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Rainer Mohr (Sole Director)

Speech for the12th ordinary General Meeting

Copyright Balda AG

Bielefeld 27 May 2011

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Report of the Board of Directors Rainer Mohr

Sole Director of Balda AG

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Overview | Agenda

1. Important Figures 2010 at a glance

2. Important events 2010

3. Overall economic development and industry situation

4. Earnings-, Assets- and Financial-situation of Balda-Group

5. Business development in the first quarter 2011

6. Forecast/Outlook 2011

7. Sale of TPK-shareholding and Acquisition

8. Balda-share 2010 up to 26 May 2011

9. Balda-Group in the future

10. Commentary on selected items on the agenda of the ordinary general meeting

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You will find further figures and information in the interactive Annual Report of Balda

AG 2010 under:

www.balda.de

www.balda-interaktiv.de

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1. Important figures 2010

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Figures 2010 (1)

  Revenues increased by 7.3 million euros or ���5.4 percent

  Sales volume slightly above last year

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Figures 2010 (2)

  EBIT after special items minus 37.4 million euros EBIT before special items minus 8.7 million euros (previous year : plus 4.5 million euros)

  EBT reaches positive 93.3 million euros (previous year : 47.3 million euros)

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Figures 2010 (3)

  Result of the Group significantly increased to 94.4 million euros (previous: 48.9 million euros)

  Cash and cash equivalents at the reference date at 48.9 million euros (previous year : 44.2 million euros)

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Figures 2010 (4)

  Investment of the Group at 10.8 million euros (previous year : 9.3 million euros)

  Employees of the Group at 31.12.2010 reduced to 2,445 employees (previous year : 3,713 employees)

  Earnings per share at 1.61 euros after 0.90 euros in the previous year, based on dividend-bearing shares on 31.12.2010: 58,890,636 shares (2009: 54,156,672 shares)

  Group equity significantly increased to 749.7 million euros (previous year : 159.2 million euros)

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Rating of the figures

  Operative result (EBIT) slides into minus

•  Higher-quality materials

•  Increasing pressure on prices at existing projects

•  High start up costs for projects for new customers

  One time net-result of around 125 million euros and a positive pre-tax profit (EBT) due to revaluation of Balda shares of the Taiwanese Touchscreen-manufacturer TPK

  Cash and cash equivalents in the amount of 48.9 million euros due to consistent and careful finance management

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2. Important events 2010

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Important events 2010 (1)

  Balda-share in the SDax again

  Claim for damages due to incorrect advice for Balda satisfactorily resolved

  Significantly better utilization of Bad Oeynhausen site by, amongst others, letting out

  Shares in the Indian company Balda Motherson Solution sold

  Concentration of production in the MobileCom Segment in Beijing

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Important events 2010 (2)

  Dr. Michael Naschke – new Chairman of the Supervisory Board

  Successful IPO of TPK

  Conversion of participation rights in the amount of 34.2 million euros,

issued in November 2007. Future interest and repayment obligations

reduced significantly

  Positive development of three of the four Group-segments with exception of MobileCom

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3. Overall economic development /���

industry situation 2010

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Overall economic development

  Recovery of the global economy in 2010 is continuing. Global gross domestic product (GDP) grows by around 5 percent

  Economic performance of developing countries increases by around 7 to 10 percent

  Gross domestic product in the Eurozone increases by 1.7 percent in 2010

  US economic output in 2010 grows around 2.9 percent

  Growth in economic output in Germany in 2010 reaches record high of 3.9 percent

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Industry situation

  Mobile phone market grows about 33 percent to 1.6 billion units (previous year : 1.2 billion units). Smartphones – mobile phones with mini computer character – increasingly popular

  Market for electronic products continues to recover. New technologies like the “iPad”, HD or 3D-TV-equipment on course of growth

  Medical industry recorded in Germany an increase in sales of around 10 percent. Expectations of the experts are also positive for 2011-2012

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4. Earnings-, Assets- and Financial situation

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4.1 Earnings situation

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Group Revenues

  Revenues of the Group increased slightly in 2010

  Targeted sales growth of 10 to15 percent not achieved ���due to losses in the MobileCom Segment

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The Segment MobileCom

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  Price pressure on suppliers sectors burdens sales and margins further

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The Segment Electronic Products

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  Revenue from new products and customers more than doubled

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The Segment Medical

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  Substantial intermediate inputs for new projects

  Manufacturing of new products planned in 2011

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The Segment Central Services���

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  The Segment Central Services:

•  Comprises Group-internal Holding- and Financial Services

•  Generates no significant revenues���

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Operative Earnings (EBIT) ���Group

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  EBIT of the Group without special effects at minus 8.7 million euros (previous year : plus 4.5 million euros)

  EBIT of the Group after special effects in the amount of minus 37.4 million euros due to

•  advancing realignment in the MobileCom Segment

•  capacity adjustments in Malaysia���

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EBIT of the Segments

  MobileCom (after special effects): minus 23.5 million euros after plus 7.3 million euros in 2009

  Electronic Products: minus 18.1 million euros (previous year : minus 3.4 million euros)

  Medical: 1.9 million euros (previous year : 5.2 million euros)

  Central Services: plus 2.3 million euros (previous year : minus 4.2 million euros)

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Revaluation of TPK-shares

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  Revaluation of TPK-shares to market values

  With a unique net effect on earnings of around 125 million euros

  Positive effect on pre-tax profit (EBT) of the Group due to the revaluation of TPK

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Pre-tax profit (EBT) and ���earnings of the total Group

  EBT Group 2010: 93.3 million euros (previous year : 47.3 million euros)

  Group result: 94.4 million euros (previous year : 48.9 million euros)

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Earnings per share

  Share volume at 31 December 2010: 58,890,636 shares (Reference date 2009: 54,156,672 shares)

  Earnings per share at 31 December 2010: 1.61 euros (previous year : 0.90 euros)

  Total earnings of the business year 2010 – under consideration of TPK-share to market values – at 559.7 million euros compared to 58.4 million euros in 2009

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Dividends

  No distribution of dividend for the business year 2011

  Distribution of a dividend in 2012 planned

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4.2 Asset situation- Balance Sheet Structure

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Group balance sheet profit

  Significantly increased balance sheet relations in 2010

  Revaluation of TPK shares at market values

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Group equity

  Equity of the Group: 749.7 million euros (previous year : 159.2 million euros)

  Significant increase of equity ratio to 92.5 percent due ���to high annual surplus and the revaluation of TPK-shares

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Group Net-Gearing

  Interest bearing liabilities clearly reduced

  Net-Gearing improved to minus 3.5 percent (previous year : plus 1.5 percent)

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4.3 Financial situation

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Group Cash Flow

  Cash Flow clearly improved due to sale of shareholdings

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Group Investments

  Investments into the new plant in Bejing worth 5.8 million euros

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Dividend capacity of the Group

  Distribution of a dividend only possible through the Balda AG

  Profits in fiscal 2011 can be passed on 100 percent to the shareholders

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5. First Quarter 2011

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Important events Q1/2011

  CEO Michael Sienkiewicz resigned / CFO Rainer Mohr appointed to Sole Member of the Board of Directors

  New Management structure established

  Special Analysis in the MobileCom Segment undertaken

•  Current business is stabilized

•  Search for strategic partners begun

  Acquisition in Medical Segment in 2011 is on the way

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Turnover / Operative Earnings

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  Group sales revenues increased slightly in Q1/2011

  Operative earnings (EBIT) to minus 1.9 million euros ���improved (previous year : minus 2.3 million euros)

  Segments Medical and Electronic Products are on target, ���the MobileCom Segment remains under pressure

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6. Forecast | Outlook ���2011

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Positive expectations for 2011

  MobileCom Segment: Search for strategic partner implemented/

End of the Cash-charge in the third quarter 2011 expected

  Electronic Products Segment: Balanced earnings targeted by continuous optimization of the cost situation

  Medical Segment: Double-digit growth planned

  Balda-Group: Planned turnover at last year’s level with slightly positive operative earnings / steady turnover growth of at least 5 percent for 2012 and 2013 planned

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7. TPK-sale and Acquisition

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TPK-Sale and Acquisition

  Share price of TPK develops positively / Value of Balda-shareholding at 31.03.2011 at around 700 million euros

  Intention to sell TPK-shares

  Acquisition in Medical Segment on focus / Funding from own resources possible

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8. Balda-Share

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Balda-share 2010

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Balda-share 2010 up to 26 May 2011

  Positive development of Balda-share / The paper increases in 2010 by around 92 percent

  Average daily turnover on the Frankfurt stock exchange in 2010 at 558,205 shares

  Share price in the first quarter 2011 further increased

  Strongest sales in SDax in the first four months in 2011

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9. Balda-Group in the future

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Perspectives for the development of the Group (1)

  Realignment of the Group

  Concentration on core competence plastic solutions

  Increase synergies between the segments Electronic Products and Medical

  Stronger engagement in growth markets

  Clear core competences on a high technological level

  In future, products with product life-cycles of several years

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Perspectives for the development of the ���Group (2)

  Less dependence on customers in less volatile markets targeted

  Reduced pressure on prices by innovations expected

  Highly competitive ability with clear competitive advantage intended

  Revenue size of around 250 to 350 million euros with a margin of around 15 percent in the next 2 to 4 years expected

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10. Annual General Meeting���Agenda���TOPs

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Agenda-TOPs / ���Corporate Actions

  Agenda for today’s AGM:

  Points 6 and 7 on the agenda: Consent to future corporate actions

  Point 11 on the agenda: Remuneration of the Board of Directors

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Thank you for your interest and your attention