Annual Report of the Fiscal Year 2006/2007 Voith – Pioneer in

Transcription

Annual Report of the Fiscal Year 2006/2007
Voith – Pioneer in Future Markets
07
Locations and Organization Structure
1
North America
Production locations 21
Service and sales locations 16
Employees 5 148
2
Central and South America
Employees 4 012
3
Europe
Employees 25 151
4
Africa
Employees 120
5
Asia, Australia, Oceania
Employees 2 833
1
Voith Paper
Head Organization
Voith Paper Holding GmbH & Co. KG,
Heidenheim/Germany
Divisions
Fiber Systems
Paper Machines Graphic Grades
Paper Machines Board/Packaging
Finishing
Automation
Rolls
Fabrics
3
5
4
2
Holding Company
Voith AG
Corporate Central Functions
Voith Siemens Hydro
Voith Turbo
Voith Industrial Services
Head Organization
Voith Siemens Hydro Power
Generation GmbH & Co. KG,
Heidenheim/Germany
Head Organization
Voith Turbo GmbH & Co. KG,
Heidenheim/Germany
Head Organization
Holding GmbH,
Heidenheim/Germany
Divisions
Large Hydro
Small Hydro
Automation
Aftermarket Business
Divisions
Industry
Road
Rail
Marine
Divisions
Facility Service Europe
Facility Service Americas/Asia
Process Service
The Voith Group in Figures*
2006/07
2005/06
2004/05
2003/04
Orders Received
5 132
4 096
3 257
3 623
Export
4 070
3 255
2 483
2 814
€ in millions
in %
79
79
76
78
Sales
4 190
3 739
3 465
3 262
Export
3 232
2 839
2 614
2 228
in %
77
76
75
68
Total output
4 240
3 830
3 475
3 266
Total fixed assets 2)
1 485
1 346
1 315
1 051
112
Capital expenditures
193
167
191
in % of Depreciation
151
142
171
97
Research and development expenditures
202
182
179
149
in % of Sales
4.8
4.9
5.2
4.6
Income before tax
290
330
162
148
in % of Sales
6.9
8.8
4.7
4.5
Net Income
179
246
97
92
in % of Sales
4.3
6.6
2.8
2.8
Total Cash flow
150
(261)
(136)
273
in % of Sales
3.6
(7.0)
(3.9)
8.4
1) 2)
844
702
691
523
in % of the Balance sheet total 2)
19.4
19.6
17.9
16.0
4 353
3 573
3 854
3 272
Group capital
Balance sheet total 2)
Personnel expenses
Number of employees (without apprentices)
1 529
1 418
1 223
1 144
37 264
34 085
30 834
24 314
*) Throughout this annual report for 2006/07, the figures for the periods 2006/07, 2005/06 and 2004/05
are shown in compliance with IFRS. However, since the figures for 2003/04 are presented in
HGB-compliant format, it is possible to compare the numbers in all four periods only to a limited extent.
1) Equity and other non-current capital provided by shareholders.
2) Previous years 2005/06 and 2004/05 adjusted due to modified IFRS accounting practice.
Annual Report of the Fiscal Year 2006/2007
1 Introduction
6
10
12
A Word from the Board of Management
The Board of
Management
The Supervisory Board
2 Pioneer in Future Markets
3 Reports of the
Group Divisions
14 Voith – Pioneer in Future Markets
26
30
34
38
Voith Paper
Voith Siemens Hydro
Voith Turbo
42 Markets
52 Employees
4 Management Report
5 Financial Report
58 I. Business and Background
60 II. Earnings, Assets and Financial
Position
68 III. Research and Development
69 IV. Events after the Balance
Sheet Date
70 V. Report on Risks and Oppor
tunities Facing the Company
76 VI. Forecast Report
83
84
86
88
89
105
77 Corporate Governance Report
78 Report of the Supervisory Board
Consolidated Statement of
Income
Consolidated Balance Sheet
Statement of Changes
in Equity
Consolidated Cash Flow
Statement
Notes to the Consolidated
Financial Statements
Statement of Income
112
132
133
138
144
Balance Sheet
Notes to the Consolidated Cash Flow Statement
Notes to the Segment Report
Other Information
The Voith Group and its
Shareholdings
152 Trade Fairs 2008
154 Contact/Imprint
1
Introduction
Faced with such dynamic ex
pansion on all fronts, Voith
grew into a new dimension
in fiscal year 2006/07. Or
ders received broke the € 5
billion mark for the first time.
Sales crossed the € 4 billion
threshold for the first time.
Adjusted for one-time influ
ences from the sale of finan
cial assets, net income of
€ 179 million was even hiher
Introduction
6 A Word from the Board of Management
10 The Board of Management
12 The Supervisory Board
The Fiscal Year 2006/2007
We are convinced that our innovative capabilities
are a key factor of Voith’s success. “Good ideas
should not fall at the financial hurdle.” At Voith, this
principle is firmly anchored – and lived out – in our
corporate culture.
Introduction | A Word from the Board of Management
Dear Reader,
Right now, the global economy is experiencing one of the
longest and most forceful upswings ever. In fiscal year
2006/07, Voith reaped the benefits: Strong growth in all the
markets we serve.
> Paper
Paper consumption is increasing around the world, but
especially in China, India and the countries of South
America. Voith supplies highly efficient paper machines
to satisfy demand for this vital commodity. One key driver
is the internet. Online mail ordering has triggered huge
demand for packaging papers.
> Energy
Demand for hydro power plants is growing in response to
the challenge of global climate change. The human race is
consuming ever more energy and there is no way to rein in
the problem of global warming without making widespread
use of hydro power. This is undisputedly the only renew
able energy source that can be used to produce climatefriendly power in the quantities needed by industry.
> Mobility
Traffic in the planet’s megacities threatens to come to
a complete standstill if efficient local public transport
systems do not ease the congestion. In buses, subway
trains and surface trains, components and systems from
Voith keep millions of people safely on the move all
around the globe – in Shanghai, New Delhi, Dubai and
a host of other leading metropolises.
> Infrastructure
At present, infrastructure projects are springing up at
an unprecedented rate all over the world. Steel mills
and power stations are being built. Facilities to extract
coal, gas and oil are being built. Refineries are being
built. And all are necessary to satisfy the world’s vora
cious appetite for materials, energy and consumables.
Voith components safeguard the availability of these
industrial systems.
> Service
Enterprises in all industries are going back to their core
business and entrusting non-core production-related
activities to agile, capable service providers such as
Voith.
Faced with such dynamic expansion on all fronts,
Voith grew into a new dimension in fiscal year 2006/07.
Orders received broke the € 5 billion mark for the first
time. Sales crossed the € 4 billion threshold for the first
time. Adjusted for one-time influences from the sale
of financial assets, net income of € 179 million was
even higher than the impressive figure achieved in the
previous year.
Innovative technologies to protect our planet
We are convinced that our innovative capabilities are
a key factor of Voith’s success. “Good ideas should
not fall at the financial hurdle.” At Voith, this principle
is firmly anchored – and lived out – in our corporate
culture.
Dr. Hermut Kormann
Dr. Hermann Jung
Dr. Hans-Peter Sollinger
Dr. Hubert Lienhard
Introduction | A Word from the Board of Management
The fiscal year 2006/07 brought a raft of fresh initia
tives. All our Group Divisions stepped up their com
mitment to projects in the field of environment-friendly
technology. The launch of Voith Paper Environmental
Solutions brought Voith Paper a major step closer to its
goal of making paper production kinder to the environ
ment and easier on natural resources. Our mid-term
goal is to close the water circulation loop in the paper
production process to the greatest extent possible
while realizing massive energy savings.
Voith Siemens Hydro Power Generation reached impor
tant new milestones in its new ocean energy line.
A Spanish customer placed the order for the world’s
first commercial wave power plant. Another groundbreaking project was the start of work on a tidal current
power plant in the context of a joint venture in South
Korea.
Trial runs with Voith Turbo’s new Maxima locomotive
delivered excellent results on Europe’s rail networks.
Initial orders have now been received for the advanced
locomotive series. The Group Division also developed
EcoPack, the first hybrid drive system for diesel
hydraulic railcars. The EcoPack reuses exhaust gas
heat and braking energy to power the vehicle. Com
pared to the conventional state of the art, this technol
ogy can slash up to 15% off diesel consumption and
reduce emissions by a similar amount.
Voith Industrial Services landed what is already its
second large order for innovative service packages for
the rail industry – a gratifying example of the genuine
synergies that Voith Industrial Services and Voith Turbo
are exploiting in practice.
Peter Edelmann
Martin Hennerici
Voith – Pioneer for the brightest and best
Our company covers a vast spectrum of technological
developments. Which is why we need plenty of cre
ative minds who share our fascination for technology.
Throughout the Voith Group, a plethora of new initia
tives are opening up opportunities for talented individ
uals to contribute their skills in many and varied ways.
We are a family business on the move – a company
full of exciting challenges for people who want to roll up
their sleeves and drive positive change.
We extend our warmest greetings to the people who,
over the past twelve months, have joined us from
LSC Process- und Laborsysteme GmbH (Neuwied,
Germany) Wiessner GmbH (Bayreuth, Germany),
Meri Entsorgungstechnik für die Papierindustrie GmbH
(Ravensburg, Germany), BHS Getriebe GmbH (Sont
hofen, Germany) and BW Hydraulik GmbH (Wuppertal,
Germany). We trust that you will quickly feel at home in
this new phase of your careers here at Voith.
A glance at our markets leaves us confident about the
months ahead. All the signs are that, in the markets we
serve, dynamic growth will be sustained through fiscal
year 2007/08.
We look forward to ongoing collaboration with our
customers and business partners in the same spirit of
trust we have nurtured hitherto.
Best regards,
the Board of Management of Voith AG
Bertram Staudenmaier
Dr. Roland Münch
10
Board of Management
of Voith AG
11
Introduction | Board of Management
(f.l.t.r.)
Dr. Roland Münch Voith Paper
until 2008-03-31 Voith Paper, from 2008-04-01 Voith Siemens Hydro
Bertram Staudenmaier Voith Paper
Dr. Hans-Peter Sollinger Voith Paper
Dr. Hermann Jung Finance & Controlling
Dr. Hermut Kormann President and CEO until 2008-03-31
Dr. Hubert Lienhard Voith Siemens Hydro
until 2008-03-31 Voith Siemens Hydro, from 2008-04-01 President and CEO
Peter Edelmann Voith Turbo
Martin Hennerici Voith Industrial Services
12
Supervisory Board
of Voith AG
Dr. Michael Rogowski
Chairman,
President of the Shareholders’
Committee of Voith,
Heidenheim
Gerd Schaible*
Deputy Chairman,
Chairman of the corporate
works’ council of Voith AG,
Heidenheim
Walter Beraus*
Secretary of the Metalworkers’
Union, Regional Organization
Baden-Württemberg Stuttgart,
Stuttgart (from 2007-04-01)
Dr. Manfred Bischoff
Chairman of the Supervisory
Board Daimler AG, Stuttgart
Rudolf Brandhuber*
Chairman of the works’ council
of Voith Dienstleistungen GmbH,
Heidenheim
Thomas Brezina*
Member of the works’ council of
the common entity of companies
of Voith Paper Heidenheim,
Heidenheim
Johann Gerressen*
Chairman of the general works’
council of DIW Indumont GmbH,
Wesseling
13
Introduction | Supervisory Board
Prof. Dr. Bernd Gottschalk
Vice President of the Bundesver
band der Deutschen Industrie
(BDI) e.V. (the Federation of
German Industries), Berlin
Ute Schurr*
Chairwoman of the general works’
council of companies of Voith Turbo
Heidenheim, Crailsheim, Garching
and Essen, Heidenheim
Florian Haupt*
Legal adviser, Heidenheim
Klemens Schweppenhäuser
Member of the Board of
Management of Familien
gesellschaft J. M. Voith GbR,
Mannheim
Gottfried Heil*
2nd Representative of the Metal
workers’ Union, Friedrichshafen
branch, Friedrichshafen
(until 2007-03-31)
Dr. F. Oliver Porsche
President and CEO of Familie
Porsche AG Beteiligungsgesell
schaft, Salzburg/Austria
Angela Voith
Doctor, Herdecke
Dr.-Ing. E. h. Jürgen Weber
Chairman of the Supervisory
Board of Deutsche Lufthansa AG,
Cologne
Dr.-Ing. E. h. Heinrich Weiss
Chairman of the Board of
Management of SMS GmbH,
Düsseldorf
Andreas Strobel*
1st Representative of the
Metalworkers’ Union, Heidenheim
branch, Heidenheim
*Elected by the employees.
14
2
Our company covers a vast
spectrum of technological de
velopments. Which is why we
need plenty of creative minds
who share our fascination for
technology. Throughout the
Voith Group, a plethora of new
initiatives are opening up op
portunities for talented individu
als to contribute their skills in
many and varied ways. We are
a family business on the move
Voith – Pioneer
in Future Markets
15
16
*Cleaning
17
*Ideas for
Environmentally Friendly Paper
Production
The scooping arm of the lime trap
at Leipa paper mill in Schwedt/Oder,
Germany, rotates slowly. Every
hour, 700 cubic meters of water from
the paper production process flow
through the system, which de-limes
the water and feeds it back into
the production process.
The lime trap is a milestone. With it,
the engineers of Voith Paper Environmental Solutions have succeeded
in taking yet another step towards
closing the water circuit of the paper
making process. A significant step
on the way to eco-friendly, water- and
energy-saving paper production.
18
*Electricity
19
*Climate-Friendly
Energy
After heavy rainfalls, the Caroni River
in Venezuela is flooded. Surplus water
thunders down the overflow of Simón
Bolívar (Guri) hydro power station.
The river drives 20 giant turbines.
With an output of more than
10 000 Megawatts, Simón Bolívar
is among the largest hydro power
stations in the world. It generates
more electricity than 14 coal-fired
power plants. Reliably. Day after day.
The hunger for electricity is growing
worldwide. Hydro power stations help
to meet this rise in demand without
putting extra load on the climate. They
make a significant contribution in
the struggle against global warming.
20
*Safety
21
*Dancing on
the Volcano
On the snow-covered slopes of Mount
Etna, 15 trucks weighing up to 40 tonnes,
get ready. Along narrow serpentines,
a test route with numerous hairpin
bends and downward gradients of up
to 10 percent leads down to the valley.
Here, in extreme conditions, the Voith
Retarder is in its element: All of the
trucks master the route confidently.
By interacting with the engine brake,
the Retarder provides the drivers
with the decisive extra plus in safety
and reliability.
Voith Retarders in trucks and coaches
have been ensuring more safety on
the roads for many years. Voith has
developed this technology further – for
more safety in everyday life and also
on the precipices of Mount Etna.
22
23
*Reliability
*Efficiency
for Production
Processes
A Voith Industrial Services employee
checks the location points before body
panels are dropped there to be run
through the paint shop.
Every year, over 200 000 loading platforms for small trucks are produced
and painted in the plant of Continental
Structural Plastics in Tijuana, Mexico.
The reliability of the specialists from
Premier at this interface is a vital
contributor to the efficiency of the production process.
The global market makes maximum
demands on the automotive industry
and its suppliers in terms of speediness,
flexibility and quality. Sourcing out
secondary processes to reliable partners adds extra scope of operation and
increases efficiency in core activities.
24
3
Reports of the Group Divisions
We are convinced that our innovative capabilities are a key factor of Voith’s suc-
cess. “Good ideas should not
fall at the financial hurdle.” At
Voith, this principle is firmly
anchored – and lived out – in
our corporate culture. Fiscal 2006/07 brought a raft of
fresh initiatives. All our Group
Divisions stepped up their
commitment to projects in the
Reports of the
Group Divisions
26
30
34
38
Voith Paper
Voith Siemens Hydro
Voith Turbo
42 Markets
52 Employees
25
26
Voith Paper
Successfully preparing the way forward
as a partner to the paper industry
Brisk business at all divisions
Larger footprint in China
Successful start for environmental
technology activities
New products for greater energy efficiency
and productivity
27
Reports of the Group Divisions | Voith Paper
Orders Received
€ in millions
03/04
1 882
04/05
1 399
05/06
1 780
06/07
2 051
Sales*
1 749
04/05
1 658
05/06
1 567
06/07
1 732
€ 1732 million
Sales
as at September 30
2004
9 938
2005
10 007
2006
9 977
2007
10 081
*See note page 57.
Orders Received
€ in millions
03/04
Employees
€ 2 051 million
10 081
Employees
28
Management Board of Voith Paper
top row: Dr. Hans-Peter Sollinger Chairman
Bertram Staudenmaier Fabrics | Dr. Roland Münch Automation (until 2008-03-31)
Norbert Nettesheim Finance & Controlling
bottom row: Stephan Bocken Fiber Systems Kurt Brandauer Paper Machines Graphic Grades
Rudolf Estermann Paper Machines Board/Packaging
Thomas Koller Finishing | Andreas Endters Rolls
Brisk Business at all Seven Divisions
Voith Paper received several orders from long-standing customers for complete production lines in fiscal
year 2006/07. One of these orders is for a graphic
paper machine that is bound for China. Another is for
a newsprint machine for the UK. A Chinese customer
signed an order for a total of four large board machines. Fiber Systems was given the nod to supply one
of the world’s largest deinking plants. Two major orders
also enabled Finishing to benefit from positive developments in the Chinese paper industry.
A buoyant market for quality control systems and strong service business put wind in the sails of Automation in the period under review. A constant uptrend
in business at the Rolls and Fabrics divisions once
again contributed to the success of the Voith Paper
Group Division as a whole.
Larger footprint in China
Construction of the new Voith Paper Technology and
Service Center in Kunshan, Jiangsu Province, is Voith
Paper’s response to the growing importance of the Chinese market. All seven Voith Paper divisions have
been based here since fall 2007. Focus on resources
The rising price of raw materials, energy and water is
a major cost driver in the paper industry. Voith Paper
develops products and solutions that cut consumption
of all three. As a result, harmful CO2 emissions are
reduced, too.
In the fiscal year under review, Voith Paper bundled
its activities to develop and market innovative environmental technologies for the paper industry by launching
Voith Paper Environmental Solutions. The new company will focus on water conservation and the recycling
of residual materials from the production process.
29
Reports of the Group Divisions | Voith Paper
Only 5 months after the beginning of erection the new production line PM 12 at Huatai
Paper Company Limited/China was successfully started up in October 2006.
The PM 12 produces high-grade newsprint.
Generating energy from treated water
The Aquatyx R2S anaerobic reactor from Voith Paper
enables water recycling to be combined with the generation of biogas for use as an energy source. This
development is a first step toward integrated paper
mills based on largely closed water loops – mills that
will convert residual materials into substitute fuels.
Lower energy and fiber consumption thanks to ATMOS
ATMOS (= Advanced Tissue Molding System) is a
revolutionary drying process in the manufacture of toilet
paper. Compared with conventional methods, ATMOS
yields energy savings of over 35% in the production of
premium quality tissue. It also requires far less capital
expenditure. Depending on the precise application, it is
also possible to use 100 % recycled materials with no
loss of quality.
Enhanced heat flow in the drying cylinder: RapidDryer
The RapidDryer is a new drying cylinder that boosts
heat flow by as much as 25% compared to the con
ventional technologies in use today. The production capacity of paper machines can thus be increased without extending the length of the drying section.
Higher productivity thanks to the SkyLine doctor blade
portfolio
The new SkyLine doctor blade portfolio is the fruit of
years of experience with roll covers. Perfect coordination of the doctor blade and the roll surface raises the
productivity of paper machines and improve paper
quality at the same time.
Saving time and money with the OnV VirtualSensor
The OnV VirtualSensor forecasts a range of process
variables (stiffness, porosity and dry weight) that, in the past, could not be calculated until the paper web
had reached the first measuring frame.
30
Voith Siemens Hydro
Booming demand for carbon-free, renewable energy
boosts hydro power business
Orders received set new record
International presence ramped up
Constructive dialogue on sustainability
of hydro power
Initial commercial projects for forwardlooking ocean energy technology
Reports of the Group Divisions | Voith Siemens Hydro Power Generation
Orders Received
€ in millions
03/04
683
04/05
624
05/06
721
06/07
1 083
Sales*
466
04/05
586
05/06
614
06/07
650
Orders Received
€ 650 million
Sales
as at September 30
2004
2 261
2005
2 581
2006
2 436
2007
2 834
*See note page 57.
€ 1083 million
€ in millions
03/04
Employees
31
2 834
Employees
32
Management Board of Voith Siemens Hydro (from left)
Dr. Hubert Lienhard Chairman (until 2008-03-31)
Dr. Roland Münch Chairman (from 2008-04-01)
Egon Krätschmer Finance & Controlling
Jürgen Sehnbruch Marketing
Dr. Siegbert Etter Corporate Technology
Major Successes on International
Hydro Power Markets
On the heels of a very good year previously, Voith Siemens Hydro saw a further significant increase of
50.3 % in the volume of orders received in fiscal year
2006/07. Driven by persistently strong global demand
for carbon-free power generation from renewable
energy sources, business volume soared beyond the
€ 1 billion mark for the first time in the history of this
Group Division.
International presence ramped up
In the period under review, Voith Siemens Hydro established a foothold in yet another key hydro power market
with its launching of a new Operating Unit in Turkey.
At the same time, its companies in Canada, India and
Brazil were expanded to accommodate growing business volume in each of these regions. Successful
integration of Sweden’s VG Power, acquired in 2006,
also reinforced Voith Siemens Hydro’s presence in the
Scandinavian market.
Constructive dialogue about the sustainability of
hydro power plants
Voith Siemens Hydro has begun to prescribe the Sustainability Guidelines, promulgated by the International Hydropower Association, as required knowledge
for all sales staff. Training courses are conducted for
employees. The Group Division is working closely
together with prominent nature conservation groups
and non-governmental organizations (NGOs) to provide
training and to prepare for implementation both inside
and outside the company. This initiative to promote
the sustainability of hydro power gives Voith Siemens
Hydro a pioneering role throughout the global industry.
33
Reports of the Group Divisions | Voith Siemens Hydro Power Generation
Assembling of generator in modernization project Furnas, Brazil.
Forward-looking market for ocean energy gathers
momentum
An order for the first commercial wave power plant
marked a critical milestone for the Group Division. In Mutriku on Spain’s Atlantic coast, 16 turbines of 18.5 kW each are being built into a new breakwater
system. Integrating these turbines in a breakwater
that is under construction anyway yields considerable
synergies in the civil structure that vastly reduce power
generation costs. That makes the optimized Wavegen
technology a very attractive proposition indeed.
Another step toward harnessing ocean power in a way that is economically viable was the launch of a joint
venture in collaboration with the Korean company
Renetec. The goal of this venture is to build the world’s
first tidal current power plant off the coast of South
Korea. Ultimately, the plant will generate about 600 MW.
Preliminary turbine test runs are scheduled for 2009.
Innovative ways to improve power grid stability
Pumped storage power plants make a significant
contribution to grid stabilization, especially when inter
mittent wind or solar energy exposes them to extreme
fluctuations. This past year, Voith Siemens Hydro again
concentrated its attention on the development of pumpturbines, including technologically sophisticated variants designed especially to optimize substantial water
level fluctuations as reservoirs rise and fall.
Other development activities focused on Kaplan turbines with adjustable turbine blades. One key issue
was on the mechanical and hydraulic design of very
large runners of up to ten meters. Voith Siemens Hydro
also succeeded in developing a new adjustable Kaplan
hub. The new system uses less oil, resulting in improved environmental effects. It is also smaller, which
improves efficiency and cuts costs.
34
Voith Turbo
Still plotting steep growth curve
Orders received and sales both set new records
Global demand for all Industry division products
as strong as ever
Road division enjoys very positive development
in all product groups
Upturn in markets served by Rail division
Innovative developments from the Marine division
very well received by customers
35
Reports of the Group Divisions | Voith Turbo
Orders Received
€ in millions
03/04
738
04/05
823
05/06
931
06/07
1 201
Sales*
725
04/05
814
05/06
894
06/07
1 011
€ 1011 million
Sales
as at September 30
2004
3 793
2005
3 958
2006
4 264
2007
4 814
*See note page 57.
Orders Received
€ in millions
03/04
Employees
€ 1201 million
4 814
Employees
36
Management Board of Voith Turbo (from left)
Peter Edelmann Chairman
Matthias Lindemann Finance & Controlling
Dr. Jürgen Zeschky Industry Division
Dr. Volker Zimmermann Road Division
Dr. Manfred Lerch Rail Division
Dr. Martin Füllenbach Marine Division
Growth Accelerates in all Divisions
In fiscal year 2006/07, Voith Turbo continued writing the success story that had begun in previous years
already.
Strong expansion in booming markets
As in the preceding years, the Industry division saw
business boom in some areas. Worldwide demand from
the power plant, oil, gas, steel and mining industries
remained consistently upbeat and fueled considerable growth in all product groups. China, India, Russia,
South Africa, the USA and the markets of Latin America
formed the regional focus of this division’s business
activity.
Commercial vehicle segment drives surge in orders
The Road division won numerous major international
projects and saw the orders received rise sharply in all
product groups. In the course of the fiscal year under review, it sold more than 15 000 DIWA automatic
transmissions and over 50 000 retarders – new sales
records on both counts. More than 100 000 dampers
were sold for the first time, too.
Rail markets gather momentum
The Rail division did brisk business both as a direct
supplier to OEMs and as a service provider. Large
orders for 200 turbo transmissions for the Spanish state
railway company and 1 250 engine/transmission units
for AGC in France set the tone. Shipment of complete
front-end modules (comprising automatic couplings and
nose sections) to customers in Spain, South Korea and
China underscored Voith Turbo’s standing as a competent system provider.
Successes scored in demanding markets
Orders for Voith Schneider Propellers and Voith Water
Tractors were received from Italy, South Africa, Egypt,
China, India and other countries. In addition, Voith
Turbo Marine confirmed its technology leadership and
the forward-looking nature of its innovative developments by winning orders for new shipping and propulsion models such as Platform Supply Vessels, Voith
Cycloidal Rudders and the Voith Roll Stabilizer system.
Reports of the Group Divisions | Voith Turbo
37
The prototype of the WinDrive has been tested successfully in the DeWind-turbine model 8.2 in Cuxhaven, Germany.
Innovations
Voith WinDrive prototype tested successfully
A prototype model of the Voith WinDrive went smoothly
into service in the period under review. This planetary
drive for wind energy plants converts variable input
speeds (caused by fluctuations in wind force) into constant output speeds. This innovation delivers two key
benefits: First, the gondola can be made much lighter,
because a frequency inverter is no longer needed.
Second, the entire driveline is much less vulnerable
to malfunctions.
The EcoPack: Conserving resources and protecting the
environment
The EcoPack is a complete driveline that combines
a number of innovations in a coherent package. The
package sets new standards in fuel consumption,
exhaust emissions and noise emissions for rail vehicles. Three special features of the EcoPack are an
integrated hybrid drive that recovers braking energy,
the Steamcell that reuses exhaust gas heat, and the
cooling system featuring SilentVent technology.
Making road transport more economical: Turbocharger
business being ramped up
In the fiscal year under review, progress was made
in product development and the preparation of volume
roll-out of Voith’s new turbochargers. A production
facility for different sizes and customer-specific variants
of turbochargers is under construction at Gommern in
Saxony-Anhalt, Germany.
Less fuel consumption and a more comfortable ride:
The Voith Water Jet
Development of the Voith Water Jet from Voith Turbo
Marine has now been successfully completed. Comparative studies show that, for ships with speeds of
over 25 knots, this propulsion concept is superior to
other drive systems in terms of both fuel consumption
and comfort.
38
Strong internal growth at all three divisions
New orders and sales hit new peaks
Large orders received from the international
automotive industry
Successful start in the forward-looking
Turkish market
Larger footprint in the process industry
Reports of the Group Divisions | Voith Industrial Services
Orders Received
€ in millions
03/04
313
04/05
400
05/06
655
06/07
791
Sales*
315
04/05
396
05/06
655
06/07
791
Orders Received
€ 791 million
Sales as at September 30
2004
7 825
2005
13 737
2006
16 858
2007
18 908
*See note page 57.
€ 791 million
€ in millions
03/04
Employees
39
18 908
Employees
40
Management Board of Voith Industrial Services (from left)
Martin Hennerici Chairman
Dr. Hubert Lachenmayer Finance & Controlling
Markus Glaser-Gallion Division Process Service
Dr. Norbert Klapper Division Facility Service Europe
Harry Nieman Division Facility Service Americas/Asia
Major Successes Scored on International
Service Markets
In fiscal year 2006/07, Voith Industrial Services saw
both orders received and sales leap. Forceful internal
growth in all three divisions – Process Service, Facility Service Europe and Facility Service Americas/Asia
– played a part in making the period under review a
thoroughly successful fiscal year. The Group Division
also powerfully underscored its position as a leading
service provider to the European automotive industry.
Major order covering eight plants for General Motors
Europe
A single order from General Motors Europe commissioned Voith Industrial Services with providing technical cleaning services at all eight of the customer’s
European assembly plants. The order, which is being
handled by Facility Service Europe, is the first of such a
contract for which the customer invited tenders covering multiple factories and countries.
Optimizing processes all along the value chain
At the Slovakian plant where the body is made for the
Audi Q7, Hörmann Industrietechnik had its contract
extended ahead of time as performance targets were
met in full. The project involves maintenance, servicing
and machine operation, but also process optimization.
Within the framework of a continual improvement process, both the performance and availability of the plant
have been improved significantly.
High-tech services for the world’s most advanced truck
factory
MAN commissioned Voith Industrial Services with
handling an extensive array of services at its Polish
plant in Niepolomice. Process Service is spearheading
this project. Voith Industrial Services is responsible for
aspects such as just-in-sequence delivery of wheels
right up to the assembly line, including material flow
organization, the entire logistical service package and
all maintenance and facility management processes.
Reports of the Group Divisions | Voith Industrial Services
41
Maintenance and repair of rail vehicles for public transportation
in the Netherlands – in workshops of Voith Railservices.
Flying start in Turkey
The launch of a new company in Turkey gave Voith
Industrial Services an initial foothold on this important,
forward-looking European market. Within just a few
weeks, Pirelli had already signed orders for building and
industrial cleaning services at two Turkish plants.
Excellent customer relationships
In fiscal year 2006/07, Daimler Brazil presented Voith
Industrial Services Brazil (part of the Facility Service
Americas/Asia division) with its “Interação Award” for
the best service provider in 2006. This prize is awarded
in honor of suppliers whose services play a key role
in improving Daimler’s productivity and sharpening its
competitive edge.
New milestone for Voith Railservices B.V.
Veolia Transport Nederland, a privately owned Dutch
local passenger transport operator, commissioned
Voith Railservices with servicing 16 trains on the
oermond-Nijmegen line. Worth € 22 million, this order
R
has unquestionably established Voith Railservices as a leading European service provider for rail customers.
Larger footprint in the process industry
Very good references from other refinery customers
led British Petroleum Deutschland to award Process
Service a substantial initial order for pipeline construction work at its Gelsenkirchen site. During a scheduled
four-week refinery outage, more than 220 employees
were on site at times. This order represents a further
milestone in the development of the Process Service
division.
Major order in the paper industry
At the Scheufelen paper mill in Oberlenningen, Germany, Voith Industrial Services is handling electrical
and mechanical maintenance for the production units.
Technical facility management and replacement parts
provisioning are also part of the order.
42
Markets
Paper
Energy
A world without paper? Unthinkable. More than
every third sheet of paper in the world is produced
on a Voith paper machine. Voith Paper offers its
customers the entire papermaking process from one
single source.
More than a third of the electricity generated with
hydro power is produced with turbines and generators
made by Voith Siemens Hydro. Voith Turbo components
ensure energy supplies in power stations all over the
world.
Markets
43
Mobility
Service
Drive and braking systems from Voith ensure that
people and goods reach their destinations quickly
and safely. In a wide range of industries, Voith
components operate in all places where energy
has to be converted into controlled motion.
The future belongs to integrated service concepts.
Voith Industrial Services is one of the leading
suppliers in the area of industrial services:
From planning, engineering and assembly through
to maintenance, technical cleaning and facility
management.
44
Paper
Nothing works without paper. All of us encounter
it in almost all areas of life, in a wide range
of shapes.
Focus on:
Voith Paper
Voith Turbo
Voith Siemens Hydro
Markets
45
Picture left: An Employee of Voith Paper.
Picture right: Janus MK 2 Calender of the
Leipa PM 4 in Schwedt/Oder, Germany
Significant Events and Orders
October 2006
· One of the largest deinking plants for Guangzhou Paper/China.
· New world speed record for coated fine papers on PM 3 at Gold East Paper/China: 1 662 meters per minute.
· Successful start-up of PM 12 at Huatai Paper Company
Limited/China after an assembly time of only five months –
a world record.
November 2006
· Paper machine PM 18 and further components for Nine Dragons Paper Co. Ltd./China.
December 2006
· Paper machine for high-quality copying and offset papers for Phoenix Pulp and Paper Public Company Limited/Thailand.
February 2007
· Rebuild of press section at Klingele in Weener/Germany.
March 2007
· Paper machine Bhigwan PM 2 including stock preparation
and finishing for Ballarpur Industries Ltd. (BILT)/India.
May 2007
· Major order for four packaging paper machines from Nine
Dragons Paper Co. Ltd./China.
· Rebuild of a packaging paper machine at Carteria Giorgione S.p. A. in Castelfranco Veneto/Italy.
· Press section for a pulp plant of Votorantim in Três Lagoas/Brazil.
June 2007
· New stock preparation machine for JSC Kondopoga/Russia.
· Major rebuild of a paper machine at Norske Skog in
Jaguariaíva/Brazil.
July 2007
· Rebuild of a paper machine for Billerud Skärblacka AB/Sweden.
August 2007
· Paper machine Dandeli PM 6 for West Coast Paper Mills/India.
September 2007
· Paper machine PM 27 for testliner production for Dongguan
Nine Dragons Paper Co. Ltd./China.
46
Energy
The energy requirements of mankind are increasing
day after day. We are working on new technologies,
in order to ensure sustainable energy supplies.
Focus on:
Voith Paper
Voith Turbo
Voith Siemens Hydro
Markets
47
Picture left: Landmarked historical power house of hydro power plant
Eglisau, Switzerland. Picture right: Employee at the operating panel of
hydro power plant Aimores, Brazil.
October 2006
· Four geared variable-speed couplings for RWE Power for the world’s largest coal-fired power plant in Neurath/Germany.
November 2006
· Rehabilitation and partial modernization of the Hungarian hydro power plant Tiszalök at Tiszaviz Vizerömü KFT.
December 2006
· Kaplan turbines and generators for Swiss Kraftwerk Eglisau-
Glattfelden AG for ERNEG hydro power plant.
· Groundbreaking ceremony for generator production plant in
Shanghai/China.
· Kaplan turbines and generators for Rheinfelden hydro power station at the German-Swiss border for Energiedienst AG, a subsidiary
of .EnBW.
.
· Equipment for Akocak hydro power plant of Ak Enerji/Turkey.
January 2007
· First pilot wind power station with the newly developed
WinDrive in the DEWI OCC test field in Cuxhaven/Germany.
March 2007
· Francis turbines and generators for Darica hydro power plant
in Turkey. The customer is Yapisan Elektrik Üretim A. S.
· Kaplan turbines and generators for Baguari hydro power plant in Brazil, owned by the consortium Cemig, Furnas and Neoenergia.
April 2007
· Rehabilitation of Lotru Ciunget at Hidroelectrica S.A./Rumania.
May 2007
· Exchanging unit 2 in the Russian hydro power plant Uglich of JSC Gidro OGK, a subsidiary of the Russian RAO UES.
June 2007
· Four Kaplan turbines as part of a consortium for the 1 100 MW hydro power station Estreito/Brazil of Consórcio Estreito Energia.
· First commercial wave power station in Mutriku harbor for the
Basque energy supplier Ente Vasco de Energia.
July 2007
· Establishmentof a joint venture for new tidal current technology with Renetec, Korea.
August 2007
· Complete equipment with eight Francis turbines for Jinping II of Ertan Hydropower Development Co./China.
48
Mobility
Mobility has many facets. But the basis of
mobility will always be the same: Energy
needs to be converted into motion and then
transmitted.
Focus on:
Voith Paper
Voith Turbo
Voith Siemens Hydro
Markets
49
Picture left: An employee in the Service Center Rail.
Picture right: MAN Lion’s City Bus with DIWA.5 transmission.
October 2006
· Ten universal joint shafts for the waste water pump station of Singapore National Water Agency PUB/Singapore.
June 2007
· Voith Turbo Scharfenberg in Salzgitter/Germany is awarded
a prize in the competition “365 Landmarks in the Land of Ideas”.
January 2007
· Handover of the first of a total of 240 DLoco locomotives with Voith final drives to the Chinese Ministry of Railways.
· Scharfenberg couplers for 87 metro vehicles in Dubai. The order was placed by the Japanese vehicle manufacturer Kinki Sharyo.
July 2007
· 700 final drives for the trains of the Swedish operator
Skanetrafiken and Deutsche Bahn AG built by Alstom.
· 416 final drives for commuter trains of Southeastern
Pennsylvania Transportation Authority in Philadelphia/USA.
· 272 final drives for the German rail manufacturer Stadler.
February 2007
· Acceptance of a guest professorship at the Institute for Rail Vehicles and Rail Technology at Dresden Technical University
in Germany.
March 2007
· Another Voith Water Tractor for Shanghai Deep Water Port/China.
· Voith locomotive Maxima receives the “Red Dot Design Award”.
May 2007
· 60 front ends for the Spanish Talgo high-speed train.
· DIWA transmissions for 620 new citybuses of Dubai Roads & Transport Authority DRTA.
August 2007
· 300 DIWA transmissions for bus operators in Norway.
· 500 DIWA transmissions for low-floor buses of various operators in the Rumanian capital Bucharest.
· Largest order in Australia: 1 252 couplers for 626 rail carriages for the Australian EDI Rail.
September 2007
· The French national railway company increases its order for wheelset transmissions for the regional AGC train from 1 500
to 2 500 units.
50
Service
Good service can be very easy. Experience and an
eye for detail are sufficient to really understand
the tasks and requirements of the customer and to
transform them into intelligent service concepts.
Focus on:
Voith Paper
Voith Turbo
Voith Siemens Hydro
Markets
51
Picture left: Quality inspection of painted car bodies at the conveyor belt for an automotive customer in England. Picture right: Qualified employees
contribute to a failure-free train service.
October 2006
· Extended contracts with Infineon Technologies and Qimonda in Dresden/Germany.
November 2006
· De- and reassembly of the complete production plant and warehouse technology for the welding machine builder Fronius International GmbH/Austria.
January 2007
· Special cleaning and clearing work after a major fire at
Robert Bosch GmbH, Rommelsbach/Germany.
· Systems responsibility during full production for the support
of the logistics systems at Volkswagen Sachsen GmbH in
Zwickau/Germany.
February 2007
· Major gas turbine inspection at Shell Deutschland Oil GmbH in Hamburg/Germany, for GE Energy Products GmbH & Co. KG.
March 2007
· Maintenance of train fleet for the commuter train operator
Veolia Transport Nederland/Netherlands.
· Facility services at Autostadt Wolfsburg VW/Germany.
April 2007
· Further projects added to general agreement with Wacker
Chemie AG/Germany
· Calculation and construction of a lightweight car door for the German Ministry of Education and Research.
May 2007
· Maintenance for eight assembly plants of General Motors Europe.
June 2007
· Comprehensive contract for MAN in Niepolomice/Poland.
July 2007
· First service order in China outside the automotive industry for the Dutch food company International Nutrition.
August 2007
· Technical building management for EADS Germany at five
locations.
September 2007
· Contract for modernization work at Ruhr Oel GmbH/Germany.
52
Employees
An attractive employer offering exciting challenges
Internal growth and acquisitions drive up
staffing levels
Excellent development opportunities in an
international context
With the “Knowledge Factory” against
technophobia and the shortage of engineers
Employees
53
Employees
as at September 30
8 322
2004
15 992
2005
16 546
14 288
30 834
2006
16 677
17 408
34 085
2007
17 729
19 535
37 264
Systems & Products 24 314
Services
Employees
by regions
7 904
Germany
Europe excluding Germany
3 315
Americas
4 069
Asia
Others
9 062
4 870
8 185
5 091
9 160
2 246 512
2 758
195
195
Services
37 264
37 264
Employees
54
Voith – Pioneer for People with
a Passion for Technology
Budding engineers rate Voith as one of the most popular
Germany’s most successful young managers under the age
employers in Germany. This was one of the findings of
of 40. The award comes as powerful confirmation that
the “Graduate Barometer”, an annual survey conducted by
Voith offers excellent development opportunities – and the
“Manager Magazin”, one of Germany’s leading business
chance of rapid promotion – to talented, dedicated
journals. In 2007 the for Voith important university graduates
employees.
gave Voith 13th place among the country’s top employers,
confirming the enviable position achieved in previous years.
Trainee programs at Voith – springboard to global management responsibility
Excellent development opportunities for young managerial
talents
One example of the many development programs that
In 2005, the “Top Companies for Leaders” study put Voith
Development training program at Voith Paper. The program
among the ten most attractive European employers for
aims to form a pool each year of between five and seven
up-and-coming executives. In the fiscal year under review,
top junior managers in the field of research and develop-
this outstanding result was underscored by the fact that a
ment. When they graduate from the program, they will then
Voith employee ranked among the top 25 in the “Career
be in charge of inventing and developing new products.
of the Year” awards. The employee in question began as
After an initial orientation phase (three month stays at two
a trainee in 2002 and is now deployed in Russia as the
different research departments), the program digs deeper
Group’s youngest manager. Handelsblatt, a respected
by throwing trainees into their first independent product
German business daily, awards this prize once a year to
development project over a nine-month period.
await young managerial talents at Voith is the new Product
55
Employees
International collaboration with universities
schools. The “Knowledge Factory” aims to reduce techno
In the battle to attract the brightest and best minds, Voith
phobia – fear and hostility toward technology – and get
has for years been committed to numerous projects at uni-
children and youngsters excited about the world of busi-
versities and other institutes of higher education around
ness and technology. In the two years since the “Know-
the globe. One topical example is Voith Paper’s cooper
ledge Factory” was established, Voith has launched
ation with Nanjing Forestry University (NFU) in Nanjing,
a large number of projects. In 2007, a project to help
about 300 km northwest of Shanghai in the forward-look-
youngsters explore how things work was ramped up after
ing Chinese market. With a 100-year tradition to its name,
a successful pilot phase. Experiment kits were supplied to
the NFU offers paper technology courses that are held in
more than 50 elementary schools, enabling teachers and
high regard. Voith Paper supports both selected students
pupils to do all kinds of exciting scientific experiments.
and projects that enable paper technology study courses
Voith employees go into schools to introduce the kits and
to be developed and improved.
supervise their use.
With the “Knowledge Factory” against technophobia and
the shortage of engineers
A word of thanks
Voith is a founder member of the “Knowledge Factory”,
company. Our thanks go to all our employees, whose
under whose aegis 60 companies are now committed to
exemplary dedication and commitment are largely respon-
more than 500 partner projects with kindergartens and
sible for this successful performance.
Fiscal year 2006/07 was a decidedly good year for our
56
4
Management Report
For the fourth year in a row,
the global economy maintained its pattern of dynamic
expansion in the period under
review. Triggered by a growing crises of confidence on
the US mortgage lending market, initial signs of uncertainty
began to appear toward the
end of the fiscal year (to September 30, 2007). The extent
to which coordinated intervenManagement Report
58
60
68
69
70
76
I. Business and Background
II. Earnings, Assets and Financial Position
III. Research and Development
IV. Events after the Balance Sheet Date
V. Report on Risks and Opportunities Facing
the Company
VI. Forecast Report
77
78
Corporate Governance Report
Report of the Supervisory Board
Advice: Throughout the 2006/07 Annual Report, the figures
for the fiscal years 2006/07, 2005/06 and 2004/05 have been
prepared in accordance with IFRS, whereas the figures for 2003/04 have been prepared in accordance with the German Commercial Code (HGB). Direct comparison of the figures for
all four periods is therefore possible only to a limited extent.
57
58
Management Report
for Voith AG
I. Business and Background
A) The Voith Group’s Business Activities
B) Organization and Control of the Voith Group
The Voith Group started out as a craftsman’s business, founded in 1867 by Johann Matthäus Voith in
the German city of Heidenheim/Brenz. What began as
a small locksmith’s shop quickly grew to become one
of the largest machine factories in southern Germany,
focusing on paper technology products and water turbine construction. Today, the company is still owned by
the Voith family and operates worldwide in the paper,
energy, mobility and service markets. The corporate
Group is split into four Group Divisions: Voith Paper,
Voith Siemens Hydro Power Generation, Voith Turbo
and Voith Industrial Services.
The Voith Group is headed by Voith AG, which is headquartered in Heidenheim/Brenz in the eastern part
of Baden-Württemberg in southern Germany. Voith AG
acts as an operational management holding company.
This company’s Board of Management shapes and is
responsible for the Group’s general business strategy.
It is supported by corporate functions based at the
same location in Heidenheim. The four Group Divisions
operate as independent profit centers and are each
managed by a head organization. These four head
organizations direct and control operating business in
the Group Divisions.
Voith Paper is a global process supplier to the paper
industry. Its seven divisions develop technology solutions that span the entire papermaking process, from
fiber to finished product.
In all its Group Divisions, Voith strives to achieve
sustainable, profitable growth. Corporate control is
anchored in a value-based management philosophy
that uses the return on capital employed (ROCE) as
the key measure of the company’s earnings power.
Management ratios are calculated on the basis of
earnings before tax and interest (EBIT). All figures
and reports submitted to the Board of Management
are based on these management ratios.
Voith Siemens Hydro Power Generation is a joint
venture company that has combined the strength of two leading hydro power component suppliers to create
a leading, full-line supplier for hydro power plants.
Voith Turbo specializes in mechanical, hydrodynamic,
electrical and electronic drive and braking systems for
road, rail, marine and industrial applications.
Voith Industrial Services is one of the leading providers
of industrial services, covering everything from plann
ing, engineering and assembly to servicing, technical
cleaning and facility management.
59
Management Report
C) Macroeconomic Situation
Foreign demand booming in the engineering sector
Global economy still growing strongly
In the fiscal year under review, the German engineering sector saw a boom in fresh orders. In real terms,
orders were up 16 % year on year. Strong demand from
abroad – especially orders placed for large plants and
systems – was largely responsible for this upsurge.
For the fourth year in a row, the global economy maintained its pattern of dynamic expansion in the period
under review. Triggered by a growing crisis of confidence on the US mortgage lending market, initial signs
of uncertainty began to appear toward the end of the
fiscal year (to September 30, 2007). The extent to which
coordinated intervention in the money markets by the
major central banks will stabilize interest rates around
the world and contain macroeconomic risks remains to
be seen. Nor did a further increase in oil prices choke
off the powerful uptrend, which was fueled in particular
by the growth regions of Latin America and Asia and by the Eurozone’s flourishing economy. The German econ
omy benefited substantially from this favorable development, growing by 3 % in the first half of 2007.
Such powerful impulses from abroad, coupled with
solid domestic demand, drove even the previous year’s
record production volume up a further 11% to € 173
billion in the period under review. This figure established
Germany as the world’s second-largest manufacturer
of plants and machinery, after the USA but ahead of
Japan. Employment figures in this industry reflect this
trend: In the year to September 30, 2007, some 45 000
new recruits swelled Germany’s core engineering workforce to 929 000. Indeed, the corporate sector actually
found its recruiting ambitions hampered by an increasingly acute shortage of suitably qualified specialists in
general and engineers in particular.
60
Orders Received
03/04
3 303
04/05
2 846
05/06
3 432
06/07
4 336
320
3 257
411
4 096
664
796
Services
5 132
€ in millions
II. Earnings, Assets and Financial Position
Orders Received
Sharp jump in orders in all Group Divisions
All Voith Group Division’s recorded a year-on-year
increase in new orders in fiscal year 2006/07. With the
world’s economy remaining buoyant, the Group as a
whole received orders with a total volume of € 5.1 billion, breaking the record set in fiscal year 2005/06 by
a further 25.3 %. This very positive development was
fueled partly by brisk business at all four Group Divisions and partly by first-time full-year consolidation of
new orders at VG Power and the Hörmann Group (both
acquired in 2006 and consolidated for only 9 months
in the previous year), plus first-time consolidation of
some of the orders received by BHS Getriebe GmbH
(acquired in July 2007) and the orders of a number
of smaller new companies in the consolidated Group.
Adjusted for these effects, the order intake increased
by 21.9 %. At fiscal year-end (September 30), the Voith
Group as a whole had orders worth € 3.9 billion on
hand.
At Voith Paper, new orders rose by 15.2 % to € 2.1 billion (previous year: € 1.8 billion) – a new record in its
own right. Several large orders shaped the course of
business over the year and had a positive impact on all
seven divisions. After a phase of consolidation in the
previous year, Fiber Systems witnessed a significant
jump in new orders, one of which was to supply the
world’s biggest deinking plant to China. Graphic Paper
Machines benefited from two major orders in particular,
one for a complete production line to be delivered to
China and the other for a newsprint paper machine for
the UK. Board/Packaging received a large order from
a customer for a total of four board machines. Two
substantial orders ensured a positive business trend at
Finishing too. Automation made a major leap forward in
quality control systems and service. Business at both
Rolls and Fabrics remained at a positive, high level.
New orders surged by 50.3 % and set a new record
of € 1.1 billion (previous year: € 721 million) at Voith
Siemens Hydro Power Generation. Orders received by
Swedish-based VG Power are included in these figures
for the first time. Excluding this effect, new orders
would have increased by 46.9%. The markets of Europe and South America accounted for the lion’s share
of these orders. Strong demand was driven by the positive outlook for hydro power and Voith Siemens Hydro’s
powerful strategic position on this global market. All
four divisions – Large Hydro, Small Hydro, Automation and Aftermarket Business – reaped the benefits of
the booming demand. One highlight was the contract,
signed in August 2007, for the delivery of the entire
electromechanical apparatus for the Jinping hydro
power plant – one of the largest in China. This single
order is worth more than € 120 million. Voith Siemens
61
Management Report
Orders on Hand
Orders Received
03/04
2 937
04/05
2 580
05/06
2 913
06/07
3 923
as at September 30
Voith Industrial
Services 15%
by Divisions
Voith Paper 40%
Orders Received
Others 2%
by Region
Germany 21%
Asia 27%
Voith Siemens
Hydro 21%
€ in millions
Hydro also scored its first major success in the forward-looking market for ocean energy when a Spanish
power utility commissioned the Voith Group Division to
build the world’s first commercial wave power plant on
Spain’s Atlantic coast.
Gratifying business development in all four divisions
boosted Voith Turbo’s order intake by 29 % to € 1.2
billion, against € 931 million a year earlier. Adjusted
to eliminate the effect of the consolidation of BHS
Getriebe GmbH and a number of smaller companies
for part of the year, order growth stood at 24.1%.
The Industry division benefited from sustained activity
on China’s power plant market, rapidly growing markets
in Russia, South Africa and South America, and the
boom in the world’s steel industry. At the Road division,
demand for DIWA automatic transmissions, retarders
and torsional vibration dampers hit new peaks as the
international commercial vehicle market remained in
high gear. After a prolonged period of stagnation, a
reviving market also gave the Rail division a positive
inflow of new orders. Marine was able to double its
order volume in the fiscal year under review. One particularly pleasing development was the market’s elated
response to Voith’s propulsion systems for Platform
Supply Vessels, which supply offshore oil platforms.
Voith Turbo 24%
€ 5 132 million
Americas 24%
Europe excluding
Germany 26%
€ 5 132 million
Orders received by Voith Industrial Services were up
20.8 % to € 791 million (previous year: € 655 million)
in the period under review. The Hörmann Group’s
full-year order intake is included in this figure for the
first time. Adjusted to eliminate this effect, orders rose
by 13.4% in the period under review. All three divisions
won substantial orders in key industries. One key driver
of growth at the Facility Service Europe division was
temporary manpower business in Germany. Numerous
large service orders for car factories also played a part.
Orders increased sharply year-on-year at Facility Service Americas/Asia too, mainly thanks to impulses from
the expanding Brazilian and Chinese markets. Process Service experienced significant organic growth in fiscal year 2006/07. Considerable stimulus came from the
activities of Hörmann Industrietechnik and its subsidiary Hörmann Engineering, both of which were integrated into Process Service in the previous year, and
from new lines of business such as service business
for wind energy plants and rail services.
62
Sales
Sales
03/04
2 940
322
3 262
04/05
3 058
407
3 465
05/06
3 075
06/07
797
Services
Voith Paper 41%
Sales
Others 2%
by Region
Germany 23%
Asia 23%
664
3 393
Voith Industrial
Services 19%
by Division
Voith Siemens
Hydro 16%
Voith Turbo 24%
4 190
€ in millions
€ 4 190 million
Americas 24%
Europe excluding
Germany 28%
€ 4 190 million
Sales
Sales exceed the € 4 billion mark
In fiscal year 2006/07, consolidated sales rose by
12.1% to € 4.2 billion (previous year: € 3.7 billion),
thereby breaking the € 4 billion barrier for the first
time. These sales figures include the business volume
posted by VG Power and Hörmann Industrietechnik for
the full year (against 9 months in the previous year),
three months’ sales at BHS Getriebe GmbH and the
sales of a number of smaller newcomers to the consolidated Group. Adjusted to eliminate these effects, sales
increased by 9.1%.
Sales at Voith Paper were up 10.6 % to € 1.7 billion
(previous year: € 1.6 billion), essentially due to the large
volume of orders carried over from the previous year
and a further substantial order intake in fiscal year 2006/07 itself.
Due to the long-term nature of production contracts at
Voith Siemens Hydro Power Generation, the trend in
sales follows that of orders received after a consider-
able time lag. Sales at this Group Division were up
5.8 %, from € 614 million in the previous year to € 650
million in the fiscal year under review. After eliminating
the effects arising from first-time consolidation of VG
Power, sales rose by 2.1%.
Voith Turbo posted sales of € 1 011 million (previous
year: € 894 million) and thus exceeded the € 1 billion
mark for the first time. These figures include the sales
of newly-consolidated BHS Getriebe GmbH and a number of smaller acquisitions. Adjusted to eliminate these
effects, sales were up 10.1%.
All of Voith Industrial Services’ divisions recorded
significant sales growth. Total sales for this Group
Division thus came to € 791 million (previous year:
€ 655 million), an increase of 20.8 %. Adjusted to
eliminate the effects of the first-time consolidation of
Hörmann Industrietechnik, sales growth was 13.4%.
Management Report
63
Capacity Utilization
Capacity well used at all Group Divisions
Voith’s long-term business strategy remains focused on
staying competitive in today’s global markets. Accordingly, every business process is constantly reviewed in order to sustainably increase productivity. Capacity is consistently dimensioned with the aim of adapting it flexibly and selectively to varying economic situations and utilization cycles. Since the order intake rose sharp-
ly at many parts of the Group in the fiscal year under
review, it became vitally important to optimize capacity utilization. A new Six Sigma quality management
initiative and the introduction of a zero-defect production target heralded initial projects to sustainably
improve performance at Voith Paper and Voith Turbo.
At Voith Paper, capacity was once again utilized at a
high level comparable with that of the previous fiscal
year. At 10 081, the number of employees was slightly
higher than in the previous year (9 977). Fluctuations
in capacity utilization were absorbed by the appropriate
use of external manpower and internal overtime.
Strong business growth fueled a 16.3 % increase in
staffing levels at Voith Siemens Hydro Power Generation, bringing the total number of employees to 2 834
(previous year: 2 436). The surge in orders in the fiscal
year under review and the resultant positive outlook
make it imperative to recruit additional, highly qualified
staff if capacity shortages are to be avoided in future.
Capacity was well utilized (and on occasion very well
utilized) at all of Voith Turbo’s divisions. The addition of
550 new employees, bringing the total to 4 814 (previous
year: 4 264), is largely due to first-time consolidation of
the workforce of BHS Getriebe GmbH. The remaining
modest year-on-year increase in personnel reflects the
Group Division’s efforts to absorb peak capacity utilization on a flexible basis.
At Voith Industrial Services, too, the number of employees
increased to 18 908 (previous year: 16 858) in line with
sales development. The powerful loyalty of employees
in this Group Division kept the fluctuation rate very low.
The shortage of suitably qualified specialists hampered
growth at times. A number of positions remain vacant.
64
Net Income
03/04
92
04/05
97
05/06
246
06/07
179
€ in millions
Net Income
High level of net income once again
Following a historic peak in the previous year, earnings in fiscal year 2006/07 were once again excellent.
Buoyed by the consistently positive economic situation,
earnings before tax stood at € 290 million (against € 330 million in the previous year).
Net income before earnings attributable to providers
of non-current capital came to € 179 million (previous
year: € 246 million). It should, however, be noted that
a one-time effect totaling € 112 million from the sale of
DIS AG, Düsseldorf, significantly impacted the previous year’s figures. Due to the sale of Grundstücks- und
Baugesellschaft AG, Heidenheim, earnings for the fiscal
year under review also contain a one-time effect in the
amount of € 26 million. The sale of these financial commitments is reported in the “other financial result” both
in fiscal year 2006/07 and for the previous year.
The change in inventories and capitalized costs fell from
€ 91 million in fiscal year 2005/06 to € 50 million in the
period under review, mainly because of the exceptional
high level of capital expenditure invested in the Voith
Paper Technology Center (PTC) in Heidenheim in the
previous year.
The above-average increase in the cost of material to
€ 1 758 million (previous year: € 1 539 million) compared to total output is attributable to rising prices on
the commodity markets.
The other items on the income statement largely
changed in line with the pattern of business development.
The non-recurring result improved to minus € 3 million
(previous year: minus € 46 million). In the previous year,
this item included the cost of initiating capacity adjustment measures. In fiscal year 2006/07, the continuation
of these measures again incurred expenses for which
provisions could not be formed in the previous year.
Assets and capital structure as solid as ever
In response to developments in IFRS-compliant account
ing practice, changes were made in fiscal year 2006/07
to the way in which termination rights for minority inter
ests are reported. Explanatory notes are provided in
the “Summary of Significant Accounting and Valuation
Policies” in the notes to the consolidated financial statements. Individual items of data from the previous fiscal
year have been altered in the balance sheet in this context. These adjustments are taken into account in the discussion that follows.
65
Management Report
Sound business development shaped the assets and
financial position of the Voith Group in fiscal year
2006/07. Total assets increased by 22 % to € 4 353
million (previous year: € 3 573 million).
First-time consolidation effects were the main reason
for the increase in non-current assets to € 1 713 million
(previous year: € 1 552 million). The lower figure for
investments in associates is due to the sale of Grundstücks- und Baugesellschaft AG, Heidenheim.
Well-filled order books drove current assets up 31 %
to € 2 640 million (previous year: € 2 020 million). This
is reflected in particular in the trend in inventories,
receivables and cash, and cash equivalents. In addition, marketable securities held as current assets rose
sharply and are available to be used as part of the existing investment strategy.
A clear shift from current to non-current financial
liabilities is apparent. Non-current financial liabilities
rose by 71% to € 868 million (previous year: € 508
million), essentially because a eurobond with a total
volume of € 300 million was issued and a further noncurrent € 100 million loan was taken out. The bond is
listed in Luxembourg and has a maturity of ten years.
Its issue enabled Voith AG to exploit attractive interest
rates on the capital market and, to its own advantage,
replace the bond repaid prematurely in 2006. Current
financial liabilities declined to € 123 million (previous
year: € 191 million) as loans were repaid, primarily in
Germany.
The increase in other liabilities (a subset of current liabilities) is largely due to the fact that advances received
rose to € 574 million (previous year: € 373 million). This gain was in turn attributable to the positive order
situation.
At September 30, 2007, Group capital stood at € 844
million (previous year: € 702 million). Group capital is
the sum of equity and other long-term capital resources
made available by shareholders.
In fiscal year 2006/07, profit-sharing capital in the amount
of € 77 million was included in equity for the first time.
The group capital ratio was 19 % (previous year: 20 %).
Cash flow remains favorable
Good business development enabled the Group to
boost cash flow from operating activities to € 347 million
(previous year: € 232 million) in fiscal year 2006/07.
The assets and capital structure effects outlined above
are the main reason for positive total cash flow of
€ 150 million. For further details of equity and cash flow,
please refer to the statement of changes in equity, the
consolidated cash flow statement and the notes to the
consolidated financial statements.
66
Investments and Depreciation
112
03/04
116
191
04/05
112
167
05/06
118
193
06/07
Investments
128
Depreciation
€ in millions
Capital Expenditure
Financial Investments and Participating
Interests
With further business expansion anticipated, the vol-
ume of capital spending was ramped up by 16 % to
€ 193 million in the period under review (previous year:
€ 167 million). Most of this cash was spent on equipment
and production plants to further sharpen the Group’s
innovative edge. Capital spending accounted for 4.6 %
of consolidated sales in the period under review, up
from 4.5% a year earlier.
Selective new acquisitions and startups
After a phase of expansive corporate development in the previous years, activities in this area focused
primarily on integrating the Group’s recent acquisitions
in fiscal year 2006/07. Even so, further opportunities
to effect new acquisitions and strategically extend
the product portfolio were also exploited in the period
under review.
After two years of thorough preparation, Voith Paper
Environmental Solutions GmbH & Co. KG, headquartered in Ravensburg, Germany, was founded in October 2006. Environmental technologies are now being
developed and marketed under the aegis of this new
company. Another Ravensburg-based firm – Meri Entsorgungstechnik für die Papierindustrie GmbH – was
integrated in these activities. Voith Paper had long
held an equity stake in this company and stocked this
interest up to 70 % in fiscal year 2006/07. Meri GmbH
has its headquarters in Munich, Germany, and operates subsidiaries in Appleton, Wisconsin, USA, in São
Paulo, Brazil, and in Monterrey, Mexico. A 50 % stake in
Aquatyx Wassertechnik GmbH, Ravensburg, was also
acquired in 2007. Aquatyx, too, is now operating as a
joint venture with Voith Paper Environmental Solutions.
67
Management Report
Voith Paper Automation took over LSC Process- und
Laborsysteme GmbH, Neuwied, Germany, effective
January 1, 2007. This acquisition came as Automation’s
response to the singular significance of measurement
systems in Voith Paper’s portfolio. It also marked an important step in the direction of technology leadership in
automation systems for the cellulose and paper industry. Voith Paper Air Systems GmbH & Co. KG, headquartered in Bayreuth, Germany, opened for business
in June 2007. The newly launched company comprises
parts of the insolvent Wiessner GmbH, whose entire
paper machine technology and product portfolio was
acquired.
This investment lays the foundation for the strategic
expansion of our air systems business. It constitutes
the ideal complement to Voith Paper’s process line
package strategy, which aims to offer one-stop shopping for end-to-end systems. Service business in relation to Wiessner systems already in the field likewise
opens up lucrative business prospects.
In July 2007, Voith Siemens Hydro Power Generation
signed a letter of intent with South Korean firm Renetec concerning the launch of a joint venture that will leverage technology to harness tidal current energy. As
soon as fiscal year 2006/07 came to an end, the new
joint venture company, Voith Siemens Hydro Tidal Co. Ltd., was launched in early October 2007. Voith
Siemens Hydro owns a 51% interest in the joint venture, whose aim is to develop and build a new type of
tidal current power plant.
Voith Turbo’s Industry division completed two acquisitions in the fiscal year under review. The purchase of
BW Hydraulik GmbH in Wuppertal, Germany, effective
October 1, 2006, enriched Voith Turbo’s capabilities in
the production of hydraulic systems for metal forming
applications. BW Hydraulik will in future be integrated in
Voith Turbo H+L Hydraulic GmbH & Co. KG.
With retroactive effect from January 1, 2007, Voith
Turbo also bought gear unit manufacturer BHS Ge-
triebe GmbH, Sonthofen, Germany. BHS Getriebe is
one of the world’s leading makers of high-performance
gearboxes, couplings and rotor-turning gear units for
high-speed and industrial applications in a wide variety
of heavy industries, including power generation, oil and
gas extraction and transportation, and petrochemicals.
The company employs more than 300 people, has a
stable customer structure and operates a subsidiary in
the USA.
In November 2006, Voith AG sold its 25.1% stake in
Grundstücks- und Baugesellschaft AG, Heidenheim, to
the GAGFAH Real Estate Group.
68
Research and Development
03/04
149
04/05
179
05/06
182
06/07
202
€ in millions
III. Research and Development
– a mill that will convert residual materials into substitute
fuels to generate heat and power in its own power plants.
R&D spending remains on a high level
Research and development expenditures of € 202 million in fiscal year 2006/07 exceeded the already high level
reached in the previous year (€ 182 million). The figure is equivalent to 4.8% of sales (previous year: 4.9 %).
Voith Paper brought its revolutionary ATMOS (Advanced
Tissue Molding System) technology to market readiness.
The technology is used to dry and produce soft tissue
with a fluffy texture. Direct comparison with conventional
methods shows that ATMOS facilitates energy savings of more than 35 % during production of premium quality tissue – and with far lower capital expenditure. Depending on the precise application, it is also possible to save
on fibers and use 100 % recycled materials.
The launch of Voith Paper Environmental Solutions
GmbH & Co. KG gave the green light for Voith Paper to
commence development of new environmental technologies for the paper industry. In spring 2007, construction of
a pilot anaerobic reactor set new standards in innovation
in the water clarification segment. The newly developed
Aquatyx R2S two-stage anaerobic reactor enables the
recycling of water during the paper production process to
be combined with the generation of biogas for use as an
energy source. In conjunction with the “lime trap” manufactured by Voith Paper subsidiary Meri, this technology
enables scale to be filtered out of treated water.
This development is a first step in the direction of an
integrated paper mill based on largely closed water loops
In the period under review, Automation unveiled the OnV
VirtualSensor, a new measurement system that uses
cutting-edge modeling techniques to calculate and forecast a range of process variables (stiffness, porosity and
dry weight). Up to now, it was not possible to calculate
these values until the paper web had reached the first
measuring frame. As a result, machine operators can
now respond faster to deviations and take appropriate
corrective action.
Voith Paper Fabrics brought two new press felt models to
market in the fiscal year under review: “Pro” and “Planar”.
Both models improve paper quality while saving energy.
Moreover, longer runtimes and faster fabric replacement also enhance machine efficiency. Voith Paper Rolls
developed the SkyLine doctor blade portfolio. Perfect
coordination of the doctor blade and the roll surface
boosts the productivity of paper machines and improves
paper quality at the same time.
Voith Siemens Hydro devoted the bulk of its research
and development activities to renewable energies in
fiscal year 2006/07. These energy sources (such as
wind energy) are not yet available on a constant basis
and therefore cause fluctuations in the power grid that
can, for example, be absorbed by generating energy
from pumped storage hydro systems. To be able to fill
such power gaps at any time, pump-turbines are needed
that can cope perfectly with the varying water levels in
reservoirs. Voith Siemens Hydro is working to develop
and improve precisely these technologically sophisti-
Management Report
cated turbines. Progress was also made in the development of Kaplan turbines, whose blade wheels can be
adjusted. R&D activity focused on high-performance
turbines with diameters of up to 9.5 meters, and on work
to reduce the size of the adjusting mechanism at the hub
of the blade wheels in order to improve efficiency. Ocean
energy research was another priority issue in the period
under review. Building on existing models, a new wave
power strategy was developed that slots what are known
as breakwater turbines into existing harbor protection
infrastructures, thereby slashing the cost of generating electric power from wave energy in this way. The
first power plant to use this technology is already under
construction in northern Spain. The second focus of R&D
work in this area was on tidal current power generation.
Work on development of the world’s first power plant of
this type, too, began off the coast of South Korea in the
period under review.
Voith Turbo’s Industry division developed new management and control technologies that are now being
used in a variety of products for power plants, such as
steam turbines. The prototype for WinDrive – a variable-speed planetary drive for wind energy plants with
an output of more than 2 MW – also went into service
successfully. In addition, work began on construction
of a further WinDrive prototype for 60-Hz operation.
At the Road division, one focus of R&D work was on
the development of exhaust gas turbochargers for the
commercial vehicle industry. Another project involves
development of a hybrid model for use in buses. The
Rail division concentrated on development projects
aimed at conserving natural resources, protecting the
environment and improving safety. Tangible successes
69
were scored in noise reduction, thanks to the development of new wheelset transmissions and the SilentVent
cooling system. One forward-looking drive system was
presented in the shape of the EcoPack, which focuses
on economizing on resources and features components
that recover braking energy, for example. Meanwhile, the
“SteamCell”, which reuses exhaust gas heat from diesel
engines, successfully completed its test phase. During
the period under review, the Maxima locomotive likewise
successfully completed extensive test runs in preparation for licensing for use in Germany. The Marine division
developed new applications for the Voith Schneider® Propeller. This propeller is now also being used to improve
dynamic positioning and rolling properties in adverse
weather conditions. At AIR, a company acquired in the
previous fiscal year, further progress was made in the
development of innovative propulsion systems.
IV. Events after the Balance Sheet Date
On October 9, 2007, it was announced that Dr. Hermut
Kormann will, at the age of 66, step down from his
tenure as President and Chief Executive Officer of
Voith AG effective March 31, 2008. In response to a
proposal by the Shareholders’ Committee, the Super
visory Board, at their regular meeting on October 8,
2007, unanimously appointed Dr. Hubert Lienhard,
member of the Board of Management of Voith AG and
Chief Executive of Voith Siemens Hydro Power Generation, as his successor.
Apart from the transactions outlined above, no significant events have occurred since the end of fiscal year
2006/07.
70
V. Report on Risks and Opportunities Facing the Company
A) Risks
Risks to the Voith Group
Risk and Quality Management
External Risks
Macroeconomic risks
The Voith Group operates a distributed risk management system. Responsibility for risk management is
assigned in line with individual risk profiles on all levels
and in all functions, irrespective of value thresholds.
Like the risk management system, the Voith quality
management system covers every aspect of the Group.
Steps to integrate it in a comprehensive Technical Risk
and Quality Management System were initiated in the
previous fiscal year. The Six Sigma project launched
in 2006 in the form of two pilot projects at Voith Paper
Fabrics and in Voith Turbo’s cardan shaft production
operations is part of this process.
The Voith Group’s business is dependent on general
global economic conditions, especially those in Europe
and Russia, the USA, Asia and Latin America. Experience shows that changes in economic developments
directly affect demand for the Group’s products and
services. Similar influences can be exerted by political
or fiscal changes in individual countries in which Voith
operates.
Voith continually monitors macroeconomic developments, trends in the industry and internal processes
that can impact the Group’s situation. A defined risk
catalogue helps management to detect specific risks.
A distinction is drawn between two classes of risks:
Risks to the Group and risks to performance. These
classes break down as follows.
The global economy was strong and healthy in fiscal year 2006/07, even though the threat of slower growth
in the USA and the still fraught situation on the commodity markets gave rise to a number of serious disruptions in fall 2007.
The emerging markets of Eastern Europe, Asia and
Latin America are continuing to expand at a rapid pace
and therefore remain a powerful source of growth
stimulus that is driving exports worldwide.
Following on from an upswing, Germany is increasingly
showing signs of moving into a phase of slower growth,
albeit bolstered by positive economic development in
the European Union.
Sales prospects continue to look good for industry as
the economic climate remains upbeat overall.
Industry-specific risks
The Voith Group occupies a leading position in all four
of the growth markets – paper, energy, mobility and
service – in which it operates. A strong global economy
has for a number of years been fueling growth in all the
markets served by Voith. In fiscal year 2006/07, this uptrend developed into a veritable boom in some areas,
outstripping the average pace of industrial growth over
Management Report
the past decade. This development is being driven by
exceptional demand for infrastructure projects in the
emerging economies of Asia, Eastern Europe, Russia
and Latin America. Although exports have flattened
slightly, the industry still expects demand to remain
strong.
Price pressure caused by fierce international competition on these growth markets remains prevalent,
however. For years, Voith has therefore been making
systematic adjustments to build a “recession-proof”
structure. Every level of the Group is being aligned to
stand up to the competitive demands of today.
German industry takes a critical view of the growing
incidence of “pirate copies” of its machinery and plants,
especially in certain emerging economies. As one of
the companies that file the most new patents, the Voith
Group sees an acute threat to its innovative products.
Within the framework of the international community,
Voith does everything in its power to protect itself
against abuse of its intellectual property by registering trademarks, copyrights and patents, by signing
confidentiality agreements and by defending exclusive
access to its process expertise.
There is no evidence of perceivable, significant industry-specific risks to the Group.
Management Risks
Voith operates a reliable reporting system that also encompasses its risk and quality management systems.
Group accounting plays a pivotal role in this system
and was migrated to International Financial Reporting
Standards (IFRS) in fiscal year 2005/06.
A comprehensive system of corporate planning and
financial analysis aligns and coordinates the targets
and metrics defined for subsidiary companies with
those of the Group Divisions and the Group as a whole
and monitors them consistently.
71
No risks of material Group management errors are
perceivable at the present time.
Liquidity and Financial Risks
The Group’s financial structure is designed to safeguard
long-term stability. Voith is able to finance ongoing investment in future growth out of its own cash flow. It also has access to adequate credit lines. In addition, the issue of a euro-denominated bond listed on the
Luxembourg Stock Exchange brought the Group net
proceeds of € 300 million at a fixed rate of interest in
fiscal year 2006/07.
The Baa1 rating given by Moody’s Investors Service to
Voith AG when its first bond was issued in 1999 was
confirmed with Baa1 “stable outlook” when the new
bond was issued in June 2007.
Risks relating to shifts in exchange rates – especially
between the euro and the US dollar – can significantly
impact the deliveries and services provided by individual Group companies and, hence, both sales and
operating earnings. Voith’s global footprint nevertheless enables it to largely balance out any such effects.
All currency risks in respect of third parties are hedged
individually.
Suitable instruments are used to hedge interest and
payment risks to the greatest extent possible. The
Group Divisions take out appropriate contingency insurance in particular to hedge risks arising from default or
protracted delays in the payment of trade receivables.
The Group has sufficient reserves to cover any additional operating risks.
No particular liquidity or financial risks are perceivable
at the present time. For more information, please refer
to the notes to the consolidated financial statements.
72
Infrastructure Risks
IT risks
Voith operates its own IT unit which consistently and
reliably handles the Group’s data at its own dedicated
data center. The IT experts at Voith manage the whole
IT infrastructure for the entire Group and also maintain
the specific application systems used by each Group
Division. In addition, a series of security mechanisms
has been put in place to minimize risks relating to
system outages. These mechanisms include access
control systems, contingency strategies for emergencies, uninterruptible power supplies for critical systems, back-up systems and redundant data storage.
Firewalls, virus scanners and similar tools are used
throughout the Voith Group to guard IT systems against
unauthorized access.
Voith finds highly qualified new talents in the network
built up with domestic and foreign universities and
other educational establishments, and through focused
recruiting campaigns.
Human resources risks
Corporate guidelines on industrial safety have now
been added to the existing set of guidelines. These
guidelines are binding for all Voith sites and lay the
foundation for harmonized protective/industrial safety
standards worldwide. Internal safety audits are conducted in the Group Divisions to verify compliance with
the guidelines.
In its capacity as an innovative corporate Group with a
global footprint, Voith competes with other international
players for the services of its highly qualified specialists
and managers. Due to the Group’s broad array of activities involving schools and universities, combined with a
wide variety of programs, initiatives and organizations
and a strong global orientation make Voith an attractive
employer that has already won international awards.
Ongoing training and development programs, international career development prospects, performancelinked compensation systems, a family-friendly human
resources policy and flexible working hours all help to
keep Voith’s staff highly motivated – a fact evidenced
by the Group’s traditionally very low fluctuation rate.
Environmental protection risks
All production processes in the Voith Group satisfy
strict corporate guidelines on quality, risk management
and environmental protection. An integrated environment management system monitors permanent compliance with these guidelines and ensures that both
production and products consistently meet the same
high quality and environmental standards.
In fiscal year 2006/07, Voith Siemens Hydro Power
Generation became the first Group Division to intro
duce a comprehensive management system that
covers all three aspects – environmental protection,
industrial safety and general quality assurance – worldwide. The management system has been accredited by
an independent auditor and is based on internationally
recognized ISO standards.
No particular risks relating to the Group’s infrastructure
are perceivable at the present time.
Management Report
73
Risks to Performance
Contractual Risks
Voith places rigorous demands on the quality of its
products. Quality is therefore monitored closely within
the framework of its integrated management system.
Although every reasonable precaution is taken, however, unforeseen defects in parts or systems can incur
the considerable expense of necessary servicing or
product recalls. They can also lead to contractual risks.
Regular checks ensure that adequate provisions are
set aside to cover the legal risks that exist throughout
the Group. In particular, these include risks relating to
warranties, liability, contractual penalties, guarantees,
and the possibility of inadequate or incorrect price calculations. Appropriate liability and property insurance
in line with standard industry practice is taken out to
cover the possibility of damages and/or liability risks.
Appropriate provisions are made for special risks arising from existing contracts, insofar as said risks can be
reliably quantified.
Technical Risks
Innovation-related risks
The future profitability of the Voith Group hinges on
its ability to develop marketable products and use the
most modern production technologies. Development
lead times are very long in some cases. This fact, coupled with relentless technological advances and fierce
competition create uncertainties that can cast doubt
on the economic success of existing or future products. The development of products or services that the
market does not accept and any changes in customer
demand patterns that the Group fails to anticipate or to which the Group is unable to respond, may decrease
demand for products and services and cause Voith’s
competitiveness to deteriorate, possibly having a negative impact on the Group’s economic situation.
To cover these risks, the Group invests large sums of
money to further improve and refine existing technologies, and to research and develop new products and
systems. In addition, it operates global patent strategies and conducts in-depth market research to protect
the Group’s successful market position.
Capacity utilization risks
Most products made by Voith are one-off items that
pass through each phase of production – from design
to shipment – in accordance with unique order specifications. This fact can temporarily lead either to underutilization of capacity or to capacity bottlenecks in the
various stages of development. While exploiting the
full flexibility of its capacity utilization system wherever
possible, Voith also continually aligns its global capacity with long-term sales expectations calculated on the
basis of model scenarios.
Adequate insurance cover protects the Group against
outages or interruptions to critical production processes. Within certain tolerances, fluctuations in capacity
utilization can be absorbed by flexible work time
models within the framework of regional conditions.
74
B) Opportunities
Sourcing risks
Macroeconomic Opportunities
Sourcing risks were minimized to the greatest extent
possible in the period under review. The processes by
which suppliers are selected and dealt with are specified in writing. A dual sourcing policy safeguards the
supply of basic materials to Group companies by third
parties. Back-up strategies are in place in case suppliers who provide core components for the Group’s
production processes should default.
Voith ranks as a leading provider in the markets for
paper, energy, mobility and service. The products and
services Voith provides are urgently needed, especially
to develop the infrastructure in emerging countries and
the growth regions of the world. This portfolio includes
paper machines, hydro power plants, products and
systems to develop local public transport and rail transport networks, products for use in power plants, steel
mills and the extraction of raw materials, and technical
services for new factories and industries. This market
constellation provides Voith with ideal conditions for
further growth and increasing profitability.
Global demand for commodities remains strong and
has both fueled a sustained shortage of raw materials
and driven prices up. As past experience shows, prices
may fluctuate substantially and negatively impact
Voith’s earnings potential if market conditions prevent
us from passing higher prices on to customers or,
conversely, if the selling prices commanded by Group
companies erode faster than the prices of input products and materials.
There is no danger to our procurement of materials
such as steel and copper at the present time. In fiscal
year 2006/07, Voith once again used every means at its
disposal to contain the risks posed by cost increases.
It did so by concluding a mix of forward transactions
and other hedging arrangements.
To the best of our knowledge, no significant technical
risks exist at the present time.
Overall risk
To the best of our knowledge at the time this report went to press, there is no material threat to the
continued existence of the Voith Group.
Strategic Opportunities
Global orientation
At Voith AG, internationalization is a long-standing
tradition that began when the company built its own
plant at St. Pölten, Austria, more than 100 years ago.
Today, Voith has in-house production facilities and sales
centers at more than 270 locations in over 40 countries
in all regions of the world. Dynamic business development in the growth markets of Asia and Latin America is
of special importance to its current growth pattern. This
global orientation enables Voith to participate in these
developments with its own capacity on the ground. At
the same time, it keeps the company from becoming too
dependent on particular regional and national markets.
Management Report
Diversification and acquisitions
Voith operates three Group Divisions that concern
themselves with the production of capital goods:
Voith Paper, Voith Siemens Hydro and Voith Turbo.
These three Group Divisions are independent of one
another. Each has sufficient room to expand into new
components, systems and related services. Their
expansion is flanked by the selective acquisition of
companies that usefully complement existing product
ranges.
To diversify into new areas of business, the Group has
also set up the Voith Industrial Services Group Division,
whose service activities are independent of specific
products and are less capital intensive. In recent years,
growth in this Group Division has been fueled largely
by acquisitions. One was the takeover of DIW Deutsche
Industriewartung AG in 2000. Another was the purchase
of the US American Premier Group in 2005. A majority interest in Hörmann Industrietechnik was bought in
2006, and further smaller acquisitions were effected in
the fiscal year under review.
Under the aegis of Voith AG, these four Group Divisions
keep the Group from becoming too dependent on any
one target industry. Equally, they create the opportunity
to tap synergies by networking their innovative capabilities, expertise and a variety of services.
Promoting innovation
In increasingly saturated and highly competitive markets, innovation plays a crucial role. Voith has cultivated
an innovation-friendly climate – and has repeatedly
developed ground-breaking products – ever since its
75
inception. Innovation indeed commands top priority.
The Group’s policy is to drive technological progress in
manageable stages so that mature, reliable solutions
can be offered to customers on the basis of exhaustive
analysis.
This policy demands a strong focus on practical solutions. The acquisition in 2005 of Wavegen, the Scot-
tish-based global leader in wave energy systems, and
joint ventures such as Voith Siemens Hydro Tidal,
founded in 2007 in South Korea to harness tidal current
energy, are only two of many examples that testify to the
Group’s long-term innovation strategy. They also enrich
its portfolio and stabilize its long-term growth prospects.
Long-term corporate development to defend independence
Voith is a family-owned business whose shareholders
are personally committed to the well-being of the
company. In its capacity as an unlisted stock corporation, the Group draws on its own earnings power to
reinforce its equity structure. Thanks to a moderate
dividend policy, Voith has sufficient financial resources
to fuel continuous, attractive growth – and to remain
independent as a family-owned enterprise. A capital
ratio of 19 % at September 30, 2007, and solid corporate
finances leave the Voith Group well placed to continue
its successful growth in future.
Since Voith does not have to worry about share pricedriven considerations, it has earned an excellent
standing on the institutional investment market. This
privileged position was used once again in 2007 to issue
a € 300 million bond, and will be used again in future as
the need arises.
76
VI. Forecast Report
Further global growth despite nascent risks
Capacity well used and sound business prospects at Voith
In fall 2007, the global economy’s powerful uptrend gave
way to latent uncertainty with regard to further growth.
The shift of gear was triggered by turbulence on the
capital markets which in turn was caused by difficulties
on the US real estate market and the resultant threat of
slower economic growth in the USA. Alongside this risk,
the considerable vulnerability of commodity markets
and the resultant risks to raw materials prices are also
affecting economic growth in industrialized countries.
Germany’s booming export business and Voith’s exceptional position in the four growth markets for paper,
energy, mobility and service leave the Group extremely
well placed for further growth. The order books are well
filled at many Group Divisions and divisions; and new
orders are coming in all the time. The positive business
development witnessed in the fiscal year under review
therefore looks set to continue. The Group therefore
expects to see sales once again exceed those of the
previous year.
Emerging economies have so far been able to escape
these influences; their growth remains as strong as
ever. Of the larger emerging markets, China is expanding fastest at a rate of 11.5% at last – regardless of
an inflation rate of nearly 6 %. India, the leading Latin
American countries, the countries of Eastern Europe
and the Commonwealth of Independent States, too,
are still experiencing a boom that is buoying up what
remains of the world’s export growth.
In Germany, business climate indicators suggest that
the economic uptrend has peaked and that a phase of
flatter growth is now impending. Accordingly, growth
in orders will increasingly be shaped by genuine new
investment. This will improve the quality of growth and
should give the engineering industry bright prospects
for the future on its home market.
Despite the latent risks to global economic growth,
the outlook for both the emerging economies and the
member states of the European Union is still regarded
as favorable.
Voith Paper expects sales to set a new record by taking
the € 2 billion hurdle in fiscal year 2007/08. The sales
forecast thus lines up with the volume of orders received
in the past fiscal year. Large orders in particular have
given this Group Division a comfortable cushion and will
ensure that capacity is used to the full. A further high
order intake is anticipated this fiscal year.
In light of the favorable outlook for hydro power and
Voith Siemens Hydro Power Generation’s solid market
position, this Group Division likewise expects both sales
and new orders to rise sharply. Europe and Latin America are likely to generate most of this growth stimulus,
although the relative importance of the Asian markets
will increase as well.
For its part, Voith Turbo expects to see sales exceed
€ 1 billion in fiscal year 2007/08. This bright outlook is
substantiated by well-filled order books in all divisions
at the start of the fiscal year and sales growth driven
by new companies for which full-year consolidation will
take effect for the first time in the fiscal year ahead.
Management Report
77
Corporate Governance Report
Similarly, Voith Industrial Services anticipates a continuation of its upbeat sales and earnings situation this fiscal year. The November 2007 acquisition of Denmark’s
Skandinavisk Industriservices has reinforced this Group
Division’s position in Scandinavia, which is a key market
for the petrochemicals and power plant industries. The
aim now is to build on this strong position. The successful wind service and rail service startups are expected
to deliver dynamic growth too. Moreover, Voith Industrial
Service will also benefit from its position as a leading
international service provider to the automotive industry.
Very positive overall conditions for all of Voith’s Group
Divisions lead us to believe that capacity will be well utilized and that fiscal year 2007/08 will once again deliver
very satisfactory net income. Adjusted for one-time
influences, the latter figure should be on a par with that
recorded in fiscal year 2006/07.
The developments and trends described above assume
generally favorable conditions in the economy as a
whole and in our industry in particular. These assumptions also shape the Voith Group’s longer-range plans.
Business in fiscal year 2008/09 is expected to continue
on the same high level as in the preceding years. To the
best of our knowledge at the present time, the markets
for paper, energy, mobility and service should remain as
dynamic as they are today. Existing business should be
complemented by the market launch of a number of new
products (Fiber Loading, ATMOS, Voith’s Maxima locomotive and EcoPack) and by moves to penetrate service
business in new regional markets such as China and
India. The impetus generated by these advances should
fuel further positive development in orders received,
sales and cash flow.
On September 25 and October 9, 2007, the Board of
Management and the Supervisory Board submitted a
statement of compliance pursuant to Section 161 of the
German Stock Corporation Law, for fiscal year 2006/07
explicitly drawing attention to a small number of deviations. This statement of compliance has been made
available to Voith’s shareholders.
One of the deviations is due to the fact that the consolidated financial statements were not made available to
the public within 90 days after the end of the fiscal year
(Item 7.1.2). The remaining deviations relate to provisions that are either not required (e.g. Items 5.3.3 and
6.1 through 6.8) or do not seem appropriate to a familyowned business such as Voith (e.g. Items 4.2.2, 4.2.4,
4.2.5, 5.4.7 and 7.1.1).
78
Report of the Supervisory Board
Dear Reader,
In the fiscal year under review, the deliberations of the
Supervisory Board focused primarily on the forceful
expansion of the business activities of Voith AG and its Group Divisions. The Supervisory Board met four
times in the fiscal year 2006/07: on October 6 and
October 25, 2006, on March 5, 2007, and on June 15,
2007. At each of these meetings, it examined in detail
the gratifying economic development and general situation of both the consolidated Group and the company
(Voith AG). One extraordinary meeting was devoted
exclusively to the constantly growing importance of our
Group Divisions’ business and future development in
China. At each meeting, detailed reports about the economic position of the Group and the Group Divisions,
corporate planning (including financial and investment
planning), developments in the company’s earnings
and financial position, risk management, and issues of
strategic orientation, were supplied to the Supervisory
Board by the members of the Board of Management.
The financial and capital expenditure planning for
the current and subsequent fiscal year was approved
unanimously. The Supervisory Board also constantly
discussed current investment projects and acquisitions
planned by the Group Divisions. In addition, the Board
of Management informed the Supervisory Board in
detail of personnel management issues at Voith and of
the challenges inherent in the Group’s strong growth.
The Chairman of the Supervisory Board was also kept
constantly informed about significant developments
and key decisions by the Board of Management. He
also consulted regularly with the President and Chief
Executive Officer on matters of material importance. For
unavoidable reasons, two members of the Supervisory
Board attended less than half of its meetings in the fiscal year under review.
The Personnel Committee met once in the fiscal year
under review, on March 5, 2007. There was no need to
Management
Report | Report
of des
the Supervisory
Board
Konzernlagebericht
| Bericht
Aufsichtssrats
convene the Mediation Committee formed pursuant to
Section 27 Paragraph 3 of the German Codetermination
Act. The Balance Sheet Committee met on February 15,
2007, in the presence of the auditors who examined the
annual financial statements. This committee conducted
an in-depth examination of the financial statements of
both the consolidated Group and Voith AG for fiscal year
2005/06, and of the report submitted by the auditors,
Ernst & Young AG Wirtschaftsprüfungsgesellschaft,
Stuttgart. Issues relating to International Financial Reporting Standards (IFRS) and impending legal changes
were once again discussed on this occasion.
The Annual General Meeting convened on April 25, 2007, and formally approved both the managerial
conduct of the Board of Management and the monitor
ing activities of the Supervisory Board in fiscal year
2005/06. The meeting also elected Ernst & Young AG,
Wirtschaftsprüfungsgesellschaft, Stuttgart, to audit the annual financial statements again in fiscal year
2006/07. The Supervisory Board subsequently placed
the corresponding audit order.
The auditor examined and granted its unqualified audit
opinion on the accounting records, the annual financial
statements and management report of Voith AG, and
the consolidated financial statements and management
report for the Voith Group as a whole at September 30,
2007. The consolidated financial statements were
prepared in accordance with International Financial
Reporting Standards (IFRS). In the course of its audit,
Ernst & Young AG paid special attention to “financial
instruments and disclosures in the notes (quality and
completeness)”, in accordance with the mandate laid
down by the Supervisory Board in light of the change
in financial reporting standards.
79
In September and October 2007, the Board of Management and the Supervisory Board submitted their reports
on corporate governance and the corresponding statements of compliance for fiscal year 2006/07.
At its meeting on January 15, 2008, the Balance Sheet
Committee examined the annual financial statements
prepared for Voith AG and the consolidated Group in
light of the audit reports. Thereupon, the committee
recommended that the Supervisory Board approve
said financial statements, which it did at its meeting on
January 24, 2008. Both meetings were attended by the
relevant member of the auditor’s Management Board
and the person responsible for auditing Voith AG and
the consolidated Group. They explained the material
results of the audit and were available to provide additional information. On the basis of its own examination,
the Supervisory Board also approved the management
report prepared for Voith AG and the consolidated
Group. It further concurs in the proposal submitted by
the Board of Management regarding the appropriation
of net income. The annual financial statements prepared for Voith AG and the consolidated Group have
thus received formal approval.
The Supervisory Board expresses its thanks to the
Board of Management, all other levels of management,
the employees of the Group and the representatives
of the workforce for their exemplary commitment and
successful endeavors in the fiscal year under review.
Heidenheim, January 24, 2008
Chairman of the Supervisory Board
Dr. Michael Rogowski
80
5
81
Financial Report
83 Consolidated Statement of Income
84
86
Statement of Changes in Equity
88
Consolidated Cash Flow Statement
89 Notes to the Consolidated Financial Statements
105
Notes to the Consolidated Statement of Income
112
Notes to the Consolidated Balance Sheet
132
133
138
Other Information
144
The Voith Group and its Shareholdings
152
Trade Fairs 2008
154
Contact/Imprint
82
83
Voith Financial Report
Consolidated Statement of Income
for the period from October 1, 2006 through to September 30, 2007
€ in thousands
Notes
2006/07
2005/06 Sales
(1)
4 189 919
3 738 541
Increase in inventories
and capitalized costs
(2)
49 740
91 262
Total output
4 239 659
3 829 803
Other operating income
(3)
395 504
422 919
Cost of material
(4)
(1 757 722)
(1 538 760)
Personnel expenses
(5)
(1 529 343)
(1 418 205)
Depreciation
(127 622)
(117 867)
Other operating expenses
(6)
(907 798)
(875 057)
312 678
302 833
Non-recurring result
Share of profits from associates
Interest result
(8)
(42 456)
(45 707)
Other financial result
(9)
21 266
112 897
290 223
330 379
(111 572)
(84 504)
178 651
245 875
(7)
(2 555)
1 290
(46 498)
6 854
Income before taxes
Income taxes
(10)
Net income before result attributable to
providers of non-current capital
Result attributable to providers of non-current capital
Net income (after result attributable to
providers of non-current capital)
174 465
237 701
Net income attributable to the Group
165 853
235 336*)
Net income attributable to minority interests
8 612
2 365*)
(4 186)
(8 174)*)
*) Data for previous year adjusted.
84
as at September 30, 2007
Assets
€ in thousands
A. Non-Current Assets
Notes 2007-09-30
2006-09-30
I. Intangible assets
(11)
582 272
437 891*) II. Property, plant and equipment
(12)
842 033
794 520
III. Investments in associates
(13)
4 818
53 401
IV. Investments in securities
(17)
16 487
16 882
V. Other financial assets
(13)
39 057
43 735
VI. Other receivables and assets
(16)
139 702
88 928
VII. Deferred tax assets
(10)
88 963
117 117
1 713 332
Total Non-Current Assets
1 552 474
B. Current Assets
I. Inventories
(14)
711 517
617 863
II. Trade receivables
(15)
917 632
814 421
III. Marketable securities
(17)
318 924
124 434
IV. Income tax assets
23 447
18 636
V. Cash and cash equivalents
(18)
465 108
304 829
VI. Other receivables and assets
(16)
203 410
140 297
2 640 038
2 020 480
4 353 370
3 572 954
Total Current Assets
Total Assets
Equity and liabilities
€ in thousands
A. Equity and Other Non-Current Capital
Provided by Shareholders
85
Notes 2007-09-30
2006-09-30
I. Issued capital
120 000
120 000
II. Revenue reserves
581 955
496 432
III. Other reserves
6 412
32 007
IV. Profit participation rights
76 800
–
V. Minority interests
20 046
12 981
805 213
38 852
844 065
Total Equity
VI. Other non-current capital provided by
shareholders
Total Equity and Other Non-Current Capital Provided by Shareholders
B. Non-Current Liabilities
40 429*)
(19)
I. Provisions for pensions and similar obligations
(20)
382 257
382 105
II. Other provisions
(21)
131 811
138 452
III. Income tax liabilities
16 550
27 917
IV. Financial liabilities
(22)
867 516
508 251*)
V. Other liabilities
(23)
77 935
54 710
(10)
99 781
97 739
1 575 850
22 122
19 076
VI. Deferred tax liabilities
701 849
661 420
Total Non-Current Liabilities
C. Current Liabilities
1 209 174
I. Provisions for pensions and similar obligations
(20)
II. Other provisions
(21)
309 317
345 829
III. Income tax liabilities
100 314
52 466
IV. Financial liabilities
(22)
123 010
190 939
V. Trade liabilities
(23)
360 110
297 487
VI. Other liabilities
(23)
1 018 582
756 134
Total Current Liabilities
1 933 455
1 661 931
Total Equity and Liabilities 4 353 370
3 572 954
86
Statement of Changes in Equity
€ in thousands
Balance as at 2005-10-01
Issued
capital
Equity attributable
to shareholders
in the parent
company Revenue
Other
reserves
reserves
60 925
Minority
interests
613 842
16 815
Total
Total
equity
120 000
432 917
Gains on available-for-
sale financial assets
(8 056)
(8 056)
Gains on cash flow hedges (15 097)
(15 097)
Currency translation differences
(13 623)
(13 623)
Gain on hedge of net investments
(3 739)
(3 739)
0
(3 739)
(372)
0
(592)
630 657
(8 428)
(15 097)
(14 215)
Other gains
2 791
2 791
0
2 791
Tax on items recognized directly in equity
8 806
8 806
(37)
8 769
Total income for the year recognized directly in equity
(28 918)
Net income
235 336
Total income for the year
235 336
Change in Group structure
(2 569)
(2 569)
Issue of profit participation rights
(129 154)
(129 154)
(28 918)
(28 918)
(1 001)
(29 919)
235 336
2 365
237 701
206 418
1 364
207 782
(559)
0
(3 128)
(129 154)
Dividends
(40 098)
(40 098)
(3 477)
(43 575)
Minority interests’ put options
(1 162)
(1 162)
120 000
496 432
32 007
648 439
12 981
661 420
€ in thousands
87
to shareholders
Equity attributable
in the parent
company Issued
Revenue
Other
capital
reserves
reserves
Profit
participation
rights
Minority
interests
Total
equity
648 439
0
12 981
661 420
Total
120 000
496 432
Gains on available-for-
sale financial assets
(1 112)
(1 112)
(33)
(1 145)
Gains on cash flow hedges 4 909
4 909
0
4 909
(18 486)
(18 486)
Gain on hedge of net investments
(10 835)
(10 835)
0
(10 835)
Other gains
(1 395)
(1 395)
0
(1 395)
Tax on items recognized directly in equity
1 324
1 324
52
1 376
Total income for the year recognized directly in equity
(25 595)
Net income
165 853
Total income for the year
165 853
Change in Group structure
Issue of profit participation rights
Dividends
Minority interests’ put options
120 000
581 955
6 412
(4 053)
(76 277)
32 007
(25 595)
(349)
(25 595)
165 853
8 612
174 465
140 258
8 282
148 540
4 108
55
76 800
0
76 800
(4 053)
0
(76 277)
(330)
(18 835)
(25 925)
(4 142)
(80 419)
(1 183)
(1 183)
708 367
76 800
20 046
805 213
For further information regarding the development of equity, please see note 19 of the notes to the consolidated financial
statements.
88
Consolidated Cash Flow Statement
2006/07
2005/06
€ in thousands
Net income before result attributable to providers of non-current capital
178 651
245 875
Depreciation
133 048
118 969
Changes in provisions and accruals
(18 815)
(22 115)
Other non-cash items
14 911
(2 591)
Changes in other operating assets and liabilities
71 956
13 340
(Gains)/Losses on the sale of non-current assets and securities
(32 727)
(121 659)
Cash flow from operating activities
347 024
Investments in property, plant and equipment and intangible assets
(193 146)
Proceeds from the disposal of property, plant and equipment and intangible assets
10 469
4 279
Investments in financial assets
Acquisition of subsidiaries
(166 842)
(19 661)
(56 237)
(128 905)
(3 462)
72 609
215 565
(190 301)
131 999
Proceeds from the disposal of financial assets
Change in investments in securities
Cash flow from investing activities
Dividend payments
Other changes in equity and non-current capital provided by shareholders
(448 935)
231 819
125 302
(84 950)
(34 680)
76 800
(145 799)
Changes in loans
287 695
(431 335)
Changes in financial receivables and financial liabilities
(28 040)
(6 230)
Cash flow from financing activities
251 505
Total cash flow
149 594
Exchange rate movements and changes in Group structure
10 685
Cash and cash equivalents at the beginning of the period
304 829
572 431
Cash and cash equivalents at the end of the period
465 108
(618 044)
(260 923)
(6 679)
304 829
Cash flow from operating activities includes interest income of € 18 331 thousand (previous year: € 37 119
thousand) and interest expenses of € 35 427 thousand (previous year: € 68 675 thousand). Cash outflows for
income taxes totaled € 62 197 thousand (previous year: € 61 900 thousand). You will find further information in
“Notes to the Consolidated Cash Flow Statement” in the Notes to the Consolidated Financial Statements.
89
Notes to the Consolidated Financial Statements
General
Voith AG is the parent company of the Voith Group
the EU to prepare their consolidated financial state-
and is situated at St. Pöltener Strasse 43, Heiden-
ments solely on the basis of IFRS. The term IFRS also
heim/Brenz. Voith AG participates in the capital mar-
includes the current valid International Accounting
kets and is registered at the Registration Court in Ulm
Standards (IAS). All binding pronouncements made by
(HRB 661319). The consolidated financial statements
the International Accounting Standards Board (IASB)
of Voith AG are filed with the electronic version of the
have been taken into account, as have the additional
Federal German Gazette.
stipulations required in accordance with Section 315 a
On December 14, 2007, the Board of Management
of Voith AG released the consolidated financial state-
The reporting currency for the consolidated financial
ments for presentation to the Supervisory Board.
statements is the Euro. Except where explicitly stated Pursuant to EU Regulation (EC) No. 1606/2002 in
conjunction with Section 315 a of the German Com-
Consolidated Group
of the German Commercial Code (HGB).
otherwise, all amounts are stated in thousands of
Euros.
mercial Code (HGB), the consolidated financial state-
In the balance sheet, assets and liabilities are stated
ments of Voith AG for the fiscal year 2006/07 were
either as current or non-current items in line with their
prepared in accordance with International Financial
maturity. Assets and liabilities that will be realized
Reporting Standards (IFRS) and the interpretations
or will mature within 12 months after the end of the
of the International Financial Reporting Interpretations
period under review are classed as current. Invento-
Committee (IFRIC). This Regulation compels all
ries and trade accounts receivable and payable are
companies that participate in the capital markets always classed as current items. The consolidated
(i. e. whose issued debt is traded on a regulated mar-
statement of income was prepared in accordance with
ket in an EU member country) and are domiciled in
the nature of expense method.
In addition to those companies acting as holding
Subsidiaries are consolidated at the time when the
companies, the consolidated financial statements
Voith Group acquires control over them. Their inclu
also include all the Group’s major manufacturing,
sion in the consolidated financial statements ends
service and marketing companies both in Germany
when the parent company no longer controls these
and abroad as at September 30 in each fiscal year.
companies. In two cases, Voith AG exercises control
Consistent accounting and valuation policies are used
as defined in IAS 27 owing to a majority of voting
to prepare the separate financial statements for sub
rights in the relevant decision-making bodies.
sidiary companies as applied for the parent company
at each balance sheet date.
The following companies are included in the consolidated financial statements:
Voith AG and its fully consolidated subsidiaries: 2007-09-30
2006-09-30
Germany
66
58
Abroad
160
144
Total of fully consolidated companies
226
202
Associates accounted for using the equity method:
Germany
–
1
Abroad
1
–
Total of associated companies accounted for using
the equity method
1
1
90
The main companies consolidated for the first time
VPAH Voith Paper Automation GmbH & Co. KG,
in the fiscal year under review are Voith Paper China
Co. Ltd., China, LSC Process- und Laborsysteme
VPDN Voith Duria GmbH & Co. KG, Heidenheim
Heidenheim
GmbH, Germany, Voith Paper Environmental Solu-
VPEU Voith Paper GmbH & Co. KG, Euskirchen
tions GmbH & Co. KG, Germany, Meri Entsorgungs
VPES Voith Paper Environmental Solutions GmbH & technik für die Papierindustrie GmbH, Germany, Voith Turbo BHS Getriebe GmbH, Germany, VPH Voith Paper GmbH & Co. KG, Heidenheim
Voith Turbo Drive Systems B.V., Netherlands, and VPMG Voith Paper Krieger GmbH & Co. KG, VG Power AB, Sweden.
Co. KG, Ravensburg
Mönchengladbach
VPR Voith Paper Fiber Systems GmbH & Co. KG, An exhaustive German-language list of the compa-
nies and other investments included in the consoli-
VPSH Voith Paper Rolls GmbH & Co. KG, dated financial statements has been filed as a section
Heidenheim
of the consolidated financial statements filed with the
VPT Voith Paper Holding GmbH & Co. KG, electronic version of the Federal German Gazette.
Heidenheim
Companies in which Voith AG has the opportunity
directly or indirectly to exercise a significant influence
on financial and operating policy decisions (associat
ed companies) are measured using the equity method.
In fiscal year 2006/07, GAW Pildner-Steinburg GmbH Nfg & Co. KG (GAW), Graz, Austria, was measured
using the equity method and included in the consolidated financial statements for the first time. Grundstücks- und Baugesellschaft AG, Heidenheim, Germany, which was measured using the same method in the previous year, was sold in November 2006.
Ravensburg
VPWE Voith Paper Rolls GmbH & Co. KG, Weissenborn
VPFH Voith Paper Fabrics GmbH & Co. KG, Heidenheim
VSH Voith Siemens Hydro Power Generation GmbH & Co. KG, Heidenheim
VSHK Voith Siemens Hydro Kraftwerkstechnik GmbH & Co. KG, Heidenheim
VTA Voith Turbo GmbH & Co. KG, Heidenheim
VTGO Voith Turbo Aufladungssysteme GmbH & Pursuant to Section 264 b HGB, the following limited
partnerships are not required to prepare annual finan-
VTHL Voith Turbo H+L Hydraulic GmbH & Co. KG, cial statements subject to the regulations valid for
incorporated firms:
VTKH Voith Turbo Hochelastische Kupplungen VISD Spüldienste Niederbayern GmbH & Co. KG, VTLH Voith Turbo Lokomotivtechnik GmbH & Dingolfing
Co. KG, Gommern
Rutesheim
GmbH & Co. KG, Essen
Co. KG, Heidenheim
VIPH Voith Industrial Services Paper GmbH & VTSH Voith Turbo Schneider Propulsion GmbH & Co. KG, Heidenheim
Co. KG, Heidenheim
VIPS DIW Instandhaltung GmbH & Co. KG, VTSK Voith Turbo Scharfenberg GmbH & Co. KG, Heidenheim
VISI Voith Industrial Services Indumont GmbH & VTWH Voith Turbo Wind GmbH & Co. KG, Co. KG, Stuttgart
Heidenheim
Salzgitter
VISK Voith Industrial Services Energy GmbH & Co. KG, Stuttgart
VZB J.M. Voith GmbH & Co. Beteiligungen KG, VIST DIW Instandhaltung GmbH & Co. KG, Heidenheim
VOGG Voith Grundstücksverwaltungs GbR, Stuttgart
VIME Voith Industrial Services Mechanical
VOHI ditis Systeme GmbH & Co. KG, Heidenheim
Engineering GmbH & Co. KG, Stuttgart
Heidenheim
91
Since they are included in the consolidated financial
VPA
statements of Voith AG, the following incorporated
VPIT Voith IHI Paper Technology Co., Ltd., Voith Paper Inc., Appleton (WI), USA
firms are not required to comply with regular disclo-
Tokyo, Japan
sure obligations insofar as the conditions defined in
VPSO Voith Paper S.r.L., Schio (Vicenza), Italy
Section 264 (3) HGB (reporting duties) are met.
VFWS Voith Paper Fabrics US Sales Inc., Wilson (NC), USA
VOIS Voith IT Solutions GmbH, Heidenheim
VIH Voith Dienstleistungen GmbH, Heidenheim
VSPA Voith Siemens Hydro Power Generation Ltda.,
VOHA Voith Assekuranz Vermittlung GmbH, VSPO Voith Siemens Hydro Power Generation Heidenheim
São Paulo (SP), Brazil
VOHB Voith Dienstleistungsbeteiligungen GmbH, GmbH & Co. KG, St. Pölten, Austria
VSY
Voith Siemens Hydro Power Generation, Inc., Heidenheim
York (PA), USA
Pursuant to Section 264 b Paragraph 3 HGB and Sec-
VSS
Voith Siemens Hydro Power Generation tion 264 (3) Paragraph 4 HGB, a copy of the consoli-
Shanghai, Ltd., Shanghai, China
dated financial statements of Voith AG is filed with the
VSFK Voith Fuji Hydro K. K., Kawasaki-shi, Japan
electronic version of the Federal German Gazette.
VTI
Voith Turbo, Inc., York (PA), USA
In addition to the companies listed above, the follow-
Business
Combinations in
Fiscal Year 2005/06
ing significant companies are also included in the
VICU Premier Manufacturing Support Services Inc., consolidated financial statements:
Cincinnati (OH), USA
VIKI
Hörmann Industrietechnik GmbH, Kirchseeon,
VPKR Voith Paper GmbH, Krefeld, Germany
Germany
VPS
Voith Paper GmbH, St. Pölten, Austria
VIW
DIW Instandhaltung GmbH, Vienna, Austria
VPP
Voith Paper Máquinas e Equipamentos Ltda., VIWA Premier Manufacturing Support Services São Paulo (SP), Brazil
The main business combinations in fiscal 2005/06
(UK) Ltd., Warwick, UK
business combinations contributed a total of involved the acquisition of Hörmann Industrietechnik
€ 119.4 million to sales and net loss of € 6.1 million to
GmbH and its subsidiaries (effective January 1, 2006)
the Voith Group’s consolidated statement of income and Voith Turbo Aufladungssysteme GmbH & Co. KG in the fiscal year 2005/06.
(effective September 30, 2006). Taken together,
Business
Combinations in
Fiscal Year 2006/07
BHS Getriebe GmbH
Voith Turbo GmbH & Co. KG acquired a 100% stake
in the USA. All acquired assets and liabilities were
in gear unit manufacturer BHS Getriebe Holding
recognized at fair value. The difference between the
GmbH, Sonthofen, Germany, effective July 17, 2007.
purchase price and acquired equity that could not be
BHS Getriebe is one of the world’s leading manufac-
assigned to any particular asset was stated as good-
turers of high-performance gearboxes, couplings and
will. Some of the acquired intangible assets (such as
rotor-turning gear units for high-speed and industrial
the employee base) could not be recognized as they
applications in a wide variety of heavy industries.
did not meet the recognition criteria. Goodwill derives
The company employs more than 300 people, has a
from anticipated synergies such as shared use of the
stable customer structure and operates a subsidiary
Voith Group’s existing sales channels.
92
In fiscal 2006/07, the company contributed sales total
October 1, 2006, consolidated sales would have been
ing € 15.0 million and net income of € 0.8 million to € 47.4 million higher and consolidated earnings would
the Voith Group’s consolidated statement of income. have been € 4.4 million higher.
If the business combination had taken place on
LSC Process- und
Effective January 1, 2007, Voith Paper GmbH & Laborsysteme GmbH
Co. KG, Heidenheim, acquired a 100% stake in will. Goodwill derives from the need to protect the
LSC Process- und Laborsysteme GmbH, Neuwied,
division’s market position and supplier structure from
Germany.
assigned to any particular asset was stated as good-
competitors and from anticipated cost savings due to
expected synergies.
This acquisition came as Voith Paper Automation’s
response to the singular significance of measure-
Other Acquisitions
In fiscal 2006/07, the company contributed sales ment systems in its portfolio. The takeover marks an
totaling € 3.7 million and net income of € 0.5 million to
important step in the direction of technology leader
the Voith Group’s consolidated statement of income. ship in automation systems for the cellulose and
If the business combination had taken place on paper industry. All acquired assets and liabilities were
October 1, 2006, consolidated sales would have been
recognized at fair value. The difference between the
€ 2.0 million higher and consolidated earnings would
purchase price and acquired equity that could not be
have been € 0.3 million higher.
The main item under other acquisitions is Meri
the newly acquired company and its subsidiaries
Entsorgungstechnik für die Papierindustrie GmbH,
contributed sales totaling € 13.5 million and net
Ravensburg, Germany, in which Voith Paper
income of € 0.3 million to the Voith Group’s consoli-
increased its stake to 70% effective October 1, 2006, dated statement of income.
thereby acquiring a majority interest. In fiscal 2006/07,
93
The fair value of the acquired assets and liabilities is listed in the table below:
Principles of
Consolidation
Balance sheet item
€ in thousands
BHS
LSC
Carrying amount Fair value
immediately
at time of before business
acquisition
combination
Carrying amount
Fair value
immediately at time of before business
acquisition
combination
Other
Fair value
at time of
acquisition
Non-current assets
50 172
10 457
1 567
580
507
Current assets
52 769
52 769
6 411
6 411
5 448
Accruals and provisions
Liabilities
Carrying amount
Minority interests and other non-current capital provided by shareholders
Goodwill
Purchase price Cash and cash equivalents
Borrowings
Net cash inflow (outflow)
(8 039)
(8 039)
(653)
(653)
(717)
(42 301)
(30 386)
(1 616)
(1 241)
(3 142)
52 601
24 801
5 709
5 097
2 096
0
0
(1 980)
66 407
7 861
3 584
119 008
13 570
3 700
(3 348)
(1 591)
(708)
0
0
0
118 300
10 222
2 109
Since there is no difference between the carrying
business combination are not shown separately. amounts and the fair value of the “Other acquisitions”, Incidental costs related to acquisitions in fiscal year the carrying amounts immediately before the
2006/07 are of minor significance.
For the purposes of capital consolidation and in
In accordance with the option permitted by IFRS 1,
accordance with the purchase method prescribed by
Voith has elected not to apply the provisions of IFRS 3
IFRS 3, the cost of the combination is netted against
retroactively to business combinations effected before
the corresponding shareholders’ equity acquired,
the transition to IFRS. Existing goodwill has thus
which is stated at its value as at the acquisition date.
been adopted from the HGB accounting figures as at
Any excess of cost over the carrying amount is October 1, 2004.
capitalized as goodwill. Excesses of the carrying
amount over cost are recognized in profit and loss.
The same accounting and valuation policies are
Before the transition to IFRS, the cost of a combi
equity of all companies accounted for using the equity
nation was netted against shareholders’ equity calcu-
method.
used to determine Voith’s stake in the shareholders’
lated using the book value (carrying amount) method.
Since the fiscal year 1998/99, any excesses of cost
Intercompany transactions and results are eliminated.
over the carrying amount have been capitalized as
Unrealized gains in stocks and fixed assets relating to
goodwill. Any such differences accruing from previ-
intercompany transactions are eliminated in the con-
ous reporting periods were netted against reserves.
solidated statement of income. Intercompany sales
Excesses of the carrying amount over cost were
and other intercompany earnings are netted against
recognized in reserves.
the corresponding expenses. Deferred tax is calculat-
The purchase method is applied in cases where the
in profit and loss.
ed for consolidation transactions that are recognized
Voith Group subsequently purchases additional shares
in companies in which it already exercises control.
94
Foreign Currency
The consolidated financial statements are prepared in
Foreign currency transactions in local financial
Translation
Euros, Voith AG’s functional currency. Financial state-
statements are translated at the exchange rate on the
ments prepared by subsidiaries that use a different
effective date of the transactions concerned. At fiscal
functional currency are translated as follows:
year-end, the resultant monetary items are measured
Shareholders’ equity of foreign subsidiaries is trans-
in light of the exchange rate at the balance sheet
lated at historical rates. All other items on the balance
date. Any gains or losses on currency translation are
sheet are translated at the rates applicable as at the
recognized in profit and loss as unrealized gains or
balance sheet date. Goodwill arising from business
losses.
combinations before the transition to IFRS is an
exception to this rule and is still translated at historical
Translation adjustments arising from loans denominated in foreign currencies (where these are used to
rates.
hedge net investments in foreign business operaIn the consolidated statement of income, income and
tions) are recognized in equity until the underlying net
expenses are translated at average exchange rates.
investment is disposed of. Only after disposal they are
Retained earnings and losses are translated using the
recognized in the consolidated statement of income.
relevant historical exchange rate on the closing date
These translation adjustments give rise to deferred
of the previous fiscal years.
tax items that are also recognized in equity.
Differences arising from currency translation are
netted against other reserves.
In the period under review, translation of the currencies that are of significance to the Voith Group was based on the following exchange rates:
Exchange rates between the Euro and the main foreign currencies in the Voith Group
Summary of
Significant Accounting
and Valuation Policies
Exchange rate as at balance sheet date
US Dollar
Average rate
2007-09-30
2006-09-30
2006/07
2005/06
1.4187
1.2669
1.3331
1.2314
Brazilian Real
2.6150
2.7512
2.7142
2.7221
Pound Sterling
0.6983
0.6775
0.6764
0.6842
Swedish Krona
9.2150
9.2700
9.2150
9.3428
Norwegian Krona
7.7170
8.2350
8.0997
7.9583
Canadian Dollar
1.4169
1.4115
1.4746
1.4004
Australian Dollar
1.6086
1.6985
1.6477
1.6458
Chinese Renminbi
Japanese Yen
10.6484
10.0178
10.2764
9.8659
163.5800
149.4500
158.4138
142.8546
The consolidated financial statements are prepared
In accordance with IAS 27, consistent accounting and
using the historical cost method. The only exceptions
valuation policies are used to prepare the separate
to this rule are derivative instruments and financial
financial statements for the companies subsumed
instruments held for sale, which are recognized at fair
under the consolidated financial statements. The
value. Acquisitions and disposals of financial assets
main accounting and valuation policies are listed and
are reported at the settlement date.
explained below.
Income and
Expenses
95
Sales revenue (less various cash and other discounts
mated future cash inflows over the expected maturity
granted to customers) is recognized when products
of a financial instrument to the net carrying amount of
or merchandise have been delivered and/or services
the underlying financial asset.)
rendered and when the risk of ownership has been
transferred to the customer. In the case of long-term
Dividend income is recognized when receipt of pay-
construction contracts, sales are recognized using
ment becomes a legal entitlement.
the percentage-of-completion method. A detailed
explanation of this method is provided in the notes on
Operating expenses are recognized as expenditure at
“Long-term construction contracts”.
the time when a service is used or when other salesrelated expenses are incurred. Taxes on income are
Interest expenses and interest income are recognized
calculated in accordance with taxation law in the
as they accrue. (The effective interest rate method,
countries in which the Group operates.
i.e. the imputed interest rate, is used to discount esti-
Intangible Assets
Acquired intangible assets are capitalized at cost Goodwill is subjected to annual impairment tests. and depreciated in a straight line over their antici-
To calculate its value, goodwill is assigned to four
pated useful lives. Most of these assets are software
cash-generating units. In line with the management’s
programs that are depreciated over a three-year
internal reporting practices, these four cash-generat-
period.
ing units are identified on the basis of the Group’s
operating activities. Voith AG has therefore defined
Internally generated intangible assets are capitalized
the Group Divisions Voith Paper, Voith Siemens
as development costs, using their production costs,
Hydro Power Generation, Voith Turbo and Voith
provided that manufacture of these assets meets
Industrial Services as its four cash-generating units.
the recognition criteria stated in IAS 38 and will, in
particular, probably result in future economic benefits
At the Voith Group, goodwill is tested for impairment
for the Group. Production costs include all costs that
on the basis of its use value, which itself is based
are directly attributable to the development process.
on current management planning data. Planning
These assets are depreciated in a straight line from
assumptions are adapted in line with new knowledge.
the start of production for a defined period, usually
Due account is taken of reasonable assumptions
between three and five years. If the requirements for
regarding macroeconomic trends and historical
capitalization are not met, expenses are recognized
developments.
in profit and loss in the fiscal year in which they were
incurred.
Cash flow forecasts are based on the detailed
financial budget for the coming year, on the financial
Unscheduled write-downs (impairments) are effected
planning figures for the coming two years and on
in accordance with IAS 36 if the recoverable amount
well-founded top-down planning for a two- to six-year
(the present value of expected future cash flows from
period. Cash flows for periods after the sixth fiscal
the use of the assets concerned) falls below their
year are extrapolated at a constant 1% growth rate.
carrying amount. Should the reasons for impairments
These growth rates do not exceed the average long-
effected in previous periods no longer apply, these
term growth rates of the business areas in which the
impairments are reversed.
corresponding cash-generating units operate.
96
The discount rates are derived from a calculation of
and 7.2% was used to calculate the present value of
the weighted average cost of capital, which is itself
future net cash inflows (previous year: between 5.9%
based on the debt/equity structure at Voith and the
and 6.2%). Extrapolation to the pre-tax rate that must
financing costs of comparable competitors for each of
be stated pursuant to IAS 36 results in interest rates
the cash-generating units. The discount rates applied
of between 9.6% and 11.1% (previous year: between
reflect the equity risk specific to each cash-generat-
7.9% and 9.0%).
ing unit. An after-tax interest rate of between 6.7%
Property, Plant
Property, plant and equipment is stated at cost less
attributable production costs and an appropriate
and Equipment
scheduled depreciation and, where necessary, for
share of production overheads. Depreciation is effect-
impairment. Production costs for internally gener-
ed in a straight line over the following useful lives:
ated property, plant and equipment include all directly
Useful life
Buildings
Plant and machinery
40 to 50 years
4 to 15 years
Other equipment
4 to 12 years
The recognized carrying amount of property, plant
value of a previously impaired asset subsequently
and equipment is subjected to an impairment test if
increases again.
unusual events or market developments indicated
that they may be impaired. To this end, the carrying
Repair and maintenance costs are recognized as
amount of an asset or cash-generating unit is com-
expenses at the time when they are incurred. Sig-
pared with its recoverable amount, which is defined
nificant renewals and improvements are capitalized.
as the higher of fair value less costs to sell and value
Interest on borrowed funds is not capitalized.
in use. Impairment losses are reversed if the fair
Leased Assets
Leasing transactions that transfer substantially all
is recognized and then settled by the lease pay-
risks and opportunities incidental to use of the leased
ments. The interest component is recognized in the
property, plant or equipment to the Voith company
interest result. All other leases in which Voith Group
(the lessee) are classified as finance leases. In
companies act as the lessee are stated as operating
such cases, the lessee capitalizes the leased asset
leases. The lease payments for operating leases are
at the start of the lease period and writes it down
recognized as expenses in a straight line over the
over the asset’s useful life. A corresponding liability
term of the lease.
Financial Assets and
Marketable Securities
Shares carried under financial assets as other invest-
97
“available-for-sale” and “held-to-maturity”. The Voith ments are stated at cost, because no active market
Group has no marketable securities “held-to-
exists for these companies and their fair value cannot
maturity”.
be determined at reasonable cost. Such assets are
written down if substantial objective evidence indi-
Securities are stated at their market value (where
cates that they are impaired.
market valuations can be obtained) or at fair value.
Unrealized gains and losses on marketable securities
In applying the equity method, associates are stated
“held-for-trading” are recognized in profit and loss at
as the amount of equity held by the Voith Group plus
the balance sheet date. Marketable securities “avail-
any goodwill. Changes in associated companies’
able-for-sale” are recognized separately in equity, tak-
equity that are not recognized in profit and loss are
ing into consideration also deferred taxes, until such
likewise recognized directly in equity in the consoli-
time as they are realized. Available-for-sale securities
dated financial statements.
are assets that are not held for trading.
In accordance with IAS 39, loans are classified as
Where no market value is available and fair value
non-current loans under other financial assets and are
cannot be determined at reasonable cost, market
stated at amortized cost, adjusted (where necessary)
able securities are recognized at cost. Impairments
for impairments.
on available-for-sale securities and financial assets
are recognized in profit and loss if it is likely that the
Marketable securities classified as non-current or
market value will remain permanently below the cost
current assets need to be distinguished in accordance
of acquisition.
with IAS 39 between securities “held-for-trading” ,
Inventories
Long-Term
Construction
Contracts
Raw materials and supplies, merchandise, work in
The weighted average cost, or cost based on the
progress and finished goods are all stated under
first-in, first-out (FIFO) method is capitalized in the
inventories at the lower of cost and net realizable
balance sheet. Suitable allowances are made for
value. Production costs include both direct costs
inventory risks arising from the period in stock, lower
and an appropriate share of material and production
realizable values, etc. These allowances are reversed
overheads and production-related depreciation that
if the reasons for the initial impairment of inventories
can be attributed directly to the production process.
no longer exist.
Long-term construction contracts are recognized
of completion based on project revenues and costs.
based on the percentage-of-completion (PoC)
In such cases, sales revenues in the amount of costs
method. The cost-to-cost method is used to calculate
incurred for the construction contract to date are
the ratio of costs already incurred to forecast total
recognized immediately as income, while the costs
costs in order to determine the percentage of com-
incurred by the construction contract in the report-
pletion. Realized earnings are then stated as sales
ing period are immediately recognized as expenses.
and, after deducting customer advances, as trade
Appropriate provisions are formed to cover antici-
accounts receivable. If the outcome of a construc-
pated losses on such contracts in light of perceivable
tion contract cannot be forecast with any degree of
risks.
certainty, it is not possible to calculate the percentage
98
Accounts
Receivable and
Other Assets
Financial
Derivatives and
Hedging
Relationships
Accounts receivable and other assets (with the excep-
Accounts receivable that bear little or no interest and
tion of financial derivatives) are stated at face value
that have maturities of more than one year are stated
or at cost. Individual allowances cover bad-debt risks.
at their discounted present value.
Voith uses a variety of financial derivatives – usually
Fair value hedges
forward exchange contracts, currency options and
Fair value hedges are hedges of the Group’s expo-
interest rate swaps – to hedge underlying trans
actions. Essentially, the Group applies two policies
– either the fair value hedge accounting of firm
commitments or cash flow hedge accounting – to hedge operating business transactions.
At the inception of a hedge relationship, the Group
formally designates and documents the hedge relationship to which the Group wishes to apply hedge
accounting and the risk management objective and
strategy for undertaking the hedge. The documentation includes identification of the hedging instrument,
the hedged item or transaction, the nature of the risk
being hedged and how the Group will assess the
hedging instrument’s effectiveness in offsetting the
exposure to changes in the hedged item’s fair value
or cash flows attributable to the hedged risk. Such
hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and
are assessed on an ongoing basis to determine that
they actually have been highly effective throughout
the financial reporting periods for which they were
designated.
Hedges that meet the strict criteria for hedge accounting are accounted for as follows.
sure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment that is
attributable to a particular risk and could affect profit
or loss. For fair value hedges, the carrying amount
of the hedged item is adjusted for gains and losses
attributable to the risk being hedged, the derivative is
remeasured at fair value, and gains and losses from
both are recognized in profit or loss.
For fair value hedges relating to items carried at
amortized cost, the adjustment to carrying amount is
amortized through profit or loss over the remaining
term to maturity.
When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment
attributable to the hedged risk is recognized as an
asset or liability with a corresponding gain or loss
recognized in profit or loss. The changes in the fair
value of the hedging instrument are also recognized
in profit or loss.
The Group discontinues fair value hedge accounting
if the hedging instrument expires, is sold, terminated
or exercised or the hedge no longer meets the criteria
for hedge accounting. Any adjustment to the carrying
amount of a hedged financial instrument is made
using the effective interest method to amortize it in
the statement of income. Amortization may begin as
soon as an adjustment exists and shall begin no later
than when the hedged item ceases to be adjusted for
changes in its fair value attributable to the risk being
hedged.
Cash flow hedges
Cash flow hedges are hedges of the Group’s exposure
to variability in cash flows that is attributable to a
particular risk associated with a recognized asset or
liability or a highly probable forecast transaction and
could affect profit or loss. The effective portion of the
gain or loss on the hedging instrument is recognized
directly in equity, while the ineffective portion is recognized in profit or loss.
Amounts initially recognized directly in equity are
transferred to the statement of income when the
hedged transaction affects profit or loss, such as
when hedged financial income or financial expense
is recognized or when a forecast sale or purchase
occurs. Where the hedged item is a non-financial
asset or liability, the amounts recognized in equity are
transferred to the initial carrying amount of the nonfinancial asset or liability.
If the forecast transaction is no longer expected to
occur, amounts previously initially recognized directly
in equity are transferred to profit or loss. If the hedging
instrument expires, is sold, terminated or exercised
99
Where no hedging relationship exists to an underlying transaction (i.e. where hedge accounting does not
apply), financial derivatives are classified as held-fortrading instruments. Changes in the fair value of these
instruments are recognized in profit and loss.
Financial derivatives with positive values are stated
under other assets, those with negative values are
stated under other liabilities.
A treasury tool is used to manage all external hedges.
The same treasury tool is also used to calculate the
fair value of forward exchange contracts. The original
forward rate is compared with the forward rate calculated at the balance sheet date. The difference is discounted to the balance sheet date. The forward rate is
calculated based on interest rates for the two currencies determined by linear approximation on the basis
of current LIBOR rates. The fair value of options,
interest rate swaps and interest rate caps is based
on information supplied by banks. This information is
calculated on the basis of certain assumptions and
using recognized valuation models (Black-Scholes
and Heath-Jarrow-Morton).
without replacement or rollover, or if the designation
as a hedge is revoked, amounts previously recognized in equity remain in equity until the forecast
transaction occurs. If the related transaction is not
expected to occur, the amount is recognized in profit
or loss.
Cash and Cash
Equivalents
Cash and cash equivalents include cash and checks
accounts include both daily deposits and time depos-
in hand, balances in bank accounts and other cash
its with fixed maturities of up to three months.
equivalents. Under this item, balances in bank
Non-Current Assets
Non-current assets are classified as held for sale
Held for Sale
if their carrying amount is to be recovered princi-
measured at the lower of their carrying amount and
pally through a sale transaction rather than through
their fair value less costs to sell.
continuing use. Non-current assets held for sale are
100
Deferred Taxes
In accordance with IAS 12, deferred tax assets and
legal position, will be or are expected to be valid in
liabilities are formed for timing differences resulting
the countries concerned at the time of realization.
from valuation differences arising between tax report-
Deferred tax assets that are not likely to be real-
ing and reporting for IFRS purposes. Deferred tax
ized within a foreseeable period are either impaired
items are also formed for tax losses carried forward
or not recognized at all. Deferred tax assets and
insofar as it is reasonable to expect that they will be
deferred tax liabilities may be netted if the Group has
realized in the near future. Deferred taxes that relate
an enforceable legal claim to offset actual tax refund
to items recognized directly in equity are themselves
entitlements against actual tax liabilities or if they
recognized in equity. Deferred taxes are calculated
concern the same tax-paying entity.
based on the tax rates that, in light of the current
Profit Participation
Rights
Accrued Pension
Liabilities and Similar
Obligations
Pursuant to IAS 32, the conditions defined for the
as a separate component of the Group’s equity. Inter-
issue of profit participation rights at the end of
est will not be reported as interest expenses but will
September 2007 require these rights to be reported
be treated in a similar manner to a dividend obligation.
Actuarial measurement of pension provisions is
enterprise must recognize a portion of its actuarial
based on the projected unit credit method prescribed
gains and losses as income or expenses if the net
by IAS 19. This method takes into account known
cumulative unrecognized actuarial gains and losses
pensions and acquired vested rights at the balance
at the end of the previous reporting period exceeded
sheet date, as well as factors such as expected future
the greater of:
increases in salaries and pensions. Defined benefit
obligations are measured based on the proportion of
a) 10% of the present value of the defined benefit future benefits accrued at the balance sheet date.
obligation at that date (before deducting plan assets); and
Measurement makes due provision for assumptions
b) 10% of the fair value of any plan assets at that about the future development of certain parameters
date.
that could affect the actual future benefit amount. The
Other Provisions
10% corridor rule prescribed by IAS 19.92 is applied
The portion of actuarial gains and losses to be recog-
when recognizing actuarial gains and losses in the
nized is the excess determined pursuant to IAS 19.92
balance sheet and in profit and loss. In measuring
divided by the expected average remaining working
its defined benefit liability pursuant to IAS 19.54, an
lives of the employees participating in a given plan.
In accordance with IAS 37, provisions are formed for
Provisions for warranty claims are based on historical
all perceivable risks and obligations of uncertain tim-
claim trends and estimated future trends. Specific
ing in the amount that is likely to be realized. These
provisions are set up for known claims. Provisions for
provisions are not netted against recourse claims.
outstanding expenses, anticipated losses on orders
Provisions are formed where the Group has present
and other order-related obligations are measured
obligations in respect of third parties resulting from
based on services still to be rendered, usually in
past events that will probably lead to a future outflow
the amount of the production costs expected to be
of resources whose amount can be estimated reliably.
incurred.
Liabilities
101
Provisions that will not lead to an outflow of resources
amount set aside as a provision is expected to be
in the subsequent period are stated at their discount-
refunded (through an insurance claim, for example),
ed present value at fiscal year-end. The discount rate
the refunded amount is stated separately as an asset
is derived from market interest rates. The present
if it is almost certain to be realized. Income from
value also includes anticipated cost increases. If an
refunds is not netted against expenses.
Current liabilities are stated at their repayment
Liabilities arising from leasing contracts that are clas-
amount. Financial liabilities are measured at their
sified as finance leases in accordance with the criteria
amortized cost. Amortized cost consists of the
laid out in IAS 17 are recognized at the present value
acquisition cost less repayments, issue charges and
of the minimum lease payments at the start of the
the amortization of any premium or discount. Where
lease. Thereafter, they are stated under financial
liabilities serve as underlying transactions in the
liabilities at their amortized cost. Lease payments
context of hedging relationships, they are stated at
are split into an interest component and a repayment
their fair value.
component. The interest component of each payment
is recognized as an expense in profit and loss.
Classification of
In accordance with IAS 32, financial instruments that
ity interests are reclassified from equity to financial
Minority Interest
entitle the holder to repayment of the capital made
liabilities. This financial liability is recognized in the
available to the company must be classified as liabili-
amount of the probable compensation obligation and
Holders’ Capital in
Limited Partnerships
ties. In companies that operate as limited partner-
measured at fair value. The difference between this
and Due to Put Options
ships, shareholders have the right (under German
liability and minority interests as a share of equity is
law) to demand repayment of the capital they have
treated as an ongoing business combination and is
made available to the company. This right cannot be
stated as goodwill.
excluded by the shareholders’ agreement. Put options
create a similar obligation pursuant to IAS 32.
In this context, isolated items of data from the previous year were adjusted. As at September 30, 2006,
a) Put options (change in IFRS accounting practice)
the carrying amount of goodwill rose to € 37 566
thousand (September 30, 2005: € 32 868 thousand),
Developments in IFRS accounting practice led to
while the carrying amount of other non-current finan-
changes in the recognition and measurement of put
cial liabilities rose to € 77 351 thousand (September
options in fiscal 2006/07. Where the right to terminate
30, 2005: € 71 490 thousand). The figure reported for
minority interests exists in the form of a put option,
“other non-current capital provided by shareholders”
the corresponding portion of minority interests is not
in the previous year declined by € 39 785 thousand
derecognized but is treated as a component of equity
(September 30, 2005: € 38 622 thousand). Net income
during the fiscal period. Accordingly, a share of net
(after profit or loss attributable to providers of non-cur-
income for the fiscal year is also allocated to minority
rent capital) in fiscal year 2005/06 was reduced by interests. At every closing date, it is assumed that the
€ 2 692 thousand.
put option will be exercised; the corresponding minor-
102
b) Limited partnerships
by shareholders”. In the consolidated statement of
income, the profit or loss attributable to the provid-
Use of Estimates
Minority interests in German limited partnerships are
ers of non-current capital is disclosed separately
furthermore classified as liabilities and stated at amor-
under “Result attributable to providers of non-current
tized cost under “other non-current capital provided
capital”.
In order to properly and fully prepare the consolidated
assets and tax refund claims will be realized, and to
financial statements, the management must make
measure and recognize construction contracts and
estimates and assumptions that will influence the
provisions (in particular the actuarial parameters used
values reported for assets and liabilities on the bal-
to calculate pensions and other obligations) and the
ance sheet, the information provided in the notes, and
probable costs associated with warranty, process and
the figures reported for income and expenses in the
environmental risks.
period under review.
These discretionary decisions and estimates are
Estimates are used primarily to determine the useful
based on assumptions derived from the knowledge
lives for intangible assets and property, plant and
available at the time when the consolidated financial
equipment in the Voith Group, to measure the value
statements are prepared. Voith regularly examines
of goodwill and fixed assets (especially the cash flow
these assumptions and, where appropriate, adjusts
forecasts and the discount factors used for this pur-
them in light of actual developments.
pose), to assess the likelihood that receivables, other
Adoption of Amended
The following amendments to IFRSs and IFRICs
and New Standards
became compulsory and had to be taken into account
and Interpretations
for the first time in fiscal 2006/07:
IFRIC 4: “Determining Whether an Arrangement Contains
a Lease”
IFRIC 4 specifies criteria to identify leasing elements
in contracts that are not formally classified as leasing
Amendments to IAS 19: “Employee Benefits”
contracts.
The amendments to IAS 19 give companies the
option of recognizing actuarial gains and losses
directly in equity as they arise. Voith has decided not
to use this method.
IFRIC 7: “Applying the Restatement Approach under
IAS 29 Financial Reporting in Hyperinflationary
Economies”
This interpretation specifies how to proceed in the
Amendments to IAS 39: “Financial Instruments: Recognition and Measurement”
The scope of IAS 39 has been broadened to include
rules governing financial guarantee contracts and the
hedging of expected intercompany transactions.
event that a company’s functional currency is classified for the first time as hyperinflationary.
IFRIC 8: “Scope of IFRS 2”
This interpretation clarifies the point that IFRS 2
(“Share-Based Payment”) applies to agreements in
which the company makes payments in return for
no counterperformance or inadequate counterper
formance.
103
IFRIC 9: “Reassessment of Embedded Derivatives”
IFRS 7: “Financial Instruments: Disclosures”
IFRIC 9 specifies how the rules governing the report-
This new standard covers all compulsory disclosures
ing of embedded derivatives in IAS 39 are to be
in relation to financial instruments. It prescribes the
applied.
disclosure of information about the importance of
financial instruments and about the nature and scope
First-time adoption of the amendments to IAS 39
of risks associated with these instruments. This stan
and the interpretations IFRIC 4, IFRIC 7, IFRIC 8
dard replaces the compulsory disclosures hitherto
and IFRIC 9 had no material impact on the Group’s
prescribed by IAS 30 and IAS 32. IFRS 7 must be
assets, financial and earnings position.
adopted for fiscal years that begin on or after January 1, 2007.
The following revised and newly published IFRSs and
IFRICs were not yet compulsory in fiscal 2006/07 or
Amendments to IAS 23: “Borrowing Costs”
have not yet been endorsed for the European Union
by the Commission of the European Communities.
The main change to this standard is that the option of
The impact of standards to be applied in future to the
recognizing borrowing costs as expenses for certain
Voith Group is currently being examined.
assets has been eliminated. As a result, borrowing costs that are directly attributable to qualifying
assets must now be recognized as part of the cost
Amendments to IAS 1: “Presentation of Financial
Statements”
of these assets. The amendment must be adopted
for borrowing costs attributable to qualifying assets
that are to be recognized on or after January 1, 2009.
These amendments govern compulsory disclosures Since borrowing costs are currently recognized as
in relation to the objectives, guidelines and proce-
expenses, the carrying amounts of qualifying assets
dures used for capital management and are to be
are expected to increase in future.
adopted for reporting periods that begin on or after
January 1, 2007.
IFRS 8: “Operating Segments”
A further amendment aims to improve analysis
options and make financial statements more readily
IFRS 8 replaces IAS 14 (“Segment Reporting”). The
comparable for the people who read them. IAS 1
main difference to IAS 14 is that the full management
governs the basic principles of the presentation and
approach is used to identify and present relevant
structure of financial statements. It also contains mini-
segment information. In future, segment reporting will
mum requirements regarding the content of financial
therefore be aligned with internal reporting structures.
statements. The revised standard is to be adopted
By contrast, IAS 14 required relevant information to
for reporting periods that begin on or after January 1,
be prepared in line with the accounting rules used to
2009.
prepare the consolidated financial statements. The
new standard must be adopted for fiscal periods that
begin on or after January 1, 2009.
104
IFRIC 10: “Interim Financial Reporting and Impairment”
IFRIC 12: “Service Concession Arrangements”
IFRIC 10 (“Interim Financial Reporting and Impair-
IFRIC 12 governs arrangements in which govern-
ment”) requires users to retain impairments that
ment bodies grant contracts for the supply of public
are made to goodwill, equity instruments or assets
services to private enterprises. The interpretation
reported at cost in interim financial statements. specifies how private companies are to account for
IFRIC 10 must be adopted for fiscal periods that begin
the rights and duties arising from such arrangements.
on or after November 1, 2006.
IFRIC 12 must be adopted for fiscal periods that begin
on or after January 1, 2008.
IFRIC 11: “IFRS 2 – Group and Treasury Share
Transactions”
Adoption of IAS 1, IFRS 7 and IFRS 8 will modify
and/or expand the notes to the Group’s consolidated
IFRIC 11 (“IFRS 2 – Group and Treasury Share Trans-
financial statements. Since the Voith Group does not
actions”) requires the adoption of IFRS 2 in cases
use share-based payments, IFRIC 11 will have no
where a company uses treasury shares or equity
impact. IFRIC 12 will probably have no material influ-
instruments issued by another Group company to pay
ence on the Group’s assets, financial and earnings
for goods or services. IFRIC 11 must be adopted for
position.
fiscal periods that begin on or after March 1, 2007.
At present, the Voith Group does not plan to adopt the
new standards prematurely.
105
Notes to the Consolidated Statement of Income
The figures shown under “Systems & Products” and Others are shown separately under the heading
below relate to the Group Divisions Voith Paper, “Services”, as these Group Divisions mainly comprise
Voith Siemens Hydro Power Generation and Voith
service companies.
Turbo. The figures for Voith Industrial Services (1) Sales
By Group Division
€ in thousands
Systems & Products Voith Paper
2006/07
2005/06
1 732 359
1 566 961
Voith Siemens Hydro Power Generation
650 036
614 176
Voith Turbo
1 011 016
893 485
3 393 411
3 074 622
Services
790 671
654 459
Others
5 837
9 460
796 508
663 919
4 189 919
3 738 541
By Region
2006/07
2005/06
€ in thousands
Systems & Products
Germany
503 452
535 591
1 024 212
843 062
Americas
835 038
759 359
Asia
942 991
815 113
Others
87 718
121 497
3 393 411
3 074 622
Services
Germany
454 627
364 569
159 204
134 480
178 144
158 793
4 533
6 071
0
6
796 508
663 919
Americas
Asia
Others
Voith Group
Germany
1 183 416
977 542
Americas
1 013 182
918 152
Asia
Others
958 079
900 160
947 524
821 184
87 718
121 503
4 189 919
3 738 541
106
(2) Decrease/Increase
in Inventories and
€ in thousands
Change in inventory of finished goods and work in progress
Capitalized Costs
(3) Other Operating
Income
2006/07
2005/06
26 839
46 841
Other capitalized costs
22 901
44 421
49 740
91 262
2006/07
2005/06
€ in thousands
Income from the use and reversal of provisions
229 305
254 293
Foreign exchange gains
91 512
74 769
Recovered bad debts
21 168
9 959
Gains on disposal of non-current and current assets
4 097
3 319
Other income
49 422
80 579
395 504
422 919
Gains on disposal of non-current and current assets
the previous year concerned the Voith Paper Group
include no gains (previous year: € 479 thousand) from
Division.
the disposal of assets held for sale. Gains reported in
(4) Cost of Material
(5) Personnel
Expenses
€ in thousands
Expenditure for raw materials, supplies and purchased goods
Expenditure for purchased services
2006/07
2005/06
1 405 970
1 264 669
351 752
274 091
1 757 722
1 538 760 2006/07
2005/06
€ in thousands
1 255 972
1 164 941
273 371
253 264
1 529 343
1 418 205 Wages and salaries
Social security, employee benefits and related charges
Number of Employees
107
Average for the fiscal year
2006/07
2005/06
2007-09-30
2006-09-30
Systems & Products
Industrial employees
7 078
7 009
7 187
7 031
Salaried employees
10 076
9 618
10 542
9 646
17 154
16 627
17 729
16 677
Services
16 269
14 277
16 956
15 196
Salaried employees
2 441
2 060
2 579
2 212
18 710
16 337
19 535
17 408
Voith Group
23 347
21 286
24 143
22 227
Salaried employees
12 517
11 678
13 121
11 858
35 864
32 964
37 264
34 085
Apprentices and trainees
980
809
980
809
36 844
33 773
38 244
34 894
Number of Employees by Region
2007-09-30 2006-09-30 Systems & Products
Average for the fiscal year
2006/07
2005/06
Germany
7 508
7 246
7 904
7 356
3 269
3 216
3 315
3 192
Americas
4 018
3 996
4 069
3 890
Asia
2 175
1 998
2 246
2 063
Others
Services
Germany
8 549
7 464
184
171
195
176
17 154
16 627
17 729
16 677
9 062
8 133
4 571
4 320
4 870
4 412
Americas
5 086
4 253
5 091
4 517
Asia
Voith Group
Germany
504
300
512
346
18 710
16 337
19 535
17 408
16 966
15 489
16 057
14 710
7 840
7 536
8 185
7 604
Americas
9 104
8 249
9 160
8 407
Asia
2 679
2 298
2 758
2 409
Others
184
171
195
176
37 264
34 085
35 864
32 964
108
(6) Other Operating
Expenses
(7) Non-Recurring
Result
€ in thousands
Increase in provisions
2006/07
2005/06
191 530
191 087
Other selling expenses
290 352
274 762
Other administrative expenses
190 075
167 756
Foreign exchange losses
67 358
41 139
Rent for buildings and machinery
48 127
40 157
11 533
20 222
Allowances for bad debts
Losses on disposal of non-current and current assets
Other expenses
2 679
2 210
106 144
137 724
907 798
875 057
The non-recurring result primarily includes expenses incurred for major restructuring activities and
retrenchments.
The table below provides a detailed breakdown of these expenses:
(8) Interest Result
€ in thousands
Personnel expenses
Depreciation
Other expenses
Income from reversal of provisions
2006/07
(4 217)
2005/06
(34 222)
(220)
(436)
(3 378)
(11 840)
5 260
(2 555)
0
(46 498)
In fiscal 2006/07, the continuation of activities initiated
for which provisions could not be formed in the
in the previous fiscal year generated expenses previous year.
€ in thousands
Interest and similar income
Interest and similar expenses
2006/07
2005/06
27 803
33 438
(70 259)
(79 145)
(42 456)
(45 707)
(9) Other Financial
Result
(10) Income Taxes
109
2006/07
2005/06
€ in thousands
Income from investments
Expense from loss-transfer agreements
Write-down on investments in shares
(2 820)
Write-down on long-term loans
(2 349)
0 Write-down on marketable securities (36)
(40)
536
909
26 054
112 070
911
(119)
0
(319)
(634)
Income from marketable securities and loans Income from the sale of associated companies
21 266
112 897
2006/07
2005/06
€ in thousands
Effective taxes
(95 584)
(69 792)
Deferred taxes
(15 988)
(14 712)
(111 572)
(84 504)
Effective taxes include domestic income taxes and
As at September 30, 2007, tax losses carried forward
comparable foreign income taxes that are calculated
of € 322 157 thousand (previous year: € 348 712
in accordance with the local tax laws valid for each
thousand) for German corporate taxes, additionally
subsidiary company.
For individual Group companies, deferred tax items
thousand (previous year: € 28 385 thousand) for
are recognized for timing differences between tax
foreign taxes were not recognized as deferred tax
thousand) for German trade tax and € 63 868
reporting and IFRS, as well as for consolidation
assets as there was no reasonable expectation that
measures recognized in profit and loss. Deferred
the related deferred tax assets would be realized
tax assets are also recognized for tax losses carried
in the future. Since the outcome of an ongoing tax
forward that can be reasonably expected to be
inspection of the Group’s German companies has
realized in the near future. In light of a corporate
not yet been finalized, its impact on losses carried
tax reform in 2008, the average income tax rate for
forward is not taken into account in this report. In
German companies is 30% (previous year: 38.65%).
Germany, losses carried forward do not expire. Out-
Deferred taxes are calculated at the tax rates valid in
be realized within no more than 5 to 10 years. In the
side Germany, losses carried forward can normally
the respective countries.
period under review, carried forward tax losses in the
amount of € 2 884 thousand (previous year: € 7 315
In the period under review, deferred tax expenses
thousand) were realized for which no deferred tax
arising from temporary differences amounted to assets were formed in the previous year.
€ 23 171 thousand (previous year: € 23 071
thousand). The reversal of write-downs on deferred
tax assets on losses carried forward resulted in
deferred tax income of € 4 234 thousand (previous
year: € 4 599 thousand).
110
The following table provides a detailed overview of deferred tax items at the balance sheet date:
€ in thousands
Intangible assets
Property, plant and equipment
Investments and marketable securities
Inventories and receivables
2007-09-30
2006-09-30
Deferred tax assets
Deferred
tax liabilities
Deferred
tax assets
Deferred
tax liabilities
15 262
50 093
13 845
35 852
4 973
50 068
5 017
52 232
4 341
5 557
4 839
8 786
17 114
55 515
34 361
58 364
Other assets
11 367
26 410
15 684
14 146
Pension provisions
38 906
445
35 290
6 737
9 792
17 159
6 755
8 854
76 850
6 060
68 829
15 409
Financial liabilities
Other provisions and liabilities
Write-down on deferred tax assets arising from temporary differences
Tax losses carried forward
Netting
Balance sheet figure
(21 047)
42 931
(111 526)
(111 526)
88 963
99 781
(2 252)
37 390
(102 641)
(102 641)
117 117
97 739
111
The income of Voith AG and its subsidiaries in
Expected tax expenses in the period under review
Germany is subject to corporation income tax and
were calculated based on a tax rate of 38.65%
trade tax. Profits earned outside Germany are taxed
(unchanged from the previous year), which takes into
at the current rates valid in the countries concerned.
account the structure of the Voith Group.
Reconciliation of expected and actual tax expenses:
€ in thousands
2006/07
2005/06
Income before taxes
290 223
330 379
Expected tax expenses
112 171
127 691
Deviations from expected tax rates (21 341)
(16 561)
Effects of changes in tax rates
Tax-free income
(5 247)
1 929
(16 682)
(59 718)
Non-deductible expenses
19 430
12 360
Taxes relating to other reporting periods
17 214
2 493
Change in write-downs on deferred tax assets
10 482
13 475
Other tax effects
(4 455)
2 835
Taxes on Income
Effective tax rate (%)
111 572
84 504
38.4%
25.6%
Deferred taxes of € 9 413 thousand (previous year: thousand) arising on investments in subsidiaries were
€ 10 141 thousand) relating to temporary differences
not recognized in the balance sheet, since the pre
requisites specified in IAS 12.39 were met.
112
Notes to the Consolidated Balance Sheet
(11) Intangible
Development of Intangible Assets from October 1, 2005 to September 30, 2006.
Assets
€ in thousands
Cost as at 2005-10-01
Changes in Group structure
Currency translation differences Franchises,
trademarks, patents, licenses and similar rights (including
licenses to
such rights)
Goodwill*)
Develop- ment
costs
Advances
paid for
intangible
assets
Total
70 467
419 465 21 531
52
511 515
1 125
26 202
0
8
27 335
(1 277)
0
(2)
(1 615)
(336)
Additions 7 630
0
11 500
55
19 185
Disposals
(3 887)
0
0
0
(3 887)
Other adjustments
4 698
Transfers
Cost as at 2006-09-30
Accumulated depreciation as at 2005-10-01
Currency translation differences Current depreciation
Disposals
Transfers
Carrying amount as at 2006-09-30
*) Previous year’s figures adjusted.
4 698
1 581
0
0
449 088
33 031
84
558 783
(53 003)
(2 899)
0
(109 721)
0
(542)
(29)
1 552
76 580
(53 819)
(542)
210
(8 519)
3 543
(592)
0
0
(1 176)
0
0
(4 095)
0
210
0
(13 790)
3 543
0
0
0
0
0
0
(592)
(59 719)
(54 179)
(6 994)
0
(120 892)
394 909
26 037
84
437 891
16 861
113
Development of Intangible Assets from October 1, 2006 to September 30, 2007.
€ in thousands
Cost as at 2006-10-01
Currency translation differences Franchises,
trademarks, patents, licenses and similar rights (including
licenses to
such rights)
Goodwill*)
Develop- ment
costs
Advances
paid for
intangible
assets
Total
76 580
449 088
33 031
84
558 783
117 084
39 232
(167)
77 852
0
0
(4 137)
5
(2)
(4 301)
Additions 12 160
0
17 437
70
29 667
Disposals
(5 304)
0
0
0
(5 304)
Other adjustments
Transfers
Cost as at 2007-09-30
Disposals
Transfers
1 117
17 210
572
21
18 920
707
0
3 308
(29)
3 986
540 013
54 353
144
(54 179)
(6 994)
124 325
718 835
(59 719)
0
(120 892)
18
0
(5)
(1)
(11 344)
0
(8 183)
(1)
(19 528)
4 391
0
0
4 391
(26)
0
0
(520)
0
12
(546)
(66 680)
(54 179)
57 645
485 834
(15 702)
38 651
(2)
142
(136 563)
582 272
*) Previous year’s figures adjusted.
Developments in IFRS accounting practice have
No impairment losses were recognized in respect of
changed the way in which rights to terminate minority
goodwill on the basis of impairment tests performed.
interests (put options) are accounted for. These put
An impairment loss of € 2 211 thousand (previous
options are now recognized as a financial liability and
year: € 133 thousand) was recognized on develop-
measured at fair value. The difference between this
ment costs, as sufficient potential for use no longer
liability and minority interests as a share of equity is
exists. This impairment affected Voith Turbo and stated as goodwill.
Voith Paper.
The “other adjustments” in the table above essentially
reflect changes to goodwill arising from this modified
accounting practice.
114
(12) Property, Plant
and Equipment
Development of Property, Plant and Equipment from October 1, 2005 to September 30, 2006.
€ in thousands
Cost as at 2005-10-01
Land, lease-
hold rights and buildings (including build-
ings on third- party land)
Technical
equipment,
plant and machinery
533 917
1 052 778
Fixtures,
Advance
furniture payments and
and office
construction
equipment
in progress
359 841
53 261
Total
1 999 797
4 576
11 261
6 516
463
22 816
Currency translation differences (5 961)
(15 803)
(2 217)
(536)
(24 517)
Additions 18 859
64 295
39 153
Disposals
(5 761)
(40 571)
(34 784)
Transfers
18 886
19 812
6 419
Cost as at 2006-09-30
1 091 772
374 928
25 350
147 657
(347)
(81 463)
(46 669)
(1 552)
564 516
31 522
2 062 738
(262 035)
(724 509)
(268 308)
(1 854)
(967)
0 (1 254 852)
(99)
0
(2 920)
1 799
11 568
2 292
0
15 659
(12 409)
(57 089)
(35 015)
0
(104 513)
Disposals
5 113
40 072
32 631
0
77 816
Transfers
(1 049)
3 707
(2 066)
0
592
(268 680)
(728 105)
(271 433)
363 667
103 495
0 (1 268 218)
295 836
31 522
794 520
115
Development of Property, Plant and Equipment from October 1, 2006 to September 30, 2007.
€ in thousands
Cost as at 2006-10-01
Land, lease-
hold rights and buildings (including build-
ings on third- party land)
Technical
equipment,
plant and machinery
564 516
1 091 772
Fixtures,
Advance
furniture payments and
and office
construction
equipment
in progress
374 928
31 522
1 291
Total
2 062 738
6 169
2 536
2 921
Currency translation differences (8 800)
(25 549)
(2 744)
Additions 20 575
40 414
43 826
58 664
163 479
Disposals
(5 664)
(10 119)
(22 025)
(3 051)
(40 859)
Other adjustments
Transfers
Cost as at 2007-09-30
Disposals
Transfers
(187)
144
1 675
699
(113)
5 578
8 424
1 898
(19 886)
1 109 153
399 503
12 917
(37 280)
2 405
(3 986)
582 518
68 240
2 159 414
(268 680)
(728 105)
(271 433)
0 (1 268 218)
3 964
20 509
2 591
0
27 064
(13 159)
(58 006)
(37 149)
0
(108 314)
8 311
19 640
0
31 541
79
562
0
546
3 590
(95)
(274 380)
(757 212)
(285 789)
351 941
113 714
0 (1 317 381)
308 138
68 240
842 033
Impairment losses of € 1 161 thousand were
The advance payments and construction in progress
recognized during the year (previous year: € 1 386
relate to the following assets: € 30 058 thousand thousand), of which a significant portion related to
for buildings (previous year: € 7 850 thousand), machinery. Of this amount, impairment losses totaling
€ 34 264 thousand for technical equipment, plant and
€ 220 thousand (previous year: € 436 thousand) were
machinery (previous year: € 18 787 thousand) and recognized in non-recurring result in profit and loss.
€ 3 918 thousand for non-production equipment
Impairment losses in the fiscal year under review
(previous year: € 4 885 thousand).
affected Voith Turbo, Voith Paper and Voith Industrial
Services. In the previous year, Voith Turbo and Voith Paper were affected.
116
Property, plant and equipment includes the following assets:
Finance leases
€ in thousands
Land
Technical equipment, plant and machinery
871
829
Fixtures, furniture and office equipment
1 677
1 917
7 109
8 429
2007-09-30
2006-09-30
4 561
5 683
Buildings, plant, machinery and office and other
totals € 1 052 thousand (previous year: € 1 103
equipment classified as finance leases are stated
thousand).
under this item. The corresponding leasing liabilities
are shown as financial liabilities. Depreciation (13) Investments in
Associated Companies/
Other Investments
No contingent rents were recognized in profit and loss.
For the first time, the amounts subsumed under “Changes in Group structure” include associated companies
measured using the equity method.
Development of Investments in Associated Companies/Other Investments from October 1, 2005 to September 30, 2006.
€ in thousands
Cost as at 2005-10-01
Currency translation differences Investments in associated companies
Other
investments
Long-term
loans
119 314
55 455
6 557
Total
181 326
(9 039)
(5 779)
0
6
0
(384)
(14 818)
(378)
Additions 41 986
17 624
3 438
63 048
Disposals
(98 860)
(3 823)
(1 215)
(103 898)
Transfers
Cost as at 2006-09-30
Currency translation differences 0
55
0
55
63 538
8 396
125 335
53 401
0
(29 796)
(730)
(30 526)
0
Current depreciation
0
Disposals
0
8
(634)
168
0
176
(634)
2 838
(53)
2 785
(27 584)
(615)
(28 199)
0
53 401
35 954
7 781
97 136
117
Development of Investments in Associated Companies/Other Investments from October 1, 2006 to September 30, 2007.
€ in thousands
Cost as at 2006-10-01
Investments in associated companies
Other
investments
Long-term
loans
Total
53 401
63 538
8 396
125 335
0
0
97
97
18
57
75
Additions 1 290
15 614
3 412
20 316
(53 823)
(3 228)
(1 105)
(58 156)
Disposals
Other adjustments
0
(12 873)
0
Transfers
3 950
(3 950)
0
0
Cost as at 2007-09-30
4 818
59 119
10 857
74 794
0
(68)
Current depreciation
0
(2 820)
Disposals
0
2 487
0
(27 985)
(2 934)
(30 919)
31 134
7 923
43 875
4 818
(27 584)
(12 873)
(615)
(28 199)
17
(51)
(2 349)
(5 169)
13
2 500
The table below aggregates the key data for the associated companies measured using the equity method.
€ in thousands
Equity
Liabilities
Total equity and liabilities
Sales
Net income
GAW
2007-09-30
GBH
2006-09-30
8 351
185 316
18 193
189 787
26 544
375 103
28 113
46 771
4 337
15 404
No. of shares (in thousands)
–
1 807
Share price (in EUR)
–
41.70
Fair value
–
75 352
The associated company Grundstücks- und Baugesellschaft Heidenheim AG (GBH) was sold on November 9, 2006.
118
(14) Inventories
Inventories consist of the following:
€ in thousands
Raw materials and supplies
2006-09-30
222 005
179 248
Work in progress
240 174
221 709
Finished goods and merchandise
144 687
126 364
Payment in advance to suppliers
104 651
90 542
711 517
617 863
Inventories totaling € 231 249 thousand were stated
(15) Trade Receivables
2007-09-30
prescribed by IFRS) totaling € 2 586 thousand (previ-
at their net realizable value (previous year: € 200 299
ous year: € 4 925 thousand) were effected. These
thousand).
amounts are included in the cost of materials.
Impairments on inventories amounted to € 52 606
Inventories with a carrying amount of € 2 680
thousand (previous year: € 63 936 thousand) and
thousand are pledged as securities (previous year: were recognized as expenses. Write-ups (reversals
€ 3 133 thousand).
Trade receivables consist of the following items:
€ in thousands
2007-09-30
2006-09-30
Trade receivables
710 881
675 649
Write-downs on receivables
(38 735)
(53 098)
Receivables from long-term construction contracts
245 486
191 870
917 632
814 421
Trade receivables are classified as current assets. Credit risk is used to manage default risk in trade
As at September 30, 2007, the volume of receivables receivables. In particular, Hermes cover is used to
that is not expected to be realized within one year secure foreign customers.
was € 125 243 thousand (previous year: € 69 051
thousand).
Receivables recognized using the-percentage-ofcompletion method relating to long-term construction
Trade receivables amounting to € 6 496 thousand
(previous year: € 6 495 thousand) are interestbearing.
contracts are determined as follows.
119
€ in thousands
Aggregate amount of costs incurred and profits/
losses incurred on projects in progress (cumulative)
Progress billings to date
Gross amount due from customers
Advances received (“progress billings”)
2007-09-30
2006-09-30
1 528 603
1 528 415
(633 734)
(668 897)
894 869
859 518
(663 762)
(674 217)
231 107
185 301
Thereof receivables from long-term construction contracts
245 486
191 870
Thereof liabilities from long-term construction contracts
(14 379)
Advances received amounting to € 199 198 thousand (6 569)
An amount of € 6 138 thousand (previous year:
(previous year: € 93 129 thousand) for which no
€ 7 419 thousand) in trade receivable is held as
contract costs have been incurred to date are
retentions by customers. Retentions are amounts
included in liabilities.
of progress billings that are not paid until conditions
specified in the contract have been met.
Sales relating to long-term construction contracts
totaled € 1 182 598 thousand (previous year: € 867 004 thousand). Amounts billed to customers are
shown under trade receivables.
(16) Other Receivables
and Assets
€ in thousands
Financial derivatives with hedged operational transactions
Financial derivatives with hedged financial transactions
11 081
14 133
Other financial receivables 64 003
31 681
Prepaid expenses
Other assets
Since a significant portion of the other financial
receivables are subject to variable interest rates, their
market values are largely equivalent to their carrying
amounts.
2007-09-30
2006-09-30
72 935
27 759
18 307
17 764
176 786
137 888
343 112
229 225
120
(17) Marketable
The reported value of € 335 411 thousand (previous
yield. In addition to defined yield expectations, our
Securities
year: € 141 316 thousand) for marketable securities
investment strategy focuses on the reliability and the
consists primarily of held-for-trading securities in the
interchangeability of the entire investment.
amount of € 199 332 thousand and available-for-sale
securities. The year-on-year increase is due essen-
The sale of one available-for-sale security outside
tially to the purchase of held-for-trading securities with
the scope of our investment strategy caused € 3 594
a residual maturity of six months. These securities,
thousand to be reclassified from equity in the previous
too, are held primarily to safeguard liquidity and can
year to profit and loss in the period under review. In
be integrated in the Group’s existing investment strat-
the previous year, € 6 193 thousand were reclassified
egy for available-for-sale securities. At the balance
from equity to profit and loss due to the sale of market
sheet date, most of the latter securities were invested
able securities. Transactions effected during the fiscal
in shares in various classes of investment funds. Daily
year are recognized in profit and loss.
fund prices are supplied to enable the calculation of
(18) Cash and Cash
This item mainly consists of time deposits held at banks.
Equivalents
2007-09-30
2006-09-30
€ in thousands
Checks
112
662
Cash in hand
947
1 035
Notes receivable
Cash at banks
3 760
1 881
460 289
301 251
465 108
304 829
Cash at banks earns interest at floating rates based
interest at the respective short-term deposit rates.
on daily bank deposit rates.
At the balance sheet date, the fair value of cash and
Short-term deposits are made for varying periods of
cash equivalents was € 465 108 thousand (previous
between one day and three months depending on the
year: € 304 829 thousand).
immediate cash requirements of the Group, and earn
121
(19) Equity and Other
Non-Current
Capital provided
by Shareholders
Capital and revenue reserves
The revenue reserves consist of retained earnings generated by Voith AG and its consolidated
subsidiaries.
As at September 30, 2005, Voith AG’s subscribed
capital of € 120 000 thousand was held by share
holders in the form of 21 500 000 ordinary shares
own shares pursuant to Section 237 Paragraph 3 Item 3 of the German Stock Corporation Act (AktG).
This transaction involved conversion of the preferential shares to ordinary shares. At September 30, 2006,
and September 30, 2007, 30 149 100 ordinary shares
were outstanding.
Other reserves
and 18 500 000 preferential shares. The preferential
Other reserves include the effects of the currency
shares had no voting rights but entitled the bearer to
translation of foreign subsidiaries, the effects of the
preferential dividend claims.
valuation of marketable securities and cash flow
An amount of € 129 154 thousand was reported in
of net investments (pursuant to IAS 21).
hedges (pursuant to IAS 39) and gains on the hedging
fiscal 2005/06 relating to the purchase of Voith AG’s
The table below lists the components of other reserves:
€ in thousands
Unrealized gains
Market valuation of marketable securities
2007-09-30
2006-09-30
2005-09-30
19 234
14 201
42 007
3 517
4 675
13 115
15 717
8 131
30 288
0
1 395
(1 396)
30 061
48 935
Cash flow hedges
Other unrealized gains
Foreign exchange differences
259
Currency translation 278
19 245
34 380
Hedging of net investments (19)
10 816
14 555
Deferred taxes on items recognized directly in equity
(7 119)
(18 021)
Minority interests
Non-current capital
Other reserves
Other unrealized gains relate to amounts realized
(6 596)
792
(7 277)
462 (539)
(5 598) (11 457)
32 007
60 925
6 412
€ 76 800 thousand, constitute Group equity. The
directly in equity at companies measured using the
rights in question were issued by a subsidiary and are
equity method. Due to the sale of these companies in
lower-ranking bearer profit participation rights with
the fiscal year under review, they were recognized in
variable compensation, no bullet maturity and no right
profit and loss.
of termination on the part of the creditors.
Profit participation rights
Minority interests
Pursuant to the criteria defined in IAS 32, the Group’s
The major portion of minority interests is attributed to
profit participation rights, with a nominal volume of
the co-owners of the companies Rif Roll Cover Srl,
122
Italy, Voith Fuji Hydro K.K., Japan, Voith IHI Paper
Technology Co., Ltd., Japan, Voith Siemens Hydro
measured at fair value.
Power Generation Shanghai, Ltd., China, and Porrits
& Spencer (Asia), Ltd., India.
Appropriation of net income at Voith AG
The Board of Management proposes to pay a divi-
Other non-current capital provided by shareholders
dend of € 0.33 per share (€ 9 949 thousand in total)
Other non-current capital provided by shareholders
out of the unappropriated retained earnings of includes other shareholders’ interests in the capital
Voith AG, and the remaining € 10 627 thousand to
stock of German limited companies. A significant por-
carry forward to the current fiscal year.
tion of this amount is attributable to the co-owners of
Voith Siemens Hydro Power Generation GmbH & Co.
The dividend of € 76 277 thousand paid in the period
KG. Developments in IFRS accounting practice have
under review (previous year: € 40 098 thousand) changed the way in which rights to terminate minority
was equivalent to a dividend of € 2.53 per share
(previous year: € 1.33).
(20) Pension Provisions
Provisions for pensions are recognized for benefits
The pension provisions for defined benefit plans are
and Similar Obligations
in the form of retirement, invalidity and dependents’
determined in accordance with IAS 19 (Employee
benefits payable under pension plans. The benefits
Benefits) using the projected unit credit method,
provided by the Group vary depending on the legal,
under which the future obligations are measured
tax and economic circumstances of the country con-
based on the pro rata benefit entitlements earned
cerned and usually depend on the length of service
as of the balance sheet date. Measurement reflects
and remuneration of the employees.
assumptions as to the trends in the relevant variables
affecting the level of benefits. All defined benefit plans
Group companies provide occupational pensions
require actuarial valuations.
under both defined contribution and defined benefit
plans. In the case of defined contribution plans, the
Owing to their benefit status, the obligations of
company makes contributions to state or private pen-
US Group companies in particular in respect of
sions schemes based on legal or contractual require-
post-retirement medical care are also carried under
ments or on a voluntary basis. Once the contributions
provisions for pensions. These post-retirement benefit
have been paid, there are no further obligations for
provisions take into account the expected long-term
the company. Current contributions are recognized
rise in the cost of healthcare.
as pension expenses in the period concerned. In
2006/07, they amounted to € 68 150 thousand for the
Insofar as foreign Group companies have plan assets,
Group as a whole (previous year: € 70 793 thousand).
these consist essentially of stocks, fixed-interest
Defined benefit plans make up the major portion of
assets of domestic companies. The plan assets of the pension plans. A distinction is drawn between
the Group companies do not include any shares in funded and unfunded plans.
Voith AG.
bonds and real estate. Insurance cover forms the plan
123
The following amounts related to defined benefit plans are recognized in the balance sheet:
€ in thousands
Present value of funded obligations*)
Fair value of plan assets
Shortfall *)
2007-09-30
2006-09-30
2005-09-30
199 407
185 602
204 419
(137 260)
(137 199)
(137 751)
62 147
48 403
66 668
Present value of unfunded obligations*)
373 292
404 184
367 538
Unrecognized actuarial gains and losses
(31 152)
(51 406)
(29 958)
Unrecognized past service costs
Provision in the balance sheet
Thereof non-current
92
0
0
404 379
401 181
404 248
22 122
19 076
11 322
*) Data as at September 30, 2006 and September 30, 2005 adjusted.
The present value of defined benefit obligations comprises the following items:
€ in thousands
Defined benefit obligation at the beginning of the period
Current service costs
Interest expenses (pursuant to IAS 19)
Actuarial losses (+)/gains (-)
Past service costs
Plan curtailments or settlements
Benefits paid
Other
Defined benefit obligation at the end of the period
2007-09-30
2006-09-30
589 786
571 957
12 828
12 112
28 265
25 874
(14 663)
20 477
64
310
104
148
(206)
(29 964)
1 482
(14 996)
572 700
340
(34 807)
985
(7 610)
589 786
124
The development of plan assets is shown in the table below:
€ in thousands
Fair value of plan assets at the beginning of the period
2007-09-30
2006-09-30
137 199
137 751
9 786
Expected return on plan assets
9 756
Actuarial gains(+)/losses(-)
2 620
Contributions
6 847
7 850
0
73
(672)
Benefits paid
(9 760)
(12 551)
(9 402)
(5 038)
Fair value of plan assets at the end of the period
137 260
137 199
The actual return on invested plan assets amounted
and on forecasts of probable returns on the classes
to € 12 376 thousand (previous year: € 9 114 thou-
of securities held in the portfolio. These forecasts are
sand).
based on yield expectations for comparable pension
funds for the remaining service period (investment
The expected long-term interest yield on fund assets
horizon) and on experience gathered by the manag-
is calculated based on the portfolio’s actual long-term
ers of large portfolios and experts in the investment
yields, on historical returns in the market as a whole,
industry.
Plan assets consist of the following components:
in %
2007-09-30
2006-09-30
Stocks
45%
49%
Bonds
23%
34%
Real estate
Other
4%
5%
28%
12%
100%
100%
Actuarial gains and losses are the result of changes
income and pensions and changes in interest rates)
in portfolios and in actual trends (e. g. increases in
that differ from underlying assumptions.
125
The following amounts are recognized in profit and loss:
€ in thousands
2007-09-30
2006-09-30
Current service costs
12 828
12 112
Interest expenses on pension obligations
28 265
25 874
(9 756)
(9 786)
Past service costs
Gains on plan curtailments or settlements
Realized actuarial gains or losses
64
310
(206)
340
779
109
Current service costs, past service costs, the effects
realized actuarial gains and losses that relate to the
of plan curtailments or settlements and realized
plan assets are recognized under other operating
actuarial gains and losses that relate to defined
expenses.
benefit obligations are stated under personnel
Interest expenses on pension obligations are stated in
expenses. Expected returns on plan assets and
the interest result.
The following assumptions underlie Voith Group’s calculation of pension provisions:
in %
Germany & Austria
USA
2007-09-30
2006-09-30
2007-09-30
2006-09-30
Discount rate
5.25%
4.75%
5.75%
5.75%
4.5%
5.0%
8.0%
8.0%
Salary increases
3.0%
2.0%
3.8%
1.5%
Pensions increases
2.0%
1.5%
0%
0%
Annual increase in healthcare costs
0%
0%
6.1%
7.0%
Experience-based adjustments – i. e. the effects of
and what actually occurred – are shown in the table
deviations between previous actuarial assumptions
below:
in %
Difference between projected assumptions and actual values: (+ gains/- losses)
- As a percentage of the present value of defined benefit obligations
- As a percentage of the fair value of plan assets
2007-09-30
2006-09-30
2005-09-30
0%
(0.5%)
+2.8%
+1.9%
(0.5%)
+3.0%
126
(21) Other
The development of other provisions is shown below:
Provisions
€ in thousands
Personnel-related provisions
Other tax provisions
Warranty provisions
Other order-related provisions
Other provisions
Balance
as at
2006-09-30
Changes in
the Group
structure
95 437
1 969
4 468
Additions
Reversals Transfers
(25 736)
34 631
(7 160) 2 457
3
(1 929)
6 033
(182)
196 609
2 708
(64 176)
97 740
(42 867)
0
(187)
116 908
1 661
(34 970)
52 253
(43 469)
0
219
(266)
92 336
70 859
169
(19 493)
10 426
(77)
(141)
50 416
484 281
6 510
€ in thousands
Utilization
111
(22)
(102 570)
(752) 100 957
0
(8 892) (2 435)
(146 304) 201 083
Dis- Currency
Balance
counting translation
as at
effects differences 2007-09-30
0
66
2007-09-30
(74)
8 297
(705) 189 122
(1 938) 441 128
2006-09-30
< 1 year
> 1 year
< 1 year
> 1 year
Personnel-related provisions
36 603
64 354
29 608 65 829 Other tax provisions
5 862
2 435
2 735 1 733 Warranty provisions
139 728
49 394
145 233 51 376 Other order-related provisions
84 583
7 753
108 053 8 855 Other provisions
42 541
7 875
60 200 10 659 309 317
131 811
345 829 138 452
Early retirement and anniversary/long service provi-
on customer orders, for service contracts as well as
sions comprise the major portion of the personnel-
for commission provisions. Other provisions include
related provisions. Warranty provisions are accrued
items such as obligations arising from retrenchments
for statutory and contractual obligations as well as
and restructuring measures. The latter activities are
for extended warranty. Other order-related provisions
expected to be completed within the next two fiscal
include obligations for services still to be rendered
years.
(22) Financial
127
Voith AG’s financial liabilities include the following items:
Liabilities
€ in thousands
2007-09-30
2006-09-30
Bonds
670 515
400 949
Bank loans
149 147
131 823
Lease liabilities
5 185
6 552
Notes payable
8 481
5 007
Financial derivatives with hedged financial transactions
1 482
3 978
Other financial liabilities*)
155 716
150 881
990 526
699 190
Developments in IFRS accounting practice have
est, euro-denominated bond in the (nominal) amount
changed the way in which rights to terminate minority
of € 300 million. The bond was launched with a dis-
count of € 1 701 thousand. The fair value of the bond
is € 295 233 thousand. Its carrying amount is measured at fair value.
€ 297 199 thousand.
In the current period, as in the previous period,
A long-term bank loan in the (nominal) amount of no liabilities are secured by mortgages. Financial
€ 100 million was secured to finance approved
liabilities totaling € 944 thousand are secured by other
research and development projects. The fair value of
assets (previous year: € 1 094 thousand).
this loan is € 98 895 thousand.
To finance ongoing growth in the long term, the Group
Since most of the other financial liabilities are subject
exploited the favorable market environment in the
to variable interest rates, the market value and book
period under review and issued a ten-year, fixed-inter-
value are similar.
The Group’s financial liabilities have the following maturities:
€ in thousands
2007-09-30
2006-09-30
Under 1 year
123 010 190 939
1 to 5 years
321 933
236 853
Over 5 years
545 583
271 398
990 526
699 190
128
The Voith Group’s current and non-current bonds and other liabilities due to banks are denominated in the
following currencies:
Interest-Bearing Loans:
2007-09-30
2006-09-30
€ in thousands
Euros
547 039
162 187
US Dollars
242 459
346 728
Swedish Krona
20 395
2 632
Japanese Yen
3 261
11 790
Other currencies
6 508
9 435
819 662
Current
532 772
Effective interest rate
(%)
Maturity Carrying amount at
2007-09-30
€ in thousands
Carrying
amount at
2006-09-30
€ in thousands
SEK loan
3.75% + 0.25%
Indefinite
20 395
2 578
JPY loan
1.22% – 1.25%
Indefinite
3 114
8 690
GBP loan
6.75%
Indefinite
2 365
1 917
USD loan
USD LIBOR +0.3%
2-month
revolving
0
35 604
USD loan
USD LIBOR +0.3%
2-month
revolving
0
23 736
USD loan
USD LIBOR +0.3%
2-month
revolving
0
11 868
USD loan
USD LIBOR +0.5%
2006-12-29
0
7 889
USD loan
6M USD LIBOR
2007-03-31
0
4 689
Euro loan
EURIBOR +0.25%
Indefinite
0
2 800
1.0%
Indefinite
0
2 775
11 397
12 338
37 271
114 884
JPY loan
Others
Total current
Non-current
€ 300 million bond, 2007/2017
€ 200 million bond, 2001/2011
129
Effective interest rate
(%)
Maturity Carrying amount at
2007-09-30
€ in thousands
Carrying
amount at
2006-09-30
€ in thousands
5.587%*
2017-06-21
297 199
0
EURIBOR +1.65%**
2011-07-18
145 565
146 322
USD 180 million private placement, USD LIBOR in first tranche, 2004/2014
arrears + 0.785%**
2014-08-17
127 007
141 553
USD 85 million private placement, USD LIBOR in
second tranche, 2004/2016
arrears +0.94%**
2016-08-17
59 417
66 533
USD 60 million private placement, USD LIBOR in third tranche, 2004/2019
arrears +1.145%**
2019-08-17
41 327
46 541
€ 100 million loan
4.50%*
2012-05-11
100 000
0
Industrial revenue bond
Variable, currently 3.96%
2009-06-01
5 392
6 038
Industrial revenue bond
Variable, currently 3.96%
2017-01-01
5 392
6 038
Others
1 092
4 863
Total Non-current
782 391
417 888
819 662
532 772
* Yield/effective interest rate.
** Including the effect of related interest rate swaps.
The bonds and the USD private placement all have bullet maturities.
130
Lease liabilities relate solely to finance lease obliga-
the contractual period and had the following maturi-
tions. Most of the underlying lease contracts include a
ties as at the balance sheet date:
buy option. Finance lease liabilities are settled during
(23) Trade Accounts
Payable /
Other Liabilities
€ in thousands
Total future minimum lease payments (gross)
2007-09-30
2006-09-30
6 098
7 626
Under 1 year
1 117
1 227
1 to 5 years
2 475
2 693
2 506
3 706
Over 5 years
Present value of future minimum lease payments
5 185
6 552
Under 1 year
1 047
1 097
1 to 5 years
2 227
2 381
1 911
3 074
Over 5 years
Interest component of future minimum lease payments
€ in thousands
Trade accounts payable
Liabilities from long-term construction contracts
Financial derivatives with hedged operational transactions
Personnel and social security liabilities
Tax liabilities
Customer advances received
Deferred income
Other liabilities
913
1 074
2007-09-30
2006-09-30
345 731
290 918
14 379
6 569
6 822
4 804
182 545
163 561
95 177
82 779
573 942 372 727
21 919
17 753
216 112
169 220
1 456 627 1 108 331
As in the previous fiscal year, no trade accounts
At fiscal year-end, personnel and social security
payable are secured by other assets in the current
liabilities included outstanding vacation benefits,
period. Interest is payable on € 3 524 thousand of
overtime annual bonus payments and unpaid wages,
trade accounts payable (previous year: € 1 856
salaries and social security contributions.
thousand). € 1 340 thousand (previous year: € 2 621
thousand) of trade accounts payable are payable after
12 months.
Sales tax (VAT) liabilities, whose fair value essentially
corresponds to the carrying amount, formed the main
item in tax liabilities.
Government Grants
€ in thousands
As at October 1
Granted during the fiscal year
Amortized in profit and loss
As at September 30 Subsidies totaling € 6 665 thousand (previous year:
131
2006/07
2005/06
555
467
6 787
133
(619)
6 723
(45)
555
Government assistance totaling € 16.0 million was
€ 483 thousand) were granted for capital spending
promised to reimburse the Group for costs incurred in
on property, plant and equipment. Subsidies totaling
the relocation of subsidiaries in China. Of this amount,
€ 58 thousand (previous year: € 72 thousand) were
€ 2.8 million had already been received at the balance
granted for other expenses.
sheet date.
132
In fiscal 2006/07, changes in bonds/bank loans primar
of € 242 134 thousand and cash outflows of ily comprised the issue of a new bond in the amount
€ 432 435 thousand.
of € 297 199 thousand and a new euroloan in the
amount of € 100 000 thousand. Other transactions Information relating to the acquisition of consolidated
with banks resulted in a net repayment totaling companies is provided in the section on “Business
€ 109 504 thousand. In the previous year, bonds total-
combinations in fiscal year 2006/07”.
ing € 305 900 thousand and a euroloan totaling € 81 010 thousand were repaid. Other transactions
Cash and cash equivalents include checks, notes
with banks resulted in a net repayment totaling receivable, cash in hand and balances in bank
€ 44 425 thousand. In the period under review, move-
accounts.
ments in marketable securities included cash inflows
133
Information on the
Segment Data
Segment data is essentially compiled using the same
accounting and valuation methods as the consoli-
Investments include intangible assets and property,
dated financial statements. Intercompany sales are
plant and equipment.
effected at market prices.
The regional breakdown of orders received and sales
Segment assets and segment liabilities contain
is based on the customer’s domicile. Investments and
assets and liabilities that contributed to realizing the
segment assets are assigned to the location at which
operating result in the period under review.
they exist or are effected. In line with internal control
To ensure that the figures for each segment remain
ling and reporting practices, four specific regions
comparable, interest-bearing receivables and pay
– Germany, Europe excluding Germany, the Americas
ables that cannot be assigned to a specific segment
and Asia – are defined. All other regional activities are
are not included. Accordingly, income and expenditure
reported under “Other”.
arising from these items did not affect the operating
result.
Information on Activities
in these Segments
Voith Paper – is a leading provider of complete pro-
a leading, full-line supplier for hydro power plants. Its
cess lines for the papermaking industry. An estab-
key products are Francis, Pelton, Kaplan, bulb and
lished process supplier to the paper industry world-
pump turbines. This Group Division also produces
wide, Voith has amassed a wealth of experience
generators and generator drive units for all kinds of
covering everything from fiber technology through
turbines, as well as excitation and diagnostic systems,
processing to printing technology. Voith develops
frequency converters, insulation systems, switching
solutions that span the entire papermaking process,
systems for all voltages and transformers.
from fiber to finished paper – and that for every type of
paper: graphic grades, board, packaging papers, tis-
Voith Turbo – specializes in mechanical, hydro
sue paper and special-purpose papers. Voith is also
dynamic and electronic drive and braking systems
one of the global leading manufacturers of forming
for road, rail, marine and industrial applications. Voith
fabrics, wet felts, dryer fabrics and press felts for the
Turbo crafts customized solutions ranging from indi-
world’s cellulose and paper industry.
vidual machines to end-to-end process solutions.
Voith Siemens Hydro Power Generation – is a joint
Voith Industrial Services – is one of the leading
venture company that combines the strength of two
providers of technical, consulting and management
leading hydro power component suppliers to create
services in industrial contexts.
134
Voith Group
Segment Information by Division
€ in millions
Voith Paper
External sales
Sales with other segments
Voith Siemens Hydro Voith Turbo
2006/07
2005/06
2006/07
2005/06
2006/07
2005/06
1 732
1 567
650
614
1 011
894
34
40
3
3
4
4
1 766
1 607
653
617
1 015
898
147
152
34
38
99
86
Total segment sales
Profit from operations
Goodwill impairment
Operating interest income 2)
Non-recurring result
Segment result 3)
Depreciation on intangible assets and property, plant and equipment
1
0
0
0
0
0
Investments 4)
74
91
21
12
65
34
Investments from newly acquired subsidiaries
12
3
1
0
117
22
0
(1)
0
0
0
0
(3)
(3)
(10)
(4)
0
0
(2)
(38)
(1)
0
0
0
142
110
23
34
99
86
63
63
12
10
32
28
Total investments
86
94
22
12
182
56
Segment goodwill
220
210
10
6
137
64
1 413
1 390
585
440
879
620
5
0
0
0
0
0
1 006
976
553
387
407
332
841
850
274
235
510
448
10 081
9 977
2 834
2 436
4 814
4 264
Segment assets
Investments in associates
Segment liabilities
Capital employed 5)
6)
Employees 1)
Subtotal for Voith Paper, Voith Siemens Hydro and Voith Turbo.
2)
Operating interest income (expenses) from ordinary activities is defined as interest received by the company on the long-term financing of receivables from customers or on that portion of customer advances that is not used to finance inventories and PoC receivables.
3)
Segment result according to IAS 14.
4)
Excluding additions due to new acquisitions and financial assets.
5)
Segment assets (excluding goodwill, including set-off of advances received for inventories) less segment liabiltiies (excluding provisions, accruals and advances
received).
6)
Statistical number of persons employed at fiscal year-end.
Systems & Products 1)
135
Others
2006/07
Total
2006/07
2005/06
2006/07
2005/06
2005/06
2006/07
2005/06
3 393
3 075
791
655
6
41
47
46
57
(87)
(104)
9
4 190
3 739
0
0
3 434
3 122
837
712
(81)
(95)
280
276
27
20
19
15
4 190
3 739
326
311
0
(1)
0
0
0
0
0
(1)
(13)
(7)
0
0
0
0
(13)
(7)
(38)
0
(9)
0
0
264
(3)
230
27
11
19
15
310
(3)
256
(47)
107
101
15
12
6
5
128
118
1
0
0
0
0
7
1
7
160
137
21
20
12
10
193
167
130
25
0
21
0
0
130
46
290
162
21
41
12
10
323
213
367
280
119
115
0
0
486
395
2 877
2 450
389
351
55
47
3 321
2 848
5
0
0
0
0
53
5
53
1 966
1 695
200
173
136
126
2 302
1 994
1 625
1 533
158
136
48
54
1 831
1 723
17 729
16 677
18 908
16 858
627
550
37 264
34 085
136
Segment Information by Region
Orders received
Voith Group
€ in millions
Germany
Europe excl. Germany
Americas
Asia
Other
Total
2006/07
2005/06
900
117
110
1 618
1 319
24%
61%
66%
49%
46%
1 348
1 073
1 183
978
34
26
647
586
26%
26%
28%
26%
17%
15%
19%
21%
1 263
1 137
1 013
918
18
20
806
715
24%
28%
24%
25%
9%
12%
24%
25%
1 376
961
948
821
23
10
231
213
27%
23%
23%
22%
12%
6%
7%
7%
83
84
88
122
1
1
19
15
2%
2%
2%
3%
1%
1%
1%
1%
5 132
4 096
4 190
3 739
193
167
3 321
2 848
Germany
Europe excl. Germany
Asia
Other
Total
2005/06
958
2006/07
23%
€ in millions
2005/06
841
2006/07
21%
Systems & Products 2006/07
Americas
2005/06
Segment assets
21%
2006/07
Investments
1 062
Orders received
External sales
2005/06
External sales
2006/07
2005/06
Investments
2006/07
Segment assets
2005/06
2006/07
2005/06
608
476
503
536
95
93
1 323
1 061
14%
14%
15%
17%
59%
68%
46%
43%
1 188
939
1 024
843
26
16
567
517
27%
27%
30%
27%
16%
12%
19%
21%
1 086
978
835
759
15
17
740
644
25%
29%
25%
25%
10%
12%
26%
26%
1 371
955
943
815
23
10
228
213
32%
28%
28%
27%
14%
7%
8%
9%
83
84
88
122
1
1
19
15
2%
2%
2%
4%
1%
1%
1%
1%
4 336
3 432
3 393
3 075
160
137
2 877
2 450
137
The segment result can be reconciled to the figures in the consolidated financial statements as follows:
€ in millions
Total segment result
2006/07
2005/06
310
256
Interest result
Other financial result
1
7
(42)
(46)
21
113
290
330
Income before tax
The segment assets and liabilities can be reconciled to the figures in the consolidated financial statements as follows:
€ in millions
2006/07
2005/06
Total segment assets
3 321
2 848
Financial assets and non-current securities
60
114
Income tax assets
24
19
Financial receivables
75
45
784
429
89
117
Total assets
4 353
3 572
Total segment liabilities
2 302
1 994
Financial liabilities
990
699
Other non-current capital provided by shareholders 39
40
Income tax liabilities
117
80
Deferred tax liabilities
100
98
3 548
2 911
Cash and cash equivalents
Deferred tax assets
Total liabilities and other non-current capital provided by shareholders
138
Other Information
Contingent Liabilities, Contingent Assets and Other Financial Obligations
Appropriate provisions have been formed in the
An ongoing tax inspection at the Group’s German
relevant Group companies to cover contingent liabili-
companies could lead to further material changes in
ties arising from taxation, court and arbitration pro-
tax items.
ceedings. Neither Voith AG nor any of its consolidated
companies are involved in any current or foreseeable
Contingent Liabilities
The Voith Group has contingent tax assets totaling
taxation, court or arbitration proceedings that could
approximately € 6 million (previous year: € 22 million)
materially influence their economic situation. outside Germany.
The contingent liabilities listed below are stated
these contingencies as the risk of their realization is
at face value. No provisions were formed to cover
regarded as low.
€ in thousands
Guarantee obligations
Warranties
Assets pledged as security for third-party obligations
2007-09-30
2006-09-30
23 122
39 482
765
245
3 300
3 756
27 187
43 483
Most of the guarantee obligations mature in 2015.
Other Financial
Obligations
In addition to liabilities, provisions and contingent
leasing agreements for buildings, land, equipment,
liabilities, the Voith Group also has other financial
plant, machinery, and other non-production-related
obligations, in particular those arising from rental and
tools and equipment.
2007-09-30
2006-09-30
€ in thousands
Purchasing commitments for capital expenditure
37 943
19 713
Obligations arising from non-cancelable operating rental and leasing agreements
81 016
58 246
Other obligations 9 487
6 498
128 446
84 457
Assets leased within the framework of operating
related to leased vehicles, machinery and buildings.
rental and leasing agreements led to cash outflows
The majority of leases run for between one and ten
totaling € 48 127 thousand (previous year: € 40 157
years. Some companies have the option of extending
thousand) in the period under review. These pay-
their rental contracts.
ments were recognized as expenses and mostly
139
The maturity of future minimum lease payments for non-cancelable operating rental and leasing agreements is shown below:
€ in thousands
2007-09-30
2006-09-30
Nominal value of future minimum lease payments
Due in under 1 year
28 907
22 559
Due in 1 to 5 years
44 551
32 099
Due in over 5 years
7 558
3 588
81 016 58 246
A negligible amount is expected as sublease cash
The “Other obligations” item consists essentially inflows from assets under operating rental and lease
of maintenance agreements.
agreements within the Group.
Financial Derivatives
and Financial Assets
and Liabilities
Voith is a global player. In the course of its ordinary
the balance sheet (upward of a value of € 1 million)
business, it is therefore exposed to exchange rate
are hedged individually within the framework of hedge
and interest rate risks that could affect its assets,
accounting. Small amounts are hedged collectively.
financial and earnings position.
Derivative financial instruments are used to limit the
Interest rate-related market value risk and cash flow risk
Interest rate risks due to valuation fluctuations of
risks arising both from operating business and from
a financial instrument linked to changes in market
the resultant financing requirements. These instru-
interest rates exist primarily for medium- to long-term
ments are used in accordance with clearly defined,
fixed-interest receivables and payables.
uniform, Group-wide guidelines. Compliance with
The Voith Group’s exposure to interest rate risks
these guidelines is verified on an ongoing basis.
is centrally analyzed and managed by Corporate
The Voith Group does not trade in financial deriva-
Finance. The risk of changes in interest rates is
tives.
hedged on a case-by-case basis in relation to fixed-
Foreign exchange risk
Foreign exchange risks exist in particular wherever
receivables, liabilities, cash and cash equivalents
and orders (firm commitments/planned transactions)
are or will be denominated in a currency other than
interest receivables and payables. Interest rate risks
are hedged by interest rate swaps and combined
interest rate/currency swaps, usually in the context of
hedge accounting.
At present, the Group raises funds essentially by
the presentation currency of the Group company
drawing on financial instruments with floating interest
concerned. For the Voith Group, this happens above
rates. The resultant risk to cash flow is contained by
all with the US dollar.
interest rate caps.
Most foreign exchange risks are recorded and managed centrally by Corporate Finance. These risks
are hedged by forward exchange contracts, currency
options, currency swaps and combinations of interest
rate and currency swaps. Major items and orders on
The carrying amounts of those key financial instruments that are exposed to interest rate risks are
grouped by contractually defined maturity in the
following table:
140
Under 1 year
1–2
years
€ in thousands
2007-09-30
Floating interest rates Cash and cash equivalents
465 108
Bonds
Bank loans
Fixed interest rates
2–3
years
3–4
years
4–5
years
–
–
–
– 465 108
–
–
–
37 271
5 941
214
– 145 565
214
Over 5
years
Total
–
227 751 373 316
87
5 420 49 147
Bonds
–
–
–
–
–
297 199 297 199
Bank loans
–
–
–
–
100 000
– 100 000
2006-09-30
Floating interest rates Cash and cash equivalents
Bonds
Bank loans
304 829
–
–
–
–
– 304 829
–
–
–
–
146 322
254 627 400 949
114 884
1 739
6 819
781 781
6 819 131 823
Risk of default
the default risk regarding the Group’s other financial
The Voith Group enters into business transactions
assets (which consist of cash and cash equivalents,
exclusively with recognized, creditworthy third par-
financial assets that are held for sale and certain
ties. The Group investigates the creditworthiness of
financial derivatives) is limited to the carrying amount
all customers who solicit credit-based transactions
of the said instruments. This kind of asset loss can
with it. In addition, the Group constantly monitors
occur if business partners fail to fulfill their contractual
outstanding receivables to ensure that it is exposed to
obligations.
no material risk of default. The Group also takes out
The Voith Group is exposed to no material concentra-
credit insurance. In the event of counterparty default,
tion of default risks.
At fiscal year-end, the following items were outstanding to hedge foreign exchange and interest rate risks:
Nominal value*
2007-09-30
€ in thousands
Positive market value Negative market value
< 1 year
> 1 year
< 1 year
> 1 year
< 1 year
> 1 year
Forward exchange contracts
(fair value hedges)
231 376
219 126
21 301
22 462
4 396
17
(cash flow hedges)
26 781
14 805
9 330
4 399
217
–
Interest rate swaps
(fair value hedges)
Other derivatives Total
–
328 600
–
655
–
858
147 305
349 854
10 156
15 713
1 965
851
405 462
912 385
40 787
43 229
6 578
1 726
141
Nominal value*
2006-09-30
€ in thousands
Positive market value Negative market value
< 1 year
> 1 year
< 1 year
> 1 year
< 1 year
> 1 year
(fair value hedges)
65 801
67 448
5 162
3 779
1 129
25
(cash flow hedges)
26 926
19 877
5 856
5 145
65
–
Interest rate swaps
(fair value hedges)
–
355 927
–
1 576
–
1 931
145 441
413 227
7 019
13 355
3 000
2 632
856 479
18 037
23 855
4 194
4 588
Other derivatives Total
238 168
* Nominal value refers to the volume of the hedged transactions in the local currency, translated at the exchange rate on the balance
sheet date.
The reported interest rate swaps were concluded to
rates agreed for these bonds were converted to float-
hedge the fair value of the € 200 million bond running
ing rates. The main terms and conditions agreed for
from 2001 through 2011 and to hedge the fair value of
the bonds and interest rate swaps are identical.
the private placement. As a result, the fixed interest
Research and
Development Costs
In fiscal 2006/07, research and development costs
ous year: € 125 908 thousand) which includes both
totaled € 201 980 thousand (previous year: scheduled depreciation on these capitalized devel-
€ 181 907 thousand).
opment expenses and activities for non-customerspecific new developments and improvements, as
Of this amount, € 17 437 thousand (previous year:
well as € 40 985 thousand (previous year: € 44 499
€ 11 500 thousand) was capitalized as development
thousand) for development activities capitalized in the
expenditure in the balance sheet. The remaining
context of customer-specific orders.
expenses consist of € 143 558 thousand (previ-
Related Party
In the course of its ordinary business activities, Voith
members who hold shares in the Group also serve on
Disclosures
AG maintains relationships both with the subsidiaries
the supervisory boards of other companies with which
listed in these consolidated financial statements and
Voith maintains relationships in the course of its ordi-
with other related enterprises and individuals (family
nary business activities. Any transactions involving
members who are shareholders, and members of the
these companies are conducted on the same terms
Supervisory Board and the Board of Management).
and conditions as business with any unrelated third
parties.
All business transactions with related enterprises and
individuals are conducted on regular market terms
and conditions.
A total of € 417 thousand was paid at customary
market rates to members of the Supervisory Board
and former members of the Board of Management for
Members of the Board of Management, members
of the Supervisory Board of Voith AG and family
consulting and other services.
142
The majority of intercompany deliveries and services to related enterprises and individuals are shown in the
table below:
€ in thousands
Services purchased from related parties
2007
2006
1 374
2 945
Services rendered to related parties
15 230
10 528
Receivables from related parties
22 528
14 537
Write-downs on receivables from related parties
Liabilities to related enterprises
Liabilities to family members who are shareholders
(3 719)
(3 364)
117 743
106 929
30 917
39 938
Liabilities to family members who are shareholders
Relationships with associates are of minor signifi-
include current floating-rate transfer accounts and
cance.
pension obligations.
Research and development services in the amount of
For more information on the profit participation rights
€ 1 345 thousand (previous year: € 1 502 thousand)
with a nominal volume of € 76 800 thousand granted
were provided and charged to the Group by one
at the end of September 2007 to shareholders belong-
related party.
ing to the Voith family, please refer to note 19.
Compensation of
Governing Bodies
Remuneration paid to members of the Board of
€ 847 thousand (previous year: € 1 286 thousand)
Management of Voith AG in fiscal 2006/07 totaled was spent on pension and other payments to former
€ 8 857 thousand (previous year: € 5 203 thousand).
members of the Board of Management.
This amount includes long-term compensation com-
Auditor’s Fees
and Services
Events After
Balance Sheet Date
ponents totaling € 1 183 thousand (previous year:
Provisions for pension obligations in respect of former
€ 419 thousand). The members of the Supervisory
members of the Board of Management totaled Board received compensation in the amount of € 10 509 thousand (previous year: € 10 313 thou-
€ 377 thousand (previous year: € 363 thousand).
sand) at the balance sheet date.
The following fees (including compensation for expenses) were paid to the independent auditor for services
rendered in fiscal 2006/07:
€ in thousands
Audit of the consolidated financial statements
Other auditing and valuation services
Tax advice
Other services
2006/07
2005/06
1 692
1 957
294
242
91
128
66
282
2 143
2 609
At the end of November 2007, Voith Industrial
plants in Scandinavia. The company employs around
Services acquired a 100% stake in SIS Skandinavisk 160 people and posts annual sales equivalent to Industriservice AS, Ringsted, Denmark. SIS is a
€ 32 million. No statement can yet be made about the
leading provider of technical services for the petro
purchase price, as it had not yet been finalized.
chemical and chemical industries and for power
Heidenheim/Brenz, December 14, 2007
Voith AG
The Board of Management
Dr. Hermut Kormann
Dr. Hermann Jung
Dr. Hans-Peter Sollinger
Dr. Hubert Lienhard
Peter Edelmann
Martin Hennerici
Bertram Staudenmaier
Dr. Roland Münch
The Consolidated Financial Statements of Voith AG
as at September 30, 2007, have been audited and
certified without qualification by Ernst & Young AG
Wirtschaftsprüfungsgesellschaft, Stuttgart.
143
144
The Voith Group and its Shareholdings
Name and registered office
Significant affiliated companies
Voith AG, Heidenheim As at 2007-09-30
Capital
Share held *
in local currency
%
120 000 000 EUR
44 600 000
EUR
100.0
Voith IT Solutions GmbH, Heidenheim
50 000 EUR
100.0
Voith Assekuranz Vermittlung GmbH, Heidenheim
51 129 EUR
100.0
Voith Theta GmbH, Heidenheim
50 100 EUR
100.0
Voith Jota Finanz GmbH, Heidenheim
25 000 EUR
100.0
400 000 EUR
100.0
35 000 EUR
100.0
1
USD
100.0
Voith Paper Holding GmbH & Co. KG, Heidenheim
30 703 300 EUR 100.0
Voith Paper GmbH & Co. KG, Heidenheim
36 003 000 EUR
100.0
J. M. Voith GmbH & Co. Beteiligungen KG, Heidenheim
ditis Systeme GmbH & Co. KG, Heidenheim
Voith IT Solutions GmbH & Co. KG, St. Pölten/Austria
Voith IT Solutions Inc., Wilson (NC)/USA
Voith Paper Automation GmbH & Co. KG, Heidenheim
25 000 EUR
100.0
Voith Paper Rolls GmbH & Co. KG, Heidenheim
580 000 EUR
100.0
Voith Paper Fabrics GmbH & Co. KG, Heidenheim
500 000 EUR
100.0
Voith Paper Air Systems GmbH & Co. KG, Bayreuth
100 EUR
100.0
1 300 000 EUR
100.0
Voith Paper Fabrics Düren GmbH, Krefeld
270 000 EUR
100.0
Voith Paper GmbH, Krefeld
603 000 EUR
100.0
1 587 561 EUR
85.0
26 076 EUR
100.0
Voith Paper Fiber Systems GmbH & Co. KG, Ravensburg
10 303 134 EUR
100.0
Voith Paper Karton- und Verpackungspapiere Forschungs
GmbH, Ravensburg
5 338 800 EUR
100.0
51 129 EUR
70.3
500 000 EUR
95.0
Voith Paper Rolls GmbH & Co. KG, Weißenborn
26 000 EUR
100.0
Voith Paper Argentina S. A., Carapachay – Buenos Aires/Argentina
Voith Paper GmbH & Co. KG, Euskirchen
Voith Paper Krieger GmbH & Co. KG, Mönchengladbach
LSC Process- und Laborsysteme GmbH, Neuwied
MERI Entsorgungstechnik für die Papierindustrie GmbH, Ravensburg
Voith Paper Environmental Solutions GmbH & Co. KG, Ravensburg
12 000 ARS
100.0
Voith Paper Australia and New Zealand Pty. Ltd.,
North Ryde (NSW)/Australia
100 AUD
100.0
Voith Mont Montagens e Serviços Ltda., Barueri (SP)/Brazil
536 BRL
100.0
Voith Fabrics do Brasil Representação Comercial Ltda.,
São Paulo (SP)/Brazil
Voith Paper Máquinas e Equipamentos Ltda., São Paulo (SP)/Brazil
Meri Sistemas e Tecnologia Ltda., São Paulo (SP)/Brazil
Voith Canada Inc., Hamilton (ON)/Canada
*The percentage indicates the head organization’s shareholdings.
128 390 BRL
100.0
37 270 408 BRL
100.0
50 000 BRL
59.8
14 775 275 CAD
100.0
Financial Report | The Voith Group and its Shareholdings
Voith Paper Canada Inc., Laval (QC)/Canada
145
Capital
Share held *
in local currency
%
100 CAD
100.0
Voith Chile Ltda., Coronel – Chile/Chile
12 500 000 CL P
100.0
Voith Paper Fabrics (China) Co., Ltd., Kunshan, Jiangsu Province/China
15 000 000 USD
100.0
Voith Paper Rolls (China) Co., Ltd., Kunshan, Jiangsu Province/China
16 050 000 USD
100.0
6 250 000 USD
100.0
13 320 000 USD
100.0
300 000 USD
100.0
33 638 EUR
100.0
5 046 EUR
100.0
Voith Paper (China) Co., Ltd., Kunshan, Jiangsu Province/China
Voith Paper Technology (China) Co., Ltd., Liaoyang City/China
Voith Paper International Trading Co., Ltd., Shanghai/China
Pikoteknik Oy, Parhalahti/Finland
Voith Paper Fabrics Oy, Vantaa/Finland
Voith Paper Oy, Vantaa/Finland
Voith Paper Fabrics SAS, Annonay Cedex/France
Voith Paper SAS, Orsay/France
Voith Paper Fabrics Blackburn Ltd., Blackburn (Lancashire)/Great Britain
Voith Paper Fabrics Stubbins, Ltd., Bury (Lancashire)/Great Britain
200 000 EUR
100.0
8 675 100 EUR
100.0
40 000 EUR
100.0
14 400 000 GBP
100.0
160 000 GBP
100.0
1 000 000 GBP
100.0
Voith Paper Technology (India) Ltd., Calcutta/India
29 999 900 INR
50.0
Porritts & Spencer (Asia) Ltd., Faridabad (Haryana)/India
43 925 590 Voith Paper Ltd., Manchester/Great Britain
INR
74.0
750 000 USD
100.0
3 570 000 USD
76.0
RIF ROLL COVER SRL, Basaldella (Udine)/Italy
102 960 EUR
51.0
Voith Paper S. r. L., Schio (Vicenza)/Italy
258 000 EUR
100.0
50 000 000 JPY
100.0
Voith IHI Paper Technology Co., Ltd., Tokyo/Japan
490 000 000 JPY
49.0
Voith Paper Co., Ltd., Tokyo/Japan
PT. Voith Paper, Jakarta/Indonesia
PT. Voith Paper Rolls Indonesia, Karawang – West Java/Indonesia
Jagenberg Kabushiki Kaisha, Tokyo/Japan
100 000 000 JPY
100.0
Voith Paper Fabrics Japan Co. Ltd., Tokyo/Japan
10 000 000 JPY
100.0
Voith Paper Automation Japan Ltd., Tokyo/Japan
40 000 000 JPY
100.0
Voith Paper Fabrics Asia Pacific Sdn. Bhd., Ipoh, Perak Darul
Ridzuan/Malaysia
200 MYR
100.0
56 000 000 MYR
100.0
Meri Sistemas Ambientales S. A. de C.V., Monterrey/Mexico
250 000 MXP
49.2
Voith Paper Fabrics B. V., Haaksbergen/The Netherlands
113 445 EUR
100.0
Voith Paper Fabrics Ipoh Sdn. Bhd., Ipoh, Perak Darul Ridzuan/Malaysia
Voith Paper B. V., Vaassen/The Netherlands
18 151 EUR
100.0
4 401 000 NOK
100.0
Voith Paper Fabrics AS, Tranby/Norway
100 000 NOK
100.0
Voith Paper Fabrics GmbH, Frankenmarkt/Austria
374 265 EUR
99.8
Voith Paper Rolls GmbH & Co. KG, Laakirchen-Oberweis/Austria
726 728 EUR
100.0
35 000 EUR
100.0
1 000 000 EUR
100.0
Voith Paper AS, Lier/Norway
Voith Dienstleistungs-GmbH, St. Pölten/Austria
Voith Paper Automation GmbH & Co. KG, St. Pölten/Austria
146
Voith Paper GmbH, St. Pölten/Austria
Capital
Share held *
%
in local currency
13 994 750 EUR
100.0
Voith Paper Rolls GmbH & Co. KG, St. Pölten/Austria
5 000 000 EUR
100.0
Voith Paper Rolls GmbH & Co. KG, Wimpassing/Austria
3 270 278 EUR
100.0
10 000 RUR
100.0
Voith Paper Fabrics Gusum AB, Gusum/Sweden
2 000 000 SEK
100.0
Voith Paper Fabrics Högsjö AB, Högsjö/Sweden
28 589 000 SEK
100.0
Voith Paper Rolls AB, Lessebo/Sweden
500 000 SEK
100.0
Voith Paper AB, Spanga-Stockholm/Sweden
100 000 SEK
100.0
Voith Paper Walztechnik AG, Zurich/Switzerland
150 000 CHF
100.0
Voith Paper Fabrics, S. A., Guissona (Lérida)/Spain
1 202 024 EUR
100.0
Voith Paper S. A., Ibarra (Guipúzcoa)/Spain
1 887 715 EUR
100.0
625 750 USD
100.0
2 006 975 USD
100.0
Voith Paper Technology Russia GmbH, St. Petersburg/Russia
Voith Paper Fabrics Appleton, Inc., Appleton (WI)/USA
Voith Paper Inc., Appleton (WI)/USA
Meri Papertec Inc., Appleton (WI)/USA
Voith Paper Automation Inc., Los Gatos (CA)/USA
Voith Paper Rolls Central Inc., Neenah (WI)/USA
Voith Paper Fabrics Shreveport, Inc., Shreveport (LA)/USA
Voith Paper Finishing Inc., Springfield (MA)/USA
Voith Paper Rolls West Inc., Springfield (OR)/USA
Syn Strand Inc., Summerville (SC)/USA
Voith Paper Fabrics Waycross, Inc., Waycross (GA)/USA
Voith Paper Rolls South Inc., West Monroe (LA)/USA
Voith Fabrics Wilson Limited Partnership, Wilson (NC)/USA
Voith Fabrics Wilson LLC, Wilson (NC)/USA
Voith Paper Fabrics US Sales Inc., Wilson (NC)/USA
Voith Paper Rolls Inc., Wilson (NC)/USA
2 000 USD
70.3
6 000 000 USD
100.0
100 000 USD
100.0
26 050 348 USD
100.0
7 120 626 USD
100.0
11 327 802 USD
100.0
641 649 USD
100.0
200 USD
100.0
10 626 990 USD
100.0
2 000 USD
100.0
240 081 443 USD
100.0
300 USD
100.0
2 857 891 USD
100.0
147
Voith Turbo GmbH & Co. KG, Heidenheim Capital
Share held *
in local currency
%
25 600 000 EUR
100.0
Voith Turbo Lokomotivtechnik GmbH & Co. KG, Heidenheim
2 500 000 EUR
100.0
Voith Turbo Schneider Propulsion GmbH & Co. KG, Heidenheim
2 582 050 EUR
100.0
Voith Turbo Wind GmbH & Co. KG, Heidenheim
1 000 000 EUR
100.0
200 000 EUR
95.0
Voith Turbo H+L Hydraulic GmbH & Co. KG, Rutesheim
6 100 000 EUR
100.0
Voith Turbo BHS Getriebe GmbH, Sonthofen
3 038 000 EUR
100.0
Voith Turbo BHS Getriebe Holding GmbH, Sonthofen
283 000 EUR
100.0
Voith Turbo Scharfenberg GmbH & Co. KG, Salzgitter
5 113 000 EUR
100.0
Voith Turbo Pty. Ltd., Wetherill Park (NSW)/Australia
650 000 AUD
100.0
Voith Turbo Scharfenberg Pty. Ltd., Wetherill Park (NSW)/Australia
400 000 AUD
100.0
Voith Turbo S. A./N. V., Brussels/Belgium
300 000 EUR
100.0
Voith Turbo Ltda., São Paulo (SP)/Brazil
5 250 568 BRL
100.0
Voith Turbo Inc., Concord (ON)/Canada
1 021 CAD
100.0
38 250 000 CLP
100.0
650 000 HKD
100.0
6 916 000 RMB
100.0
Voith Turbo A/S, Gadstrup/Denmark
700 000 DKK
100.0
Voith Turbo Hochelastische Kupplungen GmbH & Co. KG, Essen
200 000 EUR
100.0
Voith Turbo Aufladungssysteme GmbH & Co. KG, Gommern
500 000 EUR
60.0
Voith Turbo SAS, Noisy-le-Grand Cedex/France
2 072 000 EUR
100.0
Voith Turbo Limited, Croydon (Surrey)/Great Britain
5 000 000 GBP
100.0
Voith Turbo Private Limited, Hyderabad (A. P.)/India
70 000 000 INR
100.0
Voith Turbo Rail Private Limited, Hyderabad (A. P.)/India
4 999 800 INR
100.0
Voith Turbo s. r. l., Reggio Emilia/Italy
1 200 000 EUR
100.0
38 000 000 JPY
100.0
20 000 HRK
60.0
Voith Turbo Sdn. Bhd., Kuala Lumpur/Malaysia
1 000 000 MYR
100.0
Voith Turbo S. A., Casablanca/Morocco
4 000 000 MAD
100.0
Voith Turbo S. A. de C.V., Mexico (D. F.)/Mexico
2 474 095 MXP
100.0
18 000 EUR
100.0
Voith Turbo Drive Systems B. V., Twello/The Netherlands
1 461 000 EUR
100.0
Voith Turbo GmbH & Co. KG, St. Pölten/Austria
3 633 642 EUR
100.0
40 000 EUR
100.0
ACIDA GmbH, Herzogenrath
Voith Turbo S. A., Santiago de Chile/Chile
Voith Turbo Limited, Hongkong/China
Voith Turbo Power Transmission (Shanghai)
Company Ltd., Shanghai/China
Voith Turbo Co., Ltd., Kawasaki-shi, Kanagawa/Japan
Voith Turbo d. o. o., Zagreb/Croatia Voith Turbo B. V., Twello/The Netherlands
Voith Turbo Ges.m.b.H., Vienna/Austria
148
Capital
Share held *
in local currency
%
Voith Turbo sp. z. o. o., Wola Krzysztoporska/Poland
250 000 PLN
100.0
Voith Turbo S. R. L., Bucharest/Romania
183 950 RON
100.0
Voith KMPO Getriebe GmbH, Kazan/Russia
14 400 000 RUR
58.0
Voith Turbo Safeset AB, Hudiksvall/Sweden
2 000 000 SEK
100.0
Voith Turbo AB, Spanga-Stockholm/Sweden
3 475 000 SEK
100.0
H + L Holding AG, Baar/Switzerland
200 000 CHF
100.0
Hartmann + Lämmle AG, Neuheim/Switzerland
250 000 CHF
100.0
Voith Turbo d.o.o., Belgrade/Serbia
151 015 YUD
50.0
Voith Turbo Pte. Ltd., Singapore/Singapore
507 330 SGD
100.0
1 500 000 EUR
100.0
127 572 ZAR
100.0
337 500 000 KRW
80.0
Voith Turbo Co. Limited, Kaohsiung/Taiwan
5 500 000 TWD
100.0
Voith Turbo s. r. o., Brno/Czech Republic
1 000 000 CZK
100.0
Voith Turbo Ukraine TOW, Kiev/Ukraine
50 000 EUR
100.0
285 250 000 HUF
100.0
2 150 000 USD
100.0
16 617 EUR
100.0
23 519 500 EUR 65.0
25 565 EUR
100.0
15 441 100 EUR
100.0
VS Auslandsbeteiligungen GmbH, Heidenheim
26 000 EUR
100.0
Voith Siemens Hydro Power Generation Services Ltda., São Paulo (SP)/Brazil
20 000 BRL
100.0
Voith Siemens Hydro Power Generation Ltda., São Paulo (SP)/Brazil
42 962 560 BRL
100.0
Voith Siemens Hydro Power Generation Inc., Brossard (QC)/Canada
2
CAD
100.0
4 114 848 CAD
100.0
43 333 667 USD
80.0
2 000 USD
100.0
527 854 EUR
100.0
1 349 496 GBP
100.0
Voith Turbo S. A., Coslada (Madrid)/Spain
Voith Turbo (Pty) Ltd, Witfield (Boksburg)/South Africa Voith Turbo Co., Ltd., Seodaemun-Gu (Seoul)/South Korea
Voith Turbo Kft., Biatorbágy/Hungary
Voith Turbo, Inc., York (PA)/USA
Voith Turbo Ltd., Limassol/Cyprus
Voith Siemens Hydro Power Generation GmbH & Co. KG, Heidenheim VHG Auslandsbeteiligungen GmbH, Heidenheim
Voith Siemens Hydro Kraftwerkstechnik GmbH & Co. KG, Heidenheim
Voith Siemens Hydro Power Generation Services Inc.,
Mississauga (ON)/Canada
Voith Siemens Hydro Power Generation Shanghai, Ltd., Shanghai/China
Voith Siemens Hydro Power Generation Ltda., Cuenca/Ecuador
Voith Siemens Hydro Power Generation SA, Belfort/France
Wavegen a trademark of Applied Research & Technology Ltd.,
Inverness/Great Britain
149
Capital
Share held *
in local currency
Voith Siemens Hydro Pvt. Ltd., New Delhi/India
19 999.000 %
INR
100.0
120 000 EUR
100.0
200 000 000 JPY
50.0
3 000 MXP
100.0
3 000 000 NOK
100.0
530 000 NOK
100.0
3 633 642 EUR
100.0
1 000 PEN
99.0
1 200 000 SEK
51.0
Voith Siemens Hydro Power Generation S. L., Ibarra (Guipúzcoa)/Spain
345 575 EUR
100.0
Voith Siemens Hydro Power Generation s. r. o., Pilsen/Czech Republic
200 000 CZK
100.0
Voith Siemens Hydroelektrik Limited Sirketi, Sögütözü, Ankara/Turkey
1 000 000 TRY
100.0
Synergics Energy Development, Inc., Annapolis (MD)/USA
1 689 790 USD
97.5
1
USD
100.0
249 707 USD
50.1
43 344 100 USD
100.0
500 000 EUR
100.0
Voith Industrial Services Paper GmbH & Co. KG, Heidenheim
25 000 EUR
100.0
Voith Industrial Services Wind GmbH, Stuttgart
25 000 EUR
100.0
DIW Instandhaltung GmbH & Co. KG, Heidenheim
41 312 EUR
100.0
724 652 BRL
100.0
100 CAD
100.0
50 000 GBP
100.0
500 000 PLN
100.0
5 000 EUR
100.0
100 000 SEK
100.0
803 006 EUR
100.0
10 USD
100.0
Voith Siemens Hydro Power Generation S. p. A.,
Cinisello Balsamo (MI)/Italy
Voith Fuji Hydro K. K., Kawasaki-shi, Kanagawa/Japan
Voith Siemens Hydro Power Generation Mexico, S. DE R. L. DE C. V.,
Huixquilucan, Edo de Mexico/Mexico
Voith Siemens Hydro Power Generation A/S, Oslo/Norway
Sarpsborg Energi Service AS, Sarpsborg/Norway
Voith Siemens Hydro Power Generation GmbH & Co. KG,
St. Pölten/Austria
Voith Siemens Hydro Power Generation S. A. C., Lima,
Lima – San Isidro/Peru
VG Power AB, Västeras/Sweden
Weld Mart, Inc., Chattanooga (TN)/USA
Hydro Resource Solutions, LLC, Norris (TN)/USA
Voith Siemens Hydro Power Generation, Inc., York (PA)/USA
Voith Industrial Services Holding GmbH, Heidenheim
Voith Serviços Industriais do Brasil Ltda., São Paulo (SP)/Brazil
Premier Manufacturing Support Services of Canada Ltd.,
Markham (ON)/Canada
Premier Manufacturing Support Services (UK) Ltd., Warwick/Great Britain
Premier Manufacturing Support Services Poland Sp. z. o. o., Gliwice/Poland
Premier Manufacturing Support Services Unipessoal Lda.,
Linda-A-Velha/Portugal
Premier Manufacturing Support Services AB, Trollhättan/Sweden
Premier Manufacturing Support Services Spain S. L.,
Coslada (Madrid)/Spain
Premier Manufacturing Support Services Inc., Cincinnati (OH)/USA
150
Capital
Share held *
in local currency
DIW Deutsche Industriewartung AG, Stuttgart %
20 500 000 EUR 54.8
Voith Dienstleistungen GmbH, Heidenheim
1 000 000 EUR
100.0
Hörmann Industrietechnik GmbH, Kirchseeon
5 912 500
EUR
51.0
Voith Industrial Services Engineering GmbH, Ludwigshafen
200 000 EUR
100.0
Voith Industrial Services Industriefertigung GmbH, Radebeul
25 000 EUR
100.0
3 542 369 EUR
100.0
15 525 000 EUR
100.0
Voith Industrial Services Mechanical Engineering GmbH & Co. KG, Stuttgart
657 631 EUR
100.0
Voith Industrial Services Energy GmbH & Co. KG, Stuttgart
250 000 EUR
100.0
DIW Service GmbH, Stuttgart
50 000 EUR
100.0
Profluid GmbH, Ulm
25 000 EUR
100.0
436 865 BRL
100.0
200 000 USD
100.0
Shenyang/China
100 000 USD
100.0
Hörmann Engineering GmbH, Chemnitz
950 000 EUR
51.0
23 419 381 MXP
100.0
35 000 EUR
51.0
1 500 000 EUR
100.0
200 000 PLN
51.0
DIW Service s. r. o, Bratislava/Slovakia
2 000 000 SKK
100.0
DIW Service d. o. o., Maribor/Slovakia
30 000 000 SIT
100.0
DIW Service s. r. o., Prague/Czech Republic
2 000 000 CZK
100.0
Hörmann Györ Kft, Györ/Hungary
9 220 000 HUF
50.0
20 000 000 HUF
100.0
Voith Industrial Services Indumont GmbH & Co. KG, Stuttgart
DIW Instandhaltung Ltd. & Co. KG, Stuttgart
Premier Brazil Servicos de Supporte para Industrias Ltda.,
São Paulo (SP)/Brazil
Premier Automobile Manufacturing Support Services Co. (Shanghai) Ltd.,
Shanghai/China
Premier Automobile Manufacturing Support Services Co. (Shenyang) Ltd.,
Premier Manufacturing Support Services de Mexico S. de R. L. de C. V.,
Saltillo, Coahuila/Mexico
Hörmann Industrietechnik Steyr GmbH, Steyr/Austria
DIW Instandhaltung GmbH, Vienna/Austria
Hörmann Serwis Polska Sp. z. o. o., Poznan/Poland
DIW Service Kft., Veszprém/Hungary
Significant investments
GAW Pildner-Steinburg GmbH Nfg & Co. KG, Graz/Austria
LZH Logistic Zollservice Heidenheim GmbH, Heidenheim
Micromat Spannhydraulik GmbH, Rutesheim
Nippon Retarder System Co., Ltd., Osaka/Japan
Technical Services Paper GmbH, Ettringen
**The percentage indicates the Group’s shareholding.
151
Capital
Share held **
%
in local currency
799 401
EUR
20.0
51 000 EUR
25.1
154 000 EUR
50.0
50 000 000 JPY
50.0
30 000 EUR
30.0
152
Trade Fairs 2008
Voith Paper
Voith Turbo
Tissue World Miami/USA
2008-03-12 – 2008-03-14
Auto Expo
New Delhi/India
2008-01-10 – 2008-01-17
SPCI Stockholm/Sweden
2008-05-27 – 2008-05-29
SME08
Salt Lake City (UT)/USA
2008-02-24 – 2008-02-27
Zellcheming
Wiesbaden/Germany
2008-06-24 – 2008-06-26
MIAC
Carrara/Italy
2008-10-08 – 2008-10-10
Expo Foro
Mexico City/Mexico
2008-03-05 – 2008-03-07
VietShip 2008
Hanoi/Vietnam
2008-03-11 – 2008-03-14
ABTCP
São Paulo/Brazil
2008-10-15 – 2008-10-18
PapFor
St. Petersburg/Russia
2008-11-10 – 2008-11-13
IFPE Conexpo
Las Vegas (NV)/USA
2008-03-11 – 2008-03-15
PowerGen
New Delhi/India
2008-04-03 – 2008-04-05
HRSG User’s Group
Austin (TX)/USA
2008-04-07 – 2008-04-09
MACH
Birmingham/England
2008-04-21 – 2008-04-25
Busworld Turkey
Istanbul/Turkey
2008-04-24 – 2008-04-26
Electric power
Baltimore (MD)/USA
2008-05-06 – 2008-05-08
International Tug & Salvage
Singapore/Singapore
2008-05-19 – 2008-05-23
Expo Ferroviaria
Turin/Italy
2008-05-20 – 2008-05-22
Autotec
Brno/Czech Republic
2008-06-03 – 2008-06-08
Global Petroleum
Calgary (AB)/Canada
2008-06-10 – 2008-06-12
Transport Publics
Paris/France
2008-06-10 – 2008-06-12
Infrovrac
Paris/France
2008-06-17 – 2008-06-19
Trade Fairs
153
Lastbil
Jönköping/Sweden
2008-08-20 – 2008-08-23
APTA
San Diego (CA)/USA
2008-10-06 – 2008-10-08
Hidroenergia 2008
Bled/Slovenia
2008-06-11 – 2008-06-13
ONS Stavenger
Stavenger/Norway
2008-08-26 – 2008-08-29
FIAA
Madrid/Spain
2008-10-14 – 2008-10-17
HydroVision 2008
Sacramento (CA)/USA
2008-07-14 – 2008-07-16
Transpublico
São Paulo/Brazil
2008-08-28 – 2008-08-30
Persontrafik
Gothenburg/Sweden
2008-10-15 – 2008-10-17
Expo Bus
Birmingham/England
2008-11-04 – 2008-11-06
Hydro 2008
Ljubljana/Slovenia
2008-10-06 – 2008-10-08
Rio Oil & Gas
Rio de Janeiro/Brazil
2008-09-15 – 2008-09-18
MinExpo
Las Vegas (NV)/USA
2008-09-22 – 2008-09-24
InnoTrans 2008
Berlin/Germany
2008-09-23 – 2008-09-26
SMM 2008
Hamburg/Germany
2008-09-23 – 2008-09-26
IAA 2008
Hanover/Germany
2008-09-25 – 2008-10-02
Voith Siemens Hydro Power
Generation
WIREC 2008
Washington DC/USA
2008-03-04 – 2008-03-06
Asia 2008
Danang/Vietnam
2008-03-10 – 2008-03-11
NHA Conference 2008
Sacramento (CA)/USA
2008-03-30 – 2008-04-04
IAHR 2008
Foz do Iguassu/Brazil
2008-10-27 – 2008-10-31
Husum WindEnergy
Husum/Germany
2008-09-09 – 2008-09-13
maintain
Munich/Germany
2008-10-14 – 2008-10-16
154
Your Contact with Voith
Holding Company
Phone: +49 7321 37-0
Fax: +49 7321 37-70 00
E-mail: info@voith.com
Voith Paper
Phone: +49 7321 37-7254
Fax: +49 7321 37-7941
E-mail: info.voithpaper@voith.com
Public Relations
Phone: +49 7321 37-2219
Fax: +49 7321 37-7107
Voith Turbo
Phone: +49 7321 37-2832
Fax: +49 7321 37-7110
E-mail: info.voithturbo@voith.com
Investor Relations
Phone: +49 7321 37-2332
Fax: +49 7321 37-7010
Voith Siemens Hydro
Power Generation
Phone: +49 7321 37-6848
Fax: +49 7321 37-7828
E-mail: info.voithsiemens@voith.com
Phone: +49 711 78 41-170
Fax: +49 711 78 41-179
E-mail: info.industrialservices@voith.com
155
Contact | Imprint
Imprint
Published by
Voith AG
P.O. Box 2000
89510 Heidenheim/Germany
Phone: +49 7321 37-0
Fax: +49 7321 37-7000
Internet: www.voith.com
Editor
Markus Woehl
Voith AG,
Corporate Communications,
Heidenheim/Germany
Design
Henriette M. Albert
Roland Kaiser
Voith AG,
Corporate Communications,
Heidenheim/Germany
156
The paper on which this annual report is printed was produced on a Voith paper machine.
The people shown in this report are Voith employees.
The annual report is also available in German.
Printed in Germany © Voith AG 1/2008
06

Annual Report of the Fiscal Year 2006/2007 Voith – Pioneer in

Transcription

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