1.6 MB

Transcription

1.6 MB

2002 Annual Report
Technologies · Systems · Solutions
Dürr AG
Paint Systems
Final Assembly
Systems
Services
Ecoclean
Measuring
Systems
Paint Systems is the
Final Assembly Systems
Services supports
Ecoclean supplies
Measuring Systems
leading supplier of
plans and carries out
the automotive industry
high-tech systems for
concentrates the measur-
paint shops for large-
projects as one of the
worldwide with
parts cleaning, coolant
ing technology activities
production-related
recycling, and auto-
services.
mation in workpiece
scale production of
automobiles and automotive components.
world’s leading suppliers
of products and complete systems for final
machining.
vehicle assembly.
of the Schenck Group.
The automotive industry
forms the focus of our
wide range of customers.
Product lines
Product lines
Product lines
Product lines
Product lines
Paint Systems
Assembly Turnkey
Manufacturing Support
Cleaning Systems
Development Test
Automotive
Turnkey final assembly
Services
Automotive
Systems
Complete automotive
plants, including planning
Services, primarily for
Cleaning technology used
(Schenck Pegasus)
paint shops, including
and project handling
paint shops, including
in the production of power
Engine, power train,
cleaning, maintenance
train components by the
vehicle, exhaust and
automotive industry
brake testing systems
buildings, materials flow
and process systems,
Final Assembly
and repair of equipment,
and control and super-
Products
material logistics, and
visory control systems
Handling and assembly
facility management
equipment, filling sys-
as well as wind tunnel
Cleaning Systems
balances for automobile
Industrial
development
Paint Systems
tems, and test stands for
Operating Models
Cleaning technology for
Industrial
the end of the assembly
Operator models for
automotive components
Balancing
Complete paint shops
line
all stages of automobile
suppliers and other
(Schenck RoTec)
production
industrial enterprises
Balancing and diagnostic
for automotive compo-
systems for rotating and
nent suppliers and other
Automotion Conveyor
industrial sectors
Techniques
Automation
Conveyor systems for
Automation technology
Application Technology
body and paint shops and
for workpiece transport
Weighing/Feeding
Hardware and software
final assembly lines in
and handling
(Schenck Process)
systems for automated
the automotive industry
oscillating components
Systems and components
Chip and Coolant
for weighing, feeding,
DSEngineering
Systems
automation, and vibration
Environmental
Planning of final assembly
Systems for coolant
conveying in industrial
Systems
plants and testing centers
recycling
processes
Exhaust-air purification
for vehicle and compo-
equipment for auto-
nent development
paint application
motive paint shops and
for production processes
in other industries
Key figures for the Dürr Group (US-GAAP)
2002
2001*
Sales and earnings
Consolidated sales
in € k
2,082,137
2,196,169
EBITDA
in € k
89,136
127,837
(earnings before interest expense, taxes, depreciation
and amortization)
EBIT (earnings before interest expense and taxes)
in € k
55,070
83,675
EBT (earnings before taxes)
in € k
22,620
39,790
Net income
in € k
12,018
20,003
in € k
611,087
646,093
Non-fixed assets
in € k
1,109,158
1,130,823
Equity
in € k
262,296
292,982
Financial and capital structure
Fixed assets
In % of total assets
Of which capital stock
Pension accruals
14.65
15.96
in € k
36,603
36,603
in € k
53,142
51,692
Other accruals
in € k
257,782
279,746
Financial debt
in € k
353,774
439,639
Total assets
in € k
1,790,301
1,835,684
Capital expenditures (without operator models)
in € k
27,653
35,897
Statements of cash flows
Net cash provided by operating activities
in € k
198,659
188,444
Net cash used in investing activities
in € k
– 40,417
– 44,799
Net cash used in financing activities
in € k
– 74,237
– 40,028
Personnel
Employees (average for the year)
12,620
12,561
Employees at year’s end
12,902
12,675
647,080
647,404
Personnel expenses
in € k
Key figures of interest to the capital markets
Dividend per share
in €
0.80**
1.10
Earnings per share
in €
0.84
1.40
High
in €
26.00
29.00
Low
in €
14.80
17.10
Close
in €
16.00
24.30
in k
14,298
14,298
in € m
229
347
Market price of Dürr shares
No. of shares at year’s end
Market capitalization at year’s end
** As restated (see p. 74)
** Dividend proposed to the annual shareholders’ meeting
2002
2001
Total sales
1,054.3
1,094.5
Total incoming orders
1,286.8
1,036.5
Paint Systems
39.2
61.7
2,837
2,952
Final Assembly
Total sales
404.7
425.2
Systems
476.2
351.3
EBITDA
15.6
15.4
1,609
1,631
Total sales
143.9
134.0
143.1
134.3
EBITDA
Services
11.2
10.8
4,272
3,727
Total sales
221.9
277.3
236.7
243.2
EBITDA
Ecoclean
15.0
22.2
1,079
1,084
Measuring
Total sales
385.9
428.9
Systems
381.2
411.3
EBITDA
10.4
17.4
3,046
3,224
EBITDA
The Corporate Center (see p. 53 ) had 59 employees on December 31, 2002 (2001: 57); the Corporate Center’s EBITDA amounted to
€ – 2.3 million (2001: € 0.3 million).
For information regarding consolidation, see p. 49.
Consolidated sales in € m
2,500
1,014
1,224
2,042
EBITDA* in € m
2,196
2,082
140
55.2
65.4
115.3
127.8
89.1
98
99
00
01
02
120
2,000
100
1,500
80
1,000
60
40
500
20
0
0
98
99
00
01
02
* As restated (see p. 74)
Key figures for the Dürr Group
Amounts in € m
Technologies · Systems · Solutions
The Dürr Technology Group is one of the world's leading suppliers of products,
systems, and services for automobile manufacturing. Our customers include all
significant automobile manufacturers and numerous suppliers of modules and
parts. We realize innovative technologies for them that contribute decisively to
greater efficiency, quality, and flexibility in vehicle development and production.
Our range of products and services covers the entire life cycle of production
systems, from planning and execution to services during operation and on
to modernization. We enhance our customers' competitiveness with trendsetting
solutions.
Our strengths are the great commitment and consistent customer orientation of
our employees, global presence, and outstanding innovating power. On this basis,
Contents
we intend to grow profitably and substantially raise the value of our enterprise.
2 Letter to the shareholders
6 Report of the Supervisory Board
10 Dürr stock
Reports from the
business units
16 Paint Systems
22 Final Assembly Systems
28 Services
34 Ecoclean
40 Measuring Systems
Management report
46 Economic environment
47 Strategy
49 Business developments
55 Financial position
58 Development and innovation
59 Purchasing management
60 Employees
62 Environmental protection
62 Risk management
64 Events subsequent
to the reporting date
65 Outlook
68 Annual financial statements
114 Dürr worldwide
Contents
1
Board of Management
Stephan Rojahn (54), Chairman and
Chief Executive Officer
· Ecoclean and Measuring Systems
· Public & Investor Relations, Quality
Management, and Corporate Audit
High incoming orders despite weak economy
Incoming orders increased
Net debt cut in half
Earnings burdened by restructuring and margin pressure
earnings enhancement program started in 2003
After becoming Chairman of Dürr AG’s Board of Management at the beginning of this year,
I now present the past fiscal year’s results to you for the first time.
Despite continuing weakness of the world economy and the automotive industry, the Dürr
Technology Group managed to increase incoming orders again in 2002. Receiving many
large orders, we confirmed our leading position as a supplier of production systems and
manufacturing support services for the automotive industry. Consolidated order intake
grew on the previous year by almost 14 % to € 2,346.7 million. Orders on hand rose by about
18 % to € 1,381.4 million at the end of the year, with significant differences among the
individual business units. Consolidated group sales came to € 2,082.1 million and were thus
slightly below the previous year’s amount of € 2,196.2 million, mainly due to currency
influences.
On the other hand, development of earnings was unsatisfactory. Besides high margin
pressure, restructuring expenses amounting to about € 20 million were the main burden.
Including restructuring, group EBITDA operating result (earnings before interest expense,
taxes, depreciation and amortization) amounted to € 89.1 million after € 127.8 million* in
the previous year, and earnings before taxes to € 22.6 million (previous year: € 39.8 million*).
We stepped up measures to safeguard earnings already at the beginning of 2002. With
targeted restructuring programs, primarily in the Measuring Systems business unit and
the Environmental Systems product line, we lowered our cost base. Besides reducing
personnel and combining business locations, we also adjusted capacities.
* As restated, see p. 74
2
Dr. Wolfgang Baur (50),
Chief Financial Officer
· Finance, Controlling, Legal,
Dr. Reinhold Grau (49)
Dr. Norbert Klapper (40)
·
· R&D and Marketing
· Final Assembly Systems
Paint Systems
Human Resources, and IT
and Services
· Global Sourcing
Scheduled repayments of loans taken out in the past years to finance our acquisitions had
a positive effect on earnings. Expanded management of interest expenses and currency,
improved working capital management, and advance payments on large projects substantially contributed to increasing our cash position. That enabled us to reduce net debt as of
the end of 2002 by half in comparison with the previous year.
Different market situations in the business units
The Paint Systems business unit maintained its top position in the field of painting technology with systems orders from all major sales regions. Innovative technologies such as
the enhanced RoDip dip-painting process had just as convincing an impact as the Dürr
Ecopaint painting robot, of which more than 300 units were delivered in the past fiscal year.
We furthermore managed to achieve significant market share gains in the component
supplier industry and in the niche market of aircraft painting.
The Final Assembly Systems business unit strengthened its market position significantly as
a systems supplier of turnkey final assembly plants. We improved our competitiveness,
above all, by organizationally combining the competencies of Schenck and Dürr companies,
by developing new products with lower capital investment and operating costs, and by
tapping more cost-effective procurement and production opportunities.
With new, multiple-year contracts, the Services business unit achieved another sales plus.
Internal process optimization, an extended range of services, and the continuing trend
toward outsourcing on the part of automobile manufacturers will continue to form the key
prerequisites for profitable growth in the future.
After years of strong growth, sales and earnings declined in the Ecoclean business unit
under cyclical influences. We nevertheless expanded our strong world market position
with innovative solutions in systems for parts cleaning and coolant recycling in engine and
transmission production. Given our lowered production costs, we are confident of our
quick return to the path of previous successes on economic upturn.
Incoming orders in the Measuring Systems business unit were slightly below the previous
year’s level due to the stronger euro and reduced capital spending propensity in many customer industries and regions. Restructuring expenses in the Schenck Group and high margin pressure affected earnings. We are planning further cost-cutting measures, in view of
the market’s continuing weakness.
Letter to the shareholders
3
Difficult stock markets
In open dialogue, we have explained current business development and our strengths and
opportunities for improvement in detail to analysts and investors and to you, our shareholders. Dürr stock has nevertheless not been able to escape the general weakness of
the stock market. Given the subdued earnings situation, the Board of Management is proposing at the annual shareholders’ meeting to pay a dividend of € 0.80 per share in the
interest of a continuous dividend policy (previous year: € 1.10). Despite the reduced payout
compared with the previous year, Dürr stock would thus achieve an attractive dividend
yield of 5 % for 2002 based on the year’s closing share price. With the new segmentation of
the German stock market, Dürr now belongs to the SDAX index. As a member of Deutsche
Börse’s new Prime Standard segment, we satisfy international standards of transparency
and disclosure. We have largely implemented the new German Corporate Governance Code
with the commitment to a value-oriented approach to corporate governance.
Strategic capital investments by our customers
Our main customer group, the automotive industry, is one of the most important business
sectors worldwide. Competition among automobile manufacturers has intensified due to
cyclical influences and is characterized by increasing model variety, ambitious cost goals, and
higher quality standards. Against that background, there is great need for Dürr’s state-ofthe-art production systems, which improve the efficiency and flexibility in the manufacturing
process. That also applies to the segment of parts and module suppliers. They are providing ever more comprehensive services in all areas of vehicle production and are therefore
investing more in high-performance manufacturing technologies.
Robust business model
Dürr is outstandingly positioned as a market and technology leader in its business areas.
Our life cycle concept offers solutions for the entire service life of production systems:
from planning to execution to services during operation and on to technical modernization.
Our range of products and services, expanded by acquisitions, encompasses all major
stages of the automotive value chain: vehicle development, power unit production, painting, and final assembly. We make this range available to our customers worldwide. Our
business model offers good possibilities for development and furthermore allows us to
smooth out to a large extent cyclical fluctuations in demand among regions, customers,
and product lines.
4
gives highest priority to improving earnings
After years of expansion, and in view of the continuing difficult economic environment, we
are now directing all our efforts to improving our cost and earnings position. At the beginning
of 2003, the Board of Management decided to step up the SPRINT earnings enhancement
program. The program is now called
and features more ambitious targets, deeper
penetration throughout the Group, and faster implementation. It emphasizes cutting purchasing costs, optimizing processes in design, project engineering, and production, reducing
order handling risks, and streamlining location and portfolio structures.
Outlook for fiscal 2003
We do not expect any great impetus for the world economy in 2003. The business environment remains subject to many political imponderables. Accordingly, the capital spending
behavior of our principal customer group – the automotive industry – will be guided by
caution.
Against this background, we have not assumed any improvement of general conditions
in our planning for 2003. Because of the high order intake in 2002, the good level of orders
on hand as well as the restructuring measures implemented last year, we expect our
sales and earnings situation to stabilize in 2003. However, reliable forecasts are not possible
at present in view of the economic and political uncertainties. Nevertheless, with the
program we are fulfilling all the prerequisites to be able to profit above average
on an economic upswing.
We wish to thank all our members of staff especially. Their dedication, skills, and customer
orientation have helped our products and services receive high recognition worldwide. My
colleagues and I would also like to thank our customers and business associates for their
good cooperation and you, our shareholders, for the confidence that you have placed in us.
Stephan Rojahn
Chairman of the Board of Management
Letter to the shareholders
5
Dr.-Ing. E. h. Heinz Dürr
Report of the Supervisory Board
The Supervisory Board regularly and diligently monitored the Board of Management’s
activities in 2002, and beyond that provided advice to further the Dürr Group’s development.
The Board of Management informed the Supervisory Board about the economic situation
and the company´s development and planning, including financial, investment and personnel planning, and about transactions requiring Supervisory Board consent and substantial
business occurrences. All Supervisory Board resolutions were adopted after thorough
review, on the basis of detailed written and oral reports.
The Supervisory Board convened in the period under review at five regular meetings and
one extraordinary meeting. The Personnel Committee met twice in the same period, while
the Mediation Committee was not convened. The Audit Committee came together on
April 7, 2003 to discuss the 2002 financial statements. The composition of the Supervisory
Board remained unchanged in 2002.
Between meetings, the Chairman of the Supervisory Board maintained close contact
with the Board of Management and obtained timely reports on important events, primarily
from the Chairman of the Board of Management. He furthermore discussed business
policy, strategic orientation and the financial situation of the Group and its subsidiary enterprises with the Chairman of the Board of Management and reported the results of these
discussions to the entire Supervisory Board, either immediately or at its next meeting.
One of the focal points of the deliberations of both Boards was how to improve both the
cost situation and the operating profitability of the Dürr Group. With a view to preserving
the Group’s technological leadership in the long term, the Supervisory Board informed
itself concerning Dürr’s innovation strategy and selected development projects in the business units.
In the framework of positioning the new Final Assembly Systems business unit as a provider
of solutions for the final stage of vehicle assembly, the Supervisory Board consented to the
acquisition by Dürr Automotion GmbH of Schenck Somac GmbH and DSEngineering GmbH,
companies belonging to Carl Schenck AG. The Supervisory Board also approved the takeover of the assets and liabilities of Schenck Motorama Inc. by Dürr Production Systems Inc.,
a subsidiary of Dürr Inc.
In its extraordinary meeting of September 4, 2002, the Supervisory Board appointed
Mr. Stephan Rojahn a regular member of Dürr AG’s Board of Management effective
October 1, 2002 and Chairman of the Board of Management effective January 1, 2003.
Mr. Rojahn succeeds Mr. Hans Dieter Pötsch, who left the company at his own request
on December 31, 2002 to pursue a new professional function. The Supervisory Board
thanks Mr. Pötsch for the great personal dedication with which he continuously led and
expanded the Dürr Group since 1995.
6
At its meeting of December 5, 2002, the Supervisory Board granted Mr. Frank Haun’s
wish to leave Dürr AG’s Board of Management on March 31, 2003. The Supervisory
Board also thanks him for many years of dedicated service. After Mr. Haun’s departure,
Mr. Rojahn assumed responsibility within the Board of Management for the Ecoclean
and Measuring Systems business units. The assignment of other duties within the Board
of Management remained unchanged.
Together with the Board of Management, the Supervisory Board has concerned itself
with issues of corporate governance. In December 2002, the Supervisory Board and the
Board of Management issued a joint declaration of compliance, according to which Dürr
will largely follow the recommendations and suggestions of the Government Commission
German Corporate Governance Code.
The Board of Management reported continuously and in a timely manner to the Supervisory Board about existing risks. The Supervisory Board advised the Board of Management
regarding expansion of risk control and monitoring systems.
The annual financial statements and management report prepared by the Board of Management as of December 31, 2002, together with the consolidated financial statements and
consolidated management report of Dürr AG were examined, including the particular auditing
points specified by the Supervisory Board, by the auditors engaged by the Supervisory
Board after appointment by the annual shareholders’ meeting, and have received an unqualified audit report. The annual financial statements and consolidated financial statements, the management report and consolidated management report, the proposal for
the use of unappropriated profit, and the auditors’ reports concerning the auditing of the
annual financial statements and of the consolidated financial statements were submitted
to all members of the Supervisory Board in good time before the meeting held to approve
the financial statements, and were discussed in detail with the Board of Management
at that meeting of the Supervisory Board on April 9, 2003. The auditors signing the audit
reports for the annual financial statements and the consolidated financial statements of
Dürr AG also participated in that meeting with regard to the relevant points on the agenda,
and reported concerning their audit. The Supervisory Board took approving note of the
audit result.
The Supervisory Board examined the annual financial statements and consolidated
financial statements and the management report and consolidated management report.
This examination by the Supervisory Board revealed no cause for objection. The Supervisory Board concurs in the assessment of the business situation and future development
of the consolidated Group as presented in the consolidated management report.
7
The Supervisory Board approves the annual financial statements prepared by the Board
of Management, which are hereby ratified. The Supervisory Board approves the Board of
Management’s proposal for the use of the unappropriated profit. The Supervisory Board
also approves the consolidated financial statements.
The Supervisory Board has examined the report prepared by the Board of Management
pursuant to Sec. 312 of the German Stock Corporation Law concerning relationships with
associated enterprises for the period from January 1 to December 31, 2002 (dependent
company report). The dependent company report was also examined by the auditors
appointed by the annual shareholders’ meeting, and has been issued the following unqualified audit report pursuant to Sec. 313 (3) of the German Stock Corporation Law:
“After examination and assessment in accordance with our professional duties, we
confirm that:
1. the factual information given in the report is correct,
2. the performance rendered by the company in connection with the transactions mentioned
in the report was not unduly high,
3. regarding the measures mentioned in the report, no circumstances argue in favor of
a materially different judgment than that made by the Board of Management.”
The examination of the dependent company report by the Supervisory Board revealed
no cause for objection. The Supervisory Board concurs in the results of the examination
of the dependent company report by the auditors. According to the final results of the
examination by the Supervisory Board, there are no objections to be raised against the
declaration by the Board of Management at the end of the dependent company report.
The Supervisory Board thanks the Board of Management, all employees, and the representatives of the staff for their dedication in the past year, as well as the shareholders for the
confidence they have placed in the company.
Stuttgart, April 9, 2003
The Chairman
Dr.-Ing. E. h. Heinz Dürr
8
Members of the Supervisory Board
Dr.-Ing. E. h. Heinz Dürr1
Entrepreneur, Berlin
Chairman
Werner Kramp
Chairman of the Group Works Council
of Carl Schenck AG, Darmstadt
Peter Weingart1
of Dürr AG, Stuttgart
Deputy Chairman
Peter Krüger
Manager of Commercial Order
Processing of Dürr Systems GmbH,
Stuttgart
Prof. Dr. Norbert Loos1, 2
Managing Partner of
Loos Beteiligungs-GmbH, Stuttgart
Deputy Chairman
Günter Lorenz1
Principal Authorized Representative of
IG Metall administrative offices,
Darmstadt
Lieselotte Dedek-Fried2
Member of the Works Council of
Schenck RoTec GmbH, Darmstadt
Joachim Schielke
Member of the Board of Management
of Landesbank Baden-Württemberg,
Stuttgart
Benno Eberl2
Trade Union Secretary of IG Metall
administrative offices, Stuttgart
Prof. Dipl.-Ing. Jörg Menno Harms
Chairman of the Managing Board of
Hewlett Packard GmbH and
Holding GmbH, Böblingen
Dr. Heinz Gerd Stein2
Business consultant, Duisburg
Until September 30, 2002,
of ThyssenKrupp AG, Duisburg and
Essen
Dr. Tessen von Heydebreck
of Deutsche Bank AG, Frankfurt/Main
1
2
Member of the Mediation Committee and Personnel Committee
Member of the Audit Committee
9
Dürr stock
Tough year on the stock markets
In 2002, Dürr stock performed in line with the general downward trend on the
exchanges. But it achieved an above-average dividend yield of 5 %.
Dürr stock was trading at € 24.31 in the XETRA electronic trading system at the beginning
of 2002. It reached its high for the year of € 26.00 at the end of May 2002. In line with
the negative development on the capital markets, the price of Dürr stock then dropped to
€ 16.00 at the end of the year (– 34 %). The comparative indexes also finished negatively.
The DAX lost 44% in the course of the year, the MDAX 30%, and the CDAX-Machinery 31%.
Above all, uncertainty at the stock markets and general economic weakness, reinforced
by fear of war in Iraq and related crude oil price increases, formed the background for
these losses.
Dürr secured its stock’s liquidity in the XETRA system with one Designated Sponsor in 2002.
About 7,000 no-par shares were traded daily on average.
Adjusted dividend
Dürr achieved earnings per share of € 0.84 in 2002 (previous year: € 1.40) due to expenses
for restructuring measures. The Board of Management and the Supervisory Board will
propose to the annual shareholders’ meeting a dividend in the amount of € 0.80 per share
(previous year: € 1.10).
Key figures
2002
No. of shares at year’s end
in k
14,298
14,298
in € k
12,018
20,003*
Earnings per share
in €
0.84
1.40*
Cash flow per share
in €
3.32
5.20*
Dividend per share
in €
0.80**
1.10
Net income
Dividend yield at share price close
Share price high
in %
5.0
4.5
in €
26.00
29.00
Share price low
in €
14.80
17.10
Share price close
in €
16.00
24.30
Price-earnings ratio at year’s end
19.0
Price-cash flow ratio at year’s end
Market capitalization at year’s end
** As restated (see p. 74)
** Dividend proposed to the annual shareholders’ meeting
10
2001
in € m
17.4*
4.8
4.7*
229
347
Dürr stock price development from January to December 2002
compared with indexed development of the DAX, MDAX, and CDAX-Machinery
in €
30
28
WKN 556 520
26
ISIN DE 0005565204
Reuters symbol DUEG
24
Bloomberg code DUE
22
20
18
16
14
J
F
M
Dürr stock in Frankfurt
A
M
J
DAX
J
A
MDAX
S
O
N
D
CDAX-Machinery
Despite this adjustment, Dürr shareholders achieved an above-average dividend yield of
5.0 %. All no-par shares are fully entitled to dividends. Tax credits are no longer possible
since the introduction of the “half-income“ method of taxing dividends. The dividend
payout date is May 30, 2003.
Shareholder structure
Heinz Dürr GmbH holds 49 % of the capital of Dürr AG, LBBW Trust GmbH 11%, and
BWK GmbH Unternehmensbeteiligungsgesellschaft 7 %. The free float amounts to 33 %
of capital stock: Heinz und Heide Dürr-Stiftung GmbH holds 4.5 %, institutional investors
19.1%, and individual investors 9.4 %. Domestic investors own 96 % of the capital stock,
and foreign investors 4 %. The latter are primarily in the USA, the Netherlands, Liechtenstein, Great Britain, and Switzerland.
Dürr employees again had the opportunity in 2002 to acquire stock in the company at
a price discount of 30 %.
New stock market segmentation: Dürr in Prime Standard
Deutsche Börse AG resolved to introduce a new segmentation of the German stock market
in 2002, providing for two new segments, the Prime Standard and the General Standard, as
of January 1, 2003. Moreover, the newly composed MDAX, SDAX, and TecDAX indexes have
taken effect as of March 24, 2003. Dürr has already fulfilled the prerequisites for belonging
to the Prime Standard for years, for example, by publishing quarterly reports and applying
International Accounting Standards. Dürr was thus one of the first German companies to be
admitted by Deutsche Börse to the Prime Standard. The MDAX comprised 70 stocks until
the end of March 2003 and was then reduced to 50. Dürr, which was in the bottom third of
the MDAX, has therefore been quoted in the SDAX since March 24, 2003.
Dürr stock
11
First Dürr Capital Markets Day
About 40 stock analysts, bank representatives and investors gathered information at first
hand about Dürr stock and the Group at the first Dürr Capital Markets Day on September 12,
2002 in Stuttgart. The Board of Management explained the company’s strategy, markets,
and key figures. With the Dürr Capital Markets Day as an additional communication tool, we
intend to continue providing comprehensive information about the company and strengthening confidence in the stock in the future.
Intensive communication with investors
Dürr regularly provides up-to-date, detailed information about the Group’s development. We
keep analysts, the press, and investors abreast of current events on equal terms and in a
timely manner. In 2002, we further intensified direct contact with institutional and individual
investors at five meetings with analysts and banks, regular conference calls, and nine
national and international road shows – for example in Great Britain, France, and the USA –
as well as at many individual talks.
Fourteen different banks and analyst firms wrote a total of 35 analyses about Dürr in 2002.
We offer access to important information such as stock price development, company press
releases, analyst studies, and earnings estimates on the investor relations pages of our
website. Financial reports can be ordered in printed form, downloaded, or studied online.
We are again broadcasting our annual shareholders’ meeting live on the Internet on
May 28, 2003. Dürr is again organizing several road shows at home and abroad this year.
Corporate Governance Code implemented
The concept of corporate governance stands for responsible company management and
control aimed at sustained growth of company value. Important aspects include attention to
shareholders’ interests, efficient cooperation between managing and supervisory boards,
and open, transparent corporate communications. Dürr was one of the first listed companies
in Germany to take up the issue of corporate governance, and already in 2001 established
its own Code of Best Practice. In 2002, we adopted the German Corporate Governance Code
shortly after its publication and got 81% on the DVFA scorecard (which evaluates compliance with the Code). Dürr understands corporate governance as a continuous process and is
pursuing all the Code’s changes in a timely manner. You will find more information about
this topic on the investor relations pages of our website.
According to Sec. 161 of the German Stock Corporation Law, the board of management and
the supervisory board of a listed stock corporation are obliged to declare once every year
that the recommendations of the Government Commission German Corporate Governance
Code were and are being complied with, or which recommendations were or are not being
applied. Dürr AG already fulfills most of the mandatory provisions of the Code, while planning
on implementing further provisions. The deviations from the Code are specified below
with the corresponding reasons.
2
In accordance with Sec. 161 of the German Stock Corporation Law, the Board of Management and the Supervisory Board of Dürr AG declare: “Dürr AG complies with the recommendations of the Government Commission German Corporate Governance Code with the
following exceptions:
‘The Management Board shall arrange for the appointment of a representative to
exercise shareholders’ voting rights in accordance with instructions.’ (Code, Item 2.3.3,
Sentence 3, 1st Half Sentence)
The banks assume the task of offering shareholders the opportunity to exercise their
right to vote by a representative appointed by the bank acting on and bound by their
instructions.
‘If the company takes out a D&O (directors and officers’ liability insurance) policy for
the Management Board and Supervisory Board, a suitable deductible shall be agreed.’
(Code, Item 3.8, Paragraph 2)
A D&O insurance policy with no deductibles exists for the members of the Board of
Management and the Supervisory Board. This is a group insurance policy for executives
at home and abroad, although a differentiation between members of the executive
body and employees does not appear appropriate. In addition, a deductible is not usual
abroad and would therefore make it difficult to recruit executives from abroad.
‘Compensation of the members of the Management Board shall be reported in the Notes
of the Consolidated Financial Statements subdivided according to fixed, performancerelated and long-term incentive components.’ (Code, Item 4.2.4, Sentence 1)
We report the sum of the salaries of the members of our Board of Management in the
notes to our consolidated financial statements. In our view, a special item broken down
into fixed salary and success-related components would not provide any additional
benefit for the shareholders.
‘Furthermore, ... an age limit to be specified for the members of the Supervisory Board
shall be taken into account.’ (Code, Item 5.4.1, Sentence 2, Last Part)
Dürr sees no necessity for defining an age limit for members of its Supervisory Board.
‘Also to be considered [for specifying the compensation of the members of the Supervisory Board] ... shall be … the chair and memberships in committees.’ (Code, Item 5.4.5,
Paragraph 1, Sentence 3, Last Part)
Because of the success-related compensation of the members of our Supervisory
Board there is no separate remuneration for the chair or for membership in committees.
Dürr stock
13
‘Also payments made by the enterprise to the members of the Supervisory Board or
advantages extended for services provided individually, in particular, advisory or agency
services shall be listed separately in the Notes to the Consolidated Financial Statements.’
(Code, Item 5.4.5, Paragraph 3, Sentence 2)
The possibility of obtaining the expertise of individual members of our Supervisory Board
for special topics at any time represents a special advantage for Dürr. Cooperation is
based on the conditions that are usual in the industry, which are also maintained in comparable transactions with third parties. Hence, we see no necessity for individualized
publication.
‘Corresponding information [for the purchase or sale of shares in the company or of
related purchase or sale rights (e.g. options) and of rights directly dependent on the stock
market price of the company by members of the management board and supervisory
board of the company or its parent company and by related parties] shall be provided
in the Notes to the Consolidated Financial Statements. The shareholdings, including
options and derivatives, held by individual Management Board and Supervisory Board
members must be reported if these directly or indirectly exceed 1% of the shares
issued by the company. If the entire holdings of all members of the Management Board
and Supervisory Board exceed 1% of the shares issued by the company, these shall
be reported separately according to Management Board and Supervisory Board.’
(Code, Item 6.6, Paragraph 2)
The quota of shares held by large shareholders and statements about directors’ dealings
are published as specified by the German Securities Trading Law. We believe that these
legally regulated mandatory statements are adequate.
‘The Consolidated Financial Statements shall be publicly accessible within 90 days of
the end of the financial year; interim reports shall be publicly accessible within 45 days
of the end of the reporting period.’ (Code, Item 7.1.2, Sentence 2)
At present we are unable to comply with all the recommended deadlines. However, in
the medium term we plan to comply in full with this recommendation. Our consolidated
financial statements are published within four months of the end of the fiscal year.
Our half-year report is publicly accessible within 60 days; the interim reports for the first
quarter and for the first nine months of the fiscal year are accessible within 45 days
of the end of the reporting period.”
Dürr AG
Public & Investor Relations
Otto-Dürr-Strasse 8
70435 Stuttgart
Germany
Phone: +49-7 11-1 36 17 85
Fax: +49-7 11-1 36 10 34
E-mail: [email protected]
www.durr.com
14
Financial calendar for 2003
Financial press conference
April 10, 2003, Stuttgart
Publication of the 2002 annual report
Interim report on first half
of 2003 and conference call
August 20, 2003
DVFA analysts’ conference
April 11, 2003, Frankfurt/Main
Road show in Germany
August/September 2003
April 2003
Second Dürr Capital Markets Day
September 10, 2003
Interim report on first quarter
May 14, 2003
Road show in the USA
October 2003
Road show in Great Britain
May 2003
Interim report on first nine months
November 13, 2003
Annual shareholders’ meeting
May 28, 2003, Stuttgart
November 2003
Dividend payment
May 30, 2003
German Mid Cap Conference
calendar week 49, 2003, Frankfurt/Main
Road show in Germany and the USA
July 2003
Dürr stock
15
Wet or dry
Paint Systems
business unit
The requirements in massproduction automotive
painting are becoming ever
more complex due to the
growing variety of models.
As the technology and market
leader, Dürr is an expert in
all types of painting techniques and thus does justice to
its customers’ different approaches to automobile
painting. We provide the right
solution for every process
requirement and vehicle
model – whether emission-free
powder paint or wet paint.
Paint Systems
Strong technology position translated
into market successes
In 2002, the Paint Systems business unit maintained its position as the world market
leader with large orders for body paint shops in Europe, North America, and China.
Top technologies like the Ecopaint painting robot and the RoDip dip-painting process
played a significant role in our order success. In the automotive supply segment, we
made significant market share gains with innovative, highly efficient systems solutions.
2002
2001
Total sales
1,054.3
1,094.5
1,286.8
1,036.5
39.2
61.7
2,837
2,952
Amounts in € m
EBITDA
Large projects make for record order inflow
In 2002, the Paint Systems business unit landed numerous large
projects and set a new record for incoming orders despite sluggish
conditions in the automotive industry. Nevertheless, earnings
were down from the previous year’s high, mainly because of restructuring charges in the Environmental Systems product line.
The upswing in volume was propelled by the strong need of
our customers in the automobile manufacturing and component
supply industries to rationalize and modernize their operations
under the influence of competition. Modern process technologies
enable customers to paint new car models not only less expensively and more safely from the environmental viewpoint, but also
more flexibly, with more variants, and faster. Our new business
also benefited from our abilities in completing complex turnkey
projects in every automobile manufacturing region of the world.
In China, we continued our very good performance from the year before. Among other
successes, the local automobile manufacturer SAIC Chery Automobile in the eastern Chinese
city of Wuhu hired us to build a complete paint shop with a capacity of 150,000 vehicles
per year. Shanghai Volkswagen presented us with its “Supplier Award 2002” for installing a
new paint shop at its Shanghai facility. This plant’s excellent values for energy consumption,
level of automation, and ergonomics set standards for the entire Chinese market. With sales,
18
More quality at lower
cost: The innovative RoDip
dip-painting process.
engineering, production, and service directly present there, Dürr is a market leader with
excellent prerequisites for participating further in the dynamic growth of the Chinese automotive industry. We also felt an awakening interest in Dürr paint technologies in Japan,
Asia’s biggest automotive market. Dürr has had its own company there since 2001.
In North America, a US automobile manufacturer placed a large order for a turnkey
system for body pretreatment and dip-painting. Korean automobile manufacturer Hyundai
ordered a complete paint shop for its US plant in Montgomery, Alabama, with a capacity
of 300,000 bodies per year. In Germany, the BMW Group ordered an extensive package that
included several fully automated lines for applying primer and top coats. This large, technologically demanding project also incorporates our new generation of Dürr products for
powder painting, fully the equal of our range in wet painting products.
Innovations and systems projects of showcase quality
We also enhanced our market and technological leadership by completing a number of
showcase contracts in 2002. For DaimlerChrysler in Sindelfingen (Germany), we started up
a new pretreatment and electrocoating system that also handles the premium Maybach
model. For Volkswagen in Wolfsburg (Germany), we updated an entire paint shop to produce
the new Touran minivan. At the BMW facility in Dingolfing (Germany), Dürr was the general
contractor for the installation of three robotic primer lines. These also use the innovative Dürr
Ecopurge Reflow system, which minimizes paint loss in color changes and thus enhances
efficiency. We further highlighted our capabilities in high-end process solutions in powder
painting as part of a large order for Ferrari in Maranello (Italy).
Besides powder painting, another focus of innovation in paint systems technology was the
further development of the RoDip dip-painting process. The new RoDip 3 Plus version,
especially designed for smaller production rates, has individually driven body conveyor units
whose forward and rotary movements can be programmed individually. This provides for
maximum flexibility in handling a variety of different body types on a single line. RoDip’s
advantages in quality and cost have established it as the leading process in a very short
time. Ten systems have been ordered worldwide just since the beginning of 2001.
Paint Systems business unit
19
Quality assurance: The Dürr Ecopaint Checker
uses a laser sensor for fully automatic
measurement of point film thickness.
Supplier industry: Gains in market share
In the automotive supply segment of the market, Dürr expanded its position even further.
Only about three years after the Paint Systems Industrial product line was established,
nearly every major supplier of modules and trim parts is one of our customers. In 2002, for
example, Decoma ordered two turnkey systems to paint plastic bumpers for plants in
Belgium and North America. For Peguform in Germany, we are supplying a painting system
for door panels and headlining. The French supplier industry placed a great many orders,
including painting systems for chassis components and headlights.
In the future, automotive suppliers will show a growing need for high-performance painting
systems, because the ongoing trend toward outsourcing is leading automobile manufacturers
to commission their suppliers not just to make, but increasingly also to paint vehicle trim
parts. Dürr products optimized specifically for this market segment ensure that paint results
meet manufacturers’ highest quality requirements, even when the base materials and
painting systems differ.
The niche market in aircraft painting also did well in 2002. It is handled mainly by our British
center of competence. Dürr is supplying systems to surface-treat wing parts and to paint
fully assembled wings for the new Airbus A 380 megaliner.
Application technology: Painting robots on the way to becoming industry standard
The Application Technology product line supplies technologies for automated paint application,
including painting robots and machines, paint supply systems, quality measurement systems, and software solutions. In 2002, we maintained the high-volume growth track of previous years and further expanded our market share. A primary contributor to our success
was the Dürr Ecopaint painting robot – a technology leader. It offers persuasive advantages
in efficiency, flexibility, and quality, and is increasingly replacing conventional painting
machines. Some 900 units have been ordered since the Dürr robot was introduced for massproduction painting in 1999 (as of the end of 2002). That makes the Ecopaint robot the
world’s most sought-after model of its kind and puts it on the way to becoming an industry
standard for all customers.
We also found growing interest in the Dürr Ecopaint Checker. This fully automated instrument uses a laser sensor to measure layer thickness in the wet film after paint has been
applied. If discrepancies from the optimum are found, the associated Ecopaint Expert database system can immediately help define new parameters for programming painting
machines and robots.
20
Growth market: Dürr provides automotive
Environmental systems: Dürr offers
component suppliers with optimized solutions
a wide range of efficient processes in
for painting trim parts.
the field of exhaust-air purification.
To enhance the performance of robot application even further, Dürr developed the new
Ecobell 2 generation of wet-paint atomizers. The Ecobell 2 has higher paint outputs that
enable optimized robot movement patterns, making for faster painting.
Environmental technology: Successful restructuring
Performance was generally sluggish in the exhaust-air purification systems business pursued
by the Environmental Systems product line. Aside from in-house deliveries for Dürr paint
shops, the main emphasis was on orders from focus sectors: the chemical, pharmaceutical,
and semiconductor industries. Spending on exhaust-air purification systems contracted
in the United States because environmental regulations were relaxed to stimulate the US
economy after September 11, 2001. We responded to this demand slowdown by rapidly
adjusting capacities. The additional harmonization of our product range positions us for
profitable future performance, not only in our business with automobile manufacturers
and suppliers, but also in our other focus sectors.
Paint Systems business unit
21
business unit
In the final stage of vehicle
assembly, a painted body
and a variety of components
and assemblies are turned
into a complete automobile in
a few hours. Producing the
growing number and variety
of models economically
requires perfectly coordinated
logistics, assembly, and testing. As a full-range supplier,
Dürr plans and builds turnkey
final assembly facilities that
offer our customers lower
costs, greater flexibility, and
more quality.
Producing more efficiently
Strong demand for full range
of final assembly equipment
In 2002, Dürr reinforced its market position as a full-range provider for final vehicle
assembly. Aside from successes in stand-alone products, several system orders
also made a significant contribution. We enhanced the level of automation in a number
of products to give our customers even greater productivity and flexibility in final
assembly.
2002
2001
Total sales
404.7
425.2
476.2
351.3
15.6
15.4
1,609
1,631
Amounts in € m
EBITDA
The Final Assembly Systems business unit, founded at the beginning of 2002, is the successor to the former Automotion business
unit1. Final Assembly Systems has the goal of building our new
business in products and systems for final vehicle assembly into
a further strong pillar of the Dürr Group. It is aiming at world
market leadership in the medium term.
The prerequisites for that have been fulfilled well. After acquiring
a majority interest in Carl Schenck AG in 2000, we organizationally
pooled our operations in assembly, testing, filling, and conveying
systems. Within a very short time, we had established ourselves
as a complete provider with the broadest range of any competitor.
Final Assembly Systems has the in-house resources to supply
around 70 % of the machinery and software solutions needed for
a final assembly installation. We can also take over the process
planning for the customer on request. The combination of these
two aspects puts us in a very good position to win contracts for
complete final assembly plants.
The ongoing need for automation and greater flexibility in final assembly leads us to expect
significant market growth in the medium term. As part of our two-pronged strategy, we
intend to profit from this situation both in business involving individual installations and as
a general contractor for large turnkey systems. The sharp rise in new orders in fiscal 2002
demonstrates just how well the market has been accepting our range of products and
services.
1
24
See p. 49
Fast and precise: Car bodies
and power trains are joined at
Dürr “marriage stations.”
Systems business: Large orders for new construction and modernization
Dürr already has a market share of around 10 % in systems business for complete final
assembly systems. After showcase projects like the new Opel final assembly plant in
Rüsselsheim (Germany), a model for the entire General Motors Group in respect to productivity and the conversion of a final assembly line for Magna Steyr Fahrzeugtechnik
in Graz (Austria), we continued to benefit in 2002 from the growing demand for turnkey
systems with a number of new contracts.
Volkswagen commissioned us as general contractor to convert an existing line for the
assembly of the new Golf A5 at its facility in Mosel (Germany). At Land Rover’s plant
in Solihull (Great Britain), Dürr is building new assembly conveyor systems and an automated “marriage station” to combine power trains and bodies of the new T5 model.
A strategically important systems order from DaimlerChrysler marks our debut as a
general contractor for final assembly in the high-volume North American market. At the
Mercedes plant in Tuscaloosa, Alabama (USA), we took charge of converting an assembly
line to produce the new M-Class model generation.
Final assembly products: Fully automated solutions in demand
An important factor in Dürr’s expansion in final vehicle assembly is our broad range of inhouse products, including assembly and handling equipment, test stands for quality control
of fully assembled vehicles, and filling stations to dispense such essential supplies as
brake fluid and transmission oil. In this technologically demanding segment, where the
entry barriers for new vendors are high, our Final Assembly Products product line is the
market leader in Europe. We intend to continue expanding in North America in the future
by means of increased know-how and technology transfers from Europe.
Given the growing pressure to increase productivity in the manufacturing process, demand
on the part of automobile companies in 2002 was primarily aimed at systems with the
maximum degree of automation. Among our market successes were fully automated
“marriage stations”. We also combined forces with a German automobile manufacturer
to develop an innovative solution for wheel alignment on vehicle geometry test stands.
The core is a “seeing robot” with two cameras and an image processing system, which
ensures exact positioning of the alignment device on the tie rod. This innovative technique
has good marketing prospects, since it offers not only an alternative to ergonomically
awkward manual wheel alignments, but also higher quality and shorter throughput times.
We also foresee good chances for other new developments like a robot system for the
fully automated mounting of windshields and rear windows, and a leakage test method for
brake systems. With our expanded product range for electronic testing in the assembly
process, we are correctly positioned to benefit from the rising use of electronics in vehicles
today.
Final Assembly Systems business unit
25
Efficient assembly processes: Dürr plans
and executes intelligent solutions for the
installation of complete modules.
In filling technology, we received important showcase orders from the premium manufacturers Bentley and Porsche. The top Volkswagen model, the Phaeton, is also filled using
Dürr equipment at the “Glass Factory” in Dresden (Germany). As part of a large order, we
also supplied two complete sets of line equipment for automated filling of the new Fiesta
at the Ford facilities in Cologne (Germany), and Valencia (Spain). In the automotive supplier
market, the Dürr Somac filling equipment center of competence in Chemnitz (Germany)
continued along its path of successful expansion. Demand there focused especially on
combined solutions for filling, testing, and assembly to be used, for example, for clutch
components and shock absorbers.
Conveyor systems: Numerous large projects
Large orders for conveyor systems, especially from the North American automotive industry,
enabled the Automotion Conveyor Techniques product line to make an important contribution to the business unit’s high total incoming orders. For example, Ford ordered new body
assembly conveyor systems for its US plants in Dearborn, Michigan, and Norfolk, Virginia;
Volkswagen also ordered them for its Wolfsburg plant in Germany. Added to that were
extensive internal deliveries for final assembly systems projects and for new turnkey paint
shops of the Paint Systems business unit. The after-sales business was especially good in
France. Our service centers, which we maintain locally for a number of clients, proved their
value in that connection. In the niche market for aircraft construction, we received technologically demanding orders from Airbus for precision assembly and conveying equipment
for tail and wing parts of the new Airbus A 380 megaliner.
Analogically to our good market position in paint shop conveyor equipment, we also want
to become established as the leading provider of conveying equipment in the area of final
assembly. We therefore expanded our range of products further. The emphasis was on
developing electric overhead rail systems that can convey body shells and body parts at
variable speeds and with ergonomic flexibility. Our innovative MOVITRANS system for
contact-free power and data transfer became even better established in the market. It is
used, for example, in the conveying system for a new “marriage station” at Volkswagen’s
Mosel plant in Germany, and in skillet conveyor systems at Magna Steyr Fahrzeugtechnik’s
Graz plant in Austria.
To cut costs, we have begun moving our detailed engineering, electrical pre-assembly, and
pre-startup operations from Germany to a facility at Radom (Poland). We have achieved
additional savings by standardizing our product range and purchasing more extensively in
Eastern Europe.
26
Quality check: All vehicle
functions are tested and
adjusted at the end of the line.
Plant planning: Good order situation
The newly created DSEngineering product line, a service provider that plans final assembly
lines and testing centers for vehicle and subassembly development, registered a generally
good inflow of orders in 2002. DaimlerChrysler, for example, commissioned us to handle
the concept planning for the assembly of the Mercedes Sprinter and Vito models at a new
US facility. For Adam Opel AG, DSEngineering is planning the modification of assembly
systems for the new Astra series and is coordinating the conversion activities at several
plants.
Our innovative planning concepts make more flexible and economical manufacturing and
testing processes possible for our customers. In this connection, despite generally slacker
automobile sales, we expect further market growth of around 10% per year in plant planning. In expanding our activities, we focus both on large projects in assembly and testing
systems and on the stand-alone business outside the Dürr systems alliance. An important
basis for growth is our above-average process and product competence, which we ensure
through regular exchanges with systems specialists from other Dürr units.
Final Assembly Systems business unit
27
Trend rising
Services
business unit
Services related to automobile production are a
growth market – and the trend
is rising. The reason is that
manufacturers are assigning
more and more tasks to
external specialists – for example, equipment cleaning,
maintenance and facility
management. The Services
business unit is benefiting
from this outsourcing trend,
also because we are expanding with our customers into
new markets. Already about
4,000 employees are now
contributing to greater cost
efficiency and higher quality
in more than 80 automobile
factories worldwide.
Services
New markets and services
Although conditions in the automotive industry remained sluggish overall, the Services
business unit increased sales again in 2002. A major contribution here came from
new, long term cleaning and maintenance contracts, primarily in North America, South
America, and Europe. To enable further growth, we expanded our capabilities as
a provider of specialized technical services. We also pushed ahead with our regional
expansion, and optimized in-house processes.
2002
2001
Total sales
143.9
134.0
143.1
134.3
Amounts in € m
EBITDA
11.2
10.8
4,272
3,727
The Services business unit – represented by the US-based
Premier Group, acquired in 1999 – differs from competitors who
either operate only locally or are tied to specific manufacturers
by concentrating and offering above-average technical know-how,
a global range, and uniform service standards worldwide. Since
joining the Dürr Group, Premier has boosted sales more than 30%,
most notably through close cooperation with the Paint Systems
business unit. In North America – the most important geographical market segment, accounting for more than 30 % of sales –
Premier enjoys a market leadership. We significantly improved our
position in Europe, Central America, South America, and Asia,
with plenty of potential still left to tap.
Range of services expands
The Services business unit pursues a strategy of steadily expanding its core business with
new, technically sophisticated service capabilities. This is yet another way we stand out
from among our competitors. It lays the groundwork for continuing profitable growth, even
as competition in the conventional cleaning business intensifies.
In 2002, for example, we launched the Premier Tech consulting program in North America.
Here, experienced teams of Premier experts advise customers about operational and
strategic aspects of equipment maintenance. In a model project in Sweden, we started
our own first paint stripping system, which uses an innovative method to clean paint
shop equipment. The paint stripping process – equally cost-effective and with a minimum
30
Good starting position: With the
Outsourcing: We are able to carry out a wide
Premier Group, Dürr has a strong base
range of services covering all aspects of automobile
in the growing services market.
manufacturers on behalf of our customers.
of environmental impact – has strong market potential worldwide. We also tried new
approaches in customer relations during 2002 – for example in an operator model for
a customer in Great Britain, where we took over the entire wheel assembly process
under a pay-on-production agreement.
Broadening our range from technical cleaning through facility management to maintenance
and consulting has enabled us to strengthen the marketing of our comprehensive service
packages. With this full-service concept, we are making the most of the trend among automobile manufacturers particularly in cases of new facilities toward buying in as many
production-related services as possible from key partners so as to take advantage of such
outsourcing benefits as lower costs, lower capital tie-up, and higher quality. Additionally,
full-service capabilities improve our position in new project acquisitions. This is an important
basis for expanding our volume further, thus increasing the service business contribution,
resistant to economic cycles, to the Dürr Group’s sales.
We anticipate further stimuli for growth due to a stronger focus on new customer business
and a more thorough development on the supplier market, where we already enjoyed
considerable gains in 2002.
Expansion continued
One emphasis of market cultivation in 2002 was placed on new automobile plants which
our customers were building at low-cost locations as part of their global production and
selling strategies. We continued our expansion in the growth market of Eastern Europe. At
Volkswagen’s facility in Poznań (Poland), we are now in charge not only of technical cleaning in the paint shop, but also of complete maintenance of outside production facilities. In
the Czech Republic, Škoda placed an order with us to clean production areas at its Mladá
Boleslav plant.
Services business unit
31
Special know-how: Premier is
expanding its range by adding
sophisticated technical services.
Business performance at production facilities in Latin American was similarly positive. After
successfully restructuring our activities, we especially gained shares in the growing Mexican
market. In Brazil, new customer business particularly benefited from our maintenance
skills. In Asia, China is still the market for Services with the greatest growth potential. We
also plan to position ourselves in Thailand with a joint venture organization. In the following
years, market volume for production support services will grow substantially as Western
automobile manufacturers set up new plants there.
We expanded our good position in the core North American market through follow-up orders
from existing customers and contracts with new customers. For example, Ford placed
orders for two plants in the United States. A key factor in this order success was our
convincing performance at the Camaçarí plant in Brazil, where Ford gave us its first order
in 2001. We also expanded our strong position at the US plants of Japanese automobile
manufacturers, for example with a long term full-service package for cleaning and maintenance at the Honda plant in Alabama.
In Western Europe, Great Britain remained the most important market for Services in
2002. Here, we strengthened our lead not only with the operator model mentioned above,
but also with new orders in spare parts management. Premier pursued its entry into
the Benelux market by founding a new company in the Netherlands. At the end of 2002,
we received our first package of orders from Mitsubishi’s Dutch subsidiary, Nedcar, for
cleaning and maintenance services at the Born facility, where Volvo and Mitsubishi models
are produced. As part of its European expansion strategy, Premier is planning to expand
its market position especially in France, but also in the intensely competitive German
market.
32
Qualified employees: Premier relies
on continuing programs of vocational
and specialist training.
Internal processes optimized
Premier enhanced its profitability with a number of different programs and process adjustments in 2002, laying important groundwork for further growth. One emphasis was on
activities in the United States. Here, we cut overhead and tightened up cost management
at operating sites. We also pursued the “Voice of the Customer” program to foster dialogue
with our customers, so that we can harmonize our range of services even better to our
customers’ needs. To ensure uniform service quality worldwide for automobile manufacturers that operate globally, Premier developed a system to standardize its services.
Services business unit
33
Absolutely clean
Ecoclean
business unit
Manufacturing residue
such as metal shavings can
cause engine and transmission failure under operating
conditions. Thorough
cleaning of all components
is therefore an indispensable
element of quality assurance
in the automotive industry.
Dürr Ecoclean builds innovative cleaning systems that
reliably remove dirt even
from the smallest drill holes.
By combining different technologies, we set standards
worldwide – both for quality
and cleaning costs per unit.
Ecoclean
Holding our own in a tough market
environment with innovative technology
The Ecoclean business unit increased its market shares in fiscal 2002 despite a slight
decline of incoming orders. We are making use of the economic slowdown to strengthen
our profitability and expect to return to the growth path of past years once our markets
recover. The basis for that will be our proximity to customers, orientation to quality, and
ability to innovate as a partner for cleaning and automation concepts in engine and
transmission production.
2002
2001
Total sales
221.9
277.3
236.7
243.2
Amounts in € m
EBITDA
15.0
22.2
1,079
1,084
Because of capital spending freezes and project postponements
in the USA, the volume of orders placed for cleaning and filtration
systems declined by about one third in fiscal 2002. To strengthen
our operating profitability against that background, we are improving our cost position by various means. Those include further
product range standardization and optimized supply chain management. We are tapping cost-saving potential in the production
process by utilizing the location advantages of our Czech plant and
by means of a new center for the manufacture of the mechanical
components at our facility in Loué (France).
Added value through technological crossover concepts
Despite declining capital spending and heightened competitive and price pressure under
cyclical influence, we managed to increase our market shares further in fiscal 2002. One
reason for that was the continuing consolidation process in the industry, which reduced
the number of competitors in the regional markets. For another thing, the Ecoclean business unit successfully differentiated itself from smaller, locally operating suppliers primarily
by the superior technology and performance of its products, but also through outstanding
proximity to customers and high advisory and planning skills.
To make added value possible for our customers in the form of maximum cleaning quality,
environmental compatibility, and production efficiency, we are working systematically on
developing sophisticated technological crossover concepts. That includes XINC, our innovative
systems solution combining cleaning technology and coolant recycling. Already employed
36
Maximum cleanness: Crankshafts
are deburred and cleaned during and
after the manufacturing process.
by numerous customers, this combination improves intermediate cleaning of workpieces
by a multiple of ten and reduces capital expenditures and operating costs. Moreover, XINC
systems can be located flexibly inside facilities at shop level as they require no foundations
and therefore leave no holes in the concrete floor.
In the framework of our innovation management, we have further increased the efficiency
of Ecoclean cleaning systems. Our goal is the reliable removal of particles even on the
scale of milligrams, that are generated in the machining of engine and transmission components. Moreover, we have been working on solutions to reduce the coolant quantities
needed in workpiece machining by 30 % to 40 %.
Large-scale orders from the automotive industry
The Cleaning Systems Automotive product line managed to partly offset the weaker business trend in the USA thanks to a continuing good inflow of orders in Europe. We received
large-scale orders there primarily from Audi and DaimlerChrysler.
Within one of the most extensive orders in Ecoclean history, we supplied cleaning and
filtration systems for the production of cylinder heads, crankcases, and crankshafts to the
Audi plant in Györ (Hungary). DaimlerChrysler ordered a total of 28 systems for cleaning
cylinder heads and blocks as well as camshafts and crankshafts for its German plants in
Stuttgart, Kölleda, and Berlin. The Ford Group pressed ahead with its global deployment
of standard production and cleaning technologies in 2002 and commissioned us to supply
25 cleaning machines for various plants.
Flexible cleaning systems for industrial customers in the non-automotive industry
In the Cleaning Systems Industrial product line, Dürr Ecoclean managed to maintain the
previous year’s sales level despite an overall decline of project volume. In industrial business, parts suppliers to the automotive industry are the most important customer group,
followed by machinery builders. We fulfill the diverse requirements of the heterogeneous
non-automotive sector with modular products that can be flexibly adapted to different types
of workpiece.
Ecoclean business unit
37
Dirt analysis: The careful study of drill holes and cavities
of cleaned workpieces provides us with new knowledge
for the optimization of our cleaning systems.
Market successes were achieved in 2002 particularly by the newly launched, fully standardized “Minio” system, which employs non-halogenated hydrocarbons as solvents to clean
components susceptible to corrosion. The system is completely closed and therefore operates absolutely emission-free.
Automation technology: More flexibility in the manufacturing process
The Automation product line registered stable business development in the USA, its principle
market. The centerpiece was the completion of a large-scale order for General Motors in
its engine factory in Tonawanda, New York (USA) where Dürr Ecoclean, acting as supplier
and systems integrator, realized all the automation systems in addition to the cleaning
and filtration technology.
In Europe, we managed to further expand our market position as planned. For example,
Dürr Ecoclean received its first automation systems order from Peugeot. For its cylinder
head production plant in Trémery (France), we realized the entire floor conveyor technology
as well as fully automated gantries for loading and unloading cleaning and machining
equipment.
We expanded our range of solutions in automation technology last year with specific aims
in view. For example, we developed RoboLoop, a new gantry robot system with automated
grippers. It enables maximum flexibility in loading and unloading machines, for example,
through simultaneous handling of different workpieces. RoboLoop also offers additional
possibilities to interlink machines variably, because this innovative system can transport
workpieces around curves and is thus not restricted to conventional straight production
lines.
38
Intelligent automation: Materials flow
systems from Dürr Ecoclean for engine and
transmission manufacture building.
Coolant recycling: Positive development in Germany
In the area of coolant recycling, demand declined in the well-established US market. On the
other hand, we continued to grow in the newly developed German market. We managed
to increase sales there significantly on the preceding year, albeit still from a low level. The
main reason for that were orders for filtration systems in the framework of large-scale
Ecoclean contracts from the automotive industry, on which we cooperated closely with
other product lines of the Ecoclean business unit.
Ecoclean business unit
39
Measuring Systems
business unit
The engine is the heart
of an automobile. The development teams of automobile
manufacturers and component
suppliers are constantly
working on future generations
of power units. Their goal is
more performance and driving
comfort with lower fuel consumption and emissions. Dürr
is an important partner in
this innovation process. New
engines are checked on our
fully automated test stands
with maximum precision
and thus reach the stage of
production readiness faster.
Highest precision
Measuring Systems
The stage is set for improved earnings
Incoming orders for the Measuring Systems business unit were down slightly from
the previous year as a result of a considerably poorer investment climate in many
industries and regions, and a very strong euro particularly at the end of the year. With
a comprehensive restructuring plan, we were able to cut costs and improve our
competitiveness.
2002
2001
Amounts in € m
Total sales
385.9
428.9
381.2
411.3
EBITDA
10.4
17.4
3,046
3,224
Since the beginning of 2002, all of the Schenck Group’s activities
in measuring technology – Development Test Systems (Schenck
Pegasus), Balancing (Schenck RoTec) and Weighing/Feeding
(Schenck Process) – have been combined in the Measuring
Systems business unit.
Comprehensive restructuring improved competitiveness
Capital investment was weaker in many of our customer industries and regions in 2002, not least as a result of the events of
September 11, 2001. It was not until the second half of 2002 that
we registered some improvement. The trend in Asia was positive,
particularly in China. On the whole, incoming orders were down
slightly from 2001, due also to currency exchange fluctuations.
Intense competition and heavy pressure on margins continued to cause generally unsatisfactory earnings. For this reason, we implemented a broadly based restructuring plan for
Schenck’s measuring technology activities last year. The FoCus turnaround program included
e.g. adjusting capacities, streamlining our product range, consolidating smaller locations,
and improving asset management. We reduced our workforce by more than 300 employees,
mostly in Germany, Great Britain and the USA. On the whole, Measuring Systems improved
its cost structure considerably, lowered its break-even point and as a result of this became
more stable when faced with economic fluctuations. Nevertheless, the result for the year
2002 was marked primarily by the one-time restructuring expense.
We pursued a policy of targeted capacity expansion in the emerging Asian market. In
China, in particular, the accessible market volume is growing fast, as there has been strong
demand for Schenck measuring systems in developing new production capacities there. In
42
Vehicle development:
Higher productivity:
Precision scales from
Fully automatic balancing
Schenck are used to
machines for electric
determine the coefficient
armatures shorten cycle
of drag for new models.
times.
addition to strengthening our sales and marketing presence, we have also further expanded
our manufacturing capacities in Asia, to make our production close to the market and costeffective. As part of our global manufacturing strategy, we are also using the advantages of
our Asian locations to strengthen our competitiveness in North America and Europe.
Development Test Systems: New automation system for engine testing
The Development Test Systems product line (Schenck Pegasus) is one of the leading
suppliers of testing and measuring systems for automotive development. One focus of
our regional expansion last year was in Japan, Asia’s largest automotive market. At the
turn of the year from 2002 to 2003, we founded a new joint venture there between Schenck
Pegasus GmbH and Tokyo Koki Seizosho Ltd., the testing systems specialist, and Horiba Ltd.,
the market leader in emissions testing systems. The stage-one objective of the joint venture
operating under the name Schenck-TKS Test Systems Ltd., is to reinforce our sales and
service network in Japan and to adapt our testing technology more efficiently to the specific
demands of the Japanese market. This will then enable us to follow the global expansion
strategies of our Japanese customers better in a second stage.
At the SAE 2002 World Congress in Detroit, we unveiled our new STARS software platform
for endurance testing, emissions testing and dynamic engine development tests. STARS
is the first proprietary system developed by SRH Systems, the joint venture founded in
2001 between Schenck Pegasus, Horiba Ltd. and the British engine and transmission
developer, Ricardo plc. That international collaboration between application specialists and
software developers has enabled us to ensure that STARS meets all the needs of the
automotive industry and can be used the world over. This automation system, which was
used by well-known customers and partners immediately after it was launched on the
market, also provides additional key advantages such as shorter development times thanks
to simultaneous testing of engine and vehicle components, multi-site data analysis, and
cost savings resulting from simple configuration and maintenance.
We started a new technology trend in the area of wind tunnel systems as well. For a French
automobile manufacturer, we developed the world’s first wind tunnel balance with rolling
road system and wheel drive units. This design enables a far more realistic simulation of the
aerodynamic forces acting on a moving vehicle, including crosswind, particularly with
respect to the underbody and tire areas. This is a key factor in optimizing the aerodynamics
of new vehicles and reducing their fuel consumption.
Measuring Systems business unit
43
Quality control: We have developed
an innovative laser measuring system
for fully assembled wheels.
Balancing: High end systems boost market position
Our Balancing product line (Schenck RoTec) was able to further expand its competitive
position as technology and market leader in a field characterized by consolidations. Our
global presence and strong expertise in providing high-quality balancing systems were an
important basis for a generally positive development. With innovative, high end solutions,
Schenck RoTec made a significant contribution to assuring quality and increasing productivity – not only among automotive manufacturers and suppliers, our largest customer
group accounting for 60 % of sales, but also in other key industries such as the machinery
sector, aerospace, the electrical equipment industry and the turbo machinery industry.
We further enhanced and expanded our broad range of balancing and diagnostic systems in
2002. For balancing electric motor rotors in mass production, we launched a new generation
of fully automatic rotary transfer balancing machines with far shorter cycle times, cutting
balancing costs by up to 25 % per piece. The CAB 850 digital measuring unit forms the core
of the new product generation. In addition to carrying out measuring tasks, the CAB 850
also controls all internal processes, thus eliminating the additional costs of conventional
SPS controls.
For automobile manufacturers and just-in-time or supply-in-line-sequence (SILS) suppliers,
we developed a system for the fully automated assembly, inflation and balancing of complete wheels. For the first time, we integrated a laser measuring station, which enables
testing of up to 250 complete wheels per hour with maximum precision. The system uses
two laser beams to scan the tread and sidewall of the tire for eccentricity or deformations
and at the same time check the tire sits properly. Compared with conventional methods,
the laser inspection allows ten times greater measuring accuracy – a significant contribution
to greater road safety.
Weighing/Feeding: Focusing on modular design
Our Weighing/Feeding product line (Schenck Process) is the only global supplier of hightech systems and components for weighing, feeding, screening and automation in industrial
processes. In a fragmented market, we are among the top three suppliers worldwide.
Against the background of the continuing economic slowdown, we experienced more
intense competition and heavier pressure on margins in 2002 in our primary markets,
the cement, steel, mining, chemical, plastics and logistics industries.
To differentiate ourselves from our competitors, we are increasingly offering complete
systems solutions for industrial processes in addition to providing individual components. Our
focus is firmly on modular mechatronic solutions. This approach reduces the amount of
engineering involved in each individual project, simplifies the integration of our systems into
our customers’ overall processes and therefore increases cost-efficiency.
44
Optimized processes: Intelligent Schenck
weighing and feeding systems contribute to more
economical production in many industries.
Together with an Austrian customer, we developed a plant concept that ensures the optimum feeding and mixing of different ingredients for cement production. It allows producers
to mix a variety of cement types to given formulae, at a precisely defined quality. The plant
incorporates our new MULTIDOS-H weighfeeder, which was specially designed for very
heavy loads and large discharge cross-sections.
We delivered four MULTIRAIL WheelScan diagnostic systems to the Spanish national railway, RENFE, for rail line maintenance and safety management. Each system has seven
concrete weighing sleepers equipped with high-precision strain-gange weighbeams, which
can precisely measure the axle and wheel loads of around 150 trains each day while the
trains are moving at speeds of up to 160 km/h. A software tool analyzes the data and provides an information base that can be used for the status-oriented maintenance of the
rail network. Each time a measurement is taken, each and every wheel of a rail vehicle is
analyzed for possible out-of-round condition – an essential tool for accident prevention.
The diagnostic system reports any acute safety problems such as flat spots on the wheels
within just 120 seconds.
Measuring Systems business unit
45
Management report
Economic environment
World economy remains slow
The global slowdown of growth continued in 2002, particularly under the influence of worldwide economic conditions and geopolitical risks. Plunging stock markets worldwide, the
threat of a war in Iraq, and the world economy’s heavy dependency on US business conditions and the US current account deficit were among the factors that exerted particularly
strong effects. Additionally, the International Monetary Fund (IMF) cites risks posed by the
interest rate policies of the leading central banks.
Worldwide gross domestic product (GDP) grew 2.8 % in 2002. The United States, hitherto
the world economy’s driving force, achieved growth of a bit over 2 %. While Europe grew
about 1%, Germany took last place in the European Union, with only 0.2 %. Only certain
regions in Asia – notably South Korea and China – had growth substantially above the figure
for the world economy. The Japanese economy, which recovered appreciably at first in
2002, lost momentum again toward the end of the year.
Stagnating automotive business and structural weakness
Amid the slow overall economic growth, the automotive industry no more than matched
its previous figures for sales volumes, at 57 million motor vehicles sold. The industry is
particularly suffering from large excess capacity in vehicle production, excessive financing
to promote sales, and painful pressure on margins. Yet automobile manufacturers continue
to invest in up-to-date production systems which allow them to produce more flexibly and
more efficiently amid intensifying competition worldwide. The trend toward niche vehicles
and the increasing variety of models also ensure demand for high-performance production
technologies. Furthermore, the mass manufacturers have been shifting production duties
more and more extensively to their suppliers of parts and modules. As a result, demand for
production systems will grow further amid this customer segment.
In North America, the highest-volume market, vehicle sales volumes fluctuated significantly
during 2002, but settled in around 16.7 million vehicles overall. Yet this level was achieved
only through massive rebates, bonuses and financing promotions, and by filling up dealers’
inventories. Automotive sales in South America have been stagnating for years. In Brazil
alone, manufacturers have built 22 new plants over the past six years, however only about
50 % of the production capacity of 3.2 million vehicles can actually be sold.
New vehicle registrations in Western Europe were down more than 3 % in 2002, so that
the number of vehicles sold was about 14.6 million by the year’s end. Modest growth in
Central and Eastern Europe was unable to compensate for the decline. Germany reported
its fourth weak year in a row, with about 3.2 million cars sold.
46
Wide product range: Dürr offers solutions
for production and testing at many stages
of the automotive industry's value chain –
from vehicle development to final assembly.
Asia, China and South Korea were the biggest growth markets. Nearly every automotive
manufacturer is investing locally, even though sales volumes are still low in absolute terms.
In Japan, by contrast, sales stagnated at roughly 4.5 million vehicles. However, Japanese
automobile manufacturers profited from the weak yen and the associated higher import costs
for competing products, and also from the market successes of Japanese cars abroad.
Strategy
A key supplier with potential for synergy
In the past few years, Dürr has significantly strengthened its position as a key supplier
to the automotive industry. Ongoing innovation and strategic acquisitions – including Carl
Schenck AG in Darmstadt (Germany) and Premier Manufacturing Support Services L.P.
in Cincinnati, Ohio (USA) – enabled us to expand substantially both our systems skills and
our global presence. Our range extends through planning, implementation and financing,
to servicing and operating installations. Today we supply solutions of uniform high quality
for all aspects of flexible production systems all over the world – especially to automobile
manufacturers and suppliers, our primary customer group.
Dürr is concentrating on making better use of the potential for synergy within its expanded
corporate group, for its customers’ benefit – for example, through worldwide product
standards. This approach enables Dürr to offer solutions that are not only competitive, but
meet ever rising expectations for quality, productivity and flexibility. Our state-of-the-art
production systems permit substantial productivity increases in vehicle manufacturing, even
as model variety expands and product life cycles decrease.
Our clear orientation to the automotive industry and our excellent positioning in other
important sectors give us prospects for sustained growth in both sales and earnings.
Painting systems
As the world’s leading, globally based supplier of mass-production paint shops for automobile manufacturers, Dürr profits from the ongoing international trend toward placing
large systems orders. At the same time, our technological leadership in the field of paint
application equipment also gives us a strong market position in other growth sectors,
including automotive supply, commercial vehicle manufacture and general industry branches
such as aviation.
Management report
47
Final assembly systems
In automotive final assembly, Dürr has established itself promptly as one of the leading
systems suppliers. Our strong market position is based on our success in the strategically
crucial product business. We will continue to focus on automotive final assembly in the
future, and expand our market position further. Dürr has the in-house resources to supply
around 70 % of the products and solutions for systems orders in final assembly. The result
is significant advantages for our customers in terms of time, money and coordination.
Manufacturing support services
The automotive industry is continuing its trend toward outsourcing projects and processes
that are not part of the core business. For that reason, we have further expanded our range
of services in all aspects of automotive production. Today, apart from paint plant cleaning,
it also includes such technical services as consulting, maintenance and facility management.
We have been offering an increasing number of complete service packages.
Cleaning technology for engine and transmission construction
The dynamic evolution of engine and transmission technology reinforces our position for
profitable growth. Dürr systems for workpiece cleaning, coolant recycling and automation
make significant contributions toward producing new models of engines and transmissions
with maximum quality and flexibility, and minimum environmental impact. We stand out
from our competitors through our international presence, our marked orientation toward
quality, and our innovative strength. New machine concepts offer our clients lower costs
for both initial investment and operation. Apart from the product business, we are also
expanding our position as a systems integrator for complete processing lines in engine
and transmission manufacture – drawing on our process and planning capabilities.
Measuring technology
In measuring technology, Dürr concentrates on key applications for balancing and diagnostics
systems, for weighing and feeding equipment, and for test systems used in the development of new vehicles and automotive components. Our solutions stand out for their precision, innovation and standardized quality, and have been opening up opportunities for us
in growth markets. The SRH Systems Ltd. joint venture gives us excellent know-how in testing equipment for automotive development. It serves us as a base for the development of
standardized solutions that can be used worldwide.
48
Business developments
Dürr prepares its consolidated financial statements under United States Generally
Accepted Accounting Principles, or US-GAAP. The terms “previous year” or “year before”
always refer to 2001.
Material changes in comparison to last year´s report are listed below:
In conjunction with the transfer of a company within the consolidation group, receivables on orders and project-related accruals had to be restated. These restatements had
the following impact for fiscal 2001:
Income before
income taxes
Net income
Year ended December 31, 2002, amounts in € m
As previously reported
47.3
24.7
Restatements
– 7.5
– 4.7
As restated
39.8
20.0
All profit figures for fiscal 2001 incorporate this restatement, and are thus presented
on a comparable basis.
In the new Final Assembly Systems business unit (formerly Automotion), created at
the beginning of 2002, Dürr pooled all its activities in automotive final assembly. The
Development Test Systems product line (Schenck Pegasus) was assigned organizationally
to the Measuring Systems business unit (formerly Automotion). The previous year’s
values for Final Assembly Systems and Measuring Systems are presented on a comparable basis.
In compliance with Statement of Financial Accounting Standards (SFAS) No. 142, as of
fiscal 2002 goodwill is no longer amortized. Instead an impairment test must be applied
that is intended to reveal any loss of value in capitalized goodwill, and thus indicate any
need for an impairment. No impairment was recognized in fiscal 2002.
As of July 3, 2002, Dürr Automotion GmbH acquired DSEngineering GmbH and Schenck
Somac GmbH (now Dürr Somac GmbH) from Carl Schenck AG and from one of Carl
Schenck AG´s subsidiaries respectively.
Schenck Motorama Inc. sold its assets and liabilities to Dürr Production Systems Inc.
as part of an asset deal.
Management report
49
Incoming orders rise
Consolidated incoming orders for the Dürr Group in 2002, at € 2,346.7 million, were well
above the previous year’s figure (€ 2,063.2 million). Here, several major orders profited from
the automotive industry’s long term capital spending strategies.
Total incoming orders in the Paint Systems business unit again outperformed the previous
year, at € 1,286.8 million (previous year: € 1,036.5 million). Particularly important contributions came here from major orders for painting systems for automobile manufacturers in
Germany, France, China, and the United States. Besides the growing variety of models,
another key factor behind the automotive industry’s capital spending on new painting systems is the increase in expectations about productivity, quality and environmental impact
in vehicle painting. The niche market in airplane painting also performed gratifyingly, as
did business with suppliers to the automotive industry. Total incoming orders at the Final
Assembly Systems business unit were well above the previous year’s figure, at € 476.2 million
(previous year: € 351.3 million). One emphasis here was large orders for complete final
assembly lines in North America and Europe. The business unit also participated in the high
level of incoming orders in Paint Systems, through orders for conveyor systems in paint
shops. The Services business unit continued its steady growth course, generating aggregate incoming orders of € 143.1 million (previous year: € 134.3 million). It particularly attracted new orders from the United States, Brazil, Great Britain, the Netherlands, and Eastern
Europe. Total incoming orders at the Ecoclean business unit were down slightly from 2001,
to € 236.7 million (previous year: € 243.2 million). This was primarily a consequence of
Consolidated incoming orders
by business units in 2002
by regions in 2002
Total: € 2,524.0 million
Paint Systems € 1,286.8 million (51.0 %)
Final Assembly Systems € 476.2 million (18.8 %)
Services € 143.1 million (5.7 %)
Ecoclean € 236.7 million (9.4 %)
Measuring Systems € 381.2 million (15.1%)
Germany € 582.5 million (24.8 %)
Rest of EU € 528.5 million (22.5 %)
Rest of Europe € 93.0 million (4.0 %)
North/Central America € 848.4 million (36.2 %)
South America € 33.4 million (1.4 %)
Asia/Africa/Australia € 260.9 million (11.1%)
Total incoming orders: Incoming orders of a business unit
including intra-group orders from other business units
50
lower demand for industrial cleaning technology in the United States, as a result of the
weak economy. Technological crossover concepts like the XINC systems solution met with
a very good response on the market. It combines cleaning technology and coolant recycling
to cut both operating expenses and investment costs. In the Measuring Systems business
unit, total incoming orders were slightly below the previous year, at € 381.2 million (previous
year: € 411.3 million). The critical factor here was the considerable deterioration of the
investment climate in many industries and regions, and the very strong euro, especially
toward the year’s end. Developments in Asia, especially in China, were quite satisfactory.
In regional terms, consolidated incoming orders for the Group broke down as follows: The
figure rose in Europe to € 1,204.0 million (previous year: € 1,142.3 million). Large orders
from the United States, as mentioned above, raised the figure for North and Central America
from the previous year’s € 619.6 million to € 848.4 million. New orders in South America,
at € 33.4 million, were below the previous year’s € 58.5 million. The figure in Asia, already
high at € 242.8 million the year before, rose to € 260.9 million, thanks primarily to orders
from China.
Sales remain high
Dürr had consolidated sales of € 2,082.1 million in 2002. We were thus only 5.2 % below
the previous year’s high level (€ 2,196.2 million), despite the difficult overall economic
environment. After adjustments on the order of roughly € 60 million for the effects of
foreign exchange rates, the decline in sales was 2.5 %.
Total sales
Consolidated sales
by regions in 2002
Paint Systems € 1,054.3 million (47.7 %)
Final Assembly Systems € 404.7 million (18.3 %)
Germany € 517.4 million (24.9 %)
Rest of EU € 592.5 million (28.5 %)
Rest of Europe € 75.7 million (3.6 %)
North/Central America € 567.0 million (27.2 %)
South America € 70.6 million (3.4 %)
Asia/Africa/Australia € 258.9 million (12.4%)
Management report
51
The Paint Systems business unit achieved total sales (including sales to other Group business
units) of € 1,054.3 million, maintaining the previous year’s very high level (€ 1,094.5 million).
Total sales at the Final Assembly Systems business unit were down from € 425.2 million in
2001 to € 404.7 million. This was mostly due to customers’ delays in placing orders, which
in turn meant that the orders were processed and revenues recognized later. New projects
at the Services business unit increased aggregate sales to € 143.9 million (previous year:
€ 134.0 million). The Ecoclean business unit, at € 221.9 million, did not match the previous
year’s high level of € 277.3 million. The primary cause was a decline in demand for industrial
cleaning technology in the United States. The Measuring Systems business unit billed
€ 385.9 million, down from the previous year’s € 428.9 million, primarily because of declines
in North America.
Regionally, Europe remained the focal point for sales volume, with some 57 % of consolidated Group sales (previous year: 53%), or € 1,185.6 million (year before: € 1,154.9 million).
It was followed by North and Central America, with € 567.0 million (previous year: € 723.2
million). Sales in South America were down from the previous year’s € 159.9 million to
€ 70.6 million. Here, medium-sized orders declined from the year before. Major orders from
China pushed up sales in Asia from the previous year’s € 158.2 million to € 258.9 million
in 2002.
High orders on hand ensure capacity utilization
Despite some unstable markets, Dürr had a very large consolidated catalog of orders on hand
as of December 31, 2002, amounting to € 1,381.4 million (previous year: € 1,171.6 million).
This backlog will ensure that capacity remains adequately utilized well into the current
fiscal year.
Total orders on hand by business units
as of December 31, 2002
Paint Systems € 875.0 million (58.2 %)
Final Assembly Systems € 302.6 million (20.1%)
52
Restructuring and margin pressure take toll on earnings
Earnings for the past fiscal year were severely affected by one-time charges. These charges,
incurred mainly for German and American companies in the Group, totaled some € 20 million.
They were largely for structural adjustments – such as combining locations, or adjusting
to lower volumes. Additionally, differences in foreign exchange rates from 2001 adversely
affected the Group’s results when earnings from our subsidiaries and associated companies
were converted. In particular, the strength of the euro against the US dollar contributed
to a decline of Group earnings before taxes by around € 3 million from the year before.
Economic conditions and unstable markets pulled down earnings still further, especially
in the high-margin products business. Thus EBITDA (earnings before interest expense, taxes,
depreciation and amortization) receded from € 127.8 million to € 89.1 million in 2002. The
return on sales went down from 5.8 % to 4.3 %. EBITDA before restructuring charges was
around € 110 million. On this basis, Dürr generated a return on sales of 5.3 %.
The Group’s income before income taxes and minority interests was € 22.6 million in
2002 (previous year: € 39.8 million). This means that Dürr achieved a ratio of pretax income
to sales of 1.1%, compared to 1.8 % the year before. After deducting income taxes and
minority interests, the Group’s net income for the year was € 12.0 million (previous year:
€ 20.0 million), and earnings per share were € 0.84 (previous year: € 1.40).
Depreciation and amortization were € 34.1 million (previous year: € 44.2 million). Interest
expenses, primarily for outside financing of acquisitions, were cut to € 32.5 million (previous
year: € 43.9 million).
The Paint Systems business unit generated pretax income of € 23.3 million (previous year:
€ 34.6 million). Restructuring charges in the Environmental Systems product line – a consequence of a sharp drop in demand in the US – were a particularly important factor here.
Despite customer postponements on orders and restructuring charges in North America,
pretax income at the Final Assembly Systems business unit rose to € 10.0 million (previous
year: € 6.3 million). The Services business unit contributed € 7.5 million to consolidated
pretax income (previous year: € 7.7 million). After adjustments for the effects of currency
translation and intra-Group transfers, the business unit’s profitability at the operations
level improved compared to the year before. The Ecoclean business unit, at € 10.4 million,
was unable to repeat the previous year’s strong pretax income of € 14.7 million, because
of a severely recessionary US market and increasingly intense competition. Primarily
because of restructuring charges, the Measuring Systems business unit reported a loss of
€ 4.5 million (previous year’s profit: € 1.5 million). The net result for the Corporate Center
was € – 24.1 million (previous year: € – 25.0 million), and mainly comprises headquarters
costs, special projects, and financing expenses associated with corporate acquisitions.
Earnings before taxes were down primarily in Germany and other European countries,
but improved in North America. In Asia they were slightly below the previous year’s figure,
but still satisfactory.
Management report
53
Earnings before taxes and EBITDA by business units in 2002
Amounts in € m
50
39.2
40
30
23.3
20
15.6
10.0
10
7.5
11.2
15.0
10.4
10.4
0
– 2.3
– 4.5
– 10
– 20
– 24.1
– 30
– 40
Paint Systems
Final Assembly
Systems
Earnings before taxes: € 22.6 million
Services
Ecoclean
Measuring
Systems
Corporate Center
EBITDA: € 89.1 million
Improved profitability a core objective
After years of expansion, and in view of the continuing difficult economic environment,
we are now directing all our efforts to improving our cost and earnings position. At the
beginning of 2002 we already took more extensive steps to safeguard our profits. Targeted
restructuring programs – especially in the Measuring Systems business unit and the
Environmental Systems product line – lowered our cost base as planned. Besides reducing
personnel and combining business locations, we also adjusted capacity.
At the beginning of 2003, the Board of Management decided to step up the SPRINT earnings
enhancement program. The program is now called
and features more ambitious
targets, deeper penetration throughout the Group, and faster implementation. It emphasizes
cutting purchasing costs, optimizing processes in design, project engineering, and production, reducing order handling risks, and streamlining location and portfolio structures. We
also aim to improve profits via lower capital tie-up, Group-wide liquidity management, and
debt reduction.
Statement of income
The poor economy reduced consolidated sales by € 114.1 million from the year before,
to € 2,082.1 million.
The gross margin was down € 46.0 million in 2002, to € 381.2 million. Thus it declined from
19.5 % of sales to 18.3 %. The main reason for the drop was one-time expenditures, most
of which are included in the cost of sales.
54
Despite higher restructuring expenses, selling, administrative and other operating expenses
were down € 14.5 million, to € 326.0 million. Aside from the elimination of goodwill amortization (previous year: € 9.9 million), the savings on costs we pursued in 2002 also had a
positive impact here.
The net financial expense improved € 10.5 million in 2002, to € 25.2 million. This was the
effect of a substantial reduction of debt thanks to successful Group-wide management
of working capital and advance payments.
Personnel expenses remained at the previous year’s level.
Financial position
Total assets decrease
Total assets declined to € 1,790.3 million in fiscal 2002 (previous year: € 1,835.7 million). Both
fixed and non-fixed assets were down from the year before.
Fixed assets amounted to € 611.1 million, equivalent to 34.1% of total assets (previous
year: 35.2 %). The decline in property, plant and equipment in 2002 resulted from a restrictive capital spending policy, and from currency translation effects. The largest item in
fixed assets is still intangible assets, at € 390.4 million or 21.8 % of total assets. This figure
includes goodwill of € 355.5 million. The impairment review performed on this goodwill
in the preparation of the annual financial statements indicated no need for valuation adjustments.
Non-fixed assets amounted to € 1,109.2 million, equivalent to 62.0 % of total assets (previous
year: 61.6 %). The following changes resulted when the item for costs and estimated earnings on uncompleted contracts was reallocated from inventories to receivables: inventories
were reduced 0.5 % to € 107.3 million, and receivables and other assets were down 11.7 %
to € 771.1 million. Thus we have reaped the first results of our vigorous management of
inventories and receivables. This effect was partially reversed by an increase of € 80.8 million
in cash and cash equivalents as of the reporting date, to € 230.7 million, as a consequence
of payments that were received immediately before the end of the year, too late for them to
be applied toward repaying debt.
Management report
55
Financial position
Fixed assets
34 %
15 % Shareholders’ equity
Non-fixed assets
62 %
17 % Accruals
Deferred taxes and
prepaid expenses
4%
65 % Liabilities
3%
Assets
Deferred taxes and
deferred income
Liabilities and shareholders’ equity
December 31, 2002
Fixed assets
35 %
16 % Shareholders’ equity
Non-fixed assets
62 %
18 % Accruals
Deferred taxes and
prepaid expenses
3%
64 % Liabilities
2%
Assets
Deferred taxes and
deferred income
December 31, 2001
Equity, at € 262.3 million, declined by € 30.7 million from the year before, in part because
of less favorable foreign exchange rates. The resulting equity ratio is 14.7 % (previous year:
16.0 %). After adjustments for the effect of the reporting date on cash and cash equivalents,
the equity ratio remained at the previous year’s level.
Out of the accruals of € 310.9 million, the main item, i.e. € 243.8 million, was for postcontract costs, warranties and anticipated losses on pending transactions; € 14.0 million
were for tax accruals, and € 53.1 million for pension accruals.
Net debt cut by more than half
Net cash provided by operating activities in 2002 was slightly above the previous year, at
€ 198.7 million (previous year € 188.4 million). Net cash used in investing activities declined,
as planned, to € – 40.4 million, from the previous year’s € – 44.8 million. Net cash used in
financing activities, at € – 74.2 million, comprised mainly a reduction of short term bank debt
for € 11.1 million and scheduled redemption of long-term bank loans for € 52.1 million. The
Group’s long term cash and cash equivalents increased, especially during the second half,
56
because of high levels of advance payments and also as a result of improved management
of interest expenses, foreign currencies, and working capital. Following the previous year’s
good figure of € 149.9 million, they rose to € 230.7 million in 2002. As a consequence, net
debt as of the end of fiscal 2002 was down from € 289.8 million to € 123.1 million.
Acquisitions
No acquisitions were made in 2002. In December 2002, we paid on schedule the installments of € 40.0 million and US$ 10.0 million on loan financing for acquisitions from previous
years.
Capital expenditures
The Dürr Group’s capital expenditures, not including investments in operator models,
amounted to € 27.7 million for fiscal 2002 (previous year: € 35.9 million). The Paint Systems
business unit spent € 10.3 million (previous year: € 8.7 million), especially to expand
painting robot production in Germany. Capital expenditures by the Final Assembly Systems
business unit amounted to € 2.8 million, after the previous year’s € 11.4 million. Here, it
should be borne in mind that a facility expansion was carried out in the United States in
fiscal 2001. The Services business unit spent € 4.3 million (previous year: € 3.2 million)
to build up new, high-margin lines of business in technical services. This is an important
prerequisite for continuing our growth course in the service business. The Ecoclean
business unit invested € 6.1 million (previous year: € 2.8 million) to enhance productivity
Total: € 27.7 million
Paint Systems € 10.3 million (37.2 %)
Final Assembly Systems € 2.8 million (10.1%)
Ecoclean € 6.1 million (22.0%)
Not including investments in operator models
Management report
57
Innovation management: User-oriented
development work forms the basis for the
market success of new products.
at production facilities in Germany and France, and thus to safeguard operating profitability
in the medium term. The Measuring Systems business unit reported capital expenditures
of € 4.2 million (previous year: € 9.2 million). This was primarily for replacements and
rationalization.
Control and profit-and-loss transfer agreements
In addition to the existing profit-and-loss transfer agreements, Dürr AG signed control
agreements with the following companies in 2002: Dürr Automotion GmbH, Dürr Ecoclean
GmbH, Dürr Ecoservice GmbH, Dürr Environmental GmbH and INTX AG. It also signed
control and profit-and-loss transfer agreements with Dürr Ecoclean International GmbH,
Dürr Beteiligung Alpha GmbH and Dürr International GmbH.
Report on relationships with associated companies
In conformity with Sec. 312 of the German Stock Corporation Law, the Board of Management of Dürr AG prepared a report on relationships with associated companies, in which it
issued the following concluding declaration: "We declare that under the circumstances
known to us at the time when transactions were carried out or a measure was implemented or refrained from, our company received fair and reasonable consideration in each
transaction, and was not placed at a disadvantage by implementing or refraining from the
measure in question."
Development and innovation
Expenses for research and development (R&D) shown in the income statement for fiscal
2002 are € 35.3 million (previous year: 36.5 million). This represents 1.7 % of the Group’s
sales. Allowing for additional project related R&D expenditures included under client orders,
this again yields an R&D ratio of just above 6 %.
The objective of our R&D activities is to expand our position in the market and among the
competition by continuously improving our range of products and services. In this regard,
in 2002 we concentrated primarily on increasing the proportion of modular-design product
families in our total portfolio.
In product development, we aim to apply state-of-the-art technologies quickly to new
solutions. The new version of our EMOS Electronic Monitoring and Operating System software, for example, uses Web browser techniques to provide a visual display of plant and
equipment. Dürr is increasingly using virtual reality programs in process planning.
58
Through close cooperation among business units, and by using the same parts, modules
and processes, we ensure that our individual solutions are perfectly coordinated with one
another, so they can be fitted together more easily into complete systems. One goal of our
innovation management is to establish new developments swiftly on the market.
The Dürr Group maintains systematic contact with universities and research institutions,
so we can develop approaches to innovative, user-oriented solutions jointly with outside
specialists. Cooperation between Carl Schenck AG (Measuring Systems business unit)
and Darmstadt Technical University in the field of mechatronics is just one example.
Purchasing management
Cutting costs through international cooperation
As an engineering-oriented company with generally shallow production depth, Dürr does a
great deal of purchasing. For that reason, purchasing management plays a key role in cutting
costs Group-wide. The objective of purchasing is to maximize savings through volume,
and to take advantage of all opportunities to cut the overall cost of purchases. That is why we
signed additional framework agreements in 2002 – some of them applicable worldwide –
with preferred suppliers, and why we continued pooling purchasing volumes across national
borders, both within the business units and (where possible) at the Group level. One important aid here was the global orientation of our purchasing organization. Within the business
units, there are regular international coordination efforts to organize pending orders to
be placed and framework agreements to be signed. As a supplement, we intensified the
dialogue between the specialty buyers for various business units so as to enable further
synergy – for example in procuring standard items. Transparency is further ensured by our
Group-wide Purchasing Information Base on the corporate intranet, with information about
framework agreements and the demands for various commodity groups.
We have expanded the amount of purchasing we do in low-wage countries. As a member
of the AEV general purchasing alliance, we benefit from the joint framework agreements of
the participating companies. As part of our supplier management program, we seek longterm cooperation with efficient, quality-oriented partners.
Management report
59
Rational processes
To rationalize our purchasing processes, we increasingly count on electronic purchasing
tools. Dürr uses the Internet to place calls for bids and identify new suppliers. We regularly
conduct reverse auctions via the Web for all major locations – including for international
demands. This helps us to cut costs and speed up the procurement process. To obtain items
on parts lists, we use electronic data transfer systems that can automatically trigger order
placements.
Employees
Image as an attractive employer makes recruitment easier
Dürr’s attractions as an employer are enhanced by excellent opportunities for development
and the chance to act on one’s own responsibility within an international, team-oriented
working environment. This has enabled us to recruit qualified staff, especially engineers, in
a job market where supply still remains tight. We offer especially good career prospects
in the medium and long term by means of assistance programs for young members of the
next generation.
As of December 31, 2002, the Dürr Group had a total staff of 12,902 (previous year: 12,675).
Restructuring measures, especially in the Schenck Group, led to major adjustments in
human resources. By contrast, the Services business unit created 545 additional positions
for new projects. After adjustment for this business unit, the Dürr Group’s staff as of
December 31, 2002, was smaller by 318 employees (– 3.6 %).
Targeting prospective university graduates
The Internet, job markets, and direct contacts with university-level institutions of learning
are important tools in Dürr’s staff and university marketing. The Corporate Management
Development unit and representatives from our business units attend university job fairs
and are in close contact with academic chairs of technical and business disciplines. We
support up-and-coming young people with fellowships. Through internships, we offer
secondary school and university students an opportunity to gather experience with everyday operations. Thanks to our good university contacts, in 2002 we filled vacancies with
very promising recruits.
60
Teamwork and innovative thinking:
Highly qualified employees are the reason
for our technological leadership.
Special management development program
At the end of 2002, we adopted the Management Education Network, an international
management development program. Through this training program, which includes six
subject areas and practically oriented case studies, along with other material, we offer our
executives an attractive opportunity for career development.
International training
In keeping with the importance of both our forward-looking human resources work and our
social responsibility, we increased the number of trainees by 14 to 282. As part of their
systematic basic training, our junior staff quickly learns to understand the requirements of
globalization – for example, through internships at locations in other countries.
We oriented the Dürr continuing education program even more toward the business units’
needs in 2002. This qualification tool is well accepted, as is clear from the steadily high
attendance at specialty seminars. One point of emphasis in our continuing education program
is improving our staff’s foreign language skills. In this, we pay due attention to the increasingly international nature of our business.
Employees by business units
Employees by regions
Total: 12,902
Total: 12,902
Paint Systems 2,837 (22.0 %)
Final Assembly Systems 1,609 (12.5 %)
Services 4,272 (33.1%)
Ecoclean 1,079 (8.4 %)
Measuring Systems 3,046 (23.6 %)
Corporate Center 59 (0.4 %)
Germany 4,859 (37.7 %)
Rest of EU 2,353 (18.2 %)
Rest of Europe 720 (5.6 %)
North/Central America 3,319 (25.7 %)
South America 1,003 (7.8 %)
Asia/Africa/Australia 648 (5.0 %)
Management report
61
Maximum environmental compatibility:
Dürr develops emission-free painting processes
jointly with the automobile industry.
Environmental protection
Maximum environmental compatibility is one of the most important features our clients
expect from Dürr production systems. For that reason, conservation of resources and
emission reduction remained one of the main criteria in product development for 2002. In
painting technology, for example, Dürr expanded its range of products for solvent-free
powder painting. Additionally, we help conserve paint even further with color change systems
that reduce consumption, and new solutions to minimize overspray in the application
process. The Ecoclean business unit supported its clients in environmental matters with
seminars on new regulations on pollution control.
Our in-house production generally has little environmental relevance. The emphasis at our
production locations is on assembly processes, involving comparatively low energy consumption and little waste. We use environmental management systems to control existing
risks and further improve environmental protection. During the year, our systems continued
their successful course of obtaining certification. Today, virtually every location in the United
States and Germany is environmentally certified to ISO 14001.
Risk management
The Dürr Group views risk management as managing both opportunities and threats, and
as a central management task of the Board of Management and other senior management. We have developed our own tools to identify, assess, control and monitor risks – for
example, a risk management manual, a specific Dürr risk profile, and a risk structure sheet
for each type of risk. We additionally ensure continuous, uniform risk management Groupwide through appropriately organized controlling and internal control systems. There are
no apparent risks that might jeopardize the company’s continuing existence.
General economic development
Dürr’s business performance is influenced by the general economic situation, and especially
by the situation in the automotive industry. For that reason, the Board of Management,
Supervisory Board and other senior management watch economic developments in this
sector with particular attention. Our reporting system is oriented toward detecting changes
in our principal client group’s investment behavior at an early stage, so that we can take
early measures accordingly.
62
Competitors
As a technology group, we counter the risks posed by the intense competition in our markets
through innovative products and processes. As part of risk management, we compare
our solutions with our competitors’ best efforts (benchmarking) with regard to both cost
and the scope of performance. In this context, we work continuously on improving the
price-performance ratio of our products and services.
Clients and market
Dürr is a key supplier for many of its clients. This close partnership enables us largely to
anticipate the risks that result from changes in requirements, and to modify our products
and services accordingly. Client and market development is additionally one of the focal
points for the managing bodies of our Group and our companies. Close partnership with
our clients and corporate management’s dedication are reliable safeguards.
Order handling and monitoring
Profit-oriented order handling is of vital importance to Dürr’s business success. Additionally,
many of our orders are projects worth millions. They are technically complex, and are usually
carried out over a matter of several months. To minimize the associated risks, we use
proven tools, such as project management manuals and risk and opportunity checklists. Major
projects are regularly analyzed by the Board of Management and other senior managers.
Supplier relations
The ongoing trend toward large projects has led to more extensive, more complex orders
for Dürr as a general contractor. These go together with larger purchasing volume. We
counter the resulting risks with systematic contract management and supplier evaluations.
Dürr experts regularly monitor suppliers’ quality standards and their reliability in work
on projects. We maintain long term business relationships, especially with our preferred
suppliers of technically complex components or equipment, in order to reduce procurement risks.
Currency fluctuations
As a company operating worldwide, Dürr is exposed to foreign exchange risks. Since a large
portion of our added value is generated in the US and Germany, we keep a sharp eye on
the exchange rates between the dollar and the euro. We minimize risks from exchange rate
fluctuations by designing, producing and purchasing locally, and by using financial derivatives and centralized foreign currency management. We hedge major goods and services
transactions with forward exchange contracts, and smaller orders through macro-hedging.
Management report
63
Information technology
In information technology, which is so important for business, we use the latest security
solutions to protect our infrastructure and data against intrusion. We further increased
the availability and fail-safeness of our server and storage systems for business-critical
applications.
Legal dispute with Alstom
An integral part of the acquisition of the Air Industries Group from Alstom in fiscal 2000 was
an equity guarantee for the consolidated group, and a margin guarantee for selected orders.
The two parties – Alstom S.A. on one side, and Dürr AG and Dürr Systems GmbH on the
other – disagree on the actual amount of these guarantees. Since May 2001, arbitration
proceedings have been pending before the International Chamber of Commerce (ICC) in
Paris. No final decision has been issued. A decision against us might have an adverse
impact on the Dürr Group’s future earnings.
Financing
Acquisitions in previous years were financed with long term loans. The terms of these loans
require us to maintain certain balance sheet and earnings ratios. If these ratios change, the
lenders might modify the associated terms of the loans.
Events subsequent to the reporting date
No events occurred after the end of fiscal 2002 that were of material importance for the
Dürr Group or that might alter the assessment of its financial position, results of operations
and cash flows.
64
Outlook
No economic improvement expected in 2003
Although important leading indicators make a turnaround in economic growth seem possible
in 2003, there is little prospect of an improvement, especially in the euro region and
Germany, given the geopolitical and economic risks. For the time being, we do not expect
the economy to be strengthened by private consumption.
The world economy is projected to grow 3.1% above 2002; this projection is based on an
average oil price of around US$ 25 per barrel. Growth in the United States is supposed to
be slightly higher than the year before, at 2.6 %; similarly, the figure for Europe is expected
to be roughly 1.6 %. Germany, with projected 0.4 % growth in GDP, will once again be
among those bringing up the rear in the European Union. Growth well above 5 % is expected
only in Asia, especially in China and South Korea.
The performance of the international automotive industry is a vital parameter for Dürr, since
automobile manufacturers and their suppliers are the Group’s largest client group by far,
accounting for more than 80 % of sales. Worldwide car sales volumes are expected to be
stagnant again in 2003. Intensive financing efforts to boost sales led buyers to purchase
new cars ahead of schedule in 2002; ongoing demand will lag as a result. Especially in
Germany, this situation could well be exacerbated further by tax increases.
However, the automotive industry’s spending that is of relevance to Dürr depends on more
than the short or medium term performance of the economy. Strategic investments,
which arise for example when models are changed, tend to be independent of the current
market situation. A growing variety of vehicles, ever shorter product life cycles, and outsourcing more added value toward automotive suppliers will generate a further need for
capital expenditures, and thus growth potential for Dürr.
Paint Systems: Profitability to expand
The Paint Systems business unit’s strategy is focused on building profitability and value.
Here, the standardization of our products plays an important role. At the end of 2002,
we profited from the award of many large projects. But these successes reduced the
potential for new orders in 2003. Consequently, we expect incoming orders for 2003
to be lower than the year before.
Management report
65
Simulation: New processes
are modeled quickly and efficiently
on the computer.
Final Assembly Systems: Growth in the US
The Final Assembly Systems business unit anticipates that both sales and incoming orders
will be weaker in 2003, since we assume our clients will reduce capital spending. The
further expansion of our position in the United States is especially important. The project
situation here is quite promising. In Europe, we will pursue a cost-cutting program that
will help us to improve our competitive position still further. Additionally, the business unit will
expand its international presence while organizing its global processes more efficiently.
Services: Sales expected to rise
The Services business unit expects sales to increase in 2003. The prerequisites will be
further structural measures in North America, further growth in new service segments,
and the continuation of our global expansion. Although demand for operator models has
receded, we certainly still foresee opportunities in this segment. One risk lies in the further
weakening of the US dollar against the euro, since we generate a large share of our sales
and earnings in the dollar region.
Ecoclean: Product standardization a leading edge
Engine and transmission technology continues to evolve dynamically. Hence, Ecoclean
plans to expand its market lead in cleaning systems for power train component production,
and to increase its market share. This year, we expect the competitive environment to
consolidate further. By standardizing our products, we expect to gain additional competitive
advantages and enhance the potential for cost cuts.
Measuring Systems: Business in Asia to expand
Building on the FoCus restructuring program inaugurated in 2002, we began our
successor program at the start of 2003. We will especially expand our business in Asia, to
make the most of the growth potential there.
Outlook for the Group
We do not expect any great impetus for the world economy in 2003. The business environment remains subject to many political imponderables. Accordingly, the capital spending
behavior of our principal customer group – the automotive industry – will be guided by
caution.
Against this background, we have not assumed any improvement of general conditions
in our planning for 2003. Because of the high order intake in 2002, the good level of orders
on hand and the restructuring measures implemented last year, we expect our sales and
earnings situation to stabilize in 2003. However, reliable forecasts are not possible at present
in view of the economic and political uncertainties. We have started our
program
to continue and accelerate our successful cost-cutting measures.
will primarily
enhance our productivity, besides improving our processes and quality. Thus, we are fulfilling
all the prerequisites to be able to profit above average on an economic upswing.
66
Risks to our outlook
This outlook and other portions of the Annual Report include forward-looking statements
about future developments. As is the case for any business activity conducted in a global
environment, such forward-looking statements are always subject to uncertainty. Our information is based on the conviction and assumptions of the Board of Management of Dürr
AG, as developed from the information currently available. However, the following factors
may affect the success of our strategic and operating measures: geopolitical risks, changes
in general economic conditions (especially a prolonged recession in Europe or North
America), exchange rate fluctuations and changes in interest rates, new products launched
by competitors, and a lack of customer acceptance for new Dürr products or services,
including growing competitive pressure. Should any of these factors or other imponderable
circumstances arise, or should the assumptions underlying the forward-looking statements
prove incorrect, actual results may differ from those projected. Dürr AG undertakes no obligation to provide continuous updates of forward-looking statements and information. Such
statements and information are based upon the circumstances as of the date of their publication.
Stuttgart, April 2003
Dürr Aktiengesellschaft
The Board of Management
Management report
67
Annual financial statements
69 Report of independent auditors
70 Consolidated statements of income
71 Consolidated balance sheets
72 Consolidated statements of equity
73 Consolidated statements of cash flows
74 Notes to the consolidated financial
statements
Report of independent auditors
We have audited the consolidated financial statements of Dürr Aktiengesellschaft, Stuttgart, consisting
of the balance sheet, statement of income, statement of cash flow, statement of shareholders’ equity
and notes, for the fiscal year from January 1, 2002 to December 31, 2002. The Company corrected
the consolidated financial statements for the prior year; we refer to the description under “1. Summary
of significant accounting policies” in the notes to the consolidated financial statements. The legal
representatives of the Company are responsible for the preparation and content of the consolidated
financial statements. Our responsibility is to assess – based on our audits – whether the consolidated
financial statements are in line with accounting principles generally accepted in the United States
(US-GAAP).
We conducted our audit in accordance with the German Auditing Rules and in compliance with the
general accepted standards of auditing prescribed by the German Institute of Certified Public
Accountants (Institut der Wirtschaftsprüfer). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatements. In establishing the audit procedures we considered our knowledge about
the Group’s business operations, its economic and legal environment, and expectations of possible
errors. In the course of the audit the documentation supporting the carrying amounts and disclosures
in the consolidated financial statements is examined on a test basis. The audit also includes assessing
the accounting principles used and significant estimates made by the legal representatives, as well
as evaluating the overall presentation of the consolidated financial statements. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the net assets,
financial position, results of operations and cash flows of the Group for the fiscal year in accordance
with US-GAAP.
Our audit, which also extended to the group management report prepared by the Board of Management
for the fiscal year from January 1, 2002 to December 31, 2002 did not give rise to any objections. In
our opinion, the group management report accurately presents the situation of the Group and the risks
arising from future developments. Furthermore, we can confirm that the consolidated financial statements and the group management report for the fiscal year from January 1, 2002 to December 31, 2002
fulfill the prerequisites under German law for exemption from the legal necessity of preparing consolidated financial statements and a group management report. We have audited the compliance of the
group accounting with the 7th EC Directive, required for exemption from the duty to prepare group
accounts in accordance with German commercial law, on the basis of the interpretation of German
Accounting Standard No.1/1a.
Stuttgart, April 7, 2003
Ernst & Young Deutsche Allgemeine Treuhand AG
Wirtschaftsprüfungsgesellschaft
Prof. Dr. Langenbucher
Wirtschaftsprüfer
Hochrein
Wirtschaftsprüferin
Report of independent auditors
69
Consolidated statements of income
for Dürr Aktiengesellschaft, Stuttgart, for the years ended December 31, 2002 and 2001
Note
2002
2001
Amounts in € k
Net sales
2,082,137
2,196,169
– 1,700,957
– 1,768,970
381,180
427,199
– 326,039
– 340,505
– 35,335
– 36,524
27,984
25,310
47,790
75,480
(7)
– 25,170
– 35,690
22,620
39,790
(8)
– 9,352
– 19,697
Income before minority interests
13,268
20,093
Minority interests
– 1,250
– 90
Net income
12,018
20,003
0.84
1.40
Cost of sales
Gross margin
Selling, administrative
and other operating expenses
(5)
Research and development expenses
Other operating income
(6)
Income before financial income, income taxes
and minority interests
Financial income (expense), net
Income before income taxes
and minority interests
Income taxes
Basic and diluted earnings per share in €
The accompanying notes are an integral part of these consolidated financial statements.
70
Consolidated balance sheets
for Dürr Aktiengesellschaft, Stuttgart, as of December 31, 2002 and 2001
Note
2002
2001
Goodwill
(9)
355,538
375,547
Other intangible assets, net
(9)
34,910
32,161
(9)
198,172
214,912
(10)
22,467
23,473
611,087
646,093
Amounts in € k
Assets
Fixed assets
Property, plant and equipment, net
Investments
Non-fixed assets
Inventory, net
(11)
107,345
107,847
Receivables and other assets, net
(12)
771,103
873,092
Short-term investments
Cash and cash equivalents
Deferred taxes
(8)
Prepaid expenses
Total assets
3
3
230,707
149,881
1,109,158
1,130,823
64,744
53,273
5,312
5,495
1,790,301
1,835,684
(thereof short-term 2002: € 1,146,932 thousand; 2001: € 1,180,727 thousand)
Capital stock
(13)
36,603
36,603
Additional paid-in capital
(13)
159,000
159,048
Retained earnings
(13)
55,586
59,296
–
– 44
(13)
11,107
38,079
262,296
292,982
Deferred compensation
Accumulated other comprehensive income
Minority interest
8,199
8,440
Accruals
(15)
310,924
331,438
Liabilities
(17)
1,152,425
1,157,528
(8)
49,874
40,152
6,583
5,144
1,790,301
1,835,684
Deferred taxes
Deferred income
Total liabilities and shareholders’ equity
(thereof short-term 2002: € 1,129,326 thousand; 2001: € 1,079,309 thousand)
Consolidated financial statements for Dürr AG
71
Consolidated statements of equity
Accumulated
other comprehensive income
Minimum
Additional
Deferred
pension
Net
Cumulative
Capital
paid-in
Retained
compen-
liability
derivative
translation
Compre-
stock
capital
earnings
sation
adjustment
losses
adjustment
Total
Balance at
January 1, 2001
36,603
159,000
55,021
–
– 159
–
40,534
290,999
Net income 2001
–
–
20,003
–
–
–
–
20,003
20,003
Other comprehensive
income (loss)
–
–
–
–
40
– 6,784
4,448
– 2,296
– 2,296
17,707
hensive
income
Amounts in € k
Comprehensive income
–
–
–
–
–
–
–
–
Issuance of stock options
–
48
–
– 48
–
–
–
–
Amortization of deferred
compensation expense
–
–
–
4
–
–
–
4
Dividends
–
–
– 15,728
–
–
–
–
– 15,728
Balance at
December 31, 2001
36,603
159,048
59,296
– 44
– 119
– 6,784
44,982
292,982
Net income 2002
–
–
12,018
–
–
–
–
12,018
12,018
Other comprehensive
income (loss)
–
–
–
–
– 74
– 4,668
– 22,230
– 26,972
– 26,972
Comprehensive
income (loss)
–
–
–
–
–
–
–
–
– 14,954
Adjustment of deferred
compensation
–
– 48
–
48
–
–
–
–
Amortization of deferred
compensation expense
–
–
–
–4
–
–
–
–4
Dividends
–
–
– 15,728
–
–
–
–
– 15,728
36,603
159,000
55,586
–
– 193
– 11,452
22,752
262,296
Balance at
December 31, 2002
72
Consolidated statements of cash flows
2002
2001
12,018
20,003
Amounts in € k
Net income
Minority interests
Dividends paid to minority shareholders
Depreciation and amortization
Net gain on disposal of property, plant and equipment
Deferred income taxes
Non-cash income from associated companies
Non-cash (income) expenses from stock option program
1,250
90
– 54
– 375
34,066
44,162
– 180
– 1,716
131
205
– 782
– 177
–4
4
Changes in operating assets and liabilities
Inventory
Receivables
Short-term investments
– 12,134
73,807
54,433
105,509
–
1,770
– 192
– 61,896
Liabilities (other than bank)
108,843
5,996
Other assets and liabilities
1,264
1,062
Accruals
Net cash provided by operating activities
198,659
188,444
Purchases of other intangible assets
– 12,693
– 25,006
Purchases of property, plant and equipment
– 29,402
– 40,424
Purchases of other investments
– 230
– 1,731
Acquisitions, net of cash acquired
– 924
14,432
Proceeds from the disposal of fixed assets
2,832
7,930
Net cash used in investing activities
– 40,417
– 44,799
Net change in short-term debt
– 11,129
11,366
Proceeds from long-term debt to banks
4,752
316,586
Redemption of long-term debt to banks
– 52,132
– 352,252
Dividends paid
– 15,728
– 15,728
Net cash used in financing activities
– 74,237
– 40,028
Effect of exchange rates on cash and cash equivalents
– 3,179
– 2,493
Increase in cash and cash equivalents
80,826
101,124
At the beginning of the year
149,881
48,757
At the end of the year
230,707
149,881
Cash paid for:
Interest
34,475
37,169
Income taxes
12,932
29,936
Capital lease obligations of € 8,576 thousand were incurred in 2001 when the Group entered into a lease for new land and buildings.
73
Notes to the consolidated financial
statements for the year 2002
1. Summary of significant accounting policies
The Company
The legal predecessor of Dürr Aktiengesellschaft (“Dürr AG” or the “Company”) was Dürr BeteiligungsGmbH headquartered in Stuttgart. The Company was transformed on November 4, 1989 into Dürr AG,
located in Stuttgart. Dürr AG and its subsidiaries (“Dürr” or the “Group”) develop and manufacture paint
finishing plants, automation and conveyor systems, environmental systems as well as industrial cleaning technology, and offer manufacturing support services. In addition, the performance spectrum of Dürr
includes the manufacture of systems for process control procedures, the automation of production
processes, and balancing of revolving parts and assemblies. Dürr’s main customers are the major companies in the automobile industry worldwide.
Changes in basis of
Effective January 1, 1999, Dürr adopted US Generally Accepted Accounting Principles (US-GAAP) as the
presentation
basis of its group accounting. The consolidated financial statements of Dürr AG prepared in accordance
with US-GAAP are in line with Directive 83/349/EG.
On January 1, 2002, the Group adopted SFAS (Statement of Financial Accounting Standards) No. 142
“Goodwill and Other Intangible Assets”. For this reason, goodwill is no longer subject to scheduled
amortization.
The consolidated financial statements of Dürr AG have been prepared in thousands of euros, except
for per share amounts.
Certain prior year balances have been reclassified to conform with the Group’s current year presentation
of the business units.
Corrections of errors in prior
In conjunction with the transfer of an entity within the consolidated group, the Group discovered
year financial statements
that in 2001 project related receivables were overstated and accruals were understated and as a result
income before income taxes was misstated.
To correct this error, which had a negative effect on income before income taxes in the year ended
December 31, 2001 of € 7,506 thousand and on the net income of € 4,734 thousand, adjustments were
made to the corresponding items in the income statement and the balance sheet for 2001.
The above restatements have the following effects on income before income taxes and minority
interests, net income and earnings per share for the year ended December 31, 2001.
Income before
income taxes
and minority
Net
Earnings
interests
income
per share
in € k
in € k
in €
Income before restatement
47,296
24,737
1.73
Restatement of prior year
at a subsidiary
– 7,506
– 4,734
– 0.33
Income after restatement
39,790
20,003
1.40
Description for the year ended December 31, 2001
74
Consolidation principles
The consolidated financial statements include the accounts of Dürr AG and companies in which Dürr AG
has a controlling financial interest. Investments in which the Company exercises significant influence,
but which it does not control (generally 20 – 50 % ownership interest) are accounted for using the equity
method of accounting (associated companies). All significant intercompany accounts and transactions
have been eliminated.
All other investments have been accounted for at cost. The item “Minority interest” represents the
separate ownership of seven (2001: eight) subsidiaries as listed in note 24 “Schedule of investment
holdings”.
Dürr has accounted for its acquisitions using the purchase method of accounting in accordance with
SFAS No. 141 ”Business Combinations”. As such, all acquired assets and liabilities assumed are recorded
at fair value. The excess of the purchase price paid over the fair value of the assets acquired and
liabilities assumed is capitalized as goodwill.
Use of estimates
The preparation of the consolidated financial statements pursuant to US-GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at balance sheet date, and the reported amounts of revenues
and expenses during the reporting period. Actual results could vary from these estimates.
Areas requiring significant estimates include percentage of completion accounting, the allowance for
doubtful accounts, contingencies and other accruals. In addition, significant estimates and assumptions
are required in the determination of the fair value of the Group’s tangible and intangible long-lived
assets, and to assess the impairment of goodwill for the separate business units.
Foreign currency translation
The functional currency of each of the subsidiaries of Dürr AG is the local currency of the country
and transactions
in which each subsidiary is located. The assets and liabilities of subsidiaries stated in any currency
other than the euro are translated at the spot rate as of each balance sheet date. The statements
of income are translated at the average annual rate for the period. Differences arising from the translation of assets and liabilities as compared to their translation in earlier periods and from the translation of income and expenses at average rates are included in “Accumulated other comprehensive
income”.
Transaction differences from foreign exchange rate fluctuations are included in the consolidated statement of income under “other operating income” and “other operating expenses”. The aggregate foreign
currency exchange loss (2001: loss) recognized in the consolidated statement of income for the year
ended December 31, 2002 was € 311 thousand (2001: € 142 thousand).
Through its US subsidiaries, the Group holds net assets amounting to € 93,698 thousand. These net
assets were translated from US dollars into euros as of December 31, 2002, using an exchange rate
of 1.0416.
75
Intangible assets
Intangible assets are goodwill and licenses, patents and similar rights.
and property, plant
and equipment
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, “Business Combinations”,
and SFAS No. 142, “Goodwill and Other Intangible Assets”. Beginning on January 1, 2002, Dürr amortizes licenses, patents and similar rights with definite useful lives (between three and twenty years)
on a straight-line basis over their prospective useful lives to their estimated residual value. Goodwill
and other intangible assets with indefinite useful lives are not amortized but are reviewed annually for
impairment. In conjunction with the first-time application of SFAS No. 142, the Group has reviewed
the useful lives of other intangible assets and determined that it does not possess any other intangible
assets which have an indefinite useful life.
Dürr reviews the impairment of goodwill using a two-stage test at business unit level. In the first step,
the fair value of the goodwill recorded by a business unit is compared to its book value. In the case
that the fair value of the business unit is less than its book value, a second step is performed which
compares the fair value of the business unit’s goodwill to the book value of its goodwill. The fair value
of the goodwill is defined as the difference between the fair value of the business unit and the fair
value of all assets and liabilities of the business unit. If the fair value of the goodwill is lower than its
book value, the difference is recorded as an impairment. As of December 31, 2002, goodwill of
€ 355,538 thousand (2001: € 375,547 thousand) was recognized in the accounts.
The following summary shows the effects of amortization recognized on goodwill on the net income
in thousands of euros and on the earnings per share (basic and diluted) in euros.
2002
2001
12,018
20,003
Net income
As reported
Amortization of goodwill
–
9,864
Tax effect
–
– 1,358
12,018
28,509
0.84
1.40
Pro forma
Earnings per share (basic and diluted)
As reported
–
0.69
Tax effect
–
– 0.09
0.84
2.00
Pro forma
76
Goodwill recognized on associated companies is no longer amortized. However, associated companies
are still reviewed for impairment in line with APB Opinion No. 18 “The Equity Method of Accounting
for Investments in Common Stock”.
Prior to January 1, 2002, intangible assets, including goodwill, were amortized on a straight-line basis
over the shorter of the contractual term or their useful life.
On January 1, 2001, Dürr extended the useful life of goodwill from 20 years to 40 years, as the Board of
Management believes, due to the nature of the Group’s business, 40 years to be more representative
of the economic use. The effect of this change in estimate on income before income taxes and minority
interests, net income and earnings per share was € 10,236 thousand, € 9,009 thousand, and € 0.63
respectively for the year ended December 31, 2001.
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is computed
using the straight-line method over the estimated useful lives of the respective classes of assets.
The useful lives range from three to five years for computer hardware, five to ten years for furniture
and fixtures, five to 15 years for machinery and equipment, and 15 to 50 years for buildings and
improvements. Certain low-value items are expensed as incurred in the year of acquisition. This policy
does not have a material effect on the consolidated financial statements.
The costs of property, plant and equipment include major expenses and replacement parts that extend
the useful life of the asset or increase its capacity and interest associated with significant capital
additions. When assets are sold or retired, their cost and related accumulated depreciation and amortization are eliminated. Any gains or losses on disposition of such assets are recorded as other operating income or other operating expenses. Maintenance and small repairs are expensed when incurred.
Pursuant to SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Group
also records any impairment losses on the book value of long-lived assets if circumstances indicate
that their value is permanently impaired. Impairment is determined by comparison of the book value
of the respective assets with the undiscounted cash flows expected to be generated by the asset in
future. If recognition of an impairment loss is considered necessary for such assets, the loss corresponds
to the difference between the book value and lower fair value. Fair value is generally based on an estimate or the estimated discounted future cash flows expected from the assets. During the year ended
December 31, 2002, Dürr did not record any impairment losses on long-lived assets.
Moreover, SFAS No. 144 establishes accounting guidance for long-lived assets to be disposed of by
sale consistent with the fundamental provisions of SFAS No. 121, “Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of”.
77
Investments
Investments in other unlisted companies in which Dürr does not exercise a significant influence and
investments in associated companies are classified as investments. Shares in associated companies
are accounted for using the equity method of accounting, while shares in other unlisted companies
are accounted for at cost. Impairment losses are recorded if there has been anything other than a
temporary decline in value.
The securities reported under investments qualify as available for sale securities and are recognized
at fair value as of the balance sheet date. Unrealized gains and losses on these securities are reported
under “Accumulated other comprehensive income” taking into account any deferred taxes. There
were no adjustments to “Accumulated other comprehensive income” in the years ended December 31,
2002 and 2001, as the unrealized changes in fair value were immaterial.
Leases
The companies in the Dürr Group are lessees of land, buildings, office and operating equipment. The
majority of leases qualify as operating leases. When the leases meet the definition of capital leases,
the leased asset is capitalized at acquisition cost (net present value of future minimum lease payments
less costs incurred for insurance, maintenance and taxes, and any profit thereon). An obligation is also
established at that time for the same amount. The upper limit for the capitalization of a leased asset and
the liability is its fair value. The leased asset is depreciated over the shorter of the estimated useful
life or the term of the lease. Interest is imputed on the obligation using the effective interest method
over the term of the lease.
Sale and lease-back
No properties were sold within the scope of sale-and-lease-back agreements during the year ended
December 31, 2002.
During the year ended December 31, 2001, two properties were sold within sale-and-lease-back arrangements. In the first step, the land and building were sold to property management companies and in
a second step leased back for further use. The realized gain of € 1,453 thousand on the first transaction
was deferred and is being recognized in earnings over the fifteen-year lease term. The second transaction did not result in a material gain. The leasebacks have been recorded as capital leases (see note 9
“Intangible assets, net and property, plant and equipment, net”).
Trade receivables
Receivables are recognized at the lower of nominal value or realizable value.
Dürr reviews its debtors on a regular basis in order to reduce its credit exposure. Separate debtor
accounts are classified as overdue or delinquent based on management’s judgment.
The Group evaluates the collectability of its accounts receivable based on a combination of factors.
In cases where Dürr is aware of circumstances that may impair a specific customer’s ability to meet its
financial obligations, Dürr records a specific allowance and thereby reduces the net recognized receivable to the amount the Group reasonably believes will be collected. For all other customers, the Group
recognizes allowances for doubtful accounts based on the length of time they are overdue, the current
business environment, and the Group’s historical experience. Hedges against commercial and political
risks inherent in receivables are governed by Group policy, if need be, by taking out domestic or foreign
credit insurance coverage or involving commercial banks.
78
All short term liquid financial assets with an original term of up to 3 months are classified as cash and
cash equivalents.
Stock-based compensation
SFAS No. 123 and SFAS No. 148 establish accounting and disclosure requirements using a fair value-
based method of accounting for stock-based employee compensation plans.
In accordance with the provisions of SFAS No. 123, Dürr has elected to account for stock-based awards
issued to employees using the intrinsic value method prescribed in APB Opinion No. 25. Accordingly,
compensation cost for stock-based awards granted to employees is measured as the excess of the
market value of the Company’s stock on the measurement date over the amount the employee must
pay to acquire the stock.
For stock-based employee compensation awards in which all terms are fixed on the grant date, the
intrinsic value of the option is measured on the basis of the estimated fair market value of the Company’s
common stock on that date. The intrinsic value of awards in which some of the award terms are
dependent upon future events (a “variable award”) is measured in each reporting period based on the
estimated fair market value of the Company’s stock at the end of each reporting period until all terms
under the award become known. Compensation costs for either type of award are recognized over the
employee’s service period, which is generally equivalent to the vesting period of the award.
Dürr accounted for its stock option plan, DISOP (Dürr International Stock Option Plan), as a variable plan
and has recorded compensation costs of € – 4 thousand during the year ended December 31, 2002
(2001: € 4 thousand).
As the measurement date for DISOP has not yet been reached, future changes in fair market value of
the Company’s common shares will lead to future adjustments in the total compensation from this
program.
The weighted average fair value of options granted during the year ended December 31, 2001 cannot
be reasonably estimated due to the dependence of the exercise price on future dividends. Other
relevant assumptions for estimating the fair value using the Black-Scholes option pricing model are
as follows:
Expected term
Years
4.5
Volatility
in %
29.00
Risk-free interest rate
in %
4.70
Expected dividend yield
in %
4.50
79
Had compensation cost for these grants been determined consistent with SFAS No. 123, “Accounting
for Stock-Based Compensation”, there would have been no change in the net income and earnings per
share as the best estimate of fair value is the intrinsic value at December 31, 2001 and 2002.
Please see note 14 “Stock-based compensation” for more detail on the Dürr International Stock
Option Plan.
Accruals/liabilities
Accruals for pension obligations are calculated using the projected unit credit method.
Current liabilities and short-term accruals are recorded based on reasonable estimates. Contingent
liabilities are accrued when it is probable that a liability will be incurred and the amount can be
reasonably estimated.
Income taxes
Dürr computes the income tax burden using the liability method in accordance with SFAS No. 109,
“Accounting for Income Taxes”. Under this standard, deferred taxes are determined according to the
difference between the US-GAAP carrying value in the balance sheet and the tax law values of assets
and liabilities based on the enacted statutory tax rates for those years in which the difference is
expected to be reversed. A valuation allowance is calculated on deferred tax assets if it is more likely
than not that the tax benefit will lapse rather than be realized.
Earnings per share
If there are dilutive elements present, two different ratios for earnings per share must be disclosed.
“Basic earnings per share” does not take account of dilutive effects; it is calculated by dividing net
income by the weighted average number of common shares outstanding. In addition to the number
of common shares outstanding, “Earnings per share (diluted)” recognizes shares that could be issued
on the basis of outstanding options. The calculation is as follows (all amounts in thousands of euros,
except per share amounts). No dilutive effects arose in the year ended December 31, 2002.
2002
Net income
Weighted average shares outstanding
Dilutive effect of assumed exercise of options
12,018
20,003
14,298.2
14,298.2
0.0
0.9
14,298.2
14,299.1
Basic earnings per share
0.84
1.40
Diluted earnings per share
0.84
1.40
Weighted average shares outstanding (diluted)
Revenue recognition
2001
Dürr derives its revenues mainly from long-term construction contracts. Long-term construction
contract revenues are recognized on the percentage-of-completion method based on costs incurred
relative to total estimated costs. The completed-contract method is used for smaller contracts in
which it has been determined that the financial position and results of operations are fairly presented.
The completed-contract method is also used in situations where estimated costs to complete cannot
be reliably determined.
80
Billings issued to customers and cash received from customers are not recorded as sales but deducted
without effect on income from cost in excess of billings on uncompleted contracts or added to billings
in excess of costs on uncompleted contracts.
To the extent that costs have been incurred on contracts, but the amounts cannot be billed under the
terms of the contracts, they are reported together with the corresponding proportion of income as
cost and estimated earnings on uncompleted contracts. The invoicing of such amounts is dependent
on certain contractually defined milestones being reached. Cost and estimated earnings includes
directly allocable costs (cost of materials, labor cost, and cost of services provided by third parties) as
well as the appropriate portion of production overheads and the estimated earnings.
Also included in cost and estimated earnings on uncompleted contracts are amounts that Dürr seeks
or will seek to collect from customers or others for errors or changes in contract specifications or
design, contract change orders in dispute or unapproved as to both scope and price, or other customerrelated causes of unanticipated additional contract costs, claims and pending change orders. These
amounts are recorded at their estimated net realizable value when realization is probable and can be
reasonably estimated. No profit is recognized on the costs in connection with these amounts. Pending
change orders involve the use of estimates. Therefore, it is reasonably possible that revisions to the
estimated recoverable amounts of recorded pending change orders will be made in the future. Any
litigation costs incurred in this respect are expensed as incurred.
The percentage-of-completion method is based on the use of estimates. Due to the uncertainties
inherent in the estimation process, it is reasonably possible that completion costs, including those
arising from contract penalty provisions and final contract settlements, will need to be subsequently
revised. Such revisions to costs and income are recognized in the period in which the revisions are
determined. Pending losses are recognized in the period in which they are first identified.
Project revenues due to delays, specification or design faults caused by the customer, cancellations,
pending changes in contract in terms of scope or price as well as other unforeseen costs are recognized when it is likely that these receivables will result in additional project revenues, and the amount
can be reliably estimated. Such additional project revenues are shown in the amount in which project
costs are incurred.
Shipping costs are included in the cost of sales.
Research and development
Research and development costs which are not incurred in connection with current long-term
expenses
contracts are expensed as incurred.
Advertising costs
Advertising costs amounted to € 5,101 thousand for the year ended December 31, 2002
(2001: € 5,238 thousand) and were expensed as incurred.
Concentrations of credit risk
Sales of the Group’s products are dependent on the economic conditions of the automotive industry.
A significant portion of the Group’s revenues is concentrated with a limited number of customers
because the worldwide market for automobiles is dominated by a small number of large corporations.
81
New accounting provisions
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, “Accounting for
Asset Retirement Obligations”. SFAS No. 143 establishes accounting requirements for retirement
obligations associated with tangible long-lived assets, including (1) the timing of the liability recognition,
(2) the initial measurement of the liability, (3) the allocation of asset retirement cost to expense,
(4) the subsequent measurement of the liability, and (5) the financial statement disclosures. SFAS
No. 143 is effective for fiscal years beginning after June 15, 2002 with early application encouraged.
Dürr will adopt SFAS No. 143 on January 1, 2003. However, it does not anticipate that adoption
of SFAS No. 143 will have a material impact on its net assets, its financial position or its results of
operations.
In April 2002, FASB released SFAS No. 145 “Rescission of FASB Statements 4, 44 and 64, Amendment
of FASB Statement 13 and Technical Corrections”. SFAS No. 145 requires that profits and losses arising
from the extinguishment of debt be recognized in operating income and no longer be recognized as
extraordinary items as previously required by SFAS No. 4, unless the profits and losses meet the criteria of extraordinary items defined by APB Opinion No. 30. In addition, SFAS No. 145 supplements
SFAS No. 13 “Accounting for leases” to the extent that any inconsistencies in the recognition and
measurement of sale-and-lease-back transactions and other contractual changes which have a similar
commercial effect to sale and lease back transactions should be treated similarly. With regard
to the rescission of SFAS No. 4, SFAS 145 must be applied to financial statements prepared after
May 15, 2002. Where it refers to SFAS No. 13, SFAS No. 145 must be applied to any transactions
occurring after May 15, 2002. The application of this statement does not have any impact on the
consolidated financial statements of Dürr.
Furthermore, in June 2002, FASB released SFAS No. 146 “Accounting for Costs Associated with Exit or
Disposal Activities” which rescinds Emerging Issues Task Force (EITF) Issue 94-3, “Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs
Incurred in a Restructuring)”. SFAS No. 146 requires that expenses resulting from the discontinuation or
sale of operations must not be recorded in income until there is a legal commitment to the third party
concerned and not on the date management decide on a plan for discontinuation or sale. These expenses
include certain severance payments to employees, costs for terminating contracts prematurely, and
expenses related to the merger or closure of operations or relocation of employees. SFAS No. 146 also
requires that the liability is measured at fair value and adjusted to accommodate estimated future
cash flows. The new standard is oriented to the future discontinuation or sale of operations occurring
after December 31, 2002. The Group adopted SFAS No. 146 on January 1, 2003.
In January 2003, FASB released Interpretation (FIN) No. 46 “Consolidation of Variable Interest Entities –
an interpretation of ARB No. 51” which clarifies the application of the consolidation requirement for
variable interest entities. After a preliminary review, Dürr found that FIN No. 46 does not have any
significant impact on the consolidated financial statements. However, it is not possible to make
a conclusive assessment of this issue at this stage owing to the complexity of the new standard.
82
2. Consolidation group
The Group is comprised of Dürr Aktiengesellschaft and 104 foreign and domestic subsidiaries (2001: 104).
The consolidated financial statements include seven companies in which minority interests are held
(2001: eight). Eight entities (2001: eight) are consolidated using the equity method. Five entities
(2001: five) are accounted for under the cost method of accounting. In the year ended December 31,
2002 four companies were included in the consolidated financial statements for the first time. Two
entities have been removed from the consolidation group. Two companies were no longer included
in the consolidation group, as they were merged with other entities in the consolidation group.
On January 1, 2002, Schenck Pegasus GmbH, Darmstadt (Germany) was split into two independent
entities allocated to the Measuring Systems business unit and Final Assembly Systems business
unit respectively. As all companies were under the common control of Dürr AG, this split has been
presented as a reorganization under common control. For this reason, the historical values for net
assets, financial position and results of operations have been presented as if the pooling of interests
method had been applied.
During the year ended December 31, 2002, the Final Assembly Systems business unit established
Dürr Production Systems Inc., Farmington, Michigan (USA), which is active in the fields of assembly
technology, transmission checking technology and injector pumps checking technology as well as
in wheel assembly systems.
During the year ended December 31, 2002, the Services business unit founded Premier Manufacturing
Support Services B.V. in Born (Netherlands), which offers services to accompany manufacturing
processes such as plant maintenance and service.
The financial statements of the consolidated companies are prepared as of December 31, 2002. Three
associated companies have different balance sheet dates. In these cases, the most recent financial
statements available as of December 31, 2001, March 31, 2002 and September 30, 2002 were considered. The time lag in reporting is consistent from period to period. Dürr does not anticipate any material
impact on the net assets, financial position and results of operations as a result of the inclusion of
more recent financial statements.
83
3. Mergers and acquisitions
The following acquisitions were recognized in the year ended December 31, 2001 using the purchase
method in accordance with APB Opinion No. 16 or SFAS No. 141. Assets and liabilities were accounted
for at fair values. The excess of the purchase price over the fair value of net assets acquired was
capitalized as goodwill. In the year ended December 31, 2002, Dürr stopped amortizing goodwill on
a scheduled basis pursuant to SFAS No. 142 (up to December 31, 2001, Dürr amortized goodwill
over a useful life of 40 years using the straight-line method). The consolidated statements of income
contain the results of the acquired companies from the date of acquisition.
Dürr AIS S.A.S.
On February 17, 2000, Dürr acquired a 50% investment in Alstom Automation S.A., Courbevoie (France)
(since belonging to Dürr AG, it was initially renamed Dürr AIS S.A. and then Dürr AIS S.A.S. in the year
ended December 31, 2002) for a price of € 7,000 thousand from Alstom S.A. The purpose of the company is the planning and erection of entire paint shops for automobile manufacturers and automotive
suppliers.
Dürr Systems GmbH, a 100 % subsidiary of Dürr AG, exercised the option granted in the purchase
agreement on April 30, 2001, and increased its ownership to 100 % by purchasing the remaining 50 %
of Dürr AIS S.A.S for a purchase price of € 7,000 thousand. The total purchase price including direct
acquisition costs was € 14,279 thousand.
In the agreement underlying this transaction, the parties agreed on both an amount of guaranteed
equity for Dürr AIS S.A.S. (including its subsidiaries) and a guaranteed gross margin for selected projects.
The actual amount of these guarantees is disputed by the parties Alstom S.A. on the one hand and
Dürr AG and Dürr Systems GmbH on the other. An arbitration hearing at the International Chamber
of Commerce (ICC), Paris, has been pending since May 2001. The final decision has not yet been
reached. As of December 31, 2002 and 2001, Dürr has recorded a receivable based on its claim against
Alstom S.A. Depending on the result of arbitration, the receivable may have to be adjusted with an
effect on income in further years.
The valuation of the net assets acquired from Alstom S.A. as of April 30, 2001 has not yet been
completed. The allocation of the purchase price to the purchased net assets was based on preliminary
assumptions, which have yet to be finalized.
The following table presents the sum of the value of the assets and liabilities acquired on February 17,
2000 accounted for through April 30, 2001 using the equity method of accounting for investments and
the fair market value of the remaining 50 % of the acquired assets and liabilities as of April 30, 2001.
Amounts in € k
Goodwill
Other fixed assets
Non-fixed assets
Liabilities assumed
Deferred taxes
94,003
5,030
216,244
– 294,497
– 7,859
12,921
84
Dürr AIS GmbH
Through its subsidiary Dürr Systems GmbH, Stuttgart (Germany), Dürr took over the development
center for the RoDip painting process in Butzbach (Germany) from ABB Ltd. as of January 1, 2001 with
an asset deal. This transaction resulted in € 6,483 thousand goodwill. Dürr also acquired a worldwide
license for RoDip from ABB Ltd. for US$ 18,000 thousand.
Schenck Test Automation Ltd.
On February 20, 2001, Dürr acquired Ricardo Test Automation Ltd., Worcester (Great Britain) through
its subsidiary Schenck Pegasus GmbH, Darmstadt (Germany) in exchange for € 5,497 thousand.
Thereafter, the company was renamed Schenck Test Automation Ltd. The resulting goodwill amounted
to € 4,222 thousand. The company designs testing systems for power train development.
Carl Schenck AG
During the year ended December 31, 2002, Dürr AG acquired a further 6,488 (approximately 0.42 %)
no-par value shares of Carl Schenck AG for € 924 thousand. As a result, Dürr held 95.95 % of the
shares in Carl Schenck AG as of December 31, 2002. During the year ended December 31, 2001,
Dürr AG had acquired a further 31,501 (approximately 2.03 %) no-par value shares of Carl Schenck AG
for € 5,347 thousand.
Carl Schenck AG and its subsidiaries are a global leader in the manufacture of systems and plants for
process control procedures, the automation of production processes and balancing of revolving parts
and assemblies.
Dürr Korea Inc.
On July 12, 2001, Dürr purchased further shares in Shinhang Dürr Inc., Seoul (South Korea), for KRW
1.6 billion and renamed the company Dürr Korea Inc. As of December 31, 2001, Dürr AG held 90 % of
the shares. The company produces and sells industrial painting equipment.
Pro forma amounts
The following unaudited pro forma summarized statements for the year ended December 31, 2001
represent the Group as if Dürr AIS S.A.S. had already been acquired by companies of the Dürr Group
at the beginning of the year ended December 31, 2001. No presentation of the effects of other
acquisitions has been made on grounds of immateriality. The pro forma amounts for the year ended
December 31, 2001 include amortization of the goodwill arising on acquisition and the interest
expenses on acquisition debt. The pro forma amounts do not include any possible synergies from
mergers and acquisitions. The pro forma information is provided for comparative purposes only,
whereby the comparability is limited, as the structures of the acquired entities have changed since
acquisition. The pro forma information does not necessarily reflect the actual results that would have
occurred, nor is it necessarily indicative of future results of operations of the combined companies.
2001
Amounts in € k (unaudited)
Pro forma net sales
2,275,527
Pro forma income before income taxes and minority interests
35,505
Pro forma net income
15,015
Pro forma basic earnings per share in €
1.05
Pro forma diluted earnings per share in €
1.05
85
4. Personnel expenses
The following personnel costs are included in the expense positions of the consolidated statements
of income:
2002
2001
Wages and salaries
523,182
527,591
Social security contribution
123,898
119,813
647,080
647,404
8,574
7,750
Amounts in € k
Thereof pension costs
5. Selling, administrative and
Selling, administrative and other operating expenses are comprised of the following:
other operating expenses
2002
2001
Selling expenses
152,122
156,599
Administrative expenses
136,274
152,722
–
9,864
37,643
21,320
326,039
340,505
Amounts in € k
Other operating expenses
Other operating expenses mainly consist of write-downs of non-fixed assets of € 3,064 thousand
(2001: € 2,307 thousand), foreign currency transaction losses of € 6,435 thousand
(2001: € 3,263 thousand), and additions to other accruals of € 686 thousand (2001: € 528 thousand).
6. Other operating income
Other operating income includes gains on disposal of property, plant and equipment of € 395 thousand (2001: € 1,966 thousand), income from rental and lease agreements of € 343 thousand
(2001: € 1,211 thousand), income from the release of accruals of € 6,326 thousand (2001: € 5,804 thousand), income from the release of allowances of € 775 thousand (2001: € 546 thousand), and foreign
currency transaction gains of € 6,124 thousand (2001: € 3,121 thousand).
7. Financial income
(expense), net
Investment result
Other interest and similar income
86
2002
2001
782
177
Amounts in € k
6,498
8,018
Interest and similar expenses
– 32,450
– 43,885
Net interest
– 25,952
– 35,867
Financial income (expense), net
– 25,170
– 35,690
8. Income taxes
Income before income taxes and minority interests amounts to € 22,620 thousand
(2001: € 39,790 thousand).
Income taxes can be broken down as follows:
2002
2001
Amounts in € k
Current taxes
Germany
2,544
3,458
Foreign
6,677
16,034
– 4,216
– 61
Deferred taxes
Germany
Foreign
4,347
266
9,352
19,697
The income taxes include the domestic federal corporate income tax including a solidarity surcharge
and trade taxes on income. Comparable taxes of foreign legal entities are also shown under this
position.
Due to the Tax Reduction Act passed in October 2000, the German corporate income tax rate was 25 %
plus a solidarity surcharge of 5.5 % thereon for the year ended December 31, 2002. This results in
a nominal tax rate of 26.4 % on income. Including German trade tax, the total tax burden amounted
to 39 % (2001: 39 %).
Deferred taxes have been recognized as of December 31, 2001 at the German companies of the Dürr
Group using a total tax rate of 39 %.
In September 2002, the law to assist flood victims was passed which provides for a one-off increase in
the tax rate for fiscal 2003 from 25 % to 26.5 %. For this reason, as of December 31, 2002, a total tax
rate of 40.2 % is used related to differences reversing during the year ended December 31, 2003 and
39 % for differences reversing in later periods.
The following table shows the reconciliation of expected income taxes to the reported tax expense
using the German corporate tax rate of 39 %.
2002
2001
8,822
15,518
Amounts in € k
Expected expense for income taxes
Foreign tax rate differential
– 4,809
1,618
–
3,646
Non-deductible expenses
2,356
3,063
Changes in valuation allowance on
deferred tax assets
3,467
– 7,096
–
2,489
Current taxes from prior years
Non-deductible amortization of goodwill
Other
– 484
459
Actual expense for income taxes
9,352
19,697
87
Deferred tax assets and liabilities are summarized as follows:
2002
2001
As of December 31, amounts in € k
Intangible assets
1,180
2,041
Property, plant and equipment and investments
2,832
1,645
Inventories and receivables
20,598
20,094
Tax loss carryforwards
31,719
22,179
Accruals
9,550
5,534
Liabilities
15,721
19,239
81,600
70,732
Valuation allowance
– 7,803
– 7,078
Deferred tax assets
73,797
63,654
Intangible assets
8,896
4,867
Property, plant and equipment and investments
25,642
23,650
Inventories and receivables
17,729
18,550
5,870
3,029
Accruals
Other
790
437
Deferred tax liabilities
58,927
50,533
Net deferred tax assets
14,870
13,121
Deferred tax assets and liabilities are shown in the consolidated balance sheets as follows:
2002
Amounts in € k
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets
(liabilites)
2001
Total
> 1 year
Total
> 1 year
64,744
25,997
53,273
6,236
– 49,874
– 25,136
– 40,152
– 22,670
14,870
861
13,121
– 16,434
As of December 31, 2002, the tax loss carryforwards amounted to € 81,561 thousand
(2001: € 54,663 thousand), of which € 66,776 thousand (2001: € 43,263 thousand) do not expire.
Loss carryforwards of € 8,776 thousand (2001: € 3,513 thousand) must be realized by 2007 at
the latest and loss carryforwards of € 6,009 (2001: € 7,887 thousand) by 2012 at the latest. The Group
also has German trade tax loss carryforwards totaling € 65,028 thousand (2001: € 42,793 thousand),
which do not expire.
As of December 31, 2002, deferred tax assets in the amount of € 12,514 thousand (2001: € 9,579 thousand) and deferred tax liabilities of € 15,858 thousand (2001: € 18,305 thousand) were recorded on
consolidation entries.
88
9. Intangible assets,
Details regarding the changes in the Group’s intangible assets and property, plant and equipment
net and property, plant
are presented in the consolidated fixed assets schedule in note 23 “Development of fixed assets”.
and equipment, net
Amortization of licenses, patents and similar rights came to € 6,666 thousand (2001: € 5,851 thousand),
and depreciation of property, plant and equipment to € 27,347 thousand (2001: € 28,391 thousand).
No residual book values were assumed when calculating the amortization on licenses, patents, and
similar rights acquired during the year ended December 31, 2002. The weighted average useful life for
licenses, patents, and similar rights acquired in the year ended December 31, 2002 is 5.7 years. The
estimated amortization of intangible assets for each of the next five years amounts to € 6,877 thousand,
€ 5,551 thousand, € 4,517 thousand, € 4,428 thousand, and € 3,259 thousand.
The following table presents the movements in goodwill by business unit for the Dürr Group as
of December 31, 2000, 2001 and 2002.
Final
Paint
Assembly
Systems
Systems
Ecoclean
Services
Measuring
Systems
Dürr Group
36,313
64,718
22,480
68,618
78,703
270,832
2,174
1,152
347
1,068
1,087
5,828
100,347
4,694
–
–
3,710
108,751
Amounts in € k
Book value at 12/31/2000
adjustment
Additions in 2001
– 3,258
– 721
– 771
– 1,885
– 3,229
– 9,864
135,576
69,843
22,056
67,801
80,271
375,547
adjustment
– 2,986
– 3,145
– 3,223
– 10,020
– 1,798
– 21,172
–
–
–
–
724
724
Amortization in 2001
Adoption of SFAS No. 142
Additions in 2002
–
198
–
–
241
439
132,590
66,896
18,833
57,781
79,438
355,538
Four (2001: four) buildings were capitalized as capital leases. Dürr is not legal proprietor of these
buildings. The depreciation expense recorded on these buildings is included in the depreciation
of property, plant and equipment, net. The following table shows the acquisition cost and accumulated
depreciation for these buildings reported under property, plant and equipment, net.
2002
2001
Historical cost
20,078
20,518
Accumulated depreciation
– 6,512
– 5,362
Net book value
13,566
15,156
89
10. Investments
Associated companies are listed in note 24 “Schedule of investment holdings”, including the ownership
percentage in capital stock, shareholders’ equity and net sales. € 5,760 thousand (2001: € 5,760 thousand)
of goodwill relating to investments in associated companies is included in investments. In the year
ended December 31, 2002, no amortization was recorded on this goodwill (2001: € 145 thousand).
11. Inventory, net
Inventory is comprised of the following:
2002
2001
51,090
62,647
Raw materials and manufacturing supplies
Finished goods
Prepayments to suppliers
Reserve for obsolescence
6,124
5,635
58,932
49,060
– 8,801
– 9,495
107,345
107,847
Raw materials and manufacturing supplies and finished goods are stated at the lower of cost or
market as of balance sheet date. Raw materials and manufacturing supplies of € 33,748 thousand
(2001: € 38,969 thousand) are recognized at average cost and € 8,449 thousand (2001: € 13,118 thousand) using the FIFO (“First In, First Out”) method.
12. Receivables and
Receivables and other assets, net are comprised of the following:
other assets, net
2002
2001
450,773
521,221
Trade receivables, net
Trade receivables from associated companies
Cost and estimated earnings in excess of billings
Other assets
5,618
6,140
231,290
261,833
83,422
83,898
771,103
873,092
The majority of the Group’s trade receivables, net are to automobile manufacturers worldwide. Generally,
these receivables are not secured by bank guaranties or other collateral. The receivables for the
year ended December 31, 2002 include valuation allowances for doubtful debts of € 13,712 thousand
(2001: € 11,030 thousand). As of December 31, 2002, 49.4 % (2001: 45.9 %) of the trade receivables,
net were due from six (2001: four) customers.
Cost and estimated earnings
The following table provides a summary of cost and estimated earnings and the related invoiced
on uncompleted contracts
amounts for all projects.
2002
2001
Cost and estimated earnings
Less billings
90
378,583
427,176
– 573,437
– 463,648
– 194,854
– 36,472
These amounts are offset on a project-by-project basis and are included in either receivables or liabilities
(see note 17 “Liabilities”).
2002
2001
Cost and estimated earnings in excess of billings
231,290
261,833
Billings in excess of cost and estimated earnings
– 426,144
– 298,305
– 194,854
– 36,472
Other assets mainly consist of tax receivables, amounts due from suppliers, receivables from employees,
and indemnification receivables.
€ 764,818 thousand (2001: € 870,464 thousand) of the receivables and other assets, net are due
within one year.
13. Shareholders’ equity
Capital stock
As of December 31, 2002, the capital stock was € 36,603 thousand and divided into 14,298,200 common
shares, issued to bearer.
Each share represents € 2.56 of the capital stock.
Authorized capital
By resolution of the annual shareholders’ meeting on May 31, 2001, the Board of Management is
(Dürr AG)
authorized through May 30, 2006 to increase capital stock by a total of up to € 16,219,904 through
the issuance of up to 6,335,900 shares of voting common stock or nonvoting preferred stock, each
representing € 2.56 of capital stock, in exchange for cash.
Conditional capital
Furthermore, on May 30, 2001, the shareholders authorized the Board of Management, with the
(Dürr AG)
approval of the Supervisory Board, to increase capital stock by a total of up to € 10,240 thousand
through the issuance of up to 4 million shares of common stock or preferred stock, each representing
€ 2.56 (conditional capital I) of capital stock. The conditional capital increase can be used to issue
convertible bonds with a nominal value of up to € 102,400 thousand, which can have a term up to
15 years. The authorization is granted through May 30, 2006.
In conjunction with the Dürr International Stock Option Plan, the Board of Management is further
authorized to increase capital stock by up to € 2,560 thousand through the issuance of up to 1 million
common shares, each representing € 2.56 (conditional capital II) of capital stock.
Dividends
The amount of dividends available for distribution to shareholders is regulated by German Stock
Corporation Law (Aktiengesetz), and is based upon the income of Dürr AG as reported in its statutory
financial statements prepared in accordance with German GAAP (HGB). Dürr AG management will
propose to the annual shareholders’ meeting a distribution of € 11,439 thousand (€ 0.80 per share)
of the 2002 income of Dürr AG as a dividend to the shareholders and € 5,608 thousand be carried
forward.
91
Accumulated other
The changes in the components of other comprehensive income (loss) for the year ended
comprehensive income
December 31, 2002 and the related tax effects are as follows:
2002
Amounts in € k
2001
Pretax
Tax effects
Net
Pretax
Tax effects
Net
– 14,448
5,729
– 8,719
– 12,743
4,970
– 7,773
6,662
– 2,611
4,051
1,621
– 632
989
– 7,786
3,118
– 4,668
– 11,122
4,338
– 6,784
– 22,230
–
– 22,230
4,448
–
4,448
Net losses on derivatives hedging
variability of cash flows
Unrealized derivative losses
Reclassification adjustments for
losses included in net income
Net derivative losses
adjustment
Additional minimum
pension liability
Other comprehensive loss
– 121
47
– 74
66
– 26
40
– 30,137
3,165
– 26,972
– 6,608
4,312
– 2,296
14. Stock-based compensation
Dürr International Stock
By resolution dated May 30, 2001, the annual shareholders’ meeting authorized the Board of Manage-
Option Plan (DISOP)
ment of Dürr AG to establish and implement a stock option plan. Under this plan, the Company is
authorized to issue 1 million shares.
Out of this resolution, options were granted to managers of the Company and some affiliated
companies (the participants). The option entitles the participants to subscribe for one ordinary share
in the Company at a defined exercise price. The defined exercise price is the average closing price
(€ 23.75) of the shares in Dürr AG on the XETRA of the Frankfurt Stock Exchange on the 10 trading
days immediately preceding the grant date, reduced by the aggregate value of dividends per share
between the grant date and when the shares are exercised.
In order to participate in the plan, the managers invested in the Company’s shares. The participants
have been granted five options for every two purchased shares.
The option will lapse on the earlier of the fifth anniversary of the grant date or when the participant
ceases to be employed by the Company or any of its affiliated companies.
The option may only be exercised after the expiration of a two year waiting period, and if one of the
defined performance targets has been met. The defined performance targets are as follows:
1. Outperformance with regard to the CDAX-Machinery (stock exchange index) between the grant
date and the expiry of the waiting period. Outperformance is given when the increase of the
Dürr AG share from the beginning to the end of the defined period is higher than the respective
increase of the index.
92
2. Average increase of 10 % of the earnings per share (EPS) in the period beginning at the end of
the last fiscal year before the grant date and ending at the end of the last fiscal year before the
waiting period expires.
The options can only be exercised during the exercise window of 15 German banking days following
the publication of the quarterly reports or the annual financial statements by the Board of Management.
Dürr did not issue any further options in terms of the stock option program in the year ended
December 31, 2002 to participants (2001: 106,195; grant date: November 1, 2001). During the year
ended December 31, 2002, 11,400 options were forfeited.
The following table summarizes the status of the Group’s stock options as of December 31, 2002.
2002
2001
94,795
106,195
As of December 31
Outstanding options
Number
Weighted average remaining life
Years
3.83
4.83
Weighted average exercise price
in €
22.65
23.75
–
–
–
–
2002
2001
Pensions
53,142
51,692
Taxes
13,990
20,063
243,792
259,683
310,924
331,438
241,759
264,153
Exercisable options
Number
Weighted average exercise price
15. Accruals
in €
Accruals are summarized as follows:
Other accruals
Thereof current
Other accruals are mainly comprised of post-contract costs, anticipated losses on transactions,
warranties, legal costs and personnel accruals.
16. Pensions and other
postemployment benefits
Pension entitlements have been granted to the members of the Board of Management of Dürr AG and
the members of the Board of Management and general managers of German subsidiaries based on
salary and years of service with the Group.
Workers who were employed at the German locations in Filderstadt and Wyhlen at the time their companies were acquired were entitled to pension benefits. The pensions are based on years of service.
The payments foreseen by the pension plans are calculated on fixed amounts plus an element that is
93
dependent on years of service. In addition, the pension benefits available to the employees of the
domestic Dürr subsidiaries include a life insurance program (BZV) of € 593 thousand in line with the
tariff group.
The valuation of German pension obligations uses the 1998 Heubeck mortality tables.
The US subsidiaries of Dürr have pension plans covering all non-union employees at these subsidiaries.
The plan provides benefits based on a career average earnings formula.
The US subsidiaries contribute to pension funds for union employees. The pension expenses for these
employees during the year ended December 31, 2002 amounted to approximately € 923 thousand
(2001: € 715 thousand).
In addition, Dürr’s US subsidiaries have a “401(k)” profit sharing plan for certain employees. The benefits
are based on years of service and the employees’ compensation. The Group’s contribution is discretionary and is determined annually by management. The Group’s contribution expense during the year
ended December 31, 2002 was approximately € 2,165 thousand (2001: € 1,080 thousand).
The following tables present further information on these plans:
2002
2001
Projected benefit obligation at beginning of year
73,578
62,074
Foreign currency exchange rate differences
– 3,431
192
–
6,277
3,609
4,192
4,220
4,109
Changes in projected benefit obligation
Business combinations
Service cost
Interest cost
Actuarial gains or losses
– 5,507
– 948
Benefits paid
– 4,214
– 2,793
Other
Projected benefit obligation at end of year
75
475
68,330
73,578
2002
2001
20,908
19,124
Change in plan assets
Fair value of plan assets at beginning of year
Foreign currency exchange rate differences
Business combinations
34
–
451
Actual return on plan assets
– 233
869
Employer contributions
1,270
1,101
– 1,139
– 671
18,173
20,908
Benefits paid
Fair value of plan assets at end of year
94
– 2,633
2002
2001
Funded status*
50,157
52,670
Unrecognized actuarial net gains (losses)
2,148
– 1,444
Unrecognized prior service costs
– 934
– 1,144
Other
– 351
–
51,020
50,082
Net amount recognized
* Difference between the projected benefit obligation and the fund’s assets
For plans which have unfunded accumulated benefit obligations in excess of plan assets at the end
of the period, the accumulated benefit obligation is € 48,156 thousand and the fair value of plan assets
is € 461 thousand.
The net amount recognized is in the following balance sheet captions:
2002
2001
Intangible assets
– 1,699
– 661
Prepaid expenses
– 108
– 755
Other comprehensive income
– 315
– 194
Pension accruals
53,142
51,692
Net amount recognized
51,020
50,082
2002
2001
Components of net periodic pension costs were as follows:
Amounts in € k
Service cost
3,609
4,192
Interest cost
4,220
4,109
– 1,575
– 1,547
55
271
Expected return on plan assets
Amortization of unrecognized items
Other
Net periodic pension cost
235
27
6,544
7,052
The following averages were used to calculate pension commitments:
2002
2001
Discount rate
5.76
6.07
Expected long term return on plan assets
7.25
8.00
Rate of compensation increase
2.98
3.48
In %
Weighted average assumptions
95
17. Liabilities
Liabilities consist of the following:
Total
Amounts in € k
Liabilities to banks
(2001)
Billings in excess of cost and
estimated earnings
(2001)
Accounts payable
(2001)
Payables to associated companies
(2001)
Other liabilities
(2001)
December 31, 2002
(December 31, 2001)
Of which become due
< 1 year
1 < x < 5 years
> 5 years
353,774
114,798
233,548
5,428
(439,639)
(151,949)
(133,071)
(154,619)
426,144
411,880
14,264
–
(298,305)
(242,885)
(55,420)
(–)
222,908
222,831
77
–
(267,809)
(267,755)
(54)
(–)
6,086
6,086
–
–
(3,051)
(3,051)
(–)
(–)
143,513
100,651
37,398
5,464
(148,724)
(126,890)
(14,607)
(7,227)
1,152,425
856,246
285,287
10,892
(1,157,528)
(792,530)
(203,152)
(161,846)
In the year ended December 31, 2001, Dürr secured a term loan (“syndicated loan”) with Deutsche
Bank AG, Landesbank Baden-Württemberg, Deutsche Bank Luxembourg S.A. and other banks
of € 200,000 thousand and US$ 50,000 thousand. As of December 31, 2002, € 100,000 thousand
(2001: € 140,000 thousand) and US$ 40,000 thousand (US$ 50,000 thousand) were outstanding.
Variable interest based on EURIBOR and LIBOR is payable quarterly or on demand.
Further, Dürr has secured a revolving credit facility with Deutsche Bank AG, Landesbank BadenWürttemberg, Deutsche Bank Luxembourg S.A. and other banks in the amount of US$ 50,000 thousand
in 2001. The credit facility is payable no later than 2006. As of December 31, 2002, US$ 50,000 thousand
(2001: US$ 35,000 thousand) were outstanding. Variable interest based on EURIBOR and LIBOR is
payable quarterly or on demand.
The loan and revolving line of credit are secured by pledges of shares in subsidiaries with net assets
of € 144,404 thousand (2001: 125,687 thousand).
The agreements with the consortium of banks contain certain covenants which require the Group
to maintain financial ratios at the end of each calendar quarter. If a non-compliance event should occur,
the consortium of banks could demand repayment with a two-thirds majority. As of December 31, 2002,
all financial ratios had been maintained.
At December 31, 2002, Dürr had lines of credit at various banks totaling € 999,590 thousand
(2001: € 1,107,057 thousand). Under the credit arrangements, the Group has the option to borrow
amounts at various interest rates. Use of the credit lines is unrestricted, except for € 50,000 thousand
(2001: € 50,000 thousand) which is to be used for acquisitions.
96
Aggregate amounts of liabilities to banks maturing during the next five years and thereafter are as
follows:
2003
2004
2005
2006
2007
Thereafter
114,798
22,582
27,225
133,197
50,544
5,428
Amounts in € k
All lines of credit can be summarized as follows:
2002
Total credit lines available to the Group
999,590
Drawings on lines of credit
353,774
Thereof due within one year
114,798
Thereof due after one year
238,976
€ 120,746 thousand (2001: € 199,534 thousand) of liabilities to banks are payable in US dollars and
€ 5,582 thousand (2001: € 14,954 thousand) in pounds sterling. The remaining amounts are generally
payable in euros. Loans of € 17,838 thousand (2001: € 19,048 thousand) are secured by mortgages.
Total interest costs for the period amounted to € 32,450 thousand (2001: € 44,029 thousand), none
of which were capitalized (2001: € 144 thousand). The weighted average interest rate for short-term
liabilities to banks as of December 31, 2002 was 4.19 % (2001: 5.10 %).
In addition to the syndicated loan, Dürr took out a number of loans from various banks. These loans
have terms of between one and 18 years, are charged interest once every three or six months (between
3.75 % and 6.72 % p. a. or the three-month or six-month EURIBOR plus 0.60 % / 0.50 % respectively)
and some are secured by liens on land.
Other liabilities
Other liabilities primarily contain social security liabilities of € 16,165 thousand (2001: € 15,153 thousand),
tax liabilities of € 37,954 thousand (2001: € 37,205 thousand), obligations under capital leases of
€ 12,861 thousand (2001: € 13,161 thousand), and derivative financial instruments of € 27,750 thousand
(2001: € 19,508 thousand).
97
18. Segment information
The Dürr Group is comprised of a strategic management holding and five business units (2001: five),
differentiated by products and services. A new business unit, Final Assembly Systems, has been created
out of the Automotion business unit reported in the year ended December 31, 2001.
The business units have global responsibility for their products and results. The Dürr Group is made
up of the following business units:
Paint Systems
The Paint Systems business unit plans and manufactures products and systems for large-scale
production line painting for automotive producers and suppliers.
The Final Assembly Systems business unit – formerly Automotion – was established at the beginning
of 2002 and organizationally bundles the activities of the Dürr Group as a provider of products and
systems for the final assembly of automobiles. The activities of the Development Test Systems product
line, formerly allocated to the Automotion business unit until the end of 2001, have been carried under
the Measuring Systems business unit since January 1, 2002.
Certain prior year amounts have been restated, corresponding to the new organizational structure.
Services
The Services business unit offers manufacturing support services such as plant maintenance for the
global automotive industry.
Ecoclean
The Ecoclean business unit is a specialist for integrated systems for cleaning parts and coolant recycling
as well as automation technology used to interlink processes.
Measuring Systems
The Measuring Systems business unit organizationally bundles the measurement technology activities
of the Schenck Group. It comprises the product lines: Balancing (balancing and diagnostic systems),
Weighing/Feeding (measuring and process systems) and, since the beginning of 2002, Development
Test Systems (testing systems for vehicle development). Development Test Systems was allocated
to the former Automotion business unit until the end of 2001. Schenck Fertigungs & Service GmbH
is the main supplier of components and services for all other divisions of the Schenck Group.
Certain prior year amounts have been restated, corresponding to the new organizational structure.
Corporate Center comprises other fully consolidated companies.
The principles underlying the Group’s management reporting and controlling are the same as those
in the consolidated financial statements according to US-GAAP. The Group measures the performance
of its business units by income before taxes in accordance with the disclosure in the consolidated
statements of income.
Revenues related to transactions between the business units are generally recorded at values that
approximate the prices that would be offered to independent third parties. Revenues are allocated to
regions generally based on the location of the customer. Business unit assets and long-lived assets
are allocated on the basis of the location of the subsidiary reporting these assets.
98
In the following tables, disclosures are made on the business units for the years ended December 31, 2002 and 2001.
Final
Paint
Assembly
Measuring
Corporate
Systems
Systems
Services
Ecoclean
Systems
Center
Dürr Group
1,044,292
305,960
143,603
210,170
378,112
–
2,082,137
10,057
98,777
306
11,685
7,777
–
1,054,349
404,737
143,909
221,855
385,889
–
23,305
10,001
7,488
10,384
– 4,527
– 24,031
22,620
675,755
314,103
106,000
156,453
407,157
130,833
1,790,301
Amounts in € k
2002
Revenues with
external customers
Revenues with other
business units
Total revenues
Business unit assets
128,602*
2,210,739
12,014
2,761
4,340
6,085
4,180
22
29,402
12,763
4,483
3,287
3,154
9,542
837
34,066
Employees as of Dec. 31, 2002
2,837
1,609
4,272
1,079
3,046
59
12,902
1,068,629
325,743
133,218
253,955
414,624
–
2,196,169
25,901
99,463
775
23,353
14,308
–
1,094,530
425,206
133,993
277,308
428,932
–
34,607
6,343
7,686
14,665
1,452
– 24,963
39,790
Business unit assets
760,932
336,569
113,436
192,038
388,876
43,833
1,835,684
10,539
11,462
5,848
2,823
9,201
551
40,424
16,362
5,142
3,071
4,237
10,680
4,670
44,162
Employees as of Dec. 31, 2001
2,952
1,631
3,727
1,084
3,224
57
12,675
2001
Revenues with
external customers
Revenues with other
business units
Total revenues
163,800*
2,359,969
* These sales were eliminated in the Group
Sales with third parties and long-lived assets break down by region as follows:
Other
North/
Other EU
European
Central
South
Africa/
Asia/
Germany
countries
countries
America
America
Australia
Dürr Group
2002
517,411
592,457
75,701
567,014
70,609
258,945
2,082,137
2001
445,969
523,452
185,418
723,207
159,891
158,232
2,196,169
Amounts in € k
Revenues with
external customers
Long-lived assets
2002
188,093
141,939
5,725
243,210
7,603
8,335
594,905
2001
186,816
138,378
6,340
271,352
13,024
9,338
625,248
99
Sales with a major customer amounted to 12.6 % of consolidated net sales in the year ended
December 31, 2002 and 20.2 % in the year ended December 31, 2001. The revenues were reported
by the business units Services, Final Assembly Systems, Paint Systems, Ecoclean and Measuring
Systems. Another major customer also accounted for 12.6 % of consolidated net sales in the year
ended December 31, 2002 and 12.9 % in the year ended December 31, 2001 allocated among the
Paint Systems, Final Assembly Systems, Ecoclean, Measuring Systems and Services business units.
Entities known to be under common control are considered as a single customer.
19. Related party
transactions
Dr.-Ing. E. h. Heinz Dürr is the main shareholder and Chairman of the Supervisory Board of Dürr AG.
Dr.-Ing. E. h. Heinz Dürr is also a member of the Administrative Board of Landesbank Baden-Württemberg. Joachim Schielke is a member of the Supervisory Board of Dürr AG and a member of the Board
of Management of Landesbank Baden-Württemberg. The Group has various loans and lines of credit at
Landesbank Baden-Württemberg totaling € 97,891 thousand (2001: € 102,884 thousand). Drawings on
these lines of credit amounted to € 10,734 thousand (2001: € 25,095 thousand).
Dr. Tessen von Heydebreck is a member of the Supervisory Board of Dürr AG and also a member of
the Board of Management of Deutsche Bank AG. Dürr has received various loans and lines of credit
totaling € 118,641 thousand (2001: € 123,634 thousand). Drawings on these lines of credit amounted
to € 17,718 thousand (2001: € 35,601 thousand).
See note 17 “Liabilities” for further details regarding the various loans from Landesbank BadenWürttemberg and Deutsche Bank AG.
The Group’s derivative financial instruments and interest rate swaps are mainly transacted through
Deutsche Bank AG and Landesbank Baden-Württemberg. We refer to note 21 “Financial instruments”
for details on the forward exchange transactions and interest rate swaps.
The Board of Management confirms that all the above transactions with related parties were performed
at arm’s length conditions.
20. Other financial obligations
Rental and lease agreements
The Group companies lease plants, office space and automobiles at a range of locations. The contracts
terminate at various dates between 2003 and 2018. Future minimum payments up to the earliest
possible contractually agreed termination is as follows:
2003
2004
2005
2006
2007
Thereafter
Total
16,050
17,328
16,036
12,410
9,358
43,085
114,267
2,162
2,094
2,050
1,917
1,839
8,391
18,453
Amounts in € k
Non-cancellable leases
Capital leases
Total related rent expenses in the year ended December 31, 2002 amount to € 34,116 thousand
(2001: € 27,590 thousand). The interest portion for the total minimum payments for capital leases
amounts to € 5,592 thousand (2001: € 7,144 thousand); the repayment portion amounts to € 12,861 thousand (2001: € 13,161 thousand), of which € 1,561 thousand (2001: € 1,632 thousand) are short-term.
100
Other financial commitments
The other financial commitments that do not result from rental and lease agreements are listed below.
2003
2004
2005
2006
2007
Thereafter
Total
36,093
19,960
10,458
10,635
10,788
28,447
116,381
Amounts in € k
Other long term
purchase commitments
Risks
Dürr operates in countries where political and economic commercial risks exist. The effects of such
risks are, with today’s perspective, not known and are therefore not included in the accompanying
consolidated financial statements.
Dürr may be involved in lawsuits, including product liability, in the normal course of business. There
are no such matters pending that the Board of Management expects to be material in relation to the
Group’s business, financial position, or results of operations. Legal costs are expensed as incurred.
There is litigation pending related to a tax field audit conducted in 2000. A demand for back-tax of
€ 900 thousand plus possible interest is currently being negotiated. The Board of Management estimates
the chances of the Group winning the litigation as more likely than not. The legal fees associated with
the case are expensed as incurred.
Dürr has litigation before a court of arbitration regarding its acquisition of Dürr AIS S.A.S. Dürr believes
it is probable that Dürr will be successful in winning its material claims.
At the hearing on March 3, 2003, the court of arbitration appointed an independent expert.
21. Financial instruments
Use of financial instruments
The Group uses derivative financial instruments to reduce the impact of changes in foreign exchange
rates and interest rates on its cash flows and changes in the fair values of assets and liabilities. Interest
swaps are also used to optimize the net interest payments. Dürr is exposed to credit loss in the event
of non-performance by the other parties (financial institutions) to the financial instruments described
below.
All derivatives as well as the related transactions are subject to daily internal controls and valuation
in line with a policy set by the Board of Management. Derivatives are only entered into with banks with
a good credit rating. Interest rate swaps are entered into only with German banks.
The use of derivative contracts is limited to the economic hedge of known business risks.
Fair values
The book values and fair values of the major financial instruments as of December 31, 2002 and 2001
are as follows:
2002
Debt to banks
Interest rate swaps
Foreign currency exchange forward contracts
2001
Book value
Fair value
Book value
Fair value
– 353,774
– 356,185
– 439,639
– 441,640
– 27,363
– 27,363
– 18,747
– 18,747
3,093
3,093
– 1,891
– 1,891
101
The fair value of financial derivatives has been estimated on the basis of the following methods and
assumptions:
The fair value of cash and cash equivalents, receivables, short term investments and liabilities approximate their book values owing to their short term liquidity. For long term debt, the fair value is estimated
based on the current rates offered to the Group for debt with the same or similar remaining maturities
and terms. For foreign currency exchange forward contracts, the fair values were estimated on the basis
of the difference between the contractually agreed exchange rates and forward rate prevailing on
the balance sheet date. The fair values of the interest rate swaps are estimated as the present value
of expected future cash flows.
Accounting and disclosure
Dürr adopted SFAS No. 133 on January 1, 2001. The cumulative change in accounting principles recorded
of derivative financial
in “Accumulated other comprehensive income” was a loss of € 1,021 thousand (net of € 652 thousand
instruments and hedge
in tax). The cumulative effect recorded in the consolidated statement of income was immaterial.
accounting (SFAS No. 133)
Foreign currency exchange forward contracts and interest rate swaps are recognized in the consolidated
balance sheet at fair value. If the criteria for hedge accounting are fulfilled, the instruments are
accounted for as cash flow hedges as described in the following paragraph. Otherwise, the changes
in market value are recorded in the consolidated statement of income at each balance sheet date.
Cash flow hedges
The Group uses interest rate swaps to hedge the effect of the change in market interest rates on interest
payments for existing and forecasted debt to banks. In addition, foreign currency exchange forward
contracts were entered into in the year ended December 31, 2002 to hedge against exchange rate fluctuations on cash flows from purchase and sales transactions. The effective portion of the change in
market value of interest rate swaps and foreign currency exchange forward contracts classified as
cash flow hedges is recorded through accumulated other comprehensive income. When the hedged
transaction affects income the amount from the interest swaps and forward exchange transactions
recorded in “Accumulated other comprehensive income” is reclassified into interest expense (interest
swaps) and cost of sales (foreign currency exchange forward contracts) in the income statement.
Due to the ineffectiveness of interest swaps, a net loss of € 369 thousand (2001: net loss of € 54 thousand) was recorded for the year ended December 31, 2002. It is anticipated that € 3,813 thousand
(2001: € 3,087 thousand) of net losses included in “Accumulated other comprehensive income” at
December 31, 2002 will be reclassified into income during the next 12 months due to the realization
of the hedged interest payments and purchase and sales transactions. As of December 31, 2002, Dürr
had entered into derivative financial instruments with a maximum maturity of 48 (2001: 50) months
to hedge its exposure to changes in interest and foreign exchange rates associated with forecasted
transactions.
22. Additional local
disclosure requirements
Conditions for exemption in
As a publicly traded company, Dürr AG makes use of the option to prepare exempting consolidated
accordance with Sec. 292a
financial statements according to an internationally recognized set of accounting standards instead of
of the German Commercial
according to German GAAP as set forth in Sec. 292a HGB.
Code (HGB)
102
Exemption pursuant to
Premier Manufacturing Support Services GmbH & Co. KG, Frankfurt/Main (Germany), has made use
Sec. 264b HGB
of the exemption option from the preparation of financial statements pursuant to Sec. 264b HGB.
Exemption from the need
The company Ingenieria Agullo S.A., Barcelona (Spain) has made use of the exemption option from
to prepare consolidated
the preparation of consolidated financial statements pursuant to Spanish law.
financial statements for a
Spanish sub-group
Main differences between
The main differences between US-GAAP and German GAAP (HGB) as these pertain to the consolidated
US-GAAP and German GAAP
financial statements of Dürr AG are listed below.
(HGB)
The German and US accounting systems are based on fundamentally different considerations. While
accounting according to HGB emphasizes the principle of prudence and the protection of creditors, the
prime objective of US accounting is to provide information of relevance to investors for the decisionmaking process.
The comparability of the financial statements, both between fiscal years and between different
companies, as well as the determination of profits on an accrual basis are accorded more importance
under US-GAAP than under HGB.
Accruals (SFAS No. 5, SFAS No. 87 and SFAS No. 88)
In US accounting practice, accruals are generally not shown separately but under liabilities. To satisfy
the provisions of the corresponding EU directive, Dürr still discloses accruals separately in the balance
sheet, contrary to American accounting practice.
In US accounting, the possibilities to recognize accruals are far more restricted than under HGB.
Accruals have to be recognized when an obligation exists towards a third party, its utilization is probable
and the anticipated accrual amount can be reliably estimated.
Accruals for future expenses are not permitted under US-GAAP.
Under US-GAAP, pension accruals – unlike under German accounting principles – are determined taking
anticipated wage and salary increases into account. For calculation purposes, the US-GAAP figure
includes the market interest rates of the countries concerned and not the discount rate of 6 % applicable
in German tax law.
Goodwill (SFAS No. 142)
Under US-GAAP, goodwill must be capitalized and reviewed annually for impairment, or whenever there
is any indication of impairment. Pursuant to HGB, goodwill can be amortized on a regular basis or offset
against equity. These options are not permitted by US-GAAP.
Unrecognized profits (SFAS No. 52 and SFAS No. 133)
Under HGB, the principle of imparity requires that only unrealized losses are recognized, while under
US-GAAP, unrealized gains must also be recognized. This difference is particularly evident in the recog-
nition of unrealized gains from end-of-period valuation of amounts denominated in foreign currencies
and derivative financial instruments.
Long-term construction contracts (SOP 81-1 and ARB Opinion No. 45)
Under German law, revenues and expenses in connection with long-term construction contracts are
recorded according to the principle of realization. Under US-GAAP, they are recognized according to the
percentage-of-completion method.
103
Leasing (SFAS No. 13 and SFAS No. 98)
Under US-GAAP, leased assets are capitalized by the economic owner and not the legal owner. With the
capital lease, the risks and rewards from the ownership of the leased asset largely lie with the lessee
although the lessee does not have legal title to the asset. Under US-GAAP, such a capital lease is treated
similarly to a purchase. This means that the lessee capitalizes the leased asset and shows a liability in
the same amount while the lessor posts a receivable from sales financing and revenues from the sale
of the leased asset.
Deferred taxes (SFAS No. 109)
Under US-GAAP, deferred tax assets and liabilities have to be recognized that result from temporary
differences between tax carrying values and the carrying values in the consolidated balance sheet. Due
to the reduced future tax payments, tax loss carryforwards represent an economic benefit. Therefore,
when the loss arises, the future (deferred) tax benefit has to be capitalized subject to its realizability.
Derivative financial instruments (SFAS No. 133, SFAS No. 137 and SFAS No. 138)
According to US-GAAP, all derivative financial instruments must be recognized at fair value. Special
accounting treatment, in which fluctuations in fair values are recognized in “Accumulated other comprehensive income” rather than directly affecting income, is permitted when specific restrictive criteria
are met. The application of hedge accounting depends on the nature of the underlying transactions
and financial instruments used for hedging those transactions. If the criteria for hedge accounting are
not met, the fluctuations in fair value of the derivatives are posted to income in the period of occurrence. Global macro hedges do not qualify for hedge accounting under US-GAAP.
Minority interests
HGB follows the entity theory, which requires that minority interests be classified as a part of equity. In
addition, the income or loss attributable to minority interest is included in the consolidated entity’s
net income or loss. Under US-GAAP, in accordance with the parent company theory, minority interests
are not considered part of equity but are classified separately between equity and liabilities. The
income or loss attributable to minority interests is recorded as expense or income, and is therefore
excluded from the consolidated entity’s net income or loss.
German Corporate
The statement required by Sec. 161 of German Stock Corporation Law (AktG) was issued by the Board
Governance Code/Statement
of Management and the Supervisory Board of Dürr AG and Carl Schenck AG, and made available to
pursuant to Sec. 161 AktG
shareholders.
Other disclosures
Annual average number of employees:
2002
Industrial employees
5,720
5,658
Office employees
6,572
6,630
Trainees/apprentices
328
273
12,620
12,561
As of December 31, 2002, Dürr had 12,902 employees (2001: 12,675).
104
2001
Members of the Board of Management
Stephan Rojahn
Frank Haun
Chairman (since January 1, 2003,
(until March 31, 2003)
ordinary member since October 1, 2002)
Carl Mahr Holding GmbH
Carl Schenck AG* (since December 12, 2002,
Carl Schenck Machines en Installaties B.V.*
Chairman since February 1, 2003)
(until December 16, 2002)
Dürr Systems GmbH* (since January 1, 2003,
Dürr Ecoclean Inc.*
Chairman since January 20, 2003)
(until March 4, 2003, Chairman)
Dürr Ecoclean Inc.*
Ingenieria Agullo S.A.*
(since March 5, 2003, Chairman)
Interautomation Inc., USA*
Dürr Inc.* (since October 22, 2002, Chairman)
(until October 31, 2002)
Olpidürr S.p.A.* (since January 1, 2003)
Interautomation Inc., CAN* (Chairman)
Verind S.p.A.* (since January 1, 2003)
Nagahama Seisakusho Ltd.*
Schenck Avery Ltd.*
(until September 11, 2002)
Hans Dieter Pötsch
Schenck Canada Inc.*
Chairman (until December 31, 2002)
(until October 31, 2002, Chairman)
Schenck Corporation* (Chairman)
Bizerba GmbH & Co. KG
Schenck Ltd.* (Chairman)
Carl Schenck AG* (until December 5, 2002,
Schenck Motorama Inc.*
Chairman until June 28, 2002)
(until March 8, 2002, Chairman)
Dürr Systems GmbH*
Schenck Pegasus Corporation*
(until December 31, 2002, Chairman)
(until August 20, 2002, Chairman)
Gottlieb Gühring OHG (Chairman)
Schenck Polska Sp. z o.o*
Schuler AG
(until September 30, 2002)
Dürr AIS S.A.S.* (until June 28, 2002)
Schenck Slovakia spol. s r.o.*
Dürr Inc.* (until October 22, 2002, Chairman)
(until November 27, 2002)
Olpidürr S.p.A.* (until December 31, 2002)
Schenck spol. s r.o.* (until November 18, 2002)
Verind S.p.A.* (until December 31, 2002)
Schenck Test Automation Ltd.*
(until August 19, 2002)
SRH Systems Ltd.* (until October 21, 2002)
Dr. Wolfgang Baur
STIC-HAFROY S.A.*
Carl Schenck AG*
INTX AG* (Chairman)
Dr. Norbert Klapper
Competence Call Center AG
Dürr Systems Spain S.A.*
Goodex AG (until March 11, 2002)
Dürr Inc.*
Premier Manufacturing Support Services L.P.*
Premier Manufacturing Support Services L.P.*
Total remuneration for members of the Board
Dr. Reinhold Grau
of Management came to € 2,187 thousand in the
year ended December 31, 2002. Remuneration
Dürr AIS S.A.S.* (until June 28, 2002)
of € 203 thousand was paid to former members
Dürr Ltd.*
of the management. The pension accrual for
Dürr Systems Spain S.A.*
this group came to € 2,183 thousand as of
Olpidürr S.p.A.*
December 31, 2002.
Verind S.p.A.*
Member in statutory supervisory boards
Member of comparable domestic and foreign boards
* Group mandate
105
Members of the Supervisory Board
Dr.-Ing. E. h. Heinz Dürr1
Benno Eberl2
Entrepreneur, Berlin
Trade Union Secretary of IG Metall administrative
Chairman
offices, Stuttgart
Benteler AG
ThyssenKrupp Aufzüge GmbH
Dussmann AG & Co. KGaA
(Deputy Chairman)
Krone GmbH (Chairman)
ThyssenKrupp Elevator AG (Deputy Chairman)
Stinnes AG
Carl-Zeiss-Stiftung (Commissioner)
Landesbank Baden-Württemberg
Prof. Dipl.-Ing. Jörg Menno Harms
(Member of the Administrative Board)
Chairman of the Managing Board of Hewlett
Packard GmbH and Holding GmbH, Böblingen
Peter Weingart1
Heraeus Holding GmbH
Jenoptik AG
of Dürr AG, Stuttgart
Württembergische Hypothekenversicherung AG
Deputy Chairman
CA Leuze GmbH & Co. KG
(Member of the Administrative Board)
Dürr Systems GmbH* (Deputy Chairman)
Groz Beckert KG (Deputy Chairman)
Prof. Dr. Norbert Loos1, 2
Dr. Tessen von Heydebreck
Managing Partner of
Loos Beteiligungs-GmbH, Stuttgart
of Deutsche Bank AG, Frankfurt /Main
Deputy Chairman
BASF AG
Behr GmbH & Co. (Deputy Chairman)
BVV Versicherungsverein des
BWK GmbH
Bankgewerbes a.G.
Unternehmensbeteiligungsgesellschaft
Deutsche Bank Privat- und
Carl Schenck AG*
Geschäftskunden AG*
(Chairman June 29, 2002 – January 31, 2003)
Dt. Euroshop AG*
Dr. Haas GmbH (Chairman)
DWS Investment GmbH*
Hans R. Schmid Holding AG (Chairman)
Gruner + Jahr AG
LTS Lohmann Therapie-Systeme AG
Deutsche Bank Polska S.A.* (Chairman)
(Chairman)
Deutsche Bank OOO, Moscow* (Chairman)
TDS Informationstechnologie AG
Deutsche Bank Rt., Budapest* (Chairman)
Trumpf GmbH + Co. KG
Deutsche Bank Luxembourg S.A.* (Chairman)
LTS AG, USA (Chairman)
EFG Eurobank Ergasias S.A.
Lieselotte Dedek-Fried 2
Member of the Works Council
of Schenck RoTec GmbH, Darmstadt
106
Werner Kramp
Dr. Heinz Gerd Stein2
Business consultant, Duisburg
of Carl Schenck AG, Darmstadt
Until September 30, 2002, Member of the Board
of Management of ThyssenKrupp AG, Duisburg
and Essen
Peter Krüger
Manager of Commercial Order Processing
AXA Versicherung AG
of Dürr Systems GmbH, Stuttgart
Bankgesellschaft Berlin AG
Howaldtswerke-Deutsche Werft AG
Landesbank Berlin – Girozentrale –
Günter Lorenz1
WILO AG
Principal Authorized Representative of IG Metall
Evangelisches und Johanniter Klinikum
administrative offices, Darmstadt
Duisburg/Dinslaken/Oberhausen gem. GmbH
Hülskens Holding GmbH & Co.
Siemens VDO Automotive AG
Institut für Management und Technologie IMT
Berlin GmbH
INTAC International, Inc.
Joachim Schielke
Kunststoffwerk Philippine GmbH & Co. KG
Member of the Board of Management of
(Chairman)
Landesbank Baden-Württemberg, Stuttgart
Saarpor Klaus Eckhardt GmbH Neunkirchen
Kunststoffe KG (Chairman)
ICS Informatik Consulting Systems AG
Thumann & Heitkamp Verwaltungs-GmbH
Internationales Bankhaus Bodensee AG
ThyssenKrupp Budd Company
(Chairman)
ThyssenKrupp Elevator Holding Corp.
Süd Private Equity Management
GmbH & Co. KGaA (Chairman)
MKB Mittelrheinische Bank GmbH
(Deputy Chairman)
MMV Leasing GmbH (Deputy Chairman
Total remuneration for members of the
of the Advisory Board)
Supervisory Board amounted to € 392 thousand
Rehabilitationsklinik Bad Wurzach GmbH
for the year ended December 31, 2002.
1
Member of the Mediation Committee and Personnel Committee
Member of the Audit Committee
Member in statutory supervisory boards
Member of comparable domestic and foreign boards
* Group mandate
2
107
23. Development of fixed assets
Intangible assets
Licenses,
patents and
Goodwill
similar rights
Prepayments
Total
354,375
55,724
240
410,339
439
11
–
450
Additions
–
12,693
–
12,693
Disposals
–
3,033
–
3,033
724
– 545
–
179
Amounts in € k
Acquisition and manufacturing cost
at 1/1/2002
Changes in consolidation group
Reclassifications
Acquisition and manufacturing cost
at 12/31/2002
355,538
64,850
240
420,628
Accumulated amortization
at 1/1/2002
–
25,689
43
25,732
–
3
–
3
Additions
–
6,666
53
6,719
Disposals
–
2,450
–
2,450
Reclassifications
–
176
–
176
Accumulated amortization
at 12/31/2002
–
30,084
96
30,180
Net book value at 12/31/2002
355,538
34,766
144
390,448
375,547
31,935
226
407,708
Property, plant and equipment
Other
Land and buildings
equipment,
Prepayments
including buildings
Machines and
furniture and
and construction
on land of others
equipment
fixtures
in progress
Total
198,798
76,028
137,521
1,579
413,926
Amounts in € k
Acquisition and manufacturing
cost at 1/1/2002
–
–
75
–
75
4,713
6,098
14,988
3,603
29,402
Disposals
876
3,151
9,842
1,104
14,973
Reclassifications
159
830
– 606
– 562
– 179
202,794
79,805
142,136
3,516
428,251
58,905
54,850
102,284
–
216,039
–
–
11
–
11
Additions
6,680
6,153
14,514
–
27,347
Disposals
1,525
2,779
8,838
–
13,142
79
78
– 333
–
– 176
Additions
cost at 12/31/2002
at 1/1/2002
Reclassifications
at 12/31/2002
108
64,139
58,302
107,638
–
230,079
138,655
21,503
34,498
3,516
198,172
150,967
23,494
38,695
1,756
214,912
Investments
Investments
in associated
Other
Marketable
companies
investments
securities
Other loans
Total
Amounts in € k
cost at 1/1/2002
19,001
2,129
553
2,005
23,688
Additions
596
–
27
203
826
Disposals
146
25
22
45
238
–
–
21
– 21
–
19,451
2,104
579
2,142
24,276
Reclassifications
cost at 12/31/2002
at 1/1/2002
1,609
200
–
–
1,809
Additions
–
–
–
–
–
Disposals
–
–
–
–
–
at 12/31/2002
1,609
200
–
–
1,809
17,842
1,904
579
2,142
22,467
18,404
1,929
559
2,581
23,473
109
24. Schedule of investment holdings
The schedule of investment holdings of Dürr AG contains selected companies pursuant to Sec. 313 (2) No. 4 HGB.
Employees
(closing date
Shareholders’
Name and headquarters
excluding
Ownership
equity
Net sales
%
€k
€k
trainees)
100
163,816
354,151
1,165
Germany
Dürr Systems GmbH, Stuttgart
Dürr Automotion GmbH,
100
30,100
173,645
354
Dürr Environmental GmbH, Stuttgart1
100
5,100
24,442
45
INTX AG, Stuttgart1
100
4,994
–
4
Dürr Ecoclean GmbH, Filderstadt1
100
57,700
114,710
348
Dürr Ecoclean International GmbH, Stuttgart1
100
313,802
–
–
Dürr Holding GmbH, Stuttgart1
100
52
–
–
100
100
–
–
161
Dürr Ecoservice GmbH,
110
Stuttgart1
Stuttgart1
Premier Manufacturing Support Services
GmbH & Co. KG, Frankfurt/Main
100
– 883
4,774
Dürr AIS GmbH, Butzbach1
100
2,498
40,056
95
Dürr Somac GmbH, Chemnitz1
100
500
31,743
144
DSEngineering GmbH, Darmstadt1
100
938
6,713
53
Carl Schenck AG, Darmstadt
96
96,681
–
56
Schenck Pegasus GmbH, Darmstadt1
96
6,430
69,962
341
Schenck RoTec GmbH, Darmstadt1
96
9,225
80,294
481
Schenck Process GmbH, Darmstadt1
96
11,249
70,853
425
Schenck Fertigungs & Service GmbH, Darmstadt1
96
6,136
44,332
449
Waagen und Maschinen Ed. Schmitt & Cie. GmbH, Darmstadt1
96
5,076
–
–
Schenck Atis GmbH, Darmstadt1
96
512
–
–
Schenck Immobilien & Service GmbH, Darmstadt1
96
12,540
18,746
37
Schenck Final Assembly Products GmbH, Püttlingen1
96
5,981
79,870
338
Employees
(closing date
Shareholders’
excluding
Ownership
equity
Net sales
%
€k
€k
100
1,327
6,951
trainees)
Other EU countries
Dürr Anlagenbau GmbH, Zistersdorf/Austria
Schenck Ges.m.b.H., Braunau/Austria
79
96
523
4,567
36
Dürr Ltd., Warwick/Great Britain
100
4,898
45,758
107
Henry Filters (Europe) Ltd., Warwick/Great Britain
100
1,003
3,062
10
Premier Manufacturing Support Services (UK) Ltd.,
Warwick/Great Britain
100
1,389
21,190
664
96
4,016
19,935
56
Schenck Automation Systems Ltd., Banbury/Great Britain
96
1,225
12,620
38
Schenck Test Automation Ltd., Worcester/Great Britain
96
589
7,321
42
SRH Systems Ltd., Worcester/Great Britain
54
– 188
245
1
STIC-HAFROY S.A., Loué/France
100
21,418
49,808
316
Dürr Automotion S.A., Massy/France
100
5,858
28,964
123
Dürr AIS S.A.S., Courbevoie/France
100
2,292
188,841
262
96
2,852
24,573
50
Dürr Systems Spain S.A., San Sebastian/Spain
100
7,047
55,249
157
Ingenieria Agullo S.A., Barcelona/Spain
100
6,674
14,335
114
Industrias Schenck S.A., Madrid/Spain
96
2,166
10,113
41
Schenck Ltd., Banbury/Great Britain
Schenck S.A., Le Pecq/France
Olpidürr S.p.A., Novegro di Segrate/Italy
65
2,595
20,793
77
Verind S.p.A., Rodano/Italy
50
4,650
13,795
69
Polisistem S.r.l., Turin/Italy
29
1,364
1,763
14
CPM S.p.A., Beinasco/Italy
50
931
6,332
54
IMPIND S.p.A., Milan/Italy
100
339
–
–
96
197
4,848
24
95
Schenck Italia S.r.l., Paderno Dugnano/Italy
Premier Manufacturing Support Services L.P.,
Trollhättan/Sweden
100
1,864
3,736
Schenck Vaegt- og Maskinfabrik A.p.s., Copenhagen/Denmark
96
106
911
3
Carl Schenck Machines en Installaties B.V., Rotterdam/Netherlands
96
480
2,461
16
100
– 44
53
14
Premier Manufacturing Support Services B.V., Born/Netherlands
1
Profit-and-loss transfer agreement with respective parent company
First-time consolidation on January 1, 2002
3 Use of protective clause pursuant to Sec. 286 (3) sentence 1 No. 2 HGB as well as Sec. 313 (3) HGB
2
With reference to Sec. 286 (3) No. 2 HGB and Sec. 313 (3) HGB, no disclosures have been made regarding the subsidiaries of Dürr Inc., Plymouth, Michigan/ USA.
The schedule of investment holdings contains selected companies pursuant to Sec. 286 (3) No. 1 HGB and Sec. 313 (2) No. 4 HGB.
A complete list of investment holdings has been filed with the Commercial Register of the District Court of Stuttgart.
111
Employees
(closing date
Shareholders’
excluding
Ownership
equity
Net sales
%
€k
€k
96
16,331
–
–
Dürrpol Sp. z o.o., Warsaw/Poland
100
2,386
19,052
147
Premier Manufacturing Support Services Poland Sp. z o.o.,
Gliwice/Poland
100
1,317
5,119
308
96
485
3,350
23
Agullo Chekia, spol. s r.o., Oslavany/Czech Republic
100
1,101
1,973
36
Premier Manufacturing Support Services s r.o.,
Mladá Boleslav/Czech Republic
100
258
1,561
161
18
trainees)
Other European countries
Schenck Industrie-Beteiligungen AG, Glarus/Switzerland
Schenck Polska Sp. z o.o., Warsaw/Poland
Schenck spol. s r.o., Prague/Czech Republic
96
689
3,674
Schenck Slovakia spol. s r.o., Bratislava/Slovakia
96
193
939
8
Schenck Ukraina TOW, Kiev/Ukraine2
96
70
1,608
16
Dürr Inc., Plymouth, Michigan/ USA3
100
81,576
433,024
3.471
Dürr Automation Inc., Wixom, Michigan/ USA
100
19,118
55,676
121
Henry Filters Inc., Bowling Green, Ohio/ USA
100
17,486
22,921
82
H. R. Black Co. Inc., Warren, Michigan/ USA
100
3,561
5,616
19
Dürr Ecoclean Inc., Plymouth, Michigan/ USA
100
12,749
–
–
Behr Robotics Inc., Auburn Hills, Michigan/ USA3
100
–
–
–
Dürr Sigma Systems Inc., Wixom, Michigan/ USA3
100
–
–
–
Schenck Corporation, Deer Park, New York/ USA
96
28,562
–
3
Schenck RoTec Inc., Deer Park, New York/ USA
96
17,028
–
–
Schenck Turner Inc., Orion, Michigan/ USA
96
4,092
10,529
77
Schenck Trebel Corporation, Deer Park, New York/USA
96
15,185
16,384
69
Schenck Pegasus Corporation, Troy, Michigan/ USA
96
11,117
12,255
83
Schenck AccuRate Inc., Whitewater, Wisconsin/ USA
96
19,834
22,446
117
Schenck Motorama Inc., Farmington, Michigan/ USA
96
174
–
–
100
2,222
2,931
82
North America/Central America
Premier Manufacturing Support Services of Canada, Ltd.,
Alliston/Canada
112
Schenck Canada Inc., Toronto, Ontario/Canada
96
7,076
–
–
Interautomation Inc., Oakville, Ontario/Canada
96
1,468
8,079
47
Dürr de México, S.A. de C.V., Naucalpan de Juarez/Mexico
100
– 140
15,002
69
Productos Industriales, S.A. de C.V., Naucalpan de Juarez/Mexico
100
576
–
–
Employees
(closing date
Shareholders’
excluding
Ownership
equity
Net sales
%
€k
€k
100
3,732
24,557
116
96
2,537
8,959
108
100
134
2,719
13
96
257
2,894
24
trainees)
South America
Dürr Brasil Ltda., São Paulo/Brazil
Schenck do Brasil Indùstria e Comercio Ltda., São Paulo/Brazil
Africa/Asia/Australia
Dürr South Africa (Pty.) Ltd., Port Elizabeth/South Africa
Schenck Africa (Pty.) Ltd., Johannesburg/South Africa
Dürr India Private Ltd., Chennai/India
100
752
5,601
27
Schenck Avery Ltd., Noida (U.P.)/India
71
510
3,756
135
Schenck Jenson & Nicholson Ltd., Ranchi/India
48
3,197
3,575
206
Carl Schenck Singapore Pte., Ltd., Singapore/Singapore
96
74
408
3
Dürr Korea Inc., Seoul/South Korea
90
5,632
15,017
53
Schenck Korea Ltd., Seoul/South Korea
64
– 709
652
5
Dürr Paintshop Equipment and Engineering (Shanghai) Co. Ltd.,
Shanghai/China
100
3,068
13,038
70
Schenck Shanghai Testing Machinery Corporation Ltd.,
Shanghai/China
48
3,535
6,556
402
Schenck Shanghai Machinery Corporation Ltd.,
Shanghai/China
95
764
2,921
79
Dürr Japan K.K., Yokohama/Japan
100
97
113
5
Nagahama Seisakusho Ltd., Osaka/Japan
48
11,802
23,217
91
Schenck Australia (Pty.) Ltd., Gladesville/Australia
71
4,762
30,756
45
1
Profit-and-loss transfer agreement with respective parent company
First-time consolidation on January 1, 2002
3 Use of protective clause pursuant to Sec. 286 (3) sentence 1 No. 2 HGB as well as Sec. 313 (3) HGB
2
With reference to Sec. 286 (3) No. 2 HGB and Sec. 313 (3) HGB, no disclosures have been made regarding the subsidiaries of Dürr Inc., Plymouth, Michigan/ USA.
The schedule of investment holdings contains selected companies pursuant to Sec. 286 (3) No. 1 HGB and Sec. 313 (2) No. 4 HGB.
A complete list of investment holdings has been filed with the Commercial Register of the District Court of Stuttgart.
113
Dürr worldwide
Germany
Premier Manufacturing Support
Services GmbH & Co. KG
Stuttgart, phone: +49 -711-13 60
Dürr AG
Dürr Ecoclean GmbH
Filderstadt, phone: +49 -711-7 00 60
Carl Schenck AG
Darmstadt, phone: +49 - 61 51- 3 20
Fludicon GmbH
Darmstadt, phone: +49 - 61 51-2 79 86
INTX AG
Bietigheim-Bissingen, phone: +49 -71 42-7 80
Ochtrup, phone: +49 -25 53 - 92 70
Dürr AIS GmbH
Butzbach, phone: +49 - 60 33 - 8 05 00
Dürr Environmental GmbH
Schenck Fertigungs &
Service GmbH
Darmstadt, phone: +49 - 61 51- 32 20 61
Schenck Pegasus GmbH
Darmstadt, phone: +49 - 61 51-32 30 98
Schenck Process GmbH
Darmstadt, phone: +49 - 61 51- 3210 28
Schenck RoTec GmbH
Darmstadt, phone: +49 - 61 51- 32 2311
Premier Servicios de Soporte para
Manufacturas Argentina S.A.
Cap. Fed. Buenos Aires,
phone: +55 -11- 56 33 36 84
Brunswick, phone: +49 - 5 31-215 90
Brazil
Dürr Brasil Ltda.
São Paulo, phone: +55 -11- 56 33 35 00
Premier Brasil Servicos de Suporte
para Industria Ltda.
São Paulo, phone: +55 -11- 56 33 36 84
Schenck do Brasil Industria e
Comercio Ltda.
São Paulo, phone: +55 -11- 56 33 35 00
Canada
Services of Canada Ltd.
Alliston, phone: +1-7 05- 4 35 50 77
Grenzach-Wyhlen, phone: +49 -76 24 -3 10
DSEngineering GmbH
Darmstadt, phone: +49 - 61 51- 32 39 43
Australia
Schenck Australia (Pty.) Ltd.
Baulkham Hills, phone: +61-2- 98 9410 01
Belgrave, phone: +61-3- 97 54 66 33
Dürr Somac GmbH
Chemnitz, phone: +49 -3718 -12 20
Interautomation Inc.
Oakville, phone: +1-9 05 - 8 27 77 55
China
Darmstadt, phone: +49 - 6151- 32 42 01
Gladesville, phone: +61-2- 98 79 44 40
Schenck Final Assembly
Products GmbH
Püttlingen, phone: +49 - 68 98- 69 20
114
Schenck Ges.m.b.H.
Braunau, phone: +43 -77 22- 62 38 70
Argentina
Dürr Automotion GmbH
Paint Systems
Dürr Anlagenbau Ges.m.b.H.
Zistersdorf, phone: +43 -25 32-25 46
Monschau, phone: +49 -24 72- 8 30
Schenck Immobilien &
Service GmbH
Darmstadt, phone: +49 - 61 51- 32 27 84
Dürr Systems GmbH
Austria
Dürr Paintshop Equipment and
Engineering Co. Ltd.
Shanghai, phone: +86 -21- 6219 3719
Premier Automobile
Manufacturing Support Services
(Shanghai) Co. Ltd.
Shanghai, phone: +86 -21- 50 64 32 04
Carl Schenck AG
Beijing, phone: +86 -10 - 6512 35 95
Shanghai, phone: +86 -21- 0 64 7216 56
Services
Ecoclean
Measuring Systems
Schenck (Tianjin) Mineral
Systems Ltd.
Tianjin, phone: +86 -22- 88 35 0218
Great Britain
Dürr Ltd.
Warwick, phone: +44 -19 26 - 4188 00
CPM S.p.A.
Beinasco, phone: +39 - 011- 3 98 8411
Schenck Italia S.r.l.
Genoa, phone: +39 - 010 - 4199 55
Schenck Shanghai Machinery
Corporation Ltd.
Shanghai, phone: +86 -21- 62 65 96 63
Services (UK) Ltd.
Warwick, phone: +44 -19 26 - 47 40 50
Schenck Shanghai Testing
Machinery Corporation Ltd.
Shanghai, phone: +86 -21- 3 06 45 99
Henry Filters (Europe) Ltd.
Warwick, phone: +44 -19 26 - 47 40 30
Japan
Colombia
Schenck Automation Systems Ltd.
Banbury, phone: +44 -12 95 -251122
Dürr Japan K.K.
Yokohama, phone: +81- 45 - 4 75 36 71
Schenck Ltd.
Banbury, phone: +44 -12 95 -251122
Nagahama Seisakusho Ltd.
Osaka, phone: +81-7 26 - 96 33 01
Schenck Americas S.A.
Bogota, phone: +57-13- 60 33 70
Schenck Test Automation Ltd.
Worcester, phone: +44 -19 05 - 6133 61
Czech Republic
Services s r.o.
Mladá Boleslav, phone: +42- 03 -2 62 0215
SRH Systems Ltd.
Worcester, phone: +44 -19 05 - 6133 61
India
Denmark
Dürr India Pvt. Ltd.
Chennai, phone: +91- 44 - 4 32 36 20
Schenck Vægt- og
Maskinfabrik ApS
Bagsvaerd, phone: +45 - 44- 98 22 55
Dürr AIS S.A.S.
Courbevoie, phone: +33-1- 43 34 74 00
Dürr Automotion S.A.
Massy, phone: +33-1- 69 93 29 00
Paint Systems
Premier Manufacturing
Support Services de Mexico,
S. de R.L. de C.V.
Saltillo, phone: +52- 8 - 4 4416 86 87
Netherlands
France
Schenck S.A.
Le Pecq, phone: +33-1-30 0913 00
Mexico
Schenck Avery Ltd.
Noida, phone: +91-12 02- 56 3174 79
Schenck Jenson & Nicholson Ltd.
Ranchi, phone: +91- 6 51-29 07 34
Loué, phone: +33-2- 43 39 78 00
Schenck-TKS Test Systems Ltd.
Kanagawa, phone: +81- 4 27- 80 53 81
Dürr de Mexico S.A. de C.V.
Naucalpan de Juarez, phone: +52- 5- 5 53 291188
Schenck spol. s r.o.
Prague, phone: +42- 02- 33 09 4111
STIC-HAFROY S.A.
Paderno Dugnano, phone: +39 - 02- 9100 24 52
Italy
Olpidürr S.p.A.
Novegro di Segrate, phone: +39 - 02-70 2121
Polisistem S.r.l.
Turin, phone: +39 - 011- 6126 26
Verind S.p.A.
Rodano, phone: +39 - 02- 95 32 09 74
Services B.V.
Born, phone: +31- 46 - 4 89 42 87
Carl Schenck Machines en
Installaties B.V.
Rotterdam, phone: +31-10 - 411 75 40
Poland
Dürrpol Sp. z o.o.
Radom, phone: +48- 48 - 3 610100
Warsaw, phone: +48 - 22- 6 25 7106
Services
Ecoclean
Measuring Systems
Dürr worldwide
115
Services Poland Sp. z o.o
Gliwice, phone: +48 - 32-2 70 98 34
Schenck Polska Sp. z o.o.
Warsaw, phone: +48 -22- 6 65 4011
Spain
Dürr Systems Spain S.A.
Madrid, phone: +34 - 91- 5 5176 63
San Sebastian, phone: +34 - 9 43 - 3170 00
Valladolid, phone: +34 - 9 83 - 39 70 02
Russia
Dürr Systems GmbH, Moscow Office
Moscow, phone: +7- 0 95 - 9 26 06 26
Singapore
Carl Schenck Singapore Pte., Ltd.
Singapore, phone: +65 -7 75 80 98
Schenck Slovakia spol. s r.o.
Bratislava, phone: +42-12- 55 56 34 70
Somerville/NJ, phone: +1- 9 08 - 6 85 46 00
Dürr Inc.
Plymouth/MI, phone: +1-7 34- 4 59 68 00
Viladecans, phone: +34 - 93 - 6 47 25 25
Dürr Industries Inc.
Ingenieria Agullo S.A.
Barcelona, phone: +34 - 93 -2 921100
ACCO Systems Inc.
Warren/MI, phone: +1- 5 86 -7 55 75 00
Industrias Schenck S.A.
Madrid, phone: +34 - 91-7 4619 80
Dürr Production Systems Inc.
Farmington/MI, phone: +1-2 48 - 4 78 35 00
Services L.P.
Cincinnati/OH, phone: +1- 513 -7 3135 90
Sweden
Slovakia
Dürr Environmental Inc.
Services A.B.
Trollhättan, phone: +46 - 5 20 -7 93 61
Dürr Automation Inc.
Wixom/MI, phone: +1-2 48 - 9 60 46 30
Thailand
Henry Filters Inc.
Bowling Green/OH, phone: +1- 419 - 3 52 75 01
Services (Thailand) Co., Ltd.
Bangkok, phone: +86 -21- 50 64 32 04
H.R. Black Co. Inc.
Sterling Heights/MI, phone: +1- 5 86 -2 64 20 20
Ukraine
Schenck AccuRate Inc.
Deer Park/NY, phone: +1- 6 31-2 42 4010
South Africa
Dürr South Africa Ltd.
Port Elizabeth, phone: +27- 41- 3 63 58 88
Schenck Africa (Pty.) Ltd.
Johannesburg, phone: +27-11- 4 93 53 40
Schenck Ukraina TOW
Kiev, phone: +38 - 0 44 - 4 90 26 96
South Korea
Dürr Korea Inc.
Seoul, phone: +82-2- 5 69 22 44
Schenck Korea Ltd.
Seoul, phone: +82-2- 5 62 72 96
Whitewater/WI, phone: +1-2 62- 4 73 24 41
Schenck Pegasus Corporation
Troy/MI, phone: +1-2 48 - 6 89 90 00
USA
Behr Systems Inc.
Auburn Hills/MI, phone: +1-2 48 -745 85 00
Schenck Turner Inc.
Orion/MI, phone: +1-2 48 - 3 77 21 00
Dürr AIS Inc.
Wixom/MI, phone: +1-2 48 - 6 68 2100
Paint Systems
116
Services
Ecoclean
Measuring Systems
Publisher:
Dürr Aktiengesellschaft
Otto-Dürr-Strasse 8
70435 Stuttgart
Germany
Please contact us for
further information:
Dürr AG
Public & Investor Relations
Phone: + 49-7 11-1 36 17 85
Fax:
+ 49-7 11-1 36 17 16
E-mail: [email protected],
[email protected]
www.durr.com
The English translation of our
2002 Annual Report is based on
the original German version.
The German version shall prevail.
Design:
3st kommunikation, Mainz
Setting:
Knecht, Ockenheim
Printing:
Universitätsdruckerei u. Verlag
H. Schmidt GmbH & Co, Mainz
Binding:
Thalhofer, Schönaich
“ethabind“ jacket, patented

1.6 MB

Transcription

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