresentedtheoptimumflooringsolutioninthecommercial/industrialapplicationareaattheBAUexhibitioninMunich:Mor-tarfloors,stoneflooring,sealantsandlevellingcoatingsonanepoxyresinorpolyurethaneresinbasiscanbefi-nishedtoproduceauniqueendresultwithArturo.

» Asthepartnertotheparquet-layingbusiness,thetradeanddecision-makersininteriordesign,JPCoatingsfeltitselfduty-boundtoincreaseitsrangeandservicesco-veringallaspectsofthenewlaying,renovationandva-luepreservationofparquetflooring:Pallmann,thepro-fessionalintheareaofsurfacefinishing,withatraditiongoingbackover100years,nowoffersitscustomersper-fectlymatchedproductsforeverylevelofflooringcons-truction–fromtherightsubstratepreparationthroughtothecleaningandcareofparquetfloors.

» “Fromtheroottothecrown”–underthisslogan,Pall-mannpresenteditsnew,completerangeofproductsforparquetflooringforthefirsttimeattheBAUexhibition.

» In2010,thespecialistdepartmentsofQualityMa-nagementandInternationalR&Dinitiatedanambitiousprojectforthemaximumharmonisationofgroupcom-paniesatthegloballevel.ThisisintendedtoensurethatproductionworldwidetakesplaceaccordingtothesamestandardsatallthedifferentproductionlocationsoftheUzinUtzGroup.Thiswillenableidenticalproductqua-litiestobeturnedoutinfutureatallproductionloca-tions.

» Ecologicalresponsibility,productinnovationandsus-tainabilityaretraditionallynotcontradictoryatUzinUtzAG:in2010,76.2%ofcompanysalesweregeneratedwithproductswhichcomplywithstrictecologicalemissionrequirements(suchasthe“BlueAngel”andEmicode).UzinUtzAGthereforestandsoutnotonlyforitscom-prehensiveflooringsystemexpertise,butalsocontinu-estosetthehigheststandardsinthesectorwithregardtoitsecologicalresponsibility.

29

Beginning of the growth phase with new innovative products of UZin.

introduction of the first acrylic latex adhesive “UZin KE 2000”.

Thefirstmobilephonesonthemarket.

Foundation of the UZin sales company in France.

German reunification and build up of the sales orga-nization in the former East Germany.

19861987

19881989

1990

Group companies

SYnERGY

Banks of the Danube near Elchingen

32 Global markets

StoneAgemummy„Ötzi“isfound.

Foundation of the UZin sales companies in England and Austria.

The new dry mortar plant is opened in Donautal, Ulm.

Quality certification of the production site Ulm to Din iSo 9001.

ChristoandJeanne-Claudecon-cealthe“BerlinerReichstag”.

19911992

19931994

1995

Bonding Force and Expansion

Theskyisendless.Andfromfirmground,thestarscanalmostbetouched.

» Realisticexpansioneffortstodaydemandaglobalperspective,especiallysinceintheconstructionsector,excessiverelianceondomesticeconomicinfluencesiscounterproductive.Overthelastdecadetherefore,UzinUtzAGhasconsistentlyandsignificantlyexpandeditsinternationalactivities.Theexportquotahasbeensi-gnificantlyabove50%forthelast7years,andin2010reached54.6%.TheGroupcurrentlyoperateseightfor-eignproductionlocations,andthelocationsinNorthAmericaandAsiawererecentlyextended.Overthepastyear,salesdevelopedpositivelyparticularlyintheUSAandSwitzerland.

» InScandinavia,UzinUtzAGcurrentlyachievessa-lesofaround€5.4million.Inordertoexploitthesubs-tantialpotentialsinthenorthernEuropeanregionevenbetterinfuture,andtoensurefullsalescoveragehere,amajorityshareholdingintheNorwegiansalescompa-nyLøkkenASwasacquiredwitheffectfrom01.01.2011.Thiscompany,withwhichalong-standingpartnershipalreadyexists,specialisesinthesaleofflooringproducts,andcurrentlygeneratesannualsalesofaround€6milli-on.Withthislatestacquisition,theUzinUtzGrouphasfurtherextendeditsforeignpresence,successivelyandsystematicallycontinuingthesetcourseforgrowthatthegloballevel.

33

introduction of the low-emission products UZin-ÖkoLine.

in october the Uzin Utz AG goes public.

UZin Tyro AG, Switzerland is acquired.

Foundation of the UZin-sa-les company in the czech Re-public.

new production plants are founded in Legnica, Poland, in Shanghai, china and in Soissons, France.Majoritarian acquisition of the company Wolff GmbH.

19961997

19981999

2000

Global markets

ExPAnSion

Donautal in the sun

36 R+D/U-Vision

Pallmann GmbH & co. KG in Munich is acquired.opening of the logistics cen-tre in Ulm.

IntroductionoftheEuroasalegaltender.

SummerofthecenturyinGermany.

The Unipro companies in the netherlands and Belgium, are acquired.

Siga Floor AG (Sifloor AG) in Ruswil, Switzerland, is acquired.

20012002

20032004

2005

Development and Earning Power

Preparingtheground,sowingideas,treadingnewpaths,harvestingsuccesses,insuringtheyield–thisiscalledsustainable.

Theessenceofsustainabilityincludesanoverallper-ceptionofentrepreneurialactionandmanagement.In-novation,growthandearningpowerareinouropini-oninseparablefromtheconceptsofresponsibility,thelong-termviewandenvironmentalcompatibility.Perma-nentfurtherdevelopmentthereforealwaysgoeshand-in-handatUzinUtzAGwithforward-lookingdecisionsandactivitiesdesignedtocomplywithcustomerinte-rests,companyobjectives,socialandenvironmentalas-pectstoanequaldegree.

» Neweffects,newsystemsandinnovativeproblemsolutionsareessentialfortheacceptanceandthelong-termmarketsuccessofourproducts.Theinnovationsectorthereforeformsoneofthemainpillarsofourstrategy,whichwillbefurtherstrengthenedbytheim-minentmoveintothenewcentralbuildingforResearch&Development.AttheUlmlocationin2010,anave-rageof77highlymotivatedemployeesweredevotedtotheambitioustaskofproducingforward-lookingproductsolutions–andwithgreatsuccess:the45projectshavesofarresultedin22developments,whicharecurrentlybeingperfectedpriortomarketlaunch.AlthoughR&Dcostshaverisenbyalmost15%to€5.4million,theseeffortshavebornefruit:FortheJubileeyear2011weareaimingforanewproductquotaof50%.Throughoutthegroup,thequotafor2010was49%,withthemaincom-panyinUlmalreadyreaching51.9%in2010.

» Well-trainedstaffnaturallyalsoplayanimportantroleinthefutureprojection.Wearethereforeplacingspecialemphasisonalong-termpersonnelpolicydirec-tedatquality.Itisouraimtopromotewell-trainednewpersonnelintheirownstructureswhereverpossible–thiswasimplementedin2010withanaveragetrainingquotaof7.1%(company)and4.3%(group).

» Theanalogywithagriculturealsoholdsupwithre-gardtoourgroundtheme:inthesamewayastraditio-nalcultivationmethodspreservetheresourcesofnatureandsoils,ourcompanystrategyisdesignedtosafegu-ardthefuture,bycarefulandplannedbudgetingofourcapabilitiesandresources.Todaywecanlookbackon100yearsofsuccessfulentrepreneurship,andatthesametimelookforwardwithrealisticoptimism.Becausetheoldfarmingruleapplies:Whatevertheweather,theploughing,sowing,weedingandharvestingstillhastobedone.

» Thegroundatleastispreparedforfurthersuccess-fulyearsanddecades.

37

The five brands are grouped under the umbrella brand “UFloor Systems”.

The codex brand for cera-mic tiles and natural stone is launched.

With35000yearsprobablytheoldestknownhumanrepresen-tation,the„VenusvomHohlenFels“,isfoundontheSwabianAlb(Germany).

BarackObamabecomesthefirstcolouredPresidentoftheUSA.

Group sales over €180 millions.

20062007

20082009

2010

R+D/U-Vision

EARninG

Field between Erbach and Ulm

BALAncE oF SUccESS

Profit and Loss Account 43

Balance Sheet 44

Statement of changes in equity 45

consolidated cash flow statement 46

Segment Reporting 47

Equity Holdings 48

Consolidated Financial Statement of Uzin Utz Group for Financial Year 2010

42

Uzin Utz Aktiengesellschaft, Ulm (Donau) Profit and Loss Account 2010

consolidated Profit and Loss Account 2010 (in TEUR)

Sales revenues

Changes in inventory of finished goods and work in process

Total output

Other operating income

Income from investment properties

Costs of material

Personnel expenses

Depriciation/amortisation on tangible and intangible as-sets

Other operating expenses

operating income

revenues from investments in associates (equity method)

Financial result

Result from ordinary activities

Taxes on income

other taxes

net income for the year

Minority interests in profit

consolidated net income for the year

Appendix

1

2

2

3

4

5

6

7

8

9

10

2010

184,199

2,063

186,262

2,373

291

80,608

47,275

5,576

38,941

16,526

70

-2,166

14,430

4,031

710

9,690

-44

9,646

2009

172,213

-840

171,373

2,403

0

73,186

45,545

5,394

36,351

13,300

40

-2,385

10,954

3,253

622

7,079

56

7,135

43

Uzin Utz Aktiengesellschaft, Ulm (Donau) Consolidated Balance Sheet

Assets (in TEUR)

Assets

Intangible assets

Tangible assets

Non- current financial assets

Investment Properties

income tax receivables

Deferred tax assets

Other non-current assets

non- current assets

Inventories

Trade receivables

income tax receivables

Other current assets

Cash and Cash equivalents

current assets

Balance sheet total

Appendix

11

12

13

14

16

15

16

17

16

16

16

18

Appendix

19

19

19

19

19

19

20

21

15

21

20

21

21

22

21

21

2010

31,932

59,410

1,142

2,970

651

1,711

45

97,860

25,331

25,736

355

3,537

14,457

69,417

167,277

2010

12,805

13,624

51,112

-164

-235

77,142

2,383

34,992

9,126

419

46,920

6,730

22,601

11

7,627

1,243

5,003

43,215

167,277

2009

31,764

56,709

774

2,238

791

1,568

18

93,863

20,079

22,738

269

3,355

14,350

60,792

154,655

2008

32,332

58,508

754

2,232

873

1,395

30

96,124

21,729

23,964

238

5,062

13,638

64,632

160,756

2009

12,805

13,624

41,575

-164

-235

67,605

2,187

33,924

8,503

405

45,019

6,345

24,168

11

5,499

1,607

4,401

42,031

154,655

2008

12,805

13,624

36,838

-95

-124

63,048

1,845

35,604

7,866

333

45,647

7,208

32,910

64

6,155

1,091

4,634

52,061

160,756

Liabilities (in TEUR)

Subscribed capital

Capital reserve

Revenue reserve

Minority interests

Own shares

Total equity

Provisions for pensions and other similar obligations

Due to credit institutions long-term

Deferred tax liabilities

other non-current liabilities

non-current liabilities

Reserves

Due to credit institutions short-term

advances received

Trade payables

income tax liabilities

Other short-term liabilities

current liabilities

Balance sheet total

44

45

Uzin Utz Aktiengesellschaft, UlmStatement of changes in equity

31 December 2008

Changes in accounting methodes/ad-justments

Balance as of January 01, 2008

Exchange rate-related differences

Other changes

Market valuations for cash flow hedges

Net Income directly recognized in equity

Net profit of the year

Total recognized income and expenses

Own shares

Dividends payed

Changes in basis of consolidation

31 December 2009 / 01 January 2010

Exchange rate-related differences

Increase of capital

Other changes

Market valuations for cash flow hedges

Net Income directly recognized in equity

Net profit of the year

Total recognized income and expenses

Dividends payed

31 December 2010

12,805

0

12,805

0

0

0

0

0

0

0

0

0

12,805

0

0

0

0

0

0

0

0

12,805

13,624

0

13,624

0

0

0

0

0

0

0

0

0

13,624

0

0

0

0

0

0

0

0

13,624

42,760

-981

41,779

0

-75

0

-75

7,135

7,059

0

-2,639

0

46,199

0

0

10

0

10

9,646

9,656

-2,637

53,218

-718

0

-718

375

0

0

375

0

375

0

0

0

-343

2,465

0

0

0

2,465

0

2,465

0

2,122

-124

0

-124

0

0

0

0

0

0

-111

0

0

-235

0

0

0

0

0

0

0

0

-235

-4,224

0

-4,224

0

0

-58

-58

0

-58

0

0

0

-4,282

0

0

0

53

53

0

53

0

-4,229

64,123

-981

63,142

375

-75

-58

241

7,135

7,376

-111

-2,639

0

67,769

2,465

0

10

53

2,528

9,646

12,174

-2,637

77,306

-95

0

-95

5

-25

0

-20

-56

-76

0

0

7

-164

-10

12

-47

0

-45

44

0

0

-164

64,028

-981

63,048

380

-101

-58

221

7,079

7,300

-111

-2,639

7

67,605

2,455

12

-37

53

2,484

9,690

12,174

-2,637

77,142

Statement of changes in equity (in TEUR)

Subscribed capital

Capital reserve

Retained earnings Sum Minority interests

Other transactions

Reserve on own shares

Total Equity

Group net income

Translation differences

46

Uzin Utz Aktiengesellschaft, UlmConsolidated cash flow statement

consolidated cash flow statement (in TEUR)

net profit for the year

+/- Depreciation and amortisation of fixed assets

+/- Change in provisions

+/- other non-cash income and expense items

-/+ Gain/loss on disposal of non-current assets

+/- Change in current assets (inventories, receivables)

+/- Change in liabilities

cashflow from operating activities

+ Proceeds from disposal of tangible assets

- Investments in tangible assets

+ Proceeds from disposal of intangible assets

- Investments in intangible assets

+ Proceeds from disposal of financial assets

- Investments in financial assets

- Change from acquisition/ sale of consolidated companies

cashflow from investing activities

- Proceeds for own shares

- Payments to shareholders and minorities

+ Proceeds from the issue of bonds

- Repayment of bonds

cashflow from financing activities

Payment-related change in cash and cash equivalents

- Exchange-rate-related and other changes in cash and cash equivalents

+ Cash and cash equivalents at beginning of the period

cash and cash equivalents at the end of the period

cash and cash equivalents

Cash and cash equivalents

short-term liabilities due to credit institutions

cash and cash equivalents

2010

9.690

5.285

245

1.365

12

-7.300

4.991

14.287

165

-6.278

15

-315

116

-328

0

-6.625

0

-2.637

23.669

-24.168

-3.137

4.525

-34

303

4.794

2010

14.457

-9.663

4.794

2009

7.079

5.394

-106

-752

15

5.888

-530

16.988

607

-2.762

0

-268

56

-77

-569

-3.013

-111

-2.639

18.311

-23.290

-7.729

6.246

121

-6.064

303

2009

14.350

-14.047

303

47

2009

79,327

22,392

101,718

320

1,454

5,656

100,738

49,631

1,632

2,614

2009

14,785

2,857

17,642

27

288

1,171

15,309

8,208

116

455

2009

32,298

7,321

39,619

127

169

3,930

40,585

20,482

910

969

2009

12,480

635

13,115

46

36

1,283

9,171

2,535

123

297

2009

33,324

2,151

35,475

15

945

1,327

33,536

29,572

618

1,058

2009

0

-35,356

-35,356

-324

-296

-68

-43,704

-23,379

0

0

2009

172,213

0

172,213

210

2,596

13,300

155,635

87,050

3,400

5,394

External sales

Intercompany sales

Total sales

Interest and similar income

Interest and similar expenses

Profit

Assets

Liabilities

Investments

Depreciation

Segment Reporting (in TEUR)

Germany Western Europe South- / Eastern Europe

all other segments transition Total Group

Installation systems

surface care and enhancement

2010

84,192

24,972

109,165

270

1,478

6,782

106,020

51,414

4,322

2,457

2010

14,779

4,567

19,346

35

227

1,598

14,977

8,272

163

448

2010

34,915

8,687

43,602

176

330

4,079

39,832

16,052

1,552

1,212

2010

12,644

878

13,521

24

18

984

10,963

3,382

179

307

2010

37,669

2,206

39,875

2

599

3,037

34,839

29,254

378

1,153

2010

0

-41,310

-41,310

-310

-290

47

-39,353

-18,239

0

0

2010

184,199

0

184,199

197

2,362

16,526

167,277

90,136

6,593

5,576

Uzin Utz Aktiengesellschaft, Ulm (Donau) Segment Reporting

2010 2010 2010 20102009 2009 2009 2009

non-current assets according to the location of assets (in TEUR)

Germany Switzerland Rest Sum

68,434 15,419 11,156 95,00868,663 12,783 11,055 92,502

2010 2010 2010 20102009 2009 2009 2009

83,647 17,126 83,426 184,19979,669 16,963 75,581 172,213

Geographic segmentation of external sales (in TEUR)

Germany the Netherlands Rest Sum

2010 2010 2010 2010 20102009 2009 2009 2009 2009

144,028 17,238 17,536 5,397 184,199138,896 14,219 15,063 4,035 172,213

External Sales according to business area (in TEUR)

flooring wood flooring ceramic tiles and natural stone

others Sum

48

Equity Holdings (figures according to local GAAP)

company

Uzin Dr. Utz Ges. mbH

Unipro-Belgie N.V.

Uzin Tyro AG

Sifloor AG

DS Derendinger AG **)

Uzin Utz Construction Materials Co. Ltd.

Uzin s.r.o.

artiso solutions GmbH

Artiso AG *)

RZ Reinigungs- und Pflegesysteme GmbH

Genial Produkte GmbH

Hermann Frank GmbH & Co. KG

Hermann Frank Verwaltungs GmbH *)

BIL LEASING Verwaltungs GmbH & Co. 870 KG

Objekteure Verwaltungs-gesellschaft mbH *)

Utz Beteiligungs GmbH

Uzin Utz AG

JP Coatings GmbH

Uzin France SAS

Uzin Limited

Unikem d.o.o.

Uzin Utz Magyarország Kft. **)

Unipro B.V.

Ufloor Systems NZ Ltd.

Uzin Polska Produkty Bodowlane Sp.zo.o.

Uzin Polska Sp.zo.o.

P.T. Uzin Utz Indonesia

Unihem Trading d.o.o.

Unihem d.o.o.

Utz Inc.

Ufloor Systems Inc.

Production and sales site

Sales site

Place

AT, Wien

BE, Gent

CH, Buochs

CH, Sursee

CH, Thörishaus

CN, Shanghai

CZ, Prag

DE, Blaustein

DE, Blaustein

DE, Meckenheim

DE, Meckenheim

DE, Oberderdingen

DE, Oberderdingen

DE, Pullach

DE, Ulm

DE, Ulm

DE, Ulm

DE, Würzburg

FR, Paris

GB, Leamington Spa

HR, Zagreb

HU, Budapest

NL, Haaksbergen

NZ, Whangaparaoa

PL, Legnica

PL, Legnica

RI, Jakarta

RS, Belgrad

SLO, Ljubljana

USA, Aurora

USA, Aurora

Share of Capital in %

100.00

99.98

100.00

100.00

100.00

90.00

100.00

50.00

50.00

100.00

100.00

100.00

100.00

94.00

100.00

100.00

-

100.00

100.00

100.00

50.00

90.00

100.00

90.00

100.00

100.00

49.00

50.00

50.00

100.00

90.00

Equity in TEUR

-408

923

5,210

7,393

1,110

-298

1,081

142

30

-1,943

-1,491

735

30

-2,797

29

-46

46,112

6,032

2,196

1,447

265

-34

4,597

225

3,623

1,718

1,146

-140

3,172

219

-1,412

Net income in TEUR

-32

215

889

113

237

36

171

27

3

84

1

-164

1

798

1

-19

6,473

784

234

433

1

-90

1,266

31

557

262

141

-24

293

-1

217

49

UzinUtzAktiengesellschaft,Ulm(Donau) Situation Report of the Uzin Utz Group for the Business Year from 1st January 2010 to 31st December 2010*Business performance and framework conditions

Business performance, business activities andframework conditionsDevelopment of the sector and the overall eco-nomyFollowingthegreatestrecessionofthepost-wareraintheyear2009,theworldeconomyrecoveredfasterthanexpectedintheyear2010.AccordingtotheinformationoftheWorldBank,globalGDPgrowthinthepastyearreached3.9%.Thishowevergivesrisetothequestionofthesustainabilityofthispositivedevelopment.Na-tionaleconomicprogrammestocushiontherecessionhavecreatedbudgetdeficitsanddebtlevelsofalmostunheard-ofdimensions.InadditiontotheconcernsoverarelapseintheUSAandtheprospectofamorerestrictivemonetarypolicyinChina,theEuropeanUnioninparti-cularisalsofacedwithamajorchallenge.Continualre-portsofEuro-countrieswithseverefinancialproblemsareputtingincreasingpressureonthesystemoftheEu-ropeanUnionanditscommoncurrency.» TheGermaneconomyintheyear2010wastypicaloftheworldwideupturn.Germanyisjustifiablyreferredtoasthe“growthengine”oftheEuropeaneconomicre-gion.Attheendoftheyear2010,Germanyhadachie-vedaGDPgrowthof3.6%.Stronggrowthwasachievedparticularlyintheengineeringandautomotivesectors.Medium-sizedGermancompaniesinparticularbenefitedfromtheeconomicupturn,withconsequentnoticeablepositiveeffectsontheemploymentmarket.ThemainsupportingpillarofeconomicdevelopmentinGermanyistheexportboom.Inthefuturehowever,theheavyde-pendencyonChinaandthefinancialdifficultiesofmanyEU-countrieswillconstituteariskfactorforGermanfor-eigntrade.Nevertheless,economicinstitutescontinuetoforecastgrowthof2.1%to2.4%fortheGermaneco-nomyintheyear2011.» Intheconstructionsector,theupturnwhichstartedattheendof2009couldnotbecontinuedintotheearlymonthsof2010becauseoftheweather.Theunusuallycoldwintercausedadeclinedinturnoverintheconst-ructionsectorof17.2%inthefirst3monthsincompa-risontothesameperiodofthepreviousyear.Thesec-torrecoveredoverthecourseoftheyear,althoughwithanoveralldeclineinturnoverof1%,itwasnotabletojoininthegeneraleconomicupturn.» Withadeclineinturnoverof4.5%intheyear2010,theGermancommercialconstructionsectorwasama-jorcontributortothelowlevelofoptimisminthecon-

structionsectorasawhole.Iftheoveralleconomicup-turncontinuesintheyear2011however,commercialconstructionwillalsobenefitaccordingly.Inthiscase,expertsforecastanincreaseinturnoverofaround1%.» Theeconomicprogrammesinstitutedbythecentralgovernmentwerealsounabletorevitalisebusinessinthepublicconstructionsector,asbecomesclearfromthefallinturnoverof3%intheyear2010.Norisanyrecove-ryexpectedinthisareainthenearfuture.Severelyaf-fectedbythelowwillingnesstoinvestinthecommunalarea,afurtherdeclineinturnoverof4.5%isanticipatedintheyear2011.» Aclearrecoverytrendcanbeseeninresidentialcons-truction,whereturnoverincreasedby6%.Thishasbeenbroughtaboutmainlybythestabilisationofincomeex-pectationsinthecourseoftheeconomicupturn,arevivalofinterestofinvestorsinresidentialproperties,continu-inglowinterestratesandthehighlevelofsubsidisationfortheenergyrenovationofthehousingstock.» In2011,thepositivedevelopmentsinresidentialcon-structionwillmostprobablynotsufficetocompensatesatisfactorilyforthedeclineinpublicconstruction.AsthePresidentoftheHauptverbandderDeutschenBauindust-rie(NationalAssociationoftheGermanConstructionIn-dustry),Dipl.-Ing.HerbertBodnerannouncedatthebe-ginningoftheyear,thebestthatcouldbehopedforwasstableturnover,orpossiblyevenafurtherdecline.

Assessment of the company managementTheyear2010wasaverysuccessfulbusinessyearfortheUzinUtzGroup.Salesrosebyalmost7%.Againstthebackgroundofthecontinuingtoughcompetition,someareasandregionssucceededinfurtherincreasingtheirmarketshare,andoperatingsuccessfullyasinter-nationalmarketleadersandcompletesuppliersintheareaofflooring.Thisisparticularlyencouragingontheoccasionofthe100-yearcompanyJubileeintheyear2011,andinthelightofthestilldifficultbutstabilisingmarketenvironment.» Thestrengthofthegroupisreflectedevenbetterintheresult.Theresultfromordinaryactivities,ataround€14.4million,representsanimprovementof31.7%overthepreviousyear.Ontheonehand,thisresultgivestheUzinUtzGroupthesecurityofbeingabletohandlecri-sismanagement,whileontheother,theGroupbenefitsfromitsfirmfoundationofdiversification,particularclosenesstothecustomerandstrongcompanyculture.

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» Otheressentialrequirements–particularlywithregardtosustainability,environmentalprotectionandecologicalorientation–havealsobeencreated,inordertoenableustofacecurrentandfuturechallengessuccessfully.» Sustainabilitymustnotsimplybealabel,butisseenasanindicationofcompanyresponsibility,andmustcha-racterisetheattitudeofthewholecompany.» TheUzinUtzGroupisoneoftheforerunnersinthefieldofsustainablebuildingproducts.Sustainabilityisnotregardedasone-dimensionalinourcompany,butalwaysincludesecological,economicandsocialconsiderations:» Firstly,theobjectiveistodevelopproductswhichcon-tributetohealthyroomair.Secondly,itisnotonlytheemissionswhichareimportantforbuildingproducts.Ma-nufacturersareincreasinglyrequiredtoprovideenviron-mentalproductdata.TheUzinUtzGroupisthefirstcom-panyinthesectortoenablethesustainableassessmentofthecompletefloorconstructionwithitsenvironmen-talproductdeclarations.» Inachallengingeconomicenvironment,characterisedbyuncertaintiescausedbythefinancialmarketcrisis,toughercompetitionandnegativecurrencyeffects,theUzinUtzGrouphasmaintaineditspositionverywell,andcomeoffbetterthanthecompetitioninmanyimportantaspects.

internal company success factorsNowasbefore,ourlong-standingandlong-termstrat-egy,thecombinationofthefourinternalcompanysuc-cessfactors

− highlyqualifiedandhighlymotivatedemployees,− leading,high-qualityproductsinanintelligentsys-

temstructure,− uniqueserviceandlogisticsconcept,− successfulbrandsthatcreateconfidence,

isdemonstratingitssustainableeffectiveness.Withregardtothesefourconvincingfocalpointsofourcompanycul-ture,whichformourbasisforprofitablegrowth,nothinghaschangedinthepast,norwillitchangeinthefuture.» Weareflexibleandadaptable.Wealsoworkcontinu-allyonnewandbenefit-orientatedproductswhichcon-vinceourcustomers.Weoperateanexcellentriskma-nagementsystem,whichcontributestooursustainablevaluecreation,andthereforetolong-termbusinesssuc-cess.TheUzinUtzGroupcanalsorelyonthespecialde-dicationofskilledemployeesandmanagementteams.Allthis,togetherwithhighlysatisfiedcustomers,contribu-

testostabilityandrepeatedlyoffersnewopportunities,forwhichtheGroupiswell-prepared.» StartedinOctober2009,theconstructionofthenewcentralbuildingforResearch&Developmentwasalmostcompletedbytheendof2010,sothatfromearly2011,ouremployeeshaveevenmoreroomfortheirideasforthedevelopmentofinnovativetopproducts.Thenewbuildingalsorepresentsacommitmenttotheheadquar-terslocationofUlm,andisavisibleconfirmationthatwecontinuetorelyonthelocationofGermany.» TheaveragenumberofemployeesintheGroupfellto841(859).Ofthese,474(486)wereemployedinGerma-nyand367(373)abroad.38(46)youngpeoplewerealsotakenonastrainees.Thisunderlinesimpressivelytheef-fortsthathavebeengoingonformanyyearstotrainourownqualifiedspecialistpersonnelthroughoutthegroup,andpreparethemforfuturepositionsinthecompany.TheGroupwillcontinueinfuturewiththisimportantbusinesspolicytask,offeringfutureprospectstoyoungpeoplebymeansofspecialtrainingopportunities,andatthesametimeensuringqualifiedfutureemployeesforthecompa-ny.TheUzinUtzGroupwantstheiroutstandingdedica-tiontoremaininthecompanyinthefuture.Everythingisthereforebeingdonetofosterthispotentialinthebestpossibleway.» UzinUtzAGandUniproB.V.,Haaksbergen,Nether-lands,arecertifiedtotheDINISOstandards.Thebran-chinVaihingenandHerrmannFrankGmbHwerenewlycertifiedinthebusinessyear2010.Bothlocationspro-ducemachineryforfloorlayingandtreatment.Furtherinternalauditorswerealsotrainedinthesecompaniesin2010,andcomprehensiveauditprogrammesinstitut-ed.Theexternalrepeatandre-certificationauditsonceagainconfirmedthehighqualityandthecorrectnessofthepreviouscertification.» Inthebusinessyear2010,productionthroughoutthegroupwascarriedoutattheproductionlocationsinUlm,Vaihingen/Enz,Oberderdingen,Würzburg,Meckenheim,Buochs(Switzerland),Sursee(Switzerland),Haaksbergen(Netherlands),Legnica(Poland),Soissons(France),Shang-hai(China),Ljubljana(Slovenia)andJakarta(Indonesia).ThetotalutilisationofallUzinUtzworkswasaround87.5%,therebyincreasingbyaround1.9percentagepointsoverthepreviousyear(85.6).TherewasnonotableincreaseinproductioncapacitiesintheGroupintheyear2010.» Therewerenomajorchangesintheproductionran-ge.Nowasbefore,everybatchproducedthroughoutthe

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groupissubjectedtostrictqualitycontrol.Deliveriesonlytakeplacefollowingreleaseoftheproductsbytheres-ponsiblelaboratory.» Thereweresomeminorchangeswithregardtorawmaterialssuppliersinthereportingyear,althoughtheprocurementstructuresremainedessentiallyunchanged.» Intheyear2010,nothingchangedwithregardtothegroup-wideprinciplesoflong-termdisposition,long-termcontractpartnershipsorcomprehensivequalitycontrolsintheareaofprocurement.» Thefinancingstrategyisexplainedinthe“Financialsituation”sectionofthisreport.

internal organisation and decision-makingTheinternalgrouporganisationfollowstheprincipleofdirectdecision-makingchannelsandtheflattestpossib-lehierarchies.Allmajordecisionsarepreparedindepart-mentalanddivisionalcommittees,andthensubmittedtotherelevantdirectororboardwithadecision-makingre-commendation.AllmajordecisionsarediscussedbytherelevantdirectororboardoftheshareholdingcompanywiththeBoardofUzinUtzAG.Alldecisionsrequiringap-provalarepresentedbytheBoardofUzinUtzAGtotheSupervisoryBoardofUzinUtzAGforapproval.

important events and developments in the reporting yearInthebusinessyear2010,preparationsweremadeforthestrategicre-positioningofindividualbrands,andthe-sewerecommunicated,amongstothermeans,attheex-hibition‘BAU2011’inJanuary:newproductswerealsoaddedtothebrandrangesofUzinUtzAG.» TheQeshfloorbrandhasbeentradingsinceJanuary2011underthename‘Arturo’.Previouslyspecialisinginthemanufactureofindustrialflooring,Arturopromotesitselfasanexpertinindividualsyntheticresinflooring–whetherforindustry,commerceorresidentialproperties.Thefloorsadaptthemselvesperfectlytothefunctionoftheroom,andcanbeappliedtoaconceptwithauniquedesign.» ThePallmannbrandnowoffersforthefirsttimeacom-pleterangecoveringallaspectsofparquetflooring–fromtherightsubstratepreparationthroughtothecleaningandcareofparquetfloors.Asapartnertotheparquet-layingbusiness,thetradeanddecision-makersininteriordesign,UzinUtzAGfeltitselfduty-boundtocombineitsrangeandservicescoveringallaspectsofthenewlaying,

renovationandvaluepreservationofparquetflooring.» codexreactedearlytotheconsumertrend,andtes-tedandcertifiedmostofitsproductstothedemandingrequirementsoftheGEV–GemeinschaftEmissionskon-trollierteVerlegewerkstoffe,KlebstoffeundBauproduktee.V.(Associationforemission-controlledlayingmaterials,adhesivesandbuildingproducts).Thebrandistakingano-therconsistentstepforwardwiththenewEcoTecproductline:theproductscomplywiththerequirementsoftheEmicodeEC1PLUScertification,andarethereforeevenlowerinemissions.AcompletesystemconstructioncanbecarriedoutwithEcoTec,fromthesubstrateprepara-tiontothejointingofthetileornaturalstoneflooring.» Theinvestmentsinstitutedattheendof2009attheUlmlocationwereprogressedin2010:thecentralRe-search&Developmentbuilding,whichbringstogetherourpreviouslyseparatedlaboratories,waslargelycom-pletedbytheendoftheyear.

internal control systemThegroup-wideinternalcontrolsystemisbasedonanumberofmechanismsandkeyfigures,whichillustratespecificdepartmentalproceduresandmakethemmeasu-rable.Allinternalcontrolsystemsforallareasarebasedonthefollowingkeyfinancialfigures:

− Cash-flowfromordinaryactivities,− Salesrevenues,− Resultfromordinaryactivities,− Returnonsales,− Returnoncapitaland− Equityratio.

Events, decisions and factors significantly affec-ting the further development of the company» Allevents,decisionsandfactorssignificantlyaffectingthefurtherdevelopmentofthegroupwhichwerealrea-dyknownintheyear2010arecontainedintherelevantpartofthisreport.Allsuchmatterswhichbecameknownbetweentheendoftheyear2010andthecompilationofthisreportarecontainedinthesection“Significanteventsfollowingtheendofthebusinessyear”.

Deviations from earlier reported expectationsIntheyear2010,therewerenomajordeviationsinbusi-nessdevelopmentsintheGroupfromearlierreportedexpectations.

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capitalrepaymentswhichwerepossibleduetothehighcash-flow.Long-termfixed-interestloanswerealsota-kenouttotakeadvantageofthefavourableinterestrate.Thisreducedtheshort-termcurrent-accountoverdrafts.» Theliabilitiesfromincometaxfellfrom€1.6millionto€1.2million.» Thereservesincreasedby€0.4millionto€6.7milli-on(6.3).» Theshareoftheshort-termliabilitiesinthebalancesheettotaltherebyfellfrom27.2%inthepreviousyearto25.8%intheyear2010.» Thelong-termduetocreditinstitutionsincreasedby€1.1millionto€35million(33.9)duetotheabove-men-tionedassumptionoflong-term,low-interestloans.» Theshareofthenon-currentliabilitiesinthebalancesheettotalfellslightlyfrom29.1%inthepreviousyearto28.0%intheyear2010.Inabsoluteterms,thenon-currentliabilitiesincreasedbyaround€1.9millionfrom€45.0millionto€46.9million.» Theprincipleandsimultaneousobjectiveofthefinancemanagementistoensureadequateliquidityatalltimes,whileatthesametimemaintainingahighequitycapi-talratiowellabovethesectoraverage.Thisrequirementwasalsosatisfiedintheyear2010.Liquiditywasinsuredatalltimes,andlinesofcreditwereneverutilisedtothefullamount.In2010,variousfinancingmeasureswererequiredduetotheinvestmentsattheUlmandHaaks-bergenlocations.Thetotalcreditvolumeinthegroupintheyear2010was€57.6million,slightlydownfrom€58.1millioninthepreviousyear.Ofthistotal,therewerearound€22.6millionwitharemainingtermofuptooneyear(24.2),€31.2millionwitharemainingtermofbetween1-5years(27.9)andaround€3.8millionwitharemainingtermofover5years(6.0).Theseloanswerealmostalltakenoutatafixedinterestrate.There-mainingproportionofthecreditvolumewastakenoutatvariableinterestrates.AfurthercapitalrequirementexistsparticularlyfortheinvestmentsofUzinUtzAG,althoughwedonottherebyanticipateanymajorchan-gesintheinterestratestructure.Thetotalcreditvolu-mealsoincludesthreesubordinatedcapitaltranchesofUzinUtzAGintheamountof€6.8million,whichcomefromtheprogrammes“Capitalforwork”and“ERPin-novationprogramme”oftheKreditanstaltfürWieder-aufbau(ReconstructionLoanCorporation).Withitsre-ceivablesfromthisloan,thebankstandsirrevocablybehindallpresentandfuturereceivablesofcreditorsin

Theasset,financialandrevenuesituationoftheGroupdevelopedpositivelyoverallintheyear2010.Increasingsalesincombinationwiththecontinuationofstrictcostmanagementledtoimprovementsinmostmajorposi-tions.Salesrevenuesandtheresultfromordinaryacti-vitiesincreasedonceagain.» Inthecomparisonofthebalancesheetvalues,itmustbenotedthatthecorrectiontothecompanyvaluationofBILLeasingshownintheAppendixhadaneffectonthepreviousyear’sfiguresforintangibleassetsandequity. Financial positionThebalancesheettotalincreasedby€12.6millionto€167.3million(154.7).Theshareofgroupnon-currentassetsfellto55.3%(57.7),andthecurrentassetsthere-foremakeup44.7%(42.3)ofthebalancesheettotal.» Tradereceivablesroseduetotheincreasedsalesfrom€22.7millionto€25.7million.» Asaresultoftheimprovedordersituation,inven-toriesroseby€5.2millionfrom€20.1millionto€25.3million.» Theintangibleassetsroseslightlyfrom€31.8millionto€31.9million.» Thetangibleassetsroseby€2.7millionto€59.4mil-lion,asaresultofincreasedinvestmentactivities.Theexchangerateeffectfromtheconversionofnon-Eurobalancesamountedtoaround€1.9million.Fortheco-mingyear,atotalof€15millionininvestmentsisplan-nedwithinthegroup.TheserelatemainlytoinvestmentsfortheextensionoftheUlmproductionlocationstartedinpreviousyears.InvestmentsarealsoplannedatUni-proB.V.for2011,whichrelatemainlytothepurchaseofthepropertycurrentlyinuse.» Thecashandcashequivalentsincreasedbynearly0.8%or€0.1millionto€14.5million.» Withtheexceptionofinvestmentproperties,thecom-pleteassetscontinuetorepresentthecommerciallyne-cessaryvalues.» Non-balancesheetfinancinginstrumentswereused,andrefermainlytorentalandleasingcontracts. Liquid and capital resourcesThetotalequityamountedto€77.1million(67.6),andataproportionof46%(44)ofthebalancesheettotalremainssignificantlyabovethesectoraverage.» Theshort-termfinancialliabilitiesfellbyatotalof€1.6millionto€22.6million.Thisreductionresultsfrom

Situation of the Group*

*(allfigurestoIFRS)

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precedencebeforetheclaimsforreturnofacapital-re-placingloanofashareholderorequivalentclaims.» Publicsubsidyprogrammes,medium-sizedcompanyloansandotherlow-interestfinancingwereagainap-pliedforandused.» Aninterestratehedgingdealwasconcludedin2008foravariable-interestloantobetakenoutin2010.Aninterestrateof4.92%wassecureduntil30.06.2016foranominalvalueof€5.0million.» Forwardexchangedealsandcurrencyoptionsarealsousedinindividualcasesforthesecuritisationoffixedpaymentsorincaseofmajorforeigncurrencyreceiva-blesorliabilities.» Thedetaileddevelopmentoftheliquidityisshowninthegroupcapitalflowaccount.

Profitability» ThesalesrevenueoftheGroupincreasedintheyear2010by7.0%from€172.2millionto€184.2million.ThiswasdueabovealltothepositivesalesdevelopmentsofUzinUtzAG,JPCoatingsGmbHandsalesdevelopmentsofthecompaniesinSwitzerlandandtheUSA.» Thetotalgroupforeignsalesincreasedtoaround€100.6million(92.5).Theforeignshareincreasedbyaround0.9%to54.6%(53.7).Theshareofsalesnotin-voicedinEuroincreasedtoaround25.5%(20.0).ThecurrenciesoutsidetheEurozonerelevantfortheGroupdevelopedasfollows:» Thetotalexchangerateeffectonthegroupsaleswas1.77%(-1.1).» ThesalesvolumesintheGroupwereincreasedby5.5%intheyear2010.Inthereportingyear,therewerenochangesintheproductmixwhichhadaneffectonmajorchangesinthesalesandtheresult.Salespriceswereincreasedonaveragebyaround1.4%.» Duetotheproductionmainlybybatchesandtheusu-allyveryshorttimebetweenorderanddelivery,produc-tiongenerallytakesplaceforananonymousmarket,withdeliveriesbeingmadeex-stock,whichthroughouttheGroupissufficientforaround1.5monthssales.State-mentsontheoutstandingorderbookarethereforenotconclusive.» Theoverallcapacityincreasedby8.7%to€186.3mil-lion(171.4).» Theabsolutematerialexpenditureincreasedby10.1%from€73.2millionto€80.6million.ThematerialusagequotawithintheGroupincreasedfrom42.7%to43.3%.

» Theshareofpersonnelcostsintheoverallcapaci-tyfellto25.4%(26.6).Inabsoluteterms,thepersonnelcostsroseasaresultofwageandsalaryincreasesfrom€45.5millionto€47.3million.» Duetotheinvestmentsmade,depreciationincrea-sedfrom€5.4millionto€5.6million.» Theotheroperatingexpenditureincreasedbyaround€2.6millionfrom€36.4millioninthepreviousyearto€38.9million.Thisresultsmainlyfromexpenditurewhichwaspostponedinthepreviousyearduetotheevenmoredifficultmarketsituation.» Todeterminetherevenuesituation,differentresultsfiguresareusedinsomecasesincomparisontotheGroupfinancialstatements.» Theearningsbeforeinterestandtaxes(EBIT),at€15.8million,weresignificantlyabovetheleveloftheprevi-ousyear(12.7).» Duetothereducedoverallcreditandcurrentaccountvolume,thefinancialresultof€-2.1millionwas10.7%abovethepreviousyear’sfigure(-2.3).» Theearningsbeforetaxes(EBT),at€13.7million,werearound32.8%abovethepreviousyear’sfigure(10.3).» TheannualsurplusintheGroup,ataround€9.6mil-lionwasaround€2.5millionor35.2%abovetheprevi-ousyear’sfigure(7.1).» Detailsonthesales,annualsurplusesandequityca-pitaloftheindividualshareholdingscanbetakenfromthe“Shareholdings”sectionintheGroupAppendix.

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andcontinuetooccur,withregardtotheiravailability.Itisthereforeessentialtoidentifycorrespondingsubsti-tuterawmaterials,inordertoconverttheproductfor-mulae,whilestillmaintainingconsistentquality.» Inordertoovercomethesechallengeswiththeopti-mumresultandmaximumproductqualitythroughoutthegroupatalltimes,aprojectwasstartedintheyear2010bythespecialistdepartmentsofQualityControlandInternationalResearch&Development.Theaimistoensurethatproductgroupswhichareproducedatdif-ferentlocationswithinthegroupareproducedworldwi-detothesamestandardsandthesamequality.Thisisintendedtoreducetotheminimumthenumberofpro-ductfaultsthroughoutthegroup.

Failure risks in the area of production and the main iT-supported processesIntheproductionareasoftheindividualworks,thelike-lihoodofinefficientoperationofproductionfacilitiesislargelyreducedbyregularmaintenance,firesafetyandotherprecautionarymeasures.Correspondinginsurancecoveragehasbeentakenoutagainstdamagecausedbynaturaldisastersandresultingstoppages.» Thebusinessandproductionprocesses,andtheinter-nalandexternalcommunicationoftheUzinUtzGroupareincreasinglybasedoninformationtechnologies.Amajorfault,oreventhefailureoftheglobalandregio-nalbusinesssystemscanleadtoalossofdataandim-pairmentofthebusinessandproductionprocesses.Thelikelihoodoffailureofprocess-criticalinformationsys-temsisreducedtotheminimumbycorrespondingtech-nical,structuralandorganisationalmeasures.

Financial risksTheleveloffinancialrisksisdifficulttoassessinthecur-rentsituation.Duetothepersistinguncertaintiesonthefinancialmarkets,sensiblesecuritisationmustbeprovi-dedforsaleswhicharesubjecttoanexchangeraterisk,whilealwaysweighingupthecostsandbenefits.ThedevelopmentofthecurrenciesrelevantfortheGroupisdescribedinthe“Revenuesituation”sectionofthisreport.Possiblefuturelargeexchangeratefluctuationscontinuetoharbouraresidualrisk.» Evenaftertheeconomiccrisisisconsideredtohavebeenovercome,thefocusintheGroupstillliesonthepermanentcreditratingofcustomers.Thegreatmajorityofreceivablesfromcustomersarealsocoveredbycre-

Main risksEnvironment and sector risksThemainoveralleconomicrisksfortheGrouparepo-sedbygeneraleconomicdevelopments,andparticular-lythoseintheconstructionsector.AlthoughtheglobaleconomyandtheGermaneconomyareontheupturn,risksmuststillbeanticipatedduetothecontinuingweakdevelopmentoftheconstructionindustry.Publiccon-structioninGermanyinparticularcannotpulloutofitsdownwardtrendbecauselocalauthoritieshavenofundsavailable.Europe,anothermainmarket,alsopre-sentsrisks.ContinualreportsbyEUstateswithseverefinancialproblemscontinuetogivecauseforconcernintheseregions.Thesameuncertaintyalsoexistsinothermarkets.Byactivedialoguewithourcustomersandin-tensiveinternalanalysisandresearchonthemarketen-vironment,customerrequirementsandthecompetition,wecanreactingoodtimetonewdevelopmentsandtheneedsofthesector.

Product risksThefuturedevelopmentofthegroupdependstoagreatextentondevelopinginnovativeproductsandoptimi-singexistingformulations.Everyeffortisthereforebeingmadetopushaheadwithdevelopmentworkandidentifyproductrequirementsandtrendsingoodtime.Highde-velopmentcostsandcontinualin-housedevelopmentsarebeingdevotedtothisrequirement.Anypossibleda-magesoccurringarecoveredbycomprehensiveinternati-onalinsurancecoverage,whichalsoincludescorrespon-dingproductliabilityinsurance.Normaloperatingrisksarecoveredbycorrespondingprecautionaryreserves.» Inadditiontothechangingrequirementsofourcusto-mers,newlawsarecontinuallybeingpassed,particularlyrelatingtothechemicalssector.Duetotheprohibitionortherestricteduseofcertainchemicalsorhazardousmaterials,itisessentialfortheUzinUtzGrouptodeve-lopnewformulationsinlinewiththeserequirements,whileatthesametimemaintainingorevenimprovingtheproductquality.Since1stDecember2010,undertheregulationsofREACH(Registration,Evaluation,Au-thorisationandRestrictionofChemicals),anotificationrequirementhasbeeninforceforimportersofrawma-terialsfromnon-EUcountriesiftheseimportmaterialswhicharehazardousorsubjecttoregistration.» Duetothecriticalsituationofvariousessentialrawmaterialmarkets,deliverybottleneckshaveoccurred,

Risk Report

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ditinsurance.Theoptimisationoffreelyavailablefundsisensuredbygroup-wide,strictclaimsmanagement.» Allmajorliabilitiesinfavourofbanksarebasicallyfi-nancedinthelongtermwithfixedinterestratesorse-curedagainstinterestratechangerisksbyaninterestrateswap.» ThemainfinanceinstrumentsusedbytheUzinUtzGroupincludebankloansandcurrentaccountoverdrafts,financing-leasingagreementsandliabilitiesfromdeli-veriesandservices.Themainpurposeofthesefinanceinstrumentsisthefinancingofbusinessactivities.TheGrouphasvariousfinancialassets,suchasreceivablesfromdeliveriesandservices,fundsandshort-termde-posits,whichresultdirectlyfromitsbusinessactivities.TheUzinUtzGroupalsohasaverylowlevelofderivati-vefinanceinstrumentsintheformofforwardexchangetransactionsandaninterestrateswap.Thepurposeofthesefinanceinstrumentsistoprovidesecurityagainstinterestratechangerisksresultingfromthebusinessac-tivitiesoftheUzinUtzGroupanditsfinancingsources.

investment risksRisksresultingfrommajorinvestmentsareassessedbystandardisedinvestmentcalculations,andmustbeap-provedbytheBoardofUzinUtzAG.Externalconsultantsarealsoengagedforthispurposeifnecessary.Possibleacquisitionsareanalysedwithexternalsupport,assessedbytheBoardandapprovedbytheSupervisoryBoard.

Risks endangering the company’s existenceNoneoftheaboveriskscurrentlyendangerthecompany’sexistence.Thereareatthemomentnootheridentifia-blerisksthatmightendangerthecompany’sexistence.

Description of the risk management systemTheGroupoperatesasystemfortheidentificationandcontrolofpresentandfuturebusinessandfinancialrisks.Thisriskmanagementsystemwasimplementedmanyyearsagointhegroup.Nomajorchangeshavebeenmadetothesystem.Thisisneverthelessalivingsystem,whichinthecourseofcontinualimprovementissubjecttoapermanentoptimisationprocess.» Theelementsoftheriskmanagementsystemare

− theriskmanagement,− theriskcontrollingand− theriskreporting.

» Theseareallbasedonanumberofindividualevalu-

ations,analyses,reportsandprojectgroups,whichana-lyseindividualprocessesandcircumstancesindetailac-cordingtothesituation.Theresponsibilityforthistasklieswiththeresponsibledepartmentalordivisionalma-nageroftherelevantshareholdingcompany.Thesere-portdirecttotherelevantdirectororboardofthecom-pany,whointurnconsultonallimportantmatterswiththeChiefFinancialOfficerofUzinUtzAG,withwhomtheoverallresponsibilitylies.The“CentralControlling(CO)”DepartmentoftheparentcompanycoordinatestheriskmanagementelementsacrosstheGroup.Docu-mentsdistributedtotheChiefFinancialOfficerofUzinUtzAGaresubmittedbyhimifnecessarytothecom-pleteBoardandtheSupervisoryBoardofUzinUtzAGandothercircles.Thecompleteriskmanagementsys-temisdesignedtoidentifyandcounteractrisksendan-geringtheexistenceofthecompanyatanearlystage,andtoensuretheachievementofthebusinessobjecti-ves.Theprinciples,guidelines,processesandresponsi-bilitiesoftheinternalcontrolandriskmanagementsys-temaredefinedandestablished.Theriskmanagementsystemessentiallycoverstheriskgroupsdescribedabo-ve.Inadditiontoindividualriskmanagementmeasures,weactinawarenessofrisksonthebasisofsafety-orien-tated,professionalcompanymanagement,withappro-priateinsurancecoverandguidelinesandinstructionsapplicableacrossthecompany.» Thehighlycontrolling-orientatedandprovencostma-nagementintroducedinthepast,asanintegralcompo-nentofcontrolling,whoseimportanceisevengreaterundertheexistingconditions,willcontinuetosupportthephilosophyofrevenue-orientateddevelopment.» Thestatementsinthesections“Financialsituation”and“Financialrisks”ofthisreportapplyfortheareaoffinancialinstruments.Theresultandliquidityrisksofthefinancialassetsarealsoidentifiedintheformofanearlydetectionsystem.Themainelementsofthissys-temconsistofdetailedmonthlyreportingonalmajorbalancesheetandP&Lpositions,aquarterlyriskma-nagementreport,regularauditdiscussionsonsitewiththeshareholdingcompanies,anOrganisationManualwhichisvalidthroughouttheGroupandmandatory,di-rectcommunicationschannelsforthedirectorsoftheshareholdingcompanieswiththeBoardofUzinUtzAGonallimportantmatters.

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contactpartners.Theconsolidatedaccountsarecom-piledcentrallyonthebasisofthedataofthesubsidiarycompaniesincludedintheconsolidationgroup.Duringthisprocess,manualchecksarecontinuallycarriedoutbyGroupControllinginordertoensuretheplausibilityoftheforwardedandtheconsolidateddata.» InternalAuditregularlychecksbusinessprocessesofboththesubsidiarycompaniesandcentraldepartmentsforcorrectness,efficiencyandsecurity.InternalAuditreportsasanindependentbodydirecttotheBoard.» Theobjectiveofourriskmanagementsystemandourinternalcontrolsystemistoensuretheeffectiven-essofbusinessactivityandcompliancewiththerele-vantlegalregulations.

internal control and risk management system with regard to the financial reporting processAmajorcomponentfortheavoidanceofrisks,particu-larlyinaccountingandfinancialreporting,istheinter-nalcontrolsystem.Thisprovidesthefollowingfeatures:» IntheUzinUtzGroup,themanagementandcompa-nystructuresareclearlydefined.Department-widekeyfunctionsarecontrolledcentrallybyUzinUtzAG,alt-houghtheindividualsubsidiarycompaniesretainahighdegreeofindependence.» Themainfunctionsinthefinancialreportingprocess–book-keeping,financeandaccountingandcontrolling–areclearlyseparated.Areasofresponsibilityareclear-lyassigned.» Anadequatesystemofguidelinesisinplace(e.g.Groupbalancesheetguidelines,travellingexpensesgui-delinesetc.),andiscontinuallyupdated.» Thefinancialsystemsusedareprotectedasfaraspossibleagainstunauthorisedaccessbycorrespondingauthorisationproceduresandaccessrestrictions.» ThefinancialsystemsusedarebasedessentiallyontheSAPstandard.TheapplicationprogrammeExcelfromtheMSOfficesuiteisusedforpresentationandfurtherevaluations.» Receivedortransmittedaccountingdataarecontinu-allycheckedforcompletenessandaccuracy.Program-medplausibilitychecksarecarriedoutbythesoftwareused.» Thecontrolsystemwithregardtothefinancialre-portingprocessisdesignedsoastoensurepromptandcorrectaccountingofallbusinessprocessesandtran-sactions.Changesinlegislation,financialreportingstan-dardsandotherofficialrequirementsarecontinuallyana-lysedwithregardtotheirrelevanceandeffectsonthegroupfinancialstatements,andtheresultingchangesreflectedintheinternalGroupguidelinesandsystems.ThecontrolofthegroupfinancialreportingprocessatUzinUtzAGiscarriedoutbythecentraldepartmentofGroupControlling.» Thegroupcompaniescompiletheirfinancialstate-mentslocallyandforwardthemusingadatamodelwhichisdefinedinstandardformthroughouttheGroup.ThegroupcompaniesareresponsiblefortheobservationoftheGroupguidelinesandprocedures,andthecorrectandtimelyoperationoftheirfinancialreportingpro-cessesandsystems.Thelocalcompaniesaresupportedinthecompletefinancialreportingprocessbycentral

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Future economic conditionsFollowingtheGermanrecordyearof2010,growthwillslowdownintheyear2011.ExpertsforecastaGDPgrowthof2.1%to2.4%.Theseforecastsarealsosubjecttoacer-tainrisk,duetosuchfactorsastheEurocrisis.TheWorldBankanticipatesanincreaseof3.3%fortheglobaleco-nomyinthecurrentyear.Emerginganddevelopingcoun-triescontinuetobelargelyresponsibleforthisgrowth.» IntheopinionofDipl.-Ing.HerbertBodner,PresidentoftheHauptverbandderDeutschenBauindustrie(Nati-onalAssociationoftheGermanConstructionIndustry),theGermanconstructionindustrywillagainbeunab-letokeeppacewiththegrowthintheoveralleconomythisyear.Thisismainlyduetotheemptycoffersoflo-calauthorities,forwhichreasonafurtherdeclineintur-novermustbeanticipatedinpublic-sectorconstruction.FortheGermanconstructionindustryasawholehow-ever,Bodnerforecaststhatturnoverwillstabiliseatthepreviousyear’slevel.Expertsarealsomoreencouragingintheirforecastsfortheyear2012.Itcouldbeinterpre-tedfromtheassumptionsmadepriortotheBAU2011exhibitionthatthebuildingindustrywillreturntostronggrowthandcatchupwiththeeconomyasawhole.» Betweentheendoftheyear2010andthetimeofcompilationofthisreport,growthofaround10%wasidentifiedintermsofsalesincomparisontothesameperiodoflastyear.Althoughtheconstructionsectorhasnotyetrecoveredfully,weareconfidentthatbecauseofourtechnicalandgeographicaldiversification,wewillcontinuetoachieveverysatisfactoryresultsovertheco-mingyears.Withourfirmfoundation,ourpositioninginthemarketandourspecialclosenesstothecustomer,weareconvincedthatwewillbeableinfuturetoadapttocurrentchallenges.Therearenointernalfactorsknownwhichmightbringintoquestionanyconclusionsregar-dingthecurrentlyreportedorfuturesituation.» Wewilldescribebelowthedevelopmentsinthere-gionsmostimportantfortheUzinUtzGroup.WewillexamineinparticularthedevelopmentintheregionsofwesternEuropeandsouthern/easternEurope:» TheeconomicsituationinwesternEuropefallsintotwocamps.WhilecountriessuchasSpainandPortugalarestillhavingtostrugglewiththecrisis,countriessuchasSwitzerland,FranceandtheNetherlandsareagainre-portingbetterfigures.Ageneralupwardtrendcanalsobeidentifiedforthecurrentyear,althoughinweakenedform.

» InFranceforexample,arealincreaseinGDPof1.4%isforecastfor2011.Goodopportunitiesintheconst-ructionsectorareseenparticularlyintheextensionandrenovationofresidentialandcommercialpropertyandincraftsmanshipconstructionwork.» TheDutcheconomyisalsoontheupturn,andex-pectsGDPgrowthof2%forthecurrentyear.Itishow-everuncertainwhetherthiswillbenefittheconstructionindustrytothesameextent.Savingsmeasuresarenowtakingtheplaceoftheeconomicsupportprogramme,whichcouldcertainlyslowdowngrowth.» InGreatBritaintoo,itisclearthatthebuildingindus-trycannotkeeppacewiththeoveralleconomicdeve-lopment.Whilegrowthofupto2.3%isexpected,dri-venbyexports,nonotablegrowthisanticipatedinthebuildingindustryfortheyear2011.Onlyresidentialcon-structionisexpectedtopickupspeedagaininthenexttwoyears.» InSwitzerland,therobustdomesticeconomyisbeingcounteractedintheyear2011byadeteriorationinex-ports.Itisthereforeexpectedthatweakenedeconomicgrowthof1.9%willbepossibleinthecurrentyear.Duetotheendingoftheeconomicsupportpackages,theconstructionsector,andparticularlyresidentialconst-ruction,couldalsoshowdecliningfigures.» Whiletheeconomiccrisishadsevereeffectsonmanysouthern/easternEuropeancountriesintheyear2009,someofthemwereabletorescuethemselvesfromthecrisisintheyear2010,insomecaseswithstronggrowthrates.Thistrendwillalsocontinueinthecurrentyear.Countriesfallingintothiscategoryincludeinparticu-larthefourlargenationaleconomiesofPoland,Turkey,RussiaandKazakhstan.» ThePolishNationaleconomyharboursenormouspotential.Intheyear2010,thecountryachievedGDPgrowthof3.5%.AccordingtotheStatisticalOfficeoftheEuropeanUnion,thisgrowthshouldimproveevenfurtherinthecurrentyearto3.9%.Constructionandinstallationserviceswillgrowinthenextthreetofouryearsbyapprox.12%peryear,supportedbysuchma-joreventsasthe2012EuropeanChampionship.Alt-houghcommercialandresidentialconstructionhasnotyetbeenabletorecovertothisextent,greatpotentialisalsoseenhereforthefuture.» TheCzecheconomywasalsoabletofinishtheyear2010withGDPgrowthof2.4%.Asimilarincreaseisforecastforthecurrentyear.Forthebuildingindustry,

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increaseinemployeenumbersisexpected.ThenumberofemployeeshasalsobeenincreasedbytheacquisitionoftheNorwegiancompanyLøkkenASbytheir20em-ployees.» Mostoftherisksdescribedinthesection“Riskreport”alsoofferopportunitiesfortheGroup.Duetoitssize,marketpositionandtheinternalsuccessfactorsalrea-dydescribed,theGroupcanandwillcontinuetomakeuseofeverycommerciallysensiblemarketopportunityarisinginordertoincreaseitsmarketshare.Theoppor-tunitiesofferedbystrategicallysensiblecompanyac-quisitionswillofcoursealsobeexaminedindetailandrealisedwhereappropriate.» Inparticular,the

− environmentandsectorrisks,− theproductrisks,− thefinancialrisksand− theinvestmentrisks

continuetoofferoutstandingopportunitiesbecauseoftheirapplicabilitytoallmarketplayers,andinviewoftheexcellentpositionoftheGroupintheareasofpro-ductquality,serviceandLogisticsconcept.Inadditiontothehighqualityoftheproductsmanufactured,ouruniquetechnicalconsultationexpertiseandtheabilitytodeliveralmostanywhereinEuropewithin48hoursformthefoundationsforsustainablesuccessandopti-mumutilisationoftheopportunitiesarising.» WeexpectthefollowingdevelopmentforthecourseofbusinessinthesegmentsofwesternEuropeandsou-thern/easternEurope:inbothsegments,weexpectsa-lestoremainstableincomparisontothepreviousyear.Overall,weexpectslowedgrowthinwesternEurope.Inouropinion,strongergrowthcouldalsosetininsou-thern/easternEurope.Significant events following the end of the busi-ness yearOn1stJanuary2011,UzinUtzAGcontractuallyagreedtoacquire80.4%ofthesharesofLøkkenASinSkien,Norway.TheacquisitionofthissalescompanycreatesalaunchplatformforNorwayandScandinaviaasawhole,sincewehaveaccesstoanalreadyexistingsalesnetwork.» Therewerenofurthersignificanteventsfollowingthebalancesheetdate.

theyear2010wastherealcrisisyear,andisstillhavingitseffectsonthecurrentyear,althoughimminentpro-jectsinofficeandresidentialconstructionandEUsub-sidiesshouldcontributetotheupturn.

Future development of the Uzin Utz GroupDespitetheverygoodchancesofacontinuingworldwi-deeconomicupturn,themarketsituationremainsunsta-blebecauseofcertainriskfactors.ExperiencehasalsoshownthattheconsequencesoftheglobalupturnonlyworkwithadelayedeffectonthesectorsinwhichtheUzinUtzGroupoperates.» Inthelightoftheseexpectations,theGroupremainscautious,butveryconfident.UnforeseeabledevelopmentsbeyondthecontroloftheGroup,andtheirconcomitantrisks,maystillunderminethebasisofanyforecast.» Fromthecurrentpointofviewandstateofknow-ledge,thefollowingassessmentofthefuturecompanydevelopmentappearsfeasible:» ThefinancialproblemsofGermanlocalauthoritiesandsomeEuropeancountriesareseverelyhamperingtheinvestmentstrengthofthemainmarketsoftheUzinUtzGroup.Despitethishighlevelofuncertaintyandredu-cedpredictability,wearefirmlyconvincedthatwearewell-preparedfortheJubileeyear2011andforthefu-turebecauseofthestrongmarketpositionwehavees-tablished,ourorganisationstructure,ourbroadproductrangeandourregionaldiversification.» Duetothisuniqueposition,weareconfidentthatthestagnationoftheconstructionmarketwillnotspreadtotheUzinUtzGroup,andthatwecanthereforeexpectaverypositivebusinessyear2011.Inadditiontoafurtherincreaseinsales,wealsoexpectanincreaseinthere-sultfromnormalbusinessactivities.Thisperformancewillbeallthemoreimportantsinceincreasedcostsareplannedforthebusinessyear2011,causedbythefort-hcomingJubilee.Inadditiontothiscosteffect,thede-velopmentinrawmaterialcostswillalsoconstituteanimportantfactor.Inthecaseofrawmaterialswhicharesensitivetoprice,demandandvolume,contractswillbeconcludedwithoursupplierswhichguaranteeaspeci-ficofftakequantity,andalsoafixedprice,foruptooneyear.» Thefinancialsituation,whichisaffectedaboveallbyinvestmentsofUzinUtzAG,willremainrelativelystab-leinthebusinessyear2011.» Duetotheexpectedbetterordersituation,aslight

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Research and development activityCostsforresearchanddevelopmentintheGroupamoun-tedto€5.4million(4.7)intheyear2010.Anaverageof77(75)employeesworkedintheareaofR&D/producttechnology,whotogethercontributedtoanewproductquotaofallUzinUtzdevelopmentlocationsof49%(38).Intermsofindividualbrands,wecanreportasfollows:

UZin & codex brandsUZINhasbeenabrandofexpertiseofthespecialisttradeandspecialistwholesalebusinessinthebuildingindust-ryfor60years.Forthispurpose,UzinUtzAGproducesawiderangeofconstructionchemicalproductswhichhavepropertiesspeciallymatchedtotheapplicationprocesses.AttheUlmheadquarters,theR&Dperson-nelresearchanddevelopevernewerandmoreinnova-tiveproductsystems,inordertofacilitatetheworkofcustomersinasystematicway.Theydevelopoutstan-dingproducts,whoseperformancemakesthemstandoutclearlyfromtheotherproductsonthemarket,andprovideclearlydefinedaddedvalueforthecustomer.Inthereportingyear2010,andthereforeoneyearearlierthanplanned,thenewproductquotaof51.9%excee-dedthetargetof50%setfouryearsagofortheJubi-leeyear2011.» Inconcreteterms,thismeansthatUzinUtzAGin2010generated€46millionofsaleswith“new”pro-ducts,whicharenomorethan5yearsold.Theinno-vationleadershipofUzinUtzAGwasalsoimpressivelyconfirmedbytherepresentativemarketsurveycarriedoutbytheperiodical“Fußbodentechnik”inthe04/2010issue,whichasked1,500Germanflooringbusinessestonametheirfavouritelayingmaterials.UzinUtzAGemer-gedasthe“mostpopularlayingmaterialmanufactureroftheyear2010”,andthedrymortarproductsUZINNC170LevelStarandUZINNC182eachtookfirstplaceinthecategories“Bestself-levellingcompound”and“Bestlow-slumplevellingcompound”.Intheotherflooringsys-temcategoriesof“Primer”and“Adhesive”,thecorres-pondingUZINfluidproductsallgainedaplaceonthepodium.ThedispersionproductsUZINPE280andUZINKE2000Sachievedonethirdandonesecondplaceres-pectively.ThisisthebestpossibleconfirmationthatthedevelopmentresultsofUzinUtzAGenjoythegreatestregardinthesector.Competitiveadvantagescanonlybeconsistentlyused,andabove-averagegrowthachie-ved,withacontinualflowofinnovations.Thecontinui-

tyoftheresearchstrategyisimportantbothforboomandforcrisistimes.Theglobalrecessionhasleftdeepscarsonmanycompanies,insomecasescreatinggreatuncertainty,althoughnotatUzinUtzAG.Onthecon-trary,theR&Dstrategyofthecompanyisdirectedinthelongtermatthefurtherdevelopmentoftheportfo-lio,andatground-breakingsolutionsderivedfromglobaltrends.UzinUtzAGhaslaidthegroundworkforsustai-nablesuccessesofthebusinessareasofUZINandcodexwithaseriesofnewproducts.Inthiscase,itwasessen-tialtotakeintoaccounttheparadigmshiftinthesec-tor,accordingtowhichsuccessisnotdeterminedonlybynewproducts,butalsobyneweffects,newsystemsandnewsystemsolutions.Thisdecisivecontributiontoachievingourambitiousobjectiveswasmadebyourhighly-motivatedR&Dpersonnel,whoin2010devotedeveryefforttobringingnewproductsonline,andfromapipelineof45projectsattheUlmheadquarters,andprepared22productsformarketlaunch.» Themajorhighlightsaredescribedbelow:

1. Dry mortar developmentsa) Laying materials for natural stoneNaturalstonesareformedbynaturalprocesses,sothatunevenness,colourandshapevariationscannotbepre-vented.Everynaturalstoneisunique,andthisunique-nessthereforealsoplacesspecialrequirementsonthelayingandjointing.Layingproductswhichpreservethenaturalbeautyofthestonearethereforeallthemoreimportant.Forthisreason,UzinUtzAGhassetitselfthestrategicobjectiveintheareaofcement-basednaturalstonegroutingofofferingthecraftsmanspecialadvan-tagesintheformofinnovations.Followingthesuccessfuldevelopmentin2007ofacomprehensivegroutingrangeforceramictilesindifferentshades,extensiveformula-tionworkwascarriedoutin2010toproduceatotalof9differentcolourvariantsforthenaturalstonegroutingrangecodexBrillantcristal.Thesecement-basednatu-ralstonegroutingmortarscompletethecodexgrou-tingmortarrangeinanexclusiveway,sothatnothingmorestandsinthewayoftheirmarketlaunchin2011.Beginningwiththemixingprocess,throughtojointingandwashingofthenaturalstonejoints,outstandingaddedvaluehasbeenprovidedfornaturalstonelayers.Thefinishednaturalstonejointappearancealsostandsoutforthefulljointfillingandtheexceptionallook.Thenew,verylow-emissiongroutingmortarsfornatural

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larlyfavourableapplicationpropertiesincomparisontonormalreduced-dustproductsonthemarket.Particularpropertieswhichshouldbementionedincludetheout-standingnon-slipcharacteristics,evenwhenusinglar-ge-formattiles,smoothworkingwithoutstandingtimeandtheparticularlylongopentime.Worksafetyisalsogreatlyimprovedwithregardtodustreductionbyme-ansofthespecialformulationused.Duetothenew,in-novativeandadvancedformulation,withupto90%lessdustreductionduringmixing,codexPowerCX5isoneoftheabsolutetopproductsamongstlow-dust,thin-bedmortarsonthemarket.

c) Low-slump levelling compoundsWiththemarketlaunchofthenewLevelPlusEffectge-nerationin2008,UzinUtzAGsetnewstandardsintheareaof“self-levellingcompounds”,impressivelydemons-tratingitspositionasthetechnologyleader.Thelastgapinthelevellingcompoundsectorisnowbeingclosedwiththeoptimisationofthelow-slump,cement-basedlevellingcompoundUZINNC182.Althoughtheexistingproductwasvotedoneofthemostpopular“low-slumplevellingcompounds”inthesurvey,thespecialistdepartmentofDryMortarDevelopmenthasimprovedtheformulationevenfurther.Truetothemotto“makingthebestlow-slumplevellingcompoundevenbetter”,thepowderspe-cialistssucceededinprovidingthenewproductwithac-celeratedhardening,bothatlowapplicationtemperaturesandhighlayerthicknesses.Atthesametime,theformu-lationwasalsochangeslightlyinordertoimprovethemodellingcapabilityandthesurfacefinish.Therequire-mentshavealsobeencreatedtoenableustoadvertiseinfuturewiththemostprestigiouseco-labels,andthebestknowninGermany,suchastheBlueAngelandEmi-codeEC1RPlus.Thenewproductalsoguaranteesabet-tercompositeadhesionoftheadhesiveonthecompoundlayerinthecaseofdirectuppercoveringapplication.Twonewlow-slump,cement-basedlevellingcompoundswerealsodevelopedfortheScandinavianmarket.UZINNC181andUZINNC184canbeappliedtovarioussubstra-teswithoutpriming,andarereadyforlayingafteronlyonehour.BothnewproductsmeetthehighestemissionrequirementsofEmicodeEC1RPlusandtheirapplica-tionconsistencycanbevariedbyindividualwaterdosing.

d) Support of the locations in Soissons and LegnicaAfurtherfocusofactivitiesattheheadquartersin2010

stoneareconvincingaboveallfortheveryfastcrystal-linewaterbonding,andthereforeprovidegenuinesta-bilityofformandhighcolour-fastnessofthejointedna-turalstonecovering.Incomparisontoexistingproductsonthemarket,thenewdevelopmentsalsodemonstra-tetheadvantageofoptimumflankadhesion,combinedwiththeperfectbalancebetweenhardnessandflexi-bility,sothatevenwithunfavourablejointgeometriesandnaturalstonetiledimensions,nocrackscanform.Inparallelwiththesedevelopmentactivities,extensivetestswerecarriedoutinordertoachievethebestpos-sibleclassificationofCG2WAtoDINEN13888.TheCG2WAclassificationstandsforthefulfilmentofthehighestpossiblestrengthrequirement,thelowestpos-siblewaterabsorption(W)andthehighestabrasionresistanceclass(A)inthisproductgroup.Thefurtheractivitiesofthedrymortarspecialistsfocusedonthecompletionofthenaturalstonerange,andtheobjecti-veofprovidingaquick-hardening,white,cement-basedspecialmedium-bedmortarreadyformarketlaunchin2011.WiththeproductcodexStoneSX60MB,whosedevelopmentwaslargelycompletedin2010,sensitivenaturalstonecoveringscannowbelaidreliablyandwi-thoutdiscoloration.Thisproductalsostandsoutforitsacceleratedsetting,whichholdsthewaterinthemortarbymeansoffastcrystalformation,withoutgivingitofftothenaturalstone.Thankstotheuseofspecialwhitecements,theproductcanalsobeusedforlight,trans-lucentnaturalstones.Asoneofthefewlayingmaterialmanufacturersfortilesandnaturalstone,codexrecog-nisedthetrendtowardsverylow-emissionandthereforehealthylivingproductsatanearlystage,andformulatedthenewcodexproductline“ecoTec”,whichalsoincludesthenewlydevelopedproductsofcodexBrillantcristalandcodexStoneSX60MB.ThesecomplywiththebestpossibleemissionrequirementclassEmicodeEC1RPlus.

b) Reduced-dust dry mortar productsThespecialistdepartmentofDryMortarDevelopmenthassucceededincomprehensivelyassessingthestruc-turalandeffectprincipleofsuitablefluiddust-removaladditives.Thehigh-qualityresultsobtainedfromthisworkwereusedforthedevelopmentofareduced-dust,self-levellingcementlevellingcompoundprototypeforthemarketsegmentUZIN,andforthedevelopmentofthereduced-dustthin-bedmortarcodexPowerCX5.TheproductcodexPowerCX5demonstratesparticu-

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wasthe“transfer”ofthenewlevellingcompoundtech-nology“withLevelPlusEffect”,alreadymarketedwithgreatsuccessinGermany,toourforeigndrymortarworks.Inthiscasetheobjectivewastoadaptthepro-ductformulationsandproductionprocessesofUZINNC175NeuandUZINNC170LevelStartothelocalrawma-terialcircumstancesofthelocationinSoissons,inordertofulfilessentialrequirementsfortheriskmanagementandanypotentiallossofproductioninUlm.Thecement-basedlevellingcompoundUZINNC395wasalsore-for-mulatedwithrawmaterialslocallyavailableinFrance,adaptedtolocalrequirementsandthereforepreparedfortheFrenchmarketlaunchunderthenameUZINNC495.FurtherextensivedevelopmentsupportwasalsocarriedoutfortheworksinLegnica,tobeabletoprovi-deanewself-levellingcompoundUZINNC146adap-tedtothelocaleasternEuropeanmarketrequirements.ThethinscreedUZINNC195Swasalsoimprovedwithregardtothecoverageandsurfacesmoothnessandpre-paredforitsmarketlaunchinPolandandScandinavia.

e) UZIN TurboLight-System®InclosecooperationwithApplicationTechnology,wesuc-ceededinbringingthenewUZINTurboLight-System®tothepointofmarketreadinesswithsomeuniqueadvan-tages.Theadvantagesarecleartosee:thetimesuntillayingreadinessofthesystem,whichisalsoheat-insu-lating,havebeenreducedbyabouthalfincomparisontodryscreeds.Withthissystem,thesupportingsubs-trateissubjectedtoonlyonethirdoftheloadofcon-ventionalscreeds.Areasofunevennessfrom8mmto30cmcanalsobelevelledoffseamlesslywiththissys-tem.Lastbutnotleast,thecompositecanalsobeusedwithoutrestrictionindampareas.Thisinnovation,forwhichapatenthasbeenapplied,isasystemoflayingmaterialsperfectlymatchedtoeachother,andisideallysuitableasaproblem-solverforconstructionsiteswithtightdeadlinesandlargeareasofunevennessinthere-novationarea.Textileandelasticfloorcoverings,par-quetandtilescanallbelaidonthisfast-hardeningsys-temusingtheusualmethods.SystemconsistsofthefastlightsmoothingmortarUZINNC194Turbo,thereno-vationfleeceUZINRR201andthecompositelevellingcompoundUZINNC195Neu.Thelightsmoothingmor-tarUZINNC194Turbohardenslargelywithoutshrin-kage,andisoneofthekeycomponentsofthesystem,consistingofspecialfastcementbondingagentsand

lightadditives.There-formulationofthecompositele-vellingcompoundUZINNC195wasalsocompletedinthecourseofpreparationandtestingofthisnewsystem.

2. Fluid product developmentsa) Solvent-free dispersion contact adhesiveTheproject“Solvent-free,verylow-emissiondispersioncontactadhesive”wasdevelopedunderthedirectionoftheR&DspecialistdepartmentofUzinTyroAG,andtheresultingproductsuccessfullytestedinclosecooperati-onwiththeCentralLaboratoryinUlm,inordertopre-pareitformarketlaunchin2011.Afterseveralyearsofdevelopmentwork,wecannowsupplyforthefirsttime,andonthe100-yearJubileeofUzinUtzAG,asolvent-freeneoprenecontactadhesiveonanaqueousdisper-sionbasis,whichcoversthecompleteapplicationrangeofproductswithahighsolventcontentandhighinitialstrength,whichwerepreviouslyconsideredtobeindis-pensableforthispurpose.WithUZINWK222wehavesucceededindevelopinganoutstandingnewproduct,withwhichskirtingrails,profilesandfloorcoveringscanbefittedtostairs,wallsandceilingsinfuturewithoutanyrisktohealth,withoutthefloorlayerhavingtochangethemethodofapplication.Sincethecomplete,group-wi-dediscontinuationofsolventusehasbeendefinedasanimportantobjectiveforthecomingyears,thisinnovati-onrepresentsafurthermilestoneinecologicalbuilding.

b) Laying materials for the fixing of floor coveringsPVCdesigncoveringsareatrendwithmarketpotential,areenjoyingincreasingpopularityandareideallysuita-bleforshops,hotelsandresidentialareas.Forthisap-plication,theR&DFluidProductsspecialistdepartmenthasdevelopedthenewproductsystemUZINU3000foraveryspecialmethodofergonomiclayingofdimensio-nallystablePVCdesigncoverings.Theready-to-usedi-spersionsystem,consistingofthefastfixativeUZINU3000RollFixandthematchingUZINU3000Primer,isinitsapplicationrangeanoutstandingadditiontothealreadyexistingalternativeproductrecommendationsUZINKE66andUZINSigan2,particularlyforsmallerareas.Thenewtechnologyusedisideallysuitableforsimpleapplications,andenablesparticularlyconvenientworkinginthestandingposition.Italsoallowsseamlesslaying,andifnecessaryalsothesimplereplacementofindividualfloorcoveringelements.Afurtherpluspointofthenewsystemisthatlaidareasareimmediatelyset

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95,aninnovationinpolyurethaneadhesivetechnology,wasunmatchedforalongtime,andwasalsonotsur-passedbythesilane-terminatedadhesiveUZINMK100,sinceadhesiveswithsilaneadhesivetechnologyusuallydemonstratealowerperformancerangeinthisrespect.Theycouldhowevercompensateforminordisadvantagesofpolyurethanetechnology,suchasperhapsthemoredifficultandcomplexapplication.Intensiveeffortswerethereforedevotedtocombiningthebestpropertiesofbothadhesivetechnologies.Theadhesivesexpertssol-vedthisprobleminanimpressivewaywiththedevelop-mentin2010ofanewsilane-terminatedpolyurethaneadhesive.AnewerainparquetflooringhasbegunwiththenewproductUZINMK200.Itcombinesthelong-provenpolyurethanetechnologywiththetechnicalworksafetyadvantagesofsilanetechnology.Throughtheuseofanewhybridbondingagenttechnology,theR&DFlu-idProductsspecialistdepartmenthassolvedtheprob-lemofhowtobringthestrengthsoftwotechnologiesdowntoanoutstandingcommondenominatorusingamodulardesignprinciple.Theresultisthefirst1-Ksila-ne-terminatedadhesivewithahard-elasticandsimul-taneouslyfast-settingadhesiveserration.Itsrelativelyhighserrationhardnessisalmostequivalenttothatof1-Kpolyurethaneadhesives,althoughtheproductstillhasexcellentspreadingproperties.Themoisture-harde-ning1-Ksilane-terminatedadhesiveischaracterisedbythefollowingpluspointsofthecompletelynewstan-dard:Firstly,thehard-elasticadhesiveserrationwithveryhighshearstrengthandverygoodspreadingproperties,andsecondlytheextremelyfastdryingpropertieswithsimultaneouslylongopentime.Theparquetlayerthusreceivesaproductwhichisextremelyeasytoapplyandlay,whichgreatlyrestrictswooddeformationandjointformation,andallowshimtosandthesurfaceafteronly12hours.Thissolvent-andwater-freeadhesiveisappro-vedforallparquettypesandformats.Followingsuccess-fulemissiontesting,thenewproducthasbeenclassifiedinthebestEmicodeclassEC1RPlus.» Inadditiontothiswork,thedevelopmentofaspe-cialproductfortheexportmarketwassuccessfullycom-pleted,andthesolvent-freedispersionparquetadhesiveUZINMK61preparedforitsforthcomingmarketlaunchin2011.Inthereportingyear,theimportanttasksoftheR&DFluidProductsspecialistdepartmentincludednotonlythedevelopmentofnewproducts,butalsothequa-litativefurtherdevelopmentofexistingproducts.The

forfoottrafficandloading.Thankstothelowapplicationquantity,theimpressioncharacteristicsarereducedtoaminimum.Thenewlydevelopedadhesionfixativeforde-signcoveringsdiffersfromexistingcompetitorproductsduetothesignificantlybetterapplicationpropertiesandalongeropentime.Thedevelopmentspecialistshavealsoformulatedanewuniversalfixativetailor-madeforthelocalrequirementsintheeasternEuropeanmarket.ThenewlydevelopedproductUZINU500hasbeende-signedasaspecialfixativeforthismarket,andhasthedecisiveadvantageoverlocalcompetitorproductsthatPVCandCVfloorcoveringsinresidentialapplicationscanbelaideasilyandcost-effectivelybyrollingthefi-xativeontodifferentsubstrates,withcorrespondinglylowmaterialconsumption.

c) Products for special applicationsThepolyurethanelevellingcompoundUZINKR410hasbeenupgradedtoverylowemissionlevelsbyextensivere-formulationwork,andnowcomplieswiththebestEmicodeclassEC1RPlus.Theoptimisedproducthasalsobeengivenbettercoverage,thetrowelapplicationhasbeenmadeeasierandthesurfacefinishlooksmuchmorehomogenous.Anewfibre-conductivedispersionadhesivehasalsobeendevelopedforindustrialapplica-tions.UZININ19458,anadhesiveforPVC,rubberandtextilefloorcoverings,isoutstandingparticularlyforitshighinitialconductivityanditsexcellentadhesion,particularlyincombinationwithfloorcoveringswithahighsoftenercontentondoublefloorpanelswithme-tallicandmineralsubstrates.

d) Parquet laying materialsAsannounced,UzinUtzAGdiscontinuedthesaleofsol-vent-basedparquetadhesivesfortheGermanmarketatthebeginningof2011.Notonlyforthisreasonwasitthatthefocusremainedheavilyontheparquetareaagainin2010.Awholerangeofground-breakingnewlayingma-terialsweredeveloped.Thefirstofthesethatshouldbementionedisthegroupofmoisture-hardening1-Kpar-quetadhesiveswhicharebothsolvent-freeandwater-free,andonthebasisofinformationrecentlypublishedbythe“BerufsgenossenschaftBau”(“BuildingTradesAs-sociation”)cannowbeofficiallyclassifiedassubstitu-tematerialsforsolvent-basedparquetadhesives.UzinUtzAGhasforyearsproducedparquetadhesiveswho-seserrationhardnessisuniqueinthemarket.UZINMK

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mostrecentexampleofsuchanoptimisationin2010wasthefinalformulationofthelow-waterandverylow-emissiondispersionparquetadhesiveUZINMK80SNeu.Thespreadingcharacteristicsandalsothefilmingspeedhavebothbeensignificantlyimproved.Thenewdevelop-mentnowoffersasignificantadvantageovercompara-bleproductsonthemarketwithregardtowooddefor-mationwhenlaying2-layerparquet.Thenewproductcontainslesswater,andasasystemcomponenthasbeenspeciallymatchedtothedispersionparquetpri-merUZINPE380Neu.Inthecourseofthiswork,thecorrespondingdispersionprimerUZINPE380wasalsooptimised,inordertosimultaneouslyimprovetheper-formanceofthebasicparquetsystem.Sinceitsfurtherdevelopment,thenewprimerforabsorbentsubstrates,onwhichtheparquetcanbelaiddirectwithdispersionparquetadhesives,complieswiththerequirementsofthemostdemandingandbest-knownemissionlabelsinGermany–the“BlueAngel”and“EmicodeEC1Plus”.Theoptimisedsystem“UZINPE380-UZINMK80S”thereforerepresentsanimportantalternativeforuseinbuildingsinwhichtechnicalfunctionalityandthestric-testecologicalcriteriaareoftheutmostimportance.

3. General building approval for parquet adhesivesDuetochangedstipulationsintheConstructionRegula-tionsListBPart1,an“allgemeinebauaufsichtlicheZulas-sungspflicht”(abZ)(“generalbuildingapprovalobligati-on”)appliessince1stJanuary2011forparquetadhesiveswhichareintendedforuseinregularlyusedrooms.Thismeansthatonlyparquetadhesiveswhichhavebeenap-provedbytheDeutschesInstitutsfürBautechnik(DIBT)(“GermanInstituteofBuildingTechnology”),andarede-signatedbythemonitoringsymbol(Ü)maybeusedinsuchareas.Infringementofthisrequirementconstitu-tesanoffence,andcanleadtothecustomerrejectingacceptanceoftheservice.Theinitiationofthisregula-tionissubjecttotheEUBuildingProductsDirectiveandthemainrequirementcontainedinitregarding“Hygi-ene,health,environmentalprotection”,thepurposeofwhichistoprotectusersofbuildingsagainstemissions(VOCs)frombuildingproducts.However,sinceVOCre-quirementsarenotyetregulatedattheEUlevel,ithasonlybeenpossibletospecify“national”emissionlimitvalues.Forthisreason,theDIBTrequiresanemissionrestrictioninregularlyusedroomsforallparquetadhe-sives,whichisbasedonaspecialtestscheduleofthe

“AusschusszurgesundheitlichenBewertungvonBau-produkten”(AgBB)(“CommitteefortheHealthAssess-mentofBuildingProducts”)alreadyexistinginGerma-ny,andfollowingsuccessfultestingissuesanapproval,whichisvalidforfiveyears.ThespecialistdepartmentsofChemicalAnalysis,ProductSafetyandFluidProductDevelopmenthavesubjectedallparquetadhesivesoftheproductrangetotheAgBBtestprocedureandqualifiedthemfortheabZcertification.Thisprovidedtherequi-rementfortheÜ-designationfortheparquetadhesivesUZINMK80SNeu,UZINMK92S,UZINMK92Sdark,UZINMK100andUZINMK200andalargenumberofown-brandproducts,andthenecessaryworkspro-ductioncontrolswerealsoinstalled.Extensiveprepara-tionswerealsomadeduringthereportingyearinordertocomplypromptlywiththenextapprovalobligationfortheproductgroup“floorcoveringadhesives”,whichwillinfuturebesubjecttotheseregulationsandisduetocomeintoeffecton1stJanuary2012.

4. Ecology and other product safety topicsa) SustainabilityForUzinUtzAG,sustainabilityismorethanjustamar-ketingtrend.Sustainabilityisafundamentalrequire-mentonbuildingworksandbuildingproducts,andwillthereforebecomeakeysuccessfactorfortheconst-ructionindustryoverthecomingyears.Ouruniformlong-termthinkingshowsthatsustainabilityatUZINUtzAGisnotjustaconvenientlabel,butisregardedasasignofgreatcommercialresponsibility.Sustainabilityisthereforenotregardedasbeingone-dimensional,butalsotakesintoaccountecological,economicandsoci-alconsiderations.Nowthattheinterdisciplinaryproject“Sustainability”hasbeeninhandforseveralyearswithverygreatsuccessbythespecialistdepartmentPro-ductSafety,togetherwiththecompanymanagement,UzinUtzAGsucceededin2010,asthefirstcompanyinthefieldoflayingmaterials,inproducingenvironmen-talproductdeclarations,so-calledEPDs,foracomple-tesystem,andhavingthemassessedexternallybythe“SachverständigenausschussdesInstitutsfürBauenundUmwelt”(“ExpertCommitteeoftheInstituteforCons-tructionandtheEnvironment”).EPDsarethemostsui-tableinstrumentforprovidingvaluableandtrustwor-thyecologicalproductdataforarchitectsandplanners.SofartherearenoEPDsfromanymarketparticipantsinthesector,neitherforcorrespondingproductsnorfor

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ordertoobtaincertificatesofdifferentemissionseals.WithaneyetofutureEuropeanregulations,suchastherevisionoftheECBuildingProductsDirectiveandthebuildingapprovalobligationforparquetadhesivesfrom1stJanuary2011andforfloorcoveringadhesivesfrom1stJanuary2012,thespecialistdepartmentsofChemi-calAnalysis,ProductSafetyandFluidProductDevelop-ment,inacomprehensivetestprocedure,havesubjectedtheexistingecologicalproductrangetothenewcertifi-cationsystemandadaptedittothe“new”Emicodere-quirements.Despitethishighhurdle,amajorproportionoftheproductspreviouslydesignatedasEC1willinfu-turecomplywiththestrictercriteriaofthe“new”labelEC1Plus,sincethisecologicalproductareaalwayshadtomeetahighinternalqualitystandardatUzinUtzAG.About75%ofthepreviousEC1productshavenowbeenqualifiedforthenewexclusiveclassEC1Plus.

c) REACHFrom1stDecember2010,undertheREACHrequirements,thereexistsanotificationobligationintheCLPdirectory(Classification,LabellingandPackaging)oftheEuropeanChemicalAgencyECHAforimportersofrawmaterialsfromnon-EUcountries.Asanimporterofnon-EUrawmaterials,UzinUtzAGisthereforealwayssubjecttothisnotificationobligation,firstlyifproductsareimportedwhichcontainhazardoussubstancesrequiringaparticu-lardesignationoftheproduct,andsecondlyifproductsareimportedwhicharenotsubjecttodesignation,andcontainsubstanceswhicharenotdangerousbutsubjecttoregistration,andwhichexceedthereferencelimitofonetonneperyear.Inordertocomplywiththeseobli-gations,whicharecoupledtotheREACHrequirements,substantialcapacityinthespecialistdepartmentPro-ductSafetywasappliedinthereportingyear2010tomakethenecessarycontributiontotheintendedcom-prehensiveEuropeandatabasefortheclassificationanddesignationofthesubstancesdescribedabove.

5. Quality assurance system within the Uzin Utz GroupThegeneralobjectiveofqualityassurancemanagementandtheinternalcontrolsystemistoensurethequali-tyofUZINproducts,whichisacknowledgedworldwi-de.ThespecialistdepartmentsofQualityManagementandInternationalR&Dstartedacomprehensiveprojectin2010,inordertoensurethatcertainproductgroups

acompletelayingmaterialssystemforflooringconst-ruction.HereUzinUtzAG,astheleaderinthesector,hasproducedEPDsforthecompletesystemstructureinthereportingyear,andhashadthemvalidated.ThisconsistsofthedispersionprimerUZINPE60andtheminerallevellingcompoundUZINNC170LevelStarforthesubstratepreparationandthedispersionproductsUZINKE66orUZINUZ88forthelayingoftherelevantfloorcoverings.Forthefirsttime,completecalculationsarenowpossible,whichcanbeincludedinthebuilding’seco-balance.UzinUtzAGshowsbythisexamplethatecologicalresponsibilityandproductinnovationarebynomeansmutuallycontradictory.Internalkeyecologi-calfigureshavealsobeenestablishedforthefirsttime,whichalsodocumentaquantitativeconfirmationofthesustainabilityinitiative.76.2%ofthecompany’ssalesin2010weregeneratedwithproductswhichcomplywiththestrictestecologicalemissionrequirements,suchasthoseoftheBlueAngelandtheEmicode.UzinUtzAGthereforestandsoutnotonlyforitstechnicalexpertiseonallaspectsofflooring,butisalsosettingnewstan-dardsinthesector,whichalsotakeintoaccountquan-titativeecologicalaspects.Herethecompanyhasbeenthefirsttoputsustainabilityactivitiesonaconfirmab-leandverifiablefoundation.

b) New Emicode “EC 1 Plus”Formanyyearsnow,UzinUtzAGhasplacedthefocusofitsactivitiesonthedevelopmentofproductswhichare“safe”fortheenvironment,thefloorlayerandtheend-consumer.WiththeassistanceoftheR&DspecialistsofUzinUtzAG,the“GemeinschaftEmissionskontrollierteVerlegewerkstoffe,KlebstoffeundBauprodukte”(GEV)(“Associationforemission-controlledlayingmaterials,adhesivesandbuildingproducts”)hasrevisedtheEmi-codeclassificationforbuildingproducts.Amongstotherthings,theyhavedevelopedanewpremiumclass“EC1Plus”,whichevenexceedsthedemandingrequirementsoftheprevioushighestcategory“EC1–verylow-emissi-on”.The“new”EC1Pluslimitvaluesarethereforestric-terthanthelimitvaluesrequiredforBlueAngelcertifi-cation.The“new”Emicodehasonedecisiveadvantageincomparisontotheoldsystem:Duetothemodifiedemissiontestingprocedure,tisnowpossibleforthefirsttimetomakedirectcomparisonsofthetestresultstotheBlueAngel,theAgBBsystemandtheEmicode.Onlyoneemissiontestwillthereforeberequiredinfuturein

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whichareproducedatdifferentlocationswithintheUzinUtzGroup,canbeproducedworldwideaccordingtothesamestandards.Wewillthereforebeableinfu-turetoproduceidenticalproductqualitiesinallworks.Atthesametime,thiswillalsocreatetherequirementstoachievedeliveryreliabilityofproductsinemergencymanagementscenariosbymeansofaredundantsystem.Intheeventofaproductionstoppageatoneworks,de-liveryreliabilitycouldthenbemaintainedbyanalterna-tiveproductionlocation.ThefundamentalcomponentofthisprojectistheharmonisationoftestingmethodsandproductspecificationsinallcorrespondingworksoftheUzinUtzGroup.Inthefirststep,thecentraldepart-mentofQualityManagementhasmadevariousregulartargetandmethodagreementswiththeresponsiblelo-calqualityassurancepersonnelofthesubsidiarycom-panies.Testingmethods,specificationsandqualityassu-ranceprocedureshavebeenfurtherstandardised,andtheconclusivenessofmoderntestingproceduresinvestigated.Themainresultsofthesequalityassurancemeasureswillnowbesystematicallyrecordedandcentrallyevaluated.» Inadditiontotheproductsandactivitiesoftheyear2010describedhere,andinordertomaintainourinno-vationlead,numerousotherproductoptimisationswereimplemented,andotherworkcarriedoutwhichwillnotbedescribedseparatelyatthispoint.

UZin switchTecChanged user behaviour and requirements for healthy livingInEuropeandthewesternEuropeanforeignmarketsofUzinUtzAG,achangehasoccurredinrecentyearsindemandbehaviourintheconstructionandrenovationofresidentialandcommercialproperties.Inthecaseofre-novationinparticular,usersareincreasinglylesspreparedtoacceptthestoppagetimesandhindrancesusuallyas-sociatedwithsuchwork.Theynowdemandfastandfle-xiblesolutions,whicharealsoreversiblewithlittleeffort.» Investorsandend-consumersarealsobecomingmoresensitivetointernalroomhygieneandlivingquality,andthereforetheneedtouseproductswhichwhereverpos-sibledonotgiveoffsubstancesintotheroomair,andthattheseemissionsdonotposeanyhealthrisk.» TheswitchTecdryadhesivetechnologyhas,sincethebeginningofitsdevelopmentinthe1960’s,beenasy-nonymforfast,cleanandflexiblerenovationwithverylowemissions.

EMICODEInordertoemphasiseourpioneeringroleforahealthyroomclimate,wehavemodifiedourareaproductsUzinSigaway,UzinSupertape7900,UzinSigan1,UzinSigan2andUzinSigan3accordingtothelatestGEVclassifica-tioncriteriafortheEMICODE.AtthebeginningoftheUzinJubileeyear2011,alltheseareaproductsnowful-filthecriteriaforthehighestclassEMICODEEC1PLUS:“verylow-emissionPLUS”.

Blue AngelTheproductsUzinSigan1,UzinSigan2andUzinSigan3,togetherwiththecorrespondingedgetapesSigan1Tape,Sigan2TapeandSigan3Tape,havebeenre-formulatedtocomplywiththematerialcriteriaforthequalitysealofthe“BlueAngel”,whichiswellknownbyend-customers.» Theproductshavealsobeenmadesignificantlymorerobustagainstconditionsoccurringduringnormaluse(e.g.moisturepenetrationduetocleaningetc.).AllSiganproductsareeasytoapply,areguaranteedtobeabletobeappliedbubble-freeandcanbeeasilyrepositionedifrequired.Adhesionforcesadaptedtotherelevantappli-cationpurposeguaranteereliableuseandresidue-freeremovalevenafteryearsofintensiveuse,somethingwhichisuniqueinthisproductquality.

Uzin PlanusInordertooffercompletesystems,thedispersionprimerPlanushasalsobeenre-formulatedinaccordancewiththerequirementsfortheBlueAngel,andupgradedtoamodernrawmaterialbasis.Herewehavesucceededindevelopingaverylow-emission,film-formingspecialpri-mer,basedonaqueousdispersionpolymers,whichalsohasimprovedapplicationcharacteristics.FollowingthephilosophyoftheswitchTecproductline,thenewPla-nusalsodemonstratesexcellentresistancetotheusu-aleffectsofsuchthingsasmoistureandsofteners.Thenewformulationcanalsobesanded,andcantherefo-recouldeasilybere-workedifrequired,whichfurtherincreasestheflexibilityandrecyclabilityofthesystem.» UzinPlanusalsocomplieswithalltherequirementsforEMICODEEC1PLUS“verylow-emissionPLUS”andtheBlueAngel.» Uzinisthereforethefirstsupplierofacompletesys-temconsistingofadryadhesive(Sigan1)inconjunc-tionwithaprimer(Planus)withthecombineddesigna-tion“verylow-emissionPLUS”and“BlueAngel”.

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WoLFF brandTheyear2010alsosawthecompletionofthedevelop-mentoftheGeckoFlex.Thismachinehasbeenspeciallydevelopedforthesandingofparquetedges,andextendstherangeofconventionaledge-sandingmachinesofthePallmannbrand.» TheMamboEvosingle-disksandingmachinehasalsobeenprovidedwithnewelectronicswithimprovedope-ration.Theguidehandlehasalsobeencompletelyre-designedandprovidedwithfully-variableadjustment.» TheWallmasterisanewspecialtoolintheWOLFFrange.Thistoolisidealforthefinishingofbasesandtroughformation.Itsspecialshapeenablesseveralfunc-tionsrequiredwhenlayingPVCcoveringswithoverlap:markingtheheightofskirtingboards,cuttingthemit-resintheinnerandoutercornersandneatshapingandpressingintocornerswithoutthedangerofpiercingthecovering.» TheErgoCuttercompletedin2010isalsoagreataidforthecraftsman.Thisisapre-cuttingdeviceforoldco-veringswhichcanbeusedinthestandingposition.Inthepast,suchworkhadtobedonelaboriouslyonthehandsandknees.

Pallmann brandTheresearchanddevelopmentofthePallmannbrandwasmarkedintheyear2010bynumerousinnovativeresearchprojectsanddevelopmentactivitiesimportantfortheparquetsector.» AnextractoftheactivitiesoftheDevelopmentDe-partmentisgivenbelow:» Mandatorylegalregulations,suchasthedesignati-onobligationforsystemscontaining>5%solvents,andthereplacementofsystemscontainingNMPcomprisedthemaincompanypolicyactivitiesoftheR&DDepart-ment.Itshouldalsobeemphasisedinparticularthatinadditiontotheuseofsubstituterawmaterials,manyofthePALL-Xproductswereimprovedwithregardtosuchpropertiesasappearance,coverageandeaseofapplica-tion.Theactivitiesfocusedonthereductionofthesol-ventcontent(to30%)andtheimprovementofthesan-dingcapability.» Furtherresearchactivitiestookplaceintheareaofanewtypeofcoatingforparquetsurfacestobesealedontheconstructionsite.Theobjectivewastodevelopacoatingwhichachievesitsfullload-bearingcapabili-ty,bothchemicallyandmechanically,immediatelyaf-

terapplication.ThisrequirementcanonlybeachievedwithaUVsealant.» Theresearchactivitiestookplaceintheareasofpri-ming(Flash-LightBase)andtopcoatssystems(Flash-Light-Coat),whichweredevelopedtothepointofmar-ketability.Asa100%-system,theprimeroffersoptimumpreparationofthefloor.Becausenodryingofthesystembymeansofemissionshastotakeplace(solvent-free),thehardeningcanbegindirectlyafterapplication.Thetopcoatsystemiswater-basedandsolvent-free–heretoo,hardeningcantakeplaceafteronlyashortdryingtime.Themobilehardeningunit(Flash-Light-Mobile)wasoptimisedinclosecooperationwiththeWOLFFbrandofUzinUtzAG.» Furtherresearchactivitieswerecarriedoutincon-junctionwiththeshareholdingcompanyUnipro.Thesol-vent-free2-KcoatingQeshfloor7750,whichisappliedtodifferentPUandepoxysubstrates,wasdevelopedfortheQeshfloorbrand.Theapplicationofthisprotectivefilmprovidesverygoodresistanceagainstchemicalandmechanicalstress.» Acountry-specificrangeofcoatingswasdevelopedinordertoopenuptheFrenchmarket.Theconceptin-cludesprimersandtopcoatsystemswhicharebothwa-ter-andsolvent-based.

Jordan Lacke brandTheresearchanddevelopmentoftheJordanLackebrandintheyear2010wascharacterisedbymanyinnovativeresearchprojectsanddevelopmentactivitiesimportantforthefurnituresector.» AnextractoftheactivitiesoftheDevelopmentDe-partmentisgivenbelow:» Thefocusoftheresearchactivitieslayonthereduc-tionofthesolventcontents.Thisresultedinthedeve-lopmentofthesystem2KDecolux672amongstothers.Thisisasolvent-based2Klayercoating,whichinadditi-ontothelowsolventcontentalsocomplieswiththere-quirementsoftheDecopaintguideline.2KDecolux672isatransparent,high-fill,light-fastcoatingforinteriorapplication.» AfurtherDecopaint-compliantproductis2KDeco-Soft-Touch692.Thissystemistransparent,withadullmattappearanceandapleasantlysoft,“rubbery”feel.Suchsoft-touchsurfacefinishesareverycommoninau-tomotiveinteriordesign,althoughtherearehardlyanycomparableproductsforwoodsurfaces.

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» Onespecialproductinthislineisthenewlydeve-loped2KClassicGlowEffect.Thissystemcontinuestoglowforacertaintimeinthedark,andisthereforeidealforuseinpublicareas,forexamplewhereescaperoutesneedtobeindicatedinthedarkfollowingapowerfai-lure.

Arturo brandThesyntheticresinisdevelopedandproducedbyUniproB.V.,acompanyoftheUzinUtzGroup,inHaaksbergen(NL).Uniproistheknowledgecentreforfluidfloorcoa-tingsproducedusingsyntheticresin.» Acompletelynewsyntheticresinflooringconceptwastobelaunchedontothemarketatthe2011BAUexhibitioninMunichunderthenewArturobrand.TheprojectsrelatingtothisnewconceptwerethereforeatthetopoftheprioritylistforR&Din2010.Theaimofthisconceptistomergetheproductanddesignintoauniqueendresult.Uniproaimstodevelopintoaspecia-listnotonlyforfunctionalflooring,butaboveallforde-signflooring.Thefloorrepresentsanimportantfunctio-nalfoundationofanyroom.Thefunctionalityiscertainlynotdeterminedonlybypracticalaspects.Theflooralsoinfluencestheatmosphereandthemoodofaroominwhichonelivesandworks.» Inadditiontothealreadyexistingcoveragecoatingsofpolyurethaneandepoxy,acompletelynew,non-yel-lowingpolyurethaneflooringwasdevelopedontheba-sisofatechnologywhichiscompletelynewtoUnipro:thePU2030.Thiswascarriedoutusingrawmaterialswhichwerecompletelynewtousuntilrecently,andwhichhavequiteindividualcharacteristics.Thisflooringwillbeintroducedandavailableinallcoloursbytheendoftheyear.» IncooperationwithJPCoatingsinWürzburg,amatt,transparent“topsealant”wasdeveloped,whichisthefirstcoatingonthemarkettobecompletelysolvent-freeandoffersuniquecolourreproduction.Thisproductwaslaunchedinthesecondhalf-year2010.

RZ brandInthethirdyearofitsmembershipoftheUzinUtzGroup,theincorporationoftheRZlaboratoryintothenetworkoftheGroupwasalmostcompleted.Thefocusin2010layinparticularonthefurtheroptimisationofformu-lations.Therationalisedrangewasfurtherimproved,includingtheareasofrawmaterialselectionandraw

materialpurchasing.Positiveeffectshavealreadybeenachievedinmanyareasbytheimprovedproducts,suchaswiththeRZElasticWipe-Care,whichsinceSeptem-berhashadanoptimisedpH-level.» Thepastresearchanddevelopmentyearconcentra-tedparticularlyonthefurtherextensionoftheoverallRZTurboProtectconcept.RZTurboProtectisaunique,solvent-free2Ksealingcoatingforextremelylong-termprotectionofelasticfloorcoverings.Itstandsoutclearlyfromallalternativescurrentlyonthemarket.Thepro-ductonlyhastobeappliedonce,andtheflooristhenprotectedagainsteventhehigheststresses.Therearealsofurtherproductadvantagesintheareaofenviron-mentandhealth:thecoatingiswater-based,solvent-freeandhasaneutralodour.Thistopproducthasnowbeenpresentedtoallwell-knownfloor-coveringmanu-facturers,testedandofficiallyrecommended.Thecom-binedexpertiseoftheUzinUtzbrandsofPallmannandRZ,andtheflooringexpertiseoftheUZINbrandhaveallgoneintothedevelopmentofthisproduct.» RZChemiewasalsocommissionedwiththedeve-lopmentofnewproductssupportingtheoverall“Tur-boProtect”concept.AspecialPUWipe-Care,aneutralTurbofastbasiccleanerandasurfacerenovationpro-ducthaveallbeendevelopedaroundthesealingcoa-ting,successfullyroundingofftherange.Anodourless,aqueousbasiccleanerwasalsodevelopedonthebasisoftheexistingformulationoftheRZbasiccleaner.Theadvantagesoftheformulationincludeitsrapidactionandthetechnicalcharacteristicofbeingabletoremoveparticularlyold,metal-crosslinkedcarefilmlayersmoreeffectively.

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Existing branchesTheshareholdingstruckchartandthelocationsoftheshareholdingcompaniesinthegroupcanbetakenfromthesection“Shareholdings”intheAppendix.» InadditiontotheUlmlocation,thecompanyhasafurtherproductionlocationinVaihingen/Enz,whichisdevotedexclusivelytotheproductionofthemachinesoftheWOLFFbrand.» ThecompanyalsooperatesarepresentativeofficeinMinsk,Belarus.» UzinUtzAGalsooperatesthreeservicecentresthroug-houtGermany.Thesearetrainingandcommunicationscentresforcraftsmen,thetradeandprojectmanagersatthestrategicallyimportantlocationsofDresden,Me-ckenheimandMunich.» TheFrenchshareholdingcompanybasedinSoissonsalsomaintainsasalesofficeinParis.

Special features of the Group situation report» AllcompaniesnotincludedintheGroupfinancialstatementsareofonlyminorimportancefortheGroupfinancialstatements.

Ulm,18thMarch2011

TheBoard

Imprint

Published by UzinUtzAktiengesellschaft D-89079Ulm InvestorRelations

Produced by UzinUtzAktiengesellschaft SiegfriedGalter,Ulm büroballweg,ulmDesigned by büroballweg,ulm BHPdesignballweg&hupepartner,München

Photography SvenErikKlein,Saarbrücken Photography (Portraits) SvenErikKlein,Saarbrücken RebeccaRayher,Wendlingen

Text UzinUtzAktiengesellschaft SiegfriedGalter,Ulm

Printed by mediaGroupleRoux,Erbach

Investor Relations Internet ServiceUzinUtzAGfinancialreportfortheyear2010isavailab-leasPDF-filefordownload.Pleasevisitwww.uzin-utz.com,category»InvestorRe-lations«.

Visit us at:

www.uzin-utz.de

Dieselstrasse 3D-89079 Ulm

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www.uzin-utz.de

2010AveryspecialyearforUzinUtzAGalso warrants a special businessreport.Wehavethereforedecidedtotreadnewpathsingraphicdesign–beginningwiththisbusinessreport:every year we will commissiona recognised photographic artistwiththevisualisation,sothateveryindividualbusinessreporthasitsownunique,aestheticconcept.

ThefirstoftheseisSvenErikKlein.Hisselectionofthemotifsreflectsthevaluesofourcompany.Muchofthephotographytookplacehereintheregion,becauseglobalpresencedoesnotexcludekeepingbothfeetfirmlyonthegroundinthelocalregion.

Bornin1974inIllertissennearUlm,SvenErikKlein,isagraduateoftheKarlsruheDesignCollege,andhasstudied under such well-knownartists as Candida Höfer, GünterFörgandMarie-Jo Lafontaine.Heoperatesa studio inSaarbrücken.Inadditiontosoloexhibitionssuchas in the “Stadthaus” inUlm, theGoethe Institute in Nancy or theSaarlandGallery inthe“Palais imFestungsgraben”inBerlin,Kleinhasalsoparticipatedingroupexhibitionsinthe“Literaturhaus”inMunichandintheUlmMuseum.Hisphotographicworksarerepresentedinmanypublicandprivatecollections.

Coverpicture:BrenzspringinKönigsbronn