Ceramic Industry

Ferro Announces Annual Net Sales Increase

March 9, 2012

Ferro Corp. recently announced net sales of $443 million for the three-month period ended December 31, 2011, compared to net sales of $537 million in the fourth quarter of 2010. Net sales for the year ended December 31, 2011, reached $2.2 billion, an increase of 2.6% compared with 2010. Sales increased in all segments except Electronic Materials, where reduced demand and excess inventories of solar power modules resulted in decreased demand for the company’s conductive metal pastes. Excluding the Electronic Materials segment, sales increased by 7.5% compared with 2010.

Sales of precious metals increased, primarily in the first half of the year when demand for conductive pastes was stronger and silver prices were higher. During 2011, changes in product pricing and mix were the primary drivers of increased sales, accounting for 10 percentage points of sales growth. Changes in foreign currency exchange rates contributed an additional 2 percentage points of sales growth. Lower sales volume reduced growth by 9 percentage points.

Net sales for the three months ended December 31, 2011, were $443 million, a decline of 18% from net sales of $537 million in the fourth quarter of 2010. Reduced sales of Electronic Materials products, including precious metal sales, were the primary driver of the decline in consolidated net sales. Excluding the Electronic Materials segment, sales increased by 2.4%. Reduced customer demand for conductive pastes used in solar cell applications and metal powders used in a variety of electronic products resulted in a $103 million decline in sales for the Electronic Materials segment, including a $65 million decline in sales of precious metals due to reduced volume and lower silver prices. Demand for conductive pastes remains weak due to low end-market demand and excess inventory of completed solar power modules, particularly in the European solar market.

Sales increased in the Performance Coatings, Polymer Additives, Specialty Plastics and Pharmaceuticals segments compared with the prior-year quarter, while sales declined in the Color and Glass Performance Materials segment.

“We began 2011 with high expectations following a strong performance in 2010 that was driven by worldwide economic growth and surging demand for solar power,” said James F. Kirsch, chairman, president and CEO. “During the year, the anticipated demand for conductive pastes used in solar cells did not materialize, resulting in significant booking reductions by our customers throughout the world, adversely affecting earnings. Our non-solar Electronic Materials businesses performed well in 2011, as did our Color and Glass Performance Materials and Pharmaceuticals businesses. However, improvements in these businesses did not offset the impact of the steep decline in solar paste revenues.”

For more information, visit www.ferro.com.