Financial Overview

(in million euros)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	3,249.6	2,458.6	32.2	-The acquisition of all outstanding shares of Inergy Automotive Systems as of 1 September 2010 -BPO, a Turkey-based manufacturer of automotive exterior components, was fully consolidated as from 1 January 2010.
Automotive Equipment
Sales	2,778.0	2,014.5	37.9	(1)

Factors  (1)
The Company leveraged its international deployment model to increase revenue. Sales in Western Europe represented 44% of automotive revenue, as opposed to 56% in 2009. Asia and South America now account for 21% of Automotive revenue, up from 16% in 2009. The division operates 26 plants in China, India, Thailand, Japan, South Korea, Brazil and Argentina, with four new production facilities to be added in 2011.Sales in North America represented 26% of Division revenue, as opposed to 21% in 2009.

Acquisition

Buy out of Inergy Automotive Systems
-The Company has  received authorization from the European Commission to acquire the entire stake in Inergy Automotive Systems. In June 2010, the Company announced its intention to acquire the remaining 50% stake in Inergy Automotive Systems from its joint venture partner Solvay S.A in Belgium. A total of 270 million euros will be paid for the acquisition.
Inergy Automotive Systems manufactures vehicle fuel tanks at its 24 production plants in Europe (12), Asia (6), North America (3), South America (2) and South Africa (1).  Inergy generated revenue of 1.2billion Euros in 2010.

Acquisition of Peguform's Redondela Vigo plant in Spain
-In September 2010, Auto Exterior div. acquired Germany-based Peguform's plant in Vigo, Spain for 26.5 million Euros. The plant, which manufactures body components for the nearby PSA Peugeot Citroen production facility generated revenue of 39 million Euros in 2010. Following the acquisition, Plastic Omnium received sizeable orders for the future Citroen C4 Picasso and new mid-range models produced by PSA Peugeot Citroen that will increase the plant's revenue to 100 million Euros in 2014.

Acquisition of Automotive Components Holdings LLC (ACH) affiliate
Inergy Automotive Systems  has signed agreements to acquire the plastic fuel system/fuel tank manufacturing assets of Ford Motor Company's Automotive Components Holdings LLC (ACH) affiliate in Milan, Michigan, U.S. The business produces 1.3 million fuel systems annually. The change of ownership will be effective as from 1 June 2011. This acquisition strengthens Inergy Automotive Systems' production base in North America, which already includes plants in Adrian (Michigan), Anderson (South Carolina) and Ramos (Mexico). They mainly supply General Motors, Hyundai, Nissan and Chrysler. A new facility will be constructed in Michigan to which current production at the ACH Milan plant will be transferred with an anticipated completion date during 2013. With this acquisition, Inergy Automotive Systems estimates output of more than 15 million fuel systems in 2012. (From a press release on May 19, 2011)

Activities in emerging countries

In China, Auto Exterior div. forged strategic alliances with leading local manufacturers like SAIC and FAW that enabled it to quickly win market share and establish a solid foothold in the country. Together, Auto Exterior div. and Auto Inergy div. set up three new plants in 2010 – one for Auto Inergy div. in Beijing and two for YanFeng Plastic Omnium (YFPO) in Nanjing and Chengdu.
The Company today has 12 production facilities in major manufacturing regions, including Shanghai, Beijing, Canton, Chongqing and Wuhan.
The Group also plans to reinforce its development resources in the country by opening a new R&D center. In 2010, China accounted for 6% of consolidated Automotive revenue.

In India, the Varroc plant in Pune has been delivering bumpers for the Beat, General Motors' low-cost city car, since late 2009 and has five programs in the pipeline for Mahindra. Inergy began producing the fuel system for a low-cost Toyota vehicle at its Vellore plant in second-half 2010 and signed a partnership agreement with Suzuki-Maruti on 12 January 2010. As part of this joint venture, in which Inergy holds a majority stake, a new plant is being built to initially manufacture fuel tanks for the Swift, beginning in 2011.

Contracts

-Fuel system for Verna, Hyundai/Beijing Automotive Industry
-The DINOx emissions control system for Audi's five premium models including Q7
-Fuel tanks for Swift, Maruti Suzuki

Award

-A German company HBPO GmbH received "Supplier Award 2010" from Porsche AG for its front-end module installed in the new Porsche Panamera. HBPO is a joint venture between the three automotive parts suppliers Hella, Behr and Plastic Omnium. (From a press release on April 7, 2010)

Restructuring

-At 31 December 2010,  Inergy Automotive Systems Canada Inc.'s Blenheim plant is classified as held for sale.

The following assets were sold in 2010:
Plastic Omnium Automotive Ltd's Telford plant and Inergy
Automotive Systems SA's Nucourt plant

R&D Expenditures

(in million euros)

	FY2010	FY2009	FY2008
Overall	144	110	140

R&D Structure

-A total of 1,000 engineers and technicians are employed worldwide in 14 R&D centers located near car maker decision-making centers.
-Auto Exterior div.  has created two separate departments for its tailgate and structural component product lines, both based at Σ-Sigmatech, the Company's international R&D center. This new organization will enable the Division to stay ahead of market trends and strengthen its positioning as an expert consultant to car makers. Between now and 2020, the Division expects to significantly increase its business volume in rear opening modules and structural components.

Product Development

 In its Automotive Equipment businesses, Plastic Omnium focuses its research on solutions that reduce a motor vehicle's carbon footprint across its entire life cycle. These solutions involve using plastic, lightweight composites, and recycled or biotechnology-based materials; optimizing component design by integrating new functions that reduce carbon emissions; and designing automotive parts that can be easily disassembled and recycled at the end of their useful lives.
This research path has led to the development of new product lines, such as tailgates made entirely of thermoplastics or of thermoplastic/sheet-molding compounds and floor modules that can house EV batteries.

SMC
In 2010, Auto Exterior div. developed a new-generation floor module made with sheet molding compound (SMC) composites. Plastic Omnium Automotive can currently produce an array of exterior and structural components capable of reducing vehicle weight by 50 kg and carbon emissions by 6g per km.

New tailgate "Highgate"
Auto Exterior div. has developed the “Higate” hybrid tailgate with a thermoplastic outer layer and a structure made using sheet molding compound technology. The "Higate" tailgate already equips the Peugeot 508 SW and the Range Rover Evoque. A second tailgate, made entirely of thermoplastics, has also been developed for small urban vehicles.
 
Effort to reduce hydrocarbon emissions
Auto Inergy div. has also stepped up its effort to reduce hydrocarbon emissions – in particular nitrous oxide and carbon dioxide – with its TSBM and SCR-DINOx solutions.
Twin sheet blow molding technology (TSBM) helps reduce hydrocarbon emissions by integrating a large number of components into the fuel tank during the blow molding stage instead of welding them once the tank has been manufactured. 

Capital Expenditure

(in million euros)

	FY2010	FY2009	FY2008
Overall	138	49	96

Investment outside France

China
-The two new YFPO plants in Nanjing and Chengdu were built in 2010 to produce bumpers for, respectively Shanghai Volkswagen and FAW Volkswagen.
India
-The facility in New Delhi was created in late 2010 through a partnership with Suzuki-Maruti.
Brazil
-In late 2010, Auto Inergy div.  began building its second plant in the country -in Sorocaba, near Sao Paulo – which will produce the
fuel tank for a compact Toyota vehicle. Plastic Omnium Auto Exterior also has a plant in Brazil, in Taubate.
Eastern Europe
In 2010, Auto Exterior div. launched construction of its first plant in Poland. With eight production facilities in Poland, the Czech Republic, Russia, Romania and Slovakia in 2011, the Automotive Division is strengthening its base for supplying General Motors, Renault, Volkswagen, Audi, Suzuki and Skoda in Easter Europe.

Morocco
Auto Inergy div.  has established a foothold in Morocco to supply Renault. Located in Tangiers, the plant will be brought on stream
in late 2011.