Financial Report 2006

Transcription

Financial Report 2006
Corporate structure
Westag & Getalit AG
Divisions
Products
Plywood/Formwork
-Formwork panels
- Vehicle panels
- Industrial floors
Doors/Frames
- Contract doors/frames
- Fire/smoke
protection
- Kitchen worktops
- Window sills
- HPL-laminate panels
- Stage floors
- Sound-proofing
- Interior construction
- Sandwich panels
- Burglar-proofing
products
- Mineral materials
Headquarters
- HR management
- Purchasing
- Technical services
- Marketing communications
- Lattice walls
- Finance
- IT
- Shipping
- Special doors
- Co-generation plant
- Interior doors/frames
Markets
Laminates/Elements
- Construction industry
- Timber trade
- Timber trade
- Automotive industry
- Building materials trade
- DIY stores
- Wagon building
- DIY stores
- Interior construction
- Plant engineering
- Builder’s hardware trade
- Furniture industry
- Internal customers
- Energy companies
- Dry liners
Export focus
EU
EU / Middle East/Far East
EU / Eastern Europe
Sales
Export share
Locations
€ 38.2 million
33.3 %
Rheda-Wiedenbrück
€ 81.1 million
13.6 %
Rheda-Wiedenbrück
€ 74.0 million
30.1 %
Rheda-W./ Wadersloh
€ 3.4 million
Rheda-Wiedenbrück
Abridged table of contents:
P. 2 Letter to the shareholders
P. 4 Report of the Supervisory Board
P. 6 Divisional reports
P. 12 Management report - Outlook
P. 22 The Westag share
P. 25 Financial statements
Management Board
Pedro Holzinger (67)
Managing Director
Rheda-Wiedenbrück
(until December 31, 2006)
Bernhard Wenninger (41)
Managing Director
Oelde
(Member of the Management Board
since July 1, 2006, Managing
Director since January 1, 2007)
Supervisory Board
Hubert Stretz
Graduate engineer, Gütersloh
Temporary Chairman (until March 14, 2006)
Chairman (since March 15, 2006)
Klaus Pampel
Managing Director of Hüttenes-Albertus Chemische
Werke GmbH, Meerbusch
Vice Chairman (since March 15, 2006)
Ronald Jeffries
Businessman, London/Great Britain
Eckhard Schunck
Business graduate, Bielefeld
(until August 8, 2006)
Wilhelm Beckers (45)
Director Doors/Frames Division
Rheda-Wiedenbrück
Dr. Michael Paulitsch (60)
Director Plywood/Formwork Division
Warendorf
Franz-Josef Knapp*
Technical employee, Rheda-Wiedenbrück
(until August 8, 2006)
Dietmar Lewe*
Wood processing mechanic, Rietberg
Chairman of the works council since April 9, 2006
Reinhard Grewe*
Member of the works council freed from work,
Rheda-Wiedenbrück
(since August 8, 2006)
* employee representative
Edmund Volmer (64)
Director Laminates/Elements Division
Wadersloh
Westag & Getalit AG at a glance
2006
2005
2004
Sales (in € ‘000)
Change over the previous year
196,798
13.5 %
173,425
3.6 %
167,393
2.8 %
162,788
0.0 %
162,723
- 10.3 %
Export sales (in € ‘000)
46,044
29.7 %
35,495
25.7 %
28,243
11.4 %
25,354
5.5 %
24,025
- 7.3 %
Export share
23.4 %
2.9 %
20.5 %
3.6 %
16.9 %
1.3 %
15.6 %
0.8 %
14.8 %
0.5 %
Investments (in € ‘000) 2)
10,659
0.1 %
10,646
66.6 %
6,390
69.6 %
3,768
- 62.4 %
10,015
- 48.5 %
Depreciation (in € ‘000)
8,519
4.3 %
8,170
- 10.1 %
9,086
- 14.8 %
10,634
- 4.9 %
11,187
9.3 %
Cost of materials ratio
49.5 %
1.9 %
47.6 %
2.0 %
45.6 %
- 0.6 %
46.2 %
0.1 %
46.1 %
- 0.6 %
Staff cost ratio
29.5 %
- 3.3 %
32.8 %
- 1.5 %
34.3 %
- 0.6 %
34.9 %
- 1.3 %
36.2 %
1.6 %
1,209
1.7 %
1,189
- 2.9 %
1,224
- 2.3 %
1,253
- 4.1 %
1,307
- 7.3 %
EBITDA (in € ‘000)
22,010
31.2 %
16,773
- 11.5 %
18,953
36.8 %
13,854
14.5 %
12,095
- 13.9 %
EBIT (in € ‘000)
13,491
56.8 %
8,603
- 12.8 %
9,866
206.5 %
3,219
254.1 %
909
- 76.2 %
EBT (Earnings before taxes, in € ‘000)
13,486
56.9 %
8,598
- 11.5 %
9,712
226.6 %
2,974
311.9 %
722
- 80.1 %
Net profit (in € ‘000)
11,926
128.2 %
5,227
- 12.1 %
5,948
290.5 %
1,523
20.5 %
1,264
- 44.5 %
Return on sales before taxes
6.9 %
1.9 %
5.0 %
- 0.8 %
5.8 %
4.0 %
1.8 %
1.4 %
0.4 %
- 1.6 %
ROCE
16.6 %
4.2 %
12.4 %
- 2.4 %
14.8 %
10.8 %
4.0 %
2.9 %
1.1 %
- 3.2 %
Return on equity
14.5 %
7.5 %
7.0 %
- 1.2 %
8.2 %
6.0 %
2.2 %
0.3 %
1.9 %
- 1.5 %
Equity ratio
67.8 %
1.6 %
66.2 %
- 0.7 %
66.9 %
3.9 %
63.0 %
0.5 %
62.5 %
1.8 %
Book value per share (in €)
14.38
13.8 %
12.64
3.6 %
12.20
4.3 %
11.70
0.1 %
11.70
1.8 %
DVFA/SG earnings per share (in €)
1.60
66.7 %
0.96
- 4.0 %
1.00
212.5 %
0.32
190.9 %
0.11
- 70.3 %
Market price at end of year - ordinary share (in €)
17.20
78.2 %
9.65
21.4 %
7.95
37.1 %
5.80
65.7 %
3.50
- 43.1 %
Market price at end of year - preference share (in €)
17.01
75.7 %
9.68
21.0 %
8.00
33.3 %
6.00
81.8 %
3.30
- 49.4 %
Dividend yield - ordinary share
4.8 %
- 0.2 %
5.0 %
- 1.0 %
6.0 %
1.2 %
4.8 %
4.8 %
0.0 %
- 6.2 %
Dividend yield - preference share
5.2 %
- 0.4 %
5.6 %
- 1.2 %
6.8 %
1.2 %
5.6 %
2.0 %
3.6 %
- 3.1 %
Market capitalisation (in € ‘000)
97,841
77.0 %
55,284
21.2 %
45,617
35.2 %
33,748
73.5 %
19,448
- 46.3 %
Number of employees as of Dec. 31 3)
The results of the fiscal years 2002 to 2003 have partly been adapted to IFRS in a simplified way
Including intangible assets
3)
Including trainees
1)
2)
2003 1)
2002 1)
Contents
2
Letter to the shareholders
4
Report of the Supervisory Board
6
Products and markets
12
12
12
13
13
14
14
16
16
16
16
17
17
18
18
18
20
21
Management report
Business development in 2006
Plywood / Formwork
Doors / Frames
Laminates / Elements
Exports
Result
Value added
Staff
Balance sheet structure
Repurchase of own shares
Capital expenditure
Research and development
Relationships with affiliated companies
Equity investments
Risk management
Basic information about the compensation system
Outlook
22
The Westag share
24
Human resources
25
26
28
31
32
35
43
47
52
53
54
55
56
59
Financial statements
Balance sheet (IFRS)
Non-current assets (IFRS)
Income statement (IFRS)
Notes
Notes to the balance sheet
Notes to the income statement
Other information
Statement of changes in equity
Cash flow statement
Corporate Governance
Audit certificate
Balance sheet (HGB)
Profit and loss account (HGB)
2
Dear readers,
Pedro Holzinger
2006 was a positive year not only for the German economy as a whole but also for the construction sector. Incoming orders in the building construction sector increased by a
gratifying 4.3 % following 11 years of recession. The industry was initially reluctant to
speak of a turnaround, all the less so as no
causal factors were apparent. In the meantime, however, optimism about the future is
growing.
Westag & Getalit AG benefited from the turnaround to a disproportionate extent. Sales
increased by 13.5 % to € 196.8 million. Good
domestic growth and, in particular, continued
strong exports helped us reach full employment on the basis of our new flexible working
time model of an average 38 hours per week.
This enabled us to keep personnel expenses
largely unchanged. The staff cost ratio
amounted to a gratifying 29.5 % (2005: 32.8 %).
The development of raw materials prices was
not quite as gratifying, especially as regards
the prices of particle boards, which rose at an
even faster rate than in 2005. Against the
background of fierce competition and the
industry-wide scepticism about the sustainability of the upswing, all market players initially tried to keep their prices stable in order
to maintain volumes and capacity utilisation.
It was possible to raise sales prices only with
some delay and only just at the same rate as
the increase in raw materials prices. As a
result, the cost of materials ratio climbed to
49.5 % (2005: 47.6 %).
Nevertheless, we were able to increase earnings significantly, mainly due to the improved
capacity utilisation. Earnings before income
taxes rose by a gratifying 56.9 % to € 13.5
million (2005: € 8.6 million).
We are particularly pleased that we are able to
give our employees a share in our joint success
in the form of a bonus. In the meantime, nearly
all our employees have personally agreed to
the new flexible working time model. Their
readiness to work three hours per week without compensation has not only contributed to
our good result but also greatly increased the
safety of their jobs.
We remain convinced that giving employees a
greater share in the company’s performance
will lead to better and more successful ways of
working together. This is why we have offered
all our employees a flexible scheme for part of
their Christmas bonus. More than half of our
employees have accepted this offer.
The good utilisation of our production facilities and the continued positive outlook call for
substantial investments in 2007. Major projects are planned in all three Divisions. The
Plywood/Formwork Division plans to increase
its capacity for supersize formwork panels. The
Doors/Frames Division intends to expand the
production of frames; this investment makes
sense as such and with a view to intensifying
the sale of doors. The Laminates/Elements
Division plans to expand the capacities for cut
and edged worktops as well as for the Getacore®
mineral worktops, which have developed especially positively. Apart from the above, our
investments will focus on increasing our own
electricity generation by expanding the cogeneration plant under ecological aspects,
with a view to ensuring an even more efficient
use of the steam generated and needed for
production purposes and covering our complete electricity requirements from our own
plant, if required.
A set of noise protection measures have been
initiated in close cooperation with the environmental authorities in order to achieve a
lower noise level for our existing plants in
Wiedenbrück, which would allow them to be
operated for an extended time also during
evening hours.
As a customer-oriented manufacturer of product variants, our company depends on a
sophisticated logistics system. A full logistic
service from order taking through production
to delivery must be cost-efficient to ensure
profitability also for smaller batch sizes.
Thanks to integrated IT-controlled processes,
this has increasingly been achieved. We will
continue to optimise our efforts in this respect
to take maximum advantage of modern technologies.
Our business performance in the year to date
is making us optimistic. The positive trend of
2006 continued in the first two months of
2007. Double-digit growth rates in all three
divisions and positive prospects for the future
reflect our confidence and determine our
actions going forward. The European expansion of Westag & Getalit AG is making good
progress. We continue to work towards an
export share of 30 % over the medium term,
even though our gratifying double-digit
growth in Germany has made this goal more
challenging. Unfortunately, the continued
strong increase in our procurement prices,
especially for particle boards, remains a major
determinant for our calculation. Notwithstanding our efforts to offset part of the
resulting rise in costs through high capacity
utilisation and ongoing rationalisation, we
will be forced to increase our prices again. In
view of the general price development in our
line of industry, the understandable concern
on the part of our customers tends to decline,
though.
The development in the past years has shown
that a customer-oriented manufacturer of
product variants can play an important role
among the mass producers in the timber products industry. Westag & Getalit AG is proud to
be among the leading players in this segment.
New products, skilfully implemented and combined, will continue to open up interesting
perspectives for our company going forward.
As my tenure as the CEO of Westag & Getalit
AG is drawing to an end, I would like to say a
few words of farewell. After 31 years, during
which we had good times and difficult times, I
am very pleased to hand over a truly healthy
company that is in good shape for the imminent economic upswing. In particular, the
past 11 years of recession in the construction
industry were a constant challenge to stay as
profitable as possible while at the same time
maintaining and promoting the continued
viability of our company. Together we have
achieved this, not least thanks to the commitment of my fellow Board members and the
performance and motivation of our employees.
My sincere thanks go to all of you.
Rheda-Wiedenbrück, March 2007
Pedro Holzinger
3
4
Dear readers,
Dipl.-Ing.
Hubert Stretz
Westag & Getalit AG looks back on a successful
year 2006. In the past fiscal year, the Supervisory Board of Westag & Getalit AG performed
its tasks as defined by law and the company’s
statutes. We advised the Management Board
on directing the company and supervised the
management activities. The cooperation between
the Supervisory Board and the Management
Board was marked by open and trusting communication. A Supervisory Board meeting was
held in each quarter. These meetings were
attended by the members of the Supervisory
Board and the Management Board and one
representative of the auditors. The Management
Board provided the Supervisory Board with
regular and timely oral and written reports on
corporate planning, the economic situation
and the development of the company as well
as important individual events and measures
and discussed them with the Supervisory Board.
Deviations in the business performance and
the implementation of the agreed investments
from the plans and targets were explained to
us in detail. In addition, the Chairman of the
Supervisory Board was immediately informed
of all important business events and developments.
Work of the committees
The work of the Supervisory Board was supported
by the committees it has formed, i.e. the
Personnel Committee and the Audit Committee.
The Personnel Committee held several meetings
in the fiscal year. Its work again focused on
the search for a suitable successor to Mr
Holzinger as well as succession planning for
Mr Volmer, who has informed the Supervisory
Board that he does not want to renew his Management Board contract, which will expire on
June 30, 2007, as he will reach the age limit.
The Audit Committee held two meetings in the
fiscal year. Topics addressed by the Audit
Committee under the guidance of the Vice
Chairman of the Supervisory Board included
the financial statements, the preparation of
the election of the auditors, risk management,
the new Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation
Act (AktG), the Corporate Governance Report
and the efficiency review of the Supervisory
Board.
Focus of the consultations
The consultations focused on the strategic
question where to put the focus of the sales
and marketing activities. Together with the
Management Board, we decided that the
company’s export share should be increased
further despite the currently good construction
activity in Germany. Another focus was on
investment planning, with investments worth
€ 18.4 million planned for 2007.
Personnel matters
The Supervisory Board appointed Bernhard
Wenninger member of the company’s Management Board with effect from July 1, 2006. At
the Supervisory Board meeting dated November
7, 2006, Mr Wenninger was appointed Managing Director with effect from January 1, 2007
according to prior agreement with the other
Management Board members. The former
Managing Director, Pedro Holzinger, whose
contract had initially been renewed until the
2007 AGM resigned from office with effect
from December 31, 2006 when his successor
was found. He will initially remain available to
the company in an advisory capacity. Pedro
Holzinger served the company for 37 years,
including over 31 years as a member of the
Management Board. During this time, Mr
Holzinger clearly left his mark on the company.
The Supervisory Board would like to thank Mr
Holzinger for his visionary and highly responsible work on the company’s Management
Board.
The Annual General Meeting dated August 8,
2006 elected Eckhard Schunck as a new member of the Supervisory Board. At the same
time, Reinhard Grewe, freed for full-time work
on the company’s works council, joined the
Supervisory Board to succeed Franz-Josef
Knapp, who resigned from the Supervisory
Board. We would like to thank Mr Knapp for
the good and trusting cooperation over many
years.
Financial statements
The financial statements for fiscal 2006 prepared by the Supervisory Board in accordance
with HGB and IFRS and the Management
Report of Westag & Getalit AG were audited
by Peters & Partner GmbH. The auditors were
commissioned by the Supervisory Board in
accordance with the resolution adopted by the
Annual General Meeting on August 8, 2006.
The auditors issued an unqualified audit certificate. The financial statements and the audit
reports were made available to all members of
the Supervisory Board by the auditors in good
time prior to the annual accounts meeting of
the Supervisory Board. These documents were
discussed in detail at the Supervisory Board’s
annual accounts meeting on March 15, 2007.
In addition, the auditors reported on the audit
of the company’s risk management system,
which led to no objections.
We have taken note of and approved the audit
report. We reviewed the financial statements
and the Management Report. We agree with
the result of the auditors’ audit based on our
own findings and endorse the financial statements prepared by the Management Board.
The financial statements have thus been
approved. We accept the Management Board’s
profit appropriation proposal.
The Supervisory Board also reviewed the
related party disclosures of the Management
Board. This review and the review of the auditors’ report led to no objections. The report
of the auditors contains the following audit
certificate.
“Based on our duly performed audit and
assessment, we confirm that the information
provided in the report is accurate."
Due to the final result of our audit, we raise
no objections against the final statement by
the Management Board.
We would like to thank the members of the
Management Board, all employees and the
employee representatives for their successful
work in the past fiscal year.
Rheda-Wiedenbrück, March 2007
The Supervisory Board
Dipl.-Ing. Hubert Stretz
Chairman
5
Weser-Ems Arena, Oldenburg
Golden Terraces, Warsaw
Products and markets: Plywood/Formwork
Concrete formwork panels remain our most
important product group and strong growth
was achieved in panels for precast concrete
works, in-situ concrete construction and framed
formwork systems. Our success continues to
rest on the BETOPLAN® and MAGNOPLAN®
brands. Due to our wide range of types and
grades, we can respond at all times to the
growing demand also from precast concrete
works in Germany and abroad and thus market
our supersize formwork panels successfully.
The large number of different dimensions and
finishes allows us to meet diverse architectural
demands in in-situ concrete construction. As
a specialist for system formwork, we are a
reliable international partner to manufacturers
and wholesalers/retailers.
cially from the commercial and industrial
construction sectors, which make increased
demands on highly reusable formwork panels
for jointless concrete.
While sales growth in the previous years was
driven by exports, the past fiscal year saw
both domestic and international sales rise by
over 40 %. The successful integration of the
AGEPAN products (wood-based substrate)
additionally contributed to our success. Our
panels meet with an excellent response espe-
In the current situation, which is characterised
by strong global growth for the construction
industry, the supply of plywood and veneers is
increasingly becoming a problem in price and
volume terms. Purchase prices were raised
constantly in the past year. Following initially
difficult negotiations, we have learned that
our customers are increasingly willing to
accept price increases at least to a certain
extent.
Against the background of overcapacities, the
automotive industry was reluctant to invest in
new plants. As a result, our efforts in the area
of special floor panels were not overly successful. In the commercial vehicle construction
sector, we supply large-size floor panels for
trailers and flatbed bodies. Due to the very
low price level, we do not participate in the
booming market for semitrailer floors. In this
commodities segment, there is fierce competition
between imports from Russia, Latvia and, to a
growing extent, China.
Our Division will have to cope with further
price increases and raw material shortages
in the current fiscal year. Despite these
problems, we are confident that we will be
able to continue to participate in the positive
market development.
NFO-Kissingen Schalungsbau
7
Aluminium frame
Hotel Klosterpforte, Marienfeld
Products and markets: Frames/Doors
The widely unexpected economic upswing in
Germany led to a noticeable pick-up in demand
for construction elements in the course of
2006. Our Doors/Frames Division increasingly
benefited from this positive trend and reported
a 6.8 % increase in domestic sales. The 2006
sales growth was also supported by the measures
initiated in 2005 to turn our company into a
customer-oriented full-range supplier. The
addition of numerous contract variants to the
avanti door range was a particularly important
step, which helped to increase sales of products
for the contract sector significantly.
Exports developed even more positively, as the
swift and consistent implementation of our
customers’ technical requirements made our
sales efforts highly successful. Today, we are in
a position to offer integrated systems solutions,
which have been our key strength in the German contract sector, also in foreign markets.
As a result of our export efforts, our foreign
sales increased by an impressive 47.2 % in the
past fiscal year.
Hotel Sonne, Wiedenbrück
Our new working time model clearly helped
improve our basis for calculation in 2006,
which led to incremental sales. Especially in
the second half of the year, capacity utilisation
reached a level that allowed us to hire additional
staff.
Due to the steep rise in raw materials prices, it
was inevitable to pass the higher costs on to
our customers in the form of increased sales
prices. While the fierce competition between
door manufacturers had made it impossible to
implement the long overdue price adjustments
for a long time, we were finally able to raise
our prices in the second half of 2006. The continued upward trend in raw materials prices
will make further price increases inevitable in
2007.
To support our continued growth in the market,
we developed a number of innovative new
products in 2006, which were recently presented
at the premier industry event, BAU 2007, in
Germany. The focus of our development activities was on innovative element functionalities
and new surfaces with trend-setting designs.
9
“Noce Butcherblock“ trend design
McDonald’s McCafé
Products and markets: Laminates/Elements
Demand for our products and services increased
noticeably in 2006. Business picked up also in
Germany, especially in the interior construction
sector. Our sales reps’ stronger concentration
on the contract sector proved to be successful.
Mineral materials, digital printing and worktop cutting were the product segments that
reported particularly strong growth. We will
expand our business activities with the help of
a sheet layout software that has been specifically customised to meet our demands. The
software allows customers to plan their personal
kitchens and send us these plans online.
this sector by certain shareholders’ intentions
to sell complete DIY store chains, setting in
motion a concentration process in the industry.
This development had an adverse impact on
our business with DIY stores.
In line with our two-year intervals, we have
revised our design collections and will offer
the market a new HPL and mineral materials
collection in 2007.
In the past fiscal year, our company as well as
our customers have become increasingly aware
of the difficult situation of the timber products
industry. The dramatic shortage of timber has
not only led to an increase in the prices of
timber products such as particle boards but is
making a continued supply increasingly uncertain. On the one hand, this means that our
price increases are more readily accepted than
in the past. On the other hand, however, we
are increasingly regarded as a supplier who
must guarantee the availability of products.
As we are well aware of this role, we are doing
everything in our power to tap additional
sources of supply and to increase our stocks of
particle boards, in particular, to a level that
These measures were complemented by customer
group-specific events and support at the point
of sale.
Unfortunately, the DIY store business continued
to decline. Great unrest has been caused in
In view of the continued good development of
our export activities, we will expand them
further. Measures initiated for this purpose
include the strengthening of our sales organisation, new design collections customised to
the respective markets and a selective countryspecific marketing approach.
ensures that we will be able to cope with supply
bottlenecks.
Going forward, these aspects are likely to play
a much more important role for our business
activities.
Architects event, MARTa Herford
11
12
Management report
Management report
Noticeable increase in domestic sales for the first time
in many years and strong export growth. Sharp rise in
earnings before income taxes as a result of the greatly
improved performance.
Plywood / Formwork
Business development in 2006
After eleven years of recession in the German
construction sector, a turnaround finally
materialised in 2006. According to the Federal
Statistical Office, incoming orders in the
building construction sector were up by 4.3 %
on the previous year.
Westag & Getalit AG benefited disproportionately from this positive trend and boosted
its sales by an impressive 13.5 % to € 196.8
million (previous year: € 173.4 million). While
domestic sales increased by 9.3 %, exports
surged by 29.7 % to € 46.0 million (previous
year: € 35.5 million). All divisions contributed
to the excellent sales performance.
The Plywood/Formwork Division boosted its
sales by 41.0 % to € 38.2 million (previous
year: € 27.1 million) in fiscal 2006. A major
contribution to this growth was made by
exports, which rose by 42.2 %, as we further
expanded our sales to manufacturers of formwork systems. The export share amounted to
33.3 % (previous year: 33.0 %) in 2006.
Unlike the previous year, 2006 also saw a sharp
increase in domestic sales, which climbed by
an impressive 40.4 %. A major contribution to
this performance was made by the much
higher utilisation of precast concrete works
and the increased number of properties with
high-quality concrete surfaces. The integration
of the Phenox products, which are well known
in the market, also contributed to the rise in
sales.
Sales performance of the divisions
€ million
100
81.1
80
71.0
71.7
71.0
67.6
64.1
62.3
74.0
73.2
69.6
60
40
38.2
25.3
24.2
27.1
25.0
20
2002
162.7 Mio.*
2003
162.8 Mio.*
Plywood/Formwork
Doors/Frames
Laminates/Elements
2004
167.4 Mio.*
2005
173.4 Mio.*
2006
196.8 Mio.*
* Total sales also include the co-generation
plant revenues, which are not shown as a
separate bar.
Management report
Due to the high performance, production
capacity utilisation was very good throughout
the year 2006. By contrast, raw materials
became increasingly scarce in the course of the
year as a result of strong global construction
demand. Accordingly, the prices of raw plywood
panels and veneers increased as well, which
forced us to raise our sales prices.
Doors / Frames
The Doors/Frames Division was able to increase
its sales by a strong 10.9 % to € 81.1 million
(previous year: € 73.2 million) in 2006. Much
of the sales growth was attributable to exports,
which surged by 47.2 %. As we complemented
our product range and adjusted our sales
organisation to the requirements of our customers, we were able to establish ourselves as
a competent supplier of systems solutions.
The decision taken in 2004 to concentrate on
promising key markets has thus proven to be
right in the long term. The export share rose
to 13.6 % (previous year: € 10.3 %).
In the context of the economic recovery in
Germany, our domestic sales increased by 6.8 %
in 2006. The improved sales situation was
particularly evident in the contract sector,
where we won clearly more orders than in the
previous year. In product terms, the strongest
increase was achieved by functional doors and
the new lines of varnished doors and doors
with genuine wood veneer.
In line with the high performance, production
capacity utilisation was very good throughout
the year 2006. During certain periods, especially before and after the vacation season,
additional shifts were required to meet the
increased demand. The high utilisation also
allowed us to hire new staff. A new edge
processing line was taken into service in the
fiscal year, which is not only more efficient
but has also increased the processing capacity
in the production of contract doors.
The Doors/Frames Division also felt the price
pressure in the procurement of raw materials,
whose prices continued to rise in 2006. As it
was no longer possible to compensate for
these increased costs through productivity
gains, we were forced to raise the prices of
our products in the second half of 2006. These
external effects put an end to several years of
declining prices not only for our company but
for most of our industry.
Laminates / Elements
The Laminates/Elements Division increased its
sales by 6.4 % to € 74.0 million (previous
year: € 69.6 million) in 2006. This was mainly
attributable to export sales, which climbed
17.0 %. The export share reached 30.1 %
(previous year: 27.4 %). In the domestic market, laminates with customised digital printed
motifs and high-gloss surfaces achieved the
strongest growth. The increase in export sales
was not least attributable to our acrylic-based
solid surface worktops.
As in the previous year, the Laminates/Elements Division was particularly affected by
the increase in raw material prices.
The prices of the chemicals used by the Division
increased as a result of the rising oil price.
The situation was even more challenging in
the area of plywood, where growing demand
13
14
Management report
met with a reduced supply. This resulted in
sharp price increases, while the supply situation
deteriorated at the same time.
Although it remained difficult to pass on the
higher costs to our customers, we were able to
implement some price increases.
Earnings before income taxes
€ million
14
13.5
12
10
The new double belt press for the continuous
production of high pressure laminated boards
was installed in summer 2006. The new press
will enable us to exploit rationalisation potential and launch new products in the market.
9.7
8.6
8
6
4
3.0
2
Exports
0.7
2002
As in 2005, we reported high export growth in
fiscal 2006. Although domestic sales increased
as described above, the export share rose
sharply again from 20.5 % in the previous year
to 23.4% in 2006. The highest growth rates in
2006 were posted in Russia, Great Britain, the
Netherlands as well as Switzerland.
The 29.7 % increase in foreign sales is the
result of a clearly defined export strategy,
which we initiated in 2004 against the background of weak domestic demand. At the
time, our efforts were focused on certain
export markets. Since then, we have invested
in the right products for the respective markets
as well as in a powerful and efficient sales
organisation.
The excellent results achieved to date encourage
us to stick to our strategy and to further expand
our export activities.
2003
2004
2005
2006
Result
Westag & Getalit AG’s earnings before income
taxes rose sharply to € 13.5 million (previous
year: € 8.6 million). The increase was mainly
due to the 13.5 % rise in sales. The higher
performance resulted in better utilisation of
our plants and, hence, in fixed cost degression,
which led to the disproportionate increase in
earnings.
In 2006, the procurement cost of our raw
materials again was one of the main adverse
factors. The cost of materials ratio climbed
from 47.6 % in 2005 to 49.5 % in 2006. As
described in the previous chapters, the prices
of raw plywood panels, veneers, particle
boards and chemicals increased particularly
strongly.
Management report
Value added
€ ‘000
197,444
97,808
8,519
Gross performance
Net value added
71,833
Reserves/Profit carried forward
7,227
Shareholders
4,699
Government
1,750
Cost of material
Depreciation
19,284
Other expenses and
income
71,833
Net value added
Staff
Value added
On the other hand, the higher performance
and our new working time model enabled us
to clearly reduce the staff cost ratio from
32.8 % to 29.5 %.
Depreciation rose by € 0.3 million as a result
of increased investment activity. While other
operating expenses climbed by € 2.3 million,
the ratio dropped moderately from 11.6 % to
11.4 %. Other operating expenses include
additions to provisions for environmental
protection measures in an amount of € 1.2
million.
Westag & Getalit AG’s net profit rose to € 11.9
million in fiscal 2006 (previous year: € 5.2
million). This amount includes a non-recurrent
special effect that results from the amendment
of the German Corporate Income Tax Act,
according to which the existing income tax
benefit will be paid out in ten equal annual
instalments. The total claim must be capitalised
in the balance sheet as of December 31, 2006.
58,157
Value used
The resulting special income in a discounted
amount of € 3.2 million (which is equivalent
to a gross tax benefit of € 4.0 million) led to a
one-time reduction in our effective tax ratio
in 2006 and the recognition of an increased
net profit for the year. In fact, it is only the
recognition of an existing tax refund claim in
the balance sheet which has changed. This
affects neither our earnings before income
taxes nor our liquidity. Adjusted for this effect,
net profit for the year would have amounted
to € 8.7 million.
Earnings per share according to DVFA/SG
climbed to € 1.60 (previous year: € 0.96).
Value added
As a result of the increased performance,
Westag & Getalit AG’s net value added rose by
9.1 % in 2006. Reflecting the higher raw
materials costs, the increase is slightly lower
than the increase in performance. After allo-
15
16
Management report
Number of staff
As at December 31
1,500
1,200
1,209
1,189
900
854
838
600
308
300
310
45
43
2005
The new working time model, which was introduced as of January 1, 2006, has proven its
worth. It provides for an increase in weekly
working hours from 35 to 38 without pay
compensation in times of high utilisation and
a reduction in weekly working hours in times
of partly seasonally induced weak utilisation
and has greatly reduced our cost structure.
This has improved our basis for calculation
and, hence, the competitiveness of our
products, which also contributed to the higher
sales revenues.
2006
Trainees
Employees
Industrial employees
Total
cation of an amount of € 7.2 million to the
revenue reserve and the profit carried forward, the Management Board and the Supervisory Board will propose a strong 66.8 %
increase in the dividend to € 4.7 million to
the Annual General Meeting.
As a result of higher capital expenditure, noncurrent assets rose by € 3.1 million. Inventories
increased by € 4.4 million, reflecting the higher
sales revenues and our inventory policy. With
liquid funds declining by € 2.8 million at the
same time, the increases in the asset items
sent total assets rising to € 121.2 million
(previous year: € 112.1 million).
The good profit situation pushed the equity
ratio to 67.8 % (previous year: 66.2 %). No
liabilities to banks existed in the fiscal year.
Repurchase of own shares
Staff
As of December 31, 2006, the number of
employees increased moderately to 1,209
(previous year: 1,189). The higher number of
employees is mainly due to the improved
capacity utilisation at our plants, which
resulted in increased employment. In addition,
several new jobs were created to strengthen
our sales team.
The portfolio of own shares increased from
73,500 on December 31, 2005 to 185,500 on
December 31, 2006 due to stock exchange
purchases. All repurchased shares are preference shares. The repurchase of own shares
was approved by the Annual General Meeting
on August 8, 2006.
Management report
€ million
121.2 112.2
Non-current assets
40%
40%
Current assets
60%
60%
thereof: liquidity
14%
112.2 121.2
66%
67%
Equity
13%
14%
Non-current liabilities
21%
19%
Current liabilities
17%
2006 2005
Capital expenditure
Investments in an amount of € 10.7 million
were made in 2006 (previous year: € 10.6 million). The single most important investments
were a double belt press for the continuous
production of high pressure laminated boards,
a thermal laminator for the coating of substrates with HPL precursor materials and foil
as well as a new flexible edge processing line
for doors.
The planning and procurement of all three
projects started in 2005, which means that
part of the respective investment amount was
incurred already in the previous year.
All investment activities in 2006 served
capacity expansion and rationalisation
purposes and are thus designed to reduce our
production costs. The double belt press, in
particular, will also enable the manufacture
of new products which we have so far been
unable to offer at competitive prices.
2005 2006
Research and development
In 2006, the Plywood/Formwork Division
focused on the development of new surfaces,
partly with polypropylene (PP), which reduce
the use of additional stripping agents during
the removal of the formwork on the construction site. The first products with this function,
which reduces the working time for the
processor as well as the environmental impact,
have already been added to our delivery
range.
The Doors/Frames Division developed products
with new functionalities that are integrated
into the element. We have also added frames
made from new materials such as aluminium
to our product range. As regards the designs,
we developed new wood reproductions and
veneers in response to the growing trend
towards greater individuality also in standard
homes.
17
18
Management report
within the family and now amounts to 75.5 %.
Pursuant to Section 22 para. 1 sentence 1 No. 1
of the German Securities Trading Act, these
voting shares count towards Gethalia Foundation.
Sales performance of the divisions
€ million
15
11.2
10
10.0
10.6
10.7
10.6
9.1
8.2
8.5
6.4
5
3.8
2002
2003
2004
2005
2006
Capital expenditure
With regard to our relationships with affiliated
companies, we would like to point out that we
did not conduct any legal transactions with
Syntalit AG or Gethalia Foundation. The respective report required under Section 312 AktG
(German Stock Corporation Act) concludes with
the following declaration: “Transactions which
are subject to reporting requirements did not
take place.”
Equity investments
Depreciation
The Laminates/Elements Division prepared
the launch of flame-retarding A2 panels with
decorative surfaces for interior construction.
In the field of mineral materials the Division
also worked on a manufacturing process for
moulded preforms and sinks, which will allow
us to add interesting new products to our
portfolio. Our R&D efforts in the field of digital
printing focused on improving the properties
for outdoor use. In addition, we concentrated
on the refinement of translucent board
materials.
Relationships with affiliated companies
According to information supplied by Syntalit
AG, Zug/Switzerland, and Gethalia Foundation,
Vaduz/Liechtenstein, on December 18, 2006,
the share of Syntalit AG in the voting capital of
our company climbed above the 75 % threshold
on December 12, 2006 as a result of transactions
With retroactive effect from January 1, 2006,
Westag & Getalit AG acquired a 49 % interest in
AKP Carat-Arbeitsplatten GmbH. Headquartered
in Meiningen/Thuringia, the company employs
59 people and specialises in the production and
sale of ready-made worktops. The purpose of the
cooperation is a more effective marketing
approach. In 2006, the company generated a
net profit of € 0.3 million.
Risk management
The purpose of Westag & Getalit AG’s risk
management system is the identification,
assessment and management of risks that
inevitably result from the company’s activity
in changing markets. The aim is to master or
at least minimise risks that could have an
adverse impact on our operational and/or
financial strength.
At Westag & Getalit AG, risk management is
not solely the task of a specialist but integrated
Management report
into the tasks of all managers and employees.
Their basic tool is an SAP-based planningoriented information system, which quickly
identifies deviations from defined targets and
initiates counter-measures.
Sales risks
Even though the sales situation improved
noticeably in 2006, sales risks are naturally of
fundamental importance. To mitigate these
risks, we continuously expand and improve
our product portfolio and our customer structure. At the same time, we diversify our sales
efforts. By expanding our export activities,
we reduce our exposure to the German market.
Stringent cost management is required to
further improve the price competitiveness of
our products.
The number of bankruptcies in our industry
has tended to decline in recent years.
Nevertheless we attach top priority to efficient
receivables management, in the context of
which most customer receivables are insured
against default.
Supplier risks
Risks relating to our suppliers tended to gain
in importance in 2006. As a result of improved
economic activity in Germany and the strong
global demand for construction products,
the prices of our raw materials increased. In
addition, supply bottlenecks occurred in some
cases.
To mitigate these risks for our company, we
are constantly on the lookout for new, efficient
suppliers while at the same time making reliable
contractual agreements with existing suppliers.
In addition, we build up stocks of certain
materials to ensure sufficient supplies.
On the other hand, we closely monitor the
price development and do what we can to pass
the resulting higher costs on to our customers
in the form of higher sales prices for our
products.
Operational risks
Due to the numerous different production
processes, the availability of our plants and
the management of the production procedures
are of special importance for Westag & Getalit
AG. In response to this challenge, we ensure
that our plants are serviced and monitored
regularly, have taken out appropriate insurance
cover against damage by natural forces and
train our staff on an ongoing basis. We do this
in the context of a continuous improvement
process, which we regard as an important tool
for protecting the level of performance achieved
as well as for ongoing optimisation.
Information technology has steadily gained in
importance in the past years. The resulting
integration of sub-processes into our business
processes leads to risks which we minimise by
continuously adapting our existing systems to
new security standards.
Personnel risks
The success of our company hinges on the
qualification and commitment of our employees.
In response to the need for increasing knowhow, we offer suitable training initiatives to
ensure our employees and executives will be
19
20
Management report
able to master the tasks of the future. Numerous measures such as the provision of many
apprenticeships and internships as well as
close cooperation with schools and universities
identify our company as an attractive employer
that offers interesting and safe jobs. This way,
we already respond to the future demographic
development, which will make it increasingly
difficult to find qualified staff going forward.
Financial and exchange risks
Due to the high equity ratio and settlement
of most transactions in euro, financial and
exchange risks play only a minor role for
Westag & Getalit AG. We mitigate these risks
by monitoring current exchange rate trends
and using rate-hedging instruments, if
required.
Basic information about the
compensation system
The compensation of the members of the
Management Board comprises fixed and
variable components. The variable components for the Board members responsible for
the production divisions depend, on the one
hand, on the annual profit of the respective
division and, on the other hand, on the
annual profit of the company. The company’s
annual profit is its net profit before corporate
income taxes less any loss carried forward
from the previous year and the amounts to
be allocated to open reserves by law and the
articles of incorporation. The variable component for the Board members in charge of the
central division is based exclusively on the
annual profit of the company. In order to
create incentives for a high annual profit, the
profit shares increase disproportionately if
certain profit levels are exceeded. The percentage of total compensation accounted for
by variable components varies with the realised
annual profit. In case of extraordinary, unpredicted developments, the variable component
can be limited. The company has not concluded
any agreements with the members of the
Management Board about the granting of
shares in the company, share options or similar
forms of compensation.
Management report - Outlook
Management report - Outlook
Good start to the year 2007. Further export growth planned;
domestic business to grow as well, assuming the positive
economic development continues.
The economy in 2007
Although a long-term economic forecast is
always subject to some degree of uncertainty,
there is a kind of optimism in our industry
that we have been missing for a long time.
According to the Confederation of the German
Construction Industry (HDB), sales in the
German construction sector will grow by 3.5 %
against the previous year in 2007.
Outlook for Westag & Getalit AG
We have made a good start to the year 2007.
All three divisions reported a double-digit
increase in sales for the January to February
period. Overall, sales rose by 19.3 %.
Against this background and in view of our
strong market position, we are optimistic for
the year 2007. We expect the start of the
continuous production of laminated boards to
provide strong stimulation for our domestic
business. It will allow us to launch new product
lines in the market which we have so far been
unable to manufacture at competitive prices.
Our modern, high-performance edge processing line for doors will enable us to offer our
customers an even wider range of products as
well as increased capacity. Sales will also be
driven by our export activities, which we
intend to expand again in 2007. We stick to
our medium-term target of a 30 % export
share.
While the high sales growth in the first two
months of 2007 cannot be extrapolated for
the full year, we project further growth for
2007.
Capital expenditure
Investments totalling € 15.4 million have
been planned for 2007. Due to the high
demand, additions to capacity are required in
the fields of acrylic-based solid surface worktops and cut-to-size elements as well as the
production of frames. This also includes the
construction of new production halls with a
total space of more than 9,000 square metres.
These investment projects will partly become
effective in 2007 and partly in 2008.
Income
We had to cope with another sharp rise in
raw material prices, especially in the area of
particle boards, in the first quarter of 2007.
Although our customers are beginning to
understand that price increases are inevitable,
it will be difficult to impose the necessary
price adjustments.
Overall, we are confident, however, that we
will again be able to generate appropriate
earnings before income taxes.
21
22
The Westag share
The Westag share
Sharp increase in the Westag share price.
Price performance
While the DAX gained approx. 22.0% in the fiscal year, the Westag ordinary share increased
by 78.2 % to € 17.20 and the Westag preference
share by 78.1 % to € 17.01. Compared to the
February 2003 low of approx. € 3.00, the value
of our shares even rose more than fivefold. Our
shares were mostly traded at the Frankfurt
Stock Exchange, where they are listed in the
Prime Standard.
In an analysis conducted by the “Wertpapier“
magazine (No. 4/2007), we were ranked 41st
among the top 100 high-yield shares in the
Prime Standard. This is good news not only for
our shareholders.
Shareholder structure
In a letter dated December 18, 2006, Syntalit
AG, Zug/Switzerland, and Gethalia Foundation,
Vaduz/Liechtenstein, informed us that the
share of Syntalit AG in the voting capital of our
company climbed above the 75 % threshold on
December 12, 2006 as a result of transactions
within the family and now amounts to 75.5 %.
Pursuant to Section 22 para. 1 sentence 1 No.
1 of the German Securities Trading Act, these
voting shares count towards Gethalia Foundation.
In the context of the employee share programme,
which has been organised on an annual basis
since 1999, a total of 194,660 preference
shares have been acquired by employees of our
company. This represents 6.8 % of the total
preference shares. In addition, our company
held 185,500 own preference shares as of
December 31, 2006, which represents 6.5 % of
the total preference shares.
Investor relations
Our investor relations activities continued at a
high level in the fiscal year. Our annual accounts
press conference was held in Düsseldorf on
May 11, 2006, while a presentation to DVFA
analysts took place in Frankfurt on August 30,
2006. Another highlight was the Annual General
Meeting in Rheda-Wiedenbrück on August 8,
2006, which was attended by roughly 360
shareholders. In addition, we regularly published
quarterly reports and press releases. We also
held numerous one-on-one meetings with
investors who visited the company’s headquarters in Rheda-Wiedenbrück. Moreover,
several stock market magazines and shareholder
newsletters recommended our share as a buy in
the fiscal year.
Dividend
For many years, our company has pursed a
shareholder-friendly policy of paying out a
dividend that is linked to the profit generated.
Based on a net profit of € 11.9 million generated in the fiscal year, the Management Board
and the Supervisory Board decided to propose
a dividend of € 0.82 per ordinary share and of
€ 0.88 per preference share to this year’s
Annual General Meeting. Based on the year-end
price, this represents a dividend yield of 4.8 %
for the ordinary shares and of 5.2 % for the
preference shares.
The Westag share
23
Price performance of the Westag shares in 2006
187.5 %
187.5 %
175.0 %
175.0 %
162.5 %
162.5 %
150.0 %
150.0 %
137.5 %
137.5 %
125.0 %
125.0 %
112.5 %
112.5 %
100.0 %
100.0 %
01
02
03
04
05
Ordinary shares, ISIN DE0007775207
Key figures of the
Westag share
06
07
08
09
10
11
12
Preference shares, ISIN DE0007775231
2006
2005
2004
2003
2002
Total number of shares
Net profit per share (in €)
DVFA/SG earnings per share (in €)
Book value per share (in €)
5,720,000
2.08
1.60
14.38
5,720,000
0.91
0.96
12.64
5,720,000
1.01
1.00
12.20
5,720,000
0.31
0.32
11.70
5,720,000
0.28
0.11
11.70
Ordinary share information
Number of ordinary shares1)
Highest price (in €)
Lowest price (in €)
Year-end price (in €)
Dividend per share (in €)
Dividend yield (in %)
PER
2,860,000
17.74
8.95
17.20
0.82
4.8
11.6
2,860,000
12.05
7.52
9.65
0.48
5.0
10.1
2,860,000
8.50
5.60
7.95
0.48
6.0
7.6
2,860,000
6.20
3.00
5.80
0.28
4.8
18.1
2,860,000
6.95
3.10
3.50
–
0.0
31.8
Preference share information
Number of preference shares1)
Highest price (in €)
Lowest price (in €)
Year-end price (in €)
Dividend per share (in €)
Dividend yield (in %)
PER
2,860,000
18.10
9.45
17.01
0.88
5.2
11.5
2,860,000
12.20
7.75
9.68
0.54
5.6
10.1
2,860,000
8.90
5.80
8.00
0.54
6.8
7.7
2,860,000
6.10
3.00
6.00
0.34
5.6
18.8
2,860,000
6.50
3.05
3.30
0.12
3.6
30.0
1)
1)
diluted and basic
24
Human resources
Human resources
New working time and compensation models secure the future
of the company.
New working time and compensation models
Introduced at the beginning of fiscal 2006,
the new working time model, which provides
for a flexible weekly working time of 38 hours
on an annual average, has fully met all expectations. On the one hand, it has improved our
basis for calculation, which turned out to be
a good basis for the sales growth achieved
during the year. On the other hand, it enabled
us to limit the increase in personnel expenses.
Our employees benefited from the improved
profit situation through a bonus agreement.
Building on the new model, employees were
offered the possibility to sign a flexible Christmas bonus agreement. Under this scheme, part
of the annual Christmas bonus is linked to the
company’s profit for the year. More than half
of the workforce have signed this agreement.
The model is designed to give our employees a
greater share in the company’s performance
and to increase their identification with the
company.
Staff information
As of December 31, 2006, the number of
employees was up by 20 from 1,189 to 1,209.
1,009 of them work at our Wiedenbrück plant,
while 200 work at Wadersloh.
Although we have no longer been bound by
collective wage agreements – and no collective
pay rises have been agreed since then anyway –
we voluntarily increased the wages and salaries
of our employees by 1.5 % with effect from May
1, 2006. The staff cost ratio declined from
32.8 % to 29.5 %.
As of December 31, 2006, Westag & Getalit AG
employed 45 apprentices/trainees. Seven
technical apprentices and four commercial
trainees completed their vocational training
in the fiscal year.
612 employees accepted the offer to subscribe
to preference shares in the fiscal year and
acquired a total of 18,180 shares.
New staff magazine
A new staff magazine entitled “Westag Intern“
was launched in the fiscal year. It will be
published on a quarterly basis and inform our
employees about current topics and developments as well as new products of our company.
The response to the new magazine has been
extremely positive.
Acknowledgements
We would like to thank our employees for the
great personal commitment shown in the past
fiscal year. Our thanks also go to the works
council and the employee representatives on
the Supervisory Board for their constructive
cooperation.
Financial statements 2006
26
Balance sheet (according to IFRS)
Balance sheet as of December 31, 2006 (according to IFRS)
Assets
Notes
Dec. 31, 2006
Dec. 31, 2005
€
€ ‘000
333,019.79
400.6
19,467,514.59
18,509,914.00
8,184,875.51
460,663.75
19,776.3
11,298.8
7,452.5
5,961.3
46,622,967.85
44,488.9
1,000,000.00
42,440.00
0.0
48.2
A. Non-current assets
I. Intangible assets
Software, licences and other industrial property rights
1
II. Tangible assets
Land and leasehold rights and buildings
Technical equipment and machinery
Other fixtures and fittings, plant and office equipment
Advance payments and assets under construction
1
III.Financial assets
Shares in associated companies
Other loans
1
1,042,440.00
48.2
47,998,427.64
44,937.7
17,974,523.00
3,517,109.00
10,630,341.00
13,985.1
3,368.7
10,347.4
32,121,973.00
27,701.2
19,836,138.41
4,579,691.41
19,308.1
563.4
24,415,829.82
19,871.5
8,991,462.00
7,736,660.02
9,151.5
10,345.6
16,728,122.02
19,497.1
73,265,924.84
67,069.8
0.00
90.1
121,264,352.48
112,097.6
B. Current assets
I. Inventories
Raw materials and supplies
Work in progress
Finished goods and merchandise
II. Receivables and other assets
Trade receivables
Other assets
III.Cash and cash equivalents
Securities
Cash at banks or on hand
C. Deferred tax assets
2
2
2
3
Balance sheet (according to IFRS)
Equity and liabilities
Notes
27
Dec. 31, 2006
Dec. 31, 2005
€
€ ‘000
7,321,600.00
7,321,600.00
14,643,200.00
7,321.6
7,321.6
14,643.2
24,344,572.38
24,344.6
595,757.30
34,515,739.02
595.8
31,315.5
35,111,496.32
31,911.3
8,134,841.63
3,296.0
82,234,110.33
74,195.1
13,004,155.00
3,554,409.00
12,398.34
12,429.1
3,132.4
0.0
16,570,962.34
15,561.0
7,325,295.07
4,096,842.65
11,037,142.09
7,008.2
5,257.6
10,075.2
22,459,279.81
22,341.0
121,264,352.48
112,097.6
A. Equity and reserves
I. Called-up share capital
Ordinary shares
Preference shares
4
II. Capital reserve
4
III.Revenue reserves
Legal reserve
Other revenue reserves
4
IV. Net profit for the year
B. Non-current liabilities
Provisions for pensions and similar obligations
Other non-current provisions
Deferred tax liabilities
C. Current liabilities
Trade payables
Other current liabilities
Current provisions
4
5
6
6
7
Development of non-current assets
28
(in €)
I.
A. Gross values
Jan. 1, 2006
Acquisition/
manufacturing cost
Additions
Disposals
Reclassifications
Dec. 31, 2006
Acquisition/
manufacturing cost
1,254,897.62
93,347.08
23,331.38
0.00
1,324,913.32
1,254,897.62
93,347.08
23,331.38
0.00
1,324,913.32
Land and leasehold rights
and buildings
47,049,759.78
717,604.95
0.00
75,176.65
47,842,541.38
Technical equipment and
machinery
76,671,163.78
5,893,567.02
359,451.21
5,317,505.24
87,522,784.83
Other fixtures and fittings,
plant and office equipment
60,764,121.55
3,297,501.78
1,126,631.99
764,553.59
63,699,544.93
Advance payments and
assets under construction
5,961,332.15
656,567.08
0.00
- 6,157,235.48
460,663.75
190,446,377.26
10,565,240.83
1,486,083.20
0.00
199,525,534.89
0.00
48,200.00
1,000,000.00
9,000.00
0.00
14,760.00
0.00
0.00
1,000,000.00
42,440.00
48,200.00
1,009,000.00
14,760.00
0.00
1,042,440.00
191,749,474.88
11,667,587.91
1,524,174.58
0.00
201,892.888.21
Intangible
assets
Software, licences
and other industrial
property rights
II. Tangible assets
III. Financial assets
Shares in associated
companies
Other loans
Non-current assets – total
B. Depreciation
C. Net values (A-B)
Jan. 1, 2006
accumulated
depreciation
Additions
depreciation
current year
Disposals
Dec. 31, 2006
accumulated
depreciation
Year under review
Dec. 31, 2006
net book values
Previous year
Dec. 31, 2005
net book values
854,319.83
160,905.08
23,331.38
991,893.53
333,019.79
400,577.79
854,319.83
160,905.08
23,331.38
991,893.53
333,019.79
400,577.79
27,273,489.19
1,101,537.60
0.00
28,375,026.79
19,467,514.59
19,776,270.59
65,372,378.78
3,981,212.26
340,720.21
69,012,870.83
18,509,914.00
11,298,785.00
53,311,617.04
3,275,577.14
1,072,524.76
55,514,669.42
8,184,875.51
7,452,504.51
0.00
0.00
0.00
0.00
460,663.75
5,961,332.15
145,957,485.01
8,358,327.00
1,413,244.97
152,902,567.04
46,622,967.85
44,488,892.25
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,000,000.00
42,440.00
0.00
48,200.00
0.00
0.00
0.00
0.00
1,042,440.00
48,200.00
146,811,804.84
8,519,232.08
1,436,576.35
153,894,460.57
47,998,427.64
44,937,670.04
29
Income statement (according to IFRS)
31
Income statement for the year ended December 31, 2006 (according to IFRS)
Notes
2006
2005
€
€ ‘000
2002
Sales
8
196,798,469.70
173,424.6
Changes in inventories of finished goods and work in progress
9
276,953.00
286.8
10
368,830.27
269.4
197,444,252.97
173,980.8
Other own work capitalised
Total performance
Other operating income
11
2,860,246.93
2,436.7
Cost of materials
12
97,808,220.07
82,751.9
Personnel expenses
13
58,156,720.79
57,086.1
Depreciation of intangible fixed assets and tangible assets
14
8,519,232.08
8,169.6
Other operating expenses
15
22,481,085.10
20,173.4
Other taxes
16
189,712.58
183.2
13,149,529.28
8,053.3
336,668.17
544.7
13,486,197.45
8,598.0
1,560,285.17
3,370.9
11,925,912.28
5,227.1
2.08
0.91
Operating result
Financial result
17
Taxes on income
18
Net profit
Earnings per share (diluted and basic)
19
32
Notes
Notes
General information
Westag & Getalit AG is a manufacturer of wood
and plastics products based in Rheda-Wiedenbrück, Westphalia. The stock corporation has
been entered in the Commercial Register of
Gütersloh under number HRB 5565.
Westag & Getalit AG is listed in the Prime
Standard.
The individual financial statements of Westag
& Getalit AG, Rheda-Wiedenbrück, as of
December 31, 2006 have been established in
accordance with all International Reporting
Standards (IFRS) of the International
Accounting Standards Board (IASB), London,
as applicable on the reporting date and all
binding interpretations of the International
Financial Reporting Interpretations Committee
(IFRIC) for the fiscal year. The fiscal year
corresponds to the calendar year and ended
on December 31, 2006. Westag & Getalit AG is
not required to establish consolidated financial
statements.
All standards applicable to fiscal 2006 were
taken into account. All accounting and valuation
methods used comply with IFRS. The expenditure type of presentation was applied to the
income statement. In addition to the income
statement, the balance sheet and the cash
flow statement, a statement of changes in
equity has been included. Moreover, the notes
comprise a segment report. In order to enhance
their meaningfulness, individual items of the
income statement as well as the balance sheet
have been summarised and explained in the
notes.
Accounting and valuation principles
The following accounting and valuation
principles were applied:
Non-current assets
Purchased intangible assets are capitalised at
their acquisition costs in accordance with IAS
38. They are depreciated over their estimated
useful economic lives of 3 to 8 years using the
straight-line method.
Any further decline in economic usefulness is
taken into account by means of non-scheduled
depreciation. As a general rule, self-constructed
intangible assets are not capitalised.
Tangible assets
Tangible assets are shown and valued at their
acquisition or production costs less scheduled
depreciation over their useful lives. Nonscheduled depreciation was not required in
the year under review. The straight-line method
is used for depreciation over the useful lives,
unless the declining balance method has to be
used to take actual usage into account.
The useful life of factory, business, residential
and other buildings is mostly 25 to 50 years,
of technical equipment and machinery up to
15 years and of other fixtures and fittings,
plant and office equipment 3 to 10 years. The
periods of depreciation and useful lives are
reviewed annually.
Tangible assets with acquisition costs of less
than € 410 are fully depreciated in the year of
addition. In addition to the cost of materials
Notes
at acquisition costs, the production costs of
self-constructed assets comprise production
labour as well as pro-rata production overhead
costs including depreciation. Financing costs
are not taken into account. A revaluation of
tangible assets has not been performed.
Financial assets
Financial assets include shares in associated
companies, interest-bearing loans as well as
cooperative shares held to maturity. They are
valued at their acquisition costs or at their
lower fair values in accordance with IAS 39.
Receivables and other assets
Receivables and other assets are valued at
their acquisition costs. Discernible risks are
taken into account by means of adequate
value adjustments.
The general credit risk is taken into account
by means of value adjustments based on past
experience.
Existing receivables in foreign currencies are
valued at the mean rate on the balance sheet
date. Receivables with a remaining maturity of
over one year are discounted at a rate of 4 %.
Current assets
Inventories
As a general rule, raw materials and supplies
as well as merchandise are valued at their
average acquisition costs. If, on the balance
sheet date, exchange or market prices result
in lower values, they are depreciated to their
fair values.
Work in progress and finished goods are shown
at their production costs. In addition to directly
attributable costs, production costs include
reasonable production-related portions of the
necessary fixed and variable material and
production overhead costs. Financing costs
are not included in the acquisition and production costs. Inventory risks resulting from
the period of storage or reduced usability are
taken into account by means of adequate
depreciation. Lower values on the balance
sheet date due to reduced proceeds on disposal
are shown accordingly.
Cash and cash equivalents
The securities shown in the balance sheet are
held to maturity and valued at their respective
fair market values on the balance sheet date.
Until realisation at the time of disposal,
unrealised profits and losses resulting from
valuation are included in other revenue reserves
taking deferred tax assets into account. Means
of payment are shown at their depreciated
acquisition costs. Foreign currency assets are
valued at the mean rate on the balance sheet
date.
Deferred tax assets
Deferred tax assets are determined from
temporary differences between the book values
and the tax valuations of assets and liabilities
in accordance with IAS 12. Die Deferred tax
assets are based on a tax rate of 40 %.
33
34
Notes
Liabilities
Pension provisions
Pension provisions include obligations under a
pension scheme for the company’s employees.
The provisions are calculated based on salaryindependent monthly old-age and disability
pension payments per full year of staff membership in the company. In addition, there are
individual pension commitments. Provisions
are set up for obligations under rights to future
pension payments and current pension payments to active and former employees and
their surviving dependants.
Provisions for pensions are valued using the
projected unit credit method in accordance
with IAS 19. This method takes into account
not only the pensions and vested rights to
future pension payments known on the balance
sheet date but also careful estimates of future
increases in pensions and salaries. The calculation is based on actuarial expert opinions
relying on certain biometric assumptions.
The expected mortality and disability rates are
based on the Prof. Dr. Klaus Heubeck 2005 (G)
tables. The provisions were calculated on the
basis of the new retirement ages stipulated by
the German Pension Reform Act (BMF letter
dated December 29, 1997). In deviation from
the above, the retirement age of some individual
pension commitments is the completion of the
65th year of age. Actuarial profits or losses are
only recognised with an impact on the operating
result if they exceed 10 % of the volume of
obligations. The company’s pension schemes
have been closed; new employees are not
entitled to company pensions.
Other provisions
Provisions in accordance with IAS 37 are set
up to the extent that there are current obligations from past events to third parties which
are likely to result in a future outflow of
resources that can be reliably estimated.
Provisions for guarantee claims are set up on
the basis of past or estimated future claims.
Other provisions are also taken into account in
accordance with IAS 37 for all discernible risks
and uncertain obligations in the amount of
their probable occurrence. The amounts shown
are a best possible estimate of the funds
required to meet the obligations existing on
the balance sheet date.
Provisions for obligations which are unlikely
to burden resources already in the following
year are set up in an amount equalling the
present value of the expected outflow of
resources using a discount rate of 5.5 %. The
valuation of provisions is reviewed on each
balance sheet date. A distinction between
non-current provisions and current provisions
is made in the balance sheet.
Liabilities
At their first-time inclusion, liabilities are
shown at their acquisition costs. In the following years, all liabilities are valued at their
depreciated acquisition costs.
All foreign currency liabilities are valued at
the mean rate on the balance sheet date.
Trade payables as well as other current liabilities
are liabilities with a term of no more than
twelve months.
Notes
Realisation of earnings and expenses
Sales revenues and other operating income
are recognised as soon as ownership or risk
pass to the customer or at the time when a
service is performed. Sales revenues are shown
less cash discounts, discounts, price reductions
and bonuses. Changes in inventories of work
in progress still in the production process on
the balance sheet date are reported at their
pro-rata production costs.
Operating expenses are recognised with an
impact on income at the time of the use of the
respective product or service.
Guarantee expenses are included at the time
of realisation of the respective sales revenues.
Interest income and interest expenses are
recognised on an accrual basis using the
effective rate method.
Expenses and earnings are translated at the
average market price of the period.
Notes to the balance sheet
1.
Non-current assets
The breakdown of the non-current asset items
summarised in the balance sheet and their
development throughout fiscal 2006 have been
recorded in the respective notes to the balance
sheet. The investments are explained in the
management report. Tangible assets are
encumbered with land charges in an amount of
€ 6,800 thousand. No actual drawing existed
on December 31, 2006.
As of the balance sheet date, the Westag &
Getalit AG held 49 % of the shares in AKP Acrylkantenprofis GmbH (AKP), Meiningen, which
is an associated company. AKP has a nominal
capital of € 65 thousand. The company’s equity
capital amounted to € 1,479 thousand as
of December 31, 2006. A net profit of € 291
thousand was generated in 2006.
35
36
Notes
2.
Current assets
2.1
Inventories
(in € ‘000)
2006
2005
17,974.5
13,985.1
3,517.1
3,368.7
10,630.3
10,347.4
32,121.9
27,701.2
Current assets inventories
Work in progress
Finished goods and merchandise
Total
No value adjustments made in earlier years were reinstated to original
values in the fiscal year. No inventories were transferred as security by
Westag & Getalit AG.
2.2
Receivables and
other assets
Assets (in € ‘000)
2006
2005
19,836.1
19,308.1
4,579.7
563.4
24,415.8
19,871.5
Receivables and other assets
Trade receivables
Other assets
Total
Default risks are taken into account through value adjustments in an
amount of € 1,063 thousand (previous year: € 1,010 thousand). Other
assets include claims from corporate income tax credits in a discounted
amount of € 3,236.9, which will be paid out over a period of ten years
starting 2008. This claim has a nominal value of € 3,991 thousand.
2.3
Cash and cash
equivalents
(in € ‘000)
2006
2005
Securities
8,991.5
9,151.5
Current account balances
1,483.8
2,272.7
Time deposit account balances
6,252.8
8,072.9
16,728.1
19,497.1
Total
Bank guarantees in an amount of € 149 thousand have been obtained until
August 15, 2011 as insolvency coverage for partial retirement working
time credits. No other securities or bank deposits were pledged or assigned
in the year under review as well as the previous fiscal year.
Notes
3.
Deferred tax assets
(in € ‘000)
2006
2005
Securities
0.0
0.1
Provisions
0.0
1,043.9
Special item with an equity portion
0.0
- 953.9
0.0
90.1
Deferred tax assets
Total
Based on a tax rate of 40 %, deferred tax assets totalled to € 90.1 thousand
on December 31, 2005. The deferred tax liabilities incurred in the fiscal year
are shown on the liabilities side of the balance sheet.
4.
Equity
4.1
Called-up share
capital
(in € ‘000)
2006
2005
Ordinary shares
7,321.6
7,321.6
Preference shares
7,321.6
7,321.6
14,643.2
14,643.2
Number of individual
share certificates
Amount
in € ‘000
12,250
2,450,000
6,272.0
14,000
280,000
716.8
13,000
130,000
332.8
2,860,000
7,321.6
2,860,000
7,321.6
2,860,000
7,321.6
5,720,000
14,643.2
Called-up share capital
Total
Bearer shares
Number of share certificates
Ordinary shares
Preference shares
286,000
Total number and amount of
ordinary and preference shares
37
38
Notes
The development of equity is shown in the
enclosed statement of changes in equity.
All of the company’s shares are registered for
trade and officially quoted at the Düsseldorf
and Frankfurt stock exchanges. The ordinary
shares are full voting shares, while the preference
shares are nonvoting. Preference shareholders
receive a preferred dividend of € 0.12 per preference share out of the net profit for the year.
If the distributable net profit for the year is
not sufficient to pay out a dividend of € 0.12
per preference share, the deficit must be paid,
without interest, out of the net profit for the
year generated during the subsequent years in
such a way that the older deficits are paid before
the newer ones and the preferred amounts
payable for the year out of the same year’s
profit are paid subsequent to the repayment
of all deficits.
Subsequent to the distribution of a dividend
of € 0.12 per ordinary share, the preference
shareholders receive an extra dividend, which
may not be paid retroactively, of € 0.06. Both
preference and ordinary shareholders participate
in a further distribution in the proportion of
their prorate shares in the capital stock. The
company reserves the right to issue further
preference shares which, with respect to a
distribution of profit or of company assets, are
either of equal rank or take priority over the
existing nonvoting preference shares.
On August 9, 2005, the Annual General Meeting authorised the Management Board to
increase, by August 8, 2010 and with the
Supervisory Board’s approval, the capital stock
once or several times, by way of issuing new
bearer shares and/or nonvoting preference
shares by up to € 5,840,000.00 (approved
capital I) in return for cash deposits.
The shareholders are generally entitled to the
usual subscription right. However, the Management Board has been authorised to exclude,
with the Supervisory Board’s approval, peak
amounts from the shareholders’ subscription
rights.
The board has furthermore been authorised to
exclude the shareholders’ subscription right
up to a nominal value of € 300,000 in order to
issue employee shares and to exclude the subscription right of holders of one type of shares
to subscribe to shares of the other types while
simultaneously issuing ordinary and preference
shares and preserving the existing shareholder
relationships within both share types. In addition, further approved capital (capital II)
exists which amounts to up to € 1,460,000.
The Management Board has been authorised
to increase, by August 8, 2010 and with the
Supervisory Board’s approval, the capital stock
to said amount by way of issuing, once or
several times, new nonvoting ordinary and/or
preference shares in return for cash or noncash capital contributions. The board is
furthermore entitled to exclude, with the
Supervisory Board’s approval, the shareholders’
subscription right,
a) insofar as the new shares’ issue amount is
not substantially lower than the market
price,
b) in order to acquire companies or participations if this is in the company’s interest,
c) insofar as this is required in order to offer
ordinary shareholders exclusively new
ordinary shares and preference shareholders
exclusively nonvoting preference shares in
equal proportions.
This authorisation also includes the entitlement
to issue preference shares which, with respect
to a distribution of profit or of company assets,
are equal in rank with the existing nonvoting
preference shares.
Notes
4.2
Capital reserve
(in € ‘000)
2006
2005
Capital reserve
24,344.6
24,344.6
Total
24,344.6
24,344.6
The capital reserve consists of the premiums of earlier capital increases.
4.3
Revenue reserves
(in € ‘000)
2006
2005
Revenue reserves
Legal reserves
Total
Revenue reserves contain the past results of
Westag & Getalit AG to the extent they have
not been distributed. They also include negative
changes in equity with no impact on profit or
loss, which result from the adoption of IFRS.
In fiscal 2006, € 3,200 thousand were allocated
to the revenue reserves in accordance with
Portfolio as of January 1
595.8
595.8
34,515.7
31,315.5
35,111.5
31,911.3
Section 58 (2) AktG (German Stock Corporation
Act).
As authorised by the Annual General Meeting
on August 9, 2005, the company purchased
own shares (preference shares) in fiscal 2006.
In detail:
2006
2005
73,500 share certificates
0 share certificate
Number/purchase
73,500 share certificate
Portfolio as of Dec. 31
73,500 share certificate
3.2 %
1.3 %
January-February 2006
August-December 2005
9.46 €/share certificate
9.32 €/share certificate
Share in the capital stock
Time of purchase
Purchase price
(average since acquisition)
The own shares in an amount of € 1,755 thousand held on the balance sheet date were netted
with the net profit for the year without any impact on the operating result.
39
40
Notes
5.
Non-current
provisions
5.1
Provisions for
pensions
(in € ‘000)
2006
2005
12,429.1
12,022.4
1,122.9
950.8
0.0
0.0
- 547.8
- 544.1
13,004.2
12,429.1
Development of the balance sheet item
As of Jan. 1
Current expenditure as detailed below
Profits and losses from scheme settlement
Current pension payments
As of Dec. 31
Composition of the balance sheet item
Expected value of the pension obligations on the
balance sheet date
15,525.0
15,014.8
Adjustments based on experience
- 225.2
0.0
Changes in accounting principles
- 195.3
0.0
15,104.5
15,014.8
- 2,100.3
- 2,585.7
13,004.2
12,429.1
Present value of the pension obligations on the
balance sheet date
Actuarial losses not included in the balance sheet
As of Dec. 31
The income statement of fiscal 2006 includes the following expenses for pension obligations
as personnel expenses:
(in € ‘000)
2006
2005
Current service cost
386.3
319.5
Interest expenses
624.6
625.8
Unrecognised past service cost
47.1
0.0
Amortised actuarial losses
64.9
5.5
1,122.9
950.8
Total
The amount of provisions is calculated using actuarial methods based on the following
assumptions:
(in %)
2006
2005
Discount factor
4.50
4.25
Rate of pension progression
1.75
1.50
Notes
5.2
Other non-current
provisions
Non-current provisions for long-term guarantees,
partial retirement and anniversary benefits
are recognised at their settlement amount
(in € ‘000)
Provisions for personnel
41
discounted to the balance sheet date. In
2006, non-current provisions developed as
shown below:
As of
Jan. 1, 2006
Use
Reversal
Addition
As of
Dec. 31, 2006
1,389.4
278.4
0.0
108.4
1,219.4
Other provisions
1,743.0
519.0
0.0
1,111.0
2,335.0
Non-current provisions
3,132.4
797.4
0.0
1,219.4
3,554.4
Non-current provisions include partial amounts totalling € 1,013 thousand (2005: € 957 thousand)
that are likely to be met within 12 months from the balance sheet date.
5.3
Deferred tax
liabilities
(in € ‘000)
2006
2005
Deferred tax liabilities
Fixed assets
Provisions
Total
264.7
0.0
- 1,081.9
0.0
829.6
0.0
12.4
0.0
Based on a tax rate of 40 %, deferred tax liabilities totalled to € 12 thousand on December 31,
2006. Deferred tax assets produced in the previous year are shown on the assets side of the
balance sheet.
6.
Liabilities
6.1
Trade payables
(in € ‘000)
2006
2005
Trade payables
7,325.3
7,008.2
Total
7,325.3
7,008.2
42
Notes
6.2
Other current
liabilities
(in € ‘000)
2006
2005
1,568.8
1,778.7
102.7
1,397.6
Other current liabilities
Liabilities to employees
Liabilities for social security
Income tax on wages and salaries
1,491.9
1,172.8
Value-added tax
346.9
436.6
Advance payments received
213.3
211.4
Debtors classed as creditors
184.1
107.5
Others
189.1
153.0
4,096.8
5,257.6
Total
7.
Current provisions
(in € ‘000)
As of
Jan 1, 2006
Use
Reversal
Provisions for taxes
1,960.8
1,809.3
151.5
1,855.4
1,855.4
Provisions for personnel
2,302.8
899.1
80.1
1,968.7
3,292.3
Other provisions
5,811.6
4,165.4
214.9
4,458.1
5,889.4
10,075.2
6,873.8
446.5
8,282.2
11,037.1
Current provisions
Provisions for personnel include provisions for
outstanding vacation obligations, royalties,
time credits and contributions to social in
surance against occupational accidents. Other
Addition
As of
Dec. 31, 2006
current provisions include provisions for
guarantee obligations, bonuses, environmental
protection measures, insurance premiums and
other provisions.
Notes
Notes to the income statement
8.
Sales
Breakdown of sales according to geographic regions:
(in € ‘000)
2006
2005
150,754.4
137,930.3
46,044.1
35,494.3
196,798.5
173,424.6
(in € ‘000)
2006
2005
Increase/decrease in inventories of finished goods
and work in progress
277.0
286.8
Total
277.0
286.8
(in € ‘000)
2006
2005
Other own work capitalised
368.8
269.4
Total
368.8
269.4
(in € ‘000)
2006
2005
Income from reversal of provisions
295.0
771.8
Income unrelated to accounting period
523.7
520.4
Remuneration in kind - cars
221.4
193.9
Employment subsidies
179.7
191.8
81.7
156.3
Insurance refund
599.5
79.4
Other income
959.2
523.1
2,860.2
2,436.7
Sales
Domestic
Abroad
Total
9.
Changes in inventories
of finished goods and
work in progress
10.
Other own work
capitalised
11.
Other operating
income
Income from disposal of non-current assets
Total
43
44
Notes
12.
Cost of materials
(in € ‘000)
2006
2005
74,259.9
62,881.3
Merchandise
14,224.1
11,085.0
Energy costs and packaging material
7,548.7
7,231.0
Cost of services
1,775.5
1,554.6
97,808.2
82,751.9
2006
2005
Wages and salaries
47,187.1
46,344.5
Social security contributions
8,676.9
8,491.8
Other social expenditure
1,077.4
1,182.9
Expenses for pension costs and other benefits
1,215.3
1,067.0
58,156.7
57,086.2
Cost of materials
Total
13.
Personnel expenses
(in € ‘000)
Personnel expenses
Total
On an annual average, Westag & Getalit AG’s staffing levels were as follows:
2006
2005
Number of staff (excl. trainees)
14.
Depreciation and
amortisation
non-current assets
Employees
308
314
Industrial employees
845
853
Total
1,153
1,167
(in € ‘000)
2006
2005
160.9
155.5
8,358.3
8,014.1
8,519.2
8,169.6
Depreciation and amortisation non-current assets
Intangible assets
Tangible assets
Total
Notes
15.
Other operating
expenses
(in € ‘000)
2006
2005
Freight out
8,861.1
8,057.6
External cost of repair and maintenance
4,286.4
3,378.0
Insurance, contributions and fees
1,013.2
1,211.3
Advertising and trade fair expenses
1,374.0
1,471.2
External production labour and overhead
2,093.9
1,232.1
Consulting fees including IT consulting
1,104.5
856.5
Commissions
342.6
278.7
Postage, stationery, office supplies and telephone
608.8
564.9
Travel and mileage allowance
623.3
606.4
Car cost
418.5
362.3
1,754.8
2,154.4
22,481.1
20,173.4
(in € ‘000)
2006
2005
Other taxes
189.7
183.2
Total
189.7
183.2
Other expenditure
Total
16.
Other taxes
Other taxes mainly comprise real property tax and vehicle license tax.
17.
Financial result
(in € ‘000)
2006
2005
500.2
553.9
1.6
1.6
- 4.8
- 5.1
- 160.3
- 5.7
336.7
544.7
Financial result
Interest income
Income from long-term financial investments
Interest expenses
Depreciation of securities held as current assets
Total
45
Notes
46
18.
Taxes
2006
€ ‘000
% 1)
2005
€ ‘000
% 1)
Taxes on income
Expected tax expenditure
5,394.5
40.0
3,439.2
40.0
- 3,236.9
- 24.0
0.0
0.0
Corporate income tax refund on previous
year’s dividend
- 307.0
- 2.3
0.0
0.0
Reversal of tax provisions
- 151.5
- 1.1
0.0
0.0
102.4
0.8
- 23.5
- 0.3
- 241.2
- 1.8
- 44.8
- 0.5
1,560.3
11.6
3,370.9
39.2
Capitalised corporate income tax credit
Deferred tax assets
Other tax effects
Total
1)
of earnings before income taxes in
an amount of
13,486.2
8,598.0
Based on a tax rate of 40 %, deferred tax assets are derived as follows:
(in € ‘000)
Provisions for pensions
Non-current provisions for personnel
Special item with an equity portion in accordance
with the Income Tax Act
Provisions for deferred maintenance
19.
Result per
share
2006
2005
- 122.4
- 28.4
25.6
119.4
- 124.3
- 114.5
58.8
0.0
Value adjustment of fixed assets
264.7
0.0
Total
102.4
- 23.5
2006
2005
11,925,912.28
5,227,074.17
Ordinary shares entitled to dividend
2,860,000.00
2,860,000.00
Preference shares entitled to dividend 1)
2,674,500.00
2,674,500.00
Dividend per ordinary share in €
0.82
0.48
Dividend per preference share in €
0.88
0.54
Result per share in €
2.08
0.91
(in € ‘000)
Result per share
Net profit in €
Notes
Other information
20.1
Segment reporting
Segment assets include all operating assets
used by a segment, in particular non-current
assets, inventories, receivables as well as cash
and cash equivalents. Segment liabilities
comprise all operating liabilities and consist
primarily of liabilities and provisions.
Segment investments include all investments
in non-current operating assets. The breakdown into segments is largely based on the
respective shares in total sales, unless a direct
allocation is possible.
Westag & Getalit AG’s segment reporting is based on a breakdown into geographic regions by
customers domiciled in Germany and abroad (primary reporting format).
(in € ‘000)
Domestic
Abroad
Westag total
150,754.4
46,044.1
196,798.5
41,973.9
11,900.9
53,874.8
Fixed cost
31,925.6
8,463.0
40,388.6
Result
10,048.3
3,437.9
13,486.2
Fiscal 2006
Sales
Profit contribution
Fiscal 2005
Sales
137,930.3
35,494.3
173,424.6
Profit contribution
38,596.3
9,225.1
47,821.4
Fixed cost
32,056.1
7,167.3
39,223.4
6,539.3
2,058.7
8,598.0
Domestic
Abroad
Westag total
102,820.0
18,444.3
121,264.3
Result
(in € ‘000)
Fiscal 2006
Segment assets
Segment liabilities
33,703.6
6,045.9
39,749.5
Segment investments
9,037.4
1,621.2
10,658.6
Segment depreciation
7,223.4
1,295.8
8,519.2
Segment assets
97,182.6
14,915.2
112,097.8
Segment liabilities
32,859.4
5,043.1
37,902.5
Segment investments
9,273.8
1,423.3
10,697.1
Segment depreciation
7,082.6
1,087.0
8,169.6
Fiscal 2005
47
48
Notes
Segment reporting by divisions (secondary reporting format)
(in € ‘000)
Plywood/
Formwork
Doors/
Frames
Laminates/
Elements
Other
Westag
total
38,199.0
81,140.6
74,022.4
3,436.5
196,798.5
68.2
4,031.9
5,734.0
824.5
10,658.6
13,789.0
40,380.4
45,962.5
21,132.5
121,264.4
27,092.8
73,160.0
69,554.6
3,617.2
173,424.6
93.6
4,686.0
5,094.2
823.3
10,697.1
11,183.7
39,420.7
43,383.4
18,109.8
112,097.6
Fiscal 2006
Sales
Segment investments
Segment assets
Fiscal 2005
Sales
Segment investments
Segment assets
20.2
Other financial
obligations
(in € ‘000)
2006
2005
Purchase commitments in connection with
capital expenditure
700.2
3,194.9
Rental and lease contracts
323.6
404.7
Other financial obligations
206.7
239.6
1,230.5
3,839.2
Other financial obligations
Total
20.3
Information about
relationships with
affiliated companies
According to information supplied by Syntalit
AG on December 18, 2006, Syntalit holds the
majority of our company’s ordinary shares
(75.5 %). In addition, we were advised by
Gethalia Foundation that it is a shareholder of
Syntalit AG and that the full 75.5 % of the voting
shares held by Syntalit AG in our company have
to be counted towards Gethalia Foundation
pursuant to Section 22 para. 1 sentence 1 No.
1 WpHG. Since then, we have received no notification of a change in shareholdings subject
to reporting requirements. With regard to our
relationships with affiliated companies, we
would like to point out that we did not conduct
any legal transactions with Syntalit AG and
Gethalia Foundation.
The respective report required under Section
312 AktG (German Stock Corporation Act)
concludes with the following declaration:
“Transactions which are subject to reporting
requirements did not take place.”
Notes
20.4
Supervisory Board
and Management
Board compensation
2006
2005
€
€
61,500.00
67,500.00
1,761,647.55
1,436,829.16
Total compensation received by former Management
Board members and their surviving dependants
121,380.36
120,145.68
Pension provisions for former Management Board
members and their surviving dependants
675,600.00
740,097.00
0.00
0.00
Total Supervisory Board compensation
Total Management Board compensation
Consulting services
The names of the Management Board and Supervisory Board members appear
separately on the cover page.
No advances, loans or guarantees were granted to Supervisory Board or Management
Board members.
21.
Corporate
Governance Code
Westag & Getalit AG has issued the Declaration of Conformity regarding the
recommendations made by the German Corporate Governance Code government
commission that is required under Section 161 AktG (German Stock Corporation Act)
and has given shareholders access to this declaration via the Internet.
22.
Agreed auditor’s fee
The auditor’s fee as defined in Section 319 (1) HGB (German Commercial Code),
which is recognised as an expense item, is comprised as follows:
(in € ‘000)
2006
2005
Audit
97
94
Tax consulting services
36
35
Other services
32
31
165
160
Auditor’s fee
Total
49
50
Notes
23.
Translation to IFRS 1
23.1
Equity reconciliation
HGB-IAS/IFRS
(in € ‘000)
2006
2005
83,970.7
74,951.6
661.9
0.0
- 1,755.2
- 685.2
0.0
- 0.3
- 12.4
90.1
2,073.9
2,384.7
- 2,851.8
- 2,545.8
147.0
0.0
82,234.1
74,195.1
2006
2005
11,836.2
5,404.8
- 310.8
- 341.1
Personnel expenses
- 305.9
- 71.0
Depreciation
661.9
- 71.0
147.0
210.9
- 102.5
23.5
11,925.9
5,227.1
Equity reconciliation HGB-IAS/IFRS
Equity according to HGB
Tangible assets
Own shares
Deferred tax assets
Provisions for pensions
Other provisions
Total
23.2
Net profit
reconciliation 2006
HGB-IAS/IFRS
(in € ‘000)
Net profit reconciliation HGB-IAS/IFRS
Net profit according to HGB
Taxes on income
Total
24.
Events after the
balance sheet date
No events having a material impact on the
financial statements have occurred after the
balance sheet date.
25.
Financial, currency
and credit risks
Westag & Getalit AG is exposed to a moderate
extent to financial and currency risks related
to the procurement of materials from foreign
currency countries. These risks are mitigated
in individual cases and to a small extent by
concluding hedging transactions while monitoring currency trends.
No such transactions existed on the balance
sheet date. In order to eliminate default risks,
we have taken out insurance cover for most of
our accounts receivable.
Notes
26.
Proposal regarding
the appropriation of
the net profit for the
year
The 2006 net profit for the year according to HGB amounts to € 8,031,983.14 and is
composed as follows:
€
Net profit 2006
11,836,205.79
Previous year’s appropriated retained earnings brought forward
465,829.79
Allocation to the reserve for own shares
- 1,070,052.44
Allocation to other revenue reserves in accordance with Sect. 58 (2) AktG
- 3,200,000.00
Net profit for the year
8,031,983.14
We submit to the Annual General Meeting the following proposal regarding the appropriation of
the net profit for the year:
€
Distribution of a dividend of
€ 0.82 per ordinary share
€ 0.88 per preference share
2,345,200.00
2,353,560.00
4,698,760.00
Residual profit to be brought forward to new account
3,333,223.14
8,031,983.14
Ordinary shares consist of 2,860,000 no par
shares and preference shares consist of
2,674,500 no par shares.
The capitalised corporate income tax claim in
an amount of approx. € 3,237,000.00 is reflected
in the residual profit to be brought forward to
new account. It is planned to distribute this
claim to the shareholders in accordance with
the receipt of the respective payments.
For the proposal regarding the appropriation
of the net profit for the year, the number of
own shares held at the time of preparation of
the balance sheet (185,500 share certificates)
was deducted from the total number of preference shares.
Rheda-Wiedenbrück, February 16, 2007
Westag & Getalit Aktiengesellschaft
Management Board
Wenninger
Beckers
Dr. Paulitsch
Volmer
51
52
Notes
Statement of changes in equity
(in € ‘000)
Subscribed capital
Capital reserve
Revenue reserve
Net profit
for the year
Total
14,643
24,345
29,652
4,071
72,711
As of Jan. 1, 2005
Change in other reserves
- 141
- 141
Sale of own shares
- 685
- 685
- 2,400
0
Dividend
- 2,917
- 2,917
Net profit
5,227
5,227
Addition in accordance with Sect. 58 II AktG
2,400
As of Dec. 31, 2005
14,643
24,345
31,911
3,296
74,195
As of Jan. 1, 2006
14,643
24,345
31,911
3,296
74,195
- 1,070
- 1,070
- 3,200
0
Dividend
- 2,817
- 2,817
Net profit
11,926
11,926
8,135
82,234
Sale of own shares
Addition in accordance with Sect. 58 II AktG
As of Dec. 31, 2006
3,200
14,643
24,345
35,111
Dividends paid out per share amount to
(in €)
2006
2005
Ordinary shares
0.48
0.48
Preference shares
0.54
0.54
Dividends paid out per share
Notes
53
Cash flow statement 2006
Cash flow statement 2006
2006
2005
T€
T€
Operating result/EBIT
13,150
8,053
Income tax payments
- 4,800
- 3,569
8,519
8,170
Depreciation and amortisation
Result from asset retirements
Change in current assets
Change in liabilities
Cash flow from operating activities
Investment in tangible and intangible assets
Change in financial assets
Income from asset retirements
Cash flow from investment activities
Interest income
- 80
- 154
- 5,728
593
1,221
2,112
12,282
15,205
- 10,659
- 10,646
- 994
54
153
250
- 11,500
- 10,342
501
660
-5
- 11
0
0
Acquisition/sale of own shares
- 1,070
- 685
Dividend payments
- 2,817
- 2,917
Cash flow from financing activities
- 3,391
- 2,953
Change in cash and cash equivalents
- 2,609
1,910
Cash and cash equivalents as of January 1
10,346
8,436
7,737
10,346
Interest expenses
Repayment of non-current financial liabilities
Cash and cash equivalents as of December 31
The cash flow statement shows the origin and
use of cash flows in the fiscal years 2006 and
2005. A distinction is made between cash
flows from operating activities as well as from
investment and financing activities using the
indirect method.
Cash and cash equivalents shown in the cash
flow statement comprise all cash and cash
equivalents recognised in the balance sheet.
Securities are not included.
54
Westag & Getalit AG complies with the requirements of the
German Corporate Governance Code with a few exceptions.
In accordance with Clause 3.10 of the German
Corporate Governance Code, the Management
Board and the Supervisory Board provide the
following report on corporate governance at
Westag & Getalit AG:
The term “corporate governance” refers to the
responsible and transparent management and
control of a company that are geared to sustainable value creation. This promotes the shareholders’, business partners’, employees’ and
public’s trust in the management and supervision of the company. The German Corporate
Governance Code, a set of rules and regulations
on good and value-oriented corporate governance, was adopted in 2002. Since then, it
has been updated several times, most recently
with effect from June 12, 2006. The Management Board and the Supervisory Board of
Westag & Getalit AG comply with the recommendations of the German Corporate Governance Code save for a few exceptions. On
November 7, 2006 they declared, pursuant to
Section 161 AktG, that the company complies
with the recommendations of the German
Corporate Governance Code government
commission as amended on June 12, 2006
save for the following exceptions:
1. The D&O insurance taken out by Westag &
Getalit AG for the members of the Management
Board and the Supervisory Board does not
include a deductible (Clause 3.8 (2) of the Code).
2. The Management Board and the Supervisory
Board report on the company’s corporate
governance in the annual financial report but
do not provide a detailed description of any
deviations from the recommendations and
suggestions of the Code (Clause 3.10 phrases
2 and 3 of the Code).
3. The company’s articles of incorporation
do not provide for the compensation of the
members of the Supervisory Board to reflect
the exercising of the chair and membership in
committees (Clause 5.4.7 (1) phrase 3 of the
Code).The compensation of the members of
the Supervisory Board does not take into
account the performance of the company
(Clause 5.4.7 (2) of the Code). Payments made
or advantages extended by the company to
the members of the Supervisory Board for
services provided, in particular consulting or
agency services, are not listed separately in
the notes to the financial statements (Clause
5.4.7 (3) phrase 2 of the Code).
With regard to the few recommendations that
are not complied with, the Management Board
and the Supervisory Board are of the opinion
that it would not be sensible for our company
to conform to these rules.
The cooperation between the Management
Board and the Supervisory Board of Westag &
Getalit AG has traditionally been characterised
by responsibility and transparency. The
company has not only complied with all legal
provisions at all times but has also applied
additional rules of good corporate governance.
As regard the dealings with its shareholders,
the company has a policy of providing comprehensive, up-to-date and timely information.
A financial calendar regularly informs our
shareholders of important events. This financial
calendar is published in the Annual Report,
the quarterly reports and on our website. In
addition, detailed documents and information
are made available on our website. The Declaration of Conformity is available to shareholders
at: www.westag-getalit.de/corporate-governance.
Audit certificate
Audit certificate
We have audited the individual financial statements of Westag & Getalit Aktiengesellschaft,
Rheda-Wiedenbrück, - consisting of balance
sheet, income statement, statement of changes
in equity, cash flow statement and notes –
including the accounting and the management
report, for the financial year starting on January
1 and ending on December 31, 2006. The legal
representatives of the company have to ensure
that the individual financial statements and
the management report are established in
accordance with IFRS as applicable in the EU,
the supplementary commercial law regulations
to be applied in accordance with Section 324a
HGB (German Commercial Code) as well as the
supplementary provisions of the company’s
articles of incorporation. It is our responsibility
to form an opinion, based on our audit, on the
individual financial statements and the management report. We were moreover commissioned to assess the general compliance of the
individual financial statements with IFRS.
We have conducted our audit in accordance
with Section 317 HGB (German Commercial
Code), based on the principles of proper
auditing laid down by the “Institut der Wirtschaftsprüfer in Deutschland e. V. (IDW)”.
According to this, the audit is to be planned
and carried out in such a way that misrepresentations and infringements that significantly
affect the picture of the financial and earnings
position as given in the individual financial
statements and the management report,
prepared with due regard to the principles
of proper bookkeeping, are detected with a
sufficient degree of certainty.
Knowledge of the business activities and the
economic and legal environment of the
company as well as expectations of possible
errors are taken into account when the audit
procedure is laid down. During the audit, the
effectiveness of the accounting-related internal control system as well as the proof for
statements made in the accounting, the individual financial statements and the management report are evaluated on the basis of
sample audits. The audit includes an evaluation
of the accounting principles applied, as well
as an appraisal of the legal representatives’
principal judgements and an assessment of
the overall presentation of the individual
financial statements and the management
report. In our opinion, our audit forms a
sufficiently reliable basis for our evaluation.
No objections were raised in response to our
audit.
It is our conviction that, based on the findings
of our audit, the individual financial statements
comply with IFRS as applicable in the EU, the
supplementary commercial law regulations to
be applied in accordance with Section 324a
HGB (German Commercial Code) as well as the
supplementary provisions of the company’s
articles of incorporation as well as with IFRS in
general and, with due regard to the principles
of proper bookkeeping, convey a correct picture
of the company’s financial and earnings position. In general, the management report is in
line with the individual financial statements,
presents a true and fair view of the company’s
position and gives a fair representation of the
opportunities and risks concomitant with
future development.
Hanover, February 23, 2007
Peters & Partner GmbH
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
Michael Peters
Auditor
Elke Reil
Auditor
55
Balance sheet (according to HGB)
56
Balance sheet as of December 31, 2006 (according to HGB) 1)
Assets
Dec. 31, 2006
Dec. 31, 2005
€
€ ‘000
333,019.79
400.6
19,467,514.59
18,075,739.00
7,957,123.51
460,663.75
19,776.3
11,298.8
7,452.5
5,961.3
45,961,040.85
44,488.9
1,000,000.00
42,440.00
0.0
48.2
A. Fixed assets
I. Intangible assets
Software, licenses and other industrial property rights
II. Tangible assets
Land and leasehold rights and buildings, including buildings
on third-party land
Plant and machinery
Other fixtures and fittings, tools and equipment
Payments on account and tangible assets in course of construction
III.Financial assets
Equity investments
Other loans
1,042,440.00
48.2
47,336,500.64
44,937.7
17,974,523.00
3,517,109.00
10,630,341.00
13,985.1
3,368.7
10,347.4
32,121,973.00
27,701.2
19,836,138.41
4,464,714.21
19,308.1
471.7
24,300,852.62
19,779.8
1,755,234.03
8,991,462.00
685.2
9,151.8
10,746,696.03
9,837.0
B. Current assets
I. Inventories
Work in progress
Finished goods and goods for resale
II. Accounts receivable and other assets
Accounts receivable
Other assets
III.Investments
Own shares
Other investment
7,736,660.02
10,345.6
74,906,181.67
67,663.6
114,977.20
91.7
122,357,659.51
112,693.0
IV. Cheques, cash on hand and cash in other bank accounts
C. Prepayments and accrued income
1)
The complete financial statements to HGB, which have received the auditors’ unqualified audit certificate,
will be available at the Amtsgericht Gütersloh following disclosure.
Balance sheet (according to HGB)
Liabilities
57
Dec. 31, 2006
Dec. 31, 2005
€
€ ‘000
7,321,600.00
7,321,600.00
14,643,200.00
7,321.6
7,321.6
14,643.2
II. Capital reserve
24,344,572.38
24,344.6
III.Revenue reserve
Legal reserve
Reserve for own shares
595,757.30
1,755,234.03
34,600,000.00
595.8
685.1
31,400.0
36,950,991.33
32,680.9
A. Capital stock
I. Subscribed capital
Ordinary shares
Preference shares
IV. Net profit for the year
B. Special item with an equity portion
C. Accrued liabilities
Provisions for pensions and similar obligations
Provisions for taxation
Other provisions
D. Liabilities
Advances from customers
Accounts payable
Other liabilities
8,031,983.14
3,282.9
83,970,746.85
74,951.6
2,073,859.85
2,384.7
10,152,364.00
1,855,400.00
12,883,151.09
24,890,915.09
9,883.3
1,960.8
11,246.8
23,090.9
213,270.13
7,325,295.07
3,883,572.52
211.4
7,008.2
5,046.2
11,422,137.72
12,265.8
122,357,659.51
112,693.0
Profit and loss account (according to HGB)
59
Profit and loss account - financial year 2006 (according to HGB)
2006
2005
€
€ ‘000
196,798,469.70
173,424.6
276,953.00
286.8
2002
Sales revenues
In/decrease in finished goods, inventories and work in process
Capitalised cost of self-constructed assets
368,830.27
269.4
197,444,252.97
173,980.8
3,171,053.78
2,777.8
96,032,732.45
81,197.3
1,775,487.62
1,554.6
97,808,220.07
82,751.9
Cost of materials
Cost of raw materials, consumables and supplies, and of purchased materials
Cost of purchased service
Personnel expenses
Wages and salaries
47,187,119.04
46,344.4
10,663,591.75
10,670.7
57,850,710.79
57,015.1
9,181,159.08
8,169.5
22,628,085.10
20,384.3
1,571.68
1.5
Other interest and income
500,274.08
553.9
Write-down of financial assets and of investments held as current assets
160,338.00
5.7
4,839.59
5.1
13,483,799.88
8,982.4
1,457,881.51
3,394.4
189,712.58
183.2
11,836,205.79
5,404.8
465,829.79
963.3
Transfer to own share reserve
1,070,052.44
685.2
Transfer to other revenue reserves
3,200,000.00
2,400.0
8,031,983.14
3,282.9
Social security and other pension costs, thereof in respect of old-age pensions
Depreciation of intangible fixed assets and tangible assets
Other operating expense
Income from other investments and long-term loans
Interest and similar expenses
Results from ordinary activities
Taxes on income
Other taxes
Annual net profit
Previous year's appropriated retained earnings brought forward
Financial calendar*
March 15, 2007
Press Release
Report on the results of the fiscal year 2006
May 10, 2007
Press Release
Report on the first three months of 2007
May 11, 2007
Annual Financial Statements Press Conference in Düsseldorf
August 7, 2007
August 31, 2007
November 8, 2007
Annual General Meeting of Shareholders in Rheda-Wiedenbrück
Press Release
Interim report on the first six months of 2007
DVFA Event/Analysts’ Conference
in Frankfurt
Press Release
Report on the first nine months of 2007
*For updates, refer to:
www.westag-getalit.de/finanzkalender
Editorial information
Published by:
Westag & Getalit AG
Edited by:
Investor Relations
[email protected]
ISSN 1610-6776
Postfach 2629 · D-33375 Rheda-Wiedenbrück
Tel. 0 52 42/17- 0 · Fax 0 52 42/17-7 50 00
www.westag-getalit.de

Financial Report 2006

Transcription

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