09.402 KHS_MR 2008_engl.qxd
Transcription
09.402 KHS_MR 2008_engl.qxd
MANAGEMENT REPORT 2008 AT A GLANCE: KHS WORLD 2008 The global economic downturn reached the mechanical engineering industry in the course of the business year 2008, causing a decline in incoming orders at KHS World (i.e. the KHS Group plus the KHS Beverages companies). The negative EBT figure resulted above all from precautionary depreciation and risk provisions for the Chinese subsidiary. The equity ratio is an encouraging 44%. KHS WORLD AT A GLANCE KHS Group KHS Beverages companies 2008 Incoming orders Revenues Order backlog Employees at year end Personnel costs Revenue per employee EBITDA EBIT EBT Investments Depreciation Balance sheet total Shareholders’ equity Equity ratio * = Individual values, not consolidated € million € million € million Number € million € thousand € million € million € million € million € million € million € million % 756 911 267 5,256 245 173 29 -11 -18 55 18 635* 278 44 2008 72 75 29 434 23 173 7 2 2 56 5 141* 100 71 KHS World KHS Group Change 2008 2007 in % 828 986 296 5,690 268 173 36 -9 -16 111 23 773 378 47 957 996 410 5,111 229 195 55 40 34 27 15 637 289 45 -21.0 -8.5 -34.9 2.8 7.0 -11.3 -47.3 -127.5 -152.9 103.7 20.0 -0.3 -3.8 -3.0 09 GROUP MANAGEMENT REPORT FOR KHS WORLD 09 10 11 12 15 16 18 20 20 21 22 Business Operations and Macroenvironment Net Assets, Financial Position, and Results of Operations Investments Research and Technology Quality Management Environmental Protection Employees Further Information Risk Report Forecast Report Events since the End of the Business Year 26 REPORT BY THE SUPERVISORY BOARD 30 FINANCIAL STATEMENTS FOR KHS WORLD 30 32 36 Balance Sheets for KHS World Income Statement for KHS World FURTHER INFORMATION 36 37 38 41 KHS Group Companies KHS Beverages Companies Supervisory Board, Executive Management Board, and their Mandates Publisher’s Notes 04 The Executive Management Board Left to right: Georg Michels Dr.-Ing. Johann Grabenweger Burkhard Becker Volker Till Roland Flach (Chairman) 05 As a leading global supplier of filling and packaging technology for over 140 years, LONG-TERM STRATEGY of corporate activity. Our success is based on a SUSTAINABLE TRIO of economic performance, ecological KHS pursues a responsibility, and social commitment. Only lasting financial gain enables a company to invest in new equipment, in research and development, and above all in the EXPERT KNOWLEDGE OF ITS EMPLOYEES. Qualitative and permanent growth has top priority – as opposed to merely striving for short-term profits. We consistently gear our business activities towards one goal: namely that of offering our customers worldwide products and services in PREMIUM QUALITY – anytime and anywhere. The KHS Group has always supported ecological economic principles. These involve the careful handling of resources, recognizing the ecological implications of all of our projects, processes, and developments in good time, and incorporating these into our plans accordingly. KHS’ ENERGY MANAGEMENT CONCEPT defines and optimizes extensive potential energy savings and operating costs in practically all processes and product variants – not least through facilities sited close to the customer throughout the globe. Our SOCIAL COMMITMENT focuses on people. The highest demand for quality, total reliability, and a deep sense of trust have forged a long-term bond between our clients and us. Our staff are the company’s most important resource. It is in these people that the Group’s technical, ECONOMIC AND ECO- LOGICAL EXPERTISE has manifested itself over decades. We thus encour- age the competence and commitment of those employed by us, for they are the key to our long-lasting success. Machines and systems for more SUSTAINABILITY 06 IN ORDER TO USE LESS ENERGY ... we make extensive use of mechanics in our Innoket 360 labeler, rendering an energy-consuming vacuum system for the autosplicer superfluous. 07 08 INTRODUCTION/MANAGEMENT REPORT KHS WORLD INTRODUCTION Given that the audited annual financial state- In the future, the situation of the KHS Group ments of KHS AG and the main KHS companies have and of the KHS Beverages companies will be alterna- been included in the consolidated financial state- tively disclosed in a separate management report for ments of Klöckner-Werke AG, Duisburg, and of KHS World. Reporting is based on the figures in the Salzgitter AG, Salzgitter, which were based on IFRS annual financial statements of the individual compa- standards, the Executive Management Board of KHS nies and essentially on the consolidation principles AG has decided on cost grounds not to prepare finan- that have also been applied in previous years. cial subgroup statements for the KHS Group as from the business year 2008. The main companies in the KHS Group and the KHS Beverages (PET) companies brought into However, it should be noted in this regard that simplified intercompany consolidation, without capital consolidation, is carried out between the KHS Group and the KHS Beverages companies. Klöckner-Werke AG in the business year 2008 are The annual financial statements of the com- included in the Filling and Packaging Technology seg- panies included in the management report are gen- ment in the consolidated financial statements for erally audited by external auditors. Klöckner-Werke AG and in the Technology Division in The figures given under the heading of KHS the consolidated financial statements for Salzgitter World are the combined figures of the KHS Group AG. The respective annual financial statements have and the KHS Beverages companies. For reasons of been issued as an unqualified auditor’s report. simplicity, the previous year’s figures (2007) denote the figures for the KHS Group only. 09 MANAGEMENT REPORT BUSINESS OPERATIONS AND MACRO- In the past business year, the KHS Group ENVIRONMENT recorded €756 million in incoming orders, signifying With effect from April 2, 2008, the Beverages com- a year-on-year decline of €201 million or 21%. panies were taken over by the Rank Group from However, a severe decline of more than 40% Salzgitter Mannesmann PET Technologie GmbH, a was inflicted on the Eastern European business that subsidiary of Salzgitter Mannesmann GmbH (a wholly had grown disproportionately thanks to the boom in owned subsidiary of Salzgitter AG). The product previous years. China and India fared similarly. Com- portfolios of KHS AG and in particular of KHS Cor- pared to the previous year, the regions of North poplast GmbH & Co. KG are complementary. Joint America and Southern Europe/Africa were stable, or handling of the market resulted in initial successes improved slightly. already being achieved in 2008. In a business combination agreement dated In the business year 2008, the KHS Beverages companies recorded €72 million in incoming orders July 31, 2008, the KHS Beverages companies were incorporated in Klöckner-Werke AG, Duisburg, by Salzgitter Mannesmann GmbH, Salzgitter; operational management of the Beverages companies is REVENUE BY SEGMENT the responsibility of KHS AG. The crises afflicting the property and financial markets have had severe impacts on the global economy in recent months. 34% Carbonated beverages 14% Other beverages In the first months of 2008, mechanical engineering and plant construction were able to with- 4% Food & non-Food stand the global decline, but the downturn is now affecting these industries as well. Markets are facing an uncertain future, with the result that postponements of investment projects have had a sustained and detrimental impact on the incoming orders received by the KHS Group and the KHS Beverages companies in the second half of 2008. Incoming orders for KHS World amounted to €828 million in the business year 2008. 48% Beer 10 MANAGEMENT REPORT KHS WORLD The EBT of the KHS Beverages companies for during the period from April 2, to December the business year 2008 is €1.8 million. In total, KHS 31, 2008. Demand in the last quarter fell short of expec- World thus produced a negative EBT of €16.5 million. The balance sheet total for KHS World is tations because of the global financial crisis. Many potential customers shelved their projects for the time €773 million. Of that total, €635 million stems from the being. Despite significant growth in service provision, KHS Group, whose balance sheet is therefore at the the total volume of incoming orders fell. same level as in the previous year (€637 million). However, there were a number of changes NET ASSETS, FINANCIAL POSITION, AND within the balance sheet. On the asset side, non-cur- RESULTS OF OPERATIONS rent assets rose as a result of investments by €22 mil- In the business year 2008, KHS World generated lion, whereas current assets fell by €24 million. €986 million in revenue. This decline in current assets is mainly down In the KHS Group, revenues amounted to €911 million, or €85 million below the prior-year fig- to lower trade receivables and to a reduction in receivables from Klöckner-Werke AG. ure of €996 million. This drop in revenues is mainly Despite the fall in shareholders’ equity to attributable to the negative effects of the global eco- €278 million, resulting from the net loss for the year, nomic crisis during the second half of the year and the equity ratio for the KHS Group is still an impres- had a noticeable impact on KHS Group earnings. sive 44%. However, the negative EBT of €18.3 million The decrease in shareholders’ equity is offset is principally due to the special effects of precaution- on the equity and liabilities side by an increase in non- ary write-downs and provisions for risk in the Chinese current liabilities of around €3 million and by a €5 subsidiary KHS China GLM2 Co. Ltd., Shantou (China) million rise in current liabilities. Whereas trade payable fell by around €25 that reduced profits by a total of €28.5 million. At €75 million, the revenue of KHS Beverages companies was underpinned by a high level of orders million, financial liabilities increased by approximately €17 million. The greater risks associated with the business on hand at the beginning of the year and by a posi- macroenvironment are reflected in a higher level of tive growth in demand. provisions, which were increased by a total €18 million. The balance sheet total of the KHS Beverages KEY EARNINGS FIGURES companies rose to €141 million. This increase is KHS World KHS Group Change mainly attributable to the acquisition of IP rights as 2008 2007 in % part of the takeover by Salzgitter Mannesmann Incoming orders 828 957 -13.5 GmbH. This IP acquisition was initially financed by a Revenues 986 996 -1.0 EBITDA 36 55 -34.5 By a resolution adopted on June 5, 2008, the EBIT -9 40 -122.5 debt owed to the partner was brought into the com- EBT - 16 34 -147.1 pany as a capital contribution, and added to capital € million loan provided by the limited partner. reserves. 11 The equity ration is 66% (previous year: 35%). tem amounted to €22 million. Business is normally KHS AG received a €70 million intercompany conducted in euros. credit line from Salzgitter Mannesmann GmbH, Salzgitter, for the business year 2009. As at December 31, 2008, €34 million of the intercompany credit INVESTMENTS facility had been utilized. Investments totaling €111 million were made by KHS According to current estimates, there is therefore sufficient liquidity for the operative business of World in the business year 2008. Intangible assets include goodwill resulting from the merger of KHS Asbofill GmbH, as well as KHS AG. The KHS Beverages companies are likewise capitalized development costs for product innovation. financed using the cash pooling system of Salzgitter The focus of investing activities with respect Mannesmann GmbH. The current credit line has not to fixed assets was on IT and on various construction been utilized to date. As at December 31, 2008, the measures at the sites in Dortmund and Worms. The financial receivables owed by Salzgitter Mannesmann construction work in Dortmund pertained mainly to GmbH (the cash pool leader) from the cash pool sys- the head office complex; at the Worms plant, a new BALANCE SHEET KHS WORLD ASSETS BALANCE SHEET KHS WORLD EQUITY AND LIABILITIES € million € million 800 773 700 267 700 637 600 165 500 400 400 300 300 200 200 506 2008 472 2007 637 600 500 100 773 800 378 289 131 122 2007 Non-current assets Shareholders’ equity of which intangible assets: €121 million, tangible assets: €131 million Non-current liabilities Current assets Current liabilities of which inventories: €159 million, trade receivables: €273 million 264 226 100 2008 of which provisions: €101 million, financial liabilities: €28 million of which provisions: €56 million, trade payables: €110 million 12 MANAGEMENT REPORT KHS WORLD assembly building was built. Mention should be also Neuss, KHS Corpoplast GmbH & Co. KG, Hamburg, made here of a patent acquired for the new drive KHS Moldtec GmbH & Co. KG, Essen, KHS Plasmax technology in the current KL series of labeling GmbH, Hamburg, and KHS Hensen Packaging GmbH, machines. Verden, made various measures in the way the KHS Expertpack GmbH, Korbach, and KHS Hensen Technology Division is organized necessary. These Packaging GmbH, Verden, were acquired by KHS AG included the standardization of processes, a reduc- in order to reinforce expansion of the new Flexible tion in the number of components required, the use Packaging Division. of standardized norms, and the definition of suitable The acquisition of KHS Asbofill GmbH by KHS AG has strengthened our joint activities in the field of aseptic filling. interfaces, enabling the different CAD systems to communicate with those in use at KHS. Both Expertpack GmbH and KHS In 2008, the KHS product portfolio was Asbofill GmbH were merged with KHS AG in the cur- streamlined by standardizing in some product areas, rent business year. with other product ranges extended and completed. The volume of investments made by the KHS Two main priorities were set in the eighty different Beverages companies was €56 million, most of which development projects. One of these was to cut pro- – €55 million – was for acquisition of IP rights in con- duction costs, in order to remain competitive in the nection with the takeover of the Beverages compa- face of falling prices; the other was the further func- nies by Salzgitter Mannesmann GmbH. tional development of the various products. Particular attention was paid to the aspect of sustainability of KHS machines. This is much appreciated by KHS RESEARCH AND TECHNOLOGY customers. Prime concerns here are a substantial At the start of the last business year, the KHS Tech- reduction in media consumption, the careful use of nology Division was reorganized. By condensing resources, and a reduction in energy requirements. the various engineering and design sectors, such as These developments are constantly supplemented by development and plant construction and conversion, regular consultations and talks with our customers. and by including documentation in the Technology In addition to its major new developments, Division, the capacities of our employees were used the KHS Technology Division has close ties to associ- with greater flexibility than in previous years. An ations, technical universities, and educational institu- internal exchange of knowledge and expertise has tions for the packaging and beverage industries. As thus been set up. part of this collaboration, courses and diploma and These organizational measures ensure that in dissertation theses suggested by the KHS Technology future products will be consistently developed in tune Division are regularly assigned, the practical aspect of with the market and that possible conversion and which is studied at KHS. There are also frequent upgrading of products already on the market are exchanges with suppliers as to their suggestions for taken into consideration at the design stage. All basic improvement and the use of future technologies. research activities are amalgamated at the new Inno- Securing knowledge from digitally created vation Center; developments that can be used by sev- data is a key component of investment and use. The eral Competence Centers are centrally coordinated. constant development of electronic systems and com- The integration of the new Klöckner- munications setups makes protecting this knowledge Werke/KHS Group subsidiaries KHS Asbofill GmbH, increasingly difficult, however. Investing in IP rights 13 is thus more important than ever before. This necessity and the development in applications for patents 225 new patents and patent applications; 1,500 existing patents ... can be observed throughout the entire mechanical engineering industry. In the past business year KHS ... are the result of long-term development and research. registered no fewer than 121 patents and was granted 104 patents and 50 trademark rights. Projects of note completed in 2008 include the following. only specialized but also more flexible. Innofill NV Labeling technology: With the develop- filling systems were introduced to the market to meet ment of the Innoket 360, a roll-fed labeler for the the high demands on technology and hygiene. These wrap-around labeling of glass and plastic bottles, the include the Innofill NV-H that specializes in hot-fill foundations were laid for a completely new genera- technology, nine of which Coca-Cola USA has already tion of machines for various sizes of bottle and with ordered and received in 2008. Other machines are varying capacities. The first machines have been on in operation in Russia and in the USA. With the new the market since August and have proved successful NV-H hot-fill system, still fruit juices are filled free in practice right from the start. The output of these flow in plastic bottles at a capacity of up to 60,000 first machines is 50,000 bottles per hour. bottles per hour. The high-performance, volumetric At the same time redevelopment of the mod- filling valves have been developed in keeping with the ular Innoket SE was begun, the roll-fed module of Hygienic Design concept according to the latest which is based on the Innoket 360 and already suc- requirements. cessfully in operation at the first customer plants. Another new filling system, the Innofill DRV- Palletizing technology: The Innopal LH is VF/H, is now available in the same capacity range for a new, particularly reasonably priced palletizer for the the filling of carbonated soft drinks in combination entry- to medium-capacity range that is equipped with hot juice beverages. This has now closed gaps with a variety of functions, from interlocked layer for- in our portfolio. mation to slip-sheet processing and pack turning. By using an impeller flow meter as an alterna- Other products in the field of packaging and tive system of measurement for all machines with vol- palletizing technology are currently being launched. umetric filling, products without electrical conductiv- These include the Innopack LF packer and the newly ity can now be filled, such as cooking oil or even dem- designed Innopal LD can depalletizer. ineralized water. This system is characterized by its Bottle washing technology: The Innoclean high filling capacities and compact design. The first series has now been rounded off by the Innoclean machine thus equipped went into operation at the SEC. This machine greatly reduces the use of ma- Silver Springs Bottled Water Company in Florida in terials through laser welding, which in turn leads to October. enormous savings in energy. The platform for PET fillers is now com- Filling technology: The number of different plete. With the Innofill DRV for the filling of carbon- filling systems was further considerably reduced in ated and non-carbonated beverages, the Innofill NV 2008 through various standardization measures. for the free-flow filling of still beverages and the Customers now have access to systems that are not Innofill DVF for the filling of beer in large PET bottles, 14 MANAGEMENT REPORT KHS WORLD there are now three series of filler available for the reporting, and the implementation of standard inter- bottling of a huge range of products. Expansion of faces. It enables devices to be linked to MES (Man- the series for glass bottles will be completed by agement Execution Systems), with which KHS equip- drinktec 2009. ment can be easily connected up to ERP (Enterprise The successful volumetric Innofill DVD can Resource Planning) systems such as SAP. filling system has also been converted to the new Inspection technology: The chief develop- platform’s tubular ring vessel, now offering our cus- ment in this Competence Center was Vision Circle, tomers a number of important benefits. We have software based on the laws of neural networking. In made significant progress in the cleaning process the future, using this all KHS image processing sys- through the use of the tubular ring vessel and con- tems will access a single software platform that sistent Hygienic Design. The related lighter-weight enables various applications through parameteriza- design saves energy when heating and cooling dur- tion alone. ing sterilization. The filling valves are more readily In 2008, this included the following: crate Automatically inspection with a camera model for the recognition extendable and retractable rinsing caps are also new. and sorting of bottles in crates, an alignment station The first product to emerge from the collab- to align bottles in our labelers, including seam recog- oration on the blow molding technology championed nition, a Cap Inclination Control for the reliable by KHS Corpoplast GmbH & Co. KG, Hamburg, is the detection of capping errors, such as the absence of inclusion of a stretch blow molder in the caps, crooked closures, damage, and the length of filler/capper monoblock, implemented last year. thread engagement and Party Can Orientation for the These compact bottle manufacturing and filling sys- alignment of non-symmetrical containers prior to tems have enabled us to reduce the amount of space packing. Furthermore, a new non-pneumatic guided needed by our customers and to avoid investment in bottle rejection system was engineered for systems an air conveyor, now no longer required as a buffer with capacities of up to 72,000 bottles per hour. accessible and easier to service. segment. The bottle gripper systems designed by Flexible packaging: The new poucher intro- KHS additionally allow continued development of duced in 2007 was a big hit at the PMMI trade show new lightweight bottles – a major factor when it in Chicago. comes to costs and assessing the impact of waste on orders for five of these flexible machines with a high the environment. A total of five systems have been capacity and short changeover times to various ordered by customers, including the very first shapes of pouch. The exhibition yielded spontaneous monoblock for filling beer in PET bottles. The first Keg technology: In the field of keg technol- successfully accepted setup is the one with the new ogy, the PETKEG filler continued to be modified and impeller flow meter mentioned above for Silver improved. This new technology was first used com- Springs in Florida, USA. mercially in May 2008 to fill 5- to 20-liter PET kegs and Plant engineering: All functions of PMS features the new non-returnable flat fitting from KHS. (Plant Management System), successor to AIS Many of the research and development activ- (Plant Information System), are now complete and ities of the KHS Beverages companies concentrated on the system has already been installed on all new sys- the design of a new Blomax series that is to super- tems with HMIs (Human Machine Interfaces). PMS sede Series 3. The second prototype was finished in has been designed with regard to ease of operation, 2008 according to schedule and trials have begun. 15 QUALITY MANAGEMENT remained at a level that was slightly lower or the As expected, the surveillance audit carried out last same as in the previous year. We attribute this posi- year by TÜVCert as certifying body resulted in the tive trend to the intensified application of quality KHS AG quality system being certified once again for management in the new combination with process all locations. management throughout the company, as described On an international level, the sites in Waukesha above. and Sarasota (USA) and in São Paulo (Brazil) were also The revised KHS 2010plus Change Program is included in certification of the Group in the business also having a positive effect on reducing the costs of year 2008. The site in Ahmedabad, India, was likewise quality within KHS; measures defined in previous certified, but not as part of the group certification. The years have been restructured and concentrated in latter site is certified separately in accordance with ISO special-focus projects. 9001:2000 and 14001:2004, and is included in the global KHS 15 quality management system. These special-focus projects are driven and managed by a dedicated project organization, bud- At the beginning of the business year 2008, getary and time planning, as well as intensive the central Quality Management department was progress checks. The main aim of these special-focus restructured. The central Process Management and projects is to optimize business processes and imple- Quality Management departments, which report ment cost-reduction measures, in order to provide directly to the Executive Management Board, were important support to the positive development of amalgamated. This restructuring is aimed at net- KHS. One of these special-focus projects involves working the task of process management (namely to monitoring our quality management activities in the design the KHS process model) more intimately with context of the measures described above. the monitoring function of quality management (to ensure correct implementation of the process model in day-to-day business operations), thus enhancing ENVIRONMENTAL PROTECTION the performance of KHS. During the last business year, KHS also turned its As part of the monitoring function of quality attention to optimizing the environmental compati- management, various QM methods (such as internal bility of its processes and products at its various sites audits, quality cost reporting) were brought into line in the interest of its customers, employees, and the with the process structure and applied uniformly and environment. consistently at the various company sites. Its glass and PET beer bottling machines and The process model was also harmonized and can fillers were reworked during the business year integrated with existing, revised, and newly issued under review so that the new, tubular version of the procedural instructions. ring vessel already used in fillers for bottling soft In addition to the monitoring function, the drinks in PET could also be implemented in the above specific processes essential to quality management types of filler. This technology saves around 2 met- and intensified, ric tons of material per machine on the 16 types of expanded, and implemented to some extent in the machine mentioned. Because of its smaller surface structural organization of the production plants. area, this version of the tubular ring vessel also quality assurance were also Despite the enormous output in the business years 2006 and 2007, our quality costs in 2008 reduces the amount of required cleaning media by approx. 10%. 16 MANAGEMENT REPORT KHS WORLD This cut in materials also has an advantageous sus the energy losses occurring during the generation effect on the amount of energy needed for heating and of electricity in power plants (power plant efficiency cooling during the sterilization of the relevant fillers. is approx. 38%). KHS has reworked the product startup, shut- The direct gas heater thus cuts CO2 green- down, and changeover phases of the filler and mixer house gases by up to 60% compared to heating with processes of its soft drink systems, thereby consider- electricity. ably reducing product loss (wastewater) and the One of the main aspects of the business year amounts of rinsing water and cleaning agents 2008 was consolidation and the increased implemen- needed. tation and application of the technological develop- The monoblock series is a monoblocked sys- ments of the last few years. The following examples tem comprised of a bottle blow molder and a filler for are given with regard to the protection of the envi- PET bottles. This development permits economic use ronment: of materials by eliminating the necessity for the con- • Savings in energy through the use of regenerative necting conveyors otherwise needed, for example. processes in the process and systems engineering To date, empty PET bottles have been transported via of bottle washing and pasteurizing equipment and air conveyors from the blow molder to the filler. Gen- the use of energy-saving bottle carriers in bottle erating the necessary flow of air in the conveyors con- washing machines sumes a lot of energy. Savings in energy and also in • Cuts in water consumption in bottle washing and operating costs are achieved by removing the convey- pasteurizing machines through the deployment of ors from between the blow molder and filler. With this system array, KHS now offers customers an interesting alternative to the conventional line layout. KHS also offers its customers a recently devel- new water-saving concepts • A considerable reduction in the amount of chemicals required thanks to a new chemicals dosing unit built into pasteurizers oped shrink tunnel as another new alternative to its • Improved standards of hygiene through the opti- standard film shrink tunnel for packaging machines. mization of and reduction in the surface areas of This modern version is no longer heated by electric- machines and components, thereby cutting down ity, as in the past, but by a direct gas heater. The on the use of cleaning agents and also lengthen- energy balance is altogether very advantageous ver- ing cleaning intervals • A distinct cut in greenhouse gas CO2 through the use of new filling systems and • A decrease in the noise generated by conveyors equipped with stainless-steel chains by modifying A new PET monoblock saves energy … the chain return. The implementation of energy-saving measures was also an important topic at the various KHS AG sites over the last business year. New heating systems were installed at the … thus making a lasting contribution to environmental protection. plants in Dortmund and Worms. According to an economic efficiency calculation, the savings in energy 17 compared to the old heating systems are around from the suppliers indicate that no problems are to be 20% for the Dortmund site and approx. 30% for expected regarding dependable delivery for KHS AG. Worms. As a further measure, some of the old rows For KHS AG, protecting the environment is an of roof windows in Worms and Bad Arolsen were important part of the company’s responsibility to replaced with new double-paned windows. The society – and this does not just apply to its premises modern, energy-saving heating systems also generate in Germany. At all of its sites, KHS World will con- fewer emissions. tinue to make an all-out effort towards minimizing As KHS AG is also concerned with improving hazards for both people and the environment. For all the environmentally compatible disposal of waste, a at KHS World, one important aspect of long-term new waste management program has been imple- customer satisfaction will thus continue to be meet- mented as a pilot project at the Dortmund site in col- ing the expectations of our clients with respect to the laboration with an external waste disposal company environmental compatibility of our products and as a service provider. After an initial test phase, this processes. Adhering to the relevant legal regulations concept shall also be applied to the other KHS plants on environmental protection at all sites worldwide – – providing it is both ecologically and economically as a definition of the minimum requirement – thus sound. A central recycling center has been set up. In goes without saying for KHS AG. If both prudent and the future, the external waste disposal company will economically viable, where possible these minimum collect the waste from this depot and ensure that it requirements shall also be exceeded. is segregated and either properly disposed of or recy- All general and legal conditions are also met cled. Waste statistics and any necessary records shall by the KHS Beverages companies. No potential risks be kept by the disposal company as stipulated by KHS to the environment are apparent. AG and the relevant statutory regulations. The waste disposal company shall inform KHS AG as to any new or amended regulations pertaining to waste disposal EMPLOYEES laws and shall implement any necessary changes Qualified university graduates have been recruited to together with KHS AG. secure innovative potential and boost our sales activities. Another major topic in the past business year Additional qualified personnel have also been was the implementation and implications of REACH hired to increase capacities in the areas of final by and for KHS AG. This EC regulation is concerned assembly and service. with the Registration, Evaluation, Authorization, and In order to meet the growing service restriction of CHemicals ("REACH") in the European demands of our customers, on January 1, 2008, all Union. Our staff made use of the aid and support central, service-orientated functions were compiled in provided by our parent company Salzgitter AG and a new division entitled Life Cycle Solutions. attended various informative courses on the subject. bundling existing activities and continuing to extend After concerning itself with REACH, KHS AG our service activities, we will be able to cope with ascertained that it is indeed affected by the regulation By these new challenges. with regard to the procurement of necessary On April 1, 2008, our central Human resources. All suppliers in the corresponding product Resources division was reorganized, with the result groups were thus written to. The replies received that the ensuing modern personnel management is 18 MANAGEMENT REPORT KHS WORLD better geared towards the organizational units, thus interdisciplinary exchange. KHS’ university recruit- supporting collaboration on all staffing matters across ment department was also present at various univer- all sites. sity trade shows. This decision also took the results of a satis- In November 2008, informative courses on faction survey made of all members of staff into the transferal of employers’ obligations were held for account, thus meeting the demand for more informa- executives. These events, staged together with the tion, increased communication, and more advice. Employers’ Liability Insurance Association, aimed to In addition to the ongoing technical training sensitize executive staff to their responsibilities of service personnel, the focus of personnel develop- regarding safety at work and company organization. ment included language and sales training, and inter- In order to ensure a future supply of qualified national exchange programs with international busi- managers and specialists, the company’s own train- ness schools. ing program is an important part of personnel development. Our executive management development At the end of the business year 2008, 230 was also further advanced with the introduction of young staff members worldwide – 161 of which were various processes, such as 360° feedback, objective in Germany– were enrolled in technical and business agreements, and HR reviews, for example. vocational training programs. Further activities in university recruitment In 2007, a company agreement on trainees should also be mentioned in this respect. September was made that regulated the hiring of trainees during 2008 saw the first National Student Day in Dortmund, their course of study and their employment on com- in which 27 students took part. The event was con- pletion of their training. The aims of this system are ceived to enable contacts to be made and to facilitate to create a stronger incentive to perform and a greater sense of motivation during training, achieve greater quality and productivity on completion of training, to improve and recruit new talent, and to DEVELOPMENT IN THE NUMBER OF EMPLOYEES boost the image of KHS vocational training both 31.12. 31.12. Change 2008 2007 in % 3,015 2,848 5.9 KHS China GLM2 875 963 - 9.1 KHS USA 363 349 4.0 KHS Brazil 356 322 10.6 working hours was furthered while taking various KHS Mexiko 191 201 - 5.0 changes and supplements into consideration. KHS India 127 124 2.4 In order to provide effective help to KHS Sales companies 329 304 8.2 addicts and potential addicts in the earliest stages 5,256 5,111 2.8 of affliction, in September 2008 a company 434 (417) 4.1 5,690 (5,528) 2.9 KHS AG KHS Group KHS Beverages companies KHS World within and outside the company. In order for it to be able to react to fluctuations in workloads in the individual departments and between the various plants, thus securing company yields, the company agreement on the flexibility of agreement on alcohol and addictive substances at work was drawn up. The reason behind this was to take measures that will ultimately also secure employment. 19 In the period under review, the number of working The social commitment of our staff is encouraged … days lost through illness, accident, and medical treatment or therapy was 4.13% of the number of possible workdays. During the course of the business year 2008, … to make the world a better place. 47 staff members celebrated their 25th, 22 their 40th and one person their 50th anniversary of employment with the company. Approx. 2,419 former company employees or On January 8, 2003, the court decided to take evidence their beneficiaries received payments under the com- on the matter, and in its decision of October 17, 2003, pany’s pension plan. it commissioned an expert witness to submit an expert The personnel management of the KHS Bev- opinion. erages companies was taken over by KHS AG in 2008. This expert opinion was completed by the By the start of 2009, all processes and struc- expert witness in April 2008 and was sent to the par- tures will be completely identical. ties by the court in May 2008. After examining the We would like to thank all of our employees expert opinion, KHS AG and Klöckner Mercator for their commitment and also the employee repre- Maschinenbau GmbH raised a number of objections sentatives for their trusting and constructive collabo- and questions that were filed with the court. In its ration. decision of November 3, 2008, the court then announced that the expert witness was being commissioned to make additions to his expert opinion. FURTHER INFORMATION However, he was previously requested to notify the With regard to the arbitration proceedings made court of the costs involved. pending by shareholders of KHS AG, we report as fol- • Proceedings against Klöckner-Werke AG and KHS lows on further developments in the business year AG at the Dortmund District Court, for court deter- 2008: mination of the reasonable settlement for the KHS • Proceedings against KHS AG and Klöckner Merca- AG shareholders who ceased to be shareholders tor Maschinenbau GmbH at Düsseldorf District because of integration of the company, pursuant to Court in the matter of "reasonable compensation" Section 320 (1) of the German Stock Corporation (Section 304 German Stock Corporation Act) and Act. "reasonable settlement" (Section 305 German In June 2008, the expert opinion commissioned in a Stock Corporation Act) in respect of the control decision by the District Court on July 9, 2003, was com- and profit transfer agreement concluded by and pleted, submitted to the court, and sent to the parties between KHS AG and Klöckner Mercator Maschi- for comment. KHS AG and Klöckner-Werke AG have nenbau GmbH on September 28, 1993. no remarks or questions in this regard; the expert opinion basically concurs with the position of KHS AG and In October 2000, KHS AG petitioned the court to dis- Klöckner-Werke AG. It remains to be seen whether miss any request for settlement exceeding DM176 per objections will be submitted by the suing shareholders. KHS share with a nominal value of DM50, and for any A court decision based on the expert opinion is other- annual compensation payment exceeding DM10.15. wise expected. 20 MANAGEMENT REPORT KHS WORLD RISK REPORT and high-value projects. All departments involved in Our global operations offer business opportunities future project development are included in the review but also involve certain business risks. process, starting with the quotation phase. Impor- For this reason, an extensive risk management tant projects are examined for technical risks by the and reporting system has been implemented in KHS Engineering Service department. Other specialized World in order to ensure the appropriateness of cor- departments perform checks regarding legal, finan- porate risks in relation to earnings opportunities. The cial, and earnings-related risks. Any disproportionate system is based on the documented risk strategies of risks that are identified lead to project reviews; mea- Klöckner-Werke AG (the parent company listed on the sures to minimize risks are developed. stock exchange) and of KHS AG, and on KHS proce- Financial risks pertaining to receivables and dural instructions on corporate risk management orders on hand are subjected to continuous monitor- which are founded, in turn, on these strategies. ing by the accounting department. In addition to As at the balance sheet date, a risk inventory was carried out in order to document and quantify normal reporting, ad hoc announcements are also used when necessary. existing risks and to implement appropriate counter- Default risks pertaining to foreign receivables measures. The main risk categories relate to market are mostly limited by documentary credits; in individ- risks that ensue from the general economic and com- ual cases, export credit insurance instruments are also petitive climate, to customer and country-related used. Hedging transactions are used to cover any financial risks in connection with order financing, to currency risks. order processing risks in the case of complex and As of the reporting date, no order-related technologically sophisticated plants, and to contrac- risks jeopardizing the continued existence of the com- tual risks. The risk inventory is carried out using a risk pany were identified. database tool in order to ensure a uniform and standardized form throughout the Group and to ensure that risks are subsequently monitored. FORECAST REPORT The results of the risk inventory are presented The IFO World Economic Climate indicator deterio- at an annual risk committee meeting. Material risks rated further in the fourth quarter of 2008 and has are identified in co-operation between the Executive fallen to the lowest level in more than 20 years. In Management Board and risk management depart- its latest forecast, the International Monetary Fund ment, and subsequently tracked on a quarterly basis (IMF) has also cut its estimate for global GDP growth by the risk management department. in 2009 to 0.5%. Growth has slowed significantly, Continuous risk monitoring is also carried out and the economy has already entered a recession in in the current business year by means of a reporting a number of industrial countries. In the USA, the sit- system that is based on detailed corporate planning uation is still considered highly unfavorable. The IMF and which enables continuous comparison of current also takes a pessimistic view of conditions in Ger- business development with the original budget. many. The original estimate was for zero growth, but Quality costs are also subjected to systematic record- the IMF now expects economic output to shrink next ing and evaluation. year by 2.5%. Special checks are carried out in accordance However, the downturn in the world econ- with special KHS procedural instructions for complex omy is not just affecting the major economic regions 21 of North America, Western Europe, and Asia. profitable spare part and conversion business will Demand from newly industrializing countries, which increase in share, and that, within the machinery has supported the world economy until now, has also business, the relatively profitable market for special- slowed. It remains to be seen whether and to what ized machines will play a greater role. extent the various recovery programs launched to With efficient and holistic solutions for all combat the financial crisis and the co-operation on types of packaging, from PET, glass and cans to kegs economic programs adopted at the World Economic and pouches, and with our extensive range of services Summit will have any effect. The impacts on the real (Life Cycle Solutions), the KHS Group is stemming economy are difficult to anticipate at present. How- itself against the current downturn. However, we ever, if weakened industries can be stabilized in the expect that the total output will decline on the whole. months ahead, the world economy may recover grad- We are counteracting the inefficient cost relations ually and slightly by the end of next year. that ensue here with a number of measures, some of The outlook for mechanical manufacturing which were already initiated in 2008. Since we do and plant engineering is also poor at present. The not anticipate any significant recovery in the first half propensity to invest is already declining as a result of of 2009, the result for the coming year will also be the weak economy, tougher lending conditions, and noticeably lower. in some cases excessive capacities. Whereas the The KHS Beverages companies expect global focus in 2007 was on new investment and expanding demand for stretch blow molders to weaken in 2009 capacities, the main purpose of current investments because of the negative impacts of the financial cri- is to procure replacements. Optimized utilization of sis. Consolidation of domestic demand in particular existing production capacities and efficient use of is expected to continue. resources are becoming more and more important in this context. Positive stimuli for incoming orders are expected as a result of synergies with KHS AG in the Despite financial bottlenecks, beverage pro- line business, from sales of monoblock machines, and ducers continue to face a growing demand – espe- from the expansion of the service business. In the cially in newly industrializing countries. Population food and non-food sectors, the individual machine growth, the attainment of higher living standards in business is to be expanded. newly industrializing countries, and general changes in consumer habits are still the key drivers behind the growth in beverage demand. EVENTS SINCE THE END OF THE BUSINESS YEAR However, despite the increasing demand for Business in the month of January was significantly beverages, mainly in the water, beer, and fruit juice weaker in a context dominated by the persistent sectors, on the whole 2009 will also be a difficult year global financial crisis, and continued investment for KHS World. With the exception of sustained restraint on the part of customers is expected in the demand in the emerging markets, we nevertheless months ahead. This will be accompanied by dramatic generally anticipate a substantial decline in the new downward pressure on prices. machinery business. Increasing competitive pressures In response, at the beginning of the new busi- and diminishing propensity to invest are the main ness year we began to lay off temporary employees challenges that KHS World must face. However, in and to not renew temporary employment contracts. terms of revenue structure, we can expect that the A works agreement was also negotiated with the 22 MANAGEMENT REPORT KHS WORLD Our employees in Life Cycle Solutions service 20,000 machines worldwide … … and consistently meet customer requirements. central works council concerning the introduction of Dortmund, March 20, 2009 short time beginning March 2009. In the business KHS AG year 2009, cost-reducing measures and improve- The Executive Management Board ments to processes will be prioritized. The CEO, Mr. Valentin Reisgen, left the company as of January 31, 2009, by mutual agreement. Until the post has been filled, Mr. Roland Flach has been assigned CEO responsibilities in accordance with Section 105 (2) of the German Stock Corporation Act. Mr. Burkhard Becker has also been Roland Flach (Chairman) appointed as additional member of the Executive Management Board of Klöckner-Werke AG. Burkhard Becker Dr.-Ing. Johann Grabenweger Georg Michels Volker Till 23 24 IN ORDER TO PRESERVE NATURAL HABITATS ... we save energy and fresh water in our bottle washing machines by specifically cutting down on materials 25 26 REPORT BY THE SUPERVISORY BOARD KHS WORLD REPORT BY THE SUPERVISORY BOARD In the last business year, the Supervisory Board of KHS tion of the SIG Beverages Group by Salzgitter and its AG reviewed in detail the company’s situation and planned integration within the Group. By integrating performed the duties incumbent on it under legisla- PET blow molding technology, KHS AG will be able to tion, the company’s Articles of Association and its supply turnkey systems from a one-stop shop in the Rules of Procedure. It advised the Executive Manage- fast-growing market for plastic bottle technology. ment Board and monitored business management. The Supervisory Board approved the purchase The Executive Management Board notified the Super- of a plot of land in Hamburg, and consented to the visory Board Chairman of all important pending trans- acquisition of KHS Asbofill GmbH and KHS Moldtec actions and decisions. The Executive Management GmbH & Co. KG for subsequent merger with KHS AG. Board reported regularly and comprehensively to the On November 28, 2008, the Supervisory Supervisory Board. Board discussed adjustments to the standing orders of the Executive Management Board, and adopted a resolution in this respect. MEETINGS OF THE SUPERVISORY BOARD Three meetings were held to inform the Supervisory Board of the earnings and financial situation of the ANNUAL FINANCIAL STATEMENTS company, of business events of material importance PricewaterhouseCoopers AG Wirtschaftsprüfungsge- and regarding KHS Group planning and strategy. sellschaft, a firm of auditors in Essen, Germany, No meetings of the Mediation Committee in audited the annual financial statements of KHS AG as accordance with Section 27 (3) of the German Co- of December 31, 2008, including the bookkeeping determination Act were held in the past business and the management report. The audit provided no year. cause for objection. The auditor issued an unqualiThe Executive Management Board reported fied audit opinion. regularly at each meeting of the full Supervisory The Supervisory Board reviewed the annual Board on the business and financial situation of the financial statements of KHS AG and the management company. In its meeting on March 19, 2008, the report prepared by the Executive Management Board. Supervisory Board also dealt with the annual state- The auditor’s report on the annual financial state- ments for 2007, the agenda of the Annual General ments was provided to the Supervisory Board for Meeting and the report of the Supervisory Board. The review. In its meeting on March 13, 2008, the Super- Executive Management Board explained the acquisi- visory Board approved the annual financial state- 27 ments as submitted by the Executive Management January 30, 2009, Mr. Gemmel was elected to the Board. The annual financial statements are thereby Supervisory Board of KHS AG. Mr. Valentin Reisgen left the Executive Man- adopted. The auditor participated in this meeting. With regard to the early detection system for agement Board as of February 1, 2009. We wish to risks, the auditors stated that the Executive Manage- thank Mr. Reisgen for all the work he has done for ment Board appropriately complied with the mea- the company in the past years. sures required in accordance with Article 91 (2) of the By resolution of the Supervisory Board dated German Stock Corporation Act, in particular those January 26, 2009, Mr. Roland Flach was seconded to relating to the establishment of a monitoring system, the Executive Management Board of KHS AG for a and that the monitoring system is suitable for the period of twelve months, effective February 1, 2009, early detection of developments that could jeopardize pursuant to Section 105 (2) of the German Stock Cor- the future of the company. poration Act. Mr. Flach was appointed Chairman of the Executive Management Board of KHS AG. The Supervisory Board thanks the Executive CHANGES ON THE SUPERVISORY BOARD AND Management Board, the management teams in the EXECUTIVE MANAGEMENT BOARD various subsidiaries and holding companies, as well as With effect from January 1, 2008, Mr. Burkhard the entire workforce and the work councils, for the Becker took up his position on the KHS Executive work they performed during the reported business Management Board for a term of five years. The year. Supervisory Board also approved extending the employment contract of Dr. Johann Grabenweger until December 31, 2013, and consented to the appointment of Mr. Georg Michels to the Executive Management Board of KHS AG effective July 1, 2008, Dortmund/Frankfurt am Main, March 13, 2009 likewise for a five-year term. The Supervisory Board During the past business year, and with authorization from the Executive Management Board, Mr. Maternus Gemmel discharged his responsibilities for sales operations until December 31, 2008. In the Extraordinary General Meeting held on Prof. Dr.-Ing. Heinz Jörg Fuhrmann (Chairman) 28 TO KEEP OUR SKIES CLEAR ... our new shrink tunnel for the packaging of beverage containers now produces up to 60% less CO2 29 30 FINANCIAL STATEMENTS KHS WORLD FINANCIAL STATEMENTS FOR KHS WORLD BALANCE SHEET ASSETS KHS WORLD KHS Beverages € thousand Consoli- KHS Group companies dation KHS World KHS Group 31.12.2008 31.12.2008 31.12.2008 31.12.2008 31.12.2007 Non-current assets Intangible assets Property, plants and equipment Investment property Financial assets Other assets Deferred tax 61,725 59,097 0 120,822 59,184 111,035 20,331 0 131,366 99,558 929 803 0 1,732 1,106 8,498 49 0 8,547 828 370 0 0 370 28 3,834 670 0 4,504 3,944 186,391 80,950 0 267,341 164,648 Inventories 129,279 29,356 0 158,635 135,932 Trade and other receivables 272,478 2,931 - 2,452 272,957 266,763 Current assets Financial assets Other assets Recoverable tax on earnings Cash and cash equivalents 2,260 22,558 0 24,818 32,734 25,518 1,394 0 26,912 16,580 848 0 0 848 8,630 17,925 3,446 0 21,371 11,668 448,308 59,685 - 2,452 505,541 472,307 634,699 140,635 - 2,452 772,882 636,955 31 BALANCE SHEET EQUITY AND LIABILITIES KHS WORLD KHS Beverages € thousand Consoli- KHS Group companies dation KHS World KHS Group 31.12.2008 31.12.2008 31.12.2008 31.12.2008 31.12.2007 Shareholders’ equity Subscribed capital 28,262 15,290 0 43,552 28,262 248,766 84,460 0 333,226 258,744 277,028 99,750 0 376,778 287,006 1,207 0 0 1,207 1,520 278,235 99,750 0 377,985 288,526 Provisions 97,371 3,964 0 101,335 84,011 Financial liabilities 27,830 0 0 27,830 38,065 10 0 0 10 12 Reserves Minority interests Liabilities Non-current liabilities Other liabilities Deferred tax 242 1,298 0 1,540 146 125,453 5,262 0 130,715 122,234 Provisions 35,267 21,188 0 56,455 30,351 Financial liabilities 55,428 815 0 56,243 28,876 103,431 8,911 - 2,452 109,890 127,778 867 692 0 1,559 5,307 36,018 4,017 0 40,035 33,883 231,011 35,623 - 2,452 264,182 226,195 634,699 140,635 - 2,452 772,882 636,955 Current liabilities Trade payables Tax liabilities Other liabilities 32 FINANCIAL STATEMENTS KHS WORLD INCOME STATEMENT KHS WORLD KHS KHS Group € thousand Total revenues Changes in inventories and own work capitalized Other operating income Beverages Consoli- companies dation KHS World KHS Group 1.1.- 1.1.- 1.1.- 1.1.- 1.1.- 31.12.2008 31.12.2008 31.12.2008 31.12.2008 31.12.2007 911,115 88,971 - 14,202 985,884 995,545 8,223 - 996 0 7,227 6,110 44,494 5,964 - 4,200 46,258 34,572 Cost of materials - 495,900 - 40,572 14,202 - 522,270 - 577,195 Personnel costs - 245,236 - 23,320 0 - 268,556 - 229,005 Other operating expenses - 193,244 - 22,950 4,200 - 211,994 - 175,077 0 105 0 105 -9 29,452 7,202 0 36,654 54,941 Depreciation - 18,215 - 4,827 0 - 23,042 - 15,311 Impairment of financial assets - 22,104 0 0 - 22,104 0 Earnings before interest and taxes (EBIT) - 10,867 2,375 0 - 8,492 39,630 Income from participations Earnings before interest, taxes, depreciation and amortization (EBITDA) Interest income 1,472 193 0 1,665 2,365 Interest expenditure 8,881 - 819 0 - 9,700 - 8,091 - 18,276 1,749 0 - 16,527 33,904 - 4,097 - 615 0 - 4,712 - 16,891 - 22,373 1,134 0 - 21,239 17,013 4,673 0 0 4,673 22,010 38 0 0 38 640 - 17,738 1,134 0 - 16,604 38,383 Earning before taxes (EBT) Taxes on earnings Earnings after tax Income from loss compensation Minority interests in profit/loss Consolidated net income for the year 33 34 SINCE EVERY DROP COUNTS ... the new Eco vacuum pump reduces pump water consumption in our fillers by 97.5% 35 36 FURTHER INFORMATION KHS WORLD FURTHER INFORMATION KHS GROUP COMPANIES (FIGURES IN LOCAL CURRENCY) Result for Currency Name and domicile of company Percentage Equity the year shareholding (in thousands) (in thousands) 270,159 - 11,619 1 KHS AG, Dortmund (parent company) EUR 2 Holstein und Kappert GmbH, Dortmund EUR 100.0 25 0 3 IRKAS Beteiligungs GmbH & Co. Vermietungs-KG, Munich EUR 99.0 26 1 4 Seitz Enzinger Noll GmbH, Bad Kreuznach EUR 100.0 27 0 5 KHS Hensen Packaging GmbH, Verden EUR 100.0 – – 6 KHS Andes Limitada, Bogotá (Colombia) COP 99.9 - 887,238 - 917,238 7 KHS Argentina S.A., Buenos Aires (Argentina) ARS 95.0 0 9 8 KHS Asia Pte. Ltd., Singapore EUR 100.0 223 350 9 KHS Austria GmbH, Wiener Neudorf (Austria) EUR 100.0 248 - 33 10 KHS Benelux B.V., Breda (Netherlands) EUR 100.0 177 158 11 KHS China GLM2 Co. Ltd., Shantou (P.R. of China) 4) CNY 70.0 20,431 - 589 12 KHS GmbH, Wolfwil (Switzerland) CHF 100.0 1,288 507 13 KHS Indústria de Máquinas Ltda., São Paulo (Brazil) BRL 100.0 10,960 - 6,946 14 KHS Italia S.r.l., Mailand (Italy) EUR 99.0 43 2 32,080 1) 3) 15 KHS Japan Corporation, Yodogawaku, Osaka (Japan) 16 KHS Machine & Equipment Co. Ltd., Quinhuangdao (P.R. of China) 17 KHS Machinery Pvt. Ltd., Ahmedabad (Inda) 18 KHS Machines Nigeria Ltd., Lagos (Nigeria) JPY 100.0 185,341 CNY 100.0 2,182 316 INR 89.0 335,427 30,183 8,808 NGN 100.0 196,519 19 KHS Makine Sanayi VE Ticaret Limited Sirketi, Istanbul (Turkey) TRY 99.9 35 - 64 20 KHS Manufacturing (S.A.) (Pty.) Ltd, Kramerville (South Africa) ZAR 100.0 22,680 5,841 21 KHS México S.A. de C.V., Zinacantepec (Mexico) MXN 100.0 105,306 5,521 22 KHS Pacific Pty. Ltd., Tullamarine (Australia) AUD 100.0 2,974 2,774 23 KHS RUS OOO, Moskau (Russian Federation) RUB 99.0 13,759 11,775 24 KHS S.A.R.L., Torcy (France) EUR 100.0 214 116 25 KHS s.r.o., Budweis (Czech Republic) CZK 100.0 7,845 4,468 26 KHS Sibiu S.R.L., Sibiu (Romania) RON 100.0 156 244 27 KHS Skandinavien ApS, Glostrup (Denmark) DKK 100.0 1,420 1,418 28 KHS UK Ltd., Solihull (Great Britain) GBP 100.0 574 206 29 KHS Ukraine OOO, Kiew (Ukraine) UAH 100.0 1,088 498 30 KHS USA, Inc., Waukesha (U.S.A.) USD 100.0 52,258 3,066 31 KHS-ZAGORA AD, Stara Zagora (Bulgaria) BGN 50.0 731 231 32 Kisters Limited, Redditch (Great Britain) GBP 100.0 254 0 33 Klöckner Holstein Seitz S.A., St. Cugat del Valles (Spain) EUR 100.0 509 97 34 KHS AG Korea Co., Ltd., Seoul (South Korea) 2) 4) KRW 100.0 587,038 63,178 35 Impuls AD, Gabrovo (Bulgaria) BGN 15.2 376 – 3) 1) Beginning July 11, 2008 2) Annual financial statements 2007 3) Estimate, annual financial statements are not yet available. 4) The reported equity and annual result figures are taken, with the exception of those items marked 4) (national law), from the IFRS financial statements as of December 31, 2008. 37 KHS BEVERAGES COMPANIES (FIGURES IN LOCAL CURRENCY) Result for Currency Name and domicile of company Percentage Equity the year shareholding (in thousands) (in thousands) 1 KHS Corpoplast GmbH & Co. KG, Hamburg EUR 100.0 67,800 431 2 KHS Moldtec GmbH & Co. KG, Essen EUR 100.0 2,000 688 3 KHS Plasmax GmbH, Hamburg EUR 100.0 1,526 - 3,013 4 KHS AG (Thailand) Ltd., Bangkok (Thailand) THB 100.0 28,959 10,862 5 KHS Corpoplast (UK) Ltd., Houghton Le Spring (Great Britain) GBP 100.0 129 62 6 KHS Corpoplast Argentinien S.A., Buenos Aires (Argentina) ARS 100.0 449 - 229 7 KHS Corpoplast North America Inc., Hillsborough (U.S.A.) EUR 100.0 1,927 258 8 KHS Corpoplast Trading (Shanghai) Co., Ltd., Shanghai (China) CNY 100.0 3,740 2,211 9 KHS Management AG, Neuhausen am Rheinfall (Switzerland) CHF 100.0 155 55 EUR 100.0 185 - 51 10 SIG Technologia para Plasticos S.A., Barcelona (Spain) 38 FURTHER INFORMATION KHS WORLD SUPERVISORY BOARD, EXECUTIVE MANAGEMENT BOARD, AND THEIR MANDATES SUPERVISORY BOARD Roland Flach, Kronberg im Taunus, Chairman (until January 31, 2009) Chairman of the Executive Management Board of Klöckner-Werke AG CEO of KHS AG, pursuant to Section 105 (2) of the German Stock Corporation Act (since February 1, 2009) Statutory supervisory board memberships: • ALLBODEN Allgemeine Grundstücks-AG, Vice-Chairman • BHE Beteiligungs-AG, Chairman • KHS AG* • RSE Grundbesitz und Beteiligungs-AG, Chairman* • RSE Projektmanagement AG, Chairman* Comparable mandates: • KHS USA, Inc. (USA), Chairman* Prof. Dr.-Ing. Heinz Jörg Fuhrmann, Salzgitter, Chairman (since February 1, 2009) Acting Chairman of the Executive Board, Salzgitter AG Statutory supervisory board memberships: • Europipe GmbH* • KHS AG, Chairman* • Klöckner-Werke AG, Chairman* • Mannesmannröhren-Werke GmbH* • Nordcon Investment Management AG • Norddeutsche Affinerie AG • Öffentliche Lebensversicherung Braunschweig • Öffentliche Sachversicherung Braunschweig • Salzgitter Flachstahl GmbH* • Salzgitter Mannesmann Handel GmbH, Vice-Chairman* • Salzgitter Stahl GmbH* • TÜV Nord AG Comparable mandates: • Ets. Robert et Cie S.A.S. (Frankreich), Comité de Surveillance Joachim Kletzin, Berlin, Vice-Chairman** Director of the IG Metall training center Statutory supervisory board memberships: • KHS AG, Vice-Chairman* • Klöckner-Werke AG, Vice-Chairman* Comparable mandates: • BiB Bildungs- und Beschäftigungsgesellschaft mbH, Leipzig, Chairman of the Advisory Board Erich Bach, Frankfurt am Main** Head of the Staff IR/DS Board at IG Metall Statutory supervisory board memberships: • KHS AG* • Klöckner-Werke AG* Karl Ehlerding, Hamburg Managing Director of KG Erste “Hohe Brücke 1” Verwaltungs-GmbH & Co. Statutory supervisory board memberships: • Deutsche Real Estate AG • KHS AG* • Klöckner-Werke AG* • MATERNUS-Kliniken AG • WCM Beteiligungs- und Grundbesitz-AG (in insolvency) Comparable mandates: • Deutsche Bank AG Nord, Advisory Board Karl-Heinz Engbarth, Bad Kreuznach** Chairman of the works council of KHS AG, Bad Kreuznach plant Statutory supervisory board memberships: • KHS AG* Maternus Gemmel, Bad Kreuznach (since February 1, 2009) Statutory supervisory board memberships: • KHS AG* 39 Heinz Groschke, Büchen, Member of the Executive Management Board, Salzgitter AG Statutory supervisory board memberships: • Ilsenburger Grobblech GmbH* • KHS AG* • Klöckner-Werke AG* • Salzgitter Mannesmann Line Pipe GmbH* Comparable mandates: • A.P. Steel (U.K) Ltd. (Great Britain), Chairman • Project Metals Ltd. (Great Britain), Chairman • Salzgitter Mannesmann International (HK) Ltd. (Hong Kong), Board of Administration • Salzgitter Mannesmann International (Asia) Pte. Ltd. (Singapore), Board of Administration • Salzgitter Mannesmann (Scandinavia) AB (Sweden), Board of Administration • Salzgitter Mannesmann (Italia) S.r.l. (Italy), Supervisory Board • Salzgitter Mannesmann (España) S.A. (Spain), Board of Administration • Salzgitter Mannesmann International (USA) Inc. (USA), Chairman • Salzgitter Mannesmann International (Canada) Inc. (Canada), Chairman • Salzgitter Mannesmann International (México) S.A. de C.V. (Mexico), Chairman • Salzgitter Mannesmann Trade (Beijing) Co. Ltd. (China), Chairman • Salzgitter Mannesmann (UK) Ltd. (Great Britain), Chairman Peter-Jürgen Schneider, Hanover Member of the Executive Management Board, Salzgitter AG Statutory supervisory board memberships: • Ilsenburger Grobblech GmbH* • KHS AG* • Klöckner-Werke AG* • Mannesmannröhren-Werke GmbH* • MHP Mannesmann Präzisrohr GmbH* • Peine Träger GmbH* • Salzgitter Flachstahl GmbH • Salzgitter Stahl GmbH* • SZST Salzgitter Service und Technik GmbH, Chairman* • Verkehrsbetriebe Peine-Salzgitter GmbH, Chairman* Comparable mandates: • HANSAPORT Hafenbetriebsgesellschaft mbH, Chairman • Projekt Region Braunschweig GmbH Artur Schreiber, Dortmund** Head of Central Logistics Division, KHS AG Statutory supervisory board memberships: • KHS AG* • Klöckner-Werke AG* Peter Söpper, Dortmund** Full-time works council member at KHS AG, Dortmund plant Statutory supervisory board memberships: • KHS AG* Karl Spanke, Essen Head of Auditing, Salzgitter AG Statutory supervisory board memberships: • KHS AG* • Klöckner-Werke AG* • RSE Grundbesitz und Beteiligungs-AG* • Salzgitter Flachstahl GmbH* Helmut Weber, Fröndenberg** Chairman of the central works council of KHS AG, of the works council of KHS AG, Dortmund plant, and of the Group works council of Klöckner-Werke AG Statutory supervisory board memberships: • KHS AG* • Klöckner-Werke AG* • Salzgitter AG* * Group mandates ** Workforce representative 40 FURTHER INFORMATION KHS WORLD MANAGEMENT BOARD Roland Flach, Kronberg im Taunus, CEO of KHS AG, pursuant to Section 105 (2) of the German Stock Corporation Act (since February 1, 2009) Chairman of the Executive Management Board of Klöckner-Werke AG Statutory supervisory board memberships: • ALLBODEN Allgemeine Grundstücks-AG Vice-Chairman • BHE Beteiligungs-AG, Chairman • KHS AG* • RSE Grundbesitz und Beteiligungs-AG, Chairman* • RSE Projektmanagement AG, Chairman* Comparable mandates: • KHS USA, Inc. (USA), Chairman* Georg Michels, Düsseldorf (since July 1, 2008) Responsible for Sales Comparable mandates: • KHS China GLM2 Co. Ltd. (China)* • KHS Machinery Pvt. Ltd. (India)* Volker Till, Hofheim/Taunus Responsible for the Technology and Engineering Division Comparable mandates: • KHS China GLM2 Co. Ltd. (China)* • KHS Japan Corporation (Japan)* • KHS Machinery Pvt. Ltd. (India)* • KHS Pacific Pty. Ltd. (Australia)* • Klöckner Holstein Seitz S.A. (Spain)* Valentin Reisgen, Neuss, CEO (until January 31, 2009) Responsible for Business Development, Management, Legal Affairs and Patents, Life Cycle Solutions, Quality and Process Management Statutory supervisory board memberships: • ALLBODEN Allgemeine Grundstücks-AG, Chairman • BHE Beteiligungs-AG, Vice-Chairman • RSE Grundbesitz und Beteiligungs-AG, Vice-Chairman* Burkhard Becker, Hattingen Responsible for Finance and Human Resources (Personnel Director) Comparable mandates: • KHS China GLM2 Co. Ltd. (China)* • KHS AG Korea Co., Ltd. (Korea) • KHS Machinery Pvt. Ltd. (India)* • KHS Management AG, member of the Board of Administration Dr. Ing. Johann Grabenweger, Frankfurt am Main Responsible for Production and Logistics/Procurement Comparable mandates: • KHS China GLM2 Co. Ltd. (China)* • KHS Machinery Pvt. Ltd. (India)* * Group mandates 41 PUBLISHED BY KHS AG Juchostrasse 20 D-44143 Dortmund Phone +49 (0) 231 569-0 Fax +49 (0) 231 569-1541 [email protected] www.khs.com PHOTOS © Paul A. Souders/CORBIS © Joseph Sohm; Visions of America/CORBIS © Liu Liqun/CORBIS © Atlantide Phototravel/Corbis © Momatiuk - Eastcott/Corbis © Stockbyte Ingo Rappers CONCEPTION AND IMPLEMENTATION Konzeption + Design GbR, Cologne This is a translation of the German report. Only the German version is legally binding. This report contains forward-looking statements and forecasts based on assumptions and estimates made by the management of KHS AG. Although we assume that the expectations in these forward-looking statements are realistic, we cannot guarantee that these expectations will be fulfilled. Assumptions may include risks and uncertainties. These may lead to actual results that differ from those forecast. Factors that can cause such discrepancies include changes in currency controls or in the economic and business environment, fluctuations in foreign exchange rates, insufficient acceptance of new products or services, and changes in corporate strategy. www.khs.com