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We have decided to better our communication with you. We are going to talk to you about how we are moving OMG to the other end of the supply channel and closer to end markets. We will discuss how are margins are improving because we are getting rewarded for technology and innovation. We would demonstrate how we are gaining control over our destiny by participating in growth around the world. And you will see that higher profits and more stable earnings will be the result of our efforts. You can follow our presentation in the slide that we published this morning.So let’s get started and I would like to refer you to slide 3 in your deck. 2011 was a great year for the OM Group. We achieved outstanding financial results, highlighted by revenue growth of 27% and adjusted EPS increasing 34%. This growth was driven primarily by our mid-year acquisition of VAC. If you look at the full year on a pro forma basis, revenue was $1.9 billion or an increase of almost 60%. We were once again able to generate positive cash flow from operations. 2011 marked the 6th consecutive year in which we are able to do this. Our ability to generate cash has been a consistent strength of our model and affords us the opportunity to invest in growth. In addition to the outstanding financial performance, we also delivered on our transformation objectives by creating the Magnetic Technologies platform. With the (Audio Gap) VAC we are now exposed to additional downstream markets all over the world. VAC enables us to simultaneously meet several key objectives. First, VAC is a global leader in developing materials and technologies, utilizing high quality alloys with advanced magnetic properties. This expands OMG’s downstream presence, converting raw materials into specialized products to meet specific market needs. Second, the business provides access to broader global markets, with favorable long-term trends. These markets include automotive, renewable energy, electrical infrastructure, and industrial automation. With over 700 patents and clear technological leadership, VAC has the ability to develop new products targeted directly at growth trends in every part of the world. There is no doubt in my mind that that positions OM Group for profitable growth.
Third, VAC was immediately accretive to earnings. It has performed well during the five months that we have owned them and is exceeding our expectations. This new business improves the profitability profile of our entire organization, with higher and more sustainable earnings. Finally, VAC brings abundant growth opportunities for both organic growth and bolt-on acquisitions. For example, we are growing this year in the automotive sector as past investment in product development is paying off. Also, VAC competes in some fragmented spaces and there are multiple acquisition opportunities. While VAC was certainly the biggest acquisition we have made since I joined the company, it was not the only one.In December, we acquired Rahu Catalytics, a developer of specialty additives for coatings and composite applications. This acquisition adds to our product development pipeline, by providing us with the technology behind our cobalt replacement additives. We call this family of products Borchi OXY-Coat. This is critical for the long-term strategy of Specialty Chemicals, providing a clear path for growth and margin improvement while providing our customers with equal and friendly solutions. While we made significant investments this year, we did not compromise the strength and flexibility of our balance sheet. In fact, we have enhanced our balance sheet and created the capital structure to provide additional options in funding future growth opportunities. One other highlight before you turn the slide, worthy of mentioning is the additional expertise that we added to our Board of Directors in 2011. The addition of Pat Mullin from Ohio and Hans-Georg Betz from Europe brings world-class expertise in global finance, alternative energy technology and commercialization along with global supply chain experience in Europe, Asia, and the Americas. Read the rest of this transcript for free on seekingalpha.com